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1 I 1 Council Meeting Minutes July 24, 1990 Page 8 Council Business, continued Bob Deike, Holmes and Graven, said the March 1988 development contract ob 1 i gated the City to acqu ire the Phase 1 Parce 1, upon BCP's satisfaction of certain conditions. The City acquired the parcel and deeded it to BCP to allow fulfillment of the contract to construct 145,000 square feet of improvements with a market value of no less than $5,500,000. The required completion date of the entire Phase 1 was to be no later than December 31, 1989. To date, BCP has constructed one 19,600 sq. ft. offi ce/warehouse with a market value of $730,000. The tax increment generated from the building's completion equals approximately $53,000 for 1990. If BCP had fulfilled the contractls obligations, the City's tax increment received in 1991 and thereafter would have equalled in excess of $200,000/year. As a result of the developer's failure, to perform in accordance with the agreement, the City is suffering tax increment losses which were intended to be used to retire the City's debt incurred in the parcel IS acquisition. In January 1990, a default notice was sent to BCP. In May 1990, an agreement was reached which allowed the developer to split up one piece of the parcel to build the Measure Tech facility, a 31,000 square foot building. Dei ke confi rmed that hours ago a proposal was recei ved from the developer. In order to evaluate the proposal, he recommends the Council meet in a closed executive session. Robert Foster, Attorney for BCP, noted that the developer has installed streets, sewer, water, storm sewers, and a retention pond. These costs of improvements coupled wi th the current economi c climate had made it very difficult for success of the project. Measure Tech and the recently approved U.S. Tire Exhaust facility are both owner-occupied and owner-financed. BCP feels both businesses would be excellent New Brighton corporate citizens. BCP's proposal involves the sale back of Lot 4 to the City for the balance of the mortgage remaining on Phase 1. After BCP's sale of Lot 1 to Measure Tech and Lot 2 to U. S. Ti re, the amount of the outstanding mortgage would be $315.000. Proceeds from the Measure Tech sale woul d pay the improvement bi 11 s. BCP waul d remove the large dirt piles on Lot 4 and correct the minor erosion problems. The building on Lot 2 will be removed and $50,000 will be escrowed for the demolition. Council Business Status of Brighton Corporate Park Report 90~167