1988-04-26 - Laserfiche WebLink

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I I I Council Meeting Minutes April 26, 1988 Williams asked if the seven-unit structure was ever viewed as being incorporated into the 85 units; Sorenson indicated they had not considered that alternative, but felt there may be a problem with grading because of the underground parking for the 85-unit building. Benke stated another option could be to relocate the seven-.unit on the site and use it for a "community type" facility. Gene Rezac, Gray Star Corporation president, stated the cost to acquire and move the building and/or relocate tenants would be exorbitant. Benke commented planning dictates the removal of the building while economics advocates utilizing it where it is. Gunderman asked if increasing density would alleviate the building from a financial standpoint. Rezac responded that both consultant and lender recommend 85 units as the upper limit, and not fewer because of the amenities in- volved. Locke stated this project would not be possib18 without ~he $320,000 Community Development Block Grant and tax incremellt financing assistance that is being provided on a pay-as-you-go basis (rather than the city providing $516,000 up front for buying property or making site improvements, the developer instead will get a promissory note, in essence, from the city which says the city will pay him from the increment his project generates over a ten-year period that amount to about $90,000 a year). The value of that in present dollars would be $516,000. That is way the project has been put together from a financial standpoint, it is based on the normal process of evaluating tax increment projects, and it's a fairly tight project in terms of the developer and the city's assistance. Locke continuted that to acquire the seven units and remove it from the site could be an uncompensated $200,000 cost that was neither anticipated nor planned. The only way the numbers will work, if we want the seven-unit building out, would be for the city to find a way to provide additional assistance into the pro- ject. Jim Casserly, the City of New Brighton's fiscal consultant, used fairly conservative assumptions (mill rate, no inflation). Casserly did a less conservative analysis (assuming a higher mill rate, and about 2-1/2% of annual inflation on the value of the building two years after it is complete); based on those assump- tions, there is an increase in the amount of increment that could conceivably support up to an additional $200,000 assistance (would have to extend the number of years the increment is collected to 12 years in a 14-year district). Page 10