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I I I Council Meeting Minutes March 8, 1988 Motion by Gunderman, seconded by Brandt, to REFER THE EXTERIOR STORAGE STANDARDS STUDY FINDINGS TO THE PLANNING COMMISSION AND THE ECONOMIC DEVELOPMENT COMMISSION FOR REVIEW. 5 Ayes - 0 Nayes, Motion Carried Locke reviewed the staff report concerning proposed amendments to Brighton Park's Development Agreement and stated the key items at this point that need to be resolved are: (1) provide the City with lease and/or purchase commitments satisfactory to the City for 50,000 square feet of development; (2) provide the City with evi- dence satisfactory to the City of financing for the initial 50,000 square feet of development; (3) the City needs to be sure that any mortgage gives the City the right of reversion should there be a default on the development agreement; and (4) the City must have a letter of credit for $600,000 before acquisitions hegin. Jim Casserly, the city's fiscal consultant, reviewed what this project entails and its uniqueness which is one of the reasons why it's important that the City meet the conditions before acquiring property. Casserly discussed his one page memo with attachments and highlighted some unique things about the project (chart showed construction and year of completion for the phases which must be done between now and December 31, 1989); the city has never struc- tured a nineteen year bond term (considered for this project because of the difficulty of doing redevelopment); the completion factor was used in the analysis; and the city has not allowed its land to be mortgaged unless there was construction of a facility on the property. In summary, Casserly indicated this is an ambitious project and it is imperative that construction proceed as it has been contempla- ted and planned; if only 20,000 square feet were to take place this year, the new taxes that would be generated would only be $9,500 a year because in a tax increment district you have to re- place the base value and the Phase I cost to the City is $1,300,000. Casserly stated the conclusion is that the timetable is tough; development has to take place or it becomes extremely difficult, if not impossible, to meet the debt service on the bonds; believes the modification that has been discussed regarding the mortgaging can be worked out; and staff and consultants have been very con- cerned to make sure that the conditions of the development agree- ment are met. Locke stated the 20,000 square feet of development is well met by CMS, and the developer is working on securing actual leases on a second building (30,000 square feet) for lease office/warehouse building in part to meet the city's requirement and in part be- cause that is a condition for their financing approval. They then need to translate the preleasing structure into a financing com- mitment for the building; talked to Norwest Bank (letter of credit source) who indicated they have approved the letter of credit and as soon as we can provide the exact language that has to be put into the brief document, it will be delivered to the city by the Page 20 Exterior Storage Standards Study Findings Report 88-75 Brighton Park) Inc. Amendments to Development Agreement Report 88-76