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I I I Council Meeting Minutes October 28, 1986 Council Business, continued direct payment by the developer as originally envisioned. This has been made possible basically because the increments generated from this project, with refinements of interest rates and every- thing else, is somewhat more than what had originally been pro- jected. Locke further stated the Agreement requires the developer to commit to the construction of a three-story, 42,000-plus square foot, first-class office building with a minimum value of $2,756,100; the construction would commence in November 1986 and be complete in Spring of 1987 (January 1, 1988 for tax purposes). Locke continued that the city's commitment is assistance in the amount of $470,000 which would not be provided before completion of the project and is based on the tax increment generated from this project over an eight-year period. The city's assistance makes possible a sub- stantially larger and higher quality building than would otherwise be possible, larger setbacks from residential property, increased landscaping, and a larger site because of the property acquired from Atonement Lutheran Church. The taxes gen- erated by this project are approximately double what would other- wise be generated and, over a period of years, will net a total benefit to the community-at-large. The contract has been designed in such a way, Locke informed the council, as to maximize security of the city: the timing at which we provide assistance, which is not until the project is complete; the developer is guaranteeing the minimum increments per year; and has provided the city with a $50,000 Letter of Credit should their be a shortfall in the increments generated. The developer agreed in setting this up as a redevelopment district which allows the city the flexibility to extend the length of the dis- trict beyond the eight increment years, should the city need it and, in addition, provides potential for the city to collect additional increment dollars for general community revelopment purposes. Should council have any questions, Locke indicated both O'Meara and Casserly were available to answer any questions; neither consultant had any questions or comments. Schmidt asked, given the fact that the city's assistance is not to be provided until actual construction is complete, for a worst case scenario if the developer defaulted on payment of taxes. Page Five