1986-10-28 - Laserfiche WebLink

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~. .. ;',' .' I: /. "1i' II ,i 'Ii * 1 ~ ~ I :- '" ~ ~ * .~ ~ ~ ,~r ~ i " " t :'j Z .. .. ,: ,. '" . - ! j f ~ ~ - " ~ I .. i S ~. .~ 'Jf :r ,. ; ~'~ ;~ II! i~~ ~; ~;::; ~~: ~.,:, ~: f:, r~, ~. i;" ;, w,,' ., '" ~/ ~~ f {~' ,I ~" " ~ } j Council Meeting Minutes October 28, 1986 Council Business, continued O'Meara stated there is no guarantee that the developer will pay the taxes; if the city should receive a lesser amount, the developer will make up the difference and the $50,000 Letter of Credit is there to secure that obligation; however, the Letter of Credit may not cover the entire amount, but the developer is signing an Assessment Agreement which should generate that kind of increment. If the developer fails to pay the taxes at that level, they will run into difficulty with the county and face forfeiture. O'Meara stated further that the major risk is that the city will not have enough security should the developer not make up the shortfall. Schmidt expressed concern for real estate in general, particular- ly office space; O'Meara stated the developer is looking at a fairly sizable investment in the building and, if that happens in this case, the city is about as secure as it can get (redevel- opment). However, if the bottom falls completely out of the rental offices market in this city and the developer walks away from it, the city would have no revenue whatsoever. Schmidt stated he raised some of the questions because this is the first redevelopment project the new council has seen. In response to Benke's request, O'Meara explained that economic development was the level of assistance that the city had tra- ditionally put into this type of a project. To. this date, the city has not created a redevelopment district. What it has done in other instances is to limit the number of years. Because this development was approached on a comprehensive basis creating all tax increment districts for city-wide perspective, there is nothing unusual about this particular project. What the Agreement provides is the maximum opportunity for the city to use the resources; the developer needs a level of subsidy and the city needs the flexibility and the opportunity to assist with harder core redevelopment projects. O'Meara further explained that as the city is able to take pro- jects like this and integrate them with the very very difficult hard-core redevelopment projects, it obtains some advantage of including this district in the city's total planning and total project areas. The discussion of an economic development dis- trict is purely for discussion with the developer; how the city handles its finances and the kind of district the city creates is purely its business and this is a very prudent action by the city. Benke stated he had raised the point because as a practical matter what we are proposing to do is logical and permitted by law and it is not unusual action for a redevelopment assistance type of package. Page Six