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<br />Council Meeting Minutes <br />October 28, 1986 <br /> <br />I <br /> <br />Council Business, continued <br /> <br />Casserly explained the amount has nothing to do with the rating <br />on the bonds but rather it affects the level of comfort for the <br />city and also noted there is no perfect formula and there is <br />nothing magical about the amount. The concern with this project <br />was there could be a deficiency if the taxes came in at $90,000 <br />rather than $118,000; but added the developer is personally <br />guaranteeing so the city has a strong level in collecting the <br />taxes. <br /> <br />Benke stated if we required a $100,000 Letter of Credit, it would <br />be a direct cost to the applicant which has not been factored <br />into negotiations. If the city requires a larger Letter of <br />Credit, we would be back to the bargaining table. <br /> <br />I <br /> <br />Gunderman asked for confirmation that one guarantee is the <br />structure of the building, setbacks, air-conditioning, garbage, <br />etc. as discussed with no changes or modifications; Locke <br />indicated the city has a double-control because, even though the <br />Development Agreement does not necessarily spell out all of those <br />items, a lot of those specific site-related items are included in <br />subsequent agenda items for this meeting. <br /> <br />Gunderman questioned a penalty clause; Locke stated that until <br />the developer receives a Certificate of Completion for the <br />project, they do not receive the $470,000 assistance from the <br />city; the city could also deal with those issues as they <br />would with anyone violating the zoning codes (tagging process, <br />citing violations, etc.). <br /> <br />As a follow-up to Gunderman's point, Schmidt stated if the city <br />were working with an unexperienced developer without a lot of net <br />worth, it might require a larger Letter of Credit and there would <br />be a varying cost factor that the developer would have to pay. <br />With a developer with considerable experience and net worth along <br />with a personal guarantee, we have that as additional security. <br /> <br />O'Meara stated he regards this as a relatively secure Development <br />Agreement, but added he doesn't believe there is anything without <br />risk. <br /> <br />Schmidt stated, for constructive purposes, having staff design a <br />tracking system (subsidies requested, subsidies negotiated, as <br />well as security being provided) would benefit the new council <br />and the new staff in current and future development projects. <br /> <br />, <br /> <br /> <br /> <br />-...........1 <br />t, <br />, <br /> <br />Before proceeding with the next agenda items, Benke asked if there <br />was a possibility the city would end up with a large rezoned <br />parcel and no project; Locke stated there are no guarantees until <br />the project is actually under construction, and that is a bit of <br />a risk that has to be taken. <br /> <br />Page Eight <br />