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I I I Council Meeting Minutes October 14, 1986 Public Hearings, continued With regard to the transition of zoning, Benke recalled when the city was going through the Comprehensive Plan process, we tried to do, where possible, buffering. For this area, it was felt that single family homes would have a number of driveways on Silver Lake Road which would not be desirable; another alternative was multiple family housing but the feeling was there would be more activities at all hours. Following a lot of discussion, it was determined the area should be zoned for an office building which would require midday traffic and virtually none on weekend when neighbors would be in their yards. Satre stated the residents did not get into a discussion about the change that was made at that time. In response to Mark Jeppson's, 1901 - 26th Avenue N.W., questions, Benke summarized the several actions that need to be taken (subdividing the lot, approving the Development Agreement, adoption of a rezoning ordinance). With regard to the Development Agreement, Benke stated the key elements are how much assistance the applicant wishes, what the terms of recovery of those funds are, and what security arrange- ments are provided so the city does not expend its money until the project is in hand is guaranteed it will get its money back. Benke further stated the details have been agreed to, but the final form of the document is not ready for approval but it will be available for consideration at the next meeting. M. Jeppson felt verbal agreements had not been fulfilled in the past. In response to M. Jeppson's question, Benke stated the Agreement with the developer is based on an economic development district which is based on an eight-year payback. With regard to M. Jeppson's question regarding bonds, Locke stated, because of the nature of the way the Development Agree- ment has been structured, the need to meet the maximum security for the city is not required until the project is complete (April I, 1987); in terms of a bonding decision, Locke stated the city does not have to make it now and noted the types of bonds that are sold for Tax Increment projects are general obligations bonds secured by the tax increments generated by the projects. M. Jeppson expressed concern about using general obligation bonds because, should forfeiture occur by the developer, the general taxpayer is obligated; Benke stated the tax incrementing is done generally with those kinds of bonds, which is precisely why one strategy is to defer any investment until after a project is in place; Benke continued that the Development Agreement itself will commit the developer to the cash flow needed to payoff those bonds so, before we give them any money, the building will be in place and the cash flow will be agreed to and will be secured by the Development Agreement, which is why the city takes a conserv- ative approach to all tax increment districts. Page Six