10/19/10 Special Meeting - Laserfiche WebLink

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Development Manager Lazan commented that we exercised retail on the ground floor, they went forward doing that at our direction and since then secured one LOI there is opportunity to discuss more retail to our applicant. Commissioner Jeffrey asked does this change the financial picture of what our participation might be and what the returns might be if we are talking rental housing versus rental retail. Development Manager Lazan answered yes, we created a problem and we solved the problem before we got our deal done but if we create a new problem we may not solve it the same way. Chairperson Dehen asked once the construction starts is additional retail out other than the corner. Development Manager Lazan responded once the final construction is complete the only retail we can put in is three thousand feet. Motion by Commissioner Ramsey to close the meeting at 7:03 p.m. seconded by Commissioner Look. Motion carried. Voting Yes: Chairperson Dehen, Commissioners Elvig, Jeffrey, Look, McGlone, Ramsey and Wise. Voting No: None. This portion closed at 7:03 p.m. Meeting re- opened at 8:05 p.m. Development Manager Lazan explained three provisions in the deal classified as subsidies are: the capital /equity contribution/construction loan, the 2 million tax increment financing (TIF), the payment and seller of development fees roughly 1.77 million dollars. For clarification there are two components of the T.I.F. one is the new special legislative T.I.F which we are proposing to provide $2 million dollars and the second is pooled tax increment funding. Stacie Kvilvang, public finance consultant with Ehlers and Associates, explained the two financing sources. Their summary analyzes the financing for this project what they considered a public subsidy, what the risk factors are and what is being proposed to mitigate risk factors. The contribution to the developer of 1.3 million dollars is coming from the city's pooled TIF districts, coming under the legislative authority provided in the last legislative session. That funding will be reimbursement for costs other than what is considered qualifying TIF costs. Those dollars will not be paid to the developer until they show they have made those expenses, then the City will reimburse them. The second one is the development fees of the 1 8 million dollars is to reimburse the City and Met Council and others for various development fees and is paid up front by the City at the time of plat. The reason why they are using the existing TIF balances, roughly $3 million dollars, those funds have the most flexibility to reimburse for those items because state law provides that authority to the city. Commissioner Look asked of the 1.77 million how much of that is Met Council. Housing and Redevelopment Authority / October 19, 2010 Page 3 of 6