Agenda - Council - 09/23/1997 - Laserfiche WebLink

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ADDITION TO CASE #10 DEVELOPMENT ISSUES By: Ryan Schroeder, City Administrator Background: As noted within the Council agenda, there are a number of development projects that staff has been working on that we believe should receive Council action this evening. While this is somewhat unorthodox, Council action will allow for the continuance of these projects as we go through some staffing changes over the next few months. The first three requests for action are using the same pro forma as we have for all of the industrial projects over the past three years. That is that tax increment realized as a result of the project first is dedicated to reimburse any City expenditures, then it is dedicated to other project costs as necessary in order to provide for the project. In instances where the City owns the land, our land and infrastructure costs are reimbursed with an 8 to 8.5% capitalization rate. In the AEC Park, the same occurs as a reimbursement to AEC. All projects are fully amortized within the life of the respective tax increment district. The first project is another by Sharp Construction. It is located in the AEC Energy Park at the intersection of Ramsey Boulevard and 143rd. It is a two-phase ~pec building similar to the building at c.R. #116 and Unity Street (but with taller ceilifig heights). Council will be considering the site plan in October. Enclosed is the development permit approval for the $1.6 million first phase which includes a reimbursement to AEC for the land and $28,500 in site improvements and the $1.1 million second phase with $12,500 in site improvements. All City costs are covered out of the TIF. Council approval allows for the developer to pursue financing. Northern Airgas is a company which has had a facility in Ramsey for quite some time (under prior ownership). They are proposing a $1.7 million expansion to the easternmost lot on McKinley Street. The project includes a $20,000 contribution to site improvements. Construction is expected to start fairly immediately with final site approval in October. All City costs are covered out of the TIF. We have been working on a Hotel proposal for about a year. Council may recall that the LAND Company has site plan approval on the southwest quadrant of Sunfish Lake Boulevard and Highway #10. As part of this development, they are proposing a hotel with a market value minimum of $3 million. Unlike the previous projects, the City does not have a prior investment in the land necessary to complete this project. We are proposing instead to dedicate available increment (after City costs are covered) to the project for site improvements. This is expected to result in a $25,000 annual reimbursement of increment each year for ten years upon receipt of the second tax payment each year. With 2.5 years of capitalization that has a present value of $136,000, or about 4.5% of total project costs, well within the realm of what our participation levels generally are. All City costs are covered out of the TIF. Council approval allows the developer to pursue project financing. All-Brite Graphics is located at 6320 Highway #10 in Ramsey. They have been attempting to expand to the west for quite some time but due to some survey/title problems in that area as well as their lack of ownership their efforts have not been successful. Council wiI1 recall that last year the adjacent intersection at Sunfish and Highway #10 began redevelopment. Redevelopment of