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HRA Executive Director Nelson stated that the appraisal, which was ordered by the bank, came <br />back very positive and that helps to support the financing position. She informed the HRA that <br />staff would be back in front of them next Tuesday night to discuss the construction financing <br />piece. She added she understands about the financial liability. She talked about paying the debt <br />service with TIF generated from the District and noted that staff will provide that information <br />next Tuesday as well. <br />Marketing Manager Lazan stated there has been a lot of discussion in and out of this room about <br />this project. We take this very seriously — this is a big risk. He stated he respects the concerns <br />on this. We feel there are benefits to doing this project. There is a sufficient amount of upside <br />but he respects the risks we are bringing forward. <br />Commissioner Elvig cautioned staff to be careful on how this is messaged to the community and <br />asked about the equity piece. <br />Mr. Lazan stated that the biggest thing is the equity on the loan payments. It looks like we fund <br />an additional $4 million. There is value in the product. That adds $2 million in debt coverage <br />for the loan. The conceptual agreement we have to date is that F & C would bring another $2 <br />million within 12 months and another million in six more months. He stated we can demonstrate <br />the TIF District is the backstop — it will not get to the residents. <br />Commissioner Tossey stated we are not the only City that has been giving Special TIF Districts <br />and referred to Lino Lakes and talked about how they defaulted. He stated he cannot support <br />this. He cannot risk what's happening all over the State. He felt Ramsey should not make the <br />same mistake the other cities are making. That money /financing should not be tied up. <br />Chairperson Ramsey stated that if the project fails, we may have that service debt for a couple of <br />years. We may have to pay a few hundred thousand but someone will come and take us out of <br />that. <br />Commissioner McGlone commented that HRA's do loan money. <br />Commissioner Tossey talked about getting the taxpayers out of that. The HRA is the City of <br />Ramsey and ultimately it could be backstopped by taxes of our residents. With TIF — that's tying <br />up our money. <br />Mr. Lazan stated we are not ready right now but we will be ready next week and will come with <br />a plan to manage that debt. Our projects setup today are set up way different than they were in <br />different economic times. We set this project up to succeed. <br />Commissioner Elvig suggested looking at what Commissioner Tossey is talking about in the <br />paper (Lino Lakes) and probe into it so we can know what we have done differently and to point <br />out similarities as well. <br />Mr. Lazan agreed to do that — a bullet point for each. <br />HRA Work Session - June 7, 2011 <br />Page 5 of 7 <br />