Minutes - Council Work Session - 11/27/2012

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success and administrative overhead required to implement these two programs before considering a Minor Transfer Program. He indicated the EDA also supported staff's recommendation. Mayor Ramsey stated this makes sense except for when a tenant moves out and it is re- leased because then an additional SAC /WAC would have to be paid, placing a burden on the property owner to have up front cash. Councilmember Elvig agreed, noting the City can then get off the RALF program. Development Services Manager Gladhill indicated staff had submitted an official comment about the RALF program that it does not allow a look back after 2013. He stated another community had submitted a similar comment that it had taken properties for public purposes and there is still reduced demand that will not come back. Development Services Manager Gladhill stated staff has not yet heard if that comment had been considered but the unofficial comment to staff was that whether the property was brought down last year or next year, it has taken down the property. The concern is how far back cities will be allowed to look. Councilmember Elvig agreed that most times when looking at leased space (i.e., Subway) it is the landlord who covers the majority of the up front costs and this option would "steal" some of that equity from the owner. He noted if giving an EDA loan, the City does extensive background and financial checks but this seems to be a quick "rubber stamp loan" that the City would be responsible to collect. He asked who would be responsible for the payment should the tenant skip. Development Services Manager Gladhill suggested a better title would be "deferred payment" instead of "loan." He explained if the tenant paid for four SAC and then a new user needs six SAC, the new user would be responsible for the additional two, not the City. The City could stop paying on those two SAC units and the new user would pay them. He clarified with the Small Business Program it is only deferring payments, not providing a loan. Councilmember Strommen noted it is not being paid by the City, it is a "pay as you go." Councilmember Backous asked whether a deferred payment mechanism can work in this scenario. Development Services Manager Gladhill stated there is a minor transfer aspect with it and could be a combination but the main concern is that sometimes the landlord pays the SAC and sometimes the tenant pays the SAC. Councilmember McGlone asked if Ramsey enters into a deal with the Metropolitan Council to afford a restaurant ten SACs on a deferred payment of ten years, is Ramsey then bound should the business (i.e., restaurant) go out of business in three years. City Council Work Session / November 27, 2012 Page 4 of 8