Minutes - Council - 12/16/2003 - Laserfiche WebLink

Home

Mot/on carried. Voting Yes: Mayor Gamee, and Couneilmembers Kurak, Elvig, Cook, Pearson, Strommcn, and Zimmerman. Voting No: None. Case #1 a: Request by Amcon to Defer City Costs City Administrator Norman explained that this development has gone through a development change. Previously they were working with Academic Investments and now the project has been turned over to Amcon. Mr. Robcrt Foster, representing Amcon, explained that Amcon's sole role initially was to build the building but it became necessary for Amcon to step in and replace Academic Investments. The reason Amcon is doing this is because time is of essence in order to get the school open in September. There were significant delays in the closing on the property by Academic Investments, which is why Amcon stepped in. Because the timeframe is so short they did not have the time to get a loan to buy the land and pay some of the upfront costs, which includes reimbursing Academic Investment for up front costs and land closing so Amcon is going to pay for the land tip fi'ont until the bonds are closed. In order to get it all accomplished in such a short amount of time, Amcon was requesting that the City defer the cost of the site improvements and SAC and WAC charges until the bonds closed. Because Amcon has been pushed into the role of being the developer to save the project and pay out of their pocket, 1.5 million dollars is a very difficult thing to do. He noted that it was anticipated that the bonds would close in six to eight weeks. City Administrator Norman noted that staff did have a meeting with representatives fi'om Amcon and this is not a request to waive or reduce any of the fees; it is simply a deferment until the bonds arc sold. Mayor Gamec inquired if there were any problems legally if the City were to defer the costs. City Attorney Goodrich replied that if in fact the Council would decide to defer the costs what guarantee will there be that the fees will be paid on time. Mr. [roster explained that they are going to start the project on Monday because they intended to closc on thc land tomon'ow. That date is essential to get started before Christmas to get the project completed. If they can't put the agreement together there is a real possibility the project goes away, at least Amcon's involvement. There is a very small chance that once they are this far that the bonds won't be issued. If that happens, Amcon will go out and put permanent financing in place. At the time of closing on the land they will be putting a signed lease in place so that if thc bonds are not issued, the PACT Charter School will lease the building from them. Amcon would be willing to include language that the fees paid to the City will be paid when the bonds close or when permanent financing is in place. City Attorney Goodrich replied that he would need to see that language in writing. He inquired if Amcon would be guaranteeing payment. City Council/December 16, 2003 Page 8 of 33