Agenda - Council - 05/31/1983 - Laserfiche WebLink

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I I I I I I I I I I I I I I I I Motion carried. Voting Yes: Chairman Greenberg, Commissioners Menkveld, Guy, Miller, Muller, Fults, Schneider and Schmidt. Voting No: None. Absent: Commissioners Cox and Sentyrz. Case #3: Report On Utility Assessment Ordinance: Commissioner Menkveld stated that City Council held a special meeting on Monday, May 9, 1983 and one of the items on the agenda was to discuss the ordinance, specifically the requirements put on the developer with regard to financing. The subject was tabled until the May 31, 1983 Council Meeting in hopes that in the meantime Council might receive some insight and direction. Council did -not request EDC to provide direction but do feel EDC is obligated to provide input regarding this matter. Commissioner Menkveld stated that if Ramsey is going to have quality development, Ramsey will have to be competitive with surrounding communities. The utility ordinance in it's present form, is not competitive with any of the surrounding communities and there is no reason, other.lthan owning property in the area for a very long period of time, that a developer would want to develop in Ramsey when he could go to Blaine or Coon Rapids where it is more economically feasible to develop. Commissioner Menkveld stated that he is currently involved with a development in Blaine and all that was required was a cash deposit of 25% of engineer's estimate of the project. Commissioner Schmidt stated that a recent development in Anoka required no cash deposit or letter of credit, just a developer's agreement. Commissioner Schmidt further commented that the lending institution must reflect letters of credit as liabilities,'that liability is passed down to the developer and consequently reduces the developer line of credit'. _ Commissioner Miller noted that mortgaged land is also considered a liability and reduces line of credit for the developer. It really comes down to the question of how badly the City of Ramsey desires to develop. Mr. Berg stated that the City's concern is for interim financing and that City General Funds might have to be drawn from. After PIR funds are built up, it might be possible to lower requirements. Commissioner Menkveld stated that the City will not even start to develop with requirements that are 3 to 4'times that of surrounding communities. Comissioner Miller stated that 35% cash deposit or letter of credit is workable, but not first mortgage on land, that that would essentially come to 100%. Commissioner Menkveld commented that the Mayor of Ramsey has stated that he does not care if Ramsey develops or not, and in that case there is no need for a LDC or EDC. Commissioner Fults agreed and added that the Mayor also said that if a developer wants to develop in Ramsey, then the developer is obligated to all costs. Mr. Berg recommended that a representative of a lending institution attend the Council meeting scheduled for May 31, 1983 to provide Council a better understanding of the financial aspect. Commissioner Schmidt stated that a 25% cash deposit or letter of credit should be sufficient and with a letter of credit there is a third party involved reviewing project and'developer's financial ability. If the City wants absolutely no risk, then there won't be any development. EDC/May 11, 1983 pa~e 3 o~ 5