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RECOMMENDATION (8) Hybrid Approach The City of Ramsey installs a portion of arterial infrastructure (Phase 2&3 only)when sufficient market demand is present and does not purchase any property. Arterial infrastructure costs split (60%/40%city and developer). Staff believes this approach is a good balance between being pro-economic development and listening to the market. This approach keeps the City of Ramsey competitive in the real-estate marketplace while also avoiding major speculative upfront public investments. This approach has been reviewed by existing property owners, Bolton & Menk, ACG Consulting, Ehlers&Associates,and CBRE—and generally appears to be reasonable. PHASING OF ARTERIAL INFRASTRUCTURE— Based on the Bolton & Menk arterial infrastructure analysis, improvements to the larger developable area (350+acres) can be broken down into three logical phases. Bolton & Menk has indicated Phase 1 improvements don't need to be completed until the larger developable area is substantially built out. In other words, Phase 1 of the 92 acre business park can be developed today, with no improvements(Phase 1 business park land encompasses roughly 25 acres). Depending on actual market absorption rates,the timing of Phase 1 infrastructure improvements will be variable. Staff forecasts Phase 1 will not be implemented for 5-20 years (likely 10+years). As a result, Staff would recommend the City only complete Phase 2& Phase 3 arterial infrastructure improvements. Furthermore, Staff would recommend waiting to complete Phase 2&3 arterial improvements until one or both of the two items occur: (1)the Phase 1 area of the business park is absorbed by the market, or(2)a large/ significant development project is secured in the Phase 2 or 3 areas outlined in the Bolton & Menk arterial infrastructure analysis. Staff forecasts Phase 2&3 will be implemented in 3-10 years. 60/40 SPLIT FOR ARTERIAL INFRASTRUCTURE—after reviewing two major public infrastructure projects within The COR (2004 and 2005), and the Legacy Christian Academy development project(2013), it appears the City of Ramsey established a pattern of a cost share arrangements of roughly 60%city and 40%developer. The city's 60%share has come from a wide array of funding sources (bonds,TIF funds, PIR fund,various grants, MSA Fund, etc.). These roadways generally included Bunker Lake Boulevard, Sunwood Dive,and Rhinestone Street. Bunker Lake Boulevard and Puma Street,which serve the new proposed business park, are considered "arterial infrastructure" by staff. This roadway is a designated Municipal State Aid (MSA) route. Infrastructure within this roadway includes "trunk"water/sewer lines;which are identified in the City's adopted Comprehensive Water/Sewer Plans. Trunk lines are meant to serve the entire City. In summary,the arterial infrastructure that is proposed for Bunker/Puma will serve more than just the immediately adjacent parcels. As a result,Staff believes it is reasonable to consider cost-share between existing property owners and the city for said arterial infrastructure. It is very likely, prospect developers will take the same position. CITY FUNDING OPTIONS— the cost for arterial public infrastructure in the larger developable area is as follows: Phase 1$1.790M, Phase 2$1.633M, and Phase 3$1.991M ($5.414M total). The cost of Phase 2& Phase 3 arterial infrastructure costs only is$3.62M. Breaking number down in to a 60/40 split renders $2.17M/$1.45M. Based on this recommendation,the City of Ramsey would be responsible for the$2.17M. Of the$2.17M, about$1.1M is allocated to business park parcels (the remaining is allocated to residential and retail). Staff would recommend the EDA cover the city's share of expenses allocated to business park parcels-- $1.1M. After deducting the EDA share,the City is left with about$1.08M to address. Do to the uncertainty of Page 10 of 12