Agenda - Economic Development Authority - 01/12/2017

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The City IS NOT comfortable with Stone Brook's originally proposed location (Outlot B,Site#1). The city IS interested in helping with funding the financial gap on other sites via a formal business subsidy. Stone Brook is asking the City to address their questions/issues on other sites (mainly pricing). Likely,the gap in costs, from Site#1 to other sites (i.e. 42 and 44),would range from $335,000-$531,000. It should be noted, Stone Brook has made their opinion clear to staff,that even if they are able to get another site for like cost,they would still strongly prefer to be located on Site#1. They will only locate on another site if the City is telling them no to Site #1. With this mind, Stone Brook needs 0.9 - 1.0 acre of land. If Site 41 was purchased at$3 psf, it would cost $117,612 to $130,680. If Stone Brook paid 20%of arterial infrastructure costs (Polite, $284,880)it would cost them about$56,976. The combined costs of the Site #1 and a 20%portion of Yolite would be roughly $174.588 for Stone Brook,as proposed. The Mcdonald's site (Site 42) and the PSD site (Site 44) are the two other locations Stone Brook would consider. They range in cost from $522,720 to $705,672 (asking prices). Therefore, a gap of roughly $335,000 to $531,000 exists. Stone Brook is requesting, for the City to discount that gap, in order to make those sites "like costs." In summary,get prices on other sites down to $3-$4 psf Below are some options to consider,to fill the funding gap. (1) The City has the ability write down the cost of land(i.e. selling the land for less market rates). For example,the McDonald's sites could be sold at$3-4 psf rather than $12 psf. Staff believes this level of discount goes beyond a standard land price negotiation process, and will trigger the need to comply with the City's formal business subsidy policy. Staff is concerned this project would require an "exception"to our business subsidy policy due an insufficient number of jobs being created at a high enough wage level. Staff is also generally uncomfortable with the general level of subsidy that would be required in this scenario (doesn't compare well to past projects). (2) The City has the ability to subsidize the project via Tax Increment Financing (TIF)via TIF District 14. This project is anticipated to collect$315,000 of PV TIF over the next 20 years (or$500,000 FV). Although we do have the "ability" to cover the gap for this project via TIF, staff is also cognizant of the City's many other financial obligations for The COR--in which TIF District 14 would be an ideal funding source. This option would also trigger the need to comply with the City's formal business subsidy policy. ALTERNATIVE C TheCity IS NOT comfortable Stone Brook's originally proposed location (Outlot B,Site #1). The City IS NOT interested in helping out with the funding_financial gap on other sites via a_formal business subsidy. The City still remains interested in selling city owned land to Stone Brook Stone Brook may need to reconsider their approach/expectations for this project altogether(land accusation costs,potentially timing,location, city willingness to formally subsidize, etc.). If this alternative is selected, staff would recommend the EDA provide Stone Brook with as much feedback as possible, so they can understand and consider their options moving forward. Examples below: (1) The McDonald's sites are available (Site 42), and the City believes these sites are a good fit for this project,the City encourages Stone Brook to make an offer on these sites. The City would be happy to come to a non "formal business subsidy" negotiated price (i.e.the City still could agree on a price less than the asking price). Please see Site 42 log for details/comments from Stone Brook/Staff. (2) The Casey's parcel sites are available (Site 43),the City thinks these sites are a good fit for the project,the City encourages Stone Brook to make an offer on these sites. The City would be happy to come to a non "formal business subsidy" negotiated price (i.e.the City still could agree on a price less than the asking price). Staff would note,these sites result in many land use questions/concerns. Please see Site 43 log for details/comments from Stone Brook/Staff. Action: