Agenda - Economic Development Authority - 04/13/2017

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.The EDA wanted information to be provided RE the bonding option. How would it effect the city(i.e. what are our debt payments). How much would we recoup in assessments? Staff worked with Ehlers to provide a preliminary answer to these questions. That information is included in the "Alternatives" attachment in this case--slide 48. .The EDA asked how this proposed project would effect the City's business park--from a land price perspective. In other words, if Hageman Holdings takes on additional assessments, as proposed, are they now priced-out of the market--and our business park is now not competitively priced? That question was generally addressed in the attached QA Log--page 5. .The EDA took the general position--that minimizing the City's investment in this project is ideal. Option B (as outlined in the attached alternatives) is ideal for the City. However,the EDA understood more discussion is needed, and that input from Capstone is needed. .The original MOU proposal included a provision for Capstone to not begin repaying assessments for five years. The EDA requested that Capstone's assessments begin repayment immediately. Capstone has agreed to that request. .The original MOU proposal included a provision to allow Hageman Holdings to NOT accrue interest over time. The EDA requested that the Hageman Holdings assessment does accrue interest over time, and follow industry standards. Staff has updated the attached MOU accordingly. CAPSTONE Capstone Homes was in attendance of the EDA meeting on 03/09. They did submit the attached responses to EDA questions. It should also be noted, Capstone (and Pearson Farms) desire to receive formal direction from the Council on the attached MOU in April. Several of their agreements,processes, and next steps are contingent upon said direction. COUNCIL The Council reviewed this case on 03/28. Attached are draft Council minutes. Below is a summary of preliminary Council feedback: .The Council is generally supportive of the attached MOU, and the corresponding projects. .The Council is generally open to considering the option of using EDA dollars for funding this project. The Council does not want to bond for this project. .The Council requested the payback of Capstone assessments be clarified in the MOU,to make it clear they will be on a five-year assessment,with payments starting in year one. If homes are sold before the five-year term, assessments will be due immediately. Staff did make this requested update. Action: Motion to recommend the City Council: Adopt the attachment MOU between the City of Ramsey, Capstone Homes, and Hageman Holdings; subject to final review and amendments by the City Attorney. Attachments MOU Background Alternatives City QA Log Capstone QA Log EDA Minutes Council Minutes Study