Agenda - Economic Development Authority - 12/14/2017

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This case was reviewed last by the City Council in February of 2017. At that time, staff was asked to continue working with RRH on this project. Since February 2017, this project has been put on hold--RRH wanted to wait for the City's new Trunk Sewer Plan to be adopted (which now includes a trunk sewer line running up to the 167th/ Hwy 47 node). In November of 2017, the Trunk Sewer Plan was updated and adopted. Hence, the RRH project is now back before the City. **Attached is a process outline Notification: Observations/Alternatives: Attached to this case are questions, with answers from Rum River Hills, asked by staff/ policy makers/ the public regarding this project over the years. Funding Source: Recommendation: Assuming the EDA/ Council still have interest in further pursing this project, staff would make the following recommendations, from an EDA perspective. (1) Proof of Real Market Interest. Staff would suggest RRH bring a developer to the table based on the currently proposed deal. Staff want's to know if this proposal is "real" and that a developer and/or equity investor is legitimately interested. Staff is concerned, even if the City was able to provide assistance as requested, the project still won't move forward. Staff wants to avoid wasting the City's time and resources. Staff would recommend RRH provide a cover letter from the proposed developer/ financing agency involved --indicating they have genuine interest/ ability to work on this project. Staff would connect with said developer/ financing agency to verify. (2) Ensure Viability of RRH The City may also want to consider requiring Rum River Hills to open their financials for review. Although Rum River Hills won't be the primary developer on this project, Rum River Hills will be directly involved, and will have a major stake in the success of the project. Staff would suggest this review be done confidentially, by a third party. (3) Big Picture Benefit for Community Staff would also note, we are concerned about equitable treatment to the City's two different golf courses. If we move forward with this project, the City assistance proposed should have clear community benefits (i..e. safe pedestrian connections across 47 via a second pedestrian underpass, new road entrance to Elmcrest Park, revitalization of the 167/47 Node, and beyond, etc.). If the Council in not comfortable with how this project shows up from an equity perspective, it would be helpful to hear that now. (4) Cost -Benefit Analysis for the City The payback period for this project is unclear at this point. If sewer is not considered City assistance, the payback may be reasonable. If the Council wanted to further investigate this project, staff would suggest providing direction to further refine the City's proposed payback (i.e. cost -benefit). Staff would recommend working with Ehler's to put this together. (5) Identify/ Confirm City Funding Ability As proposed by RRH, the City would need to come up with funding for various assistance requests ($1,230,000 at this point). Because the City has already committed our traditional economic development funding sources for the foreseeable future (ACHRA and EDA Fund), we will have to look elsewhere for funding this project. This may or may not be a problem. Staff would suggest this item be further investigated as well. (6) Performance Requirements These assistance requests are being made by RRH based on how this project will help the 167/47 Node. Staff feels it's appropriate to make performance requirements a part of this project. Meaning, the developer must deliver XYZ by ABC date in order to receive City assistance. If the developer doesn't perform, what penalties/