Agenda - Council - 07/09/2019 - Laserfiche WebLink

Home

Community Development Director Gladhill explained that there were two projects for Bunker Lake Boulevard and Puma Street, which were assessed to the property and were deferred. He noted that those assessments will now be collected with the purchase of the 43 acres. Jason Aarsvold, Ehlers, provided additional details on the "but for" test. He explained that the business originally requested $1,500,000 to make this site feasible. He stated that the task was then to determine what would be warranted for this request. He noted that the TIF has a nine- year period and therefore $972,000 would be generated during that time. He explained that they spoke with the applicant and the applicant determined that would still be sufficient to make this site feasible. He explained that they also looked at this from another perspective of a developer purchasing and developing this site and then leasing it to the business and found an 8.42 percent cash on cost return. He noted that typically developers would like to see between seven and nine percent cash on cost return and therefore the 8.42 percent is within that range. Economic Development Manager Sullivan explained that the TIF district would actually generate $1,200,000 over the nine-year period but ten percent would be used to cover administrative costs that the City may incur during that period. Councilmember Kuzma stated that the EDA reviewed this request and recommended approval. Councilmember Musgrove asked for additional input on why a business would come to the City for funding rather than a bank or another investor. She asked for additional input on TIF as well. Economic Development Manager Sullivan provided additional details on the TIF Agreement, noting that the City will be acting as a go between. He explained that the money collected from the TIF district is actually the property taxes paid by the business and would go back to the City to go back to the business. Councilmember Kuzma noted that this is also a tool that the City can use to be competitive with other communities and help attract new businesses to the community. 2.02: 2020 Budget Direction City Administrator Ulrich reviewed the staff report. Councilmember Riley referenced the priorities and asked if those were items identified as being medium or high budgetary items. City Administrator Ulrich noted that these were items from the Strategic Plan as well as a broader list of overall priorities. Community Development Director Gladhill confirmed that those were medium to high cost items, with an attempt to focus on the higher cost items in the Strategic Plan. Mayor LeTourneau stated that he agrees that the items shown on the list happen to be items that were high cost but noted that some of those leading items were high visibility or high need items. City Council Work Session / June 25, 2019 Page 2 of 7