Laserfiche WebLink
Motion by Member Cords, seconded by Member MacLennan, to approve the June 10, 2021, <br />minutes as presented. <br />A roll call vote was performed: <br />Member Howell aye <br />Member Riley aye <br />Chairperson Steffen aye <br />Member Cords aye <br />Member Johnson aye <br />Member MacLennan aye <br />Member Olson aye <br />Motion carried. <br />4. EDA BUSINESS <br />4.01: Review Site Concept, Project Analysis and Recommendation for Public Hearing for <br />TIF 18; Case of Oppidan <br /> <br />Economic Development Manager Sullivan presented the staff report. <br /> <br />Jason Aarsvold, Ehlers, stated that this project would have three buildings and provided an <br />overview of the underwriting process Ehlers completes to ensure the projections from the applicant <br />are accurately represented. He stated that these are industrial buildings intended for industrial <br />manufacturing uses and the expenses and projected rents were accurately represented. He stated <br />that without any assistance, the project was getting to about a 6.36 percent return on cost whereas <br />the typical market would have a 6.5 to seven percent return on cost. He noted that the developer <br />was attempting to get to a 6.75 percent return on cost but the increase in building materials had an <br />impact on costs. He stated that they can use a nine-year economic development district to help the <br />developer reach the return they are attempting to reach. He stated that the developer will pay all <br />costs upfront and will ask for a reimbursement of eligible project costs in the form of a TIF Pay- <br />Go Note. He explained that there is no risk for the City in using this method. <br /> <br />Chairperson Steffen referenced the original ask of $2,900,000 and asked if the reduction to <br />$1,172,000 was done before or after the Ehlers analysis. <br /> <br />Mr. Aarsvold stated that it was a bit of both. He stated that the original number may have come <br />from him, and the reduced number was a result of continued discussion and negotiation by city <br />staff. He stated that the City wants to ensure that the assistance does not overly enrich the project <br />but also wants to ensure it provides the increased return on cost that would be needed. He <br />confirmed that he has spoken with the developer on multiple occasions to ensure this is workable <br />for all parties. <br /> <br />Chairperson Steffen asked if the purchase agreement in place is contingent on the TIF. <br /> <br />Economic Development Authority/ July 8, 2021 <br />Page 2 of 12 <br /> <br />