Minutes - Council - 08/23/2022 - Laserfiche WebLink

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Councilmember Specht aye Councilmember Riley aye Councilmember Howell nay Councilmember Woestehoff aye Councilmember Heineman aye Mayor Kuzma aye Motion carried. 7.03: Adopt Resolution #22-185 Approving Purchase Agreement and Sale of Outlot A, Gigi Addition; Case of Schiebout Family Limited Partnership Economic Development Manager Sullivan reviewed the staff report and the EDA recommendation to move forward with the purchase agreement. He added some of the notable terms and contingencies of the purchase agreement include 180 day inspection period, right of reentry agreement requirement, land cost write down of $311,454, third party TIF analysis supporting the need for assistance and a C/o that is obtained 16 months after closing. He explained the land cost write down and stated that the developer will be asking for tax increment financing which is essentially up front financing for the project. He noted that the land value is $311,454 and the City will provide the land at no cost to the developer and once the project is built the TIF revenue generated by the project will come back to pay the City back for the land cost. He added that the next step in the process would be a formal submittal of the business assistance subsidy application by the developer. He stated that the developer is waiting to see if the Council is ready to move forward to a purchase agreement before taking the next step. With this, he said that there will be project costs, valuations, and job creation, then Staff will analyze these numbers as well as third party analysis, which will look through all of the provided information and make sure that it meets the but-for test which needs to be met before TIF can provide for the project. He stated that TIF calculations will follow this to see how quickly the funds will be paid back. Lastly, there will be a rate of return investment for the developer to insure that public dollars are being used properly. Once all of this is complete it will move forward to a public hearing and a TIF agreement that will outline the job creation goals, valuations, and site plan approvals. He added that the applicant was present for questions. Councilmember Woestehoff asked about the previous case that Economic Development Manager Sullivan had mentioned from 202 concerning a hotel that had a design that included a restaurant and asked if that was part of this particular plan as well. Economic Development Manager Sullivan said no and the discussion was had at EDA that as much as a restaurant would be great in this location the numbers are not showing well to do that now. Councilmember Musgrove asked about the amounts of the earnest money and if it was a standard or if there was flexibility. Economic Development Manager Sullivan explained this is a unique case because of the upfront financing, so for this case he took $5,000 to get a placeholder then within the letter of intent if it is moved to a purchase agreement that $5,000 would go to help pay for the TIF analysis and City Council / August 23, 2022 Page 9 of 16