Minutes - Economic Development Authority - 01/12/2023

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Economic Development Manager Sullivan asked for Ehlers to provide more information on the concept of minimum assessment agreement as part of the project. Mr. Aarsvold stated that within the TIF Agreement they can have another agreement called an Assessment Agreement that sets the minimum baseline value for the duration of the assistance payback. He noted that would ensure they would generate the revenue necessary for the TIF. Member Stewart referenced the extended inspection period and asked for details. Economic Development Manager Sullivan replied that there are 180 days in the standard purchase agreement which allows the applicant to conduct due diligence for the condition of the of the site and to start working through the site plan and platting processes. He stated that because they have moved to a new site, he felt it appropriate to provide additional inspection time. He noted that the applicant does not have to fully utilize that time if it is not needed. Member Howell stated that she is excited about the project but is nervous about the additional assistance needed from the City. She stated that her concern is not that it would unduly enrich the project but that the additional funds that it would require to reach the return on investment, and therefore she will deny the request. Chairperson MacLennan asked for additional details on the cost to the City Member Howell is speaking of. Member Howell stated that her issue is with the assistance requested to result in only a 7.7 percent return on investment with the assistance, which is a risk and not a very high rate of return. She commented that maybe it's just not the right time for a hotel. Member Riley commented that if they do not move forward that would mean nothing would happen. He stated that this is an appropriate use of TIF. He stated that overall, there is an increase of $367,000 in assistance. He stated that the new land is not shovel ready and would require $350,000 in fill, therefore it would seem the increase would be related to moving to the new site. Member Stewart commented that she likes this project. Chairperson MacLennan commented that he likes that this project is moving forward on an undeveloped site, which could be a catalyst for other development to come. Motion by Member Stewart, seconded by Member Wiyninger, to recommend to the City Council to approve the First Amendment to Purchase Agreement, Business Assistance and a TIF Agreement in the form of$434,511 in TIF Land Cost Write Down and $550,000 in Pay-Go TIF for Site Development/Improvements as presented, subject to City Attorney Review. Total TIF Business Assistance Package of $984,511 for Ramsey Properties LLC and to Draft a TIF Agreement. Economic Development Authority/January 12, 2023 Page 3 of 7