Agenda - Economic Development Authority - 05/11/2023

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1. Imposition of Restrictions; Term. The Restricted Property may not be used for hotel, lodging or similar uses, and no multi -family apartment uses for rent terms of less than six months are permitted on the Restricted Property (the `Restrictions"). The Restrictions shall be in effect for a period of ten (10) years from the date the Restricted Property is conveyed by the City to a third party for development (the "Term"). Staff is asking the EDA for comments and a recommendation on the willingness to enter into temporary use restrictions for Outlot A, Ramsey Properties Addition. There is still some work to be done in terms of the Agreement or to memorialize as a deed restriction, but the request is straight -forward and the EDA should provide a recommendation to the City Council. It should be noted that the City Attorney has not been able to review the draft Agreement at the time of this memo but could possible have some feedback by the date of the EDA meeting. Use Restrictions are not uncommon in commercial developments and the city has also agreed to some in the purchase agreement with Aldi. Notification: Notification is not required. Observations/Alternatives: General Project Description • 98 unit, Four Story Hilton Home 2 Hotel with hot breakfast and indoor pool; a Certificate of Occupancy 16 months after Closing. If this is not done, the City may exercise the Right of Re -Entry. • Tax Assessed Value 7.14M • Estimated Taxes - $218,000 annually • 11 new jobs created with a starting minimum wage of $14.75 22 new jobs to be create' p;rj_rg at least $18.22 / hr (more anticipated to be created but only willing to commit to 11) • $14.75 minimum wage is lower than our Business Subsidy Policy ($18.22/hr) but is allowed as long as it is communicated to DEED. • Average hourly wage for Jobs Created: $22.97 $18.22 • Catalyst project (provides more trips to COR and encourages investment in restaurants/retail) General Terms of First Amendment to Purchase Agreement (and Business Assistance Package) • Parcel: Part of Outlot A, COR TWO to be platted as Lot 1, Block 1, Ramsey Properties Addition +/- 2.813 acres) • Purchase Price and Valuation: The purchase price for the Property is $1.00 on 4/ 2.85 acres (121,116 square feet) 2.813 acres (122,543 SF) as outlined in Preliminary Plat Document (the "Purchase Price"). The property valuation is $434,511 . ($3.50/SF)($3,55/SF) • $550,000 in Pay -Go TIF Note for Site Development / Improvements • Inspection Period: Inspection Period ends May 26, 2023 • Right of Re -Entry Required • Reimbursement of Platting costs up to $3,500 if project proceeds. Business Assistance Application Review Review and analysis of the Business Assistance Package has been completed by City Staff and Ehler's. The project scores a 28.65 (one point lower due to job commitment) which is still a moderate to high score for our project rating system. Analysis by Ehlers supports the need for assistance for this project, its supports the TIF "But -For" test and does not unduly enrich the developer. Staff believes that this Hotel project is a potential catalyst to draw in investment from restaurants and other retailers, It is clear that TIF is needed to bring this project to fruition. The City only has the ability to provide TIF assistance for projects in the COR until November 2023. TIF Agreement and Subsequent Public Hearing