Minutes - Council - 12/21/1999 - Special

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. . . Councilmember Hendriksen questioned the reasoning for the water line being run to the front of the property line. Director of Public Works Kapler explained its for water suppression and maintenance reasons. Mr. Winkels noted that it is acceptable to have the fire hydrants located in the front of the property. Councilmember Anderson inquired as to the recommendation of the Planning Commission. Planning Consultant Scalzo replied that the Planning Commission recommended approval, but had some questions in regards to the exterior color. Mr. Winkels reviewed the exterior of the building. City Administrator Nonnan stated that the City Council first became aware of the proposed development project along Highway #10 at the former "Lighthouse Bar" site during an informal Council discussion at the close of their regular scheduled meeting of July 23, 1999. The proposed project is a 42,000 square foot multi-tenant retail/warehouse commercial facility, of which the major tenant will be B & B Carpet of downtown Anoka. The developer requested business subsidy assistance in the fOlm of Tax Increment Financing (TIF) due to the high costs for redevelopment of the site. The site currently contains the building that formerly was the Lighthouse Bar, and a vacated residential building also exists. Demolition of the two buildings will be costly due to the fact that the former Lighthouse Bar contains asbestos. The staff has determined that "be it not for the business subsidy agreement, this project would not be financially feasible," Providing business subsidy assistance to the project would allow the City to accomplish several things. on the site. The City would require a quality building with a landscape plan to set the tone for other new sites along the corridor. The City would require the developer to set aside forty feet of right-or-way in front of the building for a frontage road. And, the City would require the installation of City sewer and water to the site. The developer has indicated willingness to work with the City on all of the matters. In regards to the development agreement, staff has been negotiating with the developer and builder of the project in order to determine the amount of business subsidy agreement provided to Ramsey B & B LLC project. The County Assessor's Office has placed the estimated market value on the property at $1,910,900 and estimates the annual real estate tax payments for the property will amount to $78,313. The developer and staff believed that the estimate was based on some false assumptions, and the County Appraiser has revised the estimate to $2,620,000. Economic Development Consultant Mike Mulrooney has put together a tax increment financing project schedule and determined that the project will have an estimated annual cash flow of $43,378. The developer has requested assistance in the amount of $420,000 in a pay-as-you-go fashion, where the City pays the developer as the TIF revenues are paid. Staff has negotiated the project with the developer and has reached a tentative agreement with the developer to provide assistance in the amount of $372,043 in accumulative net present value for the project and that City Council/December 21, 1999 Page 7 of 15