09/13/05 - Laserfiche WebLink

Home

Commissioner Gamec noted the need for a quick exit from the lease if plans for the highway begin to proceed. Motion by Commissioner Cook, seconded by Commissioner Elvig, to adopt Resolution #HRA- 05-09-004 initiating process for the adoption of the redevelopment plan. Further discussion: Commissioner Elvig questioned what the bonding process will be. Finance Officer Lund replied it will be the same process as with the EDA authorizing the redevelopment plan for the Municipal Center. The HRA can authorize every step, and the issuing of the bonds is the final step that commits the HRA. Chairperson Strommen requested the HRA receive the additional information that has been requested prior to the public hearing. Commissioner Elvig stated he would like to echo Commissioner Cook's earlier comments, and if RTC has equity in this building using it as sureties may be a good stopgap measure. Commissioner Gamec questioned why the City would become involved by purchasing these buildings, rather than RTC, LLC leasing out the buildings on their own for cash flow. City Administrator Norman replied RTC, LLC needs the front end cash in a lump sum, rather than annual revenues. Commissioner Elvig noted RTC, LLC previously came to the City looking for the 25% of the 125% performance bonding required by the City. He questioned ifRTC, LLC does not have the 100% of the bonding they previously indicated they were in possession of. City Administrator Norman replied that issue is completely separate and has nothing to do with this request. Chairperson Strommen directed staff to keep this process moving, and to provide the HRA with the requested information. Motion carried. Voting Yes: Chairperson Strommen, Commissioners Cook, Elvig, Gamec, Jeffrey, Olson, and Pearson. Voting No: None. City Administrator Norman explained the funding needed by RTC, LLC is due to their contract with Rehbein as the master excavator, which requires $3 million dollars at the end of the fiscal year on September 30, 2005. He reviewed his memo to Community National Bank in which he suggested that he would propose a process to allow for the payment for the Rehbein contract prior to September 30th if the restrictive covenant is removed from Ramsey Town Center by Community National Bank. He also reviewed the memo he received from Community National Bank which states they will release the covenant upon the successful sale and closing of its two acre parcel at $12.50 per square foot. He advised this is not the issue before the HRA tonight. Staff will proceed with dual tracks of RALF funding and the bonding process. Commissioner Elvig questioned why the City would provide a bridge loan to a bank, which is the essence of proceeding with the RALF funding. Commissioner Gamec expressed frustration in the City providing financial assistance to RTC, LLC. Commissioner Elvig suggested the City look at this as a banker, and noted the bank always dictates where funds will go and how they are utilized. He would like to stipulate that the funds do not go to Community National Bank, and that they go to RTC, LLC and Rehbein. He would want an agreement that RTC, LLC uses any extra money towards getting Town Center projects going. Chairperson Strommen inquired about the possibility of the City fronting these monies and not having the funds to pay the bond if the RALF funds are not approved for the NAU building. She stated there are a lot of questions and the first paragraph in the memo from the bank is troubling. City Administrator Norman Housing and Redevelopment Authority / September 13, 2005 Page 4 of6