Minutes - Council Work Session - 03/10/2026

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2026, the group established a potential $2.5 million funding package that included up to $300,000 in fee waivers, if needed. After reviewing the financing in more detail, he said the current funding gap under the proposed structure is approximately $1.34 million. Economic Development Manager Sullivan explained that ARAA is leading the financing process with the bank and has already received approval from the bank’s loan committee. However, final approval from the bank’s board has not yet occurred. He noted that the bank is scheduled to meet the following morning to determine whether the financing can be finalized. Economic Development Manager Sullivan stated that the City’s contribution would likely be structured as a Housing and Redevelopment Authority (HRA) loan. To use these funds, the City would need to establish a development and redevelopment project area. Creating this project area would require adopting a redevelopment plan and incurring administrative costs estimated at $20,000 to $30,000. He explained that these costs could be paid from the HRA fund, allowing the City to reuse the funds in the future once loan payments are repaid. Economic Development Manager Sullivan explained that Ramsey HRA funds would be used for the loan. The City would need to file a resolution with the County specifying how the funds will be used. Once approved, the County would transfer the funds to the City, which would then issue the loan. Economic Development Manager Sullivan presented a map of the proposed redevelopment project area. He noted that the area includes both the Highway 10 and Highway 47 corridors, as well as the 160th Avenue area, where the City currently has a water tower but no sewer service. He stated that future loan repayments could be reinvested in projects in this area, including extending the sewer infrastructure, which was previously estimated at $1.5 million. Economic Development Manager Sullivan reviewed the proposed timeline, explaining that if the process begins immediately, it would first go to the Economic Development Authority (EDA) at the next meeting and could move through the approval process by approximately May 14. Economic Development Manager Sullivan then described the proposed loan structure. The City loan would address the approximate $1.34 million financing gap. He noted that interest rates have recently decreased due to changes in Treasury bill rates. The current proposal being discussed with the bank includes either a seven- or ten-year term with a 25-year amortization schedule. Under this structure, the project would likely be refinanced after the initial term and repay the City loan at that time. Economic Development Manager Sullivan explained that the bank also requires a stabilization period before the City begins receiving loan repayments. Because the project developers do not yet have an operational track record, the bank wants to see a debt coverage ratio of at least 1.2 before the City begins collecting payments. He stated that this typically results in about a one-year delay before repayments begin, though the City would likely limit any deferral period to no more than two years. City Council Work Session / March 10, 2026 Page 12 of 21