Agenda - Economic Development Authority - 01/08/2000

Home

Case# Development Agreement with Listul Industries By: Sean Sullivan, TIF Specialist Background: On May 2, 1996 the City of Ramsey entered into a Development Agreement with Listul Industries. The agreement included financial assistance totaling $119,525.97. As of this date, the City has collected $41,036 from the tax increment that was generated from this property leaving a balance of $78,489 owed to the city. Observations: Listul Industries first mortgage was foreclosed upon by its bank. A Sheriff’s Sale was conducted on December 1, 2000 and the property was sold to the bank subject to Listul’s six month right of redemption. The Listul property is still subject to property taxes and increment will continue to be generated from this parcel. The property has a minimum assessment agreement in place in favor of the city which provides that the minimum County Assessed value will be $750,000. Recommendation: The City will continue to receive its required increment to reimburse its financial assistance through the generation of tax increment. In the unlikely case the bank would sell the property to a tax-exempt entity, the City’s increment could be lost. The options available to the City are as follows: Sue Listul Industries for the amount of deficient increment based on the deficiency agreement. As noted above, this business is in foreclosure and the possibility of receiving the full amount owed is not great. The City can continue to collect increment from this parcel under its current tax status and reimburse itself for the financial assistance provided. It is Staff’s recommendation that the City take no legal action in regards to a lawsuit against Listul Industries and continue to collect increment from the subject property. Motion: Based on discussion. Review Checklist: City Administrator City Attorney Community Development Assistant EDA: 1/8/2001