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EDA 2001 03 01CHANHASSEN ECONOMIC DEVELOPMENT AUTHORITY SPECIAL MEETING MARCH 1, 2001 Chairman Boyle called the meeting to order at 6:30 p.m. MEMBERS PRESENT: Gary Boyle, Jim Bohn, Linda Jansen, Mark Kroskin, and Robert Ayotte MEMBERS ABSENT: Craig Peterson and Steve Labatt STAFF PRESENT: Todd Gerhardt, Assistant City Manager APPROVAL OF MINUTES: Kroskin moved, Jansen seconded to approve the Minutes of the Economic Development Authority meeting dated February 15,2001 as presented. All voted in favor and the motion carried unanimously. UPDATE ON MORTGAGE FORECLOSURE ON CHANHASSEN BOWL PROPERTY~ CHANHASSEN VENTURES~ LLC. Gerhardt: Mr. Chairman, EDA members, what I'd just like to do is basically just walk through my staff report just to update Jim who wasn't here last time and I think Bob wasn't here and just talk about the direction staff was given and what we did. So first item that we were supposed to work on was negotiate with Southwest Metro Transit on relocation or reduction of the parking easement located on the city property that surrounds the bowling alley property. Staff talked to Mr. Simich and he was receptive to relocating the park and ride area. However, he would like something in that area and of course paved to like they have currently. Some of the sites that we had talked about were Lake Ann. One of the problems with Lake Ann was in the summertime you have park and rec activities that start at 5:00 that may conflict with the bus riders on getting back at that time. It's typically around 5:00 to 6:30 you'll see cars sitting over at the park and ride site. They do have some future plans along 212 and 41, but I think that is to accommodate more growth as Chanhassen grows. That was supposed to help alleviate what's going on in the downtown area. So those are potential solutions but not real ones. One of the other sites that we talked about was the old Red-E-Mix site where you would have a right-in if you were coming from the east, or heading west on Highway 5 you could come in but you couldn't probably go back out. You wouldn't have the acceleration that would allow you to go back out so it would have to be a reconstruction of what would be the walkway by the pedestrian bridge to access behind what is the old Hanus building, Rapid Oil and the car wash and having the buses either enter or exit that way. We talked about Pony-Pauly-Pryzmus site. There's approximately 85 parking stalls there. Right now they're using probably 115. He wasn't receptive to splitting the two parking lots. You lose a lot of efficiency with that. You don't want your bus to stop in one location, go a block and stop again. He talked about a problem they had like that over at the Eden Prairie Center. On his first term on Southwest Metro he corrected that. He just, it's frustrating for riders to get on and stop right away again so, it was an operational procedure. But he is receptive. One of the other things that he suggested was that we potentially look at the redevelopment of the site and incorporate a transit hub as a part of that similar to what they're doing over in Eden Prairie. And he added to that that he has access to grant monies, you know if you wanted to put some kind of ramp in or something of that sort might work in concert with the movie theater and the dinner theater down the line so he suggested that and he encouraged that I submit the article. I don't know if you had a chance to read that but it's very pro transit hub locations in redevelopments and how they work in other communities throughout the United States. So that's about it for the park and ride. One of the other things that you have difficulty in saying Economic Development Authority - March 1,2001 sure, we'll move it is we don't know what the use is going to be there yet. If for some reason a bowling company comes in there, he probably could exist there and depending on what type of use, it might be like some type of restaurant that only serves in the evening. You have some of these steak places that are only open in the evenings. He could probably exist there during the day so knowing what the use is, is kind of been our problem down line. I mean he's been very receptive to us in the past talking about relocating but why relocate the person if you don't really have to. So that's an issue that we need to be aware of. Any questions on that one? Boyle: How much space do they have again? In number of parking spaces. Gerhardt: Yeah, we did a, there's 115 parking stalls within their permanent easement and I don't. Boyle: And how did they get the easement? I'm sorry. Gerhardt: That's a good question, how they got the easement. I don't know the answer to that so. I think that pre-dates me. Kroskin: It sounds like there's some flexibility there though? Gerhardt: Yes. Yes. Very much so. And the big thing if you would happen to go to the Red-E-Mix, we'd have to talk about construction of a parking facility there. Getting engineered drawings to see how you could accommodate. Ayotte: How do you find out the users? Have you had any thought about how we go about finding out future use? Jansen: That will depend on who comes in. I mean it's an unknown. Kroskin: I think the key is now is their flexibility. You know that's where we have to leave it right now. Which is good. Jansen: And the fact that he mentioned the grant opportunities, to be able to step up and partner with them were we to do a major redevelopment of that site could be very exciting, if you want to think really big. Like they did in Eden Prairie. Gerhardt: The thing that surprised me is, I thought Eden Prairie's redevelopment of that area was going quite slow and what he told me, he's got everybody lined up. The only...was the parking ramp. They can't build it until the parking ramp's in place because they're sharing that so everybody's kind of waiting on him and they're hoping to break ground this summer for that parking ramp. And then you'll start seeing the apartments and office buildings going in there. I think a hotel, if I heard right, and a couple other restaurants. Boyle: Are we utilizing the 115 right now do you think? Do you know? Does it appear to be full? Gerhardt: We're exceeding... Boyle: Wow. Economic Development Authority - March 1,2001 Gerhardt: It just hasn't been an issue with the bowling alley to enforce that permanent easement. Bohn: When you were doing the study for the movie theater expansion, they came across they were using more of their easement... Boyle: Okay. Are there any other questions? Okay. Enough of park and ride. Gerhardt: Number two was to negotiate with Heritage Bank to give a 6 month extension to the EDA for additional time to investigate the purchasing of the property or finding somebody to purchase our option, and reducing their $380,000 first mortgage. We talked to a Tom Jacobson at Heritage Bank and he wasn't interested in either of the two. I mean he was definitely, you know had been in this position before and he played his cards the way we expected him to. That he wasn't going to give an extension and wasn't going to reduce the mortgage and his arguments were that he's seen purchase agreements for over a million dollars and know there's enough equity out there that he should become whole out of this deal. And Scott and I made him aware of the title issues and access issues that existed over there and he acted like he knew about that. I don't think he knew about not owning his south entrance. He didn't respond to that. He felt he could turn the property by June 1 and we told him that you'd have to get city approval and that's typically anywhere from a 3 to 4 month period of time once you have already got your ducks in a row of what you want to do with the property. So I think that may have shook a few branches but what we got out of that was his attorney contacted our attorney. Kroskin: That was John Kelly? Gerhardt: Yes. And they have another attorney on staff that deals with more of their legal issues. John Kelly primarily, from what I understand, has put loans together for them. He did not put this loan together. So we must have hit a nerve there that stimulated a call from their attorney at least and Scott and I are planning on calling and talking to the president of the bank and repeating what we had told Mr. Jacobson and it's kind of, we're playing chicken here. They're hoping that we're going to buy it and make them whole out of it and they can walk away by no later than March 26th. And we're hoping that they would reduce their loan so we can have some holding power if we should decide to buy. So, and time is a big factor when you're negotiating so I think these will intensify in the next week or so. Kroskin: Well I think they know, when you're negotiating, the fact that they know we have a deadline is a weakness for us. Gerhardt: Very much so. Kroskin: I think that, and this is just my opinion. I don't know what your's is Todd but if you've got a situation where if you want to draw which is more important, getting them to reduce their note or giving us time, what do you think is more important? If you could choose between the two. I don't think they're going to reduce that note down much more than 5 %. Gerhardt: No. No, I don't either. Boyle: Is time an option? Gerhardt: I don't think so. You know if time, everybody's aware of it that has an interest in it. Economic Development Authority - March 1,2001 Kroskin: I'm just saying time on our side. You give us, you know if they give us an extension for us to just do a little bit more due diligence. Would we take that over a reduction? Gerhardt: Let's kind of think that through. I mean we talked to Mr. Mithun who owns the movie theater that's directly impacted by what might happen on this property so he would have a big interest in the property. Clayton has property in the area. They know. That they have an interest in what might happen there, but not directly. They're kind of living with what they already have so I think they're just more interested what's going to happen overall to the east of them. And some of the ancillary people that we've talked to, other bowling alley people, most of them don't have the money. They've asked me if we'll loan them money. We're not getting in the banking business. That's how we got put in this position the first time so, and I have heard from kind of another individual that read it in the paper that has kind of a commercial lending arm and basically what he wants to do is just assume all the mortgages that are out there and just assign everything over to him. And that they would hold it for a 3 year period to talk about redevelopment and leasing it back and you know, might as well do it with one of us because we at least have a local interest. So that is not probably an option that we'd want to pursue. And I got that, I even read it really close. I just briefed it and I'll share with you once Scott and I have had a chance to talk about it, I'll e-mail it over to you so you can take a look at it just so you know what deal was out there. And that's all I've heard from and even Mr. Mithun is kind of sitting back waiting for the clock to tick and I'm sure he would like to hope that we don't buy it and work directly with the bank because that would save him $140,000 right there. So he's kind of gambling on this. Boyle: Well give us a time line I guess. 26th is D-Day I guess, right? Gerhardt: The 26th is the D-Day. We'd like to talk to Mr. Mithun directly again and see what his interest is and then probably set up another EDA meeting after the 21st and then have you make a decision. See what offers come in. Keep you updated on our negotiations with Heritage. Kroskin: You know with regard to Heritage, you've got nothing to lose by just, you know you can, it's not like we're all going to be friends after this. I think you could just push them, I mean push it all the way. Just push and as you and Scott like to say, the good cop, bad cop all the way and just draw some big, heavy lines in the sand and we're going to make it really difficult for you, if not impossible. We're going to go out of our way to make it heck for you to get this thing moved. If you've got to go that far. You've got nothing to lose, but gain some time or a reduction and I think you could maybe play, just say look. Do you really want to hold the dice with us? We'll tie that thing up. Gerhardt: We'll throw out the big M word. Boyle: Let's talk about the extension of time extension again. Do we really, can we, who do we go to get an extension? Kroskin: Well it'd be Heritage. Boyle: Heritage would give us? Kroskin: Because they're the first mortgage. Boyle: First in line, yeah. After the 26th. Economic Development Authority - March 1,2001 Kroskin: But isn't it a requirement, there's a certain amount of time after the sale that you have to act? Boyle: Of the auction, or whatever it was. Gerhardt: I think Heritage is going to have to redeem the very next day after this. Well I don't know if they'll have to do it right after that but it's basically their property because there's nobody else behind them. Now what's going to force Heritage basically to pay the taxes on this thing, in order to take title of it is the County going through a sheriff's sale for delinquent taxes, which will force them. Plus I think they don't want this penalty and interest to keep ticking away. I mean that takes away from their holding power too, because he expressed that when we talked to him is that he didn't want to hold it again because there's another hundred thousand dollars worth of taxes due this year. So, and then once they do take ownership, are they going to continue to operate the building? So, and that's one of the things you should be thinking too if you're thinking or leaning towards buying this building, what are you going to do when you own it? Are you going to? Jansen: Go bowling. Gerhardt: Yeah, we'll have a party in our meeting room. Bohn: Bring your umbrella. Gerhardt: Or bring disco back and fire up the lights in the Filly's portion. But we're going to have to look at finding somebody to manage and operate a bowling alley. Are you going to grant yourself a liquor license, things like that. Kroskin: Well it's losing money right now, right? Gerhardt: I haven't seen the books on it. Kroskin: I mean if it's losing money, why do you want to run it? Gerhardt: Well again, and you're going into the wrong time of the season to own a bowling alley. Kroskin: I think get the thing turned and. Boyle: I think any season on this one might be a bad time. Gerhardt: And that's if you can keep the rain off the bowling people. Kroskin: Todd, if an outside interest was willing to come in and buy the property and work out an agreement, not dissimilar to the one you outlined here. If we could write a real, oh I don't want to say one sided but a very city friendly agreement where it's, we have the option to take them out at any time and you can work in a little profit structure, something like that, would we entertain something like that? Boyle: I think so. Jansen: I don't know why not. Economic Development Authority - March 1,2001 Boyle: Seeing that we've got $140,000 at stake, and the control of what might go in there. Kroskin: It'd have to be the right individual. The contract would have to be written appropriately, but when you brought that up I happen to know corporate individuals and their corporations that could do that. Gerhardt: One of the things, you invested all this money into a bowling alley and then you just mm right around and close the door. Now you're paying real estate taxes and not generating any revenue to come in, so you know. Now then we have to go out and find somebody that would redevelop this site to a use that we want to see it as. That's. Jansen: We'd have to get very busy very quickly. Kroskin: Yeah, and I guess from a timing, how does, I mean there hasn't really been a lot of discussion, has there, about how does the city, how do we want to see that developed? I mean that's going to take some time. Jansen: There are old plans but we haven't really revisited those in a long time. Kroskin: Well I think you'd have to go. Jansen: And if you're going to make it transit friendly, then it's a completely different animal. Kroskin: Well I'm just again going to what we're hearing from the residents you know. Pedestrian friendly. Some retail shops, restaurants. Jansen: There was a plan like that for it. Kroskin: And that's one of those last few areas in the downtown that can be developed that way. Boyle: Oh, it's an important piece of property. Kroskin: Also there's discussion that this could be financed similarly to how the maintenance building on, was it Lake Ann? Gerhardt: Yes. Kroskin: Has been financed? I think that's worth a look. Gerhardt: One of the things that I didn't put in, one of the pros or cons is that, how are we going to buy this building? Where are you going to use the money? The TIF district over there is not an option for two reasons. One, the 5 year window, state law is past. You have to enter into a contract within 5 years when the TIF district was created. That went away June 22nd of last year. Second, there's probably not enough increment in that district to buy the facility. So either one of those would allow you to use the tax increment district over there. So the next option is general fund money and you have two options there. Taking basically $610,000 out of reserves and buying the building or two, you finance it like you did Lake Ann and park shelter building where the EDA basically leases the building back to the city and pays you an annual amount to cover the bonded debt for that facility. So in this case it would probably be around $60,000 a year probably let's say. Economic Development Authority - March 1,2001 Kroskin: On a lease? Gerhardt: Yeah. Ayotte: On a lease back like that, what would be the mm time to put something together in order to execute the same type of thing at Lake Ann? Are there any time issues associated with that? Gerhardt: Yeah. Kroskin: But you could take and buy it and then, buy it and hold it and then you'd have the time to do the bond issues. Gerhardt: Scott didn't want to take money out of it. He would really try to like to fit it in the window that we're operating on right now. So we're kind of running on a two track system. We're investigating to see if you really want to buy the building and making sure we stay within the window for financing. Kroskin: But we could. Gerhardt: You could take money out of reserve. Kroskin: For a short period of time. Gerhardt: Bruce is aware of that. Kroskin: And do the, get the funding done. Gerhardt: And then.., you would replenish that money. Kroskin: Yeah. Just handle it like a purchase. It's certainly an alternative. Boyle: Just out of curiosity, let's assume today is March 25th and we are at the same position then as we are right now. We don't really have anybody that's going to, we don't have a good buyer. Heritage is still holding tight. What would we do tonight, do you think? Kroskin: I don't deal in hypothetical's like that. Boyle: Okay. I respect that. Jansen: I'd buy it. Ayotte: That's what I would, yeah. Jansen: I guess I'm going down the track of we're going to buy it. And especially having heard the financing option on the building. If we're then, at $60,000 a year, we've also bought ourselves some time conceivably to be able to properly plan this instead of feeling like we've got to rush because now we're out $610,000 in cash that's come out of our reserves. Economic Development Authority - March 1,2001 Kroskin: Todd, on a lease back like that, can you explain to me how the taxes work on that? Gerhardt: Well, I'm sure the bonding company's going to, well. If we continue to operate the building you're going to have to pay the property taxes. No matter what you're going to be on the hook for the property taxes this year, okay. We can file for exemption on the property taxes as a publicly owned building. I don't know how the County's going to view that. Kroskin: Can we nail that down so we know exactly what we, how we'd be dealing with, what we would be faced with in that situation. Ayotte: If we have a lease back deal? Gerhardt: The tax situation? Ayotte: The tax situation, yeah on that. Over all aspects, whether we buy it or do the lease. So we know exactly what we're faced with. What kind of cash. Gerhardt: I know if you operate the facility you're going to have to pay the property taxes. And if you, if the property remains vacant, and it's in the city's name, the big question is what are you going to use that property for in the future? And even though we're going to put it back in private use, it's in our, we're holding it. Can we be exempt from property taxes on that? You've got to be a public purpose so I'll try to get an answer to that. Kroskin: And/or, see what we can do with that to create that public purpose. Gerhardt: Okay. Ayotte: Would there be any other costs that we'd have to be concerned about with respect to liability as an example? Is there any other expense that we would incur that we'd have to be concerned about while we're trying to make a decision? Gerhardt: Only would be if you ran it as a bowling alley, you're going to have to look at your DRAM insurance. Ayotte: Outside of that. I'm saying if we did a lease back to buy time, was there any other cost that we? Gerhardt: No. We would make the insurance company aware that we purchased the building. I don't see it really impacting our policy that much. Boyle: Wouldn't it probably be in the best interest to demolish the building if we did purchase it? I think you said 40 thou or something like that. Would it make more marketable? Jansen: It's a little more complicated. Gerhardt: Somewhere between 50 and 75 to demolish but you've got to remember, 50 to 75. Somewhere in there. It depends if we can re-use some of those panels. If there's a market for those panels but I'd say in that 50, $75,000 range but remember, you've got to build a $50,000 wall too if you take the building down. Economic Development Authority - March 1,2001 Kroskin: As far as that property south of the entrance there that we were talking about, and that's owned by? Gerhardt: Mr. Bloomberg. Kroskin: Yeah, that owns the dinner theater. Gerhardt: Correct. Kroskin: Have you had any discussions... (There was a tape change at this point in the discussion.) Gerhardt: ... exercise that option. Kroskin: Would that option be able to be resurrected possibly? Same price or? Clayton Johnson: My concern is what's going to happen to that property. That's our interest. Kroskin: Can we kind of get in the ballpark and kind of figure out. Clayton Johnson: $70,000... Kroskin: For all of them? Clayton Johnson: No, for our land. Gerhardt: For the south piece? Clayton Johnson: Yeah. Kroskin: What about where the bowling pins are? Wasn't that some. Clayton Johnson: That's really not an issue. That's, we're trying to accommodate development .... option price that he had originally was $70,000. $6.00 a square foot. Kroskin: Okay. Thank you. Good job. I think if you can maybe, like we did last time, kick it back to us just some of the things we're looking, you know further information and I think you just go after that bank. If you and Mr. Botcher just pin your ears back and go after them. You've got nothing to lose. Let them have it. Boyle: Sounds good. Good luck. Jansen: So the 26th is the last date. Last day that we can decide. So you want us in here at the end of the week before that? Bohn: Between the 21st and 25th. Economic Development Authority - March 1,2001 Gerhardt: Yeah, I would like to meet on the 21st. What is the 21st? Jansen: It's a Wednesday. Kroskin: That's fine with me. Gerhardt: I'd really like to meet on that day as kind of our next meeting. Jansen: 6:30 again? Boyle: Sure. Kroskin: And if you could get the e-mail to us because we've got the, everything we talked about, but you took notes, I didn't so. Gerhardt: Yep, I got it. Kroskin: Good job Todd. Boyle: Okay, thank you very much. Are there any other questions before we get off this? Okay. Move onto item 3 on the agenda. UPDATE ON REQUEST FOR TIF ASSISTANCE, VILLAGES ON THE PONDS SENIOR RESIDENTIAL CAMPUS, PRESBYTERIAN HOMES. Gerhardt: We met this last Monday and again, what we're trying to do is we figured out the affordability side of making 34 of the units affordable. There's no question that the city should participate in that and we get the benefit of that. Now what we're looking at is the gap financing portion of the building and trying to get a return on our investment in that portion. And so we scheduled another meeting for this coming Monday with the underwriter at our financial consultant's office in Roseville. And hopefully, we're meeting with the underwriters so that we're not operating outside the box where we do something where they can't get financing. So the underwriters are playing a big role in this understanding where the city's coming from in this to invest in the project to make it happen. And it looks like it's probably going to be some kind of loan with a repayment down the line. Now one of the things that you should be thinking about between now and next time we come back is taking a close look at that market study that I handed out last week, and I owe you one yet. That market analysis that they did on there. If you've lost it or you tossed your packet, I can get you another one but one of the things that we've been kind of working on is keeping the affordable units around for 15 years. Now this is a 25 year TIF district. Now you could take it out to 25 years. The affordability but if you take a look at that, that market study, they're predicting within the next 10 to 15 years incomes on seniors going up. And right now you have a group of seniors kind of between the age of 55 and 64 that have a substantial higher income than those people from 64 to 74. And if you look out 10 years, those two incomes match up directly. So the financial tools that the government has given us, you know putting tax free money aside and things like that, have equaled that playing field in the next 10 years of people then investing that and take advantage of those programs so. Where my parents and my parents parents didn't have those options for retirement. You know they retired off of their home or they retired off the farm and you used those type of incomes to live off of. So just take a look at that. Something to think about as we move ahead. Right now we're using the 15 year loop so if 10 Economic Development Authority - March 1,2001 you have any thoughts now, that's great but that's something that needs to be a policy decision by you. And I would hope that the 21st probably is a good time frame for us to wrap up our side of it and have them make the TIF application too. Get that back to you. You saw in that last packet, it was called a business subsidy and there was a but for analysis in there. That's what we're working on right now is that but for analysis. Is why they're asking for the TIF assistance so they have to prove to us why they need it and what we're using it for. So that's what we're trying to work out right now are those numbers. Ayotte: You're meeting with those folks on the 5th, did you say? Gerhardt: By March 21st we might add another item on your agenda. We might be able to present something to you on the Presbyterian Homes by the 21st for your consideration. Creating a TIF district and creating 34 units affordable and providing TIF assistance to meet the debt service. Boyle: Are there any other questions? Gerhardt: We may need to call you late, is what Vernelle is thinking. She's a little more optimistic than I am, but she thinks that we might be able to be back sooner than the 21st. So typically we like to get the packets out the Friday before so, but. And especially on this one I think you're going to want some time to check out kind of what we've been looking at over the last 6 months. Give you time to read it at home too. So I was hoping to get a time line together but not knowing where we are here on Monday, I figured we'd start with that. So that will be coming up too. We'll get you a time line because when you create a TIF district it's got to go to the Planning Commission. City Council's got to add a couple of public hearings. That's almost a 2 month process in itself so, they'd like to get in the ground by August. Just so you know that, and that's, they haven't gone to the Planning Commission yet and that's a 3 month process. So if you back it up, you know you take July, June May, you've got April in there to do all this. Kroskin: That's pretty tight. Boyle: If they want to break ground by October. Gerhardt: They'd like to break ground in August. Vernelle Clayton made a comment from the audience that was not heard on the tape. Boyle: Okay, are there any other questions? Again, thank you Todd. You added an item 4. Talking about conceptual approval. Linda, do you want to start off? Jansen: Thank you. I started an initial conversation with staff and wanted to bring this to the EDA's attention for everyone to be able to comment. In our PUD process we have a formalized conceptual approval process that the intent is that the developers can bring their plans forward and at least run the concept by council, and in that case by Planning Commission and get a feel for whether or not conceptually what they're going after is going to be acceptable. That approval that happens on the concept however is not legally binding, realizing that when it comes through and gets formalized, it may have changed enough that you could get a different answer when you get back to the City Council. Where I'm going with that thought is were we to implement a concept approval procedure for TIF, it would have a similar reaction for the developers. They need to have some sort of an indication from us, conceptually like Presbyterian Homes. Conceptually are the dollars something that we feel at this point we're comfortable with saying we would finance it? We're not looking at site plan. It's no approvals of any of the components necessarily. 11 Economic Development Authority - March 1,2001 We're just looking at the finances. That way they could start into the planning process, at least with some sort of an indication of what our intent is. Because if we just say flat out no, then it saves them all the time and expense of going through the whole planning procedure. But again staff would be able to maybe, I suggested they could use the template of the concept approval for the PUD. To also then have it noted in there that it's not legally binding so that all parties are aware that though we've looked at it conceptually, it may change enough as it comes through the process. The dollar amounts could also change by the time it comes back to the EDA. Ayotte: So what's the down side? I don't see any. Jansen: We don't those procedures in place right now so I just want to make sure that before staff goes off and puts this together, that everyone here is comfortable with their doing that. It would be a new procedure for us. Boyle: What would be the down side to that? Well, let me rephrase the question. The time line would be like the organization, or the individual would come to EDA first, correct? Jansen: Yep. Like they have currently. Boyle: Right. And then rather than saying conceptually we like what you have but we would have to have more financial information I think at that time. Jansen: Which is what Todd would be bringing back at the next meeting. But conceivably those numbers can change once you've gone through the Planning Commission and tweak some things in it. It goes to council. They've tweaked some things in it. The dollar amount of the project can fluctuate so you don't want to put a final stamp on it before it goes through the planning process. Boyle: So as an example, with Presbyterian Homes. That conceptual approval could easily take place at the next meeting if we had all the financial information. From staff, is that correct Linda? I mean I'm trying to put into perspective. Jansen: Yep. Yep. Gerhardt: They could submit right now and you could see their numbers and staff is kind of reviewing and trying to feel comfortable with and understanding, they could fill out that business subsidy right off the bat and present to you and then give us the direction if you want to do this project or not and then give some guidelines on the financing side if you want to. Or we could recommend some that you would want to probably see. Boyle: Well I wouldn't want to do that too prematurely until after you folks have finished your negotiating with the builder. And I assume that's going on right now, isn't it Todd? Gerhardt: Well the thing that Linda's suggesting, I guess we're kind of going pretty far down the road here on this already assuming you're going to more than likely support this kind of project, and not even seeing the numbers. I thin Linda's point is, she'd like to have the EDA at least see some of the preliminary numbers first and some concepts on the project before staff spends 3 months working with them. If I understand it right. 12 Economic Development Authority - March 1,2001 Jansen: Yes. Kroskin: Yeah, I guess I'd like to see what the generated form looks like, but yeah. Ayotte: Save time on everybody's. Kroskin: Put one together and let's take a look at it. Boyle: Yeah, I agree. Do you see any down side? Gerhardt: No. Boyle: Okay. That's a good idea Linda. Jansen: Oh thank you. I think it will help all of our applicants. Boyle: Have a better understanding. Who's idea was this? ... Brad, would you like to address the EDA? Brad Johnson: What you just did, we work about 7 cities. That's generally how the process works is that, we fall in love or we get divorced relatively early in the program when we pull stuff so that nobody's wasting their time. But I was going to mention this, we are in these meetings listening to this thing about the bowling alley because we have an interest in doing something there and we'd like to meet with the staff to go over I think you have issues. I think we can help solve some of the issues that you're concerned about, but we'd just assume do it first with the staff and then report back to you because I was at Oranco last week and I just missed, I was at four places. Calgary, Oranco, Fairfield and Gersham. All of them are transit oriented places and they do work and it would be kind of fun to put together so, but we do have kind of a plan and we've worked with that site for so long I think we know a lot of the problems. And in addition to that, we basically developed the whole downtown with sort of a handshake and a... with the city and I'll guarantee the city's done a lot more than $600,000 than what you see here but that was an idea that we'd all participate and we'd like to try that once again and Todd has talked about some upfront financial assistance to the city. Boyle: To the city or from the city? Brad Johnson: To the city. In the process. You're not in the same situation as those days I think we had money in the bank you know, and today obviously you don't. It wouldn't look good. Boyle: Back in the good old days, right? Brad Johnson: Well, there's always the good old days. I think because of our interest, we have, Bloomberg Companies has 15 other acres. 10 or 15. 10 acres adjacent to that and that's really our interest is to see how that can be fit into more of a major thing rather than trying to deal with 2 ½ acres. We also were approached today by a tenant for the bowling alley. We were approached yesterday by a fellow who would like to develop part of that into something the city could use. I mean we get contacts every day and the first thing we say is no. Let's wait until it's all together because it gets too complicated and we think it's going to take the city, the transit authority, Bloomberg's and Mithun, and he's on vacation. Just got back, to put the deal together correctly. It's going to have to take more than just one at a time, otherwise you'll be at this table more than once if somebody comes in and takes it over. You may be the best thing 13 Economic Development Authority - March 1,2001 that could happen to somebody that buys it from the bank. Because it is so frustrating so I think you have an opportunity to control so if that's okay with Todd, we can get together and we've got some ideas. Gerhardt: Any day with you Brad. Brad Johnson: I'll call you, the two of us. If that's okay... Boyle: Does anybody have a reservation with this? Jansen: It doesn't hurt to have conversation. Kroskin: I guess what I'd like to see is to have Todd, have you guys focus on what we discussed tonight and I'd like to see all that information come back sort of unbiased, so to speak. Just in standing alone on it's own. But I would like to also see kind of as maybe a secondary thing, maybe just have Mr. Johnson submit some concepts for you guys to look at and maybe include in what we're going to see on the 21st. Just some, you know we could do this, A, B, C, D and E, like you're talking about tonight, rather than, what I don't want to see I guess is to work on a blended situation up front. Am I being, do you understand where I'm coming from? Brad Johnson: I think our intent would be that, let's assume you go ahead with what you're thinking about doing and then what you do to cover yourself. Kroskin: I'd like to see the alternatives you're proposing but I want to see what we're talking about separate and then maybe see what Mr. Johnson's proposing. Gerhardt: Well I'm just guessing what Mr. Johnson's proposing is going to be after we buy the building. Kroskin: And I'd like to see that. You know and you talked about financial assistance. I'd like to see a number, you know just throw out your thoughts on paper so we can take a look at it. Is that okay? Brad Johnson: We'd like to sit down and explain to them, or I think as part of the bank negotiations they'll know where they're. Kroskin: In what regard? Brad Johnson: Well you know what I mean? Kroskin: What do you mean? Brad Johnson: Well Clayton would like to talk that over prior. Kroskin: Okay. Jansen: Yeah, I don't see any harm in having a conversation about it. Bohn: If you've got a hammer to hit the banker up, we're willing to listen. Brad Johnson: We don't have a hammer but just a concept. 14 Economic Development Authority - March 1,2001 Jansen: Okay, thanks Brad. Boyle: Thank you very much. Anything else on the floor before we... Jansen: No, I don't think so. Yeah, I think we're set. Great. Gerhardt: I can put, you know I may blend something with the business subsidy plan and tend to use kind of a format that's in the business subsidy plan and the general concept plan for the PUD. Try to blend two together on that, because the business subsidy is where the developer really has to put money up, if you read that where we closed, it's almost $12,000 that would come when we sign on the dotted line on that. So I can go through that. That's not a problem. Boyle: Okay. Bohn moved, Jansen seconded to adjourn the Economic Development Authority meeting. All voted in favor and the motion carried unanimously. Submitted by Todd Gerhardt Assistant City Manager Prepared by Nann Opheim 15