EDA 2003 07 14CHANHASSEN ECONOMIC
DEVELOPMENT AUTHORITY
SPECIAL MEETING
JULY 14, 2003
Chairman Furlong called the meeting to order at 9:45 p.m.
MEMBERS PRESENT: Tom Furlong, Steve Labatt, Brian Lundquist and Bob Ayotte
MEMBERS ABSENT: Craig Peterson and Jim Bohn
STAFF PRESENT: Todd Gerhardt, Roger Knutson, Justin Miller and Bruce De.long
CERTIFICATE OF COMPLIANCE, BYERLY'S DEVELOPMENT. T.F. JAMES
COMPANY.
Justin Miller presented the staff report on this iterm
Furlong: The one question I' have, is there any reason why we wouldn't accommodate this
request?
Miller: Only if there was something outstanding that they hadn't performed, but they've done
everything.
Furlong: And there's not?
Miller: That's right.
Furlong: Thank you. Any discussion? If not is there a motion?
Labatt: Move approval.
Furlong: Is there a second?
Lundquist: Second.
Furlong: Any discussion on the motion?
Labatt moved, Lundquist seconded that the EDA approve Certificate of Compliance for Lot
4, Block 1, West Village Heights 2~ Addition. All voted in favor and the motion carried
unanimously with a vote of 4 to 0.
APPROVAL OF TAX INCREMENT FINANCING AGREEMENT, PRESBYTERIAN
HOMES.
Miller: This is a TIF agreement that's been alluded to in a few of the items already. Basically
Presbyterian Homes is building a 161 unit senior care facility across the street in the Villages on
the Ponds development and we are providing them, or hope to provide them with TIF assistance
to help make a percentage of those units affordable. Basically for the first 6 years of the
agreement, Presbyterian Homes will receive 90 percent of the increment produced and for the 2
Economic Development Authority -July 14, 2003
years after that they will receive 50 percent. This is a pay as you go note, which means that they
will only receive the money that is generated so if they don't generate enough taxes and they only
get back 90 percent of what they produce. There is a total issue amount on the note of
$1,060,000. That is a maximum amount, and that is there's a deadline at the end of 8 years. If
we haven't paid off that entire amount, there's no obligation of the city to continue to do that, but
the important thing is that we pay 90 percent for the fu'st 6 years and 50 percent for the next 2
years. There are two changes to the TIF agreement. They're real simple. That was in, or
changes to the agreement that was in your packet. It's on page C-2, which is actually the note.
Instead of the interest at a rate of 6% accrue on the note, that should actually be 0%. There will
be no interest accruing on the note. And then on page C-6, 'where it says 4.01 pledge, and about
the fourth line down it says in no event more than 124%. That should be 125, just to match at
other places in the agreement as well. We went over those changes with the developer and
they're fine with those too. Staff is pleased with this agreement. Thinks that we're getting a
great deal out of this and we'd recommend approval.
Furlong: Thank you. Any questions for staff?.
Lundquist: Yeah a question, in essence what the note is doing, is that the maximum obligation in
return increment that we would give back to the developer?
Miller: That's right.
Lundquist: So if they generate the taxes, rate changes or whatever happens and in 3 years 90
percent of the increment that we've returned meets $1,060,000, then we're done paying.
Miller: We would keep track of that and that is a maximum number.
Lundquist: Okay. So that million 60 is calculated based on what we anticipate the revenues to be
on that and what we would return in increment based on that 90 percent and 50 percent.
Miller: That's right.
Lundquist: Okay.
Furlong: Other questions? I guess as point of clarification, just as if we reach the million 60
before the end of the 8 years, we stop. If we don't reach the million 60, since this is a pay as you
go, by 8 years we still'stop.
Miller: That's right.
Furlong: So a million 60 is an estimate at this point based upon current laws and regulations.
Miller: Based on current tax rates and tax structures.
Furlong: And we're not taking on any liability from this beyond the million 60 that we're, I mean
I don't even want to say that's a liability.
Miller: There's wording in the note that says this will only be paid out of available ~tax increment.
Furlong: Thank you. Okay, any other questions? If there's none, is there a motion?
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Economic Development Authority - July 14, 2003
Lundquist: Motion to approve the Redevelopment Agreement with PHM/Chanhassen Inc. as
stated in the memo.
Labatt: Second.
Furlong: Any discussion?
Lundquist moved, Labatt seconded to approve the Redevelopment Agreement with
PHM/Chanhassen Inc. (Presbyterian Homes) as presented. All voted in favor and the
motion carried unanimously with a vote of 4 to 0.
APPROVAL OF MINUTES: Lundquist moved, Labatt seconded to approve the Minutes of the
Economic Development Authority meeting dated June 9, 2003 as presented. All voted in favor
and the motion carded unanimously with a vote of 4 to 0.
Lundquist moved, Labatt seconded to adjourn the meeting. All voted in favor and the
motion carried.
Submitted by Todd Gerhardt
Executive Director
Prepared by Nann Opheim
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