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HomeMy WebLinkAbout1991/11/12 - ADMIN - Minutes - Economic Development Authority - RegularM I N U T E S S P E C I A L E C O N O M I C D E V E L O P M E N T M E E T I N G S T . L O U I S P A R K , M I N N E S O T A N o v e m b e r 12 , 19 9 1 ICR0FILMED l. Call to order President Meland called the meeting to order at 6:45 p.m. 2. Roll call 1 ) j The following Commissioners were present at roll ca 11: Jeff Jacobs, George Haun, Keith Meland, Jane Tschida, Lyle Hanks. Commissioners Friedman and Mitchell arrived shortly thereafter. Also present were the Executive Director, City Attorney and Director of Community Development. 3. PILOT agreement Mr. Steilen gave an update on the memorandum before the Authority. He said the issue before the Authority is whether Park Nicollet Foundation ought to be relieved of the PILOT agreement in the event the Medical Clinic leaves. The Authority has directed the attorneys to let the Clinic out of the agreement if it ceases to occupy the property; the question is whether the Foundation also ought to be let out of the agreement if the Clinic leaves. He saw three choices: Keep the Foundation in the agreement; let them out of the agreement; or seek a compromise that would let them out with conditions. In essence, if the Clinic were to leave the Tower site, does the Authority want the Foundation bound by the PILOT agreement meaning they would have to pay taxes at the current level regardless of the valuation of the property and/or tax exempt status. Attorney Steilen said there were two primary concerns: A general concern about issuing bonds in favor of the Foundation and at some point the Authority ought to get them to agree to pay taxes because they require the same services as everyone else; then a separate concern that if the Authority is going to do a development with subsidies, we absolutely want the Clinic bound to paying taxes because we're counting on the tax increments. He said what the Authority understands is that the Foundation will enter an agreement with the PCA which will satisfy the State's concerns. That doesn't mean a lender is going to be willing to make a loan on the building. Mr. Dixon said Jim Toscano had visited him that morning to inform him the PCA was going to consider the stipulation agreement and remediation plan on Dec. 17 instead of Nov. 18 because of need for more technical information.. Mr. Steilen said what he understood, vis-a-vis the development agreement, is that the Authority wants to tie in the Clinic to a long-term agreement on the payment of taxes in return for agreeing to subsidize development. He said what there seemed to be confusion about is the bond issuance and the extent to which the Authority wishes to tie in the Clinic. If no development occurs, what the Authority is left with is the agreement executed on the bonds. Say no development occurs and the Clinic leaves in 5 years. .0Q¢$ the Authority still want to require the Foundation to pay taxes at t'he' $550,900 level for the next l0 years as a condition of the bond issue. EDA minutes Nov. 12, 1991 MICROFILMED 2. It was moved by Commissioner Hanks, seconded by Commissioner Mitchell, to instruct the attorney to work on the compromise approach as delineated in Attorney Steilen's, memo. Mr. Dixon stated what the compromise was: The Authority would not terminate the PILOT agreement but allow contested valuation based on reduced rent flow. Mr. Steilen said he would also like to bargain for reduction in land value based on interest savings. Commissioner Friedman expressed his concern that the Authority, apparently having no leverage in this proposed matter, is not getting anything it seems. Mr. Steilen reminded Council that most cities don't "get" anything under these bonding procedures, but that a while back he had recommended the City institute a fee structure and that was generating measurable income. Mr. Steilen wanted to make clear what the compromise solution proposed: The Clinic will pay taxes as long as it is there and the taxes won't be reduced below $550,000 which is the current level. If the Clinic leaves, valuation can be challenged but not on the basis of pollution. To the extent the Foundation derives interest savings, this would count towards the City's liability in the event of litigation over costs of remediation. It becomes purely a policy decision of the Authority as to whether this constitutes "getting enough" to justify issuing the bonds. President Meland pointed out an alternative to the motion on the table which would be to do nothing until after the MPCA meets on Dec. 17. Commissioner Hanks amended his motion that if the bond issue is not going forward prior to Dec. 17, the EDA should be so informed. The motion passed 7-0. 4. Proposed amendment to contract with TPAP It was moved by Commissioner Hanks, seconded by Commissioner Haun, to defer the requested amendment to Dec. 4 or until the Authority can meet with Mr. Trkla prior to that date. Councilmember Mitchell was concerned that the focus of discussions was off-track, that it ought to be on the development. Si nee the Authority had never sat down and provided parameters for Mr. Trkla, it was his feeling Trkla was working in a vacuum. Commissioner Hanks wondered if it wouldn't be a good idea to get Mr. Trkla to town and spend 3, 4, 5 hours in intense discussions. Councilmember Mitchell said what was missing was a process. Currently, individ- ual Commis s i one rs are being asked their opinions and what was needed was for a process and parameters to be established. EDA minutes Nov. 12, 1991 MICROFILMED 3. ' I Councilmember Friedman felt that at least a week's notice for such a meeting was essential. The motion passed 7-0. 5. Three-member committee President Meland said research had indicated the formation of the 3-member commit tee to work wit h the consultant actually was contrary to the By-laws of the Authority. It was moved by Commissioner Haun, seconded by Commissioner Friedman, to disband the 3-member committee. The motion passed 7-0. Mr. Dixon noted that in Mr. Trkla's report Trkla stated that he was not aware that other deve 1 opers had expressed any interest in the Tower sit e. Mr. Dixon pointed out that was not accurate and cited notes of a Sept. 13 telephone conversation with Mr. Trkla and Mr. Steilen wherein Dixon advised Trk la and Steil en that he had been contacted by Robert Muir regarding Tower Place and would be meeting with Muir on Sept. 17. 1991. 6. Other business l ) s j None. 7. Adjourn ment It was moved by Councilmember Haun, seconded by Councilmember Jacobs, to adjourn the meeting at 7:40 p.m. The motion assed 7-0. f Executive Director \