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ECONOMIC DEVELOPMENT AUTHORITY
CITY OF PRIOR LAKE
MEETING DATE:
AGENDA #:
PREPARED BY:
AGENDA ITEM:
DISCUSSION:
ISSUES:
ALTERNATIVES:
MARCH 22, 1999
SA
DONALD RYE, PLANNING DIRECTOR
CONSIDER APPROVAL OF METHOD FOR PREPARING
DEERFlELD FINANCIAL DATA
At the EDA workshop, the EDA considered a proposal that the City's
economic development consultant, Roger Guenette, assist Deerfield
Development in developing their financial analysis to determine if the
development would be eligible for tax increment financing. The
estimated cost of such an analysis was $15,000. Some concern was
expressed that the arrangement which was proposed, which had the
developer reimbursing the EDA for Mr. Guenette's fee, created an
actual or potential conflict of interest. The EDA decided that perhaps a
way could be found through an agreement that would eliminate this
problem and allow the work to be done by Mr. Guenette.
The EDA has confirmed through discussion that a very small amount
of land remains within the City for commercial and industrial
development. In the Business Office Park, one 4.5 acre parcel remains.
The addition of the 57 acre Deerfield property would provide
considerably more property. The question for the EDA is whether it
should invest money and effort to assist the developer in adding this
property to the inventory.
In reviewing this further, staff believes there are 4 alternatives the
EDA may consider. These are:
1. Do nothing. This would place the developer in the position of
proceeding without City assistance.
2. Commission Advance Resources to conduct the necessary analysis
and the EDA pay their fees.
3. Commission Advance Resources to conduct the necessary analysis
and arrange to have the EDA and developer split the cost up to
some maximum amount (say up to $7,500 each).
162ID~~I)@ltelM.\BDAAStID~mm~~Minnesota $5372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245
AN EQUAL OPPORTUNITY EMPLOYER
4. Direct the developer to retain their own consultant to prepare the
analysis. The EDA would reimburse the developer for the cost of
the analysis if the project reaches the construction stage.
Regardless of who conducts the analysis, the developer will need to
develop a number of things in order for the analysis to be properly
conducted. These include development of plans for infrastructure
improvement and related costs, estimates of the amount and types of
development and the likely staging of such development and a
determination of rent structures or sale proceeds. In order for a
determination to be made of the eligibility of this project for tax
increment financing, the information needs to be developed in
sufficient detail to understand project costs and the income stream to
be derived from the project. At that point, the determination can be
made as to the level of assistance needed to make the project occur.
Conclusion
For a variety of reasons, staff favors the fourth alternative. If option I
or 4 are chosen, Advance Resources can provide Deerfields' consultant
with a description and format for the data we need.
REVIEWED BY:
~.
MOTION:
Frank Bo
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