02-19-2013 EDC Minutes - Laserfiche WebLink

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Economic Development Commission Minutes February 19, 2013 Page 3 of 4 Jenna Crawford gave an update on Chamber events. 8. March Agenda Items • Urban and Rural Taxing Districts 9. Other Business Discussion was held regarding the request from Lonesome Cottage to restructure the loan to the City. The City Clerk explained the following: 1. The City entered into a TIF Development Agreement with Lonesome Cottage for$146,000. TIF increments are paid to the Developer twice a year. 2. Lonesome Cottage purchased 6.95 acres from the City's industrial park, which equals the tax increment amount. 3. The city entered into a loan agreement with Lonesome Cottage for $100,000 to be paid on January 2°a in five installments 4. The developer is receiving about $23,500 per year in tax increment and owes the City$24,833 per year for loan repayment. 5. The tax increment will continue through 2017. The Note to the City will be paid off in 2014. 6. The developer is requesting to restructure the loan to allow monthly payments to the City for the balance of the loan for 60 months. The EDC discussed the pros and cons of working with Lonesome Cottage to restructure the loan. The EDC felt it would be best to work with the business as it is a viable employer in the City. It was noted that the payments should be tied to the TIF payments. It was also suggested that the payments be extended to 3 to 4 years rather than 5 years. The EDC suggested reviewing a financial statement prior to restructuring the loan.- - COMMISSIONER ROGGENKAMP MOVED TO RECOMMEND THAT THE COUNCIL SUPPORT THE RESTRUCTURING OF THE LOAN CONTINGENT ON REVIEW OF A FINANCIAL STATEMENT. COMMISSIONER MERRIT SECONDED THE MOTION. MOTION CARRIED 4-0.