05.01 - Conceptual Support for Estab of a TIF

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MINUTES SPECIAL MEETING ECONOMIC DEVELOPMENT COMMITTEE JULY 28, 2009 PRESENT: EDC members Mark Jurchen, Cindy Rieck, Ed Larsen, Justin Bolz- Andolshek, and Patrick Smith; Sheila Holley, Realtor Representative; Paul Tucci, Pat Barrett, Oppidan; Sheila Haverkamp and Elissa Rogers, BLADC; Mayor Adams; Dawn Bittner, Zoning Administrator; and Ruthann Hanson, Chamber. The meeting was called to order at 8:02 a.m. The purpose of the meeting is to consider a request by Oppidan for Tax Increment Financing. Member Jurchen stated this is an ethical issue for him but is putting this aside to concentrate on what is best for the City. He stated he had gone online and researched TIF. After receiving this information last week, one week is a short time to make this type of decision. He questioned whether this project is indeed a but/for issue. Sheila Haverkamp explained the but/for requirement. The developer covers all of those costs. A financial analysis is done for individual projects. Market viability is not part of that process. The increment for this project is to complete the infrastructure. Mr. Tucci stated that the preliminary but/for has been given by Oppidan. The costs of the project reflect the road extension, the land under the road, the force main to Olson Street, demolition and repositioning of the Babinski fence. Member Jurchen asked if an analysis had been done regarding the net result in jobs. Mr. Tucci explained that the preliminary number are 80 to 100 jobs with 20% fulltime, 40 hour per week jobs with the remainder part time, 15 to 32 hours. He did not have the wage information. Chair Larsen stated that this project could assist in improving the economic situation in the community, increase employment opportunities and increase the tax base. Member Jurchen asked if there would ultimately be costs to the City and if there would be any bonding required. No bonding would be required. There would be a development contract written that would protect the City. Mr. Tucci stated that if the taxes are not paid, there would be no increment back to the developer. Member Smith stated that TIF expires, either over a specific time or the value of the note. Member Jurchen further stated that the City's TIF Policy may need to be looked at. He also has clients that could be jeopardized and he may have a conflict of interest. He should encourage the City to consider this, but he can't say he supports it. Minutes Economic Development Committee July 28, 2009