City Council Minutes

Pursuant to due call and posted notice thereof, the Economic Development Authority of the Victoria City Council was called to order at 6:15 p.m. by Mayor Hershberger Thun in the Council Chambers at 7951 Rose.

Members Present: Mayor: Mary Hershberger Thun; Councilmembers: Tim Amundsen, Jim Paulsen, Rick Tieden, and Kim Roden.

Absent: None.

Staff Present: David Urbia, Interim City Administrator; Holly Kreft, City Planner; and Mike Norton, City Attorney.

Others Present: Mary Meuwissen; Sue Orsen, The Victoria Gazette; and others.
 

Ms. Kreft stated this is a follow up from the May 10^th meeting and at that time staff was directed to put together a term sheet. The term sheet lays out the points that would be put in to a redevelopment agreement. She noted if this was given approval it would then move forward to a final approval.

Mr. Norton referenced section I. General Project Description and section II. General Development Timing and Phasing. He said there has been some discussion about the timing in the development agreement.

Mr. Norton stated the public assistance is for the purpose of creating a public parking facility with at least 50 spaces and in exchange for that kind of facility the developer is requesting a tax increment financing note in the amount of $1,750,000. In the agreement there will be a number of conditions relating to the construction and timing.

Mr. Norton explained the financing concepts. He said the categories they are seeking reimbursement for are all lawful categories that if agreed can be reimbursed. He said the initial financing is expected to be a note. The tax increment would be defined as the amount generated by this project. The developer will also be asking that there not be a cap placed on the amount other than for purposes of recovering the actual costs. Mr. Norton said they need a definite number to put in to the note. There would be semi-annual payments of the note until the note is paid off. The developer has also indicated that once the project is up and running they want to refinance this note. He noted it is a fairly common method of financing. The bonds are only as good as the tax increment that is generated by the minimum improvements of the project on the creamery site, not from the other buildings.

Mr. Norton noted there have been a couple of questions about the potential assignment.

Councilmember Roden asked about the May 21^st letter and if all those issues have been resolved. Ms. Kreft responded there are still some points that need to be worked in to the developer agreement and referred to the letter as having points of concern and clarification. Councilmember Roden said another issue is the certain types of expenses typically not reimbursed by the City.

Jay Lindgren, Dorsey and Whitney, said this is something they support and they are asking the City Council to support this. He commented on the deadline because of the existing tax increment. This would help them issue the construction contract before the end of June.

Councilmember Paulsen asked if there was going to be a parking structure with only one building. Mr. Lindgren said the intention is not to only build one building and by the language they don’t know which of those two buildings would go first.

Councilmember Paulsen asked if they have ever done a specialty retail office in commercial development like this. Mr. Lindgren said he thinks the answer is no.

Councilmember Paulsen asked about the TIF funds. Mr. Lindgren said there are two advantages to the developer for asking for the bonds and one is it is a way to capitalize the whole thing and the other is there is an interest rate savings to the developer. He noted that the tax increment note or bond have no risk to the City.

Councilmember Paulsen stated they are depending on the shared parking to work for this and he wants everyone to understand if the parking is not there it has to be handled by the private sector not the private sector.

Mayor Hershberger Thun commented on the easements. Ms. Kreft noted that was also addressed in the conditional use permit. Mayor Hershberger Thun said she wants to make sure the developer is responsible for relocating that middle area. Mr. Norton said there would be requirements that the easement issue get resolved. He also talked about the construction and replacing with similar quality and design.

Mayor Hershberger Thun asked if they could potentially end up with an underground parking lot and nothing on top of that and a construction zone for the next five years. Mr. Lindgren said the developer will not undertake the parking garage until there is assurance there are tenants in place to build sufficient buildings. He noted the developer is taking the risk and that tax increment will only be there if the buildings are built.

Mr. Urbia stated there would need to be another EDA meeting on June 14^th.

Mr. Norton explained what would be approved tonight would be the concepts in the term sheet and any amendments and then staff would be directed to prepare a contract for private development consistent with the terms and return on June 14^th to review the agreement.

Councilmember Roden said she is not comfortable with "piecemeal" and not having a timeframe for the buildings. Mr. Norton said the zoning elements were approved. He noted Victoria has never done a project with this much public money to a private development. Other businesses were provided with TIF grants. Mr. Norton talked about the timing on the delivery of the note and said that could be in the agreement. He said they could think about not delivering the note until the parking facility was completed. He noted he has some of that language in a draft he has been working on.

Mayor Hershberger Thun said her only concern is they don’t have a complete project and when it is going to be done.

A motion was made by Councilmember Tieden, seconded by Councilmember Paulsen, that the City of Victoria move forward the development agreement with the Meuwissen Creamery Project based on the term sheet as drafted. With the majority of the members voting in favor, the motion carried. Vote: 4 Ayes, 1 Nays (Roden).

The EDA meeting adjourned at 6:43 p.m.
 

Respectfully submitted,

Tanya Schmieg
TimeSaver Off Site Secretarial, Inc.