Awesome. Good evening and welcome to the Economic Development Authority meeting. It is August 10th at 7 PM and I'm calling the meeting to order. Looking for a motion to adopt this evening's agenda. >> I'll make that motion. >> Moved by Commissioner Burek. >> Second. >> Second by Commissioner Warden. Any discussion? Hearing none. All in favor, please signify by saying I. >> I. >> Oppos. Same sign. The eyes have it. Five to zero. First item of business this evening is approving our minutes from our April 13, 2026 meeting. Looking for a motion to approve those unless there are any additions or corrections. >> Hearing none. Looking for a motion. >> So moved. >> Moved by Commissioner Warden. >> Second. >> Second by Commissioner Duca. Any discussion or questions? >> Hearing none. All in favor, please signify by saying I. >> I. >> Opposed. Same sign. The eyes have it. 5 to zero. There is no old business to come before us this evening. So, I will turn it over to staff to discuss the new business, the TIFF district 22 term extension. >> Thank you, honorable chair and commissioners. Um, we want to come be back before the EDA tonight with a request to extend the district term limit for taxing room financing for the project at 53750 or really 5330 Highway 12, which is the proposal by Equinox development for a new town home rental town home community uh development. That project is in the process of being considered by the uh city for entitlement uh for the approvals necessary to allow the construction of that. And on a parallel track is the tax increment financing uh the the establishment of the tax increment financing district number two-2 which is something that we've talked about in front of the EDA uh before and was or is I should say scheduled to be considered by the city council uh with a public hearing in at the meeting in uh August um at the end of this month. Between the time that we had done our initial analysis and reviewed the applicant's proforma for the project and now uh the applicant and the city have identified additional costs associated with the development that we'd like to uh ask the EDA and then ultimately um would have to be approved by the city council uh for consideration to extend the district term from 20 years to 26 years. So, I'll talk just a little bit about how we got to 21st and then um what is being asked. This project is an 85 uh unit town home uh development. They would be rental town homes owned by a management company and then uh all of the units would be rented. It's uh located on the 5330 plus the now uh former 5370 site which was broken off recently from the 5370 building um on Highway 12. With that, there's approximately 6.5 acres that are proposed to be developed as a part of this project. When the city originally looked at this, it came before the EDA. We said, "Would the would the EDA be interested in um establishing tax increment financing a district for this project and then offering a level of tax increment financing that was initially contemplated um as a certain amount um associated with the project. We landed then after a more formal analysis of the applicants uh proforma on a 20-year tax increment financing district. So that's not the maximum length that's allowed. That was the amount that the city's financial uh tiff consultant determined was needed in order to support the project. So we and we often try to do that. We try to land on what is the need, not what is the maximum you can get. this particular case that that ended up being 20 years and that made the project what we thought was a reasonable ask by the applicant and a reasonable return to potential investors on the project of what would be um kind what what I call reasonable kind of uh um from the standpoint of what you would get as a return with all that we started the process then of establishment of that district. So, we certified that the existing building located on the 5330 pro property was substandard. Um, and so we had to do the analysis for that. We've made that finding and then we notified the county and the school district of the uh public hearing that we would have and we gave them their due notice related to the public hearing um later this month. That would uh allow us then to kind of take the next step of establishment of the district. what we were going to bring to the city council at that time was the 20-year taxing rent financing uh for this project. So, with all that, the applicant has come back and we met with them several weeks ago and we talked through kind of where we are in the process right now and there was a couple of elements that have come up during the course of the applicant preparing the project for further entitlement. Um and so the applicant provided the city with additional information relating to some of those costs that they are are noting as kind of costs not expected initially when they put together their proforma for the project. Some of those relate to soil corrections that are necessary as a result of what's out there um that wasn't identified initially. And then some of the costs that they would like the city to consider um essentially reimbursing or giving them um additional tax increment for relate to a sidewalk connection along Highway 12 from the project site to the Hawk signal uh at Bud Avenue or essentially to Bud Avenue to be able to access the Hawk signal. the city has been the one that's been um the primary just design or estimator on that initial sidewalk consideration. And when that sidewalk uh when we estimated what that looked like and what that cost would be, the city's engineer came up with approximately 225,000 in additional costs. Those costs were not necessarily contemplated by the developer upfront or in the initial um proforma that they had. So those are additional costs. They also identified the additional costs I noted and the developer could talk about those if we want to go into more detail on exactly what those are. With all of that said, we had uh looked at then running a second scenario. Scenario A was what we had initially contemplated being um calculated for the project, which was a 20-year district duration with a total net available tiff to the developer of 6,277,000 or a net present value of 3.5 million. Scenario B would increase the length of the district to the maximum length, which is a 26-year uh district or duration. It would have a total net available to the developer of 8.8. 8 or a net present value of 4.1. The net pre present value difference between those two scenarios is about $650,000 which the developers asking for in order to make the project uh able to go in their opinion and still provide them with a a return that makes that that would allow them to borrow the money to do the project. So, we're not asking for a you the the EDA doesn't have authority to say yes or no specifically, but because you're the economic development authority because we brought the project pri uh before you prior, we're asking for some direction and discussion relating to this and the decision point for the developer would be if they feel that um we do have room that we would expand the the duration of the district, we would likely not hold the public hearing in August and we would renotice a new public hearing with the new duration amount um and the tiff amount for a future date and I don't know what that date is but we have to give the due notice and everything so it would come later um likely in September uh that we would consider a um consider the tax increment financing district. So, um I I want to note a couple of things on the sidewalk. That is something that I was hoping I'd actually have planning commission direction on that because that was one of the items that we had um put in front of the planning commission. As you know, we didn't have the planning commission meeting last week. Um so, I don't know exactly where they fall on that. The sidewalk I I think from a staff level is an important connection point. One of the things that when we started looking at that sidewalk along Highway 12, if you think about the the section of road that we have around the Hawk Signal and in downtown on Highway 12, um if you go out and look at it, we have a sidewalk and then we have our decorative street lights that's that go along Highway 12 along the sidewalk going down to the Hawk signal all the way to Bud Avenue. We then have a pretty kind of crude section of road on the north side of Highway 12. um that is, you know, mostly parking lots and curb cuts and kind of not taking care of boulevard. By connecting a sidewalk to this development, I really do think there is some value to the city to extend our streetscape along Highway 12, which is consistent with our comprehensive plan. um and is something that I think starts to help to define downtown as its kind of unique district versus everywhere else on Highway 12. That's just for context. It's not I mean that's that's Mark's thought or opinion from a staff level that I do think there's value. I also think when you're bringing in 85 rental town home units to expect that those uh residents of Maple Plane that are now going to move in to expect that they will go all the way to Pioneer Creek on a sidewalk which is available and then take the sidewalk down to Bud and then come back to downtown to go to McGarry's to go to hopefully some other you know things that are going to happen in downtown is probably unrealistic. I think you're going to see people walk straight out of this development and if there is no sidewalk, I think we'll see people cross the road or, you know, try to get across into downtown to go to different things. Um, but again, you know, I mean, that's just a that's just a a planning perspective, not necessarily something that we have to do. Um, I do think the cost of the sidewalk off the property is, you know, a significant cost. not necessarily one that would be typically uh born by a developer, but so I can go into more detail. The developers here tonight if if you want to talk more specifically about that, but I'd love to have some some discussion or feedback from EDA or thoughts on uh what the developer is asking for. The last thing I'll say before I I yield um if I can is that the downtown redevelopment project, just for context, we was given a 26-year district. um for their project. It's not atypical. That is the maximum length of uh the district that's available. Um this project um has a higher valuation in the end than that project does. Um so for whatever that's worth contextually. So with that, I'm happy to answer any questions. >> Thank you for that update. Would anyone like to hear from the developer or have questions for Mr. Cultus? Anyone want to hear from the developer? Have questions for the developer? >> Hi. >> Okay. >> Anyone have questions for Mr. Fus? >> Okay. Adam, >> go ahead. Go first. >> So, uh, couple of kind of questions, comments. So, one, uh, I think the sidewalk I agree. Uh, personally, I think that provides value. I think part of the reason why we're looking at this as part of the economic development a Having those, you know, market rate rooftops, uh, in our business district is great. Having access to some of these businesses, you know, that are along the north side of 12, uh, having some kind of better frontage, also providing that path, uh, you know, over to the the real central downtown area, uh, is beneficial. I think tying that into an extended tiff makes absolute sense. I think one of the questions that I have is just kind of looking at this from a financial standpoint is I know I mentioned the uh the value of that sidewalk we're looking at about $225,000. Um the additional tiff looks like an NPV of around $650,000. So just curious what some of those additional costs and I know without having numbers assigned to it, you know, site improvement costs, but just wondering if there is any more detail as to what some of these additional costs that the >> and I could let the developer talk to them too. I'll give you the numbers just real quick. So on their initial estimate that we had gotten in the analysis in at the end of April, they had a um they did not have any soil correction numbers in that initial analysis. Um in their revised what they found on site because of what's there, they have 650,000 in soil corrections. Um so that's a that's a new number. They did not anticipate that there was that level of bad soil. So, and then the site work earthwork numbers did increase um somewhat. I'll also tell you that in their revised numbers, the utility numbers almost doubled in terms of utility installation looping um and just making the sanitary sewer and the water connections that are necessary to service this development. They are um going to be looping that through the site. Um and those utilities will be public utilities when they're done. So, They had an increase in a couple of kind of significant and tiff eligible costs associated, but they can they can tell you more about that. I'm just telling you what they gave us as far as numbers. We looked at it and and we agree that these are probably realistic in terms of what that represents. So, so they're not, you know, and the I think they had uh they have um in their numbers probably about 1.5 million in cost increase from the original concept to now. And obviously they're not asking nor can we give them that. Um they're asking for the what would essentially equate to that 650,000. >> Thank you for those questions, Commissioner Warden. Uh Commissioner Visel. >> Oh, thank you, Madam Mayor. Chairperson, sorry. Um my apologies. Okay, so um I noticed in the packet Can there's this I'll just ask the question. I'm sorry. Okay. I'd like to understand the long-term budget implications of a 26y year term. Since the city cannot use as stated in the packet, use the new tax base for other priorities on a until the district expires. How this might how might delaying that revenue affect our flexibility for future projects or services during this tiff period? So, um I don't know that I I don't know that I can give you like a a specific answer to the, you know, actual economic impact to the city. I think what we look at is more generalities of the project. Um what we can say for certain is there is no economic impact to the city in terms of us taking taxes away from the city because the base taxes that are on the property today remain going to the city, the school district, and the county through the duration of the district. So whatever that whatever the city's getting in taxes on that property today are going to continue to go to the city, the school district, and the county throughout the duration of that district. What doesn't go to the city, the school district, and the county initially or what uh percentage will go back to the developer is the incremental increase in taxes that are generated as a result of the development happening. which is why we're able to utilize the tax increment financing is because the test is if not for the tax increment financing, you wouldn't get this project. So in essence, you wouldn't get the taxes associated with the project either. So you [clears throat] could either So the test is the site either stays where it is today and you keep getting what's Aken Land is generating which you're going to continue to get as a city or if you believe that the the development's a good development and benefits the taxpayers long term in terms of bringing in rooftops and redeveloping a blighted property and all of those things, then you're you're saying that we would essentially pledge that new tax base to the project to try to get the project to happen, but you're not actually taking away taxes from taxpayers because the the test says that those taxes wouldn't come without doing the tax increment financing. So, I don't know in that regard if it answers your question, but but the test has to be met, which is but for the tax increment financing being given to the project, we don't get the project. And so in essence, you're not you're not giving them taxes that you would otherwise be getting because you're saying that we wouldn't have those taxes unless we gave them the increment back to make the project work. So I don't know if that specifically answered or if you have any followup on that. I'm happy to try to talk through that a little bit more, but um that's I mean that's the the general basis for how we got to where X increment could be used for this. >> No, I'm asking since we would be tied up with the TIF district for 26 years, how would that affect us for future possible developments and other possibilities we could have future down the road since we would be tied up? >> Well, you're not you're not really tied up. you're pledging the taxes that are going to be the new taxes that are generated from the project back to the project. So, it's not there is no there is no cost to the city to do that. The the notion is that without the project without the tax increment financing, there is no project. >> Okay. Then I guess I ask what's the benefit to the city to extend it by six years then? >> Well, that's I mean that's what I'm hoping you guys give me direction on. The benefit to the city is it's possible this project doesn't go without the additional tax increment financing. They're trying to figure out can we make the numbers work based on the fact that we found additional costs that are going to be needed in order to make this project go. So at some point the return just doesn't work or they can't get lending to do the project which is what they're saying to us. So, it's it's probably somewhere in that realm that they came to us and said, "We we're run we're kind of hitting a wall right here. We don't have any more leeway within our budget to make this project work. >> Commissioner Commissioner Duca, >> you were looking for feedback. Mark, our 20 years was based on need versus the maximum amount." You said that up front. You clearly articulated that there's an additional need that goes beyond the the 650 extra thousand worth of tip. I'm fine with the extension to 26. I think to the point uh you made too on the sidewalk. I think that's just a good responsibility. I think it it ought to happen. Um, nobody knows what you're going to get when you start doing soil correction. We we found that with the downtown development. So, I'm fine as as long as you know you're comfortable that there's about a million and a half extra dollars there. We'll put give them that 650,000 up to our maximum and that should the direction you're looking for, isn't it? >> Yeah, that is absolutely. Um, one thing I would I do because you just kind of made me think of this is the way that the taxing rate works is that we establish a a max dollar amount and then we in the dollar amount that's really the driver. So if this valuation of this project is higher than what we think and we always try to be conservative so hopefully um and they hit that dollar amount sooner, it will go back on the tax roll sooner than that. That would just be the max number that they could get. Um but the dollar amount would be what the cap is on that >> based on eligible. Yeah. >> Any other thoughts or discussion? >> Do you feel like you have enough direction? >> Does anybody else have any [laughter] Commissioner Bureek or Commissioner Moscowski, I don't know. Do you have any thoughts? I don't >> I I want [clears throat] more or less I'm going to echo anything that Mike said on that aspect. I I think the sidewalk is a value to the city. Um I I getting a project to go through is the challenge and that's what we're faced here. So, it's getting a project start in our city which is going to increase our rooftops, our population, people going to our businesses. It's in my opinion on the positive side of what we're looking for. >> And I honestly didn't say much because I what I was thinking has already been said by Commissioner Warden and Commissioner Duca. I think if we were to do this and not do a sidewalk, that would be a miss that we'd regret and never get back. Um, the value in the sidewalk to me speaks volumes. I can't speak to the soil and all those other things because I'm not going to pretend to understand the soil because I don't in our lovely clay city. Um, but again, you know, the 20 to 26 years, I appreciate that in the beginning, you know, we were looking at what the need is and that need obviously changed. um you know, can we look at this and is there option C? Could we do 23 years? Would that be enough to still do the project? You know, I'm not set that it has to be 26, especially since I feel like some of these numbers are still a little bit gray and maybe haven't been narrowed down enough. Um but again, I haven't seen the plan in detail. So, you know, can we can there be a medium? Can there be 23? Could there be 24? I I would push back a little bit on that once we get the actual numbers, but I can't ask for that without the actual numbers. So, that's where I'm at um with it. >> Great. I think that's good. >> Yep. Enough feedback. >> Yeah, that's great. >> Anybody have any more questions for um Mr. Cultus? >> Mark, would this delay because we have to repost public hearing and such delay the possible of this in 27? >> No, I don't think so. I think we're okay. Um, but I think that's something we have to give them the new we have to do the new calendar which we'll do tomorrow and we would likely then uh send out our new notice which would set our new time frame. >> Everything sort of has to reset. >> Yeah. I mean, as you know, planning didn't consider this. So, now we are in September anyway on the entitlement side. Um, so I think we probably line up close is our hope that this doesn't really delay us anywhere. But >> thank you. >> And I would just like to add to that. I mean, I think also realizing that we want to be um friendly and we want to see this work. If we need to plan a special meeting or move a date, you know, with enough notice, um, we can do that as well. So, just to keep that in mind when you're looking at the calendars >> because I know Minnesota winters, if we miss a window, you miss a big window and I would hate to see that happen because that would be could could be detrimental. >> Any other discussion or questions? Staff, you're good. >> Yeah, I have just one more uh question is I know you mentioned some of the utility costs go up >> as part of this investigation so far. as any additional kind of city costs come up. Just uh wondering if those would be something to consider recapturing to your example if we go, you know, the 23 24 we mentioned, you know, we did do the full 26 on the downtown development. However, some city infrastructure costs were included in that to this. I would argue that this sidewalk is uh kind of considered a city uh amenity uh that would be included, but just want to see if there's any additional costs that we're expecting that we're going to be incurring above would have been considered if that would want to be looped in. >> Yeah, the sidewalk was our big one that kind of came up. Um we haven't so that one we we've estimated. Hopefully the cost comes in less. The one thing I would say so we um in this development we were not proposing to provide them with anything. We were asking them to build all in infrastructure associated with the project including the public infrastructure and then dedicate it back and we take over our utilities. is somewhat unique because we have private roads which is actually a benefit I think long-term to the city in this in this case private roads are not what I would talk about otherwise but in this development they make sense but with that said we are we did ask them um as a part of this project to develop the road to the north that would connect to Pioneer that is a pretty big expense because as you know there's no houses on that there's nothing they can do that to me is kind of a quasi public improvement But I think it has huge benefit to now what's going to become 300 residents of the city of Maple Plane that live in this development are two 278 or whatever this number is um you know 85 times 1.9 or 2.3 right so I just think that's a that is a significant um piece that they are building all on their own dollar so I kind of look at that as kind of a quasi public improvement but nothing else outside of that Good. >> Sorry, I just wanted to say there is one typo because it still says in the packet we're going to have a hearing on August 12th, which I don't think >> that was my mistake. I we had originally scheduled August 12th, then we moved it to the August 24th. So, >> I know I just wanted >> make sure >> still logged in on that >> in the public air. So, >> all right. Good discussion. Thank you for that. And we'll look forward to the new calendar then from staff. >> All right. Um, next item of business is other business this evening and that is a staff report by assistant city administrator um Larson. So I will turn it over to him. >> Thank you madame mayor or sorry thank you chair and commission. Um I met with uh a few different businesses since the last time we met. I met with Monies uh Bank of Maple Plane Haven Homes and the Daily Store. Um some of the key takeaways, I'm not going to go through all of the reports because you guys have all read them, but some of the key takeaways that I've taken from them uh from each one. Uh so for Monies, uh the key takeaway is is that they they're feeling the pressure of uh the state and county uh regulations specifically to minimum wage uh and it varying uh increase in every single year. and he can't necessarily um count on his future expenses. Um, one thing that I do want to say that he's very uh in favor of is us expanding the rooftops in our community. He is very uh Jason is very uh much in favor of that and fully supports it. um with the Bank of Ma Maple Plane, uh their focus is really on measured sustainable growth. Uh specifically with their home loan portfolio, which as we gain more uh rooftops, that only expands the possibility for for him to uh or for the Bank of Maple Plane to expand their portfolio. uh one of the areas of opportunities that they see where they're not necessarily competitive in the marketplace is auto loans. Um they just can't comp compete with some of the the bigger banks and uh specifically the auto manufacturers. Uh with Haven Homes, uh parking is their big issue that they've got uh specifically for their employee staff. uh that back Pike parking lot really gets jam-packed with with uh with cars and there one of the future expansions that they're looking at is expanding that parking lot just a little bit in there when the time comes. Uh and then the Daily Store. I had the pleasure of meeting with with Kyle. Uh he's the company is brand new to the area. uh he's extremely focused on uh grassroots advertising campaigns uh word of mouth and also through Facebook uh to broaden his consumer base and really get established in our community. Um one of the things that he's looking for is uh future uh events within the city, something similar to like party in the park um or arts in the park. really looking to engage with those type of um events where he can get the word out uh either by being a sponsor or or being a part of it in some way of some sort. So that is in a nutshell uh the key takeaways that I had from uh meeting with those four businesses. But overall, it's been a great experience uh learning more about the businesses within our community and how we can help them more. Uh but to that, I will open it up to any questions that the uh commission may or may not have. >> Questions or comments for Mr. Larson? >> I have one as the leazison on to the West Henipin Chamber of Commerce. Yes. Um I know three out of four of these are um chamber members. So, I hope that when you're doing these types of visits, you're thanking them if they're members, and if they're not, that you're bringing along applications and dropping them off. And if you need them, I will happily um make sure you know where they are and get you some. >> That would be wonderful. Okay. I I know the the Daily Store would definitely would be open to that, I think. >> Yes. And I have dropped one off, but it never hurts to get a second invitation. Um and then also just with Haven Homes and I know it is not our land to sell but there is space in front of there um for development. So hopefully they are talking with the right people as well. And >> yeah uh that was actually uh one of the topics of conversation when they built their property. They thought it was a miss that they also didn't purchase those two pieces of land right in front of it because then they would have control over what could go there or they could even uh further expand in that area. >> Exactly. And just for the general public too, so many people think that's city owned because it's on Gateway Boulevard. Those green spaces are not owned by the city. So we do not um decide what goes there. It's what we'd like to develop. So, all right. Any other thoughts or questions, Mr. Larson? All right. Thank you for that update. Uh, with that, I am looking for a motion to adjourn this evening's EDA meeting. >> Move by Warden. >> I'll second. >> Second by Vera. All in favor? I. >> Meetings adjourned at 7:33.