HomeMy WebLinkAbout1989-05-25 CA Ltr to Stephen Watson •
l
LAW OFFICES OF
ECKBERG, LAMMERS, BRIGGS, WOLFF & VIERLING
1835 NORTHWESTERN AVENUE
STILLWATER, MINNESOTA 55082
LYLE J. ECKBERG (612) 439 -2878
JAMES F. LAMMERS FAX (612) 439 -2923
ROBERT G. BRIGGS
PAULA. WOLFF
MARK J. VIERLING
VICKI L. GIFFORD May 25, 1989
GREGORY G. GALLER C(DPY
Mr. Stephen M. Watson
252 South Plaza Building
Minneapolis, MN 55416
RE: Application for Tax Increment Financing
City of Oak Park Heights
Dear Mr. Watson:
Since your application has been submitted to the City of
Oak Park Heights' city staff consisting of myself, Mr. Bob Voto
the City .Auditor, and Daniel Wilson of the City Planner's staff,
we have had an opportunity to review the application and have, as
you know, requested additional data as it affects that
application.
Of the documents that have been produced to us, it is
clear that the $1.2 million of tax increment financing that is
being requested of the City of Oak Park Heights is not devoted to
new construction or improvement of the Mall premises, but rather
is scheduled within your agreements to be returned to the seller
of the property so as to offset the purchase price and, in
effect, finance the transaction in part. When the City of Oak
Park Heights established its policy for tax increment financing
and discussed its intent, the City Council made it eminently
clear that it wished to adopt a conservative and responsible
application of tax increment financing within this community. As
a matter of policy within the City of Oak Park Heights, as well
as implementation of the conservative application of tax
increment financing within the community, the City has always
envisioned the use of its tax increment dollars by a developer as
a direct part of the construction of a high - quality, commercial,
industrial and residential development that was desired. The
City did not desire the use of its tax increment dollars to be
used by a developer and a purchaser as a financing tool to buy
off the seller's interest.
Consequently, although you are still welcome to proceed
ahead with your application and attend and advocate your position
at the public hearings that have now been scheduled, we feel it
fair to advise you that city staff will be recommending against
your application.
Mr. Stephen Watson
Page 2
May 25, 1989
Should you desire to proceed further with your
application without amendment, we also wish to advise you that
there is within the documentation which you have submitted to
date no data that documents the allegation of substandard
conditions. Further, there is no clarity within your application
or the supporting documentation as to how much and in what form
the developer's equity within the project would be.
Consequently, we are not in the position to compare the equity
with the City's equity policy requirements as provided within the
City's policy statement. The proforma which you provided is not
what was requested, as we would prefer a spread sheet analysis on
an annual basis. That analysis should provide a detailed source
of funds, i.e. rents, percentage rents, fee charges, etc. The
expenses should be in equal detail. What we are looking for is a
fixed and variable operating expense along with all debt. The
intent is to be able to determine the shortfall on a year -by -year
basis.
Finally,' it appears that the application that you have
submitted to date would require substantial variance to the City
policy with regard to fiscal disparity of developer equity, and
you may wish to revise your application to address those issues
should you wish to proceed.
This correspondence should not be construed by you as a
denial of your application as that process can only take place in
front of the City Council following the public hearing that has
been scheduled. It is, however, a communication to you to advise
you of staff position based upon the information that you have
provided to date.
Very truly yours,
Mark J. Vierling
MJV:kp
cc: Bob Voto
David Licht
Dan Wilson
° Dan Wilson MEMORANDUM
TO:
Curt Gutoske
FROM: Northwest
DATE: 30 May 1939 AssOCIated
Oak Park Heights -St. Croix Hall TIF Consultants, Inc.
RE:
798.02 - 89.09 (612) 925 -9420
FILE NO: 4601 Excelsior Blvd. - Suite 410 • Minneapolis, MN 55416
Enclosed please find a letter from Mark Vierling to Mr. Stephen
Watson regarding the City Staff recommendation of the St. Croix
Mall TIF application.
Pleaee call if you have questions.
Enclosure
WHITE - ORIGIN1 YELEAM - FILE COPY PINK - C FILE