1988-02-16 Special Meyer Phillips 66 Station
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CITY OF ALBERTVILLE
POBOX 131
ALBERTVILLE, MINNESOTA 55301
PHONE (612) 497-3384
ALBERTVILLE, MN
COUNCIL ACTION ITEM
FEBRUARY 16, 1988
MEYER PHILLIPS 66 STATION/CONVENIENCE STORE
BACKGROUND
On November 16, 1987, the CIty of AlbertvIlle was approached to consIder
the use of tax Increment fInancIng assIstance on the PatrIck Meyer Project
(A PhIllIpS 66 StatIon and ConvenIence Store) The CouncIl receIved a cost
breakdown (attached) WhICh suggested a total project cost of $748.000 00.
The CouncIl IndIcated that the project was generally acceptable to be consIdered
for Tax Increment ASSIstance, but that further reVIew by the CIty's Tax
Increment consultant, Holmes & Graven, was requIred, along WIth a deposIt
of $1,000.00 to InItIate the CIty'S reVIew of the project.
On January 4, 1988, ChrIstIne M. Chale of Holmes & Graven, outlIned the
detaIls of the project (see attached memo)
She IndIcated the developer was askIng for $50,000 to $90,000 00 In publIC
aSSIstance to fInance specIal dIsbursements and land acqUIsItIon costs
(The Developer has an optIon to purchase the land)
It was suggested the project would generate between $3,500 and $6,500 In
Increment begInnIng In 1989.
The CIty would need to amend ItS eXIstIng dIstrIct or create a new dIstrIct
to accomodate thIS project.
The Developer also proposed utIlIZIng $25,000 In excess project funds from
the 1984A Issue to fund costs assocIated WIth thIS project A Plan Amendment
would be requIred.
A meetIng was scheduled to dISCUSS thIS project but was delayed due to dIffIculty
WIth the WrIght County Assesor's OffIce In establIshIng a value for the
project (see attached).
That data was forwarded to Holmes & Graven, and on January 28, 1988, ChrIstIne
forwarded another memo (attached) to the CIty regardIng thIS proposed project.
The Increment range was prOjected at $3,135 to $8,180.00 begInnIng In 1990.
ChrIstIne Chale outlIned two optIons for dIScussIon. A General OblIgatIon
Bond Issue Or, a pass thru arrangement, whereby publIC aSSIstance IS provIded
the developer In smaller amounts over tIme, only If and as tax Increment
IS receIved.
Make our Otv Your Otv
We invite Home lnduslrv BUSiness
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COUNCIL ACTION ITEM
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A copy of all documents relat1ve to th1s project were forwarded to Brad
Farnham w1th Juran and Moody, Inc. for h1s reV1ew and comment as the C1ty'S
F1nanc1al Adv1sor.
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On February 1, 1988, the Counc11 met w1th Mr. Farnham to d1scuss h1s react10n
to the proJect. He adv1sed that the C1ty not 1ssue 1tS General Ob11gat1on
Bonds to ass 1St th1S proJect. He recommended that the Counc11 only cons1der
pass thru ass1stance annually over a per10d of t1me, only 1f, and
as, tax 1ncrement 1S rece1ved.
He caut10ned the C1ty Counc11 aga1nst access1ng the 1984A Bond Issue excess
project funds as the Developer had requested at th1s p01nt 1n t1me.
He p01nted out that the projected 1ncrement of between $3,100 and $8,100
would support less than $50,000 00 1n Bond Proceeds before expenses of 1ssuance.
Between $35,000 and $40,000 would be ava11able after expenses were pa1d
He felt the 1ncrement was too marg1nal to Just1fy the sale of bonds.
The Developer and h1s attorney, John Gr1es, appealed for the ass1stance,
1nd1cat1ng that C1ty part1c1pat1on was needed to complete the f1nanc1ng
package.. ...
The C1ty's costs to amend the plan to allow the pass thru ass1stance were
est1mated at $10,000.00. The C1ty was asked to cons1der repayment of those
costs over t1me as the 1ncrement was rece1ved. The Counc11 d1d
not accept that plan.
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Act10n was not taken, and the Counc11 dec1ded to schedule a workshop to
d1scuss th1s project and to reV1ew use of Tax Increment Ass1stance h1stor1-
cally, and for the future.
The workshop was held on February 9, 1988
The Meyer Project was d1scussed
It was determ1ned that:
1 It would cost $8,000 to $10,000 00 to amend the C1ty'S plan
to accommodate th1s proJect. The C1ty felt th1s should be
pa1d up-front by the Developer rather than over t1me.
2 The Tax Lncrement Ass1stance 1S very small for th1s project
$3,500 annually over 8 years.
$3,500 x 8 = $28,000.00
The Counc11 wondered how stable th1s project was, 1f $28,000 1n cash over
e1ght years was g01ng to "make or break" th1s project
ACTION ITEMS
1.
The Counc11 f1nds that the Tax Increment generated by the Meyer Project
1S not of a magn1tude to warrant pub11c ass1stance cons1derat1on
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The Project 1S s1m111ar to 2 eX1st1ng adjacent buslnesses who have not
been ass1sted w1th Tax Increment F1nanc1ng. A5ri~nce to the Meyer
Project could g1 ve the appearance of unfa1r adv' e.
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The Counc11 supports the Meyer ProJect, but w11i t, over llme, subsld1ze bhe
$10,000.00 In C1ty expenses to ass 1St the proJect.
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