EDSR MEMORANDUM 05-27-1997 ak ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY
MEMORANDUM
TO: Economic Development Authority
21- EROM: Paul T. Steinman, Director of Economic
Development
DATE: May 22, 1997
SUBJECT: Agenda Memo for EDA Special Meeting
Tuesday, May 27, 1997
The EDA special meeting is scheduled for 5:45 p.m., Tuesday, May 271
1997.
The purpose of the EDA special meeting is to take action on the EDA's
purchase of the remaining lot in the Elk River Industrial Park. Attached to
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this memo is a copy of the purchase agreement which has been negotiated
between staff and the seller's representative. The details of this agreement
are as follows:
• Purchase price $65,000
• EDA to pay closing costs 700
• EDA share of pro rated taxes 150
• EDA due diligence environmental/soils testing 350
TOTAL $66,200
Staff has requested that the seller provide a Certificate of Survey at the
closing, however, this request has been denied by the seller.
The Omnibus tax bill which has been passed by committee and proposed to
the Governor at the time of writing this memo does not include any
provisions which would affect the expenditure of excess tax increment dollars
from the Alltool TIF district for this acquisition. The single requirement
which has yet to be met, which would affect this source of funds, is a
modification of the budget to include the purchase of this lot as an identified
expenditure. Such budget modification would be undertaken by the City
Council since the Council was the governing body at the time of creation of
the Alltool TIF district in 1988. Staff would recommend proceeding with this
• budget modification as soon as eligible activities have been identified for the
13065 Orono Parkway • P. O. Box 490 • Elk River, MN 55330-1743 • (612) 441-7420 • Fax (612) 441-7425
Equal Opportunity Housing and Equal Opportunity Employment
Agenda Memo
May 22, 1997
Page Two
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excess TIF funds - approximately $170,000. Staff currently anticipates the
budget modification would be as follows:
• $66,200 Purchase Industrial Park lot
• ??? E & 0 Tool TIF Request for Expansion Project
• ??? Eligible Expenditures in West Business Park
Staff will proceed with the budget modification upon identification of these
other eligible expenditures. The budget modification is required to be
completed and funds expended prior to December 31, 1997. The
Development Account will be used to pre-fund this purchase and upon
completion of the modification, it will be reimbursed $66,200 from the excess
TIF funds.
Additionally, the legislature had included June 1, 1997, as the effective date
for new TIF legislation. This effective date made it imperative for the EDA
to close on the Industrial Park lot prior to June 1, 1997. The final version of
the tax bill however, now indicates an effective date of June 30, 1997. Since
preparations had already been made and this special EDA meeting called,
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staff is continuing to pursue a May 30, 1997, closing date for the industrial
park lot. This early date helped convince the seller to agree to a $65,000
purchase price.
Recommendation
Staff recommends the EDA approve the purchase of the Industrial Park lotus
outlined in this memo and on the attached Purchase Agreement.
eda\meetings\agmm 527.doc