7.0 EDSR 03-10-2008ITEM # 7.
Kive r
MEMORANDUM
TO: Economic Development Authority
FROM:
DATE:
SUBJECT:
Attachment
Catherine Mehelich, Director of Economic
March 10, 2008
Update on Proposed Entertainment Center Project
Development
• EDA Meeting Minutes, October 8, 2007
Issue
At its October 8, 2007 meeting the EDA heard a presentation from the developers of a
proposed entertainment center and hotel project. The presentation included a description of
the proposed project and the developer's request for public financing assistance needed fox
the project to proceed. The EDA indicated a willingness to consider the developer's
proposal with additional details, and directed staff to proceed with the due diligence
necessary to complete a financial feasibility analysis of the proposed project and assistance
request.
At the March EDA meeting staff will provide a verbal update on the status of the
development proposal.
Economic Development Authority Minutes Page 2
October 8, 2007
P.M. TO AWARD THE SALE OF $10,000,000 GENERAL OBLIGATION BONDS,
SERIES 2007. MOTION CARRIED 7-0.
6. Consider Resolutions Approving the Decertification of TIF District No. 17 and TIF District
No. 20 in the City of Elk River
Director of Economic Development Catherine Mehelich presented her staff report.
MOVED BY COMMISSIONER TVEITE AND SECONDED BY
COMMISSIONER KLINZING TO ADOPT RESOLUTION 07-OG APPROVING
THE DECERTIFICATION OF TAX INCREMENT FINANCING DISTRICT
NO. 17 WITHIN DEVELOPMENT DISTRICT NO. 1 IN THE CITY OF ELK
RIVER. MOTION CARRIED 7-0.
MOVED BY COMMISSIONER TVEITE AND SECONDED BY
COMMISSIONER MOTIN TO ADOPT RESOLUTION 07-07 APPROVING THE
DECERTIFICATION OF TAX INCREMENT FINANCING DISTRICT NO. 20
WITHIN DEVELOPMENT DISTRICT NO. 1 IN THE CITY OF ELK RIVER.
MOTION CARRIED 7-0.
Update on Gateway Business Center
Planning Manager Jeremy Barnhart presented his staff report.
Mr. Barnhart stated that staff continues to work with the adjacent property owners to agree
on the needs fox the area. He noted that both of the major property owners axe working on
developing their own plans and are not ready to offer more specific information at this time.
Mr. Barnhart indicated that staff has learned that there is a possibility of one or two major
land uses that wish to locate within the Gateway property. He stated that staff is taking a
flexible approach to the layout and design of the Gateway property because the needs in
terms of size, access, visibility are not known at this time.
O Concept Review -Entertainment Center
Director of Economic Development Catherine Mehelich presented her staff report.
Richardt Fleischmann, Energy Entertainment Enterprises, LLC - presented a PowerPoint
outlining the details of the proposal for Energy Entertainment City Hotel and Conference
Center.
Mr. Fleischmann explained that in an attempt to ensure a successful venture for all affected,
Energy Entertainment Enterprises, LLC is requesting certain concessions and considerations
to assist them in initiating their venture as follows:
• Grant of 14 acres of land and waiving of associated assessments and fees
• Site engineering and preparation assistance to include wetland mitigation, tree
removal, and addition or removal of any required fill
^ Three year tax abatement on completed project
• Negotiations on SAC, WAC, and other fees
Waiving of park dedication fees
Economic Development Authority Minutes Page 3
October 8, 2007
Discounts on certain fee schedules such as plumbing and electrical
Curb and gutter, walking paths, and area illumination
Applicable rebates, financing, or incentive programs
Ms. Mehelich stated that staff is looking for EDA feedback and direction on how to
proceed.
Commissioner Klinzing stated that this is an exciting project. She indicated that normally,
the tax rebate financing would be inclusive of all the financial considerations and questioned
why that approach was not taken. Mr. Fleischmann explained that Energy Entertainment
Enterprises, LLC did not wish to be presumptious but would be interested in pursuing that
option.
Commissioner Dwyer questioned if the estimated construction costs were known. Mr.
Fleischmann indicated construction is estimated at upwards of $20 million.
David Sorenson, Energy Entertainment Enterprises, LLC -explained that the Gateway site
was chosen due to its close proximity to the Northstar Rail and the park and ride. He noted
that he is a long-time resident of Elk River.
Commissioner Motin stated that the project sounds intriguing. He questioned the estimates
on the proposed incentives. Mr. Clark indicated that the incentive costs are difficult to gauge
but he would estimate between $2 - $3 million. Commissioner Motin stated that he would
like to see an extension of the abatement period.
Commissioner Tveite indicated that he also finds the project intriguing but expressed
concerns over the request for a letter of intent prior to completion of the architectural work.
Mr. Sorenson explained that the letter of intent would be necessary to secure funding for the
architectural work.
Discussion took place on the timing of the letter of intent and the land grant. It was the
consensus of the EDA that they were in favor of the project but that the letter of intent
would need to be structured so that if approved, financial considerations would be
contingent upon progress of the project. Mr. Clark indicated that staff will come back at the
November EDA meeting with the following information:
^ Full analysis of the city's overall costs
^ Analysis of the incentive request
^ Initial findings on the but for analysis
^ Staff will work with the EDA attorney and Energy Entertainment Enterprises, LLC
to draft a letter of intent
Commissioner Motin indicated that he would like staff to compile a list of pros and cons for
this project. Commissioner Zerwas stated that he would also like staff to project how this
project would affect the remaining Gateway property.
9. Update on U.S. Post Office Property
Community Development Director Scott Clark presented his staff report. Mr. Clark stated
that the U.S. Post Office will be selling their Line Avenue property through a sealed bid
process. Mr. Clark explained that staff recognizes that the subject property is a very attractive