Memo- North Annex Redevelopment Proposal
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Mel110
TL): Jim Ken-igan, Sid hunan
Frum: Rl)bert Deike
Date: August] 9,1004-
Re: North Annex Redevelopment Proposal
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1 ha\'c revie\\ed the infol111ation you provided to me on the new redevelopment proposal tor the North
Anne'\ property that has been discussed with SUPERVALU and Opus Co qXJratioII, This is to provide
)/()u with sOllle comments on the proposal.
As described in your memorandum to the Mayor and City Council, the proposal involves three or 1tlUr
ph~lses of development resulting in an uverall development that is somewhat smaller than whal had
heen previously anticipated, There would be no assurances or guarantees that any ofthe phases would
~1L'llla! 1 v OL'CUL SUPER V ALU proposes to demolish the existing buildings on the site and wuuld be .
gi\'t'11 a tax increment revenue note in the amount of its demolition costs payable from the tax
increment being n.Jn-ently generated fi'om the existing distribution warehouse and from the tax
incrc'll1ent that will be generated f)-om any new development on the North Annex property.
The following are some issues that I identified in reviewing the infonnation:
l. \Vil1 lXl)lllent of the tax. increment note given to SUPER V ALl' for demolition costs be
subject to any performance conditiuns'l Under the existing agreement the HRA agreed to
issue SUPERV ALU a tax increment revenue note ifit demolished the North Annex but no
interest would accrue unless the North Annex is redeveloped. If reimbursement is not tied
at all to redevdopment of the North Allilex, it is possible that SUPERV AU] will be
reimbursed with interest eyen ifno or limited development occurs.
-, What level of control \<\'i1l the City have over the nature and design of the phases or the
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N0l1h A1mcx development and how long \vill that control last? If no development occurs
tor a long period of time, how \'iill the City retain its control over what t:}11es or
development is permitted? Unless it is specifically dealt with in the agreement the site
could be redeveloped into non office t:>11es of uses.
., What will be the status of the HRA's option to acquire the N0l1h A.lll1CX Property? The
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HRA has an option to acquire the property that connnences on February] 8, 2005 and
extends for 547 Jays_
1.et llle know if YOll have any questions about this memo. .
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. EHLERS
& ASSOCIATES 1 r, c
To: Jim Kerrigan, City of Hopkins
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From: Sid Inman, Ehlers & Associates
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Date: August 19,2004
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2: Subject: North Atmex Project - Tax Increment Financing Plan
I am writing this memo in response to the discussions we have had regarding the tax increment plan
of finance for the NOlth Annex Project. The HRA staff has been approached by Supervalu and Opus
to request a phased redevelopment of the NOlth Annex Site.
As YOLl aware, the city sold a General Obligatlon bond to provide funding for the construction of the
intersection, It is cunently being paid out of tax increment from the new warehouse. This will not
change and all tax increment both current and future are first pledged to the city bonds.
Next, Supervalu will demolish the existing building. They are requesting that they be reimburse for
this expense by the HRA tlrrough the issuance of a series of pay as you go tax increment notes. They
arc requesting that tax increment from the ne'vv warehouse and future tax increment from projects wi 11
be used to pay these notes,
. Supervalu and Opus desire to begin marketing the North Annex to users. The HRA and Opus will
caleu late the need for assistance for each user based on a per square foot cost of buying the lanel,
builellng and parking (But For Test). Once the level of assistance is established, pay as YOLl go tax
increment notes will be issued to provide this assistance, Theses notes may be issued to the user,
Opus, Supervalu or a combination ofthe three,
Please let me know if YOLl have comments or questions. I will be at the HRA meeting 011 the 24\11 to
discllss this item,
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LEADERS IN PUBLIC FINANCE
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3060 Centre Pointe Drive Phone: 651-697~8507 Fax: 651-697-8555
Roseville, MN 55113-1105 sid@ehlers-inc.com