12/19/1988 Meeting - Laserfiche WebLink

Home Browse Search

e Mr. Bennett objected and said the landlord could be responsible for tenant improvements if higher rents were charged and he would consider that preferable to tying up capital at the expense of other downtown projects. Mr. Gleason commented that interior improvements would be legitimate costs of the City to be publicly bid. Development Director Abe Farkas said interior costs were estimated at $3 million to $5 million. It would be possible to bond and use the interest on cash investments to payoff the debt. He added that between $3 million and $3.5 million would be committed to the library building, leaving between $1 million and $2 million in reserves. Mr. Farkas noted that at least $500,000 musts be left in reserves to protect existing bond indebtedness. Mr. Bennett said the question was whether to use the money itself or to use interest from it to bond. Ms. Ehrman reported that the Council Committee on Library Financing had discussed that question and preferred to offer the community a total package for the project. Mr. Rutan said the proposal under consideration was complex and it would be appropriate for council to schedule a work session to consider sources and commitments of funds, risk factors at different points, and the extent to which the City would be subsidizing a private developer's project. He indicated that he would be uncomfortable voting on whether to proceed with the project before his questions were answered. Mr. Miller requested additional information on the impact the project would have on tax increment flow and on what would happen if that stream did not e increase as projected. Mr. Gleason supported Mr. Rutan's suggestion for a work session. He advised the council that the proposal should be regarded as conservative because it carried no expectations of growth in the value of the structure, the land, or the shell although such growth was likely. There was no increased value assumption in the increment district itself, nor was there any assumption regarding the existing library building. Mr. Gleason stated that the City's investment in the project would benefit the City's part of the project and he considered the land transaction an excellent business decision. Mr. Bennett agreed with Mr. Gleason's assessment and complimented Pankow's participation in the development of the site. Mr. Holmer expressed his satisfaction with the general framework of the project but reported that citizens did not understand why the tax increment district boundary could not be expanded to include the present library site. Ms. Wooten said her explanation to citizens was that without the new building to generate new tax increment revenue, the library could not be renovated. Mr. Gleason added that the value of the project's proximity to an existing parking structure combined with the new below-grade parking facility to be leased by Pankow, savings in architectural and engineering fees, and e MINUTES--City Council December 19, 1988 Page 4 Work Session