Good evening, everyone.

We are going to get the agenda session started for tonight.

It is 5 15.

The first item on the agenda would be planning and economic development.

Item number two, resolution 647.

Resolution approving DITA resolution 26D-18 authorizing a development agreement between the Duluth Economic Development Authority and Historic Duluth Armory LLC for the redevelopment of the Armory Arts and Music Center and approving the development agreement.

Item number three, resolution 673, resolution vacating a portion of a right-of-way along 18 and a half Avenue West between 4th Street and Fifth Street in the Platte of Myers rearrangement of blocks 106 and 105, 106, 127, 128, and 142 in the Duluth proper second division.

Item number four, resolution 678.

Resolution vacating a portion of a right-of-way along 26th Avenue West between West 10th Street and its alley in the plat of Spaulding's addition to Duluth.

Line northwesterly of the northeasterly extension of the southeasterly line of said block 17, and line southeasterly of the northeasterly extension of the northwesterly line of said lot one, block 17.

Item number five, resolution 683.

Resolution authorizing the proper city officials to enter into agreement with the Federal Reserve Bank of Minneapolis to support the coordination of periodic focused groups.

Thank you so much, uh President Nephew.

I have a question uh regarding the resolution 647.

Happy to see we've got some folks here from the historic armory as well.

Um my question is uh we met about this at DITA yesterday, and we really got a chance to hear a lot about the public benefit, the jobs requirement, the increased uh property tax as a result of this project.

So I'm wondering if we could um uh hear a little bit more about that so that the counselors um may uh may hear what the uh what the commissioners, the data commissioners heard.

Are you hoping to hear from Manager Hobbes?

All right, come on up.

Welcome.

Thank you, President Nephew, Counselors, thank you, Counselor Randorf.

Um happy to speak to that in a little more detail.

Also, as you said, folks from the Armory are here if you have specific questions on what the jobs are and what that might look like, um, great for them to be able to answer that.

Uh but as Counselor Randorf described, with any TIFF that we proceed with, there is a public benefit requirement, um, which you'll see.

I actually printed some things today.

Uh the business subsidy agreement that gets attached is a great way to document what those public benefits are.

And so those are also things that you'll see included within the development agreement itself.

And because of this business subsidy agreement per state statute, uh, the developer is required to report regularly for a two-year period to ensure that they are meeting that public benefit requirement.

And if it's okay, I'm gonna take the opportunity quick to talk about a new term that you'll see incorporated within these development agreements related to that item in particular.

Um so you'll note in the council memo there are a few things that we point out as new terms that you will see in TIFF agreements moving forward that were a direct result of the work that we did just last year.

It feels like much longer ago, but just last year, right related to the TIFF policy, um, really that centered around feedback that we heard from all of you, that we've heard from the community, and that we ourselves as staff have experienced.

And so one of the terms related to the public benefit is creating a sliding scale for reporting that allows a little more accountability for those developers as they demonstrate how they're meeting public benefit.

So, as you'll see in the agreement, um, if they're receiver or reporting anywhere from I believe it's zero to eight, they get 50% of their tax increment payment.

If it's nine to fourteen, they get 90%.

If they're completing their full public benefit, as they said, they get the full TIFF payment.

And so this allows us a real tangible tool for accountability instead of that whole pulling the whole thing out, which gets very challenging and complicated both for us as well as for the developer.

Um, if I can, I will also talk very quickly about another term that is very similar, and that relates to construction completion deadline.

So we've all experienced a lot of uh amendments for agreements when projects are not on schedule and we don't and haven't had a great mechanism to enforce a little more accountability.

And so what we're doing here is we're allowing some flexibility for the developer while also creating some accountability for us and for them.

And so what you'll note is if the developer does not meet the date that they identified as their commencement of construction, they'll see a 10% reduction in their TIFF note.

If they do not meet their project completion date, they will have a two and a half percent reduction per month until that's met.

Our ultimate goal is that developers provide us with more realistic deadlines on when they think construction will commence and when they think they will complete it and allow us a little bit more of a carrot and a stick, if you will, to ensure that those things are met.

And so the armory was a really wonderful partner in working through that with us.

They ensured that this worked with their TIFF lender.

Um, and again, this is things that came out of best practices that we see from communities across the state, uh, and at the advice of our our our TIFF advisor at Eller.

So excited to see those things incorporated in there.

So, Councilor Randor, to answer your question, um, there is that public benefit related to the 14 jobs.

Um, of course, also the redevelopment of a historic property is incredibly important, and then finally the increase in property taxes.

So, that is another new term that you'll see is the requirement of property taxes being paid in perpetuity.

Uh, that we identified that as our primary purpose and goal with with uh TIFF is to see property tax increases, and so we wanted a mechanism in our agreements to be able to see that come to fruition.

So I will pause there if there's any additional questions about that or anything else, but wanted to make sure I pointed those things out a little more specifically.

All right, thank you.

Uh Counselor Klana.

Thank you, President Nephew.

Uh, my question is about uh resolution 683, item five, uh the Federal Reserve Bank uh focus group.

Um we can only go with that.

Yeah.

Um so yeah, the the these have been great services to the region, the community.

Um given the pressures that have been on the Federal Reserve politicizing it, uh you know, the potential that maybe these focus group groups evolve in direction that isn't what really they're for, and what we'd hope they'd accomplish.

Are there provisions in this agreement to if need be discontinued the dis the agreement?