ADMINISTRATION - Erik Thorvig, Community Development Director
Title
APPROVAL OF SEWER AVAILABILITY CHARGE (SAC) LOAN AGREEMENT FOR FRESH PICKED PIZZA
Background
In July 2019, Fresh Picked Pizza received approvals for construction of a new restaurant at 8683 Central Avenue NE. The owner of the restaurant is proposing to construct a new 5,000 sf. restaurant with take-out, dine-in and patio seating. The property currently has a dilapidated former nursery building which will be removed for the new restaurant. Many other significant aesthetic improvements will occur on the site. The property is part of a larger redevelopment area identified in the 2040 Comprehensive Plan.
Since last July, the restaurant owner has been determining project costs and attempting to secure financing. One of the challenges that the restaurant owner has expressed is the ability to make a project financially feasible.
The Sewer Availability Charge (SAC) is a fee by the Metropolitan Council to maintain wastewater infrastructure. SAC fees vary based on the type of use and the amount of discharge they produce into the wastewater system. Based on information provided by the Metropolitan Council, the SAC fee for the restaurant will be $27,765. The city has an account with approximately $125,000 that was collected from SAC credits available to the city from building demolitions. Typically, the city acts as a pass-through to the Met Council for SAC payments. The money available was collected by the city however did not have to be distributed to the Metropolitan Council because credits were available.
Staff is proposing the following structure to the loan:
• Amount - $27,765 (or actual amount of SAC as determined by Met Council)
• 0% interest
• Deferred payments
• Forgivable if business operates for a period of five years (date determined by official opening date of the restaurant)
• If business closes prior to five years, full amount of loan is due, or loan is assessed against the property.
• Funding is provided upon issuance of the building permit.
Recommendation
Adopt the attached resolution. Staff will prepare a loan agreement that will be executed by the president and executive director.
Body
WHEREAS, the property at 8683 Central Avenue NE was purchased by the owner of Fresh Picked Pizza; and
WHEREAS, the property has a vacant, dilapidated building and is located within an identified redevelopment area in the 2040 Comprehensive Plan; and
WHEREAS, approvals were received in July 2019 for the construction of a new 5,000 sf. restaurant; and
WHEREAS, the city council recognizes that there are certain costs associated with redevelopment of the site that result in the need for city assistance;
NOW, THEREFORE, BE IT RESOLVED, that the Blaine City Council hereby approves entering into a loan agreement for the Sewer Availability Charge (SAC) based on the following terms and directs the mayor and city manager to execute the necessary documents.
• Amount - $27,765 (or actual amount of SAC as determined by Met Council)
• 0% interest
• Deferred payments
• Forgivable if business operates for a period of five years (date determined by official opening date of the restaurant).
• If business closes prior to five years, full amount of loan is due, or loan is assessed against the property.
• Funding is provided upon issuance of the building permit.
PASSED by the City Council of the City of Blaine this 4th day of May, 2020.