Council, outside counsel debate Reister Point Crossing development agreement, port authority bond plan and remaining TIF issues

City attorneys and outside counsel presented an update June 30 on the proposed development agreement for the Reister Point Crossing project and outlined several remaining points of negotiation with the developer's attorney.

Outside counsel Steve Friedman and Russ Balthus of Squire Patton Boggs told the committee the most fundamental change in the latest draft is the financing structure: instead of the city issuing bonds to fund public improvements and be repaid with TIF (tax-increment financing) pilot payments, the port authority would act as the bond issuer and conduit. "So instead of the city issuing it, the port issues it, but the city is still the entity that collects the payments and has to provide those payments to the port authority," Balthus said. He said the arrangement does not change the city's right to receive a specified reimbursement: "$2,724,491.35" for the city's portion of the connector road already completed.

Counsel outlined five outstanding negotiation points reflected in the developer's June 26 letter: (1) the scope and characterization of "remedial public improvements" versus other developable improvements and whether remedial improvements are payable only if TIF revenues are available; (2) language that would require representations that the new TIF ordinances have been duly passed and are in effect, which the city worried could be inaccurate until the school district acts; (3) language appearing to obligate city council to approve final plats as varied by the planning commission, which counsel said would effectively pre-approve rights-of-way and public improvements and could strip council of its opportunity to review and accept easements and rights-of-way; (4) cost-certification and documentation language needed to satisfy state auditor requirements if the port authority issues bonds; and (5) liability language to ensure the city remains responsible only for defects traceable to the original detention-basin design as agreed in prior settlement language.

Councilmembers raised concerns about surrendering council's legislative role on phased approvals. "I speak only for myself, but I don't think that council should give up our obligation and duty to approve each phase as it comes along," Councilwoman Mitchell said. Several members asked whether the streets would be public or private; counsel said the developer is requesting public streets and that roads must be publicly dedicated for TIF reimbursement purposes. Counsel also said the port authority would likely act as conduit only and would not pledge its own funds; the port would pay bondholders out of the pilot payments the city receives and forwards.

Officials discussed timing. The school district is scheduled to meet July 16 and could act on required approvals; attorneys and staff discussed deadlines for receiving revised draft language and for possible special meetings. Council members and staff suggested a firm draft timeline to allow attorneys to wordsmith remaining items: a proposed internal deadline of Wednesday, July 2 (requests for drafts to be provided to city attorneys) and discussion of a possible special committee meeting the week after the holiday if counterdrafts arrive. Mayor Brubaker urged more verbal back-and-forth between counsel rather than letters alone.

No final development agreement was approved. The committee voted to go into executive session to discuss pending litigation; roll-call votes were recorded for the executive session motion.

Next steps: outside counsel will continue negotiations on the five outstanding points, coordinate with the law department and finance staff on cost-certification language, and report back to the committee as drafts are revised and related school-district approvals proceed.