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About a month after the issue was first tabled, the Albert Lea City Council on Monday is again slated to vote whether to amend the city’s agreement with the developers of the Tiger Hills housing development.

According to city officials, developer Greg Moen has requested the council amend the way assessments for the second phase of the development are paid for.

Instead of a certain amount of city assessments being due each year, he has requested that assessments be allowed to be paid in full plus interest at the time a lot is sold, or deferred until Nov. 30, 2017, whichever happens first.

The council approved a similar deferment for the assessments in phase one of the project.

Moen has said in documentation to the city that this would allow him to pay his delinquent real estate taxes. The lots are projected for a forfeiture sale in 2012 if the delinquent taxes are not paid.

In a letter to City Manager Chad Adams, Moen said he has been working with his bank to be able to release some of the proceeds from lot sales to pay the development’s delinquent taxes.

He said he is current through the first half of 2011 with the phase one taxes and has had a lot sell on June 17 and is expecting another on July 8.

“The bank has agreed that since the funds are available at this time, that they will release them to pay all the taxes and bring us current as long as the city changes our assessments to be set up the same as phase one,” he writes.

“The time has come that the council must make a decision on this now, as the funds are ready to be released at this time,” he continues. “If we wait then the bank will apply those funds to the loan, and depending on the market conditions, we may not have the ability to pay at that time.”

He asked the city manager to consider the tax revenue generated for the community.

“It should be quite easy for you to see that this has been a very good investment for the city of Albert Lea,” he said.

During discussion about the issue Thursday, Adams presented the council with four options on how to handle the issue.

• He said, first, the council could chose not to do anything with the agreement until spring of 2012, as the delinquent parcels would not go into tax forfeiture until August 2012. This would give more time to see if additional lots will be sold.

• A second option would be to modify the assessment schedule with a letter of credit. A letter of credit would be required to ensure the money is paid.

• Third, the council could choose to defer the assessments to lot sales, just not as long as 2017.

• Lastly, Adams presented the option that Moen prefers of deferring the assessments until lots sell or until 2017. The developer would be required to pay all delinquent property taxes and assessments to date. When the issue came before the council in May, Moen had paid about $500,000 of the principle owed to the city. The city put roughly $1.3. million into the project. But then there are also interest costs.

First Ward Councilor John Schulte V asked if there had been any hardship shown by Moen such as that he was going to go into bankruptcy if this amendment was not approved.

Adams said Moen had not indicated this.

Second Ward Councilor Larry Baker expressed support for Moen’s request, saying that he does not think the city should get into the business of selling lots in case the city ends up with the lots.

Mayor Vern Rasmussen said ultimately what needs to be decided is what’s the best way the city can recoup its money that has put into this.

Sixth Ward Councilor Al “Minnow” Brooks said for him, the decision comes down to whether the city is prepared to make similar amendments with other developers if they see this one approved.

“Are we going to give all the other developers the opportunity to come back and say we’re going to honor the same thing for you we did for Greg?” Brooks asked.

He said he thinks there would be nothing wrong in the council saying they would like to wait and vote on the issue in the spring after seeing what happens the rest of this year and beginning of 2012.

“We’re supposed to do what’s best for the community as a whole — not what we think individually,” Brooks said.

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Section 2.08. Mayor.

The mayor is the presiding officer of the council. The council must choose from its members a mayor pro tem. The mayor pro tem holds office at the pleasure of the council and serves as mayor in the mayor's disability or absence from the city or when a vacancy in the office of mayor exists. The mayor:

(i) exercises the powers and performs the duties conferred on the mayor by this charter, the ordinances of the city, and law;

(ii) is the official head of the city for ceremonial purposes, for purposes of the service of civil process, and for the purposes of martial law; and

(iii) must report to the council neglect, dereliction of duty, or waste on the part of an officer or department of the city.

http://albertlea.com/stat1/2/8.htm

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Moen had paid about $500,000 of the principle owed to the city. The city put roughly $1.3. million into the project. But then there are also interest costs.