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Development Finance APA Conference September 29, 2011 Bret Weiss – WSB Mark Ruff - Ehlers

Development Finance APA Conference September 29, 2011 Bret Weiss – WSB Mark Ruff - Ehlers. That Was Then, This is Then. Late 80’s development similar to now Use what we learned during the boom years Is slower, smaller development bad ?. How Interested Are You?.

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Development Finance APA Conference September 29, 2011 Bret Weiss – WSB Mark Ruff - Ehlers

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  1. Development Finance APA Conference September 29, 2011 Bret Weiss – WSB Mark Ruff - Ehlers

  2. That Was Then, This is Then • Late 80’s development similar to now • Use what we learned during the boom years • Is slower, smaller development bad?

  3. How Interested Are You? • Decide what you are willing to do • Review policies to see if they still fit • Don’t be afraid of “What if’s” • Clean up obstacles

  4. Vision + Can Do = Success • Inventory what you have to offer • Understand what it takes • Stop waiting for others to do it for you • Don’t let the past cloud the future

  5. Time to Partner • Talk to the businesses & investors in your city • P3 can be small projects too • How can you encourage investment? • Find a way

  6. “Can Do” versus “Can’t Do” • G.O Bonds for infrastructure • WAC/SAC calculations • Finance fees • Park dedication costs • Transportation trunk fees • Grants

  7. Financial Tool Kit • Deferred assessments/agreements – Monticello interchange • City funded studies – Monticello Walgreen’s • Transportation trunk fees – Rogers • Development subsidies – Inver Grove Heights & Rogers

  8. How? • How can I change the world if I can’t even change my …….(pick one: mother, brother, partner, son, dog)

  9. Why? • Lending is still tight

  10. Appraisal Gap

  11. Tough to Generate a Policy • Every project differs • Risk is inherent • The most important actions • Knowing the Risk • Mitigating risk • Requires you to know your Council/Board

  12. Risk of Lawsuit • Document why you want to help this person and not the next • Adopt clear findings • Describe public purpose • Follow procedures carefully • Involve your city or development attorney early

  13. Public Trust • You are doing what with my taxes? • More information is better than less • Last minute rush is still common

  14. Rating Changes • Rating agencies like to see growth in market value • Four Factors: Economy, Finances, Debt and Management • Debt is the least important factor for Moody’s • Management is the one factor most in your control

  15. Case Studies • 125 Unit Apartment Project • City offering $1M up front • Developer is “old school” • Minimum market value • Subordination • Completion of building

  16. Case Studies • Manufacturing expansion • City sold land at a discount • Repaying itself • Minimum market value included • Enough land to expand

  17. Case Studies • Rental Housing and Commercial • Design dominates • Amount of public assistance is secondary as long as there is minimal risk • Problems today is clearly identified • Existing circulation poor • Project failed already once

  18. Final Words • Secure a network of good references for data • Reward developers who are good partners and know their banks • Select a team of experienced advisors • Trying to do it all yourself is difficult for anyone

  19. Questions? • Bret Weiss(763) 287-7190 • bweiss@wsbeng.com • Mark Ruff(651) 697-8505 • mruff@ehlers-inc.com

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