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HRA 05/13/1982 - 29387• CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING MAY 13, 1982 CALL TO ORDER: Chairperson Commers called the May 13, meeting to order at 7:33 p.m. ROLL CALL: 1982, Housing & Redevelopment Authority Members Present: Larry Commers, Russel Houck, Carolyn Svendsen, Elmars Prieditis, Duane Prairie Members Absent: None Others Present: Jerrold Boardman, City Planner Mark Haggerty, Smith, Juster, Feikema Ron Berg, Miller Securities Richard J. Larsen, Larsen /Rova Architects Marlin Hutchison, Barthel Construction James Vassar, Vassar & Associates, Inc. Judy Schollen, Lennies, 6381 University Ave. N.E. Ted Burandt, 6211 Riverview Terrace APPROVAL OF APRIL 8, 1982, HOUSING & REDEVELOPMENT AUTHORITY MINUTES: MOTION BY AR. PRAIRIE, SECONDED BY MR. HOUCK, TO APPROVE THE APRIL 8, 1982, HOUSING & REDEVELOPMENT AUTHORITY MINUTES AS WRITTEN. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. I. CENTER CITY PROJECT: A. Update on Property Acquisition - Columbia Park Properties (Memo #82 -33 from Executive Director) 1. Letter to Art & Dorothy Smith dated April 28, 1982, regarding Purchase Price Approval Mr. Boardman stated that, for the record, he needed approval of the $85,000 purchase price for Art & Dorothy Smith's property. He stated he had given the HRA members a copy of a letter from Mr. Herrick advising Mr. Boardman that the additional $5,000 requested by Art & Dorothy Smith for the property was more than adequate compensation in the sense that, if they went into 0 HOUSING &'REDEVELOPMENT AUTHORITY MEETING, MAY 13, 1982 PAGE 2 condemnation, they would spend at least $5,000 or more on the purchase of the property. He stated Art & Dorothy Smith have settled on the purchase price of $85,000 and are in the process of building a new home in Blaine. MOTION BY MR. HOUCK, SECONDED BY MR. PRIEDITIS, TO APPROVE THE PURCHASE PRICE OFFER OF $85,000 FOR THE ACQUISITION OF ART & DOROTHY SMITH'S PROPERTY. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 2. Approval of Letter of Understanding dated April 16, 1982 Mr. Boardman stated that at the last meeting, the HRA made a motion approving the contract for private redevelopment by and between the HRA and Columbia Park Properties, subject to the negotiation of a satisfactory letter of indemnification by the City Attorney and the attorney for Columbia Park Properties. Mr. Boardman stated the approval for this letter was done by a telephone poll of the HRA members. Mr. Commers was out of town, but four out of four of the other HRA members agreed to this letter and it was submitted for approval to Columbia Park Properties. Mr. Boardman stated he was under the understanding that everything in the letter was what was discussed and agreed upon by the HRA. B. 73rd Avenue Partnership Mr. Boardman asked Mr. Mark Haggerty to bring the HRA up to date on this project. Mr. Haggerty stated that with him was Ron Berg, of Miller Securities, who was the primary individual who has been working on underwriting this particular project. Mr. Haggerty stated that as of Friday, May 7, he had received firm construction numbers from Hagmann Construction (also the construction firm for Columbia Park Properties), and they were going to build the two buildings together. BWBR Architects (architects for Columbia Park Properties) had drawn up the plans the HRA had in their agenda, and it appeared they would also be the architects for the office building. Mr. Haggerty stated the thing that went wrong was that on Friday, two senior partners in his law firm which had agreed to be the master tenant in the office building, decided to pull out of the project. Mr. Haggerty stated he is now trying to get up to 50% occupancy, at which time the two senior partners have agreed to go along with leasing the building. He stated that at that point, they could issue bonds and begin construction. Right now they only have 10 -15% rented. 0 HOUSING & REDEVELOPMENT AUTHORITY MEETING, MAY 13, 1982 PAGE 3 Mr. Haggerty stated that because of this situation, he could not, in good conscience,ask the City to issue the bids for moving the road or doing the parking lot at this time. Mr. Berg stated they had scheduled to sell bonds on July l internally themselves, based on all previous discussion, and they had hoped to be under construction by Aug. 1. He stated that as far as Miller Securities' offer to underwrite the bonds, that offer remains open if a master lease tenant can be found. Mr. Commers asked Mr. Haggerty to keep Mr. Boardman advised of any new .developments. Mr. Haggerty stated he appreciated what the HRA has done, and he was very sorry to have to make this report. Mr. Commers asked what bearing this new situation had on the street project. Mr. Boardman stated they are continuing the bids on the street project and have set up the parking lot as an alternative bid. They are going to keep 64th Ave. in as a regular bid, because by state law, they can legally delete up to 25% of the project, and 64th Ave. is not up to 25 %. So, if by the end of July, Mr. Haggerty cannot put the office building project together, the City can make a decision as to whether to go ahead with the street project or hold off on the street project until an office building project can be put together. He stated it might be worth the City's while to go ahead with 64th Ave. now, because the bids may come in much cheaper than doing it later. C. NSP Proposal for Action on 64th Ave. Project (Memo #82 -34 from Executive.Director) Mr. Boardman stated he would like to delay this item as it was based on the removal of 64th Ave. MOTION BY MR. HOUCK, SECONDED BY MR. PRAIRIE, TO TABLE THE CONSIDERATION OF MEMO #82 -34 FROM THE EXECUTIVE DIRECTOR REGARDING THE NSP PROPOSAL FOR POWER LINE MODIFICATIONS. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. D. Request by Mayor to Remove Existing Hardware Sign (Memo #82 -35 from Executive Director) Mr. Boardman stated that Mayor Nee has requested that the HRA take the necessary action to remove the Fridley Hardware sign as it is a non- conforming sign to the City's present code. The Mayor felt now was a good opportunity to have it removed. • • 11 HOUSING & REDEVELOPMENT AUTHORITY�MEETING,'MAY 13,1982 . PAGE 4 Mr. Boardman stated he has talked to Charles Peugh of Signcrafter to determine whether the City could actually sell the sign for profit. Mr. Peugh had stated it was very unusual, if not impossible, to sell the sign to a sign company for profit. Mr. Boardman had asked Mr. Peugh to look at it and make an estimate on what it would cost for the removal. The estimated cost is $582. Mr. Boardman stated that if there were no objections, he would get telephone quotes from three other companies before going with the lowest bid. MOTION BY MR. HOUCK, SECONDED BY MR. PRIEDITIS, TO AUTHORIZE THE EXECUTIVE DIRECTOR TO GET MORE BIDS AND THEN CARRY OUT THE REMOVAL OF THE FRIDLEY HARDWARE SIGN AS REQUESTED BY THE MAYOR. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. E. Submission of Proposal by Barthel Construction & Update of Activity - Extension of Right of Development for Six Months Mr. Hutchison stated that Mr. Dick Larsen, their architect, has prepared a preliminary drawing of an elevation of the shopping center. Mr. Larsen showed the new preliminary drawing and reviewed the old site plan. Mr. Hutchison stated they want this center to harmonize with the entire project. They are very flexible with materials and colors, but they do want to indicate a quality. They know the City is looking for a quality development. Mr. Hutchison stated they are making progress with a supermarket and a drugstore. They have to have those two major tenants before they can interest anyone else into the center. They are working with Mortenson, their contractor, in getting rough estimates of cost and trying to establish what.their needs are going to be. Mr. Commers asked if they had any further contact with their bond people. Mr. Hutchison stated they are in contact with their bond people on some other projects, and they are still optimistic they can do this project. Mr. Boardman asked about the timetable with leases. Mr. Hutchison stated he did not know that timetable, but, hopefully, they would have more information for the HRA by the HRA's June meeting. Mr. Boardman stated the HRA was now looking at a six month right of development. At the end of that six months, the HRA would like to be • HOUSING & REDEVELOPMENT AUTHORITY MEETING, MAY 13, 1982 PAGE 5 in a position to sign construction /development documents. There is the possibility for extension, but the developer has to show a reason for that extension in that they are making adequate progress. MOTION BY MR. PRIEDITIS, SECONDED BY MR. HOUCK, TO GRANT DEVELOPMENT RIGHTS FOR SIX MONTHS TO BARTHEL CONSTUCTION COMPANY AND VASSAR AND ASSOCIATES, INC. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. F. Correspondence - Phillips Petroleum Co. on Sale of Property at 6500 University Ave. N.E. Mr. Commers stated this was a letter dated April 6, 1982, from Phillips Petroleum Company's real estate representative in which they were asking for $125,000 for the station at 6500 Univ. Ave. N.E. Mr. Boardman stated this letter was for the HRA's information. He was not necessarily requesting an action on it from the HRA. At this point in time, he did not think the HRA should make an offer on that building. He stated he would continue to watch it closely. Mr. Commers stated that one thing that has to be kept in mind is that if Phillips enters into a new lease with that building, the City would have to deal with that in any future acquisition. He asked Mr. Boardman to respond to Phillips Petroleum Co. telling them the HRA is giving the matter some consideration. Mr. Prieditis stated he felt they should just tell Phillips Petroleum that the HRA is not interested in the building at that price. Mr. Commers agreed. He stated they should probably tell Phillips Petroleum that this area is low on their priority list right now, and the offer is just too high. The HRA members concurred that Mr. Boardman write a letter to Phillips Petroleum stating that the City appreciates their offer, but the price is too high. G. Competition Proposal (Memo #82 -36 from Executive Director) Mr. Boardman stated they have i ntervi ewed approximately 12 firms to do the Center City Design, and they have narrowed it down to the following four firms: 1. Sanders & Associates 2. Barton - Aschman Assoc., Inc. • 3. Inter Design 4. Herb Baldwin • HOUSING & REDEVELOPMENT AUTHORITY MEETING, MAY 139 1982 PAGE 6 Mr. Prairie asked Mr. Boardman what criteria was used to arrive at these four firms. Mr. Boardman stated they looked at the different types of projects these firms have done which were similar to the Center City project. They also looked at the design techniques the firms used in each of the design areas. Mr. Boardman stated they are now looking at design competition. The firms will prepare all their material by June 17, and that material will be presented to the HRA in a presentation form at the HRA's July meeting. The material will include illustrative site plans with a scale of 1 inch = 30 feet and an illustrative model with a scale of 1/16 inch = 1 foot. Mr. Boardman stated he was looking for approval of the competition and the authorization to go ahead with the competition. MOTION BY MR. PRIEDITIS, SECONDED BY M . HOUCK, TO APPROVE THE COMPETITION AND TO AUTHROIZE MR. BOARDMAN TO PROCEED WITH THE COMPETITION AS OUTLINED IN THE "SCOPE OF WORK, CENTER CITY SITE DESIGN COMPETITION, CITY OF FRIDLEY ". . UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. II. MOORE LAKE PROJECT A. Fehling, Fehling, & Nybo (Memo #82 -37 from Executive Director) Mr. Boardman stated Ms. Nybo was out of town, and he had hoped she would make it back in time for this meeting. From his meeting with Ms. Nybo's attorney that day, the attorney had said Ms. Nybo was interested in doing the project. The attorney was not speaking for Ms. Nybo, but was reacting to the contract documents the City had given Ms. Nybo. Mr. Boardman stated that last week, Ms. Nybo had indicated to him that she would probably be in a position to sign contract documents and that, if the HRA would accept that idea, she would like to go ahead with the acquisition and she would have a letter of credit that would back the HRA if she could not go ahead with the project. Mr. Comers stated that according to the last minutes, the HRA made a motion that this was to be the final 30 -day extension on right of development, and that if the executed financing commitment was not presented at this meeting, the development rights would terminate. He stated neither the HRA or Mr. Boardman have had any contact with her, other than Mr. Boardman's brief contact with her attorney that • day. He stated Ms. Nybo is not at the meeting and there has been no request for an additional extension; therefore, Ms. Nybo's development rights are terminated. • HOUSING _&_ REDEVELOPMENT AUTHORITY MEETING, MAY 139 1982 PAGE 7 MOTION BY MR. HOUCK, SECONDED BY MS. SVENDSEN, TO TERMINATE THE RIGHT OF DEVELOPMENT GIVEN TO CHERYL NYBO FOR AN OFFICE BUILDING IN THE MOORE LAKE PROJECT AREA. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. Mr. Commers asked Mr. Boardman to send a letter to Ms. Nybo informing of this action. B. St. Phillips Church Proposal - Right of Development for Submission of 202 Project Application to HUD (Memo #82 -38 from Executive Director) Mr. Boardman stated he has been meeting with Judy Lee, the consultant from Ebenezer Society for St. Phillips. He has given her sample information of the things she needs for their submission of an applica- tion to HUD. He stated St. Phillips is planning on coming before the HRA with site plans and will be requesting a right of development at the next HRA meeting. He stated he will also be meeting again with Ms. Lee on Wednesday, May 19, to work out some of the costs. • Mr. Boardman stated the City Council has authorized $120,000 CDBG funds for assistance in the acquisition of property. He stated he thought the City Council has indicated a support of this project. He stated there will have to be a rezoning, and that issue can take place any time after they get a commitment from HUD. Mr. Commers stated that one thing that would be helpful for the HRA is that whenever the City Council discusses one of the HRA projects, the HRA receive a copy of that portion of the City Council minutes pertaining to that project. Mr. Boardman stated he has drafted a right of development letter. It has not yet been approved by Mr. Herrick. He stated that at this time, this was for the HRA's information so they are aware of what is going on and what he has given to St. Phillips. He stated no action is needed at this meeting. Ms. Svendsen stated that in Mark Burch's letter of May 4, 1982, he stated that Harold E. Finney Contracting Co. would be placing clean fill (which would include no concrete, rubble, or building debris) on the property owned by Max Saliterman. She asked Mr. Boardman to check into this as concrete has been dumped there along with the fill. C. Moore Lake Restoration - Information Mr. Boardman stated this was just information for the HRA of what Hickok & Associates has done with the Moore Lake Restoration Project. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MAY 13, 1982 PAGE 8 III. NORTH AREA PROJECT A. Guidelines for Proposals (Memo #82 -39 from Executive Director) Mr. Boardman stated they have limited amount of funds for development in the North Area. Since they lose 40% of their tax increment right off the top with fiscal disparities, they are sitting with very limited amount of funds to do soil correction. He stated he is looking at the possibility of trying to keep about 20% of the funds in reserve. That reserve will assist them in keeping their capitalized interest costs down. With a reduction of capitalized interest costs, they are going to have some development that is not going to be requesting HRA assistance and; therefore, some monies are going to be generated through development. He stated he has drawn up some guidelines for the HRA's review. Mr. Commers asked if Mr. Boardman knew of any legislation that has been passed that removes tax increment financing from the loss in fiscal disparities. Mr. Boardman stated the City Council can make that determination. In this case, because this area was a large-area of industrial /commercial development, the City Council made the determination that it would fall within the fiscal disparities. Legislation in the tax increment will also lose 40 %. He stated that was determined at the time the North Area Redevelopment District was established. Mr. Commers stated the City Council never consulted with the HRA on that. He asked Mr. Boardman to get the HRA copies of the City Council minutes where this was discussed. Mr. Commers stated he really did not know why the HRA needed these guidelines. He felt that when anyone comes before the HRA, the HRA should make a determination at that time as to whether they would help in that development. The HRA members were in agreement that these guidelines were not really needed and that each project should be looked at individually. Mr. Boardman stated that if the HRA felt they did not need any formal guidelines, he would ask the HRA to be very cautious when they get into different projects. Maybe the guideline should be that the HRA understands they should try to maintain a reserve in the area because there are going to be some drainage expenses. r� U 0 HOUSING & REDEVELOPMENT AUTHORITY MEETING; MAY'13;'1982 PAGE 9 Mr. Prairie stated it would be very helpful if Mr. Boardman would provide as much information as possible on each specific project as it comes before the HRA. IV. FINANCIAL A. Memo from Mark Burch to Jerry Boardman and HRA on Demolition Question of the Structures at 6471 University Ave. N.E. Mr. Boardman stated that at the last meeting, there was a question by Ms. Svendsen as to whether the contractor had completed the demolition at the contract price or if there was a reduced price. He stated this memo from Mark Burch confirmed that all the demolition of structures was completed in its entirety and there were no reductions in the contract amount. ADJOURNMENT: MOTION BY MR. HOUCK, SECONDED BY MS. SVENDSEN, TO ADJOURN THE MEETING. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MAY 13, 1982, HOUSING & REDEVELOPMENT AUTHORITY MEETING ADJOURNED AT 9:50 P.M. Respectfully sub itted, C776—Saba Recording Secretary 0