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HRA 08/12/1982 - 29384CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING AUGUST 12, 1982 . . ... ....... ................. .. CALL TO ORDER: Chairperson Commers called the August 12, 1982, Housing & Redevelopment Authority meeting to order at 7:31 p.m. ROLL CALL: Members Present: Larry Commers, Elmars Prieditis, Carolyn Svendsen, Duane Prairie Members Absent: Walter Rasmussen Others Present: Jerrold Boardman, City Planner Nasim Qureshi, City Manager Sid Inman, City Finance Director Dennis Schneider, City Council Ed Hamernik, City Council Mark Haggerty, 6441 University Ave. N.E. Mark G. Sopko, BWBR Architects, St. Paul Len & Judy Schollen, 6381 University Ave. N.E. Bill Ekstrum, 6441 University Ave. N.E. W. G. Doty, 6379 University Ave. N.E. Lawrence Manipley, 5901 Brooklyn Blvd. Ted Burandt, 6211 Riverview Terrace Cheryl Nybo, 1612 Berne Circle Roland Stinski, 3647 McKinley St. N.E. David Fuerstenberg, 1601 - 662 Ave. N.E. Margery & Robert Fehling, 5809 Tennison Drive. Brian Seckinger APPROVAL OF JUNE 17, 1982, HOUSING & REDEVELOPMENT AUTHORITY MINUTES: MOTION BY MR. PRIEDITIS, SECONDED BY MR. PRAIRIE, TO APPROVE THE JUNE 17, 1982, HOUSING & REDEVELOPMENT AUTHORITY MINUTES AS WRITTEN. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. APPROVAL OF JULY 15, 1982, HOUSING & REDEVELOPMENT'AUTHORITY'MINUTES: MOTION BY MR. PRIEDITIS, SECONDED BY MR. PRAIRIE, TO APPROVE THE JULY 15, 1982, HOUSING & REDEVELOPMENT AUTHORITY MINUTES AS WRITTEN. • UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. HOU SING & REDEVELOPMENT AUTHORITY MEETING, AUGUST 12, 1982 PAGE 2 APPROVAL OF JULY 21, 1982, HOUSING & REDEVELOPMENT AUTHORITY SPECIAL MINUTES: Mr. Comers stated they would continue the approval of these minutes until the next meeting when Mr. Rasmussen would be present. I. CENTER CITY PROJECT: A. Shopping Center - Phase III (Letter dated Aug. 6, 1982, from Executive Director to Barthel Construction) Mr. Boardman stated he has not received any response from Marlin Hutchinson of Barthel Construction regarding a status report on the retail center. He stated he has had information that Barthel was having financial difficulty, and he wanted a report for this meeting. Mr. Boardman stated he became somewhat concerned when he received a telephone call from Mr. Hutchinson about a month ago when Super Valu decided they would not go into the Center City area. Mr. Hutchinson had stated they could not put the package together and were withdrawing. Three days later Mr. Hutchinson called again and said they had acted hastily and were still trying to put the project together. Mr. Boardman stated when he did not receive any other information after • a month, he sent this letter to Mr. Hutchinson but has received no answer. Mr. Boardman stated he had reminded Mr. Hutchinson of No. 2 of the Right of Development Agreement that, "Each party must keep the other informed of potential problems and delays. If, in the opinion of the HRA, Barthel Construction is not proceeding in a timely and positive fashion, the HRA may withdraw this selection." Mr. Comers asked if there was any action Staff would like the HRA to take. Mr. Boardman stated it has always been the concern of the HRA to not get involved in too much, especially with the right of development they have given on the other side of University which could commit $1.9 million in acquisition costs. In light of the fact that Barthel has not been responding and based on the information he has received that Barthel is having financial difficulty, he did not feel Barthel was going to be able to perform on their right of development. He felt the HRA should discuss this possibility and consider the withdrawal of the right of development. He felt that in light of the financial situation, it is going to be very, difficult to do any retail in this area. Since work is going on in the Center City area east of University, they may want to delay any activity on the other side for 1 -1z years before promoting that area. Mr. Commers stated that if Staff feels the HRA should be looking at other areas, rather than develop the shopping center area, he would like 0 HOUSING & REDEVELOPMENT'AUTHORITY MEETING, AUGUST 12, 1982 PAGE 3 Staff to put together a 5 -year plan and also set out the priorities in that plan for the HRA's consideration. Each of the development areas, all property the HRA presently owns, and all financial information should be included in that plan.. Mr. Prairie stated Staff may want to inform the businesses in that area so they know that development may not be happening. Mr. Boardman stated he has kept in touch with Fred Levy's attorney and has tried to keep the business people updated on any progress, although he has not had very good information to give them in the past. He felt that if the HRA does determine that the right of development should be withdrawn, then he would send out letters informing the business people of the HRA's action and that the HRA is rethinking their redevelopment priorities. Mr. Schneider suggested . that it might be possible to send out some type of newsletter on a regular basis just to keep the business people informed of what is going on- -good, bad, or indifferent. Mr. Boardman stated that was a good idea. Mr. Commers stated he thought they should send a letter to Barthel inform- ing them that their right of development expires on October 15; and if they do not respond, the HRA will terminate that right of development. Mr. Prieditis agreed. He stated it bothered him that Barthel has not responded in any way. MOTION BY MR. PRAIRIE, SECONDED BY MR. PRIEDITIS, TO REQUEST THE EXECUTIVE DIRECTOR TO ADVISE BARTHEL CONSTRUCTION THAT UNLESS THEY RESPOND AND GIVE THE HRA A STATUS REPORT ON THE RETAIL CENTER IN PHASE III OF THE CENTER CITY PROJECT, IT IS THE INTENTION OF THE HRA TO WITHDRAW THEIR RIGHT OF DEVELOPMENT BY SEPTEMBER 15, 1982. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON CONNERS DECLARED THE MOTION CARRIED UNANIMOUSLY. B. Office Building Project (Letter dated Aug. 6 from Mark Haggerty, Memo #82 -57 from Executive Director, and background information) Mr. Boardman stated the HRA members had also received a commitment letter on the financing of the project from Miller Securities. Mr. Boardman stated he would bring the HRA members up to date on the office building project. From the HRA's March meeting through the May meeting, Mr. Haggerty was trying to put a package together for a 30,000 sq. ft. and then a 36,000 sq. ft. office building. When it came back to the HRA on May 13, Mr. Haggerty was not able to put the package together because of some difficulty in getting the proper signatures on paper. At HOUSING & REDEVELOPMENT'AUTHORITY'MEETING, AUGUST 12; 1982 PAGE 4 that time, the HRA told Mr. Haggerty that if he could get the package together, he should come back. Mr. Haggerty is now back before the HRA. Mr. Haggerty has gone in with Mr. Gus Doty to do a 36,000 sq. ft. office building. With Mr. Doty, all of the proper signatures have been obtained and the financing has been committed. Mr. Boardman stated there are a couple of issues that are different than was talked about before. One of those issues is the acquisition of property - -Mr. Haggerty's building which was talked about before, but now, with Mr. Doty involved, Mr. Doty also has some property he would like to have acquired. The property is located just south of the bank, just north of the Rice Creek building. Mr. Boardman stated that because of the situation, in order to put the project together, Mr. Haggerty and Mr. Doty need to sell those properties. At this time, they are requesting the HRA to purchase those properties so they can put front -end money into the project. He stated Mr. Haggerty and Mr. Doty were at the meeting to answer questions. Mr. Boardman stated there are several issues that have been discussed before. He referred to Mr. Haggerty's letter dated Aug. 6. Item #3: "The Fridley HRA would commence construction of the • plaza immediately to the west of the proposed building site in the spring of 1983." Mr. Boardman stated it was discussed before, but no commitments were made, that in order for an office building to be built in that location, most people have indicated they would not do an office building unless a plaza was developed. One of the things they are trying to accomplish is an overall development. With the clinic going in, and if they put an office package together, they have a horseshoe kind of area that is right for the development of a plaza. He thought one of the things they looked at with the presentation of the development of a theme was a potential for staging and that staging was based on development, trying to complete portions of the area and show other developers they are serious about development in this area. Mr. Boardman stated another issue that was discussed was that the HRA would develop the parking and then parking would be leased back to the developer on a 50 -year lease with the option that the developer, after 31 years, could purchase the property for $100,000.00. Mr. Boardman stated that in Item #5, Mr. Haggerty is proposing to hire BWBR to do the building and Hagmann Construction, who are also doing the construction of the clinic, in an attempt to maintain a character in the area. Mr. Boardman stated that in Item #6, the contract says the City will pay • for relocating 64th Ave. That is already an agreed statement with Columbia Park Properties. HOUSING & REDEVELOPMENT AUTHORITY MEETING, AUGUST 12, 1982 PAGE 5 Mr. Commers stated that in previous HRA minutes, there was some dis- cussion about drainage and site preparation problems. What estimates do they have on what that is going to cost the City if they are required to do the site preparation and drainage? Mr. Boardman stated that in talking to the city engineers, they do not have that kind of problem. The only thing they have to ensure with the parking lot development is that they drain out to the street so whatever they do within the plaza area itself will not create a drainage problem in the plaza. Mr. Inman stated the engineering estimates for the project are $109,000 for the parking lot, $56,000 for the street, and $15,000 for the sewer and water. Mr. Boardman stated Item #7 in Mr. Haggerty's letter refers to the acquisition of the land under the building. Mr. Haggerty is agreeing to pay $40,000 for the cost of that building at $2 /sq. ft. They are looking at the HRA deferring the initial payments on that property until Dec. 31, 1986, at which time the interest will commence. That interest would be at 11 %. On the first day of Jan. for ten subsequent years, the actual payments in ten increment payments would be $4,000 /yr. plus interest. Mr. Boardman stated that in Item #8, Mr. Haggerty is agreeing to a mini- mum real estate tax of $2 /sq. ft. Mr. Boardman referred to Item #9 of Mr. Haggerty's letter: "The HRA would grant to the partnership a zero lot line on one of the walls of the building in order to allow the partnership to expand or in the alternative would give us some form of development rights to develop another office building in the Center City area." Mr. Boardman stated the HRA does not necessarily grant the zero lot line, but Mr. Haggerty is saying they want the building next to the property line for potential future expansion. Mr. Boardman stated he questioned the ability of future expansion on that building and whether that should be put in the contract documents. He would have to discuss this with Mr. Haggerty. Mr. Boardman stated he and Mr. Haggerty have discussed that when the City does the parking lot, they would also do the landscaping around the building and separate that portion of assessment and assess it back to the building proper. He stated he did not have any real problem with that. Mr. Boardman stated another consideration talked about was that Mr. Haggerty did agree to pay a certain amount of maintenance toward the plaza. That was worth looking into to help defray some of the maintenance costs in • plaza. HOUSING & REDEVELOPMENT AUTHORITY MEETING,-AUGUST 12, 1982 PAGE 6 Mr. Commers asked for Staff's recommendation. Mr. Boardman stated they have the opportunity right now of getting the Center City under way. They have started with the clinic, and if they can get the office building developed, he thought it would show people they are serious in this development. He stated the project has good potential, all the papers look in order, they have a financial commit- ment from Miller Securities, Mr. Doty and Mr. Haggerty are in a position to sign contract documents and are looking at getting the project started and under way in the fall. Mr. Haggerty stated that if the project is approved, they are looking at breaking ground on October 15, with closing on the bond documents on October 1, and a completion date of June 15, 1983. Mr. Boardman stated there are several pluses for the HRA. They have the ability to sell bonds yet this year and invest those bonds. If the building is started in October, a substantial amount of that building would be up before Jan. 2, 1983, which will start generating tax increment in 1984. Based on those conditions and all the other conditions discussed to date, it was his recommendation that the HRA follow through and commit to the office building. • Mr. Prieditis asked what the HRA was investing in this project in propor- tion to the project's value and how did it compare to previous situations and the normal average? He felt it seemed like they were investing a lot of money and agreeing to a lot of conditions. And, maybe a developer coming in later on would want the same kind of conditions. Mr. Boardman stated he felt it depended on whether they are talking about the development of the plaza as a condition. He felt the plaza develop- ment should be handled as a separate issue. He stated they have to look at buying land and land costs through purchasing as investments in-the project. Mr. Commers asked Mr. Inman to review the financial information to help give the HRA some insight into the feasibility of this project. Mr. Inman reviewed the cash flow projections with the HRA. He stated that from ,a financial perspective, if they take the position that this project is financing the acquisition of other properties and assume they are going to sell those properties, it is a substantially good deal for their financial picture. Mr. Haggerty stated he would agree that buying the Doty property was not as if the City would be throwing money away. He felt the property was worth it. They would also be making an investment by purchasing the Madsen building. He stated the real point is that it is very difficult to development an office building on this site. Tenants refuse to commit before the building is in the ground, so they are taking a risk. He stated they are willing to take that risk. He stated they are asking for a lot, but he felt the City's financial return on their investment was very good. . ... .... ..... • HOUSING & REDEVELOPMENT; AUTHORITY 'MEETING,IAUGUST`12,'19$2': '' PAGE 7 Mr. Commers stated he thought it looked like the City was not making anything for a long time. The City is running the risk of carrying those properties for a possible lengthy period of time without a plan for development of those properties. Mr. Doty stated the office building project was a sizeable commitment by the City and would require the ultimate purchase of the Madsen build- ing. They are just talking about the purchase now as opposed to later. He stated he felt the purchase of his property was no risk at all. Mr. Qureshi stated he would speak on why staff has been working so vigorously to put this package together. He stated at the groundbreaking ceremony for the clinic on July 16, there was some discussion among the City Council and HRA members. Questions were raised about what was happen- ing with Mr. Doty's property and there were some concerns that maybe Staff was trying to stop development in that section. Staff gave some rationale on why that property should be considered for a different use, at least to keep the options open and encourage development in the Center City project. In the discussion, it was suggested that Mr. Haggerty and Mr. Doty should get together and put a package together. He stated they did contact Mr. Haggerty and Mr. Doty. Mr. Qureshi stated it has always been Staff's position to promote this aea as the core of the Center City area. The idea was to try to develop the core, and then they came up with the idea of the plaza. The clinic is now a reality, the HRA will be considering a contract with an architect to work on plans for the plaza, and the office building is under consider- ation now. Sizeable commitments have been made by the HRA for the reloca- tion of 64th Ave., and other commitments have been made to the clinic. The office building would complete all the development in this area, and they would have a sizeable chunk of the Center City area completed. Staff feels if that is all completed, they will have something physical to show other developers that this is the kind of development the City would like to encourage. Mr. Qureshi stated that regarding Mr. Doty's property , the City has a number of choices to consider. They can keep the property open for a while to see how the clinic develops. If the clinic doesn't develop any further, they have a property that could develop into another mini - office. Mr. Qureshi stated the City has been working on the west side of University for almost two years trying to get a project going, and they have nothing to show for it. They have given commitments for a right of development to two developers, and now it looks like this second will also fall through. Mr. Haggerty is 'taking a risk. The HRA is taking some risk, but this is a solid proposal. Staff feels it is a good proposal, and feels more comfortable with this package than any other project considered before. HOUSING & REDEVELOPMENT AUTHORITY MEETING, AUGUST 12 1982 PAGE 8 Mr. Qureshi stated Mr. Haggerty was requesting $150,000 for the purchase of his property. Staff's recommendation was $115,614 plus relocation of $19,386. Mr. Doty is requesting 3.32/sq. ft. Staff's recommendation was $3.00 /sq. ft. Mr. Prairie stated that at the HRH's July 21 meeting, the suggestion was made that they hoped Mr. Haggerty and Mr. Doty could get together on an office project. He felt this project would help the whole area, which is what the HRA has been working toward, and he thought the office building was a feasible project. Mr. Commers stated he did not personally believe it was appropriate for the HRA at this time to acquire additional properties without a plan for development. He thought the office building standing by itself was a very appropriate project, and if it could be done without the acquisition of vacant property, he would be in a position to support it. But, with that condition and some of the other terms that would have to be negoti- ated, he could not support this project. Mr. Doty stated that nothing less than $3.32/sq. ft. for his property has been negotiated, and that is a firm price. The property is worth $100,000, and he would not sell it for less. His participation in this project is conditioned on the purchase of his property by the HRA for is $100,000. He felt $100,000 was a very fair price, and he had every intention of walking out on the project if he is offerred anything less. Mr. Haggerty stated he understood the problem with the zero lot line, but he would like to have some type of right to develop another office building in the area. They would certainly be willing to take a time limit on that if the HRA wanted that. He stated his law firm does want a place to stay while the new building was being constructed, and some type of rent to the HRA would be reasonable. Mr. Hamernik referred to Item #3 in Mr. Haggerty's letter stating: "the Fridley HRA would commence construction of the plaza immediately to the west of the proposed building site in the spring of 1983. In addition, the Fridley HRA would landscape around the proposed office building with a mini-plaza ..... and would assess the cost of the building's landscaping over a period of 10 years at the City's or HRA's regular interest rate." Mr. Hamernik stated he questioned whether the HRA really wanted to obli- gate themselves to an expenditure if there is some question on what the cash flow is going to be. He had the feeling that some of the obli- gations incurred on the other project are causing some implications or problems that are difficult to deal with. He would like to see the HRA enter into an agreement with as few stipulations as possible that are outside the existing property. Mr. Haggerty stated all they are talking about with the mini -plaza is just some grass with some trees - -they just want to have something. HOUSING & REDEVELOPMENT AUTHORITY MEETING; AUGUST 12; 1982 PAGE 9 • Mr. Commers that on page 2 of the Addendum, it provides that the HRA will agree to install at no cost to the redeveloper a plaza which shall adjoin the redeveloper's office building with the City of Fridley City Hall and that said plaza will include landscaping amenities. He stated that some limitations have to be placed on the development of this plaza. In answer to Mr. Hamernik's question, that is an item that is outside their present commitments. Mr. Qureshi stated that if the HRA wants to develop this property, they are going to have to take some bold steps. Do they want to develop it next year or five years from now? If they want to develop it next year, it is imperative they move with the whole package. MOTION BY MR. PRAIRIE, SECONDED BY MR. PRIEIDITIS, TO APPROVE THE PROPOSAL FOR A 3- STORY, 36,493 SQ. FT. OFFICE BUILDING IN THE FRXDLEY CENTER CITY PROJECT, NOTING THAT MR. HAGGERTY STATED THE MINI -PLAZA COULD BE AS LITTLE AS JUST GRASS, AND THAT STAFF WORK WITH MR. HAGGERTY IN MAKING SOME ADJUSTMENTS, PARTICULARLY WITH THE ZERO LOT LINE QUESTION. UPON A VOICE VOTE, COMMERS AND SVENDSEN VOTING NAY, PRAIRIE AND PRIEDITIS VOTING AYE, CHAIRPERSON COMMERS DECLARED THE! MOTION FAILED BY A TIE VOTE. Mr. Commers stated he appreciated Mr. Haggerty and Mr. Doty for coming to the meeting and stated he hoped some other proposal could be made for that property. Mr. Doty asked the HRA if they foresaw the possibility of acquiring his property for any reason at this time. He stated his application for variances to develop a building on his property was tabled at the Appeals Commission because someone heard that the HRA might want to acquire his property. He would like some clarification that the HRA has no intention of using his property; and, therefore, he can proceed with his develop- ment plans. Mr. Commers stated the answer was no other proposals before the HRA acquire Mr. Doty's property. obvious. At this time, there were that would cause them to want to Mr. Boardman stated the reason the Appeals Commission tabled Mr. Doty's variance request was because Staff knew the question of the acquisition of Mr. Doty's property was going to be before the HRA at this meeting. The Appeals Commission- decided to wait to see what action the HRA took on this acquisition. There was no sense in continuing on with the variances if the HRA voted to purchase the property. The HRA has now determined not to purchase Mr. Doty's property; therefore, there is no reason why it shouldn't continue on through the Appeals Commission to the City Council. 17, a HOUSING & REDEVELOPMENT AUTHORITY MEETING, AUGUST 12, 1982 PAGE 10 Mr. Doty stated he just wanted to make certain this did not happen again, and he thanked Mr. Commers for his answer. Mr. Qureshi stated Staff has a policy that when anything is happening in the Center City area, the HRA should have the opportunity to give input. If the HRA has no input, then the item goes through the regular process. As a regular rule, they will be bringing these kinds of things to the HRA for the HRA's review. Mr. Commers stated he appreciated the HRA being advised when these kinds of things do arise. C. Design Contract for Center City (Memo #82 -58 from Executive Director & Contract documents) Mr. Boardman stated the "Standard Form of Agreement between Owner and Architect" received in the agenda has been modified, and the HRA members now had a new copy. He stated the type of project they are looking at with the architect is a redesign or some modified design of the schematic design phase and the design development phase. They are not interested at this time in getting into an actual construction document and bidding, negotiation, and construction phase, so anything that deals with the last three phases will not be included as a part of this architect's document. • Mr. Boardman stated that if the HRA did approve this contract, he would like to have a working meeting between the architect and the HRA. That meeting should be held as soon as possible. MOTION BY MR. PRIEDITIS, SECONDED BY MS. SVENDSEN, TO APPROVE THE "STANDARD FORM OF AGREEMENT BETWEEN THE HOUSING & REDEVELOPMENT AUTHORITY AND THE INTERDESIGN, INC." AND PROCEED WITH INTERDESIGN.ON THE CENTER CITY DESIGN THEME. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. D. Discussion on Consultant for Commercial Relocation (Memo #82 -59 from Executive Director) Mr. Boardman stated there are seven businesses they will be involved in , relocating over the next nine months. He stated single family relocations were simple enough that Staff could handle them;:but there were a lot of things involved in commercial relocation, including unit appraisals and getting out and actually searching for new locations. It would involve a lot of staff time, and he felt they should go with a professional in commercial relocation. HOUSING & REDEVELOPMENT AUTHORITY MEETING, AUGUST 12, 1982 PAGE 11 Mr. Boardman stated VonKlug &,Assoc. are probably the most knowledgeable professionals in the Minneapolis area. He stated Bill VonKlug of VonKlug & Assoc. has offered two proposals: (1) A general proposal that has to be followed with HUD monies when HUD monies are included. Fee: $14,500; (2) A more basic method for relocation. Flat fee of $9,000 for seven businesses. In addition, they would have to get unit appraisals or personal property appraisals. Mr. Boardman stated businesses usually prefer Proposal #2. He stated he has some questions that need to be answered, and he would like the option to choose which proposal was the most appropriate. MOTION BY MS. SVENDSEN, SECONDED BY MR. PRIEDITIS, TO APPROVE AND AUTHORIZE THE EXECUTIVE DIRECTOR TO GO FORWARD WITH NEGOTIATIONS AND ENTER INTO A CONTRACT WITH VONKLUG & ASSOC. TO OBTAIN THEIR SERVICES ON COMMERCIAL RELOCATION. Mr. Boardman stated Len Schollen, who owns Lennies, has found a building where he would like to relocate. If the City can relocate them into a building they have already found that is already set up as a laundromat, it may reduce the costs of relocation. He stated they may want to start some relocation in lieu of rent, but he will have to look at each situa- tion on an individual basis. Mr. Commers stated that if any of the tenants come forward with this kind of proposal, they should look into it as soon as possible in order to accommodate those tenants.'' UPON A.VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. E. 362 and 378 - 64th Ave. N.E. 1. Approval of Sale of Structures to Badger Movers Mr. Boardman stated he had sent a notice out for bids to have the structures removed. The high bid was from Badger Movers. They will pay the HRA $4,250 to move both the houses. They are ready to start work next week with authorization from the HRA. These houses were owned by Arthur Smith and Art Singer. Mr. Commers stated the HRA received a very nice letter from Mr. Singer complimenting Mr. Boardman for working with him and getting him relocated in another home. MOTION BY MR. PRAIRIE, SECONDED BY MR. PRIEDITIS, TO APPROVE THE BID OF $4,250 WITH BADGER MOVERS TO REMVOE THE TWO STRUCTURES AT 362 AND 378 - 64th AVE. N.E. • UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. HOUSING & REDEVELOPMENT AUTHORITY MEETING, AUGUST-12, 1982 PAGE 12 2. Approval of Bid on Removal of Basement and Backfill . Mr. Boardman stated that once the houses. are removed, they need to remove the basement foundations and backfill. That will also take out all the driveway, all concrete, and retaining walls on the site. He stated they went out for bids,and Ted Renollet was the low bidder of $1.295 to do this work for both structures. He would recommend the HRA approve this bid.- . MOTION BY MR. PRAIRIE, SECONDED BY MS. SVENDSEN, TO APPROVE THE BID FROM TED RENOLLET OF $1,295 FOR THE BACKFILLING AND REMOVAL OF BASEMENT FOUNDATIONS AT 362 AND 378 - 64TH AVE. N.E. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. F. 332 & 336 - 64th Ave. N.E. (Letters from G. Stanley Rischard and response letters from Executive Director) Mr. Boardman stated on June 28 he had received a letter from Mr. Stanley Rischard, the attorney who has been retained by the property owners of 332 and 336 - 64th Ave. N.E. In that letter, Mr. Rischard is requesting the HRA to proceed with condemnation. Mr. Boardman stated he had contacted Mr. Rischard after receiving this letter and they had set up a meeting to discuss a possible negotiation purchase price on those properties. At that meeting, a $200,000 price for the purchase of the garage with an $85,000 purchase price for the purchase of the house were presented, and no reasonable negotiated price was reached. At this point, Mr. Boardman stated he was looking for authorization from the HRA to proceed with condemnation. MOTION BY MR. PRIEDITIS, SECONDED BY MR. PRAIRIE, TO AUTHORIZE STAFF TO FILE A PETITION WITH ANOKA COUNTY DISTRICT COURT WITH REGARD TO THE CONDEMNATION OF THE PROPERTIES AT,332 AND 336 64TH AVENUE N.E., DESCRIBED AS FOLLOWS: 332 64th Avenue N.E.: Lots 1, 2, 3, and North 71 feet of Lot 4, Block 4, Ree's Addition to Fridley Park, except the East 54 feet: and 336 64th Avenue N.E.: East 54 feet of Lots 1, 2, 3, and East 54 feet of North 7-� feet of Lot 4, Block 4, Ree's Addition to Fridley Park. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. II. MOORE LAKE PROJECT: A. Cheryl Nybo Office Project (Memo #82 -60 from Executive Director) Mr. Boardman stated he would give a little background information on this project. He stated the HRA had approved contract documents with Ms. Nybo based on 50% lease -up. He stated Ms. Nybo has discussed this project with him several times and financing is coming down where it looks like the project could go relatively soon; however, there are some questions. First of all, Ms. Nybo has approached the HRA to see what happens if they enter into a contract with Mr. Burandt which would tie the property down, it would then give them time to wait for favorable interest rates before moving into the project. He stated that in HOUSING & REDEVELOPMENT AUTHORITY MEETING; AUGUST 12; 1982 PAGE 13 6 looking at that, the HRA could do two things: (L) If Ms. Nybo enters into a contract, the HRA would be out of the purchase of the property. The HRA could agree to assist the development in the same amount of dollars they had agreed to assist in the acquisition of the property; (2) The HRA could do the exterior improvements, such as blacktop, curbing, landscaping for the project up to the same value they have approved on the purchase price. Mr. Roland Stinski, 3647 McKinley St. N.E., stated he was the spokes- person for Fehling & Nybo. He stated that after talking to Mr. Boardman and Ms. Nybo, he would like to make a recommendation to the HRA. The proposal would be for the HRA to acquire both properties which would be no cash outlay to the HRA, enter into a contract with Mr. Burandt to purchase his property, give him a down payment, take the property on a year's contract for deed with a balloon payment inside of one year, the HRA picking up that balloon payment at the end of one year; also to acquire the office building that is there which would still be no cost to the HRA, in that there is a mortgage being placed on the property now to pay off Mr. Burandt. The mortgage would be carried by the partnership of Fehling & Nybo until such time as she got a building permit, financing and 50% rental in order to build. Then the HRA could step in and buy both properties at an agreeable price and sell them back to Ms. Nybo at a reduced figure. Mr. Lawrence Manipley, 5901 Brooklyn Blvd., stated he was the attorney for Ted Burandt. He stated there would be no contract for deed with Ms. Nybo. Any agreement would have to be a straight cash transaction with no terms. They have an existing disagreement which is not part of this project, but that is the reason why there would be no balloon pay - ment, no contract for deed, only a straight cash transaction. Mr. Manipley stated there were so many contingencies involved in this particular matter, it seemed best that the HRA not even review it at this point in time. Let the people involved put the deal together and then the HRA can see whether the numbers work, if there are any numbers. Mr. Commers stated he thought it would be best for both sides to meet and work out an agreement. The HRA is interested in doing a project and looking at it, but first the two parties have to meet and try to negotiate the terms. He stated this matter should be tabled indefinitely. MOTION BY MR. PRAIRIE, SECONDED BY MR. PRIEDITIS, TO TABLE FURTHER DIS- CUSSION ON THE CHERYL NYBO OFFICE PROJECT INDEFINITELY. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. • HOUSING & REDEVELOPMENT AUTHORITY MEETING, AUGUST 12, 1982 PAGE 14 i B. Central Avenue Project (Memo #82 -61 from Executive Director) Mr. Boardman stated Dick Mochinski, represented by Dennis Ewing and Dick Reiersgord, owns some property on Old Central and Rice Creek Road. Right now a large majority of the property is zoned commercial. Mr. Mochinski originally wanted to develop the property as industrial property. Back in 1981, when Mr.Mochinski came to Staff with that proposal, Staff suggested that since Mr.Mochinski also did home real estate projects, maybe he should take a look at an overall townhouse/ quad -type of development. Mr. Mochinski did look at it, was very interested in it, and submitted a proposal to the HRA in Feb. 1982. The HRA at that time felt the proposal he submitted was a little weak as far as access. Mr. Boardman stated he has met with Mr. Ewing and Mr. Reiersgord off and on for a period of 6 -9 months. At the last meeting, they gave him the figures. He has done a run on those figures, and the project looks like a very weak project. This would be a project phased over three years, 1983 -85, for a total of approx. 90 units. He stated he has not been able to contact Mr. Ewing and Mr. Reiersgord since Ehlers & Assoc. did the bond run, and he would prefer to table this project at this time. MOTION BY MR. PRAIRIE, SECONDED BY MR. PRIEDITIS, TO TABLE THE CENTRAL AVENUE PROJECT AT THIS TIME. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. III. FINANCIAL: A. Check Register MOTION BY MR. PRAIRIE, SECONDED BY MS. SVENDSEN, TO APPROVE THE CHECK REGISTER AS PRESENTED. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. B. Financial Report Mr. Sid Inman reviewed the financial report with the HRA members. IV. OTHER BUSINESS: A. Request from Dave Fuerstenberg of Dave's Sport Shop to Lease the Hardware Building Mr. Boardman stated that Mr. Fuerstenberg is interested in leasing the • hardware building; however, Mr. Fuerstenberg would like an extended • HOUSING& REDEVELOPMENT AUTHORITY MEETING, AUGUST-12,1982 PAGE 15 lease. The question is: Does the HRA want to lease the hardware building and what kind of time commitment would they put on a lease arrangement without tying their hands to any great extent? Mr. Fuerstenberg stated he is in need of more room. He stated the HRA is talking about relocating the businesses on University Ave., and maybe one of those businesses could be relocated in Moon Plaza in his present location. He would like as long a lease as possible as a move is quite expensive. He would like a 3 -5 year lease. At that time, hopefully, the new shopping center would be in. Mr. boardman stated he was very concerned about the HRA getting into a long -term lease. The HRA would not want to pay any relocation costs, and that would have to be a condition of a lease. He stated the site is quite narrow, and there is only enough room for one row of parking. If the HRA did enter into a lease, any improvements would have to be the responsibility of the tenant, as he did not think the HRA would want to get into those kinds of expenditures. Mr. Commers stated they would have to put limitations on a lease, and with those limitations, he did not think a lease was very feasible. They would not be in any position to pay relocation costs. An 18 -month lease was about the longest they could consider. The tenant would also have to be sure the building was up to code. Mr. Commers suggested that Mr. Fuerstenberg get together with Staff and discuss this further. Mr. Boardman stated he was willing to discuss some arrangements with Mr. Fuerstenberg as long as Mr. Fuerstenberg understood the limitations and was willing to work within those limitations. Mr. Fuerstenberg agreed to meet with Mr. Boardman to discuss this further. B. Information Items Mr. Boardman stated the following items were strictly for the HRA's information: 1. HRA Annual Report to State - 2. HRA Audit Report - Dec. 31, 1981 3. Clinic Bond Sale information 4. Minutes of City Council - July 26, 1982 5. Newspaper articles ADJOURNMENT: MOTION BY MR. PRAIRIE, SECONDED BY MS. SVENDSEN, TO ADJOURN THE MEETING. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE- AUGUST 12, 1982, HOUSING & REDEVELOPMENT AUTHORITY MEETING ADJOURNED AT 11:30 P.M. Respectfully submit ed, Lynn Saba, Recording Secreta q