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HRA 01/12/1984 - 29366CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING JANUARY 12, 1984 CALL TO ORDER: Vice- Chairperson Prieditis called the January 12, 1984, Charter Commission meeting to order at 7:42 p.m. Rnl I rAl I Members Present: Elmars Prieditis, Carolyn Svendsen, Duane Prairie, Walter Rasmussen Members Absent: Larry Commers Others Present: Jerrold Boardman, City Planner Sid Inman, Finance Director Dave Newman, City Attorney Jerry Paschke, 7270 University Ave. N.E. Mark Haggerty Wally Rasmussen, 7806 Alden Way APPROVAL OF NOVEMBER 10, 1983, HOUSING & REDEVELOPMENT AUTHORITY MINUTES: MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRAIRIE, TO APPROVE THE NOV. 10, 1983, HOUSING & REDEVELOPMENT AUTHORITY MINUTES. Mr: Prieditis made the following change to paragraph 2, page 5: "Mr. Prieditis stated the hardware building could even become a part of a future redevelopment, but that is something that is difficult to predict at this time. UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPERSON PRIEDITIS DECLARED THE MINUTES APPROVED AS AMENDED. 1. CONSIDERATION OF AMENDMENT BY ENLARGEMENT OF REDEVELOPMENT PROJECT #1: Mr. Boardman stated that at the suggestion of the City Council, Staff looked at the possibility of adding all the commercial property already vacant north of Rice Creek to Redevelopment Project Area #1. They did this and felt there was good reason to add that property and are making that proposal to the HRA. Mr. Prieditis asked Mr. Boardman to outline the benefits for adding this property into Redevelopment Project Area #1. Mr. Boardman stated the primary purpose for including this is with the potential of IDB's going out. The reserve.bond fund is one of their biggest resources at this point in time to promote development. The only way they HOUSING & REDEVELOPMENT AUTHORITY MEETING, JANUARY 12, 1984 PAGE 2 can use reserve bond monies is if any property is located in a redevelopment project area. It does not necessitate including that property in the tax increment to use the funds for projects, but as long as it is in the project area, they can use the reserve bond fund. It is also important to note that this property is all presently vacant property of which some has need for soil correction. This property has been vacant through the growth years of the City and would probably not develop without some financial aid being sought. By including this property into the redevelopment plan, it will afford maximum opportunity, consistent with the sound needs of the community as a whole, for development through private investment. It also conforms to the general plan of the City for its develop- ment. MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRAIRIE, TO APPROVE RESOLUTION NO. HRA .2-' -1983, "A RESOLUTION AMENDING REDEVELOPMENT PROJECT NO. 1 AND THE REDEVELOPMENT PLAN RELATING THERETO PURSUANT TO THE PROVISIONS OF MINNESOTA STATUTES, SECTIONS 462.411 TO 462.716, INCLUSIVE ". UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON PRIEDITIS DECLARED THE MOTION CARRIED UNANIMOUSLY. 2. CONSIDERATION OF TAX INCREMENT #5 WITHIN DEVELOPMENT PROJECT NO. 1 Mr. Boardman stated this is strictly one lot within that overall package in which they do have a proposed development. Mr. Jerry Paschke was pro- posing a 26,000 sq. ft. commercial facility on Lot 1, Block 2. As part of the package, they have worked with Mr. Paschke in putting together some assistance. This assistance is going to be similar to what was worked out with Johnson Printing & Packaging, in which the HRA will provide $30,000 write -down on the land, and in return, Mr. Paschke will develop the property. They use the assistance in the write -down to help cover their cost for soil correction. There is about $60,000 worth of soil correction needed on that site. This value was the result of the negotiation between the HRA, Mr. Paschke, and the property owner. The soil correction costs were determined by soil borings and actual bids on the correction. The actual taxes that would be generated would be approximately $45,000 per year. Other costs laid out in the tax increment plan include $30,000 in administrative cost along with $310,000 in reserve increments for funding the reserve system. The tax increment plan will give the HRA maximum flexibility in the determination of all project costs. MOTION BY MS. SVENDSEN, SECONDED BY MR. PRAIRIE, TO APPROVE RESOLUTION NO. HRA .2-1983, A RESOLUTION ESTABLISHING TAX INCREMENT DISTRICT NO. 5 WITHIN REDEVELOPMENT PROJECT NO. 1 AND APPROVING AND ADOPTING A PROPOSED TAX INCREMENT FINANCING PLAN THEREOF ". UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPERSON PRIEDITIS DECLARED THE MOTION CARRIED UNANIMOUSLY... HOUSING & REDEVELOPMENT AUTHORITY MEETING, JANUARY 12, 1984 PAGE 3 0 3. PUBLIC HEARING ON SALE OF PROPERTY AT 7820 UNIVERSITY AVENUE N.E.: Mr. Boardman stated that because state law requires a public hearing on the disposal of HRA property and the contract documents between Mr. Paschke and the HRA call for such a sale, they have called for a public hearing at this meeting. In this way, it can be considered with the "Contract for Private Development" with Mr. Paschke on this site. Vice - Chairperson Prieditis declared the public hearing open at 7:59 p.m. Mr. Boardman stated this would be a sale of property to Mr. Paschke. The HRA would be acquiring the property from Dave Harris and Bob Schroer. The purpose of the sale is to develop a 26,000 commercial facility. Mr. Boardman stated if there were any comments or questions from people in the audience, they would hear them at this time. Mr. Prieditis asked Mr. Paschke to explain his proposal. Mr. Paschke stated he will be building a building identical to the two buildings he has built just to the north on 79th. The primary use of the building will be commercial. The value of the structure, land and improve- ments will be approximately $1,000,000. 40 Ms. Svendsen asked if there would be any other costs other than the $30,000. Mr. Boardman stated the $30,000 is the cost that is laid out in the tax increment plan with reserve increments of approx. $310 with an administrative cost of about $30,000. Those are the HRA's actual costs on the project. Ms. Svendsen asked Mr. Boardman if he had included any information about the soil correction or the condition of the soil. Sometimes in the past, the HRA has had documents from the City regarding soil conditions, and she had not seen any of that kind of information on this project. Mr. Boardman stated he did not include the actual bids. He stated the City had been given some bids on the excavation of the soil; then the cost was negotiated between the City, the existing property owner, Mr. Paschke, and Mr. Jim Benson, where each of the people took a share of the cost to come up with the cost of soil correction. Mr. Prieditis asked what assurances does the HRA have to ensure the correction of the soil? Mr. Boardman stated the developer cannot get a building permit until they show the soil borings, compaction tests, etc. In due process, the building inspectors review all these things. Mr. Paschke stated soil borings have been done. There were about 16 borings, • and the City does have those borings and all the bids. The bids were all submitted to the City by Dave Harris and Bob Schroer. The borings were done by Suburban Engineering. HOUSING & REDEVELOPMENT AUTHORITY MEETING, JANUARY 12, 1984 PAGE 4 Mr. Prairie stated it might be helpful for the HRA to see some of those documents. Mr. Ebardman stated he would get copies of the bids for the HRA. Vice - Chairperson Prieditis declared the public hearing closed at 8:10 p.m. 4. CONSIDERATION OF CONTRACT FOR PRIVATE DEVELOPMENT BETWEEN HRA AND PACO INC.: Mr. Boardman stated that at this meeting the HRA members had received the modified copy of the "Contract.for Private Development ". Jim O'Meara and - Mr. Paschke's attorney, Mr. Bob Lukes, went over these documents and agreed to what was in the documents. The modifications were made and sent out that morning. He stated he had underlined those changes from the previous docu- ments. He also stated the HRA Attorney felt this gives the HRA adequate protection and the HRA can enter into those contract documents. MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRAIRIE, TO APPROVE RESOLUTION NO. HRA _3- 1983, "A RESOLUTION APPROVING AND AUTHORIZING THE EJXCUTION OF A CONTRACT FOR PRIVATE DEVELOPMENT WITH PACO INC.". UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPERSON PRIEDITIS DECLARED THE MOTION CARRIED UNANIMOUSLY. 5. DISCUSSION ON HARDWARE BUILDING: • Mr. Boardman stated John Gargaro had contacted him after the Nov. 22 Lions Club meeting indicating that the Lions were no longer interested in the hardware building. Mr. Boardman stated he had had several discussions with Mr. Inman and Mr. Qureshi, and the Liquor Store Manager, and they have indicated an interest in renting the hardware building. He stated Mr. Inman would explain their proposal. Mr. Inman stated one of his other responsibilities in the City is for the operation of the liquor store. He stated the.liquor store has maintained a• substantial marketing advantage over the years because of the natural boundaries like the river, 35W, and I -694. With the droppage of walk -in traffic at Holly Center, they have experienced the same profit margin but a reduction in volume, so they are still in a positive position. Mr. Inman stated Staff has recently discovered that some of the neighboring communities will soon be building liquor warehouse operations. Their studies indicate that while people may not be willing to drive downtown to Surdycks to get lower prices, they may be willing to go to Spring Lake Park or Blaine. So, Fridley's attempt here is to be the first and open a liquor warehouse operation in the hardware building. Mr. Inman stated the experiment would be in terms of at least a 3 -year commitment. They have done some cost structures. There have to be some • decisions on the carpeting and ceiling, and they may want to improve the road in front. HOUSING & REDEYELOPMENT AUTHORITY MINUTES, January 12; 1484 PAGE 5 Mr. Inman stated that right now they have a lease situation in Holly. Their early projections say that depending on their volumes, they will probably do as good in the hardware building as they do in Holly, because of the heavy expenditures of maintaining both facilities. They might attempt to negotiate with Mr. Levy and try to help find somebody else to rent the space in Holly. Mr. Prairie asked how the other tenants in Holly felt about this possible move. Mr. Inman stated they have not officially_informed the other tenants; however, the other tenants are aware of the fact that every business in that strip is losing money at the current time. Mr. Rasmussen stated he thought having a liquor warehouse operation in the hardware building was a great idea. He thought it was very feasible if a reasonable price can be negotiated. MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRAIRIE, INDICATING THAT THE ERA IS INTERESTED IN EXPLORING THE POtSSIBXLITY OF A LIQUOR WAREHOUSE FACILITY IN THE HARDWARE BUILDING AND AUTHORIZES THE EXECUTIVE DIRECTOR TO PRESENT FURTHER INFORMATION OWN THIS AT A LATER MEETING. UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPERSON PRIEDITIS DECLARED THE MOTION CARRIED UNANIMOUSLY. • Mr. Prairie stated he thought they were all interested in putting that building to use, but his only concern was how this might affect the tenants in Holly Center. 6. CONSIDERATION OF AUTHORIZATION FOR STAFF TO ENTER INTO A LISTING AGREEMENT FOR LIFESTYLE AND MADSEN BUILDINGS: Mr. Boardman stated he had attached listing agreements submitted by Mr. Messler. Mr. Messler was one of the three realtors he contacted for the leasing for the HRA. The other two were not interested in listing the properties. He stated he was not looking for the authorization to enter into any of these documents, but he was looking for the authorization to move ahead and to try to negotiate an agreement with a leasing agent within the approximate guidelines of the enclosed documents. Mr. Boardman stated he has gotten a response back from another agent that there is no reason the HRA should have to enter into an exclusive listing agreement, so he wanted to check into that. He would not enter into an exclusive if he did not have to. Mr. Boardman stated the reason Mr. Messler is the only one interested is because he is the leasing agent for Dr. Suh across University. He knows the area and may have the possibility of putting people in. Mr. Messler said it is going to be extremely difficult and the only way he will do it is with a guaranteed price and not as a percentage of the lease. Mr. Messler would also request that the HRA be flexible with the dollar amount that he will be able to get for the property. HOUSING & REDEVELOPMENT AUTHORITY MEETING, JANUARY 12, 1984 PAGE 6 41 Mr. Boardman stated they have been negotiating and trying to get the property north of City Hall into a package, and they would not want to restrict them- selves to more than a one year lease,so it is going to be very difficult. 7. MOTICaN BY MS. SVENDSEN, SECONDED BY MR. RASMUSSEN, TO AUTHORIZE THE EXECUTIVE DIRECTOR TO CONTINUE TO TRY TO NEGOTIATE AN AGREEMENT WITH A LEASING AGENT FOR THE LIFESTYLE AND MADSEN BUILDINGS. UPON A VOICE VOTE, ALL VOTING AYE, VICE— CHAIRPERSON PRIEDITIS DECLARED THE MOTION CARRIED UNANIMOUSLY. CONSIDERATION OF APPROVAL OF PAYMENT OF THE SETTLEMENT TO D AUTOMOTIVE CLINIC AS PER COMMISSION FINDINGS: RYAN' Mr. Boardman stated Mr. Ryan has agreed to accept the Commissioner's Award. The Commissioner's Award was $177,300. The previous payment to Mr. Ryan was $137,117, leaving a balance of $40,183. He stated they plan to close on Monday, Jan. 16, and the actual approved interest for that period of time will be $1,182. He stated that under Minnesota State Law, they are required to pay interest at a rate of 6 %. He stated he is asking for authorization from the HRA to pay Mr. Ryan the final payment per Commissioner's Award of $40,183 plus $1,182 interest. MOTION BY MR. PRAIRIE, SECONDED BY MR. RASMUSSEN, TO AUTHORIZE THE FINAL PAYMENT PER COMMISSIONER'S AWARD OF $40,183 PLUS $1,182 IN INTEREST, TOTALLING $41,365, TO DR. RYAN'S AUTOMOTIVE CLINIC. UPON A VOICE VOTE, ALL VOTING AYE, VICE— CHAIRPERSON PRIEDITIS DECLARED THE MOTION CARRIED UNANIMOUSLY. 8. CONSIDERATION OF APPROVAL OF PAYMENT TO DR. RYAN'S AUTOMOTIVE CLINIC TU_R RELOCATION• Mr. Boardman stated that also under Minnesota State Law, they are required to pay relocation on any activity. They have finally gotten all the informa- tion on the relocation for Mr. Ryan, and Von Klug & Associates are recommend- ing a payment of $10,000 to Mr. Ryan for relocation as allowed to him under state law. MOTION BY MR. RASMUSSEN, SECONDED BY BS. SVENDSEN, TO AUTHORIZE A PAYMENT OF $10,000 TO DR. RYAN'S AUTOMOTIVE CLINIC FOR RELOCATION. UPON A VOICE VOTE, ALL VOTING AYE, VICE— CHAIRPERSON PRIEDITIS DECLARED THE MOTION CARRIED UNANIMOUSLY. 9. CONSIDERATION OF APPROVAL OF FINAL PAYMENT TO VON KLUG & ASSOC. FOR BUSINESS RELOCATION SERVICES: Mr. Boardman stated he needed authorization for the final payment of $3,500 to Von Klug & Assoc. for their relocation services. • MOTION BY MR. RASMUSSEN, SECONDED BY lit. PRAIRIE, TO AUTHORIZE THE FINAL PAY- MENT OF $3,500 TO VON )CLUG & ASSOC. FOR RELOCATION SERVICES IN THE CENTER CITY PROJECT. UPON A VOICE VOTE, ALL VOTING AYE, VICE— CHAIRPERSON PRIEDITIS DECLARED THE MOTION CARRIED UNANIMOUSLY. 0 HOUSING & REDEVELOPMENT AUTHORITY MEETING, JANUARY 12, 1984 PAGE 7 10. CONSIDERATION OF APPROVAL OF 1984 MEETING SCHEDULE: Mr. Boardman stated the Commission members had received a 1984 meeting schedule. Mr. Rasmussen expressed his concern of the length of meeting time. Was there some way of limiting the length of meetings? Mr. Prieditis suggested the meetings start at 7:00 p.m. instead of 7:30 p.m. and that they limit the meeting length to not later than 9:30 -10:00 p.m. The Commissioners were in agreement with the meeting dates on the third Thursday of each month, but that the meeting time be changed to 7:00 p.m. and the meetings limited to 9:30 -10:00 p.m. Mr. Prieditis asked that Mr. Boardman contact Mr. Comers to make sure this change was agreeable with him. 11. DISCUSSION OF CHECK REGISTERS: Ms. Svendsen suggested that a little more information be included in the agenda explaining some of the vague items in the check registers. This would save the Commissioners some time in their discussion. MOTION BY MR. PRAIRIE, SECONDED BY MR. RASMUSSEN, TO APPROVE THE CHECK REGISTER DATED 1217183 TOTALLING $4,533.62; CHECK REGISTER DATED 12131183 TOTALLING $211,672; AND CHECK REGISTER DATED 1111184 TOTALLING $173,196. UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPERSON PRIEDITIS DECLARED THE MOTION CARRIED UNANIMOUSLY. 12. REIMBURSEMENT OF HRA EXPENSES: MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRAIRIE, TO AUTHORIZE A PAYMENT OF $20,579.79 REIMBURSING THE CITY FOR ADMINISTRATIVE COSTS. UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPERSON PRIEDITIS DECLARED THE MOTION CARRIED UNANIMOUSLY. 13. UNAUDITED MONTHLY REPORT AS OF 12/31/83: Vice - Chairperson Prieditis received the unaudited monthly report as of 12/31/83 into the record. He stated the Commission members should review it; and if they had any questions, they could discuss it at the next meeting. ADJOURNMENT: MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRAIRIE, TO ADJOURN THE MEETING. UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPERSON PRIEDITIS DECLARED THE JAN. 12, 1984, • HOUSING & REDEVELOPMENT AUTHORITY MEETING ADJOURNED AT 9:00 P.M. Respectfully su itted, LYW Saba, Recording Secretary