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HRA 05/10/1984 - 29363CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY ,MEETING MAY 10, 1984 CALL TO ORDER: Acting Chairperson Prairie called the May 10, 1984, Housing & Redevelopment Authority meeting to order at 7:05 p.m. ROLL CALL: Members Present: Duane Prairie, Carolyn Svendsen, Walter Rasmussen, Larry Comers (arr. 7:28 p.m.) Members Absent: Elmars Prieditis Others Present: Sid Inman, City Finance Director Nasim Qureshi, HRA Director Dave Newman, City Attorney Rick Pribyl, Finance Officer Ed Hamernik, City Councilman 0 APPROVAL OF APRIL 19, 1984, HOUSING & REDEVELOPMENT AUTHORITY MINUTES: MOTION BY MR. RASMUSSEN, SECONDED BY MS. SVENDSEN, TO APPROVE THE APRIL 19, 1984, HOUSING & REDEVELOPMENT AUTHORITY MINUTES AS WRITTEN. UPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPERSON PRAIRIE DECLARED THE MOTION CARRIED UNANIMOUSLY. APPROVAL OF AGENDA: The following items were added to the agenda: 1. Possible Listing Agreement for Hardware Building 2. Update on Progress Regarding Target Development North-of City Hall MOTION BY MS. SVENDSEN, SECONDED BY MR. RASMUSEEN, TO ADOPT THE AGENDA AS AMENDED AND TO PLACE THE TWO ADDITIONAL ITEMS AT THE BEGINNING OF THE AGENDA. UPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPERSON PRAIRIE DECLARED THE MOTION CARRIED UNANIMOUSLY. 1. POSSIBLE LISTING AGREEMENT FOR HARDWARE BUILDING: Mr. Qureshi stated that at the meeting, the HRA members had received a copy of a letter from John Low, Thorpe Bros. Inc. Realtors,regarding a Listing Agreement on the Vacant Hardware Building. He stated three months ago the HRA authorized City Administration to enter into a leasing arrangement with the same party for the buildings north of City Hall, Fortunately, during 0 HOUSING & REDEVELOPMENT AUTHORITY MEETING, MAY 10, 1984 PAGE 2 the same time frame, they were able to attract Target to build on this property so the whole question became mute. Mr. Qureshi stated they were negotiating with a couple of parties for possible lease of the hardware building. Both of those leases did not go through. Also, with the recent development of Target north of City Hall, the Holly Shopping Center has been sold to an investment group, and it was his understanding that it was the investment group's desire to upgrade the Center. The Rice Creek Center has also been almost fully leased, so there seems to be a sizeable amount of activity in this area. Mr. Qureshi stated Thorpe Bros. Inc., Realtors is the leasing agent for Dr. Suh's center, and Mr. Low indicated that whole center was now full. Mr. Qureshi stated that, because they do not want to give a long term lease on the hardware building, it is very difficult to lease the space. If the HRA feels they should be leasing the space, Staff would recommend the HRA give that responsibility to Thorpe Bros. because they seem to be very active in this area and have a fairly good track record in this area. They are asking a fairly minimal fee of 6% of each year's gross lease. Mr. Qureshi stated he mentioned to the realtor that the HRA would probably lease the building for $2 -3 /sq. ft. for 2 years maximum with one year addi- tional option and if there were any leasehold improvements, the HRA would buy out a proportionate share of those leasehold improvements. Ms. Svendsen asked if any kind of ceiling would be put on the improvements. Mr. Qureshi stated that, realistically, when anyone sees that the maximum lease is 3 years, they are not going to put a lot of money into the building. Mr. Qureshi stated that this time, they will make sure they have a solid type of lease and check on the business that leases the building so they do not have a repeat of the problems with the last lease. If there is a valid offer for a lease, they will bring that information back to the HRA for approval before signing the lease. MOTION BY MR. RASMUSSEN, SECONDED BY MS. SVENDSEN, TO AUTHORIZE STAFF TO ENTER INTO A LISTING AGREEMENT ON THE VACANT HARDWARE BUILDING WITH THORPE BROS. INC. REALTORS. UPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPERSON PRAIRIE DECLARED THE MOTION CARRIED UNANIMOUSLY. 2. UPDATE ON PROGRESS REGARDING TARGET DEVELOPMENT NORTH OF CITY HALL: Mr. Qureshi stated that at the last meeting, the HRA authorized the execu- tion of a contract for private redevelopment with Target. Target has signed those documents. He stated the City has given notice to all the tenants to move out, and it looks like everyone should be out by May 30. The only question is with the renter of the house. They have qualified her for Section 8 housing and have provided her with three options of places she can move to. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MAY 10, 1984 PAGE 3 Mr. Qureshi stated they have let the contract the HRA authorized the City Council to award. The City Council awarded those contracts at their last meeting, so they hope to move in in June and start demolishing the structures. Mr. Qureshi stated Target plans to move in the middle of June and start development on the property just south of the Madsen building. Mr. Qureshi stated that at- the last HRA meeting, the HRA authorized the City to hire the architect, and they "have been working on the preliminary plans. It is their hope that by June 8, they will be receiving the bids on it and coming back to the HRA at their June meeting for review and approval. Mr. Qureshi stated they have supplied the title information from Chicago Target to the City attorneyxs office and, hopefully, they will be working_ with,the.parties to make sure the title is clear so the title can be trans -_ ferred quickly. Mr. Qureshi stated they are also processing the plat of the area, the hearing is set for Planning Commission, and it should go to the City Council in mid - June. (Mr. Commers arrived at 7:28 p.m.) 3. PUBLIC HEARING ON THE PROPOSED SALE LEASE OR OTHER DISPOSITION OF PROPERTY LOCATED IN UNIVERSITY 1NDUSTRIAL PARK WITHIN REDEV ENT PR JEC REA N67 1: MOTION BY MR. PRAIRIE, SECONDED BY MS. SVENDSEN, TO OPEN THE PUBLIC HEARING ON THE PROPOSED SALE, LEASE OR OTHER DISPOSITION OF PROPERTY LOCATED IN UNIVERSITY INDUSTRIAL PARK WITHIN REDEVELOPMENT PROJECT AREA NO. 1. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE PUBLIC HEARING OPEN AT 7:39 P.M. Mr. Qureshi stated that at the last meeting, Mr. Paschke requested some assistance from the HRA for certain property he wanted to develop that was not feasible to develop under the present conditions of soil and drainage problems. If it is the HRA's desire to give him some assistance, the route chosen by the HRA is to buy the properties and write down the cost and sell it at a cost, so the developer can economically develop the property. When there is any public property that the HRA wishes to resell, the HRA is required to hold a public hearing. That is the process they are going through at this meeting. The public hearing is for the possible sale of Lots 3, 5, and 6, Block 4, University Industrial Park. Mr. Qureshi stated the HRA members had a copy of an agreement executed by Mr. Paschke. The agreement provides that Mr. Paschke will build minimum improvements on Lots 3, 5, and 6. On Lot 3, he will build a minimum 15,000 sq. ft. office warehouse building with a value of $450,000. On Lot 5, he • will build a minimum 30,000 sq. ft. building with a value of $750,000. Lot 6 will be a ponding area for most of University Industrial Park. The developer . HOUSING & REDEVELOPMENT AUTHORITY MEETING, MAY 10, 1984 PAGE 4 will develop the ponding area, do all the piping and draining and will give an easement to the City for ponding. The City will be responsible for structural maintenance of the pond and structures. Mr. Paschke will still maintain and upkeep Lot 6 and mow the grass. Mr. Commers asked if this agreement had been reviewed by the City Attorney. Mr. Qureshi stated Mr. Herrick has reviewed the agreement, and the modifi- cations on page 4 -3 (Section 4.5, Convenants Respecting the Holding Pond and Lot 6) were discussed and worked out by Mr. Herrick. Mr. Commers asked about the numbers that go with this transaction. Mr. Qureshi stated it basically provides that on Lot 3, once the Certificate of Compliance is issued, the developer will be paid $10,000 for the write- down. When the building on Lot 5 is completed along with the ponding and drainage on Lot 6, and when the Certificate of Compliance is issued, the write -down will be $43,000. Mr. Commers asked about the tax generation on the two parcels. Mr. Qureshi stated on the 15,000 sq. ft, building, when full tax comes on line, the estimate is $17,000 a year. On the 30,000 sq. ft. building, the estimate is $32,000 a year, but there is existing values so the net tax would be $29,800. MOTION BY MR. PRAIRIE, SECONDED BY MS. SVENDSEN, TO CLOSE THE PUBLIC HEARING ON THE PROPOSED SALE, LEASE OR OTHER DISPOSITION OF PROPERTY LOCATED IN UNIVERSXTY INDUSTRIAL PARK WITHIN REDEVELOPMENT PROJECT AREA NO. 1, UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE PUBLIC HEARING CLOSED AT 7 :46 P.M. 4. RESOLUTION APPROVING AN AGREEMENT WITH GERALD W. PASCHKE AND MODIFYING TAX INCREMENT "FINANCING DISTRICT N0. 3 AND HOUSING AND REDEVELOPMENT OR Y MUDIFIED REDEVELOPMENT PROJECT NO. 1: MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRAIRIE, TO APPROVE RESOLUTION NO.HRA 19 -84 "MODIFYING THE TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT DISTRICT NO. 3 (NORTH AREA) WITHIN REDEVELOPMENT PROJECT NO. 1 TO INCLUDE INFORMATION ABOUT INCREASED PROJECT ACTIVITIES AS REQURIED BY MINN. STAT. 5273.74, SUED. 1; AND APPROVING AND AUTHORIZING THE EXECUTION OF A CONTRACT FOR PRIVATE REDEVELOPMENT WITH GERALD W. PASCHKE". UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. • HOUSING & REDEVELOPMENT AUTHORITY MEETING, MAY 10, 1984 PAGE 5 5. APPROVAL OF ASSIGNMENT AND RELEASE AGREEMENT FOR DEVELOPMENT FOR DA Mr. Qureshi stated that in the development agreement with Target, there is a provision that Target is supposed to pay $15,000 per year for leasing the property for the parking lot. In the negotiations, they had discussed the money that would be set aside for the lease of the parking lot. The tool suggested at that time was that Target buy a certificate that would generate enough interest to pay for the l ease. Some further nWtiations have taken place , and what is proposed is that Target would set aside $130,000 and that generate enough interest to pay for the Tease agreement. If this instrument was bought today it should provide interest of $16,580 per.year. This instru- ment would be assigned to the HRA, and target would be released from the lease payments. This is going to be an advantage to the HRA because they will have the interest plus the principle for 30 years. Mr. Qureshi stated the purpose for this arrangement is to avoid any possible default on the part of Target on the lease payment. They are assured they have the building with the property underneath and the lease payment assured for 30 years. MOTION BY MS. SVENDSEN, SECONDED BY MR. RASMUSSEN, TO APPROVE THE "ASSIGN- MENT AND RELEASE AGREEMENT" BETWEEN THE FRIDLEY HOUSING 6 REDEVELOPMENT AUTHORITY AND DAYTON HUDSON D /B /A TARGET STORES. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 6. FINANCIAL REPORT: Mr. Inman stated no action was required by the HRA. He stated Mr. Pribyl had prepared this report and was at the meeting to answer questions. 7. CHECK REGISTER: MOTION BY MR. PRAIRIE, SECONDED BY MR. RASMUSSEN, TO APPROVE THE CHECK REGISTER DATED MAY 4, 1984, IN THE AMOUNT OF $14,628.04. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. ADJOURNMENT: MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRAIRIE, TO ADJOURN THE MEETING. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MAY 10, 1984, HOUSING & REDEVELOPMENT AUTHORITY MEETING ADJOURNED AT 8 :20 P.M. • Respectfully submitted, yn Sa a Recording Secretary