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HRA 12/12/1985 - 29345• CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING DECEMBER 12, 1985 CALL TO ORDER: Chairperson Commers called the December 12, 1985, Housing & Redevelopment Authority meeting to order at 7:08 p.m. ROLL CALL: Menbers Present: Larry Commers, Elmars Prieditis, Duane Prairie, Walter Rasmussen, Virginia Schnabel Members Absent: None Others Present: Nasim Qureshi, HRA Director Samantha Orduno, City of Fridley Jim Robinson, Planning Coordinator John Flora, Public Works Director Rick Pribyl, Acting City Finance Director Dave Newman,City Attorney • Jim O'Meara, O' Conner and Hannon Jim Casserly, Miller & Schroeder, Dennis Schneider, City Councilman Gordon Backlund, State Representative Dave Weir, Woodbridge Properties Sid Inman, Holmes & Graven (See attached list) APPROVAL OF NOVEMBER 14, 1985, HOUSING & REDEVELOPMENT AUTHORITY MINUTES: MOTION BY MR. PRIEDITIS, SECONDED BY MS. SCHNABEL, TO APPROVE THE NOV. 14, 1985, HOUSING & REDEVELOPMENTAL AUTHORITY MINUTES AS WRITTEN. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. APPROVAL OF NOVEMBER 25,_ 1985., SPECIAL HOUSING & REDEVELOPMENT AUTHORITY MINUTES: MOTION BY MR. PRAIRIE, SECONDED BY MS. SCHNABEL, TO APPROVE THE NOV. 25, 1985, SPECIAL HOUSING & REDEVELOPMENT AUTHORITY MINUTES AS WRITTEN. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE-,MOTION CARRIED UNANIMOUSLY. • HOUSING & REDEVELOPMENT AUTHORITY MEETING; DECEMBER 12, 1985 PAGE 2 1. PRESENTATION BY STATE REPRESENTATIVE GORDON BACKLUND: Mr. Comers stated that Representative Gordon Backlund, who was serving on one of the committees dealing with the funding of education, had asked to come to the meeting to give the HRA some information relative to school aid and the effect, if any, he might envision as a result of the tax increment financing that has taken place throughout the state. Representative Backlund stated that they have been holding hearings in the School Aids Finance Division of the House, and the School Aids Finance Division's purpose was to fund Kindergarten through 12th grade education in Minnesota, made up of partial state aid and partial local tax revenue from property tax. During the interim, they are going to study two particular areas that have to do directly with property tax, one is fiscal disparities and the second is tax increment financing. He thought it might be of interest to the HRA to know they are, in fact doing this and to gain the HRA's insight and thoughts and recommendations regarding what they should do as far as looking at these issues. Representative Backlund stated they held a meeting that day, one of many hearings, on tax increment financing and the way tax increment financing affects school aid formula itself. They are going to be making some recommendations to the Tax Committee and the Tax Committee will be looking at that as a topic during the Feb. 1986 session. Representative Backlund stated that as he understood tax increment financing, when the HRA, through the City, approves a tax increment district, that district is developed and the increased revenue for that goes to pay the bond. The input from other taxing authorities, school districts, watersheds, the county, and anyone else, was an indirect informal type of input as opposed to veto power or direct input. Representative Backlund stated their input, as they are going through the process, is after the bonds are paid off, there is excess money left over some- times, and the tax increment districts of the cities have options available to them under the statutes right now: 1. They can use the money to pay off other districts. 2. They can give the money back to the other taxing authorities. 3. They can basically use it for whatever they want. Representative Backlund stated they are looking at the school aid funding because they guarantee a level of funding for education and part of that is made up from property tax. If the tax increment district is in fact paying off its bond early and has extra revenue coming in, they are looking at a possible source of revenue by having it agreed that the extra money would be shared among the taxing districts,not only in the city, but also the county and state education, as well as any other district. • Representative Backlund stated they have not come to any conclusions, other than they were presented with this information. His reason for appearing before HOUSING & REDEVELOPMENT AUTHORITY'MEETING, DECEMBER 12, 1985 PAGE 3 the HRA was to get the HRA's opinion as a group and as individuals as to whether they should look at the statutes and make an adjustment so when a tax increment bond is, in fact paid off and paid off early, should that money then be distri- buted to the other taxing authorities, should it be used for a third purpose, or any other ideas for the best use of the money? Representative Backlund stated the second part of this was looking at the fiscal disparities overall. The way the bill has been implemented, he did not foresee any changes in it, but, in his opinion, it should be looked at as part of the overall property tax change. Mr. Rasmussen suggested Representative Backlund write the HRA members a letter addressing these concerns so the HRA members could give it some thought before responding. Representative Backlund stated he would be happy to do that. He stated nothing was going to be done formally until the sessions begin in February. Mr. Canmers stated the HRA had discussed at various times if there was any vehicle of getting some of this money back to the school districts. They had not been able to come up with any kind of idea. Representative Backlund stated that it was a legitimate option now under the is statute. Mr. Newman stated his office, as well as Jim O'Meara's office, had done some checking on this, and it was their opinion it wasn't provided for under the statute. If what Representative Backlund said was correct, then that statute should be clarified. Representative Backlund stated he would be happy to provide the HRA with that information. Mr. Commers stated the HRA appreciated Representative Backlund's coming and bringing them up to date on what was going on at the State Legislature. 2. CONSIDERATION OF REVISED DEVELOPMENT AGREEMENT WITH LOU LUNDGREN: Mr. Qureshi stated the project had been reduced from 234 units to 118 rental units and 1 manager's unit, and from 12 stories to 6 stories. The HRA will be providing only one floor of underground parking. Because of this substantial change, the HRA is being asked to approve the resolution which reaffirms the development agreement with these changes. Mr. Rasmussen asked about the rent structure. Mr. Lundgren stated the rents ranged from $567 for one bedroom to $1,000 for three bedrooms. He stated the units are all large, and the rents do include • all untilities. An underground garage is $45 /month. HOUSING & REDEVELOPMENT AUTHORITY MEETING, DECEMBER 12, 1985 PAGE 4 Mr. Prieditis stated that besides the substantial changes to the height and number of units, had the concept of the building changed? Mr. Lundgren stated there were no other changes in the quality of the building. The building will be built of very high quality materials; however, they have added an additional amenity, an enclosed small swimming pool, that was not included with the 12 story building. They have also done some minor plan change in terms of relocating and centralizing the exercise room, sauna, and those kind of amenities, instead of in different locations which they were before. MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRIEDITIS, TO APPROVE RESOLUTION NO. HRA 18 - 1985, RELATING TO THE AMENDED DEVELOPMENT AGREEMENT BETWEEN THE HRA AND FRIDLEY PLAZA ASSOCIATES. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. Mr. Qureshi stated Mr. Lundgren would like to go on Mr. Levy's property to do some soil borings and some survevs. Mr. Newman has been trying to formalize an agreement with Mr. Levy. Mr. Levy has agreed to allow Mr. Lundgren to go on his property, but he wants the whole parcel he owns treated as one parcel for acquisition purposes. It was the city assessor's and Mr. Newman's opinion that it would really not impact the acquisition process. Mr. Qureshi stated the HRA's next meeting was Thursday, Jan. 9, 1986. Would Mr. Lundgren be willing to work around this until the next meeting when they would have more detailed information? Mr. Lundgren stated he had no problem with this being considered at. the Jan. 9th meeting. 3. PUBLIC HEARING ON THE PROPOSED REDEVELOPMENT OF THE 100 TWIN DRIVE -IN SITE: MOTION BY MS. SCHNABEL, SECONDED BY MR. PRAIRIE, TO OPEN THE PUBLIC HEARING. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE PUBLIC HEARING OPEN AT 7:43 P.M. Mr. Qureshi stated the properties being discussed were three parcels which are presently being used as the 100 Twin Drive -in Theatre, and another piece of property owned by Mr. Gerald Johnson, which is northeast of the drive -in property. Also, there was an outlot owned by Mr. Johnson which would also be part of the agreement and acquisition for some right -of -way needed to do intersection improvement. Mr. Qureshi stated this was a nine -phase development. The developer had neighborhood meetings where the proposal was discussed with the neighborhood. • Per the HRA's instructions, notices were sent to a much broader area than required and notices would bessent for future meetings on this development. HOUSING & REDEVELOPMENT AUTHORITY MEETING4 DECEMBER 12, 1985 PAGE 5 Mr. Commers asked Mr. David Weir to give a general overview of the proposed development. Mr. Weir stated they were proposing a master plan office development. The overall development calls for approx. 748,000 sq. ft. of space, primarily office structures, a free - standing restaurant, and a business class hotel. He stated they have been working for a number of months trying to negotiate with Mr. Johnson for his property. At this time, they have not been able to get an actual signed agreement. Mr. Weir stated the overall concept is a campus approach. One thing they feel is extremely important is to go in and develop the total site in terms of the infra-structures, landscaping, street system, and create an environment and set the tone right from the onset. Mr. Weir stated the traffic situation has been one of extreme importance to them. Two weeks ago, they had a meeting with the neighbors, and the neighbors have had a long - standing concern about the traffic situation. Through the efforts of city staff, he felt they have come up with a reconfirmation of what is needed for the interchange. He stated that at this time, he would like to ask Mr. Jim Benshoof, Benshoof & Assoc., who is a Registered Transportation Engineer working with Woodbridge, city staff, and outside engineers, to make sure the kinds of things being proposed for the development will enhance the situation and now continue to aggravate an existing problem. Mr. Benshoof stated they have conducted detailed traffic analysis of this proposed development and its implications on the roadway system in the area. He stated he would summarize their findings. Mr. Benshoof stated they have looked at the implications on the local roadway system and the regional roadway system, Highway 65 on the east, 694 on the south, and Highway 47 on the west. As to the local street situation, the City has planned improvement to the frontage road between 57th Ave. and 7th St., just to the west of the development. That will be beneficial in accommo- dating traffic between this site and the west from Highway 47, thereby providing an alternate route that will relieve 57th Ave. and 7th St. Mr. Benshoof stated they projected future traffic volumes to the year 1999 that would occur after the development was in place. Seventh St., in particu- lar, and other local streets, they found well within the normal standards and guidelines for the type of roadway for which they were designated. Mr. Benshoof stated the traffic control at the intersection of 57th Ave. and 7th St. very likely will need to be upgraded to a 4 -way stop prior to the time of full development to accommodate the projected volumes. Similar4y, the traffic control at the intersection of the frontage road and 7th St. is currently and will have to continue as a 4 -way stop to accommodate projected volumes. 0 HOUSING & REDEVELOPMENT AUTHORITY MEETING, DECEMBER 12, 1985 PAGE 6 • Mr. Benshoof stated that as the implications of the development on the regional roadway systems, they found there were several improvements that will be of benefit to serving the traffic on those roadway systems related to this development: 1. The upgrading of 694 planned for 1988 to provide 3 lanes in each direction. 2. The 610 bridge over the Mississippi River will provide a very important alternative crossing of the river and will relieve some of the usage that now occurs in this area of Highway 65 and Highway 47. Mr. Benshoof stated they did find a need for upgrading the intersection at Moore Lake Drive and Highway 65. The intersection is now operating at capacity limits, and even without this development with just the natural growth that will occur, the intersection would need upgrading. They have developed a concept plan for that upgrading that will provide an additional left turn lane from the south to proceed to the west; an additional lane for movements from the north into the site and to the south; the upgrading on the east leg of Old Central in accordance with the plans already developed for the city. They believe those plans are right on target for what is needed on the east leg of the intersection and will complement the improve- ments on the west leg. Mr. Benshoof stated the plans are in a concept stage at this point subject to further refinement. They are working with the City Engineer, city traffic consultant, State Dept. of Transportation, and Anoka County. They find that with these improvements, the intersection will accommodate projected 1999 traffic volumes at about the same level of service as is presently being provided with existing traffic volumes. Mr. Benshoof stated they will be preparing a specific traffic report to be submitted at future meetings. Mr. Qureshi reviewed the development agreement with the HRA. Mr. Commers stated Mr. Rasmussen was going to review the financial situation of Woodbridge Properties and give a brief report. Mr. Rasmussen stated he had a meeting with Mr. Dave Weir,_ and he was satisfied with this project itself and with Woodbridge Properties' financial situation. Mr. Casserly reviewed the financial numbers with the HRA. Mr. Commers asked if there was anyone in the audience who would like to make any comments regarding this proposed development. Mr. Kirk Hart, Skywood Inn, stated he was representing the Fridley Chamber • of Commerce. The Fridley Chamber of Commerce would like to go on record that they were behind this new development. They conducted a survey and had an i HOUSING & REDEVELOPMENT AUTHORITY MEETING, DECEMBER 12, 1985 PAGE 7 overwhelming response of their members in favor of the proposed development. He stated the Chamber of Commerce's only concern was they would like to see the hotel /convention center phase moved up from 8 -9th phase to possibly the first, second, or third phase. Mr. Weir stated they would be happy to move the phasing of the hotel up, but from past experience, they have found it does not always work to use an hotel as an inducement to lease office space. They are somewhat torn on this issue. He stated there are a lot of employees in the area, and there was the possibility of getting an agreement from employees in the area committing to a number of room days per year. At this time, they have not had time to explore that possibility. Mr. Weir stated hotels are extremely risky to build and operate. They want to make sure they get the very best hotel that complements the other efforts they are undertaking, and they want it to be market - driven. MOTION BY MS. SCHNABEL, SECONDED BY MR. PRAIRIE, TO RECEIVE THE LETTER DATED DEC. 11, 1985, FROM DANIEL C. FICKEN, CHAIRMAN OF THE FRIDLEY CHAMBER OF COMMERCE BOARD OF DIRECTORS, INDICATING THE CHAMBER OF COMMERCE'S SUPPORT OF THIS PROPOSAL. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. Mr. Robert Gordier, 5705 Quincy St., expressed his concern about traffic and that traffic was operating at capacity limits on West Moore Lake Drive and Highway 65 right now. He was also concerned about how the skyline would look from his home with the high office buildings. Mr. Weir stated the 8 -story building would be about as high as the drive -in screen is right now on the property. He stated part of the rationale for the location of the buildings was to pull them away from the residential area; also part of the rationale in getting them closer to the freeway related to the noise issue as well, yet providing different heights of buildings so there was no constant change. Mr. Weir stated the project was scheduled over a 9 -phase process. Their first Wuilding, a 6 -story building, will be started in the spring, and the others will be built as the demand is produced. They believe some of the buildings will be occupied by single tenants on a "build to suit" basis. Mr. Weir stated Woodbridge Properties was being asked by the City to commit to certain levels of value related to the repayment of the tax increment bonds. This involved a tremendous' amount of engineering work to be able to deliver those values which should translate into tenants being able to occupy the space. They are extremely concerned about having to live with the current problems that exist there today. It would not be something that would promote the best . interest of thepark or for the city. • HOUSING & REDEVELOPMENT AUTHORITY MEETING, DECEMBER 12, 1985 PAGE 8 Mr. Weir stated they would like to ask the HRA to encourage the City Council to authorize staff to really do whatever is necessary relative to undertaking the final working drawings as fast as possible. Mr. Qureshi stated Mr. Weir was asking that the City actually employ the engineers that he has been working with in the past so they can design the roadway system, utilities, public improvements, etc. The City was saying it would not expend any monies out of the GO-bonds until they are both assured the whole project is going to be approved. Mr. Weir doesn't want to wait to do all the design work, so one mechanism would be that the City hire Wood bridge's engineer to do the work contingent upon proceeding with the project. This might be a way of relieving some of Per. Weir's concerns and accelerating some of the needed improvements they are talking about. Mr. Qureshi stated that if the HRA approves the development agreement, they might want to encourage the City Council to work out some arrangement where some of the design of public improvements could be expedited. The HRA members felt that was something the City Council would do anyway. Ms. Sadie Gunderston, 5707 West Moore Lake Drive, stated one of the maps of the project she had looked at showed her driveway being cut off and the driveway extended. She was concerned as to whether she would have to pay for 40 the cost of extending her driveway. Mr. Qureshi stated that when the plans are finalized, they will be contacting her. If there is any reason to extend her driveway, the City would pay for it. MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRIEDITIS, TO CLOSE THE PUBLIC HEARING. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE PUBLIC HARING CLOSED AT 9:18 P.M. 4. CONSIDERATION OF A RESOLUTION APPROVING AND AUTHORIZING THE EXECUTION OF A CONTRACT OR PRIVATE DEVELOPMENT T CO.: NOTION BY MR. RASMUSSEN, SECONDED BY MS. SCHNABEL, TO APPROVE RESOLUTION NO. HRA 19 - 1985, AUTHORIZING THE EXECUTION OF A CONTRACT FOR PRIVATE DEVELOPMENT BETWEEN THE HRA AND LAKE POINTE INVESTMENT CO. Mr. Qureshi stated this approval of this resolution provides that the HRA enter into a development agreement with Lake Point Investment Co., and it also authorized staff to enter into negotiations for acquisition of the property allowing the development. Mr. Newman stated that because of the tight timeframe involved, there was a provision in the Mn. Statute that if necessary the HRA could acquire the . property within 90 days after a petition for condemnation had been served. In order to accomplish that, he would recommend the following additional language: HOUSING & REDEVELOPMENT AUTHORITY MEETING, DECEMBER 12, 1985 PAGE 9 "Further, that the HRA's attorney be specifically authorized to take possession pursuant to MSA 117.042 and to take any and all other action necessary and desirable to carry out the purposes of this resolution." Mr. Newman stated that in order for him to feel comfortable about delivering title by May 15, 1986, the HRA had to start acquisition no later than Jan. 15 and preferably earlier. MOTION TO AMEND BY MR. RASMUSSEN, SECONDED BY MS. SCHNABEL, TO APPROVE RESOLUTION NO. HRA__s - 1985, AUTHORIZING THE EXECUTION OF A CONTRACT FOR PRIVATE DEVELOPMENT BETWEEN THE HRA AND LAKE POINTS INVESTMENT CO. FURTHER THAT THE HRA'S ATTORNEY BE SPECIFICALLY AUTHORIZED TO TAKE POSSESSION PURSUANT TO MSA 117.042 AND TO TAKE ANY AND ALL OTHER ACTION NECESSARY AND DESIRABLE TO CARRY OUT THE PURPOSES OF THIS RESOLUTION. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON C014MERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 5. CONSIDERATION OF APPROVAL OF $5.7 MILLION TAX INCREMENT LIMITED REVENUE NOTE: MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRAI1=, TO APPROVE RESOLUTION NO. HRA 20 - 1985, APPROVING A $5.7 MILLION TAX INCREMENT LIMITED REVENUE NOTE. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 6. CONSIDERATION OF A RESOLUTION REQUESTING T!IE CITY OF FRIDLEY TO ISSUE ITS $11,550,000 VARIABLE RATE DE AN GE AL LI ATION TAX INCREMENT BONDS AND APPROVING AND AUTHORIZIN= EXECUTION OF A TAX INCR E.NT PLEDGE AGREEMENT. MOTION BY MR. RASMUSSEN, SECONDED BY MR. PP.IEDITIS, TO APPROVE RESOLUTION NO. HRA 21 - 1985, REQUESTING THE CITY COUNCIL TO AUTHORIZE THE SALE OF TAX INCREMENT BONDS FOR THE EXISTING AND ADDITIONAL PROJECTS WITHIN THE REDEVELOP- MENT PROJECT AREA NO. 1. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COM14ERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 7. CONSIDERATION OF FUNDING FOR LEAGUE OF CITIFS LOBBYING FOR TAX INCREMENT LEGISLATION: MOTION BY MR. PRIEDITIS, SECONDED BY MR. RASMUSSEN, TO APPROVE FUNDING IN THE AMOUNT OF $1,288.41 FOR THE LEAGUE OF CITIES FOR TAX INCREMENT LEGISLATION. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. • 8. CONSIDERATION OF ADOPTING THE PROPOSED MINIMUM ASSESSED VALUE FOR COLUMBIA PARK PROPERTIES: HOUSING & REDEVELOPMENT AUTHORITY MEETING, DECEMBER 12, 1985 PAGE 10 Mr. Qureshi stated they have had some discussions with a representative from Columbia Park Properties. The representative has said that Columbia Park Properties is heavily involved in their expansion in Columbia Heights and have not been able to adequately review their development in Fridley. Columbia Park Properties is requesting additional time to further finalize their plan. They are going to be asking the City Council to actually authorize the sale of $4.3 million industrial revenue bonds on Dec. 16. The City Council intends to park those bonds and give Columbia Park Properties more time to finalize their plan. He would suggest the HRA table this item until they get a little more formal assurance from Columbia Park Properties. MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRIEDITIS, TO TABLE THIS ITEM. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 9. CLAIMS: The HRA questioned this audit expense as the City has always paid this in the past. MOTIO11 BY MR. PRIEDITIS, SECONDED BY MR. RASMUSSEN, TO APPROVE THE AUDIT EXPENSES AS CONTAINED IN A LETTER DATED DEC. 3, 1985, CONTINGENT UPON HAVING THIS CHECKED TO MAKE SURE IT IS LEGALLY REQUIRED. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 10. CHECK REGISTER: MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRAIRIE, TO APPROVE THE CHECK REGISTER. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 11. OTHER BUSINESS: Ms. Schnabel stated that at their last meeting, the Commissioners questioned the relocation cost to the tenants at the property being acquired at 5747 Central Ave. N.E. Mr. Qureshi stated the HRA was legally required to provide relocation to the tenants. The HRA has now acquired the building. He stated he would provide the HRA with more information on why this relocation expense was legally required. 11 HOUSING & REDEVELOPMENT AUTHORITY MEETING, DECEMBER 12, 1985 PAGE 11 ADJOURNMENT: Chairperson Commers declared the Dec. 12, 1985, Housing & Redevelopment Authority meeting adjourned at 10 :00 p.m. Respectfully submitted, 1411� 1'14a� Ly eSaa Recording Secretary • TtH u4UA /� C91-0 cr-- 0,11711)1,5 0 a-If --7 I / e r, o -Ax-