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HRA 01/09/1986 - 29344CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING JANUARY 9, 1986 CALL TO ORDER: Chairperson Comers called the January 9, 1986, Housing & Redevelopment Authority meeting to order at 7 :55 p.m. ROLL CALL: Members Present: Larry Comers, Duane Prairie, Virginia Schnabel Members Absent: Walter Rasmussen, Elmars Prieditis Others Present: Nasim Qureshi, HRA Director Samantha Orduno, Management Assistant Jim Robinson, Planning Coordinator Rick Pribyl, City Finance Director Dave Newman, HRA Attorney Dave Harris, 470 Rice Creek Blvd. Dick Harris, 6200 Riverview Terrace A, G. W. Paschke, 7970 University Ave Erik Nesset,- Woodbridge Properties Linda.Fisher, Larkin, Hoffman, Daly & Lundgren (rep. Woodbridge Prop.) APPROVAL OF DECEMBER 12, 1985, HOUSING & REDEVELOPMENT AUTHORITY MINUTES: MOTION BY MR. PRAIRIE, SECONDED BY MS. SCHNABEL, TO APPROVE THE DEC. 12, 1985, HOUSING & REDEVELOPMENT AUTHORITY MINUTES. Ms. Schnabel stated that on page 6, 4th paragraph from the bottom, "Mr. Dave Newman" should be changed to "Mr. Dave Weir ". UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MINUTES APPROVED AS AMENDED. 1. UPDATE ON UNrVERSITY AVENUE CORRIDOR: Mr. Qureshi stated that as the HRA members remembered, some business people along University Avenue had appeared before the HRA at a previous meeting to see if something could be done to upgrade University Ave. regarding its image and as a corridor for the City. The proposal was that the City get some estimates of costs for developing proposals for this area, and the business people agreed they would want the HRA to fund up to $5,000; anything beyond that, they would fund. Mr. Qureshi stated thLe City dial receive five proposals. Out of those five, three were submitted to the HRA. These proposals are as follows: HOUSING & REDEVELOPMENT AUTHORITY MEETING, JANUARY 9, 1986 PAGE 2 Barton Aschman & Assoc. - $25,000 Short - Elliott - Hendrickson - 17,000 Westwood Planning and Eng. - 11,500 Mr. Qureshi stated Staff was looking for some direction from the HRA as to whether the workshould be done, what the cost of the work should be, and how the cost should be shared (City /HRA /business people). Mr. Dave Harris stated he felt the business people had understood this would be a preliminary plan for University, and they were led to believe that $5,000 would probably give a good indication of -some ideas that could be done rather than drawing up detailed plans and specs. Ffe felt that was why these estimated figures were so high for the proposals. Mr. Robinson stated he felt these figures did reflect a turn -key operation that would carry the project from beginning to end. He felt that any one of the proposals could be scaled down to a preliminary number. Mr. Dave Harris stated he felt comfortable with what was proposed in all three proposals, but maybe now the business people should rethink the situation; and if the City wants to go into this kind of detail, then maybe the HRA, the City Council, and other enti'ti'es should participate to a larger degree. Mr. Prairie stated maybe the business people should come up with a number of how much they were willing to commit dollar -wise, and then come back to the HRA with that figure. Mr. Dave Harris stated that rather than give a number, they would give the HRA a percentage of what they would be willing to pay on a project. Mr. Commers stated the HRA was very interested in participating in this project. They felt it was something well worth looking into. As long as they are workinq to develop the rest of the Center City, there was no reason not to work on the corridor, too. Mr. Dave Harris stated they definitely see this corridor as the focal point of the whole community, and it was important to Fridley's image to make some improvements. Mr. Dave Harris stated that if copies of the materials were sent to him, he would make sure the rest of the committee members received it. Discussion continued until the next meeting. 2. REIMBURSEMENT TO G. W. PASCHKE FOR SOIL CORRECTION COSTS: Mr. Qureshi stated the HRA had agreed to pay Mr..Paschke $43,000 in soil and drainage correction once the building along Main St. was completed. . Basically, the building was completed, but there were some other items that needed attention. One was regarding some easements and some question on variances the City approved with stipulations on the pond and its capacity. He stated the City is working with Mr. Paschke to finalize these problems. HOUSING & REDEVELOPMENT AUTHORITY MEETING, JANUARY 9, 1986 PAGE 3 i Mr. Qureshi stated he would recommend the HRA release all the money except $10,000 ($33,0001 so that once all the problems are finalized, they could release the final $10,000. Mr. Commers stated the only problem he saw was that the HRA had agreed to pay Mr. Paschke when the certificate of occupance was issued. Mr. Paschke stated the building was completed, and all the grounds were completed. The pond was completed. The only thing left was some minor final grading on the bottom of the pond. He stated the easements have been drawn and are done. Mr. Qureshi agreed that the agreement required a certificate of occupancy before the money was released. Staff was recommending the release of most of the money and when the rest of the details were completed, the rest of the money would be released. MOTION BY MR. PRAIRIE, SECONDED BY MS.. SCHNABEL, TO RELEASE $33,000 TO G. W. PASCHKE AT THIS TIME AND TO AUTHORIZE STAFF TO RELEASE THE BALANCE ($10,000) WHEN THE CERTIFICATE OF OCCUPANCY IS ISSUED. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. • Mr. Dave Harris stated he would like to address the HRA relative to this subject in general. He stated that most of the time the HRA participates in soil correction so buildings can be built. He felt the problem with the whole thing was not based on the willingness of the City or the HRA but the timing in getting the money to the developer. He suggested the HRA put themselves in the developer's position where the developer acquires the land and then does the soil correction. The developer then becomes the payee, buying the service through a contractor, the soil is corrected, and the developer has paid out the money. It was at that point in time when he felt the developer should be reimbursed by the HRA for the land correction costs, not when the building was completed. Mr. Dave Harris stated that if the soil work is completed and the ground is ready for building and the money has been expended for that service by the developer, then that was when the developer should be reimbursed. Mr. Qureshi stated this would be a very strong shift from the HRA's approach in the past. What the City and the HRA desire is that the structure be complete. It is the improved property which generates the increment to give the HRA the tool to pay for the assistance. This was true in the case of Mr. Paschke's development and Woodbridge Properties' development. The whole approach was that the assistance provided was a guarantee that the actual facility would be built. He stated the time frame was only a few months. Unless the HRA desired to shift their philosophy, he would recommend they continue to provide the money when the building is completed. • Mr. Commers agreed that in order to pay these funds, the HRA needed some assurance that improvements were going to be made to the property. i HOUSING & REDEVELOPMENT AUTHORITY MEETING, JANUARY 9, 1986 PAGE 4 Mr. Dave Harris stated he felt that policy was incorrect. There had to be some kind of compromise where maybe one -half or two - thirds of the money could be provided after the correction was completed. Otherwise,they have the situation where the developer is having to be his own banker, and he felt that could be a deterrent to development. It was not always just a few short months if a project was started but halted over the winter months. It could sometimes run up to 6 -8 months. Mr. Dick Harris suggested the HRA reimburse the developer at roof stage, because they then knew for sure the building was substantially built, and a considerable amount of money had been contributed to the project. Roof . stage was usually when the developer made his first draw from the bank. Mr. Commers stated that might be a reasonable compromise. He stated the HRA would address this issue further the next time a similar situation arose. Mr. Paschke stated there were already many problems with bad soil that if the developer has a choice, he would choose not to develop a piece of property because of the high cost of soil correction. This was just adding more obstacles for developers. The assistance from the HRA was fine, but not near the total cost of soil correction. Mr. Comers thanked Mr. Dick Harris, Mr. Dave Harris, and Mr. Paschke for . their input. 3. REVISED RESOLUTION NO. HRA 21 -1985 REQUESTING CITY COUNCIL TO SELL G.O. TAX INCREMENT BONDS: MOTION BY MS. SCHNABEL, SECONDED BY MR. PRAIRIE, TO RECEIVE THE REVISED RESOLUTION HRA 21 -1985 REQUESTING THE CITY COUNCIL TO SELL G.O. TAX .INCREMENT BONDS. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 4. HRA'S OPTION' N PROPERTY LOCATED ON THE SOUTHEAST CORNER OF 63RD AVENUE AND UNIVERSITY AVENUE SERVICr-RTA7: Mr. Qureshi stated this was the parcel of property the HRA had an option on as part of the Fridley Plaza office building development. This option ran until Feb. 1986. It was provided that if the HRA desired to exercise its option, they would pay $10,000 and own the property. If they did not wish to exercise its option, then the property owner, Mr. Gus Doty, would have to pay the HRA $90,000 plus interest as of Feb. 1, 1986. They have calculated that interest and principal to be $123,976. Jar. Qureshi stated it was Staff's recommendation that because this was a fairly expensive piece of property and bedause the HRA has shown no desire • to be the property owner, it would be best not to exercise the option and let the property owner pay the HRA the money. HOUSING & REDEVELOPMENT AUTHORTTY'MEETIN-Q9 JANUARY 9, 1986 PAGE 5 Mr. Qureshi stated he has discussed this with Mr. Dotv. Mr. Doty had presented some plans for an office buildinq on that location. Mr. Qureshi had told him that if Mr. Doty desired to band an office building, the City wanted some kind of assurance before they negotiate any kind of different agreement. So, at this time, it was Staff's recommendation not to exercise the option and have the property owner pay the HRA. Mr. Comers stated he did not think they should start any kind of negotiations with the property owner on Feb. 1. It was one way or the other. If the pproperty owner wanted to negotiate, he should have been at this meetinq. He did not think it- was, unreasonable to take legal action if the payment was not received on feb. 1. MOTION BY MS. 5CHNABEL, SECONDED BY MR. PRAIRIE, THAT THE HRA ELECTS NOT TO EXERCISE ITS OPTION ON THE PROPERTY LOCATED ON THE SOUTHEAST CORNER OF 63RD AVENUE AND UNIVERSITY AVENUE SERVICE-ROAD AND DIRECTS STAFF TO NOTIFY THE PROPERTY OWNER THAT A PAYMENT OF $123,976- IS DNE ON FEB. 1, 1986. IF THE PAYMENT IS NOT RECEIVED ON THAT DATE, LEGAL COUNSEL IS DIRECTED TO PROCEED WITH PROPER LITIGATION. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 4 • 5. REVIEW S -2 ZONING FOR 100. TWIN DRIVE-�IN PROPERTY: Mr. Qureshi stated most of this prooertv was zoned C -3. some R -1. some R -3. and a small portion was C -1. Part of the development agreement the HRA entered into with Woodbridge Properties was that the HRA would provide assistance if thev would develon the complex in essentially nine chases as shown in their plan. It bound the HRA to facilitate this kind of development and it also bound Woodbridge Properties to do the same. Mr. Qureshi stated this plan called for a comprehensive campus -type approach with a lot of green area, aesthetically pleasing buildings and facilites, and it minht be more feasible to have the pproperty zoned S -2 which was approval by design. Woodbridge Properties was seekinq a recommendation from the HRA to the Planning Commission and City Council to support the S -2 zoning with certain controls and stipulations. The S -2 zoning would allow the developer to develop without regard to some of the typical setbacks and things of that type that are encountered with this type of development. The whole idea was to have a cohesive overall development which would be controlled by the HRA, the Planning Commission and the City Council. Mr. Qureshi stated Mr. Robinson has been working with representatives from Woodbridge Properties. He asked Mr. Robinson to outline some of the rationale and some of the stipulations recommended, and then the HRA's recommendation would go to the Planning Commission and City Council. • Mr. Robinson stated the HRA members had a copy of a memo dated Jan. 9, 1986, addressed to the Planning Commission and City Council. If approved, this would be the HRA's recommendation to the Planning Commission and City Council. HOUSING & REDEVELOPMENT AUTHORITY MEETING, JANUARY 9, 1986 PAGE 6 Mr. Robinson stated the Planning Commission reviewed this drafted memo at their meeting on Jan. 8 and the drafted material of the plan, and thev felt the S -2 zoning was an appropriate way to proceed with the project. When the City initially looked at the project in relationship to C -3 zoning, they saw C -3 was the highest zoning which would facilitate this project; however, there were a number of special use permits and setbacks and variances (which noramlly apply to a C -3 district) that did not seem applicable to this develop- ment because of the campus -type approach. So, rather than go through that lenqthy process, they would like to rezone the property to S -2 which was HRA zoning. Mr. Robinson stated they would also like to establish at the onset what would be reasonable modifications to the plan which the HRA and staff would approve and substantial changes to the plan which would include HRA, Planning Commission, and City Council review and approval. Those were outlined on page 2 and 3 of the Jan. 9 memo. Mr. Robinson reviewed the reasonable changes, substantial changes, and stipu- lations in the memo. Ms. Schnabel stated one thing she liked about the S -2 zoninq was that as stated on page 2 of the memo: "the S -2 code provides additional security as to the future land use of this site in the unlikely event that the Woodbridge • development is not realized." Ms. Schnabel asked that if for some reason Woodbridqe Properties was not able to develop the property and the HRA had to go to another developer, was there any way to preserve this tvpe of plan? Mr. Qureshi stated it was his understanding that this was the plan that was approved by the HRA for this property per the development agreement. Whether it was Woodbridqe Properties or any other developer, they would have to abide by this plan which goes with the property. Mr. Robinson stated what he had tried to do in the memo was distinguish between changes that would have to go to the HRA and Planning Commission and City Council and those changes that would just have to come before the HRA. It aid not take away any of the HRA "s rights under the development agreement. The HRA still had the power of review over any chanqes. Reasonable changes were reviewed and approved by the HRA and staff and do not have to go to the Planning Commission and City Council, and substantial changes are reviewed and approved by the HRA, Planning Commission and City Council. Mr. Commers stated he had reviewed the memo and had no problems with it. Mr. Eric Nesset, Woodbridge Properties, stated the rationale behind the request for S -2 zoningg had been explained adequately. What protected the City and the neighborhood was- the approval of a specific plan which the S -2 • does provide. HOUSING & REDEVELOPMENT AUTHORITY' MEETING, JANUARY 9, 1986 PAGE 7 Mr. Nesset stated they were asking for S -2 because they want approval of the site plan, but also it was their intent not to modify or limit any of the uses under C -3 that wouldn't be allowed as Dart of the development agreement;_for example, they do intend to apply for a liquor license for the hotel and the restaurant. They do agree with the future controls as proposed in the memo, but he would like to make one clarification. They are agreeinq to all the height limitations except they would like to be allowed to increase one building on the northeast corner of the property from two -story to three - story. They feel that would be considered a reasonable change and would not have to go through the Planning Commission and City Council. Mr. Nesset stated the stipulations stipulate that the facade materials should be approved as a condition of the rezoning ( #5 under the stipulations). They do not believe that should be a condition of the reznnina, because at the time of rezoning. thev would not be in a position to be locked into the facade plan. They do agree it should be a condition on the building permit. Mr. Newman stated that regarding the Dropnsed height__change. there was a problem And that concerned the acquisition of the Darcel where this building was proposed to be located. He appreciated the concerns of the developer, but in attempting to renegotiate with the current pronertv owner, he would suggest the developer not alter his plans at this time. Mr. Oureshi stated that unless there was a strong need to change the plan at this time,.he would recommend they leave the plans as they are. It would probablv not be too difficult to make this chance later once some of the other structures are built and the area is landscaped. Mr. Commers stated that since they have already adopted the plan, plus the fact that there were legal issues arising regarding acquisition, he thought this height _ change could be resolved in the future. He, too, did not think any changes should be made at this time. Mr. Robinson stated the intent of the stipulations were that they would all be approved before the first building permit was issued. He stated they could eliminate the stipulation regarding the facade material plan ( #5) from the rezoning. Mr. Qureshi stated the use of a liquor establishment was an allowed use in C -3, and it would seem reasonable to make a provision that this not be excluded from the rezoning. MOTION BY MS. SCHNABEL, SECONDED Br MR. PRAIRIE, TO RECOMMEND TO PLANNING COMMISSION AND CITY COUNCIL THE APPROVAL OF S -2 ZONING FOR LAKE POINTE CORPORATE CENTER WITH THE FOLLOWING TWO AMENDMENTS: 1. APPROPRIATE LANGUAGE BE IN•cZERTFD THAT THE S -2 ZONING NOT EXCLUDE A LIQUOR LICENSE REQUEST FOR THE HOTEL AND THE RESTAURANT. 2. ELIMINATE FIFTH STIPULATION: "ARCHITECTURAL FACADE MATERIAL PLAN • INCLUDINr, RAMPS" UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. is HOUSING & REDEVELOPMENT AUTHORITY MFETING, JANUARY 9, 1986 PAGE 8 6. LEGAL REQUIREMENTS FOR RELOCATION EXPENSES FOR TENANTS AT 5747 CENTRAL AVF. N.E.: Mr. Qureshi stated that in answer to the HRA's questions regarding whether the HRA was required to provide relocation expenses to renters or tenants, Staff had provided the HRA with information showina that by law the HRA was required to pay relocation expenses. Ms. Schnabel stated she appreciated all this information, and she saw the HRA had no choice but to pay these expenses but she felt it was an incredible "rip- ^off" to pay a sub - tenant of a tenant of the owners of the condemned property. Mr. Quresht stated action needed V tfie HRA was to autFori'ze Staff to pay the relocation expenses to the tenant. Ms. Schnabel asked if there were xeroxed copies of the rental checks to make sure this was a legitimate rent tenant. Mr. Robinson stated he would insist that those be part of the claim when it is filed. Mr. Commers stated that was a very good suggestion to make sure this was a legitimate sub - tenant that has been payinn rent for a year. M aifbe the HRA! should wait to approve the relocation expenses until they see the formal 4 written claim. MOTION BY MR. PRAIRIE, 5'ECONDED BY MS. SCHNABEL, TO TABLE THIS ITEM UNTIL A FORMAL WRITTEN CLAIM IS FILED. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. Mr. Commers stated Mr. Jack Bagley, their Relocation Consultant, should certainly be aware of all these things. Ms. Schnabel stated another question she had was if the lower level where the sub - tenant was living fell under the zoning ordinance as a legal apartment, does it meet fire code, etc.? Mr. Commers stated that if this was not a legal residence, it was questionable whether rent could legally be charged, and whether the HRA was liable to pay relocation expenses. Mr. Newman suggested that these questions be submitted to Mr. Bagley for a formal opinion. The Commissioners agreed with Mr. Newman's suggestion. 7. EXECUTION OF QUIT CLAIM DEED ON LOT 6, BLOCK 1, FRIDLEY PLAZA ADDITION: • MOTION BY MR. PRAIRIE, SECONDED BY MS. SCHNABEL, TO AUTHORIZE, THE EXECUTION OF THE QUIT CLAIM DEED ON LOT 6, BLOCK 1, FRIDLEY PLAZA ADDITION. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. . HOUSING & REDEVELOPM ENT AUTHORITY MEETING, JANUARY 9, 1986 PAGE 9 8. CHECK REGISTER: MOTION BY MS. SCHNABEL, SECONDED BY MR. PRAIRIE, TO ADPROTIE THE CHECK REGISTER AS PRESENTED. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. ADJOURNMENT: MOTION BY MS. SCHNABEL, SECONDED BY MR. PRAIRIE, TO ADJOURN THE MEETING. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE JAN. 9, 1986, HOUSING & REDEVELOPMENT AUTHORITY MEETING ADJOURNED AT 91:50 P.M. Respectfully submitted, Lynnev5aba Recording Secretary 40 latex -c Ir 0 atA �-