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HRA 09/11/1986 - 29337CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 11, 1986 CALL TO ORDER: Acting Chairperson Prairie called the September 11, 1986, Housing & Redevelopment Authority meeting to order at 7:15 p.m. ROLL CALL: Members Present: Duane Prairie, Virginia Schnabel, Walter Rasmussen, John Meyer (arr. 7:55 p.m.) Members Absent: Larry Commers Others Present: Nasim Qureshi, City Manaqer Jock Robertson, HRA Executive Director Dave Newman, HRA Attorney Rick Pribyl, Finance Director Julie Burt, Asst. Finance Director Bob Barnette, Councilman -at -Large Ed Fitzpatrick, Councilman Bob Levy, 100 S. 5th St. Linda Fisher, Larkin, Hoffman, Daly & Lindgren Sherrill Kuretich, Larkin, Hoffman, Daly & Lindgren Harry Yaffee Ken Belgaarde APPROVAL OF AUGUST 14, 1986, HOUSING & REDEVELOPMENT AUTHORITY MINUTES: MOTION BY MS. SCHNABEL, SECONDED BY MR. RASMUSSEN, TO APPROVE THE AUGUST 14, 1986, H017SING & REDEVELOPMENT AUTHORITY MINUTES. Ms. Schnabel stated that on page 8, third paragraph from the bottom, the first sentence should be changed as follows: "Ms. Fisher stated what is proposed is a 358 unit apartment complex generally located south of 85th Avenue, west of University Avenue, north of 83rd Avenue, and east of Springbrook Nature Center. UPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPERSON PRAIRIE DECLARED THE MINUTES APPROFED AS AMENDED. 1. APPOINTMENT OF VICE -CHAIR OF THE FRIDLEY HRA: Acting Chairperson Prairie declared the nominations open for vice- chairperson. Mr. Rasmussen nominated Virginia Schnabel for vice - chairperson. Hearing no other nominations, Acting Chairperson Prairie declared the nominations closed. HOUSING & REDEVELOPMENT'AUTHORITY'MEETING ;SEPTEMBER 11; 1986 PAGE 2 MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRAIRIE, TO CAST A UNANIMOUS BALLOT FOR VIRGINIA SCHNABEL AS VICE - CHAIRPERSON OF THE FRIDLEY HRA. UPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPERSON PRAIRIE DECLARED THE MOTION CARRIED UNANIMOUSLY. 2. UPDATE ON NEGOTIATIONS FOR-ACQUISITION-OF-THE RICE-PLAZA-SHOPPING CENTER: Mr. Newman stated that Bob Levy has been a guest at the last 3 -4 HRA meetings representing the property owners of the Rice Plaza Shopping Center. He stated that at the last meeting in August, the HRA had instructed Staff to enter into negotiations with Mr. Levy for the purpose of trying to determine a purchase price for the subject property. Mr. Newman stated that since the August meeting, Mr. Robertson and he had met with the County Attorney to review the appraisal the County had prepared on the property. The County Attorney had specifically requested that the details of the appraisal not be disclosed; however, they can say that the County's appraisal of the property plus the leasehold improvements was approx. $975,000. Mr. Newman stated that when Staff met with Mr. Levy on Aug. 29, Mr. Levy shared with them an analysis he had prepared that stated the property was worth between $1,050,000 and $1,150,000. Mr. Levy indicated that if the property could be closed this year, there would be a tax benefit to his clients and, as a result, they would have a greater flexibility in negotiations. Mr. Newman stated he and Mr. Robertson had discussions with Mr. Levy again that week; and Staff was prepared to recommend to the HRA, if the HRA wished to purchase the property, a purchase price of $1,008,000. That was an increase of approx. $32,000 over the County's appraisal and approx. $42,000 less than the low end of Mr. Levy's market analysis. Staff felt that it was a fair compromise between both parties. If the HRA decided to act on Staff's advice, Mr. Levy had assured him that he would strongly recommend this purchase price to his clients. Although Mr. Levy did not have his clients' specific consent, he felt it was very likely this purchase price would be acceptable to his clients. Mr. Qureshi stated he wanted to emphasize to the HRA that in the past, the HRA has taken the position not to acquire a property unless there was a specific project for that property. Even though Mr. Robertson and Mr. Newman had recommended a fair purchase price, this property was currently on the City's books for tax purposes as having a market value of $562,000. Mr. Qureshi stated there were some pros and cons the HRA should consider before making a decision on whether or not to purchase the property. • HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 11, 1986 PAGE 3 PROS: 1. There was an agreeable price range between both parties. 2. There was a potential dollar savings if in the future the HRA wanted to acquire the property and had to pay acquisition or condemnation costs, relocation costs, etc. 3. They would have control of the property for future development. CONS: 1. The [IRA would become the property manager, taking on all the advantages and disadvantages of owning property. 2. The HRA would become the tenant manager and-would have the concerns of paying taxes, maintaining the property, etc. 3. There would continue to be the uncertainty of the tenant situation. 4. If the HRA did acquire this property, they might be setting a precedent for other properties that, in similar situations, might say, "why not us ?" • Mr. Qureshi stated the site. Because of some to whether or not that end of September. Cle HRA should consider in property. HRA was in the process of pursuing a project on this financial difficulties, there was some uncertainty as project would go forward. They should know by the arly, if there was no project, that was something the their deliberations on whether or not to acquire the Mr. Qureshi stated that also at this time, Mr. Commers and Mr. Meyer were not at the meeting, and the HRA should consider this to be a very important issue. Mr. Robertson stated he had spoken to Mr. Commers earlier in the week. At that time Mr. Commers had pointed out the possibility of not being able to attend this meeting. Mr. Commers had stated it was his own personal preference that the Center City was the HRA's top priority, and personally, he was very much in favor of this acquisition. Mr. Rasmussen stated he did not think it was in the best interest of the HRA to own property without a prospective development. It was not a good precedent to set. Mr. Neuman stated there was great concern on the part of the property owners that the transaction be done this tax year. In reviewing the leases, one of the leases has four years remaining, three of the leases has three years remaining, and two of the leases has two years remaining. HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 11, 1986 PAGE 4 0 Mr. Levy stated the circumstances his clients are dealing with were not circumstances created by his clients. The HRA had created these circum- stances. He stated he has appeared before the HRA for the last four months expressing his clients' concerns. But, he can say that if this acquisition does not go forward, his clients have asked him to file a law suit against the HRA. Mr. Levy stated the reason they are in this situation was because the HRA has conducted itself in what they consider an unusual fashion. Typically, when a City is looking at a potential development, there is always a certain amount of time when things are up in the air before things are settled between the existing property owner and the developer. The history of this property has been that for six years, the HRA has gone through 4 -5 developers at various stages of development with letters of intent, public hearings, etc. It was a circumstance such as this that precipitated the acquisition of the hardware store site. What was unique here was that every time things settle down with a particular development and the HRA has terminated a contract or terminated a relationship with a developer and the property owners feel they can resume business as usual with their tenants, then there is a new proposal and a new development and the process starts all over again. They lose prospective tenants or existing tenants, and they cannot negotiate for market rental with new tenants. Mr. Levy stated that regarding the hardware store, they had entered into a verbal agreement to sign a lease for a new hardware store operator for that site, but they have never wanted to run the risk of committing fraud with a prospective tenant by signing a lease with that tenant without alerting them of the possible development by the HRA. So, they always send prospective tenants to City Hall to talk to City and HRA Staff. With the hardware store, the prospective tenant was told the acquisition would take place within 30 -60 days; therefore, they lost their prospective tenant. In that case the HRA recognized the problem and went ahead with the acquisition. Mr. Levy stated they had a similar situation recently. They had a vacancy. They lost three prospective tenants because of the possibility of the HRA taking the property. They ultimately entered into an arrangement with an existing tenant to take the additional space, but who refused to sign more than a nine month lease because of the threat of condemnation and who would not sign a market rate lease. Mr. Levy stated the direction given by his clients last winter was that enough was enough. They have tried to be understanding. They have been a member of the business community since 1958. They worked with the HRA and the City last winter with the Lundgren project which necessitated rezoning and platting of the property. They have tried to be a cooperative and understanding party. Mr. Levy stated the HRA had a legitimate public purpose in maximizing the utilization of this property and the development of the Center City site, but that was a public purpose. It was not a private purpose of the existing HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 11, 1986 PAGE 5 property owner and there were burdens-and risks taht went with that. Those burdens and risks needed to rest where the.public purpose was, where the gain and benefit was, not on the private property owner. In effect, for the last 5 -6 years, the HRA has asked the private property owner to warehouse that property and suffer the economic consequences. His clients will no longer do that. They will either resolve this on a friendly basis with a negotiated price or they will resolve it in the court room. Mr. Levy stated that at the August HRA meeting, it was his understanding that the HRA had unanimously authorized the Staff to enter into negotiations to determine what would be a fair acquisition price, with the understanding that a final decision on acquisition could not be made until there was a price on the table. He stated they entered into these negotiations with Staff in good faith predicated upon the understanding and assumption from the August meeting that a policy decision had been made. Ms. Schnabel stated she did not think that was the intent of the HRA at that meeting. Both she and Mr. Meyer had expressed their concern at the August meeting about the HRA getting into the ownership of property. When they suggested Staff talk about price, it was merely to see if there was any close- ness in dollar figures and that they wanted those figures brought back to the HRA; but they had not made a firm commitment to purchase. • Mr. Levy stated that if this transaction did not close this year, they will be talking about a different price. The tax laws change effective Jan. 1, 1987. They will file an inverse condemnation suit against the HRA and it will not be based on just the current value of the property; it will also be based on the damages suffered because of lost principle because of the threat of con- demnation, and damage action for_.business libel involving statements made to prospective tenants by staff members at City Hall. Mr. Levy stated another alternative to consider by the HRA was that if the HRA decided not to acquire the property, then the HRA should remove this property from the redevelopment district and leave them alone. Mr. Levy stated the Lundgren development had to be viewed separately and distinctly from the possible acquisition. This made the decision more diffi- cult for the HRA, but this was an independent issue because if the Lundgren project does not go, the process will just start over again with another developer. His clients will not go through that process again. (Mr. Meyer arrived at 7:55 p.m.) Mr. Qureshi stated that regarding the Lundgren development, Mr. Lundgren has approximately three weeks before coming to the HRA with a financial commit- ment. If he does have the financing commitment, it would put a whole different emphasis on whether the HRA would want to acquire the property. But, unless HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 11, 1986 PAGE 6 0 there is a specific project for the property, it was his recommendation that it would not be prudent for the HRA to acquire the property. He stated the City Council was very sensitive to the City acquiring property unless there was a project. He also thought the concerns and the problems of the tenants should also be a major consideration in the decision. Ms. Schnabel stated that if Mr. Lundgren is unable to get the financial commitment, what did Mr. Qureshi see as the climate for future developments? Mr. Qureshi stated that with the new tax laws, in the near future it was going to be much more difficult for bodies such as the HRA to have development happen. What was happening was that a lot of the tools the HRA has been using and the developers have been using will be completely eliminated and adversely modified to discourage development. Ms. Schnabel stated her position had not changed since their last meeting. She agreed with Mr. Rasmussen. She did not like the thought of the HRA becoming owners of property unless they have a very specific development project for that property. Mr. Prairie stated the HRA did acquire the hardware building site, and they were criticized for that action. They had a development commitment which fell through; and then they had problems with the tenants, so he could understand . not wanting the HRA to become a landlord again. Mr. Meyer stated he did not want the HRA to be a landlord either, except that there has been a problem her for the last 5 -6 years. That problem can be brought to court, and the HRA could lose. He was not as upset about not becoming a landlord as he was about some of the other factors that were involved in the acquisition. Ms. Schnabel stated she appreciated Mr. Levy's position and his clients' position. She felt that if the HRA was to make a commitment at this meeting to purchase the property and then found out in three weeks that Mr. Lundgren was unable to proceed with his development, they would have made a long term commitment to purchase a piece of property which appears to have had a history of difficulty in being developed and which appears at this point to have a very cloudy atmosphere for development in the future if Congress goes forward with the tax legislation being talked about. Ms. Schnabel stated she was not totally sure the HRA had even talked about the conditions of the property and what would be needed as far as maintenance, etc. She just felt strongly from a philosophical standpoint that it was not in the best interest of the HRA as a public body to purchase private property and hold it. Mr. Meyer stated he understood how Ms. Schnabel felt, but he also could under- stand Mr. Levy's arguments in that the HRA did not have the right to ware- house private property even though they have not done it intentionally. HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 11, 1986 PAGE 7 0 MOTION BY MR. PRAIRIE, SECONDED BY MR. RASMUSSEN, TO TABLE THE DECISION ON THE ACQUISITION OF THE RICE PLAZA SHOPPING CENTER PROPERTY UNTIL THE OCTOBER HRA MEETING. UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. Mr. Levy stated it would be his recommendation to his clients that they not take any action pending the HRA's action next month. This would give the HRA the opportunity to digest the information received at this meeting and, hopefully, they can avoid a conflict that would not be in anyone's best interest. 3. REPORT REGARDING CONTROL AND QUALITY OF DEVELOPMENT OF THE LAKE POINTE RPORATE'CETTER: Mr. Qureshi stated that in the agenda was a memo he had written to the HRA, Mayor Nee, and City Council members dated Septa 5, 1986. He stated the basic purpose of writing this memo was to, hopefully, lay out some of the actions the HRA, Planning Commission, and City Council have taken, specifically trying to assure the quality of the development for Lake Pointe Corporate Center.and the kind of control the HRA by agreement can exercise and the kind of control the City Council has by zoning and special use permits and other land develop - ment requirements the City has. Mr. Qureshi stated some concern was expressed by the HRA that they were seeing pretty pictures of the development but what guarantee did they have that the development would actually take place in that fashion and quality? He stated he had tried to provide the HRA with a summary of all the different actions of approval the HRA had. It was his understanding that the HRA had full authority on the basis of the agreements entered into with the developer; and the City Council by its sheer police powers and zoning and platting powers can demand this quality and type of development. Mr. Qureshi stated he wanted to emphasize that the HRA and the City Council can mutually agree to modify the type and the quality and the level of the development in the future. They cannot foresee what the future economic conditions or situations are going to be. He stated they do have a timetable which tells them when this development has to tape place. That was done merely to hopefully give further assurance to the HRA and City Council that they have gone through all these steps to guarantee this development and that they do have a sizeable control over the development. Mr. Qureshi stated the tentative date for groundbreaking was Oct. 14th at around 4:00 p.m. He stated he would be giving the commissioners more information about the program at a later date. HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 11, 1986 PAGE 8 4. CONSIDERATION OF A RESOLUTION ACCEPTING A CONTRACT WITH SUNDE ENGINEERING FOR ENGINEERING WORK'ASSOCIATED'WITH'THE'PUBLIC IMPROVEMENTS TO BE DONE ON THE LAKE POINTE CORPORATE'CENTER PROJEC : Mr. Robertson stated the specifics of the work are covered by Sunde Engineer- ing. They have reviewed this with John Flora and his staff, and it was Staff's recommendation that the HRA adopt this resolution. He wanted to point out that in the resolution the amount had changed slightly from the proposal received by Sunde in April. It was about $1,900 higher. That was as a result of the multiple bidding of the first phase of the contract. MOTION BY MR. MEYER, SECONDED BY MR. RASMUSSEN, TO APPROVE RESOLUTION NO. HRA 15 1986. UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 5. CONSIDERATION OF A RESOLUTION AMENDING THE DESIGN AGREEMENT WITH S.E.H. FOR THE 100 TWIN DRIVE-IN INTERSECTION: Mr. Robertson stated that on the proposed resolution under "NOW, THEREFORE ", second line from the bottom, that even though the overall contract was for West Moore Lake Drive and Highway 65, they will see that it only includes the • preliminary plans for the Rice Creek Road improvements from Old Central to Highway 65. He stated that in the right hand column under Rice Creek Road, the "Detailed Plans" in the amount of $36,500, and the "Construction" in the amount of $47,500 should be omitted from this resolution at this time and it will be brought back at a future time for the HRA's consideration. MOTION BY MR. RASMUSSEN, SECONDED BY MR. MEYER, TO APPROVE RESOLUTION NO. LIRA 16 1986, "A RESOLUTION AMENDING THE DESIGN AGREEMENT FOR THE 100 TWIN DRIVE -IN INTERSECTION" WITH THE FOLLOWING OMISSION: RICE CREEK ROAD DETAILED PLANS $361500.00 CONSTRUCTION 47,500.00 UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 6. CONSIDERATION OF A RESOLUTION AUTHORIZING THE EXECUTION OF AN AGREEMENT BETWEEN THE HRA AND ERNST & ASSOCIATES FOR LANDSCAPE ANF PLAN SPECIFICATIONS MOTION BY MR. PRAIRIE, SECONDED BY MR. RASMUSSEN, TO APPROVE RESOLUTION NO. HRA 17 1986. UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY • 7. STATUS REPORT ON UNIVERSITY AVENUE CORRIDOR TECHNICAL ADVISORY COMMITTEE: HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 11, 1986 PAGE 9 Ms. Schnabel stated the cost ranges that were included in the agenda were included last month also. She stated they are going to have a preliminary meeting with Barton - Aschman on Wed., Sept. 17. Several members of the Technical Advisory Committee are going to review the preliminary proposals with Barton - Aschman and then the proposals will be brought back to the full committee the following week. She stated there would probably be nothing to report until after the middle of October. 8. UPDATE ON THE WINFIELD PROJECT: Mr. Robertson stated Winfield Development was forming a new partnership and would be obtaining the financing for their project in the Paco Industrial Park under their new partnership name. Because of the legalities involved with IDB funding, it was necessary to publish notice in the newspapers for the name change. The City Council will approve the name change at their Sept. 22 meeting. The name change was just a formality and would in no way affect the funding of the IDB or the particulars of the Development Agreement. 9. UPDATE ON THE SHOREWOOD INN REMODELING PROJECT: Mr. Robertson stated the development agreement has been executed and signed by Mr. Nicklow, Vice - President and co -owner of the Shorewood Inn. Mr. Nicklow has assured Staff that the parking lot phase will start in September. A lot • of the interior work will be done during the winter. Mr. Nicklow understands that the HRA's participation does not occur until the certificate of occupancy is issued at the completion of the project. 10. UPDATE ON THE UNIVERSITY AVENUE APARTMENT PROJECT: Mr. Qureshi stated that at the last meeting, the HRA approved in concept an outline for a 358 -unit apartment complex on the property east of the Nature Center and west of University Ave. The project would be: (1) a high quality development acceptable to the HRA; (2) the HRA would provide $850,000 write- down on the land in the initial stages. The land actually would be paid back to the HRA over a 15 yr. period with no interest for 3 years, interest for 2 years, and the rest amortized over 10 years; (3) taxable increment bonds would be used for the project; (4) housing revenue bonds would be requested; (5) the project would be under one ownership; and (6) there would be a good north /south connector street between the Nature Center and University Ave. Mr. Qureshi stated the developers have a similar project in Minnetonka called Cliff. This development will be modeled after that project except they will have surface garages instead of underground parking. Mr. Qureshi stated the legal counsel for the developers, Ms. Fisher and Ms. Kuretich, had written a letter to the City indicating that because of potential changes in the laws, the project requires a higher level of equity thant what was anticipated before, and they are asking for further assistance • from the HRA. HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 11, 1986 PAGE 10 9 Mr. Qureshi stated the level of assistance authorized by the HRA was $850,000, and the developers are now requesting additional help. He stated that if the HRA changed what they approved in concept, this would be a departure from the assistance they are providing for the Lundgren project. Ms. Sherrill Kuretich stated she was an attorney with Larkin, Hoffman, Daly and Lindgren, Ltd., and was representing the developers, Mr. Yaffee and Mr. Belgaarde. She stated the letter submitted by Ms. Fisher and herself on Sept. 5, 1986, was quite explicit and quite complicated, and she would try to briefly summarize it. Ms. Kuretich stated the last time they were before the HRA in August, they were proposing that in addition to tax increment financing, they would be asking for tax exempt housing revenue bonds to finance the project. Since the August meeting, the Conference Committee of the U. S. House & Senate met and issued the Tax Reform Act of 1986. Out of that report came a change in rent restrictions that will be imposed on tax exempt housing revenue bonds for multi - family housing projects. Under the old law 20% of the units had to be set aside for persons whose income did not exceed 80% of the median. Under the new law, the developer will have a choice. They can set aside 20% of the units for persons with incomes that do not exceed 50% of the median or they can set aside 40% of the units for persons whose incomes do not exceed 60% of the median. She stated they are proposing average rents of $585 /month. If they have to meet the 50% median requirement, that means 20% of their units cannot rent for more than $438 /month (2 bedroom). If they go to the 60% median requirement, then 40% of the units cannot rent for more than $526 /month (2 bedroom). With average rents of $585 for one - two -three bedroom units, they obviously are projecting rents far in excess of the restricted rents that would be applicable for tax exempt financing. The rent question becomes very important because the City of Fridley waslooking for a high quality, high amenitive housing project. Ms. Kuretich stated that in order for the developers to provide that level of quality and level of amenities, those rents are necessary. The City does not want a project of lesser quality with fewer amenities and the developer does not want to build that type of project. Ms. Kuretich stated the result of not being able to use housing revenue bonds was that they will be looking at using taxable bonds instead of tax exempt money. The interest rate on taxable bonds right now would be 1 -12/ higher than on tax exempt money. That means the project will be able to service less debt because the interest rate will be higher. They estimate that will be approximately $1 million less the developers can borrow and service on a taxable housing revenue bond. The net result was they are short about $1 million on project costs. Ms. Kuretich stated that in August they told the HRA they had approximately $1.2 million in financial project costs due mainly to soil correction costs. • Now they are at $2.2 million because of the need for additional equity. HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 11, 1986 PAGE 11 0 The developers are proposing to provide additional equity cash for one -half of that $1 million gap or $500,000 and they are proposing to the HRA concept approval that the HRA would lend the other $500,000 to help make up that gap. This would bring the total loan amount to $1,334,000 on the basis of the increment projected to be produced by this project. She stated they did not like having to come back to the HRA, but this was a situation they could not have anticipated. Mr. Qureshi stated he wanted to remind the HRA that -they have taken the position in the past that their highest priority was the Center City area. He was advising the HRA that the concept they approved at the last meeting was exactly the same as what they entered into with Mr. Lundgren. Now these developers are coming back asking for another $112 million of additional help up front. He was sure there would be a certain level of impact if they provide a higher level of assistance to this project than to the Lundgren project, and it potentially put the Center City project at a slight disadvantage. Mr. Lundgren was also faced with the same situation as this project was facing. Mr. Meyer stated he would be concerned that the HRA would offer a higher level of assistance to an apartment project outside the Center City area and that the Lundgren project could conceivably go under because of a lack of the same level of assistance. • Mr. Yaffee stated that, as Ms. Kuretich had said, they did not want to have to come back before the HRA asking for additional assistance.- They would like the HRA to.look at their request and their change in circumstances. They are willing to share the cost equally and still pay it back. Ms. Kuretich stated that in terms of an actua was not taking a risk like the developer was. equity if the project is not successful. The form of real estate taxes. It was the second about and she felt that put the terms of risk different light. risk of investment, the City The developer loses their City will be paid back in the repayment they were talking to the City in a little Ms. Schnabel asked Mr. Newman if he had any comments. Mr. Newman stated this was a procedure that has been followed quite often (Lundgren project, Shorewood Inn project). As Ms. Kuretich had stated, it was probably a lesser degree of assistance than what the HRA has provided in other cases where they have given outright land write -down. They are using tax revenues to finance bonds. The HRA would be paid as soon as the taxes were paid; and in addition, the developers would be making payments on the note. They could compare this with the Woodbridge project which was the other extreme where the HRA is providing several million dollars in assistance. HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 11, 1986 PAGE 12 • Mr. Qureshi stated that if the HRA wished to give more assistance than they authorized conceptually, Staff would like to go back and rework the numbers and come back with a recommendation, taking into account the feasibility of the Lundgren project and whatever else they could potentially be doing to treat the two projects more equally. If there was going to be a change in assistance, then both projects should be looked at. Ms. Kuretich stated they need to know by the first of December whether they will be able to get the level of tax assistance they need for the project. They need to have an amendment to the tax increment plan which provides for the bonding for this project by the City Council by that date. That was one of the conditions on the purchase of the land. Mr. Rasmussen stated that philosophically he had a problem with this request for additional funding and felt a decision should be made at this meeting. Ms. Linda Fisher stated they did get conceptual approval by the HRA at the August meeting for a level of assistance in the amount of $850,000, and they had proceeded on that basis. Now they have to request a different level of assistance due solely to a change in the tax law. Obviously, it would have been their preference to get a similar concept decision this evening from the HRA on the new request, but it appeared the HRA had some desire to look at this further before making a positive recommendation. Ms. Fisher stated that if the HRA had any interest in pursuing this request for additional assistance, either their request or some variation of that request, although time was of the essence, she believed they could work with Staff to come back at the October meeting and maybe the HRA could make a final concept decision at that meeting. If Staff felt it was important to see how this request for additional assistance related to another project, hopefully that analysis could be done in the same timeframe, and they could then proceed to negotiate a new development contract, coming back to the Nov. 13th meeting. In the meantime, they could be making progress on the rezoning process. MOTION BY MR. PRAIRIE, SECONDED BY MR. MEYER, TO TABLE THE DECISION ON THE REQUEST FOR ADDITIONAL ASSISTANCE ON THE UNIVERSITY AVENUE APARTMENT PROJECT UNTIL THE OCTOBER MEETING. UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 11. AMENDMENT TO THE LIMITED REVENUE NOTE FOR THE 100 TWIN DRIVE -IN PROJECT: Mr. Newman stated that at the last meeting when the HRA approved the changes in the development agreement, the HRA had agreed that instead of incorporating the level of assistance in the development agreement, they would rather make changes to the note instead. He stated the numbers were the same, it was just a matter of form. He stated he would recommend approval of a resolution • amending the limited revenue note. HOUSING & REDEVELOPMENT AUTHORITY MEETING,'SEPTEMBER 11, 1986 PAGE 13 • MOTION BY MR. RASMUSSEN, SECONDED BY MR. MEYER, TO APPROVE RESOLUTION NO. HRA 18 1986. UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 12. ESTIMATES: Mr. Robertson stated they had an estimate in the amount of $812.50 which was additional work to be done by Suburban Engineering providing additional specifics for those contracts which they are rebidding. MOTION BY MR. PRAIRIE, SECONDED BY MR. RASMUSSEN, TO APPROVE THE ESTIMATE OF $812.50 TO SUBURBAN ENGINEERING. UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 13. CHECK REGISTER: MOTION BY MR. PRAIRIE, SECONDED BY MR. MEYER, TO APPROVE THE CHECK REGISTER AS SUBMITTED. • UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 14. OTHER BUSINESS: Mr. Qureshi stated he wanted to remind the Commission members that a special joint conference meeting between the HRA and the City Council was scheduled for Tues., Sept. 23, at 7:30 p.m. in the Council Chambers. The purpose of the meeting was to have interaction between the City Council and HRA to develop an analysis and approach on how they want to expend funds they will have available in the near future for doing some project. ADJOURNMENT: MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRAIRIE, TO ADJOURN THE MEETING. UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPERSON SCHNABEL DECLARED THE SEPT. 11, 1986, HOUSING & REDEVELOPMENT AUTHORITY MEETING ADJOURNED AT 10;50 P.M. Respectfully submitted, 01 Lynnff Saba Recording Secretary