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HRA 11/13/1986 - 29334CITY OF FRIDLEY 9 HOUSING & REDEVELOPMENT AUTHORITY MEETING, NOVEMBER 13, 1986 CALL TO ORDER: Chairperson Commers called the November 13, 1986, Housing & Redevelopment Authority meeting to order at 7:08 p.m. ROLL CALL: Members Present: Larry Commers, Virginia Schnabel, John Meyer and Duane Prairie Members Absent: Walter Rasmussen Others Present: Jock Robertson, HRA Executive Director Nasim Qureshi, City Manager Dave Newman, HRA Attorney Rick Pribyl, Finance Director Julie Burt, Asst. Finance Officer Ken Belgarde, University Avenue Associates Linda Fisher, Larkin, Hoffman, Daly & Lindgren Sherrill Kuretich, Larkin, Hoffman, Daly & Lindgren Bob Levy, 100 S. 5th Street Richard Diamond of the Levy Law Firm Ron Schoneman, Rice Plaza Shopping Center Tenant Mr. & Mrs. Trocke, Rice Plaza Shopping Center Tenants APPROVAL OF MINUTES: HOUSING & REDEVELOPMENT AUTHORITY MINUTES OF SEPTEMBER 23 1986: MOTION BY MS. SCHNABEL, SECONDED BY MR. PRAIRIE, TO APPROVE THE MINUTES AS PRESENTED. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. HOUSING & REDEVELOPMENT AUTHORITY MINUTES OF OCTOBER 9 1986: MOTION BY MR. MYER, SECONDED BY MS. SCHNABEL, TO APPROVE THE MINUTES AS PRESENTED. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 1. CONSIDERATION OF A RESOLUTION APPROVING THE EXECUTION OF A DEVELOPMENT AGREEMENT BETWEEN THE HRA AND UNIVERSITY AVENUE ASSOCIATES FOR CON- STRUCTION OF A 358 UNIT RENTAL APARTMENT COMPLEX BETWEEN 83RD AND 85TH AVENUES: • HOUSING & REDEVELOPMENT AUTHORITY MEETING, NOVEMBER 13, 1986 PAGE 2 • Mr. Newman stated, due to difficulties in their office, the draft of the development agreement is not before the HRA this evening. He stated he has met with representatives of University Avenue Associates and, with the exception of one issue, there is agreement on the basic concept. He stated he would like to review the concept and have the agreement before the HRA at the next meeting. Mr. Newman stated the developers went through the Environmental Assess- ment Worksheet process and need to obtain another governmental permit which means a later closing date on the property. He stated when the development agreement is executed it would include elevations for the buildings, a description of the materials to be used, the design of the buildings, and landscaping, parking and drainage plans. He stated there will be specific exhibits which outline the standards for this development. Mr. Newman stated it is proposed.the HRA would provide assistance in the form of a second mortgage at $850,000 at an interest rate of 8 %. He stated the payment schedule will be consistent as to what was proposed for the Lundgren project. He stated there would be no pay- ments for the first three years, payment of interest only for years four and five, and payment of interest plus principal for years six through fifteen. Mr. Newman stated the developer is proposing that payment of interest and principal wouldn't be in equal amounts and to pay one -half of the interest and at the end of the 15 years, the balloon would consist of the remaining principal plus any interest. Mr. Newman stated the HRA would acquire the land and convey it back to the developer at a cost not to exceed $850,000. He stated construction is proposed to begin no later than June 1, 1987 in order to allow time for the necessary permits. He stated the complex would consist of nine buildings with the last building constructed in 1990. Mr. Newman stated the developers are reluctant to provide a letter of credit as they want to use these funds for their construction. He stated, in lieu of a letter of credit, the developers would provide a personal guarantee. He stated the net worth of this partnership is quite substantial and verification would have to be provided. He stated the guarantee would continue until the project is completed and the second mortgage is'satisfied. He stated if there was a substantial change in the developer's net worth, the HRA would have to be notified so they could request other security. He stated these are details which still need to be worked out. Mr. Newman stated the values discussed and to be contained in the agreement are as follows: $1.6 million as of January 2, 1988; $4.3 million as of 1989; $6.75 million as of 1990; and $9.2 million as of 1991. He stated this is a value of approximately $22,000 per unit and takes into consideration an inflationary factor. • Mr. Commers asked if that was the fair market value of the units for tax purposes. HOUSING & REDEVELOPMENT AUTHORITY MEETING, NOVEMBER 13, 1986 PAGE 3 • Mr. Qureshi stated it is the average market value the Assessor carries on the books. He stated if the Assessor feels the values are greater, these figures could be raised. He stated these assessment values are minimum levels and could be subject to change. Mr. Commers stated a letter of credit was required for the Lundgren project and asked why the HRA should change the policy. Mr. Newman stated although a letter of credit was required for Mr. Lundgren's project, there are a number of projects where the HRA didn't supply the funds until the project was completed. He stated he didn't feel a great deal of precedent had been set when assistance is provided in the form of a second mortgage. He stated it has been his experience that developers don't like the letter of credit as it takes away the use of funds for other projects. He stated if their financial statements are as strong as indicated, their personal net worth should be sufficient to guarantee the mortgage. He stated there is one issue to which the developers are not in total agreement and that is the repayment schedule of the mortgage. Ms. Kuretich, representing the developers, stated their concern in repayment of the mortgage is not the amount, but the time schedule for the payments. She stated the developers would like the HRA to consider the possibility of no interest payments being made in the fourth and 10 fifth years of the mortgage and extended these payments over the last ten years of the mortgage. Ms. Kuretich stated the project wouldn't be completed for four years and, as the schedule now stands, the developers would be required to make payments on the second mortgage before the project is totally completed and before they receive their full income from this develop- ment. She stated they are also concerned about meeting debt service coverage requirements on the first mortgage, if these interest payments have to be made to the HRA in the fourth and fifth years. Mr. Commers asked if the developers would be willing to make these interest payments if funds were available and, if not, it could be paid over the balance of the mortgage. Ms. Kuretich stated this possibility would have to be reviewed with the developers. Mr. Commers asked why the-,HRA just couldn't provide the - second mortgage and not go through the process of conveying the land. Mr. Qureshi stated it has to be shown that the HRA took certain action to assist the developers and by buying and conveying the land, the criteria under the State statute is met. • Mr. Commers asked if there would be public improvements involved in this project. HOUSING & REDEVELOPMENT AUTHORITY MEETING, NOVEMBER 13, 1986 PAGE 4 Mr. Qureshi stated the developers are providing all the utilities and drainage with no assistance from the HRA. He stated the HRA's assistance is only in the land write -down and second mortgage. He stated there is the potential for future assessments on this property when access roads are provided to the north. Mr. Qureshi stated when the concept of this apartment complex was presented to the HRA, consideration was being given to the develop- ment proposed by Mr. Lundgren. He stated this project is, apparently, no longer viable and the developer is not able to perform. He stated he wanted to make the HRA aware that this project of University Avenue Associates could have an affect on potential development in the southwest quadrant of Mississippi and University. Mr. Meyer asked if an access to 85th Avenue would be provided as part of this project. Mr. Qureshi stated 60 feet of right -of -way would be dedicated on the north of this project to provide for future access. Ms. Schnabel stated she is concerned if there would be no payments made in the first five years, and questioned the personal guarantee. Mr. Commers asked what the interest payments would be in the fourth and fifth years. Mr. Newman stated the interest would be about $68,000 per year for these two years. W. Newman stated a letter of credit is easier to collect and a greater level of security as funds are earmarked for this purpose. He stated, from the developer's standpoint, it does freeze some of their assets. He stated a personal guarantee would guarantee the payment of the taxes and would terminate when development is completed. He stated payments on the second mortgage would also be guaranteed and would continue until the mortgage is paid. ._Mr. Newman stated one of the difficulties in this type of development is the period when no income is generated. He stated there is generally a cash shortage in the first several years and is why no payments were proposed for the first three years in order to assist the developer. Ms. Schnabel stated she understands what Mr. Newman is saying, but it still bothers her if no payments are made for five years. She felt another possibility may be a letter of credit equal to the interest payments. Mr. Commers asked what would be the amount of a letter of credit for this project. • Mr. Qureshi stated it would probably be $400,000 which amounts to about 50% of the assistance provided by the HRA. He stated a compromise may be to have the developer provide a personal guarantee and a lower amount for the letter of credit. HOUSING & REDEVELOPMENT AUTHORITY MEETING, NOVEMBER 13, 1986 PAGE 5 • Mr. Commers stated he believed there is some reluctance not to have any payments for five years, but possibly a-compromise could be worked out in regard to the letter of credit and personal guarantee. Mr. Prairie stated if a letter of credit for $400,000 would normally be provided, probably the compromise could be for a letter of credit in the amount of $200,000. Ms. Schnabel felt if a letter of credit is not provided for this project, it could possibly set a precedent. She- stated she would Like to see some form of a letter of credit to secure part of their invest- ment. Mr. Meyer stated he would agree with Ms. Schnabel's position. Mr. Commers stated he believed staff had some feedback regarding the HRA's feelings and hoped to have the agreement at the next meeting. 2. CONSIDERATION OF A RESOLUTION REQUESTING THE CITY COUNCIL TO CALL A PUBLIC HEARING ON THE AMENDMENT TO THE MODIFIED REDEVELOPMENT PLAN FOR REDEVELOPMENT PROJECT NO. 1 AND THE FINANCING PLANS FOR TAX INCREMENT DISTRICT NOS, 1 -8 TO ALLOW FOR ADDITIONAL PROJECT COSTS WITHIN TAX INCREMENT DISTRICT NO. 3 FOR THE CONSTRUCTION OF THE NORTH ESTATES APARTMENT COMPLEX BETWEEN 83RD AND 85TH AVENUES: Mr. Qureshi stated this resolution requests the City Council to call for a public review on an amendment to the financing plan for the tax increment districts in order to provide $850,000 in assistance to the University Avenue Associates apartment project. MOTION BY MS. SCHNABEL, SECONDED BY MR. MEYER, TO APPROVE RESOLUTION NO. HRA 20 -1986. UP014 A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 3. CONSIDERATION OF APPROVING ACTION TO DRAW ON LOU LUNDGREN'S $200,000 LETTER OF CREDIT PER SECTION 4.5 OF THE JUNE, 1986 DEVELOPMENT AGREEMENT: Mr. Commers stated the agenda packet contains a letter from staff dated November 7, 1986 recommending the HRA draw on Mr. Lundgren's letter of credit. He stated Mr. Lundgren has also submitted a letter dated November 7, 1986 requesting the HRA refrain from drawing on the letter of credit. Mr. Qureshi stated staff feels Mr. Lundgren has been given adequate time to obtain his financing in order to proceed with this project and would recommend the HRA draw on the letter of credit. • Ms. Kuretich, representing Mr. Lundgren, stated Mr. Lundgren is not able to be here this evening as he is Chairing an International Housing Conference in Toronto. She stated, as long as the HRA has HOUSING & REDEVEDOPMENT AUTHORI_TY MEETING, NOVEMBER 13, 1986 PAGE 6 • no other developers for this site, Mr. Lundgren would appreciate the HRA's continued patience as he is trying to work out the financing for this project. She stated if the HRA draws on this letter of credit, it would further reduce any opportunity for Mr. Lundgren to proceed. Ms. Kuretich stated if there should be another developer for this site, the HRA has the right to negotiate with them. She stated all they are asking is the HRA to refrain from drawing on the letter of credit at this time. Mr. Qureshi stated if the HRA draws on the Letter of credit and if, for some reason, the Ltmdgrim does proceed, this $200,000 could be made available to Mr. Lundgren. Mr. Meyer stated he is reluctant to draw on the letter of credit, unless it is felt the HRA has been hurt in some manner. He felt if the HRA hasn't earned the letter of credit, they shouldn't have it. He felt by exercising this right, they may be jeopardizing future development in the City if a good business climate isn't presented. Mr. Prairie stated, on the other hand, if the HRA has a letter of credit and doesn't proceed to draw on it, this requirement may not • be taken seriously. Mr. Meyer stated Mr. Lundgren indicated at the last meeting he had spent over $500,000 in plans and specifications for this project. He felt, therefore, Mr. Lundgren was serious on proceeding. Mr. Qureshi stated proposals for development create a certain level of concern in the neighborhood and felt the HRA and City Council.is sensitive to the fact that these proposals are not entertained unless the developer is serious. Mr. Prairie stated action on this item could be postponed until the December meeting, even though some interest would be lost. He felt if a developer had several projects and faced the possibility of losing $200,000, this would be a motivation factor. MOTION BY MR. MEYER,' SECONDED' BY 'MR. PRAIRIE, TO TABLE THIS'- ITEM RE- LATING TO THE LOU LUNDGREN LETTER OF CREDIT. UPON A VOICE VOTE, MR. MYER, MR. PRAIRIE, AND MR. COMERS VOTED IN FAVOR OF THE MOTION. MS. SCHNABEL VOTED AGAINST THE MOTION. CHAIR- PERSON CONKERS DECLARED THE MOTION CARRIED BY A 3 TO 1 VOTE. Mr. Commers requested staff place this item on the agenda for the next HRA meeting. 3A. RICE PLAZA SHOPPING CENTER: Mr. Commers stated the HRA has had considerable discussion, both jointly with the City Council and on their own, regarding the possible acquisition of the Rice Plaza Shopping Center. He stated he understands the issue is whether or not the HRA should acquire the property at this time for $1,008,000. HOUSING & REDEVELOPMENT AUTHORITY MEETING, NOVEMBER 13, 1986 PAGE 7 Mr. Richard Diamond, Attorney with Mr. Levy's law firm, stated the owner of this property is Bob Levy's father who has had a family relationship with the City for over 30 years with this property and the Holly Shopping Center property. Mr. Diamond stated the HRA members have a good feeling as to what has happened regarding this property and wanted to review what is on record. He stated it looks to him like what happened is simply a question of fairness. Mr. Diamond stated at some point in time, the HRA is going to take this piece of property. He stated they are here this evening to encourage the HRA to make a determination regarding this parcel. He stated there apparently has been some form of agreement as to the market value of the property. He stated this is very unusual where there is agreement to the price before a philosophical agree- ment if the property should be taken. Mr. Diamond stated there is a new tax law coming into effect and didn't know what it would do to development. He stated one thing they do know, from the owner's perspective, the new tax laws will have a serious impact on the net value as opposed to the market value on that property. He stated the figure they can agree on this evening and what makes sense today may not be the same in the next 10 several months. Mr. Diamond stated as time goes on, the owner is dealing with a situation that is uncertain. He stated it is difficult to operate a property as a private owner without knowing what the public body is going to do or knowing something will be done, but when. Mr. Diamond stated the history goes back to 1979. He stated in May, 1980, a private developer proposed a project which didn't work out. He stated there was discussion on record about several businessmen in the area feeling jolted at that time because they weren't sure what would happen with the project. He stated in July, 1980, the Standard station was considered for a lease for a Mr. Donut franchise. He stated in 1981, Mr. Boardman spoke about tenants in the area being upset, and another project which didn't work out. He stated a brochure was compiled in 1984 which stated it was only a matter of time before projects developed. He stated the HRA decided not to distribute this brochure. Mr. Diamond stated Mr. Lundgren has come in with a proposed project and the owners signed an agreement in January and it has been dis- cussed ever since. Mr. Diamond stated the HRA is in the situation where there has been a purchase price negotiated of $1,008,000. He stated the County . is working on widening Mississippi Street and a portion of the property will be taken and the funds for this acquisition will not be coming from the HRA. HOUSING & REDEVELOPMENT AUTHORITY MEETING, NOVEMBER 13 , 1986 PAGE 8 Mr. Diamond stated he recognizes it has to be in everyone's minds that Mr. Lundgren is having difficulty in proceeding with his project and even faces the possibility of forfeiting his letter of credit. He stated the Levy people are saying to take this land now. He stated the question may well become if the HRA can put itself into the position to have a piece of Land that cannot in the fore- seeable future be developed. He stated that is a valid concern. Mr. Diamond stated the question is where the burden should lie. He stated if the property is left in limbo, as it has been for the last several years, should the impact be on the public body or shifted totally to the private individuals. He stated it seems logical that the parcel will be developed, however, the question is when will a determination be made to go ahead and acquire the property. Mr. Diamond stated he would suggest because of the combination of factors now, it is appropriate for the HRA to make that decision. He felt the owners and tenants should be made comfortable with the situation so they can go on with their lives. Mr. Qureshi felt it should be recognized this is only one parcel of property and the HRA has a number of other properties in the tax increment districts. He stated the HRA's position is not to acquire property unless there is a proposed development or use for it. He stated it was hoped, if the Lundgren project proceeded, it would • give the HRA a valid reason to acquire this property. He stated the tenants' problems will be there, even if the HRA acquires the property. He stated experience has shown it isn't good to own property, unless there is a use for it. Mr. Commers stated the HRA has been through this discussion so many times, he felt a motion would be in order so everyone would have a chance to express their views. MOTION BY MR. MEYER TO ACQUIRE THE RICE PLAZA SHOPPING CENTER PROPERTY. Mr. Commers asked Mr. Newman if he could second the motion. Mr. Newman stated he understands the Chairperson cannot second the motion. Mr. Prairie stated nothing has changed since the last meeting, but there may have been movement on the other project which has some effect on this item. Mr. Newman stated one of Mr. Levy's frustrations was there wasn't a definitive action on the HRA's part because there was no second to the motion at the last meeting. Mr. Qureshi asked why it was critical to be on record that the HRA didn't want to acquire the property. Mr. Newman stated Mr. Levy was asking for some action one way or the other. THERE BEING NO SECOND TO THE ABOVE MOTION, CHAIRPERSON COMMERS DECLARED THE MOTION FAILED FOR LACK OF A SECOND. HOUSING & REDEVELOPMENT AUTHORITY MEETING NOVEMBER 13 1986 PAGE 9 MOTION BY MS. SCHNABEL, SECONDED BY MR. MEYER, FOR THE HRA NOT TO ACQUIRE THE RICE PLAZA SHOPPING CENTER AT THIS TIME. Mr. Prairie stated he felt bad for the property owners because develop- ment has been delayed. He stated the problem is that several years ago the HRA purchased property as they thought they had a developer and it didn't work out. He stated the HRA was subjected to criticism that they shouldn't own land. He stated he is sensitive to having the same thing happen again. Mr. Meyer stated he respected the views of the other HRA members and the City Manager that the HRA not acquire property unless there is a need for it. He stated it seems, in this case, it is a different situation as this redevelopment district has been targeted as the HRA's number one priority. He stated that, in itself, establishes the HRA has a use for the property. He stated there have been a number of developers showing an interest in developing and felt it was in the City's best interest to pursue development of the property. He felt they have a use for the property even though it may not be in the immediate future and for that reason, they should proceed with the purchase of the property. Ms. Schnabel stated her position really hasn't changed. She stated it is a philosophical one if the HRA should own property. She felt • the presentation was good on behalf of the owner, but she wasn't persuaded why the HRA should purchase the property. Ms. Schnabel didn't feel the HRA should become Landlords. She stated at any time in the future, if a developer has a concrete proposal, she would be more than willing to purchase the property. She stated she appreci- ated the Levy's contributions to the City, but didn't feel it was the HRA's responsibility to try and cure some of the problems coming out cf Washington with the new tax laws. W. Commers stated he favors the purchase of the property at this time. He stated he agrees with past practices for the HRA not to become landlords, but exceptions do arise. He stated the Civic Center project was the HRA's prime goal and one of the most critical parts is the southwest quadrant of Mississippi and University. He felt in the last few years, the HRA has been distracted from their goals and was concerned about losing their direttion and proceeding with other projects. He stated he felt it was in the best interests of the citizens of Fridley to acquire this property. UPON A ROLL CALL VOTE TAKEN ON THE ABOVE MOTION, M.S. SCHNABEL AND MR. PRAIRIE VOTED IN FAVOR. MR. COMERS AND MR. MYER VOTED AGAINST THE MOTION. CHAIRPERSON COMMERS DECLARED THE MOTION FAILED FOR LACK OF A MAJORITY. 4. UPDATE ON LAKE POINTE: Mr. Robertson stated_ earthwork is ahead of schedule and all building pads, except A and D, are almost completed. He stated there are some problems with the final alignment of Lake Pointe Drive in the northeast corner. HOUSING & REDEVELOPMENT AUTHORITY MEETING, NOVEMBER 13, 1986 PAGE 10 Mr. Qureshi stated the original plan for this development was approved by the HRA and City Council and the developer wishes to make a change which would affect the road alignment. He stated the City has asked the developer to submit a plan, that works under any scenario, to determine what adjustments could be made to accommodate them. Mr. Qureshi stated a meeting was held between him, Mr. Newman, Mr. Weir and Mr. Deike to see how this issue could be resolved, however, to this date, no request has been received from the developer. He stated the City has to know their needs so they can work with them to resolve the problem. Mr. Qureshi stated staff's position is to proceed with the plans approved by the HRA and City Council and to fulfill the obligations. He stated it is hoped Mr. Weir will take the same approach. Mr. Commers asked if there are any time frames that if Woodbridge didn't proceed with the project, they would be in default. Mr. Newman stated his recollection is Woodbridge is to commence construction by December 1, but would have to verify this in the development agreement. He stated Woodbridge has indicated they have pulled their engineer and architect off the project. • Mr. Newman stated under the terms of the agreement, the $1,000,000 was to be released when the plat was recorded and rezoning completed. He stated one of the contentions is the alignment of the road. He stated he has been in contact with the developer and met with Mr. Weir and his legal counsel to come up with some solutions, but they haven't responded. Mr. Newman stated he contacted Sunde Engineering and indicated the City wanted the plat released. He stated Sunde probably has an ethical problem because Woodbridge is their client. Mr. Newman stated he contacted Suburban Engineering yesterday and would Like to make provisions with them to complete the platting. He stated the City HRA is the property owner and owner of record and has the right to proceed and plat the property. Mr. Commers asked the cost if Suburban Engineering platted the pro- perty. Mr. Newman stated Suburban Engineering would have to recertify the descriptions at a cost of about $1,500. He stated the greatest cost is in placing of the monuments which would amount-to several.thousand dollars. He felt the whole thing could be done for about $5,000. He stated the platting process would probably take several weeks and once it is recorded, the title insurance company would be notified to release the $1,000,000. He stated it is anticipated Mr. Weir • would take some action to not have these funds released. 0 • HOUSING & REDEVELOPMENT AUTHORITY MEETING NOVEMBER 13 1986 PAGE 11 Mr. Meyer felt the funds are in escrow and time is on the HRA's side. He felt by having the plat recorded, it may invite a confrontation. Mr. Commers stated this would probably happen anyway sooner or later. Mr. Prairie stated this is only the first stage and wondered if there would be other problems coming up every month. Mr. Newman stated staff has tried to work with Mr. Weir time and time again and felt it would be easier to bargain once the $1,000,000 is in hand. He stated he felt reasonably comfortable, under the terms of the agreement, the funds would be released when the plat, as presented by the City, is recorded. Mr. Qureshi stated Woodbridge has committed $6 million to this project and the HRA has committed less than $2.5 million in addi- tion to agreeing to install almost $2 million in road improvements beyond the development. He stated the HRA has the control to receive the $1,000,000 and if you have a situation where it is going to become a frustration, the HRA may not want to put anymore money into the project. He stated a reasonable attempt has been made to keep the project moving, but wanted to bring to the HRA's attention some of the staff's concerns. Mr. Commers polled the HRA members and it was the consensus to proceed and have the plat recorded. It was suggested that staff remind Woodbridge, in writing, of their time frames. 5. CONSIDERATION OF APPROVING A CHANGE ORDER TO THE LAKE POINTE DEVELOP- MENT STREET IMPROVEMENT PROJECT NO. ST 1986 -1 & 2, PHASE II: Mr. Robertson stated because of subsurface drainage problems that were not previously known, this change order is requested for installation of a perforated subsurface drainage pipe system to provide proper stablization for Lake Pointe Drive. MOTION BY MR. MEYER, SECONDED BY MS. SCHNABEL, TO ADOPT CHANGE ORDER NO. 1 FOR STREET IMPROVEMENT PROJECT ST 1986 -1 & 2, PHASE II, IN THE AMOUNT OF $17,250 WHICH INCREASES THE ORIGINAL CONTRACT PRICE WITH H & S ASPHALT FROM $368,054.10 TO $385,304.10. Ms. Schnabel requested a print -out of past change orders in total dollar amounts. Mr. Pribyl stated a summary was provided of all the contracts and it shows the change orders, estimates and payments. He stated this summary will be provided for each and every contract entered into by the HRA. UPON A VOICE VOTE TAKEN ON THE ABOVE MOTION, ALL VOTED AYE, AND CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. HOUSING &_REDEVELOPMENT AUTHORITY MEETING, NOVEMBER 13, 1986 PAGE 12 • 6. RECEIVING INFORMATION FROM ANOKA COUNTY REGARDING STATUTE ACTIVITY VERTIFICATION REQUIREMENTS FOR THE CITY'S TAX INCREMENT DISTRICTS: Mr. Qureshi stated the State statute provides that tax increment districts must meet certain requirements within a three year period from the date of its original certification in order to qualify for the continued payment of tax increment for that district. He stated the County has requested the City provide information to substantiate that the three year qualification requirement hall been met and a letter has been drafted to Mr. Tilden of the Anoka County Auditor's Office from Mr. Robertson dated November 7, 1986. Mr. Commers asked if the improvements made by the City in these districts would be funded by the HRA. Mr. Qureshi stated the HRA can make a determination if they want to fund them or not. He stated the test is it has to be a public improvement and this has been met. He felt the HRA would have to make a determination on where the funds from the bonds would be used, as $3.4 million has to be expended in the next two years. MOTION BY MS. SCHNABEL, SECONDED BY MR. MEYER, TO AUTHORIZE STAFF TO SEND THE LETTER TO MR. TILDEN DATED NOVEMBER 7, 1986 FROM JOCK ROBERTSON AND AS SHOWN ON PAGE 6C OF THE AGENDA. • UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 7. RECEIVING PROJECT TIMETABLE FOR BOND IMPROVEMENT INVESTMENTS AND CONSIDERATION OF ESTABLISHING PROJECT IMPROVEMENT EXPENDITURES: Mr. Qureshi stated the HRA sold $11,550,000 in bonds for improvement projects of which $3.4 million is available and has to be expended in the next two years. He stated possible projects were discussed at the HRA meeting of May 8, 1986. The HRA received the memo dated September 19, 1986 from Mr. Qureshi in regard to a policy for funding different public improvements to encourage and facilitate development or redevelopment. 8. CONSIDERATING OF ISSUING A CERTIFICATE OF COMPLETION TO VANTAGE COMPANIES FOR CONSTRUCTION COMPLETED ON THE WHOLESALE CLUB PER SECTION 3.3(a) - ii OF THE CONTRACT FOR PRIVATE DEVELOPMENT: Mr. Qureshi stated Vantage Companies has completed the minimum improve- ments in respect to their development in Fridley and are requesting reimbursement of a portion of the soil correction costs. Mr. Meyer felt the letter from Mr. Beckmann dated October 9, 1986 • is a little vague in regard to the actual soil correction work. He also felt the report should include lot and block numbers and details on the work performed. HOUSING & REDEVELOPMENT AUTHORITY MEETING, NOVEMBER 13, 1986 PAGE 13 • Mr. Prairie agreed there should be more detail supplied so it is on file and everyone knows exactly what was accomplished. Mr. Newman stated he knows the cost estimate was closer to $1.6 million and the correction work was extensive. He stated when the contract was drafted, it was intended that more specific details on the correction be provided. MOTION BY MR. PRAIRIE, SECONDED BY MS. SCHNABEL, TO REQUEST THE ENGINEER TO COMPLY WITH THE PROVISION OF SECTION 3.3 (a), ii OF THE CONTRACT AND UPON RECEIPT OF THIS REPORT, TO RELEASE THE $100,000 TO VANTAGE COMPANIES FOR REIMBURSEMENT OF A PORTION OF THE SOIL CORRECTION COSTS. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 9. PRESENTATION BY WINFIELD DEVELOPMENT, INC. REGARDING PROPOSED DEVELOP- MENT OF THE SOUTHWEST QUADRANT OF UNIVERSITY AVENUE AND MISSISSIPPI STREET: This item was deleted from the agenda at the request of staff. 10. ESTIMATES• . MOTION BY MS. SCHNABEL, SECONDED BY MR. PRAIRIE, TO APPROVE THE ESTIMATE FOR BARTON - ASCHMAN ASSOCIATES, INC., INVOICE NO. 37770 DATED OCTOBER 6, 1986 IN THE AMOUNT OF $6,428.61. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON CONKERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 11. CLAIMS: MOTION BY MR. MEYER, SECONDED BY MS. SCHNABEL, TO APPROVE THE CHECK REGISTER (CLAIMS NO. 1525 -1539) AS PRESENTED. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 12. OTHER BUSINESS: A. CONSIDERATION OF AWARD IN THE CASE OF GERALD & NORMA JOHNSON: Mr. Commers stated the HRA has received a letter dated October 17, 1986 from Ford Crouch, Attorney for Gerald and Norma Johnson, and they are willing to accept an award of $71,640. Mr. Newman stated Mr. Qureshi has suggested approval of this settle- ment with the Johnson's to resolve the case without going forward with an appeal. He stated this $71,640 figure was based on acceptance HOUSING &_REDEVELOPMENT AUTHORITY MEETING, NOVEMBER 13, 1986 PAGE 14 of the offer by October 22, 1986 and since it is past this date, there may be some adjustment necessary in this figure. MOTION BY MS. SCHNABEL, SECONDED BY MR. PRAIRIE, TO APPROVE THE PAYMENT OF $71,640 IN SETTLEMENT OF THE GERALD AND NORMA JOHNSON CLAIM. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. B. HRA FINANCIAL STATEMENT: Mr. Commers asked the HRA members to review the financial statement before the next meeting and that the item be placed on the agenda for December. C. LAKE POINTE CONTRACTS: Ms. Schnabel asked if the Lake Pointe development would not proceed, if the HRA has an obligation to the other contractors. Mr. Qureshi stated he felt they are committed to these contracts, but hopefully the issues with Woodbridge could be resolved. ADJOURNMENT: MOTION BY MR. MEYER, SECONDED BY MR. PRAIRIE, TO ADJOURN THE MEETING. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE NOVEMBER 13, 1986 HOUSING & REDEVELOPMENT AUTHORITY MEETING ADJOURNED AT 10:00 p.m. Respectfully submitted, Carole Haddad Recording Secretary •