The URL can be used to link to this page

HRA 01/08/1987 - 6527HOUSING & REDEVELOPMENT AUTHORITY THURSDAY, JANUARY 8, 1987 7;00 PM Jock Robertson Executive Director of HRA QTY OF FRIILEY A G E N D A HCUSANG & REDEVELOPMENT AUTHORITY MEETING THURSDAY, JANUARY 8, 1987 7:00 P.M. Location: Council Chamber (upper level) CALL TO ORDER: ROLL CALL: APPROVAL OF MINUTES Housing & Redevelopnent Authority Minutes: December 11, 1986 fR CADOPTION OF AGENDA • � - �l'C. L / PUBLIC HEARING ON THE SALE, LEASE OR OTHER DISPOSITION BY THE HRA OF REAL PROPERTY GENERALLY LOCATED DIRECTLY EAST OF THE SPRINGBROOK NATURE CENTER, NORTH OF 83RD AVENUE, SOUTH OF 85TH �i AVENUE AND WEST OF UNIVERSITY AVENUE .. . . . . . . . . . . . . . l :�: 1 CONSIDERATION OF A_RESOLU_TION AUTHORIZING THE EXECUTION OF A CONTRACT FOR PRIVATE DEVELOPMENT BETWEEN THE HRA AND UNIVERSITY AVENUE ASSOCIATES FOR THE CONSTRUCTION OF A 358 UNIT RENTAL APAR24ENT QOMPL EX CONSIDERATION OF ISSUING A CERTIFICATE OF COMPLETION TO VANTAGE COMPANIES FOR OOMPLETION OF THE WHOLESALE CLUB AND AUTHORIZING THE DEV RELEASE TAG $REEI�ITO �5 �.� :� -.I�:N :IST�AN�C •AS PER •THE 3 - 3J IDERAN OF DRAWING ON LOU LUNDGREtV' S LETTER OF CREDIT• - - - CONSIDERATION OF A PROPOSAL TO AMEND THE REDEVELOPMENT PLAN FOR TI PARCELS AND REDEVELOPMENT PROTECT NO. 1 TO INCLUDE ADDITIONAL ESTABLISH A TAX INCREMENT DISTRICT AND TAX INCREMENT FINANCING PLAN RELATING THERETO- . . I .I.' - 5B �tl'� � 1 �� {� Ci- CG��C t (C ;��. { -•��LL:. iC�` C L-C� - -•I��t•1 iL � `C �C t' : •_CZj 1985 FINANCIAL STATEMENT . . . . . . . . . . . . _ CLAIMS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 OTHER BUSK] S •, L _ T. ( ��c �� C ADJCURNMEN �� "��G L I CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING, DICE11BER 11, 1986 CALL TO ORDER: Vice - Chairperson Schnabel called the Dec. 11, 1986, Housing & Redevelopment Authority meeting to order at 7:20 p.m. ROLL CALL: Meribers Present: Virginia Schnabel, Duane Prairie, John Meyer Henbers Absent: Larry Commers, 11alter Rasmussen Others Present: Jock Robertson, HRA Executive Director Nasim Qureshi, City Manager Dave Ne%,mian, F?RA Attorney Rick Pribyl, Finance Director Julie Burt, Asst. Finance Officer John Flora, Public 11orks Director Samantha Orduno, Management Assistant Mayor Bill Nee Councilperson Dennis Schneider Councilperson Ed Fitzpatrick Councilperson -elect Nancy Jorgenson Bob Levy, 100 S. 5th St. Richard Diamond, 100 S. 5th St. Harry Yaffe, 2300 Archers Lane, Minnetonka Sherrill Kuretich, Larkin, Hoffman, Daly & Lindgren June Lundgren and Louis Lundgren, The Lundgren Associates APPROVAL OF NOVEMBER 13, 1986, HOUSING & REDEVELOPM FNT AUTHORITY MINUTES: MOTION BY MR. PRAIRIE,, SECONDED BY MP. MEYER, TO APPROVE THE NOV. 13, 1986, HOUSING & REDEVELOPMENT AUTHORITY MINUTES AS WRITTEN. UPON A VOICE. VOTE., ALL VOTING AYE, VICE. - CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 1. CONSIDERATION OF A RESOLUTION APPPOVING THE A►IENDMENT TO THE ,lnnIFIFD REDEVELOPMENT PLAN FOR REDEVELOPMENT PROJFCT NO. 1 AND AMENDING THE TAX INCREMENT FINANCING PLANS FOR TAX INCREMENT DISTRICTS NOS. 2 -8: Mr. Robertson stated this was a housekeeping action required due to the construction of the University Associates apartment building in this district. It was necessary to modify the redevelopment plan and the tax increment financing plans for tax increment districts 2-8 to include the increased project costs. HOUSING & REDEVELOPMENT AUTHORITY MEETING, DECEMBER 11, 1986 PAGE 2 MOTION BY MR. MEYER, SECONDED BY MR. PRAIRIE, TO APPROVE RESOLUTIOPT NO. HRA- 21 APPROVING THE AMENDMENT TO THE MODIFIED REDEVELOPMENT PLAN FOR REDEVELOPMENT rP.OJF,CT NO. 1 AND AMENDING THE TAX INCREMENT FINANCING PLANS FOR TAX INCREMENT DISTRICTS NOS. 2 -8. UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL DECLARED THP MOTION CARRIED UNANIMOUSLY. Mr. Robertson stated that along with this development, the HRA was required to set a public haring date for the development agreement for Jan. 8, 1987, the HRA's regularly scheduled meeting. .MOTION BY MR. PRAIRIE, SECONDED BY MR. MEYER, TO SET THE PUBLIC HEARING DATF, FOR THE DEVELOPMENT AGREEMENT FOR JAN. 8, 1987, AT 7:00 P . M . UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. Mr. flewnan stated that regarding the University Associates apartment project, it was his recollection from the last meeting that there were some final items the HRA wished for Staff to continue to negotiate with the developer. It was the developer's intention to close on the property later this month, even though the HRA will not have formally executed the development agreement until the public hearing in January. lie stated he would like to have the opportunity to review the latest changes to make sure the Staff has the 11RA's concurrence and so the developer has the HRA's assurance before they close on the property later this month. Mr. Newman stated that as the HRA recalled, it has been proposed to do a second mortgage of $850,000 at 8% interest. There would not he any interest for the first three years; and although interest would begin to run in the fourth year, interest payments would not actually begin until the sixth year and would run years 6 -15. 11hat they are doing during that period is they are making all the interest that accrues currently, takino years 4 -5 interest and dividing that into ten interest installments, so they would he making 1/10 installment on the prior interest, plus they would amortize the principle so that at the end of 15 years, the installments will have reduced the principle from 5850,000 to ;425,000. Then in the 15th year, there is a balloon payment- -that is interest for that year plus remaining principle and the balance which is $425,000. Mr. Newman stated it was the HRA's concern that interest for years 4 and 5 he paid as installments over the balance of the mortgage. In the revision, thev are requiring the developer to post a letter of credit in an amount equal to' the interest. That letter of credit can be carried until the project is completed (1990). Mr. Newman stated that in the packet received at the meeting, there were two guarantees that have been reviewed with the developer. One guarantee to he signed by each of the general partners would personally guarantee the payment of the tax increment in the event the project itself doesn't pay the taxes. That will also continue until the project is completed, when the facilities are up and on line. HOUSING ix REDEVELOPMENT AUTHORITY MEETING, DECEMBER 11, 1986 PAGE 3 Mr. Newman stated the second guarantee was a personal guarantee of the payment of mortgage payments. That guarantee will continiie until the mortgage has been paid in full. It will also provide that in the event the net worth of this development collectively is less than $10 million, the HRA then has the right to require additional securities in order to secure an interest in that second mortgage. Mr. Newman stated other changes in the agreement were technical language changes. !1r. Ne►,nan stated he felt comfortable with these changes. He had tried to tale the I!RA's comments and concerns from the last meeting and come to sone concensus of what they were looking for. He stated he wanted to get the HRA's conceptual agreement with the document with the changes. This was the document that would be presented to the PRA at their January meeting. 'Is. Sherrill Kuretich stated 11r. Newman had done a good job of summarizing the changes to the document. She added that there was going to be a substantial larger letter of credit posted to the City as required by the City to assure the completion of the site improvements. That letter of credit would remain in place until the project was completed. She thought that letter of credit was somewhere around $700 - 800,000. 14s. Schnahel stated it was the concensus of the Commissioners present that the changes outlined by 11r. Newman reflected the concerns expressed by the Cor-nissioners at their last meeting. 2. TABLED: CONSIDFRATIn�! OF APPROVING, ACTION TO DRAW ON LOU LIIND;RE!!' S 42nn,0n0 =R OF CREDIT PER SECTION 4.5 OF THE JUNE 1986 DFVFLOPMFNT AGREEMENT: Mr. Qureshi stated Staff's position was the same as that presented at the last meeting, essentially that there was an agreement and one of the reasons why the HRA requested the letter of credit was it showed that the developer was serious about the development. 1r. Qureshi stated there was now no longer a valid agreement with the develoner, and in the agreement they had, it provided that if the developer did not perform by a certain date, the [IRA could draw on his letter of credit. That time has long come and gone. Mr. Qureshi stated the argument could be made that Mr. Lundgren is still exploring other possibilities of putting the package together. however, if the developer comes up with a package acceptable to the HRA and they have not made a commitment to anyone else, the HRA could still review that package and enter into another agreement with him. Mr. Qureshi stated it was Staff's recommendation to draw on the letter of credit. Mr. Qureshi stated r1r. Lundgren and his legal representative were in the audience. HOUSING & REDEVELOPMENT AUTHORITY MEETING, DECEMBER 11, 1986 PAGE 4 Ms. Kuretich stated they now think they can make some progress on workina out the finances for this project. She certainly understood Staff's concern and the HRA's concern. This letter of credit would remain in place until June 1987; and up until that point, the letter of credit can he drawn upon at any tine. She stated that if the letter of credit was draw upon at this time, Mr. Lundgren would be called upon by the bank to immediately reimburse the bank for the amount of that letter of credit. That was likely to male moving forward with this project totally impossible because it would be takinq funds necessary to proceed with the project and applying it to a payment to the HRA. Ms. Kuretich stated they have begun working with a local mortgage lender, Meritor "iortgage Corporation - Central, formerly the old Northland mortgage Conpany.Ilousing Development Division. These people are very sophisticated mortgage brokers, and they feel it will be much easier to work with a local lender. They are meetinq with 1leritor Mortgage on Tuesday morning to look at this project in terms of doing both the market rate rental and the elderly housing in one phase instead of two. They think that might make the project considerably more viable. Ms. Kuretich stated Meritor Mortgage has received the projections from Mr. Lundgren with respect to the project and are analyzing these numbers now. Hopefully, by the January meeting, Meritor will be able to provide some type of letter to the HRA indicating whether or not the project is feasible. Although it will be difficult because of the holidays, they will attempt between now and the January meeting to have some preliminary meetings with the local HUD office. They are still looking at the possibility of FHA insurance for the project. They are moving forward to explore feasible alternative methods of financing this project. They are asking the HRA's indulgence and that the IIRA not draw on Mr. Lundgren's letter of credit at this time. Mr. f1eyer asked Mr. Lundgren to review the expenditures he has already made on this project in terms of real costs. Mr. Lundgren stated he has invested in excess of $500,000 on this project, not countinq the letter of credit, so with the letter of credit, it was over $700,000 in total. lie would not be able to proceed with the project if the HRA cashes the letter of credit. He felt they do have special resources in order to proceed with the project in an expeditious fashion, and he believed that by the January meeting, they could have not only a letter from Heritor describing the feasibility of the project, but also a timetable for what has to be done. The project has completed specifications and working drawinqs so the processing with a local lending office as opposed to the one they had before should be much more rapid, not only because of the convenience of the location,but because the work has essentially all been done. Ms. Schnabel stated that with the addition of doing elderly housing at the onset, was Mr. Lundgren's position of obtaining mortgage money enhanced over what it has been previously? HOUSING & REDEVELOPlIENT AUTHORITY MEETING, DECEMBER 11, 1986 P!'GF 5 Ms. Kuretich stated doing this as a single phase made it much more difficult for the project cash flow and, in fact, was impossible unless they can use tax increment financing. When the Tax Reform Act was passed, they believed and still believe it is impossible to do the first phase of this project without tax exempt money because there are not enough units for the low income units to he subsidized by the market rate (if it was only one phase). By doing the two phases together, they believe they can make the project's cash flow by using tax exempt bonds after all. Also, there will be cost savings involved in terms of internal per unit expenses, thereby increasing the money available to pay the debt service for the financing on the project. Ms. Kuretich stated she felt the biggest impact was the fact that they had more market rate units to support the units that would have to be set aside to meet the rent restrictions under the tax reform. She wanted to emphasize that they were not talkinq about a reduced quality in the project. Ms. Schnabel asked how many units there would be in each of the buildings. Mr. Lundgren stated this was still subject somewhat to HUD's review, but there should be 165 elderly units and 124 market rate units. However, that number might vary. It was the concensus of the HRA members present to not exercise their option and to not take any action on fir. Lundgren's letter of credit at this meetinq, and that the item remain on the table. "1s. Schnahel stated she would ask that this item be placed on the January agenda so the HRA can make another determination at that time. 3. CONSIDERATION OF ENTERING INTO A MASTER LEASE FOR THE RICE PLAZA SHOPPIMr, CENTER: Mr. Robertson stated that as a result of a lone discussion on both the pros and cons of acquiring this property at the last HRA mtg., a letter was received from Richard Diamond dated Nov. 28, 1986. This letter outlined the concept of a master lease. Staff would like to keep the HRA reactions to this concept and some direction as to how to proceed. Mr. Newman stated the letter from Mr. Diamond was on page 3 of the HRA agenda. He had not really had much of a chance to discuss this with Mr. Levy and Mr. Diamond, other than briefly on the telephone. After the last meetinq, Mr. Diamond and he had talked about whether there was another way that the issue of the acquisition of the Rice Plaza Center could be resolved. The issue of a master lease had been briefly discussed with Mr. Levy last spring, and he had raised the subject with Mr. Diamond. Mr. Diamond had talked to his clients, and this letter was their original proposal. Mr. Newman stated the approach that has been taken is to try to find a vehicle that would be beneficial to both parties. Obviously, the HRA would like to develop the property,and he believed that the HRA, from a policy standpoint, felt very uncomfortable buying property when they do not have an in -hand development. With the roaster lease concept, if the HRA did decide to acquire HOUSING & REDEVELOPMENT AUTHORITY MEETING, DECEMRER 11, 1986 PAGE 6 the property, as leases expired, they would have the option of not renewing those leases; thereby avoiding the cost of relocation expenses. Mr. Newman stated that the owner's greatest concern was he did not want the value of his property to be reduced because it is in a redevelopment district. The property owner was also concerned that not only was he unable to obtain tenants, but he did know whether he should be making any capital improvements. Because of the threat of possible condemnation, he was unable to obtain the quality of tenants he desired. That affected his incomes and also the value of his property. Mr. Neviman stated that under the master lease approach, the HRA would have an option to purchase the property within a specified time period, and as Mr. Diamond had said in his letter, they would like it to not he any longer than three years. During that three year period, Rice Plaza would continue to maintain, operate, and lease the property, the [IRA would have the right to exercise its option to purchase the property, and at the end of the three - year period, the HRA would either purchase the property or opt to take the property out of the redevelopment district. Mr. Newnan stated that in the proposal, if Rice Plaza cannot lease the property within 6n days and there was a vacancy, the HRA could step in and begin making the rent payments. In a discussion he had indicated to Mr. Diamond that he felt it was necessary to have some economic incentive for Rice Plaza to make its best efforts to keep the spaces rented so the HRA could look to Rice Plaza to rent the property and collect the rents. Some verbage would have to be put into an agreement to provide for that economic set -up. They have to discuss further with Staff the possibility that instead of subsidizing 100% of lost rent, that the HRA subsidize some percentage of that. This has not heen discussed yet in any detail. They had wanted to bring the concept of the master lease to the LIRA first before proceeding any further. Another concern of Staff's was that if they had a floor purchase price and the market values dropped 2 -3 years from now unrelated to the threat of condemnation, would the HRA still be committed to this pre - determined purchase price? Ms. Sclinabel stated she would also be concerned about the purchase price. If they are going to be obligated to pay narket rents (if vacancies occur and are not filled within 60 days) plus 50% of real estate tax, or other costs, what happens to the purchase price? She felt some of these considerations had to be reflected in the negotiations to arrive at a purchase price. She agreed with Mr. Newman's concern that an incentive had to be built into any agreement to ensure the property continues to be rented, so the property does not deteriorate or stand empty during that three year period. Mr. Qureshi stated the key questions with the master lease concept were: What was the purchase price? What kind of carrying costs would the HRA have? Mr. Prairie stated lie thought they should pursue the master lease concept. It did seem to be a compromise. He would like to see the time period loner than three years. Other than that, the concept seemed like something they should pursue. HOUSING & P,EDEVELOPMENT AUTHORITY MUTING, DFUMRER 11, 1986 PAGE 7 Mr. Meyer stated that in light of this proposal, he was still trying to decide whether the HRA would be as well off or better off than if they just cleanly purchased the property. There was a potential escalation of some kind if they did not purchase the property by the end of the year. When vacancies occur, whether the 1 4RA owns the property and the vacancies occur, or whether Rice Plaza was leasing the property when the vacancies occurred, either way the HRA would he out definite dollars. At the end of 1 -2 years, 959 of the property could ::e vacant. What does the HRA really gain with this proposal? Shouldn't they just make a clean break one way or the other? 1r. Qureshi outlined some positive aspects of the master lease concept: 1. The higgest advantage would he that if the tenants leave by their own volition, the HIRA would have no relocation costs. 2. Once the lease was over, the tenants know they have to nake other arrangements. Depending on the leasing schedule, they would have tine to plan ahead. 3. It was a compromise situation between the HRA and the property owner. 4. The HRA was still not liable for managing the property. •1r. Qureshi stated the negative aspect was: 11hat was the carrying cost? That was what they would have to negotiate. fir. Qureshi stated that if the numbers were reasonahle, this master lease arrangenent would give the HRA reasonable flexihility and would also give the owner a little more room to maneuver than he has now. fir. Meyer stated he had some major concerns about the master lease concept, but he was not opposed to having Staff pursue sone type of proposal for the HRA to review. 11r. Prairie stated the concept gave the HRA the flexihility for a number of years, and it probably helped the property owner a little bit by helping offset some of the rent. It was telling the property owner that the HRA was still interested in the property. fie felt the master lease concept had possibilities. Mr. Richard Diamond stated that after last nonth's HRA neeting, they were a little frustrated about exactly where they were going on this particular project. One of the things they wanted to loot: into was the possibility of going forward with some kind of creative approach. !then the concept of the master lease came up again, they took it upon themselves, in consultation with fir. Nevnan, to put something into writing. He stated they have not really had a chance to consider all the details of this concept. fir. Diamond stated that until this meeting, they had been assuming there was not necessarily a viable development proposal that existed for this property. ldh.at they had heard at this meeting during agenda item #2 was sonewhat encouraging, because they were familiar with the people Mr. Lundgren was now HOUSING & REDEVELOPMENT AUTHORITY MEETING, DECEMRFR 11, 1986 PAGE 8 dealing with. They believe the people �Ir. Lundgren is dealing with now are appropriate people for the financing of this project, and they are encouraged that Hr. Lundgren seemed to be taking a step in the right direction. If that was the case, and Mr. Lundgren did proceed with the project in an orderly fashion, they believed the HRA would he in a position where they will want to buy the property in less time than the three years they are talking about. Mr. Diamond stated they also want to be clear in talking about specific prices and specific terms. The concept of the master lease, as they conceive it at this point, basically had two alternative elements: 1. The fIP,A wants to be in the position of saying in advance now that they will, in fact,take that poperty at some time in the future. The issue was to decide now the terms and conditions of how that was going to happen. 2. The HRA wants the option of saying they know they are going to have to make a decision some time in the future and they Mould rather have an option and leave themselves some.more flexibility in the future. Mr. Diamond stated that if the second alternative was something seriously considered by the HRA, then, from the owner's perspective, what does the owner do if the option is not exercised at the end of "x" number of years? Three years was not a magic period, but the question was: What does the owner do? What they have proposed at this point, basically for discussion purposes, was to consider taking that property out of the redevelopment district so the owner then does not have any threat or reduction of value that comes as a result of being in the district. That has really been the problem for the last six years with this property. Mr. Diamond stated one thing that has to he stated and stated very strongly was that from the owner's point of vie-, they cannot realistically conceive of the possibility of this particular project depreciating in value. If they are talking about setting the purchase price now for the future, they believe that price would probably be a higher price. That was not to say it would not he a fair price. The question of whether there would he a ceiling price had been raised, and that was certainly an issue that could he negotiated. Certainly the possibility of adopting some kind of formula that would serve everyone's needs was negotiable. fie was sure they could address those kinds of things to make everyone fairly satisfied. Mr. Diamond stated that, obviously, if this property was going to ultimately be acquired, they feel the cleanest way of doing it was to acquire it now at what has to be a lower price than it is ever going to be in the future. The second cleanest way was to enter into a master lease type of agreement. Mr. Diamond stated right now for informational purposes, there was one vacant space in the Rice Plaza Center. There were people who have recently HOUSING & REDEVELOPMENT AUTHORITY MEETING, DECEMBER 11, 1986 PAGE 9 expressed an interest in that space. P1ost of the leases now do not run out for 3 -4 years. They were short term leases, but in terms of what minht happen on that property in the next year or two, the advantages of waiting 1 -2 years were probably not great from a factual perspective. Mr. Diamond stated what was attractive to them in dealing with the master lease type of agreement was it put some predictability into the whole process sometime in the future. fir. Diamond stated he wanted to re- emphasize the fact that the easiest, safest, cleanest, and he believed, the least expensive, arrangement for both parties involved was to take the property now in 1986. "Is. Schnabel stated that in view of the fact that two of the HRA memhers were not at the meeting, the chance of entering into a purchase agreement before the end of 1986 was very minimal, as she was sure both °1r. Levy and fir. Diamond could understand. On that basis, she would ask Staff to see if sorie conclusions could be agreed upon with "1r. Diamond and Mr. Levy in terms of the master lease plan and then bring something back to the 11RA for their review at the next meeting. fir. Newman stated he felt they should be able to put together an outline with some specifics by the next meeting. Mr. Qureshi stated that if fir. Lundgren comes back to the next meetinn with a definite project, there was no question but that Staff would recommend that the HRA buy the property. But right now, they have no use for the pron?rty, and they absolutely do not want to acquire property unless it is usable. He stated he felt they should give this another 60 days in order to see if Mr. Lundgren has gotten his package together. He thought the Fehruary meetinn was more realistic. Mr. Diamond agreed with 11r. Newman that they could put something together by the next meeting so they could at least have an outline of where they were going. 4. CONSIDERATION OF A RESOLUTION APPROVING AN AMENDED DEVFLOPMENT AGREEMENT RFTWEETT THE HRA AND THE FRIDLEY BUSINESS PLA A LIMITED PARTNERSHIP: Mr. Robertson stated this was a minor housekeeping item. In August, the HRA approved a resolution authorizing the execution of a contract for private redevelopment with Winfield Development, Inc. The name was now beinn changed from Winfield Development, Inc., to Fridley Business Plaza Limited Partnership, so the only action needed by the HRA was to approve the amended development agreement with the name change. MOTION BY MR. MEYER, SECONDED BY NP. PRAIRIE, TO APPROVE RESOLUTION NO. HRA -- 2 1986, RESOLUTION OF THE BOARD OF COIPIISSIO17ERS OF THE FRIDLEY HRA APPROVING, AN AMENDED DEVELOPMFPIT AGREEMENT BETWEEN THE HRA AND THE FRIDLEY BUSINESS PLAZA LIMITED PARTNERSHIP. HOUSING & REDEVELOPMENT AUTHORITY FLEETING, DECEMBER 11, 1986 PAGF 10 UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPERSON SCHNABE.L DECLARED THE MOTION CARRIED UNANIMOUSLY. Vice - Chairperson Schnahel declared a ten - minute recess at 8:50 p.m. The meeting was reconvened at 9:00 p.m. 5. CONSIDERATION OF GIVING CONCEPTUAL APPROVAL TO A BUDGET AND AN IMPLEMENTATION PROGRAM FOR IMPROVEMENTS RELATED TO THE UNIVERSITY AVENUE CORRIDOR: Mr. Robertson stated the interest and impetus for this project actually began about a year ago with some businesspeople with establishments along the north end of the University Avenue corridor. There had been some repeated requests and interest for making improvements along the corridor. Last spring, the HRA evaluated various consultants and picked Barton- Aschman with the understanding there would be an advisory committee set up consisting of technical people from the state, county, and city and citizens from Fridley representing businesses and residents along the corridor. Mr. Robertson stated the committee went through a planning process which was summarized in the draft report. Recommendations derived from that planning process were informally presented to the HRA and City Council in October. Based on the HRA and City Council comments in October, the consultant put together a draft final report incorporating the suggestions. Mr. Robertson stated that the draft final report did not include recommendations for priorities in implementing the various components of the plan, sequence of implementation and implications for maintenance costs. The draft report did include cost sheets and estimates based on the capital improvements involved; it would have been a very theoretical exercise to try to estimate maintenance costs until the HRA and City Council indicated a direction for priorities and implementation. Mr. Robertson stated that since this draft report was received, Staff had done several things: (1) had tried to troubleshoot all the recommendations in this report to try to debug any potential technical, legal and safety questions that might not have been covered by the process; (2) anticipating that the HRA might ask Staff for recommendations, Staff had put together some suggested implementation sequences or phases; (3) had proposed some priorities; and (4) had estimated a budget which reflected these recommendations. Mr. Robertson referred to the one -page summary "University Avenue Corridor Plan" hander' out at the meeting. (See Exhibit A). He stated that when people on the Technical Advisory Committee were asked what some of the problems were that needed to be addressed, they responded with the following: unkept condition, unsightly fence south of 69th-Avenue, rural ditches north of 69th Avenue, visual lack of order, and lack of pedestrian facilities. Mr. Robertson stated Staff wished to emphasize that the overall objective was keeping Fridley competitive with what was going on in the metropolitan area and throughout the nation. We are now experiencing a shift from being a manufacturing suburb to more of an office -type suburb. Fridley is HOUSING & P,EDEVELOP11BT AUTHORITY MEETING, DECEMBER 11 , 1986 PAGE 11 in competition with other communities in the metropolitan area and with this type of development, developers are looking for an attractive community entrance and surroundings. The City has a long range financial interest in attracting private investment dollars which translate ultimately into property tax dollars and an expanding tax base. The'City should look at this as a city investment in terms of creating a pleasant community to attract private development dollars which will help keep tax rates low. Mr. Robertson stated there were actually seven different components of the University Avenue Corridor Plan that Barton- Aschrian addressed in the draft report, but these components could be summarized into three basic elements: A. Planting and screening ( including reforestation, trees, grass, and doing something about the deterioration of the fence) B. Intersection improvements (there were 8 major intersections and 3 minor intersections — including brick paving, curbs, sidewalks, overhead 'and lighted signs, street furniture, etc.) C. Street lighting Mr. Robertson stated these 3 elements were listed at the bottom of the one -page summary. To the right of each of the elements were the recommendations for priorities in terms of decreasing amounts of the inplenentation budget. If they were to decide on the full package, it would cost $2,667,000, the next column was $1,994,000, the third column was $1,431,000, and the last column was $1,069,000. fir. Prairie asked what improvements were included in the priority column totalling $1,431,000. Mr. Robertson stated that for planting and screening, it would include the turf and the trees, but would leave out the fence. For intersection improve- ments, it would be just the intersection treatment with the curb, gutter, sidewalk and bricks. There would not be any nonumentation that the consultant was recommending at the entrance on the north and the south, special nonu- mentation at the City Center, or street furniture. For street lighting, it would be lighting for the commercial frontage roads plus the intersec- - tions, both in the north /south and east /west directions, but not the entire corridor. Mr. Robertson stated Barton- Aschman had outlined two alternatives for street lighting -- either median lighting or• frontage road lighting. Of the two, the Technical Advisory Committee liked the idea of the frontage road lighting because it opened up the corridor visually at night and provided more visual access at night to the adjacent businesses. The �990,ono figure for street lighting was Staff's estimate for a compromise between those two alternatives ... to provide lighting,rather than down the median, along the HOUSI "!0 A REDEVELOPHENT AUTHORITY 11EFTING. DFCF11BER 11. 1986 PAGF__1? shoulder continuously on the traveled way, northbound and southbound lanes. In addition, smaller standards would be placed alonq commercial frontage roads. Ms. Schnabel stated that regarding "entrance walls ", she had read in the Addendum that Staff wanted the opportunity to restudy that concept. She thought that was a good thing to do. She had liked the idea when it was first presented, and she still felt there were some nice parts about it, but she had been getting some feedback from people who felt it might present a visual berrier instead of a welcome. Mr. Robertson showed some slides of planting plans, lighting, intersection details, monumentation, and some things done in other communities. Mr. Robertson stated that with the alternatives they had before them, he would like the HRA to give Staff some direction on how they wished the Staff to proceed - -how much and what amount of time? Did the HRA like these elements? Councilperson Schneider stated he agreed that the corridor needed improvement. He liked and supported the concept of doing some improvement along the corridor, but he had a little trouble with a $2,667,000 proposal. Mr. Prairie agreed, and that was why he was inclined to look more at the $1,431,000 figure. That amount of money over a 3 -year period could make the corridor look pretty good, and they could increase the amount at any time. Ms. Schnabel stated they had to keep in mind that University Avenue was not the only street in Fridley that needed upgrading. If they spend money here, they should not forget there are other roadways that also need improvement and to be cautious about the kinds of things they want to do. Councilperson Fitzpatrick agreed that University Avenue was not the only street in town, but fie stated the problem on University was very/ real and long- standing. fie would like to see something done along the corridor. He liked the dollar amount r1r. Prairie had suggested, because it would seem they would get the optimum in each of the components. Mayor flee stated he did not think the fence or the ditches were that big of a problem. The real problem that bothered him was the junk cars at the entrance to the city. fie stated the HRA had the power to do something about that by finding a public use for property that had a marginal use. Mr. Qureshi agreed that people coming into Anoka County and Fridley on Highway 47 and Highway 65 get a very bad image of Fridley, especially with the used car lot and not very attractive businesses. It would be very helpful to have an attractive entrance into the city. fie stated the NRA could address the concern raised by Mayor "fee. The HRA did have the power to desig- nate these areas as economic development or redevelopment areas and take positive steps to acquire properties and develop plans for these properties. HOUSING P, REOEVELOPMENT AUTHORITY MEETING, DECE "10E_R 11. 1986 PP.GE 13 Mr. Qureshi stated that at this time, Staff was requesting some direction from the [IRA as to what areas they felt had the greatest importance. Ms. Schnabel stated that because this opened up a new door that she had not thought of before,in that the HRA had the power to make some improvements in the 57th and University Ave. area, she would like to see the LIRA explore that avenue in more detail. She personally favored the planting and screen- ing element and personally favored the high figure in that element. She thought they got a lot for their money in terms of reforestation, turf re- establishment, and a good maintenance program on behalf of the city. 11s. Schnabel stated that in terms of the intersection improvements, she could see at this point getting some kind of modification. In the City Center part, there was maybe a need and a good argument for doing some more wort: on the University /Mississippi intersection. She was willing to sacrifice the gate- way part for the time being on 57th and 85th because those two areas are unknowns right now, as far as developmentis concerned. f1s. Schnabel stated she would like to see the City talk about picking up some of the costs on lighting. She saw it partly as the City's obligation and partly as the Highway Department's obligation to provide lighting on University Ave. itself. She would like the City to think about making an expenditure in that area. Maybe, with these suggestions, Staff could come up with a modified dollar package. Ms. Schnabel stated to summarize what she had just said, she would take the $614,000 figure for planting and screening, the $500,000 figure on intersec- tion improvements, and put a hold on street lighting until they had a clear idea where they were at, and then she would add to that a plan or program to acquire properties on the southern end of University. Mr. Qureshi stated his rationale was that they already have some plantings along the highway. It does need some maintenance and upgrading, but if they did the reforestation, it was not going to make a drastic change from what they have now because it takes time for plants and trees to grovr. If they adopt a plan all the way along, every tine a new development comes, it might be possible that a sizeable portion of the funding could come from new development. He felt the best and most cost - effective approach would be to do the intersection improvements for safety reasons and visual impact and movement of traffic. Second would be lighting in the public areas and along the commercial properties. Maybe something could be worked out with the property owners, too, for the cost of that lighting. Ms. Schnabel stated this was a piecemeal approach, and she was not sure it was what the members of the Technical Advisory Committee wanted. Mr. Prairie stated he would still recommend the HP.A go with the $1,431,000 cost figure (3rd column) on the University Avenue Corridor Plan. It was approximately one -half the maximum cost, and it could always be increased. He also thought they should work hard at cleaning up the properties they don't think make the City look very good. HOUSING & P.EDEVELOP!1ENT AUTHORITY MEETING, DECEMBER 11 , 1936 PAGE 14 Mr. fieyer stated he agreed with Mr. Prairie. Ms. Schnabel stated she would also agree with fir. Prairie. She stated she would like to see Staff put together some type of timetable, keeping in mind the HRA would like to look at the possibility of the acquisition of properties on the south end of University. MOTION, by Prairie, seconded by Meyer, to adopt the third column plan on the one -page staff summary. UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPF,RSON SCIINABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 6. UPDATE ON LAI:E POINTE CORPORATE CFJITER: fir. Robertson stated construction was shut down for the winter. The earth - work contractor has notified the City he wants to arbitrate certain thinns on the fixed price contract, and the City has not yet been notified of that hearing date. There was a new alignment of Lake Pointe Drive, and the plat had not yet been filed. fir. Newman stated Woodbridge is attempting to exercise their right to Dlace a mortgage on the property. The problem the City had with that was the �l million in escrow that has not been released from escrow yet. In accordance with the Agreement made a couple of months ago, fir. Weir has instructed the escrow agent to release the Metes and Pounds Deed for the Phase I Parcel to be released for filing. Apparently, for a couple of reasons, the County has rejected that for recording. fir. Newman stated he wanted to discuss with Mr. Rureshi and fir. Robertson some of the options they can seriously consider in wor{-ing with Woodbridge to get the fietes and Rounds Deed in a recordable form so it can be recorded. Idfien that happens, the $1 million will be released to the HRA in complete payment for the land. fir. Newman stated the original agreement entered into with Woodbridge last December stated that Woodbridge would be entitled to all the land on Jan. 1, 1937. Once the HRA has the $1 million in hand, that will, in fact, occur. Probably at that point, it was Staff's feeling they should just wait and see where Woodbridge goes from there. He felt it was their primary concern at this time to get the $1 million in hand. Mr. pureshi stated that Lake Pointe Drive will be constructed so as to connect Test H oore Lake Drive and Highway 65. This road riqht -of -way has reduced the area originally identified for Woodbridge Building A. Because of this encroachment, Woodbridge has requested the City provide the Highway 65 turn - back property in order to provide additional space for construction and lan.1- scaping. If this vacation takes place, it would add 33,000 sq. ft. of land which would become part of the develoDment. The City Council will be con- sidering this vacation at a public hearing at their next meetinn. HOUSING & REDEVELOPMENT AUTHORITY MEETING, DECEMBER 11 1986 PAGE 15 Mr. Qureshi stated the City was trying to cooperate the best way they can in minimizing Mr. Weir's concerns. 7. CONSIDERATION OF AUTHORIZING THE CITY TO PROCEED WITH PROPERTY AC tIISTTION ASSOCIATED WITH THE IN ERSFC ION IMPROVEMENT OF HATHAITTLANE ANn OLD CENTRAL: S. Mr. Qureshi stated this item was for the HRA's information. "1r. Qureshi stated that associated with the intersection improvement at Highway 65 /West Moore Lake Drive /Old Central, there was also the redesign of the Hathaway /Hackmann /Hillwind /Old Central intersection. The HRA purchased the corner residential lot in the area in order to provide for this inter- section improvement. In addition, it appeared to be necessary to relocate the garage access at 5755 Old Central because of its proximity to the new intersection to provide access off Hathaway Lane. The garage doors would have to be changed from front to rear and a nevi driveway constructed from the rear of the property. This driveway would have to cross a part of 5760 Hathaway Lane. The person who oams 57FO Hathaway Lane has indicated a desire to sell the property, a triangular piece about 24 ft. long by 28 ft. deep. CONSIDERATION OF APPROVING A CONCEPTUAL PLAN FOR FUTURE IMPROVEMENT EXPENDITURES Mr. Qureshi stated that information regarding the $3,400,000 in available funds from the 1985 $11,550,000 G.O. Tax Increment Bond sale had been brought to the HRA's attention at the May 8, 1986 HRA meeting. At that time, conceptual approval was given by the HRA to spend the available $3.4 million for several proposed projects within Redevelopment Project No. 1. At the September 23, 1986 meeting of the HRA, staff advised the HRA members of the approximately $6.8 million in projected increment within Redevelopment Project No. 1 which will have been generated by the year 1993. It had been the concensus of both the HRA and the City Council that the HRA continue to collect increment generated within Project Area No.1. Staff was requested to prepare a timeline of proposed projects and expenditures which could be funded with the $6.8 million in available increment. Mr. Qureshi stated that staff has prepared a Conceptual Plan which addressess the projects, expenditures and the timef rame for the expenditures. This Conceptual Plan is included herein as Exhibit B. On the overhead projector, Mr. Qureshi displayed 2 graphs, explaining that increment generated fran increased values of development projects is used in the following ways: 1. To retire bonds the HRA has sold, as increment is pledged f irst to pay of f such bonds. 2. Additional bonds may be sold to fund other development projects within the Project Area. 3. To fund projects directly, using available increment which is not committed to the repayment of bonds. HOUSING & REDEVELOPMENT AUTHORITY MEETING. DECEMBER 11. 1986 PAGF 16 Mr. Qureshi noted that last December, the HRA requested the City to sell $11,550,000 in G.O. Tax Increment Bonds. All but $3.4 million from this bond issue was cccmLitted to specific projects within the Project Area: funds for the southwest quadrant developmmmt and utility and road improvements for the Lake Pointe Development. The $3.4 million was committed for "general project activities" within the Project Area. Noting that state statute required these committed funds to be spent within 3 years from the date of the bond sale, Mr. Qureshi stated that by 1988 the funds from the bond sale will be spent according to the guidelines the HRA approved in May. He further explained that there were also restrictions placed on the $6.8 in available increment generated from all the City's tax increment districts. According to state law, any increment which exceeds the amount necessary to pay the costs authorized by the tax increment financing plan mist be used to retire bonds or be returned to the county for dispersal to the taxing jurisdictions. Consequently, it is necessary for the HRA to consider the proposed projects and expenditures in the Conceptual Plan as all of the proposed projects are consistent with the Redevelopment Plan for the Redevelopment Project Area and each of the tax increment districts and also meets state requirements for spending available increment. The Conceptual Plan was placed on the overhead projector anJ- Mr. Qureshi explained that the $6.8 million in available increment could fund various projects within the Project area over a 7 year period, beginning in 1987. Mr. Qureshi stated that in the past, the HRA has used available increment in two ways: 1. Direct development assistance 2. Public improvements The Conceptual Plan divided the proposed project expenditures into these two categories and outlined projects in Center City, Moore Lake and the North Area. Mr. Qureshi explained that what was needed of the HRA was approval of this overall Conceptual Plan for future project improvement expenditures. The Plan addresses project expenditures consistent with the statutory requirements regulating use of increment. With the approval of the Plan, the specifics of each project and its cost can be determined by the HRA as the project becomes a reality. Mr. Qureshi noted that the $6.8 million figure was conservative, as staff had used existing development and had not considered the values of developments to be constructed within the next 7 years; also, no allowances had been made for inf lation. MOTION BY MR. MEYER, SECONDED BY MR. PRAIRIE, TO APPROVE THE CONCEPTUAL PLAN FOR POTENTIAL PROPOSED IMPROVEMENTS AND DEVELOPMENT ASSISTANCE IN THE CENTER CITY AREA, MOORE LAKE AREA AND THE NORTH AREA. UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPERSON SCHNABEL, DECLARED THE MOTION CARRIED UNANIMOUSLY. HOUSING & REDEVELOPMENT AUTHORITY MEETING, DECEMBER 11, 1986 PAGE 17 9. CONSIDERATION OF ENTERING INTO A JOINT POWERS AGREEMENT FOR THE IMPROVEMENT OF THE INTERSECTION OF MISSISSIPPI STREET ND UNIVERSITY AVENUE WITH THF COUNTY IIGH A Y DEPARTMENT: Hr. Qureshi stated he would recommend that the HRA approve the improvements of the intersection of Mississippi and University by the Highway Dept. and recommend that the City Council enter into a Joint Powers Agreement with the Highway Dept. for this cost. MOTIOII BY MP.. HEYER, SECONDED BY MR. PRAIRIE, TO APPROVE THE IMPROVEMENT OF THE INTERSECTION OF MISSISSIPPI ST. AND UNIVERSITY AVE. WITH THE ANOKA COUNTY HIGHWAY DEPARTMENT AND TO RECOMMEND THAT THE CITY COUNCIL ENTER IllTO A JOINT POUERS AGREEMENT WITH THE ANOKA COUNTY HIGHWAY DEPARTMENT FOR THIS IMPROVEMENT. UPON A VOICE VOTE, ALL VOTING AYE, VICE- .:HAIRPERSOII SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 10. PRFSENTATION OF THE 1985 FINANCIAL STATFH ENT: Item continued until the next meeting. 11. CONSIDERATION OF APPOINTMENT OF AUDITOR FOR FISCAL YEAR 1986 (GEORGE t1. Mr. Pribyl stated he would recommend the HRA again appoint George M. Hansen Co. as the [IRA's Auditor for Fiscal Year 1986. MOTION BY MR. PRAIRIE., SECONDED BY MR. MEYER, TO APPOINT GEORGE M. HANSF.N CO. AS THE BRA'S AUDITOR FOR FISCAL YEAR 1986. UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 12. CLAIMS: MOTION BY MR. MEYER, SECONDED BY MR. PRAIRIE, TO APPROVE, THE CHECK REGISTER DATED DECEMBER 11, 1986, AS PRESENTED BY STAFF. UPON A VOICE VOTE., ALL VOTING AYE, VICE- CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. ADJOURPIP1E 1IT: Vice- Chairperson Schnabel declared the December 11, 1986, meeting adjourned at 11:20 p.m. Respectfully submitted, Lynne Saba Recording Secretary r J oc> `Utn� 79co� EXHIBIT A UNIVERSITY AMAE 013 laR FLAN December 11, 1986 A. CITIZEN CONCERNS: — UVKEPT CONDITION — UVS I GHTLY FENCE SOUTH OF 69TH - RURAL DITCHES NORTH OF 69TH — VISUAL LACK OF ORDER — LACK OF PEDESTRIAN FACILITIES B. KEEPING FRIDLEY C04PETITIVE: — SUBURBAN SHIFT TO OFFICE DEVELOPMENT — DEVELOPERS DESIRE FOR ATTRACTIVE ENTRANCE AND SURROUNDINGS — PRIVATE INVESTMENT $ = PROPERTY TAX $ I�HAT? -T A. R..tu�T I NG AND SCREEN I NG 6141( 5MK 1613( W/0 FENCE I INTERSECTION PLANTING g. INTERSECTION IMPRCNBr1ENT s 1,0531( 1,053K SOCK ( 5013( BRICK 8 CURB, T 9n 409K ' 409K ( 409K C. STREET LIGHTING _ INTERSECTION 8 FRONTAGE $2,667K $1.9941( 1$1,431K $1,059K L _.. .� O O ► O ► O po� O O Q O O ^ O O C 0 p O O ► 0 p O O po O 4. N N N •O-1 •'4 co O O O \ C O O cif O p C O► O tin C In qw r4 la% O O C p p O O p p O O O O Ln N N N N O C C) O M O m M O CD O O '"6 m rl r O O O O O • co O O O • O N V-4 CV) N CF► M� • O O W • p O — • O . • _ Ln In O 100 x • LU Cl CD °o °o °o °0 0 0 °o 0 0 0 0 0 • ab Go �-+ 0 0 0 in 0 L • o� ao r �o .� �o 0o c c r, c r, • 3 w w O d YY w C I d . Aj " w"� ads �� • • >tj'sw O O Q�� 4 w 4. GL -•� •• 1 ,C W W N • -V4 10 4 c ro go r-4 r4 90 .0 a s o .. v .-4 4 y M L j�ar'o Ox N 5,9a oca N co co �ZO a �o c w co 0 N, N .�1 P11 X W p O g O O � p p O •-i O O •� co Ln in An OD C1 • CD O O p O ON O O O O p O O ' 1011 O O O 1011 O • r p in N O • r-1 Q • • p p O ' Co O O O O O O S 1 O • O O O O O O O O G . . • . • . 0 O ' 1Ln O O O O U) co CD 0 Ln Ln O . tr 1- O %D 1l1 in N .-1 1I- } ' t? • • ' fA ' C ' U E 4) Ae y A u to � �4 w 4 to to to r4 0 0 m I w ~ . .-4 G 1 NOTICE OF PUBLIC HEARING FRIDLEY HOUSING AND REDEVELOPMENT AUr11ORITY NOTICE IS HEREBY GIVEN that the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota (the "HRA "), will hold a public hearing at its regular meeting to be held on Thursday, January 8, 1987, at the Fridley City Hall, 6431 University Avenue NE, Fridley, Minnesota, commencing at 7:00 p.m., CT, on the proposed sale, lease or other disposition by the HRA of real property generally located directly east of the Springbrook Nature Center, north of 83rd Avenue, south of 85th Avenue and west of University Avenue, in Fridley, Minnesota. The subject property is located within the HRA's Redevelopment Project No. 1, and the proposed dispostion thereof is being considered in connection with a development project for the property. All persons appearing at the public hearing will be given an opportunity to present their oral or written canrents on the proposal. LAWRENCE OCK4ERS Chairman Fridley Housing and Redevelopment Authority Publication date: December 29, 1986 2 RESOLUTTION NO. HRA- -1986 A RESOLUTION AUTHORIZING THE EXECUTION OF A CONTRACT FOR PRIVATE DEVELOPMENT WITH THE UNIVERSITY AVENUE ASSOCIATES, A MINNESO`TA PARTNERSHIP IT IS HEREBY RESOLVED by the Board of Commissioners (the "Board ") of the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota (the "Authority ") as follows: 1. Recitals: A. The Authority has all the powers of a housing and redevelopment authority under the Municipal Housing and Redevelopment Act, Minnesota Statutes, Sections 462.411 to 461.716, inclusive, as amended (the "Act "). B. In furtherance of the objectives of the Act, the Authority has undertaken a program to acquire, or otherwise promote development of open or undeveloped land and in this connection is engaged incarrying out the redevelopment project known as the Authority's redevelopment Project No. 1 (the "Redevelopment Project ") in an area (the "Project Area ") located in the City. C. There has been prepared and approved by the Authority and the City Council of the City, pursuant to the Act, a Modified Redevelopment Plan for the Redevelopment Project (the "Redevelopment Plan") . D. In order to achieve the objectives of the Redevelopment Plan and particularly to make the land in the Project Area available for development by private enterprise in conformance with the Redevelopment Plan, the Authority has determined to provide substantial aid and assistance in connection with the Redevelopment Plan. E. The University Avenue Associates, a Minnesota partnership, has presented the Authority with a proposal for the construction, within the Project Area, of a 358 unit apartment complex and a certain Contract for Private Development between the Authority and the University Avenue Associates (the "Development Contract ") , stating the terms and conditions of such development and the Authority's responsibilities respecting the assistance thereof. F. The Board hereby approves the Contract for Private Development and authorizes the Chairman and Executive Director to execute the same on behalf of the Authority, with such additions and modifications as those officers may deem necessary. G. Upon execution and delivery of the Development Contract, the 2A RESOLUTION N0. HM----71986 PAGE 2 officers and employees of the Authority are hereby authorized and dikected to take or cause to be taken such actions as may be necessary on behalf of the Authority to implement the Development Contract. PASSED AND ADOPTED BY THE HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF FRIDLEY THIS _ DAY OF , 1986. JOHN "JOCK" ROBERTSON, EXECUTIVE DIRECTOR HOUSING AND REDEV=PMENT AUTHORITY E ARTICLE III Soil Correction Section 3.1. Condition of Property. The parties acknowledge that the existing soil condition of the Development Property is substandard and is unsuitable for construction of the Minimum Improvements required under this Agreement without the Company engaging in substantial grading, soil replacement, dewatering, and other soil correction work. The Company represents that in its best opinion it will incur expenses in excess of $1,000,000.00 in performing the soil correction work necessary to construct the Minimum Improvements on the Development Property. Section 3.2. Authority Assistance. In order to encourage and induce the Company to construct the Minimum Improvements, the Authority agrees to financially assist the Company for a portion of the expenses it incurs in making the corrections described in Section 3.1. in an amount of $100,000.00 for Phase I and $50,000.00 for Phase II. Section 3.3. Method of Reimbursement. (a) Prior to the Authority reimbursing the Company for a portion of the expenses it has incurred in correcting the soils of the Development Property, the following events must have occurred: (i) The Authority having issued a Certificate of Completion for the Minimum Improvements for each parcel. (ii) The Company providing to the Authority a written report prepared by a qualified licensed engineer, which report shall describe in sufficient detail the nature of the soil correction work required on the Development Property in order to construct the Minimum Improvements and the engineer's estimate of the reasonable cost of completing this work, ( "Estimate "). (b) Providing that the engineer's estimate described in Section 3.3 (a)(ii) exceeds $1,000,000.00 for both parcels combined, then within 30 days of the completion of the events described in Section 3.3.(a)(i) -(ii) for each parcel, the Authority shall reimburse the Company for a portion of its Actual Soil Costs in the amounts provided for in Section 3.2. In no event shall the Authority reimburse the Company more than $100,000.00 for Parcel I and $50,000.00 for Parcel II. 3 - 1 3A ARTICLE IV Construction of Minimum Improvements Section 4.1. Construction of Minimum Improvements. The Company agrees that it will construct the Minimum Improvements onnstructionoPlans and Property CitycAgreemente with the approved Co Section 4.2. Certificate of Completion. A Certificate of Completion means the certificate (or certificates, if issued separately for the Minimum Improvements to be constructed on the Development Property), in the form attached as Exhibit B hereto, to be to pro iddby the Agreement, upon Authority to the Company p satisfactory completion of the Minimum Improvements. (a) Promptly after completion of the Minimum Improvements to be constructed on Parcel I or Parcel II, as the case may be, and upon written request made by the Company, the Authority will furnish the Company with a Certificate of Completion thereof, in substantially the form set forth in Exhibit B attached hereto. That no Event of Default shall have occurred and be continuing under the terms of this Agreement shall be a condition precedent to the issuance of the Certificatel(oI and II) Certificates, if issued separately of Completion. A Certificate of Completion shall be a conclusive determination of satisfaction and termination of the agreements and covenants in this Agreement with respect to the obligations of the Company to construct the Minimum Improvements covered by said Certificates. ue (b) If the Authority determines that it cannot issdays the Certificate of Completion, it shall, withi the after written request by the Company, provide Company with a written statement indicating adequate i detail in what respects the Company I complete the Minimum Improvements in accordance with the provisions of the City Agreement or is otherwise in default under the terms o this DefaultAgreement hereundera, nand without limitation an Event what measures or acts it will be necessary for the Company to take or perform in order to obtain such 1 Certificate of Completion. 4 — 1 W EXHIBIT B CERTIFICATE OF COMPLETION WHEREAS, the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, a public body corporate and politic (the "Authority "), and Vantage Properties, Inc. (the "Company ") executed a certain Contract for Private Development (the "Development Agreement ") of the above - mentioned Development Property, and the issuance of this certificate was a contemplated occurrence thereunder; and WHEREAS, the Company has to the present date performed said covenants and conditions insofar as it is able in a manner deemed sufficient by the Authority to permit the execution and recording of this certification: NOW, THEREFORE, this is to certify that a certificate of occupancy has been issued by the City of Fridley, Minnesota, and that, with respect to Phase (as defined in the Development Agreement), all building construction and other physical improvements specified to be done and made by the Company have been completed and the above covenants and con- ditions in said Development Agreement have been performed by the Company therein. THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA By Its B - 1 ant�a ag�e� 11095 Viking Drive, Suite 260 •Eden Prairie, MN 55344 • (612)944 -t000 Companies Minneapolis Division December 18, 1986 Mr. Jock Robertson Community Development Director City of Fridley 6431 University Avenue North East Fridley, Minnesota 55432 RE: Soil Correction Assistance Dear Jock: Enclosed is the revised certification you requested for the soil correction needed at our site. This certification is dated December 8, 1986 and is signed by Dale Beckmann of BRW. Attached to and referenced within this certification are the legal descriptions for the property. Please let me know the timing as to the receipt of the $100,000 from the H.R.A. As always, if you have any questions, please don't hesitate to call. Sincerely, VANTAGE PRO RTIES, INC. Kelly J. Doran Marketing Representative Minneapolis Division KJD:k jg CC: Matt Nicoll David Molda David Mitchell Nasim Querish • Commercial Real Estate Investors and Developers 3C 3D IC1til —J BENNETT RINGROSE WOLSFELO jARMS GARDNER INC • THRESr ER SQUARE December 8, 1986 Vantage Companies 11095 Viking Drive Suite 260 Eden Prairie, Minnesota 55344 Attn: Mr. David Molda RE: Fridley Soils Correction Dear David: PLANNING TRANSPORTATION ENGINEERING ,� �� ARCHITECTURE 700 THIRD STREET &:4,\SC NNEAPOLIS MN 554'5 • P-ONE 612 370 0700 1�\� I have reviewed the related soils correction costs for the property legally described on Exhibit A hereto attached and located at 8150 University Avenue North, Fridley, Minnesota. I have determined the following costs to be asso- ciated with the soils correction: Soil Correction Contract (Park Construction) $ 959,784 Soil Borings (Twin City Testing) $ 4,125 Soils Testing for Site Correction Work Contract (Twin City Testing) $ 14,950 Soils Correction Engineering (BRW) $ 9,650 Drain Rock (Lower Water Table) $ 3,036 * Capitalized Interest (Soil Correction Work) $ 21,447 Total $1,012,992 *Anticipate additional $3,500 in interest expense prior to final pay application. Included in the cost of the soils correction work, completed by Park Construction, is approximately 175,000 cubic yards of peat and other unsuitable building materials which was excavated from the site and truck hauled to dispo- sal areas. In addition, approximately 200,000 cubic yards of granular backfill material was hauled into the site for the building pads and parking lots. Throughout the excavation process, extensive dewatering of the excavation was required. This required a substantial amount of "wells" and an elaborate discharge system to be operated 24 hours a day. DWID J SENNETT DONALD W R04GROSE RICHARD P WOLSFELD PETER E JARVIS LAWRENCE J GARDNER THOMAS F CARROLL CRAIG A AMUNDSEN DONALD E HUNT MARK G SWENSON JOHN B McNAMARA DONALD L. CRAIG RICHARD O PILGRIM DALE N BECKMANN DENNIS J SUTUFF MINNEAPOUS DENVER BRECKENRIDGE PHOENIX 3E Mr. David Molda December 8, 1986 Page 2 Considering the magnitude of the unsuitable soils and the volume of granular material imported for this project, the contract amount appears reasonable. If you need more information, feel free to give us a call. Sincerely yours, BENNETT - RINGROSE - WOLSFELD - JARVIS- GARDNER, INC. Dale N. Beckmann Senior Associate DNB /sk Attachment Exhibit A 3F 121, 5 -8664 LAND DESCRIPTION FOR VANTAGE PROPERTIES, INC. WHOLESALE CLUB FRIDLEY PROPOSED PROPERTY DIVISION PROPOSED SOUTHERLY PARCEL DESCRIPTION The South 3.00 feet of the North 425.23 feet of the South 877.87 feet of all that part of the Southwest Quarter of the Northwest Quarter (SW 1/4 of NW 1/4) of Section 2, Township 30, Range 24, Anoka County, Minnesota, lying westerly of State Trunk Highway 47 excepting the easterly 600 feet thereof. That judicial landmarks have been placed pursuant to Torrens Case 1T -1944 at the Northeast corner, the Northwest corner, the Southwest corner and the Southeast corner of the North 425.23 feet of the South 877.87 feet of all that part of the Southwest Quarter of the Northwest Quarter of Section 2, Township 30, Range 24, Anoka County, Minnesota, lying Westerly of State Trunk Highway 47. I hereby certify that this land description was prepared by me or under my direct supervision and that I am a duly registered Land Surveyor under the laws of the State of Minnesota. 1 7 Marvin G. Lovlein MN. REG. NO. 17259 Date Vtc.. S /918 6 Sheet 2 of 4 Sheets Exhibit A 3G /21, 5 -8664 LAND DESCRIPTION FOR VANTAGE PROPERTIES, INC. WHOLESALE CLUB FRIDLEY PROPOSED PROPERTY DIVISION PROPOSED NORTHERLY PARCEL DESCRIPTION The North 422.23 feet of the North 425.23 feet of the South 877.87 feet of all that part of the Southwest Quarter of the Northwest Quarter (SW 1/4 of NW 1/4) of Section 2, Township 30, Range 24, Anoka County, Minnesota, lying westerly of State Trunk Highway 47 excepting the easterly 600 feet thereof. That judicial landmarks have been placed pursuant to Torrens Case #T -1944 at the Northeast corner, the Northwest corner, the Southwest corner and the Southeast corner of the North 425.23 feet of the South 877.87 feet of all that part of the Southwest Quarter of the Northwest Quarter of Section 2, Township 30, Range 24, Anoka County, Minnesota, lying Westerly of State Trunk Highway 47. Subject to a permanent easement for storm sewer and drainage purposes in favor of Vantage Properties, Inc., over, under and across the westerly 270.00 feet of the herein described property. Subject to a permanent easement for ingress and egress, emergency vehicle access, pedestrian access, parking and building appurtenance purposes in favor of Vantage Properties, Inc., over, under and across the southerly 60.00 feet of the herein described property. Subject to easements of record. I hereby certify that this land description was prepared by me or under my direct supervision and that I am a duly registered Land Surveyor under the laws of the State of Minnesota. % ' I % 4- Marvin G. Lovlein MN. REG. NO. 17259 Date Dad. 5- J98,6 Sheet 3 of 4 Sheets • Exhibit A 3H 021, 5 -8664 LAND DESCRIPTION FOR VANTAGE PROPERTIES, INC. WHOLESALE CLUB FRIDLEY PROPOSED PROPERTY DIVISION PARENT PARCEL DESCRIPTION The North 425.23 feet of the South 877.87 feet of all that part of the Southwest Quarter of the Northwest Quarter (SW 1/4 of NW 1/4) of Section 2, Township 30, Range 24, Anoka County, Minnesota, lying westerly of State Trunk Highway 47 excepting the easterly 600 feet thereof. That judicial landmarks have been placed pursuant to Torrens Case #T -1944 at the Northeast corner, the Northwest corner, the Southwest corner and the Southeast corner of the North 425.23 feet of the South 877.87 feet of all that part of*the Southwest Quarter of the Northwest Quarter of Section 2, Township 30, Range 24, Anoka County, Minnesota, lying Westerly of State Trunk Highway 47. Sheet 1 of 4 Sheets The Easterly 600 feet of the North 425.23 feet of feet of all that part of the Southwest Quarter of of Township Anoka County, Westerly of Exhibit A the South 877.87 the Northwest Quarter Minnesota, lying That Judicial Landmarks have been placed pursuant at the Northeast corner, the Northwest corner, the and the Southeast corner of the North 425.23 feet feet of all that part of the Southwest Quarter of of Township Anoka County, Westerly of to Torrens Case #T -1944 Southwest corner, of the South 877.87 the Northwest Quarter Minnesota, lying 3I 3J Section 4.3. Commencement and Completion of Construction. Subject to Unavoidable Delays, the Company shall commence construction of the Minimum Improvements to be constructed on Parcel I within 120 days of execution of this Agreement and on Parcel II within 60 months of execu- tion of this Agreement or on such other date as the Parties shall mutually agree in writing. Subject to Unavoidable Delays, the Company shall have substantially completed the construction of the Minimum Improvements on Parcel I within 9 months of the date of this Agreement and on Parcel II within 72 months of the date of this Agreement. Section 4.4. Uses. It is agreed that on the Southeast Parcel there shall not be located or constructed any busi- ness or building that engages in automotive or motor vehicle repairs or service, or that sells gasoline, fuels or motor vehicle parts. Section 4.5. Setback. It is agreed that the "setbacks" (as used in the Fridley Zoning Code) for Parcels I and II along the service road and 81st Avenue shall be as indicated in the Development Plan. All other setbacks shall be as provided in the Fridley Zoning Code. Section 4.6. Billboard. It is agreed that the bill- board currently leased to Naegele and located adjacent to I University Avenue on the Development Property shall be removed at no expense to the City on or before December 31, 1986. 4 - 2 Information for this item was prcudsed by Lou Lundgren for Friday, January 2, 1987 but was not received. �= COMMUNITY DEVELOPMENT DEPARTMENT anoF FWD-LY MEMORANDUM - MEND M: Housing 6 Redevelopment Authority Members MEMJ FROM: Jock Robertson, Executive Director of BRA MEND DATE: January 2, 1987 PK.JWING: Proposal to Amend Redevelopment Plan to Include South End of University Gbrridor As directed by the BRA at the last meeting, staff has investigated the possibility of aquiring marginal properties at the south end of the University Avenue corridor. We have determined that a Tax Increment Financing District could be established. The attached map indicates potential Project Area Expansion. If the BRA wishes to proceed with such an amendment, it may be necessary to move quickly. She State Legislature is expressing interest in drastically restricting TIF enabling statutes. Staff estimates that the amendment could be accomplished in a minumum of two months with the following 10 steps: 1. Amend Redevelopnent Plan to include Project Area. 2. Set up Tax Increment Finance plan. 3. HM approval of Plan by resolution. 4. Set City Council Public Hearing - not sooner than 30 days after information is sent to County Board, County Auditor and affected School Districts. 5. Send Plan to County Board, County Auditor and affected School Districts - 30 days to respond. * send signed Public Hearing notice showing 30 day period * sided affadavit from Rick Pribybl showing when plan and Public notice sent 6. Notify Paper for Public Hearing notices (10 day notice). 7. City Council Public Hearing. 8. City Council approval by resolution. 9. Send copy of plan and approvals to County Auditor for Certification of base assessed value. 10. Send copy of plan and approvals to State Department of Energy and Econanic Development after certification is received. 5A HRA Mmbers January 2, 1987 Page 2 In order to initiate the process the HRA would direct staff to: 1. Determine which portions of Project Area Expansion could be Economic Developnent areas (8 years) and which could be Redevelopment areas (25 years). 2. Prepare a draft Redevelopment Plan Amendment including a TIF Plan for parcels indicated on the attached map. JLP/dm M-87-2 January 2, 1987 SB NO N ,, ID_ MANOR AOO- ISr �• - -`i!i`. _emu �i i4 TRUNA '•'�Nw A -4 , N -- 5 cTE •,wr I __, hQ -7E p.. T . � ' �• -� ii � .� �-�`•- ' III 1PPY \ P��t It�,.� ,�'•r r_ �J AVE. 1-- -ASE -_ rd AVE Proposed Project Area No. 1 Expansion _ _ - - - -- T.I.F. N” rig; (t I - f_ _ .� �• ~ 1 TN AVENUE 3M.1 �— Y '59TH /- „.. �I =F • II. 'SIB AVENUE —A` ` ' #,r v� ��, �„a�� Zr = }_mow._ x _r.�•_f, • - -•.�� t r - r'C. NO N ,, ID_ MANOR AOO- ISr �• - -`i!i`. _emu �i i4 TRUNA '•'�Nw A -4 , N -- 5 cTE •,wr I __, hQ -7E p.. T . � ' �• -� ii � .� �-�`•- ' III 1PPY \ P��t It�,.� ,�'•r r_ �J AVE. 1-- -ASE -_ rd AVE Proposed Project Area No. 1 Expansion _ _ - - - -- T.I.F. N” Information for this item will be available at the Meeting. CLAIMS 1557 - 1560