HRA 02/12/1987 - 6528HOUSING & REDEVELOPMENT AUTHORITY
FEBRUARY 12, 1987
7 :00 P.M.
Jock Robertson
Executive Director of HRA
CITY OF FRIDLEY
AGENDA
HOUSING & REDEVELOPMENT AUTHORITY MEETING THURSDAY, FEBRUARY 12, 1987 7:00 P.M.
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Location: Council Cpamber (upper level)
CALL TO ORDER:
ROLL CALL:
APPROVAL OF MINUTES:
Housing & Redevelognent Authority Minutes: January 8, 1987
ADOPTION OF AGENDA:
CONSIDERATION OF,ACQUSITION OF RICE PLAZA OR ENTE ING'T-NTO A . . . 1
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MASTER. LEASE - - I— ' k . '' -
CONSIDERATION OF DRAWING ON LOU LUNDGREN'S LETTER OF CREDIT . . . . . . 2
UPDATE ON LAKE POINTE CORPORATE CENTER DEVELOPMENT PRa=. 3 30
CONSIDERATION OF A RESOLUTION (1) REQUESTING THAT THE FRIDLEY 4 - 4B
CITY COUNCIL AUTHORIZE CONSTRUCTION OF THE INTERSECTION
IMPROVEMENTS TO TRUNK HIGHWAY 65 AND WEST MOORE LAKE DRIVE AND JI.
WAIVE THE PUBLIC HEARING RELATING THERETO AND (2) APPROVING AND
AUTHORIZING THE REIMBURSEMENT TO THE CITY OF FRIDLEY, ON A
MONTHLY BASIS, FOR THE COST OF THESE INTERSECTION IMPRUM=S.
CLAIMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . -5
OTHER BUSINESS:
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CITY OF FRIDLEY
HOUSING & REDEVELOPMENT AUTHORITY MEETING, JANUARY 8, 1987
CALL TO ORDER:
Chairperson Commers called the January 8, 1987, Housing & Redevelopment Authority
meeting to order at 7:15 P.M.
ROLL CALL:
Meribers Present: Larry Conmers, Duane Prairie, John Heyer
rlenbers Absent: Virginia Schnabel, Walter Rasmussen
Others Present: Jock Robertson, [IRA Executive director
Nasim Qureshi, City tlanager
Dave NeHman, HRA Attorney
Rick Pribyl, Finance Director
Sanantha Orduno, Management Assistant
Ken Belgaarde, 7841 Ilayzata Blvd.
Barry Yaffee, 7841 1-lavzata Plvd.
Sherrill Kuretich, 7900 Xerxes Ave. S.
Louis & June Lundgren, Lundgren Associates
APPROVAL OF DECEMRER 11, 1986, HOUSING & RFDEVFLOPTIENT AUTHORITY MINUTES:
MO=0 "7 BY MR. PRAIRIE, SFCONDED BY MR. MEYER, TO APPROVE THE DEC. 11, 1986,
HOUSING 6 REDEVELOPMENT AUTHORITY MINUTES AS WRITTEN.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION
CARRIED UNANIMOUSLY.
Mr. Conmers stated he would like to have a schedule of the Rice Plaza Center
leases made available to the Commission.
1. PUBLIC HEARING ON THE SALE, LEASE OR OTHER D?SPOSITInN BY THE HRA OF RFAL
PROPERTY GENERALLY LOCATED DIRECTLY EAST OF THE S RI dGB OOY °IATIIRF CENTER,
NORTH OF 83RD AVENUE, SOUTH OF 85TH, AND HEST OF 0NIVERSITY AVENUE:
MOTION BY MR. MEYER, SECONDED BY MR. PRAIRIE,, TO OPEN THE PUBLIC HEARING.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON CO.MMF,R.S DECLARED THE PF'BLIC
HEARING OPEN AT 7:19 P.M.
Mr. Robertson stated the subject property was located directly east of the
Springbrook Nature Center, north of 83rd Avenue, south of 85th Avenue, and
west of University Avenue. This was a preliminary site plan for the develop-
ment of a 358 -unit apartment complex. They understood that the final regula-
tory decisions were scheduled by the City Council at the end of January.
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HOUSING & REDEVELOPMENT AUTHORITY MFFTING, JANUARY 8, 1987 PAGF 7
Mr. Robertson stated the developer was waiting for the final permit from the
Corps of Engineers.
Mr. Robertson stated he would turn the meeting over to the developers for
any statements they would like to make.
"1s. Sherrill Kuretich stated she was speaking on behalf of the developers. She
stated she would not make a formal presentation as the HRA had probably
already heard a great deal about the project. She just wanted to update the
HRA on the status of the land acquisition. They did close on a contract for
deed with the landowner in December, so the preliminary ren0 rements to the
development contract have been fulfilled to the effect that they now own the
property. They will be deeding it over to the HRA. At such time as the
financing is in place for the project, they will be asking the HRA to then
deed it hack to then in accordance with the provisions in the development
contract. She stated she was willing to answer any questions the HRA members
might have.
f1r. Meyer stated that as far as the Nature Center was concerned, had anyone
associated with the Nature Center expressed any problems or concerns with this
development?
Ms. Kuretich stated they had not. If anything, the people from the Springhrook
Nature Center were very pleased with the project and the things being done in
the Nature Center itself.
Mr. Meyer asked if the HRA needed to be concerned about access from this site
to 85th Ave.
Ms. Kuretich stated she did not think that was an issue that needed to he
resolved at this time; however, the City was getting an easement over the
northerly portion of the site that would be available for that connection to
the north if it was needed.
Mr. Robertson stated the City Council would make the final determination on
the access road.
MOTION BY MR. PRAIRIE,, SF,COIIDFD BY MR. MF,YFR, TO CLOSE THE PUBLIC HF.APINC:.
UPON A VOICE VOTE, ALL VOTING AYE,, CHAIRPERSON COMMFRS DECLARED TIIF, PUBLIC
HEARING CLOSED AT 7:30 P.M.
2. CONSIDERATION OF A RESOLUTION AUTHORIZING THE EXECUTION OF A CONTRACT FOR
PRIVATE DEVELOPMENT BETWEEN THE HRA AND UNIVERSITY AVENUE ASSOCIATES FOR THE
CONSTRUCTION OF A 353 -UNIT RENTAL APARTMENT COMPLEX:
Mr. Commers stated the HRA members had a copy of a draft contract for private
development between the HRA and University 6 enue Associates. tie stated they
have discussed this at length before, but he would like to review it again
briefly with legal counsel.
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HOUSING & REDEVELOPMENT AUTHORITY MEETING, JANUARY 8, 1987 PAGE 3
Mr. Comers asked Mr. Newman to clarify for the record what was done with
respect to the interest in years in terms of deferrel through years 4, 5,
and 6.
Mr. Neuman stated the interest would begin to run at 80 in years 4 and 5.
There would he no payment for those two years. The interest for those two
years would be divided on a pro -rated basis for the last 10 years, years
6 -15. The interest was approximately $136,000. Under Section 4.5, the
developer has posted a letter of credit in that amount, and that letter of
credit would expire upon completion of the construction.
Mr. Comers stated that as he understood it, they were not going to require
a letter of credit as they normally require to ensure the development, but
instead they were getting personal guarantees.
Mr. Newman stated that in this case, they have both personal guarantees- -for
the payment of the second mortgage and payment of the taxes - -plus a letter of
credit for the two years.
fir. Commers stated he did not see the section that included the personal
guarantees.
fir. Newman stated that apparently the personal guarantees had not been attached
to the copy of the development agreement the HRA members had at the meeting,
but had been given to them previously. He stated he would get a copy of the
personal guarantees to the members.
Mr. Comers stated that if they are going to approve the development agreement
at this meeting, they should have the complete document before then.
Mr. Newman agreed in that respect, but as far as the development quality plan,
it has been practiced some times in the past that because of onqninq desion,
that portion of the document might not be completed prior to execution of the
development agreement.
Mr. Coroners stated some members of the HRA have expressed a desire that prior
to adoption, they would like to at least have some review of the types of
materials being used on the outside of the building, etc. He was not surf
they wanted to get into too much detail.
Mr. Robertson stated the development quality plan was in the draft stage
subject to final verification from the developers on the materials, etc.
They have discussed the draft and have gotten an agreement on it, and they
are waiting for other portions such as the final site plan. The final site
plan cannot be completed until the developers qet the permit from the Corps
of Engineers. It was his understanding that the development quality plan
would be approved first before the development agreement was actually
consummated.
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HOUSING & REDEVELOPMENT AUTHORITY MFFTIMG, JANUARY 8, 1487 PAGE 4
Mr. Meyer stated the Agreement stated that: "The Authority shall have no
obligations of the developer to take any action pursuant to any provisions
of this Agreement until such time as the developer has submitted construction
plans to the Authority."
Mr. Meyer stated he interpreted that to mean that even though they approved
the development agreement, they would have a grace period beyond it.
Mr. Newman stated the question raised several months ago on the Lake Pointe
Development site was: How do they ensure quality? The farther they get into
the specifics of the plans, the easier it is to define it. In this case, the
developers are quite far along in the design proposal for the project, so,
in essence, the City was taking their floor plans and specifications and
incorporating those into a development quality plan. Of course, even after
the development agreement was signed, the developers are going to he doing
additional designing and planning. The final construction plans will also
have to he submitted to the City to make sure the final design conforms with
the development agreement.
Mr. Robertson stated he would get a copy of the draft develonment quality plan
for the HRA members.
MOTION BY MR. MEYER, SECONDED BY ME. PRAIRIE, TO ADOPT RESOLUTION NO. HRA-
1987, 1
"A RESOLUTION AUTHORIZING THE EXECUTION OF A CONTRACT FOR PRIVATE
DF.VF,LOPMENT WITH THE UNIVERSITY AVENUE ASSOCIATES, A MINNESOTA PARTNERSHIP ".
Mr. Coroners stated he would like the record to show that the HRA had been
presented with a copy of the Tax Increment Guarantee Agreement which would
be executed by fir. Belgaarde and fir. Yaffee.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERS017 C0111fF,RS DECLARED TH)- mOTION
CARRIED UNANIMOUSLY.
3. CONSIDERATION OF ISSUING A CERTIFICATE OF COMPLETION TO VA14TAGE C- MPAMIJS FOR
COMPLETION OF THE WHOLESALE CLUB AND AUTHORIZING THE RELEASE OF $30,0007IFF
SOIL CORRECTION ASSISTANCE PER THE DEVELOPMENT AGREEMENT:
MOTION BY MR. PRAIRIE, SECONDED BY MR. MEYER, TO AUTHORIZE. STAFF TO ISSUE A
CERTIFICATE OF COMPLETION TO VANTAGE. COMPANIES FOR--T7- COMPLETION OF THE
WHOLESALE CLUB AND TO AUTHORIZE THE RF,LEASF, OF $30,000 ,�N SOIL CORRECTION
ASSISTANCE AS PER THE DEVELOPMENT AGRF.F.MENT.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION
CARRIED UNANIMOUSLY.
4. TABLED: CONSIDERATION OF DRAWING ON LOU LUNDGREN'S LETTER OF CREDIT:
Mr. Commers stated they have had this before the HRA several times in the
past. There have been several extensions by the HRA relative to the drawing
on '1r. Lundgren's letter of credit. It was his understanding that Mr. Lunrl4ren
was supposed to present some information to the HRA at this meeting.
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HOUSING b REDEVELOPMENT AUTHORITY MEETING, JANUARY 8, 1987 PAGF 5
Mr. Robertson stated no information had been received from Mr. Lundgren.
He had talked to fir. Lundgren, and fir. Lundgren had apologized and said
that because of extenuating circumstances, he was unable to get this material
to the HRA. Mr. Lundgren was at the meeting to give the HRA an update and
why he was not able to get this material to the HRA.
Ms. Kuretich stated that at the sec. HRA meeting, she had told the HRA she
expected they would have two things by this meeting: (1) a feasibility report
on the project by Meritor Mortgage Corp.; the local mortgage lender fir. Lundgren
was now working with on the financing, and (2) a schedule.
Ms. Kuretich stated she would like to tell the HRA what they have done since
the last meeting. They have met with Meritor several times and they have also
met with FHA, the local HUD office, about the project. They did not receive
an answer from HUD until Tuesday afternoon, so they were unable to qet any
written materials together for the HRH's meeting.
Ms. Kuretich stated the FHA has gone out and looked at the site and has looked
at the submissions made by Meritor Mortgage and fir. Lundgren including cash
flow projections, the renderings, and the plans to the extent those are
available. The FHA people do not believe that a high -rise or mid -rise building
is appropriate to this site. She stated Mr. Lundgren does not agree with the
FHA and does not believe the City agrees with the FHA in light of the fact that
in order to produce the tax increment needed for the project, there would have
to he a higher density than a 3 -story loan -rise huilding. Meritor said that
someone from the FHA office had talked to someone at the City who said the
Citv did not want a mid -rise building. She stated this had caused Mr. Lundgren
some concern, because it was contrary to what they had been presented and what
they had assumed the City wanted. She stated she normally did not repeat third -
hand information, but she felt this was serious enough to get a verification
from the HRA and Staff that they had, in fact,not changed their view with
respect to the density of this development.
Ms. Kuretich stated the net result was that the FHA has indicated to Mr. Lundgren
that they are not willing to look at this project for FHA insurance as long
as it is a mid -rise project proposed for the site. The elderly portion of
this project would he a six -story mid -rise building.
Ms. Kuretich stated Mr. Lundgren was continuing to wor4, with Meritor Mortgage
to have access to a number of other guarantors, insurers, and conventional
sources of financing. He is also working with other sources in other parts of
the country.
Ms. Kuretich stated she could only reiterate what she had asked the HRA in
the past, and that was that they are continuing to explore every alternative
available. They had a commitment to do this project from the FHA, but it was
prior to the Tax Reform Act which has totally thrown everything into a tailspin.
As long as the HRA was holding the letter of credit which was drawable until
June 1987, they would like the opportunity to continue to explore all the
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HOUSING & REDEVELOPMENT AUTHORITY MEETING, JANUARY 8, 1987 PAGE F
alternatives, always keeping in mind that the HRA could draw on that letter
of credit in the event another developer comes along with a project they
like better or think might be more successful in performing. She did not
think it could hurt the HRA to continue to hold that letter of credit as long
as it can be drawn upon. On the other hand, as she had stated last month,
if that letter of credit was drawn upon at this time, Mr. Lundgren wnuld he
called upon by the bank to immediately reimburse the bank for the amount of
the letter of credit. That would effectively kill any opportunity Mr. Lundgren
would have to proceed with the project.
11s. Kuretich stated they do not believe any other developer would he in any
better position than Mr. Lundgren to put together the financing necessary
for the project as it has been proposed. The FHA made its decision soley
based on what they viewed to he the feasibility of the proposed project on the
site. She did not think all prospective lenders were going to look at it in
the sane way; otherwise, they would quit right now without spending any more
tine on it. But, they are asking the HRA's continued indulgence in allowing
them to explore every avenue available before the HRA determines they want to
draw on the letter of credit.
fir. Conners asked if there had been any recent discussions with Staff ahout
the letter of credit and the recommendation Staff had made previously that the
HRA draw on the letter of credit at this time.
'1s. Kuretich stated they have not discussed this with Staff because they had
hoped to have more positive progress by this time.
Mr. Lundgren stated tie has worked with 1411D for ten years, and what they have
said is they will not ensure the project on this site over three stories
and that is over medium density according to the City's qualifications. He
understood the tax bonding was still available. They will have to get a
guarantee other than the HUD guarantee. There are other {ands of credit
enhancements and he will continue to seek those out. He stated he has not had
much time to do this. He stated he had a meeting with Meritor Mortgage the
following day, and he will be making other phone calls.
Mr. Qureshi stated he would like to comment in defense of what f1s. Kuretich
had said regarding the contention that a city employee had told the Ho office
that the City did not*want a mid -rise building. The two staff present were
the ones who generally would make that kind of recommendation, and they were
both aware that the HRA and the City Council approved the six -story apartment
complex on this site. Somebody was saying the City did not approve when the
City has already approved it. He would be very surprised that any staff
menber with any knowledge at all would rake that kind of statement.
Mr. Conners stated he agreed, especially after they had gone through the
public hearing process and approved the six -story apartment complex. The
six -story building was actually the result of a compromise between the City,
the developer, and the neighborhood, conpared to the original proposal for a
12 -story building. There had been no change in attitude from the HRA's point
of view.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, JANUARY 8, 19'37 PAGE 7
Mr. Lundgren stated he will have to produce their own feasibility stud v
separate from the one that has already been paid for. They will also have
to produce an appraisal. This was land of important because any conventional
underwriter was going to require an appraisal of the project as it would
be completed which includes a study of the cash flow, expenses, evaluation
of the value of the property, etc.
Mr. Commers stated he was sympathetic to Mr. Lundgren's position; hoviever,
Mr. Lundgren had to understand that they have had a lot of discussions alone
these same lines for many months, and they have not seen any progress.
Mr. Cor•imers asked if there had been any change in Staff's position or
recommendation.
Mr. Qureshi stated that on the basis of not being repetitious, Staff's
recommendation was the same as the last two meetings and that was the HRA should
draw on the letter of credit. There was an agreement, and the HRA had peen
very concerned that they not deal with a developer who v!as not serious about
the project because of the sensitivity of the neighborhood and the number
of tenants in the existing building. The letter of credit was requesters to
show that the developer was indeed serious about the development.
!1r. Commers stated that was correct. This was an unusual situation to the
extent that they have attempted development before that has not worked, and
they wanted to have some assurances at this time and to satisfy the tenants
and the neighborhood that this was a serious proposal.
Mr. Qureshi stated that was the basis, and now Mr. Lundgren has gone way
beyond the timetable set forth. The agreement was null and void back in
August 1986, and it was now January 1987.
Mr. Commers asked if the drawing or not drawing on the letter of credit
prejudiced or hurt anything at this point as far as inquiries or interest
on the part of other potential developers?
Mr. Qureshi stated there have been inquiries. There was a financial loss
because the $200,000 could be drawing interest for the HRA. As long as this
is still lingering,it does have some influence on other projects. How much
he did riot know. He had a made a statement previously that because of the
climate of real estate and the new laws, it might be more difficult to get a
project. The only issue has been that whoever comes in first with a valiH
proposal that is acceptable -- whether it is Mr. Lundgren or another developer- -
the City will take it. On that basis, they are not considering any obligation
to Mr. Lundgren. Psychologically, but not legally, they are still linked to
Mr. Lundgren. If it was the decision of the HRA not to draw on the letter of
credit, that was a policy decision the HRA had to make.
14s. Kuretich stated she certainly understood how City Staff felt and the
HRA's impatience. 11r. Lundgren has been put into a position through no fault
of his own. He thought the financing was arranged for the project. She did
HOUSING & REDEVELOPMENT A11THORITY MEETING. JANUARY 8. 1987
PAGE 8
not want to keep bringing up the Tax Reform Act, but clearly it has had a
significant impact on trying to finance any kind of project, particularly one
that was designed around the uses of tax increment financing. She stated
she thought it was safe to say this was the largest overhaul of the tax code
they have ever seen, and it will take time to adjust.
Ms. Kuretich stated that by fir. Lundgren continuing to attempt to arrange
financing showed he was still interested in the project. She could under-
stand that the City was losing interest on the 5200,000; on the other hand,
she thought there was an element of fairness involved as long as fir. Lundgren
was continuing to try to put the package together. fie was not responsible
for the Tax Reform Act. In terms of the psychological impact on developers
who might want to work with the HRA, perhaps it might give these developers
some comfort to know that the HRA was not anxious to draw on the letter of
credit until it actually becomes necessary.
fir. Prairie stated just the fact that the HRA has not drawn on the letter of
credit for four months already indicated that. If the letter of credit expires
in June, the HRA should make some kind of firm deadline before that time, as
they have just gone from one delay to another. fie thought 6 -7 months was more
than fair.
'Ir. Commers stated he did not want "r. Lundgren to think that because they
haven't drawn on his letter of credit that he still had the project. He
might still lose the project. Another developer might come in or it might
he that Pir. Lundgren will never he able to put the project together. At this
point, the HFA had no legal commitment to Mr. Lundgren.
Mr. Lundgren stated he understood that. He understood there was no legal
cormitment, no moral commitment, and no ethical cormitment. He did intend to
cone in with a project the City and the HRA would he excited about, but he
did need more time. He wanted to do this project, and he wanted it to he
successful. The only thing he was asking of the HRA was they not cash his
letter of credit.
fir. Meyer stated whether it was now or May or June, as he had said before,
he was not sure whether he would vote to cash the letter of credit. He felt
that until such time as they could demonstrate that the City was being
financially hurt, then he would be more concerned and would he more inclined
to vote to cash the letter of credit.
Mr. Prairie stated that obviously they hope Fir. Lundgren will he able to
make the project work.
Mr. Conmers stated he did not want to mislead '1r. Lundgren to think th?
HRA would not do anything and have some artificial date like the May meeting
and say they would not do anythino until that meeting. It could happen next
month.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, JANUARY 8, 1987 PAGE 9
Mr. Commers stated that a motion to table this item was made at a previous
meeting. At the last meeting, there was no motion to remove the item from
the table, and it was the concensus of the members present that they not
exercise their option and not take any action on Mr. Lundgren's letter of
credit.
Mr. Commers stated it seemed to be the concensus of the HRA members present
that they do not intend to remove the item from the table, and no action
would be taken on Mr. Lundgren's letter of credit. He cautioned Mr. Lundgren
to not read too much into this statement.
Mr. Lundgren stated what he read into it was that he better meet with Staff
before the next meeting and he prepared to present a formal plan and schedule
at the HRA's February neeting.
Mr. Cormers stated that since there were no motions, this item would remain
on the table until the next meeting.
Chairperson Commers declared a ten minute recess at 8:nO p.m. The meeting
was reconvened at 8:50 p.m.
5. CONSIDERATION OF A PROPOSAL TO AMEND THE REDEVELOPMENT PLAN FOR REDEVELOPMENT
PROJECT NO. 1 TO INCLUnE AWITIGNAL PARCELS Alln FSTARLISH A TAX Imc- REfIFNT
DISTRICT AND TAX INCRE11ENT FINANCING PLAN RELATING THERETO:
Mr. Qureshi stated that at the last meetinn durinn the review of the study
on the develonment of the University Avenue Corridor, it was indicated durina
the discussion that other than just putting in some cosmetic improvements,
shrubbery, lighting, etc., the [IRA should he looking to see what they can do
with some of the other empty land, underutilized land, and some of the sub-
standard structures along University Avenue.
Mr. Qureshi stated that normally each year the State Legislature and the
Federal Government tinker with the authority of the HRA and there was some
discussion at the state level to review the whole tax increment situation and
possibly nropose to make it more restrictive. Now might be the time for the
HRA to look at this and give some thought to adding some areas to Redevelopment
Project No. 1 and making some tools available to see how sonle underutilized
areas could be utilized.
Mr. Qureshi discussed the properties Staff was proposing to he included in
Redevelopment Project No. 1, to include the southern end of the University
Avenue Corridor.
Mr. Qureshi stated the first step would he to establish a redevelopment area.
Then they could decide which properties were defined under economic develop-
ment and which ones were defined under redevelopment. After that, nothing
would happen until the HRA decided to develop an area and then they would
create an increment district.
HOUSING & REDEVELOPMFNT AUTHORITY PIFFTING, JANUARY 8, 1987 PAGF in
Mr. Commers stated as he understood it, the University Avenue Corridor
proposal the HRA has adopted did not in and of itself at this time provide
for the taking of any underutilized or underdeveloped land.
Mr. Qureshi stated that was correct. The University Avenue Corridor proposal
was only for the general aesthetics and appearance for public right of way.
But, at the last month's meeting, there was some discussion that the Citv
needed to do more than just the general aesthetics and appearance.
Mr. Qureshi stated if it was the HRA's desire to proceed, the HRA should
instruct Staff to start preparing information and cone back to the HRA with
a formal presentation. He stated Staff has estimated that the amendment to
the redevelopment plan to include the southern end of the university Avenue
Corridor could he accomplished in a minimum of two months with ten steps.
These ten steps were outlined in "Ir.Robertson's memo to the HRA dated
Jail. 2, 1987.
Mr. Meyer stated he was remembering about 20 years ago when the tornado hit
Fridley and the tasks of the HRA then. The perceptions of some of the people
at that time were they felt something was being thrust down their throats, and
they turned against even the beneficial aspects of redevelopment.
!1r, t1eyer stated it might be beneficial to informally approach some "key" people
in these proposed areas, talk to them and get some informal feeback. Maybe
the mayor or the appropriate councilperson could describe what the City was
proposing and get some feedback before going public with this with nuhlic
hearings. This might avoid any problems that might backfire in the main events
that are going on.
Mr. Prairie stated he thought most people would not he opposed to being
included in a redevelopment district; however, it wouldn't hurt to make peonle
aware of it,
Mr. Commers stated that in the ten steps listed by Staff, Step #4 was to "set
City Council public hearing ". He thought the HRA has always had the public
hearing in the past.
Ms. Orduno stated that by law, the HRA was not required to have the public
hearing, but the City Council was required to have a public hearing.
Mr. Commers asked if the Citv Council had any feelings as to whether the 11RA
should or should not have a first public hearing before the City Council's
public hearing and then be able to make recommendations to the Council.
Would that be a better procedure or should the City Council hold the only
public hearing?
Mr. Qureshi stated he could ask this question of the City Council members.
If the City Council wants the HRA to also hold a public hearing, he would advise
the HRA of that decision.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, JANUARY 8, 1987 PAGF 11
Mr. Prairie stated he would have no objection to the HRA also holdinn a puhlic
hearing, but if it was not necessary, it would save them a little time.
Mr. Meyer stated he had no objection to the HRA having a public hearing.
before the City Council's public hearing. His main concern was what he had
raised earlier. He was concerned because they were talking about one of the
sane areas the HRA dealt with 20 years ago. It seemed to him that to some
extent people were still going to see this as control of their property being
taken away from them.
Mr.Newman stated there was at least a month until the first public hearing,
so there would be ample time for the City Counciloerson to tall: to some of
the neighbors if he /she wanted to.
Fir. Qureshi stated the City Council could decide to put a notice in the paper
or send a letter to every owner affected or potentially affected, but he
thought Staff needed to do some preliminary work before they proceed too much
farther. Hopefully, Staff can come back with more information at the HRA's
next meeting.
Fir. Commers stated he did not think the HRA had any problem with Staff going
ahead and starting some preliminary work, coming back to the HRA with more
information, so the HRA can determine how they should proceed from there.
It was the concensus of the HRA to authorize Staff to do some preliminary
work on the proposal to amend the redevelopment plan to include the southern
end of the University Avenue Corridor. Before any public hearing was held,
the HRA would like Staff to discuss with the City Council some of the concerns
raised at this meeting. The HRA would be making the decision on whether or not
to go forward;and at that time, the HRA could decide on the appropriate way
to publicly present this.
10. CONSIDERATION OF A RESOLUTION OF THE FRIDLEY HRA (1) REQUESTING THAT THE
IDLEY CITY COUNCIL H RI E CONSTRUCTION H. INTERSECTInfJ I• R ME ^!TS
TO T. H. 14D WEST _ K E 71
Mr. Prairie stated there were no dollar amounts listed in the resolution
Mr. Commers stated that was a good point. The HRA has only authorized a
certain dollar amount on that project. It would he good for a dollar amount
to be included in the resolution. He stated that also in the past, the 14RA
has always paid the design contracts directly if not associated with the
construction. The only time they have reimbursed the City was on construction
contracts.
Fir. Qureshi stated this resolution would have to be reworked and should be
withdrawn at this tine.
Fir. Commers stated he would like to have the dollar amounts included in whatever
new resolution was brought back to the HRA.
HOUSING & REDEVELOPMENT AUTPORITY MEETING. JANUARY 8. 1987 PAGE 12
11. 1985 FINANCIAL STATEMENT:
Mr. Pribyl stated he would apologize to some degree for the delay in getting
the financial statement to the HRA. For some reason the auditors had tied
it up for 3 -4 months in their office. The City did not actually see the
statement until October. Another problem was that last year Mr. Sid Inman
and Mr.Pribvl's assistant left the City, so there were some Droblems because
of the lack of staff. fie stated that situation has now been corrected.
From this time on, the HRA will have a very timely financial statement. The
1986 financial statement will be presented to the [IRA in June or July.
Mr. Pribyl reviewed the high points of the financial statement.
11r. Commers stated one schedule the HRA had in the past that he would request
Staff prepare again for the HRA was a general schedule reflecting the total
amounts of money paid by the HRA to the City of Fridley for services rendered
and what those services are. Specific individuals did not have to he named.
Another request by the HRA was to receive an analysis of the investments
over the year to be done on an annual basis.
12. CLAIMS (1557- 1564):
MOTION BY MR. PRAIRIE, SECONDED BY MR. MF,YF.R, TO APPROVE T!L CKECY. REGISTER
AS PRESENTED.
UPON A VOICE VOTE, ALL VOTING AYF, CHAIRPERSON COMMTRS DF,CLARrD THE MO°'IOTT
CARRIED UNANIMOUSLY.
13. HRA ANNUAL_ REPORT:
!1r. Robertson stated he would like the HRA to give their general approval of
the annual report before it was printed and mailed out.
It was the concensus of the HRA members that they would like to read the
report before giving their approval and would contact Mr.Robertson before
noon the following day if there were any problems.
14. UNIVERSITY AVENUE CORRIDOR LIGHTING DESIGN:
Mr. Robertson stated the [IRA members had a copy of a memo from John Flora
to himself concerning the design of the lighting system on the University
Avenue Corridor. fie stated the City intended to hire Robert Eller, a retiree
from NSP, who now does consulting work. Mr. Eller was extremely familiar
with all NSP's requirements on servicing and was knowledgeable about all
MnDOT requirements. Mr. Eller would design the linhting system and would get
the necessary MnDOT permits and make sure NSP would service the lines. The
cost of Mr.Eller's services was 41,000.
HOUSING & RFD PELOPMENT AUTHORITY MEETING, JANUARY 8, 1987 PAGE 13
MOTION BY MR. PRAIRIE, SECONDED BY MR. MEYER, TO AUTHORIZE STAFF TO RETAIP7
THE CONSULTING SERVICES OF ROBERT EHLER AT A COST NOT TO EXCEED $1,000
TO DESIGN THE LIGHTING SYSTEM ON THE UA'IVF.RSITY AVENUE CORRIDOR.
Mr. Robertson stated that in December, the HRA approved a minimum lighting
plan which would include just the intersections. They would like t1r. Fhler
to design the lighting for the entire corridor so that in the future if they
want to do more and light the whole corridor, the intersection design will
be consistent with making those additions.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMF,RS DT,CLARRD THE PfOTIOPI
CARRIED UNANIMOUSLY.
An,lnIM PTNT
MOTION BY MR. MEYER, SECONDED BY MR. PRAIRIE., TO ADJOURN THE MEETING. UPON A VOICF.
VOTE, ALL VOTIPIG AYE,, CHAIRPERSON COMMERS DECLARED THE JANUARY 8, 1987, HOTTSINC &
REDEVELOPMENT AUTHORITY MEETING ADJOURNED AT 10:40 P.M.
Respectfully submitted,
Lytfn6 Saba
Recording Secretary
PU
MEMORANDUM
TO: CHAIRMAN CCt1MERS AND HRA COMMISSION MEMBERS
FRCM: JOCK ROBERTSON, EXE=IVE DIREC'T'OR
SUB=: MASTER LEASE FOR FRED LEVY'S RICE PLAZA
DATE: FEBRUARY 6, 1987
As of today, the details of a Master Lease for Fred Levy's Rice Plaza Shopping
Center have not been finalized. Mr. Levy plans to be present at the February 12,
1987 meeting and information regarding the lease arrangement should be available
for consideration at that time.
-TV
t-A
A C L
-41
Aj
U
K
M E M O R A N D U M
T0: CHAIRMAN C"4ERS AND HRA COMMISSION MEMBERS
FRCM: JOCK ROBERTSON, HRA EXECUTIVE DIRECPOR
SUBJECT: UPDATE ON PROGRESS OF LUNDGREN PROJECT FINANCING
DATE: FEBRUARY 5, 1987
Lou Lundgren informed me today that he does not have any documentation to
provide to the HRA in time for the agenda. He is currently working with four
savings and loan companies in an effort to secure financing for his project and
will present this information at the February 12, 1987 meeting.
3
HERRICK & NET)V%N P.A.
ATTORNEYS AT LAW
Virgil C. Ilerrick February 3, 1987
I ).ivId R Newman
J:nnes D. f loeft
Daniel P. O'Keefe
DORSEY & WHITNEY
2200 First Bank Place East
Minneapolis, Minnesota 55402
RE: Lake Pointe Investment Company
Dear Dan:
HAND DELIVERED
I am writing for the purpose of confirming the fact that in
our telephone conversation of February 2, 1987 you indicated that
your client did not believe that the Fridley HRA's proposal for a
resolution of the dispute of the parties contained in my letter
of January 30, 1987 was not adequate. Further, in an attempt
to ensure that all avenues have been fully explored before liti-
gation is commenced in this matter, we have agreed to meet for
the purpose of seeing whether or not there are any parameters for
settlement which the parties can agree upon.
At the risk of sounding repetitious, I do want to emphasize
that it is the desire of the City of Fridley and the Fridley HRA
for Lake Pointe's proposed development to proceed. However, it
is also my clients position that the proposal contained in my
letter of January 30, 1987 is an offer which exceeds its obliga-
tions under the terms of the Redevelopment Contracts. I would
also like to emphasize that my willingness to discuss "settlement
concepts" is due to my client's desire to see the project proceed
and not because it believes it has breached any of the terms
under the Development Contracts.
Again however, I would like to emphasize my clients desire to
see the Lake Pointe Investment Company proposal for the 100 Twin
Theatre site come to fruition.
Sincerely yours,
David P. Newman
DPN:jeb
cc: Nasim Qureshi
Jock Robertson
Suite 205, 6401 University Avenue N.E., Fridley, Minnesota 55432. 612- 571 -AW;O
3.4
HERRICK & NEAXAN P.A.
ATTORNEYS AT LANV
Virgil C. Herrick January 30, 1987
David I'. Newman
James D. Hoeft
Bruce W. Burton
DORSEY & WHITNEY
510 North Central Life Tower
445 Minnesota Street
St. Paul, Minnesota 55101
Daniel P. O'Keefe
DORSEY & WHITNEY
2200 First Bank Place East
Minneapolis, Minnesota 55402
RE: Lake Pointe Investment Company
Gentlemen:
I am writing in response to Mr. O'Keefe's letter of January
21, 1987 in which the attached copies of the Notice which was
served on the Director of the Fridley HRA together with a draft
of your proposed Summons and Complaint was enclosed.
I do not believe it is necessary for me to respond to each
point contained in Lake Pointe's letter of January 20, 1987 to
Mr. Qureshi. The BRA does not believe that it is in default
under the terms of this Agreement but rather feels that due to a
soft rental market that Lake Pointe has been utilizing every
possible effort in -order to delay its obligations to commence
construction. I do not believe that anything would be benefi-
cially achieved by specifically responding to each item contained
in this Notice. However, you should not consider the HRH's
failure to respond to each particular item as acquiescence to
your contentions. As you are probably aware, over the last few
months both parties have been engaged in a battle of letters in
which each side attempts to refute the other sides contentions.
If this project is to proceed forward I believe that the most
conducive posture is for both parties to acknowledge that there
is a disagreement and then to proceed in attempting to find a
resolution to this dispute.
Before proceeding further I think it would be beneficial to
attempt to explain certain actions that have occurred within the
last 2 weeks. Unfortunately, I am concerned that these actions
may have been misconstrued. Contrary to the claims contained in
your Notice of Default and your Complaint, the BRA at all times
has been actively pursuing a variety of options in order to have
the Deed for the Phase I Parcel recorded.
Suite 205, 6401 University Avenue N.E., Fridley, Minnesota 55432, 612- 571 -3850
In early October I received a copy of Mr. Weir's letter of
September 30, 1986 to Minnesota Title in which Mr. Weir requested
that the Metes and Bounds Deed be released for recording pursuant
to the Escrow Agreement. A few days later this Deed was for-
warded onto the City in order to obtain the necessary approvals.
Those approvals were given and were returned to Minnesota Title
on October 15, 1986. Unbeknownst to the HRA this Deed was never
recorded. On the assumption that it in fact had been recorded I
sent a letter to Mr. Johnson of Minnesota Title on December 8,
1986 in which I reminded him that it was now necessary to release
the escrow funds to the HRA since the Phase I Parcel Deeds had
been recorded. It was only after this letter was sent that I
received a phone call from Ms. Korman in which she explained that
in fact the Deeds had not been recorded because they had been
rejected by Anoka County. In that conversation I asked her to
provide me with an explanation of what they believe to be the
reasons why Anoka County rejected this Deed. Shortly thereafter
I received a letter dated December 10, 1986 from Minnesota Title
which explained their understanding of the objections. On
December 18, 1986 I then forwarded a copy of this letter onto Mr.
Burton for his review and input. On December 29, 1986 Mr. Burton
then provided me with his response and his proposed approach as
to how these problems could be resolved. On January 5, 1987 I
advised Mr. Burton that I was in agreement with his proposal and
asked him to proceed on our joint behalf. Clearly, I do not see
how these steps could be construed as an attempt to obstruct the
recording and conveyance of this Parcel.
In Mr. Burns' letter of December 29, 1986 he said to me "if
the HRA is agreeable, I suggest we propose to Ed Bock the changes
noted above and seek his approval, without change, as to the
other matters. I strongly suspect that an R.L.S. will be ultima-
tely demanded by the Torrens Office, although John Barnes'
descriptions come pretty close to meet the technical requirements
of Chapter 508." In an attempt to expedite this process I sche-
duled the meeting with Mr. Ed Bock on Monday, January 12, 1987.
The specific purpose of this meeting was to have him review the
legal descriptions to see if he concurred with Mr. Burns belief
that an R.L.S. might not be necessary. Because of our desire to
expedite this process I thought it would be most beneficial to
make this inquiry now rather than waiting until we attempted to
record the revised Deeds. In that meeting Mr. Burton indicated
to me that in fact he believed an R.L.S. would be necessffiry.
During our meeting Mr. Bock provided me with a copy of a letter
that he received from Mr. Burton dated December 3, 1986. I was
rather surprised to see this letter since I had never received a
copy earlier. In this letter Mr. Burton indicated his opinion
that the Fridley HRA did not have the authority to file a plat on
the subject property without the concurrence of Lake Pointe. Mr.
Bock informed me that he disputed some of the points raised in
Mr. Burton's letter but that he had not yet taken the time to
make a formal determination as to whether or not he agreed with
Mr. Burton's position. He asked me whether or not I wanted him
to take the time necessary in order to make this determination.
�c
I asked him to please review the title to the property and to
give him his opinion as to whether or not a Plat could be
recorded without the consent of your client. Later that day, Mr.
Bock telephoned me and informed me that in fact it was his opi-
nion that the HRA could proceed with the Plat on the property.
He also indicated that he would be relaying this message onto Mr.
Burton as well.
As I indicated to Mr. Burton in my telephone conversation of
January 14, 1987, the Fridley HRA does not have a Plat prepared
for filing on the property. My conversations with Mr. Bock were
merely informational so that I would have the required infor-
mation in order to explore all possible options with my client.
As you also recall, in that conversation I explained to Mr.
Burton that the staff was working very closly with both the HRA
and the City Council in attempting to find a resolution to the
impasse between the parties. I would also like to emphasize that
during the month of December I met with Mr. Robert Deike and also
had several telephone conversations with him in which I asked him
to review the situation with his client and to explore with him
the possibility of finding some means of resolving our impasse.
In those conversations I repeatedly told Mr. Deike that I was of
the opinion that with a little give and take by both parties a
resolution could be achieved. Unfortunately, Mr. Deike was never
authorized to respond with any solutions other than to repeat the
litany of ultimatiums which Mr. weir was suggesting.
As I indicated to Mr. Burton on January 14, 1987, the staff
has been working with the appropriate governing bodies in
attempting to resolve this dispute. In reviewing letters of
November 6, 1986 and December 3, 1986 from Mr. Eric Nesset to Mr.
Jock Robertson, it is my understanding that there are two items
which the parties are contesting. The first item is the question
surrounding the Highway Turnback Property along the east side of
the proposed site. -Frankly, I was never aware of the fact that
there was even any Turnback Property or that it was contemplated
as part of the Development until I received a copy of Mr.
Nesset's letter of September 19, 1986 to Mr. Jock Robertson. As
I am sure you are aware the most recent Plats which have been
forwarded to the City do not include this property. In my letter
of October 1, 1986 I indicated to Mr. Weir that the city staff
currently had his request for the Turnback Property under con-
sideration. On October 6, 1986 I had a telephone conversation
with Mr. Nesset in which I informed him that the staff was pre-
pared to recommend that this property in fact be included in the
Plat but that a variety of procedural steps would have to be
completed. Since that date I have had atleast two telephone con-
versations with a member of Mr. Burton's staff and have explained
to him that the Turnback is proceeding through this process.
Currently, the City Council has conducted a first reading on this
question and I believe is prepared to complete the process in
order to include the Turnback Property with the balance of the
Development.
3D
The second issue that I am aware of is the alignment of the
entrance road to the Lake Pointe Corporate Center and its inter-
section with West Moore Lake Drive. on August 18, 1986 the City
Council did grant approval of the submitted Plat subject to three
standard conditions. Prior to this City Council meeting I
discussed these conditions with Mr. Burton and he indicated his
concurrence in them. Since the approval of this Plat, Sunde
Engineering has been repeatedly contacted for the purpose of
obtaining the mylar copies. In spite of these repeated requests
the mylar copies have never been submitted to the City Council or
the HRA for execution and filing. Until Lake Pointe and its
agents complete the process of preparing these mylars I am at a
loss as to how you expect the City of Fridley to execute the
same for recording. In fact, it is my understanding that it is
not the desire of your client to have the Plat which was approved
on April 18, 1986 recorded due to the fact that it wishes to
modify the intersection with West Moore Lake Drive.
I understand it to be your client's position that the Housing
Authority should provide the assistance necessary in order to
allow your client to acquire the Gunderson property which is
located on the north side of West Moore Lake Drive. As you are
well aware, the Housing Authority has never entered into a com-
mittment with any party for the acquisition notice or in providing
assistance for the acquisition of this property. However, over
the last few weeks the staff has received an indication that the
appropriate Authoritys are prepared to assist Lake Pointe for the
actual expenses it incurrs in an amount not to exceed $94,500.00
for the acquisition of this subject property.
Although formal approval by the City Council and the HRA has
not yet occurred I am prepared to propose the following resolu-
tions:
1. That as required under the Contract for Development, the
Assessment-Agreements be executed and recorded.
2. That the inclusion of the Turnback Property in the Lake
Pointe Corporate Center Plat be completed.
3. That Lake Pointe proceed with the acquisition of the
Gunderson property with the understanding that assistance
will be provided.
4. That Sunde Engineering complete the preparation of the
mylar for Lake Pointe Corporate Center. This final Plat
should be consistent with the intersection design by
SCH, which design incorporates the use of the Gunderson
property.
5. That the escrow funds together with interest be released
to the Fridley HRA.
6. That all other obligations under the two Escrow
Agreements be completed by the parties.
I would ask that you indicate to me by Friday, February 6, 1987
as to whether or not this proposal is acceptable. The reason I
have suggested this deadline is so that ample preparations can be
completed to allow this matter to be presented to the Fridley HRA
at its February 12, 1987 meeting. I would like to emphasize that
although I am now proposing the inclusion of the Turnback
Property and assistance with the Gunderson property, the Fridley
HRA and the City Council steadfastly maintain that they're not
obligated to perform these actions under the terms of the
Development Agreement but rather are making this proposal in the
spirit of attempting to resolve the impasse and the hope of pro-
ceeding with the Lake Pointe Corporate Development.
I will be out of town during the last week of January and
will not be in my office until February 2, 1987. If you wish to
meet for the purpose of further reviewing this matter then I
would ask you to contact my office in my absence for the purpose
of scheduling a meeting upon my return. I cannot emphasize
strongly enough the desire of the Fridley City Council and the
HRA to proceed on this project. It is for this reason that I am
making this proposal.
Sincerely yours,
David P. Newman
DPN:jeb
cc: Nasim Qureshi
Jock Robertson
Bob Deike
3F
510 NORTH CENTRAL LIFE TOWER
448 MINNESOTA STREET
ST. PAUL, MINNESOTA 88101
(618)227 -8017
040 FIRST NATIONAL HANK HUILDINO
P. O. BOX 645
ROCHESTER, MINNESOTA 55903
(607)286-3166
316 FIRST NATIONAL RANK HUILDINO
WAYZATA, MINNESOTA 66391
(612) 475 -0373
350 PARK AVENUE
NEW YORK, NEW YOUR 10022
(212) 415.9200
DORSEY & WHITNEY
A Per X"ZW INCL"TWO PWo 8810 COR�
2200 FIRST BANK PLACE EAST
MINNEAPOLIS, MINNESOTA 55402
(612) 340 -2600
TELEX 29 -0605
TELECOPIER (612) 340-2666
DANIEL P. O'KEEFE
(612) 220-6067
David P. Newman, Esq.
Herrick & Newman
6401 University Avenue, Suite 205
Fridley, Minnesota 55432
Dear David:
801 DAVIDSON BUILDINO
B THIRD STREET NORTH
OREAT FALLS, MONTANA 89401
(406)787 -3638
1800 FIRST INTERSTATE CENTER
401 NORTH 31- STREET
P. O. BOX 7166
BILLIXOS, MONTANA 69103
(406) h= -3600
30 RUE LA BOETIE
75005 PARIS, FIANCE
OR -33 (1) 43-59.13 -65
041-34)(046-661-38-60
January 21, 1987
Re: Lake Pointe Investment Company
As we discussed Sunday evening, Lake Pointe, at the
insistence of its lenders and investors, may be driven to litiga-
tion if the problems caused by the HRA and City of Fridley are
not rectified within the 30 day cure period under the redevelop-
ment agreement. As a courtesy, I am enclosing a draft of the
Complaint we anticipate filing if litigation does occur, as
well as the notice letter Lake Pointe recently served on the
HRA. You can show or not show the draft to your client, as
you deem appropriate. However, it is imperative that your client
understand the magnitude of the situation, as well as the resolve
of Lake Pointe and its investors and lenders. It is not our
objective to stop discussions at this point; to the contrary,
we believe that realistic and good faith discussions can still
result in a satisfactory arrangement for the Lake Pointe develop-
ment.
I look forward to hearing from you on this matter.
Yours very truly,
,�J
Daniel P. O'Keefe
DPO /k
Enclosure
3F
.JAN 20 187 16:39 WOODBRIDGE PROPERTIES -MTKA
January 201 1987
Mr. Nasim Qureshi
Director, Fridley KRA
6431 University Avenue N.E.
Fridley, MN 55432
..__ 3G
P.2
CONFIDENTIAL ATTORNEY /CLIENT
COMMUNICATIONS CONCERNING
POTENTIAL LITIGATION
Re: Lake Pointe Investment Company
Dear Nasim:
We have been asked to write to you concerning the status of
our Lake Pointe Corporate Center project and we are doing
so with a deep sense of disappointment.
Pursuant to Section 7.2 of the Contract for Private
Redevelopment By and Between the Housing and Redevelopment
Authority In and For the City of Fridley, Minnesota and
Lakes Pointe Investment Company, A Limited Partnership,
dated December 20, 1985 [the "'Redevelopment Agreement"],
Lake Pointe hereby places the HRA on notice of the
following events of default under the Redevelopment
Agreement, the Addendum to that Agreement dated August 15,
1986, and the escrow agreements dated August 15, 1986:
1. The HRA has materially delayed, without justification,
in its performance under the Redevelopment Agreement,
Addendum and escrow agreements, thereby causing Lake
Pointe substantial damages and irreparable harms
2. The HRA has unreasonably and unnecessarily delayed in
obtaining approval for, and in filing, a plat for the
redevelopment project, substantially in conformance
with the preliminary plat attached ' to the
Redevelopment Agreement and with the plat agreed upon
by the parties as of August 15, 1986, and has
unilaterally attempted to substitute a deviant plat;
3. The HRA has attempted to design the improvements to
the intersection of west Moore Lake Drive, Old Central
Avenue, and Trunk Highway 65, and the connecting road
configuration of Lake Pointe Drive, in a manner that
violates its contractual duty to make those
improvements in an expeditious fashion and at no cost
or detriment to Lake Pointe;
t.._- .x._Ir_- I -- - 2'm W.— A"r"4aa ol••a . inw Wavvibia Rnukvard • Minnetonka. Minnesota 55343 (6121541 -1000
JAN 20 187 16:38 WOODBRIDGE PROPERTIES —MTKA
4. The HRA has unreasonably and unnecessarily delayed in
conveying to Lake Pointe the "Phase I Parcel";
b. The ERA has unreasonably and unnecessarily delayed in
conveying to Lake Pointe the NTurnback Parcel"' along
Trunk Highway 65, and has threatened not to convey
that entire parcel to Lake Pointel
6. Without Lake Pointers agreement, the HRA has
established as a de facto precondition to its own
performance that Lake Pointe construct its first phase
of office buildings before (i) the final plat is
established and -filed, (ii) 'fee title has been
conveyed to Lake Pointe,'(iii) a new project site plan
has been prepared to conform to the new plat, (iv)
Lake Pointers mortgages are filed, or (v) public road
access easements to the first phase are establishedi
7. Without Lake Pointe's agreement, the HRA has
established as a de facto precondition to its own
performance that Lake Pointe, at its cost and expense
beyond the $250,000 Lake Pointe has already invested
for such design services, have'its architects redesign
the entire site to show the overall impact upon the
entire site of the HRA -City requirement of the deviant
plat and the various design alternatives to deal with
such impacts.
86 The HRA has refused to subordinate its rights to the
redevelopment property to the rights of Lake Pointe's
mortgage holderl
9. The HRA has failed to.diligently and aggressively seek
the necessary governmental approvals for the
redevelopment projectl
10. The HRA has attempted to significantly alter the road
configurations for the redevelopment project, in an
unwarranted attempt to obtain funds from other sources
or other governmental entities, funds which the HRA
does not intend to then apply to the redevelopment
project;
11. Attempted slander of title to the redevelopment
project, to which Lake Pointe owns equitable title?
P.3
Woodbridge Properties, Inc. - 320 Woodbridge Plaza - 10201 Wayzata Boulevard - Minnetonka, Minnesota 55343 (612) 541.1000
.A
. JAN 20 '87 16:39 WOODBRIDGE PROPERTIES —MTKA
12. The HRA has failed to most its deadline obligations
under the critical path schedules not forth in the
Redevelopment Agreement, Addendum, and escrow
agreements, including but not limited to:
a. The HRA failed to use its best efforts to cause
the City of Fridley to approve replatting of the
redevelopment property by April if 1986,
substantially in accordance with the preliminary
plat attached as schedule F to the Redevelopment
Agreement;
b. The HRA failed to acquire and convey to Lake
Pointe the "Phase I Parcel" by May It 19861
c. The HRA failed to acquire the »Access Parcel"' by
May lb, 19861
d. The HRA failed to obtain the necessary
governmental approvals for the redevelopment
project by May 1, 19861
of The HRA failed to use its best efforts to obtain
plat approval from the City of Fridley by August
31, 1986, of the plat presently before the City
as of August 18, 1986;
f. The HRA failed to acquire the "Access Parcel"
within 21 days of execution of the Addendum;
g. The HRA failed to cooperate in prompt good faith
in conveying to Lake Pointe, and obtaining the
recording of, either a Meets and Bounds Deed or a
Lot and Block Deed for the "Phase I Parcel"'; and
h. The HRA failed to convey the remaining
redevelopment parcels in addition to the "Phase
I Parcel ", to Lake Pointe by January 1, 1987.
Under Section 7.2 of the Redevelopment Agreement, the HRA
has 30 days to cure the above defaults or provide
reasonably satisfactory assurances that it will cure those
defaults as soon as reasonably possible. In addition to
correcting the specific defaults identified above, the HRA
also must cure the damages resulting from the substantial
delays caused by those defaults. As a consequence of the
Woodbridge Properties, Inc. • 320 Woodbridge Plaza • 10201 Wayzata Boulevard • Minneionka, Minnesota 55343 (612) 541.1000
. JAN 20 '87 16:40 WOODBRIDGE PROPERTIES -MTKA
HRA's defaults Lake Pointe has suffered substantial
damages, and significant irreparable harm including but
not limited to substantial lost time in going forward with
the project, with attendant unanticipated market risks;
lost business opportunities, and loss of credibility, with
lenders, investors, hotel developers, potential lessees,
contractors, and other parties with whom Lake Pointe must
deal to successfully launch and complete the redevelopment
project; substantially changed circumstances and market
conditions that have occurred during the period of the
delay caused by the HRA; substantial out -of- pocket expenses
to Lake Pointe, such as significant carrying costs during
the delay period and - additional development, design and
architectural costs; lost revenues; potential deterioration
of project quality; and significant changes in the
aesthetics of the project.
It is Lake Pointe's hope and aemannerhasatisfactory defaults
can can be cured by the HRA
Pointe, Lake Pointe's investors and lenders, the HRA, and
the City of Fridley, so that the redevelopment project can
proceed in a manner beneficial to all concerned. We
suggest a meeting with Lake Pointe representatives and
appropriate representatives of the HRA and City of Fridley
to discuss the issues raised in this letter.
Sincerely,
LAKE POINTE INVESTMENT COMPANY,
A LIMITED PARTNERSHIP
Sys Woodbridge Properties Real Estate
Development Fund II, a Minnesota
limited partnership,
its general partner
Sys Woodbridge Institutional Realty Advisors
Limited Partnership,
its general partner
By: Wo 'bridge Financial Corporation,
a oral par e
By: h�
7
David-W. Weir
its President
DRW /slw
bcc: Dan O'Reefe
Dorsey & Whitney
P.5
W.wit,ri.tm^ Prnmertiec 1,v • 77n Wnn4hririve plafa • 107n1 Waysata Rnulavard . Minnetonka. Minnesota 55343 (6121541-1000
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F[ZIDLEY
CIVIC CENTER • 6431 UNIVERSITY AVE. N.E. FRIDLEY. MINNESOTA 55432 • PHONE (612) 571 -3450
January 2, 1986
Eric Nesset
Woodbridge Properties
320 Woodbridge Plaza
10201 Wazata Blvd.
Minnetonka, MN 55343
Eric;
Due to the many concerns you expressed in your letter of December 3, 1986,
it was necessary for City staff to research them prior to my response. I
would like to respond to each of your concerns in the order in which they
were expressed.
1. The intersection design for Lake Pointe Drive has not been dictated by
the City staff's decision to use state aid funds for financing the
road improvements. On November 21, 1983 the City Council approved the
attached Resoltuion No. 110 -1983 establishing the road now named Lake
Pointe Drive as a state aid road. The City record indicates that the
City intended the road to be built by state aid standards long before
your coapany approached us with the Lake Pointe project. The City
receives such state aid funds as part of the State's gasoline tax and
these funds are available to us without any restrictions as long as
the designated roads are built to state standards.
2. As I mentioned above, state aid funds are set aside for the City and
are available anytime for cur use without any restriction. Therefore,
using these funds does not in any way influence the timetable of the
construction of the intersection and roadway improvements for the Lake
Pointe project.
3. State aid street money is available to the community through its
portion of the gasoline tax collected by the State of Minnesota. As
this tax comes from all motorists in the community, the City has
chosen to receive these funds and place them in a pool from which the
monies are then used to provide maintenance and surface treatment to
all City streets. The practice of collecting the state aide funds to
which the City is entitled through its conformance to state standards
in the construction of designated state aid roads, is a legal and
acceptable practice. City staff has checked into the practice numerous
times and have obtained a legal opinion on the matter. This opinion is
attached.
4. The Preliminary Plat which was included as part of the Development
Agreement indicated a certain configuration of building on Lot 3,
Block 1. on March 3, 1986 when the City Council considered the final
plat, City staff noted that the final configuration of Lake Pointe
3L
Letter to Eric Nesset
Page 2
January 2, 1986
Drive would be adjusted when plans were finalized for the intersection
of Highway 65 and West Moore Lake Drive. On August 18, 1986 when the
final plat was revised and approved by the City Council, you commented
that the final configuration of the road had not been approved by the
State Department of Transportation and there was the possibiity of it
"moving one way or the other ".
As more detailed facts become available, it is our hope that we can
work out what your needs are for this parcel and develop a concensus
between you and the City staff which can then be presented to the HRA
and City Council for their review and approval.
The Development Agreement provides that up to $2,440,000 out of the bond
proceeds would be used for public improvements. As the cost of the public
inprovements is going to be more than three times this amount, it is
incorrect to say that the City is using only bond proceeds to pay SEH
costs.
Finally, on August 18, 1986, you were present when the City Council
approved your rezoning and revised final plat request for Lake Pointe.
That final plat did not include the right- of-way turnback property. It is
staff's position that any turnbck property which is not needed for
intersection inpravements shall be made available for conveyance. We have
not used this property as a "bargaining chip ".
As a gesture of good faith, the staff has proceeded to request the City
Council take action to nuke this property available for conveyance. The
first reading of the ordinance has been held and it is anticipated that
approximately 33,000 square feet will be made availble.
The City and the BRA are anxious to see this project become a reality and
are willing to work with you in resolving some of the issues which have
caused concern for all parties. Please do not hesitate to call with any
questions or suggestions as to how we may realistically resolve these
problems.
Sincerely,
Jock Robertson
Executive Director of the HRA
JR/90 /atb
3.^q
December 3, 1986
Mr. Jock Robertson
Executive Director - Fridley HRA
City of Fridley
6431 University Avenue NE
Fridley, MN 55432
RE: Lake Pointe Corporate Center
Dear Jock:
After reading your letter dated November 26, 1986 which I received
on December 1st, I think it is obvious that, even after meetings
with Nasim Qureshi and Dave Newman, and numerous discussions with
you, it is apparent that we must once again clarify our position
regarding the Lake Pointe Corporate Center plat and the
intersection design.
To again summarize our position on this matter:
1.) The proposed intersection design and its impact on Lake
Pointe Corporate Center has been dictated by the City
staff's decision to use state aid funds for financing these
improvements.
2.) The Development Agreement specifically states that
scheduling of the intersection and roadway improvements are
not to be influenced by your attempts to obtain financing.
Nor can the City, in order to obtain funding for the
intersection, adversely affect the Lake Pointe Corporate
Center site plan.
3.) We do not understand why the City of Fridley expects to
receive state aid funding for these improvements and charge
the cost of these improvements against the tax increment
bond proceeds.
\%oodbridge Properties, Inc. • 320 %%oodbridge Plaza • 10201 Wayzata Boulevard • Minnetonka, Minnesota 55343 1612 541 -1000
ji�
December 3, 1986
Page Two
4.) We see no reason why Woodbridge Properties should incur
additional architectural design costs to review various
design schemes presented to us which are dictated by your
choice of funding rather than an attempt to construct these
improvements to coincide with our agreed site plan.
Frankly, I do not believe that the City has been dealing with us,
regarding these matters, in a manner conducive to achieving our
mutual development goals. To date, you have given us indications
that you intend to pay the SEH design costs for the intersection
out of the tax increment bond proceeds. This is not a permitted
use for those funds under our agreement. The City has a)-so
attempted to use the turnback parcel along Highway 65, a parcel
which we always understood would be made available for our
development, as a bargaining chip. Now we are being told that the
City intends to attempt to file a plat which we have never approved
and, in fact, have objected to on several occasions.
Until we receive some assurances as to how the City intends to make
its current proposed intersection feasible by committing to fund
the purchase of property necessary to permit the intersection to be
constructed without damaging our project, we see no basis on which
to make necessary decisions relating to our development. If the
City of Fridley chooses to proceed with filing the plat,
Woodbridge Properties will be forced to exercise remedies which are
available to it. I would also like to emphasize that by delaying
the resolution of these issues the City is causing Woodbridge
Properties substantial damages by hindering its ability to proceed
with the development.
Sincerely,
Eric W. Nesset
Director of Construction
EWN:lmb
cc: Dave Weir
�%oodbridge Properties, Inc. • 320 %%oodhrid, =e Plaza • 10201 %%a�zata Boulevard • Minnetonka. Minnesota 55343 (612) 541- 1000
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CITYOF
FMDLEY
I I.R • 64.11 I'N1%TRSITI' AVE. N.E. FRIDLEY. MINNESOTA 55432 • PHONE (b12) 571 -3350
November 26, 1986
Eric Nesset
Di rector of Construction
1-bo,-7bridge Properties, Inc.
320 Woodbridge Plaza
10201 Wayzata Boulevard
!•:innetonl:a, Nod 55343
Dear Eric:
I am writing to confirm our phone conversation yesterday regarding recording of
the Final Plat on the Lake Pointe development. I understand that you received
the final document frctn Jerry Sunde on Friday, November 21, 1986 and have
forwarded it to your architects for final approval. Also, that you have requested
the one week waiting period to review the response from the architects.
Accordingly, I am notifying you that the Fridley HRA will on December 1, 1986
retain the services of Suburban Engineering for the purpose of preparing and
filing the Final Plat for Lake Pointe development unless you notify me that
Woodbridge Properties, Inc. has already recorded the Plat.
Please feel free to contact me if you have any questions.
Sincerely,
John L. "Jock" Robertson
Executive Director
Fridley HRA
JLP/dm
C -86 -532
cc: Larry Commers
David Newman
i RESOLUTION NO HRA -1987
RESOLUTION OF THE BOARD OF COMMISSIONERS OF THE FRIDLEY
HOUSING AMID REDEVELOPmENr AUTHORITY (1) .REQUESTING THAT
THE FRIDLEY CITY COUNCIL AUTHORIZE_CO_NETRUCTI_ON OF THE
I_NrE]RSECTI0N IMPROVEMENTS TO TRUNK HIGHWAY 65 AND WEST
MOORE LAKE DRIVE -WAr --
'I'g0 AND (2) aAPPROVING _ ANT2- _ALITHORIZLNG THE
REIMBURSMW TO THE CITY OF FRIDLEY, ON A MONTHLY BASIS,
FOR THE OOST OF THESE INTERSECTION IMPROVII,ENTS.
WHEREAS, on March 5, 1985, the Housing and Redevelopment Authority (the
"Authority ") authorized the execution of a contract with
Short- Elliot - Hendrickson for the development of the final plans for the
improvement and channelization of the the Trunk Highway 65 and West Moore
Lake Drive intersection, and
WHEREAS, on September 11, 1986 the Authority amended the design agreement
with Short - Elliot- Hendrickson to include the detail plans and construction
of the Highway 65 widening and West Moore Lake Drive interesection and
preliminary plans for the Rice Creek Road InprovemEnts from Old Central to
Highway 65, and
WHEREAS, it is now necessary to commence construction of the intersection
improvements to meet the obligations for Lake Pointe Corporate Center
project.
4
NOW, THEREFORE, BE IT RESOLVED that the Fridley Housing and Redevelopment
Authority hereby request that the Fridley City Council authorize
construction of the interection improvements to Highway 65 and West Moore
Lake Drive at a cost not to exceed $1,661,784.40ja also waive the public
heari� re latin�thereto.� 0
_there- --
BE IT FURTHER RESOLVED, that the Fridley Housing and Redevelopment
Authority hereby approves and authorizes reimbursement to the City of
Fridley, on a monthly basis, for the cost of the intersection improvements
to Highway 65 and West Moore Lake Drive.
PASSED AMID ADOPTED By THE HOUSING AMID RIDEVIIAPMENr AUTHORITY IN AND FOR
THE CITY OF' FRIDLEY THIS _ DAY OF _ _ , 19 87 .
ATTEST:
JOHN "JOCK" ROBERTSON
EXECUTIVE DIRECTOR
C1NOF
FWDLEY
DIRECTORATE
OF
PUBLIC WORKS
MEMORANDUM
<�
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C)o 0�
:L
4D: Jock Robertson, Community Development Director FW87 -1
FROM: John G. Flora, Public Works Director
LATE: January 7, 1987
SUBJECT: Highway 65 Intersection Improvement
Attached is the schedule prepared by S.E.H. dealing with the design and
improvement of the Highway 65 and 100 Taira Intersection Improvement plus
the Rice Creek Road and Old Central Improvement projects that was prepared
in September, 1986. Since that time, the HPA has decided to only prepare
preliminary plans for the Rice Creek Road improvement.
It appears that the schedule submitted is current as of this date with the
exception of the estimate of costs for the final design of the Highway 65
intersection. Currently, S.E.A. is preparing the landscaping and driveway
improvements for the Old Central leg of the project. These costs should be
completed within the week.
Plans have been submitted to Anoka County and MnDOT for review and to
obtain the appropriate agreements.
The Old Central leg of the improvement proposes to install medians for
traffic control. In order not to encroach further into Moore Lake, a
variance request for roadway width is being prepared for Anoka County to
submit to MnDOT. It is anticipated that the variance will be presented to
the Review Board in February and approval received in March. This work
will only reguire MSAS approval and is not on the critical path for project
Completion.
The Highway 65 improvement which requires a MrMT agreement is processing
on schedule and is the longest and most difficult hurdle in the entire
process. The variance request for Old Central is not directly related to
the Highway 65 improvement and should not affect the agreement as the two
portions of the project should be combined prior to April when it is
proposed to advertise for the improvement.
JGF /ts
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CLAIMS
1565 - 1576