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HRA 04/09/1987 - 29329CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 9, 1987 CALL TO ORDER: Vice- Chairperson Schnabel called the April 9, 1987, Housing & Redevelopment Authority meeting to order at 7:04 p.m. ROLL CALL: Members Present: Virginia Schnabel, Walter Rasmussen, John Meyer Members Absent: Larry Commers, Duane Prairie Others Present: Jock Robertson, HRA Director Nasim Qureshi, City Manager Dave Newman, HRA Attorney Rick Pribyl, Finance Director Nancy Jorgenson, Councilperson -at -Large Jack Kiffe, 318 - 114th Ave. N.W., Coon Rapids June Lundgren, 1140 Minnesota Bldg., St. Paul Cherry Lundgren, " 11 11 " APPROVAL OF MARCH 12, 1987, HOUSING & REDEVELOPMENT AUTHORITY MINUTES: 40 MOTION BY MR. MEYER, SECONDED BY MR. RASMUSSEN, TO APPROVE THE MARCH 12, 1987, HOUSING & REDEVELOPMENT AUTHORITY MINUTES AS WRITTEN. UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 1. CONSIDERATION OF LEASE OF DR. RYAN'S AUTOMOTIVE PROPERTY: Mr. Robertson stated that at the February meeting, the HRA approved and directed Staff to consummate a lease agreement with a buyer, Mr. George Frey, for Mr. Ryan's business. That deal fell through, but Mr. Ryan has found a new potential buyer, Mr. Jack Kiffe. Mr. Kiffe has agreed to meet all the conditions the HRA approved at their February meeting. He stated he had polled the HRA members by telephone several weeks ago, because at that time he was under the impression that the lease would start the first of April. About the first of April, he was told that the lease would start the first of May. So, this was now back on the agenda for the HRA's consideration. Mr. Robertson stated Mr. Kiffe was in the audience and would be glad to answer any questions the HRA might have. Mr. Newman has reviewed and approved the lease as it is. Since there was no substantive changes to the lease since the HRA considered it in February, Staff would recommend the HRA approve the lease with Mr. Kiffe. • Mr. Newman asked Mr. Kiffe if he had had an opportunity to review the terms of the lease with his attorney. HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 9, 1987 PAGE 2 Mr. Kiffe stated he had and the lease was acceptable to him. MOTION BY MR. RASMUSSEN, SECONDED BY MR. MEYER, TO APPROVE THE LEASE WITH MR. JACK KIFFE THE NEW BUYER OF DR. RYAN'S AUTOMOTIVE, WITH THE UNDERSTANDING THAT THE LEASE WOULD COMMENCE ON MAY 1, 1987. UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 2. CONSIDERATION OF LOU LUNDGREN'S LETTER OF CREDIT: Mr. Robertson stated that in the agenda was a letter from Mr. Lundgren to the HRA dated April 2, 1987. He 'stated he felt the letter was fairly self - explanatory. It stated that Mr.. Lundgren could not be at the meeting.. Essentially, Mr. Lundgren was saying that he was exploring simultaneously several different options for participation; however, he had not reached the point where a feasible financing plan could be arranged. Mr. Robertson stated Cherry Lundgren was at the meeting to answer questions about any of the details of the financing. Mr. Robertson stated another item he would like to call to the attention of . the HRA was that several times in the past, they have referred to the effec- tive date of the letter of credit as sometime this spring. That has been moved forward in the revised development agreement, so it was not as urgent as Mr. Lundgren referred to earlier. He believed the effective date of the letter of credit was February 1988. Mr. Rasmussen stated they have been discussing all along that May was the deadline for the letter of credit. Mr. Newman stated that what happened was that at one of the earlier meetings, the question was asked about the effective date of the letter of credit; and at that time Mr. Lundgren's attorney,Sherrill Kuretich, stated it was June 1987 (Jan. 8, 1987, HRA minutes, page 5). Everyone assumed that was correct, but later they found that in the revised development agreement it was actually February 1988. Mr. Rasmussen stated he felt the Commission had had a concensus that the deadline for the letter of credit would be May. Ms. Schnabel stated, yes, they had talked about May or June, but that was probably based on the misinformation that was given to them. Mr. Robertson stated that, as the HRA recalled, Staff has recommended since last November that the HRA call on the letter of credit. Staff's recommenda- tion had not changed. • HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 9, 1987 PAGE 3 Mr. Rasmussen stated that was exactly why he felt the Commission had a con - census that they would give Mr. Lundgren until May. In reading Mr. Lundgren's letter, fie did not see that much had progressed in the last 30 days. Mr. Meyer stated it seemed Mr. Lundgren had progressed a lot farther than where he was last December. Ms. Cherry Lundgren stated she has worked on the project for over 12 months. Mr. Lundgren apologized that he could not be at the meeting, but he was speak- ing at a seminar in Washington D.C. She stated that with due diligence, she has made every effort to contact all six lenders they are dealing with, and they have written proposals from all six lending groups in writing. She stated three were ready to sign immediately with just the information they have as far as issuing the commitment. Ms. Lundgren stated that at the last HRA meeting, that was the actual date they had the final feasibility study from Mr. Maxfield. Prior to that, the lenders had the loan packages but not the actual feasibility study, so the lenders have only had four weeks to review the numbers. Ms. Lundgren reviewed Mr. Lundgren's April 2 letter with the HRA members, describing each of the lending groups who have expressed an interest in the development: Summit Fund II of New York City; Winfield Development Co.; • Mr. Ed Goldin of Goldin & Co- of Denver, Colorado; Murray Savings & Loan in Dallas, Texas; Mr. Doug Mayo of Rothschild Financial Corp.; and Mr. Ben Steinberg of Steinberg Financial Co. Ms. Lundgren stated they have an individual working on syndication, should syndication be necessary, who was familiar with the package and what the payout would be over the ten years under the scenario of (1) a conventional mortgage of $6.8 million and (2) a participating mortgage which would be a little higher. She stated Mr. Lundgren has a very preliminary sketch of the tax exempt bond package, an entirely different package as far as syndication. Ms. Lundgren stated that at this point, even if Mr. Lundgren was in town, she thought he would like to give Winfield the opportunity to respond to the package. If Winfield chooses not to participate, there are two other people who have discussed coming in on the project. By the end of the week, they will have a "yea" or "nay" and will be able to proceed with one of the six packages. Ms. Lundgren stated that if the HRA chose not to call on the letter of credit, Mr. Lundgren was under the assumption that within two weeks they hope to be back with an actual development agreement with a lender and a financing package already in place. They have used a construction date of July 1, 1987, with the exception of the tax exempt bonds which she did not know the time line for. • Mr. Meyer stated it seemed to him Mr. Lundgren has fulfilled his obligation because up until now everything had been extremely negative. As he saw it, Mr. Lundgren was now on firm ground and there was almost a surety of a project which was far different than where they were at a few months ago. 0 HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 9, 1987 PAGE 4 Mr. Qureshi stated that, yes, the project looked better now than it did the last couple of months. There was a little more "meat" in the documentation than there was last month or the month before. If the HRA's understanding has been that they would draw upon the letter of credit in May or June, then there was probably no harm in delaying this a month or two more to let Mr. Lundgren proceed further. Mr. Newman stated that at a prior meeting, he felt it was made very clear to Mr. Lundgren that June was the final deadline, even though since then they have found that the letter of credit was for a longer period of time. Unless there was some very significant progress by the June meeting, that should be the final deadline. Mr. Rasmussen stated he had no problem with extending the deadline for another month, but he did think the HRA should have some kind of deadline. Ms. Schnabel stated Mr. Rasmussen's point was well taken. They might want to consider a deadline at some point in time -- possibly at the next meeting. Ms. Schnabel stated that no action was to be taken on the letter of credit, and the item would remain on the table. 3. CONSIDERATION OF A RESOLUTION APPROVING THE AMENDMENT OF REDEVELOPMENT • PROJECT NO. 1: Mr. Robertson stated that in January, the HRA authorized Staff to start the wheels in motion for amending Redevelopment Plan No. 1 to include the Univer- sity Avenue Corridor plan area. This was a suggestion made by the City Council. He stated they have proceeded to complete the draft which has been reviewed by James O'Meara of O'Connor & Hannan. The total plan with amend- ments has already been sent to the School Districts for their review. Mr. Robertson stated Staff was recommending the following two action items by the HRA: (1) to approve the resolution to amend the redevelopment plan; and (2) to approve the timetable. Mr. Robertson stated that for the HRA's information, the notice for the City Council's public hearing on April 6 had-been published in the Focus Newspaper. At the Planning Commission meeting the previous evening, they had adopted the recommendations for the plan changes. MOTION BY MR. RASMUSSEN, SECONDED BY MR. MEYER TO APPROVE RESOLUTION NO. 5 A RESOLUTION RELATING TO ENLARGING REDEVELOPMENT PROJECT NO. 1 AND AMENDING THE MODIFIED REDEVELOPMENT PLAN RELATING THERETO AND AMENDING THE TAX INCREMENT FINANCING PLANS RELATING TO TAX INCREMENT FINANCING DISTRICTS NO. 2 THROUGH NO. 8 WITHIN THE PROJECT AREA. UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. M HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 9, 1987 PAGE 5 MOTION BY MR. MEYER, SECONDED BY MR. RASMUSSEN, TO APPROVE THE TIMETABLE TO AMEND REDEVELOPMENT PROJECT NO. 1, MODIFY BY ENLARGEMENT REDEVELOPMENT PROJECT NO. 1 AND THE MODIFIED REDEVELOPMENT PLAN RELATING THERETO. UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 4. CONSIDERATION OF A RESOLUTION DESIGNATING OFFICIAL DEPOSITORIES: Mr. Pribyl stated this resolution was brought before the HRA once a year so they can designate the official depository for the HRA and to authorize the withdrawal of funds from those accounts. He stated Fridley State Bank'has been-the official depository in the past for the HRA and the City -o-f 1~ridley. MOTION BY MR. RASMUSSEN, SECONDED BY MR. MEYER, TO APPROVE RESOLUTION NO. HRA 6 -1987, RESOLUTION DESIGNATING OFFICIAL DEPOSITORIES FOR THE FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY. UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 5. CONSIDERATION OF MODIFYING S.E.H. CONTRACT FOR ADDITIONAL DESIGN WORK: S Mr. Robertson stated that S.E.H. has been working on the design of the inter- section at T.H . 65 /Lake Pointe /Old Central for several years, beginning with a $55,000 contract. A number of additional work items have been added from time to time. This was the latest contract addition which covered street lighting study,rt6,hA -of -'way . acquisition and 1a-hdscaping in the amount of $8,270. He stated it would-be in order for the HRA-to authorize this amount As an addition to the original contract. Mr. Robertson stated he would have more details at subsequent meetings. Ms. Schnabel asked if the HRA had discussed these additional expenses for this contract. Mr. Robertson stated it had been discussed before when they discussed the intersection improvements and in connection with the Lake Pointe Project. There has been a total of about $20,000 in increases authorized over the last year. This $8,270 was the latest of the increases. MOTION -BY MR. MEYER, SECONDED BY MR. RASMUSSEN, TO APPROVE THE AMOUNT OF THE EXISTING AGREEMENT WITH S.E.H. FOR AN ADDITIONAL $8,270 TOWARD DESIGN OF THE HIGHWAY 65 INTERSECTION. UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. • HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 9, 1987 PAGE 6 6. RECEIVE UPDATE ON UNIVERSITY AVENUE ASSOCIATES: Mr. Robertson stated the City Council approved the rezoning request on March 23, 1987. Enclosed in the agenda was the "City ..Council Action Taken Notice" dated March 25, 1987, which listed all the stipulations the City Council incorporated into the final rezoning agreement. Mr. Robertson stated the only outstanding item now before the final building permit was issued was a maintenance agreement to go with the storm water run -off system. They had just received it at staff level, the Public Works Department was reviewing it, and when it was approved, all the documents would be ready to sign. MOTION BY MR. RASMUSSEN, SECONDED BY MR. MEYER, TO RECEIVE THE UPDATE ON THE UNIVERSITY AVENUE ASSOCIATES PROJECT. UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 7. UPDATE ON UNIVERSITY AVENUE PLAN: Mr. Robertson stated that after discussions with the HRA and City Council regarding the Barton - Aschman proposal, some minor changes were recommended. The first phase will cover an urban demonstration segment from 57th Ave. to 61st Ave. N.E., and a rural demonstration segment from Osborne Rd. south to 73rd Ave. N.E. (rather than north to 81st Ave.) This latter change was recommended by the City Council in order that the demonstration include treat- ments from both sides of the Corridor in the City of Fridley. Mr. Robertson stated he was recommending that the HRA authorize him to enter into a contractual agreement with Barton - Aschman for getting the design work for these two demonstration segments done over this construction season. The work would be accomplished in two stages (April 3, 1987, memo from Mr. Robertson to Mr. Qureshi). Barton - Aschman has prepared the working drawings, and they have given the City a budget not to exceed $23,300. He was asking for authoriza- tion to consummate that agreement. Ms. Schnabel stated she had reviewed the proposal, and it looked very thorough and very comprehensive. She could see no problems with authorizing Staff to enter into an agreement with Barton- Aschman. Mr. Meyer stated he was interested by the fact that there was no provisions for field observation of the work on the part of Barton- Aschman. He felt they should ask Barton - Aschman for a quote of what they would charge for proper field observation, and then this could be discussed at the next meeting. MOTION BY MR. RASMUSSEN, SECONDED BY MR. MEYER, TO APPROVE A BUDGET WITH BARTON-ASCHMAN NOT TO EXCEED $23,300 TO COVER THE UNIVERSITY AVENUE CORRIDOR • DETAIL DESIGN, AND TO ASK BARTON- ASCHMAN TO SUBMIT A BID FOR FIELD OBSERVATION. THIS BID TO BE REVIEWED AT THE NEXT MEETING BY THE HRA. UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. M HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 9, 1987 PAGE 7 8. CLAIMS (1589- 1594): MOTION BY MR. RASMUSSEN, SECONDED BY MR. MEYER, TO APPROVE THE CHECK REGISTER AS SUBMITTED. UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 9> OTHER BUSINESS: a. 100 Twin Site Mr. Robertson stated the HRA had received at the meeting a memo from special legal counsel, Raymond Haik, and correspondence he has had with Mr. David Weir. MOTION BY MR. MEYER, SECONDED BY MR. RASMUSSEN, TO RECEIVE AND REVIEW A MEMO DATED APRIL 1, 1987, FROM RAYMOND HAIK TO THE MAYOR AND CITY COUNCIL, AND ATTACHED CORRESPONDENCE. UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. Mr. Kobertson stated that as the HRA members were aware, they were in the process of completing the contracts for the earthwork, the streets and utilities, and the landscaping on the 100 Twin site. In order to be on the record that they intend to fulfill these present contract obliga- tions, it would be in order for the HRA to simply direct that these contract obligations be completed to the point where the site would be presentable. Mr. Robertson stated the background on this was that there was a question on the final alignment for Lake Pointe Drive as it connects with the intersection of West Moore Lake Drive and T.H. 65. There are two houses that Woodbridge has obtained options on. They do not know if Woodbridge intends to exercise these options; however, if they do not exercise these options for any reason, Staff would like to be authorized to make a temporary connection to West Moore Lake Drive so essentially the property was complete and ready for inspection. Mr. Newman stated the HRA has already entered into the contracts for on- site improvements, but special counsel would like to have it clear in the minutes that the exact final alignment of this portion of road has not been completely resolved ,yet. That was one of the items under dispute. Because all of the site work was going to be done this summer and because there was still some uncertainty at this point as to when this issue would be resolved, it was the recommendation by Staff that a temporary road be con- structed connecting Lake Pointe Drive with Moore Lake Drive so that access • could be made to the Lake Pointe property. HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 9, 1987 PAGE 8 Mr. Newman stated he wanted to make it clear in the minutes that this would only be a temporary positioning of the road, not a permanant road. Once the dispute was resolved, that road may be repositioned into its permanent position. MOTION BY MR. MEYER, SECONDED BY MR. RASMUSSEN, TO AUTHORIZE STAFF TO PROCEED WITH DIRECTING THE CONSTRUCTION OF A TEMPORARY ROAD TO CONNECT LAKE POINT DRIVE TO WEST MOORE LAKE DRIVE. UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. Aivnl1RNMFNT- MOTION BY MR. RASMUSSEN, SECONDED BY MR. MEYER, TO ADJOURN THE MEETING. UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPERSON SCHNABEL DECLARED THE APRIL 9, 1987, HOUSING & REDEVELOPMENT AUTHORITY MEETING ADJOURNED AT 8:55 P.M. Respectfully sub 'tted, Lynne Saba Recording Secretary L� J9C K K �- JU NE L V r- tI.��2E� N cY� 3(S IlWT V, rudti , �-aox� R /(�0s P 4 G C..VN D&P -(---(4 /k- �: 15 0. / JvG ,