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HRA 07/09/1987 - 29642CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 9, 1987 CALL TO ORDER: Vice - Chairperson Schnabel called the July 9, 1987, Housing & Redevelopment Authority meeting to.order -at 7:08 p.m. ROLL CALL: Members Present: Virginia Schnabel, Duane Prairie, Walter Rasmussen, John Meyer, Larry Commers (arr. 8:10 p.m.) Members Absent: None Others Present: Jock Robertson, HRA Director Nasim Qureshi, City Manager Rick Pribyl, Finance Director Julie Burt, Asst. Finance Officer Jim Robinson, Planning Coordinator Dave Newman, HRA Attorney June & Louis Lundgren, 1140 Minnesota B1dg.,St. Paul Gerald Sunde, Sunde Engineering Barry Warner, Barton - Aschman Russell Jacobson, 327 W. Lake St., Chisholm, Mn. 55719 APPROVAL OF JUNE 11, 1987, HOUSING & REDEVELOPMENT AUTHORITY MINUTES: MOTION BY MR. RASMUSSEN, SECONDED BY MR. MEYER, TO APPROVE THE JUNE 11, 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 LOU LUNDGREN'S LETTER OF CREDIT: Mr. Lundgren stated that since the last HRA meeting, he had felt the need to get some additional help in terms of trying to get the financing lined up, particularly in terms of how to present it to the various kinds of investors. In order to help do that, he had obtained the services of Russell Jacobson, who was also at the meeting. He stated Mr. Jacobson has a long experience in terms of planning and in terms of being on the government side of 6 -7 communities throughout the country. Mr. Lundgren stated he has known Mr. Jacobson for about 10 years, and Mr. Jacobson was very creative in assembling numbers to be presented to investors. Mr. Lundgren stated they (not only their - development team, but also the City and the HRA) have come to the preliminary conclusion that their best interest at the present time was probably in the direction of a taxable bond �' issue for both Phase I and Phase II. He stated he had a meeting with Miller HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 9, 1987 PAGE 2 Schroeder at 10:00 a.m, that morning at which he presented to Miller & Schroeder the general information of the entire project, the market feasi- bility of the market rate of the six -story apartment building, and cash flow projections prepared by Mr. Jacobson. Miller & Schroeder has expressed some interest in the project, and that interest was expressed in a letter which the HRA members had received a copy of at this meeting. He stated there was nothing in the letter that suggested any commitment of any kind, but Miller & Schroeder has said they would be dealing with the numbers given to them and will come back within 7 -10 days with a number of alternative ways of possibly doing the project. Miller & Schroeder said that if they felt they could do the project, they could do it within a period of 4 -6 weeks. Mr. Lundgren stated he felt that was a very optimistic timetable. Mr. Jacobson stated he has been involved in city government for the past 16 years. For the past 7 years, he was with the City of Virginia, Minnesota, heavily involved in economic development finance, tax exempt community develop- ment action grants, revenue bonds, and related aspects. He resigned from the City of Virginia and has opened up.his own office in private financial packaging, municipal planning, as well as some real estate development. Mr. Jacobson stated he felt the first two phases of the project were very inter - related and interdependent for the overall success of both of them. The project has produced some major interest on the part of Miller & Schroeder. After going through the numbers and looking at the site, he felt there was a strong possibility they will be able to obtain financing through Miller & Schroeder. Mr. Meyer asked Mr. Lundgren if he had retained Mr. Jacobson only for the Miller & Schroeder effort, or had he also retained him to pursue other activities if Miller & Schroeder does not finance the project? Mr. Lundgren stated he has retained Mr. Jacobson to help solve the financing problem, so his efforts were not limited to Miller & Schroeder. Ms. Schnabel asked about the other possible financial backers that Mr. Lundgren has discussed in the past. Mr. Lundgren stated there were at least two "savings and loan" type of con- ventional financiers still open. Mr. Newman asked Mr. Lundgren if he had talked to any other underwriters other than Miller & Schroeder, and did he have any plans to talk to other under- writers? Mr. Lundgren stated he and Mr. Jacobson would pursue anywhere they found an interest. On the other hand, they were going to give Miller & Schroeder time to get back with a "yes" or "no" answer. Mr. Newman stated it was not uncommon to.be shopping for more than one under- ^, writer at one time. He stated this predicament has been going on for about HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 9, 1987 PAGE 3 a year now, and if the HRA decided not to act on Mr. Lundgren's letter of credit, he would encourage Mr. Lundgren to consider shopping multiple under- writers at once because of the time limitations involved. Mr. Lundgren stated he _appreciated that suggestion and would appreciate any specific suggestions as far as underwriters. Mr. Rasmussen asked for Staff's recommendation concerning whether or not to call the letter of credit. Mr. Robertson stated that since there were no other developers at this stage yet, he would recommend that the HRA delay any action on the letter of credit for another month in order to see what happens with Miller & Schroeder. No action was taken on the letter of credit, and the item remained on the table. 2. PRESENTATION OF UNIVERSITY AVENUE CORRIDOR MEDIAN TREATMENT PROPOSAL BY BARRY WARNER OF BARTON N ASSOCIATION, I C.: Mr. Warner stated that last year at this time, Barton Aschman participated with a committee of citizens and business people to establish a corridor master plan for University Avenue. That established a direction and a design theme for basically the right -of -way treatment and abutting parcels primarily to enhance the image. Subsequent to the preparation of the master plan, one of the topics that continued to have some discussion was the exact median treat- ments- -what could be done, what was possible given MnDOT's design constraints. Barton Aschman was retained by the.HRA to pursue various alternatives- -some moderate level enhancement treatment to a treatment much more significant. Mr. Warner stated he felt it was appropriate at this meeting to start out with a group education process so they collectively understand the possibilities that could occur within the corridor and also some of the opportunities, talk about some group goals and objective goals, and then visit some other corridors that have done some median treatments so the HRA can understand why or why not some of these median treatments could be adapted to.the Univeristy Avenue median. After that, they would go back and visit some of the alternatives prepared for both the rural and urban portions of the roadway. He stated he would welcome any questions during the presentation. Mr. Warner stated one of the most important things the decision makers needed to understand was what they are trying to ascertain with any treatment of the median. What, as the result of any investment, would they be getting out of it? Mr. Warner gave the falnVowiag presentation: Fridley's Median Design Goals? A. Improve community image when viewed from University Avenue r"> B. Provide a distinct community image which contrasts abutting cities HOUSING & REDEVELOMENT AUTHORITY MEETING, JULY 9, 1987 PAGE 4 C. Provide an attractive "front yard" setting for University Avenue businesses D. Set an example of the community's pride Mr. Warner stated the HRA members should think about what they personally think the goals are and possibly write those down so that when they begin talking about the alternatives, they can test the alternatives back to see if they meet the goal the HRA members think it should. Mr. Warner stated one of the things they learn very quickly when they deal with median treatment was that there are many differing agendas for the median. The roadway obviously has as its primary function the requirement to carry vehicles and transport goods in a safe, concise manner, and that was certainly MnDOT's primary objective. Factors Which Influence Median Design A.•_Mediarr and Right -of -Way Width B. Roadway designation (i.e., state trunk highways) C. Drainage design - 11krban section - rural section D. Overhead lighting - none - median - side E. Design speed F. Traffic volume G. Clear zone /recovery zone H. Number of lanes /shoulders I. Future maintenance J. Construction cost /funding opportunities K. Liability Mr. Warner stated it was very important in front of all the alternatives that the HRA have a firm understanding on what they could and could not do. HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 9, 1987 PAGE 5 Median Design Elements: A. Roadway surface.(lanes and shoulders) B. Drainage design C. Lighting - optional D. Ground cover, i.e., turf E. Landscaping, i.e., shrubs and trees F. Required protective barriers G. Traffic signals and signs Mr. Warner stated he would show some slides of a few other projects in Minneapolis of some median improvements in order to give the HRA members an opportunity to see what has been done. Mr. Warner stated the -last part of his presentation was illustrated on draw- ings showing six alternatives for both the rural sections and the urban sections, going from moderate level passive -type improvements to more aggressive improvements. (Mr. Comers arrived at 8:10 p.m.) Mr. Warner handed out an information sheet entitled, "University Avenue Median Alternatives - Fridley, Minnesota, General Cost Implications." Mr. Warner stated that irrigation was included in the more aggressive alter- natives which involved raising up the median with a Jersey Barrier; otherwise, they could get by without irrigation. He stated that irrigation would cost approximately 75� /sq. ft. Mr. Robertson stated no action was needed at this meeting. It was information for the HRA members to think about and make any comments. Mr. Warner stated he would reduce the.drawings showing the six alternatives, make copies, and send these to the HRA members. It -would take about a week. Mr. Rasmussen stated his main concern would be the cost of maintenance for any median improvements. Mr. Warner stated that lighting visually makes a very strong statement. On the other hand, there was also the traffic and safety question.and both MnDOT and the Public Works Department were interested in participating in that decision. Lighting did not always equate to safe roadways. With traffic counts increasing, they might see lighting as a more attractive feature. r•, HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 9, 1987 PAGE 6 Mr. Robertson stated they have some schematics of potential acquisition and redevelopment of the northeast corner of 57th and University, the southern intersection of the urban demonstration section. He would defer this to later in the meeting. 3. LAKE POINTE CHANGE ORDERS: a. Arbitration Payment Change Order b. Arbitration Agreement Proposal for Mining Sand Mr. Robertson stated the total award for the arbitration proceedings was $123,363. It also included a rate to be charged if sand would have to be imported from off the site. On Friday, June 19, Staff met with the City Attorney and Mr. Enebek and his attorney, Mr. Svoboda, and discussed the arbitration award. In the second paragraph of a memo dated June 26, 1987, to-Mr. Qureshi from Mr. Flora, it stated: "As a result of the dis- cussion, it was agreed that.a change order would be executed for the payment of the $123,363. Award included within that change order would be the agreement that any sand mined outside of the perimeters of the contract, excavations would be accomplished at a rate of $1.00 per cubic yard and the replacement of compacted sand at $.25 per cubic yard." Mr. Robertson stated it was agreed at this meeting that the City would not import sand and would use the sand on site in various mixtures with other soils. He stated they asked Mr. Sunde to attend this meeting to explain how this can be done in terms of completing the job without importing sand. Mr. Gerald Sunde stated that in the arbitration, the arbitrators indicated a set price for on -site sand and for mining off -site sand. So, the prices were quite different - -quite high for off -site sand. It was their plan to complete the hotel pad, which was the one remaining pad that required sand, by using sand within the excavation limits as shown in the plans and also by on -site mining, but they do not plan to export any sand off -site. Mr. Sunde stated he believed they would need about 20- 40,000 yards of sand. Mr. Meyer stated he questioned the language in Mr. Flora's June 26, 1987, memo stating: "any sand mined outside of the perimeters of the contract, excavations would be accomplished at a rate of $1.00 per cubic yard and the replacement of compacted clay at. $.2S per cubic yarda." .,He stated it took a lot of extra work to compact clay properly with sand, and 25¢ per cubic yard was pretty cheap. This was rather unusual language to convey the fact that this was providing clay compacted in place for 25¢ per cubic yard. Mr. Commers stated he felt Mr. Flora's language was intended to be a clarification of the actual arbitration award. HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 9, 1987 PAGE 7 Mr. Sunde stated the language was quite clear in the "Award of Arbitrators" (agenda page 3 -C) which stated: "Mine sand from areas on project site not presently planned to be excavated - $1.00 cubic yard (excavated volume)." Mr. Newman referred the HRA to agenda page 3 -0 which was a summary of the discussion which the City received from Mr. Enebak's attorney dated June 19, 1987, outlining the understanding of the agreement. He referred to paragraph 5: "in order to facilitate measurement and payment for the sand mining and clay compaction fill in those areas of sand mining, the City will issue a change order directing payment for mined sand at $1.00 cubic yard (excavated volume) and for clay replacement and compaction at 25¢ cubic yard." Mr. Meyer stated he was very concerned that there not be any misunderstand- ing between the City and the developer., which has been the problem in the past. Mr. Meyer stated if their big.' --objective was to make the hotel pad class A sand by taking sand from Pad A, was there something in the contract that said that was what the developer expected the City to do? Mr. Commers stated as he understood it, when Mr. Flora interpreted the arbitration award, his interpretation was ambiguous. Were they going to get other ambiguous interpretations of that award, or did they need a change order signed by everyone to make sure they all were in agreement as to what the award said? Mr. Newman stated that what he understood.the HRA members to-be-saying was they were not challenging the wording of the award but were questioning the wording related to the future work. At this time, he would recommend the HRA authorize the payment of the $123,363.to Enebak pursuant to the arbi- trator's award, but they could get some clarification on the language regarding the mining of sand for review at the next HRA meeting. Mr. Sunde stated it was important for the HRA to know that Enebak was proceeding with the work in mining sand to complete the hotel pad at this time. So, mining was already taking place beyond the excavation limits because it was the only way they could get the hotel pad done. If that was delayed a month,, it would mean another month of work without a change order. Mr. Meyer stated he felt Mr. Newman's suggestion to authorize payment ofthe $123,363 as the base arbitration award was a good suggestion,tut then the cost per cubic yard, etc., he felt that language had to be more spelled out. It seemed they could ask Mr. Sunde to.work up a language that conveys precisely what that really means for the next HRA meeting. Mr. Commers stated that if the work by Enebak was already :dor}e by the ^ next HRA meeting, what good would it do the HRA to have the language clarified? HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 9, 1987 PAGE 8 Mr. S-unde stated he wanted some legal basis on which to tell Mr. Enebak that he could continue with the work. Mr. Commers asked Mr. Sunde if he was satisfied with the language in the arbitration award. Mr. Sande stated there was no dispute by either Enebak or himself on the understanding of the language in the arbitration award. Mr. Commers hated that since Enebak and Mr. Sunde were in agreement, then he did not think the HRA should have a problem with it. Mr. Sunde stated that since June 19, Enebak has conducted operations according to what was discussed in terms of mining on the site. Enebak has done a very good job on the site. MOTION BY MS. SCHNABEL, SECONDED BY MR. MEYER, THAT THE HRA RECOGNIZES THE ARBITRATION AWARD AS ISSUED BY THE ARBITRATION BOARD, AND IN RECOG- NITION OF THAT, AUTHORIZES THE PAYMENT OF $123,363. THE HRA FURTHER AUTHORIZES MR. SUNDE TO PREPARE A CHANGE ORDER FOR EXECUTION BY THE CITY COUNCIL IN KEEPING WITH THE LANGUAGE OF THE ARBITRATION AWARD THAT SAND WILL BE MINED FROM AREAS ON THE PROJECT SITE NOT PRESENTLY PLANNED TO BE EXCAVATED AT $1.00 1CUBIC YARD AND THAT CLAY:BE COMPACTED TO REPLACE SAND IN THOSE AREAS AT $.25 PER CUBIC YARD. I� Mr. Meyer stated that somewhere in the change order, there should be some specifics written down about what was to be done with the soil. Mr. Sunde stated he would agree with that. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION- CARRIED UNANIMOUSLY c. Woodbridge Drive Road Improvement Change Order Mr. Sunde stated this was discussed at the last HRA meeting about the poor soil in a section of this road. He stated as a follow -up he had written a letter to the City dated July 1, 1987, (agenda item 3 -E). He had reviewed the soil borings in that area and there were a couple of borings that showed silty fine sand underlain by SC and CL soils. The borings did not show a water table near the ground surface, but did show some fairly heavy soils down a short distance. This situation has persisted until just recently when the unusually dry spring and early summer resulted in drying. Mr. Sunde stated they questioned the soils engineer about the recommenda- tion and his main concern was not the presence of water at times near the surface but damp conditions that would cause frost heaving. Mr. Meyer asked if they were seeing this frost susceptibility elsewhere on the site. HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 9, 1987 PAGE 9 Mr. Sunde stated he thought this case was a little unusual because it overlays a fairly dense soil where the water tends to accumulate. Mr. Robertson stated this change order was approved by the HRA at their last meeting so this was an informational item. d. Street Light Bolt Change Order Mr. Pribyl stated that on Monday, July 6, the City Council approved $5,585.47 for anchor bolts for street lighting, taking into account the total number at $50 -75 per set. MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRAIRIE, TO CONCUR WITH THE ACTION TAKEN BY THE CITY COUNCIL REGARDING ANCHOR BOLTS FOR STREET LIGHTING. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS.DECLARED THE MOTION CARRIED UNANIMOUSLY. e. Approval of the Pad A Modified Equal Agreement Mr. Sunde stated the HRA had a copy of a letter from Enebak dated June 24, 1987 (agenda item 3 -P) stating they agreed to perform the exca- vation and backfill at the pad "A" location for the same price as the original contract price. Ms. Schnabel stated she questioned item #4 in the letter which stated: "The City of Fridley aedepis and agrees to all items outlined in Mr. Svoboda's letter dated dune 22, 1987,with the following exception (this credit will be available only if the final plans for the sand fill requirements at the Hotel Pad are not changed), we agree to strike that from the agreement." In other words, Enebak was agreeing to- strike from the agreement the sand requirements for the hotel if the pad was not changed. Mr. Sunde stated he was planning to write a letter of concurrence to Mr. Enebak, but before doing that, he would like to review the wording of item #4 with Mr. Newman and get a clarification of that statement. He was not quite sure what was meant by that statement either. MOTION BY MS. SCHNABEL, SECONDED BY MR. MEYER, TO APPROVE _THE CHANGE ORDER WITH RESPECT TO THE MODIFICATION OF PAD A, WITH THE EXCEPTION THAT ITEM #4 IN MR. ENEBAK'S JUNE 22, 1987, LETTER TO MR. SUNDE BE CLARIFIED. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMER_S DECLARED THE MOTION CARRIED UNANIMOUSLY. HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 9, 1987 PAGE 10 f. Hotel Pad Sand Requirement Mr. Robertson stated there was a letter from Subterranean Engineering Corporation to the HRA clarifying the recommendations contained in their Soil Report for the Hotel Site. This was an informational item. g. Possible Pad A Enlargement Approval Mr. Sunde stated Woodbridge was requesting that a sketch be drawn up and it be sent to Subterranean and Enebak for a cost so Woodbridge can determine whether or not they want to do the extra work. (letter dated June 17, 1987, to Mark Burch from Eric Nesset - agenda item 3 -Y). This was an informational item also. 4. CONSIDERATION OF ORDERING DET L,DESIGN FOR RICE CREEK ROAD IMPROVEMENTS: Mr. Robertson stated there was a racquet club /shopping center development proposed on the -south side of Rice Creek Road. The Planning Commission has reviewed it and made a favorable recommendation to the City Council. The City Council will have a public hearing at their next meeting. He stated the City was now faced with the task of doing a detailed engineering design of that improved Rice Creek Road according to its conceptual.layout which was included in the HRA agenda. The question before the HRA was: Did they at ,---� this time want to proceed with directing SEH to proceed with detailed design work or did the HRA merely want to take this under advisement and ask for a cost estimate from-SEH for the next meeting, at which time, the HRA would make a decision on who would do -the detailed design? Mr. Commers stated that since there was still going to be a public hearing at the next City Council meeting on the oroj ect, Me. di d _ not - see__h'ow . the..HRA could proceed with directing SEH to do the final design work before that meeting. MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRAIRIE, TO REQUEST SEH TO PREPARE A COST ESTIMATE FOR THE DETAIL DESIGN WORK FOR THE RICE CREEK ROAD IMPROVEMENT BASED ON THE PRELIMINARY DESIGN, AND BASED ON THE CITY COUNCIL'S APPROVAL OF THE PROJECT. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON CONNERS DECLARED THE MOTION CARRIED. UNANIMOUSLY. 5. CLAIMS (1615- 1627): MOTION BY MR. RASMUSSEN, SECONDED BY MS. SCHRABEL, TO APPROVE THE CHECK REGISTER AS PRESENTED. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON CONNERS DECLARED THE MOTION CARRIED UNANIMOUSLY /_� HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 9, 1987 PAGE 11 Mr. Pribyl stated he would.also like the HRA to authorize payment of $30,000 to. Winfield Development for soil correction according to the development agreement. Winfield Development has now completed construction. MOTION BY MR. PRAIRIE, SECONDED BY MS. SCHNABEL, TO APPROVE THE CERTIFICATE OF COMPLETION AND AUTHORIZE A PAYMENT OF $30,000 TO WINFIELD DEVELOPMENT FOR SOIL CORRECTION COSTS. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. Because of some concerns expressed by the HRA members, Mr. Pribyl stated he would send the HRA members a copy of the insurance policy covering them. 6. ANNUAL FINANCIAL STATEMENT: Continued until next meeting. 7. OTHER BUSINESS: a. University Avenue Corridor Plan Mr. Robertson stated that in January, the City Council expressed an n interest in having a redevelopment project at the lower end of University Avenue. At the last City Council meeting,Mr. Qureshi presented to the City Council three different alternative concepts for redevelopment of the area comprising Shorty's Towing, Rapid Oil Change, and the property behind that. Mr. =Q�hi stated that if the HRA wanted Staff to do more work, Staff would run some numbers and bring these back to the HRA. The HRA members agreed to have Staff pursue this and bring back a package for the HRH's review. ADJOURNMENT: MOTION BY MR. RASMUSSEN, SECONDED BY MR. MEYER, TO ADJOURN THE MEETING. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE JULY 9, 1987, HOUSING & REDEVELOPMENT AUTHORITY MEETING ADJOURNED AT 10 :33 P.M. Respectfully.submi ted, tynnpr Saba Recording Secretary