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HRA 09/10/1987 - 29644CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 10, 1987 CALL TO ORDER: MOTION BY MR. PRAIRIE, SECONDED BY MR. RASMUSSEN, TO ELECT JOHN MEYER AS CHAIRPERSON PRO TEM IN THE ABSENCE OF BOTH THE CHAIRPERSON AND VICE - CHAIRPERSON. UPON A VOICE VOTE, ALL VOTING AYE, THE MOTION CARRIED UNANIMOUSLY. Acting Chairperson Meyer called the meeting to order at 7:25 p.m. ROLL CALL: Members Present: John Meyer, Duane Prairie, Walter.Rasmussen, Virginia Schnabel (arr. 8:30 p.m.) Members Absent: Larry Commers Others Present: Jock.Robertson, Community Development Director Rick Pribyl, City Finance Director Julie Burt, Asst. Finance Officer Dave Newman, HRA Attorney Gerald Sunde, Sunde Engineering Louis & June Lundgren, 343 East Kellogg Blvd., St. Paul APPROVAL OF AUGUST 13, 1987, HOUSING & REDEVELOPMENT AUTHORITY MINUTES: MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRAIRIE, TO APPROVE THE AUG. 13, 1987, HOUSING & REDEVELOPMENT AUTHORITY MINUTES AS WRITTEN. UPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPERSON MEYER DECLARED THE MOTION CARRIED UNANIMOUSLY. 1. TOUR OF LAKE POINTE SITE: The Commissioners took about one -half hour of meeting time to take a tour of the Lake Pointe site. Those taking the tour were HRA members John Meyer, Duane Prairie, and Walter Rasmussen, along with Gerald Sunde of Sunde Engineering, Jock Robertson, and Dave Newman. 2. CONSIDERATION OF ROAD CLOSING TO NON- CONSTRUCTION TRAFFIC AT LAKE POINTE: Mr. Robertson stated the City had received a couple of inquiries from people living on 57th Avenue about traffic on the site in the evening and on weekends. He stated he had checked with Jim Hill, Public Safety Director. Mr. Hill said there was nothing wrong with putting up barricades with "Road Closed" signs during the evening hours and weekends while construction was going on, and the HRA could direct either the Public Works Department or the contractor to put up the signs. ,ln*l HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 10, 1987 PAGE-2 Mr. Robertson stated the lower road to the south that was not yet finished was designated a "State Aid" road. At such time that the road was completed, as he understood it, that road should be opened to the public. At this time they are only constructing a temporary connection to West Moore Lake Drive, and he questioned whether they could keep that temporary road barricaded. Mr. Prairie stated that ideally it would be nice if they could keep that road closed until there was a development. Mr. Newman stated that from a purely legal standpoint, before the road could be opened, the HRA would have to transfer ownership to the City. The HRA does not own roads. At that time, it would be the City's responsibility as to what to do with the road. MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRAIRIE, TO DIRECT CITY STAFF TO SEE THAT THE ROADS ARE-BARRICADED TO NON - CONSTRUCTION TRAFFIC AT LAKE POINTE SITE ON WEEKENDS AND EVENINGS AND THAT STAFF LOOK INTO THE MOST REASONABLE COST TO ACCOMPLISH THIS. UPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPERSON MEYER DECLARED THE MOTION CARRIED UNANIMOUSLY. � 3. CONSIDERATION OF CHANGE ORDER FOR SUNDE ENGINEERING: Mr. Robertson stated the City had received a letter from Gerald Sunde dated Aug. 30, 1987. Also included in the agenda was a copy of the letter of agree- ment dated May 23, 1987, ou=tlini;ng the agreement between Sunde Engineering and the City. He wanted to note in the record that this agreement was approved at that time without review by the City Council. Mr. Sunde stated basically the change order was to allow them about two more months to finish the utilities. -In April they came in for a change order for a month, but at that time, they figured they would have the utilities done by September 1. Now it appeared that it would take until the end of October. In his August 30, 1987, letter, he had estimated the cost of the remaining work. Mr. Meyer asked why it was costing Sunde Engineering more money to finish the work. Why did Mr. Sunde need more money to do the engineering aspect of the staking, etc., for the same amount of physical work? Mr. Sunde stated when the job was originally anticipated, they were expecting there would be concurring activities going on - -that there would be utilities going in at the same time as the grading. He thought those both had completion dates of mid -July, so they felt at that time their inspector on the job could act on both the utilities and grading. They have had to cut .back the inspector so he is only at the site two hours a day, but now they are going to have to have him back for the uttlA ties.as he was not able to do it sequentially with the grading work. That was why it was costing extra now. They had hoped to !-� have a lot of things done at the same time. HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 10, 1987 PAGE 3 MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRAIRIE, TO APPROVE THE CHANGE ORDER FOR SUNDE ENGINEERING FOR THE AMOUNTS OF $7,170 FOR INSPECTION COSTS, $9,600 FOR STAKING COSTS, AND $2,500 FOR MISCELLANEOUS COSTS AS OUTLINED IN MR. SUNDE'S AUGUST 30, 1987, LETTER. UPON A VOICE VOTE, ALL VOTING AYE., ACTING CHAIRPERSON MEYER - DECLARED THE MOTION CARRIED UNANIMOUSLY. 4. CONSIDERATION OF LOU LUNDGREN'S LETTER OF CREDIT: Mr. Lundgren stated he would again like to give the HRA a progress report. He stated - Miller & Schroeder has the taxable bond issue, but the bond market during the last 30 days has not been doing very well. The interest has gone up. He stated Miller'& Schroeder were still willing to do the deal, but they would require a construction lender or interim lender to carry the project to break -even occupancy. That was a very difficult thing to do. Mr. Lundgren read the following excerpt from a two -day old Wall Street Journal article: "The bond rating agencies are preparing to give the coveted Triple A rating to securities backed by junk bonds." He stated he would give a copy of this article to City Staff for their information. He stated there was $200 -300 billion worth of junk bonds in the market which almost all financial institutions have. This would theoretically make a lot more liquidity in the bond issues and back bond issues. He stated he has talked to Miller & Schroeder about this, and they are wondering about it. Mr. Lundgren stated he has contacted.another bonding company and he will be meeting with a representative of that company on Monday, Sept. 14, at 9:00 a.m. They seem very interested and are not interested in a private issue as Miller & Schroeder were, but as a possible public issue. Mr. Lundgren stated he has been discussing the senior housing element with a wholly owned subsidiary of Mellon Bank. They say they would be willing to give a commitment but need an MIA appraisal. He stated that on these two housing projects, he has a feasibility study, and an MIA study is usually needed for any loan at the time of closing. He generally does not want to get the MIA appraisal done.too early because the appraisal can become outdated, and these appraisals are quite expensive. This :company std if they had an MIA appraisal, from the numbers given to them for this project, they could give him an application commitment in two weeks. He stated he was going to go through the process of getting an MIA appraisal if the HRA would allow him another month to do so. This would be for the senior housing project only. Mr-. Lundgren stated he has also make contact with7a life insurance company on a conventional loan which was a participation loan. They will give a forward commitment with a clean take -out with some conditions. He will be meeting with this company the following morning to discuss some of these conditions. This company was headquartered in Washington D.C. He can get the commitment for as short as 12 months or as long as 24 months. This company has a $15 million loan limit, and he has discussed all portions of the project. HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 10, 1987 PAGE 4 They have more reservations about the senior project. He would try to get the financing on the two phases -- apartment complex and retail. They will want to have a right of first refusal on the office building. Mr. Lundgren stated he was still dealing with the Towle Company in Minneapolis, who has given him three prospects, which should be contacting the City. Mr. Lundgren stated the Rothschild deal was still in place. The only thing required in that was to have a stronger joint venture partner.- With a stronger joint venture arrangement, there was still an opportunity through the Golden Company in Denver. Both those were status quo at this time. Mr. Lundgren stated that in talking to people in terms of joint ventures, he had discovered that they all had their own interests, but everyone seemed to want to make the apartments smaller, the buildings a little cheaper, and to cut out different things in the project. He stated as far as he was concerned, he has expressed an interest in any joint ventures where he would have suffi- cient design control and be absolutely certain they would maintain the consistent quality project that he has been discussing with the City and the HRA. .(Vine - Chairperson Schnabel arrived at 8:30 p.m.) Mr. Meyer stated that if there was anything the HRA could do to help Mr. Lundgren in dealing with his contacts to.make the project more feasible, he would encourage Mr. Lundgren to communicate those things to Staff in specfics so Staff could relay that information to the HRA. Mr. Lundgren stated he appreciated that, and there might be ways the HRA could help in the future, but not.at this point. No action was taken on.Mr. Lundgren's letter of credit, and the item remained on the table. 5. INFORMATION ON UNIVERSITY AVENUE CORRIDOR PLAN: Mr. Robertson stated Barton - Aschman has taken the survey the Public Works Department furnished and has done a detailed design of.curbing locations, median design, paving, exact locations for the bus shelters, sidewalk locations, planter boxes, etc. Mr. Robertson stated when they met with Barton - Aschman last week, it appeared very certain that they will have to move some of the traffic signal posts so these posts do not end up in the middle of the crosswalks or in awkward locations. He stated they have asked Barton- Aschman to prepare a proposal in order to get cost estimates for the final design and actuakl. construction costs. As soon as Staff receives that, they will forward it to the HRA with a recommendation. Mr. Robertson stated they have a meeting set up for September. 17,with some people from MnDOT on the native flowers and native grass specifics. Mr.. Barry Warner was concerned that Staff get some kind.of anticipated schedule of how long it would take for these plant materials to become established. HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 10, 1987 PAGE 5 Ms. Schnabel stated she had been looking at:the painted section of fencing along University Avenue. She stated it looked nice, but she wondered how that black fence was going to stand out against the white snow in the winter- time. Mr. Robertson stated that the fence was painted black to simulate what a vinyl coated fence would look like, Also, as he undenstood.it, a brown .vinyl coated fence not available and.that was why the fence.was painted black. He stated that between 57th and 59th Avenues, they have received, .approval from MnDOT -to replace the fencing entirely. Where the fencing -cannot' be removed, as the existing fencing deteriorates, they would have the option of replacing it with -vinyl coated fencing. 6. FINANCIAL STATEMENT REPORT: Mr. Pribyl stated he would give the HRA an overview of the significant accounting events that occurred in 1986. He stated that basically, it was an uneventful accounting year, except for the advance refunding.necessitated by Miller & Schroeder. He stated total revenues in 1986 were $1,921,129; total expenditures were $3,226,418, showing an excess of expenditures over revenues of $1,305,289. Mr. Pribyl stated they received no comments from the auditors as far as improvements, internal controls or activities that have gone on with the HRA. Mr. Pribyl stated.the.Staff that works in conjunction with the HRA was currently working on numerous reporting situations that would provide infor- mation as they get more and more into the tax increment area. After the meeting, he would like to show the HRA members some of the things the Staff has done. 7. CLAIMS (1647 - 1658): MOTION BY MR. PRAIRIE, SECONDED BY MR. RASMUSSEN, TO APPROVE THE CHECK REGISTER AS PRESENTED. UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. ADJOURNMENT: MOTION BY MR. PRAIRIE, SECONDED BY MR. MEYER, TO ADJOURN THE MEETING. UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPERSON SCHNABEL DECLARED THE SEtiT. 10, 1987, HOUSING & REDEVELOPMENT AUTHORITY MEETING ADJOURNED AT 9:10 P.M. Respectfully sub fitted, Aa ryn6V Sa a Recording Secretary