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HRA 11/12/1987 - 29646CITY OF FRIDLEY HOUSING & REDEVELOPM iT AUTHORITY MEETING, NOVEMBER 12, 1987 Acting Chairperson John Meyer called the November 12, 1987, Housing & Redevelopment Authority meeting to order at 7:05 p.m. ROLL CALL: Members Present: John Meyer, Duane Prairie, Walter Rasmussen, Virginia. Schnabel (arr. 7:40 p.m.) Members Absent: Larry Comers Others Present: Jock Robertson, HRA Director Dave Newman, BRA Attorney Rick Pribyl, Finance Director Julie Burt, Asst. Finance Officer Louis & June Lundgren, 343 East Kellogg Blvd, St. Paul Alan T. Rouse, 1786 Hennepin Ave. S., Mpls. APPROVAL OF OCTOBER 8, 1987, HOUSING & REDSVELOPIMU AUTHORITY MINUTES: MOTION by Mr. Rasmussen, seconded by Mr. Prairie, to approve the Oct. 8, 1987, Housing & Redevelopment Authority meeting minutes as written. UPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPERSON MEYER DDCLARED THE MOTION CARRIED UNANIMOUSLY. Mr. Lundgren stated that at the last meeting, the HRA members had approved and authorized a telephone call by City Staff to see if they could get the land control situation worked out with Union Labor Life Insurance Co. That call was made, and he thought that particular point was resolved. They did get a letter expressing an interest in the proposition, but the unfortunate thing was that the amount of money they want to put up was $4,400,000, which was not enough. He stated this project does not look very promising. Mr. Lundgren stated he had two other packets which were out, with expected responses to be in about the end of next week. One, Scudder Real Estate Advisors, headquartered out of Atlanta, Georgia, an equity lender, -puts together packages primarily for pension funds. He has asked them for debt funding and the required equity funding for both the first and second phases. They are a little different from some equity lenders in that they require about one -third of the positive cash flow for eight years out of the project; in addition to the return on their debt, etc. �. Mr. Lundgren stated the other lender was Monetary Resources in New York. It was an arrangement with the Mellon Bank, and they would do both phases. HOUSING & REDEVELOPMENT AUTHORITY MEETING, NOVEMBER 12, 1987 PAGE 2 Mr. Lundgren stated he was expecting to hear from these two firms by the end of next week. He was also continuing to pursue other avenues. Both these lenders were set up to close yet this year, even though he realized that was only about six weeks away. Mr. Meyer asked Mr. Lundgren if he was maybe trying to do too ambitious a project on this corner in terms of living space. Should he possibly be looking at a three -story low- -rise and lessen the structural costs? Mr. Lundgren stated he has been told by several people that, yes, he is trying to put too much on that piece of land. He. has found many people who would finance a three -story building. It was his personal feeling that this land in this location with the kind.of density they were talking about would support the project as it has been proposed. He has seen situations where the property was underbuilt or built incorrectly in terms of the potential, and a community never recovers from that. In other words, he still had a strong belief in the project the way it has been conceived. It would be very easy for him to give in and do what was really merchandisable and financeable, but that is not the kind of building he felt should be built in this location. Mr. Meyer stated that before too long, the HRA. was going to have to make a decision regarding Mr. Lundgren's letter of credit. Mr. Lundgren stated he understood the timing and the date. He was very appreciative of the HRA's patience and understanding to this point. He was trying very hard, and he still felt he could get the project done. No action was taken on Mr. Lundgren's letter of credit, and the item remained on the table.. 2. CONSIDERATION OF CHANGE OMER FOR LAKE POINT CORPORATE Ck)TM FOR SUBTERRANEAN: Mr. Robertson stated that at the October meeting, Staff had hoped to have. the final change orders for work on the Lake Point site. The information from Subterranean had come in late so it was not approved by the HRA. When that information did arrive, it was rather confusing, so it took some time, and the deadline was missed to get this information into the HRA's agenda.. Mr. Robertson stated the final change order amount was $3,516.17. If the HRA was uncomfortable with acting on this at this meeting, Staff had no problem with laying it over until the next meeting and giving the Commissioners a more detailed report before the next meeting. Mr. Meyer stated that as a generality,.they have had quite a few change orders on the Lake Pointe site. Has the City Engineering Dept. or staff taken account of the fact that perhaps some of Subterranean's charges might also reflect the fact that they were working on corrections to some of their own mistakes or inaccuracies? He was not accusing Subterranean of anything, HOUSING & REDEVELOPMENT AUTHORITY MEETING, NOVRVMM 12, 1987 PAGE 3 but was possibly the City paying for things that should have been paid for by Subterranean? Maybe the City. could approach, Subterranean in a tactful way and ask them to better explain their billings. Mr. Newman stated he shared with the staff some of the same concerns as chose expressed by Mr. Meyer. He suggested that this item.be continued until the next meeting in order to allow City Staff to talk to both Subterranean and Sunde Engineering privately in order to make sure that everything was in order. Mr. Robertson stated he was comfortable with that request. Staff would come back to the next meeting with more information regarding these change orders. 3. CONSIDERATION OF IMPRUVELENT EXPENDITURES ON: a. University Avenue Corridor - $1.5 million b. Public Ramp -,$1 million c. Rice Creek Road Diversion - $0.6 million d. Moore Lake Water Quality - $0.5 million e. North Area Ponding - $0.35 million Mr. Robertson stated these were the items reviewed by the BRA at their joint meeting with the City Council on Thurs., Nov. 5. These five items were approved by the HRA for action for projects for 1988. 1 MOTION'by Mr. Prairie,. seconded by Mr. Rasmussen, to approve Resolution NO-HRA 7 -1987, "Resolution Authorizing Improvement Expenditures for Projects within the Tax Increment District for Construction in 1988 ". UPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPERSON MEYER DECLARED THE MOTION CARRIED UNANIMOUSLY. 4. CONSIDERATION OF DIRECTING S.E.H. TO COMPLETE FINAL PLANS FOR RICE CREEK ROAD AND SUBMIT TO CITY COUNCIL FOR CONSTRUCTION; Mr. Robertson stated that on Aug. 13, 1987, the HRA authorized S.E.H. to prepare the detailed plans and provide for an inspection for a specified amount of money. What was now before the Commission was a procedural matter where the HRA was directing S.E.H. to work through the City Council as the BRA's billing administrator, and the HRA was agreeing to pay back the City Council in a monthly manner. This was the same type of arrangement the HRA had with the contractors on the Fake Pointe site. Mr. Meyer stated that in the resolution, in the first "WHEREAS", it stated: "..the Housing & Redevelopment Authority authorized the.execution of a con- tract with short-Elliot-Hendrickson for the development of the final plans for the improvement channel ization of the Rice Creek Road from T.H. 65 to Central. Avenue ". n Mr. Meyer stated neither the City nor the HRA has seen the final plans, and then in the next to last paragraph of the resolution, the HRA was resolving to pay the City on a monthly basis for the cost of the street improvements HOUSING & REDEVELOMW AUTHORITY MEETING, NOVEMBER 12, 1987 PAGE 4 to Rice Creek Road based on the final plans. Usually, the professional will bring to the public body plans which are officially approved; and then after the approval of the plans, the authorization for the letting of bids and the worries about expenditures, etc., are made. It seemed like the "cart before the horse" here. Here they are being asked to approve monthly payments from some sort of plans that are not done yet for some kind of road for an underdetermined amount of money. Mr. Newman stated the City Council acts as the HRA's agent when it comes to public improvements. In that regard, the City Council goes through each specific procedure, and, in essence, this resolution was authorizing the City Council to let the contracts, go through the necessary procedures, and the BRA was making funds available to the City Council to authorize the payment. Mr. Newman stated Mr. Meyer's point was well taken, and perhaps sane wording should be added to the resolution to say that the BRA authorizes reimburse- ment not to exceed the allocated budget amount. Mr. Newman stated what happens and what has happened in the past was that the City Council and the Public Works Department work with the consulting engineer on the final plans. The BRA was authorizing the City Council and the Public Works Department to take the necessary steps for them, and they were acting as the HRA's agent. Mr. Meyer stated it just seemed a little odd to say they are going to pay the City of Fridley on a monthly basis for the cost of street improvements to Rice Creek Road. That was what.was being said in this resolution, and he did not think it was good business. The resolution did not say how much the street improvements were going to be, and it cUd not say what the improvements are to Rice Creek Road. But, the improvements, as defined here, are contained in the documents which are still being drawn and which have not been seen or approved by the City. Mr. Newman stated this issue has come up in the Past. It .goes back to how much authority the BRA wants to give to the City Council. Mr. Meyer stated he did not think there was anything wrong with authorizing the City Council to be the BRA's agent to develop plans and specifications. And, then, at such time as the plans come before the City Council for final approval, it seemed to him there could perhaps be a second resolution. Mr. Prairie stated he felt the BRA could trust the City Council to act on their behalf. Also, for expediency, it was probably better since the City Council meets more times a month than the HRA. Mr. Rasmussen stated he would prefer to let the City Council handle this. Mr. Newman stated if the BRA is going to authorize the City.Council to act on their behalf, the City Council would rather have a broad resolution because then they have the flexibility to react to different situations as they arise. If the BRA wants to have a reporting process, that was fine, but it was something Staff would need to know. \ HOUSING & REDEVE ""ENT AUTHORITY MEETING, NOVEMBER 12, 1987 PAGE 5 Mr. Robertson stated he certainly would be willing to keep the HRA informed and give them reports as things occur. Mr. Pribyl stated this particular contract with S.E.H. was the HRA's contract. It was more work to have to deal with it through the City Council when it is the HRA's contract. Mether the City authorizes the original agreement or the HRA, the Public Works Department is still working with that group and makes recommendations to both the City and the BRA. From the Finance Staff's perspective mechanically, it works much better if the HRA authorizes the contract so there is only one step to go through instead of two. He under- stood the only reason they have been going through the City in the past was so the payment could be processed sooner, and the HRA meets only once a month. while the City Council meets twig a month. Usually, though,, when consultants bill on a monthly basis, they bill at the end of the month, so the BRA meets often enough to be able to accommodate most of those type,of payments. Mr. Robertson stated the problem usually arises (true of more complex projects) when there are inevitable modifications that.come about; and if they don't hit the monthly .cycle, there can be a month's delay. If S.E.H. could wait a month on billing, they could continue as they are now. The point was that Staff has assumed the HRA would want. this set up the way things have been set up in the past with the City Council being the'BRA's agent and the BRA reimbursing the City. Mr. Meyer stated he certainly had no problem with that process. He just felt it was good business for the City to have seen the final plans and have agreed that the plans, as drawn, are in accordance with the wishes of the City and the wishes. of the HRA, have approved the plans, and are ready for letting the bids. (Ms. Schnabel arrived at 7:40 p.m.) Mr. Robertson stated they could add the file number to the resolution and also the words "reimbursement not to exceed the contract amount ". He would recommend approval of the resolution with those two .additions. MOTION by Mr. Rasmussen, seconded by Mr. Prairie, to approve. Resolution No. BRA 8 -1987, "Resolution of the Board of Commissioners of the Fridley Housing & Redevelopment Authority (1) Requesting that the Fridley City Council Authorize Construction of the Street Improvements to Rice Creek Road from T.H. 65 to Central Avenue, pursuant to DPW project No. ST 1988 -2 and (2) Approving and Authorizing the Reimbursement to the City of Fridley on a Monthly Basis, for'the Cost of'these Street Improvements in an ,amount not to exceed $110,100.00. UPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPERSON MEYER DECLARED THE MOTION CARRIED UNANIMOUSLY. W HOUSING & REDEVE iOPMENT AUTHORITY MEETING, NOVEMBER.12, 1987 PAGE 6 5. CONSIDERATION OF DRAFT BRA 1987 ANNUAL REPORT: Mr. Robertson stated the BRA had received an earlier draft of the BRA Annual Report at the joint BRA /City Council meeting the previous Thursday. The BRA approved the wording as recommended for the Fake Pointe update. Tonight, the BRA had the rest of the copy that was missing on the back- ground of the BRA and on Moore Lake Comnons. He would like the Commissioners to review this draft and contact him within the next two days as to any changes. 6. CONSIDERATION OF 1988 MEETING DATES: The Commissioners. were in agreement with the 1988 meeting dates as submitted. 7. INFORMATION ON PROPOSED ELDERLY HOUSING AT ST. WI LIAMS : Mr. Robertson stated. Staff has been meeting with the Community Development Corporation (C.D.C.) of the Archdiocese. They are proposing to buy the parcel of land from St. Williams Church for $150,000 and construct 70 units of elderly housing. They are aiming at a strata in the market above the subsidized housing at Village Green,but below the market rate rental. If they proceed, C.D.C. will be coming to the City with an outline of the proposed development agreement, and Staff will then bring that to the BRA for review and action. Mr. Robertson stated Staff was asking the BRA if they wanted to give Staff any direction for negotiating a draft of the development agreement. The BRA did earmark $150,000 in the tax increment financing budget a year ago for this type of project in this area, and then it was reviewed at the HRA/ City Council meeting a week ago. The sense of the BRA at that meeting was they wanted to keep that item in the budget, and there was certainly an affirmative response from the City Council, especially Councilperson-at- Large Nancy Jorgenson. The.Commissioners.indicated that tie staff should meet- with- the developers._for the purpose of receiving more information about costs and rental'ra'tes before the Commission could give a direction as to how much assistance the BRA may want to provide. 8. CLAIMS (1571 - 1688) MOTION by Mr. Meyer -, seconded by Mr. Prairie, to approve the check register as submitted. UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPERSON SCHNABEL DELCARED THE MOTION CARRIED UNANIMOUSLY. 9. OTHER BUSINESS: a. Proposal from Coldwell Banker Mr. Robertson stated that in the agenda was a copy of .an unsolicited proposal received from Coldwell Banker to assist the HRA in marketig the southwest corner (the Lou Lundgren project corner). Mr. Newman and he had reviewed the proposal, and they need to know if the Authority had any interest in this type of approach. HOUSING & REDEVEMPMENT AUTHORITY MEETING, NOVE= 12, 1987 PAGE 7 This proposal raises many questions. Two of which were: (1) If the HRA were to do = -- this, they_ -would have -to- word- the proposal carefully so it was very clear that the HRA was not listing property it does not own, even though they do own the liquor store and the former Amoco Station property; (2) He_would strongly recommend against_ a one year agreement as proposed by- Coldwell Banker and make it a six month agree- ment renewable upon performance. Mr. Robertson.stated Coldwell Banker essentially was saying that because. they have a national network, they. are, in a better position to find major tenants and find developers than an individual agency. and there was some logic to that. It was his feeling they should pursue this. They have certainly been having difficulty in getting a development for that corner, and that was their top priority. Mr. Newman stated no action was required by the HRA at this meeting. If the HRA was interested in this type of concept, the Staff can pursue it further and try to define it more. Mr. Rasmussen stated he was certainly interested in pursuing it. b. Civic Center Renovaticn.Planned - Drafted News Article Mr. Robertson stated the C omissioners had received a draft of a news article that would appear in the Fridley Newsletter. The last paragraph of the article dealt specifically with the proposed funding for the parking facility that was approved by the BRA earlier in the meeting. He would appreciate the Commissioners reading at least the last paragraph and pointing out any problems or making any suggestions. AD • - 14 ii kim MOTION by Mr. Meyer, seconded by Mr. Prairie, to adjourn the meeting. Upon a voice vote, all voting aye, Vice - Chairperson Schnabel declared the Nov. 12, 1987, Housing & Redevelopment Authority meeting adjourned at 8:35 p.m. Recording EIZw mvm mw�-" ..0000WOW, - - -