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HRA 03/10/1988 - 6517HOUSIlG & FEBELOPMY AUTHORITY NEETIHG, MARCH 10, 1958 7:00 P. M. Nasim Qureshi Director of HRA and Off icial Copy city of Fridley AGENDA HQJSING & REDEVEWEMENr AUTHCRITY MTG. THQRSDAY, MARCH 10, 1988 7:00 P.& 1 • Housing & Redevelopment Authority Minutes: February 11, 1988 Special Housing & Redevelopment Minutes: February 25, 1988 CONSIDERATION OF LCU LUDDGREN'S PROPOSAL . . . . . . . . . . . . . . . 1 - 1B CONSIDERATION OF • • • axwNs mmrm M CONSIDERATION OF MAINTENANCE AGFOMM FOR LAKE POINTE SITE TARING THE 1988 GR WING SEASCN . . . . . . . . . . . . . . . . . . . . . . 3 - 3A C CONSIDERATION OF A OXMCT WITH SU DE ENG'N=' aG To FINISH STAKING AND DO CONSTWCTION INSPECTION AT LAKE POINM . . . . . . . . . 1 4 - 4B CONS; IDERMION OF REVISED CONTRACT FOR STREET COMPLETION AT 5 LAKE POINTE . . . . . . . . . . . . . . . . . . . . . .. . . . . . . CONSIDERATION OF PROPOSED CHARLES COOK HCUSIM PROLTECT . . . . . 6 - 6A INFORMATION CN PONDING PROJECT AT SpRu GBROOK NAWRE cum . . . . . . 7 - 7B QLATMS . . . .. 8-8B OTHER BUSINESS: CITY OF FRIDLEY HCUSM & REDVALMMU AUT aUTY MINUTES, FEBRIARY 11, 1988 k91[0' Chairperson Comers called the February 11, 1988, Housing & Redevelopment Authority meeting to order at 7:06 p.m. ROLL CALL: Members Present: Larry Commers, Virginia Schnabel, John Meyer, Members'Absent: Duane Prairie, Walter Rasmussen Others Present: Jock Robertson, Executive Director of EPA Julie Burt, Asst. Finance Officer Virgil Herrick, City Attorney Lou & June Lundgren, 343 Kellogg Blvd. , St. Paul Alan Rouse, 1786 Hennepin Ave. So. Mike Mulrooney, Business Development Services, Inc. Pat Pelstring, Business Development Services, Inc. Wally Wilber, Coldwell Banker Jeff Nmwcher, Ooldwell Banker APREMI, OF JAN[= 14. 1988 HOUSING & fl�R1F'�1G'r[�s1NFT�n' NOME= MINU'ZES: Mon by Mr. Meyer, seconded by Ms. Schnabel, to approve the January 14, 1988, Housing & Redevelopment Authority minutes as written. UPON A VOICE VOTE, ALL VOPING AYE, amIR msw OD*'ERs DECLARED THE MOTION CMUUED UNANIMDUSLY. 1, r•n,.TemFUnmTON OF IAU LTA'" "' S r• OF _CREDl'T: Mr. Robertson stated that as stated in his memo to the BRA dated Feb. 5, subsequent to initiating proceedings to cash Mr. Lundgren's letter of credit, the City received a proposal from him to revive the project. He had anticipated a letter of comQnitment from the J. M. Thompson Co. , but Mr. ing that he has found another Lundgren had informed him before this meet general contractor McDevitt & Street Co. feels and an outline this e. The company general been contractor was McDe set out for the HRA. Mr. Robertson stated staff had also received materials on how this project ion would generally be structured. He stated he felt the appropriate cation would be for the HRA to receive more information from Mr. Lundgren estimated timetable for the project. The HRA would not be making a decision on this project at this meeting. Mr. Lindgren stated the HRA had most of the information at this time. He felt he had financing arranged so he can proceed with the project. He had made a proposition ndistons f rtwhat needs ouuldh have to happen. He stated he had outlined the conditions really needed a response to this from the HRA before he could proceed with the Centennial Mortgage proposition. Mr. Lindgren stated he needed $23,000 immediately to file the application. He was prepared to do that, but he was not prepared to do it unless the HRA was willing to participate. He needed some reaction from the HRA before filing the application. , Mr. Lundgren stated that as the HRA members knew, the money market was changing quite rapidly. 7he prime went down a few days ago, but most of the Predictions seemed to indicate that they are going to get some more decrease in the short term rates and probably a little lesser degree in the long term rates. This was terribly important in terms of any mortgage because a quarter of a point means about 1/4 of a million dollars in terms of the mortgage that can be sustained in developing a project of this size. Mr. Commers asked Mr. Lundgren to briefly explain what he was talking about in terms of the overall project, the commitment he was looking for, and the difference between the mortgage and how he was going to come up with the interim. Mr. Lundgren stated Centennial Morgage Co. was the co- insurer. In the figures they put together, they came up with a mortgage of $7,252,000. That was based on 93% occupancy. They have the right to increase that up by $200,000 just by going up to 95% occupancy, but they are not likely to do that. Centennial Mortgage has talked directly to Lee Maxfield, and Mr. Maxfield will be able to update the material they will need. This will take about 2 -3 weeks once he is notified. Mr. (bmHmers asked about the difference between the equity and the mortgage. As he understood it, the contractor was going to contribute a letter of credit for $1 million, and Mr. Lundgren wanted the HRA to do'it in terms of a sale and leaseback. Mr. Lundgren stated that was correct. He wanted a leaseback in the amount of $850,000 for the ramp. That would build the parking underground. He had talked about it being interest -free on the front end for four years. His figures indicated that they can pay back at 8 1/2% the entire principle, pay back the interest at the end of that fourth year, and pay back the entire principle in 11 years. Mr. Robertson stated as he understood it, Mr. Lundgren was asking f or forgiveness on the interest for the first four years. Mr. Lundgren stated that was correct. Mr. Lundgren stated Centennial Mortgage also has the ability to sell this mortgage to a private fund. What they do is buy down the interest rate in effect; and, according to the figures, that would increase the mortgage by $1 million alone. So, there was another $1 million potential if they needed to go that way. -2- Mr. Lundgren stated he needed to sit down with staff and work out the specifics. Mr. Robertson had indicated to him that if the BRA has to buy property for this project, the BRA might have to buy the entire property more than would be required for the first building. Mr. Lundgren stated he had told Mr. Robertson that Centennial was willing and anxious to finance the second phase, the second building, also, and he would anticipate that project would follow 60 -70 days behind the first phase. He, said this because it influenced a little bit the BRA's situation in terms of what the BRA has to do about the property. Mr. Robertson stated that regarding the Levy property where the f irst phase building would be located, even though Mr. Lundgren would not actually need the front part of the property to proceed, the comment he had made to Mr. Lundgren was he did not believe it would be wise for the BRA to buy just a portion of the property now and then anther portion later. It did leave the other commercial strip that fronts on University Ave. , and the BRA did have control of the corner lot (old service station). Mr. Lundgren stated there were still four phases, and he planned to do all four phases. He wanted to proceed with the retail /commercial as rapidly as possible. However, he did not want to promise more were the ones he wanted to The first two phases were the housing ph get launched first. Mr. Robertson stated staff estimated the acquisition cost for the entire quadrant at $3 million. Mr. Meyer asked why it was important to bring in a company like McDevitt & Street Co. to make the project go, rather than a local contractor. Mr. Lundgren stated there are a lot of contractors who do not like to publicly bid commercial work. These larger contractors with a lot of resources and a lot of ability are able to go in and do a project of this size and scale with less money than a contractor that acts under bidding. When they have to put up letters of credit, they will do the things that are necessary to make the project work, and they do not want to be long term owners. They want to get into the project and, within a relatively short period of years, get out. This particular contractor works in over 25 states and has substantial credit. Mr. Meyer stated here was an organization neither the BRA or the City know anything about that is going to be a key player in this whole project. To him, this company was just a bunch of money managers who have zero interest in construction except as a means to make money and then get our. What the HRA has to have is a contractor and an architect team that put up a qual ity building, so the BRA or the City does not end up putting out money in maintenance, dissatisfied clients, eta Mr. Lundgren stated that was his job- He would be the owner of the building and the one who would be ensuring the quality. Ms. schnabel stated Mr. Lundgren was asking for $850,000. Was the $850,000 51: going exclusively for the contruction of the parking ramp? flow many stalls would be in the ramp? Mr. Lundgren stated there would be 145 stalls in the rang. He stated he had not said the $850,000 would pay for the ramp. What he has said is they have the cost of the building including the ramp, and they are $850,000 short. To build the ramp separately might cost more or less than the $850000. The $850,000 was arrived at cn the basis of need, not cn the basis of the actual cost of the ramp. Mr. Lundgren stated he would like to have some kind of commitment f rom the HRA that they are willing to give him this assistance as of the closing date. Mr. Comers stated that other than saying they might be agreeable to the concept, the HRA was not in a position to make any comQnitment until they see the numbers and how it is going to work, in terms of bonding and the HRA's ability to cover it. Mr. Lundgren stated perhaps the appropriate action would be to instruct staff to work with him to come up with something that is satisfactory to both parties. Ms. Schnabel stated she would be agreeable to that. Mr. Meyer stated he was very negative to this whole operation, because it seemed to him they are slipping far back fran the control they should have on this project. They are losing control of the contractor, and Mr. Lundgren was losing more and more control. Here was a contractor that was not a contractor, but a money broker. Mr. Lundgren stated he would not speak anymore in defense of this contractor until he could bring back more information. He understood what Mr. Meyer was saying, but he had to make the project work, whether it was with a local contractor or anyone else. They have plans and specifications for what they want. He was not interested in building anything different fram what he has always talked about. Mr. Herrick stated that from what he was hearing and from what he had read, Mr. Ltndgren's proposal was substantially different than the proposal the HRA acted on previously. This was really a new proposal. It was also his understanding that there was another group of people who are also interested in making a proposal. There were also two groups of people who were interested in representing the HRA on this site in an attempt to market the site. He would think what the HRA should do is consider Mr. Lundgren's new Proposal and determine whether or not that proposal was something they wanted to go along with in concept; but before they could even make a decision, they needed more information. The letter from McDevitt & Street Company was hardly a commitment letter. At best it was an expression of interest. They would also have to weigh the other proposal that will be - l - forthcoming and decide if either proposal was something that was acceptable to the HRA. If neither proposal was acceptable, then the HRA might want;. to -4- consider getting an exclusive agent to represent them on this particular parcel of land. Mr. Robertson stated he has discussed this with Mr. Herrick, and they are in agreement with this general course of action. Mr. Comers stated that at this time, the HRA has not seen any other proposals, other than Mr. Lindgren's. He did not see any harm in trying to define Mr. Ltndgren's proposal a little bit better and see what it means in terms of dollars and cents. If anyone else comes in with a pr opo sal , they can look at it, too. In the meantime, since Mr. Lungren's proposal was the wily one before the HRA, staff should go forward and see if it is feasible. Mr. Meyer stated he agreed with Mr. Commers. He did not see any harm in going along with Mr. Lindgren's proposal in concept. Ms. Schnabel stated that was fine, but she would like to see them have a better understanding of what was being requested of the HRA in terms of a coaanitment. Whether or not they accept it was something else, but it might help than further to understand the entire project and everything that has to be cone with that development, no matter who the developer is. They have dealt with Mr. Lindgren for such a long time that she did not see any harm in spending another few weeks with Mr. Lundgren on this proposal. Mr. Robertson stated staff would get together and try to do some projections. ...,.�.,...,T,�,., zvn mum cY'vTf+HGTF'S`P OI1AD DTI' OF UNIVERSITY 2. i i �N,L`TT►i.'R�TTON OF A MARKJI 1 W2 RM. FOR iaaai A�� *a1F Aim MISSISSTPPI SrREEI': Mr. Robertson stated both Coldwell Banker and Business Development Services have indicated they would like to attend and address the HRA briefly at this meeting. Both firms were fully aware of the process but wanted to make a short presentation and answer any questions the HRA members might have. Mr. Robertson stated Mr. Pat Pelstring and Mr. Mike Mulrooney were representing Business Development Services. Mr. pelstring stated he had had the opportunity to address the HRA for a few minutes at their last meeting. He stated Business Development Services was not just a coirenercial real estate firm. They do variety of other activities which would relate very well to this specific project. j directly involved in assisting with economic development efforts in the communities of Woodbury, Vadnais Heights, Little Canada, Marshall, Brainerd, Montevideo. They work extensively with tax increment f icing in Wo dhave been involved with a number of tax increment financing projects and Vadnais Heights, Coon Rapids, Fbrest Lake, Montevideo, and Marshall► and feel they have a good working knowledge and understanding of that process. They get involved fairly extensively directly with developers in assisting then in their f inancing and structure of the projects. Zhey do preliminary market analysis for developers and for businesses. They do have affiliate real estate services which can be utilized in the case where broker services -5- would be provided. Mr. Pelstring stated they have had the opportunity to review the project with Mr. Robertson on a number of occasions, and Mr. Robertson has provided them with the basic materials of the site. It was their observation that: (1) it does have excellent access; (2) recent growth and redevelopment in this area has been well received and its reputation was very stropg; (3) the primary market that can be served in this area was a mix of housing and retail /entertainment; (4) their analysis based on square footage indicates the site would probably support between $17 -23 million. Mr. Pelstring stated their approach in taking a look at the site was because of representing the site initially as a real estate project with some potential, they would rather look at it initially with the HRA from a developer perspective. They thought that served a couple of advantages. The key advantage to the HRA was gaining an understanding f rom the HRA's perspective on exactly what the utl imate benef it to the HRA and the City might be. Instead of going through a process which could be quite lengthy to select a developer and then begin a rather extensive negotiation on the structure of that development and City assistance, they would like to come to some basic understandings on the structure of that assistance on the front end so that ultimately when the HRA selected a developer, they can ask the questions and make sure that developer is willing to meet those commitments. Mr. Pelstring stated their preliminary review of the project indicated that from the development standpoint, they think the site costs to the developer ultimately should be its fair market value. They looked at a number of ways to analyze that fair market value. They would see the HRA's participation substantially in the excess costs associated with the acquisition and demolition of the site. That property as raw land had one value, and the real value to the developer is as raw land. That should be the first guiding principle they look at. Mr. Pelstring stated they would estimate a 50/50 retail /residential mix. Fbr valuation purposes, they should look at approximately $3,000 per unit development. Secondly, within the area of the retail development, it was generally decided on a square foot basis (again, talking only about the raw land acreage) at a range, at least, initially, of $2.00 -3.50 per square foot or $85,000- 150,000 per acre. Mat gave then an immediate basis to take a look at what the value of that land really is ultimately to the developer. Obviously, there were a number of variables in place. Mr. Pelstring stated the relationship ultimately between the HRA and the developer will have a number of key components. The first was that the HRA and the developer would sign a complex development agreement. He was suggesting that the basic concepts be agreed upon early in the process. They were suggesting that the HRA would provide three levels of assistance to the developer: L Fridley HRA initiates site assembly, redevelopment, and clearing. -6- 2. The Fridley BRA and developer agree to an ultimate property valuation. This amount would be lent to the developer on a subordinated basis with a three to four year principal and principal and interest deferral. 3. In consideration for the Sousing and Redevelopment Authority absorb- ing the additional acquisition and redevelopment ousts, the developer, in turn, would agree to provide a 10 to 20 percent equity position in the ultimate project. This would provide that the BRA would at some point receive both its pro rata share of cash flow from the project and, ultimately, its pro rata share of the project appreciation upon sale. Mr. Pelstring stated another important factor to consider was that based upon their preliminary analysis, it appeared very clear that the ultimate benefit to the BRA could be pretty strong. They are looking for acquisition, redevelopment, and public improvement. They would need approximately a $3 1/2 million tax increment financing bond. A $12 million project, which was at the low end of what they were suggesting, would generate approximately $550,000 a year in increment. That increment would fully amortize all the BRA's front end costs in the project. Mr. Pelstring stated the ultimate benefit then to the BRA goes back in two different directions. The loan payment, subordinated mortgage, assuming a $1.1 million value for 20 years at 8% would generate $112,000 a year to the BRA. That would be unencumbered f rom the tax increment f inancing process. The value of the equity participation - 10 -20 %. This structure says that the BRA finances all of the o Dsts of the tax increment f financing process, and that assumes all the site assembly► demolition can be accomplished f or $3 1/2 million. The developer signs the development agreement and retires all that cost through the tax increment process. In turn, the BRA would receive the land value over a 20 year time period at 8% and the equity participation. So, conceptually, this becomes the proposal they would market directly with the developers. Mr. pelstring stated they were suggesting not just to market the property, but to actually market a development format so that when they are discussing the project with a developer, it was not an open -ended question as far as what the BRA will provide and haw much assistance the BRA will give. Mr. pelstring stated that as far as their participation, they feel they would need a six month ommmitment to market the project to the developers. They would like to assist the BRA on a fee basis for the acquisition of existing sites and suggest this only from the standpoint of consistency between the BRA and developer. Other than that, they were not suggesting any other out -of- pocket expenses to the BRA. They were taking the responsibility to be reimbursed ultimately by the developer of the project. Mr. Pelstring stated their project schedule was ambitious, but they did not think it was unreasonable: Feb. /March - further developing the concept, coming back to the 5L' HRA with more specifics on the structure of the HRA's assistance that the HRA would provide or allow to market. continue discussions with developers to determine interest. April/May - Identify what they believe to be the 4 -5 key developers within the area and request then to submit preli�inary information and qualifications for the HRA's initial review. June - Be in a position to bring to the HRA 2 -4 developers with their conceptual plans; presentations by those developers. July - The HRA to select one of the developers. August - Prepare draft of the commitment and negotiate agreement. Mr. Robertson stated Mr. Wally Wilber and Mr. Jeff Nammacher were representing Coldwell Banker. Mr. Wilber stated they concur with much of what Mr. Pelstring had said. He stated there were some things they would do a little differently, but all in all, they agred with the process Mr. Pelstring had outlined. Mr. Wilber stated the one thing they would like to stress was that in trying to get one of these projects cone with any developer was that so many of the developers are reluctant to make any major moves unless they have tenants ready to move in and unless they have a good line on what the mix was going to be. Mr. Wilber stated two developers he had talked to specifically about this project said they were interested but what could they ao with the property? Mr. Wilber stated that was where the selling and marketing would take place. They are going to have to line up a tenant mix that is going to interest the developers to the point where they are going to go on line for a project of this size. He rather suspected this could be cone locally. CDldwell Banker had lines to developers throughout the United States, but he did not think they would have to tap that resource. He felt there was enough interest in this area in that particular block to get the job done, but he did think a coordinated effort in setting it up in the whole process will bring to the table some developers with some interest and participation in the project in order to sustain the interest of the developers. Mr. Commers asked what kind of tenants they would look for that would take 101000 - 20,000 sq. ft. Mr. Jeff NmMacher stated it was crucial, especially in today's market with lending institutions that are nervous about projects that are being built and the over - building, that the lender was privy to the marketplace. He showed a map that would give the HRA a little insight into the marketplace, -8- from his point of view. Mr. Nammacher stated he had worked in the marketplace for 2 1/2 years. He was familiar with the market and had a pretty good sense of the retail desman on the market. Their major emphasis would be on what kind of tenants they could draw to this kind of development. They would propose to came up with a strong marketing approach prospecting for tenants and, at the same time, would be generating this tenant information in talking to developers they have relationships with and which are now in the marketplace. Mr. Nammacher stated they have been working on a number of projects where there are similar concerns. He had put together a developer list of activHe retail developers in the marketplace. There were over 60 of them. showed this list as it was one of the tools Colwell Banker uses in their prospecting. He stated they have all the tenant categories of retail users. They categorize tenants that are viable businesses that have more than one location, because those businesses might be expanding. They also gather information on all the shopping centers in this marketplace, a floor plan of each, the tenant mix, etc. This was all part of their job and the value they bring to developers and tenants by having this information. Mr. Wilber stated that getting a developer interested in this area was totally dependent upon being able to give that developer the type of informtion he /she needs to think he /she can do a successful project. If they can do that, then there will be interested developers. Mr. Wilber stated that, in summary, their first approach was to work with the HRA in getting a format they can present to a developer. At the same time, they are selecting a developer, they are acquiring the type of informatin that developer might need. The developer wants the assurance of what kind of tenants they can bring into that location. Ms. Schnabel stated, as she understood it, Coldwell Banker's expertise was in finding tenants for already developed centers. Mr. Nammacher stated they are always in front of tenants and understanding the tenants' reeds and requirements. They take that infamation and help the tenant get into the right spot. Whether that is in an existing center or development, or whether the tenant's requirements, plus Coldwell Banker's knowledge of some other requirements put together,, would create a need for an additional shopping center. So, they do both. It was vital to their business to work with existing landlords and developers who want to build new centers. Ms. Schnabel asked Mr. Naimmacher or Mr. Wilber how they felt about the residential proposal for this property as a mix. Mr. Wilber stated they were in agreement with the residential mix. Mr. Commers asked what the financial arrangements would be with Colwell Banker. Was their commission obtained f ram the developer? -9- Mr. Wilber stated their fee will be built into the whole thing. They will ultimately get their commission f rom whoever buys the property. It was their feeling that they would predetermine the fee based on the fair market value and base the commission on that through the HRA. Zheir responsibility was to the HRA to market that property. So, yes,.the developer will pay the commission, but their responsibility was to the HRA so if they agree on what the commission is going to be with what the developer will bring in terms of the developer's financial position, it was better that way. That way they are not constantly negotiating. Mr. Nammacher stated, yes, their responsibility was to the HRA to maintain value. Because of that responsibil ity to the HRA, they feel if they are going to take on the project, they should be compensated by the HRA. Mr. Wilber stated there were some semantics here, but he did not want to get in the position where they are trying to negotiate for the developer to get the best deal from the HRA. In a sense, both the HRA and the developer have to be happy or they are not going to get the transaction done. He thought their emphasis ought to be on trying to represent the HRA's best interest. Mr. Pelstring asked what the ERA's relationship was with Mr. Lundgren at this time. Mr. Commers stated the HRA's contract and exclusive relationship with Mr. Lundgren had terminated in August 1986. At that time, Mr. Lundgren defaulted on his written agreements with the HRA, and since then, although they had not called on his letter of credit that was posted, they had tried to cooperate with him and had encouraged him. However, any kind of formal, legal relationship terminated over a year and one -half ago. Mr. Pelstring stated their approach was quite different from Coldwell Banker. He did not anticipate talking to more than 10 -15 developers. The developer is responsible to make sure space is to be leased and Business Development Services will not accept the project until the developer has completed the preliminary market analysis they need. If the HRA was not under exclusive relationship with anyone right now and were basically open to development proposals, and if his initial analysis was not something the HRA was uncomfortable with, could he presume he could pursue a proposal at this stage? Mr. Gbmmers stated he saw no reason Business Development Services could not do that. Mr. Pelstring stated it would be done entirely at their awn risk. If he did develop interest with a developer, would the HRA be open to hearing about it? Ms. Schnabel stated she felt the HPA was always open to other proposals. Mr. Herrick stated that at this stage, he was sure the HRA would welcome looking at any proposals. -10- Mr. Mul rooney stated Business Development Sery ices was a 1 ittl a dif f er ent than a typical real estate f iun in one major way. The major difference, which has occurred in Fridley and which the BRA should be commended for, was that objectives have been established for any site the BRA wished to develop. The same thing had to be kept in mind for this property. 7hey can look at what the market might offer, what developers might offer, but he believed it was the position of the BRA and the City to establish some objectives for that property and then approach the developers on that basis. Too many eoam unities offer a strategy which was commonly referred to as the M. B. C. (Management by Crisis) approach, take what is given to you, . and then 20 years f ran now try to redevelop it because it wasn't what you wanted in the first place. 7 hey tend to look at the M. B.0. (Management by Objective) approach, citing what the BRA wants developed on that property, look at the numbers, and approach developers with those objectives in mind. If those developers cannot meet those objectives, then they are not the developers the BRA or the City wants for this project. Mr. Mul rooney stated they do differ in that regard with major development proposals in that they try to operate in a direction which establishes the same objectives for the project in the first place, and then make attempts to achieve those objectives over the long range. Mr. Wilber stated he would stress that sometimes they give the developer so much credit that the assumption is that if they put the right parcel together with the right prices, they are going to have the vision to come and get it all done. Zhey feel it doesn't always work that way. Sometimes the developer needs to be coaxed; and if the developer is interested, he /she will come to the table. Mr. Comers thanked Mr. Mulrooney, Mr. Pelstring, Mr. Wilber and Mr. Nmoacher for coming to the meeting and making their presentations. Be stated both firms had made their cases very well, and the distinction between the two was very clear as to how each f irm felt and how each one would approach the problem.. The BRA would certainly give each f inn its consideration. (Mr. Oomners declared a 10 minute recess at 8:40 p.m) 3. Mr. Robertson stated there has been quite a bit of debate at staff level on whether or not to use the State Highway Department's "off - the - shelf" lights ay for highway lighting. It would not only cost less, but State n hers Department would maintain the lights. They are getting stat together on what the costs would be versus what they want to invest in initial capital investments for a unique "Fridley look" even fofor highthe llighting. He wondered what percent of the traveling public td to the projected overhead lights, .fixtures, colors, etc., as opposed commercial lighting and some of the landscaping features. Mr. o mm►ers stated he did look at the lights,- and when he sees something different, he does notice it. He was not sure whether the difference in -11- cost was worth it, however. Mr. Robertson stated the real question was: What are they going to adopt for the highway lighting? It was not only for the University Avenue Corridor, but now it was also for the Highway 65 causeway across Moore Lake. Mr. Robertson stated he would like the HRA to adopt the recomnerations for the University Avenue Corridor Phase I with the 73rd Avenue to Osborne Road section test, the alternative approved at the last meeting, which was simply increasing the maintenance of the existing turf together with the landscaping already approved by the HRA; testing the wildflower /prairie treatment between 69th Avenue and 71st Avenue; and the turf_ restoration segment together with landscaping in the urban section between 57th Avenue and 61st Avenue. Mr. Robertson stated the second recommendation would be that the HRA adopt the recommendations in Barton- Aschman's Dec. 9, 1987, memo concerning what the signal and light standard maintenance schedule and costs would be for Phase I which was approximately $109,000. That was assuming the decorative lighting and the special overhead 1 ights. If they finally decide on the MnDOT lighting, that number will be lower. Mr. Comers stated there had been mention about some kind of agreement with MnDOT for maintenance. Mr. Robertson stated that was correct. He referred to Mr. Flora's memo dated Feb. 1, 1988, second to last paragraph: 'tole discussed the possibility of the District contributing a fixed amount of money to the Corridor project....If any costs are to be shared by the District outside of normal maintenance and repair, it will require an agrement to be processed through the main office." Mr. Robertson stated his re=ia endation would be for them to proceed to do this. Essentially, the State will give the City a sum of money that will represent what MnDOT spends on maintenance. The City will incorporate that money into the City's maintenance budget. Ms. Schnabel stated she had a problem with the planting recommendation. She stated it would have to be clearly understood that these were test sites,. that it was going to take 2 -3 years to get a good feel for what these areas will look like, at least for the prairie /wildflower test site. Her biggest concern regarding the prairie /wildflower test site was; How clues it appear to the community? Does it appear that the City and the HRA cannot get their act together? It is not going to look good for a couple of years; yet people are going to hear that the HRA spent a lot of money on this area, and what is the net result going to look like? She had a problem doing these improvement piecemeal, and then in between the test, sites is the old stuff that has been an eyesore for years. She had a hard time justifying spending money on something that is going to look pretty bad for the next couple of years. Mr. Comers stated the other alternative was to make a decision to do the -12- whole thing at the same time. The HRA has been hesitant about doing that because they really did not know how it was going to turn out. He agreed with Ms. Schnabel's concerns. At this rate, it was going to take 4 -5 years before there is anything to show for the money that is being spent. Certainly, public relations -wise, a lot of legitimate questions will be raised about what is going on. Mr. Schnabel stated maybe they should go with the increased maintenance or whatever is neoessary-- replacement of turf, . etc. , but then try the test sites for the prairie /wildflower on another area in the City so they can get a feel for what it will eventually look like, but where it would not be on a roadway' where everyone sees it. It has always been her choice to do the prairieoned doinr iteiecemeal.hShe just felt theyiwoul9etha lotlof quests 9 P criticism f ran the ommunity. Mr. Herrick stated that as a property owner along University Avenue, the thing he had not liked was that the grass was too high, it was full of dandelions, and with the ugly chain link fence, it looked terrible. He agreed with Ms. Schnabel. If there has to be dandelions, th itself scald them, and try to keep the area as green as possible. That, . by make a lot of ved. If the�HRA decided improve to doeanythi g, at east some fence was remw ravement. increased maintenance would be a great imp Ms. Schnabel stated she would like to see the increased maintenance a the ll way up and down the entire Corridor. She felt that was really what the people wanted from the beginning— something visual that people could see. If people do not see something happening along there pretty soon, they will lose their faith in the City in being able to produce. Mr. Robertson stated that because they were deferring making investments on the new turf and the prairie grass, the HRA would have more money to spend on other things. They would really lose very little by increasing the maintenance over the entire Corridor or a larger test segment for a season or two. He agreed with Ms. Schnabel's idea of having the prairie /wildflower test site off the Corridor. Mr. Cmumers stated maybe they should table further discussion and ask staff to come in with a proposal for maintenance. He stated he was a little concerned about the figures Mr. Flora was coming up with for annual maintenance fees for Rice Creek Road, Highway 65, the Central Avenue parkway, and the University Avenue Corridor at $176,000 - 533,000 next summer just to maintain Lake Pointe. He would like to know how Mr. Flora arrived at those figures. Mr. Robertson stated he would be comfortable with having the discussion tabled and having staff come back with a fairly detailed break -out of costs; however, at this meeting, • he would like the HRA to authorize staff to proceed with writing the plans and specs for the landscaping and hard paving so they can get started on that at this time. Dkl= Mr. Meyer stated he was sympathetic to the idea of improving what they already have, . including contracting with someone to spray for dandelions and crab grass, to really dress up and mow what they have. That is the way lawns look like anyway and it would look pretty nice to have a mowed and manicured boulevard system along the Corridor. Mr. ClDm¢ners asked if the maintenance would include watering. Mr. Robertson stated it would have to if they wanted the green look, especially in the dry months of July and August. However, it would depend on the year. MOrl by Ms. Schmbel, seconded by Mr. Meyer, to authorize staff to proceed with the landscaping and the hard surface areas,,. including the traffic signals and light standards, in the test areas --57th Avenue to 61st Avenue and 73rd Avenue to Osborne Road, to defer the praire /wildflower experiment until staff can recommend an off -site plot, and to have staff bring back to the next meeting a detailed review of maintenance costs and an explanation of maintenance to include the University Avenue ODrridor. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON CO DECLARED THE MOTION CARRIED UNANIlMWSLy. u. Mr. Com¢ners stated he would like to have this item continued also. He would like to see a detailed review of the maintenance costs for the Lake Pointe site also. He would also like to raise the issue of why the City couldn't do the maintenance rather than hiring a contractor to do it. 5. INFORMATION ON Sr. WI T TAM PROJ=: Mr. Robertson stated he had asked the people involved if there was anything the HRA could do at this time, and they have said "no ". He told them the HRA was very interested in this project; and when there was a proposal or any additional requests, . they should cone to the HRA. 6. OTHER B STNESS: a. Update on Pbnding at Springbrook Nature Center: Mr. Robertson stated they are now at the stage where the ponds cut the walkways, and they have gotten the bids on the rustic bridges. They will cost around $17,000- 20,000. They are still within the total budget of $350,000 which the HRA approved in November. He stated he would keep the HRA informed. b. Midwest Van & Storage: Mr. Robertson stated this was an early notice concerning the Midwest Van & Storage building on the west side of Central Avenue by Rice Creek -14- 7. Road. He had given the HRA members a copy of a memo to him from Jim Robinson concerning a proposal for redeveloping that property by Mr. Ridderman for multi -use retail. This property was in one of the tax increment financing districts, so the HRA might receive a proposal for the March meeting for assistance in upgrading the appearance of the building. At this time, they have not received any specif is design. This was strictly an information item at this time. e -,F; V1 M 0 1 • 1 MCITI by Mr. Meyer, seconded by Ms. Schnabel, to approve the check register as presented. UPON A VOICE VOTE, ALL VOTING AYE, CHAIItPRL%N CD* ERS DECLARED THE MDTION G%RRIED UWIMW&Y. Mor, by Mr. Meyer, seconded by Ms. Schnabel► to adjourn the meeting. Upon a voice vote, all voting aye, Chairperson Commers declared the motion carried unanimously and the February 11, 1988, Housing & Redevelopment Authority meeting adjourned at 10:00 p. m, Respectfully submitted, -15- QTY OF ERnLEY SPECIAL HOUSING & REDEvEropmENT AUK aUTY MEETn G, FEB. 25, 1988 -z -0 • ;4� Vice-Chairperson Schnabel called the February 25, 1988, Special Housing & Redevelopment Authority Meeting to order at 7 :18 p. m ALL CALL: Members Present: Virginia Schnabel, Duane Prairie, Walter Rasmussen Members Absent: Larry Cm mere, John Meyer Others Present: Jock Robertson, Executive Director of HM Dave Newman, HRA Attorney June and Louis Lundgren, 343 Kellogg Blvd.. St. Paul Russell Jacobson, Jacobson Consulting. Imo. Nancy Jorgenson, councilmenber -at -Lard pRnEML $Y UXIIS r il1�T]C�EN: Mr. Robertson stated that at the February 11th HRA meeting, the HRA had directed him to meet with Mr. Lundgren, his consultant, and the other developer interested in the project and get pro formas and analyses from then, and come back to the March meeting with an analysis of both proposals and a staff recommendation. At the same time, the HRA had directed him to collect Mr. Lundgren's letter of credit. Mr. Robertson stated he had met several times with Mr. Lundgren and Mr. Russell Jacobson. This culminated two days ago in a meeting with Mr. Lundgren, Mr. Jacobson, Kevin Jensen, President of the Bank of Springfield. David Newman, and himself. At that meeting, a proposal was discussed and that proposal was now before the HRA in a letter from Mr. Jacobson dated Feb. 22, 1988. After about 1 1/2 hours of discussion, Mr. Newman and he decided the proposal was encouraging enough that some time should be spent to go through the pro forma before going ahead and receiving the letter of credit. At that meeting, Mr. Lundgren and Mr. Jacobson stated that if the HRA proceeded to collect the letter of credit (acknowledging it was a valid demand and they would surrender it), the project was dead. Mr. Robertson stated they first called Larry Ccu mers and Virginia Schnabel to ask if they would suspend the BRA's directive to staff to collect the letter of credit until a special meeting could be called to review Mr. Lundgren's new proposal, get some policy direction from the BRA to review the proposal, and bring it back to the HRA at their March meeting. Based on that decision, if the HRA then did not accept the proposal, staff would proceed to collect the letter of credit. Mr. Jensen has already acknowledged that he will surrender the $200,000 upon receiving the demand notice from Mr. Newman. the HRA attorney. -1- Mr. Robertson stated the new proposal proposes BRA participation in a greater amount than the previous proposal. The other developer has said that if the BRA accepts this as a policy direction, they will also make a proposal that is structured in the same way. Mr. Newman stated staff needs some authorization fram the BRA to delay the collecting of Mr. Lundgren's letter of credit. What Mr. Lundgren was proposing was a deviation fram what the BRA has looked at in the past. If it is something the BRA wants staff to explore further, staff needs to know that, because both parties should be operating within the same guidelines. Staff merely wants some direction that this is something the BRA wants them to look at and spend some time on. Ms. Schnabel stated that when Mr. Robertson and Mr. Newman called her and asked for an opinion on this new proposal, she was very reluctant to make a decision to say "yes, go ahead and do an in-depth analysis" or "yes, hold the letter of credit beyond a certain time frame" without other members of the BRA concurring or taking part in that decision. So, she had concurred with the suggestion that a special meeting be called. Mr. Newman stated they do not want to enter into a formal development contract until they have further assurances that the project will go. Mr. Lundgren had indicated to them that he had fund a mortgage company that was very receptive to the proposal; but before he receives a formal answer from the mortgage company, he must make an application which will cost him $24,000. Mr. Lundgren is reluctant to spend that kind of money and resources and time; if, in the event he is not successful, the BRA would end up entertaining proposals f ram other developers and he would not be able to proceed. Mr. Newman stated that at the March meeting, Staff would like to present to the BRA two general proposals. Mr. Lindgren has indicated that if the BRA likes his proposal and wants him to proceed, he will need from the BRA what is tantamount to the first option for a 90 day period, because it will take 75 days to process and review his loan application. During that period, they will have to negotiate formal terms and specifics and security for the BRA. if, at the end of the 90 days, Mr. Lundgren is able to arrange financing and staff was able to arrange an analysis to the HRA's satisfaction, they will then enter into a development agreement. Mr. Rasmussen stated this just seemed like another long delay. Mr. Newman stated that was true, but when Mr. Lundgren first presented this new proposal to them, what intrigued both Mr. Robertson and himself was that Mr. Lundgren felt he had a mortgage company that was prepared to proceed with the project. It was his understanding that to put housing on that corner was the first priority as opposed to alternative types of development. it was his understanding that other prposals submitted to staff did not include the dollar amount and value that Mr. Lundgren was Be agreed with proposing. Mr. Rasmussen that the BRA has been in this because of the ect position numerous yes, bit r. Robertson r�orohe were prepared t thclo a �thhe sloes come together, -2- door on Mr. Lundgren. They had told Mr. Lundgren they did not have the authority to extend the time on the letter of credit, that the only body that could do that was the HRA, and they also wanted to attempt to verify the information Mr. Lundgren had given them about the responsibleness of the mortgage company. Mr. Newman stated they had immediately contacted Centennial Mortgage Co. in South Bend, Indiana, and talked to Mr. Schuvala, who does the underwriting for Centennial. Mr. Schuvala indicated to him that he was familier with the proposal, he had reviewed the feasibility study, and, based on the information he had received to date, he was very encouraged by the project, was very interested and felt there was a good 1 ikel ihood of success that they mould provide mortgage financing for the project. Mr. Newman stated that, based on his experience with mortgage bankers, he was somewhat surprised at how positive Mr. Schuvala seemed to be about the project. He stated that, in general, mortgage bankers are very reluctant to cmr mit to anything until they have a complete package. Because of the positive response they received f roam the mortgage company,, Mr. Robertson and he decided to take the next step which was to contact the HRA to see if this proposal merited a little more time to see how viable the project really was. Mr. Newman stated the extension was drafted to the effect that unless they have agreed in writing to another extension or unless they have agreed in writing to release the letter of credit, then automatically on March 25, the HRA will receive $200,000. If the HRA does not take any action at this meeting,, then on March 25th, the money will be delivered. Mr. Prairie stated he did not feel it was any problem extending this until the March 10th HRA meeting, but there could be a problem on March 10th. Mr. Lundgren stated Centennial Mortgage has all the information he has been able to put together concerning the Fridley area, the Twin Cities area, the housing area, all statistical data, the Maxfield studies, and all .four phases of the project. They expressed an interest after having received that information. Mr. Allen Rouse and he traveled to South Bend, Indiana, to meet with Centennial Mortgage, and as a result of that visit, Centennial wrote a letter stating they would encourage Mr. Lundgren to file an application. He stated they would not have said that unless they expected to do the project. They did run all the numbers, and he had given those numbers to city staff. The time they were talking about was the time that was necessary to file an application. He felt the probabilities of the project were over 95 %. Mr. Lundgren stated the only question at all was concerning the exact mortgage amount which could vary during the underwriting, al had indicated it would increase over the number they have now• that as far as the funding was concerned, the day he has a firm commitment, they can move within 2 -3 days to sell it cn the Ginnie Mae market and will end up with � as well as This he end will be a end loan commitment for the is a HUD construction y -3- guaranteed mortgage. Mr. Lundgren stated that at the last meeting, there was some discussion about an out -of -town contractor, and some strong opinions were expressed in a negative fashion. As a result of that discussion, he has been talking to several major local contractors. So, in the package in the final analysis, they might be able to have a local contractor. Mr. Lundgren stated he has provided two cash flow situations based upon the land value. He set a low value of $142,000 and an upper value of $500000 which shows what happens to cash in those particular situations if they extend it out for 15 years. So, in the final analysis, they were asking for no money, no forgiveness, everything will be paid back. They are asking for a loan of $850,000 and that all will be paid back. Unfortunately, all these numbers were just given to Mr. Robertson at this meeting and neither he or Mr. Newman had had time to look them over. Mr. Prairie asked that if the letter of credit was cashed, would the whole project fall through? Mr. Lundgren stated that he needed help on the f ront end. By cashing the letter of credit, that would take another $200,000 that he would not have to spend on the project. Therefore, he would not be able to do this project. Mr. Rasmussen asked if staff felt they could make a recommendation by the March 10th BRA meeting. Mr. Robertson stated they feel they can work out the details and give the HRA a recommendation on March 10th. If the recommendation was that the HRA should go with Mr. Lundgren, he would then need a minimum of 75 days to get to the point where Centennial Mortgage would make the underwriting decision. Mr. Robertson. stated that if the HRA authorizes staff to analyze Mr. Lundgren's project, then he was going to inform the other developer so the other developer can bring in a comparable proposal that Mr. Newman and he will look at along with Mr. Lundgren's. MC11!j by Mr. Prairie, seconded by Mr. Rasmussen, to approve the amendments to the letter of credit so as to conform with Dave Newman's January 240, 1988, letter to the State Bank of Springf ield. In addition, staff was authorized to consider the change in Mr. Lundgren's proposal and to come back to the March 10, 1988, HRA meeting with a recommendation on both proposals. Mr. Rasmussen stated he did sympathize with Mr. Lundgren's position, but he thought they should get on with the development of this property. UPW A VOICE Vdi'E, ALL Vor= Ate, VICE-CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIM:)USLY. 0.10IW4 -4- OUSING and REDEVELOPMENT AUTHORITY 1 COMMISSION MEMBERS: LAWRENCE COMMERS, CHAIRMAN DUANE PRAIRIE VIRGINIA SCHNABEL WALTER RASMUSSEN JOHN MEYER CITY OF FRIDLEY 10: SRA Members FRCM: Jock Robertson, Executive Director of HRA DATE: March 4, 1988 REGARDING: Lou Lundgren's Development Proposal Dave Newman and I have met with Lou Lundgren and Russ Jacobson several times this week to review the financing arrangements and the pro forma for his proposed development. I also met with Mr. Sid Inman who indicated he could prepare the same type of proposal with a developer who would personally guarantee the project cost. At this time, Mr. Newman and I are unwilling to recommend approval of Mr. Lundgren's proposed redevelopment project for the following reasons: L Mr. Lundgren's March 3rd funding package does not account for the additional one million dollars for the land and the ramp in the total project cost. The outstanding question remaining is: Where will Mr. Lundgren get these funds? 2. Mr. Lundgren's pro forma, copies of which are included in the packet, contain several questionable assumptions. Specifically, the property tax assumption appears to be approximately one -third of our estimates. Mr. Lundgren will furnish the City Assessor with some comparables from Hennepin County within the next several days to see if we can f irm up this estimate. 3. Mr. Lundgren insists on a first option for the subsequent phases of the project; that is, the elderly housing, the 50,000 sq. ft. of shopping, and the off ice complex through the end of the calendar year 1988. Based on the high priority of this project, the professed interests of other developers in proceeding, and Mr. Lundgren's past rate of performance, staff believes it would be more advisable to leave the site open for competitive proposals, in which Mr. Lundgren could obviously participate. We recommend that the HRA give Mr. Lundgren until March 18 to resolve these questions to our satisfaction. If this is done, we recommend that Mr. Lundgren be required to tender a 90-day letter cf credit to coincide with a 90-day exclusive option on the Phase I parcel within which Mr. Lundgren would secure his a m►itment for the first mortgage. M -88 -49 UNIVERSITY AVE. (812) 571 -3450 EXECUTIVE DIRECTOR: JOCK ROBERTSON 8431 FRIDLEY, MN 55432 EXT. 117 FRIDLEY PLAZA ASSOCIATES A LIMITED PARTNERSHIP March 3, 1988 Mr. John L. Robertson Executive Director City of Fridley HRA Civic Center Fridley, MN 55432 HAND DELIVERED Re: Funding for Fridley Plaza XP artments 124 Unit Market Rate Housing Complex Fridley, Minnesota Dear Mr. Robertson: 1 -A Enclosed are the computations discussed with you and David Newman by Russ Jacobson, my consultant and myself yesterday afternoon. These figures indicate that if the request made through staff of the HRH in my letter to you dated 2/4/88 is granted, all financing required has been identified and is available. The steps we discussed yesterday were as follows. The HRA would grant the Fridley Plaza Associates a ninety day period from March 10, 1988 to file an application with Centennial Mortgage Company and including time for under- writing work. During this periood the Fridley Plaza As- sociates would pay mortgage fees of approximately $24,000 and began intensive work on the mortgage application. Fridley Plaza Associates would work with the HRA staff to develop the Development Agreement, which would contain the following steps: J. Upon receipt of the Centennial Mortgage Committment the Fridley Plaza from Associates cash fee simple. this phase y) 2. The Fridley Plaza Associates constructs the parking ramp with their private funds. 3. HRA buys ramp and land for $1,050,000 cash. 4. HRA sells land and ramp to developer for $1,050,000 - 15 year 2nd mortgage, deferred payment of principal and interest for the first four years @ 81h %. The Fridley Plaza Associates would require some temporary easements from the HRA for access. There will also be some utility costs which are off -site that would be assessed against the project. 1140 minnesots building, et. Paul, minnesot 551.061 PROJECT COSTS w $9,272,722 Total Project Cost without land andk6SPRA* + 200,000 Land 7 - 8,302,000 Mortgage Debt 7,252,000 Centennial Mortgage 1,050,000 HRA Mortgage $1,170,722 - 842,975 Subtract BSPRA* - 327,747 Previously paid items including Architectural - Engineering, survey, soil testing, payment to City of Fridley, legal, etc. -0- Amount Required at Mortgage Closing On this basis a project of total cost of $10,322,722 is supported by the following $7,252,000 Centennial Mortgage 1,050,000 HRA Mortgage 1,169,722 Developer Equity Project has a mortgage ratio as follows: 8,302,000 Mortgage Debt = 80.42% 16—,927722 Total Project Cost 19.58,6 Equity We believe that this program issaf balanced ��o program. One that b an work well and one in which very adequate 9 We will be looking forward to meeting with you on Thu rsdaym evening, March 10, 1988 and to be able to answer any questions Very truly yours, FRID EY PLAZA ASSOCIATES L uis R. Lundgren,F Managing General P tner *BSPRA - Builder's and Sponsor's Profit and Risk Allowance OUSING and REDEVELOPMENT AUTHORITY COMMISSION MEMBERS: 2 LAWRENCE COMMERS, CHAIRMAN DUANE PRARE VIRGINIA SCHNABEL WALTER RASMUSSEN JOHN MEYER CITY OF FRIDLEY M: HRA Members FROM: Jock Robertson, Executive Director of HI2A DUE: March 4, 1988 RDGARDING: Consideration of Moore Lake Commons Development Agreement The Moore Lake Commons Project has encountered more soil and utility installation problems than originally anticipated. They have, therefore, asked for some additional help from the City and the HRA. (See Casserly packet dated Feb. 25, 1988, in your Information Packet.) Rather than the approach suggested by Mr. Casserly, staff recommends a $400,000 land write -down in a development agreement. The agreement should then include a $400,000 special assessment for public and a improvements over ten years Lake principle Projectinterest. will be asked t attend the representative of the Moore HRA meeting to provide additional information. I- -88 -50 EXECUTIVE DIRECTOR: JC ^�K ROBERTSON 6431 UNIVERSITY AVE. (0 12) 571 -3450 FRIDLEY, MN 55432 EXT. 117 Engineering Sewer Water Parks Streets Maintenance MEMORANDUM Jock Robertson, Executive Director - BRA EW88 -72 TO: FROM: John G. Flora,(Public Works Director DATE: March 4, 1988 SUBJECT: Project Maintenance Costs 3 4, 1988, I attempted to inform you and the HRA In my memorandum of February improvement projects will result in annual members that some of the proposed imp rw expenditures for maintenance and operation. in The 40 acre plus Lake Pointe site will require extensive grounds matenance until the property is developed• The minimal work includes the grounds and and deactivation of the lawn sprinkler system, cutting and the pickup Of the debris. Due to the size of the site, it is bey capabilities of the Public w rk Paestima estimated se$25 000. IIn additions contract be awarded for this s volume. will result in an the watering of the site, based upo n last year expenditure around $8,000. Corridors, Rice The attached breakdown of costs for the University A��an completion Creek Road, Highway 65 corridor and Central parkway of the projects to include lighting of the highway and frontage roads. I safe sided the overall cost to approximately $176,000 annually. Initially, we could complete the debris pickup and mowing of the University attain Avenue corridor. This is estimated at $25,000. As the other ply be combined would exceed our inhouse capabilities and properly fruition, they depend on what At that into a service contract. e medians and overall effort ill type of is desired, whether requirements. landscaping and requirements and associated ulbtre replacement are other Electrical costs for street lighting. pole costs that will also need to be satisfied and are not currently City responsibilities. JGF/ts F 01" Corridor 2/4/88 2 Men at $10.00 - 40 hours, 7 months, 4 weeks $ 22, 400 Shoulder Cutter 101000 Truck at @35.00 /hour - 7 months► 4 weeks 840 $ 33,246 Lights $10.00 x 100 x 12 12,000 $ 45, 000 Frontage Road Lites $10.00 x 150 x 12 18,000 $ 63,000 Rice Creek Road 1 Man at $10.00 - 20 hours, 7 months► 4 weeks $ 51600 Lawn Mower @ $20.00 - 7 months, 4 w 560 eeks 840 Truck at $30.00 /hour - 7 months► 4 weeks 1,800 sprinklers 2 @ $15.00 - 20 hours, 3 times 500 Materials $ 91,300 Lights $10.00 x 30 x 12 $ 13,000 Highway #65 $45,000 Sane as Corridor Central PMW simil iar to Corridor $ 45,000 $166,000 �-A -n cc TO. Jock robertson, Executive Dixector - HRA. PW88-70 FROM: Mark L. Burch, Asst. public Works Director DATE: March 4, 1988 SUBJECT: Engineering Services for 1988 Lake Pointe Development Construction Duj . to wet weather conditions,, we were not able to finish the street construction on the Iake Pointe De%relopment site last fall. The final sections of curb and gutter and street will be constructed by H & S Asphalt as soon as weather permits this spring. Bc.,,:ause of the delay over the winter months, we will need to check and restake portions of the street project. S -* nce sunde Engineering is the most familiar with this site and has performed all previous work, we reccavend that the HRA approve a contract.with Sunde Engineering for an amount not to exceed $ 8,906 , for construction staking and inspection of the final street construction- ! aB/ts d� SUNDE ENGINEERING, INC. GERALD M. SUNDE, Consulting Engineer Mr. Mark Burch CITY OF FRIDLEY 6431 University Ave. N.E. Fridley, Minnesota 55421 4 -A 9001 East Bloomington Frwy. • Bloomington, MN 55420 • (612) 881 -3344 March 4, 1988 Re: 258 -85, LAKE POINTE CORPORATE CENTER As you requested, this letter is an estimate of the cost and work required to complete the surveying and engineering work at the above project. At the time that work was stopped in the fall of 1987, construction of street and curb near the east end of Lake Pointe Drive was not yet completed. The following paragraphs discuss in more detail the remaining work: 1. Field Survey Work remaining includes approximately 3000 feet of curb and gutter construction approximately 31 days of crew time will work. The estimated cost for the work is: 2. Inspection 1500 feet of street and staking. We estimate that be needed for the staking $3400.00 Field inspection will be furnished during the street grading and the curb construction. An inspector is expected to be on the site during the time when work is in progress. In addition, normal coordina- tion with City personnel is expected such as when paved gutters are installed in the pond areas. We expect that about 80 hours of inspector time will be needed. The estimated cost for the work is: 3 Completion of As -Built Plans $3000.00 Because the majority of catch basin and manhole castings were covered by pavement in the fall or otherwise inaccessable, they have not been located and had final elevations shot. This will be done following completion of the street construction work. Ties will be made to hydrants, service ends, and valves. The information will be added to the project plan and profile sheets. 4-B Mr. Mark Burch Page 2 March 4, 1988 In addition,- a drawing will be prepared that shows the limits of the building pads as staked and inspected by our personnel. The purpose of this drawing is to provide a permanent record of the limits of the prepared areas on the site. The estimated cost for the work is: $1900.00 4. Meetings and Contacts Concerning Projects This work involves meetings as needed with the City or Contractor as part of the completion of the project including requests for pay- ment, final inspections, etc. : The estimated cost for this work is $ 600.00 ---- The total estimated remaining cost for work on the project will be approxi mately $8900.00. We will bill the City of Fridley on a time and expenses basis at our normal billing rates. Billing is on a monthly basis. Thank you for the opportunity to submit this proposal. We will be happy to attend meetings of the HRA or City to explain the items listed above. Yours very truly, SUNDE ENGINEERING, INC. Gerald M. Sunde, P.E. Consulting Engineer GMSJsg Engineering Sewer Water Parks Streets Maintenance MEMORANDUM TO: Jock Robertson, Executive Director - HRA FROM: Mark L. Burch, DATE: March 4, 1988 Asst. Public Works Director SUBJECT: Revised Contract Amount for H & S Asphalt for Street Improvement Project ST. 1986 - 1 & 2, Phase II PW88 -71 completed The street improvements on the Lake Pointe Development n en was site will be 6 mrld the this spring. The contract for these imp halt has successful low bidder of the street' prrovem is as areas9were made available to completed portions them by completion of other contracts. Since this contract was let two years ago, there have been increases in the cost of materials. H & S Asphalt has agreed to complete the street improvements on the Lake Pointe Development for the unit prices bid in 1986 with the following revised prices. 5 Aid Price 1988 Pry 54.40 /Lin. Et. 54.60 /Lin. Et. 1. Concrete Curb &Gutter $6.60non $7.10/Aron 2. Aggregate Base Class V $13.20/Von $13.70non 3. Wearing Course Mixture 511.80/Ton $12.30/Ton 4. Binder Course Mixture These revised prices will increase the 60 an increase off Sr Phase I of this project from $368,054.10 to $378. We recommend that the HRA approve these revised prices for 1988 construction and continue the contract with H & S Asphalt for the street improvements at the Lake Pointe Development. M6B /ts 1 F416% 0 Continental Development Corporation 12003 Ilex Street Coon Rapids, NON 55433 March 2, 1988 Housing and Redevelopment Authority for The City of Fridley 6431 University avenue NE Fridley, 55432 Re: Hillwind Road Development Lear Sirs: Enclosed you will find a sketch plan showing proposed develorment st improvements for a�tract of land Central Avenue. The north of Highway 694 and e is a brief summary of my development intentions for this Hillwind Road property and my request for tax increment finance assistance. hey intentions are to develop this property to accommodate 60 arart- ment units in one or more buildings theand apartmentsoimmediatelynand four buildings. I intend to build velopment may follow at a later date. the town house de This development concept has been discussed at the City atvarious levels in the past. The TroFerty is properly zoned P. -3 where the town homes are shown. Some re- alignment of these zoning lines may o be necessary within the site to accomodate the future property division between the apartment parking area and the town homes. This proposal provides for 100% planned development for tall of es the remaining undeveloped property at this location. efficient use of the land with frethe aptooloweredensityttownfhom .esl�h density apartments along the rear the twin homes that currently border on the north. This project involves several parcels of land that I amoable to involves purchase from Cliver Erickson and David Harris. a small parcel with a single family house owned Shirley Frank, and it involves two small p' by the City of Fridley. Cneoof these sowned pb the Citredsthroughted road Right- cf -Way and the other tax forfeiture. This proposed development requires the assembly of all of these parcels. The City has indicated their willingness to contribute 6-A their -rarcels to the development if the Roger Frank rroperty can be acquired to complete the assembly. At this point I am in the very preliminary stages of preparing a project budget. Enclosed you will find my market value estimates for these proposed imrrovements. This estimate includes the land cost for the Erickson and Harris parcels, but it does not include the cost to acquire the Roger Frank property and the cost of removing the house. ' In an effort to make this project economically feasible, I am asking for the following assistance: 1) I request that the H.R.A. acquire the Roger Frank prorerty with the single family house, remove the house and write down these expenses. In my Preliminary discussions with Roger and Shirley Frank, it a,,-,rears that I will be able to obtain a purchase contract on this F ro j erty for apprez imately MO, C00 . 2) 1 request that the H.R.A. provide second mortgage financing for the apartment portion of the project in the amount of the land cost rlus any necessary soil corrections. It is not feasible for me to acquire the Roger Frank property at market value just for the land to complete this Freposed development. iv;ith assistance from the H.R.A. this proposed development becomes feasible. �s an alternative, I would consider proceeding with this developmment without involving the Roger Frank prorerty. Tinder this elan I would build the arartments as proposed and down scale the town house rortion of the rreject to fit the remaining n -1 property. Under this conceit I would ask the N.F.A. for financial assistance on the apartr:ent the same as described above, second mortgage financing in the atr.ount of land test and soils corrections. Tease give this request your consideration and give me your resuonse at your earliest convenience. I can be reached at 757 -756°. Res j. ec tfully, Ci,arles S. Cook, !resident Continental Development Corporation enclosures AM—Lai Continental Development Corporation 3 -02 -88 Estimated Improvement Costs for the , Hillwind Road 1r operty apartments : 6C units with detached garages 1 at 01,00" per units +855,0000 Architectural fees 33;coo Sac fee .� w550 per unit lark fees, cash L-, w50C per unit 30,606 *Land � ",350C per unit 21 C, COC 40,000 *soil correction contingency 65,000 _Loan finance fees 12°,600 Interium interest expense 379200 Contingency General contractors fees 1'6,000 03 COC Develoi,er fees 2,73 ,6CC Apartment Total B) Townhones: 32 units Estimated retail _ S16C,600 per 3 200,GGC unit z r5 P39,600 Total iro -:osed Imirovements * Apartment project items requested to be financed by H.R.A. tbrough a second mortgage. 7 Parks Streets Maintenance MEMORANDUM pW88 -66 public Works Director John G. Flora' r TO: ��, Est, Public Works Direct FROM: Mark L. I4arch . 2 ► 1988 DATE: brook Nature Center 1 for Spring SUBJECT: Ca aged ro rent project No. 173 Pon and approval mange for consideration onslderati �v�nt Project NO' qty Council Center Pond Imp led sections We are submlttin he SP ingbr°°k eat are for the ons get- l ali9�it deesd ed No. 1 for the Chang board � k required . ; of order The �itIM � to construct t tons o f floating r �e for e � �e additional s� this Change Orde boardw of bo�'� and , deduct-ions on by the Naturalist was. are being replaced by floating cross flood b.� Jk which noafloating reasonable and reed that tY�e City flooded areas• feel these changes and Prices for $23,008.75• �vncil apProve C ange NLB/ts Attachaents, fR D% viBLIC WORKS DEPARTMM Engineering Division CITY OF FRIDLEY Fridley, Minnesota March 2, 1988 Gammon Brothers, Inc. P.O. Box 83 Rogers, MN 55374 SUBJECT: Change Order #1 ' Springbrook Center Pond improvement Project 7 -A Gentlemen: You are hereby ordered, authorized and instructed to modify your contract for Springbrook Nature Center Pond Improvement Project #173 by adding the following: Floating Boardwalk Installed w/78" Handrail 165 L. F. $ 114.75 $18,933.75 16 Special Angled Floating Boardwalk Sections 11047.90 $15.718.58 Installed w/78" Handrail 15 Each RUTAL AMIT ION S $34, 652.25 CHANGE ORDER Me 10 . . . . Nwdloating Boardwalk $105.85 $11,643.50 installed w/78" Handrail 110 L F. TDm DEDUCTIONS $11,643.50 CHANGE ORDER NO. 1. . NQ CHANGE OEM ND. 1. . $23,008.75 CRIGINAL MNTpACT PRICE . . . . . . . . .5285,065.50 CHANGE ORDER ND. 1e e e 0 0 $ �- _ 00 8_ 7 5 FAMED CONMCT AMMNr . • . $308,074.25 Gannon Brothers, Inc. 7 -B Page 2 Change Order #1 - Project #173 March 2, 1988 Submitted and approved by John G. Flora, Public Works Director on the 22nd day of Flebruary# 1988. Prepared by Checked by ;; �-woo ��e�100101 John G. Flora, P. E. Public Works Director Approved and accepted this day of , 1988 by Gammon Brothers, Inc. GAM?M BRMHERS, INC. Michael Gmimon, President Approved and accepted this day of , 1988 by the City Council of Fridley, Mimesota. WILL EAM J. NEE MAYOR NASI 1 M. QURwHi, QTY MANAGER 3/6/4/6 ' f a YI Y V µ�• . � ' CLAIMS . r 1721 - 1726 �► ENGINEERS ■ ARCHrrECTS • PLANNERS 222 EA57 LITTLE CANADA ROAD, S7 PAt-L, ViNNESOTA 55777 612 484.0272 City of Fridley 6431 University Ave. N.E. Fridley, MN 55432 ATTN: John Flora .Director of Public Works 8-A INVOICE February 9, 1988 T.H. 65 /LIGHTING INVOICE NO. 1463 SEH FILE NO. 84142.02 FOR PROFESSIONAL SERVICES: FOR PERIOD DECEMBER 27, 1987 THRU JANUARY 23, 1988 For T.H. 65 street lighting from I -694 to Rice Creek Road. Project Manager 2.5 hrs @ $55.58/hr = $138.95 Technician 11.5 hrs @ $28.18 /hr = 324.07 Clerical 2.0 hrs @ $27.87/hr = 55.74 Expense 180.00 TOTAL AMOUNT DUE AND PAYABLE THIS INVOICE . . . . . . . . MAXIMUM FEE: $6,375.00 INVOICED TO DATE: $4,566.85 off` tram IIf ,3 inursv t, ss COUNTY OF RAMSEY. CITY OF SAINT PAUL Donald E. Lund In sad County and State. being duly sworn, on oath Sara that he is Vice President of the Short - Elliott- Hendnchson. Inc., that the foregang account s lust and true: that the sehvrcea therein charged were actually rendered. and of the value therein charged: that the fees or amounts charged therefore are such as are allowed by law: and that no part of such account has been pad Subscribed and sworn to before me the My commission e=pees 19 day of 19 $698.76 $698.76 SHORT ELL107 ST PAUL, CHIPPENA FALLS, HENDRICKSON INC MINNESOTA WISCONSIN ENGINEERS E ARCMRECT51PLANNERS 222 EAST LITTLE CANADA ROAD, ST PALL, MINNESOTA 55117 672484-0272 City of Fridley 6431 University Ave. N.E. Fridley, MN 55432 ATTN: John Flora Director of Public Works 8-B INVOICE February 16, 1988 T.H. 65 /RICE CREEK ROAD INVOICE NO. 1556 SEH FILE NO. 84142.01 FOR PROFESSIONAL SERVICES: FOR PERIOD THRU FEBRUARY 15, 1988 For design of the reconstruction of T.H. 65 and preliminary study of Rice Creek Road. In accordance with our contract. Rice Creek Road Maximum Fee $ 7,100.00 T.H. 65 Maximum Fee 55,500.00 Extra Services 33,351.61 TOTAL $95,951.61 Less Amount Previously Invoiced $87,731.61 TOTAL AMOUNT DUE AND PAYABLE THIS INVOICE . . . . . . . . $ 8,220.00 OStAte a£ Afintrsvtr, SS COUNTY OF RAMSEY, CITY OF SAINT PAUL Donald E. Lund In said County and State, being duly swum. on oath says that he is vice President of the Short- Ellion- Hendrickson, Inc , that the foregoing account is just and true; that the services therein charged were actually rendered, and of the value therein charged; that the fees or amounts charged therefore are such as are albwed by law; and that no part of such account has been pad Subscribed and sworn to before me the day of 19 My mnmugggn expires 19 SHORT ELLIOTT ST PAUL, CHIPPEWA FALLS HENDRICKSON INC. MINNESOTA WISCONSIN