HRA 06/09/1988 - 29654QTY OF FRIl�L_�'•�'
IiC)USING & F�Fn� OPMEN'I' AUTHORITY N�IUTF,S, JUl� 9, 1988
(�r,r, TO ORDER:
Chairperson Coirnners called the June 9, 1988, Housing & Redevelopment
Authority meeting to order at 7:12 p.m.
RCiLL CALZ : �
Me�nibers Present: Laxry C�r¢ners, Vixgini.a Schnab�l, Duane Prai.rie
John Meyer
N.�e�nbers Absent: Walter Rasmussen
Others Present: Nasim Qureshi, Director of HIZA
Rick Pribyl, City Fi.nance Director
Julie Burt, Asst. Finance Officer
Dave Newman, HI�A Attorney
Lou & June •L�dgren, 343 Rellogg Blvd., St. Paul
William Fogerty, 12340 Ra,disson Rd., Blai.r�
Tam & Marge Bricla�r, 1441 Rice CYeek Road
Bruce & C�ndace L�dgren, 3420 Bavaria Rd., Chaska
Richard Mochinski
APPROVAL OF N.�,Y 12, 1988, HOUSIlQG & RIDE'VIIAPMENT PaUI'HORI'PY N�VI�I�Sa
^ �pl� by Ms. Schi�ab�1, seconded. by Mr. Meyer. to apprave the May 12 , 19 8 8,
Housing & Redevelo�n.t Authority minutes as written.
'�7 • M • • � ' • � �' '�(' �• •� 1 I f�l' � • �' �1� � 1 � .� •��
r, • • 1 � 1 "� `1
C70NSm�uA'rTON OF LOU LUnIDGRII�T' S PlmP�SAL:
Mr. Ne�nm�an handed out a copy of a letter fro�n Centenni.al Mortgage th,at Mr.
Lundgren had f orwarded to staf f that af ternoon. He a1 so handed out a
reduction of the plan Mr. Lundgren would be sYiawing the HI�A at the meeting.
N1r. N�wman stated tliat c¢�. Tuesday, J�.e 7, a meeting was held attended by
Mr. L�dgren, 1�. Lundgren's attorney, Mr. Jacobsen, Mr. Casserly, Mr.
Robertson, and himself. They reviewed the status of the develo�anent. They
had the �portunity to discuss with Mr. Lundgren sc�ne of the rnunbers the HI�A
saw two weeks ago at their special meeting and to get N.[r. Lundgren's input.
They did make some c.�iariges to the rn.mibers based. on the infonnation received
fran Mr. Lundgren.
N.�. Ne�nan stated everyone recognizes that time is of the essence, and as
the conversation evolved, they were not in the position to act on the
n�nbers they were changing, because staff ha.d n�ot had time to evalua.te the
rnm�bPxs. At the end of the d.iscussion, the proposal on the table was that
Mr. LundgZell would tty to proceed without the r�eed f r� the HIZA to construct
^ the parking ramp-- t�iat he woul.d handle all that hiunself. The HI�.A would
-1-
&
9, 1988
� pravide to the d eloper the site fully prepared. Mr. Lundgren woul d
aoquire it at a st of $2/sq. ft., and t1�at payment would be deferrec]. over
a period of time. N�. Lundgren also emphasized that his co�anitment and
interest was in ing the total phase development, and he spent some time
discussing hav phases would occur ar�d the requireonents that have to be
met before sub t phases could begin.
n
�
1�. Nc�narl stated felt they reached a general concensus on the type of
standard they were looking at. At this ti.une, he would like to give Mr.
Ltmdgren the oppo imity to present to the HIZA the discussions he has ha.d
with Centennial tgage and advise the HI�A on what he has done since the
last HI�A meeting, drawings of his plan., etc. Af ter that, Mr. Newman
would like 1�. Jun Casserly to review the latest rnunbers that have been run
as a result of the discussions on J�me 7.
Mr. Lundgren sta.t tlaat in the material which he sent with his letter was a
la�r graph whicdl il ustrated the time factors that they would like to base
their phases on. irice they first started meeting on thi.s project, a rn:¢nber
of changes have made and yet there are sc�e things that are exactly the
same. The tYii.ngs tr�at are to be put in this proj ect have not changed.
Frcxn-the beginni.ng they started to put the first phase in the spot where
there are no buil 'ngs. That ha.d several advanta.ges in the sense that
nothing had to be down in order to sta.rt construction. The process of
the HI�A providing e land for this building, fram a practical point of
vi�w, mean.t that HI�A was acquiring land for this building and a gaod
portion of the 1 for Phase III. The land im.der Phase II was already in
the hands of the
1�. L�dgren sta t'hat in this perticular plan, the office portion of the
building did r.�t cupy the Burger King site. There were several advantages
to leavi.ng the Bur King building there. It was an independent aperation,
it could stand on ts own, plus the fact tbat it was costly to acquire.
N�. Limdgren stat d that in the communication from Centenni.al Mortage,
Centenni.al did rrot tell him haw m�.ch the �rtgage will be, and they did not
give the exact da when he will get the commitment. They said a f irm
co�mitment should issued on or about june 24. They said they would
continue to pursue the potential participa.tion in offering a below market
interest rate to ' rave the proj ect econcgni.cs for potential �rtgage.
N.[r. Lundgren sta
request that Y�a.s ]
providing the str
his c�pi.nion that
if they can.
Mr. L�dgren sta
week with city
getting a little
a concensus. He
They looked at a
path to getting
i in the staff ineeting, they d.iscussed the previous
n before the HRA where the HRA gave consideration to
ure of the ramp. That coul d be done ; however, i t was
was still complex and sc�a�thi.ng that should be avoided
he asstuned they would be meeting again the following
ff to firm up some of the other things. Things axe
�i.nd, and they need about 2-3 such �eti.ngs to arrive at
►u.ght the June 7th meeting had been very productive.
: of different alternatives, and he felt they were on the
:where.
-2-
� 1►�. L�dgren sta.t
, � and he thought tt�
eaough to make t1�
approxima.te time.
finn caa�mitrnent �
study. Fa.ch fun6
each phase simn�l. t
going to have a 1
N�. C�mexs state
cancerrLS fr�n the
�
� he thought the letter from Terry Chuvala was sincere,
� would get their fimn cc�nni.�ient, that it will be large
c project go and that they will be able to close at this
Within the r�xt couple of weeks, he expected to get a
�aa.red for Pha.ses II. III, and IV based on the feas�ibility
- has a different kind of lender. He felt he could pursue
ieously and still keep on schedu]:e. They expect they are
: of problens, but he tYiought it was all workable.
that at the last HRA meeting, staff had shared some
nancial viewpoint of the proj ect.
N�. Lundgren stat one of the differences of opinion was that they are
using s�ne rn.ur�bers tt�at were pulled out of the air insofar as what they were
proposing. Th�y e using the n�xs that have always been proposed. He
stated he very m ch appreciated Mr. Casserly putting this f ina.ncial
iufozmation toge r. The infozmation was helpful, and it ma.de the meeting
u�re frui.tful tY�an it would have been if they had not ha.d those rnunbers.
Mr. C.a�rmers asked
with the tax per i
Nir. L�dgren sta.te
vexy real pzoblen.
Mr. Ter.cy Chuvala was still talking about a problem
t.
there was a problen there, and it was a funciannental and
1�. Ne�an sta.ted. . Casserly has sc� r�visions and sane �re information
�1 at the meeting pre ed as a result of the modifications Mr. Lundgren has
requested. These s also reflected taxes at $900/unit.
Mr. Casserly stat
Limdgren and his p
realistic in ternns
take issue with sa
si�,if icant change
V81U3tlOri� (d'tt3C11
per �i.t was prese
the competition i
marketplace. Staf
Mr. C�mers asked
i that after the June 7th meeting, staff asked Mr.
�ple to pravide staff with any da.ta they thought was
►f what they could do. N.[r. Lundgren and hi s peopl e did
: of staff's assinnptions, whiclz was g�ood. The only real
in the asstm�ptions show up ar�. the page entitled "Market
L to his memo to the HRA dated June 9, 1988). The $900
;ed to staff as being far utore realistic in tern�s of what
ght be chargirtg. That woul d put them more in the
has been using $1,350 per tm.it.
the $900 per unit c�aared to staff's cc�nparables.
NIr. Casserly sta tl�at at staf f' s request, the Maxf ield Study was a1 so
reviEwed as to the t of taxes, and those were thought to be somewhat
canparable to the ject Mr. Lundgren is proposing. The taxes and those
cc�rq�arables were tty �uch in the $900 per �mi.t range. The $900 c�bviously
has the impact of cing the amount of tax increnent.
N.�. C�sserly sta.t
think the City w�
expensive proposi
they can see what
^
1�. Lundgren and his group pointed out tt�at they do not
be financing the cost of the ramp which was a very
ui for the City. If they Pull out ttaat 5850, 000 expense,
-3-
1�. C�.s�rly stat
�`� set at $900 per u
proposal has alwa
Lundgren t41d sta
F}}aase II w�re rou
they have $107,00
1�. C�sserly state
sq. f t. of conmerc
included 60,000 �
square foot would;
square f oot for 6 0
Their proj ectiaris :
here.
tl�at for Phase II, it was also suggested that ta.xes be
,. They had put in 100 �i.ts, but Mr. Lundgren said his
been disc�ussed with 120 units or in that range. Mr.
to put in 119 �its, and the taxes they were using for
y the same. The City had $110, 000 down before, and now
th�t on Phase IIS, the City ha.d considered. havi.ng 35, 000
a7., and Mr. Lundgren indi.cated his proposa.l has always
ft. of lea.sable space, and t1�at the City's tax rate per
e a little high. He suggested staff do it at $2.15 per
000 sq. ft. That was how staff arrived at $129, 000.
efore were $85,000 so there was a considerable increase
Mr. C�sserly sta. tl�at on. Pha.se 1V, again they used 35, 000 sq. ft. Mr.
L�dgren said the roposal has always been 60, 000 sq. ft. and at taxes pf
$2.50 per sq. ft , it would generate $150,000 in taxes as opposed to
soanething j ust La1 $100, 000 whic h�they had proj ected previously.
1�. (�.sserly sta.t there was a considerable tax increase for phases III and
N. Phase II was ut the same, and Phase I was sc�nething less. The other
rnumnbers were ted mechanically.
1�. Casserly stat Phase III was, in fact, cont�nplated to be a one-story
ca�rmercial center ith underground parking, and the office building was
n conte�tplated to be a si.�stoYy office bui.lding. He stated 1�. Lundgren had
pointed out tt�at w he cut off the district at the year 2002 and Pha.se IV
doesn't sta.rt unt'1 four yeaxs from naw, what is happening is they are
really c�npressing the amnount of incr�nent that is available for the entire
proj ect. Nir. Lund en' s peopl e thought that if the HRA was wil l ing to
c�mit itself to 1 full years of incr�nsn.t in Phase I, they ought to pursue
that for eac�h . Mr. C�.sserly had told them the HI�.A has not had any
discussion ari this, so what was contained in his informa.tion was that each
phase was self-con ' d but uses 11 full years of increment.
/'1
N.�. Casserly rev ewed the numbers on the page entitled "Lundgren
Asstmnptions, S - Phases I through N" (page 6 attached to Mr.
C�.sserly' s�no to the HIZA dated J�me 9, 19 88 ).
Mr. C�sserly sta.te6
(1) They are dealir:
7 .2- 7 .3sa . That i.
ha.s soatie bonds. but
able to have that
acqui.sit'ions. In t
shaw the HI�A the di
density tht is be
f�ction of that.
vary on the amount
l�r. Casserly
that there were two big �ns they were dea].i.ng with:
i with a bond rate which was not terribly realistic at
a vexy aggressive rate based on the fact that the City
that is absolutely no guarantee they are going to be
.ind of rate when they go out finance some of those
�e ass�ptions he had also used 10°a bond rate just to
`ference. (2) Whether the site can be develaped with the
ng suggested, because the tax increment is a d.irect
�e costs are going to be fixed, but their revenues can
>f value put on the property.
he had put in an inflation factor from the beginni.ng
-4-
using 3ps. Mr. L and his people have c7�one that in their pro formas,
'� so this oorre with the pro fozmas they have prepared.. He was r�t sure
that was c�.tirely cc�ate on c�rcial property. Part of the problem was
they do r�t have n3.ce �ven 3� inflation.
�
�
Mr. N�n stated ta.ff wanted to bring these latest numbers before the
Caamissicm. As d scussed earlier, when doing redevelopment, true
redevelopment su h as this is, property is much more expensive. As a
result, the inves t by the HIZA is going to be greater. They have had
soane discussions ut the ass�unptions Mr. Lundgren was making and staf f
wanted to talce the apport�i.ty to present those to the HRA to see if those
ass�tions were rrect. If the HRA was comfortable enough with these
rnni�bers and wanted staff to c�ntinue, he thought tl�y would need to see the
cc�¢r►itment N�. Ltim en intends to obtain from Centennial Mortgage. Staff
has indicated. an solute deadline of Jtme 28. In all honesty, there are a
lot of issues tl�at r�ed to be resolved and a considerable amount of work
that ha.s to be do e, plus the fact that Centennial will not have their
c•.�mn.itment to N�. undgren �til an or about June 28. It was going to be
physically imposs' le to put together this transaction to the degree staff
will be cc�nfortabl with.
Nlr. Newman stated i the HI2A continues to be comfortable with this, they
Ghcn�l d authorize s f to grant N�. Lundgren an additional. 60 day extension
on his letter of c dit, providing that by the end of the business day on
J�e 27, a written f�ma]. con¢nii�nent is received fran Centennial or anyone
else, plus some nable assuYance that they have the range of f ina.ncing
for 100�a of the p ject. If the HIZA was comfortable to that extension,
staff wou].d � tely begin, preparing the development cantract and hammer
out the c7etai.ls so tl�at at the July 14th HIZA meetng, staff can come back
with sc�ne a�eecl- n specifics and proceed fran there.
Mr. C�ners asked v¢hat sta.f f' s recca�¢nenda.tion was.
N.[r. Qureshi stated. tlaat, as the HIZA r�nbered, about 1 1/2 years ago staf f
had rer�+pn�Pd HIZA draw on the letter of credit. At that time, the HIZA
Ghose to give Mr. lmdgren more time. If Mr. Nernm�an and Mr. Ca.sserly have
the feeling the ' ect can be closed and are rec�ending an extension of
60 da.ys, since the has gone his far, it mi.ght be reassonable to �ant the
60-day extension, ntingent upon staff receiving information of viable
f inancing by Ju e 27 . If that does not happen, it F,vould be hi s
reco�unenda.tion to w on the letter of credit.
Mr. Camtera asked
and Mr. Casserly �
60-day extension?
Mr. Casserly state
Lundgren can. build
that are being sugc
rate ovex the last
current mill rate.
years. If , in f ac
on the basis of the revised rnmibers, did Mr. Newman
the HIZA should be comfortable enough to grant the
l the numbers were only as good as the data. If Mr.
L20,000 sq. ft. of comanercial/office spa.ce, th.e taxes
:sted were not out of line. He had used the average mill
�ix years which was about 9 or 10 mills less than the
He had pha.sed in sane of the phases over a number of
�, any of them could be done sooner, it, of course,
-5-
&
increases the am t of revenue coming in. The kind of gua.rantees they
I'� would have to get in the development agreenent to continue ea.ch subsequent
phase would be of the negotiation that would have to go on. There
really has been discussion on that. Having 11 years of increments on a
redevelap�nent proj t vvas rn�t at all unusual. They would not have to be
�canfortable in t respect.
Mr. C�.sserly stai
and. is the ramp :
fozmas that were
$6 1/2 million, 1
1/2 mi.11i� that
the way thi.s was
proj ect with an �
have to go on, a�
so tmc�nfortable
can really go in
i. his questions were: V�That is the size of the mortgage
or out? If the mortgage is wha.t is shown on the pro
�en to then the beginni.ng of the week f or approximately
; Cii.y's construction costs bei.ng $8 million, that was $1
s going to have to be ac��ted for, and he was assuming
�posed to work was it was supposed to be a$10 million
million n�rtgage. 'I'here were a lot of major things that
they have to happen pretty quickly. He stated he was riot
,th th� rnunbers if these are the kinds of proj ects that
� this site.
Mr. Ne�nan stated felt cc�nfortable if there was a market for the proj ect.
He was fairly c�nf dent they can put the n�unbers together so it can work.
As he had stated before, the HRA was going to have to make a greater
c�iiznent on this �roject than they have in the past. He did think it was
vexy realistic to s�ne that a proj ection of 7.22� on the bonds was going
to be hard. He s ted his greatest concern, of course, was with the f irst
pha.se.
� Ms. Schna7oel sta. that since they have ame this far, they prabably should
� grant the 60-day ensiari on the letter of credi.t, provided the documents
that are r.�cessary are received. by staff before the letter of credit was
due. She stated did r�ot have a great level of comfort on the figures
the HIZA has been ven. She did not sense a lot of enthusiasm fram Mr.
Casserly that the igures were workable. She stated she was vezy nezvous
about the dollar t the HIZA would be out i.n the beginning, and she was
worried about the tal market in this area. She had a lot of adverse
fee].ings about thi proj ect ri�it naw, but she did not think she wanted to
"pull the rug" if ere was scgr►ething to work with by the end of the month.
N�r. Meyer stated felt nuich the same way as Ms. Schnabel • They still do
not have anythiny ific for this site at this ti.une= yet Mr. Lundgren's
proj ect was the proj ect going at this t�me an�l he could not see where
it would do any to give hun an,�ther 60 days to see what happens.
Mr. Newman stated �
site. They have �
focusing al1 their
other people.
Mx. Prairie stated
extension after ext
ariy closer. Af ter
t�iis year.
�"�
are other developexs interested in developing this
receiving inquiriesp however, right now they are
gies on Mr. Lundgren's project and are r�t talking to
hat bothered him was that the HI�A ha.s given Mr. Lundgren
asion, and it still does not see�n like thEy are getting
0 da.ys, they will be out of the construction season for
�
�
^
Mr. Newman sta
developer, theY
he suspected that with Mr. Lundgren or any other
already into the 1989 consstruction season.
Mr. C.aaa�rs sta it see�ned to be the concensus of the HI�A t11at they would
grant the 60 day ion; but the question was whether or rmt they shoul d
make it contingen upon N�. Lundgren praviding the Centennial Mortgage or
sc�e other mQrtga. cc¢npany c�mitment by Jtule 27.
Nlr. Meyer stated. t in the last month or so they have seemed to come a
�eat deal nearer same sort of fi.nancing even though it is still poles
apart fr�n where ey were hoping to be at this time.
Mr. N�waran stated
another d�velaper
30 days rather tha
14th meeting, and
always be�z a flux
liked the deacl7.in
sa¢�thing wer whi
that if the HRA was thinking about the likelihood of
�ning in, it might be better to reduce the extension to
� 60 days. Staff could then update the HIZA at their Ju1y
he HRA could proceed fro�► there. Historically, there has
y of activity as dea.dlines approach and that is why he
of June 27 for the commitrnent, but it might well be
h Mr. Lundgren has no c:ontrol.
NIDTION by Ms. , seconded.by Mr. Prairie, to extend Mr. Lundgren's
letter of credit f 30 days �til July 26, and ask staff to give the HI�A an
update on the stat of Mr. LLU�.dgren' s proj ect at the July 14 th HIZA meeting.
•�� � � • • i � � � r � �+• �� �• i i�• � � � - � ,� • �
�,. , . � � , � -�, y �
N�. L�dgren.he s ted he did appreciate the HRA's extension. He stated
they are about 98� close right now, and he felt tlzey were very close to
being able to co�ne to soane agreenent with staf f. He was assuming the HRA
was mt ir�luding n the time extension the very cabvious thing of closing,
because there are ' ngs the HIZA has to do that he would have no control
over.
Mr. �mers stated.lthat was correct.
Mr. Casserly statc
City is going to v
becane important i
si.ze of the mortga�
prob�ably work with
t�. 'I9�at is the n
in the marketplace
Mr. Cc�ners stated
th,e n�rtgage cc�pany was going to want to know if the
rk with the $900/unit figure. The reason that will
because it has to do with the amount of caverage and the
; whi,ch can, be seeured. That is the nim�ber they should
�eca.use at this point it would not be advantageous n�ot
iber tlnat is going to have to be used to be competitive
HI2A did not control tl�at rnmiber.
1�. Casserly agr they did r�ot, but wl�t they will be doing is setting a
min?��n level of w'ch that will be the floor. So, whatever number that
ends up being, are going to want to at least have an agree.nent that it
will r�ot be less a taxes generated of $900. He lmew that was going to
be part of the dis sions and just wanted to alert the HI�A.
-7-
Mr. C�xs stat that, as he tmderstood it, the revised projections, using
the $900 per imit figure, were close to working for the averll development
based � the ass tions d.iscussed. by Mr. C�sserly at tl�.i.s meeting.
N�. f�.sserly
Mr. Qureshi sta
intersection at
satellite fire st
in soil correctia
Rabextson had wri.
that if they desi
criteria they use
9� of the total p
1�. C.�mers sta
t,he soil corre
necessaxy.
that was c:orrect.
;d this was a piece of property northeast of the
�ntral Avenue/Rice Creek Road, just south of the new
ion. He stated Mr. Mochinski was requesting assistance
and sc�e drainage work in the amount of $145,000. Mr.
,en a�no dated June 3(agenda page 2) advising the HRA
; to assist in this develognent, they could use the same
for Sprin�rook Agartrnents wh�re the HRA provided about
�ject value as a 15 year loan.
they usually get scane kind of estimate or indication fran
on people that, in fact, that type of assistance is
Mr. Qureshi stated. the HIZA could make that a cond.ition if they wi.shed to do
so. Staff ]�ew ' s was an area that had been f iled and th�t the soil was
in pretty poor sha .
Mr. Qureshi stated that sta.ff was looking for a*��i4^�n�ation that the HIZA
^ was c�nfortable wi this general concept. Then staff would cc�ne back with
a fonmal agreenent for the HIZA's consideration.
�
N�. Meyer asked if�there was poor soil under the satellite fire station.
1�. Qureshi state there was quite a bit of poor soil under the f ire
sta.ticm.. The City spent about $8, 000-9, 000 to c:orrect the soil far� the fire
sta.tion. It wa.s ' s imderstanding that Mr. Mo�hinski's two lots had worse
soil tilan the soil under the f ire station.
Mr. C.ca�¢ners sta.ted. he would like to see a presentation of sane kind on this
ProPosed devel t.
Ms. �1 stat she was not quite comfortable about sa.ying 9°s. She
would certa.inly be illing to offer assistan,ce of scane kind, but first they
shou7.d Y�ave the elaper bring in a proposal they can review.
Mr. Nleyer sta.ted
site; and if the
little m�re subs
HI�A cabviously wants scaneone tA be able to develop that
is really that poor, woul�' t they be smart to give a
ation of ha�v much they would be willing to consider?
1�. C�r�nexs stated. felt it was the HIZA's concensus that the HI�A would be
willing to give assistance, but staff should work with the developer
and cane back with �re f irnn proposal.
Mr. NbGhi.nski arriv at the �eting. He tl�arilced the HR.A for inviting him
�
-8-
&
� to the meeting.
agenda, the scope
' request that the ;
back with �e in
Mr. �c�ers
Mr. Qureshi stated
Ms. Sti.nski was a
different in that
was uiore need. to j
HI�A could agree wi
the developer.
sta.ted that since he had made the request to be on the
the project had changed considerably. He would like to
table this item until a later date when he will coQne
to table this item �til a future �eting.
3KI STA'1'EMENT 0
.
���
this it�n was similar to the Mochinski request in that
so requesting assistance. This property was a little
t requi.red a rezoning, variances were needed, and there
stify why the develaper needed assistance. Again, the
h the concept and instruct staff to conti.nue to work with
Mr. C�ners stated tt�at with this property, he was not so sure there were
axiy soil problems. The biggest problem has been trying to get the old
burned aut buildin taken dawn.
N�. C�¢ners stated I that the HIZA should j ust receive this infornnation at this
time.
�i���Cia����+��i,����1�����1�'yI�NQ�:���L��
�"1 N.[r. Qureshi stated the City and HRA had indica.ted scme interest to see haw
- they could work with some developers to iunprave the corner of 57th and
Uni.versity. They e been approached by a n�unber of developers, and one
developer, Winfiel Develo�nt, has sul�ni.tted a proposal. They are also
wai.ting for propo s fran other developers. He stated a representative
frcxn Winfield D�v c7,�nent wa.s in the audience and maybe he could explain
what he d�sired what kind of assistance, if any, he was desiring from
ttie HRA.
/"�
N�. Bill Fogerty, infield Devela�anent, stated they have been told by staff
to get a maj ar a ' sition of property in the i.ncrenent district, whicri they
have done. They e not pursued any other properties because they really
do rx�t have anythi g to stand on to do it. The site was approximately
114,000 sq. ft. ere would be about 19,300 sq. ft. building on the site.
Mr. Fogerty stated was also explicity info�ned by 1�. Robertson and Mr.
Robinson that with the University Avenue Corridor impravements, the City
wanted to have ' g nice on that corner. He stated he thought Winfield
had d�ne an ac�n.i. e j ab with the looks of their proposed develo�ent.
Nlr. FOgPxty stated.
they receiv� the �
other properties, ]
They are asking f a
second mortgage or
f t. with no assist
�hey are ready to go with the develo�ent right neow. If
.k. from the HIZA, they would start trying to acquire
ring thc�n to the HI�A, and then buy the properties back.
sane assistance, depending on whether the HR.A wants a
wt on the price of the land. They are offerig $3/sq.
zce, other than. the write-dawn and the utilities bei.ng on
�
��
�"'S
�
�
the site. Tney
loan of sc�ne so;
9
�y $4/sq. ft. with a$100, 000 second mortga.ge or a
Mr. Fogerty state the building would be a combination building facing
University Avenu . They hope to have a bank and then complimentary
businesses with a combination retail/professional (possibly real
esta.te/insurance). They have en�ugh tenants right rmw to bui.ld the building.
Mr. Fogerty sta.t he was looki.ng for autY�rization frcan the HI�A to proceed
because they have aquired one piece of property and they are incurring
archi.tectural fee . He stated it was not their intention to drive the
prices up. They d help the City acquire properties. They feel the
write-dnwn was a$ 00, 000 wri.te-d�own.
Mr. Cca¢ners asked
Mr'. Fogex'tY
ult�nate price of t�e project.
it was a$1-2 million project.
Mr. Q�eshi sta.ted tt�at if the I3RA liked the project, staff could start
working on the s. There are other people who Y�ave shown an interest
in this property. He was sure it was the HRA's desire to get the best
possible devel t with the least amount of assistance. Until staff runs
the rnmibers, it w d be hard for staff to give a reco�enda.tion on which
was the better pro ect frc�n the HIZA's point of view. Staff would be glad to
work with Winf ield on sc�ne rs�unbers and have a kind of pro fo�na prepared for
the HIZA to reviEw t their next meeting.
Nlr. C�ners stated
ahead and work on
review.
N.Ir. Bruce L�dgrer.
the proj ect in c:or:
both Mr. Robertsc
on the next HIZA ac
have clrawings in
ac�.uisitions have
Robertson ar.td Mr.
the x�xt meeting t
he saw no reason why the HRA shouldn't have sta.ff go
the numbers with Winfield Development for the HI2A to
Security Develo�nt, stated they vaere also looking at
�ctian with another developer. They ha.ve worked with
. and Mr. Robinson. He sta.ted they have requested to be
nda with a farmal. proposal and caanplete sul�r►issio�n. They
process and they are working on the numbers. Site
�r�e ahead based on what they ha.ve discussed with Mr.
;obinson. They would like the opportuni.ty to co�ne ba.ck at
� make their preser�.ta.tion.
Mr. C�xs sta.ted, a�-n, h� could see no reason why the HIZA shouldn' t get
� p�imir,�rjs s frcxn this c7evelOper also.
N.�. Qureshi stated sta,ff would work on a pro fonna and get back to the HRA
at the next meetin . If any other developer wants to make a proposal, they
wi11 do the s�►e f that developer so the HIZA has a c�le ana.lysis in
order to nrake a de ' si� on wha.t was the best develo�ent for the ��+m� ty.
Mr. Fogerty stated
make a decision at
did not want to get
Lf this is back on the July 14th agenda, could the HRA
1�at �eting? He would like to start building, but he
into a bidding war and throw the rlwmbers of f.
-10-
Ms. Sct�nabel sta. the HRA did not want that either. She thought they
should txy to a decisio�n at the next meeting.
N.�. Nfeyer stated did not l�aw how they could make a decision at the next
�ting. If atw r pro,posal c�nes in, then they will need another meeting
af ter t1�at to a decision.
Mr. Nc�man stated
with the parties
i.nfo�nation fr�n E
assistance the HI�
He would assiune tt
could sta.rt negot�
Mr. Meyer stated
City proceed in �
Mr. Qureshi stat
timetable if that
liat within the next 3 0 days, staf f will be in contact
interested in the development, will get additional
ich ane, and �vill dc� an analysis on ea.ch one, the level of
would be expected to gravide and the value to the City.
; HI�A could indicate some direction to staff and staff
�ting the texms of the develoXanent. '
because of the interest in this property, should the
� this property a tax incranent district?
staff could start working on the documentation and
� the HIZA's desire.
Mr. C�ners stated.�that would be agreeable to the HRA.
I.�. ��
s 510,00
BEIl�TG OJ]
Mr. Qureshi stated that with the initiation of work to construct the F`ridley
� Plaza parking ra� there is a r�ed for tenporary parking for the Fridley
Plaza Office Buii ng and City Ha11. The l�se for the parking lot with the
FYidley Plaza Q.' c along the University Avenue East Service Drive ha.s
expired, and it w rnot staff's intention to rene�a the lease during the ramp
construction. Thi lot could be tenporariy converted for the City's use.
The total parking ces tlaat could be made were 100 spaces, presently 50
are paved, and the City would pave the renaining 50 spa.ces at a cost not to
exceed $10, 000. the need f or pa.rking f or the City Hal1 and of f ice
�,;�ding was av�r, then it was the City's approach to laase the parcel back
to the Qinic on kind of accelerating rate dependirig on when they will
actually build on land.
Mr. Qureshi stated Istaff would keep the HI�A ir�fozmed as ea.ch of f icial step
is taken.
N�►I'ION by Ms. Sci
of $10, 000 for a
construction.
•• • � +�
�,, • • l � r� I � '� '1
(Mr. Prairie left
�
, secpnded by Mr. Meyer, to autt�rize the expend.iture
razy asphalt parking area. during the Frid].ey Plza Ra�np
• � ' • � �• •�' �) �• �!�i�' � � � � �� •
meeting at 9:20 p.m.)
�n,nar*�e n r npnme�rl �
-11-
� Mr. Qureshi state
' (brporati�., has �
m�nber visited the
representatives fr
to review the proj
revenue bonds and
project at the reg
Mr. Qureshi
F`ridl�:
�
d the proposed developer, the Arkell Development
iilt s�ne of this housing in Stillwater. A City Council
develo�nent and was reasonably impressed. He stated
m the Arkell D�velo�nent Corporation were in the audience
act with the HRA. The developer does require housing
�n interest rate reduction program in order to pravide the
�ired level.
the developer was looking at three potential sites in
(1) the site 'ust east of Sprin�rook Apar�ments
(2 ) the ' ki praperi.y (Rice Creek Road/Csntral Ave. )
(3) three lot ara�d by the City along Rice Creek Road.
Mr. John Arkell of the Arkell Devela,Eanent Corporation stated presently The
Cottages exi.st i.n -5 different locations: Madison, Wisconsin; two phases
in Stillwater; one breaking ground next month in Ma.plewood; and C�isa.go
City. The Cottag s were a tried concept. It was senior housing at
$385/imnth, and it ha.s warked veetyy well. He stated. they were at the meeting
to ask the HRA's blessing for housing revenue bonds and interest rate
reduction. Obvio sly, no developer can build housing and rent it at
$385/manth without scsne housing assistance. They also qualify for rent
credi.ts.
Mr. Arkell stated irlding three sites in the City of Fridley has been a
� dif f icul t chore. have r�ot yet bui]. t in an "inne�ring" s�uburb, and the
cost of land in dl� is vexy hi�. Sta,ff has got pro formas tha.t shaw
the costs both wi and with,�ut the interest rate rec&�ction, and it doesn' t
even cr�e close to working without the i.nterest rate reduction.
�
Mr. Arkell stat��
different sites wi�
of 80-90 iuiits.
1�. Arkell stated
before t3a.e HIZA; bu
1�. Cl�nexs asked
Mr. Arek11 sta.ted
garage was an addi
iI]Cluded th@ ma i nt�
N�r. Nleyer asked ab
Mr. Arkell stated.
is "`I�i.e Cottages"
with the cotta.ge
door and its avn�
Mr. C�ners stated
;ntly they were trying to find some land on three
the City and build 30 units on ea.ch site for a total
�y usually have a piece of land tied up before they go
in this case, they have letters of intent on 18 acres.
garages were inc].ua'led.
majority of their projects do include garages. The
na1 cost of $30/month. He stated the $3 85 /montY3. al so
:e fee.
the typ� of construction.
y were woodframe buildings with some brick. The name
they tYy to go with the white picket fence and stay
�e. It is a 720 sq. ft. apartrnent with its own front
felt it was the concensus of the HRA to ha.ve sta.ff
-12-
�
��`1
�
&
contirnue to work ith the developex, Arkell Develoianent Corporation, on the
n�bers. They ize there is a market and need for this type of housing
in Fridley, so he could see nQ reason for mt proceeding with this.
Ms. Schnabell sta she thought this was a very interesting project. It
certainly provide an altexr�ative to seni.or housing.
Mr. Arkell the HI�A menb�rs. He stated he would continue to work
with staff. He s ted they were mainly looking for HI2A approval before
proceeding any f er.
F�I''TNQ�'T'F'..G ;
�_
Mr. Fribly stated
future agendas. I
the HIzA. The esti
written.
Mr. Pribyl sta.ted
suY�itting for ap�
HI�A was r�t appra�
of that «�nntract.
MOTION by Mr.
S.E.H. in the
this was a new agenda item that wou].d be included in
. wi11 be for estimates for contracts already approved by
�ates will be r�viewed and approved before the checks are
uded under "Estimates" was an estimate S.E.H. was
l. The HRA has aleady approved the contract, and the
the initial contract but was appraving partial pay�ent
, seconded by Ms. Schnabel, to approve a payment to
.t of $37,069.02.
UPQN A VOIC� VOTE, ALL VOTIlVG AYE, CH�'� ��ON CDN.I�'�RS DECLARED THE N�TION
CARRI�D UNANIl�IJSL .
C�,AIlKS (1751-1764)
MO'I'ION by Ms. , seconded by Mr. Meyer, to approve the check register
as presentecl.
UPOAT A VOICE VO�'E, �ALL VOTIl�TG AYE, Q�AIRPERSON Q�1�.�RS DEQ�ARED THE MOTION
C�RRIED UNp,iVIl�USL .
OTf�R BUSIl�SS :
a. Mai.ntenanc F�nds for Public Improv�ents
(Memo fr�n . Qurreshj, t� HRA and City Council da.ted 6/3/88)
N.�. Caraner stated the HI�A has r�ver really discussed. the subject of
angong m.i tenance casts and the increase that is going to mean with
all these j ects.
Mr. Qure ' sta.ted before maintenance was scanething the City and I�A
can � any large proj ects, ma.intenance was going to have to
be discuss They all feel it is good to enlzan.ce the envirornnent
by making ' ce impravanents. H�e has r�ticed in dif f erent parts of
the metro ea, where nice developments were put, and then those
d�velo�nent were not maintained. Not having a nice develogment
-13-
��
�
^
& RED
woul d be
mai.ntenanc
l�r. 4uresh
Council t
considerat
and there
Mr. QuresY�
and the H
mv.ntenanc
approved.
be 50°s of
cost. If
Denonstrat
$750,000 s
�� PmJ
7
tter than ha.ving a development with little or no
stated if it was the desire of the HRA and the City
put in nice developments, there should be heavy
n given to haw those develo�anents would be maintained,
ould be a sizeable element of maintenance.
stated staff was rec�nending t�iat both the City Council
A establish a policy of reserving funds for adequate
: wh�ver a major envirormnental impravement project is
He was suggesting tl�at the m�n;�,�rr� level of maintenance
he construction costs or one-third of the entire project
he construction cost of the University Avenue Corridor
on Project was estimated to be $1.5 million, at lea.st
�ould be set aside in a maintenance trust fund so the
�t cost would be $2.25 million.
Ms. Schna el stated the HRA has had the concern about the
maint costs fr�► the begir�ningL-how much the City was going to
be needing and how �h should be set aside; but she did not th.ink
that at tivae ha.d they talked about this kind of dollar amount
for maint e.
Ms. Sc 1 stated she did not necessarily agree that the HRA
-�.�d ide the mzintenance for these proj ects. Why �esn' t the
City provi the maintenance out of the City's budget?
Mr. Qures stated the City itself cannot pravide the funds for
maintenanc .'l�e City has to provide the services--police, fire,
public wor , etc. There is the opportunity through the HRA to
PI]�7Znce Cii.y and maintain it.
Mr. Meyer
discussi�
they shoul�
these thin�
tated he thought there should be a philosophical
�etween the HI2A and City Council about maintenance and
reaah a�stual agre�nent as to who is going to pay for
Mr. Ca�¢r�r asked whc� was going to be responsi.bl e, f or exampl e, to
maintain e r�np next to City Hall in future years, the HRA or the
City? 's was something that needed to be discussed f airly
rn�; C]t]-Y•
Mr. Qures ' stated the ramp was not just for City Hall= it was open
to the pub ic so it was a facility more like a road and the City
could main ' it. On University Avenue, they already have the
basic facilities, but they want to enhance the Corridor� and if it
was the 's desire to enhance the Corridor, then it should be
buil t and ' tair�ed by HRA.
Mr. �
same
stated he could foresee many other projects where this
i is going to arise, and they have to resolve this issue
-14-
/"�
�
�"�
9, 1988
as soon asj possible.
Ms. stated t'hat regarding the Uni.versity Avenue Corridor,
this was situation where the City came to the HIZA because the City
had been roached by scer►e busir�ss peopl e who were unhappy wi th
the looks f University Av�. The HIZA did take a look at it and
decided pravide these impravements for the City. But, somewhere
along the line, the City has to realize there are going to be
maint costs. 5he remm�bered.vesy clearly a conversatian where
the HIZA s said to the City: "There is going to be maintenance
irivolved. Are you prepared to accept the mainter�nce? 4�That are you
going to about the maintenance."
Mr. Qures i stated that if the HRA feels the University Avenue
i�prov s are needed and maintained, the HRA cannot expect the
City to 'ntain thet►. He was asking the HIZA to set money aside (a
trust f� , for example) to caver the maintenarvice.
Ms. Schna�
be t�ecl.
Mr. Qures:
HRA.
Mr. Ccu[¢ne:
discussed
Mr. Qures]
this with
Mr. M�yer
ongoing m
Mr. Nc nm�ea�
the HIZP. w.
pravided �
ask�d how the money fran the trust fund will actually
stated the monies could be defined and reviewed by the
stated this was a serious issue and one that should be
th the City Co�cil.
stated the HI�A could be put on the agenda to d.iscuss
e City Co�cil at their canference meeting on June 27.
it would be good to have a list of proj ects where
ce would be n�eeded.
sta.ted. tlza.t at the last meeting, Ms. Orduiw ha.d pravided
h a meno outlining all the proj ects for which the HIZA has
MOTION by Ms. Schna.bel, seconded by Mr. Meyer, to adjourn the
meeting. a voice vote, all voting aye, Chairperson Commers
declared. e June 9, 1988, Housing & Red�velo�anent Authority meeting
adj ounyed t 10 :15 p.m.
�•-.
sul�nitted.,
-15-