HRA 01/12/1989 - 6392HOUSING AND REDEVELOPMENT AUTHORITY
MEETING
JANUARY 12, 1989
FDMM-Felfil 10 No 0 $V
City of Fridley
A G E N D A
HOUSING & REDEVELOPMENT AUTHORITY MTG. JAN. 12, 1989 7:00 P.M.
Location: Community Education Center
6085 Seventh Street N.E.
CALL TO ORDER:
ROLL CALL:
APPROVAL OF MINUTES: December 8, 1988
INFORMATION ON TANURB PROPOSAL FOR :F1A SOUTHWEST CORNER OF UNIVERSITY AVENUE ANDMISSISSIPPI STREET . . . . . . . . . . . . . . . . . . . -
INFORMATION ON TAX INCREMENT FINANCING
RETURNED TO SCHOOLS . . . . . . . .
451).
CONSIDERATION OF AUTHORIZING SPECIFICATIONS -
AND BIDS FOR LAKE POINTE MAINTENANCE . . . . to
3
CONSIDERATION OF A RESOLUTION DESIGNATING
OFFICIAL DEPOSITORIES FOR THE FRIDLEY
HOUSING & REDEVELOPMENT AUTHORITY . . . . . . .
CONSIDERATION OF DRAFT INVESTMENT POLICY
FORFRIDLEY HRA. . . . . . . . . . . . . .
•F'1 T. ' 4' N
INFOAMAT-iO''R ' OI�'$�2`
CENTRAL AVENUE & 64TH AVENUE N.E.. . F`!1
CLAIMS c`"�"� uk- .
OTHER BUSINESS
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'HOUSING and REDEVELOPMENT AUTHORITY
I
COMMISSION MEMBERS: LAWRENCE COMMERS, CHAIRMAN
DUANE PRARE VIRGINIA SCHNABEL WALTER RASMUSSEN JOHN MEYER
CITY OF FRIDLEY
TO: Housing & Redevelopment Authority Members
FROM: Jock Robertson, Executive Director to the HRA
DATE: January 3, 1989
REGARDING: Winfield Proposal for Redevelopment of 57th Place
As a follow -up to the December 8th HRA meeting, I met the next
morning with Jack K. Lemley of Valvoline to brief him on the
proposed project to date. In the course of our discussion, he
asked that the HRA deal exclusively with him as representative of
the landowner of the Rapid Oil property. I asked him to confirm
that in writing, which he subsequently did in a letter dated
December 16, 1988 (see attachment).
You will note by the letter and the attached synopsis of the soil
borings that some contamination was found on the site. These soil
borings were conducted on October 16, 1987. We have taken the
following actions to explore or to deal with this contamination:
1. We have advised Mr. Lemley by mail advising him that under
Minnesota Law, he is obligated to report this contamination
to the PCA if it has not already been reported.
2. The soils report has been forwarded to Winfield and the
Fridley Public Works Department to evaluate the seriousness
of the contamination.
3. We have included language in the draft development agreement
that prior to the HRA acquiring title to the property, both*
the developer and the HRA shall reach an agreement that the
contamination can be removed in such a way that the PCA can
certify that the remaining soils do not include any hazardous
materials as defined under State Law (see Section 3.2.F, pages
3 -1 and 3 -1 of the draft development agreement in your
packet).
The developer is currently reviewing this draft agreement, and we
expect to have the final details concluded for your review at the
February 9th meeting.
JR:ls
EXECUTIVE DIRECTOR: JOCK ROBERTSON 0431 UNIVERSITY AVE. (6 12) 571 -345
FRIDLEY, MN 55432 EXT. 117
i
December 16, 1988
Mr. Jock Robertson
Community Development Director
City of Fridley
6431 University Avenue NE
Fridley, Minnesota 55432
RE: Potential Condemnation
Rapid Oil Change No. 5701
University Avenue
Fridley, Minnesota
Dear Mr. Robertson:
VALVOLWE UWANT OIL CFLANGE
P. O. Box 14046
La& g=. KY 40512
Telephone (606) 268 -7100
This letter will confirm our conversation of Friday, December 9, 1988 wherein I
informed you I was authorized to negotiate with the Housing and Redevelopment
Authority of the City of Fridley on the above location and all correspondence
should be directed to me at the above address. Telephone calls concerning the
above matter should be directed to me at 606/268 -7526.
Rapid Oil would like
to go on record as favoring the
Security
Development
Company proposal and
will oppose any effort to take the
property
by
condemnation.
After returning to my
office and investigating the above
location
I find
that
we have had environmental borings done on this property
and the
results
have
indicated the property
is contaminated. Enclosed please
find a
copy of
that
report.
Rapid Oil planned to spend in excess of $200,000 in 1989 to upgrade this
location, however, due to the threat of condemnation our plans have been put on
hold.
Jock, I appreciate the Commissioner's and your cooperation in bringing me up to
date on this project. I hope a satisfactory solution can be reached for all
parties concerned.
Sincerely,
Crr�- �lJ
Jack K. Lemley
A Division of Ashland Oil. Im
FNN 20
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RAPID OIL CHANGE
6701 UNIVERSITY AVENUE
FRIDLEY. MINNESOTA
DELTA NO. 10 -67 -261
67th STREET
1
+ � J
--�� POWER PO
AMPER STORAGE
'DUMP STATION
(PLUGGED) N,
PUMP ISLANDS
REMOVED)
NO.4. NO.3
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ELECTRIC POWER
TO BUILDING --
W
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W
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T BUILDING
FENCE
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AREA OF
TANK
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(REMOVED) --(
NO.2
GRASS
67th STREET
LEGEND:
Dom
SOIL BORING.
FENCE
GRASS
RAPID OIL CHANGE
5701 UNIVERSITY AVENUE
FRIDLEY, MN 55421
N = None
SL = Slight
MOD = Moderate
STR = Strong
i
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Sample Depths
hNn Reading
SS, Sample (Rpm)
hNn Readings
Head Space [ppm)
Location
(Feet)
oft
Boring No. 1
4.5-6.5
N*
0
0
0
0
9.5 -11.5
N
0
0
14.5 -16.5
N
0
0
19.5 -21.5
N
Boring No. 2
4.5-6.5
9.5 -11.5
S N
250 <1 1
1
21
14.5 -16.5
MOD
20 -30
20
3
19.5 -21.5
MOD
50 -70
Boring No. 3
4.5-6.5
N
_ 0
0
<1
<1
9.5 -11.5
N
0
<1
14.5 -16.5
N
0
0
19.5 -21.5
N
4.5-6.5
N
0
0
0
<1
Boring No. 4
9.5 -11.5
N
0
0
14.5 -16.5
N
0
0
19.5 -21.5
N
.
N = None
SL = Slight
MOD = Moderate
STR = Strong
i
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Casserly Law Office, P.A.
'„'7,�n - �..4.n,- ,...- . -R,... .'��.ti: �.� =� �... =. z .....�.:.- _- �..a -: s. _ -_ .. •_:._ _ . .. .. ..:... :..... .: ;e.- '_y.... _..L.....�.r.... �...., _''� n. i_.v...yv -u «. �� �t..�.i!.�sCg. .m.,..w2d
215 South 11th Street, Suite 200 . Minneapolis . Minnesota 55403
Office (612) 339 -0221 . Home (612) 897 -3569
Date: December 22, 1988
To: Housing & Redevelopment Authority
City of Fridley
6431 University Avenue NE
Fridley, Minnesota 55432
Attn: Jock Robertson, Executive Director
From: James R. Casserly
RE: Agreement with Casserly Law Office Dated December 1,
1988
This memo is to confirm your oral authorization to continue
to provide services to the Housing & Redevelopment Authority
in excess of $1500 as required by the agreement. We are
working on the following files:
1. Hillwind (Analysis)
2. Lake Point
3. Onan (Analysis)
4. Tanurb (Analysis)
5. 57th Place (Analysis)
Thank you for your consideration in these matters.
JRC:gm
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Advertising and marketing/
How man y shopping sho in malls can one city support?
For most shopping centers this
ought to be the peak season for
jingling cash register, but at 8-year-
old Terrace Mall in Robbinsdale
you can hear the sound of footsteps
— probably Your own — boom, off
the walls
j About two- thirds of the storefronts
are vacant and dark and one of the
sury ivors, Stella's Hallmark, is
holding a closing seta Manager
Louie Mamvelas Jr. plans to move
Loa mom profitable site.
I
Just five blocks away in downtown
Robbinsdale. a new 510 - million re-
{ tail and office comples caI1M Town
Center is opening and acros the
sneer 30 year -old Robin Center »
chock full
I Questions about retail glut in the
Twin Cities often focus on Galtier
Plaza in St. Paul. Rivcrplace in
Minneapolis and two proposed pro-
jeers the Bloomington mall und the
j LSGI development on the Nicollet
M-IL But keep an eye an Robbins
dale, home for more than 14500
residents and one of the Twin Cht-
ics' oldest suburbs
Dynamics of the city's three shop
ping tatters — one young, one old,
one troubled — could become a
case study of how many stores an
area can support and what those
centers should look like.
Here's the cast of characters:
S Robin Center, built in 1955, is a
string of 31 businesses east of Hwy.
81, which runs northwest through
the city from Minneapolis. Four
stores are charter tenants: Merwin
Drug Fanny Former candies. Sher-
win- Williams paints and a Country
Club grocery. Thanks to a 1984 re-
furbishing, the center s brown, beige
and mange awnings offer a bright
facade, and managing partner Ralph
Atlas said the center's 118.000
square feet are fully leased. .
■Town Center. just west of Robin
Center across Hwy. 81. has opened
its fiat -ores and fast -food runlets
Built by Duffy Development Co„
Plymouth, and Weis Development
Co.. Rochester, the center holds
nearly 96.000 square feet, including
55,000 sgirare feet of retail, 22,000
square feet ,,f ofTice space and about
j 18.000 square feet in a packing ga-
rage.
About 75 percent of the retail space
is leased, including a Walgreen's
drug store. Subway and Little Cae-
sar's fa- -food outlets a dry cteatier
and a gun -ore and'sAooting range
A Mama D's resaurunt »expected
to open in March.
■ Terrace Ma1L which opened in
1980 between an existing Montgom-
ery Ward and the Terrace Theater.
also linen Hwy. 8I but is five blocks
southeast of the other two centers.
Anchored by Ward and Rainbow
Food% the mall's 100.0004goare-
foot enclosed court is mostly vaearrt;
just nine tenants remain from a
f peak of 25 to 30. Atha depart-
ed: a popular sat rd restau-
rant called Dufrs (later Saey's), a
j Snyder Bros. drugstore, Walden-
books, a pet shop. gift sum and
Extra Special, a clothing store for
large women, which movedto Rob-
; in Center about three months ago.
Several other Terrace Matl mer-
chants have inquired about moving
to Town Center, according to John
Duffy of Duffy Development
"1 haven't tried to go them and raid
them:' he said "1 don't want to
pirate anybody." But negotiations
are on.
Because of the exodus, Terrace's
aenertl punter wants to convert the
80,OOD square -fool development
from ao eadosed complex into a
two-sided snip center with a his
taunt idetitity and better W
the highway and local streets The
Robbinsdate City Council is sched.
uled to voteTuesday night on
measures that would let that hap
Pea
Terry Smith, a real estate broker
and consultant ado »leasing agent
for the Terrace Man, said marnta)n-
ing the enclosed commons added to
We center's lease charges The con.
version plan would expand the
Rainbow stare and sell it. then use
the revenue to redo the rest of the
mall: outward -facing doors and win-
dows deepened store space, better
signs and the like
"It would look more like Robin
Center." he said, although the Ter
race mall would be a two sided strip
with some stores facing France Av.
instead of the highway.
Small centers elsewhere are making
similar conversions from malls to
strips to cot operating costs, he said,
particularly if they Lack a profitable
retail min
In 1979, Robbinsdale sold revenue
bonds (not backed by city taxpayers)
to help get Terrace Man started. It
went further to help Town Center,
which benefited from a campaign by
Robbinsdale planners to spruce up
the main shopping district. The city
spent S2 7 million of tax- increment
funds to buy 4 aces, install utilities,
relocate people and businesses and
hire surveyors, appraisers and law-
yers. The money is to be repaid
from increased property twin over
25 years, said Dave Hagen, the city's
community development director.
A 1985 market feasibility analysis
for the city by Robert Bolden Aso-
ciatn Inc., Minneapolis, recom-
mended a strip cater whose tenants
would be "primarily service orient-
ed versus fashion onmted.... it I.
our opinion that a 35,001)4quam,
foot strip shopping center could be
suowsPoL We add, however. that
the inclusion of office building%
housing or other types of develop-
ment would enhance the viability of
the project, make it easier to learn
and make a 'statement' that would
be meaningful to the city."
Hagen and Bill Deblon, city plan-
EEning coordinator, said Robbinsdale
support all three center. panty
because of its housing strategy. That
strategy calls for construction of
apartments and townhouses that
provide a choice for older residents
who wish to move from their single -
family homes. The homes then can
be sold to younger families with
more disposable income. That
should help support merchants in
the centers. they said And Deblon
said that if those younger families
have enough children, the old Rob.
binsdale High School could reopen,
Although hundreds of such housing
units have been built, the city's poo-
ulation has risen by fewer thaw 2170
residents since 1980, according to
Metropolitan Council figures. But
residents of Crystal n Valley,
Brooklyn Center and Minneapolis
also patronize the Robbinsdale
stores.
Denton and Hagen also talk enthusi-
astically of how a light-mil line
would boost Robbinsdale. Streetcars
once linked the town's main street
W. Broadway, with downtown Min -
neapolis, but they've been gone for
40 years. Plans approved by the
Heavepin County Board envision
light -rail commuter service, indud.
ing a station, about a block from
Town Center.
"I don't think our life or death de-
peads on light m id.
rail." Deblon sa
but it offers "great potential for
fuller redevelopment
Ralph Atlas, managing partner for
the owners of Robin Center, said he
expects to be "long gone before that
coma about^ But he does expect
his center to prosper in spite of the
competing upstart across the high-
way.
"The more people yon can brinj to
an area, the better for the area, he
said. Although individual tenants
feel increased pressure, °rm
loo g
at it as the matra�er of the
whole, complete complex.
On the other hand, he said, °I per-
satisfy think Robbmsdale am sap
port only own center." Time shop
ping centers so close together pro
vide "too much retail for a mature
suburb. But if push comes to shove,
we are in the best competitive situa-
tion."
Lcaan range from 58 to' 516 a
S�fora at Termte INeO $S m
0 reat Robin Center if vacancies
were to occur today and about S12
fur retail spasm at Ttrwv Center, al-
though mfrs caw vary depending oa
charges fur oarttmon space and otit-
er casts.
Arlo said he wouldn't have wanted
to invest in Town Center, but he
hopes it don well: "rm praying
they fill it up. rd ham to see a white
elephant sitting on the comer."
After all, w mtpated vacancies at
Town Center could trigger discount.
ed team unto that might put Robin
Center at a disadvantage. But Duffy
does not expect Town Center to
become a pachyderm of any color.
"From our studies of the demo-
graphics tbem wa a mail need"
tor ta
a w wmmuniry shopping cen-
ter, not a major man such as nearby
Staff Photos by DWAW Stick
Tom Center, a $70 min retell and office aompN4Is IM opening to Robblesdate.
Brookdale, he said. For sample, he
was rprised by research slowing
t,;
percent of Robbinsdale res-
deti haYE InCOmes Of more then
$25,000 a year. 66 percent mom
than 540.000, and 15 percent more
than SA000.1
"Those are not lad incomes," he
said.
In addition, the city ap�d� water
and sewer lino emits and higlt-
"Ile city's ban regl good to work
with," he said
But suppose Terrace Mall turns
manna. Win conversion to a strip
center draw customers away from
its two competitors?
"I don't think it's gong to have an
impart," Duffy said. In a -rip ceo-
ter, "You need at least 20 -fiat front.
am (per store) to attract comm.
era" he and, and he's not sure the
revamping will provide that In ad-
dition, stretching store fronts back
into the old commons will produce
long, very narrow spaces, he said,
using bowling alleys as an analogy.
"If Ws mom than 60 or 63 feet deed
yon em'I lay out the stares right.
-be said.
Man, Where tW0- Utirda Of the alOtlilOtde a/e W Wd and dadL ,.
For now be figum that he'll need 77
percent Town to raw 0nancrat projati Center
ons.
"We're pmt over that' sem8 and
just under that in mi spew," he
said, and he's looking forward to a
grand opening in the spring.
Smith. meanwhile. is trying to find
new tenants for who he hopes will
be a resurrected ship man.
"If 1 bad my dmthem rd Inm some
high - visibility n tluntal names like a
Best Bury or Highland. T.J. Maid or
Marshals, Toys 'R' Us or Kids 'IV
Us Any arthritic types"
But, he said, "11te chances ofgetthtg
them am probably unlikely."
"ERRICK & NIEWMAN IPA.
ATTORNEYS AT LAW
Virgil C. Herrick
David P. Newman
James D. Hoeft
Gregg V. Herrick
To: Jock Robertson
From: David P. Newman
Re: Winfield Development
Date: January 6, 1989
M E M 0
Pursuant to the direction provided by the HRA at their last
meeting, I have prepared an initial draft of a Development
Contract with Winfield. However, due to the Holidays there were
certain delays encountered by the staff in reviewing this initial
draft. Consequently, the people at Winfield Development did not
have an opportunity to see this first draft until Tuesday,
January 3, 1989. Unfortunately, this then only allowed three
days for the people at Winfield to review this draft and for the
respective parties to resolve the remaining issues so that a
final draft could be placed on the HRA agenda. Obviously, such a
tight time frame is unworkable so we will be unable to provide a
final draft to the HRA for their review at the January meeting.
However, I would like to review with you briefly the general
concept contained within the proposed Agreement.
Simultaneous with the execution of the Development Contract
the Developer will pay to the Authority the sum of $17,500.00.
Coupled with the $2,500.00 payment already received, the HRA will
have received an aggregate sum of $20,000.00. The Developer then
has until May 1, 1989 to provide acceptable construction plans,
landscaping plans, evidence of financing, and an unconditional 10
year lease commitment from a bank for not less than 5,000 square
feet.
Once the above conditions have been met by the Developer and
further conditioned upon him posting a Letter of Credit in the
amount of $105,000.00, the Authority will then commence the
necessary steps to acquire the underlying property. However, the
HRA will not in fact acquire title to the property until it has
satisfied itself that it is comfortable with any environmental
problems that may be associated with this parcel. If in fact the
HRA determines that the contaminants on the parcel are too great,
it can terminate the entire arrangement. In such an event it can
reimburse itself for any actual expenses it has incurred to date
but then must refund the balance of the Letter of Credit to the
Developer.
Suite 205, 6401 Universitv Avenue N.E., Fridlev, Minnesota 55432. 612- 571 -3850
If at this point the Developer has complied with all of the
above conditions and the HRA is comfortable with the level of
contaminants on the site, it then will proceed to acquire all the
development property. This includes the parcel which the
Developer has already purchased. The Authority will then convey
the property back to the Developer. The cost which the Developer
will pay to the HRA for this property will be calculated by
totaling all of the costs which the Authority has incurred in
acquiring this parcel (including the cost of constructing
utilities) and subtracting from the HRA cost the sum of
$315,000.00. This difference then is the purchase price which
the Developer is paying for the property. Of this purchase
price he has the option to defer $100,000.00 in the form of a
Second Mortgage which will accrue interest at 10.5% and which
Second Mortgage will be payable in full at the end of three,(3)
years.
As part of the HRA's obligation, they will construct certain
utilities. You are more aware of the exact nature of those
utilities but it is my understanding that the preliminary estimate
is that their cost will range between $75,000.00 and $150,000.00
and is to be part of the form of assistance which the HRA is
providing.
Once the property has been fully conveyed to the Developer,
it will then have a set time in which it must complete construction
of the Minimum Improvements. If this time frame is not met then
fee title to the underlying property will automatically revert to
the HRA and we will also be able to retain the Letter of Credit.
The Development Agreement will include an Assessment
Agreement which will provide for an agreed minimum level of tax
which the Developer will pay each year. This will be coupled by
a Guaranty from the Developer that it will pay the taxes for the
first three (3) years after development has been completed. This
provides added protection in that normally if taxes are not paid,
the only recourse is through the statutory tax forfeiture
provisions. With this proposal, if tax forfeiture occurs during
the first three (3) years the Developer could be sued directly as
well.
I would like to point out to you that we are pegging the
level of the Authority's assistance to the sum of $315,000.00.
This is a set amount. By doing so, if the Authority's acquisition
costs increase this will be a cost passed onto the Developer. On
the other hand, if our acquisition costs are less than anticipated,
then this cost savings will also be passed onto the Developer.
Under the circumstances, I believe that these are all the
conditions which we can reasonably require of the Developer. It
is my understanding that when the HRA takes final action on the
Development Contract that Jim Casserly will be present for
purposes of reviewing with the Authority the final projections.
However, as we all know, in order to have any redevelopment occur
on this site, it will be necessary to have all increment
generated from the district during the life of the district
pledged to support this project. While it certainly does not
provide the Authority with any significant margin for error, it
is also important to remember that if there are some cost
overruns the dollars are relatively small compared to some of the
Authority's other projects.
cc: James Casserly
HERIUCK & NEWMAN PA.
ATTORNEYS AT LAW
Virgil C. Herrick January 6, 1989
David P. Newman
James D. Hoeft
Gregg V. Herrick
Alvin S. Malmon '*'
Smith, Juster, Feikema, Malmon & Haskvitz
1000 IDS Center
80 South Eighth Street
Minneapolis, MN 55402
RE: Fridley Plaza Office Building
Dear Al:
I am writing in response to your letter of January 4, 1989.
Pursuant to our earlier telephone conversation, I previously
contacted Rick Pribyl for the purpose of obtaining aft updated
itemization of the amount owing under the Second Mortgage, a
copy of which is enclosed for your reference. You will note that
Rick's numbers are consistent with yours with the exception that
he has included $617.69 for accrued interest through January 6,
1989. Thereafter interest continues to accrue at the rate of
$3.19 per diem.
I have forwarded onto the HRA.for their action your proposed
Modification of Mortgage and Subordination Agreement. Earlier
this year the ERA did agree to subordinate this mortgage to your
refinancing. However, until receipt of your January 4, 1989
letter I was unaware of the fact that you had hoped to roll
$12,617.69 of the amount due back into this mortgage. Since this
is a new request it is an item that will need to be acted upon by
the ERA. Consequently,.I am requesting our Executive.Director toy
place it on the BRA agenda at their January 121"'1989 meetrng_
As you noted, I will be out of the office until the -- evening
of January 12, 1989. In the interim, if there is any additional
information which you need I would encourage you to contact
Jock Robertson directly.
Sincerely yours,
David P. Newman
DPN:jeb
-Enclosure
-cc: Jock Robertson (copy of January 4, 1989 letter from
Alvin Malmon and attachment)
Suite 205, 6401 University Avenue N.E., Fridley, Minnesota 55432, 612- 571 -3850
Date
12/31/87 - 12/31/88
01/01/89
01/02/89
01/03/89
01/04/89
01/05/89
01/06/89
12/31/88
01/01/89
01/02/89
01/03/89
01/04/89
01/05/89
01/06/89
Fridley Office Plaza Mortgage Payment
Payment
7.5%
Due
Interest
7,960
597.00
7,960
1.64
7,960
1.64
7,960
1.64
7,960
1.64
7,960
1.64
7,960
1.64
7,960 606.84
7,520
1.55
7,520
1.55
7,520
1.55
7,520
1.55
7,520
1.55
7,520
1.55
7,520
1.55
7,520 10.85
15,480 617.69 16,097.69
LAW OFFICES
SMITE, JUSTE8, FEIKEMA, MALMON & HABHVITZ
A PARTNERSHIP OF PROFESSIONAL CORPORATIONS
SmiTu, Jv6TZa, Famenmw. NALmor & HAaxvlrz Nawovum & ExeTawK. QBAHTaaan
CMARTEREG
1000 IDS CENTER
SUITE 301
60 SOUTH EIGHTI4 STREET
6401 UNIVERSITY AVENUE. N. G
MINNEAPOLIS, MINNESOTA 39402
FRIDLEY. MINNESOTA 55432
TELEPHONE (612) 339.1461
TELEPHONE (612) 571.6670
FAX (612) 349.6055
CARL J. NEWOUIST
WYMAN SMITH, RETIRED
LEONARD T.JU6TER
S. WILLIAM EKSTRUM
HENRY H. FEIKEMA
ALVIN S. MALMON
OF CDUNSEI. '
RONALD L. HASKVM
DOUGLAS J. PETERSON
JOHN M. GISLIN
J. CHRISTOPHER CUNEO
STACEY A. OKKAL6 January 4, 1989
NICOLE E. NEE
JOEL W. LAVINTMAN
JAMES M. LOCKHART
David Newman, Esq.
Herrick & Newman, P.A.
6401 University Avenue Northeast
Fridley, Minnesota 55432
Re: Fridley Plaza Office Building
Dear David:
I am enclosing a Subordination Agreement for the balance of the Fridley
mortgage. Please note that upon delivery of the Subordination Agreement at
the closing, if we do indeed close, we will pay $3,480.00 to Fridley HRA,
which amount represents a portion of the unpaid interest on the present
principal balance of $35,999.00 (see the attached Fridley invoice). We
propose to add the rest of the delinquent interest to reinstate the original
mortgage balance at $39,999.00, its original amount. We anticipate that the
closing will take place on January 16, 1989.
(We take the position that this is not an obligation of the Partnership but
merely a non - recourse mortgage against the property, since there is no
promissory note involved in the transaction. Therefore, if in fact we do not
close this transacti , Fridley will have to foreclose on its second mortgage
in order to collect.It is doubtful as to whether or not the building is
worth substantially re than the present $1,500,000 mortgage plus accumulated
interest that is presently against the property.
However, we are optimistic that we can close and we do ask your cooperation in
getting this mortgage Subordination Agreement executed and notarized for us,
so that we may not lose the mortgage commitment that we presently have.
I understand you are going out of town and I hope you can get it done before
you go. If you cannot, I would appreciate you getting it done immediately
upon your return because the timing is going to be very tight.
ASM /dah
Attachment
Yours very truly,
Q/'_
Alvin S. Malmon
r Or J
0
® CITY OF FRIDLEY INVOICE# 4507
® 6431 University Avenue N.E. INVOICE DATE 11/30/88
Fridley, Minnesota 55432 -4384
Telephone: 571.3450 COST. ORDER NO.
e
MODIFICATION OF MORTGAGE AND SUBORDINATION AGREEMENT
AGREEMENT made this day of January, 1989, by and between Fridley
Plaza Office Building Partnership, a Minnesota partnership ( hereinafter called
"Partnership ") and the City of Fridley Housing and Redevelopment Authority
(hereinafter called "HRA ").
RECITALS
A. Partnership is the fee owner of real property in Hennepin County,
Minnesota described as follows:
Lot Fourteen (14) and the Northerly 6.8 feet of Lot Thirteen (13), Block
Five (5), Rees' Addition to Fridley Park, together with the Westerly 4.37
feet of the vacated alley lying easterly.bf and adjacent to the above
Block
property and the Southerly 40 feet of Lot Twelve (12), lack
Two (2), Rees' Addition to Fridley Park, together with the Westerly 4.37
feet of the vacated alley lying easterly of and adjacent to that part of
said Lot Twelve (12), described herein and that portion of the vacated
64th Street that lies between the above - described propety in Block Five
(5) and Block Two (2), Rees' Addition to Fridley Park.
B. On or about November 4, 1982, the Partnership executed a mortgage in
the initial principal amount of Thirty -Nine Thousand Nine Hundred Ninety -Nine
($39,999.00) Dollars ( "Mortgage ") in favor of HRA, which Mortgage was
subordinate to a first mortgage in the amount of One Million Five Hundred
Thousand ($1,500,000.00) Dollars, issued in connection with a One Million Five
Hundred Thousand ($1,500,000.00) Dollar City of Fridley, Minnesota Commercial
Development Revenue Bond Fridley Plaza Partnership Project ( "Project ").
C. The Partnership now desires to sell the Project and desires that HRA
waive the delivery of the two (2) Four Thousand ($4,000.00) Dollar principal
payments which were due on January 2, 1988 and January 2, 1989, be paid Three
Thousand Four Hundred Eighty ($3,480.00) Dollars of delinquent.interest, have
the remaining Four Thousand ($4,000.00) Dollars of delinquent interest added
1
i
back to the present principal balance to restore that balance to its original
Thirty -Nine Thousand Nine Hundred Ninety -Nine ($39,999.00) Dollars, and
subordinate the remaining principal balance of the Mortgage of Thirty -Nine
Thousand Nine Hundred Ninety -Nine ($39,999.00) Dollars to a new mortgage in
the principal amount of One Million Four Hundred Thousand ($1,400,000.00)
Dollars, in favor of State Bonding Companies, to be placed by buyers in
connection with the aforesaid sale.
D. The attached Mortgage is in the original face amount of Thirty -Nine
Thousand Nine Hundred Ninety -Nine ($39,999.00). The principal payment of
Four Thousand ($4,000.00) Dollars, which was due on January 2, 1987, was paid,
bringing the Mortgage balance down to Thirty -Five Thousand Nine Hundred
Ninety -Nine ($35,999.00) Dollars. There are two Mortgage payments presently
due and unpaid. The payment due on January 2, 1988, in the amount of
Four Thousand ($4,000.00) Dollars principal and Three Thousand Nine Hundred
Sixty ($3,960.00) Dollars interest, totalling Seven Thousand Nine Hundred
Sixty ($7,960.00) Dollars, and the payment due on January 2, 1989, in the
amount of Four Thousand ($4,000.00) Dollars and Three Thousand Five Hundred
Twenty ($3,520.00) Dollars interest, totalling Seven Thousand Five Hundred
Twenty ($7,520.00) Dollars, constituting a present balance due of Fifteen
Thousand Four Hundred Eighty ($15,480.00) Dollars, pursuant to the attached
City of Fridley invoice.
It is therefore agreed by and between the parties as follows:
1. In consideration of the payment of Three Thousand Four Hundred
Eighty ($3,480.00) at the closing of the sale of the Fridley Plaza Office
Building by the Partnership, the remaining balance of unpaid interest, in the
amount of Four Thousand ($4,000.00) Dollars, will be added back to the present
principal balance, returning the principal balance to its original amount of
2
R
0q
Thirty -Nine Thousand Nine Hundred Ninety -Nine ($39,999.00) Dollars and, in
addition, HRA hereby waives the default in the Mortgage for the two (2)
delinquent principal payments due on January 2, 1988 and January 2, 1989.
2. HRA hereby subordinates the remaining Mortgage balance of
Thirty -Nine Thousand Nine Hundred Ninety -Nine ($39,999.00) to a new mortgage
to be placed against the property, in the face amount of One Million Four
Hundred Thousand ($1,400,000.00) Dollars, in favor of State Bonding Companies
or its assigns.
3. All of the other terms of the Mortgage will remain unchanged.
IN WITNESS WHEREOF the parties have set their hands and as of the day
and year first above written.
FRIDLEY PLAZA OFFICE BUILDING
PARTNERSHIP
By:
Leonard uster
Managing Partner
By:
Gerald apu
Managing Partner
STATE OF MINNESOTA)
) ss..
COUNTY OF ANOKA )
The foregoing instrument was acknowledged before me this day of
January, 1989, by Leonard T. Juster and Gerald Kaputa, the managing partners
of FRIDLEY PLAZA OFFICE BUILDING PARTNERSHIP, a general partnership under the
laws of Minnesota, on behalf of the partnership.
Notary Public
3
A
CITY OF FRIDLEY HOUSING AND
REDEVELOPMENT AUTHORITY
By
Its
STATE OF MINNESOTA)
) ss.
COUNTY OF ANOKA )
The foregoing instrument was acknowledged before me this day of
January, 1989, by and of the CITY OF FRIDLEY
HOUSING AND REDEVELOPMENT AUTHORITY, a public corporation under the laws of
Minnesota, on behalf of the corporation.
Drafted by:
Smith, Juster, Feikema, Malmon
& Haskvitz, Chartered
1000 IDS Center
80 South Eighth Street
Minneapolis, MN 55402
Notary Public
4
ATTORNEYS AT LAW
Virgil C. Herrick December 27, 1988
David P. Newman
James D. Hoe&
Grm V. Herrick
Jock Robertson
City of Fridley
6431 University Avenue N.E.
Fridley, MN 55432
Dear Jock:
As you will recall, quite sometime ago Apollo Piping Supply
commenced Mechanic's Lien foreclosure proceedings on the
Springbrook Apartments as well as on the Fridley HRA. This
matter has now been resolved and enclosed you will find a copy of
the General Release.
Sincerely yours,
a id P. Newman
DPN:jeb
Enclosure
Suite 205, 6401 University Avenue N.E., Fridley, Minnesota 55432, 612- 571 -3850
i
w.Mrtl 0mwee -6e PWA
Innw A11 Iirrsons bg aljrse if resrnis, T�.a� — »��►a . W����a ��a� ».....» » ..._
in Consideration o/ One _.... »..» _. ».' » ». _ _... ».. . _._ . ». 1Jotlare
rereipt of whioh is hereby aaknowledjfA does_.. hereby remiso, release, and forever disdtarge3ffbexxKd
University Avenue Associates, a Minnesota partnership; Citicorp Real Estate, Inc.,
a Delaware corporation; Housing and Redevelopment Authority in and for the City
of Fridley and their respective assigns,
heirs aad legal representaNum, from all judgmenla, damages, nations and causes of aetion, Claims
awl demands. of every kind are I nalurt, in late and In equity. and howl -.arvr originaUns! or existing, to
the date herraf, by reason of.-o ateriala.. Eurnishad..A t.. .raqueaL ».a£..Callahan. Plumbing-and . Has
for work performed at the parcel known as:
Lot 1, Block 1, Springbrook Apartments at Northtown,
according to the plat thereof recorded in the County
Recorder's Office, Anoka County, Minnesota.
the undersi ed has its
En ittness hflbeteot. ». _ ».._...._ ..R!!.. ».._. _...._ .» »».Jkw hereanto sal Ayr hand . arul seal this
_ ... ... . ... _ .... .... .... 5 . »» .. ».._ »» day of z?= ember . ........ . .. ........ - ....... ».. , 19 B$
In Prtsenee of
State of
County
APOLLQ M..INO. SUPPI.Y,...IHC. » » .. ......(SE.4N
Wd f )
On .... ...._ ..... _ ... _.» „..__ day of....Accambar..-.._ .._._ ., 19.88 before me
personally apprara »_ James MaKovitt _- _..»»_.«.. _»Lha Vicb Presidunt »
of Apollo Pipine Supply, Ino., a corporation under the laws of the State of Minnosota,
to me known to be the personttdeartbed in and who exaoutsml the forrgoing indrament and acknowledged
that ... he.... executed the same as _h B»._... ..free act and deed. on behalf of the corporation.
e A AL At`r18 1 l e
JEROME J WESSMAN
11 NOTA11r fWgLia • MINNt80TA
HENNEPIN COUNTY.
Mp eaaMMWiar apl*n At* 0. 1x00 1' SWART PUBUC am qynwu Uffirg" �'G'
I
OUSING and REDEVELOPMENT AUTHORITY
COMMISSION MEMBERS: LAWRENCE COMMERS, CHAQIMAN
DUANE PRARE V11RQNIA SCHNABEL WADER RASMUSSEN JOHN MEYER
CITY OF FRIDLEY
TO: Housing & Redevelopment Authority
FROM: Jock Robertson, Executive Director to the HRA
DATE: January 12, 1989
REGARDING: Policy Issues on Tanurb Proposal at Southwest
Corner of Mississippi & University for 100,000
Sq. Ft. Retail Center
The financial structure as discussed so far would be composed of:
T.I.F. Bond (17 yr. tax exempt) . . . . . . . $1,600,000
Special Assessment Bond (17 yr. tax exempt). . 300,000
T.I. Revenue Note (for second phase) . . . . . 400,000
Note for City Land . . . . . . . . 580,000
Developer Pay (cash) . . . . . . . . . . . . .1,000,000
Total Project Costs to the City $3,880,000
(acquire, demolish, relocate, &
public improvements)
THE ISSUES
I. Is the H.R.A. willing to do a 17 yr. T.I. bond?
A. Longest previous bond is 15 years.
II. Is the H.R.A. willing to do tax exempt bonds?
A. ' To do a tax exempt bond the H.R.A. cannot get any
security such as:
1. Assessment Agreement
2. L/C for debt service
3. Guarantee of taxes or debt service
4. Mortgage '
B. However, unlike Lake Pointe, the H.R.A. would only
reimburse the Developer after the project was completed.
The Developer is responsible for all costs.
1. What debt service coverage will be allowed?
EXECUTIVE DIRECTOR: JOCK ROBERTSON 6431 UNIVERSITY AVE. (612) 571 -3460
FRIDLEY, MN 55432 EXT. 117
U
Policy Issues on Tanurb Proposal
January 12, 1989
Page 2
III. Is the H.R.A. willing to issue a limited T.I. Revenue Note for
17 years?
A. Will deficiencies in annual note payments be allowed to
accrue?
IV. Will the H.R.A. allow its land to be purchased over time?
A. Number of years
B. Interest rates
Legal Issue: Can the H.R.A. receive installment payments for sale
of its land and still issue a tax exempt bond?
JR:ls
M -89 -26
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0 w Monday /Jan. 9/1989 /Star Tribune
From the cover/
Continued from page 1D
bestos, which was widely used as
insulation between 1950 and 1970.
Tenants don't want to be in buildings
that contain asbestos, so the owners
are having to spend money to re-
move it. Those owners "are not hap-
py campers," said Deardorff. "Class
B is getting hammered."
Class A buildings such as the Nor -
west Center in Minneapolis and the
World Trade Center in St. Paul gen-
erally are the newer, taller buildings
with top - quality decor and mechani-
cal systems, and first -rate locations
downtown or along major freeways.
Class B buildings such as the Foshay
Tower in Minneapolis or the First
National Bank Building in St. Paul
are older and have less technically
advanced building systems and fewer
amenities.
The tenants' market has been hard
on landlords, particularly those who
own older, Class B buildings, but has
proved beneficial to real estate bro-
kers who have been busier than ever
trying to fill the excess space with
tenants.
"In the brokerage business, times of
crisis and change are a real opportu-
nity for brokers," said Paul Svo-
bodny, Twin Cities resident managec, `
for Coldwell Banker Commerciar
Real Estate, a national subsidiary of
Sears, Roebuck and Co. that opened
a local office in 1974. "An overbuilt
market is a disaster for developers
but a time when brokerages can do
well. They're in demand"
Reiling said that the number of leas-
ing agents in the Twin Cities has
risen substantially during the past
decade, and that many brokerages
are representing tenants who are
seeking the best possible option for
new space as well as building owners.
"We've shifted to a market in which
a higher percentage, certainly a ma-
jority, of tenants are represented by a
broker," he said "That's a growing
trend happening all over the country,
but the soft market allowed it to
happen faster."
Within the Twin Cities office market,
some segments have been softer than
others. Generally, the newer Class A
towers have had lower vacancies, as
status - conscious tenants desert older
buildings for more prestigious ad-
dresses There are exceptions, howev-
er, such as the largely empty Lincoln
Center in downtown Minneapolis
and the slowly filling World Trade
Center in downtown St. Paul.
Geographically, the suburbs have
shown the most spectacular growth,
more than tripling their office space
over 10 years, but they also consis-
tently have had higher vacancy rates
than the downtown areas, according
to figures tracked by Coldwell Bank-
er.
Both downtowns have more than
doubled their office space over the
past 10 years, although St. Paul start-
ed with a much lower base. Pon-
town Minneapolis, after experiencing
vacancy rates as low as 5 percent in
1980 and 4 percent in 1981, jumped
to double -digit rates in 1984, and the
figure has continued to rise- St. Paul
hit double -digit vacancies earlier, but
for the past five years has had lower
rates than Minneapolis until the
opening of the World Trade Center
in 1987 out it briefiv in the lead
For the next year and a half or so, the
office market is expected to tighten
because few new buildings are sched-
uled.to open. But no one is predicting
a return to the days of single -digit
vacancy rates.
Net absorption of office space has
slowed, and developers are more cau-
tious about building "Most will sit
until they have 40 percent pre -leased
(before building)," Deardorff said
"The day of speculative building is
over."
Because today's market is more com-
plex, there is a consensus that bro-
kers and' consultants must be more
knowledgeable and sophisticated
than in the past. To meet that need,
smaller companies and - individual
ry� t
brokers within larger firms are tend- space for the right tenant. American
ing to specialize in particular Hardware Mutual Insurance, which
graphic or segmented market niches owned its headquarters building near
Lake Calhoun, began talking to Holtz
"The profile of the leasing person has
changed," said Deardorff: "Before,
they were people who operated build-
ings. ... When outside developers
came to town, they hired people who
were trained in sales orientation,
then trained them to do real estate
leasing."
Brokers' paychecks vary widely, de-
pending on experience, general mar-
ket conditions, expertise and hustle.
Coldwell Banker's brokers, for exam-
ple, generally cam between_ $50,000
and $100,000 after an initial one -year
training period, and the office has
several people who are amo-g the
company's top producers nationwide
and are earning more than $300,000
a year, according to Svobodny.
Coldwell Banker has an unusual
training program for its new leasing
agents. Newcomers serve "runner-
ship" periods of a year or more with
an experienced broker while under-
going the company's regular training
program. They are paid straight sala-
ry during that time, rather than the
more usual commission arrange-
ment, which avoids having the senior
person who serves as mentor share .
commissions with the apprentice.
For example, Kurt Knopf, a former
Minnesota Vikings safety, joined
Coldwell Banker in 1983 and served
his apprenticeship with Tom Holtz,
one of the company's top producers,
fora little more than a year.
While learning the business, "the
runner digs up leads, cold-calling in
pin or on the phone, and does a
of t of leg work," Knopf said In this
case, however, the two men devel-
oped a good working relationship
that they wanted to continue, so they
formed a formal partnership after
Knopf "graduated" and continue to
work as a team.
One of the partnership's recent deals
offers an example of the increasingly
complicated task of finding the right
in the summer of 1986 about its plan
to sell the building for tax reasons
and buy or lease space elsewhere.
The partners did a detailed analysis
of several possibilities, including sell-
ing the building to an investor and
leasing it back; selling to a developer
who would build American a new
home, selling the building to a single -
user company, or the option that was
eventually chosen, finding one devel-
oper to build American a new head -
quarters and another who would buy
the old building for renovation.
American made its decision to go
ahead in November 1986 and gave
the Coldwell Banker team a Decem-
ber 1987 deadline to line up develop-
ers and close the multi-phase deal.
That meant that the agents had a
little more than a year to solicit pro-
posals, help American choose the
best one and get the contracts signed.
If they failed, the deal was off and
there would be no fee.
Generally, brokers' fees are calculat-
ed on a percentage of overall lease
value or on a straight dollar -per-
square -foot basis. Coldwell Banker
would not disclose the size of its fee
on this deal, but Svobodny said that
the fee took into account the com-
plexity of the transactions and the
number of different pieces involved
American had a number of specific
requirements to fill, such as a south
or southwest suburban site, being the
sole or major tenant, and an attrac-
tive, mid-priced building that was
not "an expensive showcase." Over
the ensuing months several develop -
yzed and proposals,
resented the Holtz pros and
cons of each.
In August 1987, American's board
approved the proposals of Opus
Corp. to build its headquarters in
Minnetonka and of Lexington Co. to
buy and renovate the former head-'
quarters on Labe Calhoun.
However, that still left a lot to do in
five months: designing the new build-
ing, obtaining government construc,
tion approvals, setting a short
term lease with bxui n to stay in
the Minneapolis g until con-
struction was complete and the final
closings.
"Somehow, it all came together in
,; , the last two weeks of December,"
Holtz said.;: ".And the Opus ground
biea 11 was held within two days of
closing." ,
a CITY OF FRIDLEY
HOUSING A- REDEVELOPMENT AUTHORITY MEETING, DECEMBER 8, 1988
i
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CALL TO ORDER:
Vice - Chairperson Schnabel called the December 8, 1988, Housing &
Redevelopment Authority meeting to order at 7:12 p.m.
ROLL CALL:
Members Present: Larry Commers, Virginia Schnabel, Duane Prairie,
John Meyer,
Members Absent: Walter Rasmussen
Others Present: Jock Robertson, Executive Director to HRA
William Burns, City Manager & Director of HRA
Dave Newman, HRA Attorney
Rick Pribyl, City Finance Director
Barbara Dacy, Planning Coordinator
Bill Fogerty, Winfield Development
Wilbur Dorn, Dorn Law Firm - rep. Crosstown Bank
Liv Horneland, Coldwell Banker
Peter Bloch, Coldwell Banker
Shinjae Suh, 12 Island Road, St. Paul
Bob Levy, 100 S. 5th St., Suite 1100, Mpis.
Ed Chanin, Maslon, Edelman, Borman, & Brand
Law Firm
Cheryl Stinski, 1612 Berne Road
Rollie Stinski, 1612 Berne Road
Pat Fisher
APPROVAL OF NOVEMBER 10 1988 HOUSING & REDEVELOPMENT AUTHORITY
MINUTES•
MOTION by Mr. Meyer, seconded by Mr. Prairie, to approve the
November 10, 1988, Housing & Redevelopment Authority minutes as
written.
UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL
DECLARED THE MOTION CARRIED UNANIMOUSLY.
1. CONSIDERATION OF REDEVELOPMENT PROPOSAL FOR SOUTHWEST CORNER OF
UNIVERSITY AVENUE AND MISSISSIPPI STREET:
Mr. Robertson stated the developer is Tanurb, a major Canadian
-1-
HOUSING & REDEVELOPMENT AUTHORITY MEETING, DECEMBER 8, 1988
firm, who has developed Loehmann's Plaza, north of Rosedale. He
stated the developer has been making substantial progress with the
landowners, at least the two major landowners. He stated
representatives of Coldwell Banker and the major landowners were
at the HRA meeting to give the HRA a progress report and to answer
questions.
Mr. Bob Levy stated he represented Rice Plaza. They have fully
negotiated a purchase agreement with Tanurb. The nature of the
agreement allows Tanurb a period of time to negotiate a
redevelopment contract with the HRA and allows or contemplates
Tanurb to assign its rights under that purchase agreement to the
HRA in order to receive tax increment dollars.
Mr. Levy stated the process they went through obviously had a
slightly different objective than the HRA's process, yet it also
had some parallels. They had a number of offers on the property,
and price was not the issue. They wanted to distinguish which
developer they felt had a proposal that had the most likelihood of
happening and would be a development the property owners, the HRA,
and the City could be proud of. The one difference was the
property owners only have to look at the process for a period of
months. The City has to look at the process on a long term basis.
Mr. Levy stated one of the main reasons for focusing on
negotiations with Tanurb is because Tanurb, financially, is
definitely the strongest of all the parties interested in the site.
The only issue they can see that might keep Tanurb from making
the project happen is if Tanurb cannot attract the tenant mix they
want. He stated the property owners are very excited about the
prospects of the development moving forward.
Mr. Levy stated that within the next few days, a purchase agreement
on their parcel and Mr. & Mrs. Suh's parcel should be fully
executed, and that will start the time period and contingencies
during which Tanurb can start negotiating a contract with the HRA.
Mr. Levy stated the property owners have been very concerned that
they not usurp the HRA 's powers or get in the HRA 's way. They
understand their purpose, which was to screen the developers, comes
to an end at the time the agreements are signed. It was then up
to the developer and the HRA to see if they can put a development
package together.
Mr. Meyer asked kind of development was possible.
Mr. Levy stated Tanurb is a shopping center developer. They are
not a multi- housing developer, and what Tanurb has in mind for this
-2-
t•
HOUSING & REDEVELOPMENT AUTHORITY MEETING, DECEMBER 8, 1988
site is a mixed use retail type of shopping center development.
Mr. Ed Chanin stated his law firm is representing Tanurb. He
stated it is somewhat early to talk about who might -be in the
project and who might be the tenants at this time. He stated they
have purchase agreements with two major property owners or expect
to have those agreements within the next 4 -5 days. They are
interested in getting together with the HRA's legal counsel and
City staff next week. One of the principals from Tanurb may travel
from Toronto to attend an initial meeting to review the
possibilities. Hopefully, the project will be to the City's
liking.
Mr. Peter Bloch, Coldwell Banker, stated he would be responsible
for the leasing on this property on Tanurb's behalf. If the HRA
or staff have any questions about how this is going to take place,
they were to feel free to contact him. He stated Liv Horneland,
his associate, had been implemental in marketing the project and
bringing this to bear.
Mr. Robertson stated staff had put together a tentative schedule
which was included in his Dec. 1, 1988, memo to the HRA (agenda
pages 1 -1A).
Mr. Commers stated the HRA members certainly looked forward to
going forward with negotiations on the development. He stated the
HRA was willing to assist as much as they could in the development
of the property.
2. CONSIDERATION OF WINFIELD PROPOSAL ON 57TH PLACE:
Mr. Robertson stated staff had given the HRA a rather complete
outline of a tentative agreement reached on Nov. 23, 1988, with
Winfield Development. There were two things that must happen in
order to trigger the HRA's decision to proceed:
(1) An appraisal be received by the HRA;
(2) A commitment by the major anchor tenant, Crosstown Bank.
Mr. Robertson stated staff received the appraisal earlier this
week, and the commitment in the form of a letter from the anchor
tenant was received the previous evening. That letter had been
handed out at the meeting. Also, Mr. Lemley from Ashland Oil,
Lexington, Kentucky, was at the meeting.
Mr. Fogerty stated it has been difficult to get as far as they have
in this process. They now own the duplex. They have put
A-
HOUSING & REDEVELOPNENT AUTHORITY MEETING, DECEMBER S. 1988
approximately $120,000 into this project. He stated they went into
this project with the understanding that the HRA wanted a high
quality development. He stated he was afraid his optimism oversold
the project in thinking the project could happen within a timeframe
that he now realized was unrealistic. They now have a tentative
agreement with the anchor tenant, Crosstown Bank; however, there
are several things that banks have to do before they can make a
firm commitment. He stated he felt they have a quality development
and he felt Winfield has pretty much accomplished what they set out
to do.
Mr. Wilbur Dorn stated he is the attorney for Crosstown Bank. He
stated he would like to clarify some things for the HRA and make
certain they are totally candid with the HRA in terms of their
negotiations with Winfield Develoment.
Mr. Dorn stated he would first like to give a little history of
Crosstown Bank. He stated the first bank was located in Cedar,
Minnesota, and was known as Farmers' State Bank of Cedar. About
14 years ago, the bank was purchased by Dolphin, a major
shareholder, and it has grown from a $2 million facility to a $50
million facility in that period of time, primarily through
expansion geared to moving to different locations.
Mr. Dorn stated they are now seeking to expand their market and
locate an additional detached facility somewhere in the 694
corridor,-which is the southern end of their trade area. Fridley
is the first choice for the Crosstown Bank. After two years of
site evaluation, they narrowed the location down to three sites in
Fridley: Lake Pointe development at 694 /Highway 65 /Central; 57th
Place; and the Holiday Plus property in the vicinity of the Stewart
Anderson Cattle Company restaurant.
Mr. Dorn stated they eliminated the Holiday Plus as a permanent
location, but are still negotiating for ground space for a
temporary facility. They are very anxious to get a location and
open a banking facility in 1989 in one of these areas. In
evaluating the Lake Pointe site, it appeared that although the site
has its advantages, development does not seem to be progressing
with the degree of speed they need to enable them to open a
facility in 1989. They also have not received the cost, figures,
and data needed to make an intelligent decision, so they have
determined to go with the Winfield site.
Mr. Dorn stated there were a number of variables that can upset
their plans. He stated they are subject to regulatory approval of
the State Banking Commission for this location. This takes about
120 days. They have reached a basic agreement on most of the
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ROUSING 8 REDEVELOPMENT AUTHORITY MEETING, DECEMBER S. 1988
provisions of the lease arrangement, but they have a lot of signage
requirements with the City of Fridley they have not even started
discussions on. There are also some parking questions.. He stated
he had talked to Mr. Newman about the correspondence to Mr. Bubany
of Winfield from Mr. Dolphin of Crosstown Bank dated December 7,
1988. One point Mr. Newman raised which he felt should be
addressed was the fact that the term of the lease was not yet
determined. He stated Winfield has asked them to commit to a 15
year lease, but at this time they have declined to make any
commitment. The reason for that, of course, is that they do not
yet know enough about some of the other aspects of the project to
make an intelligent decision. The signage will be critical, and
there are some other variables as well.
Mr. Dorn stated he has advised his client, Crosstown Bank (and they
have basically agreed), to not consider the Lake Pointe site any
longer unless things moved rather quickly soon.
Mr. Larry Commers asked if the HRA could anticipate the lease being
finally executed by April 1, 1989.
Mr. Dorn stated it would probably be before that. The lease would
be contingent upon Regulatory Commission approval, but he thought
the Winfield people are going to want a definite "yes" or "no" by
April 1.
Mr. Larry Commers asked Mr. Fogerty if Winfield was willing to go
ahead with the lease based on that contingency.
Mr. Fogerty stated, yes, they were. Winfield feels pretty
confident that the project will go.
Mr. Meyer asked why signage was so important.
Mr. Dorn stated it is a one -owner bank, and it is the owner's
philosophy to spend a lot of money on signage and advertising. The
visibility factor has worked for them. It brings people into the
bank, and the service has grown 25 times in the last 10 1/2 years.
It is the owner's philosophy that without adequate signage, an
ideal location becomes less attractive. On the Lake Pointe site,
the bank could be seen from 694 and they would not need the same
signage.
Ms. Schnabel asked if Mr. Dorn had taken the opportunity to study
the City's Sign Ordinance.
Mr. Dorn stated, yes, he had. He had also met with members of the
Planning Department on several occasions and reviewed the Sign
-5-
HOUSING A REDEVELOPMENT AUTHORITY MEETING, DECEMBER 8, 1988
Ordinance. He stated they know what they want and what they can
get. They might need some variances, but staff did not totally
reject the signage they suggested.
Ms. Schnabel stated she was concerned about signage because she
helped draft the Sign Ordinance some years ago. She stated the
same Sign Ordinance restrictions apply whether the bank is located
on University Avenue or Highway 65.
Mr. Meyer stated that if there was any possibility of the bank
dropping out. For example, if polluted soil is found, how was the
HRA protected? There should be some kind of statement in the
agreement that protects the HRA.
Mr. Larry Commers agreed. Where is the HRA in terms of protection
if there is a cleanup problem or if, in fact, the Rapid Oil
property comes in at a value double the amount of the appraisal?
Mr. Newman stated those concerns were outlined on agenda page 2 -B.
There were definitely environmental concerns, and because of these
concerns, he had added the additional safeguard of requiring the
developer to post a letter of credit of $125,000 before commencing
condemnation. The site with the greatest environmental risk, of
course, is the Rapid Oil site.
Mr. Larry Commers stated the HRA has to be prepared because in the
condemnation process, there is the risk that the value could be
found far greater than what the Winfield appraisal was.
Mr. Newman stated he would anticipate that the HRA would bear the
risk of the expenses of the infrastructure and demoliton. Since
they are relying on the developer's appraisal, site acquisition
would be the developer's risk. He was sure that when Mr. Casserly
ran the numbers, he had put some flexibility into them. As far as
issues, the approach is that once all the necessary steps have been
met, the letter of credit has been posted, and assuming the lease
is in place, they would begin the process of condemnation. He
stated that under Minnesota State Statutes, once the City begins
the condemnation process, they have the right to go on to the
property to conduct certain tests, and they could do an
environmental assessment at that time. If the soil tests come back
indicating there is no problem, then they can proceed with the
quick take action to begin acquisition. If the soil tests
determine there is a problem on the site, then they would have to
do an evaluation. It may be the case where if there is a minor
problem on the site, the HRA might decide to go ahead and take care
of the environmental problem with a reduction in the purchase
price. If the HRA decides they do not want to proceed because of
-6-
HOUSING A REDEVELOPMENT AUTHORITY MEETING, DECEMBER 8, 1988
the environmental problems, they can dismiss the condemnation
action because of something they were not aware of and terminate
acquisition.
Mr. Joe Commers, The Commers Company, stated that as the competing
developer for this project and running the risk of being redundant,
he still believed he and his development team were the best
qualified developer for this site. He stated he would like to
comment on four things:
1. A viable project. He stated they already have a letter of
intent from Ashland Oil. They have everything the competing
developer has. They provided the HRA with a proforma and in
that proforma, the HRA could see that Security Develoment
would be able to go out and get a mortgage. All this is under
being a viable project.
2. Aesthetically. He stated they gave a very nice proposal to
the HRA in July. The HRA saw the architectural drawings. He
knew there was some concern about Rapid Oil being a part of
this project, and he was not sure if the HRA fully understood
how they can incorporate Rapid Oil into the project, Rapid Oil
being only 8% of the total project. Mr. Ken Bureau, a citizen
of Fridley who had a deep knowledge in develoment, made the
comment to him that maybe the Security Development team really
has not communicated to the HRA well enough how well Rapid Oil
can be incorporated on the site. He stated they certainly
tried to communicate that in July when they presented their
proposal.
3. Cooperation. He stated they already have the cooperation of
the two major parcels. iThey control 67% of the site - -the two
biggest parcels. The HRA was going through a lot of problems
and a lot of dialogue with the competing developer, and there
would not be any of that with the Security Development team.
They already have that cooperation all the way to cooperating
on soil tests and getting any contaminants out of there.
4. Management. He stated the members of their team have been
involved in shopping center development for 15 years and have
been involved in about 46 shopping centers around the seven
state area. He stated the HRA has to think about long term
in keeping a thriving shopping center going once it is built.
They feel very confident that with their network, if a tenant
moves out, they will have that space filled right away. All
the properties in his portfolio are all very thriving
properties.
mrc
HOUSING & REDEVELOPMENT AUTHORITY MEETING, DECEMBER S. 1988
Mr. Joe Commers stated that regarding signage, all of a sudden he
was hearing that the entrance to the City of Fridley wil have a
sign advertising Crosstown Bank. As the HRA remembered, when
Security Development team made their presentation, they-asked for
no variances.
Mr. Joe Commers stated it was confusing to him and the members of
his development team when he comes back month after month to report
what is happening and what is not happening. With their particular
proposal, there seems to be a very minimal amount of complications.
The risk is definitely greater with Winfield's proposal. He had
said that back in July. He stated they could have started back in
July and now they are already six months past that point.
Mr. Joe Commers stated that in August, the HRA gave Winfield 60
days; then another 30 days were added to make it 90 days. He
stated they were led to believe that everything would come to a
head at the November HRA meeting. Then, the HRA gave Winfield an
additional 20 days plus 10 days until the December meeting. At
what point does the HRA make a decision and say they should look
at Mr. Commers' development team's proposal?
Mr. Joe Commers stated he realized there was a complication on the
part of the HRA, City staff, and the political people in Fridley
about Rapid Oil, but he thought Rapid Oil has been a very
responsible taxpaying corporation in the City. He stated if his
development team could be given the opportunity for more dialogue,
they could prove to the HRA that they could make this area very
beautiful with Rapid Oil as part of the project.
Mr. Larry Commers asked what the status was in terms of commitments
that are being made in getting the executed lease with Crosstown
Bank.
Mr. Robertson stated they just have the information received from
Mr. Dolphin on December 7, but he stated they have to get the
executed lease before the January meeting.
Mr. Jack Lemley stated he is the Condemnation Supervisor for
Ashland Oil, Lexington, Kentucky. He stated at 10:00 a.m. he had
a note on his desk that there was a second hearing at the HRA
meeting to condemn the Rapid Oil property in Fridley. He stated
he really had no idea what was going on. He stated Ashland Oil
tries to be a cooperative citizen, and they would like to work with
the City on this. Was it true that the HRA.is going to take their
property?
Mr. Larry Commers stated two proposals were presented to the HRA
-8-
s
the 57th Place redevelopment. One developer included Rapid Oil
for gave tentative approval to the developer,
and one did not. The HRA g
Winfield Development, that did not, include ele the were involved facility-
Winfield lthe
As he understood it, the Rapid Oil P there are no
competing project. He stated that at staffthas, talked to the
condemnation hearings. He stated City of moving to another site
Rapid Oil people about the possibility might want to
if one is available. That was one thing Mr. Lemley
. Lemley might want to consider is
Mr.
consider. Another thing to allow the City to go onto the
whether or not he would be willing environmental problems.
property to determine if there are any
That might help solve a lot of these t llprobl mail this
s
whole effort if, in fact there are en viromnen
Mr. Larry Conners also suggested Mr. Lemley meet with City staff
to get more of the history of this development.
Mr. Lemley stated they are remodeling several Rapid Oil facilities
odeling was being planned for the
in the metropolitan area, and rem
Fridley facility in 1989.
the HRA would be taking at this
Mr. Lemley asked what action
meeting.
Mr. Larry
Conners stated nothing needed to be finalized toat grant
meeting, other than whether or not the HRA 1s going
additional extension of time to the January
Winfield Development an
meeting.
Mr. Newman stated it was staff's intention to the the thetDecember
to present a concept of the agreem as to whether
meeting and then obtain some direction from the HRA
or not the HRA felt comfortable h contract concept.
forep I the HRA's
staff would prepare a development
consideration at the January meeting. than willing to meet with
Mr. Lemley stated he wo He stated he would like to work this out,
someone from City staf f .
and he would like Rapid Oil to stay on this site, if at all
possible.
point
Mr. Larry Commers stated the sassumeori ks without assurances that
where the HRA is starting tog go . The agreement was for Winfield to
the project is g this meeting. Now there is no firm
bring in a firm commitment by
Comm itment, only a contingent commco�itmentdfrom thedBankanother
4 -5 months before there is a firm
-9-
HOUSING & REDEVELOPMENT AUTHORITY MEETING, DECEMBER 8, 1988
Mr. Newman asked that if the HRA were to structure the development
agreement such that they would not begin the acquisition process
until the Bank had received State approval for a detached facility,
would the Crosstown Bank still be interested, and would-it impede
their ability to obtain State approval?
Mr. Dorn stated, yes, they would still be interested in the site;
and, no, it would not impede their ability to obtain State
approval.
Mr. Joe Commers stated it was very disconcerting for him as the
competing developer to have the rules changed in the middle of the
game. His development team has done everything they have been
asked to do over the past six months. They thought it was going
to come to a head 30 days ago. Now they are 30 days hence, and the
HRA is thinking about another 4 -5 months before anything is
finalized.
Mr. Larry Commers stated that there was no question that the HRA
preferred to have a bank as part of the development. As Mr. Joe
Commers knew, that was one of the HRA's major issues when the
proposals were made. He stated the question before the HRA now
was: How far do they continue to go to try to get the project they
want on that site, or do they put a stop to it now?
Mr. Newman stated he did not think the HRA was changing the rules.
From past experiences, they should know that developments sometimes
take more time than anticipated, and there had been progress on the
part of Winfield.
Mr. Larry Commers stated that was true, but for this development,
the HRA had made it very clear that there were certain timeframes
that had to be met or the development rights would be revoked, but
the HRA has done just that.
Mr. Newman stated it also should be pointed out that there are some
regulatory procedures that have to be followed that any developer
that included a bank would have to go through.
Mr. Larry Commers stated that was true.
Ms. Schnabel stated she felt Mr. Fogerty was probably correct when
he said that perhaps his enthusiasm had oversold the project. She
stated she still preferred the Winfield proposal; however, she
could understand Mr. Joe Commers' frustration in dealing with the
HRA. While it might take a little longer to get this development,
if the end result gets them the development they want, then she was
willing to give Winfield another 30 days, rather than cut it off
-10-
d
want on •tnaL ca. •-- -
et the development they ht take
now and not g Schnabel. It might
Mr. Prairie stated he agreed with Ms.
M et the project they want.
longer to g at has been the concensus
Larry Comm stated he T believed � ated and which are
Mr. he rY all along, how
every / he was a little i concerned when the
of the HRA risks that were h of ti e It might take ghtgbe
KRA starts assuming they
not necessary. Because of the length
project finished,
construction
under way and the P should not have to assume•
asked to assume certain risks t ey a risks, she was also tconcerned
edone
certain things have
Ms. Schnabel stated that besides t She hoped a all worked
about the Bank's position where na e.
can make a firm commitment.
before they he was definitely concerned about the 519
out. She stated s to grant Winfield
of the HRA members meeting and
It was
the concensus 30 days until the January
Development an additional
staff continue to work with the developer.
that ... ,,rw%cAT,s
STINSKI car r ��-y -
3, CONSIDERATION OF roposed to Ms.
what is being P of assistance
Mr. Newman stated that assistancel is the same level o percentages
They have raised ed.
Stinski as far the past* pro
ect proposed.
the BRA provided in the quality of p j
slightly because of indicated to the HRA
City Council recently of the
Newman stated the City was for the HRA to utilize the mortgage
Mr preference to obtain repayment higher
staff that their P the opportunity had proposed
approach because of of that, staff to make it a more
assistance. Because 15� instead of 10t,
percentage on the mortgage,
attractive alternative. direct policy,
ers stated the HRA has always had, if not a roject, and
one has come
Mr. Comm olicy since the JOsrwhen anyone
types of
then an indirect p
s used those earlier guideline th
they have always All the information should be made
requesting assistance. different projects when they
in requ they have given Council /HRA meeting
assistance the next joint City
available at issue. clearly
discuss this this policy has been that
stated he believed Stinski has indicated
Mr. Newman t Ms. e T7ki, but Ms. difficult for her to
communicated assn- St.' would make it very
this level °f the proje-
proceed with
-11-
HOUSING 8 REDEVELOPMENT AUTHORITY MEETING, DECEMBER 8, 1988
Mr. Robertson stated that at the last meeting, Mr. Fisher submitted
three different financial proposals. It was at the time staff
started reviewing those three proposals that they received
recommendations from the City Council saying they did not want a
major departure from the past assistance formula. He stated when
they met with Mr. Casserly to review the three financial proposals,
they found there was a legal question about whether the interest
rate reduction program could even be done under State Law for a
non - residential structure. They concluded last week that they
should probably stay with the past assistance formula as
recommended by the City Council until the HRA meets with the
Council.
Mr. Fisher stated they are asking for $600,000 in assistance.
Mr. Fisher stated he met with Mr. Casserly at about 5:00 P.M. on
December 7. They went through about five different financial
proposals - -two from last month that are still legal options and
three additional options with the loan and grant. They found there
are only three options that will really work - -the two from last
meeting and an additional one which is for the City to give the
developer a 25% loan and a 10% grant. He should point out that no
developer fees are being taken out for developing the project.
Mr. Robertson stated that obviously they cannot take the time to
do a detailed analysis of this most recent proposal at this time.
Staff did need some policy direction from the HRA. Does the HRA
want staff to consider the developer's options and do an analysis,
or not? If not, they can stick with the standard formula until
they do a more complete policy review.
Ms. Schnabel stated the amount of assistance being requested just
seemed too. high and was higher than she would want the HRA to
provide assistance. She was concerned about the proposal for the
interest payback also. She did not like the idea of 10 years with
no interest. They should either stay with the assistance they have
given in the past, or they should see if another financial package
can be put together.
Mr. Stinski stated they are proposing a financial proposal which
they know will work -for this project. They have been working on
this project since 1983, and Ms. Stinski has put many hundreds of
thousands of dollars into the project.
Mr. Meyer stated he agreed with Ms. Schnabel that this financial
proposal was beyond the HRA's guidelines and beyond the amount of
assistance the HRA should extend to any developer.
-12-
HOUSING i REDEVELOPMENT AUTHORITY MEETING, DECEMBER 8, 1988
Mr. Newman stated Mr. Casserly was extremely impressed with the
financial presentation made by Mr. Fisher. It was one of the most
complete and thorough evaluations the developer has presented. He
stated the developer is proposing a high quality building, maybe
a higher quality than what the market can support, and that might
be-why the level of assistance being requested is so high. He
stated the HRA members have to ask themselves: Is this particular
project of such a benefit to the City of Fridley that they want to
extend their present policy?
Mr. Meyer stated he certainly had reservations about the level of
assistance being requested.
Mr. Commers stated apparently there are some issues the HRA should
discuss with the City Council before they deviate from what they
have done in the past. However, that meeting cannot occur until
the end of January.
Mr. Stinski stated that without HRA assistance, they cannot build
anyway, so time really isn't an issue. He stated the HRA should
realize that there will a substantial increase in taxes to the City
from this building, and the developer will be paying back the loan.
He stated it is a beautiful building and one that will be an asset
to the City of Fridley.
MOTION by Mr. Meyer, seconded by Mr. Prairie, to table further
discussion on the level of assistance for the Stinski office
proposal until the HRA has discussed this with the City Council.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE
MOTION CARRIED UNANIMOUSLY.
Mr. Stinski _stated it sounded like staff might recommend assistance
at $400,000, and he was talking about an additional $200,000. That
is $20,000 a year over a 10 year period and is not a lot of money
to use as a reason for turning a project down.
Ms. Stinski stated she would really appreciate it if this
discussion with the City Council could be expedited as quickly as
possible, because she has tenants who are waiting to sign a lease.
Mr. Burns stated he would do his best to expedite this with the
City Council.
4. CONSIDERATION OF 1989 MEETING SCHEDULE:
MOTION by Mr. Prairie, seconded by Ms. Schnabel, to adopt the 1989
meeting schedule as written.
0W=
HOUSING & REDEVELOPMENT AUTHORITY MEETING. DECEMBER 8. 1988
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE
MOTION CARRIED UNANIMOUSLY.
5. CONSIDERATION OF OUTLINE FOR 1989 ANNUAL REPORT:
Mr. Commers stated staff has prepared a draft of this report. He
would recommend the HRA members review the draft; and if they have
any comments or suggestions for changes, they should contact staff
by Friday, December 16.
6. CONSIDERATION OF DRAFT INVESTMENT POLICY FOR THE FRIDLEY HOUSING
& REDEVELOPMENT AUTHORITY:
Mr. Pribyl stated he has met with Mr. Rasmussen and three of Mr.
Rasmussen's bank executives to review the draft investment policy.
He stated the main comment was to add some local investing feature
regarding possibly some local banks.
Mr. Pribyl stated that at this time, the City does not have an
investment policy. This particular document is his starting point
for the City's investment policy, which he hopes to bring to the
City Council some time in 1989. The parameters by which this was
prepared was in accordance with the Government Finance Officers'
Association, and also there are some elements included in this from
three other cities' investment policies. It is a key element with
regard to governmental jurisdictions. It provides protection both
on behalf of the Policy Investments Board in which they can provide
guidance as far as the type of policies and procedures the Board
wants and also provides some protection as far as the investing
officer. The investing officer has directdion from the Policy
Making Board as far as what he can invest in.
Mr. Commers stated discussion should be continued until the January
meeting when Mr. Rasmussen is present.
7. CONSIDERATION OF FUNDING A SENIOR HOUSING NEED SURVEY:
Mr. Robertson stated that the City Council requested a study to be
made of Fridley residents 55 years and older to see what their
housing preferences are in the City of Fridley. He stated he would
like to introduce Barbara Dacy, the new Planning Coordinator, and
have her make the presentation. She prepared the original policy
paper received in the HRA Information Packet in November, and she
has been working with Health Planning and Management Resources,
Inc., who will conduct the study.
Ms. Dacy stated that included in the HRA agenda, page 7 -B, was an
-14-
a
HOUSING 8 REDEVELOPMENT AUTHORITY MEETING, DECEMBER Be 1988
outline of the Purpose, Objectives, and Proposed Study Method, and
the cost estimates of this housing study. What the study is
intended to do is determine the basic questions the City has: How
many seniors are there in Fridley and what are their housing
preferences?
Ms. Dacy stated that as everyone grows older, the demographic
indicators say that by the year 2000, a significant part of the
population will be age 65 or over which does present some public
policies to the City, State, and Federal governments. The City
Council felt the City needed to get a better handle on what type
of housing is needed for seniors in the City of Fridley.
Ms. Dacy stated that since the preparation of the agenda, they have
received a specific proposal from the recommended consultant. It
is staff's recommendation that the HRA consider funding up to
$10,000 for the study. Depending upon the number of households
sampled in the mail survey, that will have an impact as to the
cost. The outline on page 7 -B shows that if 1,000 homes were
surveyed, the total cost will be $10,500. That is the number of
households recommended by the consultant for the survey.
Mr. Schnabel stated it was her guess that the results of any survey
are going to show that people just want to stay in their own homes.
Ms. Dacy stated Ms. Schnabel was right in that 80% of the elderly
people do want to stay in their homes as long as possible, but the
remaining 205 pose a need or desire for some assisted living
accommodations. There is a waiting list of 43 people at Village
Green with a 3 -4 year wait. A typical subsidized housing project
runs between 35 -40 units. She thought there was enough information
out there to indicate that a more detailed approach is necessary
to find out the demand for senior housing before making any
recommendations about assistance or any financial policies.
Mr. Newman stated the City Council is considering a rapid increase
in senior housing. Questions for the HRA to consider are: Is the
demand the same as it was a few years ago? What are the types of
senior housing? Amenities? Features? If they are going to
provide assistance, they need more information so that housing
could be designed to be more compatible with the seniors' needs.
Mr. Commers asked if the City was willing to share in the cost of
the survey.
Mr. Burns stated that at this point, he did not know. It just
seemed to be the type of study related to the HRA's purposes.
-15-
HOUSING & REDEVELOPMENT AUTHORITY MEETING, DECEMBER S. 1988
NOTION by Ms. Schnabel to approve a senior housing study to be
conducted by Health Planning & Management Resources, Inc., and that
the HRA and City share 50/50 in the cost of the study, but the
HRA's share shall not exceed $5,000.
MOTION DIED FOR LACK OF A SECOND.
Ms. Schnabel stated she did not know if federal financing was even
still available as a tool.
Ms. Dacy stated because Fridley already has an existing project in
comparison to communities that do not, a HUD representative has
said that it will be a factor in trying to decide between two
projects. On the other hand, doing what they are doing is a good
idea because if, through a study, they can show there is a real
demand out there, unlike any other community, then maybe HUD should
look at giving assistance for another project. Until this point
in time, staff has never had any direct contact with the senior
community, and part of the approach with this survey is to use the
focus groups to recruit key seniors within the community and
through the two additional sessions, there is a structured
"question and answer and discussion" period which provides
qualitative data to complement the quantitative data of the mail
survey. The focus groups will be used to explain the "how's" and
"why's" of what the - seniors said in the mail survey. It could be
a communication tool between the City and the seniors.
Mr. Burns stated he thought the City Council wants to determine
what level of commitment they will make to the seniors; but before
they make that commitment, they want a study done - -to find out more
of what the need is and what the preferences of the seniors are in
various housing categories.
Ms. Dacy stated there are a number of opportunities, other than
housing, where the survey can assist the HRA and the City.
MOTION by Mr. Meyer that the HRA authorize the funding for the
senior housing survey, the amount not to exceed $10,000.
MOTION DIED FOR LACK OF A SECOND.
MOTION by Ms. Schnabel, seconded by Mr. Meyer, to approve a senior
housing study to be conducted by Health Planning & Management
Resources, Inc., and that the HRA and City share 50/50 in the cost
of the study, but the HRA's share shall not exceed $5,000.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE
MOTION CARRIED UNANIMOUSLY.
-16-
HOUSING A REDEVELOPMENT AUTHORITY MEETING, DECEMBER 8, 1988
8. CONSIDERATION OF CHANGE ORDER NO. 6. LANDSCAPING, IRRIGATION AND
LIGHTING PROJECT NO. 168 - LAKE POINTE:
Mr. Robertson stated this was the first change order asked for by
Minnesota Valley Landscape. The previous change orders were
directed by the City. He referred to the last two sentences from
the letter dated Nov. 20, 1988, from Gene Ernst, Ernst Associates,
to John Flora, which stated: "I feel with the delay on the project
there are additional costs justified as outlined in Minnesota
Valley's letter dated November 17, 1988. With the approval of this
request, I do not feel that any future requests should be granted."
MOTION by Mr. Meyer, seconded by Ms. Schnabel, to approve Change
Order No. 6, Landscaping, Irrigation, and Lighting Project No. 168
- Lake Pointe.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE
MOTION CARRIED UNANIMOUSLY.
9. CONSIDERATION OF RETURN OF SCHOOL DISTRICT REFERENDUM LEVIES•
Mr. Pribyl stated that in some of the conversations with the HRA
regarding the 1988 tax increment amendments, the term used was
"non- controversial" changes. He stated this topic is not new; it
has been around for some time. As long as he could remember, the
School District has come to the HRA trying to find a vehicle in
which tax increment could be passed back to the School District.
The counties have always been there trying to find out how to do
it, and to some degree they have found some mechanisms through the
statutes as far as dealing with service charges and things like
that. The change in the Tax Increment Act that allowed referendum
levies to be provided to the school districts is actually the first
vehicle in which there is statutory authority to try and provide
funding back to the school districts. To some degree the
referendum levies are a windfall type of increment for the HRA,
because in their planning processes, they did not anticipate
these types of increments coming in.
Mr. Pribyl stated MSA Section 469.177 has a new Subdivison No. 10
dealing with the referendum levies, and that is the first
authoritative guideline that has provided a means for governmental
jurisdictions to provide anything to the school districts. The
application of this particular statute is somewhat complicated as
to what can actually be turned back to the school districts. Two
of the statute sections are mandatory and one is voluntary as long
as there is an agreement written between the City and the school
districts.
-17-
HOUSING & REDEVELOPMENT AUTHORITY MEETING, DECEMBER 8, 1988
Mr. Pribyl stated one of the things they are attempting to do at
this point, since this particular legislation was passed in 1988,
is to try to facilitate the transfer of this money back to the
school districts during this calendar year. The three areas that
provide funding back to the school districts are: (1) When there
are no outstanding bonds on May 1, 1988, to which increment from
the particular district is pledged; or, (2) The referendum is
approved after May 1, 1988, and there are no bonds that were issued
before that May 1 date which are outstanding at the time of the
referendum approval; or, (3) The referendum was approved after the
most recent issue of bonds to which increment from the districts
has been pledged.
Mr. Pribyl stated the first two situations actually initiate more
or less a mandatory return of referendum levy. The last one more
or less is the voluntary one in which both the school district and
the City have to enter into an agreement, and that is stipulated
by state statute.
Mr. Pribyl stated that regarding each of of these, one has to first
look at the certification date of the district, the dates in which
any bonds were sold, and the levy certificate dates in which that
referendum levy was actually passed. One has to take each of those
levies and pass it through these three criteria to determine
whether it is mandatory, voluntary, or not applicable at all. This
complicates things a great deal.
Mr. Pribyl stated Mr. Jim O'Meara has been involved in this whole
process, and they have discussed it at length. Initially when his
December 1, 1988, memo was written to the HRA, they were relying
on a number of criteria gotten from either the County or the School
District and had not gone through an elaborate investigation of all
these different criteria.
Mr. Pribyl stated currently they have actually had agreements drawn
up, and the HRA members have those draft agreements. Those draft
agreements spell out the terms in which the state statute is
applicable in this situation and also within each school district,
those particular districts that have levies that are applicable for
refunds. It doesn't define dollars, but defines the actual
district in which levies are passed back to the school district.
They have not gotten any assistance from the County as far as the
County providing absolute dates of certifications, so they are
trying to get a certified copy from each of the school districts
as far as when their Boards approved these levy referendums.
Mr. Pribyl reviewed the numbers in the "School District Increment
-18-
HOUSING i REDEVELOPMENT AUTHORITY MEETING, DECEMBER 8, 1988
Calculation"
Mr. Pribyl stated Center City is a pre -1979 district. That was a
district established under the old HRA statute and is referred to
as. existing projects under the new tax increment guidelines. It
was certified prior to August 1, 1979. That particular date was
the original effective date of the Tax Increment Financing Act.
Unless specific actions are taken to include the pre -1979
districts, in any amendment to the original Tax Increment Act, they
are not generally subject to the Tax Increment Act itself. That
is also the case with the levy referendum issue.
Mr. Pribyl stated the language in the 1988 amendment to the
original Tax Increment Act did not specifically identify pre -1979
districts. Unless the HRA elects to proceed or deal with and wants
to amend their districts that fall underneath the new guidelines,
the staff would not recommend that option. By expanding the
activity of the district after May 1, it would fall under the new
guidelines. Those are the only ways Center City would fall within
the new Tax Increment guidelines and have to be explicitly related
to or in accord with any new amendments to that actd. In any
legislative information that comes out, they will see that the
language will read something like "whether or not certified before
or after August 1, 1979 ". That type of term would be used to
include the pre -1979.
Mr. Pribyl stated this is all to some degree a judgement item.
When they look at the language of the law, it appears as though the
intent is to include pre -1979 districts. That is kind of where the
school district is coming from, and the dates that are used is
anything certified prior to May 1, 1988. The intent of the law is
to include all districts, so if that is the case, then the District
No. 1 or Center City, would also be included in those parameters.
When he asked Mr. O'Meara if that specifically exempted, under
state statute, Center City from this type of situation, it was Mr.
O'Meara's professional judgement that it did.
Mr. Pribyl stated when asked what would happen if the HRA then
opted to actually pay those using that assessed value and the
millage in Center City, Mr. O'Meara stated probably no one would
argue that, and it would be an item that would possibly be
debatable between attorneys but nothing more than that. It is
something that is somewhat gray in the state statutes, and it is
not specifically identified and dealt with.
Mr. Commers stated why wouldn't they want to wait until they get
further clarification that the Center City is out of the project.
-19-
HOUSING & REDEVELOPMENT AUTHORITY MEETING, DECEMBER S. 1988
Mr. Pribyl stated from what he is hearing Mr. O'Meara saying, that
would be the appropriate action. In talking to Mr. O'Meara, it is
an item that can be debated; but if the HRA felt strongly about
including Center City, that is a judgement decision the'HRA would
have to make. If Center City is excluded, there is about a $14,000
delinquency, and there would only be two different districts: the
Moore Lake area and Johnson /Skywood.
Mr. Pribyl stated that in th,
Seeman (District 14), there
levy. One was to continue
levy referendum actually is
of return of levy. So,
approved apart, it appears a
Then, in 1989, it goes back
new referendum.
information he had received from Mr.
were three pieces to the referendum
i 6.5 levy, and the old five year 6.5
exempt from this particular situation
.n pulling that referendum that was
s only 9 mills in applicable in 1988.
up to the 15.5 mills because it is a
Mr. Commers stated this was a very new, complex, and complicated
issue, which was very difficult to understand. He stated he felt
they had to be guided by their bond counsel, Jim O'Meara.
Mr. Pribyl stated that on Friday, he would meet with Mr. Seeman to
discuss and verify their levy referendum, so that, based on the
HRA's action, the City Council can take formal action at the
Monday, December 19th meeting.
MOTION by Mr. Meyer, seconded by Ms. Schnabel, to approve the
figures recommended by the bond counsel, Jim O'Meara, and send them
on to City Council and that the City Council be excluded from the
referendum process at this time.
UPON A VOICE VOTE, COMMERS, SCHNABEL, MEYER, VOTING AYE, PRAIRIE
ABSTAINING, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED.
10. INFORMATION ON PROPOSED METAL -TEK FACILTY AT THE NORTHEAST CORNER
OF 79TH AVENUE & MAIN STREET:
Mr. Robertson stated Metal -Tek has been in business in the City of
Fridley for about ten years. They employ about 30 skilled workers.
The company serves businesses all the way from the immediate area
to Fort Wayne, Indiana, and Detroit, Michigan. The business is
outgrowing its present leased space, and the owners would like to
build a new 28,000 sq. ft. facility in the immediate neighborhood.
There is also the possibility that a new Metal -Tek facilty will
attract a new 20,000 sq. ft. facility by one of Metal -Tek's major
customers.
Mr. Robertson stated he has discussed with Ernie Paulson, part -
-20-
HOUSING A REDEVELOPMENT AUTHORITY MEETING, DECEMBER 8, 1988
owner, the current types of grant programs and loan programs the
HRA has provided to businesses in the past. Mr. Paulson has in
turn talked to fellow owners, and they have expressed an interest.
Mr. Robertson stated he has talked briefly with Mr. Paulson Is
attorney. He stated staff is recommending that staff be directed
to proceed with a draft development agreement with Metal -Tek and
to bring it back to the January meeting.
Mr. Commers asked if the site where Metal -Tec intended to build had
any soil problems.
Mr. Paulson stated, yes, the project will require quite a bit of
soil correction.
Mr. Commers stated it was clear that the HRA has always tried to
support these types of business in this area. He asked Mr. Paulson
to meet with staff to see what type of assistance can be worked
out.
11. CLAIMS (1836 - 1845) :
MOTION by Ms. Schnabel, seconded by Mr. Meyer, to approve the check
registered as submitted.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE
MOTION CARRIED UNANIMOUSLY.
Mr. Robertson stated that included in the HRA packet was a letter
from Jim Casserly detailing his services for the HRA. He had
indicated what assistance he will provide, what his rates are, and
under what conditions he will perform without expressed prior
authorization from the HRA or HRA staff.
MOTION by Mr. Meyer, seconded by Mr. Prairie, to approve the
Casserly contract for rendering of services to the HRA.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE
MOTION CARRIED UNANIMOUSLY.
12. OTHER BUSINESS:
Ms. Schnabel stated that regarding the policy as far as HRA
assistance to developers, she would recommend that the HRA put
together some kind of HRA handbook which includes the HRA's policy
statements and the procedures. As changes were made, they could
be inserted in the handbook. She stated her reason for suggesting
this was because every time they discuss assistance, they have
-21-
HOUSING & REDEVELOPMENT AUTHORITY MEETING, DECEMBER 8, 1988
difficulty remembering what they have done in the past. With a
handbook, they would be able to have access to that information and
could answer questions more intelligently.
Mr. Commers stated he agreed with Ms. Schnabel. A handbook could
be-a very useful tool for the HRA.
Mr. Robertson stated it was an excellent idea. It could be
coordinated with the Northern Mayors' Association so it would be
consistent with other cities.
ADJOURNMENT:
Chairperson Commers declared the December 8, 1988, Housing &
Redevelopment Authority meeting adjourned at 11:15 p.m.
Respectfully submitted,
Lyr,�P'e Saba
Recording Secretary
-22-
n
e
t
OUSING and REDEVELOPMENT AUTHORITY
1
COMMISSION MEMBERS: LAWRENCE COMMERS, CHAIRMAN
DUANE PRAIRIE VIRGINIA SCHNABEL WALTER RASMUSSEN JOHN MEYER
CITY OF FRIDLEY
TO: Housing & Redevelopment Authority Members
PROM: Jock Robertson, Executive Director to the HRA
DATE: January 3, 1989
REGARDING: Information on Tanurb Proposal for Southwest Corner
of University Avenue /Mississippi Street
We met with representatives of the Tanurb Development Corporation
on December 14th and "again on December 28th. Tanurb is a
subsidiary of the Canadian based Dylex Limited (see attached
"Highlights "). They are proposing a 90,000 - 100,000 sq. ft. retail
strip center with a total estimated cost between $9 -10 million.
The financial analysis conducted by our consultant, Jim Casserly,
indicates that the HRA must have $4 million net funds up front for
land acquisition, relocation, and public improvements. At the
present time, it appears that only $2 million can be covered by the
project as currently proposed. We are continuing discussions with
representatives of Tanurb to explore various alternative financing
mechanisms and /or methods of increasing the value of the
redevelopment in order to raise the tax increment available for
financing.
We will have a progress report for the HRA on January 12th.
JR:ls
M -89 -05
EXECUTIVE DIRECTOR: JOCK ROBERTSON 6431 UNIVERSITY AVE. (6 12) 571 -345
FRIDLEY, MN 55432 EXT. 117
Highlights
Operating Results
Combined sales
Consolidated sales
Associate sales*
Sales by market
Retail: Canada
Women's
Men's
Family
Retail: United States
Women's
Men's
Manufacturing
Total combined
Earnings before discontinued operations
Net ( loss) earnings before extraordinary item
Earnings per share:
Before discontinued operations
Net ( loss) earnings
1-A
thousands of dollars percent
except for per share and ratio data change
1987
$1,299,856
680,711
$1,980,567
8 430,891
356,759
525,876
1,313,526
374,126
121,003
495,129
171,912
$1,980,567
$ 35,130
$ (117,821)
$ .69
8 (2.56)
1986
$1,208,600
670,384
$1,878,984
$ 411,966
329,736
480,142
1,221,844
372,336
105,392
477,728
179,412
$1,878,984
3 45,679
8 25,118
$ .95
$ .51
Consolidated Financial Position
Working capital $ 264,368 $ 153,278
Current ratio ( current assets to current liabilities) 2.63:1 1.98:1
Inventory turnover ( sales _ average inventory) 3.9 4.0
*Sales of associate companies (ownership 50•/0 or less) are included in combined sales.
Their earnings are reported as investment income.
On October 31, 1987 our investment in Brooks Fashion Stores Inc. was written down.
Sales for this associate company are not included in the table above.
Cover
Customers who want to make a
fashion statement turn to the
selection available at Dylex'clothiniz
g
stores. In today's fast -paced apparel
market, each of our chains must
`respond quickly to the trends that
influence Canadian and American
shoppers.
Contents Annual Meeting
7.6
1.5
5.4
4.6
8.2
9.5
7.5
.5
14.8
3.6
(4.2)
5.4
(23.1)
Report to Shareholders
2
The Annual Shareholders' Meeting
Review of the Year
6
will be held at 11:30 a.m. Thursday,
Corporate Goals
17
June 30, 1988, in the Concert Hall,
Financial Review
18
Royal York Hotel,
Financial Statements
21
100 Front Street West,
Ten -Year Summary
30
Toronto, Ontario. Canada.
Index
32
Corporate Information
33
MEMORANDUM 2
City of Fridley
In dda 1 University Avenue N.E.
Fridley. Minnesota 55432
Phone (612)571 -3460
Office of the City Manager
William W. Burns
TO: THE FRIDLEY BRA MEMBERS
FROM: WILLIAM W. BURNS, CITY MANAGER �•
DATE: JANUARY 6, 1989
SUBJECT: FURTHER CONSIDERATION OF TAB INCREMENT RETURN TO SCHOOLS
At the Conference session on December 12, 1988, the Mayor and City
Council of the City of Fridley informally discussed the School
District /Tax Increment Financing issue. Mayor Bill Nee would like
to comment on the Council's position at your January 12 meeting.
WWB /la
OUSING and REDEVELOPMENT AUTHORITY
3
COMMISSION MEMBERS: LAWRENCE COMMERS, CHAIRMAN
DUANE PRARE YBtGNIA SCHNABEL WALTER RASMUSSEN JOHN MEYER
CITY OF FRIDLEY
TO: Housing & Redevelopment Authority Members
FROM: Jock Robertson, Executive Director to the HRA
DATE: January 3, 1989
REGARDING: Lake Pointe Development Maintenance Project No. 187
The low bid for the maintenance work during the 1988 season was
$33,750. We would like to try advertising the project at least one
month earlier, in February, this year in hopes of having at least
an equal, if not lower, bid award in March.
The attached draft bid specifications indicate the scope of work
from last year with updates where we believe it is required. We
recommend that the HRA authorize the staff to proceed with
preparing and advertising plans and bid specifications for your
approval at the March 9th HRA meeting.
JR:ls
M -89 -03
EXECUTIVE DIRECTOR: JOCK ROBERTSON 6431 UNIVERSITY AVE. (612) 571 -3450
FRIDLEY9 MN 55432 EXT. 117
Engmlennq
Sewer
Wlier
Parks
S, [Lets
Main Lena n c e
MEMORANDUM
TO: Jock Robertson, Exec. Director HRA PW88 -400
FROM Jon Thompson,` Construction Inspector
DATE: December 29, 1988
SUBJECT: Lake Pointe Development
Maintenance Project No. 187
3-A
Please have the HRA authorize Lake Pointe Development Maintenance
Project No. 187 at their January 12, 1989 meeting.
We would like to advertise the project in February, 1989 and have
the bid letting the first week in March, 1989.
An authorization by the HRA is necessary in order for us to prepare
the plans and specifications.
JT /ts
w7i..
' 11 11 � Is0• V
D-C
No. rnm M.
SECTIC H A - GENERAL C OINDITIM
A -1.0 General . . . . . . . . . . . . . . . . . . . . . . . . . . 1
A -2.0 Insurance Cbverage . . . . . . . . . . . . . . . . . . 1
A -3.0 Engineer's Relation. 2
A -4.0 Materials, Services and Facilities 2
A -5.0 Qualifications . . . . . . . . . . . . . . . . . . 2
A-6.0 Contract Security and Period of Guarantee. . . . 3
A -7.0 PaYmtents . . . . . . . . . . . . . . . . . . . . . . 3
B-1.1
Grounds. . . . . . . . . . .
4
B-1.2
Month . . . . . . . . . . . . . . . . . . . . . . . . . .
. 4
B-1.3
Representative . . . . . . . . . . . . . . . . . . . . .
. 4
B-1.4
Spring Cleanup . . . . . . . . . . . . . . . . . . . . .
. 4
B-1.5
Mowing . . . . . . . . . . . . . . . . . . . . . . . . .
. 4
B-1.6
General Cleanup . . . . . . . . . . . . . . . . . . . . .
. 5
B-1.7
Fertilizer & Weed Control . . . . . . . . . . . . . . . .
. 5
B-1.8
Aeration . . . . . . . . . . . . . . . . . . . . . . . .
. 5
B-1.9
Irrigation System . . . .
5
B-1.10
Tree Pruning & Wrapping. . .
5
B-1.11
Flower Beds . . . . . . . . . . . . . . . . . . . . . . .
. 5
B-1.12
Fall - Cleanup . . . . . . . . . . . . . . . . . . . .
5
B-1.13
Sod Replacement . . . . . . . . . . . . . . . . . . . . .
. 5
B-1.14
Mowers . . . . . . . . . . . . . . . . . . . . . . . . .
. 5
Project
Maps . . . . . . . . . . . . . . . . . . . . . . . . . .
. 6 -9
SECTION C - BID SECTIC K
Notice to Bidders. . . . . . . . . . . . o 10
Bidding Information and Requirements . . . . . . . . . . . 11
Contract . . . . . . . . . . . . . . . . . . . . . . . . .12 -13
Projoceal . . . . . . . . . . • . . . . . . . . . 14 -15
rs
A-1.0 General
A -1.1 Bid proposals shall be submitted to the City of Fridley. Engineering
Department on or before Thursday, March 2, 1989, by 11:00 a.m. for
review by the Public works Director.
1-1.2 The duration of the contract shall be for a period of 7 months
oammencing on APRIL 15. 1989 and ending NMEME t 15. 1989.
1-1.3 The award of contract will be made within 45 calendar days after the
cpmAng of proposals.
A -1.4 No prequalification requirements s are imposed Prior to submitting a
bid proposal; however, each bidder is advised that at the discretion
of the Public works Director a written statement may be required
prior to consideration of the bids and prior to award of contract,
showing the experience of the bidder and the amount of capital and
equipment he has available for performance of the proposed work.
A -1.5 If requested by the City, the Contractor and his subcontractors shall
furnish lien waivers or certified statements from any party
furnishing materials or rendering service in connection with this
project, that said party has been paid in full.
A -1.6 The right is reserved to reject any or all proposals, to waive
defects and technicalities, or to advertise new proposals, if in
the judgement of the City its best interests will be promoted
thereby.
A -2.0 Insurance Coverage
A -2.1 The Contractor shall protect the project with public liability
insurance, the lower limits of which shall not be less than
$100,000.00 for injuries, including accidental death to any one
Person and subject to the same limit for each person in an amount
of not less than $300,000.00 on account of any one accident.
A -2.2 The Contractor shall also protect the project with Damage
Insurance in the sum of not less than $100,000.00 for any one or
accident. The Contractor shall take out and maintain compensation
insurance as required by the State of Minnesota. Said policies
shall have the City of Fridley as an added name insured. This
insurance shall cover the project until it has been accepted by the
City, and the ammmt of the insurance coverage shall be approved by
the City. The City will not reimburse the Contractor for the
Premiums.
A-3.0 Engineeres Relation
A -3.1 The Engineer shall be interpreted to mean the Public Works
Director, his Assistant, or designated representative.
1
3-E
A -3.2 The Engineer shall act as the City's representative during the
contract period, and shall decide questions which may arise as to
quality and acceptability of equipment furnished and work
performed. The Engineer shall interpret the intent of the contract
documents in a fair and unbiased mariner and he will make visits to
the site and determine if the work is proceeding in accordance with
the contract documents.
A-3.3 The Engineer shall promptly make all necessary explanations as to
the meaning and intention of the specifications.
A -3.4 The Engineer shall in all cases determine the amount, quality,
acceptability and fitness of the several kinds of equipment and
materials which are to be paid for under this contract.
A -3.5 The decision of the Engineer shall be final and conclusive upon the
City and the Contractor.
A -4.0 Materials, Sezvioes and Facilities
A -4.1 It is understood that, except as otherwise specifically stated in
the contract documents, the Contractor shall provide and pay for
all materials, labor, tools, equipment, water, light, power,
bariacades, transportation, supervision, t Tporary constriction of
MY nature, and all other services and facilities of any nature
whatsoever necessary to execute, conplete, and deliver the work.
A -5.0 Qualifications
A -5.1 - The apparent low- bidder, prior to the award of the contract, if
requested by the City, will be required to show evidence of prior
work during the past 36 months.
A -6.0 Contract Security and Period of Guaranty
A -6.1 The successful low bidder shall be required to furnish the owner
with a performance bond in the form required by law, in the ant
of 100% of the total contract.
A -6.2 This bond shall guarantee the proper prosecution and completion of
the work by the successful bidder: and shall further guarantee the
praLlpt payment by the successful bidder of all persons or firms
furnishing labor, equipment, materials and supplies for the work.
A.6.3 If it is found by the final inspection that some of the work and/or
materials were defective, s:uch work and/or materials shall be
replaced or repaired within 30 days of notification by the City.
If the work is not repaired within 30 days of notification, the
work will be done by other forces and charged to the performance
bond.
A -7.0 Payments
A -7.1 Monthly payments (1/7th of the lump sum contract amount) shall be
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B-1.1 Gr Rmkds
The term grounds shall mean all portions of the 44 acre Iake Pointe
Development Site (see page 7). Prospective bidders should ask for an
on -site inspection of the grounds prior to sutmission of their bid.
B-1.2 Month
A month for the purpose of this agreement shall be a calendar month.
B-1.3 Representative
The team "representative" shall mean the individual appointed by the
Engineer to ccm imicate with the Contractor for the coordination of the
maintenance of the grounds, and shall be authorized to act on behalf of
the Contractee.
B-1.4 Spring Cleant�
Spring cleanup is to be completed as soon as weather and ground
conditions permit and no later than May 15. For the purpose of this
contract, spring cleanup will include picking up paper and debris over
the entire site, raking where needed, and unwrapping the deciduous trees.
B-1.5 Mowing- No more than one -third (1/3) of leaf surface is to be cut at
one time. The City requires grass to be mewed twice each week
to maintain the range of length specified.
(a) Area north of the north road: Mao as needed to maintain grass
between 2 1/2" to 3 1/211. (Wood chip and rock beds to be kept free of
Clippings).
(b) The central area: The areas up to 20 feet back of the curb and
gutter, mow as needed to maintain i n grass between 2 1/2" to 3 1/2" as needed.
The rest of the south area, mow as needed to maintain grass between 311
and 4"
(c) Area south of the loop road: The areas up to 20 feet back of the
curb and gutter, mow as needed to maintain grass between 2 1/2" to 3 1 /211
as needed. The rest of the Central area, mow as needed to maintain grass
between 3" and 411.
(d) The 6 ponds: Mow as needed to maintain grass between 2 1/2" to 3
Bidders should note that in five of the pond areas, restoration is not
Clete but will be done this spring. Maintenance will begin in these
areas as soon as they are coapleted.
B-1.6 General Upkeep
Debris to be picked up in pond areas and on overall site on a weekly basis.
4
H-1.7 Fertilizer and Weed Control
3-H
Fertilizer is to be applied in the spring, summer and fall as directed by
the City. For the spring application, use 8 -16 -16 at cns pound nitrogen
per 1,000 square feet. For summer and fall application, use 20 -10-20 and
have a minimum, of 1 pout -d of nitrogen per 1, 000 square feet with 3p percent
sulphur coated for slow release.
B-1.8 Aeration
7here will be no aeration an this project.
B-1.9 Irrigation system
The irrigation system shall be operated under this contract.
Nonwarrantee parts damaged during routine mowing are to be replaced
;; ately with the Contractor fitrrL=ct+ -isx! labor and materials with the
exception of sprinkler heads and risers which will be provided by the City.
B-1.10 Tree Pruning and Wrapping
Tree Pruning and soft wood tree wrapping with approved tree wrapping shall
be performed in the fall as directed by the City.
81.11 Flower Beds
Flower beds shall be weeded weekly as needed. Remove dead buds as needed
with shears. Junipers shall be sprayed in the fall with 'Wilt Proof", or
equal, to prevent water loss over winter.
81.12 Fall Clearnrp
Pick up debris and rake the entire site as needed. Bag and remove leaves
from site. Contractor is responsible for disposal of leaves and bagged
debris.
81.13 sod Replacem®t
If damage occurs to sodded areas, during routine maintenance, sod will be
immediately replaced in the areas affected by the maintenance contractor.
No additional payment will be made for replacement of sod damaged during
mowing operations.
8-1.1 .Mowers
-dhe mowing shall be acoompliaied by reel or rotary mowers, flail mowers
are not acceptable.
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9
Lxm rona'E w ELone P NO BCT ND. 187
3-M
Sealed bids will be received and publicly opened for the HM by the City of
Fridley, Anoka County, Minnesota, at the office of the Public Works Director,
6431 University Avenue N.E., Fridley, Minnesota 55432 (Tel. 571 -3450) on the tad
day of Nash, 1989, .at 11:00 a.m., for the furnishing of work and materials for
LMM PPIM 1Cl RrEH NNE PF40 BM #187.
44 Acres Mowing, trimming and other a as specified.
All in accordance with plans and specifications prepared by John G. Flora, P.E.,
Public Works Director, Fridley City Hall, 6431 University Avenue N.E., Fridley,
MN 55432 (Tel. 571 - 3450).
Plans and specifications may be womined at the office of the Public Works
Director and copies may be obtained for the Contractor's individual use by
applying to the Public Works Director.
Bids must be made on the basis of cash payment for work, and accagmni-ed by a
cash deposit, certified check (on a responsible bank in the State of Minnesota)
or a bidder's bond made payable without condition to the City of Fridley, MN,
in an amount of not less than five (5%) per cent of the total amount of the bid.
The MA reserves the right to reject any and all bids and to waive any
informalities in any bids received without explanation.
No bid may be withdrawn for a period of forty -five (45) days.
By order of the HRA of the City of Fridley, Minnesota.
Dated the 12th day of January, 1989.
Published: Fridley Focus
February, 8, 1989
February 15, 1989
February 22, 1989
John G. Flora, P.E.
PUBLIC WC FW DIRE7CMR
10
Construction Bulletin
February 10, 1989
February 17, 1989
February 24, 1989
3^N
Sealed bids shall be submitted to the Engineering Department of the City of
Fridley on or before 11:00 a.m. TWFdMRY,, MUM 2, 1989, for the furnishing of
all material, equipment, labor and other resources required to c®plete the Lake
Pointe Development Project #187.
All bids shall be submitted on the proposal fora provided in the specifications
and shall consist of two (2) parts: Bid Item (A) and Bid Item (B).
The prices for Bid Item (A) , Bid Itemm (B) and the Zbtal Bid will be read at the
bid. opening. The HRA reserves the right to award a contract to the lowest
responsible bidder based q= bids received for Bid Item (A), Bid Item (B) or
the Total Bid.
No bids may be withdrawn for a period of forty -five (45) days.
Any questions regarding ding bidding or scope of work sha11 be directed to Jon
Z mapson at 571 -3450.
11
LMM POnUE
PF403 L'!' NO. 187
l0
CONTRACT
'this - Agreement made and entered into this day of ,
1989; by and between CITY OF FRMM HRA referred to as- -the CITSt
(Party of the First Part) and
hereinafter referred to as the CMMhC'IM (Party of the Second Part) .
That the 027n�ACIt7R, in consideration of the c mwenant and the agreement of the
CITY hereinafter set forth, and for the sums and price of
hereby agrees 'that,
WMMS, the CITY has heretofore asked for proposals for the f rnisI u7 of
materials, labor, and equipment and the use of the OMMtACIOR'S equipment and
plant, for the purpose of: IM POIlM DEVELOPMENT PENANCE PM= NO. 187
and appurtenances thereto, as shown on the plans and as set forth in the
Specifications now on file with the City, and that,
WREPEAS, the CONI32ACIM has submitted a Proposal in response thereto, which has
been accepted by the C MY, in which the CD012A= agrees to and shall furnish
all necessary materials, labor, use of tools, equipment, and plant and
everything necessary to perform the work designated and set forth in the
Contract, including all COdrnd A=IS superintendence, and to furnish everything
necessary for the oompletion of the Project and to put the entire system into
complete working condition.
)FUG: The OONIRACIOR agrees, under penalty of a Corporate Surety Band in
the amount of loot of the total Contract, to ocuplete the work under the
contract in accordance with the Contract Doctments.
The Contract Dommments consist of the following component parts, all of which
are as full a part of this Contract as though therein stated verbatim, or if
not attar, as if hereto attached:
1. The Minnesota Department of Hi gh�ays "Standard Specifications for
Highway Construction" dated March 1, 1983.
2. The City of Fridley Specifications included with this Contract.
..3. Zhe "Proposal ", "Bid Schedule" and "Bond" Of the Contractor.
4 Zlhis "Conttract" bebmen the City and the Contractor.
5.. Any Modifications or changes in the terms of the Contract or Bid or
additions to or deductions from the amount or character of the work
which is to be performed or which may be agreed to in writing by the
Contractor and the City.
12
- 2 -
7he QOMACIOR agrees to pay all per. sons furnishing labor and material in and
about the performance of the CMM&CT; and the CMTMCXR will, within ten (lo)
working days after the acceptance of the Cm2ACIofft' S Bid emoecute this Contract
and furnish a bawd to be approved by the City in a sum equal to loot of the full
amount of the Bid. The CONTRACIM further agrees to take all precautions to
protect the public against injury and to save the CITY harmless from ali damages
and claims of the CMURACIUR or the CM A M'S Agents or EM10yees while
engaged in the per forimanoe of this Contract and will inemmify the CITY furnished
as aforesaid and against all lass by reason of the failure of the OONII2ACM in
any respect to fully perform all obligations of this CONTPAM
The CITY agrees to pay the 03RM IOQt for the performanoe of this Contract, and
the CCNTRACICR agrees to accept as full ccopensation thereof the prices set
forth within the attacked Proposal..
Zhe CONTRACTOR and the CITY agree that all of the terms of this Contract shall
be binding upon themselves, their heirs, administrators, executors, legal and
personal representatives, successors, and assigns.
IN WITNESS YHERDOF, the Parties hereto have set their hands and seals this
day of , 1989.
JOHN G. FLORA, Public Works Director
13
PARTY OF THE FIRST PART
CITY OF FRIDLEY BRA
0
JOCK L. ROBERISON, Emecutive
Director - BRA
LARRY R. Cam, Chairman - Hm
PARTY OF THE SECOND PART
0
(TITLE)
?-P
IAA Tone r R M P'19a = NO. 3,97
3-0
I�i� FDII�PE IOA�A'
M VSKUM i187
Proposal of:
NMP-
Street Amass
City, State Zip Code
TO f=ish and deliver all u tw a s and to coo and perform all work, in
- — - - anoe with the oant act and specificatiom an file in the office of the
P&lic Work Director and the "Special Provisicos" om*ained herein fox':
UM Pon= VPVELDRiw MWBCT #287
EM rrEM (A)
Operation and of tine
In -place irrigation system
MMP SM - SID 1'I M (A) . . . .
BID rrEM (s)
All other items
(Mowing, fertilizing, general
cleanup, etc., as spelled out
in the specifications)
Dw sa K - HID M24 (s) . . . . .
T07RL BID (A + D) . . . .
(figures)
S
14
3-R
The undersigned agrees that, if the City decides to diminish or extend the Work,
or otherwise alter it by extras or deductions, including the elimination of arry
one or more of the items, by an amount root to exceed twenty- -five percent (25
of the Lump Stan Bid Price, he will perform the work as altered, increased or
Wised subject to unit bid prices as bid.
Enclosed berrewith find bidder's bond or certified check in the amount of
being at least 5% of the mount of the proposal, made payable to the City of
Fridley as a proposal guarantee which it is agreed by the undersigned will be
forfeited in the event of the Form of Contract and Bond is not executed, it is
being awarded to the wY3ersign —Ad .
Mie undersigned agrees to enter into contract in the form hereto attached and
to furnish a corporate surety bond as required by the specifications, both within
ten (10) working days from his receipt of the Notice of Award from the City.
Should this proposal be accepted, the day after the postmark date shall
constitute the day of receipt of such notice. In the event of the failure of
the undersigned to enter into such a contract within said ten (10) days, then
the amount of bid security attached hereto is to be forfeited as agreed
liquidated damages to the City of Fridley.
The undersigned agrees to begin work on or after APRIL 15, 1989, and prosecute
said work as to complete the same on or before NaVEMBER 15, 1989.
Zhe undersigned agrees that this proposal shall remain in effect and not to be
withdrawn for forty -five (45) calendar days after this date.
DATED THIS DAY OF , 1989.
SIGMURE
N@KBER
NME: If the Contractor is a corporation, attach hereto a corporate
ac)owledgement.
15
OUSING and REDEVELOPMENT AUTHORITY
4.
COMMISSION MEMBERS: LAWRENCE COMMERS, CHAIRMAN
DUANE PRAIRIE VIRGINIA SCHNABEL WADER RASMUSSEN JOHN MEYER
CITY OF FRIDLEY
TO: Housing & Redevelopment Authority Members
FROM: Jock Robertson, Executive Director to the HRA
DATE: January 5, 1989
REGARDING: Resolution Designating Official Depositories for
the Fridley Housing and Redevelopment Authority
At the first HRA meeting of each year, this resolution is put on
the agenda for approval by the HRA. This resolution is used in
conjunction with depositing the HRA's demand accounts and the HRA's
investments. This resolution also directs which signatures are
necessary for the withdrawal of funds for both the check writing
process and for the withdrawal of investment funds. Staff
recommends approval of this resolution.
JR:ls
M -89 -15
EXECUTIVE DIRECTOR: JOCK ROBERTSON 6431 UNIVERSITY AVE. ($12) 571 -3450
FRIDLEY, MN 55432 EXT. 117
mmod
4-A
IUM,UTION ND. HRA - 1989
RESOLUTION DESIGNATING OFFICIAL DEPOSITORIES FOR THE
FRICLEY HOUSIM ADD REDEVELOEMW AUTHORITY
IT IS HEREBY RESOLVED that the Fridley State Bank is hereby designated as a
depository for the funds of this corporation.
IT IS FURTHER RESOLVED that checks, drafts or other withdrawal orders issued
against the funds of this corporation on deposit with said bank shall be
signed by two of the following:
Richard D. Pribyl, Finance Director - Treasurer
William W.- Burns, City Manager
Juli M. Burt, Assistant Finance Director
and that said bank is hereby fully authorized to pay and charge to the account
of this corporation any checks, drafts, or other withdrawal orders.
BE IT FURTHER. RESOLVED that all transactions, if any, relating to deposits,
withdrawals, re- discounts and borrowings by or on behalf of this corporation
with said bank prior to the adoption of this resolution be, and the same
hereby are, in all things ratified, approved and confirmed.
BE IT FURTHER RESOLVED that any bank or savings and loan may be used as
depositories for investment purposes so long as the investments comply with
authorized investments as set forth in Minnesota Statutes.
BE IT FURTHER RESOLVED that the signatures of two of the following named City
employees are required for withdrawal of HRA investment funds from savings and
loan associations:
Richard D. Pribyl,Finance Director - Treasurer
William W. Burns, City Manager
Julie M. Burt, Assistant Finance Director
BE IT FURTHER RESOLVED that any brokerage fine may be used as a depository for
investment purposes so long as the investments comply with the authorized
investments as set forth in Minnesota Statutues.
PASSED AMID ADOPTED BY THE HOUSIM AND REDEVELOPMr AUTHORITY OF THE CITY OF
FRITHEY THIS *DAY OF , 1989
LAWRENCE R. COK4 S
CHAIRMAN -
ATTEST:
JOHN L. "JOCK" ROBERTSON
EXECUTIVE DIRECTOR
5'
DRAFT
FRIDLEY
HOUSING AND REDEVELOPMENT AUTHORITY
STATEMEW OF INVESTMENT POLICY
Effective cash management is recognized as essential to good fiscal
management. This is particularly true as mounting costs and expanding
programs have placed ever increasing pressures on local governmental revenues.
The extent to which local governments can obtain investment returns on funds
not immediately required can help to reduce this pressure. Investment
Policies must be well founded and uncompromisingly applied in their legal,
vendor, and administrative aspects.
It is the policy of the Fridley Housing and Redevelopment Authority (hereafter
referred to as "the Authority ") that available funds be invested to the
maximum extent possible, at the highest rates obtainable at the time of
investment, in conformance with the legal and administrative guidelines
outlined herein.
I. Legal Aspects
Minnesota Statutes authorize and define an investment program for municipal
governments. (Exhibit A)
A. Inrvestment Instruments Authorization
The Authority shall invest in the following instruments allowed by
Minnesota Statutes:
1. United States Treasury obligations
2. Federal Agency issues
3. Repurchase Agreements (repo's)
4. Reverse Repurchase Agreements
5. Certificates of Deposit
6. State and Local Bonds
7. Commerical Paper prime
8. Bankers Acceptances - prime
9. Money Market Funds whose portfolios consist
Treasury obligations and Federal Agency issues.
B. Supplemental Depositories
of United States
Annually the Housing and Redevelopment Authority Commission will designate
depositories for investment purposes.
r
DRAFT
FRIDLEY
HOUSING AND REDEVELOPMENT AUTHORITY
STATEMENT OF INVESTMENT POLICY
(CONTINUED)
II. Vendor Aspects
5-A
The vendor aspects of investment activity focus upon protection of taxpayer
dollars and investment income, consistent with statutory authorization and
financial prudence. The Authority shall seek to conduct its investment
transactions with several competing, reputable investment security dealers and
qualifying banks. Special care should be exercised when considering new
services.
A. Perfecting Collateral in a Repurchase Agreement
There is currently a great deal of confusion in the court system
concerning the legal status of repurchase agreements. The courts have
rendered conflicting opinions and have not decided if a repurchase
agreement is a secured loan or an actual purchase and /or sale of
securities. Because of this we feel that the collateral in each
repurchase transaction must be perfected. (Perfection is a legal concept
by which a lender attains the right to- take delivery and ownership of the
collateral involved in a loan in the event that a debtor defaults and
files bankruptcy.) With collateral perfection there is less principal
risk for the lender since the claim against the collateral is in place in
relation to those of other parties.
For repurchase agreements with maturities of 18 days or less, collateral
is considered perfected without security delivery. For repurchase
agreements with maturities extending past 18 days perfection occurs only
by taking possession of the securities. Therefore, it will be the policy
of the Authority to insist on delivery of the securities if the repurchase
agreement is for a period greater than 18' days.
B. Selection of Vendors for Repurchase Agreements
A legal interpretation of repurchase agreements as secured loans adds risk
to a transaction even when collateral has been perfected. This is because
resources can be held in stay pending the resolution of bankruptcy
proceedings. In an attempt to minimize the risk of loss. the Finance
Director shall only purchase repurchase agreements from vendors that meet
certain criteria. Those criteria are as follows:
1) The vendor must be a primary reporting dealer in United States
government securities to the Federal Reserve Bank of New York; or
any national or state bank in the United States which is a member
of the Federal Reserve System and whose combined capital and
surplus equals or exceeds $10,000,000.
5-B
D R A F T
FRIDLEY
HOUSING AND REDEVELOPMENT AUTHORITY
STATEMENT OF INVESTMENT POLICY
(CONTINUED)
2) The qualifying dealer or bank must have demonstrated over a
significant period of time a successful, profitable, and reliable
operation.
3) The qualifying dealer or bank must have an established managerial
team and a knowledgeable, professional staff capable of ensuring
the continued success of the enterprise.
C. Certificates of Deposit
The Authority will follow Minnesota Statutes 118.01 and 118.005 (Exhibit
B). The Authority will give preference to small local financial
institutions when the rate matches or exceeds other certificate bids. If
the investment exceeds the FDIC maximum the excess must be collateralized
according to the-above mentioned statute.
D. Bankers Acceptances and Commercial Paper
The use of these instruments does involve more risk than instruments of
the Federal government or Federal agencies. This is particularly true of
commercial paper which is an unsecured debt of the issuing corporation.
Therefore, the Authority will invest in these instruments only when the
yield is greater than the yield on United States Treasury Obligations or
Federal Agency Issues of similar term to maturity.
1) Bankers Acceptances
a. Purchase is restricted to the issues of the domestic
operations of the largest 40 banks in the United States
(measured by deposit), First Bank Minneapolis, and Norwest
Bank Minneapolis. Bankers acceptances in any of these banks
will not be made if any news items cause the Finance Director
concern over the financial condition of the institution.
b. The broker, dealer, or banker will verify that the bankers
acceptance is eligible for purchase by the Federal Reserve
System.
2) Commercial Paper
a. Purchase is restricted to issues which mature in 270 days or
less with a rating of A -1 (Moody's), P -1 (Standard b Poors),
or F -1 (Fitch) among at least two of the three rating
agencies.
b. Purchase shall be through reporting dealers in commercial
paper or qualifying banks.
5-c
DRAFT
FRIDLEY
HOUSING AND REDEVELOPMENT AUTHORITY
STATEMENT OF INVESTMENT POLICY
(CONTINUED)
III. Administrative Process
The primary objectives of the investment program of the Authority are safety,
liquidity, and yield. Safety recognizes the fact that investments should be
purchased which are reasonably assured of preserving the capital in the
overall portfolio. By following the guidelines presented in sections I and II
of this document preservation of capital .should be attained.
Liquidity refers to the fact that it is necessary to have sufficient funds
available to transact the day to day business of the Authority. It is
therefore the goal of the investment program to tie short term maturities to
dates that the money will be needed for expenditures. By remaining fairly
liquid the Authority will also avoid losing market value on its investments
when the economy fluctuates. In order to maintain liquidity and also take
advantage of higher yields at longer maturity dates it will be the policy of
the Authority to invest in no individual instrument which has a maturity of
more than three years unless it is specifically purchased to retire bonded
debt at a date later than 3 years. For the overall portfolio it will be the
goal of the investment program to have an average maturity of 18 months or
less.
While recognizing that the Authority is concerned foremost with safety and
liquidity it is also understood that the maximization of yield is an important
factor in the investment program. It will be a goal of the investment program
that the portfolio attain a market average or better rate of return during
each year taking into account the risk constraint of the Authority as well as
the cash flow characteristics of the portfolio. In order to assure that the
highest yield is obtained the Authority will follow a policy of competitive
bidding. All trades will be bid competitively and investments will be placed
with qualified vendors yielding the highest return to the Authority. The
Authority reserves the right to reject the most favorable bid if it is
potentially disruptive of its investments strategy, particularly in relation
to the asset mix of the portfolio. Other reasons why the most favorable bid
may be rejected would include a vendors lack of skill to perform under the
conditions outlined or a lack of ability and /or desire displayed by the vendor
to provide consistant service to the Authority.
Everyone participating in the investment process shall seek to act responsibly
as custodians of the public trust. Investment officials shall avoid any
transaction that might impair public confidence in the Authority's ab ility`to
govern effectively. By the same token, in the event of a loss in the
portfolio due to bankruptcy, fraud, or any other reason, it shall be the
,policy of the Authority that all officials involved in the investment process
including but not limited to the City Manager, the Finance Director, and the
Assistant Finance Director shall be held harmless providing that they have
acted in good faith and have followed prudent investment practices as outlined
by State Statute and in this policy statement.
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D R A F T
FRIDLEY
HOUSING AND REDEVELOPMENT AUTHORITY
STATEMENT OF INVESTMENT POLICY
(CONTINUED)
A. Cash Management and Investment Procedures
1. Each morning cash balances are prepared based on cash received the
previous day, checks paid the previous day, and sizeable checks or
wire transfers that present an investment opportunity.
2. Each morning the investment records are reviewed and updated as
investments mature or are purchased.
3. Each month the investment records are balanced to the general
ledger.
4. Each month the Finance Director shall submit a report of the
Authority's investments to the Housing and Redevelopment
Commission. That report shall contain the following items:
a. Total dollar amount of investments.
b. Percentage breakdown of portfolio by instrument.
c. Percentage breakdown of portfolio by institution.
d. Average maturity of the portfolio.
e. Average yield
5. Interest earned will be allocated to the various funds of the
Authority at least yearly.
B. Banking Depositories
Investment procedures also include selecting qualifying institutions where
Authority funds may be deposited. All Authority funds are centralized in
one bank account:
1. Effective August 1, 1985 Minnesota Statute 118.005 was amended to
read "The-governing body may authorize the treasurer or chief
financial officer to exercise the powers of the governing body in
designating a depository of the funds." It shall be the policy of
the Authority to authorize the Finance Director to exercise these
powers. In the selection of depositories for Authority funds, if
all criteria are considered to be equal then preference will be
given to banks located within the City of Fridley.
2. Minnesota Statutes 118,005 and 118.01 require that all deposits be
collateralized in the amount of 1108 of deposits (1408 if the
collateral is mortgages) in excess of federal government insurance
coverage. (Exhibit B)
MINNESOTA STATE STATUTES
475.66 DEBT SERVICE FUND.
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EXHIBIT A
Subdivision 1. All debt service funds shall be deposited and secured as
provided in chapter 118, except for amounts invested as authorized in this
section, and may be deposited in interest bearing accounts, and such deposits
may be evidenced by certificates of deposit with fixed maturities. Sufficient
cash for payment of principal, interest, and redemption premiums when due with
respect to the obligations for which any debt service fund is created shall be
provided by crediting to the fund the collections of tax, special assessment,
or other revenues appropriated for that purpose, and depositing all such
receipts in a depository bank or banks duly qualified according to law or
investing and reinvesting such receipts in securities authorized in this
section. Time deposits shall be withdrawable and certificates of deposit and
investments shall mature and shall bear interest payable at times and in
amounts which, in the judgment of the governing body or its treasurer or other
officer or committee to which it has delegated investment decisions, will
provide cash at the times and in the amounts required for the purposes of the
debt service fund, provided however, that the governing body may authorize the
purchase of longer term investments subject to an agreement to repurchase such
investments at times and prices sufficient to yield the amounts estimated to
be so required. Repurchase agreements may be entered into with a bank
qualified as depository of money held in the debt service fund, or with any
national or state bank in the United States which is a member of the federal
reserve system and whose combined capital and surplus equals or exceeds
$10,000,000, or a primary reporting dealer in United States government
securities to the federal reserve bank of New York.
[For text of subd 2, see M.S.1984]
Subd. 3. Subject to the provisions of any resolutions or other
instruments securing obligations payable from a debt service fund, any balance
in the fund may be invested:
(a) in governmental bonds, notes, bills, mortgages, and other securities,
which are direct obligations or are guaranteed or insured issues of the United
States, its agencies, its instrumentalities, or organizations created by an
act of Congress,
(b) in shares of an investment company (1) registered under the Federal
Investment Company Act of 1940, whose shares are registered under the Federal
Securities Act of 1933, and (2) those only investments are in securities
described in the preceding clause and repurchase agreements fully
collateralized by those securities, if,the repuchase agreements are entered
into only with those primary reporting dealers that report to the Federal
Reserve Bank of New York and with the 100 largest United States commercial
banks,
(c) in any security which is a general obligation of the state of
Minnesota or any of its municipalities,
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(d) in bankers acceptances of United States banks eligible for purchase
by the Federal Reserve System, or
(e) in commercial paper issued by United States corporations or their
Canadian subsidiaries that is of the highest quality and matures in 270 days
or less.
The fund may also be used to purchase any obligation, whether general or
special, of an issue which is payable from the fund, at such price, which may
include a premium, as shall be agreed to by the holder, or may be used to
redeem any obligation of such an issue prior to maturity in accordance with
its terms. The securities representing any such investment may be sold or
hypothecated by the municipality at any time, but the money so received
remains a part of the fund until used for the purpose for which the fund was
created.
[For text of subd 4, see M.S.1984]
History: 1985 c 187 s 2; 1985 c 239 s 3,4
475.67 REFUNDING BONDS AND OTHER OBLIGATIONS; VALIDITY; PROCEDURE.
[For text of subds 1 to 7, see M.S.1984]
to: Subd. 8. Securities purchased for the escrow account shall be limited
(a) general obligations of the United States, securities whose principal
and interest payments are guaranteed by the United States, and securities
issued by the following agencies of the United States: Banks for
Cooperatives, Federal Home Loan Banks,* Federal Intermediate Credit Banks,
Federal Land Banks, and the Federal National Mortgage Association; or
(b) obligations issued or guaranteed by any state or any political
subdivision of a state, which at the date of purchase are rated the highest or
the next highest rating given by Standard and Poor's Corporation, Moody's
Investors Service, or a similar nationally recognized rating agency, but not
less than the rating on the refunded bonds immediately prior to the refunding.
[For text of subds 9 to 12, see M.S.1984]
Subd. 13. Crossover refunding obligations may be issued by a
municipality without regard to the limitations in subdivisions 4 to 10. The
proceeds of crossover refunding obligations, less any proceeds applied to
payment of the costs of their issuance, shall be deposited in a debt service
fund irrevocably appropriated to the payment of principal of and interest on
the refunding obligations until the date the proceeds are applied to payment
of the obligations to be refunded. The debt service fund shall be maintained
as an escrow account with a suitable financial instittition within or without
the state and amounts in it shall be invested in securities described in
subdivision 8. Excess proceeds, if any, of the tax levy pursuant to section
475.61, subdivision 1, made with respect to the obligations to be refunded,
and any other available amounts, may be deposited in the escrow account. In
the resolution authorizing the issuance of crossover refunding obligations,
the governing body may pledge to their payment any source of payment of the
obligations to be refunded. Subdivisions 11 and 12 shall not apply to any
2
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crossover refunding obligations, or the obligations to be refunded. Subj ect
to section 475.61, subdivision 3, in the case of general obligation bonds,
taxes shall be levied pursuant to section 475.61 and appropriated to the debt
service fund in the amounts needed, together with estimated investment income
of the debt service fund and any other revenues available upon discharge of
the obligations refunded, to pay when due the principal of and interest on the
refunding obligations. The levy so imposed may be reduced by earnings to be
received from investments on hand in the debt service fund to the extent the
applicable recording officer certifies to the county auditor that the earnings
are expected to be received in amounts and at such times as to be sufficient,
together with the remaining levy, to satisfy the purpose of the levy
requirements under section 475.61.
History: 1Spl985 c 14 art 8 s 55,56
475.754 DISASTERS OR PUBLIC EMERGENCIES, CERTIFICATES OF INDEBTEDNESS.
If in any fiscal year the receipts from taxes or other sources are
insufficient to meet the expenses incurred or to be incurred in said year by
any city however organized, county or town by reason of any natural disaster
or other public emergency requiring the making of extraordinary expenditures,
the governing body of any such city, county or town may authorize the sale of
certificates of indebtedness to mature within three years and to bear interest
at a rate not to exceed the amount prescribed in this chapter. The
certificates may be issued with or without advertising for bids on such terms
and conditions as the governing body may determine and shall be in such form
as the state auditor in cooperation with the commissioner of commerce shall
prescribe. All certificates and interest thereon shall be payable from taxes
levied within existing limitations or from other available revenue.
Certificates of indebtedness issued under the provisions of this section shall
not be considered bonded indebtedness for the purposes of section 275.50,
subdivision 5, clause (h). The certificates shall not be included in the net
debt of the issuing city, county or town.
History: 1Spl985 c 14 art 4 s 94
475.76 REVERSE REPURCHASE AGREEMENTS.
Subdivision 1. A reverse repurchase agreement may be entered into by a
municipality, subject to the provisions of this section, only with a bank
qualified as depository of funds of the municipality, or with any national or
state bank in the United States which is a member of the Federal Reserve
System and whose combined capital and surplus equals or exceeds $10,000,000,
or with a primary reporting dealer in United States government securities to
the federal reserve bank of New York.
[For text of subds 2 to 4, see M.S.1984]
History: 1985 c 239 s 5
3
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EXHIBIT B
MINNESOTA STATE STATUTES
CHAPTER 118
DEPOSITORIES OF PUBLIC FUNDS
118.005 Designation, protection of deposit.
118.01 Depository bonds and collateral.
118.005 DESIGNATION, PROTECTION OF DEPOSIT.
Subdivision 1. The governing body of every municipality, as defined in
section 118.01, which has the power to receive and disburse funds, shall
designate as a depository of the funds such national, insured state banks or
thrift institutions as defined in section 51A.02, subdivision 23, as it may
deem proper. The governing body may authorize the treasurer or chief
financial officer to exercise the powers of the governing body in designating
• depository of the funds.
For purposes of this chapter, a credit union is a thrift institution.
Subd. 2. In the event the bank or insured thrift institution selected as
• depository is a member of the federal deposit insurance corporation or the
federal savings and loan insurance corporation, or is insured by the national
credit union administration, the custodian of the funds may deposit an amount
not to exceed the maximum amount of insurance on the deposits. In the event
it is desired to deposit a greater amount in any bank or thrift institution
prior to the deposit the governing body or officer shall require the bank or
thrift institution to furnish a bond, executed by a corporate surety company
authorized to do business in the state in a sum at least equal to the
estimated sum to be deposited in excess of the maximum amount of insurance.
In lieu of the bond, the depository shall assign to the custodian of the funds
collateral security in accordance with section 118.01.
History: 1985 c 239 s 1; 1985 c 292 s 8
118.01 DEPOSITORY BONDS AND COLLATERAL.
Subdivision 1. Any bank, trust company or thrift institution authorized
to do business in this state may, in lieu of the corporate or personal surety
bond required to be furnished to secure deposited funds, deposit with the
custodian of the funds as collateral security, notes secured by first
mortgages of future maturity, upon which interest is not past due, on improved
real estate free from delinquent taxes, within the county wherein the
depository is located, or within counties immediately adjoining the county in
the state of Minnesota, the obligations which are legally authorized
investments for debt service funds under section 475.66, subdivision 3, and
qualified state or local government obligations acceptable to the treasurer or
chief financial officer. Qualified obligations-must be general obligations
rated "A" or better by Moody's Investors Service., Inc. or Standard 6 Poor's
Corporation.
5-I
Subd. 2. Except for notes secured by first mortgages of future maturity,
the total in amount of the collateral computed at its market value shall be at
least ten percent more than the amount on deposit at the close of the business
day, in excess of any insured portion, which would be permitted if a corporate
or personal surety bond were furnished. The total amount of collateral
consisting of notes secured by first mortgages of future maturity computed at
its market value shall be at least 40 percent more than the amount on deposit
at the close of the business day, in excess of any insured portion, which
would be permitted if a corporate or personal surety bond were furnished.
The depository may furnish both a bond and collateral aggregating the required
amount.
Subd. 3. Any collateral so deposited shall be accompanied by an
assignment thereof to the municipality from the depository. The assignment
shall recite that the depository shall pay over to the treasurer or chief
financial officer on demand, free of exchange or any other charges, except for
early withdrawal penalties on time deposits, all money deposited therein at
any time during the period the collateral shall be so deposited and shall pay
the interest thereon when due at the agreed rate; and that, in case of any
default upon the part of the depository, the governing body of the
municipality or the treasurer or chief financial officer may sell the
collateral, or as much thereof as may be necessary to realize the full amount
due the municipality and to pay over any surplus to the depository or its
assigns.
Subd. 4. A depository may make withdrawals of excess collateral or
substitute other collateral, as defined in subdivision 1, on receipt by the
municipality of written notice from the depository. Authority is vested in
the treasurer to return the collateral to the depository. All interest on the
collateral so deposited shall be paid to the depository so long as it is not
in default.
Subd. 5. The closing of a depository shall be deemed a default on the
part of the depository and no demand on the part of the municipality shall be
necessary to establish the default. If a depository closes, any deposit
placed therein shall immediately become due and payable.
Subd. 6. All collateral shall be deposited with the treasurer or chief
financial officer of the municipality or placed in safekeeping for the
municipality in a financial institution approved by the governing body of the
municipality or the treasurer or chief financial officer, if approval
authority is designated to the treasurer or chief financial officer. The
collateral shall not be redeposited in the bank, trust company or thrift
institution furnishing it.
Subd. 7. "Municipality" for the purpose of this section means a county,
city, town, school district, hospital district, public authority, public
corporation, public commission, special district, police or salaried
firefighter's relief association, volunteer firefighter's relief association,
independent nonprofit firefighting corporation having a subsidiary
firefighter's relief association, or any retirement association established
Pursuant to statute or special law holding funds intended to support or pay
retirement benefits for employees of a municipality, any other political
subdivision, or an agency of the state or of its subdivisions.
History: 1985 c 239 s 2
N
COMMUNITY DEVELOPMENT
DEPARTMENT
°� MEMORANDUM
TO: William Burns, City Manager
Housing & Redevelopment Authority
FROM: Jock Robertson, Community Development Director
Barbara Dacy, Planning Coordinator
DATE: January 5, 1989
REGARDING: Brickner Proposal, Old Central Avenue
Tom and Rick Brickner have contacted us regarding their-proposal
to build 44 market rate apartment units at the southwest corner of
Mississippi Street and Old Central Avenue immediately south of
Sandee's restaurant. The proposal would require a rezoning from
C -1, Local Business and C -2, General Business to R -3, General
Multiple Dwelling. The Brickners also intend to request assistance
from the HRA for soil corrections.
The subject property totals 2.2, acres. The Brickners intend to
construct the building and to own and operate it. Underground
parking is proposed at a ratio of one space for every unit.
Surface parking will also be constructed to meet ordinance
requirements. Two bedroom units are proposed. The Brickners
anticipate the market for these units to be "empty nesters ", middle
age couples whose children now maintain their own household.
Rental rates approximate $700.00 a month.
The Brickners estimate the value of the project to range from $1.8
to $2 million. The Assessor's Office estimates tax revenues to be
approximately $68,250.
The subject parcel is indicative of the mixture of zoning districts
in the immediate area. Recent zoning applications such as the
Mochinski townhouse proposal have also heightened the need to
analyze the zoning and land use patterns along Old Central Avenue
from Rice Creek Road north to 69th Avenue.
Staff will initiate a special land use study of this area in order
to propose alternatives for potential development patterns along
Central Avenue. The study will be submitted to the Planning
Commission, City Council and the Housing & Redevelopment Authority
for review. Public information meetings should also be conducted.
It is anticipated that the study process, including review by all
Boards, can be completed by April.
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Brickner Proposal
January 5, 1989
Page 2
The Brickner proposal, however, can be evaluated on its own merits
despite the outcome of the land use study. The proposed use is
compatible with the commercial zoning and uses to the north and
south, as well as the duplex zoning and uses to the west.
RECOMMENDATION
We recommend the Housing & Redevelopment Authority authorize staff
to begin preparation of the development agreement for soil
correction with the developers.
BD /dn
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