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HRA 01/12/1989 - 29660!'1 CITY OF FRIDLEY 80Q8ING & REDEVELOPMENT AIITHORITY MEETING, JANUARY 12, 1989 _______..____.,__.,_____..,._____,..,,.___..__..,.__..,._,.,...,...__,..,_____..______ CALL TO ORDER: Chairperson Commers called the January 12, 1989, Housing & Redevelopment Authority meeting to order at 7:24 p.m. ROLL CALL• . Members Present: Larry Commers, Virginia Schnabel, Duane Prairie, John Meyer, Members Absent: Others Present: Walter Rasmussen Jock Robertson, Executive Director to HRA Dave Newman, HRA Attorney William Burns, City Manager & Director of HRA APPROVAL OF DECEMBER 8. 1988. HOUSING & REDEVELOPMENT AUTHORITY MINUTES: MOTION by Ms. Schnabel, seconded by Mr. Prairie, to approve the December 8, 1989, Housing & Redevelopment Authority minutes as written. IIPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED IINANIMOIISLY. APPROVAL OF AGENDA: The following item was added to the agenda: Consideration of Modification of Mortgage and Subordination Agreement for the Fridley Plaza Office Building. MOTION by Ms. Schnabel, seconded by Mr. Prairie, to approve the agenda with the above addition. 1. INFORMATION ON TANURB PROPOSAL FOR SOUTHWEST CORNER OF UNIVERSITY AVENiJE AND MISSISSIPPPI STREET: Mr. Robertson stated staff had two meetings with representatives from the Tanurb Development Corporation in December. The Tanurb company is a subsidiary of a Canadian-based company called Dylex ^ -1- HOII8INC3 � RSDEVELOPMENT AIITHORITY MEETING. JANUARY 12. 1989 �1 %"1 Limited. Tanurb's initial proposal was for a 90,000-100,000 sq. ft. retail strip center, with major anchor tenants specializing in apparel. In the first meeting, they determined there was a shortfall in the area of about $2 million. Staff has had some subsequent discussions with a financial consultant brought in by Tanurb's local attorney, Tom Borman. They are now closer to a feasible project than they were before. The way it would work would be that there would be a second phase which would add more value to the property. He stated staff received a telephone call that morning from Tanurb's attorney saying Tanurb is very interested in the two stage proposal proposed by the local consultant. They want to meet with staff on Monday afternoon at 4:00 p.m., and staff has agreed to that meeting. Tanurb will have to put together a profornaa which Jim Casserly will review. Then, if they get a feasibility study, staff will bring that back to the HRA. Mr. Robertson stated as part of the information handed out at the meeting, he had included a memo to the HRA from himself dated January 12, 1989, in which he had outlined the financial structure (taken from Jim Casserly's notes) and what staff sees as four policy issues that would be involved in it. Mr. Burns stated the City has been led to believe that Tanurb is a very reputable developer and that this project is much more realistic than others that have been proposed for this site in the past. Therefore, there is some incentive on the part of the City to try to make this work. Staff also needs to know that the HRA is behind the concept. Mr. Prairie stated he thought the HRA would like to have this development go, but they also do not want a retail center that is only half full. Mr. Commers stated this developer looks like it has the strength, and it looks l�ke it is the best and strongest developer they have had for this site. He would think the HRA would be very anxious to work with the developer if they can. However, everyone should keep in mind that he was a little concerned that they would be working without securites which provides a risk the HRA has never borne before. 2. INFORMATION ON TAX INCREMENT FINANCING RETURNED TO SCHOOLS: Mr. Robertson stated the City Manager and the Mayor have asked that this item be tabled until a joint HRA/City Council meeting on Monday, January 30, 1989. The City Council would like to consider ^ -2- HOIISIN(� & REDEVELOPMENT AIITHORITY MEETING, JANUARY 12, 1989 � getting some additional information and perhaps a second legal opinion. . Mr. Commers stated that as he had expressed in a letter to staff, he thought the HRA should try to do everything they can to get some assistance back to the school districts. However, he was not sure whether there was any jeopardy from a financial point of view on the bond issues. If the HRA does do anything, they should review it on an annual basis. He had some hesitancy to make a commitment of $104,000 back per year for several years. Mr. Burns stated part of the reason why this was being continued until January 30th was because of the concern Mr. Commers had raised about the financial issue. Mr. Burns stated he felt it was appropriate to delay a decision until they have a chance to do a financial review. He proposed to have a very thorough financial review of the HRA's financial situation at that meeting. He also proposed to present an overview of the four major projects the HRA is currently working on in 1989 so the City Council and HRA can see the financial impact of these projects. The other issues are legal issues, and it was his recommendation to seek a second legal opinion. Hopefully, that opinion will be available for the January ^ 30th meeting also. The HRA members were in agreement to continue this item until the joint HRA/City Council meeting on January 30, 1989. 3. CONSIDERATION OF AUTHORIZING SPECIFICATIONS AND BIDS FOR LAKE POINTE MAINTENANCE: MOTION by Ms. Schnabel, seconded by Mr. Meyer, to authorize staff to put out the specifications and bids for a maintenance contract for Lake Pointe for the 1989 season. IIPON A VOICE VOTE � ALL VOTING AYE � CHAIRPERSON COMMERB DECLARED THE MOTION CARRIED IINANIMOIISLY. 4. CONSIDERATION OF A RESOLUTION DESIGNATING OFFICIAL DEPOSITORIES FOR THE FRIDLEY HOUSIAIG & REDEVELOPMENT AUTHORITY: MOTION by Mr. Prairie, seconded by Ms. Schnabel, to approve Resolution No. HRA 1- 1989, a"Resolution Designating Official Depositories for the Fridley Housing & Redevelopment Authority". Mr. Commers stated he just wanted to again say for the record that the City and HRA still do not get a lot of cooperation from Fridley State Bank. He was still particularly irritated by the ^ -3- � HOIISING � REDEVELOPMENT AIITHORITY MEETING. JANUARY 12. 1989 fact that the Bank did not cooperate with the City in the exchange of property a few years ago. Mr. Robertson stated this year the Bank did not cooperate with the City in overflow parking during the construction of the parking ramp. IIPON A VOICE VOTE, ALL VOTING AYE, CBAIRPERSON COMMERB DECLARED THE MOTION CARRIED IINANIMOIIBLY. 5. CONSIDERATION OF A DRAFT INVESTMENT POLICY FOR THE FRIDLEY HRA: This item was continued until the next Housing & Redevelopment Authority meeting. 6. INFORMATION ON BRICKNER PROPOSAL FOR CENTRAL AVENUE & 64TH AVENLTE N.E.: Mr. Burns stated the City Council has some concern about the feelings of the neighborhood and has suggested that the developer conduct a neighborhood meeting. This item was continued until the next Housing & Redevelopment Authority meeting. 7. CONSIDERATION OF MODIFICATION OF MORTGAGE AND SUBORDINATION AGREEMENT FOR THE FRIDLEY PLAZA OFFICE BUILDING: Mr. Newman stated Mr. Malmon called him in late December asking about executing the Subordination Agreement. He told Mr. Malmon that the HRA had authorized that in August 1988. In that telephone conversation, Mr. Malmon asked him to have staff prepare a calculation of the amount owing under the Second Mortgage. It was Mr. Newman's recollection that it was two principle payments plus the interest. Mr. Newman stated he was surprised to receive a letter from Mr. Malmon dated January 4, 1989, in which Mr. Malmon indicated a request to roll the amount due back into the Second Mortgage. Since this was a new request, Mr. Newman had told Mr. Malmon that it would have to be acted on by the HRA. Mr. Commers stated one thing that concerned him was a statement made by Mr. Malmon in his January 4th letter: "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 ^ -4- HOIIBIN(3 & REDEVELOPMENT AIITHORITY MEETING. JANIIARY 12, 1989 ��� in fact we do not close this transaction, Fridley will have to foreclose on its second mortgage in order to collect." Mr. Commers stated if the HRA does approve this, legal counsel should write a letter to Mr. Malmon stating the HRA does not necessarily agree with the legal issues. Mr. Meyer stated he would be in favor of going along with the proposal. Mr. Commers suggested the HRA approve the transaction with the assumption that the Partnership close on the property in January 1989. Otherwise, they could renegotiate and leave this open ended until they find a buyer. Mr. Newman agreed with the suggestion, but suggested 90 days in case the Partnership runs into some problems. The HRA members compromised on 60 days. MOTION by Ms. Schnabel, seconded by Mr. Meyer, to approve the request by the Fridley Plaza Office Partnership to roll over the � balance amount of $12,617.69 into the Second Subordination Mortgage on the Fridley Office Building for 60 days. IIPON A VOICE VOTE, ALL VOTIN(3 AYE, CBAIRPERSON CO1�Il�'lERB DECLARED THE MOTION CARRISD IINANIMOIISLY. 8. CLAIMS: Mr. Commers questioned the amount of rent billed to the HRA for the office building in the amount of $3,209.56 for the month of January. Mr. Robertson stated he would get information on that for the next meeting. MOTION by Mr. Prairie, seconded by Mr. Meyer, to approve the check register and claims as presented. IIPON A VOICE VOTE, ALL VOTINd AYE, CBAIRPER80N COMMERB DECLARED T8E MOTION CARRIED IINANIMOIISLY. ADJOURNMENT• MOTION by Mr. Prairie, seconded by Ms. Schnabel, to adjourn the meeting. Upon a voice vote, all voting aye, Chairperson Commers ^ -5- � HOIIBINa & REDEVELOPMENT AIITHORITY MEETINd� JANUARY 12, 1989 d �� declared the January 12, 1989, Housing & Redevelopment Authority meeting adjourned at 8:45 p.m. Respectfully subm' ted, �Q- ✓--��- Lynne aba Recor ing Secretary ,''� � -6-