HRA 05/11/1989 - 29664,�
CITY OF FRIDLEY
HOIISINa i REDEVSLOPMENT AIITHORITY MEETINC3, MAY 11� 1989
......_............�....................�......_..__��....___........�...._____.._.._.._...._......�........
CALL TO ORDER•
Chairperson Commers called the May 11, 1989, Housing and
Redevelopment Authority meeting to order at 7:11 p.m.
ROLL CALL:
Members Present: Larry Commers, Virginia Schnabel, Duane Prairie,
John Meyer
Members Absent: Walter Rasmussen
Others Present: Jock Robertson, Executive Director of HRA
Dave Newman, HRA Attorney
Bob Boisclair, Boisclair Corporation
Liv Horneland, Coldwell Banker
Dick Bienapfl, One Appletree Square, Bloomington
APPROVAL OF APRIL 13. 1989, HOUSING & REDEVELOPMENT AUTHORITY
^ MINUTES•
OTION by Mr. Meyer, seconded by Ms. Schnabel, to approve the April
13, 1989, Housing & Redevelopment Authority minutes as written.
IIPON A VOICE VOTE, ALL VOTIN(3 AYE, CHAIRPERSON CO1�iER8 DECLARED
THE MOTION CARRIED IINANIMOIISLY.
1. CONSIDERATION OF CHANGE ORDER TO MOORE LARE COMMONS
LANDSCAPING CONTRACT:
Mr. Robertson stated the development agreement stipulated that the
HRA contribute $95,000 to the landscaping and irrigation
improvements. Due to a favorable low bid, $79,184.00 is the total
of the scope of the work as bid. In consulting with the developer,
Michele McPherson, Planning Assistant/Landscape Specialist found
the developer had also gotten some very favorable bids and, in
fact, had purchased more than the recommended number of trees in
their original landscape plan.
Mr. Robertson stated at the meeting the Commission members had a
substitute recommendation for essentially the same amount of money,
$15,000, but for an additional 10,000 sq. yd. of sod which the
developer does need.
�
HOII3ING & REDEVELOPMENT AIITHORITY MEETING, MAY 11. 1989 - PAGB 2
Mr. Robertson stated staff is recommending the HRA approve Change
Order No. 5 for the addition of 10,009.8 sq. yd. of sod at $1.58
per sq. yd. for a total of $15,815.50.
MOTION by Ms. Schnabel, seconded by Mr. Prairie, to approve Change
Order No. 5 to the Moore Lake Commons Landscaping Contract for the
addition of 10,009.8 sq. yd. of sod at $1.58 per sq. yd. for a
total amount of $15,815.50.
IIPOAT A VOICE VOTE, ALI, VOTINa AYE, CHAIRPER80N COMMERB DECLARED THE
MOTION CARRIED ONANIMOIISLY.
2. INFORMATION ON BOISCLAIR CORPORATION REDEVELOPMENT CONCEPT FOR
SOUTHWEST 4UADRANT OF UNIVERSITY AVENUE AND MISSISSIPPI
STREET:
Mr. Robertson stated in the past nine months, staff has been in
contact with Mr. Bob Boisclair of the Boisclair Corporation. Mr.
Boisclair has looked at the site, talked with staff, and has
indicated his interest in the site to Coldwell Banker, the listing
agent. Staff inet with Mr. Boisclair and Mr. Bienapfl on April 21
to discuss a proposal for a mixed use development with housing and
retail. Mr. Boisclair's proposal raises some policy issues which
� should be discussed at the same time the proposal is reviewed.
Staff is recommending Mr. Boisclair make his presentation at this
time, and then they can discuss some of the policy issues raised
by his proposal.
Mr. Newman stated staff also told Mr. Boisclair that staff is not
prepared to answer any specific questions at this time since their
financial consultant has not been able to do any evaluation yet.
Rather, they wanted this discussion to be more general in nature
and to discuss general policy discussions.
Mr. Boisclair thanked the HRA members for allowing him to present
this mixed use development proposal. He introduced Liv Horneland
of Coldwell Banker and Dick Bienapfl from the Waterford group. He
stated both Ms. Horneland and Mr. Bienapfl have been very
instrumental in bringing this development to the proposal stage.
Mr. Boisclair stated he would also be showing some slides to show
the HRA the architectural concept taken from a working model. The
slides will give the HRA a better perspective and feel for the
project. He stated Mr. Ed Bell, the architect in charge of this
project, could not be at the meeting. Mr. Boisclair stated he
would do his best to present Mr. Bell's architectural concepts and
economic general direction of their proposal.
Mr. Boisclair stated most people know of his involvement with
^ Riverplace and Galtier Plaza, and it is sufficient to say that all
the adverse publicity about his financial troubles is now behind
�
HOUSING & REDEVELOPMENT AIIT80RITY MEETINa. MAY 11, 1989 - PAGB 3
him. He is now looking forward to new opportunities with e�ertise
and deeper wisdom based on that experience. Regarding this
proposal, they do have the confidence of outside financial
investors who will put this project on a very favorable sound
basis. They expect to deal with FHA as the primary source of
insurance, and most of the retail will be separately financed by
a conventional lender. However, he needed some direction from the
HRA at this meeting if he is going to be able to proceed.
Mr. Boisclair stated that since they presented their concept, they
have done some refinements to further enhance and hopefully reduce
the cost to the public and enhance the private side of the
opportunity as well. The final concept will range between 260-350
units, and the retail will be about 80,000-85,000 sq. ft. Total
development costs will range from $27-32 million. They expect to
generate a new population base of 500-600 people into this location
and, along with that, new purchasing power of approximately $10-13
million. They will create 270-350 new jobs. So, from a public
perspective, there is a lot at stake, and it is something highly
achievable if they are able to work in a private/public
relationship which they are proposing to do.
Mr. Boisclair stated there are two phases to the entire project
� based on the need to pre-lease the retail. They have had strong
interest from Walgreen as being their primary anchor tenant for the
initial retail phase. Walgreen will take approximately 10,000-
12,000 sq. ft.
Mr. Commers asked what the significant difference were between
Alternate I and Alternate II.
Mr. Boisclair stated that the primary difference is in the
subsidized housing. When they went through both runs, it was a
surprise to them that it did not make any difference in terms of
the public/private investment ratio except the occupancy was
different. So, as far as they are concerned from an economic
perspective, it makes no difference either way.
Mr. Meyer asked the price ranges for market rate and subsidized
housing rates. In the subsidized portion, one bedroom rents for
$365-450 and two bedroom units about $460. In the market rate
portion, the range for one and two bedrooms would be roughly $500-
600.
Mr. Meyer stated that at the last meeting, Ms. Dacy and a
representative from Health Planning and Management Resources gave
a report on the survey done of senior housing needs in the City.
They found seniors, aged 55 and older, can afford to pay from $300
on the low side to mid-$600 on the high side. In seemed the rental
i� ranges being proposed by this development would capture people in
both groups--subsidized and market rate.
��
HOUBING & REDEPELOPMENT AIITHORITY MEETINGr. MAY 11, 1989 - PAGE 4
Mr. Meyer asked Mr. Boisclair to describe the quality level of
construction.
Mr. Boisclair stated the key material they are proposing is
concrete, more likely poured in place, not pre-fab. It would not
be wood frame, but they need to compete with that rental market
that is wood frame housing. In terms of the finished detail, they
expect the quality to be equal, if not superior, to what people are
familiar with.
Mr. Prairie asked about the square footages of the apartments.
Mr. Bienapfl stated the one bedrooms will range between 750-800 sq.
ft., and the two bedrooms between 950-1,100 sq. ft.
Mr. Meyer stated the unit costs and square footages seem
appropriate, yet at the same time, they don't want a project in the
city that is second rate. He was familiar with Mr. Boisclair's
other projects, and they were certainly not second rate. He stated
these costs just seemed to be too good. How sure was Mr. Boisclair
of his costs?
^ Mr. Boisclair stated he has very valid budgetary information for
the construction from a man whose credentials are very long. He
stated he has every confidence in this person's budgetary
information.
Mr. Meyer asked if a market analysis had been done.
Mr. Boisclair stated they have actually "door knocked" on projects
that are of current vintage such as Springbrook Apartments in
Fridley and the new project in Coon Rapids, and then Summit Oaks
and some of the older projects to see what the disparities are.
Both the new projects are wood frame. He stated they have an
inherent cost benefit of at least 15-20o because their building is
concrete. A wood frame can be built for $38,000 per unit, and the
same unit costs $45,000-46,000 with concrete. That includes
elevators, underground parking.
Ms. Horneland stated this proposed project provides the densities
with the housing, yet also gives the retail. She stated one
significant aspect of the retail market is that it is demarcated
by the river. The river has virtually cut the retail market in
half. That was the problem for Tanurb in that they just could not
get massive retail, nor could they get a major grocery store. She
stated Mr. Boisclair and Coldwell Banker has had conversations with
grocers, and they just will not come into this location. The scope
of the retail business has to be significantly smaller, so if they
� want redevelopment on this site, they have to have the massing with
- the housing and the smaller retail.
�
80IISING & REDEVELOPMENT AIITHORITY MEETING, MAY 11, 1989 - PAGE 5
Mr. Horneland stated that on behalf of the owners of the property,
they have been working with three different parties, and at this
time Mr. Boisclair is in the lead as far as his involvement and the
depth of analyzing the project. The owners want something to
happen. They are pretty well convinced it is not going to be a
Tanurb-type development, and they understand the problem the HRA
has with going outside the district. The owners would like to see
something happen on the site, but if not, they are also willing to
just sit there.
Mr. Boisclair stated the land itself is a big part of the bullet
that is going to be there with or without the proposal. He would
like the HRA to ignore the land acquisition, even though it is a
real dollar, and look at their project, because it really has the
value to create above that land subsidy, which is distinct and very
unique.
Mr. Commers thanked Mr. Boisclair for presenting his proposal.
3. CONSIDERATION OF ASSISTANCE POLICY FOR SOUTHWEST OUADRANT:
Mr. Robertson stated he would now like the HRA to go to the second
^ part of this project and discuss some of the policy options.
Staff, as well as the developer and the land owners, need some
direction.
Mr. Robertson directed the HRA's attention to Mr. Newman's letter
dated May 3, 1989. Obviously, what they are seeing is a
development proposal that requires several million dollars of aid
beyond the increment that the site itself can generate, and it goes
into pooling. In the history of the HRA, they have not done any
pooling before.
Mr. Robertson stated when the staff reviewed the overall financial
condition of the HRA bonds and projects at the end of the January,
they had a fairly good perspective on the their commitments,
financial depth, reserves and alternatives. At that time, they had
a fairly strong consensus of the HRA and City Council that
resolving the questions about the 100 Twin site was top priority,
and the southwest quadrant of Mississippi/University was second
priority.
Mr. Robertson stated staff prepared a general comparison which
gives the HRA the highs, lows, and the mediums of the HRA's policy
alternatives:
�
�
�
HOUSINC3 & REDEVELOPMENT AIITHORITY MEETIN(3. MAY 11, 1989 - PA(3E 6
Options
#1
#2
#3
#4
80IITHWEBT QIIADRANT POLICY OPTIONB
Value of Proiect Level of Assistance
Multi-Use (like Boisclair)
$25-30 million
Down scale of Option #1
$12-15 million
Tanurb type
Approximately $8,000,000
Several $million beyond
project area
Approximately $1,000,000
project area
Full increment generated
by project
Release the property from the redevelopment project
Mr. Robertson stated Mr. Boisclair has raised his sights to Option
#l, and before they commit any more staff time and consultant time
to analyze the project, staff needs some direction from the HRA.
Mr. Commers stated he thought the real issue is whether or not they
want to go out of the district. And, in order to know that, they
have to have a projection of how much they would have to go outside
the district. They have identified their priorities, and this is
their second priority. If it a priority, then they have to face
what it is going to take to develop the site and what they have to
do to get it done. If necessary or if it is appropriate, is the
HRA prepared to go outside the district?
Mr. Newman stated it is his concern that sometimes when they get
a proposal, staff gets too far ahead of the HRA. Staff wants to
know if this is something the HRA wants explored and if they want
the numbers run to see if it makes sense. By the same token, the
developer has to expend a considerable amount of money to further
refine the project. The HRA has to spend money to refine it, and
he did not think any of them want to commit these extra
expenditures if the HRA is not interested. Staff is not looking
for a final decision or a binding decision, but just a sense of
direction that staff is following the HRA's direction.
Mr. Robertson asked if the HRA is willing to commit several million
dollars from other projects to make this second project work.
Mr. Commers stated the HRA cannot make that decision when they do
not know the amount, but they can make the decision on whether or
�"1 not they are willing to do funding outside the district.
�
HOIISING & REDEVELOPMENT AIIT80RITY MEETIN(3, MAY 11, 1989 - PA(3E 7
Ms. Schnabel stated it is like being invited to a party and being
offered cake and pie, but they can only choose one. They just do
not have enough facts to make that kind of decision.
Mr. Robertson stated he thought the decision making is cyclical.
It is not linear in that they start at the beginning and go all the
way to the end and then make the decision. In fact, they cycle
through it once very rough, and then based on some preliminary
judgments, they cycle through again at a more intense level of
detail and of commitment to some time and money. Right now they
are at that first level.
Mr. Prairie stated it is conceivable that they could agree to
pursuing this priority and then if things started happening on the
100 Twin property, this could get in the way.
Mr. Commers stated they have to look at Item A(Dave Newman's May
2, 1989, letter, page 2), and Item A is dependent a little bit on
their first priority which is the 100 Twin site. They will have
to look at that again and see what the status is. On the other
hand, he did not know why the HRA had to lock themselves into
anything--saying they can only use money in one area or another.
He thought they should be flexible and be open and be able to do
� a project if they like the project.
Mr. Meyer stated he certainly liked the looks of this project, and
it seems to be right for this corner. It seems to be the type of
housing wanted as shown by the senior survey, and the retail
portion would support the housing.
Mr. Robertson stated that because of the commitment the City is
going to take in doing a financial analysis, staff has told Mr.
Boisclair that they need a deposit up front of $5,000. So, that
is another commitment Mr. Boisclair has to make.
Mr. Newman stated the $5,000 evolved from a discussion with Mr.
Robertson, Mr. Burns, and himself. The HRA has not formally
adopted this position, and the HRA may feel uncomfortable with
charging a developer to help defray the City's costs in doing
financial analyses. He stated staff spent a fair amount of money
in evaluating the Tanurb proposal and the proposed development at
57th Place. In the last month staff has been contacted by several
other developers who are interested in the Mississippi/University
site, and he could see more proposals coming where staff will be
spending more and more money to evaluate proposals. He stated
other cities do ask developers for up front money to help defray
these costs, and both Mr. Robertson and Mr. Burns thought it is
something the HRA should be doing.
� Mr. Prairie stated he thought it would be easier to justify a
developer sharing in the cost if the answer is "yes" to the
�
HOIIBING & REDEPELOPMENT AIITHORITY MEETIIdG. MAY 11, 1989 — PAGE 8
proposal. If the HRA is saying "maybe", then the HRA should share
in that cost. But, if that is going to hold up the project, then
maybe they should waive that fee.
Mr. Commers stated staff needs to do the analysis and find out what
the HRA costs are going to be for this proposal so they know what
they are taking about, and he did not know how they can expect the
developer to pay at this point. He stated the HRA is willing to
be open and look at things, and are maybe willing to do some things
to get additional tax increment, but they have to get some sense
and some feeling of what they are talking about so they can make
a judgement about that as it relates to the HRA's #1 priority.
Mr. Newman stated to summarize what he heard the HRA members
saying, they are willing to go outside the immediate project area
for assistance if they feel the project merits it, or it doesn't
jeopardize the HRA's financial capability. Secondly, at this time
the HRA does, not want to require some advance payment from
prospective developers on a site.
Mr. Commers stated he is saying that they should get their
financial consultant to look at this particular project.
^ Mr. Newman stated that in all fairness to this developer or another
developer, because of the financial commitment Mr. Bob Levy is
attempting to extract from the purchase agreement, the HRA is going
to have to move fairly quickly and fairly extensively so that they
can hopefully have more financial information by the next HRA
meeting.
Ms. Horneland stated Mr. Levy has the concern that because he has
gone through this situation with Tanurb and there are expanding
attorneys' fees and other costs, he wants to know that the
developer is in the deal, that the developer is paying some
analysis money. It isn't a significant amount now, but it does
escalate and it keeps everyone involved honest.
Mr. Commers stated he could understand Mr. Levy's position, but he
did not know how that impacted the HRA.
Mr. Newman stated most developers he has talked to want to move
through the process fairly quickly, because the longer it takes,
the more they will have to pay Mr. Levy.
Mr. Boisclair stated he is certainly ready to negotiate with Mr.
Levy, and he is willing to pay Mr. Levy some earnest money if he
has some sense from the HRA that they like the project. Although
the time frame is important, they will allow the HRA the time
needed.
�
n
80II8ING & REDEVELOPMSNT AIITHORITY MLETINC�, MAY 11. 1989 - PAaE 9
Mr. Newman stated they have been setting the standard that whatever
developer they talk to in earnest needs to have some kind of site
control. Once the developer has that site control, they are going
to want to act fairly quickly.
Mr. Commers stated this is different than some of the other
projects where the HRA has said they are willing to give some kind
of assistance if the project can be put together. At this point,
the HRA is saying they might be willing to assist in the project,
but they need to see some numbers first, especially because this
is such a big project. This is a potential $25 million project,
and he did not think the HRA should hesitate for the $5,000 the HRA
has to pay to the financial consultant.
Mr. Prairie and Mr. Meyer agreed with Mr. Commers.
Ms. Schnabel agreed. She stated she is also a little reluctant at
this time to require Mr. Boisclair to put up any money.
Mr. Newman stated another issue he would like to raise is whether
or not the HRA has any problems with Mr. Boisclair's past financial
history. It is staff's position that Nlr. Boisclair's past
financ�al troubles do not cause them any particular difficulties.
�^ Mr. Prairie stated he felt the strength of Mr. Boisclair's
financial statement is the determining factor.
Mr. Commers stated that at this point, staff should see if the
numbers go together; and if they do, then they can look at this in
more detail, but not at this preliminary stage.
Ms. Schnabel agreed.
Mr. Robertson stated the plus side�of Mr. Boisclair's financial
troubles is that Mr. Boisclair is proposing to use the same
architect as his previous projects, and those projects have had a
lot of design success.
Ms. Horneland stated that from a market perspective, Coldwell
Banker has done tremendous work seeking tenants and researching the
marketplace, and they know what works in the marketplace. She
stated one of the reasons Riverplace suffered is because the
developer tried to create the marketplace. This is a totally
different situation in that they already have the marketplace.
They are not creating anything new.
Mr. Commers stated it is the consensus of the HRA that they would
like to look at it. Their financial consultant will look at it and
give his overall viewpoint of the availability of funds, hopefully,
^ within the next 30 days. The HRA is certainly not opposed to going
outside the district for additional financing.
HOIIBINd & REDEVELOPMENT AIITHORITY MEETING, MAY il. 1989 - PAGB 10
��
Ms . Schnabel stated she was very impressed with the proposal as
presented.
Mr. Newman stated they need to know that the HRA has established
some kind of formal commitment, some site control, with the
property owner, and then they will proceed.
Mr. Commers stated the HRA want the numbers first so they can make
a decision on what they want to do. They do not need site control
to do that. This is just a preliminary determination right now.
Mr. Newman stated what if another developer comes in with a
proposal for the same site.
Mr. Commers stated then they might have to look at that proposal
also.
4. INFORMATION ON STINSKI DEVELOPMENT AGREEMENT:
Mr. Robertson stated this is an information item only. ATo action
is needed by the HRA.
� 5. INFORMATION ON UNIVERSITY AVENUE CORRIDOR CRABGRASS CONTROL:
Mr. Robertson stated after discussions with MnDOT, Anoka County
personnel and the Fridley Park Foreman, staff recommending that no
spraying for crabgrass should be done because too many bare spots
with no vegetation may cause dust problems and an unsightly
appearance.
Mr. Meyer stated everyone knows that crabgrass is a first rate
nuisance and a third rate cover. Why not just "bite the bullet"
and kill the crabgrass and invest in new sod?
Mr. Robertson stated what the staff is essentially saying that
there is so much crabgrass, if they kill the crabgrass, they would
either have to reseed or resod.
Mr. Robertson stated since the HRA had agreed to do a minimum of
Corridor maintenance for a year, do they still want to kill the
crabgrass or should they wait a year?
Ms. Schnabel agreed they should probably wait a year and then put
the money into the budget for resodding.
Mr. Robertson stated that would be his recommendation.
Mr. Commers stated it is the consensus of the HRA to do nothing as
� far as the crabgrass this year.
HOIISING & REDEVELOPMENT AIITHORITY MEETINC3, MAY 11, 1989 - PAGB 11
6. ESTIMATES: GREENMASTERS - LAKE POINTE MAINTENANCE
MOTION by Mr. Prairie, seconded by Ms. Schnabel, to authorize the
payment of $4,644.14 to Greenmasters, Inc., for Estimate #1 for
Lake Pointe maintenance.
QPON A VOICE VOTE, ALL VOTING AYE, CHAIRPER80N CONIIriERB DECLARED T8E
MOTION CARRIED IINANIMOIISLY.
7. CLAIMS:
MOTION by Ms. Schnabel, seconded by Mr. Meyer, to approve the check
register as presented.
OPON A VOICE VOTE, ALL VOTINa AYE, CHAIRPER80N COMMERB DECLARED THE
MOTION CARRIED IINANIMOIIBLY.
ADJOURNMENT•
MOTION by Mr. Prairie, seconded by Mr.
meeting. IIpon a voice vote, all votinq
declared the May ii, 1989, Housinq &
meetinq adjourned at 9:10 p.m.
,�1
Res ctfully s mitted,
Ly Sa a
Rec rding Secretary
,�
Meyer, to adjourn the
aye, Chairperson Commers
Redevelopment Authoritp