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HRA 03/08/1990 - 29607� CITY OF FRIDLEY HOIISING & REDEVELOPMENT AIITHORITY MEETING, MARCH 8, 1990 ����..������������.,.��������.,.�����_�....��_�..�������..�����....�..��������� CALL TO ORDER• Vice-Chairperson Schnabel called the March 8, 1990, Housing and Redevelopment Authority meeting to order at 7:20 p.m. ROLL CALL• Members Present: Virginia Schnabel, Duane Prairie, John Meyer Members Absent: Larry Commers, Walter Rasmussen Others Present: Jock Robertson, Executive Director of HRA William Burns, City Manager and Director of HRA Dave Newman, HRA Attorney Rick Pribyl, Finance Director Paul Hanson, Accountant Jim Casserly, Casserly Molzahn Barbara Dacy, Planning Coordinator William Nee, Mayor Tom Schuette, UCD, 4735 Hiawatha Ave. S., Mpls. � Frank Reese, 8200 Normandale Blvd., Bloomington n APPROVAL OF FEBRUARY_8, 1990, HOUSING AND REDEVELOPMENT AUTHORITY MINUTES• MOTION by Mr. Meyer, seconded by Mr. Prairie, to approve the February 8, 1990, Housing and Redevelopment Authority minutes as written. IIPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERBON SCANABEL DECLARED THE MOTION CARRIED IINANIMOIIBLY. ACTION ITEMS• 1. RESOLUTION ON $9,845.000 TAX INCREMEIJT REFUNDING BONDS• Mr. Robertson stated the bond bids were received on noon on Wednesday, March 7, 1990, and the bids were awarded at a special City Council meeting the evening of March 7, 1990. Mr. Robertson stated the explanation and resolution the HRA received in the packet has been modified, and the HRA has received a final resolution with the final numbers. J^,, 80II8ING & REDEVELOPMENT AIITHORITY MT�3., MAR. 8, 1990 PAGE 2 Mr. Robertson stated that when the HRA had a joint meeting with the City Council on February 8, 1990, the HRA reviewed the options presented by Mr. Jim Casserly and approved the financing procedure and authorized this bond issue. At this meeting, staff is asking the HRA to approve this resolution that will approve and authorize the execution of a tax increment pledge agreement which goes with this general obligation tax increment refunding bond. Mr. Casserly stated that what the City has done is simply refund the bonds sold in 1986. Approximately $9,060,000 are left on those bonds, so this bond issue that is sold is to completely pay off the 1986 bonds. That is why this is called a refunding bond. There is no new money in this issue. The HRA is being asked to pledge the tax increment revenue they have available to them to pay off this new 1990 refunding bond. The HRA did a similar pledge in 1985 and 1986, and now they are being asked to do the same kind of pledge in 1990. The pledge agreement says that in Tax Increment Districts 1, 2, 3, and 6, for as much as it can be pledged, the HRA is pledging the revenues from those districts to pay the debt service on this bond issue. MOTION by Mr. Prairie, seconded by Mr. Meyer, to approve Resolution � HRA No. 3-1990, "Resolution Approving and Authorizing Execution of Tax Increment Pledge Agreement Respecting $9,845,000 General Obligation Tax Increment Refunding Bonds of 1990". IIPON A VOICE VOTE, ALL VOTING AYE� VICE-CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED IINANIMOOSLY. 2. RESOLUTION DIRECTING STAFF AND HRA CHAIRPERSON TO APPROVE A DEVELOPMENT AGREEMENT WITH NORTHCO IAT SUBSTANTIALLY THE SAME FORM AS PRESENTED: Mr. Robertson stated that at the December HRA meeting, a representative from Northco, Mr. Bruce Carlson, made a presentation to the HRA on the proposed 18,000 sq. ft. project in the Northco Phase III at 73rd/University Avenue. The HRA reviewed the building plans and the need for extensive soil correction, and recommended that the City Council set up a short-term economic development district for the purpose of assisting this project with a soil correction grant of $70,000. Mr. Robertson stated that at the February 26, 1990, meeting the City Council held a public hearing and set up that district, and that has now gone to the County for certification. Mr. Robertson stated the HRA is being asked to approve a resolution asking staff to proceed with finalizing the final development �, agreement with Northco in substantially the same form as the HRA approved it in December with the pay-as-you-go feature, where the HRA does not give the grant until the project starts paying taxes. � $_O_IIBING � REDEVELOPMENT AIITHORITY MTG.. MAR. 8. 1990 PAGE 3 The development agreement is being currently reviewed by Northco, and they see no problems in finalizing the agreement. MOTION by Mr. Meyer, seconded by Mr. Prairie, to approve Resolution ATo. HRA 4-1990, Resolution Directing the Fridley Housing and Redevelopment Authority Staff and Chairperson to Approve a Development Agreement in Substantially the Same Form as Presented. IIPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPER80N 8CffiJABEL DECLARED THE MOTION CARRIED IINANIMOIIBLY. 3. UCD DEVELOPMENT PROPOSAL FOR 10 000 AUTO PARTS SITE: Mr. Robertson stated that at the last meeting, staff briefed the HRA on this development proposal for a 28,000 sq. ft. retail facility which would use the 10,000 Auto Parts site plus two additional residential properties to the east. The HRA originally reviewed it as a pay-as-you-go grant; however, when it became necessary for the project to acquire the two additional properties, UCD changed their request from a$250,000 pay-as-you-go grant to a$350,000 grant upon completion. At that time, the HRA authorized staff to proceed with some additional analysis of this, since this � no longer met the standard pay-as-you-go grant of 5-8% of the total project value. Mr. Robertson stated the HRA received at the meeting a revised analysis by Casserly Molzahn. Staff now feels confident that the developer's cost of a grant for a land assembly and write-down will be closer to $300,000 than $350,000. If the HRA is to approve the proposal, it will require the issuance of a bond. Staff added a 2� inflation rate to the estimated taxes. Principal payments are to be made semi-annually. The result is that the HRA would need a principal of approximately $350,000 to generate $300,000 in project expenses. They are using a conservative estimate in that they are assuming it is a taxable bond; therefore, the rate is 9.5% and the term of the bond is 11 years. Using the most conservative method of estimating the value of the project, they estimate about $1.7 million. The developers estimate the project value to be much closer to $2.5 million. Using the conservative method, the ratio of the grant to the $1.7 million is in the neighborhood of 17%. That is why this is a special case and why they did an additional analysis. Mr. Robertson stated that when the HRA was looking at the Tanurb project in the southwest quadrant, the ratio of the grant to the value was in the neighborhood of 20�. Mr. Robertson stated that subsequent to the printing of the agenda, � staff has met with UCD and have resolved the site plan questions that were raised at a neighborhood meeting UCD had in February. The site plan now meets all the coverage, parking ratios, and !"`�, HOIIBING & REDEVELOPMENT AIITHORITY MTG., MAR. 8, 1990 PAGE 4 setback requirements of a standard C-1 zone with one exception, and this is the setback from the right-of-way of University. This is a technicality, in effect, because of the wide planting strip between the traveled way and the property line. There is more than the standard setback normally found for a commercial street. Mr. Robertson stated Barbara Dacy, Planning Coordinator, is at the meeting to answer any questions the HRA members might have on the site plan. Mr. Robertson stated there may be questions about what the City is getting for the proposed grant. He would like to point out that the grant does not go to the developer. The grant is more in the direction of reducing the price of the property so that it is competitive with competing sites. Mr. Casserly can answer any questions regarding the grant. Mr. Prairie asked if Mississippi Street was going to be any wider than it is at the present time. Mr. Robertson stated that on the site plan, Mississippi Street shows the dog-leg left turn stacking. It is possible for the �., County to build that when they improve Mississippi Street. The ' County has already acquired the right-of-way to proceed with the intersection improvement project, and they have reviewed this site plan and have essentially said it is feasible to do it this way. Mr. Prairie stated this is really a tight area for traffic flow. Mr. Robertson stated that is correct. This is a critical part of the site plan. That is why the County essentially required the developer to acquire more land to the east to provide enough left turn stacking space. Mr. Meyer stated he had a general concern about this whole development, not only because of the development itself, but part of this whole operation is to some day have a light rail transit parking lot on 66th Avenue and to the north. Mr. Meyer asked that if they approve this project, aren't they somehow introducing a semi-blight into a very fine residential area? In terms of when they ultimately put in the light rail transit parking area, that intrudes itself one more block into an excellent residential area. He did not see that as a very good planning solution. Mr. Meyer stated they haven't even had their discussion yet on a policy for the southwest quadrant. In order to get that going, � they will probably need some of the same type of shops that are being proposed for the 10,000 Auto Parts site. They will have the Northco development at 73rd and University Avenue which will � HOIIBING & REDEVELOPMENT AIITHORITY MTG., MAR. 8, 1990 PAGE 5 contain many of the same type of shops. Do they have any kind of general plan for University Avenue and for the whole City in terms of these types of developments? It concerned him that they do not have an overall plan, other than to just develop property to get more tax money. If any of these projects go defunct, they are going to have many little one-story mom/pop shops empty all up and down University; therefore creating blight. Shouldn't that be part of the HRA's concern when they consider granting HRA funds for these types of developments? Mr. Meyer inquired why they have gone from a proposed development bordering on 66th Avenue and the people having to live with that development, to including one more full block with another parking lot to 67th. Therefore, they have thrust into the residential areas with nothing more than another parking lot. Should they be doing this to their fine residential areas? Mr. Robertson clarified that the graphic may be somewhat confusing and that the proposed UCD project only extends to 66th Avenue and not beyond. Ms. Schnabel stated Mr. Meyer has certainly raised some good ,.,� philosophical questions. She stated that at this time she would like to hear from the developer. Mr. Tom Schuette stated UCD has worked as a development company specializing in smaller buildings like this one. All of their developments are more or less driven by the Walgreen Company that has identified Fridley as an expansion location. They considered the southwest quadrant; however, it was suggested by City staff that the City was really looking for a development to use the whole 10 acres on the southwest quadrant. With the lack of a grocery store as an anchor that would use 6-7 acres, they decided they would be more successful to pursue the 2 1/2-3 acre parcel on the northeast quadrant. Mr. Tom Schuette stated their business is retail and service for the neighborhood, and the center would be a neighborhood center designed to benefit from existing traffic, homes, and buildings in the neighborhood (approximately 2 miles). It is not intended to draw customers from a distance. Mr. Schuette stated the light rail transit issue keeps coming up as University Avenue might be selected as a corridor. If it is, the Mississippi/University section may be a park and ride, and the north side of their property might be selected for a parking lot. The east side has also been considered for a parking lot, as well as Columbia Arena. He stated they met with the Regional Rail �—, Authority a couple of times and were told that if the north side of the 10,000 Auto Parts site in the 66th/67th Avenue block is chosen, could UCD do some type of land swap such that the Authority �^, HOIIBING & REDEVELOPMENT AIITHORITY MTG., MAR. 8, 1990 PAGE 6 could facilitate the dropping off of people on Mississippi? UCD has told them it would be workable. Mr. Robertson stated that at the last LRT meeting, the County said they were also considering merely a"stop and ride" station at Mississippi without a park and ride. Even in the worst case with a park and ride, access to the parking lot would not be off 66th Avenue. Traffic would go through the parking lot of the proposed development around the building to the north site. So, they would separate the residential street and residential traffic from the park and ride lot. Mr. Schuette stated the development they have designed would be insulated from 66th Avenue also. Ms. Schnabel asked what some of the other tenants would be for this development, other than the Walgreen Drug Store. Mr. Schuette stated they would be neighborhood-type uses, such as video rental, dry cleaning, pizza, Chinese restaurant. They have begun some negotiations with several other prospects, but no leases have been signed. At this time, they have a corporate ,�,, letter of intent from the Walgreen Company. Mr. Meyer stated he had no thoughts on the building itself. It seems like a good design. However, this plan puts the backs of the stores right across the street from the residential neighborhood. In addition, he wondered how the developer expects cars to funnel through one entrance/exit sufficiently to support this new center. He did not know how it could work. Mr. Schuette stated the driveway to the center is much further east than any of the existing driveways. It is approximately where the existing home is. He stated Walgreen Drug is a very sophisticated company in terms of determining whether a store will be successful, and a big part of that is access. The Walgreen Company is satisfied that the access can provide the kind of convenience they need to be successful. Ms. Schnabel stated she would assume that the property line along 66th Avenue would be screened from the residential area, because that is required by City Code. Mr. Frank Reese stated they had a good meeting with the neighborhood. They really wanted to let the neighborhood know what they were proposing and get their opinions. Mr. Reese stated the additional lots were required because of the �--�, fact that the County wanted to double the length of the present median. He stated the choices are tough. He stated the property cannot function in its present use, so the opportunity of buying �► HOIIBING & REDEVELOPMENT AIITHORITY MTa.. MAR. 8, 1990 PAGE 7 the additional single family lot was really predicated on the fact that they needed it to make the project work. Mr. Reese stated they are looking at a second generation use of this property. He stated the buyer is expecting the developer to build something other than the mundane. They are looking at long lasting materials which will be attractive to the buyer. They are planning prefinished masonry panels on the outside walls, attractive bands that run through the building (permanent color, not paint), and a generous overhang on all the open areas of the stores. Mr. Reese stated they showed the neighborhood that they will use the same building materials on the back of the building as they use on the front. They will put in a 6 ft. high fence, also made of the same building materials, that will screen off the automobile parking in the back. They are trying to create a controlled environment on their own area . The neighbors on the east will see the same type of building materials as the front. He stated they will build a center that will fit into the neighborhood. Ms. Schnabel asked Ms. Dacy to give a synopsis of the neighborhood � meeting. Ms. Dacy stated the initial mailing list went out to the required 350 ft. by State law. Then by word of mouth, the mailing list was expanded so that they now have a mailing list that e�ctends down 66th Avenue to about Hayes Street. About 30 people attended the neighborhood meeting. She stated staff received a petition the previous day signed by 50 people who are against the proposed project. She stated the major objections: 1. Traffic concern 2. People from the southwest quadrant and down the road from Moon Plaza were concerned about the impacts into the retail market. 3. Typical noise impacts 4. Odors 5. Property values Mr. Meyer asked if the potential park and ride site was discussed at the neighborhood meeting. Ms. Dacy stated that Tim Yantos, Anoka County Regional Rail Authority, attended the meeting. No presentation was made at the meeting; however, after the meeting a number of people asked Mr. Yantos him about the LRT planning process and the prospect for a park and ride. He explained that a park and ride is a possibility, � but that the decision would not be finalized until potentially 1991-1992. s ,r�, HOIISIN(� & REDEVELOPMENT AIITHORITY MTG., MAR. 8, 1990 PAGE 8 e Mr. Meyer asked if all the parking spaces in the park and ride would be accessible from Mississippi through the new development. Ms. Dacy stated that is correct. Of course, that also depends upon Anoka County as Anoka County has plans to improve the intersection of Mississippi/University. There will be four lanes north of the median and three lanes south of the median and double left turn lanes. Mr. Robertson stated the County has told the City that if the City can acquire the right-of-way at reasonable cost on the west side of University, that improvement could conceivably occur in 1991. City staff asked the County if they could do the improvement on the east side of University this year in order to serve this development and then come back later and do the west side. The County said they could do that, but it will be at a higher cost. They would rather do all the improvements at the same time. Mr. Robertson stated that even though the S-2 zone essentially is site plan specific, the proposal as shown by the architect meets all the setback requirements and parking requirements of a normal C-2 zone, with the exception of University Avenue which is an ,,..� exceptional case because of the wide right-of-way. So, if the property is rezoned to C-2, it will not require variances except for one along University. Mr. Meyer stated he is still very concerned about the traffic problems this development would create in this area. Ms. Dacy stated the distance between the proposed driveway and the intersection is better than any of the frontage road accesses they have along University. She realized there will be conflicts, but any development on that site is going to incur this type of prob�em unless the site is left as is or the scale of the development is reduced to the size of the 10,000 Auto Parts. Then, they still have the situation where the existing driveways are too close to University. Mr. Newman stated the traffic from the proposed development would have less impact than the traffic for an office building because the traffic will be spread out over a wider period of time. There will not be the 8:00 a.m. and 5:00 p.m. stacking times. Mr. Robertson stated the traffic engineers from the Anoka County Highway Department and the City engineers looked at this proposal because of the traffic concern. Both convinced staff that the critical design element is the distance of the driveway from University, which has more to do with how traffic volumes are � handled than anything else. �, HOIIBING & REDEVELOPMENT AIITSORITY MT(�., MAR. 8, 1990 PAGE 9 Mr. Robertson stated there is also the concern that if Walgreen Drug is the anchor tenant on the northeast quadrant, it is going to preclude as much commercial development on the southwest quadrant. They won't have that option of 50,000 sq. ft. of retail anymore. They would have more of some other use, office or residential. He asked the traffic engineers that, looking at proposals for the southwest quadrant with a minimum of 50,000 sq. ft. of retail and maybe more retail, what kind of congestion would there be compared to the proposed development for the 10,000 Auto Parts site? Their answer was that it would be similar or worse. Ms. Schnabel stated that if they had a project for the southwest quadrant, it would be easier to make a decision. Maybe the HRA has to additionally address the idea of what they want to do in terms of funding. Mr. Meyer stated he is also concerned about the 17�. Mr. Robertson pointed out it is less than what the HRA was considering very favorably with Tanurb in the southwest quadrant. Ms. Schnabel stated the Tanurb proposal was also a much larger ,�,� proposal and a much more inclusive proposal than this one. Mr. Robertson stated staff discussed at length with the developer and internally with staff the concern raised by Mr. Meyer about the possibility of the project not being successful. He asked Mr. Schuette to comment on what percent pre-lease agreements are required by the lenders. He stated staff would probably put that same requirement in the development agreement--that they would not proceed with the project unless they had sufficient pre-lease agreements that would be indicative of a successful project. Mr. Schuette stated 75-80� of the space has to be leased. TCF does not loan the money until they have leases in-hand and executed that are more than sufficient to service the debt. Walgreens signs a lease for 40 years, and they will use 11,000 of the 28,000 sq. ft. They will have leases signed for a minimum of 3 years, but more likely 5 years. The space will be 750 leased before they even break ground under the policy the lenders require. Mr. Newman stated that while the 10,000 Auto Parts site is smaller than the Tanurb proposal for the southeast quadrant, there are some unique features that will make it difficult for anyone to develop it. It is his understanding that Red Owl has a master lease on this property from the Theisen family for many years, and it is going to be expensive for any developer to acquire that site. �. Ms. Schnabel asked Mr. Schuette to e�lain their reasoning for changing the request for assistance. � HOIIBING & REDEVELOPMENT AIITHORITY MTG., MAR. 8, 1990 PAG$ 10 r�-. Mr. Schuette stated two factors were involved: 1. Their initial plan did not include any homes, and it was a slightly smaller building. When they met with the Anoka County Highway Department, they were told that the median was planned for improvement and the plans could not be changed. So, acquiring the house added a substantial cost. And acquiring the first house triggered the need to purchase the second house. 2. The privacy wall which will be built of the same materials as the building is an additional expense. The estimated cost is $36,000. They are doing more than adequate landscaping. Mayor Nee stated he understood Mr. Meyer's concerns. He stated the Council is looking for some advice from the HRA. When the Council first reviewed this project, the numbers were quite different, the subsidy was quite different, and it appeared to solve a problem for this property. As time went on and at the public neighborhood meeting, he heard some of the same concerns expressed in 1965. It is questionable whether the developer can make the proj ect fit with the neighborhood. Mayor Nee stated another problem is the question of timing. Many concerns are being expressed by the merchants on the southwest quadrant. What is the idea of subsidizing a development on the 10,000 Auto Parts site when the City isn't solving the problems on their corner? He stated that over the years, the Council and HRA have said that the southwest quadrant was the third priority, and the 10,000 Auto Parts site was the fourth priority. The northeast corner is in kind of a subsidiary position, because it has so many problems associated with it and so little promise. From strictly a business point of view of improving the tax base potential, it is better on the southwest quadrant than on the northeast. Mayor Nee stated he does not speak for the Council, as the other member may have different views. At the neighborhood meeting, traffic was very much an issue, and he has not seen any well defined statement of solution. Ms. Schnabel stated the traffic issue will probably not be resolved until the southwest quadrant land is made available to the County for the improvements, and at this point, they do not know when that will happen. Mr. Robertson stated the County has said the interim solution is merely to extend the existing median further east to this entrance. That will help direat and channel the eastbound traffic. However, � the better solution would be to do the whole intersection improvements which would involve the southwest as well as the northeast quadrant to provide the additional lanes. If the HRA was � HOIIBING & REDEVELOPMENT AIITHORITY MTa.� MAR. 8, 1990 PAGE 11 to acquire the land in the southwest quadrant; namely, the Levy property and the Dairy Queen (agenda item #4), then the necessa=y right-of-way for the project to be done sooner could be conveyed to the County. The County has said it is conceivable they could do the entire intersection improvement as early as 1991. Mr. Robertson stated Anoka County is aware of this project proposal and seems willing to move up this project in their 5 year capital improvement schedule to meet this need. Mr. Robertson stated the HRA is at a point where they will have to make a policy decision. If not this kind of use, then what kind of use? This property has been in the Center City Redevelopment District for ten years and has been earmarked for commercial development. As Mr. ATewman pointed out, would an office building have any better traffic characteristics? The engineers say, no, it will just be different. Mr. Prairie agreed that it would be easier to make a decision on this project if the southwest quadrant was done or at least started. ^ Mr. Robertson stated staff is not asking the HRA to finalize the ' project, but to approve the concept and direct staff to continue refining the proposal. Ms. Schnabel stated another possibility for this property is something a little more modest than this plan. Maybe this proposal is just too much for this property. Mr. Robertson stated Casserly Molzahn's proforma shows that with a land assembly grant of $300,000 which is necessary to support 28,000 sq. ft. of retail at prevailing rates, they are looking at 11 1/2 per year payback on the bonds. Presumably, less value means less taxes and a longer payback period. It is the classic redevelopment dilemma where, in order to get the taxes to accelerate the payback, they need more density. Mr. Burns asked if the 10,000 Auto Parts site is better for commercial than the southwest quadrant. Mr. Robertson stated that in terms of visibility and turning movements, the 10,000 Auto Parts site is superior. Mr. Schuette stated the east side of University Avenue is the going home side of the street which is very important to the retailer. Ms. Schnabel stated the HRA needs to address the amount of � assistance being requested. Do they feel comfortable with the request for this size of a bond? If they don't, then what assistance do they feel comfortable with that would help this ,�-� 80II8INa & REDEVELOPMENT AIITHORITY MTa.. MAR. 8, 1990 PAGE 12 developer or any other developer redevelop this particular section of the downtown area? She is sensing that $350,000 is more than what they anticipated and more than they are willing to give. Ms. Schnabel stated she would also like to know if this has been discussed with Chairperson Commers and what his feelings are about this proposed project. Mr. Robertson stated staff discussed this plan earlier with Mr. Commers and Mayor Nee. Mr. Commers was generally in favor of the project. However, at that time it was at the very early stage when they were talking about using the pay-as-you-go mechanism. He did not know how Mr. Commers feels now. Mr. Meyer stated he is not happy with the high level of assistance. He is not trying to tie his obj ection to the proj ect to that facet. Even if the project went ahead, he would wonder why they were spending 17�. Mr. Newman stated staff is looking for some direction from the HRA as to whether this is the type of proposed use they would like to see go on this site and if they would like staff to proceed into ^ further negotiations for a development agreement. Ms. Schnabel stated she had three reservations about this proposal: (1) the amount of assistance being requested, (2) the density, and (3) the traffic. Her reasons for these concerns are based on the discussions at this meeting and the neighborhood's feelings about the development. It is important that they redevelop their downtown area and this particular piece of property because it is unsightly as it is, but they should not redevelop it at the expense of the neighborhood. She has a great concern for the residents of Fridley and always has through all her various dealings with the community. Mr. Prairie stated that if circumstances were different on the southwest quadrant, it would be a whole different ballgame. Mr. Robertson stated that the HRA has three issues to consider at this meeting: 1. Make a recommendation to the Planning Commission on the specific redevelopment plan 2. Consider concept approval of the Redevelopment Contract 3. Make a recommendation to give notice for public hearing to expand the TIF district to include the two additional ;� single family units � HOIIBING & RTDEVELOPMENT AIITHORITY MTG., MAR. 8. 1990 PAGE 13 MOTION by Mr. Meyer, seconded by Mr. Prairie, to recommend against this specific redevelopment plan by UCD for the 10,000 Auto Parts site to the Planning Commission. Ms. Schnabel stated the HRA does have to recognize that at some point, they will have to find some type of development that fits on this property, because it is just as much a disservice to the neighborhood to leave it sit this way forever. Mr. Prairie and Mr. Meyer agreed. Ms. Dacy stated the Planning Commission can still hold a public hearing on this item and just announce the HRA's discussions and recommendation. However, she was operating under the scenario that if the HRA did not recommend this development, the developer might want to reconsider either an alternate plan or to not proceed. Mr. Schuette stated he did not think the plan can be altered. Any changes would cause the building to be smaller, and smaller means less revenue. Ms. Schnabel stated that if staff anticipates members of the ,�,\ neighborhood to be at the Planning Commission meeting, it might be a good idea to proceed with the public hearing so the neighbors can understand what has happened. IIPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERBON 8C8NABEL DECLARED THE MOTION CARRIED IINANIMOIIBLY. Mr. Schuette stated they have been working hard with City staff to make planning decisions, and he did not think they would have to defend those issues before the HRA. He thought that would happen at the Planning Commission. He stated they have far too much money invested to drop the project if they do not have to. Ms. Schnabel stated that if anything develops within the next several months with the southwest quadrant, that might change the HRA's feelings, but that is an unknown at this point. Mr. Schuette stated he was not sure they can control this property for that long a time. 4. SOUTHWEST OUADRANT POLICY DIRECTION: Mr. Robertson stated staff has been reviewing several different proposals for a mixed use development/commercial housing projects on the southwest quadrant and they are anticipating some possible interest from a corporate office also. In the meantime, they have � been informed that the owner, Fred Levy, has a potential buyer and developer for just his site. The proposal does not need any assistance or zoning approvals. If the HRA intends to develop the � �� HOIIBING & REDEVELOPMENT AIITHORITY MTa.. MAR. 8, 1990 PAGE 14 entire 10 acres, then it is best for the HRA to acquire control of the Levy parcel at this time. If they do not move ahead with acquisition at this time, then they face the inevitability that the entire 10 acres may never be available and they might want to just decertify this part of the Center City plan and not proceed with it, because it would not be a comprehensive development, but small parcel development. Mr. Robertson stated staff is recommending the HRA direct staff to begin conversations with Mr. Levy to negotiate an acquisition price and come back to the HRA with an update at the next meeting. Mr. Newman stated that at a luncheon meeting with Mr. Commers and the Mayor, Mr. Commezs asked that this be put back on the agenda, because it was Mr. Commers' feeling that the HRA should seriously consider acquiring the site. This was discussed by the HRA 3-4 years ago, but since that time things have changed. If they are going to upgrade Mississippi Street, early acquisition could speed up the intersection improvements for Mississippi and University by Anoka County. If the HRA is going to develop this site, they need to do it very quickly; otherwise, the increment will run out and they will not have that option. If the corporate user does not step forward, then it is staff's recommendation that the HRA go back to Ron Clark or another developer in order to get a project in place to consider so they have a development in place by next spring. Mr. Newman stated the HRA would have to own and lease and manage the property until development occurs, but that might not be too great a risk. Mr. Newman stated the HRA has the money to acquire the property. That is what the bonds were issued for back in 1985. The County appraised the property three years ago, and the estimate was slightly over $1 million. Mr. Levy had an appraisal done in the amount of $1,050,000 and $1,150,000. In looking at the development proposals in the last year, Mr. Levy agreed on a$1.1 million purchase price. Mr. Prairie asked what happens if the HRA acquires the property and nothing happens in the next five years. Mr. Newman stated the HRA would have to own, lease, and manage the property for five years. Mayor Nee stated he was also getting to the point where he thinks the HRA has to do this. If they acquire the property, there will be more of an incentive to make something happen in the southwest � quadrant in less than five years. They have to deal with this corner. ,�, $OIIBINa 8 REDEVELOPMENT AIITHORITY MTa.� MAR. 8, 1990 PAaE 15 Mr. Meyer stated he is in favor of acquisition. He did not want the HRA to be in the leasing and managing business, but he agreed they have to do something with this corner. MOTION by Mr. Meyer, seconded by Mr. Prairie, to authorize staff to have an appraisal done on the Levy property and authorize staff to approach Mr. Levy and begin negotiations regarding the purchase of the property. IIPON A VOICE VOTE, ALL VOTINa AYE, VICE-CHAIRPERSON BCHNABEL DECLARED THE MOTION CARRIED IINANIMOIIBLY. Mr. Newman stated that if the appraisal cost is any higher than $2,500, staff will come back to the HRA. 5. CLARK ENGINEERING ET AL VS. FRIDLEY HRA Mr. Robertson stated his memo to the HRA dated March 1, 1990 (agenda page 5) was self-explanatory. Mr. Newman has obtained a summary judgment granted by the court that the claims against the HRA and Clark Engineering are dismissed; however, the claim for slander of title to property and for attorneys' fees pursuant to ,_, bad faith litigation is still intact. The court has set this matter for trial on June 18, 1991. Staff needs some policy direction from the HRA. Mr. ATewman stated that when the law suit initially commenced, both he and Mr. Commers were offended by it. There was no basis for the law suit. At the HRA's direction, he attempted to negotiate a resolution and in response received a summons and complaint. He stated he needs some direction from the HRA as to whether they wish him to pursue this claim for bad faith, to negotiate a final settlement, or pursue it to trial to get the attorney�s fees. It does take staff time and HRA resources. Mr. Meyer stated Clark Engineering is a competitor, but also a colleague, and he would abstain from voting on any motion. Mr. Prairie stated that if the HRA does not pursue this claim, he would like to not see the City use any of Clark Engineering's services in the future, even though the City has not hired this firm in the past. He would be inclined to say that staff should not pursue it. Mr. Newman stated that if the HRA does not wish him to pursue it, he will try to negotiate some concessions. Ms. Schnabel stated it is her feeling that legal staff should not � pursue this. ��^, HOIIBING & REDEVEI,OPMENT AIITHORITY MTG.. MAR. 8. 1990 PAGE 16 Due to Mr. Meyer's abstaining from any vote, there was a lack of a quorum for action on this matter; however, the two members did indicate their recommendation not to proceed to trial. 6. LAKE POINTE MAINTENANCE CONTRACT AWARD: MOTION by Mr. Prairie, seconded by Mr. Meyer, to accept the bid and award the contract to Talberg Lawn and Landscape in the amount of $32,850.00. IIPON A VOICE VOTL, ALL VOTINa AYE, VICE-CHAIRPERBON BCffiJABTL DECLARED THE MOTION CARRIED IINANIMOIIBLY. 7. CLAIMS {1988-1999): MOTION by Mr. Prairie, seconded by Mr. Meyer, to approve the check register as submitted by staff. IIPON A VOICE VOTE, ALL VOTING AYE, VICE-CBAIRPERSON 8CffiJABEL DECLARED THE MOTION CARRIED IINANIMOIISLY. ^ INFORMATION ITEMS• 8. 57TH PLACE STATUS: Mr. Robertson stated the cost of the mitigation of the groundwater pumping will be around $100,000 rather than $200,000. The PCA has not apparently concluded their review of the environmental report or concluded an agreement with Ashland oil on the clean-up. Mr. Newman has suggested that the HRA not bring this item off the table until that agreement has been concluded, but recommends that as soon as that agreement is reached, staff contact Winfield Develop- ment to see if they are still interested in developing, and then take this item off the table. 9. FICEK GOLF RANGE PROPOSAL FOR LAKE POINTE: Mr. Robertson stated Mr. David Ficek has asked the City Manager to approach the City Council on temporary use of the Lake Pointe site on a year-to-year lease basis for a golf driving range. Mr. Robertson stated it appears to be technically feasible, and it would be a chance to recover some revenue. Mr. Burns points out that the Council might want to give some direction on what kind of political criticism the City might get for having a driving range there, rather than just open space. � Mr. Robertson stated this is an information item, but staff would welcome any comments the HRA members might have. �. HOUSINC� & REDBVELOPMENT AIITHORITY MTG.. MAR. 8. 1990 PA(3E 17 Ms. Schnabel stated that if they allowed this type of use, what other ideas for its use would they get? She felt it is best to leave the Lake Pointe property as it is. The HRA members were not interested in proceeding with this proposal for a golf range at Lake Pointe. 10. REPLACEMENT OF STREET LIGHTING POLES & FIXTURES AT MOORE LAKE COMMONS• Informational item only. 11. OTHER BUSINESS: a. HRA Goals and Objectives Mr. Robertson stated he had given the HRA members the first draft of the 1991 goals and objectives with some notes from Mr. Burns on what he would like to see moved to 1990. One of the items is a business retention program (the City now has a computerized business directory). Mr. Burns has asked that they do what they � can to identify a profile of high priority businesses they can begin contacting later this year to try and determine their needs for the future, much like they did for Onan. He stated this is a worthwhile activity. It can be done with their present budget, and he would recommend they proceed with developing such a program. Mr. Robertson stated he would like the HRA members to review these goals and objectives and come back with comments at the next meeting. b. Center Citp Pictures Mr. Robertson stated he would like the HRA's approval to have enlarged, mounted, and framed a series of photos for display in the Municipal Center showing the Center City Redevelopment District in its various stages. The cost is about $200. These photos show very dramatically the progress that has been made since 1965. The HRA members authorized staff to proceed. c. Electrical Hids for HRA Parkinq Ramp 8ecuritp Surveillance System Mr. Robertson stated the HRA previously approved the �, security bid for $10,973 for the zoom camera, monitor, and sound equipment. Included in the materials at the meeting was a bid from Royal Electric to install some �--�, HOIISIN(3 & REDEVELOPMENT AIITHOItITY MT(�.. MAR. 8, 1990 PA(3E 18 required additional electrical and sound wire conduit work that staff was not aware of when the bid was approved in December. Two bids were received, and the lowest bid was $649. With the HRA's permission, it will be added to the project and proceed. The HRA authorized staff to accept the low bid and award the bid to Royal Electric, Inc., for a total cost of $649.00. ADJOURNMENT• MOTION by Mr. Prairie, seconded by Mr. Meyer, to adjourn the meeting. IIpon a voice vote, all votinq aye, Vice-Chairperson schnabel dealare� the motion carried unanimously and the March 8, 1990, Housinq and Redevelopment Autbority meetinq adjourned at 10:05 p.m. Res ectfully s itted, � ^ Ly Saba Recording Secretary �