HRA 06/21/1990 - 29610CITY OF FRIDLEY
� HOIISING & REDEVELOPI�N'r ADTHORITY l�LETING, JUNE 21, 1990
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CALL TO ORDER•
Chairperson Commers called the June 21, 1990, Housing and
Redevelopment Authority meeting to order at 7:00 p.m.
ROLL CALL:
Members Present: Larry Commers, Virginia Schnabel, Duane Prairie
Members Absent: � John Meyer, Walter Rasmussen
Others Present: Jock Robertson, Executive Director of HRA
Rick Pribyl, Finance Director
Paul Hansen, Accountant
Dave Newman, HI2A Attorney
Rosemarie Crampton, 5849 - 3rd Street N.E.
Dawn Sader, 2421 - 95th Ave. N., Brooklyn Park
�►,PPROVAL OF MAY 10. 1990. HOUSING & REDEVELOPMENT AUTHORITY
MINUTES:
�— OTION by Ms. Schnabel, seconded by Mr. Prairie, to approve the
May 10, 1990, Housing & Redevelopment Authority minutes as
written.
IIPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMEERS DECLARED
THE MOTION CARRIED IINANIMOIISLY.
1. CRAMPTON REOUEST FOR SECOND MORTGAGE LOSS MAKE-UP:
Mr. Robertson stated Ms. Crampton is requesting that the HRA
forgive the remaining $2,400 of the ten year second mortgage that
the HRA has on her property at 5849 - 3rd Street N.E. Mrs.
Crampton wishes to move to another school district in order that
a special education teacher and aide can be provided for her
disabled child.
Mr. Robertson stated that when the house was completed in 1983,
the market value of the property was appraised by the City at
$64,200. .Ms. Crampton has a purchase agreement for $74,000.
Staff is recommending that there be no forqiveness unless it can
be demonstrated that Ms. Crampton received a loss upon the sale
of the property.
Mr. Commers stated that staff has informed him that the
Crampton's had made significant improvements on the property.
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HOIISING AND REDEVELOPMENT AIITHORITY MTG., JUNE 21. 1990 PAGE 2
Ms. Crampton stated they have added a garage, front entry way,
and a family room in the basement at a total cost of $12,000.
Mr. Robertson stated staff can check the assessing records and
see what the market value is right now and what the difference
is. If it turns out that there would be a loss on the sale,
staff can negotiate the agreement to the extent of what is
outstanding. The HRA might want to consider forgiving that part
that would make up any loss.
Mr. Robertson stated that with the HRA's permission, staff can
negotiate a final settlement and report back to the HRA at their
next meeting.
Mr. Prairie stated he was comfortable with staff proceeding.
Ms. Schnabel asked if there is any way of verifying that the
improvements have been made to the property.
Mr. Robertson stated staff can verify with the Assessing
Department that the improvements have been made.
Ms. Schnabel stated she would feel more comfortable with that
type of information.
MOTION by Mr. Prairie, seconded by Ms. Schnabel, to authorize
staff to negotiate a second mortgage loss makeup with Ms.
Crampton after verification of improvements to the property, to
be resolved before the July HRA meeting.
Mr. Newman asked if it was the HRA's understanding that staff
would have the authority to negotiate forgiveness of part or all
of the outstanding balance of the mortgage.
Mr. Commers stated, yes, that is the HRA's intent.
IIPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON CONIl[ERS DECLARED
THE MOTION CARRIED IINANIMOIISLY.
2. EXTENSION OF HOLD H}1I�tMT�FSS AGREEMENT WITH WOODBRIDGE:
Mr. Robertson stated Woodbridge has requested that the hold
harmless agreement that was agreed upon in December 1989 be
extended for another six months until December 31, 1990. This
allows the redeveloper or a potential purchaser to enter onto the
Lake Pointe property for the purpose of conducting normal
surveys, tests, and investigations for the potential benefit of
purchasers of that land. He stated there is no change in the
wording of the agreement.
� HOIISING AND REDEVELOPMENT AIITHORITY MTG.. JUNE 21, 1990 PAGE 3
MOTION by Ms. Schnabel, seconded by Mr. Prairie, to extend the
Hold Harmless Agreement with Woodbridge Investment Company for an
additional six month until December 31, 1990.
II�N A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COrIl�'RS DECLARED
TSE MOTION CARRIED IINANIMOIISLY.
3. ELECTRICITY BILLINGS FOR LAKE POINTE:
Mr. Robertson stated this is in answer to the concern expressed
by the HRA at the May meeting about the HRA paying for
electricity at Lake Pointe. After a review with the City
Manager, staff agreed to recommend that the HRA pay the $7.06
bill for the sprinkler control box because it is part of the
temporary maintenance system for which the HRA has already
assumed responsibility. Staff also agreed that since the City
pays for street lighting elsewhere in the City, they would
recommend to the City Council that the City pay the $107.91
street lighting bill.
Mr. Commers asked if it is the same situation for the lighting at
Moore Lake Commons.
Mr. Pribyl stated he believed the City is paying for the street
� lighting at Moore Lake Commons also.
4. AGREEMENT TO REFUND TIF SCHOOL REFERENDUM LEVIES TO SCHOOL
DISTRICTS:
Mr. Pribyl stated that in following what he perceived to be the
HRA's direction previously, Jim O'Meara of Briggs and Morgan Law
Office was contacted to once again develop a two year agreement.
They are already half way into the year 1990 so the second half
of this is the 1991 portion. He has been in contact with Jerry
Seeman of School District #14 a number of times, and they have
been pressing very hard to come up with a number for the 1991
funding process. This will commit the City to return increment
for 1990 and 1991. There were some changes made in the tax
increment legislation that now puts School District #16 into the
return also, and the dollar amount is beginning to climb. The
total return for 1990 for all school districts is calculated at
$261,798.81. They estimate the total return for 1991 to be the
same, if not more, than $261,798.81; and this amount will
continue to increase each year.
Mr. Pribyl stated the HRA should be receiving their first half
settlement sometime towards the middle of next month. Staff will
probably split this amount in half for each school district.
Then, on the second half, staff will do a complete analysis of
,.� properties within those districts to determine which ones have
actually been delinquent and then subtract those delinquent
applicable portions from the last half.
HOIISING AND REDEVELOPMENT AIITHORITY MTG., JUNE 21. 1990 PAGE 4
Mr. Prairie stated that in their previous discussions, it was his
understanding that it was a one year agreement that covered two
years, but the HRA had to renew it every year.
Mr. Commers stated staff should check into the past
documentation. If the HRA is committed to the school districts
for 1990, they should address that, but as far as another for
another two years, he is not sure that is right. By voting on
this, they should not be committed for 1992.
Mr. Pribyl stated they would just be committed to 1991. He
stated the original agreement provided for a payment in 1988 and
1989.
Mr. Prairie stated that in order to figure this into the school
district's budgeting process, the HRA should have been discussing
this in December or January.
Mr. Pribyl stated that in the original discussions, School
District #14 wanted to be able to have some idea of their next
budget year.
Mr. Commers stated that at that time, there was not the idea that
n this would be going on indefinitely. He could understand that
the school districts should know so they can figure how to
budget, but the HRA should do this before the school districts
adopt their annual budgets.
Mr. Pribyl stated that ideally, they should have done the 1988
and 1989 payments and then, shortly after that, gone to the 1990
extension. However, staff did not have the manpower to do that
at that time. They can cut the agreement period down to just
1990.
Mr. Commers stated that realistically they can't do much about it
now as the school district is relying on this payment now. But,
they should get ahead of it next year.
Mr. Pribyl stated it is his understanding School District #14 is
working on its 1991 budget right now.
Mr. Newman stated that to address the school district budget for
the fiscal year beginning in July, the HRA should be ready to
address this in January of that year.
Mr. Commers stated that since the school district is almost done
with its budget for the 1990 fiscal year, in all fairness the HRA
should approve the payment for 1990. The school districts should
^ be cautioned that from now on, the HRA wants to address this
process prior to the budgetary process. They should then review
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the past discussion and documentation and put this on the agenda
for discussion at the end of 1990.
Mr. Pribyl stated there apparently has been some misunderstanding
about how this process was supposed to take place, and they never
got keyed into the budgetary process for the school districts.
MOTION by Mr. Commers, seconded by Ms. Schnabel, to approve the
school district referendwn levy returns for 1989, payable 1990,
and that this matter be put on the December 1990 HI2A agenda for
consideration of the 1991 referendum levy returns.
IIPON A VOICE VOTE, COMMERS AND SCHNABEL VOTING AYE, �ATRTF;
ABSTAIIJING, CHAIRPERSON COrIIrlERS DECLARED THE MOTION CARRIED.
5. ESTIMATES•
MOTION by Ms. Schnabel, seconded by Mr. Prairie, to approve the
following estimates:
Natural Green, Inc. -$923.48 for labor and miscellaneous
parts to repair the temporary irrigation system at Lake
Pointe.
� Talberg Lawn & Landscape Service -_�_,_458.22 for maintenance
services on the lands�aping at Lake Pointe May 15 - June 15,
1990.
W. B. Miller, Inc. -$1,850.00 for the relocation of
driveway for the Flaten property on 5755 Central Avenue N.E.
Access Control Technologies -$10,973.00 for the completion
of ramp security installation.
IIPON A VOICE VOTE, ALL VOTING AYE, CHAIRPER.SON COMMERS DECLARED
THE MOTION CARRIED IINANIMOIISLY.
6. CLAIMS (2018-2026�:
MOTION by Mr. Prairie, seconded by Ms. Schnabel, to approve the
check register dated June 21, 1990.
IIPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COr�lERS DECLARED
THE MOTION CARRIED iTNANIMOIISLY.
7. UPDATE ON MANAGEMENT CONTRACT FOR RICE PLAZA SHOPPING
CENTER:
Mr. Robertson stated that at the last meeting when the HRA
^ approved the purchase agreement, they also directed staff to get
an environmental assessment audit. Staff solicited bids from
four companies and awarded the bid to Institute for Environmental
� HOIISING AND REDEVELOPMENT AIITHORITY MTG.. JIINE 21. 1990 PAGE 6
Assessment based on the most complete description of services and
because they seemed to be the most responsive to the HI2A's
request. He stated the Institute for Environmental Assessment
plans to have the work completed by Friday, June 14, and a report
prepared for staff by Thursday, June 20, 1990.
Mr. Robertson stated there seemed to be no unusual environmental
problems, only the ones which staff was aware of before--asbestos
material in the facia of the building. Staff is trying to locate
records for one other soil test that Mr. Lundgren had done.
Mr. Robertson stated that staff is soliciting proposals for the
management and leasing agents for the property. They plan to
review at least three proposals and references and bring a
recommendation to the HRA at their July meeting.
12. STATUS OF PROPOSED LEASE SECURITY FOR PAPPY'S FOODS:
Mr. Robertson stated Keith Warner of Pappy's Foods is still
working on the financial plan for the lease of equipment and the
proposed project in the old Service America building at Central
Avenue and Fireside Drive. In the meantime, Steiner Development
has forwarded an acceptable letter of intent to purchase the
Service America building and has apparently reached a tentative
�, agreement to lease the building back to Pappy's Foods.
Mr. Robertson stated Steiner Development is also negotiating with
Service America to build a smaller 10,000 sq. ft. building in the
rear portion of the lot and lease it back to the Service America.
The agreement has not been reached on this component of the
proposal. The HRA may wish to consider setting up a TIF district
to capture the increment from this additional building in the
near future; however, for such a small building, it may not be
cost effective.
Mr. Robertson stated he had included a schedule received from Jim
Casserly for enlarging the redevelopment project area so that the
HRA can consider providing equipment lease security for Pappy's
Foods at the July or August HRA meeting.
Mr. Prairie asked if there was any history of any other HRA's
doing a similar thing--providing assistance for the lease of
equipment.
Mr. Robertson stated he did not believe so, but he could do some
research and see if there are any. Staff has researched the
legality of it, and there is no question but that it is legal.
Mr. Prairie stated other HRA's have done some things that were
� legal, but they received a lot of flack for doing them, whether
right or wrong.
� HOIISING AND REDEVEIAPMENT AIITHORITY MTG.. JIINE 21. 1990 PAGE 7
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Mr. Commers stated there seemed no harm in having staff make some
inquiries regarding what other HRA's have done.
13. OTHER BUSINESS:
a. Proposed Fridley Auto Mall
Mr. Robertson stated the Auto Mall is proposed to be located in
the northern part of the Onan tax increment district created last
year. It is the vacant mobile home sales lot northeast of the
Rapid Oil Station. It includes a 26,000 sq. ft. auto service
mall and a 4,000 sq. ft. restaurant.
Mr. Robertson stated it is staff's intention, while revising the
Comprehensive Plan this year, to recommend that Highway 65 be the
preferred location for more extensive type retail commercial
activities that require an auto trip from establishment to
establishment like auto sales, lumber yards, etc. The City has
already made a commitment for University Avenue to be more
intensive type of commercial, offices and retail strip centers
which are characterized by a pedestrian being able to make a trip
from establishment to establishment without the need for a car.
To that extent, this auto mall would be consistent with the
Comprehensive Plan recommendations still in process.
Mr. Robertson stated that, on the other hand, are they getting
into the situation where every time there is a new development,
the developer comes in and asks for tax increment assistance. In
this situation, if this land has been owned by the same owners
for many years, what is the assistance for? It is not land
assembly and it can certainly not be for a land writedown. It is
conceivable that one of the stipulations could be that part of
the overall deal would be to extend the frontage road where it
stops on the south end of the mobile home park through the front
tier of mobile, connecting with the Fireside Drive. The
developers, Mr. Noyes and Mr. Schroeder, have informed staff that
the extension of the road would be very important to the success
of their operation; and they have been directed to approach the
owners of the mobile home park about purchasing land for that
frontage road extension. It is conceivable that could be the
justification for tax increment financing assistance.
Mr. Robertson stated the City Manager will also be discussing
this with City Council. Staff thought it was important to inform
the HRA of this proposal and to ask for any policy direction the
HRA might have at this time or during the following month.
Mr. Prairie stated he has had about ten people ask him if the HRA
is ever going to stop building strip malls.
^ Ms. Schnabel stated it does seem like every time there is a new
development, someone comes to the HRA asking for assistance. She
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HOIISING AND REDEVELOPMENT AIITHORITY MTG.. JIINE 21. 1990 PAGE 8
is sometimes bothered by the fact that not everything the HRA
does is redevelopment in the purest sense. There is a lot that
is assistance that is not redevelopment. Yet, she did feel quite
justified with the assistance they have provided.
Mr. Commers stated that in terms of development, there are two
different districts: (i) economic development district and (2)
redevelopment district. The bigger problems come when they get
to the funding side of it, and they have been funding most of
these through tax increment financing. But, everything doesn't
have to be redevelopment. The HRA has discussed doing some of
the neighborhood-type things they used to do such as the large
family home ownership program. There might be some very
identifiable projects of that nature that might be worth looking
at.
Ms. Schnabel stated she has been interested in Habitat for
Humanity, and that concept is excellent where they provide
assistance, but the people pay back that assistance. It would be
nice for the HRA to set up a system like that where they could
rehabilitate or create something, using HRA monies, yet getting
it paid back.
b. Resignation of Dave Newman, HRA Attorney
Mr. Commers stated that the HRA certainly appreciated all Mr.
Newman's efforts on behalf of the HRA, particularly the extra
time Mr. Newman has spent with them. The HRA wished him the best
of luck in his new endeavors.
Mr. Newman stated Mr. Herrick will be taking his place as HRA
attorney. Mr. Ne`aman will be available in Mr. Herrick's absence
or for projects he has had experience with.
ADJOURNMENT:
MOTION by Mr. Prairie, seconded by Ms.
meeting. IIpon a voice vote, all voting
declared the June 21, 1990, Housing an
meeting adjourned at 8:30 p.m.
Res ectfully subm'tted,
L n aba
Recording Secretary
Schnabel, to adjourn the
aye, Chairperson Commers
d Redevelopment Authority