HRA 08/09/1990 - 29612/"'�
CITY OF FRIDLEY
HOOSING & REDEVELOPMENT AIITHORITY MEETING� AIIGIIST 9, 1990
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CALL TO ORDER•
Vice-Chairperson Schnabel called the August 9, 1990, Housing and
Redevelopment Authority meeting to order at 7:15 p.m.
ROLL CALL:
Members Present: Virginia Schnabel, Duane Prairie, John Meyer
Members Absent: Larry Commers, Walter Rasmussen
Others Present: William Burns, City Manager and Director of HRA
Virgil Herrick, City and HIZA Attorney
Paul Hansen, Accountant
Neil Polstein, Attorney for University Avenue
Associates
APPROVAL OF JULY 19. 1990 HOUSING & REDEVELOPMENT AUTHORITY
�IINUTES •
OTION by Mr. Meyer, seconded by Mr. Prairie, to approve the July
� 19, 1990, Housing & Redevelopment Authority minutes with the
following correction: Page 12, #5, Estimates, the amount
$14,878.58 should be changed to $4,458.22.
IIPON A VOICE VOTE� ALL VOTING AYE, VICE-CHAIRPERSON SCHNAHEL
DECLARED THE MOTION CARRIED IINANIMOII6LY AND THE MINIITEB APPROVED
AS AMENDED.
1. AMENDMENT TO SUBORDINATION AGREEMENT RE: SECOND MORTGAGE ON
SPRINGBROOK APARTMENTS
Mr. Herrick stated that in discussing this matter with Mr. Neil
Polstein, the attorney for University Avenue Associates, they
discovered an error in the dates that were contained in the Mr.
Polstein's letter dated July 30, 1990. He asked Mr. Polstein to
comment on the reason for the request for extension and to correct
the dates that are pertinent.
Mr. Polstein stated that when Springbrook was built, it was built
with $850,000 of financing from the City secured by a second
mortgage. The primary financing was from Citicorp in the amount
of $14 million. That loan expired on July 31, 1990. In his
letter, he had stated 1992, and an extension to July 31, 1993. It
is a three year loan which actually expired on July 31, 1990.
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HOIISING AND REDEVELOPMENT AIITHORITY MTG. AIIG. 9, 1990 PAGE 2
Citicorp has agreed to the extension of the first mortgage between
University Avenue Associates and Citicorp; however, they are
requiring the consent of the HRA as the guarantors.
Ms. Schnabel stated she is a little unsure as to when the first
payment is due. Mr. Robertson's memo says July 11, 1993, and Mr.
Herrick's memo says June 11, 1993.
Mr. Herrick stated he believed the correct date is June 11, 1993.
Mr. Herrick stated that the extension of the first mortgage for a
one year period will not adversely affect the HRA. The reason he
put in the dates of the payment on the HRA mortgage was to show the
HRA that presently no payment is being made, and that this
extension will not extend up to the date of the first payment.
MOTION by Mr. Meyer, seconded by Mr. Prairie, to approve the
extension of the subordination agreement for a one year period for
Springbrook Apartments with Citicorp as requested by University
Avenue Associates.
IIPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERBON SCHNABEL
DECLARED THE MOTION CARRIED IINANIMOIISLY.
2. PROPOSED NORTH GATEWAY REDEVELOPMENT PLAN•
Mr. Burns stated he would like to review the maps of the North
Gateway Redevelopment Plan that were included in the HRA agenda.
Mr. Burns stated that the map on agenda page 1-B illustrated the
scope of what has been labeled the University Avenue Gateway Plan.
The concept is to develop a plan that will provide for planned
redevelopment of the area north of I-694 up to 61st Avenue. That
includes everything from Holiday Plus up to the vicinity of Custom
Mechanical on the west side of University Avenue and from Motor
Valet Used Cars up to the Sinclair Station at 61st Avenue on the
east side of University Avenue.
Mr. Burns stated that the zoning is shown on agenda page 1-C. On
the west side of University Avenue, the parcel including the
Holiday Plus store and The Cattle Company restaurant is zoned C-3,
General Shopping, and the parcels across the street are zoned C-2,
General Business. On the east side of University Avenue south of
57th Avenue all the way to 61st Avenue, there is more C-2, General
Business zoning. On the west side of University Avenue is the Hyde
Park area which is S-1, Special Zoning, a very restricted
residential area, which does allow the three existing commercial
properties as nonconforming uses. Behind the Motor Valet site
there is some multiple family zoning. Behind the commercial
between 58th Avenue and 61st Avenue, there R-2, Two Family zoning.
�...� HOII3_ING AND REDEVELOPMENT AIIT$ORITY MTG., AIIG. 9, 1990 PAGE 3
Mr. Burns stated that the map on agenda page 1-D shows what are
considered the problem areas. On the west side of University
Avenue, they are considering the three commercial properties,
Frank's Used Cars, Werner's Furniture, and Custom Mechanical as
potential targets for redevelopment. On the east side of
University Avenue, they are looking at everything from Motor Valet
to 61st Avenue for redevelopment.
Mr. Burns stated that the map on agenda page 1-E shows the
commercial option. They looked at both commercial and residential
as options for redeveloping in this University Avenue Gateway area.
The first option would be redeveloping phase I. Phase I includes
some landscaping and landscaping upgrade behind the Holiday Plus
store and includes Frank's Used Cars and another parcel located
next to 57 1/2 Avenue. Phase I also includes the Winfield
property.
Mr. Burns stated Phase II would be to develop the properties north
of Winfield as commercial up to the Alanon Society. There is some
feeling by staff that perhaps these lots do not have enough natural
depth for commercial development. A suggestion involves taking out
the duplexes that front on 4th Street. That may or may not be
desirable, but should be considered to enhance the success of
commercial development.
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Mr. Burns stated that the map on agenda page 1-F shows a slight
change in the plan. Winfield would still be commercial, and the
Frank's Used Cars site would continue to be residential, but the
two districts north of Winfield are now designated as residential.
The plan would be some form of townhouses or condominiums. The
property north of the Alanon Society would continue to be
designated as commercial property. Again, the alternative shows
the residential extending as far as the duplexes; however, north
of the Alanon Society, the single family residences to the east of
the commercial development seem to be in pretty good shape and
should stay.
Mr. Burns stated another parcel discussed with the City Council is
the Motor Valet site. There has been some serious discussion about
putting an LRT park and ride station there. The LRT is not a sure
thing and this location for a park and ride station is not a sure
thing. The Anoka County Regional Rail Authority is also looking
at the northeast quadrant of 53rd Avenue. If the Motor Valet site
does not become designated as an LRT park and ride station, then
staff is open as to whether or not it should become residential or
commercial or a combination of the two. Staff has not projected
a clear future land use for this parcel.
Mr. Burns stated there does not appear to be much support from the
^ City Council for extending tax increment financing to assist
Holiday Plus with landscaping in Phase I. Staff is proposing that
the City take a proactive approach with Holiday and try to work out
^ 80IISING AND REDEVELOPMENT AIITHORITY MTG. AIIG. 9, 1990 PAGE 4
a combination of land use and future landscaping for that parcel
so they can perhaps get something going on a cooperative basis.
Mr. Meyer stated he did not see a lot of visibility or worry about
the Holiday Plus site.
Mr. Prairie stated he thought the area that is more visible is from
57th Avenue north.
Mr. Herrick asked if anyone has looked at the economics of putting
a single family house on the corner of 57 1/2 Avenue/University.
Mr. Burns stated the game plan is to talk to several developers to
look at the whole situation, not only this parcel, but the parcels
north of Winfield, to get an idea of what densities can be
developed and an idea on the number of townhouse units that might
be feasible.
Mr. Prairie stated he thought townhouses in this area along the
east side of University Avenue would be the best option. If the
LRT park and ride station goes in on the Motor Valet site, it might
help sell the tor�nhouses.
Mr. Herrick stated tor�mhouses might be viable. He seriously
� doubted that single family would be viable.
Mr. Meyer stated so many of the problems and solutions they are
talking about now were there in 1964. At that time, the City
hired a planner, Hodne, to develop that strip area and to make
suggestions, and it might be interesting in seeing the old Hodne
plans.
Mr. Burns stated staff will be getting out the Hodne plans. So,
the first thing staff would like to do is talk to some developers
to get a sense of their plans for this area and then staff wants
to do some research on tax increment financing. Another variable
right now is what the state is going to do with tax increment
financing.
Ms. Schnabel asked if any thought had been given to eliminating
the University Avenue Service Drive and using 4th Street as access
if townhouses are developed.
Mr. Burns stated staff had not thought of that, but it is certainly
something that can be considered.
Mr. Meyer stated that it is his feeling after all these years that
this strip is just never going to be successful as commercial.
�..,� Ms. Schnabel stated that for many years it has been impressed on
them that the parcels that are designated on the map for an LRT
park and ride station should be the areas cleaned up first because
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HOIISING AND REDEVELOPMENT AIITHORITY MTG.. AIIG. 9, 1990 PAGE 5
that is the focal point coming off the freeway into Fridley. She
saw that area more for the development of apartment buildings or
something that cleans up that area.
Mr. Burns stated that once a decision is made for the LRT park and
ride station site either here or at 53rd Avenue, staff can examine
this further and proceed.
Ms. Schnabel stated she has been hearing about an LRT since about
1968. If the City makes the decision to develop this site and
finds a good and viable use for the site, she did not think they
should hold back just because the site might be used for an LRT
park and ride station.
Mr. Burns stated that the Gateway Redevelopment Plan was reviewed
with the City Council. Staff described the potential future
actions they would take as being at a very low level of
involvement, simply changing the Comprehensive Plan to reflect the
Gateway Redevelopment Plan and then letting economic forces take
their course. At the opposite level of involvement, they would go
out, buy the land, clear the land, and send out RFP's to
developers. The Council liked the proposal but rather than take
the proactive approach of becoming a landowner immediately, they
preferred to meet with developers and indicate to developers that
the City stands ready to buy the land, clear the land, and relocate
the residents, etc., to see what kind of reactions they get. That
essentially is what staff plans to do. One Council members was not
so sure about the residential option on the east side and indicated
that if a strong commercial project came along for the parcel north
of Winfield, the City should be willing to consider that as well.
Ms. Schnabel stated she liked the approach of the City educating
themselves ahead of time with developers to see what reactions they
get. She would like to offer one word of caution and that is that
she would not like to see a crowded development. She would like
to see some reasonable figures without real high densities on the
property.
3. ESTIMATES:
a. Talberg Lawn and Landscape (Lake Pointe)
b. W. B. Miller (Flaten Property)
MOTION by Mr. Prairie, seconded by Mr. Meyer, to approve the
estimate for Talberg Lawn and Landscape in the amount of
$4,458.21 and the estimate for W. B. Miller in the amount of
S�oo.00.
IIPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON SCHNABEL
DECLARED THE MOTION CARRIED IINANIMOIIBLY.
�.,� HOIISING AND REDEVELOPMENT AIITHORITY MTG.. AIIG. 9, 1990 PAGE 6
4. CLAIMS•
a. Check Register (2041-2051)
MOTION by Mr. Prairie, seconded by Mr. Meyer, to approve the
check register dated August 9, 1990, as presented.
IIPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPER80N BCHNABEL
DECLARED THE MOTION CARRIED IINANIMOIISLY.
5. STATUS OF WINFIELD 57TH PLACE REDEVELOPMENT PROPOSAL:
Mr. Burns stated that as pointed out in Mr. Robertson's memo dated
August 1, 1990, they still have not received the soil correction
agreement between the MPCA and Ashland Oil. Jim Casserly's memo
dated July 31, 1990, indicated that the City cannot proceed to
develop that site as a Redevelopment District as originally
proposed . They would have to proceed as a Renewal and Renovation
District that was created under the 1990 legislation which provides
less years and less flexibility than before.
Mr. Burns stated that because of what happened in St. Paul with
Winfield, staff did some research. It is the general feeling of
the staff that they still have sufficient confidence in Winfield
� to continue with them. However, they have looked around a little
bit to see if there are some potential alternatives.
Ms. Schnabel referred to a statement made on agenda page 6-C (page
2 of Jim Casserly�s July 31, 1990, memo) in which Jim Casserly
stated: "The Port Authority did not have recourse against
Winfield's Canadian parent company." Is there a method of
identifying somebody so that the HRA can be protected?
Mr. Burns stated he did not know, but he would have Mr. Casserly
and Mr. Robertson address that. He stated the City could go ahead
with the agreement with Winfield so that when the soil correction
agreement is approved, they are in a position to proceed, but he
is a little bit concerned about the potential of this site as a
liquor store site. They are reaching a conclusion on the liquor
operations study and should the City decide to stay in the liquor
business, they need an alternative site from the existing site in
the southwest quadrant, preferably on University Avenue. There are
not a lot of potential sites on University Avenue. The 57th Avenue
site is turning out to be the best possible University Avenue site.
If they are going to have a store on University Avenue, it is his
preference to own the store rather than lease it. The economics
are much more favorable in owning than leasing. Winfield is much
more interested in leasing, but consideration of the liquor store,
at least for now, has become part of the Winfield development and
^ the shaping of a development agreement.
�-..� 80IISIN(3 AND REDEVELOPMENT AIITHORITY MTG.. AIIG. 9, 1990 PAGE 7
6. STATUS OF TIF DISTRICT NO. 11 AND FRIDLEY TOWN SOUARE
ASSOCIATE'S DEVELOPMENT AGREEMENT:
Mr. Burns stated a resolution establishing TIF District No. 11 was
on the agenda for the August 13, 1990, Council meeting, but was
taken off the agenda because of the holding up in the signing of
the lease by Walgreen Drug. It will go to Council again on August
27, 1990.
7. STATUS OF MANAGEMENT/LEASING CONTRACT FOR RICE PLAZA WITH
KORDIAK REALTY•
Mr. Hansen stated there has been some discussion with the auditors
about whether the HRA may allow its agent, Kordiak Realty, to
collect receipts and pay bills on its behalf without authorization
at monthly meetings. For right now, the tenants are sending their
checks to Kordiak and Kordiak is taking care of the check until
further information is available.
ADJOURNMENT:
MOTION by Mr. Prairie, seconded by Mr. Meyer, to adjourn the
meeting. IIpon a voice vote, all votinq aye, vice-Chairperson
8chnabel declared the Auqust 9, 1990, Housinq and Redevelopment
^ Authority meetinq at 8:40 p.m.
Resp ctfully sub 'tted,
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Lyn Saba
Recording Secretary
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