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HRA 09/12/1991 - 6365
HOUSING AND REDEVELOPMENT AUTHORITY MEETING, THURSDAY, SEPTEMBER 12, 1991 7 :30 P.M. Paul Hansen Accountant CITY OF FRIDLEY A G E N D A HOUSING & REDEVELOPMENT AUTHORITY MEETING THURSDAY, SEPTEMBER 12, 1991, 7:30 P.M. Location: City Council Chambers Fridley Municipal Center / 6431 University Avenue N.E. C LL TO ORDER OLL CALL: APPROVAL OF MINUTES: August 8, 1991 ACTION ITEMS: ACONSIDER APPROVAL OF SECOND MORTGAGE SATISFACTION FOR FRIDLEY PLAZA OFFICE BUILDING. . . . . 1 - 1C /NSIDER APPROVAL OF SETTLEMENT AGREEMENT Pali' AND LEASE AGREEMENT WITH DON FITCH, DAIRY QUEEN . . . . 2 - 2K ONSIDER APPROVAL OF AGREEMENTS TO �!7CLAIMS 1'U2Cl�i '1'li}i INCREMENT TO SCHOOL DISTRICTS . 3 AND EXPENSES . . . . . . . . . . . . . . . . . . 4 - 4G INFORMATION ITEMS: COPY OF LETTER TO CITY COUNCIL /,zOPY REGARDING DECERTIFYING TIF DISTRICTS. . . . . . . . . . 5 OF CONTRACT WITH MAXFIELD RESEARCH GROUP . . . . . 6 - 6F DATE ON RICE PLAZA . . . . . . . . . . . . . . . . . . 7 INFORMATION ON BOB SCHROER PROJECT. . . . . . . . . . . 8 - 8F OTHER BUSINESS ADJOURNMENT CITY OF FRIDLEY HOUSING &REDEVELOPMENT AUTHORITY MEETING, AUGUST 8, 1991 CALL TO ORDER: Vice - Chairperson Schnabel called the August 8, 1991, Housing and Redevelopment Authority meeting to order at 7:38 p.m. ROLL CALL: Members Present: Virginia Schnabel, Duane Prairie, John Meyer, Jim McFarland Members Absent: Larry Commers Others Present: William Burns, Executive Director of HRA Barbara Dacy, Community Development Director Paul Hansen, Accountant Jim Casserly, Consultant Mike Hurley, Barna, Guzy & Steffen Spencer Johnson, 6401 University Avenue Curt Glaser, 2550 University West, St. Paul Harry Yaffe, 7841 Wayzata Blvd. Sherrill Oman, 2000 Piper Jaffray Tower �..� Don and Judy Fitch, Fridley Dairy Queen Lee Maxfield, Maxfield Research Group, Inc. Mary Bujold, Maxfield Research Group, Inc. APPROVAL OF JUNE 27, 1991, HOUSING & REDEVELOPMENT AUTHORITY MINUTES: MOTION by Mr. Prairie, seconded by Mr. Meyer, to approve the June 27, 1991, Housing & Redevelopment Authority minutes as written. UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 1. CONSIDERATION OF RESOLUTION APPROVING REDEVELOPMENT AGREEMENT WITH THE CHARLES SMITH ESTATE: Ms. Dacy stated that staff would like the HRA to consider the approval of a resolution which would authorize execution of the development contract with the Charles Smith Estate to redevelop the former Cub Foods site at 250 Osborne Road. At this time, the heirs to the Charles Smith Estate are in the process of remodeling the building into three tenant spaces and are proceeding with the required outside improvements. HOUSING & REDEVELOPMENT AUTHORITY MTG., AUG. 8, 1991 PAGE 2- Ms. Dacy stated that at the June 27, 1991, meeting, the HRA conceptually approved a pay -as- you -go approach for tax increment financing for this particular project. The concept approval stipulated that it was not to exceed $65,000, or the tax increment, which is payable over seven tax payable years. In order to accomplish the pay -as- you -go approach, the petitioners had to secure an additional $65,000 or the first mortgage. Since the June meeting, Northeast State Bank has approved the additional $65,000. The development contract at the meeting prepared by Jim Casserly matches the direction and concept approval given by the HRA on June 27, 1991. Ms. Dacy stated that also included in the development contract are a couple of new restrictions the HRA has not seen in the past. One is the restriction on a sexually oriented business. The purpose of this restriction is to make sure that tenant spaces in a publicly assisted project are not leased to a sexually oriented business as defined in the Code. Secondly, the property has had an ongoing problem with overnight parking of semi -truck trailers, so they have included language in the development contract to prohibit that activity. Mr. Casserly stated the development contract is best summed up on page 25, which is a copy of what amounts to the promissory note. It is the limited revenue tax increment note in the amount of $65,000. The $65,000 is to reimburse for tax increment eligible expenses. The note lays out very clearly that this is not the general obligation of the HRA; it is a revenue obligation and it is payable only from the revenues that come from tax increment that are paid on these particular parcels. Mr. Casserly stated legal counsel for the developer had a couple of language changes that were legitimate and were incorporated into the:contract. He stated two pages, pages 12 and 14, were handed out at the meeting. If the HRA is comfortable with the underlined changes, staff recommends these be included in the development contract. In Section 6.1 (c) on page 12, they made it clear that they are talking about semi -truck trailers and that they cannot occupy a space for over a 24 -hour period on any part of the Redevelopment Property facing University and Osborne Road or there could be a default under the contract. Page 14 is the section that contains the various kinds of defaults that could occur in this contract, and Section 7.1 (c) states that: "Failure by the Redeveloper to remove semi -truck trailers within the time period required by Section 6.2 (c)...." Mr. Meyer questioned the language, "any part of the Redevelopment Property facing University and Osborne Road ". They have to be explicit in telling the property owner under what circumstances they are violating the development contract and be explicit about where trucks cannot be parked because of the severe penalty that n accompanies this violation. HOUSING & REDEVELOPMENT AUTHORITY MTG., AUG. 8, 1991 PAGE 3 Mr. Casserly stated that the rear of the property is for loading and unloading trailers. The concern has not been with the trailers parked in the rear overnight or for a certain time period during the regular course of business, but with the whole front of the property facing University and Osborne Road. He agreed that "facing University and Osborne Road" is not the best language. Mr. Mike Hurley suggested they refer to the "customer parking" facing University and Osborne Road. Mr. Casserly suggested the following amendment: "...any part of the Redevelopment Property used for customer parking fronting University and Osborne Road..." If the HRA is agreeable, he will incorporate that into the agreement. The HRA was in agreement with that amendment. Mr. Hurley stated they do not like the default procedures, but understand what the HRA is looking for. They are working at correcting the problem with the semi -truck trailers in the parking lot. If there are any complaints, he would ask that staff contact him right away and they will tow away any violators. MOTION by Mr. Meyer, seconded by Mr. Prairie, to approve Resolution HRA 5 -1991, "A Resolution Authorizing Execution and Delivery of a Contract for Private Redevelopment By and Between the Housing and Redevelopment Authority in and for the City of Fridley and Steven Hardy, Leanne Hardy, Kent Smith, Spring Smith,m Kent Gardner, and Jerrill Lynn Gardner ". UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON. SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 2. CONSIDERATION OF CONCEPTS OF SETTLEMENT AGREEMENT AND LEASE WITH DON FITCH REGARDING DAIRY QUEEN SITE: Ms. Dacy stated that since the agenda was delivered the previous Friday, some events have caused staff to recommend different actions for the HRA to take. Ms. Dacy stated that on the settlement agreement, Mr. Fitch received word that Scott Ericson did not receive final approval on the financing for the redevelopment of the northeast corner (Fridley Town Square project). Mr. Fitch had signed a lease with Mr. Ericson to relocate the Dairy Queen business to that location. However, Mr. Fitch has indicated that he does not want to conclude an agreement on the acquisition of the property at this time. Ms. Dacy stated the second item is the lease agreement. Mr. Fitch has identified 14 items in the lease that he wants to discuss further. At this time, staff is recommending the HRA not take any action on the lease. Staff would like more time to discuss the HOUSING & REDEVELOPMENT AUTHORITY MTG., AUG. 8, 1991 PAGE 4 issues with legal counsel and then finalize a recommendation to the HRA. Staff will bring back the lease to the September HRA meeting. Ms. Dacy stated that on July 25, 1991, the HRA took possession of the Dairy Queen property. Staff sent Mr. Fitch a letter dated July 24, 1991, indicating that until a written lease agreement is executed, he is responsible for all costs that are incurred as a direct or indirect result of the operation of the Dairy Queen. Mr. Don Fitch stated he was sorry if he had inconvenienced the HRA by not having the lease ready for approval. He and his wife are no less concerned than the HRA to come to a resolution. Mr. Fitch stated that on Tuesday, Mr. Ericson did inform him that his last chance to get construction financing was turned down. At this time, they are not sure of the status of the Fridley Town Square project, and he might not have a place to relocate. Therefore, his attorney advised him that without a place to relocate at this time, he should not settle on the land and the building. At this point, it has nothing to do with the terms or City staff. Mr. Fitch stated that regarding the lease, he agrees in principal to some of the price terms, but there are a few legalities in the lease about who will be responsible for what improvements that needs to be discussed. He is confident that they will be able to come to terms on the lease. Mr. Fitch stated that he definitely would like to relocate in the northeast corner of University /Mississippi. If Mr. Ericson continues to be unsuccessful in securing financing, Mr. Fitch stated he would like the HRA to consider the potential of he and some other individuals acquiring the property and redeveloping the area for a Dairy Queen and some other businesses. He will start putting together a proposal. Mr. Fitch thanked the HRA for their time and patience. Ms. Schnabel asked if the Fitches are paying a monthly lease fee. Ms. Dacy stated the Fitches are continuing on a day -to -day operation cost. They have not issued a rent check per se. When the lease is signed, it will be written such that the Fitches will have to pay the rent due since July 25, 1991. Ms. Schnabel stated that in the lease agreement, it referred to months of operation. She would like to see the months of operation more defined so the HRA knows how many months the HRA will be collecting lease fees. Ms. Dacy stated this can be included in the lease. � HOUSING & REDEVELOPMENT AUTHORITY MTG., AUG. 8, 1991 PAGE 5 Mr. Hoeft stated the way the lease is termed right now, the Dairy Queen will pay $500 per month, and if they are in operation during any portion of any month, they shall pay a per diem prorated amount of said $500. Mr. Fitch stated he did not have a problem with putting in the lease a minimum number of months of operation. He would suggest a minimum of eight out of twelve months of operation. He is generally open at least 9 -10 months depending upon the weather in the spring and the fall. Ms. Schnabel stated she is not suggesting this to cause the Dairy Queen a hardship, but she did think the HRA should be protecting themselves. 3. CONSIDER PROPOSAL BY UNIVERSITY AVENUE ASSOCIATES REGARDING RESTRUCTURING SECOND MORTGAGE FOR SPRINGBROOK APARTMENTS: Ms. Dacy stated that in 1986 and 1987, the HRA approved a development contract for the Springbrook Apartments, and part of that development contract authorized the HRA to issue a $850,000 second mortgage to the developer and owner of the site, University Avenue Associates. Under the mortgage agreement signed by the HRA and developer, the first payment on that mortgage is due on July 11, 1993 and totals approximately $110,000. A like amount is due each year until the year 2002 when the entire principal and interest is due and payable. Last year this month, the HRA agreed to a one year extension on the second mortgage to run concurrently with the first mortgage the developer had on the property. Ms. Dacy stated University Avenue Associates has now notified staff that they would like to refinance the first mortgage and utilize an FHA- Insured mortgage. The Department of Housing & Urban Development administers this type of loan and has a lot of stipulations about the amount of subordinated debt. Ms. Dacy stated two items are being requested for conceptual discussion and some type of direction from the HRA: 1. If University Avenue Associates refinances its first mortgage, a new second mortgage would have to be issued by the HRA. 2. Because of the type of HUD requirements, the second mortgage may be in a lesser amount, and the difference between the original and new amount secured. Ms. Dacy stated she wanted to make it clear that University Avenue Associates is not requesting a reduction in the amount of payment or a forgiveness. The $850,000 is still intact; it is just a matter of being restructured. HOUSING Se REDEVELOPMENT AUTHORITY MTG., AUG. 8, 1991 PAGE 6 Ms. Dacy stated that in the agenda is a letter dated August 1, 1991, from Jim Casserly who has reviewed the restructuring issue. Staff's charge to Mr. Casserly was that they wanted to protect the current security the HRA now has with the current second mortgage and how that will be affected with the new restructuring. Ms. Dacy stated Sherrill Oman, attorney for University Avenue Associates, and representatives for Springbrook Apartments are in the audience. Mr. Casserly stated Springbrook Apartments is asking the HRA to assist them so they can get some permanent financing on the project. As he understands it, they are still operating with their construction loan, and they need to have take -out financing. The program being looked at is a HUD- guaranteed mortgage which would give them a very competitive interest rate amortized over a 35 year period. Unfortunately, some of the requirements of that HUD mortgage affect the HRA. One of the requirements is that any secondary financing has to have some limitations to it. They do not wish to make a deposit, pay a processing fee which, in this instance, is approximately $40,000, unless they have some preliminary direction from the HRA. The goal for the HRA is to be no worse off than they are now. Staff believes they would like to assist Springbrook Apartments. It would make for a more stable project if they can place permanent financing. In fact, the HRA may be in a better position than it is now for a number of reasons. Some have to do with maintaining various kinds of repair and replacement funds and having the project's debt being amortized over a long term at a competitive rate. Mr. Casserly stated the HUD procedure is fairly convoluted. There have not been many of these financings done, and it will take some time and patience on the part of Springbrook Apartments. Mr. Casserly stated that in his August 1, 1991, memo, he has suggested that the HRA consider a new subordination under the following four circumstances: 1. That the project pro forma demonstrates an ability to pay the HRA note. 2. That an appraisal of the project shows that net sale proceeds would be adequate to pay the HUD guaranteed debt and the Note (not just the HRA debt secured b the second mortgage). 3. That at least 75% of the Note be secured by assets (this may include assets other than the Springbrook Apartments). HOUSING & REDEVELOPMENT AUTHORITY MTG.. AUG. S. 1991 PAGE 8 would be fully amortized over a 35 year period and would have a significant impact on the cash flow of the project. Ms. Oman stated HUD requires an initial deposit to a replacement reserve fund for the purpose of maintaining the project and replacing capital items as they wear out. This replacement fund deposit will likely be $450 -$750 per unit. In addition, HUD will require a monthly deposit to be made to the replacement reserve fund so that at all times sufficient funds will be necessary, as determined by HUD, to properly maintain the project. That will: (1) ensure an attractive and well maintained project in the City of Fridley; and (2) ensure the project is attractive to people who live there. That will keep the vacancy rates down and improve the cash flow. Mr. Oman stated the partners are contributing $700,000- 800,000 in additional equity to the project. That demonstrates a very significant commitment by the partners of the owner to this project to keeping it and repaying the debt. Ms. Oman stated she wanted to emphasize that they are asking for concept approval only, prior to making the actual application to HUD. Mr. Curt Glaser, Glaser Financial Group, discussed the financing details. Mr. Glaser stated they are mainly property mortgage arrangers and they specialize primarily in multi- family residential housing placement and structuring loans for that type of real estate. They have explored other financing opportunities for this project, but they were not feasible. He stated HUD is very impressed with this real estate and are welcoming an application. HUD's under - writing criteria is probably easier than conventional criteria, but their underwriting decisions and business decisions are going to be as conservative as conventional. HUD's process will probably involve 4 -5 months. Mr. Glaser stated HUD will carefully review the development, because HUD's obligations, in the event of a foreclosure, are to pay a claim to the lenders. The HRA can be assured that if HUD commits to finance that the project has received the closest scrutiny in terms of its performance and ability. Ms. Schnabel stated her only concern (and she believed it has been addressed) is that if the HUD application goes through, they require that the subordinated debt be paid only out of surplus cash. As long as that is going to directly affect the HRA, they should be assured their position is going to be solid. Mr. Casserly stated that right now in the current development contract, they look to the personal guarantees, and that is not HOUSING & REDEVELOPMENT AUTHORITY MTG., AUG. 8, 1991 PAGE 9 going to change. The owner has not suggested any other guarantee. That is really the basis for the HRA's security. The HRA would like the project demonstrating consistently more cash flow. They are only as secure as the guarantee is secure, and that guarantee is not secured by anything at all other than net worth of the guarantors. In his judgement, the HRA should be in better shape if this financing is accomplished. MOTION by Mr. Prairie, seconded by Mr. Meyer, to continue to work with University Avenue Associates regarding the restructuring of a second mortgage for Springbrook Apartments subject to the four criteria suggested by Mr. Casserly in his August 1, 1991, memo: 1. That the project pro forma demonstrates an ability to pay the HRA note. 2. That an appraisal of the project shows that net sale proceeds would be adequate to pay the HUD guaranteed debt and the Note (not just the HRA debt secured b the second mortgage). 3. That at least 75% of the Note be secured by assets (this may include assets other than the Springbrook Apartments). 4. That the cumulative financial net worth of the guarantors exceeds $10 million. (This amount is contained in Article 4 of the Mortgage Guaranty presently in effect), UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 4. CONSIDER APPROVAL OF MORTGAGE SATISFACTION AGREEMENT, JOHN AND KAREN EARLEY• MOTION by Mr. McFarland, seconded by Mr. Prairie, to approve the Mortgage Satisfaction Agreement for John and Karen Earley at 6041 - 3rd Street N.E. UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 5. CONSIDERATION OF HOUSING STUDY OUTLINE: Ms. Dacy stated the HRA last discussed this in April 1991. In January 1991, she and Mr. Burns interviewed a number of other staff members in first ring suburbs to see what they do to create successful housing redevelopment programs, etc. One suburb interviewed was the City of Brooklyn Center. The City of Brooklyn Center had a housing study done by Maxfield Research Group that was very useful to the City of Brooklyn Center. The following are reasons why staff recommended the HRA look at a housing study: HOUSING & REDEVELOPMENT AUTHORITY MTG. , AUG. 8, 1991 PAGE 10 (1) Staff thought they needed a study to help the City identify areas for successful housing development and redevelopment projects. (2) An HRA member stated that the City needs more than just a demographic study. So, she has changed the outline to create a neighborhood- focused approach. (3) The Association of Metropolitan Municipalities, of which Fridley is member, has adopted a policy recommending that "...cities carefully look at the impacts of these trends on their housing stock and become involved with all local and regional governments to successfully address the potential problems. It is important to recognize the market forces that will require cities to address the metropolitan nature of these issues." (4) Metropolitan Council is also requiring cities to make sure their comprehensive plan for housing is consistent with its plan. (5) To help the City initiate a process where the City adopts goals and policies in maintaining and improving the housing stock and livability of the community. (6) The housing study would be a good tool to provide data for developers and as a resource for the citizens of Fridley. Ms. Dacy stated that in April 1991, the HRA told staff they wanted the housing study more focused. There were a lot of questions about existing neighborhoods, homes, removal, etc. She has tried to answer these questions in the outline. Ms. Dacy stated this is a very extensive study. In order to minimize the costs, staff has worked with Maxfield Research Group to identify certain tasks the Community Development Department would be responsible for. Mr. Maxfield has verbally indicated that the maximum cost of the study will be $25,000. Ms. Dacy stated staff is recommending that the HRA approve the housing study outline and authorize the Executive Director to sign a contract with Maxfield Research Group. They could start work as soon as next week. Mr. Maxfield stated they are very pleased that the HRA has considered them to do the study. They can provide some very useful information and tools for the HRA and City for use in identifying some of the concerns and issues regarding each of the neighborhoods and looking for opportunities for development over the short term and long term. ''1 / I 1-11� 1-, HOUSING & REDEVELOPMENT AUTHORITY MTG., AUG. 8, 1991 PAGE it Mr. Maxfield stated this is not just a housing issue; it is also the issue of the people themselves and looking at parks, schools, transportation, shopping, social programs, etc. As the population changes, the needs of the community also change. Mr. Meyer stated that in a very simplistic way, he is concerned about first ring suburbs. First ring suburbs such as Fridley are probably up to their maximum in housing in terms of acreage. They have a large number of people who are either empty nesters or soon to be empty nesters. They have situations where it is less and less possible for young people to afford the houses that are going to be vacated by the empty nesters. At the same time, they have the phenomenon of those people who do have more money of opening up suburbs into the second ring, which could be leaving the first ring suburbs behind and vacated, much as has been done with the inner cities. To him, this is a major concern, and how is Mr. Maxfield going to address that concern? Mr. Maxfield stated that is a very important part of the study. He shares the same concerns about .what is happening to first ring suburbs. Looking at housing and communities from marketing standpoints, there are going to be fewer entry level buyers. There are going to be more entry level homes on the market than there are buyers. One of the opportunities in the study is to identify the strengths Fridley has to offer in the marketplace. On the other hand, because there is still growth in the Twin Cities, that growth is going to create more demand for various types of housing. So, they have to look at it from two standpoints: (1) How can they position the City to be competitive to try and attract people? (2) Given the housing product, there might be another market that can attract the group that is shrinking. Mr. Meyer stated what Mr. Maxfield is saying sounds good. He hoped that the Maxfield Research Group will be as realistic as possible and not dwell on "pie in the sky" hopeful scenarios that have no major basis in reality. Mr. Maxfield stated they pride their reports on honesty and practicality. Ms. Schnabel stated this study is a real starting point on a whole series of decisions the HRA and City Council will have to address in the future. MOTION by Mr. McFarland, seconded by Mr. Meyer, to authorize the Executive Director to enter into a contract with Maxfield Research Group to conduct a housing study at a suggested contract cost of $25,000. Mr. Meyer stated this is a tremendously ambitious survey of the Fridley community for even $25,000. He expressed some concern at the April meeting that he hoped they are spending enough money to HOUSING A REDEVELOPMENT AUTHORITY MTG., AUG. 8, 1991 PAGE 12 give themselves a meaningful tool and not just a "boilerplate" report. Ms. Schnabel stated the HRA has discussed in the past that the City's housing stock needs to be addressed. If they are truly in the business of being a "Housing and Redevelopment" Authority, this housing study is a step in the right direction. UPON A VOICE VOTE, ALL VOTING AYE, VICE- CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 6. CLAIMS AND EXPENSES: Mr. Hansen stated the invoice for Noble Nursery for irrigation system repair at East Moore Lake Drive is a City expense, not the HRA's. MOTION by Mr. Prairie, seconded by Mr. Meyer, to approve the check registers dated July 19 and August 2, 1991. UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 7. CONSIDERATION OF INFORMATION ON TIF TURNBACK TO SCHOOLS: Mr. Burns stated he will be talking about the 1992 TIF return to the four school districts, the estimated 1991 amounts compared to estimated 1992 amounts, and the percentage increase /decrease that would be available to the districts. Mr. Burns stated that in order to evaluate whether they want to use their discretion as allowed by state law to turn TIF money back to the school districts, he asked the question: How much of an impact is this money going to put on the City's plans for future development? He looked at different major project areas: Southwest Quadrant, Lake Pointe, Mochinski project, University Avenue Gateway. He is assuming that the HRA will need to subsidize these projects. Mr. Burns stated that in order to address future project costs and their impact, he developed three different scenarios: Best Case, Worst Case, and Most Likely case. In all three instances, using the numbers provided by the Finance Department, it seemed clear to him that the TIF turnback to the schools is not going to stop the HRA from doing these projects. He is also assuming that the only projects that they are going to subsidize are the four major projects. He is assuming that other projects, Cub Foods project, Bob's Produce project, etc., will continue to be pay -as- you -go type projects. Mr. Burns stated he has talked to Superintendent Dennis Rens and the Director of Finance, David Shapley. It is his understanding f 11� HOUSING & REDEVELOPMENT AUTHORITY MTG.. AUG. S. 1991 PAGE 13 that School District #14 will be operating at a projected annual operating deficit over the next three school calendar years. Additionally, this year's legislative session mandated that there will be no school district referendum levies in 1991. They had planned to address the deficit by going to the voters. In the event a levy is put on a ballot in 1992, it will not be until the 1993 -1994 school year that the school will realize revenue from the new levies. Based on that kind of need, perhaps the HRA's need for the TIF turnback is not as great as the schools. Mr. Burns stated he is recommending that the HRA once again return to the school districts 1000 of the revenues generated by referendum levies approved between 1979 and 1988. Mr. Burns stated no action is needed by the HRA at this meeting. This will be brought back to the HRA for action at the September meeting. Mr. David Shapley, Director of Finance for School District #14, stated he is representing Superintendent Rens. He would like to convey to the HRA their thanks for the HRA's full support of School District #14 over the years. It is a real leadership role in a City where four school districts exist, and it is good to see this kind of community blend. Ms. Schnabel stated she would like Chairperson Commers' input before making any final decisions on the TIF turnback. 8. CONSIDERATION OF CITY COUNCIL RESOLUTION REGARDING DECERTIFYING TIF DISTRICTS: Mr. Burns stated that on July 22, 1991, the City Council passed a resolution encouraging the HRA to decertify TIF districts as long as the revenue from the districts is no longer needed to fund our various financial obligations. This resolution was suggested after a discussion regarding the Cub Foods /Bob's Produce Tax Increment District No. 11 (July 1, 1991.) The Council wanted him to make it clear to the HRA that this is not a hostile resolution, and they meant no ill will toward the HRA by passing this resolution. Ms. Schnabel asked if they have an analysis of those districts that fall into this category, or if the Council had any specific districts in mind. Mr. Burns stated they talked about the Skywood district and the Johnson Printing district. Ms.Schnabel asked if the Council is recommending that the HRA retire some of these districts earlier than the anticipated date. Mr. Burns stated he believed the Council is saying that if the HRA feels they do not need the revenue to cover redevelopment costs, HOUSING & REDEVELOPMENT AUTHORITY MTG., AUG. 8, 1991 PAGE 14 then they are recommending the HRA retire the districts early. That might be difficult to do as the HRA moves its focus on commercial /industrial redevelopment to housing redevelopment. Ms. Schnabel stated the resolution is probably a point well taken, but if the HRA is now embarking on a housing study that may introduce some real needs, the HRA needs to be cautious about what they are doing. Mr. Casserly stated he wanted to make it very clear that the HRA really does not have surplus increment. They have a nice balance right now because some of the projects they are looking at trying to accomplish have not come to fruition, but the law is very clear that in any year in which the tax increment exceeds the amount necessary to pay the costs authorized by the plans, they can only do one of four things: (1) They can prepay any outstanding bonds; (2) discharge the pledge of the tax increment and decertify the district; (3) pay into an escrow account the amount dedicated to pay a bond; (4) return the excess amount to the County Auditor who will then distribute it to the other taxing jurisdictions in proportion to their levies. The caution here is that if they do not have any plan for utilizing what they have available, then they have no option. They return it to the County Auditor and decertify. That is very important legally, as well as financially. Ms. Schnabel stated that maybe the HRA should respond to the Council using the presentation just made by Mr. Casserly. Mr. Meyer agreed with Ms. Schnabel. Mr. Casserly stated it does seem like a simple proposition that if you are creating a new district, it would be nice to get rid of an old one. The problem is that anything they are looking at creating now is very narrowly defined. The kind of districts they are looking at today in no way compare to some of the districts established previously. Mr. Meyer agreed with Ms. Schnabel's suggestion. The HRA should write a letter to the Council thanking them for their observation, that the HRA will make every effort to do as the Council suggests; but that there are some obstacles in the way that might make that difficult at this time. Mr. Burns stated another obstacle might be that decertifying the district would be in contradiction with some of the provisions of the HRA bond issues. Mr. Jim O'Meara, HRA bond counsel, has responded to this as well. Ms. Schnabel stated she certainly did not want to imply that they have any philosophical difference with the Council, because she did not think they do. She just wanted to be sure that the Council is reassured that the HRA is with the Council all the way, but they '-' HOUSING & REDEVELOPMENT AUTHORITY MTG., AUG. S. 1991 PAGE 15 do have some limitations set by state law, they do have some obligation, and they are trying to be conservative in defining these districts very narrowly. Mr. Burns stated he also thought a letter to the Council is appropriate. He understood the intent of the HRA. He would be happy to write a letter on the HRA's behalf to the Council and will include a copy of that letter in the next meeting agenda. 9. UPDATE ON INFORMATIONAL MEETING FOR MISSISSIPPI STREET PROJECT: Ms. Dacy stated the City received word as of last week that the Mississippi Street widening project will not occur this fall, but will be put out for bid next spring. Staff will be notifying the people who attended the information meeting on July S, 1991, and will notify the people again in the spring before construction begins. 10. UPDATE ON RICE PLAZA: Ms. Dacy stated a copy of the Rice Plaza 1991 rent through July is included in the agenda. The HRA should be aware that Metz Bakery will be vacating its tenant space. 111� 11. OTHER BUSINESS: a. Fridley Plaza Office Building Mr. Burns stated that at the last meeting, the HRA had a letter from Tony Krecji, Dr. Michael Park's real estate representative, asking that the HRA forgive about three - fourths of the second mortgage which is almost $40,000 and accept a settlement for $10,000. Mr. Burns stated he has discussed this with City Attorney Virgil Herrick, who has also discussed this with the prospective owners of the building. As a result of those negotiations and conversations, the $10,000 is now up to $17,500. Mr. Herrick recommends the HRA accept the $17,500. Mr. Burns stated that of the remaining life of the second mortgage (1/2/99), the HRA would receive $64,199.99. If they accept the $17,500 and realize an 8% return on that amount, they would accumulate $28,592.95 in January 1999, for a loss of $35,607.04. Mr. Burns stated he is very disappointed in this situation, as is the City council. However, the HRA seems to be stuck and there does not appear to be a practical alternative. HOUSING & REDEVELOPMENT AUTHORITY MTG., AUG. 8, 1991 PAGE 16 Mr. Mike Hurley stated he is representing Columbia Park Properties. With him is Dr. Spencer Johnson, Manager of Columbia Park Properties. Mr. Hurley stated the partnership is not the owner of the property. He stated that Dr. Michael Park is no longer the managing partner; Dr. Johnson is. Dr. Park negotiated the purchase of the mortgagee's interest for the property. He did not buy it outright. Since that time, the partnership has expended a substantial amount of money for tenant improvements and improvements to the building. They do not have the deed from the fee owner, and they are having a problem with getting any deeds. They are proposing to give some kind of compensation to get that deed. It appears they might have to foreclose on the property. If they do that, then the slate is wiped clean; and the HRA, as the second mortgage holder will have the ability to take out the first mortgage which is not too feasible because of the old partnerships. Mr. Hurley stated the partnership does not want to foreclose. They want to be good neighbors and are proposing this way to solve the situation. Mr. Spencer Johnson stated Columbia Park Medical Group is a corporation and a subset of that corporation is the partnership that owns the building. They need the building for administrative offices, and that was the impetus for buying the building. He stated he is now the Executive Manager of the Partnership. He is a family doctor who has been with the medical group since 1977, actively involved in the corporate board for 7 -8 years. This is a mess and they are hoping they can get out of it without going to foreclosure. Ms. Schnabel stated she would like to have more information from the HRA 's legal counsel before they make any decision. What is the HRA's legal position, what precedent would they be setting, and can the Partnership foreclose when they don't have a deed to the property? Mr. Jim Hoeft stated the legal position is simple and clear cut. The Partnership has the option to foreclose on the property if they cannot get a deed from the present owner. If a foreclosure does occur, the position of the HRA as the second mortgage holder would be eliminated, if not exercise right of redemption and "purchase" building. Mr. Hoeft stated that as far as setting a precedent, they have to look back to the origin of why they are in this position and the history of this property. The property is somewhat unique in the troubles it has had. At the 1 1 . HOUSING & REDEVELOPMENT AUTHORITY MTG., AUG. 8, 1991 PAGE 17 1 time the present owner bought the property, the only feasible way to finance that purchase was for the HRA to subordinate its mortgage. The HRA made the decision that they wanted the project to proceed and be successful. Unfortunately, that owner of the property, for whatever reason, did not succeed. Now the Partnership has come in with this proposal, and the HRA has to deal with it. It is either negotiate a settlement with them to assist them or to have them take whatever means they have to take the property. Dr. Johnson stated he is not sure they can wait until the next meeting for a decision by the HRA. Mr. Meyer stated he would opt to settle and get out of it. Mr. McFarland stated that $17,500 is better than nothing if the Partnership forecloses on the property. Ms. Schnabel stated it does appear the HRA has little choice. The HRA certainly wishes to maintain a good relationship with its neighbors, but she wished there was some room for negotiation and that they could make this decision without leaving a bad taste in their mouth. MOTION by Mr. Meyer, seconded by Mr. Prairie, to direct staff to bring back legislation that authorizes a negotiation settlement of $17,500 that will dissolve any differences with the prospective owners of the Fridley Plaza Office building on the payment of the second mortgage. UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. ADJOURNMENT: MOTION by Mr. Meyer, seconded by Mr. Prairie, to adjourn the meeting. Upon a voice vote, all voting aye, Vice - Chairperson Schnabel declared the motion carried and the August 8, 1991, Housing and Redevelopment Authority meeting adjourned at 10:35 p.m. Respectfully submitted, Lynne Saba Recording Secretary a° 0 Community Development Department HOUSING AND REDEVELOPMENT AUTHORITY City of Fridley TO: Housing and Redevelopment Authority Members FROM: William W. Burns, Executive Director of HRA A,' DATE: September 6, 1991 SUBJECT: Satisfaction of Mortgage for Fridley Plaza Office Building At our meeting. on Thursday, September 12, 1991, you are being asked to consider a motion that would approve the satisfaction of the second mortgage for the Fridley Plaza Office building. As part of the motion, you are also being asked to authorize the release of the mortgage satisfaction upon receipt of a check in the amount of $17,500 from the Columbia Park Medical Group. As I indicated to you at the last HRA meeting, this is not.a particularly good deal for the HRA. If we were to receive principal and interest payments on the remaining amounts that are due on the second mortgage, we would receive a total of $64,199.99 through the year 1999. The payment of $17,500, compounded at 8 percent annual interest, will yield only $28,592.95. The apparent loss from this transaction is $35,607.04 (see attached tables). Unfortunately, if we do not agree to the satisfaction of mortgage, the Columbia Park Medical Group will foreclose on the first mortgage they hold. At the time of foreclosure, we would then have the opportunity to reclaim our second mortgage by taking out the first mortgage. Since this is rather impractical, it would appear that our only choice is to agree to accept the payment of $17,500. It is my understanding that with the satisfaction of the second mortgage by the HRA, the Columbia Park Medical Group will pay performance investments of approximately $20,000 and will receive a deed for the property. Their willingness to pay additional money to the current owners of the building is apparently based upon their desire to gain earlier occupancy of the building than they would through the mortgage foreclosure process. Our attorneys have reviewed this situation in detail and advise us that we should swallow hard, hold our noses, and agree to satisfy the mortgage. Staff recommends that we concur with their advice. WWB:rsc Attachments A A- . 9. 5.1991 15:26 P. 2 1 -A BATISFACTION OF MORTGADE Date: , 1991 TEAT cERTAYN MORTGAGE owned by the undersigned, s governmental body corporate and politic under the laws of the State of Minnesota, dated November 41 1982, executed by Fridley Plaza Office Building Partnership, as Mortgagor, to the City of Fridley Housing and Redevelopment Authority, as Mortgagee, and filed for record November 9, 1982, as Document Number 601409 in the Office of the County Recorder of Anoka County, Minnesota, is, with the indebtedness thereby secured, fully paid and satisfied. CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTIiORITY BY: Lawrence R. Commers Its Chairperson BY: William W. Burns Its Executive Director STATE OF MINNESOTA ) )88. COUNTY OF ANOKA _) The foregoing instrument was acknowledged before me this day of , 1991, by Lawrence R. Commers and William W. Burns, the Chairperson and Executive Director of the City of Fridley Housing and Redevelopment Authority, a governmental body corporate and politic under the laws of the State of Minnesota, on behalf of the City of Fridley Housing and F.tu�-.•�.'.- �z^a::* Authority. THIS INSTRUMENT WAS DRAFTED BY: BARNA, GUZY & STEFFEN, LTD. 400 NORTHTOWN FINANCIAL PLAZA 200 COON RAPIDS BOULEVARD COON RAPIDS, MN 55433 (612) 780 -8500 - w 1 -B PAY. MENT INTEREST BALANCE ;> 10/1/91 17,500.00 1/2/92 - 306.25 17,806.25 1/2/93 - 1,246.44 19,052.69 1/2/94 - 1,333.69 20,386.38 1/2/95 - 1,427.05 21,813.42 1/2196 - 1,526.94 23,340.36 1/2/97 - 1,633.83 24,974.19 1/2/98 - 1,748.19 26,722.38 1/2/99 - 1 1,870.57 28,592.95 TOTAL MORTGAGE PAYMENT EXPECTED (P & 1) 64,199.99 FUTURE VALUE OF $17,500 PAYMENT 28,592.95 LOSS 35,607.04 1 -B 'AL $39,999-99 INTEREST NOS. PAYMENT RATE PAYMENTS DUE lix 10 JANUARY 2 PAYMENT TOTAL REMAINING NUMBER DATE PRINCIPAL INTEREST PAYMENT BALANCE ------------------------------------------------------------------------- $39, 999.99 1 1990 $4,000.00 $4,400.00 $8,400.00 $35,999.99 2 1991 $4,000.00 $3,960.00 $7,960.00 $31,999.99 3 1992 $4,000.00 $3,520.00 $7,520.00 $27,999.99 4 1993 $4,000.00 $3,080.00 $7,080.00 $23,999.99 5 1994 $4,000.00 $2,640.00 $6,640.00 $19,999.99 6 1995 $4,000.00 $2,200.00 $6,200..00 $15,999.99 7 1996 $4,000.00 $1,760.00 $5,760.00 $11,999.99 8 1997 $4,000.00 $1,320.00 $5,320.00 $7,999.99 9 1998 $4,000.00 $880.00 $4,880.00 $3,999.99 10 1999 $3,999.99 --------------------------------------- $440.00 $4,439.99 ($0.00) $39, 999.99 $24,200.00 $64,199.99 The mortgage was modified in January, 1989 as a result of the sale of the property. We had received a $4,000 principal payment in 1987 and we received $3,480 of interest in March of 1989. The above schedule reflects the modification. 1 -C (1*1� ...................... .. ...... . . ... ............. ............. .7 ATE . ... ENT.I...'..,", NT R.- ...... . B 10/1/91 17,500.00 17,500.00 1/2/92 - 306.25 17,806.25 1/2/93 - 1,246.44 19,052.69 1/2/94 - 1,333.69 20,386.38 1/2/95 - 1,427.05 21,813.42 1/2/96 - 1,526.94 23,340.36 1/2/97 - 1,633.83 24,974.19 1/2/98 - 1,748.19 26,722.38 1/2/99 1,870.57 28,592.95 TOTAL MORTGAGE PAYMENT EXPECTED (P & 1) 64,199.99 FUTURE VALUE OF $17,500 PAYMENT 28,592.95 LOSS 35,6 .::: - - --- --- ......... . . ..... ........................ - - ,- ... � .I...., .. .................... ...................... .... ................... ........ ... ............... .. * * ..... .. ........ .. .................. ......................................... ................... .... . ..................... ....... ......... .. .... .... ... ..... ............... .............. . .. ... 10/1/91 17,500.00 17,500.00 1/2/92 - 350.00 17,850.00 1/2/93 - 1,428.00 19,278.00 1/2/94 - 1,542.24 20,820.24 1/2/95 - 1,665.62 22,485.86 1/2/96 - 1,798.87 24,284.73 1/2/97 - 1,942.78 26,227.51 1/2/98 - 2,098.20 28,325.71 1/2/99 - 1 2,266.06 30,591.76 TOTAL MORTGAGE PAYMENT EXPECTED (P & 1) 64,199.99 FUTURE VALUE OF $17,500 PAYMENT 30,591.76 LOSS 33,608.23 ll"� -®r- D a l r-,, J� Ott 10 vs� 14 Community Development Department D HOUSING AND REDEVELOPMENT AUTHORITY City of Fridley DATE: September 6, 1991 TO: William Burns, Executive Director of HRA FROM: Barbara Dacy, Community Development Director SUBJECT: Dairy Queen Lease At the August 8, 1991, meeting, the HRA did not take any action on the proposed settlement agreement with Dairy Queen or the proposed lease at the request of the owner, Don Fitch. At this time, Fitch prefers that there be no action on the settlement agreement. The Attorney's office is continuing to schedule the dates for the commissioner hearings regarding the acquisition price for the property. Proposed for approval, however, is the lease agreement as attached. Amendments have been made in order to respond to some of Fitch's comments. There were several items which Fitch requested to be changed that we have not amended. Specifically, Fitch had requested changes in paragraph it to eliminate his liability for damage or for injury to other persons or to the property if. the HRA fails to make repairs. The language was not changed in this paragraph, because the intent of the paragraph is to provide the HRA the ability to make the necessary repairs if Fitch does not do so in a reasonable timeframe. Also, in paragraph 14, Fitch indicated he would be willing to pay the deductible but not the entire cost of repairs. The City will carry an insurance policy similar to the one that it carries for the Rice Plaza building. The policy contains a $5,000 deductible. Therefore, Fitch would be responsible for all costs for repairs. In paragraph 16, Fitch wanted to add language to state that the only basis for terminating the lease is a redevelopment project. He wanted this language in order to protect himself against potential "bad feelings" from the condemnation process or any other issues that may arise. We have not changed the language in this paragraph, because the HRA must condemn a property for a legally authorized purpose. "Bad feelings" would not constitute such a purpose. In all probability, a redevelopment project would be the reason that we would terminate the lease; however, we cannot predict the future and, as a property owner, the HRA should have all options available. Dairy Queen Lease September 6, 1991 Page 2 In paragraph 18, the language has been changed to clarify that Fitch waives benefits to relocation payments as a lessee. As part of the acquisition of the property, we will be paying Fitch relocation payments as required by law. The intent of paragraph 18 is to verify that there will be no compensation to Fitch as a lessee for termination of the lease. In paragraph 20, Fitch had requested that the HRA include language to prevent it from re- leasing the building to another Dairy Queen franchise. This language has not been included as it is staff's recommendation that all options need to be available for the HRA for this property. If Fitch relocates to the northeast corner of the intersection, it would be unlikely that the HRA would be able to re -lease the building to another Dairy Queen or other ice cream operation. Also, Fitch indicated that he is not willing to pay any attorneys' fees or costs incurred by the HRA if Fitch is in default of the property. Again, this language has not been amended. If Fitch is in default of the payments, we will work with him to have these payments satisfied without court action as long as possible; however, if it is necessary to go to court, the HRA should be reimbursed for its expenses. Finally, Fitch requested that at such time when the HRA demolishes the building, he would like to take the red roof. In paragraph 10, we have enabled Fitch to remove the existing pylon sign, deck, fencing, small detached storage shed, interior cupboards, and the ice cream equipment when he vacates the building. Because the roof is an integral part of the property, we did not include that in paragraph 10. If he would like to purchase the roof materials, he would be able to negotiate that with us. Recommendation Staff recommends the HRA approve execution of the lease as attached. Because of my vacation and work schedule, I have been unable to meet with Fitch at the writing of this report. Fitch received a copy of the lease on August 30, 1991. I am sure he will attend the meeting and address the items identified above and request your consideration of those. BD:ls M -91 -664 2 -A 612 780 1777 FROM SARNA GUZY LAW MPLS. 8.30.1991 13:28 P. 2 2 -B AGREEMENT TO LEASE THIS AGREEMENT, made this 25th day of July, 1991, by and between the Fridley Housing & Rodevelopment Authority (hereinafter designated as "Lessor ") and (hereinafter designated as "Lessee "). WITNESSETH: That the Lessor, for and in consideration of the terms, covenants, rents and conditions herein mentioned, to be paid and performed by Lessee, does hereby demise and let unto said Lessee, and the said Lessee does hereby hire and take from the Lessor, the following described premises situated in the City of Fridley, County of Anoka, state of Minnesota, to -wit: They East 75.1 feet of the North 158 feet, subject to Mississippi Street easement, of Lot No. 3, Block 1, Sylvan Hills plat S, Anoka County, Minnesota, including the northerly 30 feet of the westerly 75.1 Peet of that portion of vacated E4 -1/2 Avenue lying immediately south of said property. TO HAVE AND To HOLD, the same just as they are, without liability on the part of the Lessor to make alterations, improvements or repairs of any kind in and about the demised premises, except as and if otherwise set forth herein, from the 25th day of July, 1991 through and until the 30th day of November, 1992 for the following purposes, and for no other purposes, to -wit: 1. Operation of the existing Dairy Queen business and seasonal sales of Christmas trees. n 2. Lessee agrees to pay Lessor as and for rent for the above mentioned premises, in monthly installments of $500.00 612 X80 1777 FROM BRRNA GUZY Lab! MFL4. 8.30.1991 13:19 F. 3 2 -C Dollars each during operating months, in advance on the first day of each and every month during the full term of this Lease at the office of the Lessor, or at such other place as Lessor may in writing designate. For those months that Lessee is not in operation, Lessee shall pay no rent other than as set forth hereinbelow. If Lessee is in operation during any portion of any month, Lessee shall pay a per diem prorated amount of said $500.00 in addition to the entire costs to Lessee as set forth below. Lessee represents that it will be in operation a minimum of eight (8) months per calendar year. In addition to the rent specified in the preceding Paragraph (the "base annual rental "), Lessee agrees to provide for and pay the cost of maintaining the parking areas, grounds and sidewalks serving the leased premises. Such costs shall include lighting, snow removal, line painting and replacement of paving, curbs and sidewalks, if necessary. Such costs shall not include repaving of the entire parking area. The cost of operation and maintenance shall include property taxes. Further, the Lessee shall promptly pay the costs of all utilities, including, but not limited to electricity, telephone, sewer, water, refuse removal and natural gas. 3. Lessee agrees that it will not sublet the demised premises or any part thereof and will not assign this Lease or any interest therein. 4. Lessee shall provide or pay for all repairs and maintenance of the premises that is not covered by existing insurance or is an unreimbursed expense under said coverage. Said repairs and maintenance shall include, but not be limited 11—� � 1 • 612 780 1777 FROM BARNA GUZY LAW MPLS. 9.36.1991 13:29 to, glass breakage, furnace, air - conditioning, plumbing, electrical systems and structural repair&. P. 4 2-D 5. Lessee agrees to indemnify and hold the Lessor harmless for any liability arising out of the Lessees use of the premises. For this purpose the Lessee shall at his sole expense procure and maintain comprehensive public liability insurance for the demised premises during the term hereof in the minimum amount of Three Hundred Thousand -Five Hundred Thousand Dollars ($300,000.00 - $500,000.00) bodily injury and one Hundred Thousand Dollars ($ioo,000.00) property damage. Lessee shall provide Lessor with evidence of such insurance prior to occupancy. Lessee shall at his sole expense procure and maintain insurance for his fixtures and equipment within the demised premises. 6. Lessee to obtain workers compensation insurance. Lessee shall maintain and keep in force all employees compensation insurance required under the laws of the state of Minnesota and such other insurance as may be necessary to protect Lessor against any other liability to person or property arising hereunder by operations of law, whether such law is now in force or is adopted subsequent to the execution hereof. 7. Lessee to furnish certificate of insurance. Lessee shall furnish to Lessor a certificate of insurance showing that his liability insurance policies are in full force and effect and naming Lessor as an insured thereon. The policy shall further provide that Lessor shall be given a minimum of ten (10) days notice by the insurance company prior to cancellation, termination or change of such insurance. Such policies or duly • 612 780 1777 FROM SARHG GUZY LAW MPLS. 8.30.1991 13:30 P. 2 -E executed certificates of insurance shall be delivered to Lessor prior to the commencement of Lessee's occupancy hereunder and renewals thereof shall be delivered to Lessor at least thirty (30) days prior to expiration of the respective policy terms. 8. The Lessee consents to allow the Lessor to make any necessary alterations to the said property in the � manner necessary for the Lessee to operate and conduct�p' his drive - through business. 9. Lessee covenants and agrees that he will make no structural change or major alteration without the Lessor's consent, which consent shall not be unreasonably withheld, provided that the proposed improvements are consistent with the use of the property, do not significantly reduce the value of they property and do not violate any local, State or Federal laws, and without first furnishing the Lessor with five (5) days advance written notice outlining the proposed changes or alterations. Upon the City consenting to the alterations, then the City will issue all necessary permits without unreasonable delay. The Lessee further covenants that it will promptly pay for any alterations, repairs or maintenance made to the demised property so that no mechanic's liens will be filed against the property. In the event a mechanic's lien is filed, the Lessee shall have twenty (20) days to pay or in the alternative to post 1 -1/2 times the lien amount with the district court in order to contest it. Failure to do either of the above mentioned lien corrections shall be deemed as a default under this Lease. In any event, the ' 612 780 1777 FROM SARNA GUZY LAW MPLS. 5.30.1991 13 :30 P. 6 2 -F Lessee shall indemnify and hold harmless the Lessor for any and all costs or removing said lien. 10. The Lessee Agrees that upon termination of this Lease, all improvements to the property, together with all fixtures, shall become the property of the Lessor, with the exception that Lessee shall be able to remove the existing pylon sign, deck, fencing, small detached storage shed located at the south end of the property, interior cupboards located in the rear of the building and interior equipment used for the operation of the Dairy Queen. 11. Lessor shall at all times have the right to enter upon said premises to inspect its condition and at its election to �.� make reasonable and necessary repairs thereon for the protection and preservation thereof but nothing herein shall be construed to require the Lessor to make such repairs except as may be herein provided for and the Lessor shall not be liable to the Lessee for the failure to delay in making such repairs or for damage or injury to persons or property caused in or by the making of such repairs or the doing of such work. 12. Lessee agrees to pay for all special requirements for utilities such as gas, steam, water and electricity and for all other alterations, modifications or other services to the demised premises. charges for any such utilities or services shall be paid by Lessee and, in the event such'charges are not paid when due, the same shall constitute a default hereunder on the part of �"� they Lessoe. • 612 780 1777 FROM RARNA GUZV LAW MPLS. 8.30.1931 13 :31 P. 7 2 -G 13. The premises shall not be used for lodging or sleeping or for any immoral or illegal purposes_ 14. The parties hereto mutually agree that if the demised premises are partially or totally destroyed by fire or other hazards, then Lessor may, but is not obligated Co, repair and restore the demised premises as soon as is reasonably practicable to substantially the same condition in which the demised premises were before such damage. The Lessee may repair the damage as allowed under Paragraph 8 at his own expense. in the event the demised premises are completely destroyed or so badly damaged as not to be useable by the Lessee for the purposes herein provided, then this Lease .shall be terminable by either party hereto by serving written notice upon the other; and provided, further, � that in any event if repairs have not been commenced within thirty (30) days from the date of said damage and thereafter completed within a reasonable time, in no case to exceed three (3) months, this Lease may be immediately terminated by the Lessee by serving written notice upon the Lessor. 15. The Lessee acknowledges that he is aware that Anoka county intends to widen Mississippi Street along the north boundary of the property and that in the course of doing so the County intends to acquire a portion of the property. The Lessee acknowledges that he is waiving any and all claims to any compensation or monies that the Lessol' may receive from the County as a result of this taking. Further, the Lessees agrees to waive any claim that this acquisition by the County constitutes a breach of this Lease. 612 780 1777 FROM BARNA GUZY LAW MPL5. 6.30.1991 13:31 P. 6 2 -H 16. THIS PARAGRAPH DESCRIBES THE CONDITIONS UNDER WHICH THE LESSOR MAY TERMINATE THIS LEASE EARLY, YOUR SHOULD READ THIS PARAGRAPH CAREFULLY. In addition to the provisions contained elsewhere in this Lease, the Lessor may terminate this Lease prior to expiration date and without cause upon the Fridley Housing & Redevelopment Authority making the determination that it needs to terminate this leasehold interest as a result of development intended for this site or elsewhere in the southwest quadrant of Mississippi and University. This termination can only be effective upon the giving of ninety (90) days written notice by the Lessor to the Lessee. Lessee may terminate this Lease prior to expiration data and without cause upon the giving of thirty (30) days written notice by Lessee to the Lessor. 17. In the event that the Lessee shall continue to occupy the demised premises after the expiration of the term of said Lease, such "holding over" shall be on a month to month basis. Either party may terminate said "holding over" by giving the proper notice, as required by Minnesota law, to terminate a month to month tenancy. 18. The Lessee hereby agrees to waive any right or benefits he may have as a Lessee under this specific Lease pursuant to the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (40 U.S.C. 4601) and will provide Lessor with a signed waiver upon request. it is understood that the parties have entered into this Lease as an accommodation to each other. Upon the proper �^ termination of this Lease, the Lessee will not be entitled to any 612 780 1777 FROM FRRNA GUZY LAW MPLS. 8.30.1491 13:32 P. 9 2-1 compensation or damages for the termination of the Lessee's leasehold interest. 19. No sign shall be painted or affixed by the Lessee on any part of the outside of the demised premises without prior written consent of the Lessor. In the event of a violation of this clause by the Lessee, Lessor may remove said sign without any liability and may charge the expense incurred by such removal to the Lessee. The Lessee is permitted to substitute a sign on the building which would be affixed in substantially the same location as any existing sign and shall be constructed of letters which are substantially similar to and which letters do not collectively or significantly exceed the size of any current sign. The Lessee is also permitted to maintain the free- standing pylon sign on the property in conformance with the City of Fridley's Sign Code. The Lessee is responsible for all costs and charges pertaining to its maintenance. 20. If the Lessee shall make default in any covenant or agreement to be performed by him and if after written notice from Lessor to Lessee such default shall continue for a period of five (5) days or if the leasehold interest of the Lessee shall be taken on execution or other process of law or if the Lessee shall petition to be or be declared bankrupt or insolvent according to law, then, and in any of said cases, the Lessor may immediately or at any time thereafter without further notice or demand, enter into and upon said premises or any part thereof and take absolute possession of the same fully and absolutely without such re -entry working a forfeiture of the rents to be paid and the covenants to 612 780 1777 FROM EARHA GUZV LAW MFLS. £x.30. 1991 1332 F.-le 24 be performed by the Lessee for the full term of this Lease, and at Lessor's election, Lessor may either lease or sublet such premises or any part thereof on such terms and conditions and for such rents and for such time as the Lessor may reasonably elect and after crediting the rent actually collected by the Lessor from such re- letting collect from the Lessee any balance remaining due on the rent reserved under this Lease, or Lessor may declare this Lease forfeited and may take full and absolute possession of said premises free from any subsequent rights of the Losses_ That in the event of default by the Lessee, the Lessee shall compensate the Lessor for all reasonable attorneys fees, expenses and costs incurred by the Lessor in either reaquiring possession of the property or for bringing an action for the recovery of unpaid rent. 21. Wherever in this Lease it shall be required or permitted that notice or demand be given or served by either party to this Lease to or on the other, such notice or demand shall be given or served and shall not be deemed to have been given or served unless in writing and forwarded by mail addressed as follows: To The Lessor: Barbara Dacy Community Development Director Fridley Housing & Redevelopment Authority 6431 University Ave. N.E. Fridley, MN 55432 To The Lessee.: 611 e80 leer FROM BARNA GUZY LAID MPL1. Such addresses party by service of The Lessor and are to be construed -IN WITNESS WHE: respective names to above written. In the Presence of: in the presence Of: 8.30.1551 13:33 P.11 2 -K may be changed from time to time by either notice as above provided. Lessee agree that all the provisions hereof as covenants and agreements. REOF, the Lessor and Lessee have caused their be subscribed to this Lease on the date first LESSOR: FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY BY: LESSEE: BY: STATE OF MINNESOTA ) )SS. COUNTY OF ANOKA } The foregoing instrument was acknowledged before me this 25th day of July, 1991. THIS INSTRUMENT WAS DRAFTED BY: BARNA, GUZY & STEFFEN, LTD. 400 Northtown Financial Center 200 coon Rapids Boulevard Coon rapids, MN 55433 (612) 780 -0500 CHANGES TO DAIRY QUEEN LEASE Paragraph 2: Fitch wanted a clarification that the replacement of curbs and sidewalks does not include the curbs and sidewalks that would be replaced as part of the Mississippi Street improvement project. Proposed amended change is as follows: "Such costs shall include lighting, snow removal, line painting, and replacement of paving, curbs, and sidewalks, if necessary. This is not to include replacement of paving, curbs, and sidewalks as part of the Mississippi Street improvement project." d4_ Paragraph 2: Fitch wanted to specifically state that he is not responsible for payment of special assessments. Proposed change is as follows: "The cost of operation and maintenance shall include property taxes, but not special assessments." �-0. Paragraph 4: Fitch wanted to add the sentence as follows: i "Lessee is not responsible for replacement of furnace or air cond' 'one ." This paragraph talks about repairs and maintenance and not the replacement of said items. He wanted to make it clear that he was not to be responsible for replacement of the furnace or air conditioner. Paragraph 8: Fitch wanted to clarify that the HRA would be responsible for any necessary alterations to the property for operation of the drive - through business after the Mississippi Street improvement project is completed. Therefore, the following phrase is proposed to be added to the end of the sentence in paragraph 8: "The lessee consents to allow the lessor to make any necessary alterations to the said property in the manner necessary for the lessee to operate and conduct his drive - through business. The lessee is not responsible for the costs of the alterations." U Paragraph 11: U with the word extreme case, our action to right to sue Fitch is requesting that the phrase beginning "caused" be deleted. He states that if, in the one of his employees is killed as a result of repair, he believes he should not sign away his the HRA. CHANGES TO DAIRY QUEEN LEASE - PAGE 2 dd 0 Paragraph 12: Fitch wanted to add the following sentence at the end of this paragraph to clarify that he is not responsible for utility costs in conjunction with the Mississippi Street improvement project. The proposed sentence is as follows: "The lessee is not responsible for costs associated with changes in the utility services identified above as a result of the Mississippi Street improvement project." 7. Our insurance carrier for Rice Plaza will not insure the Dairy Queen. They placed the Dairy Queen on a temporary binder until September 13, 1991. A new policy will cost the HRA / $800 /year (even with a $5,000 deductible). Fitch can carry both the HRA and himself on his current policy, with a $250 eductible at an added cost of $500. Fitch has requested that we each pay $250 for 1992. Staff recommends that the HRA authorize staff to pursue the joint policy with Fitch and include language in the lease regarding the terms. 88. Fitch will probably also present to the HRA that he/-would want ?� {xf-'41� the HRA not to release the building to another( soft serve ACD /operation after he leaves. I explained to him that we were not going to change the lease and that we are not obligated to make such a provision. 9. Paragraph 7: There should be a thirty day notice of cancellation of the policy, not a ten day notice. 0--I<- ,'1-� FINANCE DEPARTMENT 3 MEMORANDUM TO: WILLIAM W. BURNS, CITY MANAGER FROM: RICHARD D. PRIBYL, FINANCE DIRECTOR PAUL S. HANSEN, ACCOUNTANT SUBJECT: REFERENDUM LEVY RETURN AGREEMENTS DATE: September 6, 1991 Attached you will find a copy of the 1992 School District Referendum Levy Return Agreements and the 1992 estimated amounts. We have provided the estimates of the returns on two different occasions, we felt that it is important enough to restate the estimates and the comparative data for the HRA's consideration of this item. The estimated total return amount for 1992, before delinquents, is $376,061.10. This is an increase of 14% from the 1991 estimated return amount, before delinquents, of $330,207.52. On the March 28, 1991, we provided a memo in which we estimated a 20% increase in the return amount based on an projected increase in market value of approximately 20% and projected all other factors would remain constant. However, all other factors did not remain constant. Class rates were lowered by State legislation which will have a negative impact on tax increment received for payable 1992 and the years to follow. In total the increase is estimated at 14% but, per each individual School District the percentage increase varies greatly. Below shows the estimated 1991 amounts, estimated 1992 amounts, and the percentage increase /(decrease): School Estimated Estimated Percentage District 1991 amounts 1992 amounts Increase /(Decrease) 11 $ 15, 852.91 $ 17, 876.25 13% 3 $ 29, 652.37 $ 26, 877.31 q9 %z) w �Q�c v� �dt� C14 -' $225,087.09 $271,516.41 �2-� -3. 16 $ 59,615.15 $ 59,791.14 0% The reason the amount due to School District #14 increased by 21 %, even though the class rate decreased, - was - -due to the increase of market value of the Nor haves - _Bacqu�t-- -&-- Swim- Cl -ub from $5,479,300 /"'1 to $12,395,900. Each School District should be aware that these are our best estimates at this time. The market values could be reduced through court decisions, abatements or by other means. Also, delinquents averaged approximately 9% in 1990. If you have any questions, please feel free to call. RDP /me Attachment FMIR AGREEMENT This Agreement is dated as of January 2, 1992, is by and between the City of Fridley, Minnesota, and Independent School District No. 16, and provides as follows: 9706 1. Definitions. As used in this Agreement, the following terms have the following meanings, respectively: "City" means the City of Fridley, Minnesota. "HRA" means the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota. "Project" means Redevelopment Project No. 1 established and operated by the HRA pursuant to Minnesota Statutes, Sections 469.001 through 469.047. 11 1985 Revenue Bonds" means the HRA's $4,070,000 Tax Increment Revenue Bonds of 1985, dated May 1, 1985. "Limited Revenue Note" means the HRA's $5,603,755.80 Limited Revenue Capital Appreciation Tax Increment Note, dated December 20, 1985.• "1985 G.O. Bonds" means the City's $11,550,000 Variable Rate Demand General Obligation Tax Increment Bonds, Series 1985, dated December 30, 1985. "1986 G.O. Bonds" means the City's $10,045,000 General Obligation Tax Increment Refunding Bonds, Series 1986, dated as of August 1, 1986. "1990 G.O. Bonds" means the City's $9,485,000 General Obligation Tax Increment Refunding Bonds of 1990, dated March 1, 1990. "Tax Increment Obligations" means the 1985 Revenue Bonds, the Limited Revenue Note, the 1985 G.O. Bonds, the 1986 G.O. Bonds, the 1990 G.O. Bonds, and any other contractual obligations of the HRA or the City which were entered into prior to the date of this Agreement and which commit the use of any tax increments from the TIF Districts for specified purposes, projects, or parties. "Tax Increment Act" means Minnesota Statutes, Sections 469.174 through 469.179. "TIF Districts" means Tax Increment Financing District Nos. 1 through 11 within the Project. The attached Exhibit A contains certification dates and other information on the TIF Districts. "School District" means Independent School District No. 16, the Spring Lake Park School District. "Subdivision" means Minnesota Statutes Second 1989 Supplement, Section 469.177, Subdivision 10, as amended by Laws of Minnesota 1990, Chapter 604, Article 7, Section 24 (a copy of which is attached hereto as Exhibit B) . ...� 2. Recitals. (a) In certain cases, the Subdivision either requires or allows by agreement certain tax increments attributable to school district referendum tax levies to be paid to school districts. (b) TIF District Nos. 5, 7, 9, 10,'and 11 are located entirely within the boundaries of the School District, and a portion of TIF District No. 3 is located within the boundaries of the School District. (c) None of the property within TIF District Nos. 1, 2, 4, 6, and 8 is located within the boundaries of the School District. (d) It is the purpose of this Agreement to provide for payment of certain tax increments to the School District pursuant to '-1 9706 2 and in accordance with the provision of the Subdivision. (e) Nothing in this Agreement is intended to violate the covenants and agreements heretofore made respecting the application of tax increments from the TIF Districts pursuant to the Tax Increment Obligations. 3. Representations of the City. (a) The Tax Increment Obligations were issued to finance various activities of the HRA within the Project. (b) The 1985 Revenue Bonds are not general obligations of the City or the HRA. Tax increments from TIF District Nos. 1 through 5 are pledged to the payment of the 1985 Revenue Bonds, and there are no other sources of funds pledged to the payment thereof. The final scheduled principal maturity of the 1985 Revenue Bonds is February 1, 1999. (c) The Limited Revenue Note is not a general obligation of the City or the HRA and is payable solely from tax increments pledged for such purposes from TIF District No._6. (d) The 1985 G.O. Bonds were payable from tax increments derived from TIF District Nos. 1 through 6, and the final scheduled principal maturity of those Bonds was February 1, 2000. However, on February 1, 1990, the City discharged the 1985 G.O. Bonds by paying all then outstanding principal thereof and interest thereon. (e) The 1986 G.O. Bonds are payable from tax increments derived from TIF District Nos. 1 through 6, and the final scheduled principal maturity of those Bonds is February 1, 2000. However, the City has advance refunded the 1986 G.O. Bonds via the issuance of the 1990 G.O. Bonds, and the City expects pursuant to said refunding that all of the principal of 9706 3 and interest on the 1986 G.O. Bonds will have been paid on or before February 1, 1994. (f) The 1990 G.O. Bonds are payable from tax increments derived from TIF District Nos. 1, 21 3, and 6, and the final scheduled principal maturity of those Bonds is August 1, 2009. (g) Portions of the principal of the 1985 Revenue Bonds, the Limited Revenue Note, the 1985 G.O. Bonds, and the 1986 G.O. Bonds, and the 1990 G.O. Bonds were outstanding on May 1, 1988, and /or are outstanding on the date of this Agreement. 4. Representations of the School District. (a) On October 8, 1981, the electorate of the School District approved a 5.0 mill continuous levy first effective for the 1981 , payable 1982 property taxes. This levy is hereinafter referred to as the 111981 Levy". (b) On February 27, 1986, the electorate of the School District approved a 6.0 mill continuous levy first effective for the 1986 payable 1987 property taxes. This levy is hereinafter referred to as the 111986 Levy ". (c) According to the Minnesota Department of Education, for purposes of the above - mentioned referendum levies the tax capacity rate equivalents of 5 mills and 6 mills are .05226653 and .06271984, respectively. 5. Payment of Tax Increments to School District. The City and the School District hereby agree that, except as otherwise provided pursuant to paragraph 6 of this Agreement, tax increments shall be paid to the School District by the HRA as and to the extent received by the HRA, with respect to the tax increments relating to the 1991 payable 1992 property taxes, as follows: (a) TIF District_ Nos. 9, 10 and 11. Since TIF District Nos. 9, 10, and 11 were requested for certification after May 1, 1988, the Subdivision does not apply to those 9706 4 9706 Districts, and no tax increments attributable to the 1981 Levy or the 1986 Levy from those Districts are payable to the School District. (b) TIF District No. 7. Since the 1981 Levy and the 1986 Levy were approved prior to the date of certification of TIF District No. 7, the Subdivision does not apply to those Levies with respect to this District, and no tax increments attributable to said Levies from this District are payable to the School District. (c) TIF District No. 5. Since the 1981 Levy was approved prior to the date of cert- ification of TIF District No. 5, the Subdi- vision does not apply to the 1981 Levy, and no tax increments attributable to said Levy from this District are payable to the School District. Pursuant to clause b(2) of the Subdivision, the tax increment from TIF District No. 5 which is attributable to the 1986 Levy shall be paid to the School District. (d) TIF District No. 3. Since the 1981 Levy was approved prior to the date of certification of TIF District No. 3, the Subdivision does not apply to the 1981 Levy, and no tax. increments attributable to said Levy from this District are payable to the School District. Pursuant to clause b(2) of the Subdivision, the tax increment from TIF District No. 3 which is attributable to the 1986 Levy shall be paid to the School District. 6. Further Agreements. Nothing in this Agreement is intended or shall be applied in such a manner as to violate the obligations and covenants made by the City or the HRA in connection with the Tax Increment Obligations, and to the extent but only to the extent that the application of the terms of this Agreement would give rise to a violation of said obligations and covenants, including without limitation, the default in the timely and full payment of the Tax Increment Obligations, the applicable tax increments shall be applied instead in the manner, but only to the extent necessary, to avoid such default or other violation of said covenants or 5 obligations. Nothing in this Agreement shall restrict the City or the HRA in the exercise of the powers which they may have relating to the Project or the TIF Districts. In addition, the City and the School District agree that the provisions of paragraph 5 providing for payment of tax increment to the School District shall be limited to and shall apply only to such tax increment attributable to the 1991 payable 1992 real estate property taxes, and at the conclusion of said period, the City and the School District agree to review the circumstances and to attempt to negotiate in good faith such further agreement or agreements as may be permitted by law and which are acceptable to both the City and School District with respect to discretionary payments of such applicable tax increment to the School District. IN WITNESS WHEREOF, the City and the School District have caused this Agreement to be executed by their duly authorized representatives. CITY OF FRIDLEY, MINNESOTA Mayor City Manager INDEPENDENT SCHOOL DISTRICT NO. 16 School Board Chair Superintendent �1 9706 6 EXHIBIT A Schedule of Tax Increment Financing Districts Within Housing and Redevelopment Project No. 1 of the Fridley HRA 9706 Certification School TIF District Name Date District No. 1 Center City 5/11/79 14 2 Moore Lake 7/31/81 13/14 3 North Area 5/19/82 11/16 4 Johnson Printing/ Skywood Mall 1/20/84 13/14 5 Paschke 3/15/84 16 6 Lake Pointe 12/24/85 13 7 Winfield 10/22/86 16 8 Shorewood 10/24/86 14 9 Onan /Old Central 9/7/89 16 10 Northco Phase III 4/10/90 16 it Osborne Crossings 8/9/91 16 9706 EXHIBIT B Sec. 24. Minnesota Statutes Second 15e9 S_p ?le-.e :t. sect :cn 4: ?.177, s:: 'Zdivisicn 10, :s a-.ended to :ead: 70 SC -OCT, :Ci ns._ a4>u`2 !_i:f ) (a -•`•e .:cv :s:c -s c! th:s subdivision apply to tax _nc:e-.e.t financing d:str:cts and _:ojects :cr which certificaticn was requested . Lefc :e May 1, 1568, that a:e located :n a school district in ich the �cters have a:;rCYed new tax capacity rates cr an increase in tax capacity rates after the tax incre =ent financing district was certified. (b) (1) if there are no outstanding bonds on May 1, 1568, to -'rich :rc:ea.ent from the district is pledced, cr ;i7 if the refererdu:a is ap_rcved after May 1,'1568, and there are no bonds = cutstandiry^ at the t1ze the referercu:a is a proved, that were issued befere may 1, 1968, ;51- __- tie- _ecceer.dc.» c :ea - :rg ti. e- tax- caraC ? ;Y ate- Kas- az_: eye d- after - ti. e- -oat - :event -_rite c__ese- f?;- c_- {?,7 -a_-_ =tan the authcrlty must annually pay to the school district an amount of incrempert ecual to the incre:sent that is attributable to the increase in the tax capacity rate under the referendum. (2) if clause {?j- ep_?_es (1) aces not avvly, coon approval by a r..ajority vote of the Scverning body of the municipality and the school board, the aut`.erity must :ay to the school district an a-e nt of fr•cre: er.t equal to the :r.cre -.ent that is attributable to the increase in the tax capacity rate under the referendU:J. (c) the amounts of these increments may be expended and r..ust be treated by the school district in the same manner as provided fcr the revenues derived from the referendum levy approved by the voters. she provisions of this subdivision apply to protects for which certification was requested before, C.), and after Auc::st 1, 1979. ,'-� AGREEMENT This Agreement is dated as of January 2, 1992, is by and between the City of Fridley, Minnesota, and Independent School District No. 11, and provides as follows: 9705 1. Definitions. As used in this Agreement, the following terms have the following meanings, respectively: "City" means the City of Fridley, Minnesota. "HRA" means the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota. "Pro ect" means Redevelopment Project No. 1 established and operated by the HRA pursuant to Minnesota Statutes, Sections 469.001 through 469.047. 11 1985 Revenue Bonds" means the HRA's $4,070,000 Tax Increment Revenue Bonds of 1985, dated May 1, 1985. "Limited Revenue Note" means the HRA's $5,603,755.80 Limited Revenue Capital Appreciation Tax Increment Note, dated December 20, 1985. 11 1985 G.O. Bonds" means the City's $11,550,000 Variable Rate Demand General Obligation Tax Increment Bonds, Series 1985, dated December 30, 1985. 11 1986 G.O. Bonds" means the City's $10,045,000 General Obligation Tax Increment Refunding Bonds, Series 1986, dated as of August 1, 1986. "1990 G.O. Bonds" means the City's $9,485,000 General Obligation Tax Increment Refunding Bonds of 1990, dated March 1, 1990. "Tax Increment Obligations" means the 1985 Revenue Bonds, the Limited Revenue Note, the 1985 G.O. Bonds, the 1986 G.O. Bonds, the 1990 G.O. Bonds, and any other contractual obligations of the HRA or the City which were entered into prior to the date of this Agreement and which commit the use of any tax increments from the TIF Districts for specified purposes, projects, or parties. "Tax Increment Act" means Minnesota Statutes, Sections 469.174 through 469.179. "TIF Districts" means Tax Increment Financing District Nos. 1 through 11 within the Project. The attached Exhibit A contains certification dates and other information on the TIF Districts. "School District" means Independent School District No. 11, the Anoka School District. "Subdivision" means Minnesota Statutes Second 1989 Supplement, Section 469.177, Subdivision 10, as amended by Laws of Minnesota 1990, Chapter 604, Article 7, Section 24 (a copy of which is attached hereto as Exhibit B). 2. Recitals. (a) In certain cases, the Subdivision either requires or allows by agreement certain tax increments attributable to school district referendum tax levies to be paid to school districts. (b) A portion of TIF District No. 3 is located within the boundaries of the School District. (c) None of the property within TIF District Nos. 1, 2, 4, 5, 6, 7, 8, 9, 10, and 11 is located within the boundaries of the School District. (d) It is the purpose of this Agreement to provide for payment of certain tax increments to the School District pursuant to and in accordance with the provision of the Subdivision. (e) Nothing in this Agreement is intended to violate the covenants and agreements heretofore made respecting the application of 9705 2 n tax increments from the TIF Districts pursuant to the Tax Increment Obligations. 3. Representations of the_Cit (a) The Tax Increment Obligations were issued to finance various activities of the HRA within the Project. (b) The 1985 Revenue Bonds are not general obligations of the City or the HRA. Tax increments from TIF District Nos. 1 through 5 are pledged to the payment of the 1985 Revenue Bonds, and there are no other sources of funds pledged to the payment thereof. The final scheduled principal maturity of the 1985 Revenue Bonds is February 1, 1999. (c) The Limited Revenue Note is not a general obligation of the City or the HRA and is payable solely from tax increments pledged for such purposes from TIF District No. 6. (d) The 1985 G.O. Bonds were payable from tax increments derived from TIF District Nos. 1 through 6, and the final scheduled principal maturity of those Bonds was February 1, 2000. However, on February 1, 1990, the City discharged the 1985 G.O. Bonds by paying all then outstanding principal thereof and interest thereon. (e) The 1986 G.O. Bonds are payable from tax increments derived from TIF District Nos. 1 through 6, and the final scheduled principal maturity of those Bonds is February 1, 2000. However, the City has advance refunded the 1986 G.O. Bonds via the issuance of the 1990 G.O. Bonds, and the City expects pursuant to said refunding that all of the principal of and interest on the 1986 G.O. Bonds will have been paid on or before February 1, 1994. (f) The 1990 G.O. Bonds are payable from tax increments derived from TIF District Nos. 1, 2, 3, and 6, and the final scheduled principal maturity of those Bonds is August 1, 2009. (g) Portions of the principal of the 1985 Revenue Bonds, the Limited Revenue Note, 9705 3 the 1985 G.O. Bonds, and the 1986 G.O. Bonds, and the 1990 G.O. Bonds were outstanding on May 1, 1988, and /or are outstanding on the date of this Agreement. 4. Representations of the School District. (a) On October 5, 1982, the electorate of the School District approved a continuous 6.0 mill levy first effective for the 1982 payable 1983 property taxes. This levy is hereinafter referred to as the "1982 Levy ". (b) On October 6, 1987, the electorate of the School District approved a 6.0 mill continuous levy first effective for the 1987 payable 1988 property taxes. This levy is hereinafter referred to as the 111987 Levy ". (c) According to the Minnesota Department of Education, for purposes of the above - mentioned referendum levies the tax capacity rate equivalent of 6 mills is .06999697. 5. Payment of Tax Increments to School District. The City and the School District hereby agree that, except as otherwise provided pursuant to paragraph 6 of this Agreement, tax increments shall be paid to the School District by the HRA as and to the extent received by the HRA, with respect to the tax increments relating-to the 1991 payable 1992 property taxes, as follows: TIF District No. 3. Pursuant to clause b(2) of the Subdivision, the tax increment from TIF District No. 3 which is attributable to the 1982 Levy and the 1987 Levy shall be paid to the School District. 6. Further Agreements. Nothing in this Agreement is intended or shall be applied in such a manner as to violate the obligations and covenants made by the City or the HRA in connection with the Tax Increment Obligations, and to the extent but only to the extent that the application of the terms of this Agreement would give rise to a violation of said obligations and covenants, including without limitation, the default in the timely and full payment of the Tax Increment Obligations, the applicable tax increments shall be applied instead in the manner, but only to the extent necessary, to avoid such default or other violation of said covenants or obligations. Nothing in this Agreement shall restrict the 9705 4 rMl 11" 1 City or the HRA in the exercise of the powers which they may have relating to the Project or the TIF Districts. In addition, the City and the School District agree that the provisions of paragraph 5 providing for payment of tax increment to the School District shall be limited to and shall apply only to such tax increment attributable to the 1991 payable 1992 real estate property taxes, and at the conclusion of said period, the City and the School District agree to review the circumstances and to attempt to negotiate in good faith such further agreement or agreements as may be permitted by law and which are acceptable to both the City and School District with respect to discretionary payments of such applicable tax increment to the School District. IN WITNESS WHEREOF, the City and the School District have caused this Agreement to be executed by their duly authorized representatives. CITY OF FRIDLEY, MINNESOTA Mayor City Manager INDEPENDENT SCHOOL DISTRICT NO. 11 School Board Chair Superintendent 9705 5 EXHIBIT A Schedule of Tax Increment Financing Districts Within Housing and Redevelopment Project No. 1 of the Fridley HRA Independent 9705 Certification School TIF District Name Date District No. 1 Center City 5/11/79 14 2 Moore Lake 7/31/81 13/14 3 North Area 5/19/82 11/16. 4 Johnson Printing/ Skywood Mall 1/20/84 13/14 5 Paschke 3/15/84 16 6 Lake Pointe 12/24/85 13 7 Winfield 10/22/86 16 8 Shorewood 10/24/86 14 9 Onan /Old Central 9/7/89 16 10 Northco Phase III 4/10/90 16 11 Osborne Crossings 8/9/91 16 9705 EXHIBIT B Sec. 2:. Minnesota Statutes Second 1589 S_pple -.eat, sect :cn 4: ?.177, s.;bdivisica 10, is a- .ended to :ead: 13. (PAYMENT =0 SC C:•L rC:3 LEVY -) :cvisicns c: this subdivision apply to tax inc:e -e.-t financing distracts and - :ojeets for wait:% certification was :e :_ested , tefc:e May 1, ls'ES, that a:e located in a school distr'_ct in which the voters have approved new tax capacity rates cr an i- crease in tax capacity rates after the tax incre«ert financing district was certified. (b) (1) if there are no outstanding bonds on May 1, 1988, to -aica inc:e =ent frca the district is pledced, or f?} if the referendum is approved after May 1,'*15ES, and there are no bends = cutstanding at tie ti:--e the refere dum is approved, that ::eze issued before May 1, 1988, er- ¢3j- :r- t= a - :efe :ends. »_nc:ea : :ng t=e- tar- ca;at =tY -:ate- was- apmraved- after -te:e- ..past- :ecent - =s }.e Caen. eat- _:em -t =e- district -?�- CC.a_G T_7-G :- {t7- apr_tta� the authority mist annually Day to the school district an amcu nt of increment equal to the increment that is attributable to the increase in the tax capacity rate under the refererduni. (2) if clause {3g- apniies (1) does not aDDIY, upon approval by a r,.ajority vote of the governing body of the municipality and the school board, the authority =ust pay to the school district an a Feu :t of i •crenzert equal to the ircrea.ent that is attributable to the increase in the tax capacity rate under the referendum. (c) The amounts of these increments may be expended and r..ust be treated by the school district in the same manner as provided for the revenues derived from the referendum levy approved by the voters. The provisions of this subdivision apply to protects for which certification was requested before, on, a,-.d after A.ucust 1, 1979. AGREEMENT This Agreement is dated as of January 2, 1992, is by and between the City of Fridley, Minnesota, and Independent School District No. 14, and provides as follows: 1. Definitions. As used in this Agreement, the following terms have the following meanings, respectively: "City" means the City of Fridley, Minnesota. "HRA" means the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota. "Project" means Housing and Redevelopment Project No. 1 established and operated by the HRA pursuant to Minnesota Statutes, Sections 469.001 through 469.047. "1985 Revenue Bonds" means the HRA's $4,070,000 Tax Increment Revenue Bonds of 1985, dated May 1, 1985. "Limited Revenue Note" means the HRA's $5,603,755.80 Limited Revenue Capital Appreciation Tax Increment Note, dated December 20, 1985. 11 1985 G.O. Bonds" means the City's $11,550,000 Variable Rate Demand General Obligation Tax Increment Bonds, Series 1985, dated December 30, 1985. 11 1986 G.O. Bonds" means the City's $10,045,000 General Obligation Tax Increment Refunding Bonds, Series 1986, dated as of August 1, 1986. 11 1990 G.O. Bonds" meanq the City's $9,485,000 General Obligation Tax Increment Refunding Bonds of 1990, dated March 1, 1990. "Tax Increment Obligations" means the 1985 Revenue Bonds, the Limited Revenue Note, the 1985 G.O. Bonds, the 1986 G.O. Bonds, the 9707 ,-� 1990 G.O. Bonds, and any other contractual obligations of the HRA or the City which were entered into prior to the date of this Agreement and which commit the use of any tax increments from the TIF Districts for specified purposes, projects, or parties. "Tax Increment Act" means Minnesota Statutes, Sections 469.174 through 469.179. "TIF Districts" means Tax Increment Financing District Nos. 1 through it within the Project. The attached Exhibit A contains certification dates and other information on the TIF Districts. "School District" means Independent School District No. 14, the Fridley School District. "Subdivision" means Minnesota Statutes Second 1989 Supplement, Section 469.177, Subdivision 10, as amended by Laws of Minnesota 1990, Chapter 604, Article 7, Section 24 (a copy of which is attached hereto �1 as Exhibit B) . ,11� 2. Recitals. (a) In certain cases, the Subdivision either requires or allows by agreement certain tax increments attributable to school district referendum tax levies to be paid to school districts. (b) TIF District Nos. 1 and 8 are located entirely within the boundaries of the School District, and a portion of TIF District Nos. 2 and 4 are located within the boundaries of the School District. (c) None of the property within TIF District Nos. 3, 5, 6, 7, 9, 10 and 11 is located within the boundaries of the School District. (d) It is the purpose of this Agreement to provide for payment of certain tax increments to the School District pursuant to 9707 2 and in accordance with the provision of the -1 Subdivision. (e) Nothing in this Agreement is intended to violate the covenants and agreements heretofore made respecting the application of tax increments from the TIF Districts pursuant to the Tax Increment Obligations. 3. Representations of the City. (a) The Tax Increment Obligations were issued to finance various activities of the HRA within the Project. (b) The 1985 Revenue Bonds are not general obligations of the City or the HRA. Tax increments from .:'TIF District Nos. 1 through 5 are pledged to the payment of the 1985 Revenue Bonds, and there are no other sources of funds pledged to the payment thereof. The final scheduled principal maturity of the 1985 Revenue Bonds is February 1, 1999. (c) The Limited Revenue Note is not a general obligation of the City or the HRA and is payable solely from tax increments pledged for such purposes from TIF District No. 6. (d) The 1985 G.O. Bonds were payable from tax increments derived from TIF District Nos. 1 through 6, and the final scheduled principal maturity of those Bonds was February 1, 2000. However, on February 1, 1990, the City discharged the 1985 G.O. Bonds by paying all then outstanding principal thereof and interest thereon. (e) The 1986 G.O. Bonds are payable from tax increments derived from TIF District Nos. 1 through 6, and the final scheduled principal maturity of those Bonds is February 1, 2000. However, the City has advance refunded the 1986 G.O. Bonds via the issuance of the 1990 G.O. Bonds, and the City expects pursuant to said refunding that all of the principal of 9707 3 -� and interest on the 1986 G.O. Bonds will have been paid on or before February 1, 1994. (f) The 1990 G.O. Bonds are payable from tax increments derived from TIF District Nos. 1, 2, 3, and 6, and the final scheduled principal maturity of those Bonds is August 1, 2009. (g) Portions of the principal of the 1985 Revenue Bonds, the Limited Revenue Note, the 1985 G.O. Bonds, and the 1986 G.O. Bonds, and the 1990 G.O. Bonds were outstanding on May 1, 1988, and /or are outstanding on the date of this Agreement. 4. Representations of the School District. (a) On September 23, 1986, the electorate of the School District approved a 2.0 mill continuous levy first effective for the 1986 payable 1987 property taxes. This levy is hereinafter referred to as the 111986 Levy". (b) On September 29, 1987, the electorate of the School District approved (i) a 7.0 mill continuous levy first effective for the 1987 payable 1988 property taxes and (ii) a continuous additional 6.5 mill levy first effective for the 1988 payable 1989 property taxes. These levies are hereinafter collectively referred to as the 111987 Levies". (c) According to the Minnesota Department of Education, for purposes of the above- mentioned referendum levies the tax capacity rate equivalents of 2 mills and 13.5 mills are .02261395 and .15264411, respectively. 5. Payment of Tax Increments to School District. The City and the School District hereby agree that, except as otherwise provided pursuant to paragraph 6 of this Agreement, tax increments shall be paid to the School District by the HRA as and to the extent received by the HRA, with respect to the tax increments relating to the 1991 payable 1992 property taxes, as follows: 9707 4 (a) TIF District No. 8. Since the 1987 Levies were approved after the date of certification of TIF District No. 8, and since on May 1, 1988, there were no bonds outstanding to which increment from TIF District No. 8 was pledged, the tax increments from TIF District No. 8 which are attributable to the 1987 Levies are automatically payable and shall be paid to the School District pursuant to clause b(1) of the Subdivision. Since the 1986 Levy was approved prior to the date of certification of TIF District No. 8, the Subdivision does not apply to that Levy with respect to this District, and no tax increments attributable to said Levy from this District are payable to the School District. (b) TIF District No. 4. Pursuant to clause b(2) of the Subdivision, the tax increment from TIF District No. 4 which is attributable to the 1986 Levy and the 1987 Levies shall be paid to the School District. (c) TIF District No. 2. Pursuant to clause b(2) of the Subdivision, the tax increment from TIF District No. 2 which is -- attributable to the 1986 Levy and the 1987 Levies shall be paid to the School District. (d) TIF District No. 1. Pursuant to clause b(2) of the Subdivision, the tax increment from TIF District No. 1 which is attributable to the 1986 Levy and the 1987 Levies shall be paid to the School District. 6. Further Agreements. Nothing in this Agreement is intended or shall be applied in such a manner as to violate the obligations and covenants made by the City or the HRA in connection with the Tax Increment obligations, and to the extent but only to the extent that the application of the terms of this Agreement would give rise to a violation of said obligations and covenants, including without limitation, the default in the timely and full payment of the Tax Increment Obligations, the applicable tax increments shall be applied instead in the manner, but only to the extent necessary, to avoid such default or other violation of said covenants or obligations. Nothing in this Agreement shall restrict the City or the HRA in the exercise of the powers which they may have relating to the Project or the TIF Districts. 9707 5 ,11� In addition, the City and the School District agree that, except in each case described in paragraph 5 of this Agreement where payment of tax increment to the School District is mandatory pursuant to clause b(i) of the Subdivision, all other provisions of said paragraph 5 providing for payment of tax increment to the School District shall be limited to and shall apply only to such tax increment attributable to the 1991 payable 1992 real estate property taxes, and at the conclusion of said period, the City and the School District agree to review the circumstances and to attempt to negotiate in good faith such further agreement or agreements as may be permitted by law and which are acceptable to both the City and School District with respect to discretionary payments of such applicable tax increment to the School District. IN WITNESS WHEREOF, the City and the School District have caused this Agreement to be executed by their duly authorized representatives. CITY OF FRIDLEY, MINNESOTA Mayor City Manager INDEPENDENT SCHOOL DISTRICT NO. 14 School Board Chair Superintendent 9707 6 EXHIBIT A Schedule of Tax Increment Financing Districts Within Housing and Redevelopment Project No. 1 of the Fridley HRA Independent 9707 7 11-�, Certification School TIF District Name Date District No. 1 Center City 5/11/79 14 2 Moore Lake 7/31/81 13/14 3 North Area 5/19/82 11/16 4 Johnson Printing/ Skywood Mall 1/20/84 13/14 5 Paschke 3/15/84 16 6 Lake Pointe 12/24/85 13 7 Winfield 10/22/86 16 8 Shorewood 10/24/86 14 9 Onan /Old Central 9/7/89 16 10 Northco Phase III 4/10/90 16 11 Osborne Crossings 8/9/91 16 9707 7 11-�, EXHIBIT B Sec. 24. Minnesota Statutes Second 19E9 Su;ple=er -t, sect:cn :'.3.177, subdivis:cn 10, :s a -e nded to :ead: S::d. 10. (?AYM ::tiT ^O SC CC•1, :G:; �E_= =K�vS LEV! ) (a :he .:cvasic-s c= this subdivasicn a:_ly to tax .nc:e-ent financing distracts and p :ojects fer which ce :tificat' -cn was re=_ested . tefc:e May 1, 15E8, that are located in a school district in which the :•cters have approved new tax capacity rates cr as Increase in tax capacity rates after the tax increment financing distract was certified. (b) (1) if there are no outstanding bonds cn May 1, 15E8, to which :-cre:ent from the district is pledged, or fib if the referendum is approved after May 1,'15E8, and there are no bonds - 1 cutsta -ding at the time the refere.=.dvra is approved, that :ere Issued �efere May 1, 19E8, c. - {. - ?£- ±::e- :e :e:endez- 1- ncc cgs f -g t =e- tax- ce :tc::Y- : - the- mcst- :ecent -=5Ste the authority :rust annually pay to the school district an amount of increment equal to the Inc.e-ent that is attributable to the increase in the tax capacity rate under the referendum. (� if clause {?3- a :p =:es (1) does not apply, upon approval by a - ajcrity vote of the governing body of the municipality and the school board, the authority -ust pay to the school district an a-cu nt of is cr'e.,ert ecual to the irczement that is attributable to the increase in the tax capacity rate under the referendum. (c) The amounts of these ircre-ents may be expended and must be treated by the school district in the same manner as provided for the revent:es derived from the refererdvm levy approved iy tr.e voters. The provisions of this subdivision apply to protects for vrich certification was requested before, C.), and after Auc::st 1, 1919. AGREEMENT This Agreement is dated as of January 2, 1992, is by and between the City of Fridley, Minnesota, and Independent School District No. 13, and provides as follows: 1. Definitions. As used in this Agreement, the following terms have the following meanings, respectively: "City" means the City of Fridley, Minnesota. "HRA" means the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota. "Project" means Redevelopment Project No. 1 established and operated by the HRA pursuant to Minnesota Statutes, Sections 469:001 through 469.047. 111985 Revenue Bonds" means the HRA's $4,070,000 Tax Increment Revenue Bonds of 1985, dated May 1, 1985. "Limited Revenue Note" means the HRA's $5,603,755.80 Limited Revenue Capital Appreciation Tax Increment Note, dated December 20, 1985. "1985 G.O. Bonds" means the City's $11,550,000 Variable Rate Demand General Obligation Tax Increment Bonds, Series 1985, dated December 30, 1985. "1986 G.O. Bonds" means the City's $10,045,000 General Obligation Tax Increment Refunding Bonds, Series 1986, dated as of August 1, 1986. "1990 G.O. Bonds" means the City's $9,485,000 General Obligation Tax Increment Refunding Bonds of 1990, dated March 1, 1990. "Tax Increment Obligations" means the 1985 Revenue Bonds, the Limited Revenue Note, the 1985 G.O. Bonds, the 1986 G.O. Bonds, the 9708 1990 G.O. Bonds, and any other contractual obligations of the HRA or the City which were entered into prior to the date of this Agreement and which commit the use of any tax increments from the TIF Districts for specified purposes, projects, or parties. "Tax Increment Act" means Minnesota Statutes, Sections 469.174 through 469.179. "TIF Districts" means Tax Increment Financing District Nos. 1 through it within the Project. The attached Exhibit A contains certification dates and other information on the TIF Districts. "School District" means Independent School District No. 131 the Columbia Heights School District. "Subdivision" means Minnesota Statutes Second 1989 Supplement, Section 469.177, Subdivision 10, as amended by Laws of Minnesota 1990, Chapter 604, Article 7, Section 24 (a copy of which is attached hereto as Exhibit B). 2. Recitals. (a) In certain cases, the Subdivision either requires or allows by agreement certain tax increments attributable to school district referendum tax levies to be paid to school districts. (b) TIF District No. 6 is located entirely within the boundaries of the School District, and a portion of TIF District Nos. 2 and 4 are located within the boundaries of the School District. (c) None of the property within TIF District Nos. 1, 3, 5, 7, 8, 9, 10 and it is located within the boundaries of the School District. (d) It is the purpose of this Agreement to provide for payment of certain tax increments to the School District pursuant to 9708 2 and in accordance with the provision of the Subdivision. (e) Nothing in this Agreement is intended to violate the covenants and agreements heretofore made respecting the application of tax increments from the TIF Districts pursuant to the Tax Increment Obligations. 3. Representations of the City. (a) The Tax Increment Obligations were issued to finance various activities of the HRA within the Project. (b) The 1985 Revenue Bonds are not general obligations of the City or the HRA. Tax increments from TIF District Nos. 1 through 5 are pledged to the payment of the 1985 Revenue Bonds, and there are no other sources of funds pledged to the payment thereof. The final scheduled principal maturity of the 1985 Revenue Bonds is February 1, 1999. (c) The Limited Revenue Note is not a general obligation of the City or the HRA and is payable solely from tax increments pledged for such purposes from TIF District No. 6. (d) The 1985 G.O. Bonds were payable from tax increments derived from TIF District Nos. 1 through 6, and the final scheduled principal maturity of those Bonds was February 1, 2000. However, on February 1, 1990, the City discharged the 1985 G.O. Bonds by paying all then outstanding principal thereof and interest thereon. (e) The 1986 G.O. Bonds are payable from tax increments derived from TIF District Nos. 1 through 6, and the final scheduled principal maturity of those Bonds is February 1, 2000. However, the City has advance refunded the 1986 G.O. Bonds via the issuance of the 1990 G.O. Bonds, and the City expects pursuant to said refunding that all of the principal of 9708 3 and interest on the 1986 G.O. Bonds will have been paid on or before February 1, 1994. (f) The 1990 G.O. Bonds are payable from tax increments derived from TIF District Nos. 1, 2, 3, and 6, and the final scheduled principal maturity of those Bonds is August 1, 2009. (g) Portions of the principal of the 1985 Revenue Bonds, the Limited Revenue Note, the 1985 G.O. Bonds, and the 1986 G.O. Bonds, and the 1990 G.O. Bonds were outstanding on May 1, 1988, and /or are outstanding on the date of this Agreement. 4. Representations of the School District. (a) On October 5, 1981, the electorate of the School District approved a 5.0 mill continuous levy first effective for the 1981 payable 1982 property taxes. This levy is hereinafter referred to as the 111981 Levy ". (b) On September 23, 1986, the electorate of the School District approved a 7.0 mill continuous levy first effective for the 1986 payable 1987 property taxes. This levy is hereinafter referred to as the 111986 Levy" (c) According to the Minnesota Department of Education, for purposes of the above - mentioned referendum levies they tax capacity rate equivalents of 5 mills and 7 mills are .06162496 and .07875910, respectively. (d) On November 6, 1990, the electorate of the School District approved a .08 tax capacity rate levy authorized for 7 years and first effective for the 1990 payable 1991 property taxes. This levy is hereinafter referred to as the 111990 Levy". 5. Payment of Tax Increments to School District. The City and the School District hereby agree that, except as otherwise provided pursuant to paragraph 6 of this Agreement, tax increments shall be paid to the School District by the HRA 4708 4 as and to the extent received by the HRA, with respect to the tax increments relating to the 1991 payable 1992 property taxes, as follows: (a) TIF District No. 6. Since the 1981 Levy was approved before the date of certification of TIF District No. 6, the Subdivision does not apply to that Levy with respect to this District, and no tax increments attributable to said Levy from this District are payable to the School District. Pursuant to clause b(2) of the Subdivision, the tax increment from TIF District No. 6 which is attributable to the 1986 Levy and the 1990 Levy shall be paid to the School District. (b) TIF District No. 4. Since the 1981 Levy was approved prior to the date of certification of TIF District No. 4, the Subdivision does not apply to that Levy with respect to this District. Pursuant to clause b(2) of the Subdivision, the tax increment from TIF District No. 4 which is attributable to the 1986 Levy and the 1990 Levy shall be paid to the School District. (c) TIF District No. 2. Pursuant to clause b(2) of the Subdivision, the tax increment from TIF District No. 2 which is attributable to the 1981 Levy, the 1986 Levy, and the 1990 Levy shall be paid to the School District. 6. Further Agreements. Nothing in this Agreement is intended or shall be applied in such a manner as to violate the obligations and covenants made by the City or the HRA in connection with the Tax Increment Obligations, and to the extent but only to the extent that the application of the terms of this Agreement would give rise to a violation of said obligations and covenants, including without limitation, the default in the timely and full payment of the Tax Increment Obligations, the applicable tax increments shall be applied instead in the manner, but only to the extent necessary, to avoid such default or other violation of said covenants or obligations. Nothing in this Agreement shall restrict the City or the HRA in the exercise of the powers which they may have relating to the Project or the TIF Districts. �1 9708 5 W W In addition, the City and the School District agree that the provisions of paragraph 5 providing for payment of tax increment to the School District shall be limited to and shall apply only to such tax increment attributable to the 1991 payable 1992 real estate property taxes, and at the conclusion of said period, the City and the School District agree to review the circumstances and to attempt to negotiate in good faith such further agreement or agreements as may be permitted by law and which are acceptable to both the City and School District with respect to discretionary payments of such applicable tax increment to the School District. IN WITNESS WHEREOF, the City and the School District have caused this Agreement to be executed by their duly authorized representatives. 9708 CITY OF FRIDLEY, MINNESOTA Mayor City Manager INDEPENDENT SCHOOL DISTRICT NO. 13 School Board Chair Superintendent N. EXHIBIT B Sec. i:. Minnesota Statutes Second lse9 5_p;1e-ent, sectic.n ?.177, subdivision 1-0, is a=ended to :ead: (inl'M =tii =0 SC OC•L 7C..j 1_: ='7. �:) _rcvfsicns cf this subdivision apply to tax _nc :e -.e t financing districts and pro ects for which certification was :ec_ested . hefc :e May 1, 1SES, that are located in a school district in :hici 411-e loners have a= -ro -ved new tax capacity rates cr a. n Increase in tax capacity rates after the tax increment financing district was certified. (b) (1) if there are no outstanding bonds on May It 1ssa, to vhich inc :emen.t frca the district is pledged, or fij if the refere-dum is approved after May 1,'1sES, and there are no bonds cutsta!�di'g at the ti=e the :e:ere =_,.a is approved, that were Issued tefore May 1, 1SES, ct- ;ij- __- t=e- tore :t -ee.: _ae :ee3 :ng ..: G-:_ X- G•_ LC.. f- tf ..G-KLS-Lp_ :CYt�-Gr :et-±'L- :tts CCent - -3Ste e :- _end3-t*-Y.: -c :-_ ne :ement-_ :em-t.'.e-C- St : :C- - -S- - LCCeG : - - -� the authority must anni: ally pay to the school distI_ct an a wount of incIe went ecual to the inc :event that is attributable to the increase in the tax capacity rate under the referendum. (2) if clause {?j- app_?e3 (1) does not apply, upon approval by a ,a4or;ty vote of the governing body of the :.�unicipality and the school board, the authority :rust pay to the school district an a-ou nt of incrennert equal to the inc:e. ent that is attributable to the increase in the tax capacity rate under the referendum. (c) The a::ounts.of these increments may be expended and :rust be treated by the school district in the sar:e manner as Provided for the revenues derived from the refereneum levy approved by the voters. The provisions of this subdivision apply to protects for which certification was requested before, cn, and after A.i:c_st 1, 1979. N C7 OD G .I� CY Nt d0_ C7 Ch C7 M (o N ::.M: r r N r r N 1p Lo O O lA to O CO r CO (0 CD O N O r r O r r N N O O N r O n O O Ln O co 1` CV tC CD CV CO CD (C LA O O LO (3) CO CV LO CV P- LO CO :;.;. r N O CO O r N 0) M to N CD O Co O CO N O O O O r Is OD Co O O It O t0 Cl co CO CD CO co P, r r CO CO r CV CO t0 c7 r N r r N LO f` r.: h CY (C Z 1.: 11: fl: CD CD CD ::::: O O O CO r- N (O to r- r` to .. .�; .•`: N n N N to LO tt to Lo tt• CO Lo tY `: C' CO CO CO O O th O r CO N N C7 O Ln Co r <00 LO CO r LO CO > .......... 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They contacted the communities in the northern area to determine whether or not they were willing to place an ad in this particular issue. Because other communities will probably advertise and because we have done so before in a special issue, a quarter page two -color ad was ordered. r The- cost--of- Jock Robertson had prepared a two -color ad originally for the 1989 special on the northern suburbs. I updated it to list your name and my name as contact people and also to contact us about information about or redevelop -went program and to receive a copy of the Commercial and Industrial Vacant Land Inventory. Copies of the special issue can be made available to the HRA. 2. Attached is a brochure regarding the 6Ame�ir - -E vnpr -c �i nt -- tzne -�1 R c ; `Po aPme -,r- u- c- Ee ©nomi- -- Bevelapm_e� -amour to be held in Tampa, Florida,�mbe -3 -$,= 11. The American Economic Development Council sponsors the Basic Economic Development courses nation -wide every year via major universities. It appears that the course work is more strategy and policy- oriented which will complement your course work with the National Development Council in financing techniques. Antzci�at�xgenses wurx3c} �or I am requesting HRA concurrence with these proposed expenditures. BD:ls M -91 -660 PROGRAM FEDC Fifteenth Florida Basic Econo-mic [���7 Lopment Course Professional Development Center College of Business Administration University of South Florida NOVEMBER 3.8, 1991 4 -A PROGRAM - 1991 BEDC Sunday, November 4:30 - 6:30 p.m. Check -in; Pick up materials BEDC Suite, Embassy Suites Hotel 7:00 p.m. Dinner /Orientation Embassy Suites Hotel Monday, November 8:15 - 10:00 a.m. Perspectives on Economic Development 10:15 - 11:45 a.m. Economic Geography 11:45 - 1:15 p.m. Lunch 1:15 - 3:15 p.m. Community Analysis 3:30 - 5:30 p.m. Community Development Tuesday, November S 8:15 - 10:00 a.m. Marketing Strategies 10:15 - 11:45 a.m. International Trade and Development 11:45 - 1:15 p.m. Lunch 1:15 - 3:45 p.m. Financing Alternatives for Economic Development 4:00 - 5:30 p.m. Entrepreneurship: The Role of Small Business in Economic Development Wednesday, November �j 8x15 - 10:30 a.m. Industrial Parks and Sites 10:45 - 11:45 a.m. Building Partnerships for Economic Development 11:45 - 1:15 p.m. Lunch 1:15 - 3:30 p.m. Computer Applications in Economic Development 3:30 p.m. Balance of Day Free Thursday, Novembeer,*� 8:15 - 11:45 a.m. Matching Resources to Needs: Site Selection Case Study 11:45 - 1:15 a.m. Lunch 1:15 - 4:00 p.m. An Insider's View of Corporate Site Selection 4:15 - 5:30 p.m. Expansion and Retention of Existing Business and Industry FNday, November 8:15 -10:15 a.m. Managing the Economic Development Office 10:30 - 12:00 Noon Economic Development: A Look Ahead rain m— v- urmanun sari i ne rroresslonat vevelopment Center at (813) 974 -4264 NONCREDIT PROGRAM REGISTRATION (Please Pdnt) Ab( (apt. no.) 6:1-31 (VA), UNIVERSITY OF SOUTH FLORIDA �_ 7- 5-/-z 3s-O" fultal) s `-•• • al csrwren wuoRrss 4Z�— - («Y) (state) ^ (zip code) SEX G Male J� Female MNiNEST DEGREE EARNED Alt-5-2Z YEAR OF BIRTH T Florida Basic Economic Deve (otrccecode) PROGRAM TITLE P n U e PROGRAM DATES November 3-8,1991 PROGRAM NUMBER 1478 -822 ED $395.00 RE6ISTRATt�M EEE PAYMENT INFORMATION ❑ CashXCh-k ❑ V— ❑ MasterCard Credd Card# CARDHOLDERNAME (ComPletedusinedWerenthomabove) ADDRESS CARDHOLDER SIGNATURE TELEPHONE NOTE: checks (U.S. Dollars drawn on U.S. Banks) or purchase orders payable to UNIVERSITY OF SOUTH FLORIDA RETURN TO: School of Extended Studies. 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CO m�'y�' 0 C m m C m- C m &_ m 0 0 0 0.0 0 >`m 0'*- •- o c 0•_ E 5m yo 'O m2om"'E c> p a m 0 L C ,a 0 0 0 0 X m r--. y m M.- to m` m c O a m y a- w0=ymm0 Q Of'0 0 r 0 m o'� 0 m a mo0mCWm... m Om EM D CL C LL c n o V No> m p L t$ -0. H � LC cm '0'0 m•pv°w m meM vcdcm - Z o W=m 0 C a Ea W O C Gr_ ' o W- E co rAO`O) plc a -G. I 0- 8. —mc °o �Va °ooJSr ca3� C o.= h c.� 8. a�>. cmimrccmaa�m $ °m E ca O=0CaHaSo: O H F�1 W U ti m3« K m w c o c m c_ao Mn • c > E m0 3-0 U �E o C3 E ... m a o m m of m� O C p C O V O 'ty E cE C m a WE V -yr �0 mW n o =n LL m2 Ft-ov 4 -D O O V O M CD C Cl L_ Cj m v c a � -co t_E r � Q o cis 3 0,0 •N wj m ca N U � m U� p •� W c QU i° o :--g �E c 5$ iG A DATE 09/06/91 CITY OF FRIDLEY - HRA PAGE 1 PROGRAM PO08 CHECK REGISTER 4-E CHECK RUN BATCH # :0008 002 M VEND DISC. JOB DESCRIPTION / INV # PO /INV ! SEA # PCNT AMOUNT ACCT NUMBE NO O MESSAGES 2155 �// CHECK-PREPAID **** M00027 MAXFIEL.D RESEARCH GROUP, INC. HIOUSING STUDY 00449 -01 EIH3NSO.0040 10,000.00 DR460-202DO ACCOUNTS PAYABLE 10,000.00 CR460 -10100 CASH TOTAL VENDOR HH s 10,000.00 V1 2156 CHECK- PREPAID 800065 BARNA, GUZY & STEFFEN, LTD. JULY LEGAL SERVICE 00450 -01 EZH3KZO.0OOO 549.75 DR450 -20200 ACCOUNTS PAYABLE 549.75 CR450 -10100 CASH JULY LEGAL SERVICE 00450-02 EZH3LVO.0DO0 153.00 DR452 -20200 ACCOUNTS PAYABLE 153.00 CR452 -10100 CASH JULY LEGAL SERVICE 00450 -03 EZHM.0000 165.75 DR460 -20200 SITS PAYABLE 165.75 CR460 -10100 CASH TOTAL VENDOR 868.50 2157 (HECK- PREPAID C00044, CASSERLY LAW OFFICE AUG LEGAL SERVICE 00451 -01 EZH3MOO.0000 1,202.50 DR455 -20200 ACCOUNTS PAYABLE 1,202.50 CR455 -10100 CASH AUG LEGAL SERVICE 00451 -02 EZH31LO.0000 2,165.65 DR460 -20200 ACCOUNTS PAYABLE 2,165.65 CR460 -10100 CASH TOTAL VENDOR $ 3,368.15 2158 CHECK- PREPAID F00033 FIRST NATIONAL BANK OF CHICAGO AGENT FEES 00452 -01 EZH3KPO.000O 870.50 -20204 ACCOUNTS PAYABLE 870.50 C100 -10100 CASH TOTAL VENDOR $ 870.50 2159 ✓ CHECK- PREPAID F00072 FIRST TRUST AGENT FEES 00453 -01 EZH3KSO.00OO 180.00 I 0 -20200 ACCOUNTS PAYABLE 180.OD CRSBD-10100 CASH TOTAL VENDOR $ 180.06 / 2160^' CHECK- PREPAID F00023 FRIDLEY, CITY OF AUG. EXPENSES 00454 -05 EZH3L40.0000 297.55 DR450 -2020 ACCOUNTS PAYABLE 297.55 CR450 -10100 CASH AUG EXPENSES 00454 -06 EZH3L80.000O 2,250.00 DR450 -20200 ACCOUNTS PAYABLE 2,250.00 CR450 -10100 CASH AUG EXPENSES 00454 -07 EZH3L80.ODOO 26.70 DR450 -20200 ACCOUNTS PAYABLE 26.70 CR450 -10100 CASH AUG EXPENSES 00454 -08 EZH3LFO.00O0 800.00 DR450 -20200 ACCOUNTS PAYABLE 800.00 CR450-10100 CASH AUG EXPENSES 00454 -09 EZH3LIO.00 O 95.40 DR450 -20200 ACCOMS PAYABLE 95.40 CR450 -10100 CASH r" 1 AUG EXPENSES 0454 -10 EMM0.0000 179.67 1RM5 20200 ACCOUNTS PAYABLE 179.67 CR450 -10100 CASH AUG EXPENSES 00454 -11 EZH3P0. 0000 800.00 DR450 -20200 ACCOUNTS PAYABLE 800.00 CR450 -10100 CASH DATE 09 /06/91 CITY OF FRIDLEY - HRA PAGE 2 PROGRAM P008 CHECK REGISTER 4 -F CHECK RUN BATCH 4 :0008 002 HRA VENDOR DISC. JOB L IPTION INV # PO /INV # SEQ # PCNT AMBIT ACCT NUMBER NMBR MESSAGES AM EXPENSES 00454 -12 EZHM.0000 43.41 DR455 -20200 ACCOUNTS PAYABLE 43.41 CR455 -10100 CASH . AUG. PERSONAL SERVICES 00454 -01 EZH3NPO.0000 13, 360.33 DR460 -20200 ACCOUNTS PAYABLE 13,360.33 CR460 -10100 CASH AUG EXPENSES 00454 -02 EZHM.0000 223.89 DR460 -20200 ACCOUNTS PAYABLE 223.89 CR460 -10100 CASH AUG EXPENSES 00454 -03 EZH3NZO.0000 695.00 DR460 -20200 ACCOUNTS PAYABLE 695.00 CR460 -10100 CASH _ AUG EXPENSES 00454 -04 EZH3030.0000 42.95 DR460 -20200 ACCOUNTS PAYABLE 42.95 CR460 -10100 CASH TOTAL VENDC4t $ 18,814.90 / 2161 " LACK- PREPAID GOOD69 GREENMASTERS, INC LAKE POINTE MAINT SERVICE 0045`41 EZHM.0000 3,760.33 DR455 -20200 ACCWS PAYABLE 3,760.33 CR455 -10100 CASH TOTAL VENDOR # 3,760.33 TOTAL. NUMBER OF CHECKS WRITTEN : 000000 gill TOTAL DMIM FOR CHECKS WRITTEN : S 37,862.38 LAST CHECK NUMBER : 002154 TO: FRIDLEY H.R.A. FROM: CITY OF FRIDLEY RE: BILLING FOR OPERATING EXPENSES FOR AUGUST, 1991 AND AUGUST 1991 ADMINISTRATIVE EXPENSES AUGUST ADMINISTRATIVE PERSONAL SERVICES 13,108.08 AUGUST ADMINISTRATIVE OVERHEAD 252.25 TOTAL ADMINISTRATIVE BILLING OPERATING EXPENSES: 2ND QUARTER COPIER ALLOCATION REff IQN = = -B N LF� � JULY MANAGEMENT FEE - KORDIAK MARKET VALUE APPRAISAL - DAIRY QUEEN ELECTRICITY - RICE PLAZA WEED MOWING - RICE PLAZA MOWING - RICE PLAZA SWEEPING - RICE PLAZA ELECTRICITY - LAKE POINTE TOTAL OPERATING EXPENSES FOR AUGUST TOTAL EXPENDITURES 13,360.33 223.89 69--x-bb x;42 =:9-5 - 297.55 2,250.00 26.70 800.00 95.40 179.67 43.41 $5,454.57 $18,814.90 4-G ,l-� ''� ,-a MEMORANDUM Municipal Center 6431 University Avenue N.E. Office of the City Manager 7 Fridley, MN 55432 William W. Burns CITYOF (612) 571 -3450 FRIDLEY TO: The Honorable Mayor and City Council FROM: William W. Burns, City Manager' DATE: September 6, 1991 SUBJECT: HRA Response to Council's TIF Resolution At their August 8, 1991, meeting, the HRA discussed Resolution No.. 58 -1991 which encourages the Fridley HRA to decertify portions of tax increment financing districts that are not needed for financing economic development or redevelopment improvements. The HRA asked that I communicate to Council that they are in full sympathy with Council's position on tax increment financing. At the same time, they ask Council to be understanding of some of the practical difficulties the HRA faces in decertifying tax increment districts. For example, we would be violating the covenants of our various bond issues if we were to decertify particular districts. The HRA also feels that is important to take into account declining tax values of property currently included in tax increment financing districts. As values decline, we must be wary of meeting our debt service obligations for public improvements that have been built in these districts. The HRA does recognize, however, that there may be instances where tax increment revenue from a particular district exceeds the bond requirements for that district, and the HRA is prepared to comply with Council's wishes as these situations are identified. The HRA appreciates Council's input, and looks forward to the continuation of a cooperative and supportive relationship. WWB:rsc E Community Development Department HOUSING AND REDEVELOPMENT AUTHORITY City of Fridley DATE: September 6, 1991 TO: William Burns, Executive Director of HRA FROM: Barbara Dacy, Community Development Director SUBJECT: Contract with Maxfield Research Group At the August 8, 1991, meeting, the HRA authorized the Executive Director to execute a contract with Maxfield Research Group for a housing study. Attached for the HRA AIs information is a copy of the executed contract. No action is needed on this item.- The consultant has begun work on this project and will be doing windshield surveys throughout our neighborhoods this week. BD:ls M -91 -661 0 Mf\XFIELD 6-A RE VC August 12, 1991 Mr. William W. Burns Executive Director Fridley Housing and Redevelopment Authority 6431 University Avenue Northeast Fridley, MN 55432 CONTRACT FOR PROFESSIONAL SERVICES Maxfield Research Group, Inc. proposes to provide a comprehensive housing analysis for the City of Fridley which will identify goals, opportunities, strategies and public policies related to maintaining neighborhood appearance and desirability. With an aging housing stock, and limited vacant land for new housing development, the city must address these issues in order to main- tain its tax base, stabilize its existing housing base, improve areas of con- cern, encourage new households to move to Fridley and existing households to remain. SCOPE OF SERVICES Our work will begin by developing a profile of the existing residential base and issues which will be affecting the City of Fridley ov�gyr i next �20 �years. 0- At the HRA commission meeting, we heard comments from thy" ryv. other commission members who brought up issues of concern facing the ci We will be identifying demographic changes (local and national) that will be affecting the city over both the short- and long -term as well as social changes that will affect the types of households formed and the types of housing they will be attracted to in the coming years. These issues will have a strong impact on housing in the community. Once we have identified those issues that are of concern to the city and its residents, we will develop an opportunity assessment for each Fridley neigh- borhood. This assessment will consider the following: A. Demographic Review 1. Compile demographic information which will identify trends external to the City of Fridley that will affect Fridley's housing supply and demand. a 612 -338 -0012 620 KICKERNICK 430 FIRST AVENUE NORTH 612 -338 -0659 FAX MINNEAPOLIS. MINNESOTA 5540] W Mr. William Burns August 12, 1991 Fridley Housing and Redevelopment Authority Page 4 2. Define demographic and market trends in the metropolitan area on: a. rental market b. first -time home buyer market C. move -up market d. empty- nesters e. young seniors f. old seniors 3. Identify statewide and /or national trends which may affect demand for housing in Fridley. 4. Compile demographic information internal to the City of Fridley on: a. b. C. d. e. f. 9- Employment Age of Housing Type of Housing Building Trends Public school characteristics Neighborhood demographic profiles Income Levels B. Housing Market Analysis 1. Define Fridley's "trade area." 2. Identify housing sales trends within the city, using home sales data obtained from MLS and the city assessor. 3. Survey general occupancy apartments and analyze rental mar- ket trends. 4. Provide information on rents, turnover, occupancy, tenant profiles, traffic, etc. 5. Market interviews with Fridley stakeholders that will pro- vide perceptions of Fridley neighborhoods and its housing. a. Large employers b. Real estate sales agents C. Rental managers and owners d. Fridley Section 8 housing representative e. City Assessor f. School District representatives g. Local Developers h. Church representatives i. Crime Watch block captains j. Others (as necessary) I 6 -C Mr. William Burns August 12, 1991 Fridley Housing and Redevelopment Authority Page 5 C. Neighborhood Analysis 1. Identify areas within the City of Fridley that are perceived as neighborhoods. 2. For each of these neighborhoods, define the following char- acteristics: a. Vacant Land b. Location C. Access /Transportation Services d. Housing Types and Conditions e. Positive images f. Negative images g. Resident /tenant demographics h. Existing housing markets 3. For each neighborhood, identify housing problems or oppor- tunities and assess the impact on the neighborhood. a. Identify existing or potential problems (ie. poor conditions, perceived negative image, etc.) b. Identify opportunities (ie. redevelopment, rehabilita- tion, better tenant screening, increased monitoring by law enforcement, crime watch block captains, etc.) D. Housing Strategies 1. Identify strategies to maintain /improve housing and neigh- borhood livability. a. Regular enforcement of building, fire and zoning codes. b. Methods of neighborhood participation. C. Other 2. Identify strategies to ad opportunities. a. Identify strategies plished: - -in the next - -in the next - -in the next E. Conclusions and Recommendations dress problems and to maximize for neighborhoods to be accom- five years; ten years; twenty years. 1. Prioritize items most important to the city as they under- take to maintain their housing stock and manage housing issues and develop strategies to accomplish those items. 2. Review compilation of housing programs completed by city Mr. William Burns August 12, 1991 Fridley Housing and Redevelopment Authority Page 6 staff and offer suggestions of programs which may be appro- priate to fund various redevelopment projects. Based on the above comprehensive analysis, we will discuss the changes we forsee for each neighborhood over the next 20 years, and the policies the city might adopt to direct change and /or maintain the desirability of each neigbor- hood. This analysis will address various segments of the population, such as young adults, empty- nesters, single - parent families, low- income persons, etc. and identify their housing needs in context with the existing housing stock of the city. In addition to text that discusses the opportunities or needed improvements for each neighborhood, we would also propose to use graphics and photographs to illustrate development patterns and neighborhood conditions. These graphics and photographs can also be used to show improvements or urban design changes that may be needed to keep these neigborhoods vital and live- able as housing needs change. WORK PRODUCT Findings will be presented in a bound report and will incorporate our basic findings and recommendations as well as graphics and photographs illustrating current conditions and future opportunities. The City of Fridley has agreed to make available to us items such as aerial photographs, maps, and other records on housing stock by neighborhood. COST OF SERVICES The work program we have proposed in the Scope of Services will be undertaken for a cost of Twenty -Five Thousand ($25,000) Dollars, which will include printing of ten copies of the report, maximum of two graphics per neighbor- hood, and three formal presentations. Any other formal presentations beyond those identified above will be billed at our normal hourly rates for staff time, which range from $65 to $125 per hour. A retainer in the amount of Ten Thousand ($10,000) Dollars will be required upon submission of the contract and before commencement of work by Maxfield Research Group, Inc. The remaining portion shall be payable monthly as costs in excess of the retainer are incurred. COMPLETION TIME The work outlined under the Scope of Services will be completed within sixty (60) days of the execution of this contract, unless delayed by unexpected emergencies, forces beyond the control of one or both parties, or by request of one party and acquiescence of the other party. 6 -D 6 -E Mr. William Burns August 12, 1991 Fridley Housing and Redevelopment Authority Page 7 PAYMENT All costs including staff time and out -of- pocket expenses billed on a monthly basis shall be payable to Maxfield Research Group, Inc. within fifteen (15) days of receipt of an invoice showing the work completed and the cost of the work. A finance charge of one and one -half percent (1.5 %) per month will be added to the unpaid balance of each invoice not paid within fifteen (15) days. DISCLAIMER The objective of this research assignment is to gather and analyze as many market components as is reasonable within the time limits and projected staff hours set forth in this agreement. We assume no responsibility for matters legal in character. The property /land assumed to be free and clear of any indebtedness, liens or encumbrances; and good and marketable title and competent management are assumed, unless other- wise stated. If building plans or site plans included in the report, they are to be consid- ered only approximate and are submitted to assist the reader in visualizing the property. We assume no responsibility for the accuracy of any building or site plans. Certain information and statistics contained in the report, which are the basis for conclusions continued in the report, will be furnished by other independent sources. While we believe this information is reliable, it has not been independently verified by us and we assume no responsibility for its accuracy. The conclusions in the report are based on our best judgments as market re- search consultants. Maxfield Research Group, Inc. disclaims any express or implied warranty of assurance of representation that the projections or con- clusions will be realized as stated. The result of the proposed project may be achieved, but also may vary due to changing market conditions characteris- tic of the real estate industry, changes in facts that were the basis of con- clusions in this report, or other unforeseen circumstances. I:^ the event payment is not received on a timely basis, Maxfield Research Group, Inc. shall be entitled to a lien against the subject property. This agreement will be construed according to the laws of the State of Minne- sota. TERMINATION This agreement may be terminated upon written notification of either party to the other. In the event of termination, the Client will pay Maxfield Research Mr. William Burns August 12, 1991 Fridley Housing and Redevelopment Authority Page 8 Group, Inc. for staff hours performed at the firm's normal hourly rates, plus all expenses incurred through the date of termination. If this proposal meets with your approval, please sign and return one copy to the offices of Maxfield Research Group, Inc. Agreed to this day of 1991. MAXFIELD RESEARCH GROUP, INC. /,/,- - " /,/ z 1: t - L: � :, e A. Maxfi ld FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY William W. Burns 6 -F �1 L p v D O r� m �Omom � Z n Z 3 Z N D Z cn ch g 0i N 0�D rn � 2 Z A GZ = a n r M A _ 3 W > Z G) Z: m M <;-; Doi > > >: W W A W A W p tC CD co A V N is V V N co Co O o O .L D N C1 Cf V V W i71 co CO CD �O O O CO O O C O V w W V A W O CJ1 Cf W DD w O N V W Cf W N' W tlf CD m rn >' » > CA c" J �: N CIO D' co tOJ1 N V N W co n }� N pp W OVf 0 C4 CAf W N N O ivv W cn W A W � Js, Cf C iJl W � N Cf r j N -+ N i N - 01 co N N A O P sn -I V W A A N O O A cc W cc A L. Ch W CO CA Q�pp CD 0 °o O O °oi+' V 01 cn N W W O T C Z m �o 4 co A � A N 0011 j W C11 O O ca co V ut V O N CD A N C N 0011 cp O N OVD W C�,04 = . A � in (D W (aa W co V O N O O V N 4 Cn CD W V jD C) in y A A CD CD Av aD CD m V cn O as v O V v N O cn W ppCO �CC tW D O O N N N f D p f A O W O W N W m n m T co m m O W I N m 11 t Community Development Department HOUSING AND REDEVELOPMENT AUTHORITY City of Fridley DATE: September 6, 1991 TO: William Burns, Executive Director of HRA FROM: Barbara Dacy, Community Development Director SUBJECT: Information Regarding Bob Schroer Project Dave Newman of Nedegaard Construction has requested to be placed on the agenda to discuss with the HRA preliminary items relating to the proposed redevelopment project at Bob's Produce property in the northwest corner of Osborne Road and University Avenue. No action is needed from the HRA; however, Mr. Newman wanted to review initial findings about the financing arrangements, etc. He advised me that he wants to try to have a development agreement for HRA consideration at the October 10, 1991, meeting. I have reviewed an initial site plan, and they will be revising that site plan in order to conform with various code requirements. I will be meeting with Mr. Newman and Mr. Schroer next Wednesday to review a revised site plan. BD:ls M -91 -662 C m G7YOF FRIDLEY Mi FRIDLEY MUNICIPAL CENTER - 6431 UNIVERSITY AVE. N.E. FRIDLEY, MN 55432 - (612) 571 -3450 - FAX (612) 571 -1287 August 14, 1991 Bob Schroer Bob's Produce Ranch 7620 University Avenue N.E. Fridley, MN 55432 Dear Bob: We have completed an informal review of the preliminary site plan for the redevelopment of your property dated August 1, 1991. To follow are a list of our comments: 1. We recommend that you petition to vacate, at minimum, the right -of -way east of the west property line, or the right -of- way of 77th Avenue from where it curves north, as well as the existing street easement running east /west through the property. Not only will this eliminate the need for one of the setback variances (rear yard building setback) but it will also permit you to construct a typical private driveway from Main Street into the rear of your property. If you vacate the entire right -of -way, you would have to work with the adjacent property owner to gain an easement, or even to share a driveway (see aerial). You originally indicated that you wanted to petition the City to construct the street; however, under those circumstances, we would have to assess you for the cost of installing the street. Further complicating the public improvement approach is that the right -of -way for 77th Avenue is only 33 feet wide. We also determined that there would not be a need for any type of connection between Main Street or the west service drive. Therefore, a better alternative is to construct a private driveway (bituminous surface with concrete curb) to serve the rear of the property. 2. The property is located within the Six Cities Watershed District. This district is administered by the participating cities. In this case, we would require submission of drainage calculations indicating that the post- development run -off does not exceed the quantity or quality of the pre - development run- off. This typically includes provision of some type of on- site ponding areas. Almost the entire area is covered with impervious surface. You may want to evaluate options to meet '--1 Bob Schroer August 14, 1991 Page 2 this requirement as it may affect site design or the amount of impervious surface area on the site. 3. Anoka County has indicated that they cannot reduce the length of the median. More importantly, they indicate that the County needs about 50 feet of right -of -way north of the existing center line of Osborne Road. To the best of our calculations, it may mean ten feet of additional right -of -way is needed. The plan should reflect the taking of this additional right -of -way, and building setbacks adjusted (again, this furthers the argument for vacating 77th Avenue, as you may have more room to maneuver the building pad). 4. If 77th Avenue is vacated to the rear, that would eliminate the necessity for a rear yard setback. A front yard setback is necessary from 80 feet to 64 feet along Osborne Road. Section 205.15.05.D.(5).(d) requires a five foot separation from the building to hard surface areas. While you have met this requirement along the front of the buildings, it is not clear where it is to be met along the rear of the buildings. If areas are entirely occupied as loading docks, the City has not enforced this requirement. However, where there are no loading docks, a separation must be maintained from the parking surface to the building. 5. The driveway width from the west service drive is approximately 40 feet wide. The code requires a maximum driveway width of 32 feet with a ten foot radii on abutting curbs. 6. The plan indicated approximately 205 parking spaces. About 210 parking spaces are required. If it can be shown that a square footage of building will remain for storage areas, we have adjusted the calculations on the number of parking spaces. Also, parking spaces are indicated at 91 x 20'; therefore, a variance will be necessary. In past applications, it has been suggested that a combination of nine and ten foot stalls may be acceptable. We discussed earlier that you may want to use nine foot spaces for employee parking. Please be aware that if a nine foot space is used, it must be double striped according to our standards. 7. A special use permit will be required for a garden center or nursery which requires outside display or storage of merchandise (Section 205.15.03.(C).(11)). We will also need a written agreement from the Metropolitan Waste Control Commission regarding the proposed greenhouse over the utility easement and parking areas. Bob Schroer August 14, 1991 Page 3 8. You will need to submit a landscaping plan indicating the proposed landscaping improvements as required by the ordinance (please see attached). Underground irrigation will be required. All trash enclosures must be screened. In summary, a revised site plan containing the adjustments noted above should be prepared. Further, investigation of vacating 77th Avenue should be pursued with adjacent property owners. If you have any further questions, please feel free to contact me. Sincerely, Barbara Dacy, AICP Community Development Director BD /dn C -91 -264 8 -C Y s AW w /-r AARKIW , SETBACK I I I I I i I i I EEE I I I I I II I l I � � 26 46 2S I � I I B1TLP1Md18 d� O ! j II / 77TH AVE. II // ■ � r.. _�.rs�r .-, i&vm EXISTING BUILDING RETAIL -- - - - - -= $THE£T -FAA - - -- -all August 8, 1991 8 -E COUNTY OF ANOKA Department of Highways Pau! K. Ruud, Highway Engineer 1440 BUNKER LAKE BLVD NW, ANDOVER, MINNESOTA 55304 612 - 754 -3520 City of Fridley 6431 University Avenue NE Fridley, MN. 55432 Attention: Barbara Dacey, Community Development Director Dear Ms. Dacey: We have received your letter dated August 2, 1991, referring to a proposed improvement at Bob's Produce. We have the following comments on the request to shorten the proposed median on Osborne Road as well as other concerns about the plan as they relate to the proposed Osborne Road improvement and general County policy. The following, then, are our comments on this plan 1) The right -of -way shown on the plan is the right -of -way existing as of this date. Anoka. County, in conjunction with the City of Fridley and the Minnesota Department of Transportation, is currently working on plans to upgrade Osborne Road at its intersection with TH 47. That upgrade will require additional right -of -way along the north side of Osborne Road and we would suggest that the City gain title to said right-of-way as part of this redevelopment. The County's needs for right -of -way would extend 50 feet north of the existing centerline of Osborne Road. 2) The adjustment in this right -of -way will undoubtedly affect the building and parking setback and the build setback as shown on the enclosed drawing. 3) The reconstruction of Osborne Road, includes the construction of left turn lanes to TH 47 as well as to West Service Drive. The construction of these medians are minimum standards as suggested by the State Aid Manual and we would not be in a position to shorten the medians to provide a left turn access for this driveway. Alternatives to the property owner might include, combining access with the property immediately to the west and eliminating one driveway along the north side of Osborne Road. We would be interested in working out an arrangement to facilitate said combining of driveways. Affirmative Action / Equal Opportunity Employer 5A 4) In reviewing the traffic patterns generated by the proposed expanded facility, it becomes apparent that left turn access to the facility, particularly for the retail customer, is adequately supplied by the left turn bay-located at West Service Drive. This arrangement would allow for the safest access to the facility for left turners, in that they would be provided a left turn slot in which to wait for a clearing in oncoming traffic. 5) In addition to the access issues discussed above, we are concerned about the drainage pattern for the proposed facilities. Current Anoka County policy is that we will allow no more than the existing calculated runoff to enter Osborne Road uncontained in either a structure or retarded by a holding pond. The developer will need to submit calculations showing the before and after storm water runoff to Osborne Road and facilitating a no increase factor in the design of the ultimate facility. If you have any questions regarding these items, please contact either Doug Fischer, Jane Pemble, or myself at 754 -3520. Sincerely, G. Olson, PE luty County Engineer xc: Michelle McPherson, BLA Planning Assistant dmh /1FRIDLEY f�,�w 8 -F _ a Community Development Department PLANNING DIVISION City of Fridley DATE: August 22, 1991 TO: William Burns, City Manager FROM: t/ Barbara Dacy, Community Development Director SUBJECT: Summary of Meeting with Sue Norstrom and John Uttley Regarding Lake Pointe Negotiations Jim Casserly and I met with John Uttley and Sue Norstrom on Thursday, August 22, 1991. The agenda consisted of reviewing the negotiation ground rules, the appraisal prepared by Peter Patchin, the other elements of the offer, and discussion of a future meeting. The ground rules were accepted subject to a minor change to #9, that any agreement between the four of us would have to be ratified by the Woodbridge investors. Norstrom noted that there are two limited partnerships; one partnership owns the property and the other partnership provides financing for the property. Jim and I both reviewed the process that we conducted to hire Patchin and also reviewed the instructions to him. I reviewed the development cost approach that Patchin used to base his value and also reviewed his highest and best use analysis. Norstrom stated that they would review the appraisal in more detail, especially the comparable sites and per square foot amounts. We reviewed the other elements of the development contract and clearly documented the reasoning for each amount. Norstrom noted that Woodbridge still has earnest money pending with the two single family properties north of West Moore Lake Drive. She stated that she believed the earnest money was $10,000 each. Apparently, these funds are in an escrow deposit. Norstrom appreciated the work that Casserly prepared and its clear and simple manner. She stated that she would talk to David Weir and the remaining partners and then call John Uttley to arrange another meeting. Norstrom stated that when Woodbridge bought the property, she believed that the purchase price included value attributable to the availability of tax increment assistance. She stated that she felt that that particular point was missing in the HRA's offer. Meeting Regarding Lake Pointe Negotiations August 22, 1991 Page 2 Casserly pointed out, however, that the appraisal valued the site "as is" and the value of the public improvements have already been made and paid for by the HRA. Casserly also offered to meet with them again with Peter Patchin; however, this would be an extra expense to the HRA if Patchin would attend such a meeting. Casserly believes Patchin would be an effective part of the negotiation, and could effectively defend his appraisal. Uttley and Norstrom did not indicate whether or not they would pursue this or hire their own appraiser. At this point, we will await notification from Uttley regarding a response. BD /dn M -91 -624 cc: Jim Casserly AGENDA FRIDLEY HRA /LAKE POINTE INVESTMENT COMPANY August 22, 1991 I. Negotiating Ground Rules II. Patchin Appraisal III. HRA Offer (August 21, 1991) IV. Next Meeting '� ALIG 25 '91 13 :32 FLINT612 -334 -3382- Casserly Molzahn & Associates, Inc. 215 South 11 th Street, Suite 300 • Minneapolis a Minnesota 55403 Office (612) 342 -2277 • Fax (612) 332 -4765 M E M O R A N D U M TO: City of Fridley William Burns Barbara Dacy FROM: DATE: RE: James R. Casserly Mary E. Molzahn August 26, 1991 Tax Increment Assistance to McGlynns DRAFT P.2 As requested, we have prepared a brief public policy statement rega,.rding tax increment assistance to McGlynns. 7. There are hardly more blighting and negative impacts on a city than the lass of a major business with numerous jobs and the vacating of property. This is exactly what happened. in Fridley. 2. The Tax Increment Act, from its inception, was designed to assist in these circumstances. The use of tax increment stops the further erosion of value by freezing the base and using only the gain in value (the tax increment) for assistance. If the HRA /City does /0-1, ALIG 25 '91 13 :32 FLINTGI2_334_ --62_ p,3 V p not intervene, the other taxing jurisdictions will realize a reduction in taxes. 2. The building in question is not a traditional multi - purpose office warehouse. As such, the building may require as much investment to modify and rehabilitate as it would to acquire it. In the other extreme, if the building remains vacant, its value must be decreased. It is a prudent use of tax increment dollars and in the best interest of the region and State to utilize existing infrastructure improvements and existing structures. 3. Tax increment assistance is provided over 15 years with the gross amount of assistance approaching $1.miliion. If an economic development district is established and 8 years of tax increment provided., approximately the same amount of assistance would be available. This assumes a $4 million market value for 8 years versus a $1.5 million market value for 15 years. However, since the money is received over a shorter period of time in an economic development district, the assistance to McGlynns is worth more in 1997 dollars. b. McGlynns is analyzing the construction of a manufacturing center as well as a distribution center on the East and West Coasts. The State of Minnesota, �� AUG 25 191 13 :°12 FLINT612_334_3382_ P.4 for all of its talk of encouraging expansion of existing businesses, has essentially nothing to offer a McGlynns other than tax increment assistance. Although the State may lose revenue through the school aid formulas, it.wrill still receive revenue from income taxes and unemployment taxes. Clearly the State is a winner due to the tax increment program at the local level. 7. Finally, if Fridley is successful in obtaining a $250,000 grant from the State and in turn provides a loan to McGlynns, Fridley can benefit by recycling the loan repayments (over $350,000) through the City's Development Program. In conclusion it is unusual to see as many public policy objectives being served as in the suggested tax increment assistance for McGlynns. JRC, MEN! /db � McGlynn Bakeries. One McGlynn Drive Chanhassen, Minnesota 55317 612 - 4747444 612 - 4749319 FAX August 30, 1991 VIA FAX: 571 -1287 Mr. William W. Burns City Manager City of Fridley Municipal Center 6431 University Avenue. N.E. Fridley, Minnesota 55432 Dear Bill: Our offer to Grand Metropolitan was communicated by FAX today. I have asked for an answer by 5 p.m., next Wednesday, September 4, 1991. At the latest I expect we will have a go /no go decision by Monday, September 9th. The offer is in the form of a non - binding Letter of Intent. If Grand Metropolitan agrees to the terms, then we will sign a formal Purchase Agreement about two weeks following the initial agreement. Our terms include several contingencies that relate to the City of Fridley. I have excerpted them on Attachment #1. Assuming that our offer is accepted we should meet soon to discuss the specific next steps involved in resolving these contingency issues. You may want to begin preparatory work on some of the issues such as the flooding. I will keep in touch regarding the status of our offer. Please give me a call if you have any questions. Sincerely, Mark Rasmussen Vice President Marketing /Strategic Planning MR /gd Attachment c: Barbara Dacy, Helen Brooks James Casserly I ATTACHMENT A McGLYNN BAKERIES' OFFER ON FORMER TOTINO'S PLANT Excerpts Rear" City of Fridley CONTINGENCIES: Purchase of the Property will be contingent upon the performance or satisfaction of the following: D. Proper zoning and use of property. To include City approval of Buyer's intended use including an outlet store and appropriate signage. F. City approval of a lot division to combine the 9.79 acres and the adjoining 1.0 acre into one parcel. H. Satisfactory resolution of the parking lot flooding problem by the City of Fridley or the Seller. (Noted at the open house on 8/23/91.) I. Formal authorization of certain governmental incentives by the City of Fridley and the State of Minnesota. Fridley is offering Tax Increment Financing and Industrial Development Bonds. The State is offering a discounted loan program. It is understood that if all of the above contingencies have not been met to the r� satisfaction of Buyer, in its sole discretion, that Buyer may terminate the agreement to purchase the Property. Other letter excerpts: TIMING: E. City of Fridley and State of Minnesota Financing Incentive Authorization: eight (8) to twelve (12) weeks after Letter of Intent agreement (approximately 11/25/91). I hope that you find the above terms and conditions satisfactory. Several of the contingencies warrant a few additional comments: Parking Lot Flooding: The City Manager of Fridley, William Burns, assured me on August 27, 1991 that the City would take care of the problem. I don't think that this will be an issue. Governmental Incentives: The key point here appears to be our ability to qualify for the Industrial Development Bonds. The financial savings of the bonds are key to the overall deal from McGlynn's perspective. We must also purchase the property at a value low enough to justify the Tax Increment Financing promised by Fridley. Based on my discussions with the City and State and our current rehabilitation cost estimates, I do not anticipate any unreasonable problems in these areas. Additional 1.0 Acre: We require an additional acre in order to provide sufficient future parking space. This acre adjoins the property on the north and would run parallel to the current lot line. .M FRIDLEY yE. w z� • FRIDLEY MUNICIPAL CENTER • 6431 UNIVERSITY AVE. N.E. FRIDLEY, MN 55432 . (612) 571 -3450 • FAX (612) 571 -1287 August 23, 1991 Mark Rasmussen, Vice President Marketing /Strategic Planning McGlynn Bakeries One McGlynn Drive - Chanhassen, MN 55317 Dear Mr. Rasmussen: We enjoyed meeting you last Thursday, August 15, 1991. We are very excited about McGlynn Bakeries' interest in the City of.Fridley, and specifically the former Pillsbury /Totino Pizza plant. This letter is to respond to your inquiries about the amount of public assistance available to McGlynn Bakeries in order to locate in Fridley. Also, you had other site specific questions such as the status of environmental issues pertaining to the property, signage requirements, labor force availability, and the ability to locate a retail outlet within the plant. At our meeting, we discussed tax increment financing, industrial revenue bonds, and the Minnesota Department of Trade and Economic Development's Economic Recovery Loan Program. While each option has its own set of rules and criteria, let me assure you that the City is willing to work with McGlynn Bakeries on any or a combination of these financial options. Enclosed is a one page summary of public assistance for McGlynn Bakeries. Please understand, however, that any of these options require City Council and /or Housing & Redevelopment Authority final approval. We have identified for each item a present value (1992 dollars) and a long -term value. Assumptions have been made about each financial option. After 17 years, the gross amount of assistance (if all were pursued) is about $3,800,000, which equals &'about $2 million in 1992 dollars. The City has the most control over the tax increment financing tool (item #4) and the property valuation issue (item #1) . The tax increment assistance will be paid directly to the company on a semi- annual basis beginning in 1994. Note that the Minnesota Economic Recovery Loan must be for property acquisition only if a Mark Rasmussen August 23, 1991 Page 2 15 year term is proposed. The savings expressed for this loan and the industrial development bond are the savings achieved by lower interest rates. Also enclosed is information on the labor force in our area, the City's sign and zoning ordinance, and information regarding the removal of the underground fuel tanks which occurred in 1989. A package of information regarding our community which was distributed at the open house on August 23, 1991 has also been included for you. We are proud of our community and our commitment to successful businesses (note the information on our property tax capacity rates) . If there is any other information that I can provide you, please do not hesitate to call me at 572 -3500. Sincerely, IAZ-ZZ-11) V-4-zc-�� William W. Burns City Manager WWB /dn C -91 -271 LABOR FORCE DESCRIPTION Nancy Hendrickson of the Anoka County office of the Minnesota Department of Jobs and Training has provided us with information regarding the labor force availability for food processing employees. Ms. Hendrickson informs us that 12,000 individuals are looking for employment in Anoka County. A majority of these individuals have post secondary and high school education unlike other areas of the metropolitan area. Hendrickson describes them as highly motivated and semi- skilled to skilled industrial workers. Most are trained for machine operations, packaging duties, and assembly. In fact, she noted that some former Totino employees remain unemployed or are in the process of retraining for other positions. She also notes that 50% of placements handled by her office are made outside of Anoka County; Anoka County has a ready work force "close to home ", but there are not many opportunities to locate workers near their homes. _. 111_� V SITE INFORMATION 1. In response to your inquiry about the environmental issues pertaining to the site, we have made copies of pertinent correspondence for your review. In November 1989, Pillsbury removed four underground fuel tanks from the property. During the removal process, soil contamination was discovered and the Minnesota Pollution Control Agency (MPCA) was promptly notified. Pillsbury proceeded to properly treat the contaminated soil as the attached documentation verifies. About 239 cubic yards of contaminated soil was treated and disposed of properly in accordance with MPCA rules. Still remaining on the site is a 20,000 gallon propane tank which was installed in 1977. There have been no instances or occurrences of hazards or contamination from this tank. 2. A copy of our sign ordinance pertaining to industrial districts has also been included. Wall signs are permitted. McGlynn Bakeries is allowed to have its name on the wall where Pillsbury is now printed, as long as the size meets -the criteria in the ordinance. You may also have one free- standing sign 80 square feet in area, 25 feet in height, and 10 feet from the property line. Off - premise signs or signs which are not located on the property are not permitted within the City of Fridley (you will also find this to be true of other communities). !� 3. The M -2, Heavy Industrial zoning district regulations have been included for your reference. Of specific interest is the ability to have a retail outlet within your facility. Section 205.18.01.B.(1) of the M -2 district permits retail stores of goods and services manufactured on site as an accessory use. 0Q W H a w x z z a th U a 0 w w U 4 H H a W a H to o CA d' r-1 PQ H tn to U] O • d' w m r i � ri V} m H 9 $4 > $4 �k a0 �aia�i H Q 0 � U) b, In N I H -9 to to C-4 _. o a N In ON -r1 $4 tD - ��, $4 ',�y d oz } a t C-1 V)- Vr N >4 tN Q. O .-r -rA n LO H ?' H V r0 -I V a) C O o 0 0 a) A (1) 0 a) AF. 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N.E. FRIDLEY, MN 55432 • (612) 571 -3450 • FAX (612) 571 -1287 August 26, 1991 Representative Wayne Simoneau 335 State Office Building St. Paul, MN 55155 Dear Wayne: McGlynn Bakeries is interested in buying the former Pillsbury Totino Pizza plant. Because of the cost of rehabilitating and modernizing the plant, McGlynn Bakeries has inquired if public assistance is available. One part of the assistance package that we would like to prepare for McGlynn Bakeries is a loan from the Economic Recovery Grant Fund. This letter is to request your assistance with our application to the Minnesota Department of Trade and Economic Development. Pillsbury, Inc., a subsidiary of Grand Metropolitan PLC, announced on January 18, 1990 that it was closing its Fridley pizza plant and transferring operations to its Wellstone, Ohio plant. Approximately 220 jobs were eliminated. The plant officially closed July 14, 1990. Pillsbury placed the property on the market immediately thereafter. The site totals 18.5 acres. The southerly 10 acres of the property is occupied by the plant, which totals about 145,000 square feet of building area. The remainder of the property is vacant and was used for occasional truck storage. There has been some interest in the property since its placement on the market; however, not as strong as it has been in the last month. Helen Brooks from Towle Real Estate contacted us about the interest of McGlynn Bakeries. I arranged a meeting on August 15, 1991 with Terrill Towers from the Department of Trade and Economic Development, Jim Casserly, our financial consultant, and Barbara Dacy, our Community Development Director, with Mark Rasmussen, the Vice President of Strategic Planning /Marketing for McGlynn Bakeries. At that meeting, Rasmussen informed us that McGlynn Bakeries was seeking about $1 million of assistance. We discussed with him three types of financial options including the Minnesota Economic Recovery Grant, tax increment financing, and industrial development bonds. Representative Wayne Simoneau August 26, 1991 Page 2 Through tax increment financing, we will be able to provide McGlynn Bakeries about $500,000 of tax increment financing (these are 1992 present value dollars which translate into $1 million of assistance over 17 years). Although attractive to McGlynn Bakeries, it appears that it is not enough to warrant the company's investment into the facility. They will need to invest $2 - $3 million for equipment replacement, maintenance, and other rehabilitation items. I toured the plant at an open house sponsored by Towle Real Estate, Pillsbury, and Grand Met on August 23, 1991. Bert McGlynn, Chairman of the Board for McGlynn Bakeries, attended as well as his Vice President of Engineering, Mike Dunkirk. It was apparent from their comments that substantial improvements were necessary for a modern food processing facility, but at the same time, they were very interested in this facility. Therefore, in addition to the tax increment financing assistance, we want to pursue an application for a Minnesota Economic Recovery Grant to be used for property acquisition in the amount of $250,000 - $400,000. We want to offer attractive loan terms including a 15 year term and an interest rate substantially below the rate available through conventional financing. Reoccupation of this facility will help to revitalize our local economy and employment base. The City has suffered continuing losses in the number of manufacturing employees. In the first quarter of 1988, the Metropolitan Council reported 20,304 employees. In the first quarter of 1989, it dropped to 20,083 employees. You may have also seen the recent announcement of Quebecor Inc., who will be leaving the City in January. This is a loss of an additional 250 manufacturing jobs. Further, because of the depressed economy, vacant commercial and industrial space is on the increase. Our Assessor indicates that the vacancy rate for commercial and industrial space is at least 15% - 200. This has resulted in $1 million of lost retail sales. McGlynn Bakeries indicated on a preliminary basis that about 1/3 to 2/3 of the potential 200 - 230 jobs would be relocated from existing facilities; however, the remaining portion of jobs would be available to the Anoka County labor force, and to some former Totino employees. Nancy Hendrickson at the Minnesota Department of Jobs and Training has advised us that some former Totino employees remain unemployed or are in the process of retraining for other positions. 4 � Representative Wayne Simoneau August 26, 1991 Page 3 Participation from the State is a key part of the total assistance package. I appreciate your cooperation to date and your willingness to help us with this project. Should you need any further information from my office, please feel free to contact me. Sincerely, William W. Burns City Manager WWB /dn C -91 -282 r'� HOUSING AND REDEVELOPMENT AUTHORITY MEETING, THURSDAY, SEPTEMBER 12, 1991 7:30 P.M. PUBLIC COPY CITY OF FRIDLEY AGENDA HOUSING & REDEVELOPMENT AUTHORITY MEETING THURSDAY, SEPTEMBER 12, 1991, 7: 30 P.M. Location: City Council Chambers Fridley Municipal Center 6431 University Avenue N.E. CALL TO ORDER: ROLL CALL: APPROVAL OF MINUTES: August 8, 1991 ACTION ITEMS: CONSIDER APPROVAL OF SECOND MORTGAGE SATISFACTION FOR FRIDLEY PLAZA OFFICE BUILDING 1 - 1C CONSIDER APPROVAL OF SETTLEMENT AGREEMENT AND LEASE AGREEMENT WITH DON FITCH, DAIRY QUEEN . . . . 2 - 2K CONSIDER APPROVAL OF AGREEMENTS TO RETURN TAX INCREMENT TO SCHOOL DISTRICTS 3 CLAIMS AND EXPENSES 4 - 4G INFORMATION ITEMS: COPY OF LETTER TO CITY COUNCIL REGARDING DECERTIFYING TIF DISTRICTS 5 COPY OF CONTRACT WITH MAXFIELD RESEARCH GROUP 6 - 6F UPDATE ON RICE PLAZA 7 INFORMATION ON BOB SCHROER PROJECT 8 - 8F OTHER BUSINESS ADJOURNMENT CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING, AUGUST 8, 1991 CALL TO ORDER: Vice-Chairperson Schnabel called the August 8, 1991, Housing and Redevelopment Authority meeting to order at 7:38 p.m. ROLL CALL: Members Present: Virginia Schnabel, Duane Prairie, John Meyer, Jim McFarland Members Absent: Larry Commers Others Present: William Burns, Executive Director of HRA Barbara Dacy, Community Development Director Paul Hansen, Accountant Jim Casserly, Consultant Mike Hurley, Barna, Guzy & Steffen Spencer Johnson, 6401 University Avenue Curt Glaser, 2550 University West, St. Paul Harry Yaffe, 7841 Wayzata Blvd. Sherrill Oman, 2000 Piper Jaffray Tower Don and Judy Fitch, Fridley Dairy Queen Lee Maxfield, Maxfield Research Group, Inc. Mary Bujold, Maxfield Research Group, Inc. APPROVAL OF JUNE 27 , 1991, HOUSING & REDEVELOPMENT AUTHORITY MINUTES: MOTION by Mr. Prairie, seconded by Mr. Meyer, to approve the June 27, 1991, Housing & Redevelopment Authority minutes as written. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 1. CONSIDERATION OF RESOLUTION APPROVING REDEVELOPMENT AGREEMENT WITH THE CHARLES SMITH ESTATE: Ms. Dacy stated that staff would like the HRA to consider the approval of a resolution which would authorize execution of the development contract with the Charles Smith Estate to redevelop the former Cub Foods site at 250 Osborne Road. At this time, the heirs to the Charles Smith Estate are in the process of remodeling the building into three tenant spaces and are proceeding with the required outside improvements. HOUSING & REDEVELOPMENT AUTHORITY MTG. , AUG. 8, 1991 PAGE 2 Ms. Dacy stated that at the June 27, 1991, meeting, the HRA conceptually approved a pay-as-you-go approach for tax increment financing for this particular project. The concept approval stipulated that it was not to exceed $65,000, or the tax increment, which is payable over seven tax payable years. In order to accomplish the pay-as-you-go approach, the petitioners had to secure an additional $65,000 or the first mortgage. Since the June meeting, Northeast State Bank has approved the additional $65,000. The development contract at the meeting prepared by Jim Casserly matches the direction and concept approval given by the HRA on June 27, 1991. Ms. Dacy stated that also included in the development contract are a couple of new restrictions the HRA has not seen in the past. One is the restriction on a sexually oriented business. The purpose of this restriction is to make sure that tenant spaces in a publicly assisted project are not leased to a sexually oriented business as defined in the Code. Secondly, the property has had an ongoing problem with overnight parking of semi-truck trailers, so they have included language in the development contract to prohibit that activity. Mr. Casserly stated the development contract is best summed up on page 25, which is a copy of what amounts to the promissory note. It is the limited revenue tax increment note in the amount of $65, 000. The $65, 000 is to reimburse for tax increment eligible expenses. The note lays out very clearly that this is not the general obligation of the HRA; it is a revenue obligation and it is payable only from the revenues that come from tax increment that are paid on these particular parcels. Mr. Casserly stated legal counsel for the developer had a couple of language changes that were legitimate and were incorporated into the contract. He stated two pages, pages 12 and 14, were handed out at the meeting. If the HRA is comfortable with the underlined changes, staff recommends these be included in the development contract. In Section 6. 1 (c) on page 12, they made it clear that they are talking about semi-truck trailers and that they cannot occupy a space for over a 24-hour period on any part of the Redevelopment Property facing University and Osborne Road or there could be a default under the contract. Page 14 is the section that contains the various kinds of defaults that could occur in this contract, and Section 7. 1 (c) states that: "Failure by the Redeveloper to remove semi-truck trailers within the time period required by Section 6.2 (c) . . . . " Mr. Meyer questioned the language, "any part of the Redevelopment Property facing University and Osborne Road" . They have to be explicit in telling the property owner under what circumstances they are violating the development contract and be explicit about where trucks cannot be parked because of the severe penalty that accompanies this violation. HOUSING & REDEVELOPMENT AUTHORITY MTG. , AUG. 8, 1991 PAGE 3 Mr. Casserly stated that the rear of the property is for loading and unloading trailers. The concern has not been with the trailers parked in the rear overnight or for a certain time period during the regular course of business, but with the whole front of the property facing University and Osborne Road. He agreed that "facing University and Osborne Road" is not the best language. Mr. Mike Hurley suggested they refer to the "customer parking" facing University and Osborne Road. Mr. Casserly suggested the following amendment: ". . .any part of the Redevelopment Property used for customer parking fronting University and Osborne Road. . . " If the HRA is agreeable, he will incorporate that into the agreement. The HRA was in agreement with that amendment. Mr. Hurley stated they do not like the default procedures, but understand what the HRA is looking for. They are working at correcting the problem with the semi-truck trailers in the parking lot. If there are any complaints, he would ask that staff contact him right away and they will tow away any violators. MOTION by Mr. Meyer, seconded by Mr. Prairie, to approve Resolution HRA 5-1991, "A Resolution Authorizing Execution and Delivery of a Contract for Private Redevelopment By and Between the Housing and Redevelopment Authority in and for the City of Fridley and Steven Hardy, Leanne Hardy, Kent Smith, Spring Smith,m Kent Gardner, and Jerrill Lynn Gardner" . UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 2. CONSIDERATION OF CONCEPTS OF SETTLEMENT AGREEMENT AND LEASE WITH DON FITCH REGARDING DAIRY QUEEN SITE: Ms. Dacy stated that since the agenda was delivered the previous Friday, some events have caused staff to recommend different actions for the HRA to take. Ms. Dacy stated that on the settlement agreement, Mr. Fitch received word that Scott Ericson did not receive final approval on the financing for the redevelopment of the northeast corner (Fridley Town Square project) . Mr. Fitch had signed a lease with Mr. Ericson to relocate the Dairy Queen business to that location. However, Mr. Fitch has indicated that he does not want to conclude an agreement on the acquisition of the property at this time. Ms. Dacy stated the second item is the lease agreement. Mr. Fitch has identified 14 items in the lease that he wants to discuss further. At this time, staff is recommending the HRA not take any action on the lease. Staff would like more time to discuss the HOUSING & REDEVELOPMENT AUTHORITY MTG. , AUG. 8, 1991 PAGE 4 issues with legal counsel and then finalize a recommendation to the HRA. Staff will bring back the lease to the September HRA meeting. Ms. Dacy stated that on July 25, 1991, the HRA took possession of the Dairy Queen property. Staff sent Mr. Fitch a letter dated July 24, 1991, indicating that until a written lease agreement is executed, he is responsible for all costs that are incurred as a direct or indirect result of the operation of the Dairy Queen. Mr. Don Fitch stated he was sorry if he had inconvenienced the HRA by not having the lease ready for approval. He and his wife are no less concerned than the HRA to come to a resolution. Mr. Fitch stated that on Tuesday, Mr. Ericson did inform him that his last chance to get construction financing was turned down. At this time, they are not sure of the status of the Fridley Town Square project, and he might not have a place to relocate. Therefore, his attorney advised him that without a place to relocate at this time, he should not settle on the land and the building. At this point, it has nothing to do with the terms or City staff. Mr. Fitch stated that regarding the lease, he agrees in principal to some of the price terms, but there are a few legalities in the lease about who will be responsible for what improvements that needs to be discussed. He is confident that they will be able to come to terms on the lease. Mr. Fitch stated that he definitely would like to relocate in the northeast corner of University/Mississippi. If Mr. Ericson continues to be unsuccessful in securing financing, Mr. Fitch stated he would like the HRA to consider the potential of he and some other individuals acquiring the property and redeveloping the area for a Dairy Queen and some other businesses. He will start putting together a proposal. Mr. Fitch thanked the HRA for their time and patience. Ms. Schnabel asked if the Fitches are paying a monthly lease fee. Ms. Dacy stated the Fitches are continuing on a day-to-day operation cost. They have not issued a rent check per se. When the lease is signed, it will be written such that the Fitches will have to pay the rent due since July 25, 1991. Ms. Schnabel stated that in the lease agreement, it referred to months of operation. She would like to see the months of operation more defined so the HRA knows how many months the HRA will be collecting lease fees. Ms. Dacy stated this can be included in the lease. • HOUSING & REDEVELOPMENT AUTHORITY MTG. , AUG. 8, 1991 PAGE 5 Mr. Hoeft stated the way the lease is termed right now, the Dairy Queen will pay $500 per month, and if they are in operation during any portion of any month, they shall pay a per diem prorated amount of said $500. Mr. Fitch stated he did not have a problem with putting in the lease a minimum number of months of operation. He would suggest a minimum of eight out of twelve months of operation. He is generally open at least 9-10 months depending upon the weather in the spring and the fall. Ms. Schnabel stated she is not suggesting this to cause the Dairy Queen a hardship, but she did think the HRA should be protecting themselves. 3 . CONSIDER PROPOSAL BY UNIVERSITY AVENUE ASSOCIATES REGARDING RESTRUCTURING SECOND MORTGAGE FOR SPRINGBROOK APARTMENTS: Ms. Dacy stated that in 1986 and 1987, the HRA approved a development contract for the Springbrook Apartments, and part of that development contract authorized the HRA to issue a $850,000 second mortgage to the developer and owner of the site, University Avenue Associates. Under the mortgage agreement signed by the HRA and developer, the first payment on that mortgage is due on July 11, 1993 and totals approximately $110,000. A like amount is due each year until the year 2002 when the entire principal and interest is due and payable. Last year this month, the HRA agreed to a one year extension on the second mortgage to run concurrently with the first mortgage the developer had on the property. Ms. Dacy stated University Avenue Associates has now notified staff that they would like to refinance the first mortgage and utilize an FHA-Insured mortgage. The Department of Housing & Urban Development administers this type of loan and has a lot of stipulations about the amount of subordinated debt. Ms. Dacy stated two items are being requested for conceptual discussion and some type of direction from the HRA: 1. If University Avenue Associates refinances its first mortgage, a new second mortgage would have to be issued by the HRA. 2 . Because of the type of HUD requirements, the second mortgage may be in a lesser amount, and the difference between the original and new amount secured. Ms. Dacy stated she wanted to make it clear that University Avenue Associates is not requesting a reduction in the amount of payment or a forgiveness. The $850, 000 is still intact; it is just a matter of being restructured. HOUSING & REDEVELOPMENT AUTHORITY MTG. , AUG. 8, 1991 PAGE 6 Ms. Dacy stated that in the agenda is a letter dated August 1, 1991, from Jim Casserly who has reviewed the restructuring issue. Staff's charge to Mr. Casserly was that they wanted to protect the current security the HRA now has with the current second mortgage and how that will be affected with the new restructuring. Ms. Dacy stated Sherrill Oman, attorney for University Avenue Associates, and representatives for Springbrook Apartments are in the audience. Mr. Casserly stated Springbrook Apartments is asking the HRA to assist them so they can get some permanent financing on the project. As he understands it, they are still operating with their construction loan, and they need to have take-out financing. The program being looked at is a HUD-guaranteed mortgage which would give them a very competitive interest rate amortized over a 35 year period. Unfortunately, some of the requirements of that HUD mortgage affect the HRA. One of the requirements is that any secondary financing has to have some limitations to it. They do not wish to make a deposit, pay a processing fee which, in this instance, is approximately $40, 000, unless they have some preliminary direction from the HRA. The goal for the HRA is to be no worse off than they are now. Staff believes they would like to assist Springbrook Apartments. It would make for a more stable project if they can place permanent financing. In fact, the HRA may be in a better position than it is now for a number of reasons. Some have to do with maintaining various kinds of repair and replacement funds and having the project's debt being amortized over a long term at a competitive rate. Mr. Casserly stated the HUD procedure is fairly convoluted. There have not been many of these financings done, and it will take some time and patience on the part of Springbrook Apartments. Mr. Casserly stated that in his August 1, 1991, memo, he has suggested that the HRA consider a new subordination under the following four circumstances: 1. That the project pro forma demonstrates an ability to pay the HRA note. 2 . That an appraisal of the project shows that net sale proceeds would be adequate to pay the HUD guaranteed debt and the Note (not just the HRA debt secured b the second mortgage) . 3 . That at least 75% of the Note be secured by assets (this may include assets other than the Springbrook Apartments) . • HOUSING & REDEVELOPMENT AUTHORITY MTG. , AUG. 8, 1991 PAGE 7 4. That the cumulative financial net worth of the guarantors exceeds $10 million. (This amount is contained in Article 4 of the Mortgage Guaranty presently in effect) , Ms. Schnabel stated that regarding #4, how can the HRA control this type of situation should the ownership change? Mr. Casserly stated he is not sure that it makes any difference to their guarantee if the ownership changes. Ms. Sherrill Oman, attorney with Larkin, Hoffman, stated that also with her was Harry Yaffe, one of the partners of University Avenue Associates, and Curt Glaser, a principal advisor of the Glaser Financial Group. Ms. Oman stated Mr. Casserly did a very good job in introducing the project. They are in the process of refinancing their project. This has been going on for some time. The mortgage with Citicorp Real Estate, Inc. , actually matured on May 1, 1991. It was intended to be a loan to stay in place only to cover the construction period and lease-up, and that has occurred. They have explored other methods of financing, and this appears to be the most attractive and the most feasible method. Ms. Oman stated that Citicorp understands that in the process of refinancing, they are giving the partnership the latitude on a month-to-month basis to proceed with financing. There is no threat of foreclosure or anything of that nature. They just want to get this accomplished as quickly as possible. Ms. Oman stated HUD does have restrictions on the amount of subordinate debt that can be incurred by the project itself. In her letter dated July 19, 1991, to the HRA, she had outlined the methods HUD uses in determining that amount. Ms. Oman stated that because of the cash flow projections, the project occupancy has increased and the vacancy rate has gone down. The apartments have only been in operation for a little over three years. They do not know how much smaller the second mortgage is going to be, and it may not be smaller at all. But, because it could be smaller, they thought they should come before the HRA at this stage to make sure it is something that can be worked out with the HRA. There are other ways for providing for a promise of payment other than a direct mortgage from the partnership. Ms. Oman stated they do not think a real source of security is the project, in the sense of it being collateral. They think the real security for the HRA is the assurance that they will be paid back and will be paid back in terms of the executed documents. They believe the refinancing will benefit the HRA because it will provide 30 years of financing. The rates are favorable. The debt HOUSING & REDEVELOPMENT AUTHORITY MTG. , AUG. 8, 1991 PAGE 8 would be fully amortized over a 35 year period and would have a significant impact on the cash flow of the project. Ms. Oman stated HUD requires an initial deposit to a replacement reserve fund for the purpose of maintaining the project and replacing capital items as they wear out. This replacement fund deposit will likely be $450-$750 per unit. In addition, HUD will require a monthly deposit to be made to the replacement reserve fund so that at all times sufficient funds will be necessary, as determined by HUD, to properly maintain the project. That will: (1) ensure an attractive and well maintained project in the City of Fridley; and (2) ensure the project is attractive to people who live there. That will keep the vacancy rates down and improve the cash flow. Mr. Oman stated the partners are contributing $700,000-800,000 in additional equity to the project. That demonstrates a very significant commitment by the partners of the owner to this project to keeping it and repaying the debt. Ms. Oman stated she wanted to emphasize that they are asking for concept approval only, prior to making the actual application to HUD. Mr. Curt Glaser, Glaser Financial Group, discussed the financing details. Mr. Glaser stated they are mainly property mortgage arrangers and they specialize primarily in multi-family residential housing placement and structuring loans for that type of real estate. They have explored other financing opportunities for this project, but they were not feasible. He stated HUD is very impressed with this real estate and are welcoming an application. HUD's under-writing criteria is probably easier than conventional criteria, but their underwriting decisions and business decisions are going to be as conservative as conventional. HUD's process will probably involve 4-5 months. Mr. Glaser stated HUD will carefully review the development, because HUD' s obligations, in the event of a foreclosure, are to pay a claim to the lenders. The HRA can be assured that if HUD commits to finance that the project has received the closest scrutiny in terms of its performance and ability. Ms. Schnabel stated her only concern (and she believed it has been addressed) is that if the HUD application goes through, they require that the subordinated debt be paid only out of surplus cash. As long as that is going to directly affect the HRA, they should be assured their position is going to be solid. Mr. Casserly stated that right now in the current development contract, they look to the personal guarantees, and that is not • HOUSING & REDEVELOPMENT AUTHORITY MTG. , AUG. 8, 1991 PAGE 9 going to change. The owner has not suggested any other guarantee. That is really the basis for the HRA's security. The HRA would like the project demonstrating consistently more cash flow. They are only as secure as the guarantee is secure, and that guarantee is not secured by anything at all other than net worth of the guarantors. In his judgement, the HRA should be in better shape if this financing is accomplished. MOTION by Mr. Prairie, seconded by Mr. Meyer, to continue to work with University Avenue Associates regarding the restructuring of a second mortgage for Springbrook Apartments subject to the four criteria suggested by Mr. Casserly in his August 1, 1991, memo: 1. That the project pro forma demonstrates an ability to pay the HRA note. 2. That an appraisal of the project shows that net sale proceeds would be adequate to pay the HUD guaranteed debt and the Note (not just the HRA debt secured b the second mortgage) . 3. That at least 75% of the Note be secured by assets (this may include assets other than the Springbrook Apartments) . 4. That the cumulative financial net worth of the guarantors exceeds $10 million. (This amount is contained in Article 4 of the Mortgage Guaranty presently in effect) , UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 4. CONSIDER APPROVAL OF MORTGAGE SATISFACTION AGREEMENT, JOHN AND KAREN EARLEY: MOTION by Mr. McFarland, seconded by Mr. Prairie, to approve the Mortgage Satisfaction Agreement for John and Karen Earley at 6041 - 3rd Street N.E. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 5. CONSIDERATION OF HOUSING STUDY OUTLINE: Ms. Dacy stated the HRA last discussed this in April 1991. In January 1991, she and Mr. Burns interviewed a number of other staff members in first ring suburbs to see what they do to create successful housing redevelopment programs, etc. One suburb interviewed was the City of Brooklyn Center. The City of Brooklyn Center had a housing study done by Maxfield Research Group that was very useful to the City of Brooklyn Center. The following are reasons why staff recommended the HRA look at a housing study: HOUSING & REDEVELOPMENT AUTHORITY MTG. , AUG. 8, 1991 PAGE 10 (1) Staff thought they needed a study to help the City identify areas for successful housing development and redevelopment projects. (2) An HRA member stated that the City needs more than just a demographic study. So, she has changed the outline to create a neighborhood-focused approach. (3) The Association of Metropolitan Municipalities, of which Fridley is member, has adopted a policy recommending that " . . .cities carefully look at the impacts of these trends on their housing stock and become involved with all local and regional governments to successfully address the potential problems. It is important to recognize the market forces that will require cities to address the metropolitan nature of these issues. " (4) Metropolitan Council is also requiring cities to make sure their comprehensive plan for housing is consistent with its plan. (5) To help the City initiate a process where the City adopts goals and policies in maintaining and improving the housing stock and livability of the community. (6) The housing study would be a good tool to provide data for developers and as a resource for the citizens of Fridley. Ms. Dacy stated that in April 1991, the HRA told staff they wanted the housing study more focused. There were a lot of questions about existing neighborhoods, homes, removal, etc. She has tried to answer these questions in the outline. Ms. Dacy stated this is a very extensive study. In order to minimize the costs, staff has worked with Maxfield Research Group to identify certain tasks the Community Development Department would be responsible for. Mr. Maxfield has verbally indicated that the maximum cost of the study will be $25, 000. Ms. Dacy stated staff is recommending that the HRA approve the housing study outline and authorize the Executive Director to sign a contract with Maxfield Research Group. They could start work as soon as next week. Mr. Maxfield stated they are very pleased that the HRA has considered them to do the study. They can provide some very useful information and tools for the HRA and City for use in identifying some of the concerns and issues regarding each of the neighborhoods and looking for opportunities for development over the short term and long term. HOUSING & REDEVELOPMENT AUTHORITY MTG. , AUG. 8, 1991 PAGE 11 Mr. Maxfield stated this is not just a housing issue; it is also the issue of the people themselves and looking at parks, schools, transportation, shopping, social programs, etc. As the population changes, the needs of the community also change. Mr. Meyer stated that in a very simplistic way, he is concerned about first ring suburbs. First ring suburbs such as Fridley are probably up to their maximum in housing in terms of acreage. They have a large number of people who are either empty nesters or soon to be empty nesters. They have situations where it is less and less possible for young people to afford the houses that are going to be vacated by the empty nesters. At the same time, they have the phenomenon of those people who do have more money of opening up suburbs into the second ring, which could be leaving the first ring suburbs behind and vacated, much as has been done with the inner cities. To him, this is a major concern, and how is Mr. Maxfield going to address that concern? Mr. Maxfield stated that is a very important part of the study. He shares the same concerns about what is happening to first ring suburbs. Looking at housing and communities from marketing standpoints, there are going to be fewer entry level buyers. There are going to be more entry level homes on the market than there are buyers. One of the opportunities in the study is to identify the strengths Fridley has to offer in the marketplace. On the other hand, because there is still growth in the Twin Cities, that growth is going to create more demand for various types of housing. So, they have to look at it from two standpoints: (1) How can they position the City to be competitive to try and attract people? (2) Given the housing product, there might be another market that can attract the group that is shrinking. Mr. Meyer stated what Mr. Maxfield is saying sounds good. He hoped that the Maxfield Research Group will be as realistic as possible and not dwell on "pie in the sky" hopeful scenarios that have no major basis in reality. Mr. Maxfield stated they pride their reports on honesty and practicality. Ms. Schnabel stated this study is a real starting point on a whole series of decisions the HRA and City Council will have to address in the future. MOTION by Mr. McFarland, seconded by Mr. Meyer, to authorize the Executive Director to enter into a contract with Maxfield Research Group to conduct a housing study at a suggested contract cost of $25, 000. Mr. Meyer stated this is a tremendously ambitious survey of the Fridley community for even $25, 000. He expressed some concern at the April meeting that he hoped they are spending enough money to HOUSING & REDEVELOPMENT AUTHORITY MTG. , AUG. 8, 1991 PAGE 12 give themselves a meaningful tool and not just a "boilerplate" report. Ms. Schnabel stated the HRA has discussed in the past that the City's housing stock needs to be addressed. If they are truly in the business of being a "Housing and Redevelopment" Authority, this housing study is a step in the right direction. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 6. CLAIMS AND EXPENSES: Mr. Hansen stated the invoice for Noble Nursery for irrigation system repair at East Moore Lake Drive is a City expense, not the HRA's. MOTION by Mr. Prairie, seconded by Mr. Meyer, to approve the check registers dated July 19 and August 2, 1991. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. 7. CONSIDERATION OF INFORMATION ON TIF TURNBACK TO SCHOOLS: Mr. Burns stated he will be talking about the 1992 TIF return to the four school districts, the estimated 1991 amounts compared to estimated 1992 amounts, and the percentage increase/decrease that would be available to the districts. Mr. Burns stated that in order to evaluate whether they want to use their discretion as allowed by state law to turn TIF money back to the school districts, he asked the question: How much of an impact is this money going to put on the City's plans for future development? He looked at different major project areas: Southwest Quadrant, Lake Pointe, Mochinski project, University Avenue Gateway. He is assuming that the HRA will need to subsidize these projects. Mr. Burns stated that in order to address future project costs and their impact, he developed three different scenarios: Best Case, Worst Case, and Most Likely case. In all three instances, using the numbers provided by the Finance Department, it seemed clear to him that the TIF turnback to the schools is not going to stop the HRA from doing these projects. He is also assuming that the only projects that they are going to subsidize are the four major projects. He is assuming that other projects, Cub Foods project, Bob's Produce project, etc. , will continue to be pay-as-you-go type projects. Mr. Burns stated he has talked to Superintendent Dennis Rens and the Director of Finance, David Shapley. It is his understanding HOUSING & REDEVELOPMENT AUTHORITY MTG. , AUG. 8, 1991 PAGE 13 that School District #14 will be operating at a projected annual operating deficit over the next three school calendar years. Additionally, this year's legislative session mandated that there will be no school district referendum levies in 1991. They had planned to address the deficit by going to the voters. In the event a levy is put on a ballot in 1992, it will not be until the 1993-1994 school year that the school will realize revenue from the new levies. Based on that kind of need, perhaps the HRA's need for the TIF turnback is not as great as the schools. Mr. Burns stated he is recommending that the HRA once again return to the school districts 100% of the revenues generated by referendum levies approved between 1979 and 1988. Mr. Burns stated no action is needed by the HRA at this meeting. This will be brought back to the HRA for action at the September meeting. Mr. David Shapley, Director of Finance for School District #14, stated he is representing Superintendent Rens. He would like to convey to the HRA their thanks for the HRA's full support of School District #14 over the years. It is a real leadership role in a City where four school districts exist, and it is good to see this kind of community blend. Ms. Schnabel stated she would like Chairperson. Commers' input before making any final decisions on the TIF turnback. 8. CONSIDERATION OF CITY COUNCIL RESOLUTION REGARDING DECERTIFYING TIF DISTRICTS: Mr. Burns stated that on July 22, 1991, the City Council passed a resolution encouraging the HRA to decertify TIF districts as long as the revenue from the districts is no longer needed to fund our various financial obligations. This resolution was suggested after a discussion regarding the Cub Foods/Bob's Produce Tax Increment District No. 11 (July 1, 1991. ) The Council wanted him to make it clear to the HRA that this is not a hostile resolution, and they meant no ill will toward the HRA by passing this resolution. Ms. Schnabel asked if they have an analysis of those districts that fall into this category, or if the Council had any specific districts in mind. Mr. Burns stated they talked about the Skywood district and the Johnson Printing district. Ms.Schnabel asked if the Council is recommending that the HRA retire some of these districts earlier than the anticipated date. Mr. Burns stated he believed the Council is saying that if the HRA feels they do not need the revenue to cover redevelopment costs, HOUSING & REDEVELOPMENT AUTHORITY MTG. , AUG. 8, 1991 PAGE 14 then they are recommending the HRA retire the districts early. That might be difficult to do as the HRA moves its focus on commercial/industrial redevelopment to housing redevelopment. Ms. Schnabel stated the resolution is probably a point well taken, but if the HRA is now embarking on a housing study that may introduce some real needs, the HRA needs to be cautious about what they are doing. Mr. Casserly stated he wanted to make it very clear that the HRA really does not have surplus increment. They have a nice balance right now because some of the projects they are looking at trying to accomplish have not come to fruition, but the law is very clear that in any year in which the tax increment exceeds the amount necessary to pay the costs authorized by the plans, they can only do one of four things: (1) They can prepay any outstanding bonds; (2) discharge the pledge of the tax increment and decertify the district; (3) pay into an escrow account the amount dedicated to pay a bond; (4) return the excess amount to the County Auditor who will then distribute it to the other taxing jurisdictions in proportion to their levies. The caution here is that if they do not have any plan for utilizing what they have available, then they have no option. They return it to the County Auditor and decertify. That is very important legally, as well as financially. Ms. Schnabel stated that maybe the HRA should respond to the Council using the presentation just made by Mr. Casserly. Mr. Meyer agreed with Ms. Schnabel. Mr. Casserly stated it does seem like a simple proposition that if you are creating a new district, it would be nice to get rid of an old one. The problem is that anything they are looking at creating now is very narrowly defined. The kind of districts they are looking at today in no way compare to some of the districts established previously. Mr. Meyer agreed with Ms. Schnabel 's suggestion. The HRA should write a letter to the Council thanking them for their observation, that the HRA will make every effort to do as the Council suggests; but that there are some obstacles in the way that might make that difficult at this time. Mr. Burns stated another obstacle might be that decertifying the district would be in contradiction with some of the provisions of the HRA bond issues. Mr. Jim O'Meara, HRA bond counsel, has responded to this as well. Ms. Schnabel stated she certainly did not want to imply that they have any philosophical difference with the Council, because she did not think they do. She just wanted to be sure that the Council is reassured that the HRA is with the Council all the way, but they r , • HOUSING & REDEVELOPMENT AUTHORITY MTG. , AUG. 8, 1991 PAGE 15 do have some limitations set by state law, they do have some obligation, and they are trying to be conservative in defining these districts very narrowly. Mr. Burns stated he also thought a letter to the Council is appropriate. He understood the intent of the HRA. He would be happy to write a letter on the HRA's behalf to the Council and will include a copy of that letter in the next meeting agenda. 9. UPDATE ON INFORMATIONAL MEETING FOR MISSISSIPPI STREET PROJECT: Ms. Dacy stated the City received word as of last week that the Mississippi Street widening project will not occur this fall, but will be put out for bid next spring. Staff will be notifying the people who attended the information meeting on July 8, 1991, and will notify the people again in the spring before construction begins. 10. UPDATE ON RICE PLAZA: Ms. Dacy stated a copy of the Rice Plaza 1991 rent through July is included in the agenda. The HRA should be aware that Metz Bakery will be vacating its tenant space. 11. OTHER BUSINESS: a. Fridley Plaza Office Building Mr. Burns stated that at the last meeting, the HRA had a letter from Tony Krecji, Dr. Michael Park's real estate representative, asking that the HRA forgive about three- fourths of the second mortgage which is almost $40, 000 and accept a settlement for $10, 000. Mr. Burns stated he has discussed this with City Attorney Virgil Herrick, who has also discussed this with the prospective owners of the building. As a result of those negotiations and conversations, the $10, 000 is now up to $17, 500. Mr. Herrick recommends the HRA accept the $17, 500. Mr. Burns stated that of the remaining life of the second mortgage (1/2/99) , the HRA would receive $64, 199. 99. If they accept the $17, 500 and realize an 8% return on that amount, they would accumulate $28, 592 . 95 in January 1999, for a loss of $35, 607. 04 . Mr. Burns stated he is very disappointed in this situation, as is the City council. However, the HRA seems to be stuck and there does not appear to be a practical alternative. HOUSING & REDEVELOPMENT AUTHORITY MTG. , AUG. 8, 1991 PAGE 16 Mr. Mike Hurley stated he is representing Columbia Park Properties. With him is Dr. Spencer Johnson, Manager of Columbia Park Properties. Mr. Hurley stated the partnership is not the owner of the property. He stated that Dr. Michael Park is no longer the managing partner; Dr. Johnson is. Dr. Park negotiated the purchase of the mortgagee's interest for the property. He did not buy it outright. Since that time, the partnership has expended a substantial amount of money for tenant improvements and improvements to the building. They do not have the deed from the fee owner, and they are having a problem with getting any deeds. They are proposing to give some kind of compensation to get that deed. It appears they might have to foreclose on the property. If they do that, then the slate is wiped clean; and the HRA, as the second mortgage holder will have the ability to take out the first mortgage which is not too feasible because of the old partnerships. Mr. Hurley stated the partnership does not want to foreclose. They want to be good neighbors and are proposing this way to solve the situation. Mr. Spencer Johnson stated Columbia Park Medical Group is a corporation and a subset of that corporation is the partnership that owns the building. They need the building for administrative offices, and that was the impetus for buying the building. He stated he is now the Executive Manager of the Partnership. He is a family doctor who has been with the medical group since 1977, actively involved in the corporate board for 7-8 years. This is a mess and they are hoping they can get out of it without going to foreclosure. Ms. Schnabel stated she would like to have more information from the HRA's legal counsel before they make any decision. What is the HRA's legal position, what precedent would they be setting, and can the Partnership foreclose when they don't have a deed to the property? Mr. Jim Hoeft stated the legal position is simple and clear cut. The Partnership has the option to foreclose on the property if they cannot get a deed from the present owner. If a foreclosure does occur, the position of the HRA as the second mortgage holder would be eliminated, if not exercise right of redemption and "purchase" building. Mr. Hoeft stated that as far as setting a precedent, they have to look back to the origin of why they are in this position and the history of this property. The property is somewhat unique in the troubles it has had. At the HOUSING & REDEVELOPMENT AUTHORITY MTG. , AUG. 8, 1991 PAGE 17 time the present owner bought the property, the only feasible way to finance that purchase was for the HRA to subordinate its mortgage. The HRA made the decision that they wanted the project to proceed and be successful. Unfortunately, that owner of the property, for whatever reason, did not succeed. Now the Partnership has come in with this proposal, and the HRA has to deal with it. It is either negotiate a settlement with them to assist them or to have them take whatever means they have to take the property. Dr. Johnson stated he is not sure they can wait until the next meeting for a decision by the HRA. Mr. Meyer stated he would opt to settle and get out of it. Mr. McFarland stated that $17, 500 is better than nothing if the Partnership forecloses on the property. Ms. Schnabel stated it does appear the HRA has little choice. The HRA certainly wishes to maintain a good relationship with its neighbors, but she wished there was some room for negotiation and that they could make this decision without leaving a bad taste in their mouth. MOTION by Mr. Meyer, seconded by Mr. Prairie, to direct staff to bring back legislation that authorizes a negotiation settlement of $17, 500 that will dissolve any differences with the prospective owners of the Fridley Plaza Office building on the payment of the second mortgage. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED UNANIMOUSLY. ADJOURNMENT: MOTION by Mr. Meyer, seconded by Mr. Prairie, to adjourn the meeting. Upon a voice vote, all voting aye, Vice-Chairperson Schnabel declared the motion carried and the August 8, 1991, Housing and Redevelopment Authority meeting adjourned at 10:35 p.m. Respectfully submitted, Lynne Saba Recording Secretary w • A Community Development Department HOUSING AND REDEVELOPMENT AUTHORITY City of Fridley • TO: Housing and Redevelopment Authority Members P FROM: William W. Burns, Executive Director of HRA NV DATE: September 6, 1991 SUBJECT: Satisfaction of Mortgage for Fridley Plaza Office Building At our meeting on Thursday, September 12, 1991, you are being asked to consider a motion that would approve the satisfaction of the second mortgage for the Fridley Plaza Office building. As part of the motion, you are also being asked to authorize the release of the mortgage satisfaction upon receipt of a check in the amount of $17,500 from the Columbia Park Medical Group. As I indicated to you at the last HRA meeting, this is not . a particularly good deal for the HRA. If we were to receive principal and interest payments on the remaining amounts that are due on the second mortgage, we would receive a total of $64, 199.99 through the year 1999. The payment of $17,500, compounded at 8 percent annual interest, will yield only $28,592.95. The apparent loss from this transaction is $35,607.04 (see attached tables) . Unfortunately, if we do not agree to the satisfaction of mortgage, the Columbia Park Medical Group will foreclose on the first mortgage they hold. At the time of foreclosure, we would then have the opportunity to reclaim our second mortgage by taking out the first mortgage. Since this is rather impractical, it would appear that our only choice is to agree to accept the payment of $17,500. It is my understanding that with the satisfaction of the second mortgage by the HRA, the Columbia Park Medical Group will pay performance investments of approximately $20,000 and will receive a deed for the property. Their willingness to pay additional money to the current owners of the building is apparently based upon their desire to gain earlier occupancy of the building than they would through the mortgage foreclosure process. Our attorneys have reviewed this situation in detail and advise us that we should swallow hard, hold our noses, and agree to satisfy the mortgage. Staff recommends that we concur with their advice. WWB:rsc Attachments 9. 5. 1991 15:26 P., 2 1-A SATISFACTION OF MORTGAGE Date: , 1991 THAT CERTAIN MORTGAGE owned by the undersigned, a governmental body corporate and politic under the laws of the State of Minnesota, dated November 4, 1982, executed by Fridley Plaza Office Building Partnership, as Mortgagor, to the City of Fridley Housing and Redevelopment Authority, as Mortgagee, and filed for record November 9, 1982, as Document Number 601409 in the Office of the County Recorder of Anoka County, Minnesota, is, with the indebtedness thereby secured, fully paid and satisfied. CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY BY: Lawrence R. Commers Its Chairperson BY: William W. Burns Its Executive Director STATE OF MINNESOTA ) ) ss. COUNTY OF ANOKA ) The foregoing instrument was acknowledged before me this day of , 1991, by Lawrence R. Commers and William W. Burns, the Chairperson and Executive Director of the City of Fridley Housing and Redevelopment Authority, a governmental body corporate and politic under the laws of the State of Minnesota, on behalf of the City of Fridley Housing and -'- ' -: Authority. THIS INSTRUMENT WAS DRAFTED BY: BARNA, GUZY & STEFFEN, LTD. 400 NORTHTOWN FINANCIAL PLAZA 200 COON RAPIDS BOULEVARD COON RAPIDS, MN 55433 (612) 780-8500 1-B • 8% DATE PAYMENT INTEREST BALANCE 10/1/91 17,500.00 1/2/92 - 306.25 17,806.25 1/2/93 - 1,246.44 19,052.69 1/2/94 - 1,333.69 20,386.38 1/2/95 - 1,427.05 21,813.42 1/2/96 - 1,526.94 23,340.36 1/2/97 - 1,633.83 24,974.19 1/2/98 - 1,748.19 26,722.38 1/2/99 - _ 1,870.57 28,592.95 TOTAL MORTGAGE PAYMENT EXPECTED (P& I) 64,199.99 FUTURE VALUE OF$17,500 PAYMENT 28,592.95 LOSS 35,607.04 i /' 1-C Pl.AZA1 ;' PAYMENT 1 INTEREST NOS. �' PRINCIPAL RATE PAYMENTS DUE �`�j $39,999.99 11% 10 JANUARY 2 PAYMENT TOTAL REMAINING NUMBER DATE PRINCIPAL INTEREST PAYMENT BALANCE $39,999.99 1 1990 $4,000.00 $4, 400.00 $8,400.00 $35,999.99 2 1991 $4,000.00 $3,960.00 $7,960.00 $31,999.99 3 1992 $4,000. 00 $3,520.00 $7,520.00 $27,999.99 4 1993 $4,000.00 $3,080.00 $7,080.00 $23,999.99 5 1994 $4,000.00 $2,640.00 $6,640.00 $19, 999.99 6 1995 $4,000.00 $2,200.00 $6,200.00 $15,999.99 7 1996 $4,000.00 $1,760.00 $5,760.00 $11,999.99 8 1997 $4,000.00 $1,320.00 $5,320.00 $7,999.99 9 1998 $4,000.00 $880.00 $4,880.00 $3,999.99 10 1999 $3,999.99 $440.00 $4,439.99 ($0.00) $39,999.99 $24,200.00 $64, 199.99 The mortgage Was modified in January, 1989 as a result of the sale of the property. We had received aof41989.principal abovepayment schedule reflects thereceived $3, 480 of interest in March modification. 2 ((ii / Community Development Department I � HOUSING AND REDEVELOPMENT AUTHORITY City of Fridley DATE: September 6, 1991 TO: William Burns, Executive Director of HRA FROM: Barbara Dacy, Community Development Director SUBJECT: Dairy Queen Lease At the August 8, 1991, meeting, the HRA did not take any action on the proposed settlement agreement with Dairy Queen or the proposed lease at the request of the owner, Don Fitch. At this time, Fitch prefers that there be no action on the settlement agreement. The Attorney's office is continuing to schedule the dates for the commissioner hearings regarding the acquisition price for the property. Proposed for approval, however, is the lease agreement as attached. Amendments have been made in order to respond to some of Fitch's comments. There were several items which Fitch requested to be changed that we have not amended. Specifically, Fitch had requested changes in paragraph 11 to eliminate his liability for damage or for injury to other persons or to the property if the HRA fails to make repairs. The language was not changed in this paragraph, because the intent of the paragraph is to provide the HRA the ability to make the necessary repairs if Fitch does not do so in a reasonable timeframe. Also, in paragraph 14, Fitch indicated he would be willing to pay the deductible but not the entire cost of repairs. The City will carry an insurance policy similar to the one that it carries for the Rice Plaza building. The policy contains a $5, 000 deductible. Therefore, Fitch would be responsible for all costs for repairs. In paragraph 16, Fitch wanted to add language to state that the only basis for terminating the lease is a redevelopment project. He wanted this language in order to protect himself against potential "bad feelings" from the condemnation process or any other issues that may arise. We have not changed the language in this paragraph, because the HRA must condemn a property for a legally authorized purpose. "Bad feelings" would not constitute such a purpose. In all probability, a redevelopment project would be the reason that we would terminate the lease; however, we cannot predict the future and, as a property owner, the HRA should have all options available. 2-A Dairy Queen Lease September 6, 1991 Page 2 In paragraph 18, the language has been changed to clarify that Fitch waives benefits to relocation payments as a lessee. As part of the acquisition of the property, we will be paying Fitch relocation payments as required by law. The intent of paragraph 18 is to verify that there will be no compensation to Fitch as a lessee for termination of the lease. In paragraph 20, Fitch had requested that the HRA include language to prevent it from re-leasing the building to another Dairy Queen franchise. This language has not been included as it is staff's recommendation that all options need to be available for the HRA for this property. If Fitch relocates to the northeast corner of the intersection, it would be unlikely that the HRA would be able to re-lease the building to another Dairy Queen or other ice cream operation. Also, Fitch indicated that he is not willing to pay any attorneys' fees or costs incurred by the HRA if Fitch is in default of the property. Again, this language has not been amended. If Fitch is in default of the payments, we will work with him to have these payments satisfied without court action as long as possible; however, if it is necessary to go to court, the HRA should be reimbursed for its expenses. Finally, Fitch requested that at such time when the HRA demolishes the building, he would like to take the red roof. In paragraph 10, we have enabled Fitch to remove the existing pylon sign, deck, fencing, small detached storage shed, interior cupboards, and the ice cream equipment when he vacates the building. Because the roof is an integral part of the property, we did not include that in paragraph 10. If he would like to purchase the roof materials, he would be able to negotiate that with us. Recommendation Staff recommends the HRA approve execution of the lease as attached. Because of my vacation and work schedule, I have been unable to meet with Fitch at the writing of this report. Fitch received a copy of the lease on August 30, 1991. I am sure he will attend the meeting and address the items identified above and request your consideration of those. BD:ls M-91-664 • 612 780 1777 FROM -E:ARNA r1JZW LAW MRLS. 8.30. 1991 13:28 P. 2 2-B AGREEMENT TO LEASE THIS AGREEMENT, made this 25th day of July, 1991, by and between the Fridley Housing & Redevelopment Authority (hereinafter designated as "Lessor") and (hereinafter designated as "Lessee") . WITNEBSETH: That the Lessor, for and in consideration of the terms, covenants, rents and conditions herein mentioned, to be paid and performed by Lessee, does hereby demise and let unto said Lessee, and the said Lessee does hereby hire and take from the Lessor, the following described premises situated in the City of Fridley, County of Anoka, State of Minnesota, to-wit: The East 75. 1 feet of the North 158 feet, subject to Mississippi Street easement, of Lot No. 3 , Block 1, Sylvan Hills Plat 5, Anoka County, Minnesota, including the northerly 30 feet of the westerly 75. 1 feet of that portion of vacated 64-1/2 Avenue lying immediately South of said property. TO HAVE AND TO HOLD, the same just as they are, without liability on the part of the Lessor to make alterations, improvements or repairs of any kind in and about the demised premises, except as and if otherwise set forth herein, from the 25th day of July, 1991 through and until the 30th day of November, 1992 for the following purposes, and for no other purposes, to-wit: 1. Operation of the existing Dairy Queen business and seasonal sales of Christmas trees. 2 . Lessee agrees to pay Lessor as and for rent for the above mentioned premises, in monthly installments of $500. 00 • b12 eso 1777 FROM BARNA GUZY LAW MPLS. 8.38. 1991 13:29 P. 3 2-C Dollars each during operating months, in advance on the first day of each and every month during the full term of this Lease at the office of the Lessor, or at such other place as Lessor may in writing designate. For those months that Lessee is not in operation, Lessee shall pay no rent other than as set forth hereinbelow. If Lessee is in operation during any portion of any month, Lessee shall pay a per diem prorated amount of said $500.00 in addition to the entire costs to Lessee as set forth below. Lessee represents that it will be in operation a minimum of eight (8) months per calendar year. In addition to the rent specified in the preceding Paragraph (the "base annual rental") , Lessee agrees to provide for and pay the cost of maintaining the parking areas, grounds and sidewalks serving the leased premises. Such costs shall include lighting, snow removal, line painting and replacement of paving, curbs and sidewalks, if necessary. Such costs shall not include repaving of the entire parking area. The cost of operation and maintenance shall include property taxes. Further, the Lessee shall promptly pay the costs of all utilities, including, but not limited to electricity, telephone, sewer, water, refuse removal and natural gas. 3 . Lessee agrees that it will not sublet the demised premises or any part thereof and will not assign this Lease or any interest therein. 4 . Lessee shall provide or pay for all repairs and maintenance of the premises that is not covered by existing insurance or is an unreimbursed expense under said coverage. Said repairs and maintenance shall include, but not be limited • • • b12 780 1777 FROM , 6 RNA GUZY LAW MPLS. 8.30. 1991 13:29 P. 4 2-D • to, glass breakage, furnace, air-conditioning, plumbing, electrical systems and structural repairs. 5. Lessee agrees to indemnify and hold the Lessor harmless for any liability arising out of the Lessee's use of the premises. For this purpose the Lessee shall at his sole expense procure and maintain comprehensive public liability insurance for the demised premises during the term hereof in the minimum amount of Three Hundred Thousand-Five Hundred Thousand Dollars ($300,000. 00-$500,000.00) bodily injury and One Hundred Thousand Dollars ($100,000. 00) property damage. Lessee shall provide Lessor with evidence of such insurance prior to occupancy. Lessee shall at his sole expense procure and maintain insurance for his fixtures and equipment within the demised premises. 6. Lessee to obtain workers compensation insurance. Lessee shall maintain and keep in force all employees compensation insurance required under the laws of the State of Minnesota and such other insurance as may be necessary to protect Lessor against any other liability to person or property arising hereunder by operations of law, whether such law is now in force or is adopted subsequent to the execution hereof. 7. Lessee to furnish certificate of insurance. Lessee shall furnish to Lessor a certificate of insurance showing that his liability insurance policies are in full force and effect and naming Lessor as an insured thereon. The policy shall further provide that Lessor shall be given a minimum of ten (10) days notice by the insurance company prior to cancellation, termination or change of such insurance. Such policies or duly - 612 780 1777 FROM PflRNR GUZY LAW MPL_c. 8. 30. 1991 13:30 F.. 5 2-e executed certificates of insurance shall be delivered to Lessor prior to the commencement of Lessee' s occupancy hereunder and renewals thereof shall be delivered to Lessor at least thirty (30) days prior to expiration of the respective policy terms. 8. The Lessee consents to allow the Lessor to make any necessary alterations to the said property in the/manner necessary for the Lessee to operate and conduct his drive-through business. ` � 9. Lessee covenants and agrees that he will make no structural change or major alteration without the Lessor's consent, which consent shall not be unreasonably withheld, provided that the proposed improvements are consistent with the use of the property, do not significantly reduce the value of the property and do not violate any local, State or Federal laws, and without first furnishing the Lessor with five (5) days advance written notice outlining the proposed changes or alterations. Upon the City Consenting to the alterations, then the City will issue all necessary permits without unreasonable delay. The Lessee further covenants that it will promptly pay for any alterations, repairs or maintenance made to the demised property so that no mechanic's liens will be filed against the property. In the event a mechanic's lien is filed, the Lessee shall have twenty (20) days to pay or in the alternative to post 1-1/2 times the lien amount with the district court in order to contest it. Failure to do either of the above mentioned lien corrections shall be deemed as a default under this Lease. In any event, the 612 780 1777 FROM BARNA GUZY LAW MPLS. 8.3O. 1491 13:30 P. 6 2-F Lessee shall indemnify and hold harmless the Lessor for any and all costs or removing said lien. 10. The Lessee agrees that upon termination of this Lease, all improvements to the property, together with all fixtures, shall become the property of the Lessor, with the exception that Lessee shall be able to remove the existing pylon sign, deck, fencing, small detached storage shed located at the south end of the property, interior cupboards located in the rear of the building and interior equipment used for the operation of the Dairy Queen. 11. Lessor shall at all times have the right to enter upon said premises to inspect its condition and at its election to make reasonable and necessary repairs thereon for the protection and preservation thereof but nothing herein shall be construed to require the Lessor_ to make such repairs except as may be herein provided for and the Lessor shall not be liable to the Lessee for the failure to delay in making such repairs or for damage or injury to persons or property caused in or by the making of such repairs or the doing of such work. 12. Lessee agrees to pay for all special requirements for utilities such as gas, steam, water and electricity and for all other alterations, modifications or other services to the demised premises. Charges for any such utilities or services shall be paid by Lessee and, in the event such 'charges are not paid when due, the same shall constitute a default hereunder on the part of the Lessee. 612 780 1777 P.,4 FROM EaRNG OOZY LAW MPLS. 8.30. 1991 13: 31 2-G 13 . The premises shall not be used for lodging or sleeping or for any immoral or illegal purposes. 14. The parties hereto mutually agree that if the demised premises are partially or totally destroyed by fire or other hazards, then Lessor may, but is not obligated to, repair and restore the demised premises as soon as is reasonably practicable to substantially the same condition in which the demised premises were bef ore re such damage. The Lessee may repair the damage as allowed under Paragraph 8 at his own expense. In the event the demised premises are completely destroyed or so badly damaged as not to be useable by the Lessee for the purposes herein provided, then this Lease shall be terminable by either party hereto by serving written notice upon the other; and provided, further, that in any event if repairs have not been commenced within thirty (30) days from the date of said damage and thereafter completed within a reasonable time, in no case to exceed three (3) months, this Lease may be immediately terminated by the Lessee by serving written notice upon the Lessor. 15. The Lessee acknowledges that he is aware that Anoka County intends to widen Mississippi Street along the north boundary of the property and that in the course of doing so the County intends to acquire a portion of the property. The Lessee acknowledges that he is waiving any and all claims to any compensation or monies that the Lessor may receive from the County as a result of this taking. Further, the Lessee agrees to waive any claim that this acquisition by the County constitutes a breach of this Lease. . • OIL ( U 1 ((( • FROM E<GRNR GUZY LAW MFLS. 8.30. 1991 13:31 P. 8 2-H 16. THIS PARAGRAPH DESCRIBES THE CONDITIONS UNDER WHICH THE LESSOR MAY TERMINATE THIS LEASE EARLY. YOUR SHOULD READ THIS PARAGRAPH CAREFULLY. In addition to the provisions contained elsewhere in this Lease, the Lessor may terminate this Lease prior to expiration date and without cause upon the Fridley Housing & Redevelopment Authority making the determination that it needs to terminate this leasehold interest as a result of development intended for this site or elsewhere in the southwest quadrant of Mississippi and University. This termination can only be effective upon the giving of ninety (90) days written notice by the Lessor to the Lessee. Lessee may terminate this Lease prior to expiration date and without cause upon► the giving of thirty (30) days written notice by Lessee to the Lessor. 17. In the event that the Lessee shall continue to occupy the demised premises after the expiration of the term of said Lease, such "holding over" shall be on a month to month basis. Either party may terminate said "holding over" by giving the proper notice, as required by Minnesota law, to terminate a month to month tenancy. 18 . The Lessee hereby agrees to waive any right or benefits he may have as a Lessee under this specific Lease pursuant to the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (40 U.S.C. 4601) and will provide Lessor with a signed waiver upon request. It is understood that the parties have entered into this Lease as an accommodation to each other. Upon the proper termination of this Lease, the Lessee will not be entitled to any 612 780 1777 FROM OPRNA GUZY LAW MPLS. 8.30. 1991 13: 32 P' 9 2-I compensation or damages for the termination of the Lessee's leasehold interest. 19. No sign shall be painted or affixed by the Lessee on any part of the outside of the demised premises without prior written consent of the Lessor. In the event of a violation of this clause by the Lessee, Lessor may remove said sign without any liability and may charge the expense incurred by such removal to the Lessee. The Lessee is permitted to substitute a sign on the building which would be affixed in substantially the same location as any existing sign and shall be constructed of letters which are substantially similar to and which letters do not collectively or significantly exceed the size of any current sign. The Lessee is also permitted to maintain the free-standing pylon sign on the property in conformance with the City of Fridley's Sign Code. The Lessee is responsible for _all costs and charges pertaining to its maintenance. 20. If the Lessee shall make default in any covenant or agreement to be performed by him and if after written notice from Lessor to Lessee such default shall continue for a period of five (5) days or if the leasehold interest of the Lessee shall be taken on execution or other process of law or if the Lessee shall petition to be or be declared bankrupt or insolvent according to law, then, and in any of said cases, the Lessor may immediately or at any time thereafter without further notice or demand, enter into and upon said premises or any part thereof and take absolute possession of the same fully and absolutely without such re-entry working a forfeiture of the rents to be paid and the covenants to 612 780 1777 FROM BARNA GLIZY LAID MFLS. 2-J be performed by the Lessee for the full term of this Lease, and at Lessor's election, Lessor may either lease or sublet such premises or any part thereof on such terms and conditions and for such rents and for such time as the Lessor may reasonably elect and after crediting the rent actually collected by the Lessor from such re-letting collect from the Lessee any balance remaining due on the rent reserved under this Lease, or Lessor may declare this Lease forfeited and may take full and absolute possession of said premises free from any subsequent rights of the Lessee_ That in the event of default by the Lessee, the Lessee shall compensate the Lessor for all reasonable attorneys fees, expenses and costs incurred by the Lessor in either reaquiring possession of the property or for bringing an action for the recovery of unpaid rent. 21. Wherever in this Lease it shall be required or permitted that notice or demand be given or served by either party to this Lease to or on the other, such notice or demand shall be given or served and shall not be deemed to have been given or served unless in writing and forwarded by mail addressed as follows: To The Lessor: Barbara Dacy Community Development Director Fridley Housing & Redevelopment Authority 6431 University Ave. N. E. Fridley, MN 55432 To The Lessee: 612 (8u 1 ((( _ P; li ` OOZY LAW MFL5. 8.30. 1991 i3:3: FROM EpRh7p 2.4 Such addresses may be changed from time to time by either party by service of notice as above provided. The Lessor and Lessee agree that all the provisions hereof are to be construed as covenants and agreements. IN WITNESS WHEREOF, the Lessor and Lessee have caused their respective names to be subscribed to this Lease on the date first p above written. In the Presence Of: LESSOR: FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY BY:_______________----__________ In the Presence Of: LESSEE: BY: STATE OF MINNESOTA ) SS. COUNTY OP ANO1 A ) The foregoing instrument was acknowledged before me this 25th day of July, 1991. THIS INSTRUMENT WAS DRAFTED BY: EARNA, GUZY & STEFFEN, LTD. 400 Northtown Financial Center 200 coon Rapids Boulevard Coon Rapids, MN (612) 780-0500 - FINANCE DEPARTINENT WrOf MEMORANDUM TO: WILLIAM W. BURNS, CITY MANAGER RICHARD D. PRIBYL, FINANCE DIRECTOR FROM: PAUL S. HANSEN, ACCOUNTANT SUBJECT: REFERENDUM LEVY RETURN AGREEMENTS DATE: September 6, 1991 Attached you will find a copy of the 1992 School District Refere ndum Levy Return Agreements and the 1992 estimated amounts. ortant enough to restate the We have provided the estimates of the returns on two different occasions, we felt that it is imp �s consideration of estimates and the comparative data for the HRA this item. delinquents, is before This is an increase of 14% from the 1991 estimated The estimated total return amount for 199 . On the March return amount, $376,061.10. delinquents, of $330,207.52. return w before h we estimated a 20% increase i28, 1991, we provided a memo in who projected increase in market value in the return amount based on an pr 7 f approximately 20% and projected all other factors would remain o pproxma all other factors did not remain constant. Class State constant. However, legislation which will have a rates were lowered by 1992 and the negative impact on tax increment received for payable years to follow. the increase is estimated at 14% but, per each individual percentage increase varies greatly. Below Sc In total and the shows District the p estimated 1992 amounts, shows the estimated 1991 amounts, percentage increase decrease) : School Estimated Estimated Percentage District 1991 amounts 1992 amounts Increase/ (Decrease) (Decrease) 11 $ 15,852 .91 $ 17 , 876.25 13%26,877 .31 (9%) 13 21% $ 29 , 652 .37 14 $225, 087 .09 $271, 516.41 0% 16 $ 59 ,615. 15 $ 59,791. 14 reason the amount due to School District duel4 to the increased rbys21%, The 5 479 , 30f e of even though the class rate decreased,Racquet & Swim Club from $ , market value of the Northwest to $12 ,395,900. Each School District should be aware that these are our best estimates at this time. The market values could be reduced through court decisions st vragdd approximately abatements or by other means. pproximately 9% in 1990. Also, delinquents If you have any questions, please feel free to call. RDP/me Attachment AGREEMENT This Agreement is dated as of January 2, 1992, is by and between the City of Fridley, Minnesota, and Independent School District No. 16, and provides as follows: 1. Definitions. As used in this Agreement, the following terms have the following meanings, respectively: • "City_" means the City of Fridley, Minnesota. "HRA" means the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota. "Project" means Redevelopment project No. 1 established and operated by the HRA p t to Minnesota Statutes, Sections 469.001 through 469.047. "1985 Revenue Bonds" means the HRA's $4,070,000 Tax Increment Revenue Bonds of 1985, dated May 1, 1985. "Limited Revenue Note" means the H A'S $5, 603,755.80 Limited Revenue Capital tal Appreciation Tax Increment Note, December 20, 1985. "1985 G.O. Bonds" means the City's $11,550,000 Variable Rate Demand General Obligation Tax Increment Bonds, Series 1985, dated December 30, 1985. "1986 G.O. Bonds" means the City' s $10, 045, 000 General Obligation Tax Increment Refunding Bonds, Series 1986, dated as of August 1, 1986. "1990 G.O. Bonds" means the City's $9,485, 000 General Obligation Tax Increment1e Refunding Bonds of 1990, dated March 1, 0. "Tax Increment Obligations" means the 1985 Revenue Bonds, the Limited Revenue Note, the 1985 G.O. Bonds, the 1986 G.O. Bonds, the 9706 A. Agreement and which commit the use of any tax increments from the TIF Districts for specified purposes, projects, or parties. "Tax Increment Act" means Minnesota Statutes, Sections 469.174 through 469. 179. "TIF Districts" means Tax Increment Financing District Nos. 1 through 11 within the Project. The attached Exhibit A contains certification dates and other information on the TIF Districts. "School District" means Independent School District No. 11, the Anoka School District. "Subdivision" means Minnesota Statutes Second 1989 Supplement, Section 469. 177, Subdivision 10, as amended by Laws of Minnesota 1990, Chapter 604, Article 7, Section 24 (a copy of which is attached hereto as Exhibit B) . 2 . Recitals. (a) In certain cases, the Subdivision either requires or allows by agreement certain tax increments attributable to school district referendum tax levies to be paid to school districts. (b) A portion of TIF District No. 3 is located within the boundaries of the School District. (c) None of the property within TIF District Nos. 1, 2, 4, 5, 6, 7, 8, 9, 10, and 11 is located within the boundaries of the School District. (d) It is the purpose of this Agreement to provide for payment of certain tax increments to the School District pursuant to and in accordance with the provision of the Subdivision. (e) Nothing in this Agreement is intended to violate the covenants and agreements heretofore made respecting the application of 9705 2 1 tax increments from the TIF Districts pursuant to the Tax Increment Obligations. 3. Representations of the City. (a) The Tax Increment Obligations were issued to finance various activities of the HRA within the Project. (b) The 1985 Revenue Bonds are not general obligations of the City or the HRA. Tax increments from TIF District Nos. 1 through 5 are pledged to the payment of the 1985 Revenue Bonds, and there are no other sources of funds pledged to the payment thereof. The final scheduled principal maturity of the 1985 Revenue Bonds is February 1, 1999. (c) The Limited Revenue Note is not a general obligation of the City or the HRA and is payable solely from tax increments pledged for such purposes from TIF District No. 6. (d) The 1985 G.O. Bonds were payable from tax increments derived from TIF District Nos. 1 through 6, and the final scheduled principal maturity of those Bonds was February 1, 2000. However, on February 1, 1990, the City discharged the 1985 G.O. Bonds by paying all then outstanding principal thereof and interest thereon. (e) The 1986 G.O. Bonds are payable from tax increments derived from TIF District Nos. 1 through 6, and the final scheduled principal maturity of those Bonds is February 1, 2000. However, the City has advance refunded the 1986 G.O. Bonds via the issuance of the 1990 G.O. Bonds, and the City expects pursuant to said refunding that all of the principal of and interest on the 1986 G.O. Bonds will have been paid on or before February 1, 1994. (f) The 1990 G.O. Bonds are payable from tax increments derived from TIF District Nos. 1, 2, 3, and 6, and the final scheduled principal maturity of those Bonds is August 1, 2009. (g) Portions of the principal of the 1985 Revenue Bonds, the Limited Revenue Note, 9705 3 the 1985 G.O. Bonds, and the 1986 G.O. Bonds, and the 1990 G.O. Bonds were outstanding on May 1, 1988, and/or are outstanding on the date of this Agreement. 4. Representations of the School District. (a) On October 5, 1982, the electorate of the School District approved a continuous 6.0 mill levy first effective for the 1982 payable 1983 property taxes. This levy is hereinafter referred to as the "1982 Levy". (b) On October 6, 1987, the electorate of the School District approved a 6.0 mill continuous levy first effective for the 1987 payable 1988 property taxes. This levy is hereinafter referred to as the "1987 Levy". (c) According to the Minnesota Department of Education, for purposes of the above-mentioned referendum levies the tax capacity rate equivalent of 6 mills is .06999697. 5. Payment of Tax Increments to School District. The City and the School District hereby agree that, except as otherwise provided pursuant to paragraph 6 of this Agreement, tax increments shall be paid to the School District by the HRA as and to the extent received by the HRA, with respect to the tax increments relating to the 1991 payable 1992 property taxes, as follows: TIF District No. 3 . Pursuant to clause b(2) of the Subdivision, the tax increment from TIF District No. 3 which is attributable to the 1982 Levy and the 1987 Levy shall be paid to the School District. 6. Further Agreements. Nothing in this Agreement is intended or shall be applied in such a manner as to violate the obligations and covenants made by the City or the HRA in connection with the Tax Increment Obligations, and to the extent but only to the extent that the application of the terms of this Agreement would give rise to a violation of said obligations and covenants, including without limitation, the default in the timely and full payment of the Tax Increment Obligations, the applicable tax increments shall be applied instead in the manner, but only to the extent necessary, to avoid such default or other violation of said covenants or obligations. Nothing in this Agreement shall restrict the 9705 4 • City or the HRA in the exercise of the powers which they may have relating to the Project or the TIF Districts. In addition, the City and the School District agree that the provisions of paragraph 5 providing for payment of tax increment to the School District shall be limited to and shall apply only to such tax increment attributable to the 1991 payable 1992 real estate property taxes, and at the conclusion of said period, the City and the School District agree to review the circumstances and to attempt to negotiate in good faith such further agreement or agreements as may be permitted by law and which are acceptable to both the City and School District with respect to discretionary payments of such applicable tax increment to the School District. IN WITNESS WHEREOF, the City and the School District have caused this Agreement to be executed by their duly authorized representatives. CITY OF FRIDLEY, MINNESOTA Mayor City Manager INDEPENDENT SCHOOL DISTRICT NO. 11 School Board Chair Superintendent 9705 5 EXHIBIT A Schedule of Tax Increment Financing Districts Within Housing and Redevelopment Project No. 1 of the Fridley HRA Independent Certification School TIF District Name Date District No. 1 Center City 5/11/79 14 2 Moore Lake 7/31/81 13/14 3 North Area 5/19/82 11/16 4 Johnson Printing/ Skywood Mall 1/20/84 13/14 5 Paschke 3/15/84 16 6 Lake Pointe 12/24/85 13 7 Winfield 10/22/86 16 8 Shorewood 10/24/86 14 9 Onan/Old Central 9/7/89 16 10 Northco Phase III 4/10/90 16 11 Osborne Crossings 8/9/91 16 9705 EXHIBIT B Sec. 24. Minnesota Statutes Second 19E9 e• . ^'e-.ent, section 4:?.177, subdivisicn 10, is amended to :eac. S-_c. 10. (PAYMENT. TO SC:OC•L :CR LEVY. ) (a The provisions cf this subdivision apply to tax increment financing districts and projects for which certification was requested befc:e May 1, 19E8, that are located in a school district in which the titers have approved new tax capacity rates cr an increase in tax capacity rates after the tax increment financing - district was certified. (b) (1) If there are no outstanding bends on May 1, 19E8, to which increment from the district is pledged, or ;?; if the • referendum is aprcved after May 1, 19E8, and there are no bonds • outstanding at the time the referendum is approved, that were issued before May 1, 19E8, G_-{37 t.'.e-re e_e.'.Lc..:inerezoing them._x-et_.teity7r_te-was- __ .ove' -oftee-the-...oat-recent-=:=:e G_ __..GS-to-which i'netement-from-the-diet:_et-to- =eiged. -- eSetee Tc7-et ftt-•7_ --e'T the authority must annually pay to the school district an amount of increment equal to the . increment that is attributable to the increase in the tax • capacity rate under the referendum. (2), if clause $ -eppcies (1) does not apply, upon approval by a majority vote of the governing body of the .municipality and the school beard, the authority must pay to the school district en amount of increment equal to the increment that is attributable to the increase in the tax capacity rate under the referendum. • (c) The amounts of these increments may be expended and must be treated by the school district in the same manner as provided for the revenues derived from the referendum levy approved by the voters. The provisions of this subdivision apply to projects for which certification .:as requested before, on, and after August 1, 1979. AGREEMENT This Agreement is dated as of January 2, 1992, is by and between the City of Fridley, Minnesota, and Independent School District No. 14, and provides as follows: 1. Definitions. As used in this Agreement, the following terms have the following meanings, respectively: "City" means the City of Fridley, Minnesota. "HRA" means the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota. "Project" means Housing and Redevelopment Project No. 1 established and operated by the HRA pursuant to Minnesota Statutes, Sections 469.001 through 469.047. "1985 Revenue Bonds" means the HRA's $4, 070,000 Tax Increment Revenue Bonds of 1985, dated May 1, 1985. "Limited Revenue Note" means the HRA's $5,603,755.80 Limited Revenue Capital Appreciation Tax Increment Note, dated December 20, 1985. "1985 G.O. Bonds" means the City's $11, 550,000 Variable Rate Demand General Obligation Tax Increment Bonds, Series 1985, dated December 30, 1985. "1986 G.O. Bonds" means the City's $10,045, 000 General Obligation Tax Increment Refunding Bonds, Series 1986, dated as of August 1, 1986. "1990 G.O. Bonds" means the City's $9,485,000 General Obligation Tax Increment Refunding Bonds of 1990, dated March 1, 1990. "Tax Increment Obligations" means the 1985 Revenue Bonds, the Limited Revenue Note, the 1985 G.O. Bonds, the 1986 G.O. Bonds, the 9707 1990 G.O. Bonds, and any other contractual obligations of the HRA or the City which were entered into prior to the date of this Agreement and which commit the use of any tax increments from the TIF Districts for specified purposes, projects, or parties. "Tax Increment Act" means Minnesota Statutes, Sections 469.174 through 469.179. "TIF Districts" means Tax Increment Financing District Nos. 1 through 11 within the Project. The attached Exhibit A contains certification dates and other information on the TIF Districts. "School District" means Independent School District No. 14, the Fridley School District. "Subdivision" means Minnesota Statutes Second 1989 Supplement, Section 469.177, Subdivision 10, as amended by Laws of Minnesota 1990, Chapter 604, Article 7, Section 24 (a copy of which is attached hereto as Exhibit B) . 2 . Recitals. (a) In certain cases, the Subdivision either requires or allows by agreement certain tax increments attributable to school district referendum tax levies to be paid to school districts. (b) TIF District Nos. 1 and 8 are located entirely within the boundaries of the School District, and a portion of TIF District Nos. 2 and 4 are located within the boundaries of the School District. (c) None of the property within TIF District Nos. 3, 5, 6, 7, 9, 10 and 11 is located within the boundaries of the School District. (d) It is the purpose of this Agreement to provide for payment of certain tax increments to the School District pursuant to • 9707 2 and in accordance with the provision of the Subdivision. (e) Nothing in this Agreement is intended to violate the covenants and agreements heretofore made respecting the application of tax increments from the TIF Districts pursuant to the Tax Increment Obligations. 3. Representations of the City. (a) The Tax Increment Obligations were issued to finance various activities of the HRA within the Project. (b) The 1985 Revenue Bonds are not general obligations of the City or the HRA. Tax increments from TIF District Nos. 1 through 5 are pledged to the payment of the 1985 Revenue Bonds, and there are no other sources of funds pledged to the payment thereof. The final scheduled principal maturity of the 1985 Revenue Bonds is February 1, 1999. (c) The Limited Revenue Note is not a general obligation of the City or the HRA and is payable solely from tax increments pledged for such purposes from TIF District No.. 6. (d) The 1985 G.O. Bonds were payable from tax increments derived from TIF District Nos. 1 through 6, and the final scheduled principal maturity of those Bonds was February 1, 2000. However, on February 1, 1990, the City discharged the 1985 G.O. Bonds by paying all then outstanding principal thereof and interest thereon. (e) The 1986 G.O. Bonds are payable from tax increments derived from TIF District Nos. 1 through 6, and the final scheduled principal maturity of those Bonds is February 1, 2000. However, the City has advance refunded the 1986 G.O. Bonds via the issuance of the 1990 G.O. Bonds, and the City expects pursuant to said refunding that all of the principal of 9707 3 and interest on the 1986 G.O. Bonds will have been paid on or before February 1, 1994. (f) The 1990 G.O. Bonds are payable from tax increments derived from TIF District Nos. 1, 2, 3, and 6, and the final scheduled principal maturity of those Bonds is August 1, 2009. (g) Portions of the principal of the 1985 Revenue Bonds, the Limited Revenue Note, the 1985 G.O. Bonds, and the 1986 G.O. Bonds, and the 1990 G.O. Bonds were outstanding on May 1, 1988, and/or are outstanding on the date of this Agreement. 4. Representations of the School District. (a) On September 23, 1986, the electorate of the School District approved a 2.0 mill continuous levy first effective for the 1986 payable 1987 property taxes. This levy is hereinafter referred to as the "1986 Levy" . (b) On September 29, 1987, the electorate of the School District approved (i) a 7.0 mill continuous levy first effective for the 1987 payable 1988 property taxes and (ii) a continuous additional 6.5 mill levy first effective for the 1988 payable 1989 property taxes. These levies are hereinafter collectively referred to as the "1987 Levies". (c) According to the Minnesota Department of Education, for purposes of the above-mentioned referendum levies the tax capacity rate equivalents of 2 mills and 13 .5 mills are .02261395 and . 15264411, respectively. 5. Payment of Tax Increments to School District. The City and the School District hereby agree that, except as otherwise provided pursuant to paragraph 6 of this Agreement, tax increments shall be paid to the School District by the HRA as and to the extent received by the HRA, with respect to the tax increments relating to the 1991 payable 1992 property taxes, as follows: 9707 4 (a) TIF District No. 8. Since the 1987 Levies were approved after the date of certification of TIF District No. 8, and since on May 1, 1988, there were no bonds outstanding to which increment from TIF District No. 8 was pledged, the tax increments from TIF District No. 8 which are attributable to the 1987 Levies are automatically payable and shall be paid to the School District pursuant to clause b(1) of the Subdivision. Since the 1986 Levy was approved prior to the date of certification of TIF District No. 8, the Subdivision does not apply to that Levy with respect to this District, and no tax increments attributable to said Levy from this District are payable to the School District. (b) TIF District No. 4. Pursuant to clause b(2) of the Subdivision, the tax increment from TIF District No. 4 which is attributable to the 1986 Levy and the 1987 Levies shall be paid to the School District. (c) TIF District No. 2. Pursuant to clause b(2) of the Subdivision, the tax increment from TIF District No. 2 which is attributable to the 1986 Levy and the 1987 Levies shall be paid to the School District. (d) TIF District No. 1. Pursuant to clause b(2) of the Subdivision, the tax increment from TIF District No. 1 which is attributable to the 1986 Levy and the 1987 Levies shall be paid to the School District. 6. Further Agreements. Nothing in this Agreement is intended or shall be applied in such a manner as to violate the obligations and covenants made by the City or the HRA in connection with the Tax Increment Obligations, and to the extent but only to the extent that the application of the terms of this Agreement would give rise to a violation of said obligations and covenants, including without limitation, the default in the timely and full payment of the Tax Increment Obligations, the applicable tax increments shall be applied instead in the manner, but only to the extent necessary, to avoid such default or other violation of said covenants or obligations. Nothing in this Agreement shall restrict the City or the HRA in the exercise of the powers which they may have relating to the Project or the TIF Districts. 9707 5 In addition, the City and the School District agree that, except in each case described in paragraph 5 of this Agreement where payment of tax increment to the School District is mandatory pursuant to clause b(1) of the Subdivision, all other provisions of said paragraph 5 providing for payment of tax increment to the School District shall be limited to and shall apply only to such tax increment attributable to the 1991 payable 1992 real estate property taxes, and at the conclusion of said period, the City and the School District agree to review the circumstances and to attempt to negotiate in good faith such further agreement or agreements as may be permitted by law and which are acceptable to both the City and School District with respect to discretionary payments of such applicable tax increment to the School District. IN WITNESS WHEREOF, the City and the School District have caused this Agreement to be executed by their duly authorized representatives. CITY OF FRIDLEY, MINNESOTA Mayor City Manager INDEPENDENT SCHOOL DISTRICT NO. 14 School Board Chair Superintendent 9707 6 EXHIBIT A Schedule of Tax Increment Financing Districts Within Housing and Redevelopment Project No. 1 of the Fridley HRA Independent Certification School TIF District Name Date District No. i Center City 5/11/79 14 2 Moore Lake 7/31/81 13/14 3 North Area 5/19/82 11/16 4 Johnson Printing/ Skywood Mall 1/20/84 13/14 5 Paschke 3/15/84 16 6 Lake Pointe 12/24/85 13 7 Winfield 10/22/86 16 8 Shorewood 10/24/86 14 9 Onan/Old Central 9/7/89 16 10 Northco Phase III 4/10/90 16 11 Osborne Crossings 8/9/91 16 9707 7 EXHIBIT B Sec. 24. Minnesota Statutes Second 19e9 G• ::le-pent, section 46?.177, s_bdiv_sicn 10, is amended to read: S td. 10. (PAYMENT .O sc:oc•L :CR .._._ _ND M 'IVY.) (a :he provisions cf this subd_v_sicn apply to tax increment financing districts and projects fcr which certificaticn was requested lzefcre May 1, 15E8, that are located in a school district in which the voters have approved new tax capacity rates cr an increase in tax capacity rates after the tax increment financing district was certified. (5) (1) .f there are no outstanding bonds cn May 1, 15E8, to which inc:e-.ent frcn the district is pledced, or E if the referendum is approved after May 1,' 15E8, and there are no bonds _• cutstanding at the tine the referendum is approved, that were issued before May 1, loss, _ Coe__: g the-._x-Gt_LG_ty-rate-was _.eyed-fryer-yhe-mott-recent--Sete G_ --.._S-:C-x`_G`-_S.000.:.t.`. C�-y't-GtSyotc -_S-_ctd d• ---� citeee-{c7-er-f?j-•-. -L. . the authcrity must annually pay to the school district an amount cf increment equal to the increnent that is attributable to the increase in the tax capacity rate under the referendum. (2) if clause ¢?i-appEies (1) does not apply, upon approval ' by a najcrity vote of the ycverning body of the municipality and the school beard, the authority must pay to the school district an ancunt of incr'enent equal to the increment that is attributable to the increase in the tax capacity rate under the referendum. • (c) The amounts of these increments may be expended and must be treated by the school district in the same manner as provided fcr the revenues derived free the referendum levy approved by the voters. The provisions of this subdivision apply to projects for which certificaticn was requested before, cn, and after Auc' st 1, 1979. AGREEMENT This Agreement is dated as of January 2, 1992, is by and between the City of Fridley, Minnesota, and Independent School District No. 13, and provides as follows: 1. Definitions. As used in this Agreement, the following terms have the following meanings, respectively: "City" means the City of Fridley, Minnesota. "HRA" means the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota. "Project" means Redevelopment Project No. 1 established and operated by the HRA pursuant to Minnesota Statutes, Sections 469.001 through 469.047. "1985 Revenue Bonds" means the HRA's $4,070,000 Tax Increment Revenue Bonds of 1985, dated May 1, 1985. "Limited Revenue Note" means the HRA's $5, 603,755.80 Limited Revenue Capital Appreciation Tax Increment Note, dated December 20, 1985. "1985 G.O. Bonds" means the City's $11, 550, 000 Variable Rate Demand General Obligation Tax Increment Bonds, Series 1985, dated December 30, 1985. "1986 G.O. Bonds" means the City's $10,045, 000 General Obligation Tax Increment Refunding Bonds, Series 1986, dated as of August 1, 1986. "1990 G.O. Bonds" means the City's $9, 485, 000 General Obligation Tax Increment Refunding Bonds of 1990, dated March 1, 1990. "Tax Increment Obligations" means the 1985 Revenue Bonds, the Limited Revenue Note, the 1985 G.O. Bonds, the 1986 G.O. Bonds, the 9708 1990 G.O. Bonds, and any other contractual obligations of the HRA or the City which were entered into prior to the date of this Agreement and which commit the use of any tax increments from the TIF Districts for specified purposes, projects, or parties. "Tax Increment Act" means Minnesota Statutes, Sections 469.174 through 469.179. "TIF Districts" means Tax Increment Financing District Nos. 1 through 11 within the Project. The attached Exhibit A contains certification dates and other information on the TIF Districts. "School District" means Independent School District No. 13, the Columbia Heights School District. "Subdivision" means Minnesota Statutes Second 1989 Supplement, Section 469.177, Subdivision 10, as amended by Laws of Minnesota 1990, Chapter 604, Article 7, Section 24 (a copy of which is attached hereto as Exhibit B) . 2. Recitals. (a) In certain cases, the Subdivision either requires or allows by agreement certain tax increments attributable to school district referendum tax levies to be paid to school districts. (b) TIF District No. 6 is located entirely within the boundaries of the School District, and a portion of TIF District Nos. 2 and 4 are located within the boundaries of the School District. (c) None of the property within TIF District Nos. 1, 3, 5, 7, 8, 9, 10 and 11 is located within the boundaries of the School District. (d) It is the purpose of this Agreement to provide for payment of certain tax increments to the School District pursuant to 9708 2 and in accordance with the provision of the Subdivision. (e) Nothing in this Agreement is intended to violate the covenants and agreements heretofore made respecting the application of tax increments from the TIF Districts pursuant to the Tax Increment Obligations. 3 . Representations of the City. (a) The Tax Increment Obligations were issued to finance various activities of the HRA within the Project. (b) The 1985 Revenue Bonds are not general obligations of the City or the HRA. Tax increments from TIF District Nos. 1 through 5 are pledged to the payment of the 1985 Revenue Bonds, and there are no other sources of funds pledged to the payment thereof. The final scheduled principal maturity of the 1985 Revenue Bonds is February 1, 1999. (c) The Limited Revenue Note is not a general obligation of the City or the HRA and is payable solely from tax increments pledged for such purposes from TIF District No. 6. (d) The 1985 G.O. Bonds were payable from tax increments derived from TIF District Nos. 1 through 6, and the final scheduled principal maturity of those Bonds was February 1, 2000. However, on February 1, 1990, the City discharged the 1985 G.O. Bonds by paying all then outstanding principal thereof and interest thereon. (e) The 1986 G.O. Bonds are payable from tax increments derived from TIF District Nos. 1 through 6, and the final scheduled principal maturity of those Bonds is February 1, 2000. However, the City has advance refunded the 1986 G.O. Bonds via the issuance of the 1990 G.O. Bonds, and the City expects pursuant to said refunding that all of the principal of 9708 3 and interest on the 1986 G.O. Bonds will have been paid on or before February 1, 1994. (f) The 1990 G.O. Bonds are payable from tax increments derived from TIF District Nos. 1, 2, 3, and 6, and the final scheduled principal maturity of those Bonds is August 1, 2009. (g) Portions of the principal of the 1985 Revenue Bonds, the Limited Revenue Note, the 1985 G.O. Bonds, and the 1986 G.O. Bonds, and the 1990 G.O. Bonds were outstanding on May 1, 1988, and/or are outstanding on the date of this Agreement. 4. Representations of the School District. (a) On October 5, 1981, the electorate of the School District approved a 5.0 mill continuous levy first effective for the 1981 payable 1982 property taxes. This levy is hereinafter referred to as the "1981 Levy". (b) On September 23, 1986, the electorate of the School District approved a 7. 0 mill continuous levy first effective for the 1986 payable 1987 property taxes. This levy is hereinafter referred to as the "1986 Levy" . (c) According to the Minnesota Department of Education, for purposes of the above-mentioned referendum levies thee tax capacity rate equivalents of 5 mills and 7 mills are .06162496 and .07875910, respectively. (d) On November 6, 1990, the electorate of the School District approved a . 08 tax capacity rate levy authorized for 7 years and first effective for the 1990 payable 1991 property taxes. This levy is hereinafter referred to as the "1990 Levy" . 5. Payment of Tax Increments to School District. The City and the School District hereby agree that, except as otherwise provided pursuant to paragraph 6 of this Agreement, tax increments shall be paid to the School District by the HRA 9708 4 as and to the extent received by the HRA, with respect to the tax increments relating to the 1991 payable 1992 property taxes, as follows: (a) TIF District No. 6. Since the 1981 Levy was approved before the date of certification of TIF District No. 6, the Subdivision does not apply to that Levy with respect to this District, and no tax increments attributable to said Levy from this District are payable to the School District. Pursuant to clause b(2) of the Subdivision, the tax increment from TIF District No. 6 which is attributable to the 1986 Levy and the 1990 Levy shall be paid to the School District. (b) TIF District No. 4 . Since the 1981 Levy was approved prior to the date of certification of TIF District No. 4, the Subdivision does not apply to that Levy with respect to this District. Pursuant to clause b(2) of the Subdivision, the tax increment from TIF District No. 4 which is attributable to the 1986 Levy and the 1990 Levy shall be paid to the School District. (c) TIF District No. 2. Pursuant to clause b(2) of the Subdivision, the tax increment from TIF District No. 2 which is attributable to the 1981 Levy, the 1986 Levy, and the 1990 Levy shall be paid to the School District. 6. Further Agreements. Nothing in this Agreement is intended or shall be applied in such a manner as to violate the obligations and covenants made by the City or the HRA in connection with the Tax Increment Obligations, and to the extent but only to the extent that the application of the terms of this Agreement would give rise to a violation of said obligations and covenants, including without limitation, the default in the timely and full payment of the Tax Increment Obligations, the applicable tax increments shall be applied instead in the manner, but only to the extent necessary, to avoid such default or other violation of said covenants or obligations. Nothing in this Agreement shall restrict the City or the HRA in the exercise of the powers which they may have relating to the Project or the TIF Districts. 9708 5 • In addition, the City and the School District agree that the provisions of paragraph 5 providing for payment of tax increment to the School District shall be limited to and shall apply only to such tax increment attributable to the 1991 payable 1992 real estate property taxes, and at the conclusion of said period, the City and the School District agree to review the circumstances and to attempt to negotiate in good faith such further agreement or agreements as may be permitted by law and which are acceptable to both the City and School District with respect to discretionary payments of such applicable tax increment to the School District. IN WITNESS WHEREOF, the City and the School District have caused this Agreement to be executed by their duly authorized representatives. CITY OF FRIDLEY, MINNESOTA Mayor City Manager INDEPENDENT SCHOOL DISTRICT NO. 13 School Board Chair Superintendent • 9708 6 EXHIBIT A Schedule of Tax Increment Financing Districts Within Housing and Redevelopment Project No. 1 of the Fridley HRA Independent Certification School TIF District Name Date District No. 1 Center City 5/11/79 14 2 Moore Lake 7/31/81 13/14 3 North Area 5/19/82 11/16 4 Johnson Printing/ Skywood Mall 1/20/84 13/14 5 Paschke 3/15/84 16 6 Lake Pointe 12/24/85 13 7 Winfield 10/22/86 16 8 Shorewood 10/24/86 14 9 Onan/Old Central 9/7/89 16 10 Northco Phase III 4/10/90 16 11 Osborne Crossings 8/9/91 16 9708 7 EXHIBIT B Sec. 24. Minnesota Statutes Second 15E9 c- 7:oe-.ent section 4:2.277, subdivision 10, is amended to read: S:.bd. 27. [PAYMENT 70 Sc:ccL FOR LEVI. ) (a) :he provisions cf this subdivision apply to tax increment fina ncing districts and projects for which certification vas requested . before May 1, 15E8, that are located in a school district in which the voters have approved new tax capacity rates cr an ' increase in tax capacity rates after the tax increment financing district vas certified. (b) (1) If there are no outstanding bonds cn May 1, 15E8, . to which increment from the district is pledged, or fE if the referendum is approved after May 1,' 1SE8, and there are no bonds outstanding at the time the referendum is approved, that were issued before May 1, 25E3, et-f.7-if-the-re=e:e.. -...-.. .-.._. it'e-.tx-CtpLCCty-.ate-was-approved-aft er-t a--:1.aa t-:ece-nt _tzte 0:---.'.GS-:O-Y.'.:C^-_••G:e7.e�t-_:G7.-L'e-G:St:_Gt- :z--c- c_-Gee-f_7-c:-f'.7 .. -1e`i tha authority must annually pay to the school district an amount cf increment equal to the . increment that is attributable to the increase in the tax capacity rate under the referendum. (2) if clause f?}-apes (1) does not apply, upon approval by a majority vote of the governing body of the municipality and the school beard, the authority must pay to the school district an amount of increment ecual to the increment that is attributable to the increase in the tax capacity rate under the referendum. (c) The amounts of these increments may be expended and . must be treated by the school district in the same :manner as provided for the revenues derived from the referendum levy approved by the voters. The provisions of this subdivision apply to projects for v ich certification was requested before, cn, and after August 1, 1979. N co K. F.. co N. co :i { co co co coo 07 t11 'n `n v v ii�i..:3: N N a: � M M M CO Is- Z � � N OO O to O) a0 CO CD T N O N N N O O N O) N. co co to O O tr.; O O O N O co 04 U) cn0 O O .': N c0 00 CV c0 doCO 6 O r N CO N CO coO co0 CO N 0 0 Z o) co M Q) N ,- .- 0) (0 .— oi CO N C1.) ¢ ._ : c0 M N. r- N CO Cr W 0 �e Co Z ¢ ¢ 0 000 >;" N � � rnrnrn ¢ '. 2 ::: o 0 0 0 cv Z Z o) N. N ao ao ao a 0- >:>tu::d to cn r<: W '::t11:;;:;>:¢' W N ^ N N. co c0 co 'd' M r ^ O co Z [,�. ri M co �? co05 05 cj CO- C5 COO_ . W n c0 r u) CO to p Z d:11]. 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O) O) N 2 CO N 0) . � 2 _ 0 0 0 z < m 0 CC < b I CL 11.1 k u) w 0 __ S 2 ° "0 = ® m I k _ a m ° q b k / cm -c \ 7k I s mo co >7/ co co co \ /g k % I c 2 k E -0 7 = fn a) ® \ — &§ m / 3 2 ca 2 e o cus = CC \ mm o k 2 u).o m c % § k R CL ■ o _ 0 , u a co — _ J \ \ - \ k 0 \ / ƒ >. m M Cl) a a — k 0 g 20 f \ K 70 \ 0 o_ f 2 » o § \ G n o ° — Q ® c 0 } \ / $ co \ & o S { > D 02 t / a2 > @ ® c £ a 0 7 asE Cl) 66 ° k ° 32 a m — _ a 0 / ¢ \ 2 2 § R ° / j / m o = 6 © « x < o m a 03 2 3 q f o g m % _t k § 3 >. 2 e \ m s £ \ 7 \ k ® » m m \ t $ 2 — n # + a 7 / 5 n p 0 < E ® $ \ / % / 7 Mn / ° ° -c f £ < m / n 0 m CV 0 I _ $ e e f E 3 y 3 yG. 4 LICommunity Development Department pr, HOUSING AND REDEVELOPMENT AUTHORITY J City of Fridley D .E: September 6, 1991 TO: William Burns, Executive Director of HRA FROM: Barbara Dacy, Community Development Director SUBJECT: Future Claims and Expenses 1. The Minnesota Real Estate Journal is publishing a special report on the northern suburbs in mid-September. They contacted the communities in the northern area to determine whether or not they were willing to place an ad in this particular issue. Because other communities will probably advertise and because we have done so before in a special issue, a quarter page two-color ad was ordered. The cost of the ad will be $680. Jock Robertson had prepared a two-color ad originally for the 1989 special on the northern suburbs. I updated it to list your name and my name as contact people and also to contact us about information about or redevelop-ment program and to receive a copy of the Commercial and Industrial Vacant Land Inventory. Copies of the special issue can be made available to the HRA. 2 . Attached is a brochure regarding the American Economic Development Council 's Basic Economic Development course to be held in Tampa, Florida, November 3-8, 1991. The American Economic Development Council sponsors the Basic Economic Development courses nation-wide every year via major universities. It appears that the course work is more strategy and policy-oriented which will complement your course work with the National Development Council in financing techniques. Anticipated expenses would include $395 for registration, $354 for hotel ($59/six evenings) , and $380 for air fare. I am requesting HRA concurrence with these proposed expenditures. BD: ls M-91-660 4-A ACCREDITED Ax ��` PROGRAM FEDC Fifteenth Florida it 4 sic Economic Develo . ment Course Professional Development Center College of Business Administration University of South Florida NOVEMBER 3-8, 1991 • 4-B PROGRAM - 1991 BEDC Sunday, November 3 Wednesday, November a:30- 6:30 p.m. 8;15- 10:30 a.m. Check-in; Pick up materials Industrial Parks and Sites BEDC Suite, Embassy Suites Hotel 10:45 - 11:45 a.m. 7:00 p.m. Building Partnerships for Economic Development Dinner/Orientation 11:45- 1:15 p.m. • Embassy Suites Hotel Lunch Monday, November y� 1:15 - 3:30 p.m. Computer Applications in Economic Development 8:15 - 10:00 a.m. 3:30 p.m. Perspectives on Economic Development Balance of Day Free 10:15 - 11:45 a.m. Economic Geography �J 11:45 - 1:15 p.m. Thursday, NovemberNovember, / Lunch 8:15- 11:45 a.m. 1:15 - 3:15 p.m. Matching Resources to Needs: Community Analysis Site Selection Case Study 3:30 - 5:30 p.m. 11:45- 1:15 a.m. Community Development Lunch 1:15 - 4:00 p.m. Tuesday, NovembeK5 An Insider's View of Corporate Site Selection 8:15 - 10:00 a.m. 4:15 - 5:30 p.m. Marketing Strategies Expansion and Retention of 10:15 - 11:45 a.m. Existing Business and Industry International Trade and Development r 11 L 4nch:15 p.m. Friday, November y0 1:15 - 3:45p.m. 8:15 - 10:15a.m. Financing Alternatives for Economic Development Managing the Economic Development Office 4:00 - 5:30 p.m. 10:30- 12:00 Noon Entrepreneurship: The Role of Small Business In Economic Development: A Look Ahead Economic Development For More Information Call The Professional Development Center at (813) 974-4264 NONCREDIT PROGRAM REGISTRATION(Please Print) UNIVERSITY OF SOUTH FLORIDA (Right/ �eeo.3 ( Qleaseo/in( n this/o 3e-3 SOCIAL SECURITY NUMB R >.�9 (miry /-y/ (first _` (f![ � H E ADDRESS (meet or P. 7 N� � �/r �� JUJr (apt no.) 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Ec > m � mm MW Qmm 3RUm 0 �> amo7OyN v� O O0E5 '3N Noa C O c Q d W m V C «: U � W .t as a_ Y U > 80 rr p Co c i - N C o O Q U L C m L E U 13 m •� L a1 c C m m D m N W UN. � ao W Om 7Om mcc ° ••-� mo m•= m wcoE " WE Cl' 3 V) m o C o ° « ►'ri ° a o o-� c N cm)•c may c=� c Ea �' o 4) N . 0V m wow c_ c o rnU (a [ .1 ° U � > 0 7 o C (0 7 o='y (� N() c m No m N V (0 UQ U mW C > �m U C W co U � Co O coal ) Cal a� 0. A mW�>, ' C .. 0� C N 0 �m7w Etwi m `°� Tcma r=� a� mc� � - N mm � v (ac Z �• ov ch mcmo ] a. mQ)V 'ccm= rr� ocEcc (o : 3a0 •c0t . c omaov~�, � m'v� E mmm- Ex yi 'a�"oc� r au� T Omapm . - . o9m (a O Wm mu_— me, 0 OU ° mvmo � • C U0«jmcV C Cmm 0 m ! mC ° ° (iICUC CI) I-c.):-... a(co mu. �i titi° m i-- o o m o ass- a- D .- v)S �i FL- � ' v� v) QO coi DATE 09/06/91 CITY OF FRIDLEY - HRA PAGE I PROGRAM P008 CHECK REGISTER -4-E CHECK RUN BATCH # :0008 002 HRA VENDOR DISC. JOB DESCRIPTION INV # PO/INV # SEQ # PCNT AMOUNT ACCT NUMBER NMBR MESSAGES 2155 **** CHECK-PREPAID **** M00027 MAXFIELD RESEARCH GRO1P, INC. HOUSING STUDY 00449-01 EZH3NS0.0000 10,000.00 0R460-20200 ACCOUNTS PAYABLE 10,000.00 C8460-10100 CASH **** TOTAL VENDOR $ 10,000.00 2156 CHECK-PREPAID ***# B00065 BARNA, GUZY & STEFFEN, LTD. OILY LEGAL SERVICE 00450-01 EZH3KZO.0000 549.75 DR450-20200 ACCOUNTS PAYABLE 549.75 CR450-10100 CASH JULY LEGAL SERVICE 00450-02 EZH3LV0.0000 153.00 0R452-20200 ACCOUNTS PAYABLE 153.00 CR452-10100 CASH JULY LEGAL SERVICE 00450-03 EZH3NH0.0000 165.75 DR460-20200 ACCOUNTS PAYABLE 165.75 CR460-10100 CASH TOTAL VENDOR # 868.50 2157 CHECK-PREPAID C00044 CASSERLY LAW OFFICE AUG LEGAL SERVICE 00451-01 EZH3M00.0000 1,202.50 DR455-20200 ACCOUNTS PAYABLE 1,202.50 CR455-10100 CASH AUG LEGAL SERVICE 00451-02 EZH3NLO.0000 2,165.65 0R460-20200 ACCOUNTS PAYABLE 2,165.65 CR460-10100 CASH C144 TOTAL VENDOR **** $ 3,368.15 2158 * CHECK-PREPAID **** F00033 FIRST NATIONAL BANK OF CHICAGO AGENT FEES 00452-01 EZH3KP0.0000 870.50 DR380-20200 ACCOUNTS PAYABLE 870.50 CR380-10100 CASH ** * TOTAL VENDOR **** $ 870.50 2159 **** CHECK-PREPAID *44# F00072 FIRST TRUST AGENT FEES 00453-01 EZH3KSO.0000 180.00 DR380-20200 ACCOUNTS PAYABLE 180.00 CR380-10100 CASH 41*-14 TOTAL VENDOR **** $ 180.00 2160 * CHECK-PREPAID F00023 FRIDLEY, CITY OF AUG. EXPENSES 00454-05 EZH3L40.0000 297.55 DR450-20200 ACCOUNTS PAYABLE 297.55 CR450-10100 CASH AUG EXPENSES 00454-06 EZH3L80.0000 2,250.00 0R450-20200 ACCOUNTS PAYABLE 2,250.00 CR450-10100 CASH AUG EXPENSES 00454-07 EZH3LB0.0000 26.70 DR450-20200 ACCOUNTS PAYABLE 26.70 CR450-10100 CASH AUG EXPENSES 00454-08 EZH3LF0.0000 800.00 DR450-20200 ACCOUNTS PAYABLE 800.00 CR450-10100 CASH AUG EXPENSES 00454-09 EZH3LI0.0000 95.40 DR450-20200 ACCOUNTS PAYABLE 95.40 CR450-10100 CASH AUG EXPENSES 00454-10 EZH3LM0.0000 179.67 DR450-20200 ACCOUNTS PAYABLE 179.67 CR450-10100 CASH AUG EXPENSES 00454-11 EZH3LP0.0000 800.00 DR450-20200 ACCOUNTS PAYABLE ' 800.00 CR450-10100 CASH DATE 09/06/91 CITY OF FRIDLEY - HRA PAGE 2 PROGRAM P008 CHECK REGISTER CHECK RUN BATCH # :0008 002 HRA 4-F VENDOR DISC. JOB DESCRIPTION INV # PO/INV # SEQ # PCNT AMOUNT ACCT NUMBER NMBR MESSAGES AUG EXPENSES 00454-12 EZH3N80.0000 43.41 DR455-20200 ACCOUNTS PAYABLE 43.41 CR455-10100 CASH AUG. PERSONAL SERVICES 00454-01 EIH3NP0.0000 13,360.33 DR460-20200 ACCOUNTS PAYABLE 13,360.33 CR460-10100 CASH AUG EXPENSES 00454-02 EIH3NWO.0000 223.89 0R460-20200 ACCOUNTS PAYABLE 223.89 CR460-10100 CASH AUG EXPENSES 00454-03 EZH3NZ0.0000 695.00 0R460-20200 ACCOUNTS PAYABLE 695.00 CR460-10100 CASH AUG EXPENSES 00454-04 EZH3030.0000 42.95 DR460-20200 ACCOUNTS PAYABLE 42.95 CR460-10100 CASH **** TOTAL VENDOR **** $ 18,814.90 2161 **** CHECK-PREPAID **** 000069 GREENMASTERS, INC LAKE POINTE MAINT SERVICE 00455-01 EZH3NB0.0000 3,760.33 0R455-20200 ACCOUNTS PAYABLE 3,760.33 CR455-10100 CASH **** TOTAL VENDOR **** $ 3,760.33 **** TOTAL NUMBER OF CHECKS WRITTEN : 000000 **** TOTAL DOLLARS FOR CHECKS WRITTEN : $ 37,862.38 **** LAST CHECK NUMBER : 002154 • 4-G TO: FRIDLEY H.R.A. FROM: CITY OF FRIDLEY RE: BILLING FOR OPERATING EXPENSES FOR AUGUST, 1991 AND AUGUST 1991 ADMINISTRATIVE EXPENSES AUGUST ADMINISTRATIVE PERSONAL SERVICES 13,108.08 AUGUST ADMINISTRATIVE OVERHEAD 252.25 TOTAL ADMINISTRATIVE BILLING 13,360.33 OPERATING EXPENSES: 2ND QUARTER COPIER ALLOCATION 223.89 REGISTRATION - BURNS 695.00 FICHE - JUNE 42.95 JULY MANAGEMENT FEE - KORDIAK 297.55 MARKET VALUE APPRAISAL - DAIRY QUEEN 2,250.00 ELECTRICITY - RICE PLAZA 26.70 WEED MOWING - RICE PLAZA 800.00 MOWING - RICE PLAZA 95.40 SWEEPING - RICE PLAZA 179.67 INSTALL CONDENSING UNIT - RICE PLAZA 800.00 ELECTRICITY - LAKE POINTE 43.41 TOTAL OPERATING EXPENSES FOR AUGUST $5,454.57 TOTAL EXPENDITURES $18,814.90 • MEMORANDUM 5 Municipal C rl 6431 University Avenue N.E.Fridley, MN 55432 Office of the City Manager William W. Burns CITYOF (612) 571-3450 FRIDLEY TO: The Honorable Mayor and City Council FROM: William W. Burns, City Manager i0 ' 5j DATE: September 6, 1991 SUBJECT: HRA Response to Council 's TIF Resolution - At their August 8, 1991, meeting, the HRA discussed Resolution No. 58-1991 which encourages the Fridley HRA to decertify portions of tax increment financing districts that are not needed for financing economic development or redevelopment improvements. The HRA asked that I communicate to Council that they are in full sympathy with Council 's position on tax increment financing. At the same time, they ask Council to be understanding of some of the practical difficulties the HRA faces in decertifying tax increment districts. For example, we would be violating the covenants of our various bond issues if we were to decertify particular districts. The HRA also feels that is important to take into account declining tax values of property currently included in tax increment financing districts. As values decline, we must be wary of meeting our debt service obligations for public improvements that have been built in these districts. The HRA does recognize, however, that there may be instances where tax increment revenue from a particular district exceeds the bond requirements for that district, and the HRA is prepared to comply with Council 's wishes as these situations are identified. The HRA appreciates Council 's input, and looks forward to the continuation of a cooperative and supportive relationship. WWB:rsc 6 / Community Development Department I \ HOUSING AND REDEVELOPMENT AUTHORITY City of Fridley DATE: September 6, 1991 TO: William Burns, Executive Director of HRA FROM: Barbara Dacy, Community Development Director SUBJECT: Contract with Maxfield Research Group At the August 8, 1991, meeting, the HRA authorized the Executive Director to execute a contract with Maxfield Research Group for a housing study. Attached for the HRA's information is a copy of the executed contract. No action is needed on this item. The consultant has begun work on this project and will be doing windshield surveys throughout our neighborhoods this week. BD: ls M-91-661 I .. MAXFIELD 6-A RESEARCH ROUP August 12, 1991 Mr. William W. Burns Executive Director Fridley Housing and Redevelopment Authority 6431 University Avenue Northeast Fridley, MN 55432 CONTRACT FOR PROFESSIONAL SERVICES Maxfield Research Group, Inc. proposes to provide a comprehensive housing analysis for the City of Fridley which will identify goals, opportunities, strategies and public policies related to maintaining neighborhood appearance and desirability. With an aging housing stock, and limited vacant land for new housing development, the city must address these issues in order to main- tain its tax base, stabilize its existing housing base, improve areas of con- cern, encourage new households to move to Fridley and existing households to remain. SCOPE OF SERVICES Our work will begin by developing a profile of the existing residential base and issues which will be affecting the City of Fridley oggr �,t e ,next ,.20 years. ,6 - At the HRA commission meeting, we heard comments from thc�' r—a o' her commission members who brought up issues of concern facing the ci y. We will be identifying demographic changes (local and national) that will be affecting the city over both the short- and long-term as well as social changes that will affect the types of households formed and the types of housing they will be attracted to in the coming years. These issues will have a strong impact on housing in the community. Once we have identified those issues that are of concern to the city and its residents, we will develop an opportunity assessment for each Fridley neigh- borhood. This assessment will consider the following: A. Demographic Review 1. Compile demographic information which will identify trends external to the City of Fridley that will affect Fridley's housing supply and demand. . 612-338-0012 620 KICKERNICK,430 FIRST AVENUE NORTH 612-338-0659 FAX MINNEAPOLIS,MINNESOTA 55401 6-B Mr. William Burns August 12, 1991 Fridley Housing and Redevelopment Authority Page 4 2. Define demographic and market trends in the metropolitan area on: a. rental market b. first-time home buyer market c. move-up market d. empty-nesters e. young seniors f. old seniors 3. Identify statewide and/or national trends which may affect demand for housing in Fridley. 4. Compile demographic information internal to the City of Fridley on: a. Employment b. Age of Housing c. Type of Housing d. Building Trends e. Public school characteristics f. Neighborhood demographic profiles g. Income Levels B. Housing Market Analysis 1. Define Fridley's "trade area. " 2. Identify housing sales trends within the city, using home sales data obtained from MLS and the city assessor. 3. Survey general occupancy apartments and analyze rental mar- ket trends. 4. Provide information on rents, turnover, occupancy, tenant profiles, traffic, etc. S. Market interviews with Fridley stakeholders that will pro- vide perceptions of Fridley neighborhoods and its housing. a. Large employers b. Real estate sales agents c. Rental managers and owners d. Fridley Section 8 housing representative e. City Assessor f. School District representatives g. Local Developers h. Church representatives i. Crime Watch block captains j . Others (as necessary) 6-C Mr. William Burns August 12, 1991 Fridley Housing and Redevelopment Authority Page 5 C. Neighborhood Analysis 1. Identify areas within the City of Fridley that are perceived as neighborhoods. 2. For each of these neighborhoods, define the following char- acteristics: a. Vacant Land b. Location c. Access/Transportation Services d. Housing Types and Conditions e. Positive images f. Negative images g. Resident/tenant demographics h. Existing housing markets 3. For each neighborhood, identify housing problems or oppor- tunities and assess the impact on the neighborhood. a. Identify existing or potential. problems (ie. poor conditions, perceived negative image, etc.) b. Identify opportunities (ie. redevelopment, rehabilita- tion, better tenant screening, increased monitoring by law enforcement, crime watch block captains, etc.) D. Housing Strategies 1. Identify strategies to maintain/improve housing and neigh- borhood livability. a. Regular enforcement of building, fire and zoning codes. b. Methods of neighborhood participation. c. Other 2. Identify strategies to address problems and to maximize opportunities. a. Identify strategies for neighborhoods to be accom- plished: --in the next five years; --in the next ten years; --in the next twenty years. E. Conclusions and Recommendations 1. Prioritize items most important to the city as they under- take to maintain their housing stock and manage housing issues and develop strategies to accomplish those items. 2. Review compilation of housing programs completed by city 6-D Mr. William Burns August 12, 1991 Fridley Housing and Redevelopment Authority Page 6 staff and offer suggestions of programs which may be appro- priate to fund various redevelopment projects. Based on the above comprehensive analysis, we will discuss the changes we . forsee for each neighborhood over the next 20 years, and the policies the city might adopt to direct change and/or maintain the desirability of each neigbor- hood. This analysis will address various segments of the population, such as young adults, empty-nesters, single-parent families, low-income persons, etc. and identify their housing needs in context with the existing housing stock of the city. In addition to text that discusses the opportunities or needed improvements for each neighborhood, we would also propose to use graphics and photographs to illustrate development patterns and neighborhood conditions. These graphics and photographs can also be used to show improvements or urban design changes that may be needed to keep these neigborhoods vital and live- able as housing needs change. WORK PRODUCT Findings will be presented in a bound report and will incorporate our basic findings and recommendations as well as graphics and photographs illustrating current conditions and future opportunities. The City of Fridley has agreed to make available to us items such as aerial photographs, maps, and other records on housing stock by neighborhood. COST OF SERVICES The work program we have proposed in the Scope of Services will be undertaken for a cost of Twenty-Five Thousand ($25,000) Dollars, which will include printing of ten copies of the report, maximum of two graphics per neighbor- hood, and three formal presentations. Any other formal presentations beyond those identified above will be billed at our normal hourly rates for staff time, which range from $65 to $125 per hour. A retainer in the amount of Ten Thousand ($10,000) Dollars will be required upon submission of the contract and before commencement of work by Maxfield Research Group, Inc. The remaining portion shall be payable monthly as costs in excess of the retainer are incurred. COMPLETION TIME The work outlined under the Scope of Services will be completed within sixty (60) days of the execution of this contract, unless delayed by unexpected emergencies, forces beyond the control of one or both parties, or by request of one party and acquiescence of the other party. 1 . � 6-E Mr. William Burns August 12, 1991 Fridley Housing and Redevelopment Authority Page 7 PAYMENT All costs including staff time and out-of-pocket expenses billed on a monthly basis shall be payable to Maxfield Research Group, Inc. within fifteen (15) days of receipt of an invoice showing the work completed and the cost of the work. A finance charge of one and one-half percent (1.5%) per month will be added to the unpaid balance of each invoice not paid within fifteen (15) days. DISCLAIMER The objective of this research assignment is to gather and analyze as many market components as is reasonable within the time limits and projected staff hours set forth in this agreement. We assume no responsibility for matters legal in character. The property/land assumed to be free and clear of any indebtedness, liens or encumbrances; and good and marketable title and competent management are assumed, unless other- wise stated. If building plans or site plans included in the report, they are to be consid- ered only approximate and are submitted to assist the reader in visualizing the property. We assume no responsibility for the accuracy of any building or site plans. Certain information and statistics contained in the report, which are the basis for conclusions continued in the report, will be furnished by other independent sources. While we believe this information is reliable, it has not been independently verified by us and we assume no responsibility for its accuracy. The conclusions in the report are based on our best judgments as market re- search consultants. Maxfield Research Group, Inc. disclaims any express or implied warranty of assurance of representation that the projections or con- clusions will be realized as stated. The result of the proposed project may be achieved, but also may vary due to changing market conditions characteris- tic of the real estate industry, changes in facts that were the basis of con- clusions in this report, or other unforeseen circumstances. In the event payment is not received on a timely basis, Maxfield Research Group, Inc. shall be entitled to a lien against the subject property. This agreement will be construed according to the laws of the State of Minne- sota. TERMINATION This agreement may be terminated upon written notification of either party to the other. In the event of termination, the Client will pay Maxfield Research 6'F Mr. William Burns Fridley Housing and Redevelopment Authority August 12, 1991 Page 8 Group, Inc. for staff hours performed at the firm's normal hourly rates, plus all expenses incurred through the date of termination. If this proposal meets with your approval, please sign and return one copy to the offices of Maxfield Research Group, Inc. Agreed to this / ' ay of 1991. MAXFIELD RESEARCH GROUP, INC. ee A. Maxfi ld FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY William% _s/-1.e-12- Cl� Burns r o) 7 m cn 1 co O pp �p co 0 CO 0 O CD 0) CO. O ^ O O < CO US N CV r C O pi O OO ch r CO co N N N O N O Cf) et r CO et et H CO N P. 10 CC► CO co co et er O O O coO. CO CCO CNO O N IOf) N CD CO !� N CA C!) et Q v- et CO CA CA CO N N O Cl) I) C) N CO N jest et O N O et M N P. I. CO N co Oaf N .- et W 10 N CA CD O O et COO Z O COO CNO co O COO N COO M N CO N IN N CO Cn r r eh CA co co co 0 0 0) O N co N >' CV r Cp CA C Ni CV V7 CA co c0 r CO O CO 1- et r N co r .- N r 0 N N r N r r N r ch r •- r- CD r N 0 r N M 40 N r CO LO O 40 et CO rC CI- i- C O N N Si QN N CO CO r to O N N r Cr) co r co O N CO CO CO CO et N CO O N r et Q O O v- N O O co � CA Q r' N N P. CO O. CA N CO_ 2 r r CD N r CO C9 N Cr) tt O O CO to co CO O CO N O O CO c0 Fib Of u) O N M O CA cv c0 a A O CD LL CV � CO as �C O CD rt` ON Ca co Z' O co 0 0)) '- O O < O O CNO 0)) to If) r N N CO et et r Cr) CO H 2 = y Q H a w Q F- JO Z 0W r a 0 = 2 V X Z J Y z Z 2 z Z Zwm ¢ Ym2QA o W IL Z (9 N 0 z O Z f= H Q Q H Z 2 U = 2 o Q a 8 Community Development Department \ HOUSING AND REDEVELOPMENT AUTHORITY City of Fridley DATE: September 6, 1991 TO: William Burns, Executive Director of HRA FROM: Barbara Dacy, Community Development Director SUBJECT: Information Regarding Bob Schroer Project Dave Newman of Nedegaard Construction has requested to be placed on the agenda to discuss with the HRA preliminary items relating to the proposed redevelopment project at Bob's Produce property in the northwest corner of Osborne Road and University Avenue. No action is needed from the HRA; however, Mr. Newman wanted to review initial findings about the financing arrangements, etc. He advised me that he wants to try to have a development agreement for HRA consideration at the October 10, 1991, meeting. I have reviewed an initial site plan, and they will be revising that site plan in order to conform with various code requirements. I will be meeting with Mr. Newman and Mr. Schroer next Wednesday to review a revised site plan. BD: ls M-91-662 A aj fit{ CUYOF FRIDLEY FRIDLEY MUNICIPAL CENTER•6431 UNIVERSITY AVE. N.E. FRIDLEY,MN 55432•(612)571-3450• FAX(612)571-1287 August 14, 1991 Bob Schroer Bob's Produce Ranch 7620 University Avenue N.E. Fridley, MN 55432 Dear Bob: We have completed an informal review of the preliminary site plan for the redevelopment of your property dated August 1, 1991. To follow are a list of our comments: 1. We recommend that you petition to vacate, at minimum, the right-of-way east of the west property line, or the right-of- way of 77th Avenue from where it curves north, as well as the existing street easement running east/west through the property. Not only will this eliminate the need for one of the setback variances (rear yard building setback) but it will also permit you to construct a typical private driveway from Main Street into the rear of your property. If you vacate the entire right-of-way, you would have to work with the adjacent property owner to gain an easement, or even to share a driveway (see aerial) . You originally indicated that you wanted to petition the City to construct the street; however, under those circumstances, we would have to assess you for the cost of installing the street. Further complicating the public improvement approach is that the right-of-way for 77th Avenue is only 33 feet wide. We also determined that there would not be a need for any type of connection between Main Street or the west service drive. Therefore, a better alternative is to construct a private driveway (bituminous surface with concrete curb) to serve the rear of the property. 2 . The property is located within the Six Cities Watershed District. This district is administered by the participating cities. In this case, we would require submission of drainage calculations indicating that the post-development run-off does not exceed the quantity or quality of the pre-development run- off. This typically includes provision of some type of on- site ponding areas. Almost the entire area is covered with impervious surface. You may want to evaluate options to meet 8-B Bob Schroer August 14, 1991 Page 2 this requirement as it may affect site design or the amount of impervious surface area on the site. 3. Anoka County has indicated that they cannot reduce the length of the median. More importantly, they indicate that the County needs about 50 feet of right-of-way north of the existing center line of Osborne Road. To the best of our calculations, it may mean ten feet of additional right-of-way is needed. The plan should reflect the taking of this additional right-of-way, and building setbacks adjusted (again, this furthers the argument for vacating 77th Avenue, as you may have more room to maneuver the building pad) . 4. If 77th Avenue is vacated to the rear, that would eliminate the necessity for a rear yard setback. A front yard setback is necessary from 80 feet to 64 feet along Osborne Road. Section 205. 15.05.D. (5) . (d) requires a five foot separation from the building to hard surface areas. While you have met this requirement along the front of the buildings, it is not clear where it is to be met along the rear of the buildings. If areas are entirely occupied as loading docks, the City has not enforced this requirement. However, where there are no loading docks, a separation must be maintained from the parking surface to the building. 5. The driveway width from the west service drive is approximately 40 feet wide. The code requires a maximum driveway width of 32 feet with a ten foot radii on abutting curbs. 6. The plan indicated approximately 205 parking spaces. About 210 parking spaces are required. If it can be shown that a square footage of building will remain for storage areas, we have adjusted the calculations on the number of parking spaces. Also, parking spaces are indicated at 9 ' x 20 ' ; therefore, a variance will be necessary. In past applications, it has been suggested that a combination of nine and ten foot stalls may be acceptable. We discussed earlier that you may want to use nine foot spaces for employee parking. Please be aware that if a nine foot space is used, it must be double striped according to our standards. 7 . A special use permit will be required for a garden center or nursery which requires outside display or storage of merchandise (Section 205. 15. 03 . (C) . (11) ) . We will also need a written agreement from the Metropolitan Waste Control Commission regarding the proposed greenhouse over the utility easement and parking areas. 8-C . Bob Schroer August 14, 1991 Page 3 8. You will need to submit a landscaping plan indicating the proposed landscaping improvements as required by the ordinance (please see attached) . Underground irrigation will be required. All trash enclosures must be screened. In summary, a revised site plan containing the adjustments noted above should be prepared. Further, investigation of vacating 77th Avenue should be pursued with adjacent property owners. If you have any further questions, please feel free to contact me. Sincerely, Barbara Dacy, AICP Community Development Director BD/dn C-91-264 • r PARKING SETBACK „ 8-D., -I-- -I - -r • -r I viaK• c.E T - .^I ti -n • I / 71.0IL -1 . I I a.� o`4 I 26 26 29 I 6 1 • .L�SITU iNOU6 p`� Q / /. �°1�YJNG---- - --L-I ST$EET�ASE 77TH AVE. I / aaq�C�,�{(��. / / �•�zr Q • • • III > �� / II u u / __P,aRznzG3E�eAc�_U I � � - � j EXISTING / r -T I11LDMG sE _ - ;�"'''' BUILDING RETAIL / . BI 1J1W4OU5 ICPAVING O I I I I Y 19 • �e1//4O/ I---PAVING RECEIVING: 21' ' �3 / ::':: :•: ti BITUMINOUSor �`�'' • :i• ::;:•:�.::•:ti AVMG /I Q / • H ti. III O PARKING i / 447 Q. - to scatslir :�::::ti:: (_-- 19 I St P lv OL ti:•:•}:�: �:'.'�:�•�• fit: •,ti;; I = ?,f 3:;: ' °58 .�..:�,,... rx.� 8-E• ..; ` COUNTY OFANOKA Department of Highways 'h cso`►_ Paul K. Ruud, Highway Engineer .3ro. 1440 BUNKER LAKE BLVD NW,ANDOVER, MINNESOTA 55304 612-754-3520 August 8, 1991 City of Fridley. 6431 University Avenue NE Fridley, MN. 55432 Attention: Barbara Dacey, Community Development Director Dear Ms. Dacey: We have received your letter dated August 2, 1991, referring to a proposed improvement at Bob's Produce. We have the following comments on the request to shorten the proposed median on Osborne Road as well as other concerns about the plan as they relate to the proposed Osborne Road improvement and general County policy. The following, then,are our comments on this plan: 1) The right-of-way shown on the plan is the right-of-way existing as of this date. Anoka County, in conjunction with the City of Fridley and the Minnesota Department of Transportation, is currently working on plans to upgrade Osborne Road at its intersection with TH 47. That upgrade will require additional right-of-way along the north side of Osborne Road and we would suggest that the City gain title to said right-of-way as part of this redevelopment. The County's needs for right-of-way would extend 50 feet north of the existing centerline of Osborne Road. 2) The adjustment in this right-of-way will undoubtedly affect the building and parking setback and the build setback as shown on the enclosed drawing. 3) The reconstruction of Osborne Road, includes the construction of left turn lanes to TH 47 as well as to West Service Drive. The construction of these medians are minimum standards as suggested by the State Aid Manual and we would not be in a position to shorten the medians to provide a left turn access for this driveway. Alternatives to the property owner might include, combining access with the property immediately to the west and eliminating one driveway along the north side of Osborne Road. We would be interested in working out an arrangement to facilitate said combining of driveways. Affirmative Action / Equal Opportunity Employer t 8.F -2- 4) In reviewing the traffic patterns generated by the proposed expanded facility, it becomes apparent that left turn access to the facility, particularly for the retail customer, is adequately supplied by the left turn bay located at West Service Drive. This arrangement would allow for the safest access to the facility for left turners, in that they would be provided a left turn slot in which to wait for a clearing in oncoming traffic. 5) In addition to the access issues discussed above, we are concerned about the drainage pattern for the proposed facilities. Current Anoka County policy is that we will allow no more than the existing calculated runoff to enter Osborne Road uncontained in either a structure or retarded by a holding pond. The developer will need to submit calculations showing the before and after storm water runoff to Osborne Road and facilitating a no increase factor in the design of the ultimate facility. If you have any questions regarding these items, please contact either Doug Fischer, Jane Pemble, or myself at 754-3520. Sincerely, J n G. Olson, PE eputy County Engineer xc: Michelle McPherson, BLA Planning Assistant dmh/1FRIDLEY . y