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HRA 10/24/1991 - 6379HOUSING AND REDEVELOPMENT AUTHORITY MEETING, THURSDAY, OCTOBER 24, 1991 7:30 P.M. WILLIAM BURNS EXECUTIVE DIRECTOR OF HRA CITY OF FRIDLEY A G E N D A HOUSING & REDEVELOPMENT AUTHORITY MEETING THURSDAY, OCTOBER 24, 1991, 7:30 P.M. Location: * * ** *Meeting Room #1 (Lower Level) * * * ** Fridley Municipal Center 6431 University Avenue N.E. CALL TO ORDER ROLL CALL APPROVAL OF MINUTES: September 12, 1991 ACTION ITEMS: CONSIDER CONCEPT APPROVAL OF TIF ASSISTANCE FOR REDEVELOPMENT OF BOB SCHROER PROPERTY . . . . . . . 1 - 1B CLAIMS AND EXPENSES . . . . . . . . . . . . . . . . . . 2 - 2C INFORMATION ITEMS: LETTER FROM JIM KORDIAK REGARDING RICE PLAZA. . . . . . 3 - 3B UPDATE ON RICE PLAZA . . . . . . . . . . . . . . . . . . 4 UPDATE ON FRIDLEY PLAZA OFFICE BUILDING'S SECOND MORTGAGE . . . . . . . . . . . . . . . 5 FINAL COPY OF DAIRY QUEEN LEASE . . . . . . . . . . . . 6 - 6N MEMO ON DISPUTE OF PETER PATCHIN BILL . . . . . . . . . 7 - 7E OTHER BUSINESS ADJOURNMENT CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 12, 1991 CALL TO ORDER: Chairperson Commers called the September 12, 1991, Housing & Redevelopment Authority meeting to order at 7:30 p.m. ROLL CALL: Members Present: Larry Commers, Virginia Schnabel, John Meyer, Jim McFarland Members Absent: Duane Prairie Others Present: Barbara Dacy, Community Development Director Paul Hansen, Accountant Don Fitch, Fridley Dairy Queen Dave Newman, Attorney for Bob's Produce Michael Schroer, Bob's Produce, 7620 University Dennis Rens, Fridley School District #14 APPROVAL OF AUGUST 8. 1991, HOUSING & REDEVELOPMENT AUTHORITY MINUTES• MOTION by Mr. Meyer, seconded by Ms. Schnabel, to approve the August 8, 1991, Housing & Redevelopment Authority minutes as written. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 1. CONSIDER APPROVAL OF SECOND MORTGAGE SATISFACTION FOR FRIDLEY PLAZA OFFICE BUILDING: Mr. Commers stated the HRA has received a memo from Mr. Burns relative to negotiations that have been ongoing with respect to the amount of the second mortgage that currently exists with the Fridley Plaza Office Building. It is staff's recommendation that, although neither the staff or the HRA are too happy about this under these circumstances, the HRA approve the satisfaction of the second mortgage for the Fridley Plaza Office building. Mr. McFarland asked if there are any personal guarantees on this property. Mr. Hoeft stated that in checking the files, he did not believe there are any notes or personal guarantees. -- HOUSING & REDEVELOPMENT AUTHORITY MTG., SEPT. 12, 1991 PAGE 2 - -- Mr. Commers stated that Mr. McFarland brings up a good point. If they approve the second mortgage satisfaction now before knowing for sure if there are any guarantees, will there be any problem? Mr. Hoeft stated, no, the HRA would not be compromising any guarantee rights by approving the second mortgage satisfaction. Mr. Commers stated that legal counsel will be able to find that out within a couple of days, and maybe the HRA should approve the second mortgage satisfaction contingent upon being satisfied that either there are no personal guarantees; or, if there are, this does not foreclose or cause any problems in pursuing the original managers on any guarantees that might exist. Mr. Hoeft stated he should know this for certain by September 17 or 18. Ms. Dacy stated the City will not record the mortgage satis- faction until the check is received. Mr. Meyer asked what kind of precedent this sets for any other second mortgage positions that the HRA has. Mr. Hoeft stated he thought that the circumstances in this case, the way the mortgagee's interest was bought out in that transaction and in.relation to the rest of the HRA's ongoing projects, is something that will probably not happen again. Regarding any other second mortgage position, when the HRA goes into that position, the HRA has to know that it is either taking that secondary position or re- enforcing that position through some outside guarantees of individuals or partnerships or corporations. Mr. Commers stated that just because they do something, does not mean they have to do it again. Each decision made by the HRA is independent, and by doing this they are not intending to set a precedent for anyone else. MOTION by Mr. Meyer, seconded by Mr. McFarland, to approve the satisfaction of the second mortgage for the Fridley Plaza Office building upon receipt of a check in the amount of $17,500, and contingent upon being satisfied that either there are no personal guarantees; or, if there are, this does not foreclose or cause any problems in pursuing the original managers on any guarantees that might exist. Ms. Schnabel stated she is very unhappy about this situation. It is very unfortunate that the HRA has to face this kind of situation, and she is very unhappy that these next door neighbors expect the HRA to capitulate on the second mortgage. It bothers her because of the HRA's position and because of the HRA's help initially in the building. She stated she will vote against this motion. Mr. Commers stated there is truth to Ms. Schnabel's statements, and this is something the HRA should keep in mind as they are approached about taking second mortgage positions in other projects. UPON A VOICE VOTE, COMMERS, MEYER, AND MCFARLAND VOTING AYE, SCHNABEL VOTING NAY, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED ON A 3 -1 VOTE. 2. CONSIDER APPROVAL OF SETTLEMENT AGREEMENT AND LEASE AGREEMENT WITH DON FITCH FRIDLEY DAIRY QUEEN: Mr. Commers stated that a memo from Barbara Dacy dated September 6, 1991, outlines some suggested changes to the lease. At the meeting, the HRA received an updated list of changes. Mr. Dacy stated that in the hand -out at the meeting, items 1, 2, 3, 4, and 6 are suggested changes that staff recommends the HRA consider approving. The items of most concern are items 5, 7, and 8. Mr. Commers stated that regarding the heating, ventilation, and air conditioning, does the HRA have the right to elect not to replace them if they quit working and then terminate the lease? Ms. Dacy stated that has been discussed at length with Mr. Fitch. Staff is proposing that he would be responsible for any or all repairs. However, as far as any replacement of items, the only items the HRA would be replacing would be the furnace or air conditioner. Mr. Commers stated the rent the HRA is charging would not make it feasible to replace a furnace or air conditioner. If one of these items malfunctions and the HRA is not in an economic position to replace that furnace or air conditioner, the HRA should be able to elect to either continue the lease or terminate the lease. Ms. Dacy stated the HRA can do that if they choose. Because the Dairy Queen is a seasonable business, the furnace has not been used too much; and she understood from Mr. Fitch that the air conditioner is in good condition. During the course of the negotiations, it was agreed that Mr. Fitch will be responsible for rent, utilities, taxes, ground maintenance, equipment repair, but he has requested that he not be responsible for the furnace or air conditioner. Mr. Commers asked if someone can inspect the furnace and air conditioner to see what condition they are in. If they are in HOUSING & REDEVELOPMENT AUTHORITY MTG.. SEPT. 12, 1991 PAGE -A good condition, then he would assume there shouldn't be any big problems and they can take the risk for the next 1 1/2 years. Mr. Fitch stated the air conditioner is only 10 years old and the furnace is 15 years old, so both are relatively new. He stated he is not opposed to having someone from the City inspect the air conditioner and furnace. Mr. Fitch stated he can delete item 5. In Paragraph 11 of the lease, he was requesting that the phrase beginning with the word "caused" be deleted. He believed that if, in the extreme case, one of his employees is killed as a result of the HRA's action to repair, he should not sign away his right to sue the HRA. He stated that in talking with the HRA's legal counsel, his concerns have been satisfied. Ms. Dacy stated the item that needs to be discussed is item 7, regarding insurance coverage on the building. When the HRA took title to the property at the end of July, the Dairy Queen property was added as a temporary binder on the current policy the HRA has with Rice Plaza. However, the insurance agent notified staff that because the Dairy Queen is a seasonal operation, they will not carry that particular building. An. annual policy will cost the HRA about $800, with a $5,000 deductible. Mr. Fitch wants to continue his current building policy, but his policy would be amended to name both the HRA and himself as insured. The deductible on the policy would be $250. That leaves an extra cost of $500 for the insurance, and Mr. Fitch is proposing that the HRA split that cost on a 50/50 basis. Ms. Dacy stated the temporary binder expires at midnight on Friday, September 13, 1991, so they would have to proceed with a pro -rated cost for the remainder of this year plus 1992. It is significantly cheaper to go along with Mr. Fitch's suggestion. Mr. Commers asked Mr. Hoeft if he had looked at Mr. Fitch's policy. Mr. Hoeft stated he had not yet had a chance to look at the policy. He will review the policy and make sure the HRA is named as the ensured on the policy. Mr. Commers stated this appeared to be a logical thing to do as long as the policy is reviewed by legal counsel and it gives the HRA the necessary coverage. Ms. Dacy stated the HRA's consultant, Conway Olson, also recommended this approach. Ms. Dacy stated that in item 9 (Paragraph 7 of the lease), the lease should be amended to read that there be a 30 day notice of HOUSING & REDEVELOPMENT AUTHORITY MTG. -SEPT. 32, 1991 PAGE 5 cancellation instead of the 10 day notice. Mr. Burns also recommended approval. Ms. Dacy stated that leaves item 8. Mr. Fitch wants the HRA not to re -lease the building to another soft -serve operation after he leaves. Mr. Fitch stated item 8 has one primary purpose. He stated he is hoping he will be able to move across the street to the Fridley Town Square so he did not think they are looking at the lease with the Dairy Queen as a long term lease. He stated it was never his intention to leave his present location. He has been there 25+ years and has built up a superb reputation for distributing soft -serve items. He would like to have a non - competing clause in both the lease and the settlement when they come to terms on the sale from the Dairy Queen. He did not think it is in his best interest for the City to use the reputation of that location as a purveyor of soft -serve treats to put a competing business in there when he is just moving across the street. He and his wife do not care what type of business goes into that location, but they prefer that the business not be mistaken as a Dairy Queen. They would like this incorporated as part of the lease and settlement. Mr. Commers stated that if the HRA does this and the HRA terminates the lease, then it not going to be an issue; however, if Mr. Fitch terminates the lease, the HRA has essentially a one - use building and he did not know how adaptable the building is for other uses. Mr. Meyer stated he understood Mr. Fitch's feelings about this issue; but from a realistic standpoint, does the HRA as a public body have any right to write in such.a clause? Mr. Hoeft stated that, yes, the HRA can limit the type of business for that building. Regarding the question, is the building adaptable to any other use or are they cutting off any other use for that property, that is a policy situation. Mr. Commers stated it is a take and reduces the value worth as much if they have bearing on the fair market stuck with a building they rent or lease it, it might value. He stated this is risk that the HRA does not need to of the building. The building is not to assume that risk. That has a value of the building. They could be cannot rent or lease, or, if they can be at a rent less than fair market difficult issue. Ms. Dacy stated that some of this might be solved if the northeast quadrant is redeveloped and Mr. Fitch can relocate there. It is even possible that the HRA would not be able to re- lease the building to another soft -serve business because the Dairy Queen would be in the general vicinity. It is staff's HOUSING & REDEVELOPMENT AUTHORITY MTG. , SEPT. 12, 1991 PAGE 6 recommendation that it would not be prudent for the HRA to tie its hands by putting that kind of clause in the lease at this time. Mr. Meyer stated he can understand this concern, but he did not think it has a lot of validity and logic. It is his feeling that they would be pursuing a very fine point, and he would be willing to go ahead and put the clause in the lease. Mr. Fitch stated his request is only for the building as it exists now. If the building is torn down and there is new development, then anything can be developed. His request only surfaces around the aspect of identification, especially with the red roof being maintained on the building. Mr. Commers asked Mr. Fitch if he would have any objection if the roof was painted a different color. Mr. Fitch stated he would not have as big a concern if the roof was a different color. However, he still has some concerns because of the way this whole process has taken place, and that it was not he and his wife's choice to relocate. He still has some reservations about another soft -serve operation locating in the building, but not as many if the roof is painted a different color. Ms. Schnabel stated that virtually every major fast -food business is now serving some type of soft -serve ice cream and yogurt. What concerns her is that because of the "soft- serve" definition, would the HRA be locking themselves into something they cannot manage once Mr. Fitch and his business moves? That is the problem she sees with Mr. Fitch's request. Mr. Fitch stated it has been brought up that there is a different fair market value for the property because it cannot be used for the potential soft -serve type businesses it was designed for. By the same token so far, the market valuation on this property was set not as a Dairy Queen but what it would be as something else. The purchase price was ultimately set on the basis of it being a Dairy Queen and the marketability of it being a soft -serve and the reputation it has. They can eliminate any problems with the lease if the purchase price of the property is substantially larger than currently proposed. If he is paid for the value of the property being a soft -serve Dairy Queen location, then he has no problem with the HRA leasing it to another soft -serve business. But, as currently proposed, the property is not being valued on that specific type of use. It is being valued as a general piece of property with a little building on it. Mr. Commers stated the property is valued at its highest and best use. It may be even valued higher than the use as a Dairy Queen. HOUSING & REDEVELOPMENT AUTHORITY MTG., SEPT. 12, 1991 PAGE 7 Mr. McFarland stated the lease expires in November 1992. Can the terms of the lease be binding after the expiration of the lease? If the northeast quadrant development proceeds, the soonest the Dairy Queen would move would probably be May 1992, and then they would only have about six months left on the lease. Mr. Commers stated if they would only have the restriction for approximately six months until November 1992, then he did not have any major objection, because that would give the HRA a few months to test the market and see what is out there. If the HRA is able to re -lease the building before November 1992, they would agree not to lease to a soft -serve type business. However, he agreed with Ms. Schnabel that they don't want to restrict themselves so they cannot lease to a business where soft -serve is not the primary part of the business. Mr. McFarland stated that if Mr. Fitch believes there is any real threat or risk to his business, another alternative would be for him to continue to make the lease payments, and the HRA would not be able to acquire the property back for purposes of re- leasing it. If there is no risk, then Mr. Fitch can let the lease expire in November 1992. Mr. Fitch stated that it is true that the non - complete clause would only be until the lease expires in November 1992. He stated he did not anticipate vacating the building until July, August, or September 1992 at the earliest. The HRA is potentially looking at only about 2 -3 months, but he would like that protection for that period of time. Mr. Meyer stated he is in favor of granting Mr. Fitch's request and adding a non - compete clause to the lease until the expiration of the lease that would limit the HRA to lease the building to any business where the predominant use is soft -serve. Ms. Schnabel stated that as long as the words "predominant use" is included in the lease, then she would agree to Mr. Fitch's request. Mr. Fitch stated that is agreeable to him. Mr. Commers and Mr. McFarland were also both in agreement. Mr. Commers directed the attorney to make the necessary amendments to the lease. Mr. Fitch stated that paragraph 10 of the lease addresses certain items that staff and he have agreed that he would be able to remove from the building upon expiration or termination of the lease. One thing that was not mentioned is a walk -in freezer that is part of the Dairy Queen equipment that actually sits outside the exterior of the building. The lease talks about all HOUSING & REDEVELOPMENT AUTHORITY MTG., SEPT. 12, 1991 PAGE 8 interior equipment and does not address the freezer that sits outside. He would like the freezer incorporated with the equipment he can take with him. Mr. Commers stated he presumed the HRA is the pylon sign, the fencing, storage shed, He stated Mr. Fitch should be able to take however, if he takes the freezer, then the for it. The same is true for the removal fencing, interior cupboards, etc. If Mr. them, then the HRA will not pay for them. Mr. Fitch stated that is agreeable to him. paying Mr. Fitch for and walk -in freezer. the freezer with him; HRA will not pay him of the sign, deck Fitch wants to take Mr. Hoeft stated he will work on this with Mr. Fitch. Chairperson Commers stated it is the consensus of the HRA to authorize staff to negotiate with Mr. Fitch the discussed amendments to the lease between the Fridley HRA and the Fridley Dairy Queen. 3. CONSIDER APPROVAL OF AGREEMENTS TO RETURN TAX INCREMENT TO SCHOOL DISTRICTS: Mr. Hansen stated that in the agenda is a memo dated September 6, 1991, from Rick Pribyl and himself explaining the 1992 school district referendum levy return agreements and the 1992 estimated amounts based on projections given to the City by the County. Mr. Commers stated that with the class rates being lowered, the 1992 monies could be less than these numbers. What happens if the HRA commits to these numbers now and they change? Mr. Hansen stated the estimated 1992 figures are based on the class rate changes. Ms. Dacy stated these numbers are the worst case scenario and the market values could be reduced by tax delinquencies, court cases, or other means. Dr. Dennis Rens, Superintendent of School District #14, stated he certainly appreciates the timeliness of the HRA's discussion. These monies will affect their 1992 -93 budget and will provide the School District with an opportunity to plan. The School District is also highly appreciative of the HRA's actions in the past. MOTION by Ms. Schnabel, seconded by Mr. McFarland, to approve the School District Referendum Levy Return Agreements for the school fiscal year 1992 -93. HOUSING & REDEVELOPMENT AUTHORITY MTG.. -SEPT. 12. 1991 PAGE 9 UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. Ms. Schnabel stated she would like to compliment Mr. Pribyl and Mr. Hansen on all the work they have done and to express the HRA's appreciation in having the work done so quickly. Mr. Commers stated he agreed. The information is certainly in a more understandable mode this time, and the HRA appreciates that. 4. CLAIMS AND EXPENSES: Ms. Dacy stated that she is requesting the HRA's concurrence on her request to attend the American Economic Development Council's Basic Economic Development course in Tampa, Florida, on November 3 -8, 1991. Mr. Commers stated he certainly believed it is worthwhile for Ms. Dacy to attend this Economic Development course. MOTION by Ms. Schnabel, seconded by Mr. Meyer, to approve the request by Barbara Dacy to attend the American Economic Develop- ment Council's Basic Economic Development course in Tampa, Florida, on November 3 -8, 1991. MOTION by Mr. Meyer, seconded by Ms. Schnabel, approve the check register (2155 -2161) dated September 6, 1991. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 5. COPY OF LETTER TO CITY COUNCIL REGARDING DECERTIFYING TIF DISTRICTS• Mr. Commers stated this is an informational item with respect to the issue discussed at the August HRA meeting relating to the termination of TIF districts that are not needed for financing economic development or redevelopment improvements. The HRA had asked Mr. Burns to write a memo to the Council expressing the HRA's understanding of the Council's position, but also expressing some of the HRA's concerns. This memo was included in the agenda. Mr. Commers stated there is another issue regarding the decertification, and that is the obligation the HRA has under the existing bond indentures and the ability to transfer funds from one district to another. He stated he would like to talk to Jim Casserly and have Mr. Casserly let the HRA know what the restrictions are on which districts in terms of using funds from one district and refunding another district. HOUSING & REDEVELOPMENT AUTHORITY MTG., SEPT. 12, 1991 PAGE 10 6. COPY OF CONTRACT WITH MAXFIELD RESEARCH GROUP: Mr. Commers stated this is an informational item. 7. UPDATE ON RICE PLAZA: Mr. Commers stated that if more tenants are going to be leaving Rice Plaza, it might be a good idea for staff to ask Jim Kordiak if he has some suggestions for a more aggressive program to get more tenants into the building. Without a developer at this time, the building could be vacant for quite some time. 8. INFORMATION ON BOB SCHROER PROJECT: Ms. Dacy stated that Mr. Schroer and Mr. Newman are at the meeting to introduce the HRA to the project, to talk about financing, and to request some assistance from the HRA. Mr. Schroer hopes to have a redevelopment contract for the HRA's consideration at the October meeting. Mr. Newman stated Mr. Schroer has been exploring a possible redevelopment for some time with construction to start next spring. Then he was approached by a prospective tenant about one month ago, Lyndale Garden Center, who would be a joint user of the property. Lyndale Garden Center has been around for about 60 years at 66th and Lyndale Avenue South and is the largest independent garden center in the Twin Cities area. Lyndale Garden Center recently opened up a new store in Burnsville. Mr. Schroer is very comfortable with Lyndale Garden Center' expertise and quality of business. Some years ago, Mr. Schroer operated a garden center, then came Frank's Nursery and Malmborg's Garden Center, so they feel there is a strong potential with the two businesses. ' Mr. Newman stated that due to the nature of the garden center business which is so seasonal, it is important to proceed as quickly as possible as Lyndale Garden Center needs to be in and open next spring. So, they are operating under a rather short time frame. Mr. Newman showed the updated preliminary site plan. He stated Mr. Schroer is proposing a new 18,000 sq. ft. building. Lyndale Garden Center would have an enclosed area of 15,000 sq. ft., a greenhouse of 5,000 sq. ft., and an outside sell center of approximately 40,000 sq. ft. Mr. Newman stated they hope to have the final numbers and cost in place within a few days. They have had some discussions with First Star Bank for financing. HOUSING & REDEVELOPMENT AUTHORITY MTG., SEPT. 12, 1991 PAGE.11 Mr. Newman stated they will also be requesting some assistance from the HRA. It is his understanding that the HRA prefers the "pay -as- you -go" approach. Mr. Commers stated that this project originally only qualified under the rehab portion so that funds, if any, would only be available for a short period of time. It was only if the project joined in with the project across the street that a time period could even be talked about. What Mr. Newman is proposing is that any additional taxes that are generated by this specific project would be refunded to the property owners over a period of time. Mr. Commers stated the HRA has only recently done one "pay -as- you-go" project. The HRA's preference has always been that to some extent they get something back from the developer as far as the assistance they give to the developer. So, Mr. Newman and Mr. Schroer should keep in mind that there may be different alternatives. The HRA is very concerned about setting a precedent with the "pay -as- you -go" approach. ADJOURNMENT: MOTION by Ms. Schnabel, seconded by Mr. McFarland, to adjourn the meeting. Upon a voice vote, all voting aye, Chairperson Commers declared the motion carried unanimously and the September 12, 1991, Housing and Redevelopment Authority adjourned at 9:05 p.m. Resp ctfully su witted, Lynn Saba Reco . ding Secretary C% Community Development Department HOUSING AND REDEVELOPMENT AUTHORITY City of Fridley DATE: October 16, 1991 TO: William Burns, Executive Director of HRA FROM: Barbara Dacy, Community Development Director SUBJECT: Meeting.with Woodbridge Jim Casserly and I met with Sue Norstrom and .Jim Utley on Thursday, October 10, 1991. Woodbridge requested the meeting in order to ask us questions about the appraisal and to obtain further clarification on the elements of the HRA 's offer. It was a cordial meeting; however, the questions and comments they had were not unexpected, and, in fact, we anticipated most of their issues. Norstrom started the meeting stating that she thought that the appraisal identifying the highest and best use as a power center constituted direction from the City that they accepted this notion. Casserly and I promptly corrected her and stated that it is not the case, that the appraiser was directed to conduct a highest and best use analysis for the purposes of valuation only. Norstrom stated that they retained the services of Dick Guidera as a consultant to review the appraisal and give Woodbridge reactions to the proposed offer. Guidera has advised them that because of the site's excellent location, the poor economy should not be a significant factor in the price per square foot. Norstrom also objected to the eight year development cost approach that Patchin used and stated that the offer they had from Woodmont to construct a power center about 1 1/2 years ago was within $50,000 of Patchin's eight year value ($6,386,243). Norstrom stated they believed the offer is a better indicator of the value of the property. Further, Norstrom stated that the availability of tax increment financing creates some type of value to the property. Norstrom reminded us that the investors in-this project are all local people and, in some cases, pension fund investors within the metro area and St. Cloud. Norstrom and Utley did not provide a value for the TIF and, at one point, suggested that they would be willing to consider sharing some of the increment if the site were bought by the HRA and developed by another development group. Casserly and I stated that would probably not be accepted, but we would review that with the HRA and City Council. Meeting with Woodbridge October 16, 1991 Page 2 Norstrom continued Woodbridge's objection to paying half of the cost overruns on the public improvements. She stated that their investors won't "swallow 500" responsibility when the project was "poorly bid" and "poorly supervised ".. While they have no disagreement in the amount /costs of the project, Norstrom is stating that it could have been better managed, and they should not be held responsible for 50%'of the costs. Norstrom stated that the City should be responsible for the cost of the option agreements on the Hedman and Gunderson properties . which are necessary for the traffic improvements. She stated that there is $5,500 in earnest money on the Hedman property; the option on that property expires August 31, 1992. The purchase agreement on the Gunderson property was for $5,000 with the option to expire October 31, 1992: Norstrom agreed to give Casserly copies for our review. Regarding the real estate taxes, Norstrom pointed out that the taxes are based on $6,500,000, and Woodbridge has paid taxes since 1986. She stated it was inconsistent for the HRA to offer $3,785,000 when the property is on the tax roles for $6,500,000. She believes Woodbridge• should not have to pay any of the real estate taxes and reiterated the position that Woodbridge should receive something for the "increment available on the property ". Norstrom stated -that these were questions and concepts at this time and that they needed to formulate a final position to forward back to us in writing. At that point, we would meet again to review the offer. BD:ls cc: Jim Casserly City Council M -91 -770 I _ J Community Development Department HOUSING AND REDEVELOPMENT AUTHORITY City of Fridley TO: Housing and Redevelopment Authority Members FROM: William W. Burns, Executive Director of HRA DATE: October 18, 1991 SUBJECT: McGlynn Bakeries' Proposal We will have an informal report on the McGlynn Bakeries proposal available at our meeting on Thursday, October 24, 1991. Unfortunately, I was not able to prepare the staff analysis in time for the packet. Thank you for your tolerance. WWB:rsc DATE 10/17191 CITY OF FRIDLEY - HRA PROGRAM PO(r3 CHECK REGISTER CHECK RUN BATCH # :0009 002 HRA FACE 1 JOB NMBR MESSAGES INVESTMENTS, AT CST CASH A=Nr,,' PAYABLE CASH ACCOUNTS PAYABLE CASH AC 7,0l WTI S PAYABLE CASH ACC:j?'•_W:3 PAYABLE CASH AC �C+W1 S PAYABLE Ca 114 Ai_-i 0 PAYABLE CASH A'UtUN T ; PAYABLE CASH ACCT U-ITS. PAYABLE LASH ACCOUNT-3 ACCOUNTP-3 PAYABLE CASH ACID UNT? PAYABLE ;:-ASP 2 VENDOR DISC. DESCRIPTION INV # PO /INV # SEQ # PCNT AN-W ACCT WW 2162 CHECK- PREPAID F00026 FRIDLEY STATE BANK INVESTMENT Cj0456 -01 GTJZGSO. 0000 W), WO. (9) DR701 -104( 0 500,W).00 CR701 -10100 TOTAL VENDOR ***$ $ 5001000.00 216.3 **>j* C Er.Y- PREPAID **** A00040 ANOKA COUNTY TREASURER 2ND HALF TAXES 00457 -11 GT_p,d8 -0000 131792.21 DR450 -20200 13,792.21 CR450 -10100 TOTAL VENDOR # $ 13,792.21 2164 $ CHECK- PREPAID F00023 FRIDLEY, CITY OF 2ND HALF SPECIALS 00458 -01 GUM-0000 13,251.50 DR450- 20200 13,251.50 CR450-10100 TOTAL VENDOR `x 13,1151.50 2165 *ate* CHECk; PREPAID+ **** B00065 BAR% iUZY of STEFFEN, LTD. AUG LEGAL SERVICE: 00459 -01 GT�riW6AO.0000 73 "j. W DR4 °Jti+- 202iKj 739.50 CR450- 101(10 AUG + EGA.L SERVICES 00459 -02 GTJZE30.00(* 8003.25 DR460 -202W) 803.25 CRW- 1010.1 * *** TOTAL VENDOR ate** $ 1,542.75 2166 **** CHEC:- PREPAID ** ** B00176 BRI10S AND MORGAN PROF. ASSOC. LEGAL SERV ON GEN TAX INC 00460 -01 GTJ7.E70.0000 616.0 DR460 -20200 616.90 CRW- 10100 ** TOTAL VENDOR ** ** $ 616.90 2167 * * ** CHE[ :V- REPAID * ** C00044 CA; SERLY LAW OFFICE AUG LEGAL 'SPRINGBROOK APT 00461 -01 GT_� f9 ).0003 11025.50 IR452 -20200 1,025.50 CR452- 101(YU ***** TOTAL VENDOR * * 1,fYZ,.5tj 21K C:Y.EI -t- PREPAID * *** 0.00044 CA-SKRL Y LAIC OFFICE SEPT LEGAL SERVICES 00462 -01 GUWA0.0000 90.00 DW55J -20200 90.+X+ CR455- 10100 SEPT LEGAL SERVICES 00462 -02 GTJZEBO.0000 1,203.50 DR460 -202 0 1,203.50 CR460 -10100 COPT LEGAL SERVICE= 00462413 GTJ7GN0.00 0 202.50 DR462 X0200 202. E4+ CR462- 10100 * * ** TOTAL VENDOR 1,496.00 2169 * * ** CHECK - PREPAID * * ** F00072:5 FRIDLEY, CITY OF SEPT OPERATING EXPENSE 00463 -10 GTJW6ij0.CK100 417.97 DR450 -20200 417.=7 CR450- 10!(;(! FACE 1 JOB NMBR MESSAGES INVESTMENTS, AT CST CASH A=Nr,,' PAYABLE CASH ACCOUNTS PAYABLE CASH AC 7,0l WTI S PAYABLE CASH ACC:j?'•_W:3 PAYABLE CASH AC �C+W1 S PAYABLE Ca 114 Ai_-i 0 PAYABLE CASH A'UtUN T ; PAYABLE CASH ACCT U-ITS. PAYABLE LASH ACCOUNT-3 ACCOUNTP-3 PAYABLE CASH ACID UNT? PAYABLE ;:-ASP 2 DATE /0/17191 CITY (F FRIDLEY - HRA PAGE 2 PR-ow P%tOt; CHECK RUN BATCH # :OOG9 DESCRIPTION SEPT OPERATING EXPENSE SEPT OPERATING EXPENSE SEPT OPERATING EXPENSE SEPT OPERATING EXPENSE SEPT OPERATING EXPENSE SEPT OPERATING EXPENSE SEPT OPERATING EXPENSE SEPT OPERATING EXPENSE SEPT OPERATING EXPENSE KEPT CPERTING EXPENSE IMF OPERATING EXPENSE EEPT OPERATING EXPENSE SEPT OPERATING EXPENSE SEPT ADMIN PERSONAL SERVI SEPT OPERATING EXPENSE SEPT OPERATING EXPENSE ;;EPT ( Pr ATING EXPENSE 'S PT OPERATING EXPENSE SEPT LCIUATING EXF'Erd-_:E Kc 3 ERATINv EXPENSE SEPT ! F'ERATIM3 EXF'E,N,SE �rPT C AT NG EXPENEE VENDOR INV 4 PG /INV 4 00463 -11 00463 -12 00463 -13 00463 -14 0046:3 -15 00463 -16 00463 -17 W463-18 00463 -19 (10463 -20 004E 4-1-21 OW ,3-22 00463-23 0046.3 -01 0046:3 -02 O0462 -03 0046.3-04 004611-051 004&?-C' M 0046,3 -07 0046;3 -OLO 00463 -0'? CHECK REGISTER 002 HRA DISC. :_•Eta 4 PCNT GTJW6I0.00M GTJW6RO.0000 GTMZO.0000 GTIRM0.0000 GTJW860.0000 GTJ M0.000(t GTJWSE0.0000 GTJW8H0.0000 GTJM0.(000 GT- WN0.0000 GTJW,q- R0. O000 GT_ KO. CAD 00 GTUIW9I0. MR) GTJZEF0.0000 GTJZEJ0.0000 GTJZENt'1.00IM GTJZE *.00) GTJZEWt). OOCti: CM.U30.0000 GTJZF70.0000 GTJZFA!. WOO GTJZFE0.0000 �a TOTAL VENDOR *M- *1M CHECK -REPAID x r� LAKE " !f° 'e T E MA INT EST 6 004.- ',4 -01 GT:QD '(i „0000 *-H* T ITI AL VENDOR , AMUNT ACCT MUMMER 333.72 IR450 -20200 .72 CR450 -10100 26.32 EIR450- 20200 26.32 CR450 -10100 121.75 DR450 -20200 121.75 CR450-10100 22.56 DR4,Wffr200 22.56 CR450- 10100 26.81 DR450- 20200 26.81 CR4 =t0 -10100 6160 DR450 -20200 63. EA CR450 -10100 130.00 DR450 -20200 M.00 CR4f*- 101(9) 5.5.00 DR4S0 -20200 55. CXJ CRM -10100 5.00 DR4`s0 -20200 5.00 CR450 -10100 192.75 DR456 -20200 192.75 CW4 10 -10100 46.00 EP450 -20200 46.(1) CR450 -10100 75.42 DR4 5 -20200 75.42 CR455- 101 , 144.43 DR4,959-20200 144.43 CR455 -10100 13,360.53 ER460 -20200 13,'40.3:3 CR460 -101W 25.63 DR460- 20200 ?5.63 CROW -10100 666.413 DR440 -20200 666.40 CP4 6- 10100 38.90 DR460 -20200 L;..90 C.R4,140 -10100 124.13 DR460 -20200 124.13 CR460- 101(9:) M. UR4ht_1 -20200 ? .00 CR460 -10100 23. 86 [P460 -2W00 E -5 CR460- 10100 15.00 DR460 -20200 15.00 CR460 -10100 11..x8 IP460 -20200 11.97; CR460- 10100 -2 3,760.2-13 ER4155 -20 % CR455-110100 *0 3,760._1 JOB NNBR MESSAGES ACCOUNTS PAYABLE CASH ACCOUNTS PAYABLE CASH AC COMS PAYABLE CASH ACCOUNTS PAYABLE CASH ACCOUNTS PAYABLE CASH MILINTS PAYABLE CASM ACCOUNTS PAYABLE CASH ACCOUNTS PAYABLE CASH ACCOUNTS PAYABLE CASH ACCOLWTS PAYABLE CK ACCI-JUNTS PAYABLE CASH ACCOUNT= PAYABLE CASSH AC!T31 Ii 7,, PAYABLE CASH ACCOUNT')' PAYABLE CASH ACCOUNTS PAYABLE CASH ACCOUNTS PAYABLE CASH AC X3140 -3 PAYABLE CASH A !TINT:_ PAYABLE CASH ACCOUNTS PAYABLE CH AC! sjUNTS PAYABLE CAE,H A[7 CI N T'= PAYABLE CAS-( ACCOUNTS PAYABLE CASH ACCa!�I.T PA'iAFILE 2 -A n DATE 10 /17/91 CITY OF FRIDLEY — HTA PAGE t 'PROGRAM POUR CHECK REGISTER 2�6 CHECF RLW BATCH # :0009 002 MA VENDOR DISC. JOB DESCRIPTION INV # PO /INV # SEQ # PCNT AMOUNT AU.T NUMBER NMBR MESSAGES 2171 CHECK— PREPAID F00089 FIELD, T.C. &. C.C41PANY INS. COVERAGE ON DAIRY (XI 004W -01 GT,-JJhNO. 0000 24. E9- DR45d) -20200 ACCOUNTS PAYABLE 24.65 CR450 -10100 CASH HH TOTAL VENDOR $ 24.65 TOTAL NUMBER OF CHEDS WRITTEN : t tui ** TOTAL DOLLARS FOR CHECKS WRITTEN : a T,1,«42.40 * * ** LAST Lf1ECK NUMBER : CK12161 2 -C TO: FRIDLEY H.R.A. FROM: CITY OF FRIDLEY RE: BILLING FOR OPERATING EXPENSES FOR SEPTEMBER, 1991 AND SEPTEMBER 1991 ADMINISTRATIVE EXPENSES SEPTEMBER ADMINISTRATIVE PERSONAL SERVICES 13,108.08 SEPTEMBER ADMINISTRATIVE OVERHEAD 252.25 TOTAL ADMINISTRATIVE BILLING 13,360.33 OPERATING EXPENSES: POSTAGE 35.63 ADVERTISING 666.40 ENVELOPES PRINTED 38.90 TIF MAPS 124.13 REGISTRATION - DACY 395.00 DELIVERY SERVICE 23.86 AUGUST FILINGS 15.00 DELIVERY SERVICE 11.98 AUGUST MANAGEMENT FEE - RICE PLAZA 417.97 SEPTEMBER MANAGEMENT FEE - RICE PLAZA 333.72 ELECTRICITY - RICE PLAZA 26.32 UTILITY BILLING - RICE PLAZA 121.75 GAS HEAT - RICE PLAZA 22.56 ELECTRICITY - RICE PLAZA 26.81 MOWING - RICE PLAZA 63.60 CLEAN /REMOVE RUBBISH - RICE PLAZA 130.00 AIR CONDITIONER SERVICE - RICE PLAZA 55.00 ACCESS CARRIER CHANGE - PAY PHONE 5.00 REPAIR LIGHTS - RICE PLAZA 192.75 REPAIR WIRE - RICE PLAZA 46.00 ELECTRICITY - LAKE POINTE 75.42 ELECTRICITY - LAKE POINTE 144.43 TOTAL OPERATING EXPENSES FOR AUGUST $2,972.23 TOTAL EXPENDITURES $16,332.56 rAINU CIiYOF FRIDLEY 3 FRIDLEY MUNICIPAL CENTER • 6431 UNIVERSITY AVE. N.E. FRIDLEY, MN 55432 • (612) 571 -3450 • FAX (612) 571 -1287 September 16, 1991 Jim Kordiak Kordiak Company 3948 Central Avenue N.E. Minneapolis, MN 55421 Dear Jim: At the September 12, 1991, meeting, the HRA asked you to provide them with an update as to the advertising activities for the vacant space in Rice Plaza. The next HRA meeting is October 24, 1991. Please write the letter to my attention and discuss what tools you have been using to advertise this space and provide a synopsis of what type of interest, if any, you have received about the space. Should you have any questions, please feel free to contact me. Sincerely, Barbara Dacy Community Development Director BD:ls C -91 -305 1 The 3 -A n n n 000 Kordiak 3948 Central Ave. N.E., Minneapolis, MN 55421 n n n Company 788 -9651 781 -9375 n Real Estate n Property Management it Appraisals n Income Tax Service October 2, 1991 Barbara Dacy Community Development Director Fridley Municipal Center 6431 University Ave. N.E. Fridley, Minn. 55432 Dear Barb, You have asked me to provide you with information on the advertising techniques used to find a new tenant for 236 Mississippi which Norge Village vacated on June 1 st, 1991. Immediately after they vacated I placed a "For Lease" sign in the window. At the time there were two similar signs in another vacant bay but once it was rented they are now gone. In my experience, that of my fathers and as a result of discussions with other real estate agents signs rent space better then any other technique. Window and lot signs are the most common method I use to advertise space available. I will however promptly place additional signed in the vacant unit to increase visibility as the other signs are now gone. If the board would recommend it I can prepare an ad for the newspaper advertising the availability of this space. While my past response on an ad has never been very good it can be successful. I have called an arwlaundromat owner and a comoanv which owns numerous laundromats in the Twin Cities for information and advise on that market. While the space is all plumbed for a laundry prospects do not seem real good for finding a similar tenant use for the space. As I do not expect that the next tenant will be in that business considerable improvements may have to be made to the bay to prepare it for future use. I have had several calls with inquires on the space. Most were not viable prospective tenants. Two inquires were more serious however they have not resulted in a successful rental. If the board has any special requests for promotion of the space I would be happy to operate. Generally the rental market is slow right now and while this property has its own peculiarities which make it difficult to rent it is in a good location, with great visibility and a reasonable rental rate. Sincerely, P�m - Jim Kordiak PUBLIC WORKS MAINTENANCE DATE September 16. 1991 MEMORANDUM 3 -B FROM Ralph Volkman Su erintendent TO ACTION INFO SUBJECT Invalid Ramps John Flora, &iirector / X on Friday, September 13th, two invalid rams were installed at the Rice Creek Plaza business area, as requested. Work was ccupleted by 12:00 noon. r � Community Development Department HOUSING AND REDEwLopMENT AUTHORITY City of Fridley DATE: October 16, 1991 TO: William Burns, Executive Director of HRA FROM: Barbara Dacy, Community Development Director SUBJECT: Update on Fridley Plaza Office Building Second Mortgage At the September 12, 1991, HRA meeting, the HRA asked Jim Hoeft to investigate whether or not personal guarantees were provided to secure the second mortgage on the Fridley Plaza Office Building. Hoeft has reviewed the file and determined that there were no personal guarantees required. We will be receiving the $17,500 check within the next week. After receipt of the check, we will be recording the mortgage satisfaction document. BD:ls M -91 -766 5 r � Community Development Department HOUSING AND REDEVELOPMENT AUTHORITY City of Fridley DATE: October 16'., 1991 TO: William Burns, Executive Director of HRA FROM: Barbara Dacy, Community Development Director SUBJECT: Status of the Dairy Queen Lease After the September 12, 1991, HRA meeting, we revised the Dairy Queen lease according to the HRA's direction. raph 22 of the lease states that the HRA will not re -lease the ses to another tenant whose business is �'nrimarily a sa P of —so-ft-serve ice cream roducts". This provision is not applica e, however, if the lease is terminated because of the lessee's default of any terms or conditions of the lease. The HRA also agreed to pay for one -half of the premium costs for insurance on the improvements, fixtures, ana eUUipment. The lat er por ion of paragraph 5 a dresses this issue. Hoeft reviewed Fetch's insurance policy after the Ai A ^meeting, and the HRA was added to the insurance to the policy. Note that paragraph 7 provides for a 30 day notice to be given to the HRA by the insurance company prior to cancellation. Clyde Wiley also inspected the air conditioner and furnace. The air conditioner appears to be in good condition. The furnace is showing its age and is rusting. Wiley advised that replacement two ld probable cost $4_00,__if� needed. The lease assigns repair responsi�i ity to Fitch and replacement to the HRA. The furnace is not used extensively because the operation is closed during the coldest months of the year. The attached copy was given to Don Fitch on October 16, 1991, and we anticipate that it will be executed in the near future. BD:ls M -91 -767 T ROBERT A. GUZY BERNARD E. STEFFEN RICHARD A. MERRILL ROBERT C. HYNES RICHARD A. BEENS RONALD B. PETERSON DARRELL A. JENSEN JEFFREY S. JOHNSON RUSSELL H. CROWDER JON P. ERICKSON LAWRENCE R. JOHNSON DAVID A. COSSI THOMASP.MALONE MICHAEL F. HURLEY VIRGIL C. HERRICK HERMAN L. TALLE October 14, 1991 DOS 13 � -0 Barna, Guzy & Steffen, Ltd. ATTORNEYS AT LAW 400 Northtown Financial Plaza 200 Coon Rapids Boulevard Minneapolis, MN 55433 (612) 780 -8500 FAX (612) 780 -1777 Bradley J. Martinson Petersen, Tews & Squires 4800 IDS Center 80 South Eighth Street Minneapolis, Minnesota 55402 -2208 RE: Fridley HRA v. Fitch Your File No. 3561 -02 Dear Mr. Martinson: SHARON L HALL 6 s,s ^ �) THOMAS L DONOVAN PAMELA M. HARRIS CHARLES M. SEYKORA WILLIAM M. HANSEN ` JOAN M. THIEMAN DANIEL D. GANTER, JR. BEVERLY K. DODGE GREGG V. HERRICK JAMES D. HOEFT JOAN M. QUADE SCOTT M.LEPAK STEVEN L %LACKEY OF COUNSEL PETER BARNA LAWRENCE M. NAWROCKI PATENT, COPYRIGHT AND TRADEMARK LAW Thank you for your correspondence of September 26, 1991. I take issue with your statement that the potential move of the franchise to the 10,000 Auto Parts site will greatly impact the proceedings in front of the Commissioners. The law is quite clear that through the condemnation process the Fitch's are entitled to the fair market value for the land and any improvements thereon. They are not entitled to compensation for any value related to the ongoing nature of the business. If it is Mr. Fitch's argument that if the 10,000 Auto Parts site is not available for relocation and that therefore he will effectively be put out of business, please be advised that before your representation I had discussed that matter with Mr. Fitch and had informed him that upon review of his franchise agreement there is a huge area in which Mr. Fitch can relocate his Dairy Queen operation and remain within the present structure of his franchise agreement. If American Dairy Queen refuses to let Mr. Fitch relocate within the area designated by the existing franchise agreement, then Mr. Fitch's dispute is with American Dairy Queen and not the Fridley HRA. As you know, Mr. Fitch is entitled to appropriate relocation costs pursuant to statute. The relocation expense for any location within the existing franchise agreement would entail no more expense than that for the potential 10,000 Auto Parts site. The Fridley HRA does not wish to see this matter unnecessarily delayed. However, the HRA is also willing to work with your client and has shown great patience and deference to him to date. Accordingly, I will be arranging a continuance of the Commissioners Hearing for a period no greater than 30 days subsequent to the Columbia Heights Office Anoka Office 3989 Central Avenue NE Anoka Professional Building Minneapolis, MN 55421 403 Jackson Street (612) 788 -ItM Anoka, MN 55303 (612) 427 -6300 Bradley J. Martinson October 14, 1991 Page Two existing date. My office will coordinate the rescheduling of the meeting and provide you with notice of the new hearing date. Please be advised that if it is your client's intention to seek a continuance in excess of the 30 days as referenced herein, the HRA will oppose such request both informally and through proper responsive documentation to the Court on any motion therefore. Sincerely,. BARNA, GUZY & STEFFEN, LTD. James D. Hoeft JDH:jeb cc: Barb Dacy U14 I o V L( f f FROM BARNA GUZY LAW MPLS. 13KADLEY J. MARTINSON septembcr 26, 1991 10. 2.1991 16119 LAW OFFICES PETE KSEN, TEWS & S0111 RE-S p1101LS610lIAL A918001ATION 4500 IDS CENTER 80 3ouT11 ZICHTH STPEET MINNEAPOLIS. MINNESOTA 5340 - 62.208 TELEPHONE (8121344 -1800 TELCCOPIEP. (0131344 -1880 James D. Hoeft Barna, Guzy & Steffen, Ltd. 400 Nortiltown Financial Plaza 200 Coon Rapids Boulevard Coon Rapids, MN 55433 Rea Fridley URA v. Fitch Our File No. 3561 -02 Dear Mr. Hoeft, P. 4 AdIeeEivED, SEP 2 71991 801A, GIVY & STERV U101. I have withheld responding to your inquiry regarding possible hearing dates awaiting news regarding the financing commitment for the developer on the 10,000 Auto Parts site. As you are aware, Mr. Pitch has been negotiating to move his franchise to the 10,000 Auto Parts site. I apologize for not contacting you sooner but I understood that the financing would be finalized in the fairly near future. I understand that two of the Commissioners conducted a viewing of the Fitch's store on September 26, 1991, and advised Judy Fitch that* they would have no difficulty in extending the time for the Commissioners Hearing. Since the potential move of the franchise will greatly impact the proceedings in the front of the postponednuntil a determination rmina ion has been made ion ethe viability of postponed the 10,000 Auto Parts site. I appreciate your cooperation. Very truly yours, PETERSEN, TEWS & SQUIRES PROFESSIONAL ASSOCIATION 20d�l Martinson BJM /kap /66 Enclosure cc; Donald A. Fitch I RW 6 -C 612 780 1777 FROM 6ARNA GUZY LAW MPLS. 1 0.15.1991 11:32 AGAZZXENT TO LEASE Tgls AGREEMENT, made this 25th day of July, 1991, by and between the Fridley Housing 6 Redevelopment Authority (hereinafter designated as "Lessor") and (hereinafter designated as "Lessee "). WITNEBBHTgt P. 2 g -D 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 Lott No. 3, Block it 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 HAVZ AND TO HOX,D, the game 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 0 612 780 1777 FROM BARNA GUZY LAW MPLS. 10.15.1991 11:32 P. 3 6 -E 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, Lessees 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 coats shall not include repaving of the entire parking area, or replacement of paving, curbs and sidewalks as part of the Mississippi Street improvement project. The cost of operation and maintenance shall include property taxes but not special assessments. 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 provides or pay for all repairs and maintenance of the premises that is not covered by existing 0 0 612 780 1777 FROM BARNA GUZY LAW MPLS. 10.15.1991 11:33 P. 4 6 -F insurance or is an urlreimburaed expense under said coverage. Said repairs and maintenanoe shall include, but not be limited to, glass breakage, furnace, air - conditioning, plumbing, electrical systems and structural repairs. Lessee shall not be responsible for complete replacement of the furnace or air- conditioning systems. S. 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 (S3000000000- 000000.00) bodily injury and one Hundred Thousand Dollars ($100000.00) property damage.. Lessee shall provide Lessor with evidence of such insurance prior to occupancy. Lessee shall procure /maintain insurance covering all improvements upon the demised premises, as well as all fixtures and equipment within the demised premised. Lessor shall reimburse Lessee for one -half (1/2) of the premium cost for said insurance on the improvements, fixtures and.equipment. 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. 612 780 1777 FROM BARNR GUZY LAW MPLS. 10.15.1991 11:33 P. 5 6-G I- LQQaee to furnish certificate of insurance. Lessee shall furnish to Lessor a certificate,of insurance showing that his liability insurance policies, as well as the policies covering the improvements, fixtures and equipment 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 thirty (30) days notice'by the insurance company prior to cancellation, termination or change of such insurance. Such policiea or duly 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. G. 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 Conducts his drive- through business. Lessee shall not be responsible for the costs of such alterations. 4. 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 consistaht 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 612 780 1777 FROM ERRNA GUZY LAW MPLS. 10.15.1991 11:34 P. 6 6 -H issue all necessary permits without, unreasonable delay. The Lease& further covenants that it will promptly pay for any alterations, repairs or maintenance made to the demised property so that no mechanicfe liens will be filed against the property. In the event a mechanic's Tien is tiled, 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 Lessee shall indemnity 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 they existing pylon sign,-deck, fencing, small detached storage shed located at the south end of the property, walk -in freezer located at the rear exterior of the building, 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 maker 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 612 780 1777 FROM EARNA GUZY LAW MPLS. 10.15.1991 11:34 P. 7 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. Lessee shall not be responsible for costs associated with ae change in the utility services identified above as a result of the Mississippi-Street improvement project. 13. The promisee 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 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 Leases 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 6 -1 612 760 1777 FROM BARNA GUZY LAW MPLS. 10.15.1991 11:35 (3) months, this Leese may be• immediately terminated by the Lesaae by sarving written notice updn the Lessor. 15. The Lessee acknowledges that he is aware that Anoka P. 8 6- ■ 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. Fiirther, the Leases agrees to waive any claim that this acquisition by the county constitutes a breach of this Lease. 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 Leseor may terminate this Leases 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 they 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 they demised premises after the expiration of the term of said Lease, such "holding over" shall be on a month to month basis. 612 780 1777 FROM BFRNR GUZY LAW MPLS. 18.15.1991 11:35 P. 9 6 -K 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 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. s 612 780 1777 FROM BA RNA GUZY LAW MPLS. 10.15.1991 11:36 20. If the Lessoe.shal-l.make default in any covenant or P.10 6 -L agreement to be performed by him and if after written notice from Lessor to Lessee such default shall continue for a period of five (3) days or if the leasehold interest of the Lessee shall be taken an 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 covenanter to be performed by the Lessee for the full term of this Lesser and at Lessons 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 runt 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 tree from any subsequent rights of the Lessee. That in the event of default by the Lessee, the Lessee shall.compeneate 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. ' 612 780 1777 FROM BARNA GUZY LAW MPLS. 10.15.1991 11:37 P.11 6 -M 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 Daey Community Development Director Fridley Housing & Redevelopment Authority 6431 University Ave. N.E. Fridley, HN 55432 To They Lessee: Such addresses may be changed from time to time by either Party by service of notice as above provided. 22. Lessor agrees that through and until the 30th day of November, 1992, it will not release said premises to another tenant whose business is primarily the sale of soft -serve ice cream products. This representation shall survive any prior termination of this Lease, unless said termination is due to Lessee's default under any or the terms and conditions contained herein. 23. The Lessor and Lessee agree that all the provisions hereof are to be construed as covenants-and agreements. IN WMESS WHEREOF, the Lessor and Lessee have caused their respective names to be subscribed to this Lease on the date first above written. 612 780 1777 FROM BRRNA GUZY LAW MPLS. 10.15.1991 11:37 P.12 In the Presence of: LE95OR: . FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY BY: In the Presence Of: LESSEE: BY: STATE OF MINNESOTA j )SS. COUNTY OF ANOKA j The foregoing instrument was acknowledged before me this day of , 1941. THIS INSTRUMENT WAS DRAFTED BY: BARNA, GUZY & STEFFEN, LTD. 400 Northtown Financial Center 200 Coon Rapids Boulevard Coon Rapids, MN 55433 (612) 700 -8500 6 -N t Community Development Department HOUSING AND REDEVELOPMENT AUTHORITY City of Fridley TO: Housing and Redevelopment Authority Members FROM: William W. Burns, Executive Director of HRA`��' DATE: October 17, 1991 SUBJECT: Statement from Peter J. Patchin As attested to by the attached letter, there are some problems with the statement sent to us by Patchin & Associates, Inc., in the amount of $1,126.65. The bill reportedly covers time Mr. Patchin spent in a 2; hour meeting with Barbara Dacy and Jim Casserly, as well as for other work Mr. Patchin and Mr. Joe Mako performed on our behalf in late July. After discussing this matter with Barbara and Jim, the HRA and the City have reason to believe that the work that was performed should have been covered by the original contract cost of $5,700. Unless the HRA directs otherwise, I will continue to take this position with Mr. Patchin. Thank you. WWB:rsc 7 7 -A ',- CITY OF FRIDLEY FRIDLEY MUNICIPAL CENTER - 6431 UNIVERSITY AVE. N.E. FRIDLEY. MN 55432 • (612) 571 -3450 • FAX (612) 571 -1287 October 16, 1991 Mr. Peter J. Patchin PATCHIN & ASSOCIATES, INC. 101 West Burnsville Parkway Suite 200 Burnsville, MN 55337 Dear Mr. Patchin: Thank you for your letter of October 10, 1991, explaining your position regarding your statement for services rendered to the City of Fridley. Since we had our telephone conversation, I have spoken to both Barbara Dacy and Jim Casserly, and they remain of the opinion that the work for which we were billed occurred prior to the delivery of the final draft of the Lake Pointe appraisal. They also share my opinion that it was their understanding that this work was part of the work product that should have been covered by the original contract price. There are several specifics that support our position. They are as follows: 1. During the meeting that was held in Barbara Dacy' s of f ice on March 14, 1991, we requested that the appraisal be delivered by May 1, 1991, and that the City receive a draft for discussion prior to the delivery of the final report. 2. We received the appraisal considerably after May 1, 1991, and it was marked "draft." I believe it was clearly understood that there was to be a final copy that would follow. 3. There is nothing in either the memorandum from Barbara Dacy or the letter from Jim Casserly that would require doing additional computer work. Mr. Casserly simply asked you to consider two different arguments that might be raised to contest your appraisal conclusions. 0 Mr. Peter J. Patchin October 16, 1991 Page Two Even if you had initiated a computer run using Mr. Casserly's suggested discount rate, it should have only taken a very short period of time. 4. There is nothing in your response to Mr. Casserly that would indicate that either you or members of your firm spent considerable time responding to his concerns. While we object to your bill, we do appreciate the quality of the appraisal you did for us, and hope that we can work amicably with you on future projects. Sincerely, �0e„� William W. Burns City Manager WWB:rsc R 7 -B 7 -c • � r Peter J. Patchin & Associates, Inc. Valuation Consultants 101 West Bumsville Parkway, Suite 200, Burnsville, Minnesota 55337 (612) 895 -1205 TO: City of Fridley - HRA DATE 10/10/91 6431 University Avenue NE Fridley, MN 55432 INVOICE NO. 9116A Attention: Barbara Dace Re: Market Value Appraisal Development Land - NWC I -694 & TH 65 Fridley, MN 5/21/91 - Appraisal delivered per contract $5,700.00 6/29/91 - Payment received ( 5,700.00) -0- 7/29/91 - Meeting with City staff; preparation of investment value analysis — work performed 7/26/91 thru 7/31/91 - Peter J. Patchin - 5h hrs. @ $125 /hr. 687.50 Itft Joe Mako - 6h hours @ $65 /hr. 422.50 171� Previous Balance (8/31/91) $1,110.00 Finance charge for 30 days @ lh% 16.65 2ND REQUEST FOR PAYMENT! TOTAL AMOUNT DUE $1,126.65 THE AMOUNT OF THIS INVOICE IS DUE UPON PRESENTATION. A FINANCE CHARGE OF 1 -12% PER MONTH, WHICH IS AN ANNUAL PERCENTAGE RATE OF 181/6, WILL BE CHARGED ON ALL ACCOUNTS 30 DAYS PAST DUE. \� x Peter J. 7_p -Patchin & Associates, Inc. Valuation Consultants (612) 895 -1205 101 West Burnsville Parkway, Suite 200, Burnsville, Minnesota 55337 FAX (612) 895 -1521 March 7, 1991 City of Fridley HRA 6431 University Avenue N.E. Fridley, MN 55432 Attn: Ms. Barbara Dace RE: Valuation Consulting and Appraisal Services Peter J. Patchin & Associates, Inc. 101 W. Burnsville Parkway, Ste. 200 Burnsville, Minnesota 55337 To whom it may concern: This letter is intended to be a memorandum of understanding con- cerning the engagement of Peter J. Patchin & Associates, Inc. for purpose of rendering valuation consultation and /or appraisal reports. It is understood by both parties that the nature of the assignment is as follows: Type of Property: Location: Function of Appraisal/ Consultation: Estimated Cost of 40 Acre Redevelopment Site Northwest Corner I -694 and State Highway #65 Fridley, Minnesota Sale to developer. Services Rendered: $5,700 for appraisal report; plus $125.00 per hour for time sub - Sequent to delivery of appraisal report. Terms - Total amount due within 30 days following date of invoice, 1 -1/2% per month interest charges will be added to accounts not paid by that time. 7 -E Retainer Fee - to be paid in advance of commencement of assignment: Date: PJP:prj Client Firm Name: Individual Responsible: Signature: None March 7, 1991 Sincerely, PETER J. PATCHIN & ASSOCIATES, INC. By: Peter J. Patchin, MAI, ASA, CRE President ;. . Peter J. Patchin & Associates. Inc. HOUSING AND REDEVELOPMENT AUTHORITY MEETING, THURSDAY, OCTOBER 24, 1991 7:30 P.M. PUBLIC COPY Please note new location for meeting: Meeting Room 1 - Lower Level of Municipal Center CITY OF FRIDLEY AGENDA HOUSING & REDEVELOPMENT AUTHORITY MEETING THURSDAY, OCTOBER 24, 1991, 7 : 30 P.M. Location: *****Meeting Room #1 (Lower Level) ***** Fridley Municipal Center 6431 University Avenue N.E. CALL TO ORDER ROLL CALL APPROVAL OF MINUTES: September 12, 1991 ACTION ITEMS: CONSIDER CONCEPT APPROVAL OF TIF ASSISTANCE FOR REDEVELOPMENT OF BOB SCHROER PROPERTY 1 - 1B CLAIMS AND EXPENSES 2 - 2C INFORMATION ITEMS: LETTER FROM JIM KORDIAK REGARDING RICE PLAZA 3 - 3B UPDATE ON RICE PLAZA 4 UPDATE ON FRIDLEY PLAZA OFFICE BUILDING'S SECOND MORTGAGE 5 FINAL COPY OF DAIRY QUEEN LEASE 6 - 6N MEMO ON DISPUTE OF PETER PATCHIN BILL 7 - 7E OTHER BUSINESS ADJOURNMENT CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 12, 1991 CALL TO ORDER: Chairperson Commers called the September 12, 1991, Housing & Redevelopment Authority meeting to order at 7 : 30 p.m. ROLL CALL: Members Present: Larry Commers, Virginia Schnabel, John Meyer, Jim McFarland Members Absent: Duane Prairie Others Present: Barbara Dacy, Community Development Director Paul Hansen, Accountant Don Fitch, Fridley Dairy Queen Dave Newman, Attorney for Bob's Produce Michael Schroer, Bob's Produce, 7620 University Dennis Rens, Fridley School District #14 APPROVAL OF AUGUST 8, 1991, HOUSING & REDEVELOPMENT AUTHORITY MINUTES: MOTION by Mr. Meyer, seconded by Ms. Schnabel, to approve the August 8, 1991, Housing & Redevelopment Authority minutes as written. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 1. CONSIDER APPROVAL OF SECOND MORTGAGE SATISFACTION FOR FRIDLEY PLAZA OFFICE BUILDING: Mr. Commers stated the HRA has received a memo from Mr. Burns relative to negotiations that have been ongoing with respect to the amount of the second mortgage that currently exists with the Fridley Plaza Office Building. It is staff's recommendation that, although neither the staff or the HRA are too happy about this under these circumstances, the HRA approve the satisfaction of the second mortgage for the Fridley Plaza Office building. Mr. McFarland asked if there are any personal guarantees on this property. Mr. Hoeft stated that in checking the files, he did not believe there are any notes or personal guarantees. HOUSING& REDEVELOPMENT AUTHORITY MTG. , SEPT. 12, 1991 PAGE 2 Mr. Commers stated that Mr. McFarland brings up a good point. If they approve the second mortgage satisfaction now before knowing for sure if there are any guarantees, will there be any problem? Mr. Hoeft stated, no, the HRA would not be compromising any guarantee rights by approving the second mortgage satisfaction. Mr. Commers stated that legal counsel will be able to find that out within a couple of days, and maybe the HRA should approve the second mortgage satisfaction contingent upon being satisfied that either there are no personal guarantees; or, if there are, this does not foreclose or cause any problems in pursuing the original managers on any guarantees that might exist. Mr. Hoeft stated he should know this for certain by September 17 or 18. Ms. Dacy stated the City will not record the mortgage satis- faction until the check is received. Mr. Meyer asked what kind of precedent this sets for any other second mortgage positions that the HRA has. Mr. Hoeft stated he thought that the circumstances in this case, the way the mortgagee's interest was bought out in that transaction and in relation to the rest of the HRA's ongoing projects, is something that will probably not happen again. Regarding any other second mortgage position, when the HRA goes into that position, the HRA has to know that it is either taking that secondary position or re-enforcing that position through some outside guarantees of individuals or partnerships or corporations. Mr. Commers stated that just because they do something, does not mean they have to do it again. Each decision made by the HRA is independent, and by doing this they are not intending to set a precedent for anyone else. MOTION by Mr. Meyer, seconded by Mr. McFarland, to approve the satisfaction of the second mortgage for the Fridley Plaza Office building upon receipt of a check in the amount of $17 , 500, and contingent upon being satisfied that either there are no personal guarantees; or, if there are, this does not foreclose or cause any problems in pursuing the original managers on any guarantees that might exist. Ms. Schnabel stated she is very unhappy about this situation. It is very unfortunate that the HRA has to face this kind of situation, and she is very unhappy that these next door neighbors expect the HRA to capitulate on the second mortgage. It bothers her because of the HRA's position and because of the HRA' s help HOUSING & REDEVELOPMENT AUTHORITY MTG.-, SEPT. 12, 1991 PAGE 3 -- initially in improvements to the building. She stated she will vote against this motion. Mr. Commers stated there is truth to Ms. Schnabel 's statements, and this is something the HRA should keep in mind as they are approached about taking second mortgage positions in other projects. UPON A VOICE VOTE, COMMERS, MEYER, AND MCFARLAND VOTING AYE, SCHNABEL VOTING NAY, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED ON A 3-1 VOTE. 2. CONSIDER APPROVAL OF SETTLEMENT AGREEMENT AND LEASE AGREEMENT WITH DON FITCH, FRIDLEY DAIRY QUEEN: Mr. Commers stated that a memo from Barbara Dacy dated September 6, 1991, outlines some suggested changes to the lease. At the meeting, the HRA received an updated list of changes. Mr. Dacy stated that in the hand-out at the meeting, items 1, 2, 3, 4 , and 6 are suggested changes that staff recommends the HRA consider approving. The items of most concern are items 5, 7, and 8 . Mr. Commers stated that regarding the heating, ventilation, and air conditioning, does the HRA have the right to elect not to replace them if they quit working and then terminate the lease? Ms. Dacy stated that has been discussed at length with Mr. Fitch. Staff is proposing that he would be responsible for any or all repairs. However, as far as any replacement of items, the only items the HRA would be replacing would be the furnace or air conditioner. Mr. Commers stated the rent the HRA is charging would not make it feasible to replace a furnace or air conditioner. If one of these items malfunctions and the HRA is not in an economic position to replace that furnace or air conditioner, the HRA should be able to elect to either continue the lease or terminate the lease. Ms. Dacy stated the HRA can do that if they choose. Because the Dairy Queen is a seasonable business, the furnace has not been used too much; and she understood from Mr. Fitch that the air conditioner is in good condition. During the course of the negotiations, it was agreed that Mr. Fitch will be responsible for rent, utilities, taxes, ground maintenance, equipment repair, but he has requested that he not be responsible for the furnace or air, conditioner. Mr. Commers asked if someone can inspect the furnace and air conditioner to see what condition they are in. If they are in HOUSING & REDEVELOPMENT AUTHORITY MTG. , SEPT- 12, -1991 PAGE 4 good condition, then he would assume there shouldn't be any big problems and they can take the risk for the next 1 1/2 years. Mr. Fitch stated the air conditioner is only 10 years old and the furnace is 15 years old, so both are relatively new. He stated he is not opposed to having someone from the City inspect the air conditioner and furnace. Mr. Fitch stated he can delete item 5. In Paragraph 11 of the lease, he was requesting that the phrase beginning with the word "caused" be deleted. He believed that if, in the extreme case, one of his employees is killed as a result of the HRA's action to repair, he should not sign away his right to sue the HRA. He stated that in talking with the HRA's legal counsel, his concerns have been satisfied. Ms. Dacy stated the item that needs to be discussed is item 7, regarding insurance coverage on the building. When the HRA took title to the property at the end of July, the Dairy Queen property was added as a temporary binder on the current policy the HRA has with Rice Plaza. However, the insurance agent notified staff that because the Dairy Queen is a seasonal operation, they will not carry that particular building. An annual policy will cost the HRA about $800, with a $5, 000 deductible. Mr. Fitch wants to continue his current building policy, but his policy would be amended to name both the HRA and himself as insured. The deductible on the policy would be $250. That leaves an extra cost of $500 for the insurance, and Mr. Fitch is proposing that the HRA split that cost on a 50/50 basis. Ms. Dacy stated the temporary binder expires at midnight on Friday, September 13 , 1991, so they would have to proceed with a pro-rated cost for the remainder of this year plus 1992 . It is significantly cheaper to go along with Mr. Fitch's suggestion. Mr. Commers asked Mr. Hoeft if he had looked at Mr. Fitch's policy. Mr. Hoeft stated he had not yet had a chance to look at the policy. He will review the policy and make sure the HRA is named as the ensured on the policy. Mr. Commers stated this appeared to be a logical thing to do as long as the policy is reviewed by legal counsel and it gives the HRA the necessary coverage. Ms. Dacy stated the HRA's consultant, Conway Olson, also recommended this approach. Ms. Dacy stated that in item 9 (Paragraph 7 of the lease) , the lease should be amended to read that there be a 30 day notice of HOUSING & REDEVELOPMENT AUTHORITY MTG. , SEPT. 12, 1991 PAGE 5 cancellation instead of the 10 day notice. Mr. Burns also recommended approval. Ms. Dacy stated that leaves item 8. Mr. Fitch wants the HRA not to re-lease the building to another soft-serve operation after he leaves. Mr. Fitch stated item 8 has one primary purpose. He stated he is hoping he will be able to move across the street to the Fridley Town Square so he did not think they are looking at the lease with the Dairy Queen as a long term lease. He stated it was never his intention to leave his present location. He has been there 25+ years and has built up a superb reputation for distributing soft-serve items. He would like to have a non- competing clause in both the lease and the settlement when they come to terms on the sale from the Dairy Queen. He did not think it is in his best interest for the City to use the reputation of that location as a purveyor of soft-serve treats to put a competing business in there when he is just moving across the street. He and his wife do not care what type of business goes into that location, but they prefer that the business not be mistaken as a Dairy Queen. They would like this incorporated as part of the lease and settlement. Mr. Commers stated that if the HRA does this and the HRA terminates the lease, then it not going to be an issue; however, if Mr. Fitch terminates the lease, the HRA has essentially a one- use building and he did not know how adaptable the building is for other uses. Mr. Meyer stated he understood Mr. Fitch's feelings about this issue; but from a realistic standpoint, does the HRA as a public body have any right to write in such a clause? Mr. Hoeft stated that, yes, the HRA can limit the type of business for that building. Regarding the question, is the building adaptable to any other use or are they cutting off any other use for that property, that is a policy situation. Mr. Commers stated it is a risk that the HRA does not need to take and reduces the value of the building. The building is not worth as much if they have to assume that risk. That has a bearing on the fair market value of the building. They could be stuck with a building they cannot rent or lease, or, if they can rent or lease it, it might be at a rent less than fair market value. He stated this is a difficult issue. Ms. Dacy stated that some of this might be solved if the northeast quadrant is redeveloped and Mr. Fitch can relocate there. It is even possible that the HRA would not be able to re- lease the building to another soft-serve business because the Dairy Queen would be in the general vicinity. It is staff' s HOUSING & REDEVELOPMENT AUTHORITY MTG. , SEPT. 12, 1991 PAGE 6 recommendation that it would not be prudent for the HRA to tie its hands by putting that kind of clause in the lease at this time. Mr. Meyer stated he can understand this concern, but he did not think it has a lot of validity and logic. It is his feeling that they would be pursuing a very fine point, and he would be willing to go ahead and put the clause in the lease. Mr. Fitch stated his request is only for the building as it exists now. If the building is torn down and there is new development, then anything can be developed. His request only surfaces around the aspect of identification, especially with the red roof being maintained on the building. Mr. Commers asked Mr. Fitch if he would have any objection if the roof was painted a different color. Mr. Fitch stated he would not have as big a concern if the roof was a different color. However, he still has some concerns because of the way this whole process has taken place, and that it was not he and his wife's choice to relocate. He still has some reservations about another soft-serve operation locating in the building, but not as many if the roof is painted a different color. Ms. Schnabel stated that virtually every major fast-food business is now serving some type of soft-serve ice cream and yogurt. What concerns her is that because of the "soft-serve" definition, would the HRA be locking themselves into something they cannot manage once Mr. Fitch and his business moves? That is the problem she sees with Mr. Fitch' s request. Mr. Fitch stated it has been brought up that there is a different fair market value for the property because it cannot be used for the potential soft-serve type businesses it was designed for. By the same token so far, the market valuation on this property was set not as a Dairy Queen but what it would be as something else. The purchase price was ultimately set on the basis of it being a Dairy Queen and the marketability of it being a soft-serve and the reputation it has. They can eliminate any problems with the lease if the purchase price of the property is substantially larger than currently proposed. If he is paid for the value of the property being a soft-serve Dairy Queen location, then he has no problem with the HRA leasing it to another soft-serve business. But, as currently proposed, the property is not being valued on that specific type of use. It is being valued as a general piece of property with a little building on it. Mr. Commers stated the property is valued at its highest and best use. It may be even valued higher than the use as a Dairy Queen. HOUSING & REDEVELOPMENT AUTHORITY MTG. , SEPT. 12, 1991 PAGE 7 Mr. McFarland stated the lease expires in November 1992 . Can the terms of the lease be binding after the expiration of the lease? If the northeast quadrant development proceeds, the soonest the Dairy Queen would move would probably be May 1992 , and then they would only have about six months left on the lease. Mr. Commers stated if they would only have the restriction for approximately six months until November 1992, then he did not have any major objection, because that would give the HRA a few months to test the market and see what is out there. If the HRA is able to re-lease the building before November 1992, they would agree not to lease to a soft-serve type business. However, he agreed with Ms. Schnabel that they don't want to restrict themselves so they cannot lease to a business where soft-serve is not the primary part of the business. Mr. McFarland stated that if Mr. Fitch believes there is any real threat or risk to his business, another alternative would be for him to continue to make the lease payments, and the HRA would not be able to acquire the property back for purposes of re-leasing it. If there is no risk, then Mr. Fitch can let the lease expire in November 1992 . Mr. Fitch stated that it is true that the non-complete clause would only be until the lease expires in November 1992 . He stated he did not anticipate vacating the building until July, August, or September 1992 at the earliest. The HRA is potentially looking at only about 2-3 months, but he would like that protection for that period of time. Mr. Meyer stated he is in favor of granting Mr. Fitch' s request and adding a non-compete clause to the lease until the expiration of the lease that would limit the HRA to lease the building to any business where the predominant use is soft-serve. Ms. Schnabel stated that as long as the words "predominant use" is included in the lease, then she would agree to Mr. Fitch's request. Mr. Fitch stated that is agreeable to him. Mr. Commers and Mr. McFarland were also both in agreement. Mr. Commers directed the attorney to make the necessary amendments to the lease. Mr. Fitch stated that paragraph 10 of the lease addresses certain items that staff and he have agreed that he would be able to remove from the building upon expiration or termination of the lease. One thing that was not mentioned is a walk-in freezer that is part of the Dairy Queen equipment that actually sits outside the exterior of the building. The lease talks about all HOUSING & REDEVELOPMENT AUTHORITY MTG. , SEPT. 12, 1991 PAGE 8 interior equipment and does not address the freezer that sits outside. He would like the freezer incorporated with the equipment he can take with him. Mr. Commers stated he presumed the HRA is paying Mr. Fitch for the pylon sign, the fencing, storage shed, and walk-in freezer. He stated Mr. Fitch should be able to take the freezer with him; however, if he takes the freezer, then the HRA will not pay him for it. The same is true for the removal of the sign, deck fencing, interior cupboards, etc. If Mr. Fitch wants to take them, then the HRA will not pay for them. Mr. Fitch stated that is agreeable to him. Mr. Hoeft stated he will work on this with Mr. Fitch. Chairperson Commers stated it is the consensus of the HRA to authorize staff to negotiate with Mr. Fitch the discussed amendments to the lease between the Fridley HRA and the Fridley Dairy Queen. 3. CONSIDER APPROVAL OF AGREEMENTS TO RETURN TAX INCREMENT TO SCHOOL DISTRICTS: Mr. Hansen stated that in the agenda is a memo dated September 6, 1991, from Rick Pribyl and himself explaining the 1992 school district referendum levy return agreements and the 1992 estimated amounts based on projections given to the City by the County. Mr. Commers stated that with the class rates being lowered, the 1992 monies could be less than these numbers. What happens if the HRA commits to these numbers now and they change? Mr. Hansen stated the estimated 1992 figures are based on the class rate changes. Ms. Dacy stated these numbers are the worst case scenario and the market values could be reduced by tax delinquencies, court cases, or other means. Dr. Dennis Rens, Superintendent of School District #14 , stated he certainly appreciates the timeliness of the HRA's discussion. These monies will affect their 1992-93 budget and will provide the School District with an opportunity to plan. The School District is also highly appreciative of the HRA's actions in the past. MOTION by Ms. Schnabel, seconded by Mr. McFarland, to approve the School District Referendum Levy Return Agreements for the school fiscal year 1992-93 . HOUSING & REDEVELOPMENT AUTHORITY MTG. , SEPT. 12, 1991 PAGE 9 UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. Ms. Schnabel stated she would like to compliment Mr. Pribyl and Mr. Hansen on all the work they have done and to express the HRA's appreciation in having the work done so quickly. Mr. Commers stated he agreed. The information is certainly in a more understandable mode this time, and the HRA appreciates that. 4 . CLAIMS AND EXPENSES: Ms. Dacy stated that she is requesting the HRA's concurrence on her request to attend the American Economic Development Council 's Basic Economic Development course in Tampa, Florida, on November 3-8 , 1991. Mr. Commers stated he certainly believed it is worthwhile for Ms. Dacy to attend this Economic Development course. MOTION by Ms. Schnabel, seconded by Mr. Meyer, to approve the request by Barbara Dacy to attend the American Economic Develop- ment Council ' s Basic Economic Development course in. Tampa, Florida, on November 3-8, 1991. MOTION by Mr. Meyer, seconded by Ms. Schnabel, approve the check register (2155-2161) dated September 6, 1991. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 5. COPY OF LETTER TO CITY COUNCIL REGARDING DECERTIFYING TIF DISTRICTS: Mr. Commers stated this is an informational item with respect to the issue discussed at the August HRA meeting relating to the termination of TIF districts that are not needed for financing economic development or redevelopment improvements. The HRA had asked Mr. Burns to write a memo to the Council expressing the HRA' s understanding of the Council 's position, but also expressing some of the HRA' s concerns. This memo was included in the agenda. Mr. Commers stated there is another issue regarding the decertification, and that is the obligation the HRA has under the existing bond indentures and the ability to transfer funds from one district to another. He stated he would like to talk to Jim Casserly and have Mr. Casserly let the HRA know what the restrictions are on which districts in terms of using funds from one district and refunding another district. HOUSING & REDEVELOPMENT AUTHORITY MTG. , SEPT. 12, 1991 PAGE 10 6. COPY OF CONTRACT WITH MAXFIELD RESEARCH GROUP: Mr. Commers stated this is an informational item. 7. UPDATE ON RICE PLAZA: Mr. Commers stated that if more tenants are going to be leaving Rice Plaza, it might be a good idea for staff to ask Jim Kordiak if he has some suggestions for a more aggressive program to get more tenants into the building. Without a developer at this time, the building could be vacant for quite some time. 8. INFORMATION ON BOB SCHROER PROJECT: Ms. Dacy stated that Mr. Schroer and Mr. Newman are at the meeting to introduce the HRA to the project, to talk about financing, and to request some assistance from the HRA. Mr. Schroer hopes to have a redevelopment contract for the HRA's consideration at the October meeting. Mr. Newman stated Mr. Schroer has been exploring a possible redevelopment for some time with construction to start next spring. Then he was approached by a prospective tenant about one month ago, Lyndale Garden Center, who would be a joint user of the property. Lyndale Garden Center has been around for about 60 years at 66th and Lyndale Avenue South and is the largest independent garden center in the Twin Cities area. Lyndale Garden Center recently opened up a new store in Burnsville. Mr. Schroer is very comfortable with Lyndale Garden Center' expertise and quality of business. Some years ago, Mr. Schroer operated a garden center, then came Frank's Nursery and Malmborg's Garden Center, so they feel there is a strong potential with the two businesses. Mr. Newman stated that due to the nature of the garden center business which is so seasonal, it is important to proceed as quickly as possible as Lyndale Garden Center needs to be in and open next spring. -So, they are operating under a rather short time frame. Mr. Newman showed the updated preliminary site plan. He stated Mr. Schroer is proposing a new 18, 000 sq. ft. building. Lyndale Garden Center would have an enclosed area of 15, 000 sq. ft. , a greenhouse of 5, 000 sq. ft. , and an outside sell center of approximately 40, 000 sq. ft. Mr. Newman stated they hope to have the final numbers and cost in place within a few days. They have had some discussions with First Star Bank for financing. HOUSING & REDEVELOPMENT AUTHORITY MTG. , SEPT. 12, 1991 PAGE 11 Mr. Newman stated they will also be requesting some assistance from the HRA. It is his understanding that the HRA prefers the "pay-as-you-go" approach. Mr. Commers stated that this project originally only qualified under the rehab portion so that funds, if any, would only be available for a short period of time. It was only if the project joined in with the project across the street that a time period could even be talked about. What Mr. Newman is proposing is that any additional taxes that are generated by this specific project would be refunded to the property owners over a period of time. Mr. Commers stated the HRA has only recently done one "pay-as- you-go" project. The HRA's preference has always been that to some extent they get something back from the developer as far as the assistance they give to the developer. So, Mr. Newman and Mr. Schroer should keep in mind that there may be different alternatives. The HRA is very concerned about setting a precedent with the "pay-as-you-go" approach. ADJOURNMENT: MOTION by Ms. Schnabel, seconded by Mr. McFarland, to adjourn the meeting. Upon a voice vote, all voting aye, Chairperson Commers declared the motion carried unanimously and the September 12 , 1991, Housing and Redevelopment Authority adjourned at 9:05 p.m. Respectfully su mitted, Lynn Saba Recofding Secretary 1 l 1 Community Development Department I \ HOUSING AND REDEVELOPMENT AUTHORITY City of Fridley TO: Housing and Redevelopment Authority Members 2 FROM: William W. Burns, Executive Director of HRA �\ DATE: October 17, 1991 SUBJECT: Bob's Produce Proposal Jim Casserly and I have been working on the proposal for Bob' s Produce during the past couple of weeks, and the culmination of our efforts is listed on the attached outline. At our October 24 , 1991, meeting you will be asked to review the Bob's Produce proposal and to provide conceptual approval for the terms of the tax increment financing agreement which will be presented at another meeting. While we considered means by which the HRA might recapture a portion of the tax increment value for this project, our proposal does not include a recapture provision. Should the HRA desire to . pursue this, we will be prepared on Thursday to discuss that. We think that the present value of the benefit to the total project cost is in keeping with past tax increment assistance for other projects. We also feel strongly that the use of tax increment financing for this project is consistent with our development goals, as well as with the terms of tax increment financing laws. Staff recommends the terms of the Bob's Produce proposal as contained in the attached outline. Thank you. WWB:rsc 1-A BOB'S PRODUCE I. The Project: A. A new Bob's Produce Ranch and Lyndale Garden Center. B. Project Costs: 1. Construction and Related Costs: $1, 278 2. Demolition: 20 3. Land: 784 4. Total: $2, 082 C. Estimated Size: 1. Bob's 18, 000 sq. ft. 2. Lyndale 15,000 sq. ft. 3 . Total: 33 , 000 sq. ft. II. TIF Proposal: A. Total Benefit = $348, 080 Captured over 13 tax payable years (1994 - 2006) B. Present Value of Benefit = $163 , 490 C. Average Available Increment = $26,769 D. Present Value of Benefit = 7 .9% of total project costs, or 12.8% of construction and related costs. III. Use of TIF: A. Write down of cost on old building. B. Demolition. IV. But For: A. But for use of TIF, the developer could not satisfy bank's debt coverage ratios. V. Other Considerations: A. LGA loss over 10-year period = $45, 061 B. LGA loss covered by developer's payment to the City. C. HRA will receive 10% administrative fee of $3, 360/year for 13 years, or a total of $43, 680. • 1-B 15-Oct-91 CITY OF FRIDLEY, MINNESOTA BOB1 SCHEDULE I: TAX INCREMENT ANALYSIS - OVERVIEW: BOB'S PRODUCE (A) (B) (C) (D) (E) (F) (G) (H) (I) (J) (K) ORIGINAL ESTIMATED CAPTURED ESTIMATED LESS: LESS: AVAILABLE TAXABLE PRESENT VALUE x OF PERIOD TAX TAX TAX TAX ADMIN L.G.A. TAX SEMIANNUAL CUMULATIVE YEARS ENDING CAPACITY CAPACITY CAPACITY INCREMENT EXPENSES ADJUSTMENT INCREMENT BALANCE BALANCE 0.0 12 / 1991 27,301 27,301 0 0 0 0 0 0 0 0.5 6 / 1992 27,301 27,301 0 0 0 0 0 0 0 1.0 12 / 1992 27,301 60,403 0 0 0 0 0 0 0 1.5 6 / 1993 27,301 60,403 0 0 0 0 0 0 0 2.0 12 / 1993 27,301 60,403 0 0 0 0 0 0 0 2.5 6 / 1994 27,301 60,403 33,103 16,801 1,680 0 15,121 11,848 11,848 3.0 12 / 1994 27,301 60,403 33,103 16,801 1,680 0 15,121 11,283 23,131 3.5 6 / 1995 27,301 60,403 33,103 16,801 1,680 0 15,121 10,746 33,877 4.0 12 / 1995 27,301 60,403 33,103 16,801 1,680 0 15,121 10,234 44,111 4.5 6 / 1996 27,301 60,403 33,103 16,801 1,680 341 14,779 9,527 53,638 5.0 12 / 1996 27,301 60,403 33,103 16,801 1,680 341 14,779 9,073 62,712 5.5 6 / 1997 27,301 60,403 33,103 16,801 1,680 683 14,438 8,442 71,153 6.0 12 / 1997 27,301 60,403 33,103 16,801 1,680 683 14,438 8,040 79,193 6.5 6 / 1998 27,301 60,403 33,103 16,801 1,680 1,024 14,097 7,476 86,669 7.0 12 / 1998 27,301 60,403 33,103 16,801 1,680 1,024 14,097 7,120 93,788 7.5 6 / 1999 27,301 60,403 33,103 16,801 1,680 1,365 13,755 6,617 100,405 8.0 12 / 1999 27,301 60,403 33,103 16,801 1,680 1,365 13,755 6,301 106,706 8.5 6 / 2000 27,301 60,403 33,103 16,801 1,680 1,707 13,414 5,852 112,559 9.0 12 / 2000 27,301 60,403 33,103 16,801 1,680 1,707 13,414 5,574 118,133 9.5 6 / 2001 27,301 60,403 33,103 16,801 1,680 2,048 13,073 5,173 123,306 10.0 12 / 2001 27,301 60,403 33,103 16,801 1,680 2,048 13,073 4,927 128,233 10.5 6 / 2002 27,301 60,403 33,103 16,801 1,680 2,390 12,731 4,570 132,803 11.0 12 / 2002 27,301 60,403 33,103 16,801 1,680 2,390 12,731 4,352 137,155 11.5 6 / 2003 27,301 60,403 33,103 16,801 1,680 2,731 12,390 4,034 141,188 12.0 12 / 2003 27,301 60,403 33,103 16,801 1,680 2,731 12,390 3,842 145,030 12.5 6 / 2004 27,301 60,403 33,103 16,801 1,680 3,072 12,048 3,558 148,588 13.0 12 / 2004 27,301 60,403 33,103 16,801 1,680 3,072 12,048 3,389 151,977 13.5 6 / 2005 27,301 60,403 33,103 16,801 1,680 3,414 11,707 3,136 155,112 14.0 12 / 2005 27,301 60,403 33,103 16,801 1,680 3,414 11,707 2,986 158,099 14.5 6 / 2006 27,301 60,403 33,103 16,801 1,680 3,755 11,366 2,761 160,860 15.0 12 / 2006 27,301 60,403 33,103 16,801 1,680 3,755 11,366 2,630 163,490 436,823 43,682 45,061 348,080 163,490 163,490 ORIGINAL TAX CAPACITY O.M.V. O.T.C. ESTIMATED TAX CAPACITY 60,403 11-30-24-22-0020 VACANT LAND 67,100 3,324 CONSTRUCTION COSTS 1,300,000 11-30-24-22-0018 LAND ONLY 209,700 ESTIMATED MARKET VALUE - BUILDING 1,040,000 11-30-24-22-0018 BUILDING ONLY 344,700 22,436 1991 MARKET VALUE - LAND 307,900 02-30-24-33-0026 VACANT LAND 31,100 1,541 TOTAL ESTIMATED MARKET VALUE 1,347,900 TOTAL ESTIMATED TAXES 61,314 TOTAL ORIGINAL TAX CAPACITY 27,301 ' ESTIMATED TAXES/SQUARE FOOT 1.86 TAX CAPACITY RATE 1.01508 BOB'S PRODUCE 18,000 INFLATION 0.000% LYNDALE GARDEN STORE 15,000 ADMIN EXPENSES 10.00% TOTAL SQUARE FEET 33,000 TAXABLE P.V. RATE 10.00% CASSERLY MOLZAHN & ASSOCIATES • P DATE 10/17/91 CITY OF FRIDLEY — HRA PAGE 1 PROGRAM P008 CHECK REGISTER 2 CHECK RUN BATCH # :0009 002 HRA VENDOR DISC. JOB DESCRIPTION INV # PO/INV # SEQ # PCNT AMOUNT ACCT NUMBER NMBR MESSAGES 2162 **** CHECK—PREPAID **** F00026 FRIDLEY STATE BANK INVESTMENT 00456-01 OTJZGSO.0000 500,000.00 DR701-10400 INVESTMENTS, AT COST 500,000.00 CR701-10100 CASH **** TOTAL VENDOR **** $ 500,000.00 2163 **** C•FECK—PREPAID **** A00040 ANOKA COUNTY TREASURER 2ND HALF TAXES 00457-11 GTJWBW0.0000 13,792.21 DR450-20200 ACCOUNTS PAYABLE 13,792.21 CR450-10100 CASH **** TOTAL VENDOR **** $ 13,792.21 2164 **** CHECK—PREPAID **** F00023 FRIDLEY, CITY OF 2ND HALF SPECIALS 00458-01 GTJW900.0000 12,251.50 IR450-20200 ACCOUNTS PAYABLE 13,251.50 CR450-10100 CASH **** TOTAL VENDOR **** $ 13,251.50 2165 **** CHECK—PREPAID **** B00065 BARNA, GUZY & STEFFEN, LTD. LEGAL SERVICES i 459— A �i ii 5'�-2020:l ACCOUNTS PAYABLE AUG SEfi4�C�� t.c1�+_�: 01 iT,.�1aF«�u.C.�(..} 7 �.5�0 CR4 c _ C 739.50 CR450-10100 CASH AUG LEGAL SERVICES 00459-02 GTJZE30.0000 803.25 DR460-20200 ACJ.COiNT�S F`HYAELE 803.25 CR460-10100 CASH **** TOTAL VENDOR **** $ 1,542.75 2166 **** CHECK—PREPAID **** B00176 BRIGG% AND MORGAN PROF. ASSOC. LEGAL SERV ON GEN TAX INC 00460-01 GTJZE70.0000 616.90 DR460-20200 ACCOUNTS PAYABLE 616.90 0 ?1; CASH **** TOTAL VENDOR **** $ 616.90 2167 ***{* CHECK—PREPAID **** C00044 CASSERLY LAW OFFICE E 9 is c R452— 020 P iAB`E AUG LEGAL 'c":F'RINGBROii�. APT 00461—i?1 GT`J1J��O.C�IiO!� 1,OL��..;0 Dn4.:� � ? ACCOUNTS rAiNr•�_ 1,025.50 C:R452-1i0iO0 CASH **** ,E■ ,v 025.50 VENDOR h..h Y{ � 1, 214:. **** CHECK—PREPAID **** C00044 CASSERLY LAW OFFICE SEPT LEGAL SERVICES 00462-01 OTJW9A0,0000 90.00 DR455-20200 ACCOUNTS PAYABLE 90.00 CR455-10100 CASH SEPT LEGAL SERVICES 00462-02 GTJZEB0,0000 1,203.50 DR460-2O200 ACC LMS PAYABLE 1,203.50 CR460-1010; CASH SEPT LEGAL SERVICES 00462-03 G T JZGN0,0000 202.5) DR462-20200 ACCOUNTS PAYABLE 202.50 CR46 10100 CASH **** TOTAL VENDOR * ** $ 1,496.00 2169 **** CHECK—PREPAID **** F00023 FRIDLEY, CITY OF SEPT OPERATING EXPENSE 0042-10 GTJW6DO,0000 417. 7 UR4SO—:02(00 ACCOUNTS PAYABLE 417._'7 ::R4_. 1:".C•. CAST? DATE 10/1791 CITY OF FRIDLEY - HRA PAGE 2 PRCGRAM P008 CHECK REGISTER 2-A CHECK RUN BATCH # :0009 002 HRA VENDOR DISC. JOB DESCRIPTION INV # PO/INV # SE° # PCNT AMOUNT ACCT NUMBER NMBR MESSAGES SEPT OPERATING EXPENSE 00463-11 GTJW6I0.0000 333.72 DR450-20200 ACCOUNTS PAYABLE 333.72 CR450-10100 CASH SEPT OPERATING EXPENSE 00463-12 GTJW6R0.0000 26.32 I1R450-20200 ACCOUNTS PAYABLE 26.32 CR450-10100 CASH SEPT OPERATING EXPENSE 00463-13 GTJW7Z0.0000 121.75 DR450-20200 ACCOUNTS PAYABLE 121.75 CR450-10100 CASH SEPT OPERATING EXPENSE 00463-14 GTJW830.0000 22.56 DR450-20200 ACCOUNTS PAYABLE , 22.56 CR450-10100 CASH SEPT OPERATING EXPENSE 00463-15 GTJWS60.0000 26.81 DR450-20200 ACCOUNTS PAYABLE 26.81 CR450-10100 CASH SEPT OPERATING EXPENSE 00463-16 GTJWSA0.0000 63.60 DR450-20200 ACCOUNTS PAYABLE 63.60 CR450-10100 CASH SEPT OPERATING EXPENSE 00463-17 GTJW8E0.0000 130.00 DR450-20200 ACCOUNTS PAYABLE 130.00 CR450-10100 CASH SEPT OPERATING EXPENSE 00463--188 GTJWSH0.0000 55.00 DR450-20200 ACCOUNTS PAYABLE 55.00 CR450-10100 CASH SEPT OPERATING EXPENSE 00463-19 GTJWGK0.0000 5.00 DR450-20200 ACCOUNTS PAYABLE 5.00 CR450-10100 CASH SEPT TERTING EXPENSE 00463-20 GTJW8N0,0000 192.75 DR450-20200 ACCOUNTS PAYABLE 192.75 C.R450-10100 CASH SEPT OPERATING EXPENSE 0 462-21 ; SRO.0:00 4S.00 DR45 0-2.200 ACCOUNTS PAYABLELE 46.00 CR450-10100 CASH ,P.ER,•�TIN : 'S= - 2 W9E 5. � 955 20� f• ACCOUNTS r. SEPT•�, �: cr:i'; � :� EXPENSE (?i F, �� ?�!:_,v;'�{), �?C!.� l.�.'sc ?'�r���-::tlL?:� HI.COLPdTa •Y r•Lt 75.42 CR4 5-10100 CASH SEPT OPERATING EXPENSE 00463-23 GTJW9I0.0000 144.43 DR455 20200 ACCOUNTS PAYABLE 144.43 CR455-10100 CASH SEPT ADMIN PERSONAL SERVI 00463-01 GTJZEF0.0000 13,360.33 DR460-20200 ACCOUNTS PAYABLE 13,360.33 CR460-10100 CASH SEPT OPERATING EXPENSE 00463-02 GTJZEJ0.0000 35.6.3 DR460-2O200 ACCOUNTS PAYABLE 35.63 CR460-10100 CASH SEPT OPERATING EXPENSE 00463-03 GTJZENO.0000 666.40 DR460-20200 ACCOUNTS PAYABLE 666.40 CR4660-10100 CASH SEPTOFERt i INC EXPENSE 00463-04 r2TJES0.0000 33.50 DR460-20200 ACCOUNTS PAYABLE 3..'0 CR460-10100 CASH SEPT :PE;A iNC EXPENSE 00463-if OTZag .0'0. 124.13 DR460-20200 ACCOUNT S PAYABLE 12 .13 CR460-10100 CASH SEPT PER T IN EXPENSE ! 463-04 _TJ F3U,0 00 3?'J.00 DR460-20200 Al•CO LI iT : PAYABLE 395.00 CR460-10100 CASH ..=.!-' 'PEz;-..;'a:: t:;; Ei4t.. :)(?yE,:_-fi% [ij_17F70,0i0,2 2"'-- I;h460-20200 riC;___N!_ Gi•}YAO'� 2_.:6 CR41,0-101OG _ASH SEPTERf:'.TIN'!_ EXPENSE 0463-OC G?J.FAO,0000 15.i00 DR460-20200 �:c:UUN=, PAYABLE - ry'-- _ 15.00 CR460-10100 CASH SEPT _-_ AT:NG= EXPENSE 004:3-C;+ ;T. FE?.ii±i 11.9-3 D46 O-:020•J yCU iT. PAYABLE E 11.98 CR460-10103 CASH *;s • TOTAL VENDOR -<'�r w 14.332.56 s- < CHE_H- 'REPAID: 4.: A'E -- -:[ Ff- EST , -., -rr +- - -- r c__ - 1 - NT PA FEL: -!!._.� . . ._ iMNT.,. .._•; (� i!i:�..,4-U1 !ilJcitl�l!,{![1i?t) 3,'1_;li.;_ :R4_t. chill(_ CC!:I?:l:r;�_ ! 3,lh0•-' CR455-:31 h. CASr v'o- : A; . :D!CR zt:,. $ 3-7 9' -- pATE 10/17/91 CITY OF FRIDLEY - HRA PAGE PROGRAM P002 CHECK REGISTER 2-B CHECK RUN BATCH 4 :0009 002 HRA VENDOR DISC. JOB DESSCRIPTION INV 4 PO/INV # 6E0 # PCNT AMOUNT ACCT NUMBER NMBR MESSAGES 2171 **** CHECK-PREPAID **** F00089 FIELD, T.C. & COMPANY INS. COVERAGE ON DAIRY QU 00465-01 GTJW6N0.0000 24.65 DR450-20200 ACCOUNTS PAYABLE 24.65 CR450-10100 CASH **** TOTAL VENDOR **** $ 24.65 **** TOTAL NUMBER OF CHECKS WRITTEN : 000000 HH** TOTAL DOLLARS FOR CHECKS WRITTEN : $ 551,842.40 **** LAST CHECK NUMBER : 002161 2-C TO: FRIDLEY H.R.A. FROM: CITY OF FRIDLEY RE: BILLING FOR OPERATING EXPENSES FOR SEPTEMBER, 1991 AND SEPTEMBER 1991 ADMINISTRATIVE EXPENSES SEPTEMBER ADMINISTRATIVE PERSONAL SERVICES 13,108.08 SEPTEMBER ADMINISTRATIVE OVERHEAD 252.25 TOTAL ADMINISTRATIVE BILLING 13,360.33 OPERATING EXPENSES: POSTAGE 35.63 ADVERTISING 666.40 ENVELOPES PRINTED 38.90 TIF MAPS 124. 13 REGISTRATION - DACY 395.00 DELIVERY SERVICE 23.86 AUGUST FILINGS 15.00 DELIVERY SERVICE 11.98 AUGUST MANAGEMENT FEE - RICE PLAZA 417.97 SEPTEMBER MANAGEMENT FEE - RICE PLAZA 333.72 ELECTRICITY - RICE PLAZA 26.32 UTILITY BILLING - RICE PLAZA 121.75 GAS HEAT - RICE PLAZA 22.56 ELECTRICITY - RICE PLAZA 26.81 MOWING - RICE PLAZA 63 . 60 CLEAN/REMOVE RUBBISH - RICE PLAZA 130.00 AIR CONDITIONER SERVICE - RICE PLAZA 55.00 ACCESS CARRIER CHANGE - PAY PHONE 5.00 REPAIR LIGHTS - RICE PLAZA 192.75 REPAIR WIRE - RICE PLAZA 46.00 ELECTRICITY - LAKE POINTE 75.42 ELECTRICITY - LAKE POINTE 144.43 TOTAL OPERATING EXPENSES FOR AUGUST $2,972 .23 TOTAL EXPENDITURES $1 6,332.56 3 IRJ CITYOF FRIDLEY FRIDLEY MUNICIPAL CENTER •6431 UNIVERSITY AVE. N.E. FRIDLEY, MN 55432•(612)571-3450• FAX(612)571-1287 September 16, 1991 Jim Kordiak Kordiak Company 3948 Central Avenue N.E. Minneapolis, MN 55421 Dear Jim: At the September 12, 1991, meeting, the HRA asked you to provide them with an update as to the advertising activities for the vacant space in Rice Plaza. The next HRA meeting is October 24, 1991. Please write the letter to my attention and discuss what tools you have been using to advertise this space and provide a synopsis of what type of interest, if any, you have received about the space. Should you have any questions, please feel free to contact me. Sincerely, Barbara Dacy Community Development Director BD: ls C-91-305 . T 3=A The iZ -1� MN n n n Kordiak 3948 Central Ave. N.E., Minneapolis, 55421 788-9651 781-9375 n n n ,- Company fl Real Estate 1l Property Management f Appraisals f Income Tax Service October 2, 1991 Barbara Dacy Community Development Director Fridley Municipal Center 6431 University Ave. N.E. Fridley, Minn. 55432 • Dear Barb, You have asked me to provide you with information on the advertising techniques used to find a new tenant for 236 Mississippi which Norge Village vacated on June 1st, 1991. Immediately after they vacated I placed a "For Lease" sign in the window. At the time there were two similar signs in another vacant bay but once it was rented they are now gone. In my experience, that of my fathers and as a result of discussions with other real estate agents signs rent space better then any other technique. Window and lot signs are the most common method I use to advertise space available. I will however promptly place additional signage in the vacant unit to increase visibility as the other signs are now gone. If the board would recommend it I can prepare an ad for the newspaper advertising the availability of this space. While my past response on an ad has never been very good it can be successful. I have called an area laundromat owner and a company which owns numerous Laundromats in the Twin Cities for information and advise on that market. While the space is all plumbed for a laundry prospects do not seem real good for finding a similar tenant use for the space. As I do not expect that the next tenant will be in that business considerable improvements may have to be made to the bay to prepare it for future use. I have had several calls with inquires on the space. Most were not viable prospective tenants. Two inquires were more serious however they have not resulted in a successful rental. If the board has any special reauests for promotion of the space I would be happy to cooperate. Generally the rental market is slow right now and while this property has its own peculiarities which make it difficult to rent it is in a good location, with great visibility and a reasonable rental rate. Sincerely, • iSikAy)Jim Kordiak Gcrir 4,� 3-B ®\ PUBLIC WORDS r , MAINTENANCE MEMORANDUM 4 'Qiot$ DATE September 16, 1991 FROM Ralph Volkman, Superintendent TO ACTION INFO SUBJECT John Flora/Director Y4c Invalid Ramps /� P t!/ .lJ//en,/ 'O On Friday, September 13th, two invalid ramps were installed at the Rice Creek Plaza business area, as requested. Work was completed by 12:00 noon. 1 4 CO N 07 to O O C) J: CO r r T O O N CO CO 0 4 CO ID v CO I 0 0) r r - 0 0) Ch N O O N N CO O- O N CO CO 0) r tO 0 0 N CO to CO CD 00 O) T to to r O r • N O CC! CO :&' COD r to CD C) r r coc F nt 000 V) O. r to 3 O co cp 0 F- 0 0 CD co co to O N N N CO CO N N CA CO. 'it r CO O) C) CD N N 0 to tO Ch ' F CO F st mt 0 N N 0 O N CO O to r O 'ct N N CO O C) O N ; F- to N F- N CO C) r 4 O) Of N Nt 0 0 0) CO tp N O) CD 0 0 d• Cr) r Ci N CO O O) CM C) O CO to r O 00 N CO _.': N. CO N N N CO 0) r r' r v Ch CO to N co Oa) O ONE 0 CO CV tp O) C ' CV U) : co co CO T CO O C+) r T to CO r r N T 0 N N T N r T N r T CO r r CD r N O r N to CO N T Cr) Io 0 CO TP 00 • C7 F r O h O N N Cr) r: et Ch to T ^ 0 N CO N F CO CO r to O CD N T T T T F- C7 07 CO T CO 0 N CO CO CO CD et N CD 0 N O CO to Nco to _ F- tO Ci to •- �' N N N CO 0 O) N CCO CO O1 CO CU O T CD to O C,h N M O O co N to CO O CD F- O O O CO C O) to to Ch 0 OO) Ch CG r) to O) O O) O C F- N N N CO co n co co r CO T O C) O 00 F NI. O) C) ".: 0 0) 0) T 0 0 Z 4 O O tUo a) COU) - : T N n ao v CO CO w Q cc U O 1— . w F- ) Z (7 0) Q w Y O Y Z I- Z V CO N ~ Z Z Q Z Z > Q (Li 0w0m O Z; w m ¢ w Z Q ...I fNi z cm—n Z °C U Ow = O >- Z � I} Q > Z m U = m U Q 5 Community Development Department I 1 HOUSING AND REDEVELOPMENT AUTHORITY City of Fridley DATE: October 16, 1991 TO: William Burns, Executive Director of HRA FROM: Barbara Dacy, Community Development Director SUBJECT: Update on Fridley Plaza Office Building Second Mortgage At the September 12, 1991, HRA meeting, the HRA asked Jim Hoeft to investigate whether or not personal guarantees were provided to secure the second mortgage on the Fridley Plaza Office Building. Hoeft has reviewed the file and determined that there were no personal guarantees required. We will be receiving the $17, 500 check within the next week. After receipt of the check, we will be recording the mortgage satisfaction document. BD:ls M-91-766 I 6 Community Development Department \ HOUSING AND REDEVELOPMENT AUTHORITY City of Fridley DATE: October 16., 1991 TO: William Burns, Executive Director of HRA FROM: Barbara Dacy, Community Development Director SUBJECT: Status of the Dairy Queen Lease After the September 12, 1991, HRA meeting, we revised the Dairy Queen lease according to the HRA's direction. Paragraph 22 of the lease states that the HRA will not re-lease the premises to another tenant whose business is "primarily the sale of soft-serve ice cream products". This provision is not applicable, however, if the lease is terminated because of the lessee's default of any terms or conditions of the lease. The HRA also agreed to pay for one-half of the premium costs for insurance on the improvements, fixtures, and equipment. The latter portion of paragraph 5 addresses this issue. Hoeft reviewed Fitch's insurance policy after the HRA meeting, and the HRA was added to the insurance to the policy. Note that paragraph 7 provides for a 30 day notice to be given to the HRA _by the insurance company prior to cancellation. Clyde Wiley also inspected the air conditioner and furnace. The air conditioner appears to be in good condition. The furnace is showing its age and is rusting. Wiley advised that replacement would probably cost $400, if needed. The lease assigns repair responsibility to Fitch and replacement to the HRA. The furnace is not used extensively because the operation is closed during the coldest months of the year. The attached copy was given to Don Fitch on October 16, 1991, and we anticipate that it will be executed in the near future. BD:ls M-91-767 ROBERT A.GUZYBGS SHARON L.HALL 6-A BERNARD E.STEFFEN THOMAS L.DONOVAN , RICHARD A.MIERRILL PAMELA M.HARRIS ROBERT C.HYNES CHARLES M.SEYKORA RICHARD A.BEENS WILLIAM M.HANSEN RONALD B.PETERSON JOAN M.THIEMAN DARRELL A.JENSEN Barna, Guzy & Steffen, Ltd. DANIEL D.GANTER,JR. JEFFREY S.JOHNSON BEVERLY K.DODGE RUSSELL H.CROWDER ATTORNEYS AT LAW GREGG V.HERRICK JON P.ERICKSON 400 Northtown Financial Plaza JAMES D.HOEFT LAWRENCE R.JOHNSON JOAN M.QUADE DAVID A.COSSI 200 Coon Rapids Boulevard SCOTT M.LEPAK THOMAS P.MALONE Minneapolis,MN 55433 STEVEN L.MACKEY MICHAEL F.HURLEYOF COUNSEL VIRGIL C.HERRICK PETER BARNA HERMAN L.TALLE (612) 780-8500 FAX(612) 780-1777 LAWRENCE M.NAWROCKI PATENT,COPYRIGHT AND TRADEMARK LAW October 14, 1991 Bradley J. Martinson Petersen, Tews & Squires 4800 IDS Center 80 South Eighth Street Minneapolis, Minnesota 55402-2208 • RE: Fridley HRA v. Fitch Your File No. 3561-02 Dear Mr. Martinson: Thank you for your correspondence of September 26, 1991. I take issue with your statement that the potential move of the franchise to the 10,000 Auto Parts site will greatly impact the proceedings in front of the Commissioners. The law is quite clear that through the condemnation process the Fitch's are entitled to the fair market value for the land and any improvements thereon. They are not entitled to compensation for any value related to the ongoing nature of the business. If it is Mr. Fitch's argument that if the 10,000 Auto Parts site is not available for relocation and that therefore he will effectively be put out of business, please be advised that before your representation I had discussed that matter with Mr. Fitch and had informed him that upon review of his franchise agreement there is a huge area in which Mr. Fitch can relocate his Dairy Queen operation and remain within the present structure of his franchise agreement. If American Dairy Queen refuses to let Mr. Fitch relocate within the area designated by the • existing franchise agreement, then Mr. Fitch's dispute is with American Dairy Queen and not the Fridley HRA. As you know, Mr. Fitch is entitled to appropriate relocation costs pursuant to statute. The relocation expense for any location within the existing franchise agreement would entail no more expense than that for the potential 10,000 Auto Parts site. The Fridley HRA does not wish to see this matter unnecessarily delayed. However, the HRA is also willing to work with your client and has shown great patience and deference to him to date. Accordingly, I will be arranging a continuance of the Commissioners Hearing for a period no greater than 30 days subsequent to the Columbia Heights Office Anoka Office 3989 Central Avenue NE Anoka Professional Building Minneapolis,MN 55421 403 Jackson Street (612)788444 Anoka,MN 55303 (612)427-6300 6-S Bradley J. Martinson October 14, 1991 Page Two existing date. My office will coordinate the rescheduling of the meeting and provide you with notice of the new hearing date. Please be advised that if it is your client's intention to seek a continuance in excess of the 30 days as referenced herein, the HRA will oppose such request both informally and through proper responsive documentation to the Court on any motion therefore. Sincerely, BARNA, GUZY & STEFFEN, LTD. James D. Hoeft JDH:jeb cc: Barb Dacy OL IOU irrr FROM BARNA GUZY LAW MPLS. 10. 2. 1991 16319 P. 4 LAW OFFICES 6-C FETE RSEN. TEWS 8 SQUIRES .fo'gssloNAL AasoOIATION 450010S CENTER M 80 SOUTH EIGHTH STREET MINNEAPOUS.MINNESOTA 95402.2208 TELEPHONE(612)344-1600 TELCCOCIER(812)344-1600 RECEIVEDBILADLEY1. MAR.TINSON Septembcr 26 , 1991 SEP271991 James D. Hoeft BMA, Glut & S1EFF I Lill. Barna, Guzy & Steffen, Ltd. 400 Nort21town Financial Plaza 200 Coon Rapids Boulevard Coon Rapids, MN 55433 Re: Fridley IIRA v. Fitch Our File No. 3561-02 Dear Mr. Hoeft: I have withheld responding to your inquiry regarding possible hearing dates awaiting news regarding the financing commitment for the developer on the 10,000 Auto Parts site. As you are aware, Mr. Fitch has been negotiating to move his franchise to the 10 ,000 Auto Parts site. i apologize for not contacting you sooner but I understood that the financing would be finalized in the fairly near future. I understand that two of the Commissioners conducted a viewing of the Fitch' s store on September 26, 1991, and advised Judy Fitch that they would have no difficulty in extending the time for the Commissioners Hearing. Since the potential move of the franchise will greatly impact the proceedings in the front of the poners, I ruest that the until a det rmina ion has been ma i oner' s Hearing be postponed de on the viability of the 10,000 Auto Parts site. I appreciate your cooperation. Very truly yours, PETERSEN, TEWS & SSQUIRES PROFESSIONAL ASSOCIATION /die J4 Martinson BJM/ICap/66 Enclosure cc: Donald A. Fitch I I III 612 780 1777 FROM BARNA GUZY LAID MPLS. 1@. 15. 1991 11:32 P, 2 C�D AGREEMENT TO LEABE 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") . WZTNI.SSHTf s 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 feat, 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 $500.00 612 780 1777 FROM BRRNp GUZV LAW MPLS. 10. 15. 1991 11:32 P. 34 6-E Dollars each during operating months, in advance on the first day of each and every month during the full term of this ruse 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, or replacement of paving, curbs and sidewalks as part of the Mississippi Street improvement project. The cost of operation and maintenance shall include property taxes but not special assessments. 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 612 780 1777 FROM BRRHP GUZY LAW MPLS. 10. 15. 1991 11 :33 P. 4 6-F insurance or is an unreimbursed expense under said coverage. Said repairs and maintenance shall include, but not be limited to, glass breakage, furnace, air-conditioning, plumbing, electrical systems and structural repairs. Lessee shall not be responsible for complete replacement of the furnace or air-conditioning systems. 5. Lessee agrees to indemnify and hold the Lessor harmles8 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 procure/maintain insurance covering all improvements upon the demised premises, as well as all fixtures and equipment within the demised premised. Lessor shall reimburse Lessee for one-half (1/2) of the premium cost for said insurance on the improvements, fixtures and equipment. 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. 612 780 1777 FROM BARNA OOZY LAW MPLS. 10. 15. 1991 11 :33 P. 5 G 7. Lessee to furnish certificate of insurance. Lessee shall furnish to Lessor a certificate ,of insurance showing that his liability insurance policies, as well as the policies covering the improvements, fixtures and equipment 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 thirty (30) days notice 'by the insurance company prior to cancellation, termination or change of such insurance. Such policies or duly 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 Conducts his drive-through business. Lessee shall not be responsible for the costs of such alterations. 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 612 780 1777 'FROM BPRNP GUZY LAW MPLS. 10. 15. 1991 11:34 P. 6 • 6-H 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 tiled, 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 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, walk-in freezer located at the rear exterior of the building, 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 612 780 1777 FROM BARNA GUZY LAW MPL5. 10. 15. 1991 11:34 P. 7 6-I 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. Lessee shall not be responsible for costs associated with a change in the utility services identified above as a result of the Mississippi •Street improvement project. • 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 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 612 780 1777 'FROM BARNP GUZY LAW MPLS. 10. 15. 1991 11:35 P. 8 6-J (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. 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 (9b) 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. 612 780 1777 FROM BARNA GUZY LAUD MPLS. 10. 15. 1991 11:35 P. 9 . 6-K 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 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. 612 780 1777 F•RGM BARNA GUZY LAW MPLS. 10. 15. 1991 11:36 P. 10 6-L • 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 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. 612 780 1777 FROM BARNA GUZY LAW MPLS. 10. 15. 1991 11:37 P. 11 6-M ' • 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: • Such addressee may be changed from time to time by either party by service of notice as above provided. 22. Lessor agrees that through and until the 30th day of November, 1992, it will not release said premises to another tenant whose business is pximarilx the sale of soft-serve ice cream products. This representation shall survive any prior termination of this Lease, unless said termination is due to Lessee's default under any of the terms and conditions contained herein. 23. 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 above written. 612 780 1777 Fe0M 8 RNP GUZY LAW MPLS. 10. 15. 1991 11:37 P. 12 6-N • In the Presence Of: LESSOR: FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY BY: In the Presence Of: LESSEE: BY: STATE OF MINNESOTA ) )58. COUNTY OF ANOKA ) • The foregoing instrument was acknowledged before me this day of 1991. THIS INSTRUMENT WAS DRAFTED BY: BARNA, GUZY & STEFFEN, LTD. 400 Northtown Financial Center • 200 Coon Rapids Boulevard Coon Rapids, MN 55433 ( 12) 780-8500 n 7 • Community Development Department I 1 HOUSING AND REDEVELOPMENT AUTHORITY City of Fridley TO: Housing and Redevelopment Authority Members FROM: William W. Burns, Executive Director of HRA DATE: October 17, 1991 SUBJECT: Statement from Peter J. Patchin As attested to by the attached letter, there are some problems with the statement sent to us by Patchin & Associates, Inc. , in the amount of $1,126.65. The bill reportedly covers time Mr. Patchin spent in a 21 hour meeting with Barbara Dacy and Jim Casserly, as well as for other work Mr. Patchin and Mr. Joe Mako performed on our behalf in late July. After discussing this matter with Barbara and Jim, the HRA and the City have reason to believe that the work that was performed should have been covered by the original contract cost of $5,700. Unless the HRA directs otherwise, I will continue to take this position with Mr. Patchin. Thank you. WWB:rsc • 7-A OKIJ CITY OF FRIDLEY FRIDLEY MUNICIPAL CENTER •643I UNIVERSITY AVE. N.E. FRIDLEY,MN 55432•(6 1 21 57 1-3450•FAX(612)571-1287 October 16, 1991 Mr. Peter J. Patchin PATCHIN & ASSOCIATES, INC. 101 West Burnsville Parkway Suite 200 Burnsville, MN 55337 Dear Mr. Patchin: Thank you for your letter of October 10, 1991, explaining your position regarding your statement for services rendered to the City of Fridley. Since we had our telephone conversation, I have spoken to both Barbara Dacy and Jim Casserly, and they remain of the opinion that the work for which we were billed occurred prior to the delivery of the final draft of the Lake Pointe appraisal. They also share my opinion that it was their understanding that this work was part of the work product that should have been covered by the original contract price. There are several specifics that support our position. They are as follows: 1. During the meeting that was held in Barbara Dacy's office on March 14, 1991, we requested that the appraisal be delivered by May 1, 1991, and that the City receive a draft for discussion prior to the delivery of the final report. 2. We received the appraisal considerably after May 1, 1991, and it was marked "draft. " I believe it was clearly understood that there was to be a final copy that would follow. 3. There is nothing in either the memorandum from Barbara Dacy or the letter from Jim Casserly that would require doing additional computer work. Mr. Casserly simply asked you to consider two different arguments that might be raised to contest your appraisal conclusions. 7_B Mr. Peter J. Patchin October 16, 1991 Page Two Even if you had initiated a computer run using Mr. Casserly's suggested discount rate, it should have only taken a very short period of time. 4. There is nothing in your response to Mr. Casserly that would indicate that either you or members of your firm spent considerable time responding to his concerns. While we object to your bill, we do appreciate the quality of the appraisal you did for us, and hope that we can work amicably with you on future projects. Sincerely, William W. Burns City Manager WWB:rsc 7-c • Peter J. • Patchin & Associates, Inc. Valuation Consultants 101 West Burnsville Parkway, Suite 200, Burnsville,Minnesota 55337 (612) 895-1205 TO: City of Fridley - HRA DATE 10/10/91 6431 University Avenue NE Fridley, MN 55432 INVOICE NO. 9116A Attention: Barbara Dace Re: Market Value Appraisal Development Land - NWC I-694 & TH 65 Fridley, MN 5/21/91 - Appraisal delivered per contract $5,700. 00 6/29/91 - Payment received ( 5,700.00) -0- 7/29/91 - Meeting with City staff; preparation of investment value analysis - work performed 7/26/91 thru 7/31/91 - Peter J. Patchin - 51 hrs. @ $125/hr. 687.50 balesfeA7 Joe Mako - 6; hours @ $65/hr. 422.50 Previous Balance (8/31/91) $1,110. 00 Finance charge for 30 days @ 11% 16.65 2ND REQUEST FOR PAYMENT! TOTAL AMOUNT DUE $1,126.65 THE AMOUNT OF THIS INVOICE IS DUE UPON PRESENTATION. A FINANCE CHARGE OF 1-1/2%PER MONTH,WHICH IS AN ANNUAL PERCENTAGE RATE OF 18%,WILL BE CHARGED ON ALL ACCOUNTS 30 DAYS PAST DUE. 4 Peter J. 7-D • •Patchin & Associates, Inc. Valuation Consultants (612) 895-1205 101 West Burnsville Parkway, Suite 200, Burnsville,Minnesota 55337 FAX (612) 895-1521 March 7, 1991 City of Fridley HRA 6431 University Avenue N.E. Fridley, MN 55432 Attn: Ms. Barbara Dace RE: Valuation Consulting and Appraisal Services Peter J. Patchin & Associates, Inc. 101 W. Burnsville Parkway, Ste. 200 Burnsville, Minnesota 55337 To whom it may concern: This letter is intended to be a memorandum of understanding con- cerning the engagement of Peter J. Patchin & Associates, Inc. for purpose of rendering valuation consultation and/or appraisal reports. It is understood by both parties that the nature of the assignment is as follows: Type of Property: 40 Acre Redevelopment Site Location: Northwest Corner I-694 and State Highway #65 Fridley, Minnesota Function of Appraisal/ Consultation: Sale to developer. Estimated Cost of Services Rendered: $5,700 for appraisal report; plus $125.00 per hour for time sub- sequent to delivery of appraisal report. Terms - Total amount due within 30 days following date of invoice, 1-1/2% per month interest charges will be added to accounts not paid by that time. 7-E 4 Retainer Fee - to be paid in advance of commencement of assignment: None Date: March 7, 1991 Sincerely, PETER J. PATCHIN & ASSOCIATES, INC. By. n ze Peter J. Patchin, MAI, ASA, CRE President PJP:prj Client Firm Name: Ci • Fridl/z- Individual Responsible: .� Signature: Peter J. Patchin& Associates. Inc.