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HRA 05/09/1991 - 29621�� �"` .-•, CITY OF FRIDLEY HOIIBING & REDTsVSLOPMENT AIITHORITY MEETING� MAY 9� 1991 �����������������������..������������..��������_�..�..�..����__���������� CALL TO ORDER• Vice-Chairperson Schnabel called the May 9, 1991, Redevelopment Authority meeting to order at 7:35 p.m. ROLL CALL• Members Present: Members Absent: Housing & Virginia Schnabel, Duane Prairie, John Meyer, Jim McFarland Larry Commers Others Present: William Burns, Executive Director of HRA Barbara Dacy, Community Development Director Virgil Herrick, HRA Attorney Paul Hansen, Accountant Jim Casserly, Consultant George Borer, Attorney for Jai Suh Doug Erickson, Fridley Focus APPROVAL OF APRIL 4. 1991, HOUSING & REDEVELOPMENT AUTHORITY MINUTES• MOTION by Mr. Prairie, seconded by Mr. McFarland, to approve the April 4, 1991, Housing & Redevelopment Authority minutes as written. IIPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPLRSON 3C8NABEL DECLARED THE MOTION CARRIED IINANIMOII3LY. l. CONSIDERATION OF UNIVERSITY AVENUE SIGNALIZATION RE4UEST: Mr. Burns stated MnDOT is proposing to replace the signals at approximately nine University Avenue intersections. Two of them are in the University Avenue Corridor project plan which the HRA had previously defined. The project cost is projected at $680,000, 90� of the project cost is to be covered by Federal Hazard Elimination and Safety Funds. The Fridley share is projected at $10,375. Mr. Burns stated John Flora, Public Works Director, said that this would be an opportunity for the HRA to incorporate the signalization recommendations that were contained in the University Avenue Corridor Plan for two intersections--57th Avenue and 61st Avenue. The original forecast developed by staff and Barton-Aschman at the time the University Avenue � HOIISING & REDEVELOPMENT AIITHORITY MEETING, MAY 9, 1991 PAGE 2 Corridor was formulated was $164,000, $82,000 for each intersection. Mr. Flora said they should get what was in that plan for $40,000 if they incorporate these items in the MnDOT workplan, and he is recommending the HRA give him the authority to expend $40,000 for that purpose. Mr. Burns stated this money will provide the internally illuminated street name signs Mr. Flora has been suggesting for all major city intersections. There are a number of other improvements that are associated with making those two intersections more pedestrian friendly. The HRA's $40,000 would go toward the cost of placing signal standards for improved pedestrian pushbutton controls in the medians and toward the installation of thermo-plastic striping and stop lines at those intersections. Mr. Meyer asked what the intersections would get with the "plain Jane" MnDOT intersection improvement plan. Mr. Burns stated he believed the "plain Jane" MnDOT plan provides only for upgraded signals. In fact, he believed the MnDOT plan will strip the signal standards out of the medians. The MnDOT plan will not provide the internally illuminated street name signs or pedestrian markings as suggested by Mr. ^ Flora. Mr. Meyer asked why MnDOT would want to remove the signal standards. Mr. Burns stated he did not know the answer to that question. Staff will try to get that information. Ms. Dacy stated MnDOT is aware of the Barton-Aschman plans for the entire corridor. In fact, prior to the LRT issue coming up in 1989, the City had actually progressed to the level of receiving a permit from MnDOT. Ms. Schnabel asked if the illuminated street signs will be consistent up and down University Avenue, or will they just be at these two intersections? Ms. Dacy stated illuminated street signs are proposed at the Mississippi intersection and, if approved, at the 57th and 61st Avenues at this time; and then as other intersections come on board to be improved by MnDOT or the HRA corridor plan is implemented, they would be incorporated into those plans. Mr. Hansen stated that the HRA has undesignated funds that are available at this time to cover the $40,000. �' Mr. Meyer stated that if they are looking at these two new � signals on University Avenue, then it makes him think of � HOIISING & REDEVSLOPMENT AIITHORITY MEETING, MAY 9, 1991 PAGE 3 signals at East River Road and Highway 65. Is there a long range plan to illuminate all the major traffic intersections? Mr. Burns stated the long range plan is to provide the illuminated signs at all major intersections of the three major traffic arteries: East River Road, University Avenue, and Highway 65. Ms. Dacy stated the HRA expense would only be on University Avenue, because that is the plan that was authored and approved by the HRA. MOTION by Mr. Prairie, seconded by Mr. Meyer, to authorize the expenditure of $40,000 for the improvement of two traffic intersections on University Avenue at 57th Avenue and 61st Avenue. These improvements will include: 1. Putting the signal poles in the medians rather than at the corners. 2. Upgrading and replacement of pedestrian signals. 3. Installing internally illuminated street signs. � IIPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON SCHNAHEL DECLARED THE MOTION CARRIED IINANIMOIISLY. Mr. Meyer asked if staff could get more information for the next meeting on the signal improvements. Mr. Burns agreed that more information is needed. 2. APPROVE HOUSING 5TUDY OUTLINE: Ms. Dacy stated that at the last HRA meeting, one of staff's recommendations from the interviews they did of other first ring suburbs was to look at conducting a housing study so that the HRA could identify what opportunities there are for successful redevelopment projects in specific areas and what they need to do to maximize those opportunities with the programs that are available. Ms. Dacy stated the study that staff referred to was the Brooklyn Center study, and staff reviewed the Executive Summary of that study at the last meeting. Staff has prepared a detailed outline of the scope of the proposed housing study for the HRA's concurrence or recommendations. It was staff's understanding from the lasts meeting that the HRA did not have a preference as to the consultant, but they did want to review f� the scope of the study and the cost. ,...\ HOUBING & REDEVELOPMTNT AIITHORITY MLETING, MAY 9, 1991 PAGE 4 Ms. Dacy stated the Brooklyn Center study cost about $28,000. The same consulting firna has done a study for the City of Roseville which cost about $12,000-15,000. The difference between the two studies is that the Brooklyn Center study was a neighborhood-by-neighborhood analysis, a very detailed approach. At this time, $25,000 is allocated in the HRA budget for a miscellaneous category for studies as needed. Staff would like them to see if they can accomplish the task in the outline for about $15,000 or less. Mr. Meyer stated $15,000 doesn't seem like very much considering all the things they want to accomplish with this outline. He did not want a consultant to take a lot of "boilerplate" information from other sources and put it into the study for $15, 000. Is $15, 000 enough to do a study of the things they want or are they being general about so many long listed items that they are not hitting at the heart of what they really want to find out with a study? Ms. Dacy agreed that staff does not want some "boilerplate" data that is applied to Fridley. They want something that fits Fridley, and they want to know what the trade area is and what market they should be looking at and what area of the community they should be looking at for different kinds �^� of housing. Ms. Schnabel stated that under "Analysis", perhaps they are being too general, and maybe they should better define what they hope to achieve with this type of survey. What areas of housing are aging, and what types of things should they be looking at for upgrading those areas? Should they be encouraging total redevelopment, or is the housing salvageable? Mr. Burns stated he believed they are trying to take a look at the different economic environments in which Fridley exists--state, regional, and local environments. They want to look at the opportunities and threats, the demographic trends, and other things their economic environments tend to point to, and then, based on those opportunities, determine the opportunities and threats they see in their environment and how they can best make use of the tools that are available to the HRA to address the housing needs in Fridley. Those tools include redevelopment, scattered site housing, housing rehabilitation programs, etc. Mr. Burns stated they know some of the sites they want to redevelop. Why not do a site specific research study? This outline does not necessarily exclude that, and that could be �-'��, done. ,� ,� HOIISING & REDEVELOPMLNT AIITHORITY MEETING, MAY 9. 1991 PAGE 5 Mr. Prairie asked if cities share studies with other cities. He would think some studies from neighboring cities would be helpful. Ms. Dacy stated they do already. The study will the issues of the local affect the Fridley trade have a lot of base data available get more specific and get at some of market and how the regional sales area. Ms. Schnabel stated her neighborhood is 25 years old. It is not deteriorating, but it is aging. There are neighborhoods that are a lot older and are deteriorating more. It is her feeling that these older, deteriorating neighborhoods are the ones they should try to save or help to preserve these areas from deterioration. Mr. Herrick stated there are two concepts: redeveloping an older neighborhood, and individual home upgrading. He thought the latter is more realistic. He stated that the Robbinsdale HRA has had a scattered home rehabilitation program for 20-25 years. If that is one of the things the HRA has in mind, they should contact the City of Robbinsdale for more information. Ms. Dacy stated that is the issue: What tool do they use and what program do they use where? Mr. Burns stated it is more than just using housing incentive programs. The Brooklyn Center study recommends establishing neighborhood organizations, to establish networking, and to use housing inspection and fire inspection and policing programs to create the conditions that protect housing. So, it is more than just focusing on housing. The Brooklyn Center study also shows there are some inappropriate uses. The study would also be aimed at inappropriate land uses as well. Ms. Dacy stated that, regarding Mr. Meyer's concerns about where specifically they should be focusing their redevelopment efforts, III.B under "Analysis" could probably be better stated. Mr. Meyer stated the two items under III.B, "Identify Fridley neighborhoods, and identify strong and weak neighborhoods" are very important. Numbers A and B under IV. Implementation, are very good also. There just seems to be too much generalization, and $15,000-20,000 will not give them too much. He would like them to have a firm idea of what they want the study to do and the specifics and then appropriate the necessary money to do that kind of study. � Mr. McFarland stated he thought they should take a more comprehensive approach so they do not run the risk of having conflicts after all the information is brought together. ^ HOIISING & REDBVELOPMENT AIITHORITY MEETING, MAY 9, 1991 PAGE 6 Staff should work with the consultant to tailor the program to the cost and yet try to get all the benefits they are looking for at the same time. Mr. Meyer stated they should put enough money into the study to give themselves a proper tool that they can do something with, and then do something. Ms. Schnabel agreed. She stated her concern is that they not get a study that is too generalized that they cannot really use. Ms. Dacy stated staff will come back to the June HRA meeting with a more detailed, specific outline. Mr. Burns stated that, between now and the next meeting, staff will work at developing a more focused approach with Maxfield & Associates. 3. CONSIDERATION OF APPROVAL OF EXPENDITURES FOR SHOREWOOD PLAZA REPLAT• Ms. Dacy stated that after the approval of the Shorewood Plaza Plat, the City determined that the plat drawing indicated the �, wrong street radii in order to conform to the Municipal State Aid street standards. While the road was constructed according to MSA standards, the plat was drawn incorrectly. Complicating this further, the developer could not record the original 1988 plat because of the various description and title difficulties pertaining to the property. The City did a special Surveyor's Certificate of Correction in 1988 which enabled the developer to record the plat. At this time, they have to correct this situation. Ms. Dacy stated the City's share of the cost for replatting this area is between $2,000-3,000. The HRA's responsibility would be $400-600. Staff is recommending the HRA authorize the expenditure of no more than $600 toward the replatting costs of Shorewood Plaza. MOTION by Mr. Meyer, seconded by Mr. Prairie, to authorize the expenditure of no more than $600 toward the replatting costs of Shorewood Plaza. IIPON A VOICE VOTE, ALL VOTING AYL, VICE-CHAIRPERSON SCHNABEL DECLARED THE MOTION CARRIED IINANIMOIISLY. 4. CLAIMS AND EXPENSES: � MOTION by Mr. Meyer, seconded by Mr. McFarland, to approve � the expenditures of $1,812.60 and $83.55 to Natural Green, Inc., for Lake Pointe maintenance; $3,756.58 to Greenmasters, � HOIISING & REDEVELOPMENT AIITHORITY MTsETING, MAY 9. 1991 PAGE 7 Inc., for Lake Pointe maintenance; and the check register dated May 2, 1991. IIPON A VOICE VOTE� ALL VOTING AYE� VICE-CHAIRPERSON SCHNAHEL DECLARED THE MOTION CARRIED IINANIMOIISLY. 5. DISCUSSION OF SUH AC4UISITION PROPOSAL: Mr. Burns stated he met with Dr. and Mrs. Suh about two weeks ago. They came in with a proposal to sell the HRA their shopping center property to the HRA for $950,000. They also indicated at that time that the price might be negotiable. Additionally, they suggested that if the HRA did not intend to buy their property that the HRA provide some money for a facelift of their property. Mr. Burns stated he discussed the Suh's proposal with Leon Madsen, City Assessor. He asked Mr. Madsen to comment on the $950, 000 offer and showed Mr. Madsen the different methods the Suhs used for calculating the appraised value. It was Mr. Madsen's general reaction that the $950,000 offer was not a clear bargain for the HRA. Mr. Burns stated the position he had recommended to the HRA � previously was the Suh property was not needed at this time and that they were not interested in beginning negotiations with Dr. Suh, however, the Suhs could make an offer if they chose to do so. It is his recommendation that the HRA continue to abstain from negotiating a purchase with Dr. and Mrs. Suh. He also recommends the HRA not be involved in providing a facelift for the Suh property. He believed that any money that is put into that property now, they will have to eventually pay for later at the time the property is either condemned or acquired through negotiation. Also, it is logical to e�ect that the HRA's investment in property improvements be of a more permanent nature, not a temporary nature. Mr. George Borer, attorney for Dr. and Mrs. Suh, stated that Dr. Suh was not able to attend the meeting. He stated Mr. Burns has accurately relayed the conversations with the Suhs. As he has stated before, it is a fairness issue. They feel 12 years in the district is unfair. They believe the City's actions are damaging their clients and affecting the value of the property. Mr. Burns has clearly indicated to his client that the HRA has no desire to enter into negotiations. However, Mr. Burns said they could make an offer, and they have done that. Mr. Meyer stated he agreed with staff's recommendation. � ,,� HOIISINd & REDEVSLOPMENT AIITHORITY MEETING. MAY 9, 1991 PAGE 8 Ms. Schnabel stated it appears the HRA is in agreement with staff's opinion and recommendation--that the HRA is not interested in purchasing the Suh property and is not interested in offering money toward the improvement of that property at this time. Mr. Borer stated he would like to request that the Suh property be removed from the district. That request has already been formally responded to, but he would like it to be reconsidered. Mr. Herrick stated that some time ago, Mr. Burns asked him to review the request that Mr. Borer made on behalf of his clients. He believed the first question was if he felt the City or the HRA had any liability for a claim by the property owners that they have been adversely affected by the redevelopment plans of the HRA. Based on the research he did, it was his opinion that neither the City nor the HRA has any legal liability pertaining to the Suh property. Mr. Herrick stated the second question was whether or not he felt that the HRA should purchase the property. He answered that he did not feel there was any legal reason for the HRA to purchase the property unless the HRA thought it was ^ economically feasible to do that, and they could make that decision. Mr. Herrick stated the third question had to do with eliminating the Suh property from the redevelopment district. Again, he did not see any legal requirement or practical reason for the HRA to eliminate it from the district. He stated there might be some problem with removing the property from the district, because the property was pledged for outstanding bonds and the bondholders might have some objection that their security was being diminished. Mr. Borer stated that it is a pure fairness issue, and they want the HRA to know that being in the redevelopment district is affecting long term tenants. Mr. Borer thanked the HRA for their time. 6. UPDATE ON DAIRY OUEEN ACOUISITION PROCESS_ Ms. Dacy stated the necessary paperwork has been filed to start the quick-take action. A check in the amount of $125,000 payable to the District Court Administrator was included in the May check register which the HRA approved. Someone from the City Attorney's office will be at the courthouse to participate in the hearing at the end of May to �'� appoint the commissioners and, after that, a hearing date will be set to start the process of evaluating the property. Once � HOII3ING & REDEVELOPMENT AIITHORITY MESTING, MAY 9, 1991 PAGE 9 the check is filed, the HRA will have ownership of the property, subject to the conclusion of the value of the property. Ms. Dacy stated Mr. Fitch contacted her that day. He still wants to keep the door open to negotiate a settlement on this issue. Mr. Fitch is having an appraisal done also, and he wants to negotiate with City staff again in about a month based on the results of that appraisal. Staff has informed him that they will not stop the condemnation process, but there might be an opportunity to pull out of the process. Mr. Herrick stated the City is always willing to negotiate even after the condemnation process has started, so if they can come to an agreement, they will finalize the agreement and dismiss the court action. 7. INFORMATION MEMO REGARDING FRIDLEY TOWN SQUARE PROJECT: Ms. Dacy stated 5cott Ericson has informed her that, while they have the construction financing in place, they are pursuing a standby permanent mortgage commitment from a life insurance company. He has not yet heard the outcome of this request. She will update the HRA at the next meeting. 8. RESPONSE REGARDING INSURANCE OUESTIONS: Mr. Dacy stated at the last meeting, Chairperson Commers had raised some questions about whether or not HRA members are personally liable for decisions made by the HRA. She stated there are two statutes pertaining to commission liability. Essentially, the first statute, Chapter 469.014, says that commissioners are not personally liable "on its contracts, or for torts not committed or directly authorized by them". The Authority is liable in contract or in tort in the same manner as a private corporation. Ms. Dacy stated Chairperson Commers also asked staff to look at nonprofit corporations which they did. Minnesota Statute 317A.257 regarding Nonprofit Corporations states that the officers are not civilly liable if the act did not constitute willful or reckless conduct, was done in good faith, and was within the person's scope of responsibility as a director/officer. Ms. Dacy stated the HRA had also raised the question as to whether there was fire coverage on the Kiffe Automotive site. That property is under the City's umbrella policy; however, if that structure is damaged in any way, the HRA would have to discuss whether or not the structure would be renovated or � replaced. � � HOIISING & REDEVELOPMENT AIITHORITY MEETING, MAY 9, 1991 PA(3L 10 9. UPDATE ON RAPID OIL SITE: Mr. Burns stated he had handed out new information regarding the Rapid Oil site dated May 9, 1991. Ashland Oil and Ashland Oil's attorney, Mr. Brill, are asking that the Council schedule their request for a rezoning and special use permit. In view of the HRA's redevelopment goal for this site, the HRA needs to decide if the City should proceed with the rezoning and special use permitting process or should they proceed to begin condemnation proceedings that would allow the HRA to acquire the land for future redevelopment? Mr. Burns stated he would like to associated with the Rapid Oil site. A. Soil contamination & remediation B. C. present some facts 1. Design approval by the MPCA with modification 2. Potential cost of remediation is $500,000 over 10- 15 years 3. Information on remediation costs at other sites 4. Petro Fund availability - refund for up to 90� of costs for soil remediation and monitoring 5. Likelihood of recovery of our remediation costs through condemnation process Value of new Rapid Oil facility -$200,000-300,000 (Mr. Burns stated Rapid oil intends to build a new quick change oil facility on the site.) Economics of Winfield Project l. Costs to HRA 2. Present value tax increment 3. Revenue from at $1.00/sq. 4. Net value to 5. Cost to City 6. Net value to - $538,120 at 7.5% of available over 25 years = $501,576 sale of land ft. = 86,040 FiRA = 49, 496 of lost LGA = 81,144 HRA/City = ($31,648) Mr. Burns stated that if we increase their costs for the Winfield project by 50% or more, we are very unlikely to achieve a positive cash flow for a future redevelopment project on this site. Regarding additional impact on the future "gateway" project, preliminary estimates indicate a cost of $2-3 million for residentially oriented "gateway" projects. � Mr. Burns stated there are two issues the HRA should consider: ,� AOIISING & REDEVELOPMENT AIITHORITY ME�TING, MAY 9, 1991 PAGE 11 A. Does the City and the HRA see sufficient public purpose for landbanking additional property? They have already acquired large sections of the southwest quadrant area. Additionally, they expect to negotiate a buy-out for the Lake Pointe project some time in 1991 or early 1992. Does the HRA and the City Council want to take on the cost and the political disadvantages of acquiring more land? B. Soil remediation (environmental issue). Assuming that the HRA votes yes on the landbanking issue, knowing the liabilities associated with soil remediation, are they better off not purchasing the property at this time? Landbankinq Issue A. Pros 1. Acquisition of the property will help us qualify the west side of University Avenue as part of a future redevelopment district. 2. Acquisition of the property now will help us take advantage of lower real estate prices in a poor �, market and economy. 3. There is considerable blight along both sides of University Avenue north of the interstate. Acquisition of the Rapid Oil site will help us address those blighted conditions earlier. 4. Acquisition of the Rapid oil property will contribute to our overall goals of redeveloping the University Avenue Corridor. 5. Acquisition of the Rapid Oil property now will help us avoid future costs of acquiring Ashland Oil's reconstructed/brand new facility. (Estimated new value is $250,000 plus relocation costs.) B. Cons 1. Purchasing the Rapid Oil property now may be inconsistent with the HRA's position on purchasing the Suh property. 2. The HRA would incur holding costs: a. 7 1/2% of $230,000 (acquisition price of ^ existing Rapid Oil) _ $17,250 �, ��'1 HOIISING & REDEVELOPMENT AIITHORITY MEETING, MAY 9, 1991 PAGE 12 b. The City would lose taxes from the proposed reconstruction/brand new facility which are approximately $1,875. c. If we do not lease the property, it becomes tax exempt, and the City, school district, and County lose existing tax dollars (about $6,229). d. Since the HRA does not have a redevelopment project on line, its holding costs would incur for an indefinite period of time. 3. There are political implications and risks associated with owning additional land, and there are also additional responsibilities of managing and maintaining the one acre property. 4. I f the HRA c property, the this area. facility, the taxes (about that would be deducts would $12,500). hooses not to purchase the Rapid Oil y could establish a TIF district in As Rapid Oil constructs its new HRA could take advantage of the new $12,000 per year) minus LGA deducts, generated by the new tax value. LGA be very minimal (6 1/4% of 330 of soil Remediation (Environmental =ssue) A. The initial cost of remediation should be reflected in reduced purchase price of the property at the time of condemnation. B. Any additional cost of remediation could be recovered through the Petro Fund. C. Actual cost of remediations willingness of lenders and and not likely to be known. and impact of remediation on investors are still unknown Mr. Burns stated staff is recommending the HRA proceed to acquire the Ashland Oil property through condemnation and that the process begin immediately. However, there are many unknowns. We do not know how much longer a recessionary economy will make any future development difficult. Although we are reasonably assured that most of the environmental costs will be covered, we do not know the extent or duration of these costs. Moreover, we do not know the impact that the presence of soil contamination will have on private sector willingness to invest in projects on this site. `„� Mr. Burns stated staff suggests that the HRA separate the landbanking issue from the environmental issue. In doing so, they must first decide whether or not there is sufficient ,.� HOIISING & REDEVELOPMENT AIIT80RITY MEETING, MAY 9, 1991 PAGE 13 public purpose served by landbanking the Ashland Oil property. The decision hinges on the value of eliminating University Avenue Corridor blight including automotive uses along University Avenue. Mr. Burns stated that regarding the environmental risk, if the HRA feels strongly about the redevelopment of the entrance to Fridley and sees the environmental risk as reasonable, then they should proceed to acquire the property. If they do not feel that redevelopment of the "gateway" area is or should be a high priority in this recessionary economy and that the environmental risk is unreasonable, then they should recommend that the Council proceed to act on the land use applications presented by Ashland Oil. Mr. Prairie stated he moderately disagreed with staff's recommendation to acquire the property through condemnation. A new Rapid Oil facility would improve this area, and the HRA can put their money in other areas where it is needed more. He is concerned about the amount of properties the HRA already owns. Ms. Schnabel stated she is also a little concerned about the properties the HRA owns, probably because there is not a lot r^, of development going on and she did not like to see them tying up their resources on acquisitions like this when there are so many problems associated with the property which would become the HRA's responsibility. She stated the HRA's direction a year ago was to start stockpiling some dollars for future problems they might be faced with at Lake Pointe, and she did not see expending a lot of dollars on the Rapid Oil property as being consistent with that direction. Ms. Schnabel stated another reason for not looking favorably at acquiring the Rapid Oil property ties in with the reasons for the recommendation made by staff to not acquire the Suh property. They have tried for many years to get the Winfield project off the ground, but it has failed. Compounding this are the soil problems which create another whole atmosphere for the HRA to not be interested in developing it. Maybe the HRA is better off letting this small parcel go and letting it be developed privately. Mr. Casserly stated this discussion about whether the HRA should get involved came up several times before. He stated there is now some legislation that will help HRA's deal with contaminated properties. So, putting aside the environmental concerns, the real issue becomes: TnThat is the long term plan for this area and do automotive uses help or hinder that long �,.,, term use? i"� � HOOSING & REDEVELOPMENT AIITHORITY MFETING, MAY 9, 1991 PAGE 14 10. 11. Mr. Meyer stated courts could, in remediation. If the property? if it costs $230,000 in condemnation, the fact, award the HRA $1/2 million for soil Rapid Oil expands, do they have to clean up Mr. Burns stated that is correct. John Flora, Public Works Director, is recommending that the City insist that Rapid Oil at least complete the soil remediation part of the project before a building permit is issued. Mr. Herrick stated certainly someone is going to have to complete the process. He has not seen the MPCA plan, but he had been told it involves some soil removal and then a pumping process with some aeration device, and that pumping process would be a long term process. He thought it would be reasonable that before a building permit is issued that Rapid Oil would have to have at least commenced with the process which has been approved by the MPCA. Mr. Herrick stated the most important part of the legislation mentioned by Mr. Casserly is about the buyer not being the responsible party for soil remediation. The biggest problem he sees is not the liability for the cleanup, but the difficulty in selling the property. Mr. Casserly stated he is pretty positive that this legislation is going to pass. Mr. Herrick stated he is suggesting that the City Council set the public hearing date for June 17, and by that time they will know whether or not the legislation has passed. That will give the HRA one more opportunity to discuss this, and they can then make a decision at the June HRA meeting on whether or not to acquire the property. The HRA members were in agreement with this. RICE PLAZA UPDATE: Mr. Burns stated that regarding the agreement the HRA had with Terrie Mau, she has been unable to get a letter of credit that will cover her unpaid back lease amounts. Mr. Burns stated he has suggested to Jim Kordiak that they get some kind of lien or mortgage on her tanning equipment. Since that time, he has talked to Mr. Herrick, and Mr. Herrick and Mr. Kordiak will be discussing whether or not a chattel mortgage is possible as a substitute for a letter of credit. UPDATE ON CUB FOODS PROJECT: Ms. Dacy stated that staff has asked Jim Casserly to contact the petitioner and get more detailed information on the �,.� HOIISING & REDEVELOPMENT AIITHORITY MEETING, MAY 9, 1991 PAGE 15 proforma. Perhaps the HRA could give staff some direction on how to proceed if the financial information is satisfactory. Mr. Casserly has written a memo dated April 15, 1991, regarding the creation of a new TIF district for the site. His memo outlines three options: 1. The Cub Food site qualifies independently as a 25 year redevelopment TIF district. 2. The Bob's Produce site qualifies independently as a 15 year Renewal and Renovation TIF district; it is unclear whether it qualifies individually as redevelopment. 3. Together the Cub Food site and Bob's Produce site qualify as a 25 year redevelopment TIF district. Ms. Dacy stated Mr. Casserly recommends that a single 25 year redevelopment TIF district be created for both the Cub Foods site and the Bob's Produce site across Osborne Road. He states that if redevelopment activity does not proceed on the Bob's Produce site within the next few years, the parcels involved in this property can be decertified from the district, thereby avoiding the penalties imposed under Minnesota Statutes. If development activity is proposed, then a separate TIF district could be created at that time. Mr. Prairie asked if they should include the parcels behind Cub Foods in the redevelopment TIF district. Ms. Dacy stated that is a good suggestion, and staff will explore that further. The HRA members concurred with staff's recommendation, to create a single 25 year redevelopment TIF district for both the Cub Foods property and the Bob's Produce site. 12. INFORMATION REGARDING BRICKNER DEVELOPMENT PROPOSAL: This was an information item only. 13. UPDATE ON FRIDLEY PLAZA OFFICE BUILDING: Ms. Dacy stated that at the last meeting, Mr. Commers inquired if there was any assistance given to the Fridley Plaza Office ownership in the last 2-3 years. She stated staff found correspondence between Mr. Commers and Dave Newman, former HRA attorney. Apparently, this money that was in escrow with the trustees of the former owners was not available to the HRA. ^ So, that matter was dismissed. �,, HOIISING & REDEVELOPMENT AIITHORITY MEETING, MAY 9, 1991 PAGE 16 Ms. Dacy stated that for the June HRA meeting, staff is anticipating a letter from the new owner of the Fridley Plaza Office building, Dr. Michael Park, as to some type of forgiveness on the second mortgage. Ms. Dacy stated that Fridley Office Plaza owners have accepted the terms made by the HRA at the April meeting regarding the parking lot rental settlement and future parking lot rental payments. ADJOURNMENT• MOTION by Mr. Prairie, seconded by Mr. Meyer, to adjourn the meeting. Upon a voice vote, Vice-Chairperson Schnabel declared the May 9, 1991, Housing & Redevelopment Authority meeting adjourned at 10:05 p.m. Respectfully submitted, yn Saba Recording Secretary �.. �