HRA 06/11/1992 - 6371�i
HOUSING AND REDEVELOPMENT AUTHORITY
THURSDAY, JUNE Ile, 1992
7:30 P.M.
William Burns
Executive Director of HRA
CITY OF FRIDLEY
A G E N D A
HOUSING & REDEVELOPMENT AUTHORITY MEETING
THURSDAY, JUNE 11, 1992, 7:30 P.M.
Location: Council Chambers
Fridley Municipal Center
6431 University Avenue N.E.
CALL TO ORDER
ROLL CALL
APPROVAL OF MINUTES: May 14, 1992
ACTION ITEMS:
CONSIDER CONCEPT APPROVAL OF LOAN
AGREEMENT WITH SHEET METAL CONNECTORS .. . . . . . . . . . 1 - 1D
CONSIDER RESOLUTION TO APPROVE MODIFICATION TO
REDEVELOPMENT PROJECT NO. 1 TO REFLECT INCREASED
GEOGRAPHIC AREA AND INCREASED PROJECT COSTS . . . . . . . 2 - 2I
CONSIDER APPROVAL OF TEMPORARY CONSTRUCTION
EASEMENT FOR MISSISSIPPI STREET IMPROVEMENT PROJECT . . . 3 - 3D
CLAIMS AND EXPENSES . . . . . . . . . . . . . . . . . . . 4 - 4E
INFORMATION ITEMS:
RICE PLAZA UPDATE . . . . . . . . . . . . . . . . . . . . 5 - 5C
ONAN EXPANSION UPDATE . . . . . . . . . . . . . . . . . . 6 - 6C
OTHER BUSINESS
ADJOURNMENT
CITY OF FRIDLEY
HOUSING & REDEVELOPMENT AUTHORITY MEETING, MAY 14, 1992
CALL TO ORDER:
Chairperson Commers called the May 14, 1992, Housing &
Redevelopment Authority minutes to order at 7 :30 p.m.
ROLL CALL:
Members Present: Larry Commers, Virginia Schnabel, Duane Prairie,
Jim McFarland
Members Absent: John Meyer
Others Present: William Burns, Executive Director of HRA
Barbara Dacy, Community Development Director
Paul Hansen, Accountant
Jim Casserly, Consultant
APPROVAL OF APRIL 9 1992 HOUSING & REDEVELOPMENT AUTHORITY
MINUTES:
MOTION by Mr. Prairie, seconded by Ms. Schnabel, to approve the
April 9, 1992, Housing & Redevelopment Authority minutes as
written.
UPON A VOICE DOTE, ALL VOTING AYE, CHAIRPERSON COMMERS, DECLARED
THE MOTION CARRIED UNANIMOUSLY.
1. CONSIDER APPROVAL OF SATISFACTION OF MORTGAGE ERNEST AND
KATHLEEN BERGSTROM:
MOTION by Mr. McFarland, seconded by Ms. Schnabel, to approve the
Satisfaction of Mortgage for Ernest and Kathleen Bergstrom at 5760
- 3rd Street N.E.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY.
2. CLAIMS AND EXPENSES:
a. Innovative Irrigation (Lake Pointe - Estimate #1)
Mr. Hansen stated this is the first Lake Pointe maintenance
service estimate for the 1992 contract already approved by
the HRA. The first payment is in the amount of $3,706.43.
HOUSING & REDEVELOPMENT AUTHORITY MEETING. MAY 14 - PAGE 2
b. Innovative Irrigation (Lake Pointe)
Mr. Hansen stated this is a separate expense for the removal
of rotten wood chips, dirt, grass, etc. The cost of that
removal was $997.50.
Ms. Schnabel asked how old the wood chips were and why there
was the need to remove them when wood chips usually just
mulch.
Ms. Dacy stated she will ask Jon Thompson of the City's
Engineering Department to give the HRA a report on the reason
for the removal of the wood chips.
MOTION by Mr. Prairie, seconded by Mr. McFarland to approve
the two payments to Innovative Irrigation, one for $3,706.43
and one for $997.50.
UPON A' VOICE VOTE# ALL VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED UNANIMOUSLY.
c. Expenditure Approval List dated May 8, 1992
MOTION by Ms. Schnabel, seconded by Ms. Schnabel, to approve
the Expenditure Approval List dated May 8, 1992, check numbers
2212 -2220.
Ms. Schnabel questioned check_ number 2219 in the amount of
$19,590 for the Liquor Store Parking Lot /3rd Street project.
Mr. Commers stated he did not remember the HRA discussing this
item.
Mr. Burns stated he did not recall that any of this project
was to be charged to the HRA. It was his understanding that
the Liquor Store parking lot was to be charged to the Liquor
Fund, and the 3rd Street extension was to be charged to the
City Street Fund.
Mr. Commers asked staff to find out why $19,590 was charged
to the HRA and report this information back to the HRA.
Mr. Hansen stated that any expenses associated with Rice Creek
Plaza are usually reimbursed from the tenants and are included
in their common area and maintenance charge.
Mr. Commers stated that the Expenditure Approval List only
shows the disbursements. Maybe revenues could be listed at
the bottom of the page.
Mr. Hansen stated he could provide a revenue and expense
report for the HRA.
a
HOUSING & REDEVELOPMENT AUTHORITY MEETING MAY 14 - PAGE 3
Mr. Commers asked staff to put together a format and let the
HRA look at it before it becomes a permanent report. The HRA
should approve the Expenditure Approval List with the
exception of check number 2219.
UPON A VOICE VOTEr ALL VOTING AYE, CHAIRPERSON CONKERS
DECLARED THE EXPENDITURE APPROVAL LIST APPROVED WITH THE
EXCEPTION OF CHECK NUMBER 2219 TO THE CITY OF FRIDLEY FOR THE
LIQUOR PARKING LOT /3RD STREET PROJECT.
3. RICE PLAZA UPDATE:
The HRA members reviewed the Rice Plaza update.
4. STATUS OF ONAN PROJECT:
Mr. Burns stated Onan makes both large industrial generators and
smaller gen sets for tractors and recreational vehicles. The large
industrial generators are made in Fridley. The smaller gen sets
are made in Huntsville, Alabama. Onan's large industrial generator
business is expanding, and they want to make room for additional
research and development personnel and marketing personnel in their
main facility. They are moving the research and development and
marketing people who are associated with the small gen sets into
a different building.
Mr. Burns stated Onan has a couple of choices. They can expand
their existing facility by 75,000 sq. ft. or they can move them
all to Huntsville, Alabama. The City of Fridley would like Onan
to choose the first alternative.
Mr. Burns stated there are 250 jobs at stake, approximately 200
existing jobs and another 45 -50 jobs will be created. Eighty
percent of these jobs are in the $40,000- 50,000 per year salary
range. The project is to be completed in phases, one -half in 1992
and one half in 1993.
Mr. Burns the estimated construction costs are almost $5 million,
and total projects costs, including costs for relocating some
equipment, are estimated at $10,710,000. The construction cost
will yield a tax increment upon completion of about $168,000 per
year. Total tax increment for the remaining life of that district
is $4,119,801. Out of that, the City would obtain 10% or
approximately $411,980 for administrative /program fees. That
leaves available tax increment of $3,707,821.
Mr. Burns stated the competition is the Huntsville /Madison County
Airport Authority (population: 239,000). They are providing a
substantial incentive package to move Onan and those jobs to
Huntsville. The land would be available on a nominal lease basis.
Alabama would abate its 8% sales tax and use tax on construction
W
HOUSING & REDEVELOPMENT AUTHORITY MEETING. MAY 14 - PAGE _4
materials, machinery, and equipment. Alabama would also abate 1000
of the property taxes which are substantially less than Fridley's.
These incentives have been verified by Jim Casserly.
Mr. Burns stated Fridley has also proposed an incentive package.
He believed Fridley will be successful in getting another $250,000
Economic Development Recovery Grant from the State of Minnesota.
Staff is suggesting that the HRA pay up to $250,000 to run a storm
sewer from the site to Rice Creek. The project is to be assessed
to Onan and paid for by Onan from available tax increment. In
addition, staff is suggesting a 78% tax abatement• through
approximately eight tax payable years. Present value of that
abatement is $500,000. A ratio of HRA support to the project costs
is about 7 %. Even with the 78% tax abatement pay -out, the City
would still end up with increment available for other projects
through the life of the district (year 2013) of almost $3 million.
Mr. Burns stated staff is recommending that the HRA give its
conceptual approval to this proposal. Onan will make a decision
in about 6 -8 weeks.
Mr. Prairie asked if Onan has determined whether any contamination
exists in the potential expanded area.
Mr. Burns stated Onan does not appear to be concerned about any
contamination, but he can inquire to make sure.
Ms. Schnabel asked how the Huntsville /Madison County Airport
Authority gets the State of Alabama to agree to an abatement of
state sales tax.
Mr. Casserly stated he believes it is a state policy. It is the
State's incentive to get new construction.
Mr. Casserly stated he has prepared a Comparison of Development
Incentives between Huntsville, Alabama, and Fridley, Minnesota.
He handed these out to the HRA members.
Ms. Schnabel stated that in their incentive package, the ratio of
support is 7% above the guideline of 5% as discussed with the City
Council at the last meeting. The heading of the guidelines says,
"Maximum Amounts ".
Mr. Burns stated the guidelines are intended to be guidelines and
not absolutes.
Ms. Schnabel stated then the heading should be changed to make that
clear.
Mr. Commers stated it is nice to have guidelines, but he still
believed the guidelines are a little too restrictive as far as
flexibility. He stated he certainly supported the Onan proposal.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, MAY 14 - PAGE 5
It is a good project, will keep jobs in Fridley, and Onan is a
major taxpayer in the City.
MOTION by Mr. Prairie, seconded by Mr. McFarland, to approve in
concept the proposed Fridley incentive package to the Onan
Corporation.
Mr. Casserly stated he had prepared a financial analysis of what
happens over eight years. The bottom line is that the City /HRA
keeps a little more than 21% of the available increment for their
programs, and about 78 -79% goes to pay for the special assessment
activities and the revenue note.
Mr. Commers stated he looks at these infrastructure improvements/
storm sewer, etc., as improvements that eventually have to be done
anyway. It's really a cost of the project area and, in all
fairness, not directly related to the Onan project.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON CONNERS DECLARED
THE MOTION CARRIED UNANIMOUSLY.
3. SHEET METAL CONNECTORS PROPOSAL:
Mr. Burns stated Sheet Metal Connectors is currently negotiating
with Glacier Park Property to purchase the 6.5 acre Burlington
Northern site at the west side of Main Street opposite 59th Avenue
N.E.
Mr. Burns stated Sheet Metal Connectors is a 26 year old company
on 19th Avenue in Minneapolis. Sheet Metal Connectors manufactures
sheet metal duct work, fittings, and connectors. Their sales in
1991 were $9.6 million and sales are growing at a rate ` of 10% a
year. The products are distributed nationally to about 1,700
customers.
Mr. Burns stated Sheet Metal Connectors is proposing the
construction of a 100,000 sq. ft. total concrete building with an
estimated cost between $2 1/2 -3 million. The construction will
begin as soon as possible and be completed by the end of 1992.
Mr. Burns stated this is a good project and will benefit Fridley.
There are 60 full time jobs, all union jobs, with a salary range
of $30,000- 50,000 per year. Additional tax value of the new
constructed building will be about $2,000,000. He believed the
City should be attracting strong companies to Fridley, and this is
definitely a strong, growing company. In the last five years,
Sheet Metal Connectorshas doubled the size of its employment.
Mr. Burns stated the project seems to fit on the site and should
create a low volume of truck traffic.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, MAY 14 - PAGE 6
Mr. Burns stated staff believes this is a good project for the SBA
504 Loan Program. The SBA Loan is a fixed interest loan for up to
20 years for the purchase of buildings or the acquisition of
property for new construction. The current rate for SBA loans is
8.84% which covers 400 of the cost of this construction and
acquisition up town amount not to exceed $750,000. The loan is
subordinated to the primary lender, secured by a second mortgage,
and makes lending money to a company a lot more attractive with
less risk.
Mr. Burns stated the Coon Rapids Development Corporation has looked
at Sheet Metal Connectors' financial statements and has discussed
the SBA 504 financing with Jim Casserly. They believe it is a
viable project. The Coon Rapids Development Corporation is the
local development corporation for SBA 504 purposes for Anoka
County.
Mr. Burns stated industrial revenue bond financing is possible,
but not likely.
Mr. Burns stated that in addition to the SBA 504 financing which
does not involve any HRA money, staff is suggesting some tax.
increment financing. Fridley is in competition with Brooklyn Park
for this project. Brooklyn Park has a very. aggressive economic
development program headed by a full time economic development
director.
Mr. Burns stated staff is suggesting the establishment of an
economic development district for this site which is an eight year
district and that they make available $125,000- 175,000 in pay -as-
you-go tax increment, based on the size of the ultimate project
costs and the tax increment eligible costs. A railroad spur needs
to be moved, and there may be some soil correction costs. Staff
is estimating providing tax increment financing for four tax
payable years through 1997.
Mr. Burns stated staff is recommending that the HRA approve this
proposal in concept.
Mr. Commers asked what is the total tax increment?
Mr. Casserly stated the total tax increment per year would be a
little over $100,000.
Mr. Commers asked if they would be able to utilize the excess
increment in any of the other districts, at least during the four
years that this pay -as- you -go is in effect.
Mr. Casserly stated they are only taking out 10% for administrative
expenses. The HRA can terminate the district after four years if
the HRA chooses to do that. However, if they want the district to
run longer, for any new district they create now, only 25% of the
HOUSING A REDEVELOPMENT AUTHORITY MEETING, MAY 14 — PAGE 7
increment can be moved outside the district boundaries. Staff is
looking at this district as an isolated, single parcel project, and
they wouldn't be looking for this particular development to assist
with other districts by moving tax increment.
Mr. Commers stated that if the HRA approves this project, if there
is $100,000 tax increment for four years, they will be paying about
$40,000 per year to Sheet Metal Connectors. Then, there is another
$60,000 in tax increment. Can they take 25% of that $60,000 and
use it in their overall common fund and there are no consequences?
They can always decide whether to terminate the district after the
four years. But, it seems that during the four years with pay -as-
you-go, they can take at least 25% and they should maximize .that.
Mr. Casserly stated the $150,000 is a present value. It actually
takes $240,000 to provide a present value in 1992 of $150,000.
The amount of tax increment, however, is about $400,000. Sixty
thousand dollars is going to the company. Of the remaining
$40,000, about $10,000 is being retained by the HRA (10% for
administrative). That leaves $30,000. It is that $30,000 that
they essentially transfer into the City to cover the City's lost
LGA. Every time the City creates a district like this, it is
penalized about $1.00 for every $3.00 of tax increment. The HRA
still gets the same amount of tax increment, but the City gets a
state aid reduction of about one -third of the amount of increment
that this district generates. In order to compensate the City for
its losses, this $30,000 difference is actually paid to the
company, and the City charges the company a development fee so that
the City comes out even. From the company's perspective, they are
still only getting a net of $150,000.
Mr. Commers stated he believed this substantially increases the
cost of this project in terms of out -of- pocket costs.. The HRA is
virtually taking up another $30,000 that the state is taking away..
It might be more prudent to take $150,000 out of their fund and
give it to the company as some kind of second mortgage or payback.
It is really taking away $400,000 from the taxpayers to really give
the company about $150,000. That• is a big tax increment to
effectively provide $150,000.
Mr. Casserly stated that is correct. This is the
doing it, and they are stuck with it. But, yes,
acquire the land and sell it back to the company for
Mr. Casserly explained the LGA reduction process.
mechanics of
the HRA can
$150,000.
Mr. Casserly stated that in this situation, it is worthwhile to
create the district to break even. There might be other projects
where it will not be worthwhile to do this. Economically, it is
easy to justify creating a district when they have these kinds of
numbers. The HRA has the ability to not create the district.
HOUSING & REDEVELOPMENT AUTHORITY MEETING. MAY 14 -_PAGE 8
Ms. Schnabel stated there seems to be enough concern on the part
of the HRA to ask staff to research this project more to see if
there are any alternatives.
Mr. Casserly stated there are only two alternatives: (1) create
a district and go through the mechanics described; or (2) expand
the project area and use existing funds to assist with the
writedown.
Mr. Commers stated it seems like a good company and the kind of
business they would like to have in Fridley. He liked the SBA
financing and it is a project they probably want in Fridley, but
he is just surprised at the overall cost to do it. He was not
aware of these costs prior to the meeting.
Ms. Schnabel asked Mr. Commers if he would prefer to have staff
look at some other alternatives.
Mr. Commers stated that now that he understands how the process
for creating a district works, they should. probably support the
project this time, but the HRA needs to consider these kinds of
projects more carefully in the future.
Mr. McFarland asked if there is any alternative.
Ms. Schnabel stated they could give the company a grant. How soon
does this proposal need approval?
Mr. Burns stated if the HRA can give conceptual approval at this
meeting, he can review the proposal briefly with the City Council
on May 18, 1992, and begin the public hearing process for setting
up the tax increment district. The company needs to know if the
City is supportive before they go ahead.
Mr. Commers stated he believed the HRA can approve conceptually
that they are willing to give the company some kind of assistance
in the amount of $125,000- 175,000. Can the HRA reserve the right
on how they will grant the assistance?
Mr. McFarland stated if the HRA did give the company an outright
grant, everyone would benefit but the HRA.
Mr. Commers stated he did not think they should give an outright
grant without some way of recapturing some of the cost. They may
also have to investigate ways to recover costs elsewhere in other
districts by not terminating those districts earlier and possibly
extending them one or two years.
MOTION by Ms. Schnabel, seconded by Mr. Prairie, to approve in
concept the proposal by Sheet Metal Connectors.
HOUSING A REDEVELOPMENT AUTHORITY MEETING MAY 14 - PAGE 9
UPON A VOICE VOTEr ALL VOTING AYE,, CHAIRPERSON CONNERS DECLARED
THE MOTION CARRIED UNANIMOUSLY.
6. STATUS OF BOB SCHROER'S PROJECT:
This was an information item.only.
7. CONSIDER AMENDMENT TO DEVELOPMENT CONTRACT WAL -MART, INC.:
Ms. Dacy stated this is an information item. No action is required
by the HRA. It is a Council decision.
8. UPDATE ON REDEVELOPMENT AT 250 OSBORNE ROAD:
This was an information item only.
9. FINAL VERSION OF TIF POLICIES:
Mr. Commers stated these are the amended TIF policies adopted by
the HRA at their last meeting. They are guidelines only.
Ms. Schnabel asked if the HRA wanted the word "Maximum" in the
chart entitled, "III. MAXIMUM AMOUNTS OF DEVELOPER /USER SUBSIDY ".
The HRA and staff agreed to changing the word "Maximum" was changed
to "Recommended ".
Ms. Schnabel stated the HRA members should have a revised copy of
the policies and guidelines to keep in their notebooks.
10. CONSIDERATION OF NORTH METRO MAYOR'S ASSOCIATION INDUSTRIAL
RETENTION PROGRAM:
Mr. Burns stated this program comes from Joe Strauss, Executive
Director of the North Metro Mayor's Association, who also does some
consulting business and is proposing to branch into a new business
Called "Community Resources Partnerships, Inc. ". This company
proposes to combine the efforts of Blaine, Fridley, Brooklyn Park,
and Brooklyn Center and have the four cities conduct an annual
business retention program at the cost of $30,000 each. A staff
of 6 -8 people would visit retail and industrial businesses in all
four cities, compile a comprehensive list of businesses, and do a
very comprehensive survey of these businesses. The idea is to
manage economic development on a four -city basis and by providing
information, they can better match those resources with the
communities.
Mr. Commers asked what benefit it is for Fridley to get Brooklyn
Park and Brooklyn Center's business history.
Mr. Burns stated that one of the goals of this retention program
is that by combining information -from four different cities, they
n . .
HOUSING & REDEVELOPMENT AUTHORITY MEETING, MAY 14 -_PAGE 10
create economic development opportunities for the industries that
lie within the four cities.
Ms. Schnabel questioned the annual fee of $30,000....for how many
years?
Mr. Burns stated that at one time, they were anticipating a $50,000
grant from the State Department of Trade and Economic Development.
Ms. Schnabel stated that under "Membership Benefit ", the proposal
said that a community-was to protect and expand commercial and
industrial tax base. She would like to know what guarantees there
are that this would actually occur. That is a. pretty broad
statement.
Mr. Burns stated he did not think the company can guarantee that.
He believed the company is saying that by being very systematic
about surveying industry and finding out the conditions and needs,
we, as economic development professionals and economic development
organizations, are going to be better able to respond to the
business needs and use our resources to respond to those business
needs.
Mr. McFarland asked why this isn't a City expense as opposed to
the HRA's.
Mr. Burns stated he did not believe the City can afford it, and it
falls appropriately under the topic of economic development and is
more appropriate for the HRA.
Mr. McFarland stated that the City is the one that will benefit
from economic development because of the tax growth.
Ms. Schnabel stated she is just not in favor of this program.
Mr. Prairie stated that, for example, Blaine has more developable
land than Fridley, so this program will benefit the cities
differently.
Mr. Burns stated he is also concerned about giving the other cities
all this information about Fridley businesses and Fridley
businesses' expansion programs when the information Fridley gets
from the other cities may not do them as much good because of the
lack of staff.
Mr. Burns stated he has been involved in business retention work
in the past, and he is convinced that it is good and it does pay
big dividends. But, maybe they should be making a smaller effort.
Mr. Burns stated another concern is the City's and HRA's
priorities. There has been strong interest expressed by the
I • B
HOUSING & REDEVELOPMENT AUTHORITY MEETING MAY 14 - PAGE 11
Council and the HRA to get something started in housing, and maybe
that should be a higher priority than industrial retention.
MOTION by Mr. McFarland that the City of Fridley join the Multi -
Community Business Retention Open Market Expansion Project with
the Cities of Blaine, Brooklyn Center, and Brooklyn Park.
MOTION FAILED FOR LACK OF A SECOND.
11. OTHER BUSINESS:
Mr. Burns stated that he has spoken with Scott Ericson. Mr.
Ericson told him he now has construction financing and is hoping
for permanent financing for the Fridley Town Square project.
ADJOURNMENT:
MOTION by Ms. Schnabel, seconded by Mr. Prairie, to adjourn the
meeting. Upon a voice vote, all voting aye, Chairperson Commers
declared the motion carried and the May 14, 1992, Housing &
Redevelopment Authority meeting adjourned at 9:30 p.m.
Res ectfully s fitted,
Ly Saba
Recording Secretary
a° 0
Community Development Department r
HOUSING AND REDEVELOPMENT AITT omw
DATE: June 4, 1992
City of Fridley
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUWECT: Consideration of Concept Approval of Loan
Agreement with Sheet Metal Connectors
Based on the HRA discussion at the May 14, 1992, meeting, and after
discussion with the City Council, staff is requesting concept
approval from the HRA to enlarge the redevelopment project area to
enable the. HRA to extend a loan to Sheet Metal Connectors to
encourage its location in our community.
Sheet Metal Connectors is proposing to build a 100,000 sq. ft.
building on the west side of Main Street on a 6 acre site opposite
59th Avenue N.E. A tax increment district is not proposed;
however, in order to assist Sheet Metal Connectors, it is necessary
to include the parcel in the redevelopment project area. State
Statues require the same public hearing process to be conducted
when property is added to the redevelopment project area.
Attached is the letter from the Executive Director to the President
of Sheet Metal Connectors outlining the loan package. The proposed
loan amount is $200,000. The money would be advanced to the
company when construction is completed. The interest rate is 50
and would commence one year after the money is advanced. Interest
would be deferred for the second year of the loan; and for years
three through ten, the principle, interest, and deferred interest
would be amortized evenly with semi - annual payments of $16,095.
Given the HRA's concerns regarding the costs to establish a
district, this option not only assists a good company in locating
in Fridley, but also provides the HRA with a payback of its
assistance.
Recommendation
Staff recommends that the HRA approve the concepts of the proposed
loan to Sheet Metal Connectors and authorize staff to prepare the
development agreement for action by the HRA at its July 9, 1992,
meeting.
BD:ls
M -92 -369
i
CI7YOF
FRIDLEY
1 -A
FRIDLEY - MUNICIPAL CENTER • 6431 UNIVERSITY AVE. N.E. FRIDLEY, NIN 55432 • (612) 571 -3450 • FAX (612) 571 -1287
May 29, 1992
Mr. Jerry Meyers, President
Mr. Marty Wetzel, Purchasing Manager
Sheet Metal Connectors, Inc.
112 - 19th Avenue N.E.
Minneapolis, MN 55418
Gentlemen:
Over the last two weeks, we have had an opportunity to review your project with both the
Housing and Redevelopment Authority and the City Council. Members of both bodies
were delighted you might be moving to our community.
To assist your company with the costs of the site acquisition, construction of a new facility,
and moving, the HRA is proposing to lend Sheet Metal Connectors the sum of $200,000.
The terms of the loan are very simple. The money would be extended when the building
is completed. The interest rate would be five percent. (5 %), and interest would not
commence until one year after the money was advanced. (The loan would be interest free
for one year) For the second year of the loan, interest would be deferred. For years
three through ten of the loan, the principal, interest and deferred interest would be
amortized evenly with semi - annual payments of $16,0°5. A schedule is attached which
shows the total payment and the allocation of principal and interest.
This loan would be secured by a second mortgage so that our mortgage would be
subordinated to your construction and permanent lender. We would expect a personal
guarantee by the principal(s) of the corporation. We have tried to make our security
requirements conform to those of a typical lender.
Many companies have used the HRA's loan program. In your instance, the size of the loan
would assist with the land acquisition and most site improvement costs. During your start-
up time, when cash flow is always strained there are no loan payments.
We have also talked with you about the possibilities of using the SBA 504 Loan Program.
We will be happy to assist you in any way possible to take advantage of this program.
1 -B
Mr. Jerry Meyers
Mr. Marty Wetzel
May 29, 1992
Page Two
In addition, we will do everything possible to meet your. construction timetable. In order
to provide the HRA loan, we must expand the project area of the HRA's Redevelopment
Program. We have already authorized our consultants to start preparing the appropriate
documents, and you will find attached a chronology for the expansion of Redevelopment
Project No. 1. As the chronology indicates, the final approval could be secured by June 29,
1992.
In addition, we will need to prepare a Redevelopment Agreement so you will have
assurance regarding the HRA's loan, its timing, security, and repayment. We will be
receiving concept approval for the loan and Redevelopment Agreement at -the June 11,
1992, HRA meeting, and will be confirming the City's approval of the concept at its
June 29, 1992, City Council meeting when it has the public hearing on the expansion of the
Redevelopment Project At the July 9, 1992, HRA meeting, we would expect the final
approval and the authorization to execute all documents.
Thank you for taking the time to look at the opportunities in our City. We look forward
to having you as a member of our business community.
Sincerely,
William W. Burns
Executive Director of the
Fridley Housing and
Redevelopment Authority
WWB:rsc
Enclosures
CITY OF FRIDLEY, MINNESOTA
PROPOSED SHEET METAL CONNECTORS PROJECT
TEN YEAR LOAN SCHEDULE.
'lillil .
:::::: : >-- : -:::«
. ..........
- ---------
200,000
0
d
1211992
0
0
0
200,000
6/1993
200,000
.0
0
0
0
200,000
12/1993
200,000
0
01
0
0
200,000
6/1994
200,000
5,000
0
0
0
205,000
1211994
205,000
5,125
0
0
0
210,125
6/1995
210,125
10,842
5,253
16,095
199,283
12/1995
199,288
11,113
4,982
16,695
188,169
6/1996
188,169
11,3 - 91
4,704
16,095
176,778
1211996.
176,778
11,676
4,419
16,096
165,102
6/1997
165,102
11,968
4,128
16,095
153,135
12/1997
153,135
12,267
3,828
16,095
140,868
6/1998
.140,868
12,574
3,522
16,095
128,294
12/1998
128,294
12,888
3,207
16,095
115,406
6/1999
115,406
13,210
2,885
16,095
102,196
12/1999
102,196
13,540
2,555
16,095
88,6-55
6/2000
88,655
13,879
2,216
16,095
74,776
12/2000
74,776
14,226
1,869
16,095
60,550
6/2001
60,550
14,582
1,514
16,095
45,969
12/2001
45,969
14,946
1,149
16,095
31,023
6/2002
31,023
15,320
776
16,095
15,703
12/2002
15,703
15,703
393
16.095
..... . . . . . . . . .
1.0 12
;...0,:125: -21
01"
Principal:
Interest Rate:
Year 1:
Year 2:
Years 3-10 (Ammortization):
$200,000
5.00%
NO INTEREST
DEFERREDINTEREST
8
I.0
1 -D
CHRONOLOGY FOR THE
EXPANSION OF REDEVELOPMENT PROJECT NO. 1
Week of May 25, 1992: Drafts of appropriate documents sent to
City/HRA staff.
Week of May 31, 1992: Final documents sent to City/HRA staff.
Wednesday, JU 92.. Planning Commission meeting to approve
modification to Redevelopment Project
J�VL.Z' No. 1 to reflect increased geographic area.
Thursday, June 11, 1992: HRA meeting to approve modification to
Redevelopment Project No. 1 to reflect
increased geographic area and increased
project costs.
Wednesday, June 17, 1992: Notice of Public Hearing to be published
in City's official newspaper (not more than
30 days 'or less than 10 days- -this is the
latest notice can be published).
Monday, June 29, 1992: Public hearing held by City Council to
approve modification to Redevelopment
Project No. 1 to reflect increased
geographic area and increased project costs.
Community Development Department 2 ,
D HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: June 4, 1992
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Resolution to Approve Modification to
Redevelopment Project No. 1 to Reflect Increased
Geographic Area and Increased Project Costs
In order to provide assistance to Sheet Metal Connectors, it is
necessary for the HRA to add the parcel to the redevelopment
project area. Attached is a resolution prepared by Jim Casserly
which authorizes the addition of the proposed parcel.
The City Council will conduct a public hearing regarding this issue
on June 29, 1992, and will consider final approval of its
resolution to include the parcel on July 6, 1992. The Planning
Commission will review the matter on June 24, 1992.
Recommendation
Staff recommends that the HRA approve the Resolution to Approve
Modification to Redevelopment Project No. 1 to Reflect Increased
Geographic Area and Increased Project Costs.
BD:ls
M -92 -372
2 -A
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE
CITY OF FRIDLEY
COUNTY OF ANOKA
STATE OF MINNESOTA
RESOLUTION.NO.
A RESOLUTION MODIFYING THE REDEVELOPMENT PLAN FOR REDEVELOPMENT
PROJECT NO..1 TO'REFLECT INCREASED GEOGRAPHIC AREA AND INCREASED-
PROJECT COSTS WITHIN REDEVELOPMENT PROJECT NO. 1 AND MODIFYING
THE TAX INCREMENT FINANCING PLANS FOR TAX INCREMENT FINANCING
DISTRICTS NO. 1 THROUGH NO. 12 TO REFLECT INCREASED PROJECT COSTS
WITHIN REDEVELOPMENT PROJECT NO. 1.
BE IT RESOLVED by the Board of Commissioners (the
"Commissioners ") of the Housing and Redevelopment Authority in
and for the City of Fridley, Minnesota (the "Authority "), as
follows:
Section 1. Recitals.
1.01. It has been proposed that the Authority modify the
Modified Redevelopment Plan for Redevelopment Project No. 1 to
reflect increased project costs and increased geographic area,
pursuant to and in accordance with Minnesota Statutes, Sections
469.001 to 469.047, inclusive, as amended and supplemented from
time to time.
1.02. It has been further proposed that the Authority
modify the Modified Tax Increment Financing Plans for Tax
Increment Financing Districts No. 1 through No. 12 to reflect
increased project costs within Redevelopment Project No, 1,
pursuant to Minnesota Statutes, Section 469.174 through 469.179,
inclusive, as amended and supplemented from time to time.
1.03. The Authority has investigated the facts and has
caused to be prepared with respect thereto,.a Modified
Redevelopment Plan.for Redevelopment Project No. 1 to reflect
increased project costs and increased geographic area and
Modified Tax Increment Financing Plans for Tax Increment
Financing Districts No. 1 through No. 12 to reflect increased
project costs within Redevelopment Project No. 1.
6 1-
2 -B
1.04. The Authority has performed all actions required by
law to be performed prior to the•.approval and adoption of the
Modified Redevelopment Plan for Redevelopment Project No. 1 and
of the Modified Tax Increment Financing Plans for Tax Increment
Financing Districts No. 1 through No. 12.
1.05. The Authority hereby determines that it is necessary
and in the best interests of the City and the Authority at this
time to approve and adopt the.Modified Redevelopment Plan for
Redevelopment Project No. 1 to reflect increased project costs
and increased geographic area and to approve and adopt the
Modified Tax Increment Financing Plans for Tax Increment
Financing Districts No. 1 through No. 12 to reflect increased
project costs within Redevelopment Project No. 1.
Section 2. Findings.
2.01. The Authority hereby finds that the assistance to
be provided through the adoption and the implementation of the
Modified Redevelopment Plan and Modified Tax Increment Financing
Plans are necessary to assure the development and redevelopment
of Redevelopment Project No. 1.
2.02. The Authority hereby finds that the Modified
Redevelopment Plan and Modified Tax Increment Financing Plans.
conform.to the general plan for the development and redevelopment
of the City as a whole.in that they are consistent with the
City's comprehensive plan.
2.03. The Authority finds that the Modified Redevelopment
Plan and Modified Tax Increment Financing Plans afford maximum
Opportunity consistent with the sound needs of the City as a
whole for the development and redevelopment of Redevelopment
Project No. 1 by private enterprise and it is contemplated that
the development and redevelopment thereof will be carried out
pursuant to redevelopment contracts with private developers.
Section 3. Modification of the'Modified Redevelopment Plan
for Redevelopment Proiect No. 1.
3.01. The modification of the Modified Redevelopment Plan
for Redevelopment Project No. 1 to reflect increased project
costs and increased geographic area is hereby approved and
adopted by the Commissioners of the Authority and is forwarded to
the Fridley City Council for public hearing, review and approval.
2
2 -C
Section 4. Modification of the Modified Tax Increment
Financing Plans for Tax Increment Financing Districts No. 1
through No. 12.
4.01. The modifications of the Modified Tax Increment
Financing Plans for Tax Increment Financing Districts No. 1
through No. 12 to reflect increased project costs within
Redevelopment Project No. 1 are hereby approved and adopted by
the Commissioners of the Authority and are forwarded to the
Fridley City Council for public hearing, review and approval.
Section 5. Filing of Plans.
5.01. Upon approval and adoption of the Modified
Redevelopment Plan and the Modified Tax Increment Financing Plans
(collectively the "Plans "), the Authority shall cause said Plans
to be filed with the Commissioner of Revenue.
Adopted by the Board of Commissioners of the Authority this
11th day of June, 1992.
ATTEST:
Executive Director
Chairman
CERTIFICATION
I, William W. Burns, Executive Director of the Housing and
Redevelopment Authority in and for the City of Fridley, County of
Anoka, Minnesota, hereby certify that the foregoing is a true and
correct copy of Resolution No. passed by the Authority
on the 11th day of June, 1992.
William W. Burns, Executive Director
3
2 -D
EXHIBIT I -A -4
DESCRIPTION OF ADDITIONAL PROPERTY
WITHIN REDEVELOPMENT PROJECT NO. 1
AS MODIFIED FEBRUARY 26, 1990
Tax Increment Financing District No. 10
P.I.N.
11- 30 -24 -31 -0002
Tract A of Registered Land Survey #78
AS.MODIFIED JANUARY 6, 1992
Tax Increment Financing District No. 12
P.I.N.
10- 30 -24 -14 -0049
10- 30 -24 -14 -0050 (included in project
area only)
10- 30 -24 -14 -0051
11- 30 -24 -23 -0020
11- 30 -24 -23 -0021
AS MODIFIED JULY 6, 1992
P.I.N.
22- 30 -29 -14 -0003
I -A -4
EXHIBIT I -B -3
BOUNDARY MAP OF 2 =E
REDEVELOPMENT PROJECT NO. 1
AS MODIFIED JULY 6, 1992
20
?, T 3O, R. 2 4
THS rnt K A COarm rom a IECOROS u
IHf� AOV14f 4f fHf _ 1 COWV7Y
OfflCU AfffClHrG :Hf A#LA SUOWf:
fHK ORAWHrG d rO BE W fa OHLY fOR
FR /D L EY RfffRENCf wr..fcsn A:J r.� ccufay
K HOf tfSfOKU!" MR r:f7 MAC'.
CURAM MUM CG:.r.Wj V.
53922
13. , 21 -,
I -B -7
I
C. 114 CORNCR
SCG YP
Professional Fees 15,000
Administrative Fees 72,000
Total $ 587,000
Maximum Estimated
Total Bonded Indebtedness* $ 737,000
*This amount includes capitalized interest in an amount
sufficient to pay interest on the bonds from the date of issue
until. the date of collection of sufficient tax increment revenues
to meet scheduled interest payments when due.
AS MODIFIED JANUARY 6, 1992
TAX INCREMENT FINANCING DISTRICT NO. 12
(MCGLYNN BAKERIES)
Acquisition $1,050,000
Ponding and Drainage 25,000
Professional Fees 15,000
Administrative Fees 950000
Total $1,180,000
Maximum Estimated
Total Bonded Indebtedness* $1,125,000
*This amount includes capitalized interest in an amount
sufficient to pay interest.on the bonds from the date of issue
until the date of collection of sufficient tax increment revenues
to meet scheduled interest payments when due.
AS MODIFIED_JULY 6, 1992
(SHEET METAL CONNECTORS)
Acquisition
Soil Correction, Drainage and Landscaping
Design, Planning, Administrative Fees,
Professional Fees and Contingency
Total
1 - 17
$ '175,000
50,000
25.000
$ 250,000
2 -F
a
2 -G
Subsection 1.10. Public Improvements and Facilities Within
Redevelopment Proiect No. 1. Publicly financed improvements within
Redevelopment Project No. 1 include but are not limited to:
a. The acquisition and sale and /or lease of the parcels
identified in Subsection 1.7. hereof;
b. Soil corrections, including excavation and backfill;
c.. Installation and /or upgrading of utilities and
other public improvements;
d. Development of proper traffic circulation patterns
and improved ingress and egress on public and private
roadways;
e. Funding of the Reserve Program; and.
f. Other authorized uses as provided by State law.
(The following amendment of Subsection 1.10 to the Modified
Redevelopment Plan was approved November 18, 1985.)
Additional public improvement costs.to*be incurred within
Redevelopment Project No. 1 and to be financed by tax increments
derived from all tax increment financing districts within
Redevelopment Project No. 1 are estimated to be:
Land Acquisition
Streets, Intersections, Walkways and Lighting
Parking Facilities
Soil Correction, Drainage and Landscaping
Engineering, Design and Planning,
Legal, Fiscal, Bond Issuance
Expenses and Discount and
Miscellaneous
Contingency
Bond Debt Service Reserves
Capitalized Bond Interest
Total Project Costs
Maximum Bonded Indebtedness
1 18
$3,500,000
4,100,000
1,500,000
2,300,000
1,050,000
300,000
2,612,000
3,138,000
$18,500,000
$18,500,000
2 -H
(The following amendment of Subsection 1.10 hereof was
approved on September 22, 1986.)
Additional public improvement costs to be incurred within
Redevelopment Project No. 1 and to be financed by tax increments
derived from all tax increment financing districts within
Redevelopment Project NO. 1 are estimated to be:
Land Acquisition /Writedown Costs
$ 100,000
(The following amendment of Subsection 1.10 hereof was
approved on December 22, 1986.)
Additional public improvement costs to be incurred within
Redevelopment Project No. 1 and to be financed by tax increments
derived from all tax increment financing.districts within
Redevelopment Project No: 1 are estimated to be:
University Avenue /84th Street Housing Project:
Land Acquisition /Improvement /Writedown Costs $ 850,000
Capitalized .Interest
,
Bond Discount 290,091
Issuance Costs and Contingency 26.579
Total Additional Project Costs
and /or Bonded Indebtedness $1,190,000
Maximum Additional Administrative Costs $ 94,000
Subsection 1.11. Environmental Controls. The proposed
development in Redevelopment Project No.- 1 does not present
significant environmental concerns. All municipal actions, public
improvements and private development shall be carried out in a
manner consistent with existing environmental standards.
Subsection 1.12. Proposed Reuse of Property. The public
improvements needed to bring about development and redevelopment as
set forth in Subsections 1.9. and 1.10. above include acquisition
and sale of land, relocation of existing public improvements,
demolition and site improvements.
The Modified Redevelopment Plan does not contemplate the
acquisition of private property until such time as a private
developer presents an economically feasible program for the reuse
of that property. Proposals for the reuse of private property must
be within the framework of the above cited goals and objectives of
1 - 19
Z . -=-
24
the Authority and the City.
Property by the Authority Acquisition and sale of an
with the Y shall be subject to a binding private
the reusepandhredevelopmentaofnthe 9 contract
corp orating appropriate restrictions regarding
such contract or sale, the Authority property. Before approving
adequate funds will be available to shaall be satisfiedthat �Y
associated with the proposed acquisitionY the public costs
Subsection 1.13. Administration and Mainte
Redevelopment PrQiect No. 1, nance of
Public improvements in 2-f
responsibility Nop-- ation of the
responsibility of the Executive Director of the Authority will be the
Y (the
The Administrator will administer Redevelopment Pro•ec
No. 1 pursuant to the
Act; provided, however provisions of the Housing and Redevelopment
the direction of the Authority. powers may only be exercised at
Administrator pursuant to the above-mentioned k o by the
effective without authorization by the Authoritywers shall be
Subsection 1.14. Rehabilitation.
Redevelopment Project No. 1 Owners of properties their Properties will be encouraged to rehabilitate
codes and ordinances, with s the applicable sin sta state and local
Properties who purchase Y design standards.
Pr 1 from the Authority property within Redevelopment Projects of
may be:
properties as a condition of thersalerof therland. Thee their
will provide such rehabilitation assistance as ma The Authority
from federal, state or -local sources. Y be available
Subsection 1.15. Relocation.
responsibility for providing for relocation
The Authority accepts its
States, Section 469.030. Pursuant to Minnesota
1 - 20
Is
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
DATE: June 4, 1992
City of Fridley
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development.Director
SUBJECT: Temporary Construction Easement for Mississippi
Street Project
Anoka County has requested a 5 ft. by 270 ft. temporary construc-
tion easement between the north side of the Target building and the
south side of Mississippi Street. The temporary easement would be
in effect until December 31, 1993. The easement is for additional
area during the construction of a retaining wall. Enclosed is a
memorandum from the County and maps outlining the area to be
reserved in the easement. The HRA is the fee owner of the property
immediately surrounding the Target building, thus the necessity for
the HRA to approve this easement.
While I do not have the easement document in hand for preparation
of the packet, I do anticipate receiving it from Anoka County by
Thursdays meeting.
Recommendation
Staff recommends that the HRA authorize the Executive Director and
the Chairperson to execute a temporary construction easement for
a 5 ft. by 270 ft. long strip along the south side of Mississippi
Street, such easement to terminate on December 31, 1993.
P.S. Anoka County will be going out to bids for the project in
late June for a possible August 1, 1992, start date.
BD:ls
M -92 -376
b12 (54 3531
06/02/92 15:55 FAX 612 754 3532 ANOHA CO HWY DPT
3 -A
. COUNTY OF ANOKA
Department of Highways
Paul K Ruud, Highway Engineer
1440 BUNKER LAKE BLVD NW, ANDOVER, MINNESOTA 55304 612 - 754 -3520
MEMORANDUM
To: Barbara Dacey June 2,1992
City of Fridley
From: N ichael Kelly
Anoka County
Subject: Project SAP 02- 606-08
Mississippi Street
As we have discussed, the plans for this project include a retaining wall along
the south right -of -way line in front of the Target Building. In order to
construct this wall, it will be necessary to acquire a temporary easement. This
easement will be 5 feet wide by 270 feet long (Sta. 21 +30 to Sta. 24 +00) and
will be needed until December 31, 1993.
Thank you for your assistance in this project.
dar
Affirmative Action / Equal opportunity Employer
r.v
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(D4 QJ04
06/02/92
15:56 FAX•612 754 3532
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Community Development Department
HOUSING AND REDEwLOpm ENT AUTHORITY
City of Fridley
DATE: June 4, 1992
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUWECT: Miscellaneous Items Pertaining to Claims and
Expenses
1. At the May 14, 1992, HRA meeting, the HRA questioned the
expenditure for replacement of wood chips at various spots at
the Lake Pointe site. I spoke with Jon Thompson in the
Engineering Department, and he stated that the wood chips were
originally installed in 1986 and had deteriorated severely and
were in very poor condition. Planning Assistant, Michele
McPherson, who has a degree in Landscape Architecture, advised
me that wood chips, when deteriorated, are a prime breeding
ground for weeds.
2. At the May 14, 1992, meeting the HRA also inquired about the
charge to the HRA for the 3rd Street extension through the
southwest quadrant and the parking lot. The charge to the HRA
was not reviewed by myself or you as I understand it and was
charged in error. The check has been cancelled, and the City
will pay for those costs.
3. In this month's Claims and Expenses is a bill for $2,400 for
irrigation repair. Apparently during the winter, there were
several sprinkler heads that were damaged because of snow-
plowing and stacking of snow along the curbs. The Public
Works Director has since advised his staff to move the snow
elsewhere.
The HRA budgeted $10,000 for irrigation repair so we are well
within budget.
BD:ls
M -92 -379
4
CITY OF FRIDLEY
,4 -A
Attachment B
Budget Detail Form
Submitted by Barbara Dacy /Paul Hansen Budget Year 1992
Department
COMMUNITY DEVELOPMENT
Account
No.
42400 (Services Contracted:
Non — Professional
Dollar
Amount
Requested
Inc./Dec.
Over Last Year
20,938
Total Budget
Requested
76,238
Courier service to chair, clients, consultants
Lake Pointe maintenance service
Lake Pointe treeffertilizer maintenance
Microfiche (for Finance Department)
Micro computer charge
Mini computer
Mini computer hardware and software (1 yr only)
Sprinkler maintenance
Rice Plaza maintenance
Rice Plaza tenant space refinish
Appraisal fees
Total
Division
HRA
City Manager's. I Council's
Recommendation Decision
76,238
-g A
250
30,000
as,9y s'
7,500
150
703
1,630
14,505
10,000
4,000
2,500
5,000
76,238
x 4111
t r W `
Wit' x
�4
Hittinathe roof oOer w ers com
CONSIDER THE workers' com-
pensation costs of Steve Karel,
who, with his brother, owns the
Garlock- French Roofing Com-
pany in Minneapolis.
Roofing a house is not the
safest occupation, as Karel would
be the first to admit His com-
pany, however, has implemented
safety measures, both to protect 1
workers and in hopes of reducing
its insurance premiums for work-
ers' comp. In the latest three full
years, workers at the small com-
pany — which employs up to 45
people — filed claims of only
$82,000.
Has the three -year focus on
safety reduced Garlock -Frenc
premiums? Well, no, Karel ys.
His insurer explained to s agent
that, because it to money in
Minnesota, it wo d have to raise
Garlock -Fre 's rates. Over the
same ear period, Garlock -
French s insurance premiums
amounted to $482,000. Says
Karel: " I can say with some cer-
my at was more than this
b made [in profits] forthose
Bu surely another insurer
would appy to have a safety-
conscious mpany like Garlock -
French as a ient? Not so, Karel
says. The c pany's agent
couldn't find an er insurer that
would write work ' comp cov-
erage for roofers in innesota.
Garlock- French's orkers'
compensation premium, before
the rate increase, was 54.23 cents
4.8
per dollar of a roofer's wages.
Karel's only alternative is the state
pool, where the published rate for
next year will be about 73 cents
perdollarin wages. InWisconsin,
Karel discovered, the published
rate for next year is 35.84 cents
per dollar.
The high cost of workers' comp
is a big. enough problem for
Garlock- French, but it is com-
pounded when many of the
company's competitors sidestep
that cost altogether. Karel says
22 M A Y 1 9 9 2
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04
TO: FRIDLEY H.R.A.
FROM: CITY OF FRIDLEY
RE: BILLING FOR OPERATING EXPENSES FOR MAY, 1992
AND MAY 1992 ADMINISTRATIVE EXPENSES
ADMINISTRATIVE BILLING:
MAY ADMINISTRATIVE PERSONAL SERVICES 13,631.00
MAY ADMINISTRATIVE OVERHEAD 252.25
TOTAL ADMINISTRATIVE BILLING 13,883.25
MAY OPERATING EXPENSES:
FINANCIAL STATEMENT COVERS
8.31
RESOLUTION BOOK
98.91
HRA GUIDEBOOK - PHOTOS
72.26
MARCH MANAGEMENT FEE - RICE PLAZA
173.29
PRINTING - ENVELOPES, REPORT COVERS
65.15
TIF MAPS, TRANSPARENCIES
179.80
APRIL MANAGEMENT FEE - RICE PLAZA
477.56
MINNEGASCO - RICE PLAZA
7.52
NSP - RICE PLAZA
243.05
NSP - RICE PLAZA
13.98
MINNEGASCO -RICE PLAZA
29.98
NSP - RICE PLAZA
65.11
MINNEGASCO - RICE PLAZA
10.35
SIGN REPAIRS -RICE PLAZA
891.00
FEBRUARY GARBAGE HAULING
-89.00
BID NOTICE - LAKE POINTE MAINTENANCE
162.18
NSP - LAKE POINTE
36.00
YEAR -END COPIER ALLOCATION
64.30
TOTAL OPERATING EXPENSES FOR MAY 1 2,687.75
TOTAL EXPENDITURES 16,571.00
p - - J
Community Development Department
D HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: June 4, 1992
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Rice Plaza Issues
I authorized replacement of the air conditioning unit in the former
T's Hair Plus space at Rice Plaza. According to Kordiak, it had
completely broken down (see attached letter). Kordiak advised me
that the HRA is responsible for it, because it was a complete
replacement of the unit. The cost for the replacement was about
$1,400. This expense, coupled with the sign repairs that were
completed earlier this year, totals approximately $2,800.
As you recall, the HRA had budgeted about $2,500 for ongoing
maintenance repairs at Rice Plaza. I don't anticipate any more
expenses for the remainder of the year; however, if expenses do
arise, I will notify the HRA prior to expenditure.
Children's Charm has vacated the building; however, because we did
obtain a new tenant (Bargains, Bargains), we will still be able to
break even this year. Again, as we have discussed with the HRA
previously, if another tenant leaves, we will have to re- evaluate
the Rice Plaza project.
BD:ls
M -92 -375
� The
0 M
n n n Kordlak 3948 Central Ave. N.E., Minneapolis, N 55421
n n n � Company 788'9651 781 -9375
n Real Estate n Property Management n Appraisals n Income Tax Service
June 2, 1992
B.arb Dacy
Community Development Director
Fridley Municipal Center
6431 University Avenue N.E.
Fridley, Minn. 55432
Dear Barb,
On 4/1/92 we signed a lease with Lynn Cochran of Bargains- Bargains at a rate of $710.00 per
month. In the lease I did warrant that the unit would have operating heating and air conditioning
systems upon occupancy. I was aware that there may be a problem as I had been informed by the
prior tenant Terri Mau that the air conditioning unit required considerable costly repair to
keep it running.
Shortly after her tenancy Lynn informed me that the air conditioning did not work. I sent Kevin
Hanson of Sharp Heating to inspect the unit and he provided the attached report. The compressor
(the most vital part of an air conditioner) was old, damaged and costly to replace. Even after
replacement Kevin advised that the remaining operating systems were equally old and likely to
break down. The cost of combined repairs could be approximately the cost of a new system.
Upon Kevins advise and based upon my past experience I did recommend that the unit be
replaced. While such an expense is unfortunate I am confident that it was the best decision. I
would be happy to offer any further information if you desire it.
ncerely,
im Kordiak
SERVICE ORDEJ
S IJARP - fWAC
HEATING AND AIR CONDITIONING, INC. 9wol 5-B
4854 Central Avenue N.E. Job Number
Minneapolis, Minnesota 55421
(612) 572-0459 ❑ C.O.D. ❑ CHARGE 1-1 NO CHARGE
Joh site: 246 MissiLzc-ippj St. MA -0
MNI 5-5-;3? Bargains.... MODE. "out.
See: I.ynn
504'k N,Aliif.
aim al k
-nl-,rall Avenue N!
WiaNUSEO
Polumbia I-IN
ci
11 A.M.
c 11 P.M.
III o r d I a
Aci,3,c AC SYS tem at abcvve acij .
t i-
' nli"10r-fix--if major problemS
ITY, L •UNIT PRICE I AMOUNT
LINT
Hf. I Hit. 1, HAN I R. LEIS
FILTERS x x
FILTERS x
BELTS
DESCRIPTION OF WORK PERFORMED
I I I
I RECOMMENDATIONS
A"'
All, 14, 1
TOTAL MATERIALS
WORK PERFORMED
LkIl
CONDENSING -UNIT
CONO'SATE DRAINS
HRS. LABOR
"V'"D
YA-
A,
CLEANED
I '
MAIN DNA,&
A
e-2
tUCU"
7-1ANE11
VAP VALVE
N.Rhik%
ADJuS TE 0
TOTAL LABOR
LIMITE D WARRANTY: All materials.
TERMS
and equipment are Warranted by the manu-
EIP
CLEARW
facturers' or suppliers, written warranty only. All
CAP I.,H,
AUI.,?,U
PA,Mfii
NEAR
f`A&
cared in wrililig• The above flarlied company
IN , D-,
makes no other Watidillies. e,,pi"s at Implied.
FURN. OR FAN COIL
,6 Of
hidt- 'a's of Setters e xnanse Any dant av
to make any such wallatilres an behalf of above
M '-� A,, III- .
JAU I Cm
AD—b I, L, m,;
......
WARRANTY
/*
-k
0 SERVICE CONTRACT
7-7 -V
K KA,tt,
u",
Nth 11 API
(.APAL. t LIP 4W
REPLACED RUN C. 1A
.11 �1 CAP ACITUR .A ,
I I I
I RECOMMENDATIONS
A"'
All, 14, 1
TOTAL MATERIALS
(rfLEk U
LkIl
RA
. •
A
kt'L A, IU
HRS. LABOR
RATE AMOUNT
YA-
A,
EVAPORATOR COIL
A
All
VA-I,
7-1ANE11
VAP VALVE
N.Rhik%
ADJuS TE 0
TOTAL LABOR
LIMITE D WARRANTY: All materials.
TERMS
and equipment are Warranted by the manu-
REPAIRED
CLEARW
facturers' or suppliers, written warranty only. All
CAP I.,H,
AUI.,?,U
labor performed by the above f1ditled company
is warranted for 30 days of as otherwise indt-
cared in wrililig• The above flarlied company
makes no other Watidillies. e,,pi"s at Implied.
IWIL-d abOV0 WhICh hdb b0ch St'llslaclu-11V COMPIelltd, I aspew that
and its agents at technicians We IWI dUlhorwed
hidt- 'a's of Setters e xnanse Any dant av
to make any such wallatilres an behalf of above
...... I"MV M se1je,
named company,
-L]
......
WARRANTY
/*
0 SERVICE CONTRACT
7-7 -V
Nth 11 API
(.APAL. t LIP 4W
REPLACED RUN C. 1A
.11 �1 CAP ACITUR .A ,
NI PI ACID K-
PAIRIL, -,Hf, PUMPS)
A' 1111 I,nI NWAII.l
FILTERS
WAMI.) t 6
TOTAL SUMMARY
TOTAL
MATERIALS
TOTAL
OTAL
LABOR
TRAVEL
CHARGE
TAX
TOTAL
LA,
A"'
All, 14, 1
.ip' A,
(rfLEk U
LkIl
RA
. •
A
kt'L A, IU
NtPA, L
(LIMPRish
YA-
A,
EVAPORATOR COIL
ft-,Ai,:,
VA-I,
7-1ANE11
VAP VALVE
N.Rhik%
ADJuS TE 0
EXP VALVE
Of
I REPLACED
I CAP I uRE
REPAIRED
CLEARW
CAP I.,H,
AUI.,?,U
.f.—tio
THERMOSTAT
0*- L WIN
7U 1 1-1
ELECT. HTR.
-------
CLG TOWER
r--I
"tPLACkU LINK
CL.A,,E,
NI PI ACID K-
PAIRIL, -,Hf, PUMPS)
A' 1111 I,nI NWAII.l
FILTERS
WAMI.) t 6
TOTAL SUMMARY
TOTAL
MATERIALS
TOTAL
OTAL
LABOR
TRAVEL
CHARGE
TAX
TOTAL
V.
5 -C
03- Jun -92
RICE PLAZA 1992 RENT
CHILDREN CHARM
250.00
100.00
388.39
0.00
738.39
HONG KONG KITCHEN
877.02
791.83
789.84
800.90
786.32
4,045.91
MY SISTER'S CLOSET
672.30
672.30
600.00
600.00
600:00
3,144.60
CINNAMON SKIN TAN
5,600.00
900.00
900.00
900.00
900.00
9'0200.00
BARGAINS BARGAINS
0.00
0.00
0.00
710.00
355.00
1,065.00
RAPIT PRINTING
1,076.00
1,076.00
1,076.00
2,152.00
0.00
5,380.00
TOTAL
8,225.32
3,690.13
1 3,465.84
1 5,551.29
1 2,641.32
23,573.90
YEAR TO DATE
8,225.32.
111,915.45
115,381.29
20,932.58
23,573.90
23,573.90
DAIRY QUEEN 1,500.00. 500.00 2,000.00
a�
�1
r E::7 Community Development Department
D HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: June 4, 1992
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Status of Onan Corporation Expansion
The City Council agreed to the $1 million assistance package to
offer Onan for its research, development, and office facility
expansion. At the time of this memorandum, we have not heard from
Onan regarding whether or not they will pursue the Fridley site or
the Huntsville, Alabama, site. We will give the HRA a•verbal
report at Thursday's meeting.
BD:ls
M -92 -377
FRIDLEY MUNICIPAL CENTER - 6431 UNIVERSITY AVE. N.E. FRIDLEY. MN 55432 - (612) 571-3450, FAX (612) 571 -1287
June 1, 1992
Mr. Woody Nelson
Onan Corporation
1400 - 73rd Avenue N.E.
Minneapolis, MN 55432
Dear -Woody:
In our last telephone conversation, I explained that the City Council and the HRA have
provided a concept approval to provide Onan with $1 million of assistance for its research,
development and office facility expansion. Since we have talked about different proposals
and various mechanisms for providing the assistance, I thought it best to send you a letter
outlining this proposal. The $1 million of assistance would be provided in the following
manner:
1. $250,000 would be secured by the City from the State as an Economic
Development Recovery Grant which the State has indicated on several
occasions that it will make available. The State would prefer that we loan
the money and develop a system of repayments. However; we have told the
State that we need the assistance in the form of a grant. The State's primary
interest is securing increased employment. If the new facility is vacated or
Onan's level of employment were not to increase, the State would
undoubtedly want to recover its grant. We had similar provisions with
McGlynn Bakeries, and these requirements are not onerous.
2. $250,000 would be made available to pay for stormwater management. These
funds would be available as needed to make the improvements. The City
would 'most likely go through the normal assessment process to assess the
Onan property for these improvements; however, the improvements would
actually be paid from the tax increment that is generated from the new
construction. Onan should have no repayment obligation.
3. $500,000 would be paid in semi - annual installments plus interest at 9 percent
per annum. The total payments amount to $760,640 which would have a
value of $500,000. Interest on the $500,000 would start from the completion
of the building which we assume would be in 1993. The HIZA would issue
a tax increment limited revenue note to Onan with the above terms.
- .:
6 -B
Mr. Woody Nelson
June 1, 1992
Page Two
Attached is a schedule which shows the assumptions and calculations we have
used in structuring the assistance package. The columns labeled "Revenue
Note, "Semi - Annual Payment," and "Semi- Annual PV" illustrate the amounts
referenced above. The bottom half of the page shows the various
assumptions used in calculating the estimated tax increment.
Since both the Council and the HRA have provided concept approval to this proposal, we
only need your assurance that the project will go forward so we can prepare the necessary
documentation. If you find this proposal acceptable, we can move expeditiously since we
do not have to publish any legal notices. The approval of a Redevelopment Contract which
will contain the provisions affecting the HRA can be approved at its meeting in July or
August. Those provisions dealing with the Economic Development Recovery Grant are
approved by the City Council which can be done a any one of its regular meetings.
We have spent considerable time trying to put this package together. The $1 million value
of this- assistance is approximately 25 percent of the $4 million estimated market valuation
for property tax purposes. I believe this percentage of assistance to. value is greater than
any other project we have done in the HRXs history. Your continued presence and
expansion is important to our city, and so we have worked hard to assemble the best
possible package.
We look forward to hearing from you.
Sincerely,
William W. Burns
City Manager -
WWB:rsc
Enclosure
cc: Gary L. Brisbin, Esq.
Cdr ?
CITY OF FRIDLEY
PROPOSED ONAN REDEVELOPMENT
6 -C
>:<:.:;:.»::;:>::>::>:<:
:::::..:..............._. .........................
75.000
:.::.:
t.. m...at..f......a..a amen
.:...... :. v
50.00%
1993
100.00%
em
�...�
;err S�..: :. ..
_-.. n.n _.
em :..::. niRn
...:. tt...:::.:.ncx..
m..:.:...::
:.f.....9.:...:.:.:.ncremer>t..
186,589
meat ;.;:..::::::...P
Y ..
/_:::.:.,..::
Ym . ........
... ...............................
::..:
:< :
Cu U
m.,,1aUe
6/1992
211992
6/1993
2/1993
6/1994
44,127
2,206
41,921
11.900
11,163
25,945
23,759
4,076
4,076
211994
44.127
2,206
41.921
11.900
10.811
25,945
22,736
4;076
8,151
611995
88,254
4,413
83,841
22.600
19,886
50.625
42.452
10.616
18.768
211995
88,254
4,413
83,841
22,600
19,260
50.625
40,624
10,616
29,384
6/1996
90,019
4,501
• 85,518
22,600
18.654
50,625
38,875
12.293
41,677
211996
90,019
4,501
851518
22.600
18.067
50.625
37,201
12,293
53.971
6/1997
91.820
4,591
87,229
22,600
17,498
50,625
35.599
14,004
67,974
211997
91.820
4.591
87,229
22.600
16,947
50.625
34.066
14.004
81.978
611998
93,656
4,683
88,973
22,600
16,414
50,625
32,599
15,748
97.726
211998
93,656,
4,683
88,973
22,600-
15,897
50.625
31,195
15,748
113,474
6/1999
95,529
4,776
90.753
22.600
15.397
50.625
29,852
17,528
131,002
211999
- 95,529
4,776
90,753
22,600
14,912
50,625
28,566
17.528
148,530
6/2000
97,440
4,872
92.568
22,600
14,443
50,625
27.336
19,343
167,872
212000
97,440
4,872
92,568
22,600
13,988
50,625
26,159
19,343
187.215
612001
99.388
4,969
94,419
22,600
13,548
50,625
25,033
21.194
208,409
212001
99,388
4,969
94,419
22,600
13.121
50,625 1
23,955 1
21,1941
229.603
. ::::.•;
;..:: ;.::
:;• >:: ;:;- ..:; .....:::::::.
.:.....::
... ...........
................x ...... ..................fit...........
Original Tax Capacity.
Estimated Market Value:
Square Footage
Construction/Square Foot:
Construction Completion:
Estimated Tax Capacity.
Certified Tax Capacity Rate:
Estimated Tax Increment:
Current Tax Capacity Rate:
Estimated Total Taxes:
Estimated Total Taxes/SF:
Administrative/Program Expenses:
Inflation (6/96):
Stormwater Management Program:
Principal:
Rate:
Revenue Note:
Principal:
Rate:
0
80.00%
3,960,000.
75.000
66.00
1992
50.00%
1993
100.00%
3.00%
4.60% 180,560
1989
0.97756
1995
176,508
1992
1.03339
1995
186,589
2.49
5.00%
2.00%
250,005
6.50%
500,004
9.00%