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HRA 07/09/1992 - 29633�� ^ �"� CITY OF FRIDLEY HOIISING & REDEVELOPMENT AIITHORITY MLETING, JIILY 9, 1992 ��__��»�� John Meyer was appointed to act as chairperson in the absence of the chairperson. CALL TO ORDER• Acting Chairperson Meyer called the July 9, 1992, Housing & Redevelopment Authority minutes to order at 7:35 p.m. ROLL CALL• Members Present: Members Absent: John Meyer, Duane Prairie, Jim McFarland Larry Commers, Virginia Schnabel Others Present: Barbara Dacy, Community Development Paul Hansen, Accountant Jim Casserly, Consultant Jerome Myers, Sheet Metal Connectors Robert Schwartz, 900 - 2nd Ave. S., Doug Erickson, Fridley Focus Director #450 APPROVAL OF MAY 14 1992 HOUSING & REDEVELOPMENT AUTHORITY MINUTES: MOTION by Mr. McFarland, seconded by Mr. Prairie, to approve the May 14, 1992, Housing & Redevelopment Authority minutes as written. IIPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPERSON MEYER DECLARED THE MOTION CARRIED IINANIMOIISLY. 1. CONSIDER CONCEPT APPROVAL OF LOAN AGREEMENT WITH SHEET METAL CONNECTORS: Ms. Dacy stated staff reviewed the various elements of this project at the May 14, 1992, HRA meeting. Sheet Metal Connectors is proposing to build a 100,000 sq. ft. building on the six acre parcel located on the west side of Main Street north of I-694. At that meeting, staff proposed the concept of establishing a tax increment district and a pay-as-you-go assistance plan. The HRA had a lot of concerns about the costs they were incurring to establish the district and wondered if there was another alternative that would still assist the company and be more� efficient for the HRA and the City. Ms. Dacy stated staff has done that and is proposing that the HRA establish this parael in the redevelopment project area but not HOIISINa 8 REDEVELOPMENT AIITHORITY MTG., JIILY 9, 1992 PAGE 2 /"� establish a tax increment district and execute a loan agreement with Sheet Metal Connectors to loan them $200,000 over a ten year period. The first two years the principal and interest payments would not be due. The interest rate would be 50, and the remaining amount would be amortized over the life of the loan. Ms. Dacy stated the advantage to this concept is that the current taxing jurisdictions will still get their tax money. The HRA will also recover its costs in issuing the loan, and they avoid the cost of establishment a tax increment district. Ms. Dacy stated staff is strongly recommending the HRA approve the concept of loaning $200,000 to Sheet Metal Connectors. In terms of the HRA's assistance guidelines, it is right in line with what was discussed for the TIF guidelines. The estimated project value of the proj ect is $2 - 2 1/2 million, so the maximum percent of assistance is 10%. Ms. Dacy stated Mr. Casserly and the petitioner have been working on the terms of the development agreement.. If the HRA approves the concept, the development agreement will be brought back to the HRA for action at the August meeting. Mr. Casserly stated that the HRA has extended loans on projects in ^ the redevelopment area in the past. The next action now is to e�and the project area to inClude this site. The terms of the agreement are very standard. Mr. Jerry Myers, Sheet Metal Connectors, sta.ted the loan will really help them to bring the property up to standard. They . appreciate the HRA giving Sheet Metal Connectors this consideration. MOTION by Mr. Prairie, seconded by Mr. McFarland, to approve the concept of the proposed loan to Sheet Metal Connectors and authorize staff to prepare the development agreement for action at the HRA's August 13, 1992, meeting. IIPON A VOICE VOTE� ALL VOTING AYE� ACTINC3 CBAIRPERBON MEYER DECLARED THE MOTION CARRIED IINANIMOIISLY. 2. CONSIDER RESOLUTION TO APPROVE MODIFICATION TO REDEVELOPMENT PROJECT NO. 1 TO REFLECT INCREASED GEOGRAPHIC AREA AND INCREASED PROJECT COSTS: Ms. Dacy stated the HRA needs to make a motion to approve this resolution to recommend to the City Council to establish this parcel on which Sheet Metal Connectors will be building as part of the redevelopment project area. T�ie resolution is dated June 11, 1992, and the motion needs to reflect that the date should be July /'� 9, 1992. n 80IISING & REDEVELOPMENT AIITHORITY MTG., JIILY 9, 1992 PAdE 3 MOTION by Mr. McFarland, seconded by Mr. Prairie, to approve Resolution No. HRA 2-1992, "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", and that the date of the Resolution be changed to July 9, 1992. IIPON A VOICE VOTE, ALL VOTINa AYE, ACTING CHAIRPERSON MEYER DECLARED THE MOTION CARRIED IINANIMOIIBLY. 3. CONSIDER APPROVAL OF TEMPORARY CONSTRUCTION EASEMENT FOR MISSISSIPPI STREET IMPROVEMENT PROJECT: Ms. Dacy stated Anoka County is requesting a 5 ft. by 270 ft. temporary construction easement.until the end of 1992 in order for the County to complete a detail of the street expansion project.. This easement area is loaated on the north side of the Target office building between Target's north �all and the south side of the sidewalk. Because of the change in elevation after the County adds the additional lane, they will be adding a retaining wall. ,,� Ms. Dacy stated staff is recommending the HRA approve the temporary construction easement and authorize the Executive Director and Chairperson to execute the temporary construction easement document. Ms. Dacy stated she had spoken to someone from Anoka County that day, and the County intends to start the Mississippi Street project in mid to late August. , Mr. Meyer asked if Target has any problems with this temporary easement. Ms. Dacy stated Target is aware of the County's plans and does not have any problems with the temporary easement. The retaining wall has been a part of the construction plans since the plans were originally drawn 4-5 years ago. MOTION by Mr. Prairie, seconded by Mr. McFarland, to approve the temporary construction easement for a 5 ft. by 270 ft. long strip along the south side of Mississippi Street and authorize the Executive Director and Chairperson to execute the temporary construction easement document. IIPON A VOICE VOTE� ALL VOTING AYE� ACTING CHAIRPERSON MEYER DECLARED THE MOTION CARRIED IINANIMOUSLY. �'`� ^ HOIISIATG & REDEVELOPMENT AIITHORITY MTG., JIILY 9, 1992 PAGE 4 4. CONSIDER REVISED REQUEST FOR TIF ASSISTANCE FOR FRIDLEY TOWN SOUARE PROJECT: Ms. Dacy stated that the original project approved by the City for Fridley Town Square was a 28,000 sq. ft. retail building on the 10,000 Auto Parts site and the two single family homes to the east of it. That development included a Walgreen store on the east end of the building, spaces in the middle portion, and then a fast food restaurant on the west end. During the approval process, that fast food restaurant was Burger King. Ms. Dacy stated Scott Ericson now has proposed a revised proposal that essentially eliminates the middle portion of the building. He is proposinq two free-standing buildings, the Walgreen store and the Burger King. Ms. Dacy stated the HRA members had a copy of a memo dated July 1, 1992, from Mr. Burns, Executive Director, in which Mr. Burns recommends the HRA deny the revised proposal because it exceeds the HRA's guidelines and because the value of the project has decreased and the assistance has remained the same. Mr. Casserly stated part of the problem with this project has always been that it is a"redevelopment project" so it doesn't fit � very neatly with some of the guidelines. They might be able to work around that issue; however, what is more fundamental is that the valuation being reduced dramatically cuts down the amount of tax increment even more dramatically because the base stays the same. There are already structures on the site, so the base of the district is a constant. When they reduce the valuation from about $1.7 million down to about $1.1 million, it really reduces the amount of increment to be generated from the project. The HRA could clearly not recover the kind of investment they are being asked to put into the project. The real decision the HRA has to make is whether they want to invest more than they can recover to do the project being proposed. MOTION by Mr. McFarland, seconded by Mr. Prairie, to refuse the request made by Scott Ericson to provide TIF assistance in the amount of $250,000 for a scaled-down Fridley Town Square project. IIPON A VOICE VOTE, ALL DOTING AYE, ACTING CHAIRPERBON MEYER DECLARED THE MOTION CARRIED iJNANIMOIIBLY. 5. CLAIMS AND EXPENSES: a. Check Register (2222-2233) Mr. Hansen stated the current checl� register included in the agenda is incorrect. He passed out the revised check ^, register. HOIIBING & REDEVELOPMENT AIITHORITY MTG., JIILY 9, 1992 PAGE_5 -� . Mr. Hansen stated that at the last meeting, the HRA members had questioned the check for the 3rd Street extension. Staff reviewed the situation and that check, #2219, has been voided. MOTION by Mr. Prairie, seconded by Mr. McFarland, to approve the check register (2222-2233) as amended. IIPON A VOICE VOTE� ALL VOTING AYE, ACTING CBAIRPER80_N MLYER DECLARED THE MOTION CARRIED IINANIMOIISLY. 6. RICE PLAZA UPDATE: Ms. Dacy stated the air conditioning unit in the former T's Hair Plus space completely broke down and was replaced. In the budget, $2,500 was allocated for the entire year for the building, and the air conditioning replacement plus the sign clean-up totals about $2,800. They are slightly over budget, but she did not anticipate any additional costs. Ms. Dacy stated Children's Charm has moved out of the building, but a new tenant, Bargains, Bargains, has moved in. Given that they were able to obtain a new tenant, the HRA continues to break even. If another tenant does leave, staff will schedule a review ,� of this situation as was discussed during the budget process. 7. ONAN EXPANSION UPDATE: Ms. Dacy stated Mr. Burns recently spoke to Mr. Nelson from Onan. Mr. Nelson said Onan has not yet made a decision regarding whether or not Onan will pursue the Fridley site or the Huntsville, Alabama, site. ADJOURNMENT• MOTION by Mr. McFarland, seconded by Mr. Prairie, to adjourn the meeting. Upon a voice vote, all voting aye, Acting Chairperson Meyer declared the motion carried and the July 9, 1992, Housing & Redevelopment Authority meeting adjourned at 8:15 p.m. Respsctfully sub�aitted, v!1, � •'�� Lyn Saba Recording Secretary .-�