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HRA 10/14/1993 - 6337HOUSING AND REDEVELOPMENT AUTHORITY MEETING THURSDAY, OCTOBER 14,r 1993 7:30 P.M. PUBLIC COPY CITY OF FRIDLEY A G E N D A HOUSING & REDEVELOPMENT AUTHORITY MEETING THURSDAY, OCTOBER 14, 1993, 7:30 P.M. Location: Council Chambers Fridley Municipal Center CALL TO ORDER ROLL CALL APPROVAL OF MINUTES: September 9, 1993 ACTION ITEMS: CONSIDER RESOLUTION AUTHORIZING A MODIFICATION TO THE REDEVELOPMENT_ PLAN, ECO FINISHING, INC . . . . . . . . . . . . . . . . CONSIDER AGREEMENT, FRIDLEY PLAZA OFFICE BUILDING PARKING . . . . . . . . . . . . . . . . 2.1 -2.30 CONSIDER REQUEST FOR TIF ASSISTANCE, WESTMINSTER CORPORATION . . . . . . . . . . . . . . . . 3.1 -3.8 REVIEW SCATTERED SITE ACQUISITION POLICY AND AUTHORIZE ACQUISITION NEGOTIATIONS FOR 560 HUGO STREET. . . . . . . . . . . . 4.1 -4.6 LAKE POINTE MARKETING STATUS. . . . . . . . . . . . . 5.1 -5.4 CLAIMS AND EXPENSES . . . . . . . . . . . . . . . . . . 6.1 -6.3 INFORMATION ITEMS: RICE PLAZA UPDATE . . . . . . . . . . . . . . . . . . . 7.1 -7.2 UPDATE ON SALES TAX IMPACT . . . . . . . . . . . . . . . 8.1 DISCUSS OPTION PROPERTIES AT LAKE POINTE. . . . . . . . 9.1 -9.2 OTHER BUSINESS ADJOURNMENT 1 CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 9, 1993 CALL TO ORDER: Chairperson Commers called the September 9, 1993, Housing & Redevelopment Authority minutes to order at 7:38 p.m. ROLL CALL: Members Present: Larry Commers, Virginia Schnabel, John Meyer, Duane Prairie, Jim McFarland Members Absent: None Others Present: Barbara Dacy, Community Development Director Rick Pribyl, Finance Director Craig Ellestad, Accountant Jim Casserly, Consultant Robert Welle, Reliance Real Estate Services, Inc. Jai and Shin Jae Suh APPROVAL OF JULY 8. 1993. HOUSING & REDEVELOPMENT AUTHORITY MINUTES• MOTION by Ms. Schnabel, seconded by Mr. Meyer, to approve the July 8, 1993, Housing & Redevelopment Authority minutes as written. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 1. CONSIDER REQUEST TO ACQUIRE SUH PROPERTY: Ms. Dacy stated Mr. Welle from Reliance Real Estate Services, Inc., is at the meeting on behalf of the property owners of 6440 University Avenue N.E. The property owners, Dr. and Mrs. Suh, are also at the meeting. Dr. and Mrs. Suh are requesting that the HRA acquire their property at this time. Ms. Dacy stated the Suh's request was presented to the HRA at the May 9, 1991, HRA meeting. A copy of those minutes were included in the agenda packet. Staff continues the same recommendation presented at the May 9, 1991, meeting, and that is that the HRA not begin negotiations with the Suhs at this time. Staff believes any acquisition at this time would be premature. As the HRA is aware, staff will be starting an analysis regarding the development options of the southwest quadrant within the next 6 -8 month time - frame. Mr. Robert Welle stated he is a licensed real estate sales person with Reliance Real Estate Services, Inc. He has been in retail w HOUSING & REDEVELOPMENT AUTHORITY MEETING. SEPT. 9. 1993 - PAGE 2 ° management and leasing for about 14 years. In May 1993, Reliance Real Estate Services was appointed as the exclusive leasing agent for the property at 6440 University Avenue N.E. Mr. Welle stated he was aware in the change in access from Mississippi Street to 3rd Street. University Avenue, of course, is where the action is in terms of traffic. Visibility is important, but it is also important for people to be able to see a way to get to the retail center. That is what is lacking now with the new access off 3rd Street from Mississippi Street, about two blocks off University Avenue. He believed they would be able to work this out with prospective tenants for the building, but that is not the case. In pursuing some past leads and some cold calling to recruit new tenants, he ran into two obstacles: 1. There has been a deterioration in the accessibility to the property. For a tenant operating a business with customers, this poor accessibility could make the difference between a successful business or a failed business. 2. The word is out that there is something in motion about redevelopment in the southwest quadrant. Prospective tenants are concerned that they may be forced to move in 1 -2 years. Mr. Welle stated he tried to assure prospective tenants that there is no plan for redevelopment at this time, but that wasn't enough and he could not assure them that nothing would happen in the future. After running into these objections, he realized that the property owned by J & S Investments has diminished in value and use. He believes that J & S Investments is suffering due to the way the HRA has acquired the Moon Plaza property.but has not gone all the way to completion as far as acquiring the Suh's property. If the HRA was the owner and was in control of all the properties, they would be much closer in getting development going. He believes it is very logical for the HRA to purchase the property. However, if it is not possible for the HRA to acquire the property, then the property owners are requesting that the City cooperate in any way it can to allow another party to purchase the property and develop it in such a way that makes economical sense. Mr. Welle stated that when he ran into problems when seeking prospective tenants, he called some developers. A developer who specializes in retail thought the area has merit. The reason the developer was not interested in pursuing it was because it was his understanding that there was supposed to be some type of mixed use with residential. A developer who specializes in residential said the site will never work as retail anymore because of the access. As a representative of the property owners, Reliance Real Estate Services, feels an obligation to pursue whatever remedies are required to get out of the current situation. They believe the property owners have suffered economic damages and consequences. HOUSING & REDEVELOPMENT AUTHORITY MEETING. SEPT. 9. 1993 - PAGE 3 Mr. Welle asked if there is any type of use plan or use guide or any kind of objectives for the southwest quadrant, particularly something that would include his clients' property. Mr. Commers stated the HRA tried to develop the southwest quadrant about ten years ago. Over the past ten years, they have given specific developers exclusive rights of development for different development proposals. For various reasons, each project has fallen through. At this point, the HRA plans to demolish the Rice Creek Plaza Shopping Center and to have the land prepared for a developer, and then to go forward with an analysis over the next 6 -8 months to determine what would be the best development for that site in today's market. The only requirement is that a developer must make economic sense. It must be able to generate certain types of taxes that will enable the HRA to recover the costs put into acquiring the property and any other incentives the HRA is able to give. The HRA is willing to review any development proposal to determine its economic feasibility and whether the HRA can give any type of assistance. Mr. Welle stated it is time for something to happen. The longer this delays, the more it costs the property owners. The existing Burger King franchise has given notice that they will not renew their lease. Burger King's business dropped off when the median was put up on Mississippi Street and access changed. Burger King will continue to operate on a month -to -month basis while they search for an alternate location. They will pay no rent and will pay operating expenses only. Mr. Commers stated this is the first time the HRA was made aware of the problems with access and how it has affected the Suhs' property. Ms. Schnabel asked how much property is owned by J & S Properties. Mr. Welle stated the boundary survey shows 102,000 sq. ft.- -about 2 1/2 acres. The Burger King building is 2,500 sq. ft., the main shopping center is 1,400 sq. ft., and the car wash is about 1,700 sq. ft. Mr. Welle stated something needs to be done with this property. If the HRA does not want to move forward and purchase the property at this time, he believed the Suhs are entitled to sell their property to someone else. Mr. Commers stated there are practical reasons why the HRA cannot purchase the property at this time. One reason is that the HRA • does not have an item budgeted for it in the 1993 budget. Mr. Welle asked if it could be included in the 1994 budget. Mr. Commers stated it could be if the HRA decided the purchase is appropriate. The HRA is interested in redeveloping that site and has been for a long time. At their strategy meetings last summer, r r HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPT. 9, 1993 - PAGE 4 the HRA decided to move forward to try to find some kind of project that would make sense on that site. That is one of the things they will be discussing over the next 6 -8 months. The fact that they will be demolishing Rice Plaza indicates that the City is getting closer to getting something done there. The other issue is the HRA is not interested in acquiring property and then holding it for a long period of time and managing the property. However, the HRA is willing to cooperate in any way it can with anyone who is interested in a particular project on that site. Mr. Meyer asked what makes this request different from the HRA's actions in acquiring the Rice Plaza property. Ms. Dacy stated the Mississippi Street improvement project was the big factor in acquiring the Dairy Queen and Levy properties as additional right -of -way was needed for the street improvement project. Mr. Meyer stated that in the large picture, the reason the Rice Plaza property was going down hill and losing tenants was because of the street improvements, the lack of desirability, and the fact that the HRA was not going to do anything on the property. So, the HRA listened to the arguments and purchased the property. Now, with this situation, it seems like the same rationale the HRA used to purchase the Rice Plaza property. He believed that the HRA should examine the Suhs' request the same way they did for Rice Plaza. He viewed the Suhs' request as being completely in line with the conditions at Rice Plaza, and the HRA should consider this request in the same spirit and with the same ultimate action as they did for Rice Plaza. Mr. Prairie stated he believed one of the reasons for acquisition of the Rice Plaza property was because at the time there was an existing redevelopment agreement with a developer to develop the property and the HRA needed to be in control of the property. Mr. Meyer stated that they already have one property that is blighted, and here is another property that will become blighted through no fault of the property owners. Is the HRA going to let the property sit and become a blighted area, or are they going to acquire it as they did Rice Plaza? Mr. Commers stated that consideration of the Suhs' property has to be put in the overall mix of priorities the HRA has and within the amount of funds the HRA has available for projects. At this time, the HRA is not in a position to pay $1 million for that property. The HRA is already carrying quite a bit of property in the City of Fridley rightly or wrongly, and the HRA has to be very careful in acquiring additional property without a development agreement in hand. It is a change in circumstance that has occurred. In 1991, he did not think there was any thought that the Suh property was starting to deteriorate, and there was not any problem in getting tenants. That appears to have changed in the last 60 days. He did Y HOUSING & REDEVELOPMENT AUTHORITY MEETING. SEPT. 9, 1993 - PAGE 5 not see any problem with looking at this in terms of the priorities they discussed at their planning meeting last summer. Mr. Meyer stated there are a number of ways in which the HRA improves the City. One is to encourage new industry and another is to take care of blighted areas and remove them. The HRA does not have to wait for a developer to come in with a proposal, because the HRA has taken action before to stop blight in the City by taking a positive action against offending structures. He believed that despite the HRA's financial situation, the HRA has the responsibility to decide whether or not there is a certain element of fairness that might be violated by ignoring this situation, and it could mean moving this to a higher priority than some other projects that do not have the element of fairness attached to them. Ms. Schnabel stated there are a lot of factors that need to be reviewed, and she is not prepared to make any decision on this request at this time. Mr. Meyer stated he hoped the HRA does not reject this request but will keep it on the table. Mr. Commers stated the best time to consider this request is when they are discussing the budget, and that process will be starting within the next three months. Mr. Commers stated the City can work with Mr. Welle to provide him with whatever information he needs to transmit to a developer. Mr. Welle should also keep the City informed about any possible redevelopment in the southwest quadrant. Mr. Welle stated he is certainly willing to keep the communication and spirit of cooperation open with the City, and they will do whatever is in the best interest of both the property owners and City. 2. CONSIDER LEASEHOLD AGREEMENT WITH FRIDLEY PLAZA OFFICE BUILDING• Ms. Dacy stated that on February 13, 1992, the HRA approved a third amendment to the leasehold agreement between the HRA and Columbia Park Properties to correct a legal description error. At that time, the attorney for Columbia Park Properties suggested that a new leasehold agreement be prepared to incorporate all previous agreements. Staff has met with the property manager regarding ongoing maintenance issues. None of the previous leasehold agreements specifically stated maintenance responsibilities. Mr. Commers asked if anyone has looked at the lease for the purpose of determining whether or not there is any provision for rental increase. HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPT. 9, 1993 - PAGE 6 Ms. Dacy stated Jim Hoeft, HRA attorney, revised the proposed lease, but they did not discuss a proposed rental increase. She did not know that was an issue. Mr. Commers stated that if the HRA is going to be undertaking a certain parking lot maintenance program that is going to involve several thousands of dollars, it is conceivable that before 2081 the expenses could far exceed the rents. Ms. Dacy stated she did a cursory analysis of the HRA's maintenance responsibilities. There is nothing in the leasehold agreement that is different from what the HRA has been doing up until this point in time. She worked with the Public Works Department to estimate the HRA's expenses to date and, outside of repaving and sealcoating the parking lot, the rent payments exceed the HRA's expenses. The HRA collects about $9,600 per year. Ms. Dacy stated all the irrigation lines are all tied into the Municipal Center property, so it makes sense for the HRA to continue the irrigation. The HRA is responsible for mowing the boulevard areas. In terms of the parking lot and the pavement itself, as owner of the property, she believed the HRA is responsible to ensure that the parking lot is properly maintained and paved. Prior to this time, the HRA has not sealcoated or repaved the lot. Mr. Commers stated that as the property owner, the HRA is probably required to do those things. The question is whether or not there is some kind of formula for operating expenses, because those types of expenses are usually recovered by the landlord from the tenant. Mr. McFarland stated that as long as the HRA is negotiating a revised lease agreement, this might be a good time to put in some kind of clause that allows the HRA to review the rents at any time. Mr. Commers asked staff or legal counsel to review the lease. The HRA signed a lease ten years ago in which they agreed to receive a certain amount of rent until the year 2081. It does seems strange that they did not put in some kind of cost of living increase or some other factor. Ms. Dacy stated the HRA should continue with the irrigation, lawn maintenance, and snow removal because they have done that for ten years. If the HRA is uncomfortable with sealcoating and paving the parking lot and feels that is the building owner's responsibility, that could be part of the negotiations. Mr. McFarland stated that if the HRA approves the maintenance program as proposed and the cost of that maintenance escalates many times in the future because of inflation, it would be good to put at least some kind of cap on the cost of that maintenance. He did not think $800 per month for what the HRA is doing in return is a good deal. Actually, the HRA should net $800 a month. HOUSING & REDEVELOPMENT AUTHORITY MEETING. KEPT. 9, 1993 - PAGE 7 Mr. Meyer stated that maybe they could put in a cap that the maintenance costs will never exceed 25% of the lease payments. If they do, then the extra costs are the building owner's responsibility. Mr. Commers asked staff to research the files to determine if the building owners would be able to share in the costs of the sealcoating and paving and to see if there is anything that can be done about the rent payments versus the maintenance costs. The HRA can then discuss this again at the next meeting. 3. CONSIDER SETTLEMENT AGREEMENT WITH DON FITCH: Ms. Dacy stated that a settlement has been prepared by Mr. Fitch's attorney. The agreement conforms to the direction provided by the HRA and City Council. The Executive Director has suggested that item #7 on page 2 be changed from 60 days to 120 days to allow adequate time for the redevelopment project in the northeast corner to be finalized. Jim Casserly has reviewed the agreement and agrees with the proposed change. Staff recommends the HRA approve the settlement agreement with the proposed change. Mr. Commers stated one thing he did not like about the settlement agreement is that it is contingent upon Mr. Fitch executing a partnership agreement. He stated this is on the first page of the Settlement Agreement under "Agreement", subparagraph (b): "Fitch executing a partnership agreement for the development of the project." Mr. Meyer stated he agreed with Mr. Commers. Mr. Casserly stated he believed this sentence could be deleted from the Settlement Agreement. Mr. Commers stated he would be more comfortable if the sentence is deleted. It is a statement that is to Mr. Fitch's benefit, but is not to the HRA's benefit. MOTION by Ms. Schnabel, seconded by Mr. McFarland, to approve the Settlement Agreement with Don Fitch with the following amendments: a. Subparagraph (b) under "Agreement" shall be deleted. b. Item #7 on page 2 shall be changed from 60 days to 120 days. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 4. CONSIDER RESOLUTION MODIFYING REDEVELOPMENT PLAN AND CREATING TIF DISTRICT #13: Mr. Commers stated that he was informed by the HRA Executive Director, William Burns, that the majority of the City Council i HOUSING & REDEVELOPMENT AUTHORITY MEETING. SEPT. 9. 1993 - PAGE 8 members are not in favor of this project because of the concern of the loss of LGA funds. Mr. Commers stated this is somewhat of a marginal project, and the problem is that over the lifetime of the project, the City is going to lose $9,000 per year under the new state law. He stated since there is the chance that the Council will not approve this project, he suggested the HRA table any action on this resolution until the October meeting. Mr. Casserly stated this project does meet all the criteria established by the HRA and Council. It creates new employment with the ability for further expansion in the future. The issue is that out of the $400,000, the HRA will actually generate tax increment of about $250,000- 260,000. Taking out administrative fees of 10% and taking out the adjustments for LGA takes off another $90,000- 100,000, so this means that the HRA has $150,000 that is really available out of the $400,000 if the HRA supplies this assistance. MOTION by Mr. Prairie, seconded by Mr. McFarland, to table any action on the resolution modifying the Redevelopment Plan and creating Tax Increment District No. 13 for ECO Finishing, Inc., until the October 14, 1993, meeting or a special meeting, if needed. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 5. CONSIDER SCHOOL DISTRICT TURNBACK AGREEMENTS: Mr. Commers stated that at this point he is not opposed to once again approving the school district agreements and returns, but in view of the HRA's financial condition and other priorities the HRA may have, he is concerned that the HRA may not be able to continue to make these kinds of payments. Mr. Prairie stated that this concern should be conveyed to the school districts, particularly Fridley School District #14 which receives a large dollar amount. Mr. Pribyl stated that last year the City did indicate in a letter with the agreements to the school districts that this was not a guaranteed continuing kind of payment and that the school districts should be cautious as to future funding. He stated the City will again convey to the school districts that the HRA has limited resources and has a number of projects that need to be funded in the future and that these funds are not guaranteed for the future. Mr. Commers stated staff should make sure that this concern is communicated to the proper school board personnel. MOTION by Mr. Meyer, seconded by Mr. Prairie, to approve the school district agreements and tax increment financing refunds as set forth for the year 1994. HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPT. 9, 1993 - PAGE 9 UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COM ORO DECLARED THE MOTION CARRIED UNANIMOUSLY. 6. AUTHORIZE CHANGE ORDER NO. 1 TO LAKE POINTE DEVELOPMENT MAINTENANCE PROJECT: Mr. Commers stated that staff has informed the HRA that the Lake Pointe maintenance contract is now subject to sales tax under a recent state law imposing sales tax on a variety of government unit purchases. He would like the staff to verify if the state law covers the full contract price of $24,173 or if it only applies to the unpaid balance of the contract. MOTION by Ms. Schnabel, seconded by Mr. Meyer, to approve Change Order No. 1 to Lake Pointe Development Maintenance Project No. 244 to permit payment of sales tax as required by state law. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 7. CLAIMS AND EXPENSES: Mr. Ellestad added the following checks to the check register: #2419 - Dependable Courier - $26.48 #2420 - Isaacson Lawn Care - $3,497.36 #2421 - Majer 1 Hour Photo - $36.99 #2422 - Menards - $45.42 MOTION by Mr. McFarland, seconded by Mr. Prairie, to approve the check register, checks #2393 -2422. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COM ORO DECLARED THE MOTION CARRIED UNANIMOUSLY. 8. RICE PLAZA UPDATE: Ms. Dacy stated Hong Kong Kitchen is searching for a new site. They may have a more difficult time finding a site because it is more difficult with restaurant equipment. 9. HOUSING PROGRAM STATUS: Ms. Dacy stated she had handed out a resolution that would authorize the Executive Director or the Housing Coordinator to approve the deferred loans for the program. That means either the Executive Director or the Housing Coordinator would be authorized to attend the closing for some of the petitioners, execute the documents on behalf of the HRA, and request a check from the Finance Department. MOTION by Ms. Schnabel, seconded by Mr. McFarland, to approve Resolution No. HRA 9 - 1993, "A Resolution Authorizing Certain HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPT.9. 1993 - PAGE 10 Payments under the Fridley Home Improvement Loan, Home Mortgage Assistance and Rental Rehabilitation Loan Programs ". UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COM ORO DECLARED THE MOTION CARRIED UNANIMOUSLY. 10. DISCUSS SCATTERED SITE ACQUISITION PROCESS: Ms. Dacy stated that as a result of the rehab application process, staff discovered that two detached single family homes may require extensive rehabilitation to meet minimum code requirements, and rehab costs would far exceed the value of the .structure. Authorizing the rehab is not financially appropriate, yet doing nothing would be equally disturbing by permitting substandard structures to continue. Because of this, staff is recommending a modification to the scattered site acquisition program. Staff has developed a strategy where the scattered site acquisition budget would be split in half for two purposes: One purpose would be to use about one -half the budget to use in tandem with the rehabilitation program to remove properties which cannot be rehabilitated. The second purpose would be to implement the program as previously discussed. A list of properties, ranked in order of importance /priority, will be developed and submitted to- the HRA for review. Ms. Dacy stated that in October, staff will probably be coming to the HRA with the inspection reports on the two properties. There are public policy questions as to whether or not the HRA should give these homeowners the rehab funds, or if the HRA should provide another solution to take care of the problem. Mr. Meyer agreed with the strategy proposed by staff. Mr. Commers authorized the staff to move forward and bring this information to the October meeting for the HRA's review and consideration. 11. LAKE POINTE MARKETING STATUS: Ms. Dacy stated that in May 1993, the HRA directed staff to put together a brochure to be sent to real estate brokers. She stated staff has prepared an RFP for advertising agencies to solicit their costs for marketing the property. She stated staff would like the HRA to make a motion authorizing the Mayor, HRA Chairperson, Executive Director, and herself to review the RFPs and execute a contract with one of these agencies by the end of September. The operating budget provides $30,000 for advertising and $30,000 for a Lake Pointe consultant. MOTION by Mr. Prairie, seconded by Ms. Schnabel, to authorize the execution of a contract with an advertising agency based on the RFPs by the Mayor, HRA Chairperson, HRA Executive Director, and Community Development Director. HOUSING & REDEVELOPMENT AUTHORITY MEETING. SEPT. 9. 1993 - PAGE 11 UPON A VOICE VOTE, ALL VOTING AYE# CHAIRPERSON CONKERS DECLARED THE MOTION CARRIED UNANIMOUSLY. Ms. Dacy stated that owners of the two option properties had agreed to extend the option agreements to October 31, 1993. At this time, the HRA has three alternatives: (1) Let the options expire at the end of October ($500 each) ; (2) Extend the options for another year; or (3) Exercise the rights under the purchase agreements and acquire both properties ($165,000). Both property owners are willing sellers at this time and have expressed an eagerness to move. Ms. Dacy stated the Executive Director is recommending that the HRA let the options expire and to acquire the properties when a solid development proposal is submitted. They could then pursue negotiations with the property owners or go through a condemnation process. Mr. Commers stated he believed they should try to keep the options' open for one more year. Mr. Prairie agreed. Ms. Dacy stated she can go back to the owners and see if they are willing to extend the options. Mr. McFarland asked if there is any chance the values on these properties have depreciated. Ms. Dacy stated she would have to get this information from the City Assessor. Mr. Commers stated it would be good to have that information. He requested that staff obtain the current values on the property and bring that information to the October meeting. 13. FRIDLEY TOWN SQUARE UPDATE: This was an information item only. 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 September 9, 1993, Housing & Redevelopment Authority meeting adjourned at 10:40 p.m. Respectfully submitted, Ly Saba Recording Secretary a° 1.1 Community Development Department HOUSING AND REDEVELOPMENT AUTHORITY DATE: October 7, 1993 City of Fridley TO: William Burns, Executive Director of HRA FROM: Barbara Dacy, Community Development Director SUBJECT: Consider Resolution Modifying the Redevelopment Plan ECO Finishing, Inc. Background The City Council conducted a public hearing on September 13, 1993, to consider amending the redevelopment project area and creating a Tax Increment District No. 13.. The purpose of the request was to provide tax increment financing assistance to ECO Finishing, Inc., a metal plating company. The company proposes to construct a plating and metal finishing job shop. The facility is located at the northwest corner of 51st Way and Industrial Boulevard. The estimated project cost is $2,500,000. It is estimated that 30 new jobs will be created with the possibility of expansion to 80 employees in five years. On September 27, 1993, the City Council chose not to create a tax increment district, but simply to amend the redevelopment project area to include the proposed parcel. Including the parcel in the redevelopment project area still enables the HRA to provide assistance to ECO Finishing, Inc. Because a tax increment district will not be created, there will be no loss in local government aids. Proposed Action Staff recommends that the HRA adopt the attached resolution which provides for HRA approval of the redevelopment project area amend- ment. Further, it is proposed that the HRA consider providing a $125,000 loan. The loan would be structured such that it is amortized over six years at a 5% interest rate and principal and interest are deferred for the first two years (see enclosed Casserly analysis). The HRA would gain about $23,354 in interest payments. This proposal is similar to the method used to assist Sheet Metal Connectors. Should the HRA agree to provide assistance to ECO Finishing, the HRA should pass a motion authorizing staff to prepare a development contract for approval at a future agenda. BD:ls M -93 -591 1.2 RESOLUTION NO. A RESOLUTION MODIFYING THE REDEVELOPMENT PLAN FOR REDEVELOPMENT PROJECT NO. 1 TO REFLECT INCREASED PROJECT COSTS AND INCREASED GEOGRAPHIC AREA WITHIN REDEVELOPMENT PROJECT NO. 1 AND MODIFYING THE TAR INCREI�NT FINANCING PLANS FOR TAR INCREMEIT FINANCING DISTRICTS NO. 1 THROUGH NO. 12 TO REFLECT INCREASED PROJECT COSTS AND INCREASED GEOGRAPHIC AREA 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 and increased geographic area 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 and increased geographic area within Redevelopment Project No. 1. 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 1.3 Page 2 - Resolution No. 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 and increased geographic area 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 Project No. 1. 3.01. The modifications to the Modified Redevelopment Plan for Redevelopment Project No. 1 reflecting increased project costs and increased geographic area are hereby approved and adopted by the Commissioners of the Authority. Section 4. Modification of the Modified Tax Increment Financing Plans for Tax Increment Financing Districts No 1 through No 12. 4.01. The modifications to the Modified Tax Increment Financing Plans for Tax Increment Financing Districts No. 1 through No. 12 reflecting increased project costs and increased geographic area within Redevelopment Project No. 1 are hereby approved and adopted by the Commissioners of the Authority. Section S. Filing of Plans. 6.01. 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. 1.4 Page 3 - Resolution No. PASSED AND ADOPTED BY THE FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF FRIDLEY THIS DAY OF , 1993. LAWRENCE R. COMMERS - CHAIRPERSON ATTEST: WILLIAM W. BURNS - EXECUTIVE DIRECTOR 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 day of , 1993. WILLIAM W. BURNS - EXECUTIVE DIRECTOR 3. 1.5 FRIDLEY CITY COUNCIL MEETING OF SEPTEMBER 27, 1993 PAGE 15 14. RESOLUTION NO. 71 -1993 MODIFYING THE REDEVELOPMENT PLAN FOR REDEVELOPMENT PROJECT NO. 1 TO REFLECT INCREASED PROJECT COSTS AND INCREASED GEOGRAPHIC AREA AND MODIFYING THE TAX INCREMENT FINANCING PLANS FOR TAX INCREMENT FINANCING DISTRICTS NO. 1 THROUGH NO. 12 TO REFLECT INCREASED PROJECT COSTS AND INCREASED GEOGRAPHIC AREA WITHIN REDEVELOPMENT PROJECT NO. 1: Ms. Dacy, Community Development Director, stated that Council conducted a public hearing on September 13, 1993 to consider amending the redevelopment project area and creating Tax Increment District No. 13 for the purpose of providing tax increment financing assistance to ECO Finishing, Inc. She stated that since the public hearing, the request for tax increment financing assistance has been amended. The proposal is no longer to create a tax increment district, but to add this parcel to the redevelopment project area to enable the Housing and Redevelopment Authority to provide a $125,00 loan. Ms. Dacy stated that this resolution would add this parcel to the redevelopment project area. She stated that the Housing and Redevelopment Authority would consider the request for the loan at their October 14, 1993 meeting. Ms. Debbie Gustafson, of the Bridgewater Financial Group and representing ECO Finishing, Inc., stated that the company did not amend the request. It was done by staff, and they are still requesting tax increment financing. Councilman Billings stated that it would take three votes to create a tax increment district. Since there would not have been the required votes, this request has been modified. He asked if this amendment to the redevelopment plan requires a public hearing. Ms. Dacy stated that the amendment simply requires a majority vote. She stated that, in essence, the Council already conducted the public hearing on September 13, and as part of this hearing process was to amend the redevelopment project area and create the tax increment district. MOTION by Councilwoman Jorgenson Seconded by Councilman Billings. aye, Mayor Pro Tem Schneider unanimously. 15. TOURISM BUREAU' to adopt Resolution No. 71 -1993. Upon a voice vote, all voting declared the motion carried Mr. Burns, City Manager, stated that the Nort etro Convention and Tourism Bureau was established to promote ourism. The hotel and motel business is supported by a tax on otel and motel rooms. He stated that this involves no direc tax to the residents. He stated that in accordance with the a eements with the four member CITY OF FRIDLEY, MINNESOTA PROPOSED LOAN PAYMENT SCHEDULE: ROSENBLUM PROJECT PRINCIPAL INTEREST DEFERRD INTEREST AMORTIZATION 125,000 5.00% 2 YEARS 6 YEARS 'i .6 -------------------------------------------------------------------------------- ACCRUED PRINCIPAL INTEREST TOTAL DATE PRINCIPAL INTEREST PAYMENT PAYMENT PAYMENT BALANCE -------------------------------------------------------------------------------- 8 /01 / 1994 125,000 0 0 0 0 125,000 2 /01 / 1995 125,000 3,125 0 0 0 128,125 8 /01 / 1995 128,125 3,125 0 0 0 131,250 2 /01 / 1996 131,250 3,125 0 0 0 134,375 8 /01 / 1996 134,375 3,125 0 0 0 137,500 2 /01 / 1997 137,500 9,967 3,438 13,404 127,533 8 /01 / 1997 127,533 10,216 3,188 13,404 117,317 2 /01 / 1998 117,317 10,472 2,933 13,404 106,845 8 /01 / 1998 106,845 10,733 2,671 13,404 96,112 2 /01 / 1999 96,112 11,002 2,403 13,404 85,110 8 /01 / 1999 85,110 11,277 2,128 13,404 73,834 2 /01 / 2000 73,834 11,559 1,846 13,404 62,275 8 /01 / 2000 62,275 11,848 1,557 13,404 50,427 2 /01 / 2001 50,427 12,144 1,261 13,404 38,284 8 /01 / 2001 38,284 12,447 957 13,404 25,836 2 /01 / 2002 25,836 12,759 646 13,404 13,078 8 /01 / 2002 13,078 13,078 327 13,404 0 - - - -- 12,500 - - - -- ----- - - - - - -- 137,500 - - - - - -- - - - - - -- - - - - -- 23,354 - - - - -- - - - - -- - - - - - -- 160,854 - - - - - -- - - - - - -- ROSE2 PREPARED BY CASSERLY MOLZAHN & ASSOCIATES 23- Sep -93 1.7 112 SEG. 27, r. 30, R.24 C/rY OF FRIDLEY .. ........ �l O 4 114. m \ 1'ii T to WVrep sec. 77 UN /TED STATES OE A�NfR /CA (11) oun" g. HH( CUTLOT I (.04 amor R ou 2.1 Community Development Department HOUSING AND REDEVELOPMENT AUTHORITY i DATE: October 7, 1993 City of Fridley TO: William Burns, Executive Director of HRA FROM: Barbara Dacy, Community Development Director SUBJECT: Consideration of Amended Leasehold Agreement Fridley Plaza Office Building The HRA at its September 9, 1993, meeting, requested followup research regarding several issues pertaining to the leasehold agreement for the Fridley Plaza Office building parking lot. To follow is a list of the questions with the responses: 1. Did the original lease contain an escalator clause? The original lease was executed•on September 28, 1982. The lease contained four paragraphs. Paragraph 3 required the monthly payment of $800 per month. It did not refer to an escalator clause. It should be remembered that the original lease was for the area now occupied by the municipal ramp as well as the parking area immediately to the east of the Fridley Plaza Office building. Any tenant, visitor, or occupant of the office building has the right to use the municipal ramp. Paragraph 2 of the original lease referred to maintenance responsibilities. It states as follows: "The agency agrees to pay for all of the landscaping, curbing, and other costs related to a 166 car parking lot adjacent to the redevelopment property. The agency shall pay any and all costs related to maintenance, sweeping, plowing, lighting, repairing, and taxes (if any) of the above described property during the term of this lease." The 166 car parking lot refers to the area now occupied by the ramp plus the parking lot to the east of the building. 2. Are the current owners of the Plaza Office building willing to share the cost of the sealcoating and the paving? 2.2 Amended Leasehold Agreement for Fridley Plaza Office Building October 7, 1993 ` Page 2 I spoke with Mike Hurley, attorney for the office building owners. They will not share in the cost for paving, sealcoating, or striping the parking lot. The original intent of this lease was to clarify roles and responsibilities pertaining to irrigation, land- scaping, plowing, and now paving, sealcoating, and striping. I have spoken with our legal counsel, and he has advised me that if the effort to adopt an amended lease is dropped, paragraph 2 of the original 1982 lease would be in force. It is his interpretation that the HRA is responsible for maintaining the parking lot to the east of the Fridley Plaza Office building which would include repaving, sealcoating, and striping. 3. HRA asked staff to establish a maximum percentage of the rent payments to be allocated toward maintenance. I have enclosed a copy of a memorandum from Robert Nordahl regarding our annual maintenance costs for just the Plaza Office parking lot. It totals approximately $1,785.32, or 19% of the total rent of $9,600 per year. This does not include sealcoating, paving, and striping. To date, the HRA has not incurred any expenses regarding maintenance of the ramp. On June 8, 1989, the HRA passed a motion to share the maintenance costs with the City for the ramp. It was also noted at that time that there could be maintenance costs to the ramp including sealing the concrete surface and possible restriping. The HRA can establish a maximum percentage of the rent payments to be used toward maintenance costs as part of this amended agreement; however, the ownership is not willing to share in the expenses of the paving, seal - coating, or striping. Copies of all leases are attached. A representative from the management company for the Fridley Plaza Office building will be in attendance at Thursday's meeting. A copy of the proposed amended agreement is also attached should the HRA choose to adopt it. BD:ls M -93 -589 1 2.3 REIRINED COPY AMENDED AND RESTATED LEASEHOLD AGREEMENT This Amended and Restated Leasehold Agreement, entered into this day of Ma(, 1993, by and between THE HOUSING AND REDEVELOPMENT AUTHORI'T'Y%i AND FOR THE CITY OF FRIDLEY, MINNESOTA (hereinafter called the "HRA"), and COLUMBIA PARK PROPERTIES, a Minnesota Partnership (hereinafter called "Redeveloper"). WHEREAS, on the 20th day of September, 1982, the HRA and the Fridley Office Plaza Building Partnership entered into a Leasehold Agreement ( "Leasehold Agreement ") which required the HRA to provide the Fridley Plaza Office Building Partnership with a non - exclusive right to lease a 166 car parking lot; and WHEREAS, the Leasehold Agreement was amended pursuant to Amendment to Leasehold Agreement, dated August 1, 1988, providing for the construction of a parking ramp on the site of the parking lot; and WHEREAS, the Leasehold Agreement was further amended by instrument, dated February 22, 1989, which.revised the legal description of the property subject to the Leasehold Agreement to afford the Fridley Plaza Office building Partnership additional vehicle ingress and egress access to the parking ramp parcel; and WHEREAS, the HRA and the Fridley Plaza Office Building Partnership entered into that certain Memorandum of Leasehold Agreement, dated February 22, 1989, filed March 9, 1989, in the Office of the Anoka County Recorder as Document No. 842658, to establish the Leasehold Agreement of record; and WHEREAS, the Fridley Plaza Office Building Partnership assigned its interest in the Leasehold Agreement to Performance Investments, a Minnesota Partnership, by Assignment, dated March 3, 1989; and WHEREAS, Performance Investments assigned its interest in the Leasehold Agreement to Redeveloper by assignment of Leasehold Interests, dated August 29, 1991; and WHEREAS, the parties to this Agreement have discovered that the new legal description is not correct and the parties agree that the Leasehold Agreement, as amended, should be further amended and restated to clarify the terms and conditions thereof. NOW, THEREFORE, the parties to this Agreement, in consideration of the promises, covenants and agreements made by each to the other, do hereby agree to amend and restate the Leasehold Agreement as follows: 1. Lease / Purpose. The HRA hereby leases to the Redeveloper the property described on Exhibit A ( "Leasehold Property ") attached hereto for the purpose and non - exclusive use of the property for parking of vehicles associated with the use 2.4 and operation of the building located on land owned by Redeveloper and described on Exhibit B attached hereto ( "Redeveloper Property "). Further, the HRA grants to Redeveloper or any future holder of the lessee's interest herein, for the benefit of the Redeveloper Property, the non - exclusive right of ingress and egress over and across the Leasehold Property. This lease shall be binding upon the heirs, successors and assigns of the Redeveloper. The Leasehold Property includes the parking lot and bi -level ramp. 2. Term of Lease. The term of the Lease commenced September 20, 1982 and continues until September 20, 2081, unless sooner terminated as provided herein. 3. Monthly Rent. The Redeveloper shall pay as and for the rental of the Leasehold Property as defined herein, the sum of Eight Hundred and No /100 Dollars ($800.00) per month. Rental payments are due on the first day of the month and shall be considered late after the tenth day of the month. 4. Forgiveness of Back Rent. Performance Investments, a previous holder of the Lessee's interest in the Leasehold Property was delinquent in lease payments under the Leasehold Agreement in the amount of $19,200.00. In consideration of the payment of $10,000.00 to the HRA by Redeveloper, the HRA agreed to waive and forego $9,200.00 in delinquent rental payments owed under the Leasehold Agreement on the condition that Redeveloper pays all rental payments when due or within 30 days after receipt of written notice of the payment being due, for all monthly rental payments which are due through April 1, 1994. On April 1, 1994, if Redeveloper has paid all rental payments due and owing as provided herein, then in such event, all delinquent rent referred to.herein shall be deemed forgiven. In the event Redeveloper fails to pay any rental payments within thirty days after receipt of written notice as provided herein, then in such event, in addition to any other remedies available, the HRA may demand that the additional $9,200.00 in delinquent rental payments be paid in full immediately. 5. Option to Purchase. Upon the expiration of the lease term as provided herein, assuming Redeveloper has not defaulted under the terms and conditions of said lease, then in such event, the Redeveloper shall have the option to purchase from the HRA the real property described on Exhibit C attached hereto ( "Option Parcel "). The purchase price for Option Parcel shall be its fair market value at the time the option is exercised. In the event Redeveloper exercises this option, then in such event, Redeveloper and the HRA shall close on the purchase of the Option Parcel within 90 days after the expiration of the Leasehold Agreement. The HRA shall be obligated to deliver marketable title to the Option Parcel free of any liens or encumbrances delinquent taxes and special assessments. The Redeveloper may W= G- 2.5 exercise this option only by delivering written notice of its option to purchase by certified mail or by hand delivering to the HRA not more than twelve months nor less than six months prior to September 20, 2081. In the event the HRA and Redeveloper cannot come to an agreement as to the fair market value of the Option Parcel, within thirty days after the Notice of Option to Purchase has been delivered as provided herein, then in such event, the fair market value of the Option Parcel shall be determined in the following manner: Both the HRA and the Redeveloper shall each select an MAI certified appraiser and they shall each mutually agree upon a third MAI certified appraiser. The average of the three (3) appraisals shall then be the fair market value. Both the HRA and the Redeveloper will pay for the cost of the appraiser which they appoint and shall share equally in the fees incurred for the third appraiser. 6. Maintenance of the Leasehold Property. (a) Snow Removal. Redeveloper shall be obligated to provide the snow removal, at its sole cost and expense, of the Option Parcel, which property is included in the Leasehold Property and shown as the cross - hatched parcel on Exhibit D hereto. Nothing herein provided shall obligate Redeveloper to do.any snow removal on any remaining portion of the Leasehold Property. All snow removal on sidewalks connecting the Option Parcel and Redeveloper's property shall be completed by Redeveloper at its sole cost and expense. Redeveloper shall be obligated to push all snow accumulations from the Option Parcel to an area of the ........... Option Parcel rE c :: ? ib:::: >:E .::<::L::h t !tc : _,�.; e ..ha , (b) Street and Parking Lot. All lighting of streets and parking lot which is adjacent to the Redeveloper's property and serves said Leasehold Property, shall be paid by the HRA. -3- 2.6 (c) Maintenance, seal coating and Striping the option Parcel Leasehold Property. All maintenance, seal coating, t striping and resurfacing of the Option Parcel shall be undertaken and completed by the HRA at its sole cost and expense. All striping, seal coating or resurfacing of the Option Parcel shall be done on an as needed basis. The Redeveloper shall contact the HRA and notify the HRA of its request for any such maintenance, seal coating and striping of-the Option Parcel. The HRA and Redeveloper agree that the Option Parcel shall be seal coated and striped at least (d) Maintenance of Lawn and Shrubbery. Any lawn area, shrubbery located on the Redeveloper's Property shall be maintained by Redeveloper at its sole cost'and expense. Any lawn area or shrubbery lying outside of the Redeveloper's Property and included within the Leasehold Property hereto shall be maintained at the sole cost and expense of the HRA. (e) Paving and Curbing of Leasehold Property. Any paving and curbing replacement of the Option Parcel shall be at the sole cost and expense of the HRA. (f) Parking Lot Sweeping. The HRA shall, at least once each spring and once each fall, during the Pease term, sweep the Option Parcel. 7. Real Estate Taxes and Special Assessments. All real estate taxes and special assessments levied against the Leasehold Property shall be paid by the HRA. 8. Default. In the event of any default or failure to pay rent under the terms and conditions provided herein and Redeveloper fails to cure said default within 30 days after receipt of written notice from HRA, then in such event, the HRA may terminate the lease. The only remedy of the HRA for failure to pay the rent or any other violation of this lease shall be termination of this lease. -4- 2.7 IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed as of the day and year first above written. THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA By: Lawrence R. Commers Its: Chairman By: William W. Burns Its: Executive Director STATE OF MINNESOTA) ) ss. COUNTY OF ANOKA ) The foregoing instrument was acknowledged before me this _ day of August 1993, by Lawrence R. Commers, Chairman and William W. Burns, Executive Director, of The Housing and Redevelopment Authority in and for the City of Fridley, Minnesota a political subdivision of the State of Minnesota, on behalf of said Authority. Notary Public COLUMBIA PARK PROPERTIES By: A Managing Partner By: A Managing Partner STATE OF MINNESOTA) ) ss. COUNTY OF ANOKA ) The foregoing instrument was acknowledged before me this day of August, 1993, by and -5- 2.8 ' Managing Partners of Columbia Park Properties, a Partnership under the laws of the State of Minnesota on behalf of the Partnership. THIS INSTRUMENT WAS DRAFTED BY: BARNA, GUZY & STEFFEN, LTD. 400 Northtown Financial Plaza 200 Coon Rapids Boulevard Minneapolis, MN 55433 (612) 780 -8500 (MFH) mfh \hra.cpp.aLa CM Notary Public Z9 EXHIBIT A LEASEHOLD PROPERTY Lot 15 and all that part of Lot 7, Block 1, Fridley Plaza Center, Anoka County, Minnesota, lying easterly of the following described line: Commencing at the northwest corner of Lot 14, said Block 1; thence North 89 degrees 58 minutes 45 seconds East, along the north line of said Lot 14, a distance of 13.00 feet, to the point of beginning of the line to be described; thence North 0 degrees 47 minutes 15 seconds East a distance of 213.23 feet to a point on the line common to Lots 6 and 7, said Block 1, said point being 3.00 feet westerly from the southeasterly corner of said Lot 6, and said line there terminating. -7- 2.10 EXHIBIT B REDEVELOPER PROPERTY Lot 14, Block 1, Fridley Plaza Center, according to the recorded plat thereof, and situate in Anoka County, Minnesota. -8- To be determined. EXHIBIT C OPTION PARCEL cm 2.1 1 MOO,' Fridley Plaza Office Bldg. 6401 University Ave. N.E. 3—ST—Brick --- -" - — - ---7 orvt 343 rourmies Ave. 2.12 'EXHIBIT D 4 uj Ln it II ti V. A- I Cons j4nrac it S. a Fridley Plaza Office Bldg. 6401 University Ave. N.E. 3 -5T —Brick 9 Fourmies Ave. 2.13 E KF IISIT E I _ 6 V W Z 4 � o � .e Ln , If iI y 1 ,I i < f i 'his Agreement, Dated as of this Will day of , 1982s, by and between the Housing and Redevelopment Authority in and for the City of Fridley (hereinafter called the "Agency") and Fridley Plaza Office Building Partnership (hereinafter called the ' Redevelcper') Witnesseth, that wHER S, on or before the date hereof the Agency and the Redeveloper have entered into a "Contract for Private Redeveopment" regarding certain real property located in the Center City Redevelopment Project in the City of Fridley, pursuant to which the Authority is to acquire certain property as conditioned said "Contract for Private Redevelopment" (hereinafter referred to as 'the Contract'). WHEREAS, it is contemplated that pursuant to said "Contract" the Redeveloper will construct an office building containing approximately 35,000 square feet upon the redevelopment property. 1sEtFAS, the Redeveloper has entered into that certain Loan Agreement,. dated as of October 1, 1982 (the "Loan Agreement'), with the City of Fridley (the 'City') pursuant to which the City has loaned to the Redeveloper the proceeds of the Bonds issued pursuant to that certain Indenture, dated as of October 1, 1982 (the 'Indenture "), between the City and F&M Marquette National Bank (the 'Mortgagee'). WBEREAS, pursuant *to the terms of the Indenture, there has been created a "Lease Fund" (as def ined in the Indenture) . NOW, SORE, the parties to this agreement, in consideration of the promises, convenants and agreements made by each to the other, do hereby agree as follows: 1. 7he 'Agency" agrees to lease to the redeveloper the following described property (hereinafter referred to as the 'Leasehold Property') for the purpose of the parking of vehicles associated with to development of the redevelopment property: The Southerly 12.8 feet. of Lot Six along with all of Lots 7 -11, Block Two (2), Rees' Addition to Fridley Park together with the Easterly 7.63 feet of the vacated alley lying westerly of and adjacent to the above described property and the northerly 6.8 feet of lot 2 and all of lot 1, Block Five (5) Rees', Addition to Fridley Park together with the Easterly 7.63 feet of the vacated alley lying westerly of and adjacent to the above described property; described herein and that portion of the vacated 64th Avenue that lies between the above described property in Block Five (5) and Block TWO (2), Rees' Addition to Fridley Park. 2.14 2. The 'Agency' agrees to build and pay for all of the landscaping, paving, cubing and other costs related to a 166 car parking lot adjacent to the redevelopment property. The Agency shall pay any and all costs related • to maintenance, sweeping, plowing, lighting, repairing and taxes (if any) of the above described property during the term of this lease. 3. The 'Redeveloper shall pay to the Agency $800.00 per oonth for the lease of the above described property and improvements starting on a date no later than two (2) years from the date of the certificate of completion, Schedule C of the ' Contract'. These payments shall be made on the first day of each month and shall continue for a period of 360 months at which time the 'Redeveloper' would have the option to purchase the 'Leasehold Property' for a sum of $100,000. If in the event the 'Redeveloper does not exercise the option to purchase the 'Leasehold Property', the lease shall continue at $800.00 per month for an additional 240 months. In the event of default, the 'Agency' shall notify the Redeveloper and Mortgagee of said default. In the event the Redeveloper fails to cure said default, the Mortgagee, its successors or assigns has the right to cure said default and the Agency agrees to accept as full payment of this lease from the Mortgagee, its successors or assigns the interest earned from time to time on the 'Lease Fund ". If there is a deficiency between the earnings on the 'Lease Fund' and the lease payment, the preceeding does not prohibit the Agency from collecting the deficiency from the Redeveloper. 4. The above parking lot and any adjacent City parking lot shall be open for joint use by clients, employees,.agents and the general public making use of the Redeveloper's office building and the City of Fridley's Civic Center. All notices and deliveries required or permitted by this Agreement shall be given in the manner provided in the 'Contract'. IN wiwEsS WHEREOF, the parties have caused this instrument to be executed as of the date first above written. THE HOUSING AMID P DE,VE: ,D EIFNT Ai 7HORITY IN AMID Fait CITY CF FRIDLEY_ / /Chairman ,�;, Hy Executive Director FRIDI.EYY ICE BUI ING P IP By ! Pa et And BY Partner 2.15 2.16 STATE OF Xn*a 9= ) ) ss. COUNTY OF ANORA ) the foregoing instrument was acknowledged before Mme this 20th day of October , 1982, byLarrence R. Commer &nd Jerrold L. BoardmInthe Chairman and Ewcutive Director, respectively, of the Housing and Redevelopment Authority In and for the City of Fridley, on behalf of Authority. j Notary Public CLYDE V. MOR/WiIZ ■ STATE OF rIIAII�ffSDIl'A ) crust rx - V= ANOrcA coumw r7 ) as. fah. t r11� 07. Urt DIY OF -r The foregoing instrument was acknowledged before me this day of , 1982, by =: a partner on behalf of Fridley Plaza Office Building Partnership, Minnesota partnership. NotAry Public • v�+nnnnnn. WALTER J. MULCAHY W37ARY Pug' IC - 0:4•NESOTA i RAMSEY COUNTY MrCornm,sscaEapccsJc1.01.198s � tinnwwwww, 2.17 RESOLUTION NO. HRA 3 - 1988 RESOLUTION APPROVING AN AMENDMENT TO THE LEASEHOLD AGREEMENT BETWEEN THE FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY AND THE FRIDLEY PLAZA OFFICE BUILDING PARTNERSHIP IT IS HEREBY RESOLVED by the Board of Commissioners (the "Board ") of the Housing. and Redevelopment Authority in and for the City of Fridley, Minnesota (the "Authority "), as follows: WHEREAS, on the 20th*day of September, 1982, a Leasehold Agreement was entered into between the Authority and the Fridley Plaza Office Building Partnership (the "Partnership ") which Leasehold Agreement requires the Authority to provide to the Partnership the non - exclusive right to a 166 car parking lot and further provides that the Partnership shall have the option to purchase the Leasehold property at the end of 360 months for the sum of $100,000; and WHEREAS, the Authority has wishes to construct a bi -level parking ramp on the site of the parking lot which will impact the Partnership's parking arrangements and subsequent purchase option. Consequently, there has been prepared and presented to the Board a corresponding amendment to the above - mentioned Leasehold Agreement; and WHEREAS, the City of Fridley will lease from the Partnership approximately 8,000 square feet of office space for one (1) year for the aggregate sum of $80,000. THEREFORE, the HRA has agreed to pay one -half of the lease payments not to exceed $40,000 in consideration of the Partnership's willingness to amend the Parking Lot Lease and willingness to waive any claims against the HRA for disruption to the parking lot; and THEREFORE, the Board hereby approves the Amendment to the Leasehold Agreement and authorizes the Executive Director and the other officers and employees of the Authority to execute the Amendment to the Leasehold Agreement substantially in its present form, but with such minor amendments, deletions, or insertions as such officers may deem necessary or desirable, as evidenced by their execution thereof, and the Board further instructs such officers, upon the full execution of the Amendment to the Leasehold Agreement, to take such actions as may be necessary to effectuate and implement the terms thereof. PASSED AND ADOPTED BY THE FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY THIS 8TH DAY OF SEPTEMBER, 1988 LAWRENCE R. COMMERS - CHAIRMAN t 0 2.18 . AMENDMENT TO LEASEHOLD AGREEMENT This addendum is entered into this Jok day of Gush, 1988 by and between The Housing and Revedevelopment Authority in and for the City of Fridley (hereinafter called the "HRA "), the Fridley Plaza Office Building Partnership (hereinafter called the "Redeveloper ") and F &M Marquette National Bank (hereinafter referred to as the "Trustee "). WHEREAS, on the 20th day of September, 1982, a Leasehold Agreement was entered into between which Leasehold Agreement requires Redeveloper the nonexclusive right further provides that the Redevelop purchase the Leasehold property at sum of $100,000.00, and the HRA and the Redeveloper the HRA to provide to the to a 166 car parking lot and per shall have the option to the end of 360 months for the WHEREAS, the HRA now wishes to construct a parking ramp on the site of the parking lot, and WHEREAS, the Redeveloper wishes to have the City of Fridley lease a portion of the building located at 6401 University Avenue, Fridley, Minnesota, and WHEREAS, to reflect the new agreement reached between the parties it is agreed that the Leasehold Agreement should be amended as follows: 1. That paragraph 3 of the Leasehold Agreement shall be deleted and the following provision shall be added in its place: -1- 03. The Redeveloper shall pay to the Agency $800.00 per month for the non - exclusive lease of the above de8cribed property. This property shall include a bi -level parking ramp (the legal description for which is attached to this Amendment as Exhibit A) of approximately 180 stalls, the construction of which ramp shall be substantially completed on or before March 1, 1989, and which construction shall occur at no cost to the Redeveloper. These lease payments shall be made on the first day of each month and shall continue for a period of 99 years from the day that the first lease payment begins.. In the event of default, the BRA shall notify the Redeveloper and Trustee of said default. In the event the Redeveloper fails to cure said default, the Trustee, its successors -or assigns has a right to cure said default and the BRA agrees to accept as full payment of this lease from the Trustee, its successors or assigns the interest earned from time to time on the "Lease Fund". If there is a deficiency between the earnings on the "Lease Fund" and the lease payment, the BRA. shall not be prohibited from collecting the deficiency from the Redeveloper. Upon the termination of this Lease, the Redeveloper shall have the option to purchase from the BRA the real property which is described in Exhibit B of the Addendum to the Leasehold Agreement. The purchase price for this property shall be its then fair market value. In order to exercise this option Lo purchase me xeaeve. written notice by cert. not more than twelve (: than six (6) months pr: this Lease. If the paj agreement to the fair t property within thirty notice, then the fair t determined by the foll< the BRA and the Redeve: an MAI certified Appra: each mutually agree up< Appraiser. The averag4 appraisals shall then 1 value. Both the BRA ai pay for the cost of thf appoint and. shall share incurred for the third .oper snail serve fied mail to the BRA 2) months nor less or to the expiration of ties cannot come to an Market value of the (30) days of this ,arket value should be wing method: Both oper shall each select ser and they shall ,n a third MAI certified of the three (3) e the fair market d the Redeveloper will Appraiser which they equally in the fees Appraiser." 2.19 2. The Redeveloper acknowledges that in the course of constructing the parking ramp, the HRA will be unable to provide.during the time of construction a 166 car parking lot adjacent to the redevelopment property. In lieu thereof the HRA agrees to provide access to the Redeveloper to a 95 car parking lot which will be located approximately where indicated in Exhibit C. This parking shall be nonexclusive but will be provided at no cost to the Redeveloper. 3. That the Redeveloper agrees to waive any right, claim, interest, or damages arising out of the temporary taking by the HRA of the 166 car parking lot during the period of construction. 4. That simultaneous with the execution of this Addendum the City of Fridley shall enter into a Lease Agreement with the Redeveloper in substantially the same form as contained in Exhibit D hereto. 5. By entering into this Agreement the Trustee hereby consents to its terms. IN WITNESS WHEREOF, the parties have caused this instrument to be executed as of the day first set forth above. -3- N, 2.20 2.21 THE FRIDLEY HOUSING AND REDEVELOPMENT AUT R FOR E OF FRIDLEY B -" awrence R. Commers) Its Ch it BY 4 YJJj 014 W tson s xecutive Director FRIDLEY PLAZA OFFICE BUILDING PARTNERS BY Its F & M MARQUETTE NATIONAL•BANR" BY Its -4- a 2.22 EXHIBIT A Lot 15, Block 1, Fridley Plaza Center, together with that portion of Lot 1, Block I, Fridley Plaza Center lying south of a line extending from the / northeast corner of Lot 8, Block 1, to the northwest corner of.Lot 15, Block 1, Fridley Plaza Center, Anoka County, Minnesota. j 2.23 EXHIBIT B That part of Lot 15, Block 1, Fridley Plaza Center that was formerly platted as Lot 11, Block 2, Rees Addition to Fridley Park; Lot 1, Block S. said Rees Addition and that part of Lot 2, said Block 5 lying North of the now platted Fourmies Avenue; together with that part of the former dedications of 64th Avenue and the alley running North of Fourmies Avenue and South of the West extension of the North line of said former Lot 11, Block 2 now lying within Lot 15, Block 1, Fridley Plaza Center. EXHIBIT C Lot 2, Block 2, Fridley Plaza Center, Anoka County, Minnesota i�72 2.24 2.25 THIRD AMENDMENT TO LEASEHOLD AGREEMENT Mill FIRST AMENDMENT TO MEMORANDUM OF LEASEHOLD AGREEMENT This Amendment, entered into this day of 1992, by. and between THE HOUSING AND PJEDEVELOP"NT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA (hereinafter called the "HRA "), and COLUMBIA PARK PROPERTIES, a Minnesota Partnership (hereinafter called "Redeveloper "). WHEREAS, on the 20th day of September, 1982, the HRA and the Fridley Plaza Office Building Partnership entered into a Leasehold Agreement which required the HRA to provide the Fridley Plaza Office Building Partnership with the non - exclusive right to a 166 car parking lot; and WHEREAS, the Leasehold Agreement was amended pursuant to Amendment to Leasehold Agreement, dated January 31, 1989, providing for the construction of a parking ramp on the site of the parking lot; and WHEREAS, the Leasehold Agreement was further amended by instrument, dated February 22, 1989, to revise the legal description of the property subject to the Leasehold Agreement to afford the Fridley Plaza Office Building Partnership additional vehicle ingress and egress access to the parking ramp parcel; and WHEREAS, the HRA and the Fridley Plaza Office Building Partnership entered into that certain Memorandum of Leasehold Agreement, dated February 22, 1989, filed March 9, 1989, in the Office of the Anoka County Recorder as Document No. 842658, to establish the Leasehold Agreement of record; and WHEREAS, the Fridley Plaza Office Building Partnership assigned its interest in the Leasehold Agreement to Performance Investments, a Minnesota Partnership, by Assignment, dated March 3, 1989; and WHEREAS, Performance Investments assigned its interest in the Leasehold Agreement to "Redeveloper" by Assignment of Leasehold Interests, dated August 29, 1991; and WHEREAS, the parties have discovered that the new legal description is not correct and the parties agree that the Leasehold Agreement, as amended, should be further amended. NOW, THEREFORE, the parties to this Agreement, in consideration of the promises, covenants and agreements made by each to the other, do hereby agree as follows: 2.26 1. That Exhibit A -1 attached to the Second Amendment to Leasehold Agreement and Exhibit A attached to the Memorandum of Leasehold Agreement shall be deleted in their entirety and replaced by the following legal. description: Lot 15 and all that part of Lot 7, Block 1, Fridley Plaza Center, Anoka County, Minnesota, lying easterly of the following described line: Commencing at the northwest corner of Lot 14, said Block 1; thence North 89 degrees 58 minutes 45 seconds East, along the north line of said Lot 14, a distance of 13.00 feet, to the point of beginning of the line to be described; thence North 0 degrees 47 minutes 15 seconds East a distance of 213.23 feet to a point on the line common to Lots 6 and 7, said Block 1, said point being 3.00 feet westerly from the southeasterly corner of said Lot 6, and said line there terminating. 2. That except as amended herein, said Leasehold Agreement, as amended, and Memorandum of Leasehold Agreement are hereby confirmed as modified. IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed as of the day and year first above written. THE HOUSING AND REDEVELOPMENT AUTHOR TY IN AND FOR THE CITY --OF FRID 'MI ESOTA BY:� Lawrence R. Commers Its Chairman n BY: 1441',; , ;l G' z. 71- William W. Burns Its Executive Director STATE OF MINNESOTA ) )ss. COUNTY OF ANOKA ) The foregoing instrument was acknowledged before me this day of aJL , 1992, by Lawrence R. Commers, Chairman, and William W. Burns, Executive Director, of The Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, a political subdivision of the State of Minnesota, on behalf of said Authority. ®ROBFRTA COLLJJV9 ., � %• s� RMARY PUBLIC • IOTA �° � i : �� 2. C _, /��-C •� �.- � , ANOKA COUP IAp Cann, E" Oq, 21mf► STATE OF MINNESOTA COLUMBIA PARR PROPERTIES BY: A Partner BY: A Partner 2.27 ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 1992, by and by , two of the Partners of Columbia Park Properties, a Partnership under the laws of the State of Minnesota, on behalf of the Partnership. THIS INSTRUMENT WAS DRAFTED BY: BARNA, GUZY & STEFFEN, LTD. (JDH) 400 Northtown Financial Plaza 200 Coon Rapids Boulevard Minneapolis, MN 55433 -5894 (612) 780 -8500 2.28 E fig Ineenng Sewer wafer (Parks Sheets Maintenance MEMORANDUM TO: Barb Dacy, Community Development Director PW92 -364 FROM: Bob Nordahl, Operations Analyst DATE: November 23, 1992 SUBJECT: City of Fridley Maintenance Cost Associated with the Office Plaza Parking Lot Listed below is an estimate of yearly maintenance costs associated with the Office Plaza parking lot: I. Irrigation System: One full -time park maintenance worker - 32 hours per season to turn system off/on and miscellaneous repairs. ($17.64 includes benefits) ........... ............................... $564.48 One summer part -time worker to assist - 12 hours at $6/hour ................ 72.00 Miscellaneous irrigation parts (heads, valves, etc) ........................ 125.00 II. Turf and Grounds Maintenance: One Municipal Center part -time maintenance worker to mow along 5th Street and Fourmies 48 Hours @ $6.48/hr ........................... 311.04 III. Snow Removal: One park maintenance worker and 4 -wheel drive pickup truck approximately eight snow storms a season @ 2 hours a storm ($17.64 includes benefits) ............ ............................... 282.24 Truck Cost ($20/hour) .............. ............................... 320.00 IV. Parking Lot Maintenance: Crack filling along ramp and asphalt lot - two street maintenance workers at 2 hours ($17.64) ........... ............................... 70.56 Crackfiller ........................ ............................... 20.00 Equipmentcost ................. ............................... 20.00 APPROXIMATE YEARLY COST ............................ $1,785.3 2 Please see me if you need additional information. Mal am f 2.29 HOUSING i REDEVELOPMENT AUTHORITY MEETING, JUNE S. 1989 - PAGE 9 1 Mr. Meyer stated if Mr. Boisclair is %Tilling to pursue this, knowing the negatives, re is always the hope that something might develop that would m et with the HRA's approval. Mr. Burns stated he did not nt to discourage redevelopment. They want to encourage redevelopme t. However, at the same time, it is his personal feeling that he did not think the City can realistically be in a positio to know whether they can commit money to Mr. Boisclair's proje t until they are farther along in solving the Lake Pointe problem. Mayor Nee agreed. He stated it wo ld be great if Mr. Boisclair was interested in the project 18 montNs from now. Ms. Horneland stated, again, there a significant issue and that involves the sellers of the property They have gone through this process for 10 years, and they have gone through the process of working with developers and coming in with a proposal with Tanurb to try to keep the market proposal at a number that would work with the City and with the HRA. They disco red a Tanurb project will not work. If Mr. Boisclair is allowe to work with staff on a project that works, but an agreement i not reached, then the owners are back to square one where they have been for 10 years. They would be perfectly happy then to ave the HRA take the property out of the redevelopment district and let them be. Ms. Horneland stated she does represent the wners of the property also, and they should be taken into consider tion. Mr. Newman stated the City has taken the owners ' nto consideration. With Tanurb this past year, the City worked t a pace that the property" owners requested; and now the owners ave to recognize that the HRA needs some additional time. UPON A VOICE VOTE, MEYER AND PRAIRIE VOTING AYE, IkASMUSSEN VOTING NAY, ACTING CHAIRPERSON MEYER DECLARED THE MOTION CARRIED BY A VOTE OF 2 -1. 2. CONSIDERATION OF COST - SHARING POLICY FOR FRIDLEY PLAZA RAMP: Mr. Robertson stated this is the issue of paying for the maintenance costs for the Fridley Plaza Ramp. The annual estimated maintenance costs for the ramp are approximately $6,000, and every four.. years -there would _ be some sealin�c _and stri inQ fnr �n addi 'onal st of $3 500 ear. Since the City and the tenants of the Fri ey Plaza Office Building are going to be the main users of the ramp, although it is open to the general public, staff is recommending the HRA and the City split the annual and periodic maintenance costs. The HRA could pay its share out of, the $800 received from rent of the parking space from the owners of the Fridley Plaza Office Building. 2.30 e HOUSING & REDEVELOPMENT AUTHORITY MEETING, JUNE 8, 1989 - PAGE 10 Mr. Robertson stated Mr. Burns presented this suggestion to the City Council on Monday, June 6, and the Council concurred with this concept. Chairperson Commers did not like this, but will go along with staff's recommendation; however, he does not want this to be construed generally for other HRA projects. Chairperson Commers feels the HRA should not be in the business of being an operational agency. Mr. Burns stated he is also proposing that the agreement including these terms, as well as a separate agreement that provides for the transfer of the land on which parking ramp sits to the HRA, be handled at the June 19 Council meeting. NOTION by Mr. Rasmussen, seconded by Mr. Prairie, to approve the sharing of maintenance costs with the City for the Fridley Plaza Ramp. UPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPERSON MEYER DECLARED THE MOTION CARRIED.UNANIMOUSLY. 3. Mr. Robertson stated the HRA eviewed this material at its May meeting, and the HRA directed s aff to prepare a draft development agreement to be brought back f the HRA's consideration. That draft development agreement was i cluded in the HRA packet for this meeting. Negotiations have been going on between Mr. Newman and Mr. Kitterman's staff. As of Tues y, June 6, they are essentially in agreement. Mr. Newman would gi a an update. Mr. Newman stated it appears they concept. There may be some fine tuni. the past, staff has looked to the HRA concept and the overall layout. He consistent with the HRA's discussi investment in light of the fact that and he believed it will meet with the in agreement on the.basic to be done yet, but as in for approval of the general elieved this agreement is s and is a fairly safe t e work has been completed 's satisfaction. MOTION by Mr. Prairie, seconded by Mr. Riksmussen, to approve the development agreement in concept and dir ct staff to execute a final development agreement. UPON A VOICE VOTE, ALL VOTING AYE, ACTI G CHAIRPERSON MEYER DECLARED THE MOTION CARRIED UNANIMOUSLY. 4. CONSIDERATION OF A RESOLUTION ESTABLIS ING TAX INCREMENT DISTRICT NO. 9. CENTRAL AVENUE, ONAN: Mr. Robertson stated this proposal grew out o\pa discussion Mr. Burns initiated with the Onan Corporation this t winte r. They are initiating a business retention activity thhey intended to a° 0 3.1 Community Development Department HOUSING AND REDEVELOPMENT AUTHORITY City of Fridley MM: October 7, 1993 20:... .HTi l i am Bums, Executive Dissector of HRA FRM.w Barbara 'Dacy,. Community. Dave dpmsnt .DirW- tar:. SUBJECT: Consider Request for Tax Increment Assistance, Westminster Corporation In March 1993, the City Council approved the necessary zoning approvals to permit construction of a 51 -unit elderly apartment project just north of St. William's Church on 5th Street. Westminster Corporation obtained preliminary approval frsCmt HUD for a "capital grant" to fund a significant portion of the project. The project will serve very low income seniors meeting the HUD income guidelines. As you lmaw, Westminster had proposed a 72 unit market rate project four years ago which was not pursued. ;0icso •� _. ��a �� Westminster is requesting $82,000 in tax increment assistance for the project. The property is already located in Tax Irnt District #1, the Center City District. Staff has advised Westminster that the BRA prefers to use the "pay - as you-go" approach to provide assistance. The estimated project cost is approximately $2,526,830. The requested assistance represents about 3% of the total cost which is well within the HRA guidelines. The current estimate Ervin HUD for the capital grant is $2,432,830. The gap between the project cost and the HUD financing will be funded by Wester. The public purpose for the assistance would be to assist Westminster in site acquisition and preparation costs for the project. Jim Casserly's office has prepared a cash flow analysis which indicates that $82,000 in present value dollars can be returned to Westminster over 3 1/2 years with collection beginning the first half of 1996. Casserly's office has also provided an analysis which indicates that the total tax increment which would be generated from this proj eat for the remainder of the life of the district equals $453,149 which equates to $252,437 in present value dollars. Reccmunendation Me proposed request is consistent with BRA guidelines. Staff recommends that the BRA authorize staff to prepare a development contract for final BRA approval at a future agenda based on the request of $82,000 via the pay-as-you-go approach. BD:ls M -93 -590 3.2 E�J 5th STREET N.E. - I 1 , 1 � _ 1 �ropose� CD B ' v� an a�ad � • ( 1 V� i tAaro�r -- I Jllm wra. 3 � s � I - -- G I ' r -- 32 NEW STALLS _ t L 1 r .... MOON PLAZA LEGEND DQ pt yM►[ Ml WR IIOR O1 A ALL( aQ ql Dw( vl ftit UOR O. •t �R[ �4 OI a11M(. VS i11[ tlOff Di M;JWi Ol�jiffi mrtp� NORTH �(V mflp� ■ 0'-A RIM I A:N . K-R 0 10 S '--P. F I s A:'-R - C` F I �-o R ■ ■ ii E, R & A,w S - S 0-C- I :A T: E ':-S "'I G N'r ;E,,�"W�,G-1 ;WE I.:"r-R-11.44jGz, 3.4 PA FL- co -V III - ,. �''� . y.�► � :,�i,_:; ::.�- •.` mss•.. - , - :. _- : .. _ .. ' - - - .. =^ _ �i� °� � .. ; S► � .: _ .. _ _ .j ,• • y ; � � r _ _ _ . ••a' is • •IL � , - -� .Q •� r ` .,T- �.. -� . - � � Tom- • .. -... ' • . �..p fly, • • . • 'mss' � ''= � == � •_ - ,�- --� .. �'= Mt�'K'"�''- �< .;:' ��- - �, : • ...s�aa ,' _. . „ _ - _ " :.._,. mss-:, - :_ .: " -�• �f � `' •mil / 4 �• r • _ - '. : "�- ' r - - - - :5-4 CF FAl t.i- r-;r'o PAt ►JYi ' :, - l:•_ - •'{ -- ''- �•• -•_� „i ,r -. _ _ Wit• PL Casserly Molzahn & Associates, Inc. 3.5 215 South 11th Street, Suite 300 • Minneapolis • Minnesota 55403 • Office (612) 342 -2277 • Fax (612) 334 -3382 FROM: Mary Molzahn James Casserly RE: Proposed Norwood Square Apartments /Westminister Senior Housing DATE: September 30, 1993 Enclosed please find two preliminary cash flow analyses for the Norwood Square Apartments /Westminister Senior Housing proposal. Both analyses assume that construction of a 51 unit Title II housing project will be commenced and completed in 1994, with the project assessed in 1995 and taxes payable in 1996. The units will be valued at approximately $30,745 per unit, for a total estimated market value of approximately $1,568,000. Assuming the Title II tax class, the tax capacity upon completion will approximate $36,064. Total taxes to be generated are estimated at $41,329, assuming a 1.14599 pay 1993 tax rate, or $810 per unit. The tax increment generated, assuming 0.0% inflation, is approximately $32,545 annually. Administrative expenses, based on 10.0% on the tax increment generated, are reserved for the City. The first analysis assumes a 16 year term, through 6/2009 which is the termination date of the TIF District. The amount of available tax increment generated is approximately $453,149, with a present value of $252,437 at 7.5 %. The second analysis assumes 'a 5 -1/2 year term, sufficient only to generate the amount of TIF Assistance requested.' The amount of tax increment generated that would be available for the project is approximately $104,419, with a present value of $82,000 at 7.5 %. Please call if you have any questions or comments. CITY OF FRIDLEY, MINNESOTA PROPOSED WESTMINISTER SENIOR HOUSING 3.6 WEST1 PREPARED BY CASSERLY MOLZAHN & ASSOCIATES 29- Sep-93 ORIGINAL ESTIMATED CAPTURED ESTIMATED LESS: AVAILABLE PRESENT VALUE ANALYSIS TAX TAX TAX TAX ADMIN TAX SEMI ANNUAL CUMULATIVE DATE CAPACITY CAPACITY CAPACITY INCREMENT EXPENSES INCREMENT BALANCE BALANCE 12 / 1993 3,519 3,519 0 0 0 0 0 0 6/ 1994 3,519 3,519 0 0 0 0 0 0 12 / 1994 3,519 3,519 0 0 0 0 0 0 6/ 1995 3,519 36,064 0 0 0 0 0 0 12 / 1995 3,519 36,064 0 0 0 0 0 0 6 / 1996 3,519 36,064 32,545 18,648 1,865 16,783 14,485 14,485 12 / 1996 3,519 36,064 32,545 18,648 1,865 16,783 13,962 28,447 6 / 1997 3,519 36,064 32,545 18,648 1,865 16,783 13,457 41,904 12 1 1997 3,519 36,064 32,545 18,648 1,865 16,783 12,971 54,875 6 / 1998 3,519 36,064 32,545 18,648 1,865 16,783 12,502 67,376 12 / 1998 3,519 36,064 32,545 18,648 1,865 16,783 12,050 79,426 6 / 1999 3,519 36,064 32,545 18,648 1,865 16,783 11,614 91,041 12 / 1999 3,519 36,064 32,545 18,648 1,865 16,783 11,195 102,235 6 / 2000 3,519 36,064 32,545 18,648 1,865 16,783 10,790 113,025 12 / 2000 3,519 36,064 32,545 18,648 1,865 16,783 10,400 123,425 6 / 2001 3,519 36,064 32,545 18,648 1,865 16,783 10,024 133,449 12 / 2001 3,519 36,064 32,545 18,648 1,865 16,783 9,662 143,111 6 / 2002 3,519 36,064 32,545 18,648 1,865 16,783 9,313 152,424 12 / 2002 3,519 36,064 32,545 18,648 1,865 16,783 8,976 161,400 6 / 2003 3,519 36,064 32,545 18,648 1,865 16,783 8,652 170,051 12 / 2003 3,519 36,064 32,545 18,648 1,865 16,783 8,339 178,390 6 / 2004 3,519 36,064 32,545 18,648 1,865 16,783 8,037 186,427 12 / 2004 3,519 36,064 32,545 18,648 1,865 16,783 7,747 194,174 6 / 2005 3,519 36,064 32,545 18,648 1,865 16,783 7,467 201,641 12 / 2005 3,519 36,064 32,545 18,648 1,865 16,783 7,197 208,838 6 / 2006 3,519 36,064 32,545 18,648 1,865 16,783 6,937 215,775 12 / 2006 3,519 36,064 32,545 18,648 1,865 16,783 6,686 222,461 6 / 2007 3,519 36,064 32,545 18,648 1,865 16,783 6,444 228,905 12 / 2007 3,519 36,064 32,545 18,648 1,865 16,783 6,212 235,117 6 / 2008 3,519 36,064 32,545 18,648 1,865 16,783 5,987 241,104 12 / 2008 3,519 36,064 32,545 18,648 1,865 16,783 5,771 246,875 6 / 2009 3,519 36,064 32,545 18,648 1,865 16,783 5,562 252,437 aaaaaaaaaaaaaaaaaaaaaaaaaaaa- �aaaaaaaaaaaaaaaaaaaa 503,499 aa - 50,350 aaaaaaaaaaaaaaaaaaaaaaa 453,149 252,437 aaaaaaaaaaaaa- 252,437 --- -- as 3.6 WEST1 PREPARED BY CASSERLY MOLZAHN & ASSOCIATES 29- Sep-93 CITY OF FRIDLEY, MINNESOTA PROPOSED WESTMINISTER SENIOR HOUSING ORIGINAL ESTIMATED CAPTURED ESTIMATED LESS: AVAILABLE TAX TAX TAX TAX ADMIN TAX AVAILABLE AVAILABLE DATE CAPACITY CAPACITY CAPACITY INCREMENT EXPENSES INCREMENT TO PROJECT TO CITY 12/ 1993 3,519 3,519 0 0 0 0 0 0 6/ 1994 3,519 3,519 0 0 0 0 0 0 12 / 1994 3,519 . 3,519 0 0 0 0 0 0 6/ 1995 3,519 36,064 0 0 0 0 0 0 12 / 1995 3,519 36.064 0 0 0 0 0 0 6 / 1996 3,519 36,064 32,545 18,648 1,865 16.783 16,783 0 12 / 1996 3,519 36.064 32,545 18,648 1.865 16.783 16,783 0 6 / 1997 3.519 36,064 32,545 18.648 1.865 16,783 16.783 0 12 / 1997 3,519 36.064 32.545 18,648 1,865 16,783 16,783 0 6 / 1998 3.519 36.064 32.545 18,648 1.865 16.783 16.783 0 12 / 1998 3,519 36.064 32.545 18,648 1.865 16.783 16,783 0 6 / 1999 3.519 36,064 32,545 18.648 1,865 16,783 3,719 13.064 130,537 13.054 117.483 104,419 13,064 3.7 PV OF AVAILABLE TO PROJECT SEMI ANNUAL BALANCE CUMIunVE BALANCE 0 0 0 0 0 0 0 0 0 0 14,485 14,485 13,962 28,447 13.457 41.904 12,971 54,875 12.502 67,376 12.050 79,426 2,574 82.000 82.000 82,000 WEST1 PREPARED BY CASSERLY MOLZAHN & ASSOCIATES 30- Sep-93 3.8 CITY OF FRIDLEY, MINNESOTA PAY 1993 MARKET VALUE 153,000 PAY 1993 TAX CAPACITY (TITLE II) 2.30% 3,519 TOTAL ESTIMATED MARKET VALUE 1,568,000 LAND 153,000 $ UNITS 51 VALUE /UNIT 3,000 BUILDING 1,415,000 TOTAL ESTIMATED TAX CAPACITY (TITLE II) 36,064 LAND 2.30% 3,519 BUILDING 2.30% 32,545 CONSTRUCTION 1994 VALUATION 1995 TAXES PAYABLE 1996 PAY 1993 TAX RATE 1.14599 INFLATION 0.00% ADMIN EXPENSES 10.00% PV RATE 6/1994 7.50% WEST1 PREPARED BY CASSERLY MOLZAHN & ASSOCIATES 29- Sep-93 v s I _ i 4.1 Community Development Department HOUSING AND REDEVELOPMENT AUTHORITY City of Fridley DATE: October 8, 1993 TO: William Burns, Executive Director of HRA °• gROM:.. Barbara 'Davy.;-• •Community:•Development "Director Grant Fernelius, Housing'Coordinator SUBJECT: Scattered Site Acquisition Program Recommendations As you recall at the September 9, 1993, HRA meeting, we made a proposal to divide the scattered site acquisition budget in half. Fifty percent of the budget would be available for general acquisition activities, while the other portion would be reserved for properties which were deemed not repairable under the Housing Rehab Program. We devised this proposal because we felt we needed a strategy to address properties which fell into the second category. This memo is to review the properties which we feel are potential sites for acquisition under each pool. Pool A: Housing Rehab Program Budget: $50,000 Potential Site: 560 Hugo Street N.E. This property has had a history of problems dating back several years, including exterior maintenance, noxious weeds, and storage of junk and various debris. The owner applied for our home improvement grant program, and on September 8, 1993, we inspected the property. Among the major deficiencies noted were: 1. A 24 ft. by 24 ft. addition originally constructed in 1976 which still remains unfinished. 2. Improper roof construction 3. Various electrical and plumbing system violations 4. Inadequate and unsafe heating system 5. Life safety violations, such as missing handrails and improper smoke detectors 4.2 Scattered Site Acquisition Program Recommendations October 8, 1993 Page 2 It should also be mentioned that in June of 1992, the owner applied to Anoka County for housing rehab assistance and was denied. Two separate inspections were conducted at that time, one by ACCAP and one by the City. The County determined that the property could not be repaired to a livable condition within the available budget. Our inspector has indicated that'. the property is in extremely poor condo tion: -and really -isn l t..habitable:. -Rehabilitating 'the' p*tpperty .. is not' feasible' either. Moreover, the 'owner could' not * sell the property in its current condition. The property has an estimated market value of $38,896 and comprises two 25 ft. by 110 ft. lots (total square footage equals 5,550). The lot is not considered buildable under current code without a variance. In light of these facts, we feel the only option would be to begin negotiations with the owner for voluntary acquisition. Attached for your review is a copy of the lot survey. Pool B: General Acquisition Program Budget: $50,000 Potential Sites: 513 Fairmont Street N.E. 8280 East River Road 1632 Rice Creek Road Background Information: As mentioned above, this pool of money will be used to acquire abandoned, substandard, and /or vacant properties which are considered blighting influences. These properties were identified as follows: 1. We obtained the list of all residential properties which had an estimated market value of $50,000 or less (130 properties). 2. We separated those properties that had been identified as level one or level two priorities during the February 1993 windshield survey. 3. We focused on level one priorities. These are properties with significant structural problems (i.e., sagging roofs, damaged walls, etc.). This final cut produced five properties in total, and each was evaluated on several criteria. The criteria included such things as whether the property was located in a target neighborhood, i.e., Riverview Heights or Hyde Park, the condition of the street, size of the lot, cost, etc. 4.3 Scattered Site Acquisition Program Recommendations October 8, 1993 _ Page 3 After completing this process, the properties were rank ordered. 513 Fairmont Street N.E. Estimated market value: $35,433 Lot size: 50 ft. by 110 ft. Total square-footage: 5,500 •:..Zoning:. .R-_1.,. Single Family... Occupancy,statu's:• Vacant This property has been vacant since at least July 1992. Staff has received numerous complaints from surrounding neighbors. The City's Public Works staff have boarded up the windows. The Council has also ordered tree removal and weed cutting on the property, the costs of which have been assessed to the property. We feel this is the highest priority. 8280 East River Road Estimated market value: $43,585 Lot size: 170 ft. by 110 ft. Total square footage: 18,700 Zoning: R -1, Single Family Occupancy status: Occupied 1632 Rice Creek Road Estimated market value: $44,607 Lot size: 130 ft. by 240 ft. Total square footage: 31,200 Zoning: R -1, Single Family Occupancy status: Occupied Recommendation: Staff recommends that the HRA authorize the Housing Coordinator to begin negotiations with the owners of 560 Hugo Street and 513 Fairmont Street. If the owners are interested, staff will secure appraisals of each property. Staff would then review the results with the HRA prior to a separate authorization to make a formal offer. GF:ls M -93 -596 a tir YiElRRftN OINK:=9 —IO O/ tttt ® Ciul t MurLnpa! Engurrerms • Sad Tatur f •Lard Snmeyies •land Pfmnrint Certificate of Survey for M �- i �� �ount� Irl✓at up0•fi� ph ��Alerfh and o.4= vJcsf �fo �a 50 { •a . �a �Da ul •�� r .•N A A a 0 1 - � n i 2 10 141 ' 1 �- C jO 1- O � o O P 1 fMwn Offico 784'Gm 4.4- 6875 Hiommy M. 65 N. E Mkwdm olis, Mhmaots 66432 _ South Off cs 690-6510 � 1101 Cliff Road t meville• Mhrrraots 56337 s ci- WwAP,TZ LO 1 S 11 £ 1z I I-Z�L-oc, k I, �IVr,.---,4 P�VI C—: �k,i Anna Coa,Wy o �. 7¢n�es 1>ron hlOhUhYl117 I� I hereby certify that this is a true and correct representation of a survey of the boundaries of the above described land# and of the location of ajl buildings /�there*p, and oll vi tble encroachments, if any, from or on said land. As surveyed by me this Z1 day of +`+cr '5 A. D. 199. S BURBAN ENGINEERING, INC. Engin r Sury y rs L r Surveyor's Cert�%ate 4.5 COMSTOCK & DAVIS, INC. Consulting Engineers and Land Surveyors 1446 County Road J, Mpls., Minn. 55432, 784 -9346 Lot survey and house location Survey for: Lots 45 and 46, Block "H ", Alex Barna Riverview Heights, 560 Hugo St. City of Fridley, Fridley, Minnesota Anoka County, Minnesota SO UtZ- %.A AA � o 1 #. At ek"Sh'19 °ase - '' f ZO �( r� deMice n OJ en oDa ;nom / ..8 = 50 y. /^tG en vi ac " ^y Description: Lots 45 and 46, Block "H ", Riverview Heights, Anoka County, Minnesota. Subject to easements of record. SCALE: i" = 30 3�,� Zo. v ® denafes iron monument found ^� 0 p denotes iran inonuineni sef I hereby certify that this survey, plan or report was prepared by me or under my direct supervision and that I am a duly Registered Land Surveyor under the laws of the State of Minnesota. Mi >o Z 2N.� 10832 Sept. 25,'7 3434 Reg. No. Date Job No. S =rTriburte Edl 30A Sunday /October 3/1993 4.6 OUR PERSPECTIVE Boarded u must :act fast to. save housing Ken - :-Peterson, -St. •Paul's director of ; when the costs of repairs .are- so high planning and economic development, that they exceed market* values, more says nothing drives people nuts like sophisticated city programs — such as having an empty, boarded house in loan participation pools that reduce pri- their neighborhood. And that's under- vate lenders' risk of loss — are needed standable. to make possible the rehabilitation of critical properties. "It's like a sore that drives values down and people out," Peterson concluded earlier this summer. .Residents of the. Twin Cities can be grateful that the number of boarded buildings are in the hundreds compared to places like Detroit or New Orleans, where they're counted in the tens of thousands. But that's little consolation when a shuttered house is next door. Then the immediate problem takes precedence, as Star Tribune reporters Peter Leyden and Bill McAuliffe de- scribe in today's newspaper. Many strategies — such as changing federal housing policies and implement- ing Minneapolis' Neighborhood Revi= talization Program — focus on one or more parts of the problem. What's needed most, however, is for the Twin Cities to move faster to identify boarded houses and get them rehabili- tated for new occupancy or torn down. Often problem properties fall into three categories: going, going and gone. That makes financing difficult. In Minneapo- lis and St. Paul, home ownership pro- grams for troubled properties match .qualified buyers with private lenders still willing to offer financing despite changes in federal tax law that stripped incentives for private investments. But And when houses are demolished; com- munities shouldn't necessarily try to replace .them on a one - for -one .basis. In some cases, the demolition may providt- an opportunity to enlarge the lot sizes and value of the houses next door or provide open space or other amenities in the neighborhood. The key is to move fast when the prop- erties are irreversibly bad. More than one or -two on a block for a significant period of time can ruin an otherwise stable neighborhood. One boarded building can start a domino effect on other properties. It would help if the Minnesota Legisla- ture .provided shorter redemption peri- ods after a foreclosure, abandonment or condemnation. If the wait were less than the current one -year provision, private and public investors might be more willing to commit to fixing up boarded buildings. Public and private sectors must mutual- ly reinforce each other in generating and preserving a quality, affordable housing stock. Strong partnerships among gov- ernment, private lenders and neighbor- hood housing organizations can go a long way toward making a boarded house a home again. .'River PlAns A perplexing puzzle for St. Paul -The Science Museum of Minnesota's that didn't yield a sunset provision on intriguing plan for mixing science edu- the increase or clear plans for snendine t 1 1� oH,alloA[i151tARD ERO An artist's view of nature I write to respond to the surprising and angry letter of Sept. 26 criticizing aspects o: my sculpture on the Nicollet Mall. With due respect for the letter writer's ornitho- logical knowledge, I must explain that I have made art, not literal depictions of birds. My work is inspired by nature and this sculpture in particular grew out of my rich encounter with the great natural world of Minnesota. I do not compete with God by trying to copy his creations. My job is to articulate my deepest impressions of nature by creating original form which gives shape to my understanding. I believe my vision has enriched and will continue to enrich the lives of many people in this country and abr6ad who have en- countered my work. The people of Minne- 5 - t t 1 1� oH,alloA[i151tARD ERO An artist's view of nature I write to respond to the surprising and angry letter of Sept. 26 criticizing aspects o: my sculpture on the Nicollet Mall. With due respect for the letter writer's ornitho- logical knowledge, I must explain that I have made art, not literal depictions of birds. My work is inspired by nature and this sculpture in particular grew out of my rich encounter with the great natural world of Minnesota. I do not compete with God by trying to copy his creations. My job is to articulate my deepest impressions of nature by creating original form which gives shape to my understanding. I believe my vision has enriched and will continue to enrich the lives of many people in this country and abr6ad who have en- countered my work. The people of Minne- 5.1 Community Development Department HOUSING AND REDEVELOPMENT AUTHORITY City of Fridley TO: Housing and Redevelopment Authority Members FROM: William W. Burns, Executive Director of HRA DATE: October 8, 1993 SUBJECT: Marketing /Advertising Consultant On August 18, 1993, we sent out a request for proposal to four marketing /advertising firms requesting assistance in marketing and advertising the Lake Pointe site. While we started from the position that we needed -a brochure, our preliminary discussions with advertising consultants led us to request a broader scope of services, as reflected in the attached request for proposal. We received proposals from three architectural firms: Busch +Partners, Inc.,- Gott;ry Advertising and Marketing, Inc., and Larsen Design Office. The proposals were reviewed by staff and then at a meeting with Mayor William Nee and Jim Casserly. All three proposals were very impressive and somewhat similar. We leaned towards Busch +Partners, Inc., because of Mr. Busch's experience with real estate development, his contacts in the advertising and real estate development world, and because he, rather than a non - principal, would be doing the work. I think it is also fair to say that his proposed marketing strategy for Lake Pointe was more focused than those of his competitors. My recommendation is that the HRA select the firm of Busch +Partners, Inc., to assist us in advertising and marketing the Lake Pointe site. The estimated cost for both phases of Mr. Busch's proposal will be $37,500. At our meeting on October 14, 1993, 1 respectfully request that the HRA approve the employment of Busch +Partners, Inc. for an amount not to exceed $37,500. Although we are not expecting the need for additional funding, it may be necessary at some point to request additional funding. I checked several references for Busch +Partners, Inc. They included Bruce Carlson at Northco, Ralph Robinson at Told Real Estate, and Brad Hoffman, and Judith Bergland at the City of Brooklyn Center. Each of the references were very positive. All of them concluded that Mr. Busch has performed very well. Thank you. WWB:rsc Attachment r FRIDLEY MUNICIPAL CENTER - 6431 UNIVERSITY AVE. N.E. FRIDLEY. MN 55432 - (612) 571 -3450 - FAX (612) 571 -1287 REQUEST FOR PROPOSAL ADVERTISING /MARKETING SERVICES TO: Larsen Design Office, Inc. 7101 York Avenue South Minneapolis, MN 55435 Attention: Ms. Catherine Gillis FROM: City of Fridley Fridley Housing and Redevelopment Authority DATE: August 18, 1993 SUBJECT: Request for Proposal - Advertising /Marketing Services The City of Fridley and the Fridley Housing and Redevelopment Authority are actively seeking the help of an advertising /marketing firm to assist in promoting the City's Lake Pointe site (see attached drawing). This forty acre site is one of the best remaining sites in the entire Twin Cities area for corporate office development. Located along Interstate 694, between Highway 65 and Highway 47, the site is highly visible and provides easy access to downtown Minneapolis, the airport, and most other locations in the Twin Cities area. The site also has the advantage of being ready for development. The streets are in, basic landscaping has been done, a sprinkler system is in place, water and sewer is in place, and building pads have been compacted. The site also has the advantage of being in Anoka County and the City of Fridley, where taxes and utility rates are among the lowest in the Twin Cities area. Additionally, the site offers ready access to a strong blue and white collar labor market that already supports Onan, Medtronic, Burlington Northern, FMC; and a wide variety of other industries. Our aspiration for the site is to have someone buy it and develop high density corporate office space. We need someone to help us sell it. We are hoping that whoever is selected will have the capability of providing direct, hard - selling advertising to a variety of corporate users throughout Minnesota and the United States. Now that you have heard about our aspirations, tell us how you would go about marketing the site. For example, what activities would you conduct to produce a sale to corporate office users? Please identify the approaches you would take and the cost of the activity to support your approaches. Request for Proposal 5.3 August 18, 1993 Page Two In addition to identifying activities and estimated costs for activities, please tell us what support services would be required from the City of Fridley and identify activities that would be contracted out. We would also like to know something about the key people who would be working on the project, as well as their availability, and the timetable you would propose for concluding key activities of the project. Please strtirrti# fiive. copies of your:proposal -by September 16� 1993: Proposals shouid be directed to William W. Burns, City Manager, 6431 University Avenue N.E., Fridley Minnesota, 55432. Thank you for considering this request for proposal. Sincerely, William W. Burns City Manager, City of Fridley Attachments (3) .10 IBM mom.- BAN 7 a IF1 IRS ►E pppp • F1 na.% NJ Slit, "- I-- - - F.- 5.5 ADDRESSES REQUEST FOR PROPOSAL ADVERTISING /MARKETING SERVICES LAKE POINTE SITE August 18. 1993: Busch & Partners, Inc. 318 Groveland Minneapolis, MN 55403 Attentfo.m. Merrill. Busch... The Gottry Group 10700 Normandale Boulevard Suite 220 Bloomington, MN 55437 Attention: Steve Gottry The Kuester Group, Inc. 81 South Ninth Street Suite 300 Minneapolis, MN 55402 Larsen Design Office, Inc. 7101 York Avenue South Minneapolis, MN 55435 5.5 e a ADDRESSES R REQUEST FOR PROPOSAL ADVERTISING /MARKETING SERVICES LAKE POINTE SITE August 18, 1993: Busch & Partners, Inc. 318 Groveland Minneapolis, MN 55403 Attention:.- Merrill Busch*:... . The Gottry. 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I--I. aC'� 0 oC�J0 0CL -j= w lLNNmYYNY a=m Jdz >Q-G O-a N -�YNHN Of�S O%a O O N MO O'tW O�OO �* CO OOMO1'OO Ln In N fn N %t O Ln N Imo. 1� f�NNa- 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 C. 0 0 0 0 0 0 0 0 0 0 0 0 0 Cl 0 0 0 0 0 0 � r � ; � 0 0 0 0 0 0 0 0 0 0 O N N N O O N N N N �t N NN 't 't NNNN 0'0'0'000'0'00'0 �MMM�. -MMMM C 0 0 0 0 0 0 0 0 0 0 000000000000 O M M M O O M M M M ) C) 0010 03.0000 tiNN NI�I,- NNNN P P a P a a P P P a N. \ \ \ \ \ \ \ N. \ NN Ln Ln N in wt NW%WN 0 Cl 0 0 0 0 0 0 0 0 \ \ \ \ \ \ \ \ \ \ 0 0 0 0 0 0 0 0 0 0 O--- NMgt%t m Ln P P P P P P P P P P O \ M a0 r N Ln 0 O P �- N 2 W Q 3 'o U O r- in Ln Ln xxx U U U I.- wmm O W H N W U O a 2 O F U Q ti 2 a OC F- OC U O 6.2 TO: FRIDLEY H.RA FROM: CITY OF FRIDLEY RE: BILLING FOR ADMINISTRATIVE AND OPERATING EXPENSES SEPTEMBER 1993 Account #'s for HRA's Use ADMINISTRATIVE BILLING: ADMINISTRATIVE PERSONAL SERVICES ADMINISTRATIVE PERSONAL SERVICES — for setting up HRA payroll system ADMINISTRATIVE OVERHEAD TOTAL ADMINISTRATIVE BILLING: OPERATING EXPENSES: POSTAGE BY PHONE MOWING /CLEANING SW QUAD BY PW TOTAL OPERATING EXPENSES: TOTAL EXPENDITURES — SEPTEMBER 1993 File : \123DATA \HRA \17F193BILL.wk1 6.3 Account #'s for City's Use 13,842.00 101 -0006 -341 -1200 1082.93 101 - 0000 - 341 -1200 250.00 101 - 0000 - 336 -3000 460- 0000 - 430 -4330 15,174.93 460- 0000 - 430 - 4332 83.86 236 - 0000 - 336 -3000 450 - 0000 - 430 -4340 191.37 236 - 0000 - 336 -3000 275.23 .............................. .............................. ;'i:54501 B` 7.1 Community Development Department HOUSING AND REDEVELOPMENT AUTHORITY DATE: October 7, 1993 City of Fridley TO: William Burns, Executive Director of HRA FROM Barbara Dacy, Community Development Director SUBJECT: Rice Plaza Update Jim Kordiak advised me that the remaining two tenants, STS Temporary and Hong Kong Kitchen, have found new locations. STS Temporary has advised Kordiak that they will be out by November 1, and that they are currently negotiating a tenant space in the Suh building. Hong Kong Kitchen will be relocating to the Holly Center; however, in order for the new tenant space to be remodeled, they will not be able to leave the building until mid - December. I am currently working with the Public Works Department to arrange for demolition of the building this winter. BD:ls M -93 -592 Q) 0 It 0 r 2 w Q CO qr N g IL w m 0 Z 7.2 0) T T 0 Z 0 Y F LL 7.2 il TO: William Burns, Executive Director Of KRA FROM: Richard D. Pribyl, Finance Director Craig A. Ellestad, Accountant SUBJECT: Salestax on Lake Pointe Development Maintenance Project #244 DATE: October S. 1993 After researching whether sAlestax is due on the entire amount of the contact with Isaacson Lawn Care, we have found that it is. The sales tax law that applies went into effect July 1992, not July 1993 as was implied. Therefore, we will be paying the 6.5% salestax on the entire contract which was executed in 1993. \WP \HRA\AGENTAX n Z' 9.1 Community Development Department HOUSING AND REDEVELOPMENT AUTHORITY DATE: October 7, 1993 City of Fridley TO: William Burns, Executive Director of HRA FROM: Barbara Dacy, Community Development Director SUBJECT: Consideration of Lake Pointe Option Properties At the September 9, 1993, meeting, the HRA asked staff to contact Mr. Hedman and Ms. Gunderson as to whether or not they would be willing to extend the option agreement for one more year. Mr. Hedman stated he would not. Ms. Gunderson stated she would be willing to extend the option agreement for one more year. The HRA also requested information regarding the values on the subject properties. Attached is a memo from Leon Madsen. Both properties have increased in value since 1986. Madsen also commented as to what the effect would be on the property values if the HRA did or did not renew the current option to purchase. He states that the value would decline if the potential buyer perceives that he /she might not be able to occupy the home for a reasonable amount of time before the HRA takes possession. The opposite may occur if a potential buyer perceives the purchase as an investment, rents out the home, and hopes for the HRA to acquire the property at its maximum value. Hedman did indicate that he is willing to negotiate below the current value as stated in the purchase agreement ($76,000). He is to be married within the year, and he and his fiancee want to find a new home as soon as possible. The Executive Director recommends that the HRA let the options expire and wait to acquire the properties when a solid development proposal is submitted. If condemnation is necessary, relocation costs may be required. BD:ls M -93 -593 9.2 COF MEMO TO: Barb Dacy, Director of Community Development FROM: Leon Madsen, City Assessor SUBJECT: Hedman— Gunderson Homes DATE: September 27, 1993 In response to your request for historic value data on the subject properties, I submit the following: 5707 W. Moore Lk Gunderson 1986 $58,300 1987 $60,500 1988 $62,000 1989 $65,500 1990 $66,500 1991 $67,000 1992 $71,800 1993 $71,600 5695 W. Moore Lk Hedman $51,700 $54,700 $56,000 $59,800 $60,800 $61,500 $66,300 $66,200 You also asked my opinion of what the effect would be on their values if the HRA either did or did not renew their current option to purchase. There is no definitive answer. We have seen sale prices, in both scenarios, both decline and improve. Decline would probably most likely occur when the potential buyer's perception is that they might not be able to occupy the home for a reasonable time after they take pocession. Increase could occur if a potential buyer looks at the purchase as an investment, knowing that HRA has most often paid "top dollar" for properties it acquires. One, very possible, event may be an investment purchase with the owner renting out the property during the interim, knowing an eventual purchase by the HRA will probably be at maximum value. It is extremely important to understand, that when a program, such as what the HRA is doing in this area, is injected into the market place, the active economic principles become atypical. The principle of Highest and Best Use is the foundation of the appraisal process. The determination of Highest and Best Use involves a 4 point analysis; the physically Possible Uses, the legally Permissable Uses, the most Feasible Uses, and the Highest and Best Use from the identified feasible uses. Therefore, in an analysis of any property affected by Lakepointe, we can determine the "Possible" uses since it would be anything that could physically fit on the site. We would have difficulty determining the "Permisible or Legal" uses of the subjects since there currently is an option —to— buy, which clouds what the current owner may do. Determination of "Feasible" uses is also clouded because of the uncertainty of how long the option —to —buy will remain or if it will be renewed. Since the feasible uses cannot be satisfactorily determined, the "Highest and Best" use cannot be determined with any kind of reliability. This appraisal dilemma is not unique to the subject properties. It is also a problem with the Northeast and Southwest quandrant districts at Miss. and Univ. and, to some extent, the surrounding properties. OCT 0 6 1993 Casserly Molzahn & Associates, Inc. 215 South 11th Street, Suite 300 • Minneapolis • Minnesota 55403 ® Office (612) 342 -2277 • Fax (612) 334 -3382 M E M OtR A N D U M TO: City of Fridley A6 Attention:tA(illiam Burns, City Manager A Barbara Dacy, Community Development Director FROM: James R. Casserly DATE: October 4, 1993 RE: Lake Pointe /BBMI Project I recently spoke with Tom Threlkeld of Bayport Properties who is the agent for BBMI in its site selection for a new facility. Bayport Properties had contacted a Plymouth, Maple Grove, Fridley, Brooklyn Park and Brooklyn Center. According to Tom Threlkeld, the Fridley proposal was very creative and the City provided one of the best packages. However, the other cities also had attractive proposals and as of October 4, 1993 BBMI was inclined to select the City of Plymouth. A key factor in the selection of Plymouth is that it would require the least amount of disruption for the employees since the firm is already located there. Mr. Threlkeld was most appreciative of the efforts of the City of Fridley and was going to contact Bill Burns after BBMI had made its final decision. Casserly Molzahn & Associates, Inc. 215 South 11th Street, Suite 300 • Minneapolis • Minnesota 55403 Office (612) 342 -2277 • Fax (612) 334 -3382- M E M O R A N D U M TO: City of Fridley Attention: William V/Barbara FROM: James R. Casserly DATE: October 4, 1993 Burns, City Manager Dacy, Community Development Director RE: Lake Pointe /BBMI Project I recently spoke with Tom Threlkeld of Bayport Properties who is the agent for BBMI in its site selection for a new facility. Bayport Properties had contacted a Plymouth, Maple Grove, Fridley, Brooklyn Park and Brooklyn Center. According to Tom Threlkeld, the Fridley proposal was very creative and the City provided one of the best packages. However, the other cities also had attractive proposals and as of October 4, 1993 BBMI was inclined to select the City of Plymouth. A key factor in the selection of Plymouth is that it would require the least amount of disruption for the employees since the firm is already located there. Mr. Threlkeld was most appreciative of the efforts of the City of Fridley and was going to contact Bill Burns after BBMI had made its final decision.