HRA 09/14/1995 - 6291HOUSING & REDEVELOPMENT AUTHORITY MEETING
THURSDAY, SEPTEMBER 14v 1995
7:30 P.M.
PUBLIC COPY
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CITY OF FRIDLEY
A G E N D A
HOUSING & REDEVELOPMENT AUTHORITY MEETING
THURSDAY, SEPTEMBER 14, 1995 7:30 P.M.
Location: Council Chambers, Fridley Municipal Center
CALL TO ORDER
ROLL CALL
APPROVAL OF MINUTES: August 10, 1995
CONSENT AGENDA:
CONSIDER CHANGE ORDER NO. 2 TO SOUTHWEST QUADRANT . .
. . 1 - 1B
DEMOLITION PROJECT NO. 281
ESTABLISH PUBLIC HEARING FOR OCTOBER 12, 1995 TO . .
. . 2 - 2Y
CONSIDER DISPOSITION OF VARIOUS HRA LOTS AND TO
AUTHORIZE RFP FOR SALE OF HRA LOTS
CONSIDER ACQUISITION OF 530 HUGO STREET N.E. . . . . .
. 3 - 3C
CONSIDER EXTENSION OF DEVELOPMENT CONTRACT FOR . . . .
. 4 - 4D
WHITNEY HOMES
SOUTHWEST QUADRANT BUDGET UPDATE . . . . . . . . . . .
. 5
MONTHLY HOUSING REPORT . . . . . . . . . . . . . . . .
. 6 - 6A
REVENUE AND EXPENSES . . . . . . . . . . . . . . . . .
. 7 - 7B
ACTION ITEMS:
CONSIDER APPROVAL OF AGREEMENTS FOR SCHOOL . . . . . .
. 8 - 8FF
DISTRICT REFERENDUM TIF RETURNS
CONSIDER RESOLUTION APPROVING ADOPTION OF . . . . . .
. 9 - 9P
HOUSING REPLACEMENT PROGRAM AND HOUSING
REPLACEMENT DISTRICT
CONSIDER APPROVAL OF PRELIMINARY OUTLINE OF . . . . . .
.10 - 10H
AGREEMENT FOR LAKE POINTE PROPERTY
INFORMATION ITEMS•
CONSIDER REQUEST FOR TIF ASSISTANCE FOR ARK . . . . . .
.11 - 11A
DEVELOPMENT
UPDATE ON SOUTHWEST QUADRANT PROJECT . . . . . . . . .
.12 - 12F
UPDATE ON HYDE PARK PROGRAMS . . . . . . . . . . . . . .
.13 - 13E
OTHER BUSINESS:
ADJOURNMENT
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CITY OF FRIDLEY
HOUSING & REDEVELOPMENT AUTHORITY MEETING
AUGUST 10, 1995
CALL TO ORDER:
Chairperson Commers called the August 10, 1995, Housing and
Redevelopment Authority meeting to order at 7:42 p.m.
ROLL CALL:
Members Present: Larry Commers, Virginia Schnabel, Jim
McFarland, Duane Prairie
Members Absent: John Meyer
Others Present: William Burns, Executive Director of HRA
Barbara Dacy, Community Development Director
Jim Casserly, Financial Consultant
Grant Fernelius, Housing Coordinator
Craig Ellestad, Accountant
Sheldon Strom, Center for Energy and the
Environment
Dave Ring, Center for Energy & the
Environment
Roberta Moore, 6755 East River Road NE
Larry Shafer, Agro -K Corporation
Concie Rajamannan, Agro -K Corporation
R. Eugene Logan, Agro -K Corporation
APPROVAL OF JULY 17, 1995, JOINT CITY COUNCIL WORK SESSION AND
HOUSING AND REDEVELOPMENT AUTHORITY MEETING:
OTION by Ms. Schnabel, seconded by Mr. McFarland, to approve the
July 17, 1995, Joint City Council Work Session and Housing and
Redevelopment Authority minutes as written.
UPON A VOICE VOTEr ALL VOTING AYE, CHAIRPERSON CONNERS DECLARED
THE MOTION CARRIED UNANIMOUSLY.
CONSENT AGENDA:
1. CHANGE ORDER TO PROJECT NO. 281 TO PERMIT DEMOLITION OF 533
JANESVILLE STREET, 540 HUGO STREET. 6000 -.2ND STREET, AND
5924 - 2ND STREET
2. MONTHLY HOUSING REPORT
3. REVENUE AND EXPENSES
HOUSING & REDEVELOPMENT AUTHORITY MTG., AUGUST 10, 1995 PAGE 2'
Mr. Ellestad distributed copies of additional expenses submitted
for approval.
4. SOUTHWEST QUADRANT BUDGET UPDATE
Ms. Schnabel stated, on the Southwest Quadrant expenses for July,
check #25627 was drafted for the demolition of the Suh property
but this is not reflected in the budget expenses.
Mr. Ellestad stated check #25627 for $116,520 had some of that
amount budgeted in June. He will check into those figures.
Mr. Commers questioned the expenditure for the Suh appraisal and
testimony.
Mr. Ellestad stated this was for additional work for the
condemnation hearing.
Ms. Dacy stated the hearing was held the previous week. The
expense is associated with that in cooperation with the City
Attorney prior to the hearing plus their expenses to testify.
Mr. Commers asked about the issue about the demolition payment
not matching the figures in the budget.
Ms. Dacy stated she worked with Mr. Ellestad on the numbers and
would like to go back and check. She remembers receiving a bill
for the total amount with no differentiation between the Suh
property and the apartments. As she remembers, staff made an
allocation for the Suh property out of that amount.
Ms. Schnabel stated what is listed is more than what was
allocated for the demolition.
Ms. Dacy stated $116,000 is below the contract price. The price
for the Suh property, the apartments and the commercial property
was approximately $189,000. Staff will go back and check.
Mr. Ellestad stated he also brought July and August information.
He thought that in June under Demolition the $77,000 for the Suh
Property and $45,000 for the apartments would be the $316,000.
MOTION by Mr. Prairie, seconded by Mr. McFarland, to approve the
Change Order to Project No. 281 to Permit Demolition of 533
Janesville Street, 540 Hugo Street, 6000 - 2nd Street, and 5924 -
2nd Street; to approve the Monthly Housing Report; to approve
check register #25623 through #25670 plus the additional expenses .
as contained in the August 10, 1995, memo from Mr. Ellestad,-for-a.,
total of $30,248.61; and the Southwest Quadrant Budget update ;`.
with the exception of the demolition expenses to be verified at
the next meeting.
HOUSING &.REDEVELOPMENT AUTHORITY MTG., AUGUST 10, 1995 PAGE 3
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY.
ACTION ITEMS:
5. PUBLIC HEARING: CONSIDER TEMPORARY ACOUISITION OF 6765 EAST
RIVER ROAD N.E.
NOTION by Ms. Schnabel, seconded by Mr. Prairie, to open the
public hearing.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON DECLARED THE
MOTION CARRIED AND THE PUBLIC HEARING OPEN AT 8:40 P.M.
Mr. Fernelius stated this item is to consider temporary
acquisition of the vacant parcel at 6765 East River Road, legally
described as Lot 4, Block 1, Scherer Addition. The parcel was
acquired several years ago by Anoka County as part of the road
improvement project along East River Road. The house was,taken
down and the lot has remained vacant since that time. Due to an
overhead power easement by NSP which cannot be relocated, the lot
is considered nonbuildable. The owner of the property to the
south, Ms. Roberta Moore, inquired earlier this year with Anoka
County about acquiring the property. Ms. Moore was told by the
County that they could not convey the property to her directly.
The County contacted the City to see if we would become involved
as an intermediary. Essentially., the HRA would acquire the
property from the County for $6,800 and then reconvey the
property to Ms. Moore for the same price. Ms. Moore would cover
all the costs involved in acquisition including legal expenses
and closing costs. Ms. Moore has agreed to do this.
Mr. Fernelius stated Ms. Moore plans to expand onto that property
as well as to enlarge her yard. The County would retain rights
of access. This would prevent access from that property onto
East River Road at any time in the future. Staff is asking for
public comment and HRA approval.for temporary purchase.
Mr. Commers stated there would be a restriction on the use of the
property in terms of the access. When they give the property to
Ms. Moore, he assumed it would be conveyed through a quit claim
deed with no warranty.
Mr. Fernelius stated this was correct.
Mr. Commers asked for comments from the public.
Ms. Moore stated she was agreeable to the terms. She plans.to
use the lot to expand her yard. The empty lot is not now taken
care of. It would be nice to add it I.;Q her yard.
HOUSING & REDEVELOPMENT AUTHORITY MTG., AUGUST 10, 1995 PAGE 4
Mr. Commers asked if the restriction about not getting onto East
River Road would interfere.
Ms. Moore stated no.
Ms. Schnabel asked if-it was possible that this lot could be
split.
Mr. Fernelius stated the lot could be split. Staff, as part of
the public hearing requirement, notified everyone within 350
feet. Staff has received no response. It is possible but there
is no interest on the part of the other property owner.
OTION by Ms. Schnabel, seconded by Mr. Prairie, to close the
public hearing.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON CONNERS DECLARED
THE MOTION CARRIED AND THE PUBLIC HEARING CLOSED AT 8 :53 P.M.
MOTION by Mr. McFarland, seconded by Mr. Prairie, to approve a
Resolution to Approve the Temporary Acquisition and Sale of Real
Property.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY.
6. CONSIDER APPROVAL OF RESOLUTION AUTHORIZING A COMPREHENSIVE
REHABILITATION PROGRAM IN HYDE PARK
Ms. Dacy stated the agenda packet included the focus group study
and the analysis of that study. Ms. Dacy will present the list
of activities she will be presenting to the City Council at their
next meeting in terms of what staff is recommending to do in the
Hyde Park area.
Ms. Dacy stated, when this process with the focus group was
started, staff wanted to identify the housing needs in Hyde Park
and other neighborhood concerns and issues. Staff also wanted to
create a community team within the neighborhood.
Ms. Dacy stated the immediate activities are those staff would
like to initiate in the next few months. The first is to market
and provide single family and multiple family loan programs with
a contract with the Center for Energy and Environment (CEE). CEE
would be responsible for marketing, doing a building analysis for
the homeowners, matching the homeowner with the best financial
loan package, conducting the rehab inspections, taking the
applications., and administrating a number of'MHFA programs and
some of their own programs.: Mr.:Fernel,ius will talk about some
of the City's programs that staff would like the HRA to evaluate
and authorize staff to initiate.
HOUSING & REDEVELOPMENT AUTHORITY MTG., AUGUST 10, 1995 PAGE 6
owners are elderly, we may want to consider obtaining options of
first refusal. The homes are old and continued reuse to rehab
when the homes are non- conforming.may not be good use. Neighbors
are concerned about the long term viability of the housing in
this area.
Mr. Fernelius stated staff are proposing a number of different
programs for the Hyde Park neighborhood. Staff are proposing
three programs for the HRA to fund.
Mr. Fernelius stated the first is a matching, deferred loan
program for single family homeowners in Hyde Park. This would
provide a deferred loan of up to $4,000 at 1% interest. It would
have to be matched dollar for dollar by the borrower and be paid
back when the home is sold. This loan would be available to any
homeowner in the Hyde Park neighborhood with an income of up to
$55,000. They could use as matching sources either their own
funds, an MHFA loan or a bank loan. We want to provide flexible
financing.
Mr. Fernelius stated another program is a last resort program.
We have come across a number of households that cannot qualify
for existing programs. Either there are credit problems or not
enough equity in their home, yet their income is too high for the
grant program. This program is designed to address those
households and is just for Hyde Park. Under this program, a
homeowner could receive a deferred loan of up to $10,000 at 2%
interest. Homeowners would need to meet very specific guidelines
in•order to qualify for this program. The loan is due on sale
with any interest accrued and accessible for anyone with a
household income of up to $55,000.
Mr. Fernelius stated staff wanted to offer similar terms and
conditions for multi - family homes. Through the focus group
study, we heard numerous comments .that landlords perceive
themselves as being treated differently than single family.. Ire
the interest of fairness, staff wanted to develop a program that
was consistent. Staff is proposing a deferred loan be offered up
to $4,000 per unit with a maximum of $44,000 per building. That
would include the larger 11 -unit buildings that are in Hyde Park.
The terms and conditions are the same.
Mr. Fernelius stated CEE will do a number of things which staff
is currently doing but do not have the staff time to do on this
type of scale. CEE will bring the MHFA'fix -up fund which is a
loan program where they can lend up to $15,000 at 21% to 8%
interest to households with incomes up to $41,000 and can include
up to one to four unit owner- occupied properties. In addition,
CEE would be administering the MHFA home energy loan program
which strictly energy related. This programs provides a $5,000.
loan at about 8.75% interest with a five -year term. There are no
r
HOUSING & REDEVELOPMENT AUTHORITY IM., AUGUST 10, 1995 PAGE 7
income restrictions so it can serve any single family household.
CEE will also be administering the rental rehab loan program.
Staff have administered that program in the past but not
successfully. We hope that with.CEE's involvement we can .
aggressively market this program. This program provides an
$8,000 loan per unit up to $40,000 per building at 7.5% interest
for a term of 15 years. The problem is that there is a
restriction in this program that limits eligibility to only
natural persons. Corporations or partnerships are not eligible.
CEE will be bringing in another program called the rental energy
loan fund which provides a $10,000 loan at 4% interest with a
maximum term of 5 years. He did not think there were any
restrictions in this program.
Mr. Fernelius stated staff is proposing to enter into an
agreement with CEE for the Hyde Park neighborhood only. Staff
would continue to market the other housing.programs throughout
the City as currently structured. CEE would do all the marketing
and application processing. They would offer a one -stop approach
to financing. The property owner would meet with CEE, go over
their situation, and try to put together a package to meet the
individual's needs. CEE will also provide a building analysis
which is optional for both homeowners and landlords. A building
analysis would include CEE looking at the property and helping
the owner identify and prioritize improvements. CEE would also
do inspections to verify that the improvements as.proposed were
in fact installed properly as well as providing administrative
and staffing personnel. This is a fee-for service contract. CEE
will be paid only for the loans that they are actually
originating. CEE will carry insurance and indemnify the HRA.
The contract can be terminated at any point if we determine they
are not performing to our satisfaction.
Mr. Fernelius stated CEE is anon- profit agency which focuses on
energy and housing related services. They have a large staff.
Their people have a lot of technical experience including energy
auditing and sound insulation. They have a proven track record
with MHFA as well as'a number of other programs they have
administered throughout the state. According to the proposal CEE
submitted, they have processed-over 8,000 loans totalling more
than $25 million. They have worked with a number of different
groups including the large utilities. Mr. Fernelius did check
references and stated everyone was complimentary of the
organization. They have the capacity to administer this program
as we are presenting it during the time frame that we want to get
this accomplished.
Mr. Fernelius stated, in terms of the resolution,. staff is asking
to establish the Hyde Park program; to focus only on the Hyde
Park neighborhood; to designate the administrative duties and
authorize the Executive Director and Housing Coordinator to
HOUSING & REDEVELOPMENT AUTHORITY MTG., AUGUST 10. 1995 PAGE 8
approve HRA loans; authorize the Chair of the HRA and Executive
Director to approve payment to CEE for loans that they do
administer on a bi- weekly basis; and authorize the actual
agreement with CEE. He introduced Mr. Sheldon Strom, Executive
Director, and Mr. Dave Ring, Business Manager.
Mr. Strom distributed information about the program. CEE is a
non - profit corporation. They have done energy and housing
related work for 15 years. They began in 1980 as a department of
the City of Minneapolis. In 1989, they created a non- profit
corporation that took the services as provided in Minneapolis and
in Hennepin County and created a private corporation. They have
over the years served over 40,000 households with different
programs, mostly energy programs or other rehabilitation
programs.
Mr. Strom stated CEE has a staff of 40 people. The annual budget
is about $3.5 million which comes from a variety of different
projects. The largest project they currently run is for the
Metropolitan Airport Commission where they coordinate the sound
insulation program. That program was built on the. energy work
CEE was doing to reduce noise transmission. That project
currently operates at the rate of about 800 houses per year. CEE
has recently completed a project in Madison, Wisconsin, for the
utilities which was an energy and environmental program to
deliver energy and environmental services to four neighborhoods.
Mr. Strom stated CEE has about 12 technical staff who do work in
the energy field, especially multiple family and commercial
buildings. CEE started doing financing in the early 19800s to
complement the energy programs. Many of the energy financing
programs were not economical for banks to run. CEE started
implementing those programs because they complemented other CEE
energy programs. Over the years, CEE has developed an efficient
way of delivering these energy and rehabilitation loan programs.
Mr. Strom stated CEE can offer a very high level of customer
service. On this project, CEE can very readily come in and offer
all the services the City wants and do it quickly. This is a
very important project for CEE because they think there is a
niche for these types of services. Even though it is a
relatively modest size contract, it is important because CEE
wants to prove they can do this and be successful. CEE presented
the proposal such that they would only get paid for the work that
is actually completed. They are fine with doing a project in
this manner and think they can make the project successful. They
have done numerous community -based programs in the .past.
Mr. Strom stated CEE is: proposing that they can.do this.in a way
that is highly visible, instill °pride in the neighborhood and
give the City credit for implementing the program.
HOUSING & REDEVELOPMENT AUTHORITY MTG., AUGUST 10, 1995 PAGE 9
Ms. Schnabel asked how CEE.proposed to get the word out to the
residents so they know what is available.
Mr. Strom stated they would send out a personal direct mail piece
under the signature of the elected official along with a brochure
to explain the program and a return device such as a return card
or phone number. They would encourage people to attend one
evening meeting to hear about the program. They have found these
a good way to get information across in a clear and concise
manner at a relatively low cost. An added advantage is that,
when people see their neighbors at these meetings, it tends to
instill interest and it is an easy way to sign people up for
visits with a loan official or an on -site analysis of their
house. Following that evening meeting, CEE would send a follow
up mailing to those who did not respond to the first mailing.
CEE would also make a final phone call to make sure they are
aware of the program and have chosen not to participate. CEE has
been successful with this system in previous projects. If the
City has other vehicles to communicate to the neighborhood, they
would use those as well.
Mr. Prairie asked if the interest rates were fixed rates.
Mr. Fernelius stated all the interest rates would be fixed rates.
Mr. Commers asked why there was attached to the memo information
on other programs and projects.
Ms. Dacy stated this was provided to show the HRA that staff is
proposing to allocate $1.3 million to this program and to show
that this amount of money is accounted for in the budget for this
year.
Mr. Commers stated he wanted to clarify that the HRA is being
asked to approve the Hyde Park rehabilitation program that is
going to involve $1.3 million and which will require some
additional monies over and above the budget.
Ms. Dacy stated this was correct, and the additional funds have
been included in the programming for 1996. Since we are months
away from 1996, staff have anticipated the costs.
Mr. Commers asked if the costs for the University corridor would
have a bearing.
Ms. Dacy stated they do not. The University corridor was
included in case we wanted to do any significant redevelopment
north of 57th Avenue.
Mr. Commers stated the manner in which the information is
presented makes it look as though these have been approved and
HOUSING & REDEVELOPMENT AUTHORITY MTG., AUGUST 10, 1995 PAGE 10
are on the board. The same is true of the financial statement.
These may be some things we are looking at but should be
characterized in a different way.
Ms. Dacy stated this came up earlier during the budget approval.
Because an item is included in the budget does not mean the HRA
will authorize the expense. It is included to show that this has
been planned. She thought that, if this was not shown, the
question might be where the money is coming from. Staff is
proposing an amount of $1.3 million for the HRA's approval. If
the HRA wishes, that figure can be changed.
Mr. Commers asked to clarify where the funds were allocated in
the budget.
Ms. Dacy stated the 1995 budget had $800,000 anticipated. Staff
is proposing an additional $500,000 for the single family
deferred matching program. That amount can be accommodated
because staff have anticipated for 1996 that expenditure for the
Hyde Park programs.
Mr. Fernelius stated this agreement goes through the end of next
year. They expect some of these funds will be spent in 1996.
There will be some carry over.
Mr. Commers stated they need to know how the amounts are related
to what the HRA might expect. How did staff arrive at these
numbers for the program?
Mr. Fernelius stated staff took into consideration the number of
single family homes in the neighborhood, which is approximately
130. There are an additional 50 buildings which add up to 350+
units. Staff dial some projections based on the spending in
current programs on a per -unit basis. $1.3 million assumes we
would be assisting a majority of the households in the
neighborhood. As a practical matter, that probably will not
happen.
Ms. Dacy stated with all the programs they could get a total of
about 225 to 250 loans. There are 180 properties. They want to
keep the single family and multi- family funds equal based on what
staff heard from the focus groups. In the last resort fund,
based on an average of $10,000 per loan, that is about 30
households. That seemed to be balance of all the interests.
Mr. Fernelius stated they are leveraging other dollars. There
will be matching funds.
Mr. Commers stated, as he understands, CEE would get a fee as set
forth in the schedule in Paragraph 2.1 of the Consulting
Agreement.
HOUSING .& REDEVELOPMENT AUTHORITY MTG., AUGUST 10, 1995 PAGE it
Mr. Fernelius stated CEE would receive at a minimum $225 per loan
that is closed. The building analysis is not mandatory. There
are instances where a building analysis is not appropriate.
MOTION by Mr. McFarland, seconded by Mr. Prairie, to approve a
Resolution Establishing a Comprehensive Housing Rehabilitation
Program for the City of Fridley's Hyde Park Neighborhood;
Establishing the Area of Operation; Providing for the Delegation
of certain powers and Duties; Authorizing the Execution of a
Consulting Agreement by and Between the Housing and Redevelopment
Authority in and for the City of Fridley and the Center for
Energy and Environment.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY.
Ms. Schnabel was not present during the vote.
7. CONSIDER RESOLUTION AUTHORIZING ANORA COUNTY HRA SPECIAL
BENEFIT LEVY FOR 1996
Ms. Dacy distributed a letter dated August 4, 1995, from Mr. Tim
Yantos, Anoka County. Ms. Dacy,'s memo as included in the agenda
packet talks about the intergovernmental meeting attended by
Councilmember Billings on August 2. The outcome of that meeting
is verified by Mr. Yantos that, if the communities do not want to
make a commitment to opt in or opt out of the levy, communities
can pass a resolution to inform the County of their preliminary
intent but the decision would have to be finalized by November
22, 1995. That would allow the County to do what they need to do
to certify the levy prior to December 1.
Mr. Commers asked if their intent could be that they have not yet
made up our minds.
Ms. Dacy stated yes. Between now and November 22, the technical
advisory committee and intergovernmental committee will try to
better define the use of where the levy funds would be provided
in each community. If we elect to use the money for rehab funds,
Councilmember Billings is recommending that communities
specifically use them for multi - family rehabilitation. Staff
would come up with guidelines and some type of program and bring
that back to the City Council and HRA.
Mr. Commers stated he read this to mean the County wants the City
to go in or out rather than be neutral. If we can do that, that
is fine.
Ms. Dacy stated Mr. Yantos' letter states the cities are to
inform them of our preliminary intent to participate in this
special levy. The way the let-ter is.written leans toward saying
HOUSING & REDEVELOPMENT AUTHORITY MTG., AUGUST 10, 1995 PAGE 12
yes, but there is nothing to prevent the HRA or City Council from
opting out.
Mr. Commers stated, until we get your recommendation, it is hard
to say which way we want to go.
Ms. Schnabel asked if this concept was in place in any other
county in the state where the county has an HRA and the cities
also have an HRA.
Ms. Dacy stated yes. Dakota _County has a county levy which they
use for'senior housing. South St. Paul, a community within
Dakota County, also has a levy. Washington County and Carver
County also have county HRA's.* There are a number of others in
outstate Minnesota.
Mr. Fernelius stated there are also some that have multi - county
HRA's that cover large geographic areas. It is a common
practice.
Mr. Prairie asked if Dakota County has had a county HRA longer
than the cities within that county.
Ms. Dacy stated yes. The county HRA was established in 1972.
Dakota County administers the Section 8.program.
Mr. Prairie stated it would be different from our situation.
Anoka County has not had an HRA.
Ms. Schnabel asked if the County could create TIF districts.
Ms. Dacy stated the County has adopted a policy that they will
not conduct economic development activities although they may
have the power for tax increment districts. The County has set
up a participation process where.the communities would shape the
structure of the programs. The proposed purpose of the tax levy
would be for senior housing and rehabilitation. They want the
city councils and staff members of the cities that opt in to
either of those areas to devise and implement the program. The
County does not want to add staff. They are trying to do this on
behalf of the communities to have as many housing programs as
possible.
Ms. Schnabel asked if this would create an additional burden for
City staff.
Ms. Dacy stated yes. It.may mean more meetings. But, there is
also additional monies we could use for housing programs.
Ms. Schnabel asked if the County would reimburse the City for
their time and services.
HOUSING & REDEVELOPMENT AUTHORITY MTG., AUGUST 10, 1995 PAGE 13
Ms. Dacy stated no. If we choose to do that, we would have to
subtract that from the levy for a specific program.
Ms. Schnabel asked, in terms of the legislature, are they looking
at this in a different light or thinking of any different laws
with regarding to county HRA's overlapping the city HRA's.
Mr. Casserly stated the counties have been able to set up HRA's
for years. It was only in the metropolitan area that they could
not. Anoka County had approval for an county HRA for years but
they did set it up. Hennepin County has had a county HRA but did
little with it. Washington County and Dakota County became
active earlier and did their activities through the County.
There were not city HRA's. There are questions of economies of
scale and what can be offered. Will the southern part of Anoka
County get more of the rehab activities? There are things that
have to be sorted out. It would be good to know how the funds
would be matched over time.
Mr. Prairie asked if there was a reason the County formed an HRA.
Was it to function in those communities that "did not have an HRA?
Ms. Dacy stated this came from the issue that there are-federal
funds that require a county HRA to be in place. There was a
housing advisory committee where they saw the same housing issues
come up in several cities. The County initiated this to see if
they could provide additional services and fill a need that
communities could not fill.
Mr. Prairie asked if there would be an overlap.
Ms. Dacy stated she thought the County and cities are trying to
address similar problems in as many ways as possible. The County
is saying they want to use this vehicle to do what the
communities want. The committee was set up to address the
issues.
Mr. Burns stated it seems that if we could demonstrate that we
are able to leverage money through this process that we would not
be able to leverage with our own levy. If we cannot do that, it
would seem that through this plan we are sharing the
responsibility for additional taxes and, at the same time, have
less control over the use of the funds than we would through our
own levy. If we are going to share the burden for levying the
tax, then we would be better off adopting a way to allow us to
have some control. He did not know that there was enough
information to sort this out. He is concerned that, if we commit
ourselves in a preliminary way, we are starting to share the
burden of levying the tax. He was not sure that is wise at this
point.
HOUSING & REDEVELOPMENT AUTHORITY MTG., AUGUST 10, 1995 PAGE 14
Mr. Commers stated it seems that the issue is what kind of
interest do we give. We can indicate that we are preliminarily
interested or we are not interested. Or, at this point, we are
open and have not made a determination one way or the other. He
thought it was misleading to give an indication if we do not have
some preliminary intent to follow up. He is inclined to think
the HRA should take a neutral position.
Ms. Schnabel stated she did not see where, at this point, Fridley
needs this kind of program. Although the letter says we have the
opportunity to opt in or opt out, there is no guarantee that this
will remain the same or that the rules will change. We may be
committing to a program we may not benefit from or that we are
doing on our own.
Ms. Dacy agreed. She agreed with Mr. Burns in that the County
needs to nail down what the opportunities are from MHFA to see -if
the information we are getting is accurate. This must be done so
we can determine if this is what we want. Also, if going to the
taxpayers for additional funds, we have to point to something and
have a specific program. She thought that is what the County is
trying to do. She thought a lot of communities are concerned
because the plan just came out and the County is now saying tax
levy. The timing is conflicting with the budget process, and
some of the other communities are struggling as well.
Mr. Burns stated staff have not had time to focus on this and
sort it out. We have had other projects and budget problems
taking our time.
Ms. Schnabel asked if the $72,000 home was a median priced home
for the County.
Mr. Casserly stated $72,000 is an easy figure to calculate
because that is the lowest value on homestead.
Mr. Commers stated the HRA does -not have enough information to
make a decision one way or the other.
NOTION by Ms. Schnabel, seconded by Mr. Prairie, to indicate to
the Anoka County Housing and Redevelopment Authority that, at
this time, the Fridley HRA does not have sufficient information
to be able to give them a preliminary intent of whether the
Fridley HRA would desire to opt in or opt out.
UPON A VOICE VOTES ALL VOTING-AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY.
8.. CONSIDER TAX INCREMENT FINANCING' - ASSISTANCE FOR AGRO -K
Mr. Burns stated several weeks ago representatives from Agro -K
HOUSING & REDEVELOPMENT AUTHORITY MTG., AUGUST 10, 1995 PAGE 15
visited and indicated an interest in the City of Fridley. They
have a variety of products aimed at the agricultural industry.
They make environmentally friendly fertilizers and feeds. There
is another company Agro -K is contemplating joining in the near
future called Aqua Peat, which makes a device to eradicate weeds
using steam rather than herbicides. The company is currently
located in Columbia Heights near the Camden bridge.
Mr. Burns stated staff assisted them is identifying some Fridley
sites. He believes they have chosen a site located at the
southwest corner of 81st and Main Street. This site is in a tax
increment financing district. He has asked Mr. Casserly to work
with Agro -K to develop a proposal.
Mr. Casserly stated his memo dated July 21, 1995, outlines the
proposal. Representative of the company were at the meeting to
talk about the project. Agro -K has a facility in Columbia
Heights which they are leasing. They are in need of space for
expansion and are looking for a suitable site in the immediate
area. One of the sites is in Fridley. This site has severe soil
problems which were known and documented. Agro -K is working with
the Small Business Administration (SBA) and TCF Bank to put
together a financing package to expand, develop and build. They
approached the City of Fridley to see if there was assistance for
site preparation needs and to assist them with the SBA financing
package. We talked about what was available in the,City. The
problem is that the request they have and the amounts they have
are over what our guidelines will allow. Based on that, we tried
to put together a package that would respond to their needs and
not violate the guidelines.
Mr. Casserly stated the package tried to accomplish $150,000
worth of assistance. Of that, $75,000 would be in the form of a
grant which is needed up front in order to meet the SBA
requirements and to be part of our equity contribution. The
other $75,000 would be a loan at 5% interest with two years
deferred but accruing interest. The amortization on a second or
third mortgage cannot be for a period shorter than the SBA so he
is suggesting to amortize the loan over 18 years but, on the
tenth year, adjust the interest rate to 5 basis points above
prime to encourage pay off of the loan. Ten years is what has
been done on the last few loans.
Mr. Casserly stated the financial schedule shows a 20 -year term,
but there is actually no payment for the first two years. The
company has responded to concerns raised previously.
Mr. Commers asked if there was any personal obligation to the
loan.
K
HOUSING & REDEVELOPMENT AUTHORITY-MTG., AUGUST 10, 1995 PAGE 16
Mr. Casserly stated there would be a personal guarantee by the
two principals of the company.
Mr. Prairie asked the number of acres included in the site.
Ms. Rajamannan stated the site is 6.5 acres.
Mr. Casserly stated this is in a redevelopment district. There
are some soil problems to deal with, The project value is
approaching $1.5 million. We are suggesting that approximately
5% of the project value be a loan and 5% be a grant.
Mr. Casserly distributed copies of a Contract for Private
Redevelopment By and Between the Housing and Redevelopment
Authority In and For the City of Fridley, Minnesota, and Agro -K
Corporation. He estimated $34,000 per year of tax increment
being generated on the site and they pulled out the
administrative fees of 100. In about three years, the HRA could
recover the $75,000 grant and would then get the loan repayment
over ten years because of the substantial increase in interest
that would be put on the note.
Mr. Casserly stated, in looking at this in terms of the funds to
be generated, this is a strong project for the HRA. They are
assuming the taxes they will pay will be modest, and he thought
the project will be valued at more than suggested in the
analysis. He thought the analysis is probably overly
conservative in terms of revenues generated for the HRA. The
assessment agreement suggested to be part of the package is
valued at $900,000. In addition, part of the reason for the
company looking at this site is the opportunity for expansion in
the hope that in the next two to five years they will be able to
add 20,000 square feet.
Ms. Rajamannan stated the site is 6.5 acres. They are planning a
30,000 square foot building and hope to bring a sister company
here as well. Her husband, Dr. Rajamannan, has developed a
machine to kill weeds using hot water. In 1999, they are going
to ban some chemicals. That company will be coming along with
Agro -K. They hope, in three to four years, to add another 20,000
square feet. They looked for a site in Fridley because of the
acreage. Columbia Heights has only about 2.5 acre sites. This
is why they approached Mr. Burns. Mr..Larry Shafer can answer
questions about the company.
Mr. Schafer stated Agro -K manufactures feed additives that are
drug free and hormone free for beef, dairy, and swine. They have
markets worldwide including German, Australia and Japan. Their
products are marketed through distributors, dealers and some
directly. The soil products are soil enhancers that are approved
for organic use. We are moving toward tower chemicals and more
HOUSING & REDEVELOPMENT AUTHORITY MTG., AUGUST 10, 1995 PAGE 17
environmentally safe products. There has been interest by small
users in the food industry, but some of the major producers are
now moving in that direction. We have a soils program for
agriculture products. These products are marketed throughout the
United States. They have specialty products that can be used to
reduce chemical inputs and drift of pesticides and herbicides in
order to use lesser amounts and still have effective control.
They have markets for their products in South Africa, New
Zealand, Australia, South America, and Europe. There is also new
interest in our technologies. Dr. Rajamannan spends a lot of
time overseas developing these markets which supplements the
manufacturing to a year -round basis.
Mr. Prairie asked what would be going on in this facility.
Mr. Schafer stated this would be a form of manufacturing. Raw
materials would be brought in, formulated, bagged as final
products, and shipped out in various size containers.
Ms. Rajamannan stated they have a warehouse in downtown
Minneapolis and in Georgia. They hope to combine the Minneapolis
warehouse with this facility. They also have a manufacturing
facility in South St. Paul.
Ms. Schnabel asked if this would be both research and development
and manufacturing at this facility as well as a warehouse.
Ms. Rajamannan stated yes. They do have warehouses all over the
United States.
Mr. Prairie asked if this was a liquid product.
Mr. Schafer stated yes. The feed product is dry. Many of the
soil and foliar products are liquid.
Mr. Casserly stated, because of the activities over the last
eight or nine weeks, they were going to have information for the
HRA in July but there was not time. Agro -R has received approval
from the development corporation associated with the.SBA. They
cannot submit the final package until they put together all the
financing components of which one component is that being
presented.
Mr. Casserly stated he talked with their financial institutions
who say there are no roadblocks to having approval. They are
hoping to start construction in September. That is why they are
here tonight and that is why they are asking for concept
approval.
Mr. Casserly stated this is designed this so it is a $150,000
loan. Once the building is constructed, we then forgive $75,000.
HOUSING & REDEVELOPMENT AUTHORITY MTG., AUGUST 10, 1995 PAGE 18
This is included in the note in the first paragraph. The last
sentence of the note talks about the principal balance which
shall be reduced upon issue of a Certificate of Occupancy. The
contract also includes a guarantee of performance of the
agreement and an assessment agreement which guarantees a minimum
value. He believes the HRA is as secure as they can be for a
third mortgage.
Ms. Schnabel asked, if we approve and have a loan as the third
place and if the business should be sold, what happens to the
HRA.
Mr. Casserly stated, unless we relieve them of responsibility,
they are always responsible on the note.
Mr. Prairie asked if the buyer'would have to agree to the terms.
Mr. Casserly stated yes, but that does not relieve the original
party of their obligations. The buyer could assume if the buyer
agrees.
Ms. Schnabel asked, in the case it should be sold, does the HRA
have the right to review the buyer to protect our interests.
Mr. Casserly stated the sale does not relieve the original
borrower from their obligation.
Ms. Schnabel asked how well the HRA was covered.
Mr. Commers stated page 13, paragraph 8, is a due on sale
provision which covers the question. It requires the note to be
paid if the property is sold or transferred.
Mr. Burns stated Agro -K needs to be out of their existing
facility by November 30 so that also is in play.
Mr. Commers asked what the cost for the land was per square foot.
Mr. Casserly stated the land cost is approximately.75 cents per
square foot.
Mr. McFarland asked for a break down of the financing.
Ms. Rajamannan stated SBA will provide approximately $570.,000,
the bank - $500,000, Agro -K - $125,000 plus moving expenses.
MOTION by Mr. Prairie, seconded by Ms. Schnabel., to approve a
Resolution Authorizing Execution and Delivery of a Contract for
Private Redevelopment By and Between the Housing and
Redevelopment Authority In and For the City of Fridley and Agro -K
Corporation.
HOUSING -& REDEVELOPMENT AUTHORITY MTG.. AUGUST 10, 1995 PAGE 19
Mr. Prairie asked if this has been approved by the Planning
Commission.
Mr. Burns stated the Planning Commission has not seen the
proposal. He did not think there were planning issues involved.
Mr. Burns has discussed the proposal with the City Council and
their response has been positive. He did not think there was a
need for any type of variances.
Mr. Prairie asked if this was the entire portion of the lot that
is there.
Mr. Burns stated the site is 6.5 acres which goes from Beech to
Main Street. It is a pre -1989 tax increment district and one of
the last sites in the City where we have the flexibility to use
the entire project.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY.
INFORMATION ITEMS:
9. LAKE POINTE UPDATE
Mr. Burns stated he and Mr. Casserly met with the representatives
of MEPC several weeks ago. They identified a number of items
related to what the City expects and what the developer expects.
We also looked at some of the issues. She asked how MEPC would
respond to build -to -suit situations and how flexible they would
be in their development process. They identified the issues and
identified the areas of expectation, and MEPC was going to come
back with a preliminary agreement. This was not ready for this
meeting, but it will be ready soon.
Mr. Prairie asked if the primary issue was time.
Mr. Burns stated that was one issue they raised. During the
discussion, MEPC were characterized as being conservative. They
said they were conservative but not immobilized. They are
aggressive in their decision making.
Ms. Schnabel stated the HRA wanted to be able to set the contract
within a certain time frame.
Mr. Burns stated they had discussed that at length. MEPC seemed
to be receptive to doing that, but we do not have any specifics
to present tonight. Staff will bring that to the HRA when they
have it.
HOUSING & REDEVELOPMENT AUTHORITY MTG.. AUGUST 10, 1995 PAGE 20
10. SOUTHWEST OUADRANT UPDATE
Ms. Dacy stated staff followed up on the direction of the City
Council and HRA about the condominiums. Staff's direction was to
talk to Rottlund to see how many condominium units they can build
and see if they can minimize the construction costs. She talked
to Mr. Todd Stutz of Rottlund Homes. They want to build 48 units
as originally proposed. When they looked at consolidating the
two buildings into one building with 32 units, they determined
that the cost savings would not be as great as we had thought.
Their original proposal was for four -story construction. We
asked them about a three -story building which would not require
masonry construction. The building code provides that, if you
have a multi -story building with sprinklers for all the stories,
then you may have wood frame construction. Eliminating one story
does not produce significant cost savings. The other cost
savings they could identify by going to a smaller building was
the elimination of some amenities which were not significant
savings.
Ms. Dacy stated someone had suggested smaller units. Rottlund
responded that the only items affected are sheetrock and
carpeting which are high volume materials and would not generate
significant cost savings. The design of the condominiums had a
second den/ bedroom. If the size is reduced by 100 to 200 square
feet, that would eliminate that extra room. The size of the unit
and existing amenities match what there is in a typical rambler
in Fridley that a senior would own. They felt these seniors
would not buy a smaller unit at a higher price. Rottlund feels
the $80,000 - $100,000 range fits the Fridley market perfectly and
they would like to keep the size of the unit as is because they
think this is best design for prospective buyers.
Ms. Dacy stated Rottlund would be willing to pay $200,000 for the
land, 50% of the park fees or.$54,750, and are willing to
participate in an equity participation agreement for the entire
project. Mr. Stutz, in his letter, states that anything above
the 25% standard profit margin would be paid to the City as a
deferred land payment. These negotiations took place yesterday
and staff reviewed the numbers with Mr. Casserly. Staff is
asking the HRA for direction on whether staff is going in the
right direction. There are still detail issues to work out on
how some of these things might.work. This is the most recent
update. She thought this does answer the questions asked at the
meeting. We could have a smaller unit but it comes at a high
price and brings into question whether the unit is marketable.
In her opinion, the design with two 24 -unit buildings was a good
design choice.
Mr. Commers questioned what Mr. Stutz was speaking to when he
mentioned the 25% profit margin.
HOUSING.& REDEVELOPMENT AUTHORITY NTG., AUGUST 10, 1995 PAGE 21
Mr. Casserly stated Mr. Stutz talked verbally about their gross
profit margin being 25 %. Their profit is 25 %, and also includes
part of the other company expenses.
Mr. Prairie stated he thought this was a big number.
Ms. Dacy stated Mr. Stutz stated this is not a negotiable number.
Mr. Commers asked what that would require the HRA to subsidize
Ms. Dacy stated the 48 condominiums would be approximately
$800,000 of additional costs. This proposal is essentially
reducing the cost from $800,000 to approximately $550,000.
Rottlund is proposing to pay $200,000 for the land and part of
the park fees. We cannot give an estimate on the equity
participation.
Mr. Prairie stated this ends up being $11,500 per unit more. A
person would be paying approximately $90,000 per unit so the HRA
is aiding in the sale of these units.
Mr. Casserly'stated he talked with Mr. Stutz about doing this the
other way around or having them escrow the total land payment.
When they sell the units, we .would then provide the subsidy the
other way. Rottlund is building the units for $110,000 which
they will be selling for $90,000. If the benefit is really to
the purchaser so that they, in theory, have an $80,000 - $90,000
unit that really costs $110,000 and those units appreciate over
the next 75 years, is there a way we can recover some of that
appreciation. Mr. Stutz stated the problem with that is that
people buy condominiums and homes with the hope that there will
be appreciation. To eliminate that opportunity would be a
barrier to marketing the units. His fear is that, if these do
well and people in five years can sell the units for $120,000 and
bought them for $90,000, it is our subsidy that made this
possible. Mr. Stutz feels this is a difficult hurdle to
overcome. We are $250,000 more in the pot than we were three
weeks ago.
Mr. Commers stated the HRA is over what we authorized Mr. Burns
to do. Even with the reduction, they are over what we had
discussed.
Mr. Prairie asked, when Rottlund made their proposal, did they
put the numbers on the condominium buildings. As he understands.,
Rottlund put their numbers on this part of the project and now
they °are saying they need another $0.5 million.
Ms. Dacy stated staff made that point to Mr. Stutz. Rottlund did
not have cost projections at the time of the RFQ.
HOUSING & REDEVELOPMENT AUTHORITY MTG., MOUST 10, 1995 PAGE 22
Mr. Prairie stated the costs should be fairly close to what was
proposed.
Mr. Casserly stated it has bothered him that this started as a
request for qualifications. Everyone came in with a quasi -RFP
response. He did not think anyone who made a presentation really
sorted out all of -the costs and the issues.
Mr. Commers stated the HRA relied on the information provided in
the presentations. What has happened raises some credibility
issues.
Mr. Casserly stated we have no requirement that we have to
continue to deal with the developer. In the original program
development, we had amounts included for condominiums to arrive
at the land price on a per unit basis. After Rottlund priced out
the condominium units, we have had discussions. He did not
believe that Rottlund intended to deceive. This is a product
they have not yet done.
Mr. Commers stated Rottlund should have taken that into
consideration when they made their proposal.
Ms. Dacy stated an option is to say no to Rottlund but there is
no guarantee that another developer will not do the same. Owner
occupied units seems to be driving the development.
Mr. Prairie stated he would like a break down on the 25%. It
seems to be at least double what it should be.
Ms. Dacy stated staff would meet with Rottlund.
Mr. McFarland stated the way Rottlund put together the proposal
they probably have a 25% margin. 'He thought that a smaller firm
has to settle for 15 %. The way they operate they can get 25%.
On the other hand, they have a lot of corporate overhead that
will be there. They are a publicly owned company and we can get
their financial statements.
Mr. Commers stated we are still far apart on the subsidy number.
Mr. Casserly stated they startedeto give a breakdown of the
components of the 25 %. Out of that comes the marketing,
overhead, and administrative costs. Rottlund has also agreed to
cover the costs of the public improvements on Third Street and
any associated costs.
Ms. Dacy stated, in summary, the HRA wants staff to identify the
25 %. The HRA feels the subsidy is too large. She asked if the
HRA was satisfied that you have the information requested
regarding the two buildings versus one building.
HOUSING & REDEVELOPMENT AUTHORITY MTG., AUGUST 10, 1995 PAGE 23
Mr. Prairie stated Rottlund is probably right that 1200 square
feet is better than 1,000 square feet.
Ms. Dacy asked if the HRA had any comments for the City Council.
Mr. Commers asked staff to convey to them the discussion. There
is some point at which we will leverage. If we cannot stay
within that point, perhaps we go to another developer.
Mr..Prairie stated it seemed to him that differences arise and we
are going to provide the whole thing. What has Rottlund given as
a way to negotiate? They are making their 25% on the rest of the
units. Are they not going to budge at all?
Ms. Dacy stated Mr. Stutz will not budge from the 25 %. That
leaves the design costs such as berms, landscaping, the stone
fence, construction of the plaza, etc. Those are costs they are
incurring and including in development costs.
Mr. Commers stated that should be the cost of the overall
construction that we are figuring back into the cost of the
units.
Mr. McFarland asked if we could go back to another alternative
plan.
Mr. Burns stated they could put in townhomes in place of the
condominiums. That would mean losing density and having less tax
increment. Staff has looked at this from as many angles as
possible. He did not know that it would get any better. He is
not happy with it but their does not seem to be a whole lot of
flexibility in terms of the product and still accomplish the
goal.
Mr. Prairie asked how much in sales would be generated by the
total project.
Mr. McFarland stated the project would be approximately $14.5
million in market value.
Mr. Casserly felt the sales would be more than that.
Mr. Prairie asked what the problem would be with delaying a
decision.
Ms. Dacy stated it may be that construction would not start this
year. Staff has been hopeful that the first units would go up
this year.
Mr. McFarland asked if we could make a counter offer.
HOUSING & REDEVELOPMENT AUTHORITY MTG., AUGUST 10, 1995 PAGE 24
Mr. Prairie asked what the subsidy would be.
Mr. Burns stated the subsidy would be approximately $650,000.
Mr. Prairie stated it seems that with $15 -$16 million Rottlund
would have a little give.
Mr. Commers stated, if we are $900,000 and we take off $200,000
to $250,000 to get us down to $650,000, if we spread that we are
still doing 2/3 and them 1/3. Actually, it would be an overall
$900,000 subsidy. He requested an explanation of the 25% and
suggested making a counter offer.
Mr. Casserly stated they could also discuss equity sharing at
that time.
Mr. Burns stated staff thought it would be wise for the HRA
Chairperson, the Executive Director, Ms. Dacy, Mr. Casserly and
Mr. Stutz have more communication on this issue and then bring it
back for further discussion.
Mr. Commers stated he would have time conflicts and asked if
another member would be available for these discussions.
Mr. Prairie stated he would attend.
11. HOUSING REPLACEMENT PROGRAM UPDATE
Ms. Dacy stated this was an information item. Staff has provided
an outline of the steps staff need to carry out as a result of
the new law. Staff will be coming back next month with a full
plan for approval. In the plan will be an initial recommendation
of including some sites that have been acquired. It establishes
the tax increment planning for a housing replacement program.
After the HRA discusses in September, the City Council will hold
a public hearing and approve the program.
12. UPDATE ON NORTHCO DEVELOPMENT
Mr. Casserly stated he looking for a reaction from the HRA.
Northco contacted the City. They have submitted a list of things
and the cost in terms of soil correction on the site. There has
been quite a bit of analysis. They maintain the site requires
$550,000 in soil corrections. The kind of building they want is
a 100,000 square foot facility. Mr. Casserly asked them to get
an analysis on what they would normally spend on site
preparation. They said it would be in the neighborhood of $1.15
to $1.50 per square foot of building. If we have a site in which
normal site preparation costs would be in the range of $150,000
and their site will be $550,000, there is a gap in the costs. It
was a question of whether the HRA wants to look at a way to cover
HOUSING & REDEVELOPMENT AUTHORITY MTG., AUGUST 10, 1995 PAGE 25
that gap. The HRA has done this in the past. It was easier in
the past. Now we have to create an economic development district
which had a short life, contribution requirements, and some
negative aspects. With the recent legislative changes, most of
the negative aspects are now eliminated. It is possible to look
at economic development districts again. Cities are now allowed
to make 10% contributions to a project instead of having any
local government aid penalty reduction. Since the City has
traditionally used the 10t generated for administrative expenses,
one can see how the City could invest 10% into doing the project.
Mr. Casserly stated, with that in mind, is it worth looking at
some proposals in which people would come in and ask for some
assistance for something such as soil correction. For this one
could use an economic development district which has a limited
life and one can use loans or grants. For Northco, the total
property costs are $3.5 million which will exceed the guidelines.
The assistance is not an incentive to locate in Fridley but to
make the site competitive and available so the site can be
developed.
Mr. Casserly stated, on this type of project with a $3.5 million
cost and the HRA did half as a revenue note and half as a loan,
we could provide $350,000 of assistance to help with the soil
correction costs. This project generates a substantial amount of
tax increment. It would only need a district in place for three
to four years to recover the assistance provided as well as some
additional amounts for some housing programs and administrative
expenses. It is not disadvantageous to have this kind of
district. There would be an opportunity to provide for new
development and an opportunity to develop some surplus funds for
the housing programs. -
Mr. Casserly stated these are some opportunities available that
were not available three months ago. This project was brought to
the HRA in 1990 and the project fell through. Nothing has
happened on this site for the last five years. He did not know
if we should encourage them to bring anything in. The present
guideline does not work for them on this site. Do you want to
look at something more if it provides something for the City?
Mr. Prairie asked where the site was located and the number of
acres.
Ms. Dacy stated the site is located south of 73rd and to the
north of the business center. The site is 6.67 acres.
Mr. Casserly stated this is a policy question. Does the HRA want
to look at projects that fall under the guidelines of the new
law? If there is a project that makes sense, we can bring it
before the HRA? There are other improvements that are also
A
HOUSING & REDEVELOPMENT AUTHORITY MTG., AUGUST 10, 1995 PAGE 26
called for which could be supported by a tax increment package.
Mr. Comumers asked how long is a district and how much would the
HRA recover in the life of the district.
Mr. Casserly stated taxes of $1.50 per square foot would-be
generated which would be about $150,000 for the Northco request.
The amount of tax increment generated in the first year would be
over $111,000. What is wrong with this district is there is an
inflater built in because it is an economic development district.
The total is about $682,000 and they want $350,000 to $400,000 in
assistance. He recommends staff put together a package for
$300,000 making part of it a loan and part a revenue note. It
generates a lot of tax increment at the beginning of the project
and little at the end. He distributed a copy of a memo regarding
Northco.
Mr. Burns suggested the HRA consider this item at their next
meeting.
13. SW QUAD DEMOLITION
Mr. Ellestad reviewed information about Ms. Schnabel's question
about the demolition project.
Ms. Schnabel stated that the information satisfied her question.
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 AUGUST 10, 1995, HOUSING AND
REDEVELOPMENT AUTHORITY MEETING ADJOURNED AT 10:29 P.M.
Respectfully submitted,
/oLi
Lavonn Cooper
Recording Secretary
a°
0
J
Community Development Department
HOUSING AND REDEwmop1VIENT AUTHORITY
City of Fridley
DATE: September 8, 1995
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Change Order No. 2 for Southwest Quadrant
Demolition Project No. 281
There were three additional items of work as part of the
Southwest Quadrant demolition project which has necessitated a
second change order. The total amount of the change order is
only $3,100.and is still within the budgetary limits for the
demolition portion of the project.
During removal of the strip mall and car wash, the contractor
discovered larger than anticipated concrete footings and slabs.
The depth of the foundations and pads ranged from 18 - 24 inches
and greater in some areas.
Second, a small amount of asbestos was needed to be removed from
some of the walls in the utility room at 195 Satellite Lane. The
contractor expended $500 to have the asbestos removed.
Prior to the liquor store abatement contractor initiating work
inside the building, a substantial amount of debris and clean -up
needed to occur. The $350 charges are for two Herbst employees
to operate a Bobcat and remove the materials. The HRA will be
reimbursed for this expense from the liquor fund.
Staff recommends the HRA approve Change Order No. 2 in the amount
not to exceed $3,100, and authorize the Chairperson and Executive
Director to sign the appropriate documents.
BD /dw
M -95 -481
i
CITY OF FRIDLEY
ENGINEERING DEPARTMENT
6431 UNIVERSITY AVENUE N.E.
FRIDLEY, MN 55432
August 29, 1995
Herbst & Sons Construction Company, Inc.
2299 County Road H
New Brighton MN 55112
SUBJECT: Change Order No. 2, Southwest Quadrant Demolition, Project No. 281
Gentlemen:
You are hereby ordered, authorized, and instructed to modify your contract for the Southwest Quadrant
Demolition Project No. 281 by adding the following work
ddition:
Item
1. Excess concrete removal at
strip mall and car wash
2. Asbestos survey and removal
at 195 Satellite Ln
3. Liquor store clean -up prior to
abatement contract
Amount
Lump Sum $2,250.00
Lump Sum 500.00
Lump Sum 350.00
TOTAL ADDITIONS ............... $3,100.00
TOTAL CHANGE ORDERS:
Original Contract Amount .... ............................... $194,200.00
Contract Additions - Change Order
No. 1 .. ............................... 19,300.00
No.2 ............................... . 3.100.00
i -A
Herbst & Sons Construction Company, Inc.
Change Order No. 2
Page 2
and approvedy Clyde V. Moravetz, Demolition Coordinator on the 29th day of August, 1995.
by
by
Clyde oravetz
Demo Coord inator
/
Approved and accepted thisALday of , 1995 by
& SONS CONSTRUCTION COMPANY, INC.
N
President
Approved and accepted this day of , 1995 by
CITY OF FRIDLEY - Housing & Redevelopment
Authority
William W. Burns, Executive Director - HRA
Larry Commors, Chairman - HRA
J
I iR
� � Community Development Department
D HOUSING AND REDEVELOPMENT AUTHORPl`I'
City of Fridley
DATE: September 8, 1995j_
TO: William Burns, Executive Director of HRA Pk
FROM: Barbara Dacy, Community Development-Director
Grant Fernelius, Housing Coordinator
SUBJECT: Authorize RFP Process and Establish Public Hearing
Date for Sale of HRA Owned Vacant Lots
As you know, the HRA has acquired several properties this year
under the Housing Replacement Program. Most of the old home
sites have been cleared and are now ready for redevelopment.
Staff is recommending that the HRA utilize the same sealed -bid
format that was used in March for the first round of lot sales.
Attached is a copy of the bid package which was previously used
and a list of the sites to be sold. We should point out that
four of these sites were owned by the City and have been conveyed
to the BRA for $1.00 per lot.
Under the sealed bid format, each bidder would submit their offer
along with $500 earnest money. Award would be made to the
highest bidder, subject to a number of conditions including:
1. Each new home must meet. minimum design guidelines and the
ERA must approve all house plans before construction.
2. Each successful bidder must enter into a development
agreement with the HRA and provide a letter of credit to
ensure that the house is completed. Based.on our experience
with the first round, we are continuing to evaluate options
on the amount of security that should be provided. We will
come back to the BRA for a recommendation at a later date.
We plan to market the lots to the 1,500 members of the Twin
Cities Builders Association in their monthly mailings for
September and October. In addition, yard signs will be placed on
each lot and ads will be run in the-Fridley Focus. Bids would be
received until November 2, 1995 with award to occur at the HRA's
November 9th meeting. In addition to making the award,. the HRA
would conduct a public hearing as required by state law (M.S.
469.029).
Memo on Vacant Lots
September 8, 1995
Page 2
Recommendation
Staff recommends that the authorize the
bids for the lots identified in Exhibit
In addition, staff recommends that prior
HRA call for a public hearing to be hel
d
GF/
M -95 -485
n A
RFP process and accept
A until November 2, 1995.
to contingent -award the
on November 9, 1995.
L J
Exhibit A
LIST OF LOTS FOR SALE
Address
PIN
533 Janesville St. NE
03- 30 -24 -23 -0003
5924 2nd St. NE
23- 30 -24 -22 -0074
5973 3rd St. NE
23- 30 -24 -22 -0137
5981 3rd St. NE
N/A
5720 Polk St. NE
24- 30 -24 -32 -0081
Vacated Broad Avenue
N/A
and Lot 26, Block C,
Riverview Height
A15
Sale
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Al
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tiu ftWO
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till
1�
STREET , A -
FRIDLEY
..
f �
Fridley Housing and Redevelopment Authority
Scattered Site Acquisition Program
Vacant Lot Bid Package
February 1995
X11
Table of Contents
Title Pa, a No.
Bidding Procedures 1
Post -Bid Award Procedures 2
Design Guidelines 3
Projected Timeline 4
Lot Information Sheets
..
Appendices
- 1 Offer to Buy Vacant Lot
2 Sale and Development Agreement
71=
Fridley Housing and Redevelopment Authority
Scattered Site Acquisition Program
Bidding Procedures
1. All bids must be submitted on the form "Offer to Buy Vacant Lot ",
attached as Appendix No.1. A $500.00 earnest money check must
be enclosed with each offer. Only a certified or cashier's check
made payable to the "Fridley HRA" will be accepted as earnest
money.
2. A bidder may submit an offer on more than one property, however
a separate bid form must be submitted for each property along with
$500.00 earnest money.
3. All offers must be received by than
Offers can be mailed or delivered in person to Grant Femelius,
Housing Coordinator, Fridley Municipal Center, 6431 University
Ave. NE, Fridley, Minnesota 55432. Mailed offers must be received
by the March 8th deadline.
4. The Fridley HRA shall award the sale of each property to the
highest and most responsible bidder, subject to said bidder entering
into a Sale and Development Agreement with the Fridley HRA. The
successful bidder must execute said agreement within 45 days from
the date of the award, or they shall forfeit their earnest money and
any rights in and to the property.
5. Contingent award of the sale shall be made by the Fridley HRA
on or about
6. The Fridley HRA reserves the right to reject any or all offers without
reason and to waive any informalities or irregularities in the bidding.
1
Olin
LA
Post -Bid Award Process
Step 1 After the HRA has awarded sale of a property to the
high bidder, said bidder shall have 45 days to enter into a
Sale and Development Agreement with the HRA (attached as
Appendix No. 2).
Step 2 The agreement must be reviewed and approved by the HRA.
Upon approval, the buyer and the HRA will execute said
agreement and conduct a closing on the property.
Step 3 At closing, the HRA will furnish a Quit Claim deed
to the buyer in exchange for a mortgage on the property.
Said mortgage shall be in the amount of the purchase price
of the land and shall act as security for the HRA.
In addition, the buyer shall fumish a Letter of Credit (LC)
in the amount of the improvements. Said LC shall provide
security to the HRA that the home will be constructed in the
event the buyer is unable to perform under the agreement.
Step 4 The buyer may proceed to prepare plans and specs for the
home and submit said plans to the HRA for review and
approval. After HRA approval, the buyer may proceed
with construction (after the appropriate building permits
have been obtained).
Step 5 Once the home is completed, the builder will pay off
the mortgage to the HRA and the HRA will in turn
issue a Warranty Deed.
2
i(%..
Design Guidelines
1. Only single - family, detached dwellings may be constructed on these
sites. Structures must meet minimum square footage requirements
as adopted by City Code (min. 1,020 square feet) and be
constructed in compliance with all applicable state and local codes.
2. Three and four bedroom homes are desirable. As an alternative
the home may have two bedrooms and sufficient space to provide
'for a third bedroom.
3. Two full bathrooms are desirable, however a minimum of one full
bath and a 1/2 bath (roughed -in) are also acceptable.
4. A two (2) car garage is required (attached or detached) and a hard
surface driveway (either asphalt or concrete), must also be installed.
5. Low - maintenance, exterior materials (i.e. vinyl or aluminum siding)
are desirable.
6. The house building lines, window placement and orientation to
the street must present a balanced and pleasing view from all
sides. Consideration should be given to replicating the look
and style of existing Fridley homes as much as possible.
Garage door dominance should be minimized.
7. The front and side yards shall be fully landscaped upon comp-
letion of the project.
8. The Fridley HRA shall review and approve all building, drainage,
and landscaping plans before the builder can obtain a building
permit.
3
n1 1
Projected Timeline
Date Activity
Fridley HRA to conduct public hearing to
review purpose of program, plan for selling
the properties and receive public comments.
e
Lots to be advertised for sale and sealed
bids to be received.
Fridley HRA to award sale of lots to highest,
most responsible bidder. Successful bidder
has 45 days to enter into a redevelopment
contract with the HRA.
HRA and builder to negotiate on details of
agreement, including dates for closing,
submission of plans, required approvals and
other issues.
HRA to review and approve redevelopment
contract.
Builder to submit plans for building, drainage
and landscaping to HRA for review.
Builder to start construction of home. -
Home to be completed.
21
I /we
at
Offer to Buy Vacant Lot
(print your nametcompany)
(address)
Appendix 1
(tel. no.)
(the "Buyer ") hereby submits this offer to purchase the real property located at:
(the "Property") in Fridley, MN
(fill in address of lot)
from the Housing and Redevelopment Authority in and for the City of Fridley (the
"Authority ") for the price of: ($
(words) (figures)
Buyer shall attach to this offer a certified check made payable to the Authority in the
amount of $500.00 Buyer acknowledges that acceptance of this offer by the
Authority is contingent upon Buyer entering into a development contract (the
"Contract ") with the Authority as set forth in Appendix 2 of the Vacant Lot Bid
Package. If Buyer refuses to execute the Contract within the time period specified,
Buyer will forfeit their earnest money and any rights in and to the Property.
Buyer also acknowledges that he/she has read the Vacant Lot Bid Package and
understands the contents.
Agreed to and signed this day of
(day) (month)
BUYER
X
(Signature)
X
(Signature)
(Signature)
01 1
DRAFT 1 -5 -95
SALE & DEVELOPMENT AGREEMENT
RELATING TO
(Legal and Street address)
BY AND BETWEEN THE
FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY
F :_.
631
SALE & DEVELOPMENT AGREEMENT
THIS AGREEMENT, made and entered into this day of,
5 ::•
1996, by and between the Fridley Housing and
Redevelopment Authority, (hereinafter called the "HRA "), and
(hereinafter called the "Developer ");
AITNESSETH THAT, in the joint and mutual exercise of their
powers and in consideration of the mutual covenants contained
herein, the parties recite and agree as follows:
Section 1. Recitals.
1.01. The Property. The HRA now owns the property
described in the attached Exhibit "A "., (the "Property "), located
in the City of Fridley, Anoka County, Minnesota.
1.02. Facilities and Project. The Developer,_ in accordance
with HRA approval, plans to construct or cause to be constructed.
on the Property a single family home. The Developer-shall
provide the HRA with a copy of its plans and specifications
showing details on the style, exterior architectural features,
materials, color selections, etc. of the home to be constructed,
which plans and specifications shall be submitted to.the HRA for
review-and approval prior to the issuance of any building permits
on the Property.
Section 2: Sale /Purchase -of Property.
bevel
the HRA for
Purchase the
payment of $.
carried on a
mortgage and
2.01. Sale. The.HRA agrees to sell the
open and the Developer agrees to purchase
the purchase pric
Property bj.1-111-ffi
_ •�'he 'b
purchase money m
interest will be
Property to
the Property from
Developer Will -
a minimum down
will be
a l_ %
Section 3. Developer's Representations. The
represents, warrants and covenants to the HRA
of this agreement the statements set forth in
true and correct.
3.01.
Minnesota.
No Disability.
_, authorized
Developer hereby
that as of the date
this section are
The Developer is a
to do business in the
2M
State of
3.02. Litigation. There are no pending or, to the
knowledge of the Developer, threatened actions or proceedings
before any court or administrative agency which will materially
adversely affect the financial condition, business or operation
of the Developer or the ability of the Developer to perform its
obligations under this Agreement.
3.03. Comuliance. The Developer will comply with and duly
and promptly perform all of its obligations under this - Agreement
and all related documents and instruments. Developer will also
comply with all State and local codes /ordinances.
Section 4. Developer's Undertakings.
4.01. Site Grading. Developer will be responsible for
establishing and adhering to a site grading plan, which plan -
shall be submitted to the HRA on or before The
grading plan shall at-a minimum specify house type, finish grades
and drainage pattern.
4.02 New Construction. Developer shall be
responsible for the construction, marketing and
single family home on the Property by
minimum selling price -of said home shall be $
solely
sale of
the
The
4.03. Floor Plan. Developer will be responsible for.
submitting to the HRA, and obtaining pre- approval -of the floor
plans and front elevations -of the home proposed to be constructed
on the Property.- Said pre - approval must be obtained before the
HRA will issue any building permits to Developer.
4.04. Landscaping. Developer will provide a $
yard /landscaping package included in the sale price of each home.
Said package will specify, at a minimum, tree sizes /type /number,
sodded yards, foundation plantings /beds, and any necessary
retaining walls.
4.05. Fees and Charges. The Developer will pay, when due,
all permit fees, connection charges, user-charges or other
charges lawfully imposed by the City with respect to the
Property.
Section 5. City's Undertakings.
5.01. Existing Improvements. ---The City will be responsible
for removing any existing structures, foundations and debris from
the Property and will assure that all water and sewer services
are stubbed to the boulevard at no cost to Developer.
rfl►1
Section 6. Security.
6.01. Letter of Credit. The Developer will provide the HRA
with a Letter of Credit in an amount equal to the anticipated
cost of the improvements to be made on the Property. The form of
the Letter of Credit shall be as set forth in Exhibit ? The
Developer will be responsible for submitting the Letter of Credit
to the HRA for approval as to form and amount, which approval
must be obtained before any building permits will issue.
Section 7. Default. The failure to meet any condition of this
Agreement shall be an event of default.
7.01. Remedies. If an event of default occurs and is not
cured within 30 days of receiving written notice of said default,
the HRA may take one or more of the following actions:-
a. suspend performance under this Agreement;
b. terminate the Agreement, thereby rendering void
any promises or approvals contained-in this
Agreement;
c. draw upon the Letter of Credit as referenced in
paragraph 6 herein;
d. foreclose upon the mortgage-referenced herein as
provided by Minnesota law.
Section 8. Notices. All notices hereunder shall be* In writing
and either delivered- personally or mailed by- certified mail,
postage prepaid, addressed to the parties at the following
addresses:
Friciley Housing and Redevelopment Authority
6431 University Ave. N.E.
Fridley, MN 55432
Developer
IN WITNESS WHEREOF, the HRA has caused this Agreement to be
executed by its duly - authorized officers; and the Developer has
executed this Agreement the day and year first above written.
in
FRIDLEY HOUSING AND
REDEVELOPMENT AUTHORITY
By:
William W. Burns
Its: Executive Director
By:
Lawrence R. Commers
Its: Chairperson
By:_
Its:
STATE OF MINNESOTA )
) ss.
COUNTY OF ANOKA )
On this day of , 1995, before me, a Notary Public
within and for said County, appeared to me personally known, who,
being by me duly sworn, did say that he is William W. Burns named
in the foregoing instrument, the Executive Director of the
Fridley Housing and Redevelopment - Authority, a body politic-and
corporate under-the laws of the State of.- Minnesota, and that this
instrument was signed as his free act and deed.
Notary Public -
STATE OF MINNESOTA )
) ss.
COUNTY OF ANOKA )
On this day of , 1995, before me, a Notary Public
within and for said County, appeared to me personally known, who,
being by me duly sworn, did say that he is Lawrence R. Commers
named *in the foregoing instrument, the Chairperson of the Fridley
Housing and Redevelopment Authority, a body politic and corporate
under the laws of the State of Minnesota, and that this
instrument was signed as his free act and deed.
Notary Public
010
• STATE OF MINNESOTA )
) ss.
COUNTY OF ANOKA )
On this day of , 1995, before me, a Notary Public
within and for said County, appeared to me personally known, who,
being by me duly sworn, did say that he is
named in the foregoing instrument, the
of , a under the
laws of the State of Minnesota, on behalf of the , and
that this instrument was signed as his free act and deed.
f: \munic\Jdh \devk_hra
93n
Notary Public
MORTGAGE DEED
Corporation to Corporation
Mortgage Registry Tax Due Hereon:
THIS INDENTURE,
199_, between
under the laws of Mi
E3<r' Mortgagee.
made this day of
a corporation
WITNESSETH, That Mortgagor, in consideration of the sum f
Dollars ($
Mortgagee, the rec
hereby convey unto
County,
ounty,
0
and no /100ths
), to Mortgagor in hand paid by
:ipt whereof is hereby acknowledged, does
Mortgagee, forever, real property in
State of Minnesota, described as follows,
Lot , Block
together with all hereditaments and appurtenances belonging
thereto (the Property).
TO HAVE AND TO HOLD THE SAME, to Mortgagee forever.
Mortgagor covenants with Mortgagee as follows: That Mortgagor is
lawfully seized of - the premises and has good right -to convey the
same; that the Property is free from all encumbrances, -except as
follows:
that the Mortgagee shall quietly enjoy and possess the same; and
that the Mortgagor will Warrant and Defend the title to the same.
against all lawful claims not.hereinbefore..specifically excepted.
PROVIDED NEVERTHELESS, That if the said .Mortgagor shall pay
to Mortgagee the sum of.
according to the terms of that certainhPromissory Note of even)
date herewith (the Note), the final payment being due and payable
on the earlier of , 199 , or when the
Property is sold to any third party, with interest at the rate
provided in the Note, and shall repay to Mortgagee at the times
and with interest as specified, all sums advanced in protecting
the lien of this Mortgage, in payment of taxes on the. Property
and assessments payable therewith, insurance premiums covering
buildings thereon, principal or interest on any prior liens,
expenses and attorney's fees herein provided for and sums
advanced for any other purpose authorized herein, and shall keep
and perform all the covenants and agreements herein containedl .
then this Mortgage shall be null and void, and to be released at
the Mortgagor's expense.
03e
AND MORTGAGOR covenants with Mortgagee as follows:
1. To pay the principal sum of money and interest as
specified in the Note;
2. To pay all taxes now due or that may hereafter become
liens against said Property before penalty attaches
thereto;
3. To keep any buildings, improvements and fixtures now or
later located on or a part of the Property insured
against loss by fire, extended coverage perils,
vandalism, malicious mischief and, if applicable, steam
boiler explosion, for at least the amount of the full
insurable value thereof at all times while any amount
remains unpaid under this Mortgage. If any of the
buildings, improvements or fixtures are located in a
federally designated flood prone area, and if flood
insurance is available for that area, Mortgagor-shall
.procure and maintain flood insurance in amounts
reasonably satisfactory to Mortgagee. Each insurance
Policy shall contain a loss payable clause in favor*of
Mortgagee affording all rights and privileges
customarily provided under the so- called standard
mortgage clause. In the event of damage to the
Property by fire or other casualty, Mortgagor shall
Promptly give notice of such damage to Mortgagee and
the insurance company. - The insurance shall be issued
by an insurance company or companies licensed to -do,
business in the state of Minnesota and acceptable to
Mortgagee. The insurance policies shall provide for
not less than ten days written notice to Mortgagee
before cancellation, non - renewal termination, or change
in coverage, and Mortgagor shall deliver to Mortgagor a
duplicate original or certificate of such insurance
policies;
4. To pay when due both principal and interest of all
prior liens or encumbrances, if any, above mentioned,
and to keep the Property. free and clear of all other
prior liens or encumbrances;
5.. To commit or permit no waste on said premises and to
keep them in good repair;
6. To complete forthwith any improvements which may
hereafter be under _course-of construction on the
Property; and
7. To pay any -other expenses and attorneys fees incurred
by Mortgagee by reason of litigation with any third
party for the protection of the lien of this Mortgage.
AT
r
c
This Mortgage shall immediately become due and all outstanding
balances shall accelerate upon the Property being conveyed,
assigned, sold, transferred or encumbered.
In the case of failure to pay said taxes and assessments,
prior liens.or encumbrances, expenses and attorney's fees as
above specified, or to insure said buildings, improvements and
fixtures and deliver the policies as aforesaid, the Mortgagee may
pay such taxes, assessments, prior liens, attorney's fees, and
interest thereon, or obtain such insurance, and the sums so paid
shall bear interest from the date of such payment, at the same
rate set forth in the Note, and shall be impressed as an
additional lien upon the Property and be immediately due and
payable from Mortgagor to Mortgagee and this Mortgage shall from
date thereof secure the payment of such advances with interest.
In case of default in any of the foregoing covenants, the
Mortgagor confers upon the Mortgagee the option of declaring the
unpaid balance of the Note and the interest accrued thereon,
together with all sums advanced hereunder, immediately due and
payable without notice, and hereby authorizes and empowers
Mortgagee to foreclose this Mortgage by judicial proceedings or
to sell the Property at public auction and convey the same to the
purchaser in fee simple in accordance with the statute, and out
of the moneys arising from such sale to retain-all sums secured
hereby, with -interest and all legal costs and charges of such
foreclosure and the - maximum attorney's fees permitted by law,
which costs, charges-and fees the Mortgagor agrees to pay.
The terms of this Mortgage shall run with the Property and
bind all parties hereto and their successors in-interest.
IN TESTIMONY WHEREOF, the said Mortgagor has hereunto set
its hand the day and year first above written.
STATE OF MINNESOTA )
COUNTY OF ANOKA ss.
)
The foregoing instrument
day of
the '
:. _.., of
MORTGAGOR:
BY:
Its:
was acknowledged before me this
199_, by
711
on behalf of
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
Oil
NOTE
Us $
Minnesota
, 199
FOR VALUE RECEIVED, the undersigned ( "Borrower") promises)
to nav4:. _.._..w,r ....:..,.....
: wa: s.. w�. wi`.: A► G.":► 2zfMlw`:`_fi «`3Tit.i�ip�aC�i:`' order «. ww<x:,::•:•.;.xx<:z.< >cr
er the principal sum of
and no /100ths
Dollars ($ ), with percent ( %) simple
interest on the unpaid principal balance from the date of this
Note. Principal shall be payable at
, Minnesota The entire
indebtedness evidenced by this Note, if not sooner paid, shall be
due and payable on the earlier of 199 or when
Lot Block —
County, Minnesota is sold to any third party.
If the payment under this note is not paid when due and
remains unpaid after a date specified by a notice to Borrower,
the entire principal amount outstanding and accrued interest
thereon shall at once become due and payable at the option of the
Note holder. The date specified shall not be less than five days
from the date such notice is mailed. The Note holder may
exercise this option to accelerate during any default by Borrower
regardless of any prior forbearance. If suit is brought to
collect this Note, the Note holder shall be entitled*to collect
all reasonable costs and expenses of suit, including, but not
limited to, reasonable attorneys fees.
Borrower shall pay to the Note holder a late charge of
percent per annum in the event that this Note is not paid in full
on the date it is due.
Borrower may prepay the principal amount outstanding in
whole or in part. The Note holder may require any partial
prepayment (i) be made on the date monthly installments are due
and (ii) be in the amount of that part of one or more monthly
'installments which would be applicable to principal. Any partial
.prepayment shall be applied against the principal amount
'putstanding and shall not postpone the due date of any subsequent
monthly installments or change the amount of such installments,
unless the Note holder shall otherwise agree in writing.
Presentment, notice of dishonor, and protest are hereby_
waived by all makers, sureties, guarantors and endorsers hereof:
This Note shall be the joint and several obligation of all
makers, sureties, guarantors and endorsers, and shall be binding
upon them and their 'successors and assigns.
Any notice to Borrower provided for in this Note shall be
given by mailing such notice by certified mail addressed to
&3\A /'
Borrower at the address stated below or to such other address as
Borrower may designate by notice to the Note holder. Any notice
to the Note holder shall be given by mailing such notice by
certified mail, return receipt requested, to the Note holder at
the address stated in the first paragraph of this Note, or at
such other address as may have been designated by notice to
Borrower.
The indebtedness evidenced by this Note is secured by a
Mortgage, dated , 199 , and reference is
made to the Mortgage for rights as to acceleration of the
indebtedness evidenced by this Note.
G:\MUnic \jdh \mtgdeed.hra
nV
BY:
Its:
, MN 55
EXHIBIT C
IRREVOCABLE LETTER OF CREDIT
TO: Fridley Housing and No.
Redevelopment Authority Date: , 1995
6431 University Ave. N.E.
Fridley, MN 55432
Dear Sir or Madam:
We hereby issue, for the account of _( Name of Developer ) and in
your favor, our Irrevocable Letter of Credit in the amount of
available to you by your draft drawn on sight on the
undersigned bank.
The draft must:
a) Bear the clause, "Drawn under Letter Of Credit No.
dated , 1995, of _( Name of Bank ) "
b) Be accompanied by a writing, signed by the Executive
Director of the Fridley Housing and Redevelopment
Authority, (i) stating that ( Name of Developer ) has
defaulted in its obligations under that certain
Development Contract, which contract may be amended from
time to time without our approval, between ( Name of
Developer ) and the Fridley Housing and Redevelopment
Authority dated , 1995, (the "Contract "); AND
(ii) certifying that the amount drawn is required'by the
Fridley Housing and Redevelopment Authority to fulfill the
obligations of _( Name of Developer ) under the Contract.
c) Be presented for payment at ( Address of Bank ),
Minnesota on or before 4:00 p.m. on , 1995.
This Letter of ,Credit sets forth in full our undertaking_ which
zhail. not in any way be modified,_ amended, amplified,. or limited
by reference to any document, instrument, or agreement, whether
or not referred to herein.
This Letter of Credit is not assignable.
This Letter of Credit shall be governed by the most recent
revision of the Uniform Customs and Practice for Documentary
Credits, International Chamber of -Commerce Publication No. 290.
We hereby agree that a draft drawn under and in compliance with
this Letter of Credit shall be duly honored upon presentation.
BY:
Its:
iV
0.,
a.000
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: September 8, 1995 IV
`j'O: William Burns, Executive Director of HRA ,V'
FROM: Barbara Dacy, Community Development Director
Grant Fernelius, Housing Coordinator
SUBJECT: Consider Acquisition of 530 Hugo Street NE
This is a single family home located next to the two lots the HRA
owns at 540 and 550 Hugo St. The home (built in 1948) is a one
level rambler without a basement and has one bedroom, one
bathroom, a kitchen, living room and den. Total square footage
is 1,030. The home is showing signs of exterior deterioration,
including defective paint and damaged siding.
According to the appraisal, the floor plan is functionally
obsolete, and there are signs of water damage on the ceilings.
In addition, the furnace and water heater are located in a closet
without proper fire protection. Based on this information, staff
believes this property meets the definition of a blighted
property under the Housing Replacement Program and is suitable
for acquisition.
One advantage to this site is that it has a large lot (100, x
1101) and is considered buildable under the Zoning City Code. As
previously mentioned, the site is adjacent to lots already owned
by the HRA. It is our recommendation to retain all three sites
and possibly combine them with a fourth lot (560 Hugo St.) that
would complete our acquisitions for the block.
The property was appraised by Appraisal Engineering Bureau, Inc.
for $60,500. Staff has contacted the owner and made an offer to
purchase the property. The owner has agreed to sell for $60,000.
It should be noted that this is a double lot. For comparison
Purposes the HRA purchased the 539/547 Glencoe St. site for
$86,000 and the 540/550 Hugo St. site for $75,000.
Recommendation
Staff recommends that the BRA authorize the purchase of 530 Hugo
St. from Margaret LaBarge for a price of $60,000.
GF/
M -95 -486
1�;
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Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: September 8, 1995 Q
TO: William Burns, Executive Director of HRA 10 A
FROM: Barbara Dacy, Community Development Director
Grant Fernelius, Housing Coordinator
SUBJECT: Consider Amendment to Whitney Homes Contract
Whitney Homes has requested a 30 day extension for completing the
second phase of their project. As you recall, the HRA sold two
additional lots to Whitney Homes which are located at 677 Hugo St. and
539/547 Glencoe St.
The development agreement specified that the homes would be started
in the fall and completed by October 14, 1995. However, due to some
title problems there has been a delay in starting construction and
Whitney has subsequently requested an extension.
We should point out that the first three homes built by Whitney are
nearly complete and most of them have been sold. Attached is a copy
of the amendment which was prepared by Jim Hoeft.
Recommendation
Staff recommends that the HRA authorize an extension to the Sale and
Development Agreement with Whitney Homes, Inc. for the 677-Hugo St.
539/547 Glencoe St. sites with a revised completion date of November
14, 1995.
GF/
M -95 -487
2
DRAFT 9 -7 -95
ADDENDUM TO THE
SALE & DEVELOPMENT AGREEMENT
RELATING TO
539 Glencoe Street
547 Glencoe Street
677 Hugo Street
BY AND BETWEEN THE
FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY
F
WHITNEY HOMES, INC.
ne
- 9
THIS ADDENDUM, is made and entered into this 1541 day of
1995, by and between the Fridley Housing and
Redevelopment Authority, (hereinafter called the "HRA "), and
Whitney Homes, Inc. (hereinafter called the "Developer ");
WHEREAS, the parties executed the
Development Agreement referenced above
and
original Sale and
on -- . .1ur,e. 9
1995;
WHEREAS, the parties have mutually agreed that the dates set
forth in paragraphs 2.01 and 4.02 of the original Sale and
Development Agreement shall be modified.
NOW, THEREFORE, in the joint and mutual exercise of their
powers and in consideration of the mutual covenants contained in
the Sale and Development Agreement dated SZj -,e.,, R , 1995,
and the provisions as set forth below, the parties hereto agree
to amend said original agreement as follows:
112.01. Sale. The HRA agrees to sell the Property to
Developer and the Developer agrees to purchase the Property
from the HRA for the purchase price of $7,000.00.
Developer will purchase the Property by Quit Claim Deed
with a minimum down payment of $ g5_. The balance of
$ 4000 will be carried on a purchase money mortgage
(Exhibit B) at 5.0 %, which mortgage and interest will be
due and payable no later than November 14, 1995, at which
time, if Developer is in full compliance with this
agreement, Developer will be provided with a Warranty Deed
and Satisfaction of Mortgage."
"4.02 New Construction. Developer shall be solely
responsible for the construction, marketing and sale of the
,single family homes on the Property by November 14, 1995.
The minimum selling price of said homes shall be
$80,000.00."
IN WITNESS WHEREOF, the HRA has caused this Agreement to be
executed by its duly authorized officers; and the Developer has
executed this Agreement the day and year first above written.
FRIDLEY HOUSING AND
REDEVELOPMENT AUTHORITY
By:
William W. Burns
Its: Executive Director
By:
Lawrence R. Commers
Its: Chairperson
WHITNEY HOMES, INC.
By:
Its:
STATE OF MINNESOTA )
ss.
COUNTY OF ANOKA )
On this day of , 1995, before me, a Notary Public
within and for said County, appeared to me personally known, who,
being by me duly sworn, did-say that he is William W. Burns named
in the foregoing instrument, the Executive Director of the
Fridley Housing and Redevelopment Authority, a body politic and
corporate under the laws of the State of Minnesota, and that.this
instrument was signed as his free act and deed.
Notary Public
df%
STATE OF MINNESOTA )
ss.
COUNTY OF ANOKA )
On this day of ' 1995, before me, a Notary Public
within and for said County, appeared to me personally known, who,
being by me duly sworn, did say that he is Lawrence R. Commers
named in the foregoing instrument, the Chairperson of the Fridley
Housing and Redevelopment Authority, a body politic and corporate
under the laws of the State of Minnesota, and that this
instrument was signed as his free act and deed.
Notary Public
STATE OF MINNESOTA )
ss .
COUNTY OF ANOKA )
On this day of , 1995, before me, a Notary Public
within and for said County, appeared to me personally known, who,
being by me duly sworn, did say that he is
named in the foregoing instrument, the
of Whitney Homes, Inc., a corporation under the
of Minnesota, on behalf of the corporation, and
instrument was signed as his free act and deed.
f: \munic \Jdh \fhraamdI.dev
an
laws of the State
that this
Notary Public
03 0 of
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TO: FRIDLEY H.R.A
FROM: CITY OF FRIDLEY
RE: BILLING FOR ADMINISTRATIVE AND OPERATING EXPENSES
AUGUST 1995
ADMINISTRATIVE BILLING:
ADMINISTRATIVE PERSONAL SERVICES
ADMINISTRATIVE OVERHEAD
COMPUTER OVERHEAD
(For Micro & Min( canputem)
TOTAL ADMINISTRATIVE BILLING:
OPERATING EXPENSES:
CITY OF FRIDLEY — FILM
AT &T —LONG DISTANCE
US WEST — TELEPHONE SERVICE
BENEFITS EXPENSES:
Account #'s for
HRA's Use
Account #'s for
City's Use
14,96725 101 - 0000 - 341 -1200
267.83 101 - 0000 - 336 -3000
194.42 101 - 0000- 336 -3000
460-0000-430-4107 15.429.50
460 -0000- 430 -4221
460- 0000 - 430 -4332
460- 0000 - 430 -4332
TOTAL OPERATING EXPENSES:
1224 236- 0000 - 336 -3000
6.89 236- 0000 - 336 -3000
13.37 236- 0000 - 336 -3000
32.50
CITY OF FRIDLEY — HEALTH INS
262 -0000- 219 -1001
182.40
236 -0000- 219 -1001
CITY OF FRIDLEY — DENTAL INS
262 -0000- 219 -1100
61.59
236 -0000- 219 -1100
CITY OF FRIDLEY — LIFE INS
262 -0000- 219 -1200
425
236 -0000- 219 -1200
CITY OF FRIDLEY — WORKER'S COMP
262 -0000- 219 - 2400
833.47
236 -0000- 219 -2400
TOTAL BENEFITS EXPENSES:
1.081.71
TOTAL EXPENDITURES — AUGUST 1995
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TO rn
TO:- WILLIAM W. BURNS, EXECUTIVE DIREC RJ
FROM: RICHARD D. PRIBYL, FINANCE DIRECTOR
CRAIG A ELLESTAD, ACCOUNTANT
SUBJECT: 1996 SCHOOL REFERENDUM LEVY RETURN AGREEMENTS
DATE: SEPTEMBER 1, 1995
Attached are the 1996 School District Referendum Levy Retum Agreements to
be placed on the HRA's agenda for Thursday, September 14th.
These annual agreements need to be approved by both the HRA Commission
& the City Council. If approved by the Commission, we will then put this.
item on the City agenda for approval.
The estimated total levy return for 1996 before delinquents is $310,941.
This is the same as the calculated amount for 1995.
In 1996, no TIF Districts /County ID's terminate and we feel there will be no
significant changes in the overall market values or any major settlements.
The table below breaks the referendum levy return down by school district :
School
Calculated
Estimated
Percent
District
1995
1996
Change
.11
$16,416
$16,416
0.00/0
13 $2,648 $2,648 0.00/0
14 $232,531 $232,531 0.00/0
16 $59,345 $59,345 0.0%
Total:
ATTACHMENTS
Re: \123DATAHRAWIRSCH96EST.WK1
$310,940 §§10,940 0.0°/
192,
AGREEMENT
_This Agreement is dated as of January 2, 1996, is
by and between the City of Fridley, Minnesota, and Independent
School District No. 11, and provides as follows:
299140.2
1. Definitions. As used in this Agreement, the
following terms have the following meanings, respectively:
"City" means the City of Fridley,
Minnesota.
"HRA" means the Housing and Redevelopment
Authority in and for the City of Fridley,
Minnesota.
"Project" means Redevelopment Project No.
1 established and operated by the HRA pursuant
to Minnesota Statutes, Sections 469.001
through 469.047.
"1985 Revenue Bonds" means the HRA's
$4,070,000 Tax Increment Revenue Bonds of
1985, dated May 1, 1985.
"Limited Revenue Note" means the HRA's
$5,603,755.80 Limited Revenue Capital
Appreciation Tax Increment Note, dated
December 20, 1985.
"1985 G.O. Bonds" means the City's
$11,550,000 Variable Rate Demand General
Obligation Tax Increment Bonds, Series 1985,
dated December 30, 1985.
"1986 G.O. Bonds" 'means the City's
$10,045,000 General Obligation Tax Increment
Refunding Bonds, Series 1986, dated as of
August 1, 1986. .
"1990 G.O. Bonds" means the City's
$9,485,000 General Obligation Tax Increment
Refunding Bonds of 1990, dated March 1, 1990.
"1992 G.O. Bonds "' means the City's
$4,030,000 General Obligation Temporary Tax
Increment Bonds, Series 1992C, dated December
1, 1992.
WW
"Tax Increment Obligations" means the
1985 Revenue Bonds, the Limited Revenue Note,
the 1985 G.O. Bonds, the 1986 G.O. Bonds, the
1990 G.O. Bonds, the 1992 G.O. Bonds, and any
other contractual obligations of the HRA or
the City which were entered into prior to the
date of this Agreement and which commit the
use of any tax increments from the TIF
Districts for specified purposes, projects, or
parties.
"Tax Increment Act" means Minnesota
Statutes, Sections 469.174 through 469.179.
"TIF Districts" means Tax Increment
Financing District Nos. 1 through 13 within
the Project. The attached Exhibit A contains
certification. dates and other information on
the TIF Districts.
"School District" means Independent
School District No. 11, the Anoka School
District.
"Subdivision" means Minnesota Statutes
Section 469.177, Subdivision 10 (a copy of
which is attached hereto as Exhibit B).
2. Recitals.
(a) In certain cases, the Subdivision
either requires or allows by agreement certain
tax increments attributable to school district
referendum tax levies to be paid to school
districts.
(b) A portion of TIF District No. 3 is
located within the boundaries of the School
District.
(c) None of the property within TIF
District Nos. 1, 2, 4, 5, 6, 7,•8, 9, 10, 11,
12 and 13 is located within the boundaries of
the School District.
(d) It is the purpose of this Agreement
to provide for payment of certain tax
increments to the School District pursuant to
299940.2 2
AR
and in accordance with the provision of the
Subdivision.
(e) Nothing in this Agreement is
intended to violate the covenants and
agreements heretofore. made respecting the
application of tax increments from the TIF
Districts pursuant to the Tax Increment
Obligations.
3. Representations of the City.
(a) The Tax Increment Obligations were
issued to finance various activities of the
HRA within the Project.
(b) The 1985 Revenue Bonds are not
general obligations of the City or the HRA.
Tax increments from TIF District Nos. 1
through 5 are pledged to the payment of the
1985 Revenue Bonds, and there are no other
sources of funds pledged to the payment
thereof. The final scheduled principal
maturity of the 1985 Revenue Bonds is February
1, 1999.
(c) The Limited Revenue Note is not a
general obligation of the City or the HRA and
is payable solely from tax increments pledged
for such purposes from TIF District No. 6.
(d) The 1985 G.O. Bonds were payable
from tax increments derived from TIF District
Nos. 1 through 6, and the final scheduled
principal maturity of those Bonds was February
1, 2000. However, on February 1, 1990, the
City discharged the 1985 G.O. Bonds by paying_
all then outstanding principal thereof and
interest thereon.
(e) The 1986 G.O. Bonds are payable from
tax increments derived from TIF District Nos.
1 through 6, and the final scheduled principal
maturity of those Bonds is February 1, 2000.
However, the City has advance refunded the
].986 G.O. Bonds via the issuance of the 1990
G.O. Bonds, and the City expects pursuant to
said refunding that all of the principal of
and interest on the 1986 G.O. Bonds will have
been paid on or before February 1, 1994.
299140.2 3
Q i�
(f) The 1990 G.O. Bonds are payable from
tax increments derived from TIF District Nos.
1, 2, 3, and 6, and the final scheduled
principal maturity of those Bonds is August 1,
2009.
(g) The 1992 G.O. Bonds are payable, to
the extent permitted by applicable law, from
tax increments derived from TIF District Nos.
1 through 12, and the final scheduled maturity
of those Bonds is December 1, 1995.
(h) Portions of the principal of the
1985 Revenue Bonds, the Limited Revenue Note,
the 1985 G.O. Bonds, and the 1986 G.O. Bonds,
the 1990 G.O. Bonds, and the 1992 G.O. Bonds
were outstanding on May 1, 1988, and /or are
outstanding on the date of this Agreement.
4. Representations of the School District.
(a) On October 5, 1982, the electorate
of the School District approved a continuous
6.0 mill levy first effective for the 1982
payable 1983 property taxes. This levy is
hereinafter referred to as the 01982 Levy".
(b) On October 6, 1987, the electorate
of the School District approved a 6.0 mill
continuous levy first effective for the 1981
payable 1988 property taxes. This levy is
hereinafter referred to as the "1987 Levy ".
(c) According to the Minnesota
Department of Education, for purposes of the
above- mentioned referendum levies the tax
capacity rate equivalent of 6 mills is
.06999697.
S. Payment of Tax Increments to School District. The
City and the School District hereby agree that, except as
otherwise provided pursuant to paragraph 6 of this Agreement,
tax increments shall be paid to the School District by the HRA
as and to the extent received by the HRA, with respect to the
tax increments relating to the 1995 payable 1996 property
taxes, as follows:
TIF District No. 3. Pursuant to clause
b(2) of the Subdivision, the tax increment
from TIF District No. 3 which is attributable
to the 1982 Levy and the 1987 Levy shall be
paid to the School District.
299140.2 4
an
6. Further Agreements. Nothing in this Agreement is
intended or shall be applied in such a manner as to violate
the obligations and covenants made by the City or the HRA in
connection with the Tax Increment Obligations, and to the
- extent but only to the extent that the application of the
terms of this Agreement would give rise to a violation of said
obligations and covenants, including without limitation, the
default in the timely and full payment of the Tax Increment
Obligations, the applicable tax increments shall be applied
instead in the manner, but only to the extent necessary, to
avoid such default or other violation of said covenants or
obligations. Nothing in this Agreement shall restrict the
City or the HRA in the exercise of the powers which they may
have relating to the Project or the TIF Districts.
in addition, the City and the School District agree that
the provisions of paragraph 5 providing for payment of tax
increment to the School District shall be limited to and shall
apply only to such tax increment attributable to the 1995
payable 1996 real estate property taxes, and at the conclusion
of said period, the City and the School. District agree to
review the circumstances and to attempt to negotiate in good
faith such further agreement or agreements as. may be permitted
by law and which are acceptable to both the City and School
District with respect to discretionary payments of such
applicable tax increment to the School District.
IN WITNESS WHEREOF, the City and the School District have
caused this Agreement to be executed by their duly authorized
representatives.
CITY OF FRIDLEY, MINNESOTA
Mayor
City'Manager
INDEPENDENT SCHOOL DISTRICT NO. 11
School Board Chair
Superintendent
299140.2 5
-BE
EXHIBIT A
Schedule of Tax Increment Financing Districts
Within Housing and Redevelopment
Project No. 1 of the Fridley HRA
Independent
299140.2
RIP
Certification
School
TIF District
Name
Date
District No.
1
Center City
5/11/79
14
2
Moore Lake
7/31/81
13/14
3
North Area
5/19/82
11116
4
Johnson Printing/
Skywood Mall
1/20/84
13/14
5
Paschke
3/15/84
16
6
Lake Pointe
12/24/85
13
7
Winfield
10/22/86
16
8
Shorewood
10/24/86
14
9
Onan /Old Central
9/7/89
16
10
Northco Phase III
4/10/90
16
11
Osborne Crossings
1/31/92
16
12
McGlynn Bakeries
3/5/92
14/16
13
Satellite Lane Apts.
6/20/95
14
299140.2
RIP
Exhibit B
Subd. 10. Pavment to school for referendum levy. (a) The provisions of this subdivi-
sion appl.v to tax increment financing districts and projects for which certification was
requested before May 1. 1933, that are located in a school district in which the voters
have approved new local tax rates or an increase in local tax rates after the tax incre-
ment financing district was certified.
(b)(1) If there are no outstanding bonds on May 1, 1938, to which increment from
the district is pledged, or if the referendum is approved after Mav-1, 1988, and there
are no bonds outstanding at the time the referendum is approved, that were issued
before May 1, 1988, the authority must annually pay to the school district an amount
of increment equal to the increment that is attributable to the increase in the local tax
rate under the referendum.
(2) If clause (1) does not apply, upon approval by a majority vote of the governing
body of the municipality and the school board, the authority must pay to the school
district an amount of increment equal to the increment that is attributable to the
increase in the local tax rate under the referendum.
(c) The 2mounts of these increments may be expended and must be treated by the
school district in the same manner as provided for the revenues derived from the refer-
endum levy approved by the voters. The provisions of this subdivision apply to projects
for which certification 'was requested before, on, and after August 1, 1979.
RC.
AGREEMENT
This Agreement is dated as of January 2, 1996, is
by and between the City of Fridley, Minnesota, and Independent
School District No. 13, and provides as follows:
299139.2
1. Definitions. As used in this Agreement, the
following terms have the following meanings, respectively:
"City" means the City of Fridley,
Minnesota.
"HRA" means the Housing and Redevelopment
Authority in and for the City of Fridley,
Minnesota.
"Project" means Redevelopment Project
No. 1 established and operated by the HRA
pursuant to Minnesota' - Statutes, Sections
469.001 through 469.047.
"1985 Revenue Bonds" means the HRA's
$4,070,000 Tax Increment Revenue Bonds of
1985, dated May 1, 1985.
"Limited Revenue Note" means the HRA's
$5,603,755.80 Limited Revenue Capital
Appreciation Tax Increment Note, dated
December 20, 1985.
"1985 G.O. Bonds" means the City's
$11,550,000 Variable Rate Demand General
Obligation Tax Increment Bonds, Series 1985,
dated December 30, 1985.
"1986 G.Cr. Bonds" 'means the City's'
$10,045,000 General Obligation Tax Increment
Refunding Bonds, Series 1986, dated as of
August 1, 1986.
"1990 G.O. Bonds" means the City's
$9,485,000 General Obligation Tax Increment
Refunding Bonds of 1990, dated March 1, 1990.
"1992 G.O. Bonds" means the City's
$4,030,000 General Obligation Temporary Tax
Increment Bonds, Series 1992C, dated December
1, 1992.
299139.2
"Tax Increment Obligations" means the
1985 Revenue Bonds, the Limited Revenue Note,
the 1985 G.O. Bonds, the 1986 G.O. Bonds, the
1990 G.O. Bonds, the 1992 G.O. Bonds, and any
other contractual obligations of the HRA or
the City which were entered into prior to the
date of this Agreement and which commit the
use of any tax increments from the TIF
Districts for specified purposes, projects, or
parties.
"Tax Increment Act" means Minnesota
Statutes, Sections 469.174 through 469.179.
"TIF Districts" means Tax Increment
Financing District Nos. 1 through 13 within
the Project. The attached Exhibit A contains
certification dates and other information on
the TIF Districts.
"School District" means Independent
School District No. 13, the Columbia Heights
School District.
"Subdivision" means Minnesota Statutes
Section 469.177, Subdivision 10 (a copy of
which is attached hereto as Exhibit B).
2. Recitals.
(a) In certain cases, the Subdivision
either requires or allows by agreement certain
tax increments attributable to school district
referendum tax levies to be paid to school
districts.
(b) `i'IF District No. 6 is located
entirely within the boundaries of the School
District, and a portion of TIF District Nos. 2
and 4 are located within the boundaries of the
School District.
2
(c) None of the property within TIF
District Nos. 1, 3, 5, 7, 8, 9, 10, 11, 12 and
13 is located within the boundaries of the
School District.
(d) It is the purpose of this Agreement
to provide for payment of certain tax
increments to the School District pursuant to
and in accordance with the provision of the
Subdivision.
(e) Nothing in this Agreement is
intended to violate the covenants and
agreements heretofore made respecting the
application of tax increments from the TIF
Districts pursuant to the Tax Increment
Obligations.
3. Representations of the City.
(a) The Tax Increment Obligations were
issued to finance various activities of the
HRA within the Project.
(b) The 1985 Revenue Bonds are not
general obligations of the City or the HRA.
Tax increments from TIF District Nos. 1
through 5 are pledged to the payment of the
1985 Revenue Bonds, and there are no other
sources of funds pledged to the payment
thereof. The final scheduled principal
maturity of the 1985 Revenue Bonds is February
1, 1999.
(c) The Limited Revenue Note is not a
general obligation of the City or the HRA and
is payable solely from tax increments pledged
for such purposes from TIF-District No. 6.
(d) The 1985 G.O. Bonds were payable
from tax increments derived from TIF District
Nos. 1 through 6, and the final scheduled
principal maturity of those Bonds was February
1, 2000. However, on February 1, 1990, the
City discharged the 1985 G.O. Bonds by paying
all then outstanding principal thereof and
interest thereon.
299139.2 3
(e) The 1986 G.O. Bonds are payable from
tax increments derived from TIF District Nos.
1 through 6, and the final scheduled principal
maturity of those Bonds is February 1, 2000.
However, the City has advance refunded the
1986 G.O. Bonds via the issuance of the 1990
G.O. Bonds, and the City expects pursuant to
said refunding that all of the principal of
and interest on the 1986 G.O. Bonds will have
been paid on or before February 1, 1994.
(f) The 1990 G.O. Bonds are payable from
tax increments derived from TIF District Nos.
1, 2, 3, and 6, and the final scheduled
principal maturity of those Bonds is August 1,
2009.
(g) The 1992 G.O. Bonds are payable, to
the extent permitted by applicable law, from
tax increments derived from TIP District Nos.
1 through 12, and the final scheduled maturity
of those Bonds is December 1, 1995.
(h) Portions of the principal of the
1985 Revenue Bonds, the Limited Revenue Note,
the 1985 G.O. Bonds, and the 1986 G.O. Bonds,
the 1990 G.O. Bonds, and the 1992 G.O. Bonds
were outstanding on May 1, 1988, and /or are
outstanding on the date of this Agreement.
4. Representations of the School District.
(a) On October 5, 1981, the electorate
of the School District approved a 5.0 mill
continuous levy first effective for the 1981
payable 1982 property taxes. This levy is
hereinafter referred to as the "1981 Levy ".
(b) On September 23, 1986, the
electorate of the School District approved a
7.0 mill continuous -levy first effective for
the 1986 payable 1987 property taxes. This
levy is hereinafter referred to as the 01986
Levy ".
(c) According to the Minnesota
Department of Education, for purposes of the
above- mentioned referendum levies the tax
capacity rate equivalents of 5 mills and 7
299139.2 4
299139.2
mills are .06162496 and .07875910,
respectively.
(d) On November 6, 1990, the electorate
of the School District approved a .08 tax
capacity rate levy authorized for 7 years and
first effective for the 1990 payable 1991
property taxes. This levy is hereinafter
referred to as the "1990 Levy".
5. Payment of Tax Increments to School District. The
City and the School District hereby agree that, except as
otherwise provided pursuant to paragraph 6 of this Agreement,
tax increments shall be paid to the School District by the HRA
as and to the extent received by the HRA, with respect to the
tax increments relating to the 1995 payable 1996 property
taxes, as follows:
(a) TIF District No. 6. Since the 1981
Levy was approved before the date of
certification of TIF District No. 6, the
Subdivision does not apply to that Levy with
respect to this District, and no tax
increments attributable to said Levy from this
District are payable to the School District.
Pursuant to clause b(2) of 'the Subdivision,
the tax increment from TIF District No. 6
which is attributable to the 1986 Levy and the
1990 Levy shall be paid to the School
District.
(b) TIF District No. 4. Since the 1981
Levy was approved prior to the date of
certification of TIF District No.. 4, the
Subdivision does not apply to that Levy with
respect to this District. Pursuant to clause
b(2) of the Subdivision, the tax increment
from TIF District No. 4 which is attributable
to the 1986 Levy and the 1990 Levy shall be
paid to the School District.
(c) TIF District No. 2. Pursuant to
clause b(2) of the Subdivision, the tax
increment from TIF District No. 2 which is
attributable to the 1981 Levy, the 1986 Levy,
and the 1990 Levy shall be paid to the School
District.
5
•
6. Further Agreements. Nothing in this Agreement is
intended or shall be applied in such a manner as to violate
the obligations and covenants made by the City or the HRA in
connection with the Tax Increment Obligations, and to the
extent but only to the extent that the application of the
_ terms of this Agreement would give rise to a violation of said
obligations and covenants, including without limitation, the
default in the timely and full payment of the Tax Increment
Obligations, the applicable tax increments shall be applied
instead in the manner, but only to the extent necessary, to
avoid such default or other violation of said covenants or
obligations. Nothing in this Agreement shall restrict the
City or the HRA in the exercise of the powers which they may
have relating to the Project or the TIF Districts.
In addition; the City and the School District agree that
the provisions of paragraph 5 providing for payment of tax
increment- to the School District shall be limited to and shall
apply only to such tax increment attributable to the 1995
payable 1996 real estate property taxes, and at the conclusion
of said period, the City and the School District agree to
review the circumstances and to attempt to negotiate in good
faith such further agreement or agreements as may be permitted
by law and which are acceptable to both the City and School
District with respect to discretionary payments of such
applicable tax increment to the School District.
IN WITNESS WHEREOF, the City and the School District have
caused this Agreement to be executed by their duly authorized
representatives.
CITY OF FRIDLEY, MINNESOTA
Mayor
City Manager
INDEPENDENT SCHOOL DISTRICT NO. 13
School Board Chair
Superintendent
299139.2 6
EXHIBIT A
Schedule of Tax Increment Financing Districts
Within Housing and Redevelopment
Project No. 1 of the Fridley HRA
299139.2
7
FOOR
Independent
Certification
School
TIF District
Name
Date
District No.
1
Center City
5/11/79
14
2
Moore Lake
7/31/81
13/14
3
North Area
5/19/82
11116
4
Johnson Printing/
Skywood Mall
1/20/84
13/14
5
Paschke
3/15/84
16
6
Lake Pointe
12/24/85
13
7
Winfield
10/22/86
16
8
Shorewood
10/24/86
14
9
Onan /Old Central
9/7/89
16
10
Northco Phase III
4/10/90
16
.11
Osborne Crossings
1/31/92
16
12
McGlynn Bakeries
3/5/92
14/16
13
Satellite Lane Apts.
6/20/95
14
299139.2
7
FOOR
Exhibit B
Subd. 10. Payment to school for referendum levy. (a) The provisions of this subdivi-
sion apply to tax increment financing districts and projects for which certification was
requested before May 1, 1933, that are located in a school district in which the voters
have approved new local tae rates or an increase in local tax rates after the tax incre-
ment financing district was certified.
(b)(1) If there are no outstanding bonds on May I, 1983, to which increment from
the district is pledged, or if the referendum is approved after Nlay 1, 1983, and there
are no bonds outstanding at the time the referendum is approved, that were issued
before May 1, 1988, the authority must annually pay to the school district an amount
of increment equal to the increment that is attributable to the increase in the local tax
rate under the referendum.
(2) If clause (1) does not apply, upon approval by a majority vote of the governing
body of the municipality and the school board, the authority must pay to the school
district an amount of increment equal to the increment that is attributable to the
increase in the local tax rate under the referendum.
(c) The amounts of these increments may be expended and must be treated by the
school district in the same manner as provided for the revenues derived from the refer-
endum levy approved by the voters. The pros ;sions of this subdivision apply to projects
.for which certification was requested before, on, and after August I, 1979.
• •i
AGREEMENT
This Agreement is dated as of January 2, 1996, is
by and between the City of Fridley, Minnesota, and Independent
School District No. 14, and provides as follows:
299136.2
1. Definitions. As used in this Agreement, the
following terms have the following meanings, respectively:
"City" means the City of Fridley,
Minnesota.
"HRA" means the Housing and Redevelopment
Authority in and for the City of Fridley,
Minnesota.
"Project" means Housing and Redevelopment
Project No. 1 established and operated by the
HRA pursuant to Minnesota Statutes, Sections
469.001 through 469.047.
01985 Revenue Bonds" means the HRA's
$4,070,000 Tax Increment Revenue Bonds of
1985, dated May 1, 1985.
"Limited Revenue Note" means the HRA's
$5,603,755.80 Limited Revenue Capital
Appreciation Tax Increment Note, dated
December 20, 1985.
111985 G.O. Bonds" means the City's
$11,550,000 Variable Rate Demand General
Obligation Tax Increment Bonds, Series 1985,
dated December 30, 1985.
111986 G.O.' Bonds" means the City's
$10,045,000 General Obligation Tax Increment
Refunding Bonds, Series 1986, dated as of
August 1, 1986.
01990 G.O. Bonds" means the City's
$9,485,000 General Obligation Tax Increment
Refunding Bonds of 1990, dated March 1, 1990.
"1992 G.O. Bonds" means the City's
$4,030,000 General Obligation Temporary Tax
• u
L•JA
299136.2
Increment Bonds, Series 1992C, dated December
1, 1992.
"Tax Increment Obligations" means the
1985 Revenue Bonds, the Limited Revenue Note,
the 1985 G.O. Bonds, the 1986 G.O. Bonds, the
1990 G.O. Bonds, the 1992 G.O. Bonds, and any
other contractual obligations of the HRA or
the City which were entered into prior to the
date of this Agreement and which commit the
use of any tax increments from the TIF
Districts for specified purposes, projects, or
parties.
"Tax Increment Act" means Minnesota
Statutes, Sections 469.174 through 469.179.
"TIF Districts" means Tax Increment
Financing District Nos. 1 through 13 within
the Project. The attached Exhibit A contains
certification dates and other information on
the TIF Districts.
"School District" means Independent
School District No. 14, the Fridley School
District.
"Subdivision" means Minnesota Statutes
Section 469.177, Subdivision 10 (a copy of
which is attached.hereto as Exhibit.B).
2. Recitals.
(a) In certain cases, the Subdivision
either requires or allows by agreement certain
tax increments attributable to school district
referendum tax levies to be paid to school
districts.
(b) TIF District Nos. 1, 8 and 13 are
located entirely within the boundaries of the
School District, and a portion of TIF District
Nos. 2, 4, and 12 are located within the
boundaries of the School District.
2
•
• T1
299136.2
(c) None of the property within TIF
District Nos. 3, 5, 6, 7, 9, 10 and 11 is
located within the boundaries of the School
District.
(d) It is the purpose of this Agreement
to provide for payment of certain tax
increments to the School District pursuant to
and in accordance with the provision of the
Subdivision.
(e) Nothing in this Agreement is
intended to violate the covenants and
agreements heretofore made respecting the
application of tax increments from the TIF
Districts pursuant to the Tax Increment
Obligations.
3. Representations of the Citv.
(a) The Tax Increment Obligations were
issued to finance various activities of the
HRA within the Project.
(b) The 1985 Revenue Bonds are not
general obligations of the City or the HRA.
Tax increments from TIF District Nos. 1
through 5 are pledged to the payment of the
1985 Revenue Bonds, and there are no other
sources of funds pledged to the payment
thereof. The final scheduled principal
maturity of the 1985 Revenue Bonds is February
1, 1999.
(c) The Limited Revenue Note is not a
general obligation of the City or the HRA and
is payable solely from tax increments pledged
for such purposes from TIF District No. 6.
(d) The 1985 G.O. Bonds were payable
from tax increments derived from TIF District
Nos. 1 through 6, and the final scheduled
principal maturity of those Bonds was February
1, 2000. However, on February 1, 1990, the
City discharged the 1985 G.O. Bonds by paying
all then outstanding principal thereof and
interest thereon.
3
• e
(e) The 1986 G.O. Bonds are payable from
tax increments derived from TIF District Nos.
1 through 6, and the final scheduled principal
maturity of those Bonds is February 1, 2000.
However, the City has advance refunded the
1986 G.O. Bonds via the issuance of the 1990
G.O. Bonds, and the City expects pursuant to
said refunding that all of the principal of
and interest on the 1986 G.O. Bonds will have
been paid on or before February 1, 1994.
(f) The 1990 G.O. Bonds are payable from
tax increments derived from TIF District Nos.
1, 2, 3, and 6, and the final scheduled
principal maturity of those Bonds is August 1,
2009.
(g) The 1992 G.O. Bonds are payable, to
the extent permitted by applicable law, from
tax increments derived from TIF District Nos.
1 through 12, and the final scheduled maturity
of those Bonds is December 1, 1995.
(h) Portions of the principal of the
1985 Revenue Bonds, the Limited Revenue Note,
the 1985 G.O. Bonds, and the 1986 G.O. Bonds,
the 1990 G.O. Bonds, and the 1992 G.O. Bonds
were outstanding on May 1, 1988, and /or are
outstanding on the date of this Agreement.
4. Representations of the School District.
(a) On September 23, 1986, the
electorate of the School District approved a
2.0 mill continuous levy first effective for
the 1986 payable 1987 property taxes. This
levy is hereinafter referred to as the "1986
Levy ".
(b) On September 29, 1987, the
electorate of the School District approved (i)
a 7.0 mill continuous levy first effective for
the 1987 payable 1988 property taxes and (ii)
a continuous additional 6.5 mill levy first
effective for the 1988 payable 1989 property
taxes. These levies are hereinafter
collectively referred to as the 01987 Levies ".
299136.2 4
m
(c) According to the Minnesota
Department of Education, for purposes of the
above- mentioned referendum levies the tax
capacity rate equivalents of 2 mills and 13.5
mills are .02261395 and .15264411,
respectively.
(d) On November 3, 1992, the electorate
of the School District approved a levy
increase of $203.51 per actual pupil unit,
effective for the five years ending with the
taxes payable in 1997, unless earlier reduced
or revoked; however, since the proceeds of
this levy are paid directly to the School
District by the applicable County taxing
authorities; it is not necessary or
appropriate to include said levy or its
proceeds under this Agreement.
5. Payment of Tax Increments to School District. The
City and the School District hereby agree that, except as
otherwise provided pursuant to paragraph 6 of this Agreement,
tax increments shall be paid to the School District by the HRA
as and to the extent received by the HRA, with respect to the
tax increments relating to the .1995 payable 1996 property
taxes, as follows:
(a) TIF District Nos. 12 and 13. Since
TIF District Nos. 12 and 13 were requested for
certification after May 1, 1988, the
Subdivision does not apply to those Districts,
and no tax increments from those Districts -
attributable to the 1986 Levy or the 1987
Levies are payable to the School District.
(b) TIF District No. 8. Since the 1987
Levies were approved after the date of
certification of TIF District No. 8, and since
on May 1, 1988, there were no bonds
outstanding to which increment from TIF
District No. 8 was pledged, the tax increments
from TIF District No. 8 which are attributable
to the 1987 Levies are automatically payable
and shall be paid to the School District
pursuant to clause b(1) of the Subdivision.
Since the 1986 Levy was approved prior to the
date of certification of TIF District No. 8,
the Subdivision does not apply to that Levy
with respect to this District, and no tax
299136.2 5
increments attributable to said Levy from this
District are payable to the School District.
(c) TIF District No. 4. Pursuant to
clause b(2) of the Subdivision, the tax
increment from TIF District No. 4 which is
attributable to the 1986 Levy and the 1987
Levies shall be paid to the School District.
(d) TIF District No. 2. Pursuant to
clause b(2) of the Subdivision, the tax
increment from TIF District No. 2 which is
attributable to the 1986 Levy and the 1987
Levies shall be paid to the School District.
(e) TIF District No. 1. Pursuant to
clause b(2) of the Subdivision, the tax
increment from TIF District No. 1 which is
attributable to the 1986 Levy and the 1987
Levies shall be paid to the School District.
6. Further Agreements: Nothing in this Agreement is
intended or shall be applied in such a manner as to violate
the obligations and covenants made by the City or the HRA in
connection with the Tax Increment Obligations, and to the
extent but only to the extent that the application of the
terms of this Agreement would.give rise to a violation of said
obligations and covenants, including without limitation, the
default in the timely and full payment of the Tax Increment
Obligations, the applicable tax increments shall be applied
instead in the manner, but only to the extent necessary, to
avoid such default or other violation of said covenants or
obligations. Nothing in this Agreement shall restrict the
City or the HRA in the.exercise of the powers which they may
have relating to the Project or the TIF Districts.
In addition, the City and the School District agree that,
except .in each case described in-paragraph 5 of this Agreement
where payment of tax increment to the School District is
mandatory pursuant to clause b(1) of the Subdivision, all
other provisions of said paragraph 5 providing for payment of
tax increment to the.School District shall be limited to and
shall apply only to such tax increment attributable to the
1995-payable 1996 real estate property taxes, and at the
conclusion of said period, the City and the School District
agree to review the circumstances and to attempt to negotiate
in good faith such further agreement or agreements as may be
permitted by law and which are acceptable to both the City and
School District with respect to discretionary payments of such
applicable tax increment to the School District.
299136.2 6
•
IN WITNESS WHEREOF, the City and the School District have
caused. "this Agreement to be executed by their duly .authorized
representatives.
CITY OF FRIDLEY, MINNESOTA
Mayor
City Manager
INDEPENDENT SCHOOL DISTRICT NO. 14
School Board Chair
Superintendent
299136.2 7
M•
'r
299136.2 8
EXHIBIT
A
Schedule of Tax Increment
Financing Districts
Within Housing and
Redevelopment
Project No. 1 of the Fridley HRA
Independent
TIF District
Certification
Name Date
School
District No.
1
Center City
5/11/79
14
2
Moore Lake
7/31/81
13/14
3
North Area
5/19/82
11/16
4
Johnson Printing/
Skywood Mall
1/20/84
13/14
5
Paschke
3/15/84
16
6
Lake Pointe
12/24/85
13
7
Winfield
10/22/86
16
8
Shorewood
10/24/86
14
9
Onan /Old Central
9/7/89
16
10
Northco Phase III
4/10/90
16
11
Osborne Crossings
1/31/92
16
12
McGlynn Bakeries
3/5/92
14/16
13
Satellite Lane Apts.
6/20/95
14
299136.2 8
Exhibit B
Subd. 10. Pavment to school for referendum levy. (a) The provisions of this subdivi-
sion apply to tax increment financing districts and projects for which certification was
requested before May 1. 1988, that are located in a school district in which the voters
have approved new local tax rates or an increase in local tax rates after the tax incre.
ment financing district was certified.
(b)(1) if there are no outstanding bonds on Nlay 1. 1983: to which increment from
the district is pledged, or if the referendum is approved after ,\4ay 1, 1988, and there
are no bonds outstanding at the time the referendum is approved, that were issued
before May 1, 1988, the authority must annually pay to the school district an amount
of increment equal to the increment that is attributable to the increase in the local tax
rate under the referendum.
(2) If clause (1) does not apply, upon approval by a majority vote of the governing
body of the municipality and the school board, the authority must pay to the school
district an amount of increment equal to the iricrement that is attributable to the
increase in the local tax rate under the referendum.
(c) The amounts of these increments may be expended and must be treated by the
school district in the same manner as provided for the revenues derived from the refer-
endum levy approved by the voters. The provisions of this subdivision apply to projects
for which certification was requested before, on, and after August 1, 1979.
Me
P-Me �iVYWYJA
This Agreement is dated as of January 2, 1996, is
by and between the City of Fridley, Minnesota, and Independent
School District No. 16, and provides as follows:
299137.2
1. Definitions. As used in this Agreement, the
following terms have the following meanings, respectively:
"City" means the City of Fridley,
Minnesota.
"HRA" means the Housing and Redevelopment
Authority in and for the City of Fridley,
Minnesota.
"Project" means Redevelopment Project No.
1 established and operated by the HRA pursuant
to Minnesota Statutes, Sections 469.001
through 469.047.
"1985 Revenue Bonds" means the HRA's
$4,070,000 Tax Increment Revenue Bonds of
1985, dated May 1, 1985.
"Limited Revenue Note" means the HRA's
$5,603,755.80 Limited Revenue Capital
Appreciation Tax Increment Note, dated
December 20, 1985.
"1985 G.O. Bonds" means the City's
$11,550,000 Variable Rate Demand General
Obligation Tax Increment Bonds, Series 1985,
dated December 30, 1985.
"1986 G.O. Bonds" means the City's
$10,045,000 General Obligation Tax Increment
Refunding Bonds, Series 1986, dated as of
August 1, 1986.
01990 G.O. Bonds" means the City's
$9,485,000 General Obligation Tax Increment
Refunding Bonds of 1990, dated March 1, 1990.
"1992 G.O. Bonds" means the City's
$4,030,000 General Obligation Temporary Tax
Increment Bonds, Series 1992C, dated December
1, 1992.
8Y r,
299137.2
"Tax Increment Obligations" means the
1985 Revenue Bonds, the Limited Revenue Note,
the 1985 G.O. Bonds, the 1986 G.O. Bonds, the
1990 G.O. Bonds, the 1992 G.O. Bonds, and any
other contractual obligations of the HRA or
the City which were entered into prior to the
date of this Agreement and which commit the
use of any tax increments from the TIF
Districts for specified purposes, projects, or
parties.
"Tax Increment Act" means Minnesota
Statutes, Sections 469.174 through 469.179.
"TIF Districts" means Tax Increment
Financing District Nos. 1 through 13 within
the Project. The attached Exhibit A contains
certification dates and other information on
the TIF Districts.
"School District" means Independent
School District No. 16, the Spring Lake Park
School District.-
"Subdivision" means Minnesota Statutes
Section 469.177, Subdivision 10 (a copy of
which is attached hereto as Exhibit B).
2. Recitals.
(a) In certain cases, the Subdivision
either requires or allows by agreement certain
tax increments attributable to school district
referendum tax levies to be paid to school
districts.
(b) TIF District Nos. 5, 7, 9, 10, and
11 are located entirely within the boundaries
of the School District, and a portion of TIF
District Nos. 3 and 12 is located within the
boundaries of the School District.
91§
299137.2
(c) None of the property within TIF
District Nos. 1, 2, 4, 6, 8 and 13 is located
within the boundaries of the School District.
.(d) It is the purpose of this Agreement
to provide for payment of certain tax
increments to the School District pursuant to
and in accordance with the provision of the
Subdivision.
(e) Nothing in this Agreement is
intended to violate the covenants and
agreements heretofore made respecting the
application of tax increments from the TIF
Districts pursuant to the Tax Increment
Obligations.
3. Representations of the City.
(a) The Tax Increment Obligations were
issued to finance various activities of the
HRA within the Project.
(b) The 1985 Revenue Bonds are not
general obligations of the City or the HRA.
Tax increments from TIF District Nos. 1
through 5 are pledged to the payment of the
1985 Revenue Bonds, and there are no other
sources of funds pledged to the payment
thereof. The final scheduled principal
maturity of the 1985 Revenue Bonds is February
1, 1999.
(c) The Limited Revenue Note is not a
general obligation of the City or the HRA and
is payable solely from tax increments pledged
for such purposes from TIF District No. 6.
(d) The 1985 G.O. Bonds were payable
from tax increments derived from TIF District
Nos. 1 through 6, and the final scheduled
principal maturity of those Bonds was February
1, 2000. However, on February 1, 1990, the
City discharged the 1985 G.O. Bonds by paying
all then outstanding principal thereof and
interest thereon.
(e) The 1986 G.O. Bonds are payable from
tax increments derived from TIF District Nos.
1 through 6, and the final scheduled principal
3
maturity of those Bonds is February 1, 2000.
However, the City has advance refunded the
1986 G.O. Bonds via the issuance of the 1990
G.O. Bonds, and the City expects pursuant to
said refunding that all of the principal of
and interest on the 1986 G.O. Bonds will have
been paid on or before February 1, 1994.
(f) The 1990 G.O. Bonds are payable from
tax increments derived from TIF District Nos.
1, 2, 3, and 6, and the final scheduled
principal maturity of those Bonds is August 1,
2009.
(g) The 1992 G.O. Bonds are payable, to
the extent permitted by applicable law, from
tax increments derived from TIF District Nos.
1 through 12, and the final scheduled maturity
of those Bonds is December 1, 1995.
(h) Portions of the principal of the
1985 Revenue Bonds, the Limited Revenue Note,
the 1985 G.O. Bonds, and the 1986 G.O. Bonds,
the 1990 G.O. Bonds, and the 1992 G.O. Bonds
were outstanding on May 1, 1988, and /or are
outstanding on the date of this Agreement.
4. Representations of the School District.
(a) On October 8, 1981, the electorate
of the School District approved a 5.0 mill
continuous levy first effective for the 1981
payable 1982 property taxes. This levy is
hereinafter referred to as the "1981 Levy ".
(b) On February 27, 1986, the electorate
of the School District approved a 6.0 mill
continuous levy first effective for the 1986
payable 1987 property taxes. This levy is
hereinafter referred to as the "1986 Levy ".
(c) According to the Minnesota
Department of Education, for purposes of the
above - mentioned `referendum levies the tax
capacity rate equivalents of 5 mills and 6
mills are .05226653 and .06271984,
respectively.
299137.2 4
299137.2
5. Payment of Tax Increments to School District. The
City and the School District hereby agree that, except as
otherwise provided pursuant to paragraph 6 of this Agreement,
tax increments shall be paid to the School District by the HRA
as and to the extent received by the HRA, with respect to the
tax increments relating to the 1995 payable 1996 property
taxes, as follows:
(a) TIP District Nos. 9 10 11 and 12.
Since TIF District Nos. 9, 10, 11, and 12 were
requested for certification after May 1, 1988,
the Subdivision does not apply to those
Districts, and no tax increments attributable
to the 1981 Levy or the 1986 Levy from those
Districts are payable to the School District.
(b) TIF District No. 7. Since the 1981
Levy and the 1986 Levy were approved prior to
the date of certification of TIF District No.
7, the Subdivision does not apply to those
Levies with respect to this District, and no
tax increments attributable to said Levies
from this.District are payable to the School
District.
(c) TIF District No. S. Since the 1981
Levy was approved prior to the date of cert-
ification of TIF District No. 5, the Subdi-
vision does not apply-to the 1981 Levy, and no
tax increments attributable to said Levy from
this District are payable to the School
District. Pursuant to clause b(2) of the
Subdivision, the tax increment from TIF
District No. 5 which is attributable to the
1986 Levy shall be paid to the School
District.
(d) TIP District No.'3. Since the 1981
Levy was approved prior to the date of
certification of TIF District No. 3, the
Subdivision does not apply to the 1981 Levy,
and no tax increments attributable to said
Levy from this District are payable to the
School District. Pursuant to clause b(2) of
the Subdivision, the tax increment from TIF
District No. 3 which is attributable to the
1986 Levy shall be paid to the School
District.
5
8CC
6. Further Agreements. Nothing in this Agreement is
intended or shall be applied in such a manner as to violate
the obligations and covenants made by the City or the HRA in
connection with the Tax Increment Obligations, and to the
extent but only to the extent that the application of the
terms of this Agreement would give rise to a violation of said
obligations and covenants, including without limitation, the
default in the timely and full payment of the Tax Increment
Obligations, the applicable tax increments shall be applied
instead in the manner, but only to the extent necessary, to
avoid such default or other violation of said covenants or
obligations. Nothing in this Agreement shall restrict the
City or the HRA in the exercise of the powers which they may
have relating to the Project or the TIF Districts.
In addition, the City and the School District agree that
the provisions of paragraph 5 providing for payment of tax
increment to the School District shall be limited to and shall
apply only to such tax increment attributable to the 1995
payable 1996 real estate property taxes, and at the conclusion
of said period, the City and the School District agree to
review the circumstances and to attempt to negotiate in good
faith such further agreement or agreements as may be permitted
by law and which are acceptable to both the City and School
District with respect to discretionary payments of such
applicable tax increment to the School District.
IN WITNESS WHEREOF, the City and the School District have
caused this Agreement to be executed by their duly authorized
representatives.
CITY OF FRIDLEY, MINNESOTA
Mayor
City Manager
INDEPENDENT SCHOOL DISTRICT NO. 16
School Board Chair
Superintendent
299137.2 6
EXHIBIT A
Schedule of Tax Increment Financing Districts
Within Housing and Redevelopment
Project No. 1 of the Fridley HRA
TIF District
1
2
3
4
5
6
7
8
9
10
11
12
13
299137.2
Independent
BEE
Certification
School
Name
Date
District No.
Center City
5/11/79
14
Moore Lake
7/31/81
13/14
North Area
5/19/82
11/16
Johnson Printing/
Skywood Mall
1/20/84
13/14
Paschke
3/15/84
16
Lake Pointe
12/24/85
13
Winfield
10/22/86
16
Shorewood
10/24/86
14
Onan /Old Central
9/7/89
16
Northco Phase III
4/10/90
16
Osborne Crossings
1/31/92
16
McGlynn Bakeries
3/5/92
14/16
Satellite Lane Apts.
6/20/95
14
BEE
Exhibit B
Subd. 10. Payment to school for referendum levy. (a) The provisions of this subdivi-
sion apply to tax increment financing districts and projects for which certification was
requested before i•tay 1. 1933, that are located in a school district in .which the voters
have approved new local tax rates or an increase in local tax rates after the tax incre-
ment financing district was certified.
(b)( 1) If there are no outstanding bonds on :flay I. 1933. to which increment from
the district is pledged, or if the referendum is approved after May 1, 1983, and there
are no bonds outstanding at the time the referendum is approved, that were issued
before May 1, 1983, the authority must annually pay to the school district an amount
of increment equal to the increment that is attributable to the increase in the local tax
rate under the referendum.
(2) If clause (1) does not apply, upon approval by a majority vote of the governing
body of the municipality and the school board, the authority must pay to the school
district an amount of increment equal to the increment that is attributable to the
increase in the local tax rate under the referendum.
(c) The amounts of these increments may be expended and must be treated by the
school district in the same manner as provided for the revenues derived from the refer-
endum levy approved by the voters. The provisions of this subdivision apply to projects
for which certification %%-as requested before, on, and after August 1, 1979.
8FF
Is
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: September 8, 1995 �
TO: William Burns, Executive Director of HRA 'O
FROM: Barbara Dacy, Community Development Director
Grant Fernelius, Housing Coordinator
SUBJECT: Consider Resolution Approving Adoption of a
Housing Replacement District Plan and Creation'of
Housing Replacement District No. 1
The Housing Replacement Program was authorized by a special law
passed by the legislature during the 1995 session. The law
allows the cities of Fridley, Crystal, Minneapolis and St. Paul
to create pilot programs to address neighborhood blight through
the removal of severely deteriorated housing.
The program provides the financial mechanism for recouping a
portion of the cost involved in acquiring and removing
substandard housing which is then replaced with new market rate*
single family housing.
The difference in taxes generated between the old home and the
new home is collected by the County and returned to the HRA for a
period of fifteen years. Each year for the-next ten years the
HRA may designate up to 10 parcels not to exceed a total of 50
parcels.
Jim Casserly and Mary Molzahn have prepared a Housing Replacement
District Plan for Housing Replacement District No. 1 (copy
attached)-which describes the program. The plan identifies the
objectives of the program, a project budget, the sources of funds
to be used, the total tax capacity to be collected and the impact
of the district on other taxing jurisdictions. A total of seven
parcels have been identified for Phase I of the program.
The City Council will conduct a public hearing on October 2, 1995
to receive comments on the HRA *s program and will consider final
action on October 16, 1995.
Recommendation
Staff recommends that th4 HRA approve -the attached resolution
approving and adopting a Housing Replacement District Plan and
creating Housing Replacement District'No. 1.
M -95 -488
LE
e
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE
CITY OF FRIDLEY
COUNTY OF ANOKA
STATE OF MINNESOTA
RESOLUTION NO.
A RESOLUTION APPROVING AND ADOPTING A HOUSING
REPLACEMENT DISTRICT PLAN AND CREATING HOUSING
REPLACEMENT DISTRICT 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 (the "Authority ") as follows:
Section 1. Recitals.
1.01. It has been proposed that the Authority approve and adopt'a
Housing Replacement District Plan (the "Plan") and create Housing
Replacement District No. 1 (the "District "), pursuant to and in
accordance with Laws of Minnesota 1995, Chapter 264, Article 5,
Sections 44 through 47, inclusive, as amended and supplemented from
time to time.
1.02. The Authority has performed all-actions required by law to
be performed prior to the approval and adoption of the Plan and the
creation of the District.
1.03. 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 Plan and create the District to achieve the
Authority's and City's goal of acquiring blighted, undeveloped or
underdeveloped parcels for redevelopment or rehabilitation, and for
resale as market rate housing.
Section 2. Findings.
2.01. The Authority hereby finds that the adoption and
implementation of the Plan is necessary toassure the development
and redevelopment of market rate housing within the City.
2.02. The Authority hereby finds that the Plan conforms to the
comprehensive plan of the City for the development and
redevelopment of the city as a whole.
2.03.,, The Authority hereby finds that the Plan affords maximum
opportunity consistent with. the-- sound needs of the City as a whole
for development and redevelopment within the District by private
enterprise.
Page 2 - Resolution No.
2.04. The Authority hereby finds that the approval and adoption of
the Plan and the creation of the.District is intended and, in the
judgment of this Authority, its effect will be to promote the
public purposes and objectives specified in the Plan.
Section 3. Approval and Adoption of the Plan.
3.01. The Housing Replacement District Plan is hereby approved and
adopted by the Commissioners of the Authority.
Section 4. Creation of the District.
4.01. Housing Replacement District No. 1 is hereby approved and
adopted by the Commissioners of the Authority.
Section 5. Filing of Plan.
5.01. Upon approval and adoption of the Plan, the Authority shall
cause said Plan to be filed with the Minnesota Department of
Revenue.
PASSED AND ADOPTED BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF FRIDLEY THIS DAY OF , 1995.
LAWRENCE R. COMMERS
CNAI R,
ATTEST:
WILLIAM W. BURNS - EXECUTIVE DIRECTOR
HOUSING REPLACEMENT DISTRICT PLAN
lQ10114
HOUSING REPLACEMENT DISTRICT NO. 1
THE HOUSING AND REDEVELOPMENT AUTHORITY
In And For
THE CITY OF FRIDLEY, MINNESOTA
I OCTOBER 16, 1995
Prepared by:
Casserly -Molzahn & -Associates
Suite 1100 Southpoint Office- Center
1650 West 82nd Street . .....
Bloomington,.MN 55431-1299*
(612) 885-1298
rF
MUNICIPAL ACTION TAKEN
Based upon the statutory authority provided by Laws of Minnesota
1995, Chapter 264, Article 5, Sections 44 through 47, the Housing
Replacement District Plan was approved and Housing Replacement
District No. 1 was created.
The following municipal action was taken in connection therewith:
October 16, 1995: The Housing Replacement District Plan,
including Phase.I, was adopted.
A
�n
TABLE OF CONTENTS
This Table of Contents is not part of the Housing Replacement
District Plan; it is only for convenience of reference.
PAGE
ARTICLE I. HOUSING REPLACEMENT DISTRICT PLAN
Section
1.1.
Definitions
2
- 1
Section
1.2.
Statutory Authorization
2
- 1
Section
1.3.
Statement of Objectives
1
- 2
Section
1.4.
Statement of Compliance
1
- 3
Section
1.5.
Criteria for Inclusion in the District
1
- 3
Section
1.6.
Conditions for Acquisition
1
- 3
Section
1.7.
Proposed Development Activity
1
- 4
Section
1.8.
Estimated Project Costs
1
- 4
Section
1.9.
Estimated Sources of Revenue
1
- 4
Section
1.10.
Estimated Impact
1
- 4
Exhibit
I -A
Estimated Project Costs
I -A -1
Exhibit
I -B
Estimated Impact
I -B -1
ARTICLE II. PHASE.I
Section
2.1.
Specific Development Activity
2
- 1
Section
2.2.
Estimated Project Costs
2
- 1
Section
2.3.
Estimated Market Value
2
- 1
Section
2.4.
Original Tax Capacity
2
- 1
Section
2.5.
Estimated Captured Tax Capacity
2
-.1
Section
2.6.
Original Tax Capacity Rate
2
- 1
Section
2.7.
Estimated Tax Increment
2
- 1
Section
2.8.
Duration Limits
2
- 1
Section
2.9.
Identification of Parcels
2
- 1
Exhibit
II -A
Boundary Map
II -A -1
�C
ARTICLE I
HOUSING REPLACEMENT DISTRICT PLAN
Section 1.1. Definitions. The terms defined below shall,
for purposes of this Housing Replacement District Plan, have the
meanings herein specified, unless the context otherwise
specifically requires:
"Act" means the Enabling Legislation and Minnesota Statutes
Chapter 469.
"Authority" means the Housing and Redevelopment Authority in
and for the City of Fridley, Minnesota.
"City" means the City of Fridley.
" Comprehensive Plan" means the City's Comprehensive Plan.
"District" means Housing Replacement District No. 1, created
October 16, 1995, and as it may be subsequently modified.
"Enabling Legislation" means the Laws of Minnesota 1995,
Chapter 264, Article 5, Sections 44 through 47.
"Market Rate Housing" means housing that has a market value
that does not exceed one hundred fifty percent (150 %) of the
average market value of single - family housing in the City.
"Phase" means the parcel(s) identified for inclusion and
development as part of the Plan. A Phase may include a single
parcel, but may not include more than ten (10) parcels in a
calendar year. Phases are designated with Roman numerals.
"Plan" means the Housing Replacement District Plan adopted
October 16, 1995,-and as it may be subsequently modified._ Plan
also includes any eligible program authorized by the Act.
"Project" means a project as defined in Minnesota Statutes,
Section 469.174, Subd. 8 and Minnesota Statutes, Section 469.002,
Subd. 12.
"Project Area" means the area within the territorial -- -
boundaries of the City in which the Authority* is authorized to
develop, implement or operate a Project.
Section 1.2. Statutory Authorization. The Enabling
Legislation provides for the establishment of the District. and
the adoption and implementation of the Plan. The - Authority is
authorized. under the Act to adopt the..Plan and establish the
Project Area.
1 - 2
Section 1.3. Statement of objectives. Housing is
essentially the determining factor by which a city is initially
judged, and as a result, reflects the character of the city and
the characteristics of its resident population. The Authority
has determined that there are certain areas within the City which
may negatively reflect its character and that of its residents._
These areas are potentially more valuable, more productive.and
more stable than is currently realized because they contain
parcels that are vacant, under- utilized or blighted, due to poor
planning and subdivision and zoning practices and to existing
structures, which because of (i) dilapidation, (ii) obsolescence,
(iii) overcrowding, (iv) faulty arrangement or design, (v) lack
of ventilation, light and sanitary facilities, (vi) inadequate
land coverage, (vii) obsolete layout, or (viii) any combination
of these and other factors, are detrimental to the safety,
health, morals and welfare of the community. Consequently,.the
Authority has further determined that it is in the best interests
of the City to initiate a Plan to assist in creating viable
environments which would upgrade and maintain housing stock,
maintain housing health and safety quality standards, and
maintain and strengthen the character of individual
neighborhoods.
To achieve this goal the Authority has adopted a Plan and
created a District and Project.Area, within which the Plan may be
implemented, all pursuant to the Act. This multi -year, multi -
phased Plan will strive to achieve the Authority's and-the City's
sole objective of acquiring blighted, undeveloped or
underdeveloped parcels for redevelopment or rehabilitation and
for ultimate resale as Market Rate Housing. Additional public
purpose goals that will be realized include:
restoration and improvement of the residential tax base
realization of comprehensive planning goals
- revitalization of property to create a safe,
attractive, comfortable, convenient and efficient area
for residential use
- creation and maintenance of a healthy and safe
environment
- removal of non - conforming land uses
- stimulation of private activity and investment to
stabilize and balance the City's housing supply
- elimination of code violations and nuisance conditions
that adversely.affect neighborhoods.
l 2
- recreation and reinforcement of a sense of residential
place and security which creates neighborhood
cohesiveness through City investment in neighborhood
infrastructure and public improvements, including
landscaping, park improvements, local street
modifications to reduce traffic impacts, repaving
streets, replacing curbs and gutters and updating
street lighting
encouragement of infill development /redevelopment that
is compatible in use and scale with surrounding
neighborhoods
rehabilitation of existing housing stock and
preservation of existing residential neighborhoods
where possible
demolition and new construction, where necessary, of
aging residential buildings to preserve neighborhoods
removal of substandard structures, as defined in
Minnesota Statutes, Section 469.174, Subd. 10
Section 1.4. Statement of Compliance. The Authority has
reviewed the Plan and determined that it conforms to the
Comprehensive Plan of the City and affords maximum opportunity
consistent with needs of the City as a whole.
Section 1.5. Criteria for Inclusion in the District. At
the time of Plan approval, the Authority cannot identify all
parcels that will ultimately be included in the District. As a
result, the Authority has set forth the following criteria to be
used in selecting future parcels for inclusion in the District.
The proposed parcel must comply with the City's public purpose
goals and must satisfy one of the following criteria:
(1) be a vacant site;
(2) contain a vacant house; or,
(3) contain a house deemed structurally substandard
pursuant to Minnesota Statutes, Section 469.174, Subd.
10.
Section 1.6. Conditions for Acquisition. The Authority may
acquire and reconvey parcels subject to the following conditions:
(1) The Authority may acquire
condemnation or voluntary
achieve the objectives of
property by gift, dedication,
acquisition in order to
the Plan; and
(2) Such acquisition.will be.undertaken only when there is
assurance of funding to,finance the acquisition °and
related costs.
1 3
au
Section 1.7. Proposed Development Activity. The Authority
intends to acquire a maximum of fifty (50) parcels over a period
not to exceed ten (10) years in order to achieve the Plan's
goals. The specific parcels and the development activity
anticipated for those parcels are included in the description of
the applicable Phase.
Section 1.8. Estimated Project Costs. The estimated
Project costs associated with the District are listed on Exhibit
I -A.
Section 1.9. Estimated Sources of Revenue. Project costs
may be financed through the annual collection of tax increments
and a local contribution equal to a minimum of twenty -five
percent (250) of Project costs payable from (i) its general fund;
(ii) a property tax levy; or, (iii) other unrestricted monies.
Section 1.10. Estimated Impact. Exhibit I -B reflects the
estimated impact of the proposed District on,other taxing
entities assuming that the development would have occurred
without the creation of a District. If the development is a
result of the creation of the District, the impact is $0 because.
the development would not have occurred without the assistance of
the Authority.
1 - 4
AI
EXHIBIT I -A
ESTIMATED PROJECT COSTS
TOTAL PROJECT COSTS AS OF OCTOBER 16 1995
Site Acquisition
Relocation
Demolition
Site Preparation
Pollution Abatement
Public Improvements
Administrative Expense
Total District Project Costs
$2,000,000
$ 250,000
$ 200,000
$ 250,000
$ 125,000
$ 125,000
125,000
$3,075,000
PHASE I PROJECT COSTS AS OF OCTOBER 16 1995
Site Acquisition
Demolition
Site Preparation -
Pollution Abatement
Administrative Expense
Total Phase I Project Costs
$
150,300
$
17,200
$
. 2, 000
$
2,000
S 10,000
$ 181,500
I -A -1
S 1
EXHIBIT I —B
ESTIMATED IMPACT OF HOUSING REPLACEMENT DISTRICT NO. 1
City of Fridley
County of Anoka
ISD #11
City of Fridley
County of Anoka
ISD #11
Other
TAX
BASE
26,748,444
154,934,726
75, 280,191
IMPACT ON TAX BASE
ORIGINAL ESTIMATED CAPTURED DISTRICT
TAX
TAX
TAX
AS %
CAPACITY
CAPACITY
CAPACITY
OF TOTAL
569
2,840
2,271
0.008%
569
2,840
2,271
0.001%
569
Z840
Z271
0.003%
_
IMPACT ON TAX RATE
TAX
% OF
TAX
RATE
TOTAL
INCREMEIM
0.16098
13.58%
347
0.32765
27.64%
707
0.61402
51.79%
.1,325
0.06395
5.390/a
138
1.16660
98.40%
Z518
TAX RATE
NCREASE
Q001%
0.000 ° /a
0.002%
* Assumes construction would have occurred without the creation of a Tax Increment Financing
District If construuction is a result of Tax Increment Financing, the impact is $0.
I -B -1
4K
0 ■ .
ESTIMATED IMPACT OF HOUSING REPLACEMENT DISTRICT NO. 1
City of Fridley
County of Anoka
ISD #13
City of Fridley
County of Anoka
ISD #13
Other
TAX
BASE
26,748,444
154,934,726
14,971,302
IMPACT ON TAX BASE
IMPACT ON TAX RATE
TAX
ORIGINAL
ESTIMATED
CAPTURED
DISTRICT
TAX
TAX
TAX
AS %
CAPACITY
CAPACITY
CAPACITY
OF TOTAL
274
1,180
906
0., 003%
274
1,180
906
0.01 %
274
1,180
906
0.0060/a
-
IMPACT ON TAX RATE
TAX
% OF
TAX
RATE
TOTAL
INCREMEN
0.16098
13.58%
347
0.32765
27.64%
707
0.77730
65.57%
1,677
0.06395
5.39%
138
1.32988
112.18%
2,870
TAX RATE
NCREASE
0.001%
0.000 /o
0.005%
* Assumes construction would have occurred without the creation of a Tax Increment Financing
District. If constrtuction is a result of Tax Increment Financing, the impact is $0.
I -B -2
01
EXHIBIT I —B
ESTIMATED IMPACT OF HOUSING REPLACEMENT DISTRICT NO. 1
IMPACT ON TAX BASE
IMPACT ON TAX RATE
ENTITY
TAX
RATE
ORIGINAL
ESTIMATED
CAPTURED
DISTRICT
0.16098
TAX
TAX
TAX
TAX
AS %
ENTITY
BASE
CAPACITY
CAPACITY
CAPACITY
OF TOTAL
City of Fridley
26,748,444
482
2,640
2,158 -
0.008%
County of Anoka
154,934,726
482
2,640
2,158
0.001%
ISD #14
11,712,084
482
2,640
2,158
0.018%
IMPACT ON TAX RATE
ENTITY
TAX
RATE
% OF
TOTAL
TAX
INCREMENT
TAX RATE
INCREASE
City of Fridley
0.16098
13.5810/a
. 347
0.001%
County of Anoka
0.32765
27.64%
. 707
0.000%
ISD #14
0.63296
53.39%
1,366
0.012%
Other
0.06395
5.39%
138
1.18554
100.00%
2,558
* Assumes construction would have occurred without the creation of a Tax Increment Financing
District If constrtuction is a result of Tax Increment Financing, the impact is $0.
I -B -3
QM
ARTICLE II
PHASE I
Section 2.1. Specific Development Activity. As of October
16, 1995, the Authority intends to enter into the following
proposed development activities for this Phase: (i) acquire and
develop the properties at 550 Hugo Street NE, 5973 3rd Street NE,
and 5720 Polk Street NE; (ii) acquire, demolish existing
structures and redevelop properties at 533 Janesville Street NE,
540 Hugo Street NE, and 5924 2nd Street NE; (iii) develop the
properties at 5980 3rd Street NE and vacated Broad Avenue and Lot
26, Block C, Riverview Heights.
Section 2.2. Estimated Project Costs. The estimated
Project costs for this Phase are listed on Exhibit I -A.
Section 2.3. Estimated Market Value. Upon completion of
this Phase in 1996, the estimated market value of each unit of
Market Rate Housing cannot exceed $130,116.
Section 2.4. Original Tax Capacity. The original tax
capacity *for this Phase, as most recently certified by the
Commissioner of Revenue on January 2, 1995, is estimated to be
$1,325.
Section 2.5. Estimated Captured Tax Capaci t . Upon
completion of the proposed development activities,- the estimated
captured tax capacity of this Phase, on January 2, 1997, is
estimated to be $5,335.
Section 2.6. Original Tax Capacity Rate. The blended pay
1995 tax capacity rate is 122.734 %. (City 16.098; County 32.765;
Other 6.395; ISD #11 116.660.; ISD #13 132.988; ISD #-14 118.554)
See Exhibit I -B for a breakdown.
Section 2.7. Estimated Tax Increment. Tax increment for
this Phase has been calculated at'approximately $6,548 assuming a
static tax capacity rate and a valuation increase of zero percent
(010 compounded annually.
Section 2.8. Duration Limits. Tax increment from this
Phase is payable to the Authority for fifteen (15) years from the
date of receipt of the first tax increment. Assuming the first
tax increment is received in 1998, this Phase will terminate in
2012.
Section 2.9. Identification of Parcels. The parcels to be
included in this Phase include:
2 - 1
4N
03- 30 -24 -23 -0084 *
03- 30 -24 -23 -0083 *
03- 30 -24 -23 -0003
23- 30 -24 -22 -0074
24- 30 -24 -32 -0081
**
23- 30 -24 -20 -0137
**
540 Hugo Street NE
550 Hugo Street NE
533 Janesville Street NE
5924 2nd Street NE
5720 Polk Street NE
5980 3rd Street NE
5973 3rd Street NE
Vacated Broad Ave and Lot 26,
C, Riverview Heights
* is currently being combined into a single parcel
** newly created parcel; waiting for PIN from the County
and are illustrated on the attached Exhibit II -A.
2 - 2
�... ...............
Block
I I
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Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
TO: Fridley Housing and Redevelopment Authority Members
FROM: William W. Bums, Executive Director of the HRAA1
DATE: September 8, 1995
SUBJECT: Negotiations with MEPC American Properties Inc.
MEPC presented us with the attached pre - development agreement at our meeting
on August 31, 1995. During the course of the meeting, we indicated several areas
of disagreement with their proposed terms.
The first area of disagreement was with the.term of the agreement. We indicated
that we felt there should be a short-term performance check scheduled for July 1,
1996, on their planning and marketing functions. We also suggested that the entire
contract should end July 1, 1997. Their proposed agreement runs through
December 31, 1997.
The second area of disagreement was with the absence of a mission statement. We
feel that they need to identify their primary goal, which I believe is to develop, build
and lease. They also need to indicate that they will build to suit and clarify whether
or not they are willing to sell one lot and let someone else develop it.
The third area of disagreement was with surface parking. Their proposed agreement
states that early stage surface parking may be later converted to structured parking.
We want to have the agreement read that while parking needs are generally to be
accommodated through construction of structured parking, early stage surface
parking may be necessary to a building's density requirement.
,, 1 /1
Memorandum to Fridley HRA
September 8, 1995
Page Two
We generally feel that they need to provide more details for the items contained on
their Exhibit B along with a more detailed timetable. We were also somewhat
unhappy with the section of their agreement on land price. We agreed at the
meeting that we would sell them the big parcel for $1 as long as our density
standards were met. We did not, however, define what our density standards were.
We also discussed the 8 acre retail site inconclusively. They suggested that they
pay 50 percent of the market value for the 8 -acre site. We believe that the 50
percent real estate commission is fairly high and will seek to reduce their benefit
from future retail sales.
At the end of the meeting, we agreed to rewrite the language on land prices and to
exchange memorandums with them next week. Our goal is to try to put together
some sort of a conceptual agreement for presentation to the HRA at the meeting on
September 14. It may even be possible for us to have a formal written agreement
ready for consideration by the HRA. We will work toward accomplishing that and will
hopefully reach consensus with MEPC by Thursday.
Thank you for your consideration.
WWB:rsc
InA
PRE - DEVELOPMENT AGREEMENT BETWEEN THE
CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY
AND MEPC AMERICAN PROPERTIES INC.
This Pre - Development Agreement executed as of October , 1995, establishes the
essential parameters of an exclusive Developer of record designation between The City of
Fridley Housing and Redevelopment Authority ( 'Fridley") and MEPC American Properties Inc.
("MEPC ") to initiate marketing and pre - development activities to accomplish the development,
construction and operation of an office/business park located in the City of Fridley, Minnesota,
at the Northwest quadrant of the intersection of Central Avenue and Interstate 694.
This Agreement sets forth below the terms of the Pre- Development Agreement. Each
Party shall comply with the terms, while recognizing that a specific sale and development
proposal will require the execution of a more detailed Development Agreement which shall
establish all of the terms and conditions for the sale, development,- and operation of a particular
development project within the Project area.
Parties:
Project:
City of Fridley and its Housing and Redevelopment Authority
MEPC American Properties Inc.
Lake Pointe, Corporate Office Park
Lotion: 1-694 and Central Avenue
Fridley, Minnesota
As depicted on Exhibit A
Present Owner: City of Fridley Housing and Redevelopment Authority
Developer: MEPC American Properties Inc.
Acreage: Approximately 33 acres.
Use: Office park and other related uses including restaurants, hotel,
medical clinic, bank, service retail. The interior 24.56 acres shall
be devoted exclusively to office and accessory use structures no
less than three stories in height and no less than 50,000 square feet
in each building. The exterior 8.21 acres may be devoted to any
of the above - listed uses. Early -stage surface parking may be later
converted to structured parking and bffice structures consistent
with the master plan and City ordinances.
Commencement MEPC is hereby designated the exclusive Developer of Record
& Term: commencing ; ' October , 1995 and continuing through
December 31, 1997, subject to performance of its obligations set
Dm "W.02
inR
h,
forth in this Agreement. If MEPC has not produced a letter of
intent, lease, commitment to lease, or commenced construction of
one of the above - listed uses by December 31, 1997, then either
party can terminate this exclusive arrangement with 30 days.
written notice to the other. These dates will be extended
automatically if construction cannot be commenced due to
unavoidable delays outside the control of MEPC.
Renewal: If MEPC has commenced construction of one of the above - listed
uses by December 31, 1997, then at MEPC's option Fridley shall
either extend this exclusive arrangement for another three years
from that date or sell the remainder of the Project to MEPC at the
land prices hereinafter set forth.
Developer's MEPC shall be responsible for all costs associated with the
Responsibilities: marketing and development of Lake Pointe Corporate Office Park.
MEPC shall implement a marketing plan generally as follows:
A. Establish office market data on this location and determine
the corporate users and amenities for space at Lake Pointe
Corporate Office Park.
B. Review and revise the existing master plan as .necessary to
maximize the site and meet the requirements of the
corporate users tin building size, floor plate, quality,
timing and market rate) for this location. Any changes to
the master plan will be presented to Fridley for its review
and approval, and MEPC shall reasonably adjust its plan
consistent with market needs as requested by Fridley.
C- Develop marketing materials such as fliers and brochures
to assist in marketing efforts for mailings, advertising,
Proposals to corporate users. broker parties, press releases,
etc. Scheduled timing of these marketing events and
materials are set forth in Exhibit B.
D. The official 81mouncement to the public of Lake Pointe
Corporate Office Park would be achieved by:
Broker special event on site
News releases
Corporate user presentations
Mailings to prospects
More detail in this regard is described on Exhibit B.
tics 9MM'(M 2
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In addition, MEPC shall:
E. Investigate the adequacy of soils, utilities, and street
systems for MEPC's master plan.
F. Review the adequacy of the existing Indirect Source Permit
and Environmental Assessment Worksheet for MEPC's
master plan implementation.
G. Review the adequacy of existing ordinances to facilitate
development of MEPC's master plan.
H. Investigate the status of title and existing environmental
reports furnished by the City for the presence or absence
of hazardous substances within the Project area.
I. Every 90 days provide an activities report to Fridley which
describes MEPC's activities pursuant to this
Pre- Development Agreement.
J. Cooperate with Fridley in masonable and appropriate ways.
Owner's
Responsibilities: Fridley shall be responsible for the following:
A. Indirect Source Permit and associated traffic analyses
(amended and/or reactivated original) for the Project
B. Prepare any necessary Environmental Assessment
Worksheet, Environmental Impact Statement or
modification thereof.
C. Furnish unencumbered land and or subsidize ramps due to
final density requirements.
D. Conduct any additional required environmental
investigation and remediate any hazardous substances and
assure adequacy of soils conditions for building
construction.
E. Provide any necessary infrastructure changes, including
street and intersection improvements, due to MEPC's final
master plan.
F. Refer all third party inquiries regarding use availability,
and development potential of Project land to MEPC.
ccs "SM.ez 3
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G. Consider amendments to City ordinance requirements to
facilitate development consistent with MEPC's master plan,
if requested by MEPC.
H. Cooperate with MEPC In reasonable and appropriate ways.
Land Price: The interior 24.56 acres shall be sold to MEPC in
selected by MEPC consistent with MEPC's master plan for at price of
$10.00 for each parcel acquired by MEPC. The easterly 8.21 acres shall
be sold by the City to MEPC for an amount equal to 50% of the market
value established by independent appraiser selected by mutual consent of
Fridley and MEPC, provided that the appraiser shall have determined the
value within nine months of the date of closing on any particular parcel.
Binding Effect: The contents of this Pre- Development Agreement generally set forth some
of the intended material terms, but not all of the terms of a proposed
purchase, sale, and development agreement of any portion or all of the
Prgj= area. Nevertheless, as to the terms expressed herein, this
Pre - Development Agreement is binding on MEPC and the City of Fridley
and its Housing <and Redevelopment Authority.
MEPC AMERICAN PROPERTIES INC.
By
Its
By
Its
CITY OF FRIDLEY HOUSING AND
REDEVELOPMENT AUTHORITY
By
Its
By
Its
M'+saMa 4
CITY OF FRIDLEY
By
Its
lay
Its
1nE
1nF
FLY 1�.�RTIN!G- PROGI7I .
Press Release:
Upon execution of HRA Agreement.
Signage:.
Revise signage showing MEPC as contact
October, 1995
Flyer Created and Mailed
October, 1995
to Users & Brokers
Focus Group for Office
November, 1995.
Users:
Development Plan Review:
Planning review would commence after
information is provided by the first focus
group. MEPC will then present our
preliminary development plan to the City
for HRA response and review by January,
1996.
Press Release:
Upon completion of Development Plans.
Direct Mail Piece to
April, 1996
Brokers:
Broker Event on Site:
May, 1996.
Quarterly Updates: -
MEPC will provide updates to the
Brokerage community on a quarterly
basis. This development project will be in
the annual MEPC vacancy up -date.
MEPC would meet with the HRA
quarterly to provide project updates.
Continuing. efforts would be evaluated -and put in place as
needed after May, 1996.
1nF
STATE OF MINNESOTA )
COUNTY OF )SS. )
This instrument was acknowledged before me on , 1995. by
as and as on behalf of
MEPC American Properties Inc., a
(Seal)
O
STATE OF MINNESOTA )
)SS.
COUNTY OF )
Notary Public
My Commission Expires:
This instrument was acknowledged before me on _ , 1995, by
as and as on behalf of
City of Fridley, a
(Seal)
Notary Public
My Commission Expires:
STATE OF MINNESOTA )
COUNTY OF )SS. )
This instrument was acknowledged before me on . 19951 by
as and as on behalf of the
City of Fridley Housing and Redevelopment Authority, a
(Seal)
Notary Public
My Commission Expires:
OCS 93SE3.02 Je
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s
Two (2) permanent signs $3,500
Soil and Original information is Ding provided by the City -$101000
Environmental
Review:
Traffic Consultant City provide information $5,000
Review:
Architect: Master Site Plan, City submitted package and site $20,000
plan
Attorneys Fees: Development Agreement and first building $20,000
agreement.
Miscellaneous $10,000
Items:
Total Budget '$129,300
'10H
F BUDGET
Focus Group
Consumer Research Corporation
$4,000
$4,000 per group, includes recruiting, moderating,
dinner, room, monitary enticement.
Advertising
Direct Mail Piece similar to Baseball Pitch plus -
$12,000
booth at the Metrodome (Twins Game)
$3,800
1 er similar to Eagandale
$5,000
Postage/flyer /photography
(Terry's fee's for copy, layout and proofing were
$1,312.50. This amount is included in the total
number.)
Press Releases
$10,000
Newspapers & Publications
Public Relations
Broker Parr►
$15,000
Tent, food, decorations, initiations and mailings
Newspaper
Ad placement in Monday Business Section of the
$10,000
Advertising:
Minneapolis Star Tibune throughout the two years.
Signage:
Two (2) temporary signs showing MEPC as contact
$1,000
along with moving current posts closer to highway
for permanent sign placement.
Two (2) permanent signs $3,500
Soil and Original information is Ding provided by the City -$101000
Environmental
Review:
Traffic Consultant City provide information $5,000
Review:
Architect: Master Site Plan, City submitted package and site $20,000
plan
Attorneys Fees: Development Agreement and first building $20,000
agreement.
Miscellaneous $10,000
Items:
Total Budget '$129,300
'10H
a° 0
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: September 8, 1995
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Consider Request for TIF Assistance for Ark
Development
Proposal
Gary Bidne of Ark Development Inc. is a developer acting on
behalf of "Noah's Ark", a non - profit senior housing organization.
He is proposing to build a senior housing development on the
vacant property located immediately south of Wal -Mart and just
east of Springbrook Apartments. The property is zoned C -2,
General Business, and "Homes for the Elderly" are a permitted use
in that district. Bidne is currently negotiating with the
current property owner in order to obtain a purchase agreement
for the property. The site is located in TIF District #3.
Approximately 100 rental units are proposed for the site. About
50% of the units will be one bedroom, the other 50% will be one
bedroom with a den or second bedroom. Rental rates would range
from $550 per month to $950 per month. An additional $35 per
month would be charged for a garage. Control of the units as
"senior" units is accomplished by both the - underwriters documents
and the lease documents with the individual renters.
Project Description
Bidne has coordinated other senior housing projects in New
Brighton, Little Canada, and most recently in Spring Lake Park.
Financing for the project is a mixture of tax exempt housing
bonds and tax increment financing assistance from the community.
Conflict with Rottlund Proposal?
Will this project be direct competition for Rottlund? Bidne
indicated that he didn't believe that there would competition
between the two developments. He indicated that the Rottlund
product would appeal to the younger senior, aged 55 to 65, and
the Noah's Ark product typically appeals to the senior aged 70
11
TIF Assistance for Noah's Ark Development
September 8, 1995
Page 2
years and older. There may be a 5% overlap between the two
markets, but he felt the two products appealed to different age
groups. He also indicated that his development would contain a
dining area for catered functions. It is not a congregate dining
facility, but it does provide services for seniors that are in
transition from independent living.
Noah's Ark is a non - profit organization and they would own and
manage the building. Noah's Ark would hire an outside health
care entity to manage the facility. The organization is a 50103
organization.
I had anticipated that the HRA would receive more information
about the financing of the proposed project, but I have not
received that information as of this date. I have asked for a
pro forma and•cash flow analysis of the proposed project,
including a sources and uses statement and what type of request
they would be making for tax increment assistance. As a
comparison, however, Spring Lake Park provided pay -as- you -go tax
increment financing assistance totalling $1.1 million which would
return the taxes for approximately 15 years. The taxes range
between $75,000 - $85,000 per year (the Spring Lake Park project
has not been constructed as of yet).
Project Financing
Because tax exempt bonds are requested, approximately 40% of the
units must be rented to persons who have incomes below 60% of the
area median. Bidne insists, however, that the units are market
rate, but they do meet the HUD guidelines for bonding
requirements.
Summary
Until more information is received,'it is difficult for staff to
make-a recommendation to the HRA as to whether or not we should
proceed to negotiate with Ark Development. Bidne may be at the
meeting Thursday evening to describe his project.
BD /dw
M -95 -483
11A
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: September 8, 1995 �+�/
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Evaluation of Options for Construction of Senior
Condominiums
Background
At the August meeting, the BRA reviewed Stutz's letter of August
10, 1995 regarding the proposed 48 condominium units and the
overall financing for the project. The HRA was disappointed by
the proposal made by Stutz, and instructed staff to arrange a
meeting with a member of the BRA (Duane Prairie), and a member of
the City Council (Steve Billings), to determine if there would be
negotiation room for a counter - offer. The meeting occurred on
Tuesday, August 22, 1995.
City Council position
A majority of the City Council would prefer to keep the senior
condominiums as part of the project, fully realizing the impact
of the additional costs on the project.
What is the Rottlund position?
Stutz in his letter of August 10, 1995 is proposing to pay
$200,000 for the land price which includes payment of 50% of the
park dedication fee ($54,000). The original land sale value that
staff used in the preparation of the economic analyses was
approximately $901,800. Subtracting the two figures results in a
$700,000 subsidy for the project.
Are there any ways to lower the condominium construction costs?
Jim Casserly has obtained Rottlund's proposed budget for the
development and their proposed development costs, and have
compared that with other townhome projects in the metro area.
Although he still is talking with a number of people, his most
recent comment was that Rottlund's development costs appear to be
comparable, and in some cases, better than what other projects
19
Evaluation of Options for
Construction of Senior Condominiums
August 25, 1995
Page 2
are proposing. Rottlund has also provided a detailed accounting
of the "25% margin". The HRA, specifically Duane Prairie, was
concerned about this figure. Jim Casserly and I are
reviewing the specific costs which make up the 25% margin and
comparing it to other developers.
Stutz also explained that consolidating the two 24 -unit buildings
into one building will not save a significant amount of money
because the originally proposed four -story construction was
sprinklered and did not require masonry construction. Stutz also
did not want to reduce the size of the units in order to provide
a comparable unit size to match existing amenities in Fridley
homes.
Why were the cost issues not researched by Rottlund in the first
place?
Stutz admits that they have not built condominiums before, and
probably should have completed the analyses earlier in the
process. On Rottlund's behalf, the City and HRA were requesting
a response to a "Request for Qualification ", and they submitted a
more detailed plan than we originally required.
Further, Rottlund believes that because of its changes to the
plan and creation of two new housing styles (the two -story
detached townhome and the eight -unit attached townhome) that they
have created an exciting and marketable array of products. In
fact, they do not wish to go back to the 16 -unit building because
of their satisfaction with the other housing styles.
What is the "Standard Profit Margin of 25 -t"?
Stutz stated that the 25% is applied to a unit after the per -unit
construction cost. It includes costs related to sales,
marketing, production support, on -site leasing, field
communication and on -site supervision. It also includes
commission fees for brokers, advertising, and payment of taxes.
The bottom line is 3 -1/2% - 4 -1/2% of the 25% is the net profit.
As explained in Stutz's letter, the condominium per -unit
construction cost is $80,000, and in order to accomplish a
$90,000 sale price with a 253% margin, that results in a cost per
unit of $67,500, leaving a subsidy per unit of $12,500.
19A
Evaluation of Options for
Construction of Senior Condominiums
August 25, 1995
Page 3
What is the equity _ participation proposal?
Acknowledging that the reduced land payment is causing additional
costs to the HRA, Rottlund is willing to participate in an equity
participation agreement for the entire project. In other words,
additional revenue could be obtained either through higher than
expected sales price, or lower than expected development costs.
If that is completed and if sales go well, the HRA could receive
up to 50% of the additional proceeds. An equity participation
agreement is appealing since the other units (the empty nester
and other products) also have just as strong demand.
Realistically, it is very hard'to pinpoint a projected estimate,
however, it could range anywhere from $0 - $250,000.
What options does the HRA have?
There are three options:
1. Proceed as proposed and construct the condominiums but
stipulate inclusion of an equity participation agreement for
the entire project so additional revenue can be gained from
the entire project.
2. Eliminate the senior housing component and construct
additional eight -unit attached townhome buildings.
3. Terminate the Contract for Exclusive Negotiations and seek
another developer.
Construction of senior rental housing is a fourth option,
although it appeared to be dismissed at the joint City Council
and HRA meeting. While the rental option produces more taxes per
year ($260,000), it does require approximately $75,000 in tax
increment financing payments on an annual basis to fund the
project. Construction of senior rental or the condominiums will
exact additional costs from the HRA. The rental takes its form
through annual tax increment payments; the condominium takes its
form through subsidizing the construction costs per unit.
The senior housing demand in Fridley is high. If the senior
condominiums are not constructed, there will continue to be a
demand elsewhere in the City. There are no senior projects that
staff is aware of that has been constructed without any
assistance from municipal, state, or federal resources (see other
item on the agenda regarding Ark Development). The tax structure
and construction costs have changed dramatically since the Tax
Reform Act of 1986 and a mixture of subsidies from a variety of
government sources are needed to accomplish senior housing.
12R
Evaluation of Options for
Construction of Senior Condominiums
August 25, 1995
Page 4
SUNMARY
The City Council has recommended option #1. The issue that needs
to be discussed is whether the $700,000 to complete the project
as originally planned is appropriate. If you need additional
information on any one of the three options, please do not
hesitate to contact me.
BD /dw
M -95 -484
12C
612 638 0501
AUG-10-1995 18:06
RQTTLUND HOMES
RDTTLUND HomFsm
A DIVISION f1F't t{E RoTIIUND MMpAIVY, M
August 10, 1995
Ms. Barb Dacy
City of Fridley
6431 University Ave. NE
Fridley, MN 55432
Dear Ms. Dacy.
612 E38 0581 P.02
As you are aware, The Rottlund Company, Inc, entered into a Contract for Exclusive
Negotiations on January 12, 1995 with the Housing and Redevelopment Authority of the City of
Fridley. Since that time, The Rottlund Company, Inc. has further analyzed the various
components of the development, modified its plan to meet the requirements of the planning
Commission and identified issues which require further discussion as part of a final
Redevelopment Agreement. These issues are primarily related to access to Mississippi Street and
feasibility of the 48 unit condominium component of the development based upon known
construction costs and market constraints. The Rottlund Company. Inc. maintains the following
position on these issues:
Mississippi Street
Access to Mississippi Street is required to occur at the existing 3rd Street curb cut or preferably
east of the existing 3rd Street as reflected by current plans. The Rottlund Company, Inc_ will not
pay for any extraordinary costs associated with suggested Anoka County improvements to
Mississippi Street. The new 3rd Street is preferred to be a private street. The Rottlund
Company, Inc. will provide a secondary entrance aligned with the e,g 2nd Street.. (This will
eliminate at a minimum two Village Homes.)
Condominium Construction
The Rottlund Company, Inc, has obtained construction bids on the two 24 unit condominium
buildings Originally proposed for the development. Our market research has always identified this
senior housing component market to be in the $80,000 - $100,000 range. Unfortunately, the
direct construction cost (bricks and sticks) of these units is approximately $80,000 per unit based
upon 1220 square foot unit. We have analyzed various alternatives to building these
condominium units and have concluded our original plans were appropriate to fit the market and
image is required by the development. In order to maintain a standard profit margin of 25% on
these units a $12,500 per unit subsidy is required assuming no land or development cost per unit.
GTi ,
612 638 0501
AUG-10-1995 18:l I 7
August 10, 1.995
Page 2
ROTTLUND HOMES
z a
612 638 0501 P.03
Attached for your reference is an analysis of our ability to pay for the land based upon the
required condominium subsidy. The final conclusion based upon known costs is The Rottlund
Company, Inc. can pay $200,000 for the land and 50% of required park dedication fee or
$254,000 to the City. To protect the City's interest we also propose a cap on the gross margin,
The Rottlund Company, Inc. can make on the development of 25 %. Any additional profit would
be paid to the City as a deferred land payment.
This is our position on this development and look forward to a mutual successful conclusion. If
you have any questions or comments, please feel free to contact me at 638 -0500.
ms/frdac.doc
12E
r s
612 638 0501
AUG-10-1995 18:07 ROTTLUND HOMES 612 638 0581 P.04
MONEGATE ANALYSIS August 10, 1995
Condominium Subsidy Requirement
$80,000 / unit direct condominium constriction costs
67,500 / unit _ ($90.000 sale price @ 25% margin)
$12,500 / unit subsidy required per unit
• 48
units
$600,000 total subsidy required
Sources
$ 0 = 48
7681000 = 48
676,000 = 26
528,000 = 22
$1,972,000
1,217,865
$754,135
600,000
154,135
or
$200,000
Condominiums
• 0
Townhomes
• 16,000
Cottages
• 26,000
Village homes
• 24,000
Development cost included interest (no land) _
Condominium subsidy _
Land Price
Land Price
(Development cost includes $54,000 park dedication fee)
171;
a° 0
Community Development Department
HOUSING AND REDEVELOPMENT AUTHORITY
City of Fridley
DATE: September 8, 1995 )0-,
TO: William Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
Grant Fernelius, Housing Coordinator
SUBJECT: Update on Hyde Park Housing Programs
On September 5th the Center for Energy and Environment (CEE) sent
out a mailing to all 179 property owners in the Hyde Park:
neighborhood. The information packet described the programs and
services available and also announced the Homeowner and Landlord
informational meetings which will be held on September 19th and
21st.
The meetings will provide an opportunity for people to come and
learn about the programs,.meet with loan officers and other
technical experts, and_complete.loan applications. In addition,
CEE will follow -up with phone calls for those who didn't respond
to the mailing or attend a meeting. Our goal is to get a
response from every owner in the neighborhood.
Attached is a copy of the information materials that were sent
out by CEE. So far, CEE has received several calls with positive
responses for the meetings, and has scheduled an building'
evaluation and closed a $20,000 rehab loan for a six unit
apartment building. Starting in early October CEE will also
maintain evening office hours at the Municipal Center on Tuesdays
and Thursday until 8:00 p.m.
We will provide progress reports following the informational
meetings later this month.
GF/
M -95 -489.
I
s
E�aw:
vQ-
•
FRIDLEY MUNICIPAL CENTER - 6431 UNIVERSITY AVE. N.E. FRIDLEY. MN 55432 - (612) 571 -3450 - FAX (612) 571 -1287
September 5, 1995
Dear Hyde Park property owner:
The City of Fridley Housing and Redevelopment Authority is pleased to announce an exciting new program to
help you and your neighbors make improvements to your property and improve your neighborhood at the same
time. The program offers Hyde Park property owners very attractive financing as well as technical assistance in
choosing which home improvements may best meet your needs.
The financing will be tailored to the unique needs of each owner. In most cases, owners will receive a deferred
loan combined with other low interest financing. The deferred loan would not have to be repaid until the
property is sold. Other low interest loans would be repaid each month.
As part of the program you will also receive a free on -site analysis of your property's rehabilitation needs by a
trained housing technician. However, the housing technician's recommendations are merely suggestions. You
are free to choose any improvements that you wish.
As explained in the enclosed brochure, the program offers a variety of financing options based on your income
and your rehabilitation needs. To insure that you understand the details of the program we recommend that you
attend the appropriate meeting listed below which are to be held at the Fridley Municipal Center:
Homeowner Informational Meeting
6431 University Avenue Northeast
Tuesday, September 19, 1995
7:00 - 8:00 p.m
Landlord Informational Meeting
6431 University Avenue Northeast
Thursday, September 21, 1995
7:00 - 8:00 p.m.
Please fill out and return the enclosed card to indicate whether you wish to attend the meeting or otherwise
participate in the program If you are unable to attend the meeting, you can still participate in the program;
simply complete the enclosed form and mad it back in the postage paid envelope provided.
We are doing our best to improve Fridley neighborhoods and hope you choose to participate in this exciting new
program
Sincerely, n
1. &j
William J. Nee Ann A.Bolkcom
Mayor Councilmember 3rd Ward
104 a
ancy J. Jorgenson
Councilmember at Large
w
is s
Hyde Park Housing Rehabilitation Program
RESIDENTIAL ASSESSMENT SURVEY FORM
Zip Code= -
Home Phone: ! Work Phone.
Which of the following improvements -would you Me to make to your property?.; . (check all that apply), -
lEXTERIOR
0 Windows & Doors :0 _
= Roof i
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O CementlTuc iatm �eY 7w,g�f� �-�
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Please specify needs: fi 4
C. Bank Accounts: Provide name and address of bank or branch 0 Checking:
❑ Savings:
D. Debts: List all current fixed obligations, installment accounts; revolving charge accounts, loans, and debts to banks; finance
companies and
government agencies (Ymore space is needed
list additional debts on attached sheets.)
To Whom Indebted-
(Named)
City and State
Account
Number
Date
Incurred
Original
Amount
Present
Balance
Monthly*
Payments
Check If
Business-
Related
Mortgage:
Contract-for-Deed: -j-
EF TAM AND 04SURANCE ARE NOT INCLUDED IN YOUR PAYMENT. INDICATED AVERAGE MONTMY-AMOUNT
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