HRA 03/04/1999 - 6307R'
HOUSING & REDEVELOPMENT AUTHORITY MEETING
THURSDAY, MARCH 4, 1999
7:30 P.M.
PUBLIC COPY
(Please return to Community Development Department)
A
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CITY OF FRIDLEY
HOUSING & REDEVELOPMENT AUTHORITY MEETING
THURSDAY, MARCH 4,1999,7:30 P.M.
AGENDA
LOCATION: City Council Chambers
CALL TO ORDER
ROLL CALL
APPROVAL OF MINUTES
February 4, 1999
CONSENT AGENDA
Consider Resolution Approving
Change to Revolving Loan Program ....... ....... 1`" ................. 1-1C
Claims and Expenses ............. ............................... 2
ACTION ITEMS:
Consider Resolution Authorizing Execution of
Redevelopment Contract, Shamrock Investments III, LLC ................. 3 - 3C
Consider Proposals for Robert Gerloff Residential Architects ............... 4-4E
Consider Proposal from Benshoof and Associates for
Preparation of Federal Funding Application for TH 65 .................... 5 - 5C
INFORMATION ITEMS:
Medtronic Update ................ ............................... 6- 6A
Consider Transfer of Property at 8184 East River Rd.
from Anoka County to AI Kellner ..... ............................... 7 - 7A
OTHER BUSINESS
ADJOURNMENT
M
CITY OF FRIDLEY
HOUSING & REDEVELOPMENT AUTHORITY MEETING
FEBRUARY 4, 1999
CALL TO ORDER:
Chairperson Commers called the February 4, 1999, Housing and Redevelopment
Authority meeting to order at 7:30 p.m.
ROLL CALL:
Members Present: Lary Commers, Virginia Schnabel, Pat Gabel, and John Meyer
Others Present: Grant Femelius, Housing Coordinator
Ben Martig, Housing and Special Projects Intern
William Bums, City Manager
Jim Casserly, Financial Consultant
Rick Pribyl, Finance Director
APPROVAL OF THE JANUARY 7 1999 HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES:
MOTION by Ms. Schnabel, seconded by Mr. Meyer, to approve the January 7, 1999,
Housing and Redevelopment Authority minutes as presented in writing.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED
THE MOTION CARRIED UNANIMOUSLY.
CONSENT AGENDA:
CONSIDER APPLICATION FOR 1999 MINNESOTA CITIES PARTICIPATION
PROGRAM,
2. CLAIMS AND EXPENSES.
Mr. Pribyl, Finance Director, distributed a list of additional expenses for consideration.
Ms. Schnabel inquired as to the check issued to National City Bank of Minneapolis in
the amount of $481,207.80.
HOUSING & REDEVELOPMENT AUTHORITY MEETING FEB. 4. 1999 PAGE 2 ,�
Mr. Pribyl explained that this represents the last principal and interest payment on the
revenue bonds that were issued in 1985.
MOTION by Mr. Meyer, seconded by Ms. Schnabel, to approve the Consent Agenda as
presented.
UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED UNANIMOUSLY.
ACTION ITEMS:
3. CONSIDER APPLICATION TO MHFA FOR SUPER RFP:
Mr. Grant Femelius, Housing Coordinator, explained that MHFA has a consolidated-
funding application two times each year which combines nine different funding
programs into one application process. This RFP is for the single - family programs, of
which approximately $13,000,000 is available. The purpose of the programs is to
assist with the construction, rehabilitation and /or demolition of housing for families of
low and moderate income ($30,400 to $48,640 per year).
Mr. Femelius stated staff has been talking with the Center for Energy and Environment
(CEE), the non - profit organization which administers the HRA's loan programs, about
developing some type of demonstration project. Two concepts were discussed.
Mr. Femelius stated one concept would be the construction of a new home to meet
Healthy House Standards by the American Lung Association. This home could be
constructed on one of the city's vacant lots located at 5857 Main Street N.E. and would
be built to meet the American Lung Association Healthy House Standards as they
relate to building materials, indoor air quality, mechanical equipment and insulation. In
the past, most of these features have only been found in more expensive homes. The
HRA's goal would be to construct a home with these features at an affordable price.
Mr. Femelius stated that under this project concept, CEE would apply for funds from
MHFA for the construction of the property. Sussell Corporation would be hired to
construct the home, and the HRA would provide the lot by taking a second mortgage on
the property (similar to what was done at 5800 2nd Street N.E.). The home to be
constructed would be a one and one -half story home of 1,300 to 1,600 square feet with
three bedrooms, two bathrooms and a two -stall attached garage. The estimated cost
of construction would be $107,000 to $110,000, with an additional $3,000 to $5,000 for
Healthy House Standard improvements. The end value, including the land, would be
$130,000 to $135,000.
Mr. Femelius stated this would essentially be a "demonstration program" which could
be replicated elsewhere in Fridley or in other areas of the Twin Cities.
�- HOUSING & REDEVELOPMENT AUTHORITY MEETING FEB 4 1999 PAGE 3
Mr. Femelius stated the second concept would be the rehabilitation of an existing
Fridley rambler. This would help to demonstrate how a 1950s style home could be
upgraded and /or expanded to include amenities. Under this program, the HRA, along
with CEE, would acquire an existing rambler and, using one of the plans identified in
the Fridley Rambler Planbook, to improve the property. The property, after completion
of the improvements, would then be used to demonstrate and promote the potential of
older housing. The property would eventually be sold to a qualified buyer. The HRNs
involvement would be limited to providing up to $15,000 to assist in the rehabilitation.
MHFA would be asked to provide the acquisition funds as well as a portion of the
rehabilitation costs.
Ms. Schnabel noted that under concept #1, the HRNs financial participation would be
recouped when the property is eventually resold; however, this is not the case in
concept #2.
Mr. Femelius stated this was correct.
Ms. Schnabel stated she would really like to see one of the design concepts used which
was presented to the HRA at the January meeting.
Mr. Femelius stated this would be a possibility.
Mr. Meyer asked how the Sussell Corporation was selected as the contractor under
Project #1.
Mr. Femelius stated that the HRA has had experience working with them in the past.
Mr. Meyer wondered if there would be an advantage to talking with other contractors.
Mr. Femelius stated this could be done.
Mr. Meyer asked why staff feels the need to "re- invent" the rambler. He does not see
this type of.house as undesirable, noting that the homes continue to sell.
Mr. Femelius responded that staffs desire is to provide homeowners with ideas to show
what can be done with an existing home. Many people feel the homes are too small.
By providing them with remodeling ideas, it may also encourage them to look at
alternatives to moving, thereby keeping them in the community.
Mr. Bums, City Manager, explained that some of the plans show a re- working of the
existing space which provides for uses in what otherwise would be unusable space.
Mr. Meyer asked why the HRA would need to provide an actual model. He believed
that drawings would be adequate.
HOUSING & REDEVELOPMENT AUTHORITY MEETING FEB 4 1999 PAGE 4
Ms. Gabel stated this would serve the same purpose as a model home serves. It
provides people with ideas which are often difficult to decipher from a plan.
Mr. Meyer stated the primary goal of the housing programs is to improve the housing
stock in the community. He believed using public funds for this purpose pushes the
public purpose far beyond the limit, and that this could be pursued by the private sector.
Mr. Bums stated he believes this will help to generate interest for residents to make
improvements to their properties.
Ms. Gabel stated she feels it is important to start revitalizing some of the aging housing
stock in Fridley. Some of the existing homes in Fridley are less desirable than the
newer modem styles. She stated she feels a project such as this would be a pro- active
approach to generating an interest to improve the housing stock.
MOTION by Ms. Gabel, seconded by Ms. Schnabel, to approve the City's participation
in Project #1 by contributing the lot at 5857 Main Street, on a deferred sale basis, and
to authorize staff to prepare a letter of support for the project and sign application
materials.
UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED UNANIMOUSLY.
MOTION by Ms. Schnabel, seconded by Ms. Gabel, to approve the City's participation
in Project #2 by contributing up to $15,000 to acquire and rehab an existing rambler
and authorize staff to prepare a letter of support for the project and sign application
materials.
UPON A VOICE VOTE, THREE MEMBERS VOTING AYE (GABEL, SCHNABEL,
COMMERS), ONE MEMBER VOTING NAY (MEYER), CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED.
Chairperson Commers noted that the AUAR study for the Medtronic project recently
identified the potential need for widening of lanes on Highway 65 by adding a
northbound through land and a southbound through lane from 1 -694 to 100 feet north of
63rd Avenue. It is felt that this will serve to mitigate some of the congestion on
Highway 65, which will result if the project is developed at a higher density than
originally proposed. SRF Consulting Group, which is Medtronic's consultant, has
suggested that the City evaluate a sheet pile wall construction which would not
necessitate the filling of the lake. In order to determine the feasibility of the
construction, soil borings are necessary to determine if in fact the soil is suitable for the
sheet pile wall construction.
Mr. Bums, City Manager, noted that the issue of who is responsible for payment for
these soil borings has not been determined. The City is currently negotiating with
Medtronic and has requested that Medtronic fully reimburse the HRA for these costs.
However, the soil borings need to be completed soon.
Mr. Meyer noted there was a large discrepancy in price of the three bids. He noted that
two of them were similar, but that the bid from STS was considerably higher.
MOTION by Mr. Meyer, seconded by Ms. Schnabel, to authorize the Executive Director
to execute a contract with Braun Intertic at a cost not to exceed $4,950 to complete soil
borings on TH 65 with the stipulation that the analysis be completed by March 5, 1999,
as outlined in the January 29, 1999 memo from Barbara Dacy.
UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED UNANIMOUSLY.
PRESENTATION:
5. FINAL REPORT ON HOUSING PROGRAM STUDY:
Mr. Ben Martig, Housing and Special Projects Intern, discussed the results of the
housing program study which was recently completed. The purpose of the study was
to analyze the housing rehabilitation program and to determine its effectiveness on the
housing stock in the city. The study included a survey of all past loan and grant
recipients, a survey of all Hyde Park neighborhood residents, an analysis of building
permit data and a survey of six other first -ring metro cities, similar in age and size of
housing.
Mr. Martig provided a presentation of the report to summarize the results of the study.
The findings of the analysis determined that the rehabilitation programs are improving
the housing stock in Fridley by enabling those who could not ordinarily afford to make
improvements with the means to do so.
Mr. Martig stated that based on the study, staff came up with a number of
recommendations which could improve the existing programs. Some of these included
raising the maximum loan limit from $25,000 to $35,000, to provide a brochure of the
loan and grant programs to new residents in Fridley and to create a short Contractor
Survey Form to be completed by homeowners who have gone through the program and
available for prospective customers.
Mr. Meyer stated he would not be in favor of increasing the loan limit to $35,000. The
study shows that the average loan amount is $13,000. This reveals that the $25,000
limit is sufficient for most applicants. He also stated some concern as to the Contractor
Survey Form, noting that some homeowners may provide information that is not based
on fact and that the contractor would not have an opportunity to rebut the accusations.
HOUSING & REDEVELOPMENT AUTHORITY MEETING FEB 4 1999 PAGE 6 vl
Mr. Femelius stated that before proceeding with a survey system, it would be necessary
to check on the liability issue. He noted that many residents have indicated a difficulty
in finding reputable contractors. It was felt that this would be a way to assist them,
without staff involvement.
It was the general consensus of the HRA that the information provided in the survey
was very helpful and staff was commended for their fine work on this project.
INFORMATION ITEMS:
6. MEDTRONIC UPDATE:
Mr. Bums, City Manager, provided the HRA with a copy of an architectural rendering of
the proposed Medtronic project. He noted that the parking ramps proposed for the site
will consist of five stories, three stories above ground and two stories below ground.
The campus will consist of approximately nine buildings which will be connected
underground.
Mr. Bums explained that as a part of the project, it was determined that it would be
necessary to acquire seven residential properties. Mr. Dave Ryan was hired to work
with the homeowners. He met with all seven property owners within a three -day period;
six homeowners were agreeable to selling, with one homeowner very adamantly
opposed. Since that time, Medtronic has indicated that they would be willing to remove
that property.from the acquisition.
Mr. Casserly, Financial Consultant, noted that as architects started designing the plans,
it became evident that the project was going to be a considerably larger expense than
what was first expected. As a result of this, Medtronic may be asking for an extension
of the Tax Increment District. Mr. Casserly provided the Commissioners with an
overview of specific concerns that he felt should be addressed prior to negotiating any
TIF district extension.
7. UPDATE ON WORK WITH ROBERT GERLOFF & ASSOCIATES,-
Mr. Femelius explained that, per discussions held at the January 7, 1999, HRA
meeting, staff has scheduled a meeting with Robert Gerloff to outline a scope of work to
address house plan designs for the HRA's Scattered Site Program. This meeting will
be held on February 12. After this meeting, Mr. Gerloff will prepare a proposal to
identify costs for these services. An update will be provided by staff at the March HRA
meeting.
HOUSING & REDEVELOPMENT AUTHORITY MEETING. FEB. 4. 1999 PAGE 7
Mr. Femelius noted that a kick -off event of the new Remodeling Planbook will be held
at the International Market Square on February 25, 1999. Invitations will be mailed to
the HRA members with more detailed information. All are invited to attend.
OTHER BUSINESS:
None.
ADJOURNMENT:
MOTION by Ms. Schnabel, seconded by Ms. Gabel, to adjourn the meeting at 10:25
p.m.
UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE MEETING WAS
ADJOURNED AT 10:25 P.M.
Respectfully submitted,
Tamara D. Sa fke
Recording Secretary
DATE: February 25, 1999
MEMORANDUM
HOUSING
REDEVELOPMENT
AUTHORITY
TO: William W. Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
Grant Femelius, Housing Coordinator
SUBJECT: Consider Resolution Authorizing Change to Maximum Loan
Amount
At the February HRA meeting, staff made a recommendation to increase the
maximum loan amount for the HRA's revolving loan program. The current ceiling
is $25,000. The proposal would increase the limit $10,000 for a maximum loan
of $35,000. Based on the housing study completed last month, about a third of
the respondents (36.9 %) felt that the $25,000 loan limit should be increased.
Since the focus of the HRA's programs is to upgrade housing and ultimately
retain residents, it seems appropriate to raise the limit in cases where
substantial rehabilitation is required.
We should emphasize a couple of points about the proposed maximum loan
amount. First, all loans will still need to meet the HRA's underwriting guidelines.
Borrowers must have sufficient income and adequate equity in their home to
support the loan. Second, we do not anticipate a significant impact on the
program budget. Since the program began in 1995, a total of 35 loans have
been at $25,000. This represents 16% of the total loan portfolio. On average
about 11 or 12 loans of this size are made annually. In a worst case scenario,
the impact would be $110,000 to $120,000 in additional cost per year.
The higher loan amount really gives residents more flexibility in financing their
project. It streamlines the application process so that only one loan is required
(as opposed to a third loan) at one uniform interest rate. Put another way, it is
simply one more tool in the financial tool box to assist with larger scale
rehabilitation projects.
1
Recommendation
Staff recommends that the HRA approve the attached resolution authorizing an
increase in the maximum revolving loan amount from $25,000 to $35,000.
M -99 -51
IA
m
HRA RESOLUTION NO. -1999
A RESOLUTION MODIFYING THE FRIDLEY REVOLVING LOAN
PROGRAM
BE IT RESOLVED by the Board of Commissioners (the "Commissioners ") of the
Housing and Redevelopment Authority in and for the City of Fridley, Minnesota (the
"Authority ") as follows:
Section 1. Recitals.
1.01. The Authority has previously established, by HRA Resolution Nos. 3-1993,4-
1993, 16 -1995, 8 -1996 and 19- 1997,.housing rehabilitation programs which, among other
things, provided for the making of loans funded by the Authority in the City of Fridley.
1.02. It has been proposed that the Authority now modify provisions of the revolving
loan program (the "Revolving Loan Fund ").
Section 2. Findings.
2.01. The Authority hereby finds that the Revolving Loan Fund promotes the purposes
of the Authority as those purposes are defined in Minnesota Statutes, Section 469.001, et.
seq. (the "Act').
2.02. The Authority hereby finds that the Revolving Loan Fund assists in the
preservation, maintenance, and provision of adequate housing stock; that accomplishing
this is a public purpose in that there are many residences in the City which require
rehabilitation.
2.03. The Authority hereby finds that rising home improvement and rehabilitation costs
make it more expensive for participants in the Revolving Loan Fund to complete their
home improvement projects and that it is prudent to increase the maximum loan amount
to accommodate these higher costs.
Section 3. Modification of Program.
3.01. The Authority hereby approves and amends the Revolving Loan Fund as
described in HRA Resolution No. 8 - 1996, Schedule A, Section I., Subsection B,
Paragraph 5, to read as follows:
"The Revolving Loan will carry an annual interest of five (5) percent and must be
repaid in monthly installments. The maximum Revolving Loan shall not exceed
$35,000. The maximum term shall not exceed 20 years. All Revolving Loans will be
secured with a separate mortgage. "
Page 2 -- HRA Resolution No. _ -1999
PASSED AND ADOPTED BY THE HOUSING & REDEVELOPMENT AUTHORITY
OF THE CITY OF FRIDLEY THIS DAY OF 91999.
LAWRENCE R. COMMERS - CHAIRMAN
ATTEST:
WILLIAM W. BURNS - EXECUTIVE DIRECTOR
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KRASS MONROE, P.A.
ATTORNEYS AT LAW
■ James R Cmedy
Enm9 jmnwc@kres=wnroa=m
wwwlnaummraecmn
Dbed Dial (614 885 -12%
MEMORANDUM
To: City of Fridley
Attn: Barbara Dacy, Community Development Director
Attn: William Burns, City Manager
From: James R. Casserly, Esq.
Robert W. Corey, Esq.
Date: February 26, 1999
Re: Contract for Private Redevelopment By and Between the Housing and
Redevelopment Authority in and for the City of Fridley and Shamrock Investments
III, LLC (Onan Site)
Our File No. 9571 -10
Enclosed you will find the February 26, 1999, draft of the above agreement and a Resolution
Authorizing its Execution. While this project has similarities to other projects the Authority
has undertaken, there are also substantial differences. As a result the contract between the
Redeveloper and the Authority is somewhat different.
The Contract provides the following:
Within 45 days of its execution, the Redeveloper shall deposit $200,000
and the Authority shall deposit $100,000 in a Security Fund. The
Security Fund can be used to pay for the tax increment eligible Public
Improvements.
2. Within 120 days of the execution date of this agreement, the Redeveloper
must determine if it is willing to proceed with the Redevelopment
Project. If the Redeveloper is willing to proceed and the cost of the
Public Improvements (the site remediation and abatement expenses) will
not exceed the sum of $956,140, then an Escrow Agreement will be
SUITE 1100 SOUTHPOINT OFFICE CENTER • 1650 WEST 82ND STREET • BLOOMINGTON, MINNESOTA 554314447
TELEPHONE 612fi85 -5999 • FACSIMILE 6121885-5969
3
adopted to reimburse the Redeveloper for the cost of the Public
Improvements. However, there will be no distribution from the
Escrowed Funds until the footings of the new building have been
installed (25% of the balance may then be released) and the new building
is fully enclosed (whereupon the remaining balance of the funds may be
released).
3. Upon the completion of the Minimum Improvements, the Authority will
issue its Certificate of Completion and provide a Revenue Note for the
Site Improvement costs (roads, utilities, grading and infrastructure costs).
The Revenue Note may not exceed the actual costs or $1.2 million
whichever is less. The Revenue Note will be payable from 60% of the
tax increment generated by the new development. -
4. To assure the City that there will be a minimum valuation, the
Redeveloper will execute an assessment agreement specifying that the
Redevelopment Project shall have a market value of not less than
$10,677,000.
5. Over the next several months, the Redeveloper and the City shall submit
to the Metropolitan Council and the Minnesota Department of Trade and
Economic Development applications for various pollution grants to pay
for the Public Improvement costs. If those grants are funded, then the
Authority will prepay the revenue note with 50% of the grant proceeds.
If the City does not receive grant funds in the Spring of 1999 cycle it will
resubmit the grant applications for the Fall 1999 cycle and thereafter until
grant funds are hopefully received.
6. If the Revenue Note is reduced below $1 million, then the interest rate on
the Revenue Note will be reduced to 7 1/z %. If the Revenue Note is $1
million or more (it can only be a maximum of $1.2 million), the interest
rate will be 8% (the higher interest rate reflects the longer term). In any
event, the Revenue Note will be deemed paid in full upon the termination
of the tax increment district.
7. It is anticipated that work on the Public Improvements will commence in
April, the Site Improvements will be started in May and the Minimum
Improvements started in June of 1999. The Redeveloper is anticipating
substantial completion of the building by the end of 1999. The
agreement allows, however, for substantial completion in December of
the year 2000.
The Authority has no risk by issuing the Revenue Note. It has done this many times and if
the taxes are not paid, then there is no payment on the Revenue Note. The Authority is
• Page 2
iN
funding most of the costs of the public improvements. However, this project scored very
well with the Met Council and DTED on its previous application and was only denied
funding because of a geographical balancing that had to occur in the DTED grants. It is
hoped that this problem will not reoccur in the Spring grant cycle. It appears likely that the
City, and as a result, the Authority will be reimbursed for most of the Public Improvements.
In the event the grant requests are not funded, the Authority's percentage of tax increment
will allow it to be reimbursed for the Public Improvements over the life of the tax increment
district.
The most serious risk to the Authority is its contribution to the Security Fund which amounts
to $100,000. Staff believes that this is a reasonable risk because of the substantial analysis
and work that has already taken place, the commitments by Onan and Murphy for the
development and leasing of the new facilities and the extensive site investigation that has
occurred. Finally, the risk is justified because of the substantial reward that will result not
only to the Authority but also to all of the taxing jurisdictions. This project not only puts a
non - producing parcel onto the tax roles, but also provides twenty -five to thirty percent of the
total taxes to the other taxing jurisdictions. This is a result of the certified tax capacity for
this specific district being so low; it is .97756. The actual tax rate which is currently 1.31646
tends to be twenty -five to thirty percent higher than the certified tax rate.
Finally, if this project is developed as planned, there should be additional revenues to assist
the Authority with other improvements in the tax increment districts and the project area
The Authority will still be retaining forty percent of the tax increment generated both to
reimburse itself for the Public Improvement expenses it has funded but also for other
redevelopment expenses in the surrounding area
We believe the risks and the rewards are reasonably balanced. We encourage your adoption
of the Resolution authorizing execution of the Contract and we look forward to discussing
this contract further with you.
JRC/lrb
Enclosures
cc: Murphy Warehouse Company
Attn: Richard T. Murphy, Jr. and Richard F. Miller
Real Estate Recycling
Attn: Paul M. Hyde
Mackall Crounse & Moore, PLC
Attn: William J. OBrien
G:\WPDATA*VRMLEY\10 \COR\DACY BURNS.DOC
• Page 3
3B
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE
CITY OF FRIDLEY
COUNTY OF ANOKA
STATE OF MINNESOTA
RESOLUTION NO.
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 FRIDLEY, MD4NESOTA AND SHAMROCK
INVESTMENTS III, LLC
BE IT RESOLVED by the Board of Commissioners (the "Commissioners ") of the Housing and
Redevelopment Authority in and for the City of Fridley, Minnesota (the "Authority ") as follows:
Section 1. Recitals.
1.01. It has been proposed that the Authority enter into a Contract For Private Redevelopment
(the "Contract ") with .Shamrock Investments III, LLC (the "Redeveloper ").
Section 2. Findings.
2.01. The Authority hereby finds that it has approved and adopted a development program
known as the Modified Redevelopment Plan for its Redevelopment Project No. 1 (the "Redevelopment
Program ")pursuant to Minnesota Statutes, Section 469.001 et SeMc .
2.02. The Authority hereby finds that the Contract promotes the objectives as outlined in its
Redevelopment Program.
Section 3. Authorization for Execution and Delivery.
3.01. The Chairman and the Executive Director of the Authority are hereby authorized to
execute and deliver the Contract when the following condition is met:
Substantial conformance of a Contract to the Contract presented to the Authority as of
this date.
Adopted by the Board of Commissioners of the Authority this day of , 1999.
ATTEST:
Executive Director
3C.
Chairman
DATE: February 25, 1999
MEMORANDUM
HOUSING
Um
REDEVELOPMENT
AUTHORITY
TO: William W. Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
Grant Femelius, Housing Coordinator
SUBJECT: Consider Proposal by Robert Gerloff Architects for Scattered Site
Pattern Book and House Plans
At the January HRA meeting, staff reviewed a proposal to work with Robert
Gerloff, a residential architect, for assistance in developing new home designs
for the scattered site in -fill program. Gerloff was asked to submit two proposals.
Proposal 1
For the first project, he will create an idea book (pattern book) for builders to use
when preparing new house designs. The book will include drawings and other
visual references to assist with such issues as selecting plans which are
appropriate for the lot, orientation of the garage to the street, front entrance
features, and the use of different exterior materials. The concept is to identify
general design elements which can be incorporated into a number of different
plans.
Project
For the second project, Gedoff was asked to develop concept plans for the lot at
1015 Mississippi St. The site is very large (107'x 250 or .61 acre) and wooded,
making it extremely desirable for a move -up style home. Staff believes that this
is a great opportunity to assess whether there is a market for move -up homes on
in -fill lots. To accomplish, Gerloff will prepare three schematic plans, obtain
feedback from builders, realtors and neighbors to identify a desirable plan. We
could then solicit offers from interested parties to actually build the winning
design. Working drawings of the winning design would be an additional cost.
E
Gerloff Memo
February 25, 1999
Page 2
Cost Summary
Project 1 $10,050
Project 2 * $7,650
Total $17,700
Less discount if projects are
initiated simultaneously $5,000
Grand Total
$12,700
Working drawings for Project #2, including floor plans, elevations, pers-
pectives, reviewing construction bids and monitoring construction would be
an additional $7,300.
Conclusion
We believe both projects are important to the success of the scattered site
program. Both should be seen as investments in the program which will
improve the quality, appearance and end -value of the product which is
constructed. It is a proactive step to help encourage designs that will be
sensitive to the surrounding neighborhoods.
Recommendation
Staff recommends that the Authority approve the proposal from Robert Gerloff
for an amount not to exceed $20,000. Our intent is to proceed with both projects
simultaneously, but hold off on the options under Project 2, valued at $7,300.
The actual net cost of the projects, without the options, would be $12,700.
M -99 -52
24 February 1999
Grant Fernelius
Housing Coordinator
City of Fridley
6431 University Ave. NE
Fridley, MN 55432
Dear Grant:
;3�c Nomes wi
% actar and -hatR
f. (612) 571 -1287
Following are three estimates as we talked about at our last meeting and in follow -up
phone calls.
The proposals are broken down into the following categories:
1. Fridley Infill Housing Study Estimate
2. Fridley Infill House Schematic Design Estimate
3. Fridley Infill House Working Drawings Estimate
One major point I would like to make is that if the house design is combined with the
study, we can potentially save an enormous amount of meeting and transportation
time, as well as design and writing time. I would be willing to reduce the total cost
by $5,000 if we could combine the two and do them simultaneously.
Please give me a call when you get these and we can talk through the scope of work
and costs,
Sincerely,
2 L4_c=iky.�
Robert Gerloff, AIA
4007 SNENIDAN AVENGE SOUTH MINNEAPOLIS, MINNESOTA 55410 vow: 612/927.5913 FA1: 612/927.7301 E-MAIL: CALL
4B
C\�3gic Homes �r�rh Cr,
aracter and Cb
FRIDLEY
INFILL HOUSING STUDY ESTIMATE
dare
task
name
$/hr
hr5
rojecr 5tart-up
Robert-
75
12
$900.00
initial meetin 5
contract negotiation
admini5rrative Start -u
pro ramming
defining whar'5 in the Study
rough drafr
Robes r,
75
18
$1,350.00
Pete
50
24
V,2CG.00
rough draft review meerin
Robert
50
6
$3GG.00
Pete
50
6
$300.00
_
revi5irg draft per meetincL
Robert
75
6
$4 ,0.00
Pere
50
6
X300 .cc
meet to review revised draft
Robert
75
6
$450.00
Pete
50
6
$300.00
final production
Robert
75
30
$2250.00
7 black & white line ers ective5
Pete
501
36
$1,800.00
2/24/99
Bud et:
TOTALS
162
$10,050.00
4007 SNENIDAN AVENUE SOUTH MINNEAPOLIS, MINNESOTA 55410 VOICE: 612/927.5913 FAX: 612/927.7301 E -MAIL: CALL
4C
`�3yic Homar w�rh
C Ch""tdr and Cryltm
FRIDLEY
INFILL HOUSE SCHEMATIC DESIGN ESTIMATE
da`e
task
name
� /hr
hr5
pro jeer 5 art-up
Robert
75
16
$1,3;,0.00
initial meetina5
contract ne atiation
admini5tratin 5 tart -u
oroorammino
Robert
75
6
e450.00
a.�;ninq what'5 ,r : e house
5cnerYatic de5ian
Robert
75
1a
y1,350.00
3 5chemat c oC51. n5
Pete
50
36
$1,500.00
5cherr• ir'ic review
50
6
X300.00
Pete
50
6
S- 300.00
- °vi5,r� pian G °r me t r,�
Robert
75
6450.60
Pete
50
18
:,200.00
meet to r,new r- -r5eci citnom
Robert
75
0
:450.00
Pete
50
6
300.00
2/24/99
budaet:
TOTALS
126
$7,650.00
4007 SHERIDAN AVENGE SOOTS MINNEAPOLIS, MINNESOTA 55410 VOICE: 612/927.5913 FAX: 612/927.7301 E-MAIL: CALL
umij
r �%3ic flames war R
i Character dad �ajC
FRIDLEY
INFILL HOUSE CONSTRUCTION DRAWINGS ADDENDUM
date
task
name
$/hr
hr5
3
workinM drawin 5
Robert
75
24
$1,800.00
interior watercolor per5pecrin
Fete
50
80
$4,000.00
exterior watercolor er5 ective
review bids
Robert
75
6
$450.00
Fete
50
6
$300.00
hone time during construction
Robert
75
6
$450.00
Pete
50
6
$300.00
2/24/99
budget:
TOTAL51
1281
$7,300.00
4007 SHERIDAN AVENUE SOUTH MINNEAPOLIS, MINNESOTA 55410 VOICE: 612/927.5913 FAX: 612/927.7301 E -MAIL: CALL
4E
DATE: February 25, 1999
MEMORANDUM
HOUSING
REDEVELOPMENT
AUTHORITY
TO: William Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Proposal to Prepare Federal Funding Application for TH 65 Improvements
The recently completed traffic analysis for the proposed Medtronic project indicates that
construction of a third northbound and southbound lane for TH 65 north of 1 -694 would
improve the capacity at the Lake Pointe Drive/TH 65/ Central Avenue intersection.
When 800,000 square feet of development occurs on the property, the level of service
of the intersection drops to level of service F. This level of development may occur as
soon as 2004 since Medtronic's first phase is proposed at 448,000 square feet.
Federal funding is available to pay for 80% of the construction costs, which may range
from $4 to $4.5 million. The deadline for submission of these applications is May, 1999.
In order to submit a timely application, it is necessary to retain a consultant to complete
the application.
Benshoof & Associates prepared the previous ISTEA application for the HRA for the
1998 -1999 TH 65 intersection improvement project. Benshoof has submitted a
proposal to complete the proposed federal funding application for an amount not to
exceed $11,200.00. Given the size and nature of the project, construction would .
probably not begin until fall of the year 2000 or the year 2001 depending on completion
of plans and the federal funding requirements.
In the meantime, City staff has been working with Senator Novak's office to prepare a
funding request to the State Legislature to fund the 20% local match that is required by
the federal program. This amount equates to about $2.3 million and will include other
public improvement costs to serve the Medtronic project. A bill is now being drafted
and will be considered during this legislative session. Staff has also arranged to hire
Bonnie Balach to work on behalf of the City to shepherd the bill through the Legislature.
5
Recommendation
Staff recommends the HRA authorize the Executive Director to execute the contract
with Benshoof & Associates, Inc., for an amount not to exceed $11,200.00.
BD:Is
M -99-48
5A
°FEB -26 -1999 10:01 BENSHOOF 8 ASSOC. 612 238 1671 P.02iO3
BENSHOOF & ASSOCIATES, INC.
TRANSPORTATION ENGINEERS AND PLANNERS
10417 EXCELSIOR BOULEVARD, SUITE TWO / HOMNS, MN 55W/ (612) 239-1667/ FAX (612) 239.1071
February 26, 1999
Ms. Barbara Dacy
Community Development Director
City of Fridley
5431 University Avenue Northeast
Fridley, MN 55432
RE: Proposal to Assist in Preparing TEA 21 Funding Application for T.H 65
Improvements North of West Moore Lake Drive
Dear Barbara:
In response to your request, this letter is to present our proposal to assist in submitting a
TEA 21 funding application to construct a third northbound lane and a third southbound
lane for T.H 65 north of West Moore Lake Drive. The funding application will be a
follow-up to the project solicitation expected from the Metropolitan Council in May,
1999. Based on our extensive work in this area, we believe that this project is a strong
candidate to receive funding under the Congestion Mitigation/Air Quality Program
(CMAQ) or the Surface Transportation Program (STP). Based on our experience with
other funding applications, we believe that in order to strengthen the potential success for
this application, it is important to obtain broad based support from other agencies that
have an interest in this project, including: M MOT, Anoka County, and Metro Transit.
We will place major importance on gaining support from these agencies for the resultant
funding application for this project.
When I spoke with Greg Felt at Mn/DOT about this project, the idea of addressing the
improvement of water quality for Moore Lake was discussed. A possible improvement
that could be tied to this project is the reduction in the amount of salt and other road
contaminants that go directly into the lake. We feel this will be important item to
quantify for the application. To that end, a civil engineering consulting firm, as directed
by the City, is expected to provide some review of highway drainage options.
The major work tasks that we will perform to complete this funding application are:
1) Establish project framework This involves follow - through with City staff
and staff from other involved agencies to establish a basic plan for completing
the funding application. This step will include our attendance at the March 5,
1999, informational meeting put on by the Metropolitan Council. This basic
plan will include an outline for the resultant application, identification of
information collection needs, and allocation of responsibilities for obtaining
information.
FEB -26 -1999 10:01 BENSHOOF & ASSOC. 612 238 1671 P.03/_03
Ms. Barbara Dacy -2- February 26, 1999
M
2) Obtain pertinent background information. This task is to obtain all
information needed to determine the improvements that will be addressed in
the application, to complete all analyses, and to respond to the points in the
application.
3) Identify the proposed project improvements and the cost estimates. This
will include roadway, traffic control, transit, and drainage elements. For
budgeting purpose, it is assumed that roadway construction cost estimates will
be developed by others.
4) Analyze the implications of the proposed project improvements. This is to
complete all analyses needed for the application, including: capacity, safety,
air quality, and water quality.
S) Prepare draft funding application. A complete draft of the funding
application will be prepared and reviewed with City staff.
6) Submit funding application to the Metropolitan Council. After making
appropriate revisions to respond to comments form City staff, the funding
application will be submitted.
From a scheduling standpoint, we will complete this work in an expeditious manner in
order to submit the completed application to the Metropolitan Council by the deadline
listed in the project solicitation. Our costs for completing this work will be invoiced on
an hourly rate basis using our standard hourly rate, with direct expenses billed at cost.
The total not to exceed cost for this work, including direct expenses and air quality
analyses performed by David Braslau Associates, is $11,200. We will coordinate closely
with you to assure that our work is responsive to the City's particular needs and is
completed at minimal cost. We are willing to work with you and adjust our work scope if
you feel the need to do so.
If these arrangements are acceptable, please sign below and return one copy to me. We
look forward to our joint follow-through and to accomplishing this work to the City's full
satisfaction.
Sincerely,
BENSHOOF & ASSOCIATES, INC.
Edward F. Terhaar
CITY OF FRIDLEY HOUSING
AND REDEVELOPMENT
AUTHORITY
Name Date
5C TOTAL P.03
d
DATE: February 26, 1999
MEMORANDUM
HOUSING
REDEVELOPMENT
AUTHORITY
TO: William W. Bums, Executive Director
FROM: Barbara Dacy, Community Development Director
SUBJECT: Medtronic Update
AUAR
The final draft of the AUAR and Mitigation plan is now being prepared by staff for
distribution to the required reviewing agencies by March 17, 1999. It is anticipated that
the Council will review and approve the document at its April 12, 1999, meeting.
MPCA has reviewed the City's Indirect Source permit application and has
recommended approval. Linda Fisher is submitting additional information based on the
master plan concept submitted by Medtronic.
Planning Applications
Medtronic has submitted five land use planning applications for review by the Planning
Commission and City Council. The applications include a preliminary plat, special use
permit.for 9 foot wide parking spaces, a zoning text amendment to create parking
standards for parking ramp structures, a street vacation to vacate Carrie Lane and a
portion of Quincy Street and Jackson Street, and finally the S -2 master plan /project
plan approval. The master plan will be reviewed by the Housing and Redevelopment
Authority at its April 8, 1999, meeting. The Planning Commission will review these
applications at its April 7, 1999, meeting, with final approval by the City Council on April
26, 1999.
A second neighborhood meeting is scheduled for Wednesday, March 3, 1999,
regarding the status of Quincy and Jackson Street, as a result of realigning Bridgewater
Drive. One of the seven property owners at this point has indicated that they do not
want to sell. Carrie Lane cannot be reconstructed if this house is not purchased. The
neighborhood meeting will help to identify the level of support (or no support) for this
option.
�L
Development Agreement
Jim Casserly's office is revising the draft development agreement based on the
discussions regarding extending the tax increment financing district. As a result of
several meetings with Medtronic, the City Council and Chairperson Commers agreed
with the concept to propose a bill to the legislature which would extend the TIF district
to the year 2025, with the understanding that 200,000 square feet of development
would be placed on the tax roles in the year 2012. Medtronic would obtain 80 percent
of the generated increment and the Authority would obtain 20 percent. An update on
this issue will be given on Thursday evening.
TIF Legislation
Medtronic is spearheading the effort to request the legislature to pass a bill which would
extend the TIF district to the year 2025, and also ask relief from the fiscal disparities
requirements and the local contribution which cities must make when TIF districts are
created. The local contribution for a redevelopment district is 5 percent of the annual
tax increment.
Public Improvement Legislation
The City Manager has met with Senator Novak regarding a prepared bill to request up
to 2.3 million dollars in funding for the "local match" for adding a north and south bound
lane to Trunk Highway 65 and to assist the City with the other required public
improvements for the project. The other improvements include installing a larger sewer
line from University Avenue to Vh Street, and also creating a free right turn at 570'
Avenue going north bound on University Avenue. The bill is now being drafted. Bonnie
Balach was retained on an hourly basis to assist the City in obtaining approval by the
legislature.
Summary
Another verbal update will be provided to the Authority on Thursday evening.
B D \jt
Enclosure
M -99 -54
DATE: February 25, 1999
MEMORANDUM
HOUSING
AND
REDEVELOPMENT
AUTHORITY
TO: William W. Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
Grant Femelius, Housing Coordinator
SUBJECT: Consider Transfer of Property at 8184 East River Rd. from Anoka
County to Al Kellner
Anoka County Highway Department officials contacted staff to inquire about our
willingness to assist them in the transfer of excess right -of -way land at the above
address to an adjoining property owner.
The County is prohibited by State law from directly selling excess right -of -way
land private parties. They can, however, convey the land to a public body which
in turn can act as the intermediary to re- convey the private party. The goal is
return the land to the tax rolls. In 1996, the HRA and County participated in a
similar effort on a parcel of land at 6755 East River Rd.
The property in question is located at 8184 East River Rd. (03- 30 -24 -24 -0135)
and was approximately 5,479 square feet in size. The County needed 1,238
square feet for their road project and eventually bought out the owner. The
acquisition and demolition are now complete. The adjoining property owner at
8182 East River Rd. is interested in acquiring the balance of the property at 8184
East River Rd. He has negotiated a purchase price of $4,000.
The role for the HRA would be to pay $4,000 for the land and then sell it to Mr.
Kellner for the same price, plus any closing and legal costs. A public hearing by
the HRA would be required prior to sale to Kellner. Funds would be collected
from Kellner upfront before proceeding any further.
7
Unless otherwise directed staff will initiate the conveyance process from Anoka
County. A public hearing will be the next step and would likely occur at the May
meeting.
Enclosure
M -99 -53
DRAFT: February 26, 1999
CONTRACT
FOR
PRIVATE REDEVELOPMENT
By and Between
THE HOUSING AND REDEVELOPMENT AUTHORITY
In and For
THE CITY OF FRIDLEY, MINNESOTA
And
SHAMROCK INVESTMENTS III, LLC
This Document Was Drafted By:
KRASS MONROE, P.A.
1100 Southpoint Office Center
1650 West 82nd Street
Bloomington, MN 55431 -1447
(612) 885 -5999
L
CONTRACT FOR PRIVATE REDEVELOPMENT
THIS AGREEMENT, made on or as of the day of , 1999 by and
between the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota (the
"Authority "), a political subdivision of the State of Minnesota organized under the Constitution
and laws of the State of Minnesota and Shamrock Investments III, LLC, a Minnesota limited
liability company organized under the laws of the state of Minnesota (the "Redeveloper "),
WITNESSETH:
WHEREAS, the Board of Commissioners (the "Board ") of the Authority has determined
that there is a need for development and redevelopment within the corporate limits of the City to
provide employment opportunities, to provide adequate housing in the City, including low and
moderate income housing and housing for the elderly, to improve the tax base and to improve the
general economy of the City and the State of Minnesota;
WHEREAS, in furtherance of these objectives, the Authority has adopted, pursuant to
Minnesota Statutes, Sections 469.001 et §gq. (the "Act "), a development program known as the
Modified Redevelopment Plan (the "Redevelopment Plan") and established Redevelopment
Project No. 1 (the "Project Area ") in the City to encourage and provide maximum opportunity
for private development and redevelopment of certain property in the City which is not now in
its highest and best use;
WHEREAS, the Redeveloper has entered into a purchase agreement to acquire from Onan
Corporation a parcel of property located east of Old Central Avenue between 69th Avenue
Northeast and 73`d Avenue Northeast in the City of Fridley, which property was formerly a United
States Environmental Protection Agency "Superfund" site commonly referred to as the "Onan
Site", upon which property the Redeveloper intends to construct and operate a 400,000 square
foot warehouse during 1999;
WHEREAS, the Redeveloper has entered into an agreement with Real Estate Recycling,
LLC to obtain and implement a Response Action Plan ("RAP ") in accordance with the
requirements of the Voluntary Investigation & Cleanup (TIC") program of the Minnesota
Pollution Control Agency ( "MPCA ") Site Response Section, Groundwater and Solid Waste
Division, for delisting the Onan Site from MPCA's Permanent List of Priorities and for the
remediation and development of that portion of the Onan Site upon which Redeveloper intends
to construct the warehouse;
WHEREAS, because prior grant applications made to the Minnesota Department of Trade
and Economic Department's Contamination Cleanup Grant Program ( "DTED ") and the
Metropolitan Council's Tax Base Revitalization Account ("Met Council") by the City of Fridley
for cleanup funds to assist in the cleanup of the Onan Site have not been approved and because
future grant applications, even if promptly approved, will not provide funds available for use by
Redeveloper during the 1999 construction season, the Authority has agreed to make a grant to
Redeveloper of funds to be used for Public Improvements (as defined herein) and to finance the
cost of Site Improvements (as defined herein);
WHEREAS, neither the Authority nor the Redeveloper are admitting by this Agreement
that Redeveloper is a responsible party as that term is defined in the Minnesota Environmental
Response and Liability Act ("MERLA ").
WHEREAS, major objectives in establishing the Project Area are to:
1. Promote and secure the prompt redevelopment of certain property in the Project
Area, which property is not now in its highest and best use in a manner consistent with the City's
Comprehensive Plan and with a minimum adverse impact on the environment, and thereby
promote and secure the redevelopment of other land in the City.
2. Provide additional employment opportunities within the Project Area and the City
for residents of the City and the surrounding area, thereby improving living standards, reducing
unemployment and the loss of skilled and unskilled labor and other human resources in the City.
3. Prevent the deterioration and secure the increase of commercial/industrial property
subject to taxation by the City, the Independent School Districts, Anoka County, and the other
taxing jurisdictions in order to better enable such entities to pay for governmental services and
programs required to be provided by them.
4. Provide for the financing and construction for public improvements in and
adjacent to the Project Area necessary for the orderly and beneficial redevelopment of the Project
Area and adjacent areas of the City.
5. Promote the concentration of new desirable industrial, office, and other
appropriate redevelopment in the Project Area so as to maintain the area in a manner, compatible
with its accessibility and prominence in the City.
6. Encourage local business expansion, improvement, and redevelopment, whenever
possible.
7. Create a desirable and unique character within the Project Area through quality
land use alternatives and design quality in new or remodeled buildings.
Oa
8. Encourage and provide maximum opportunity for private redevelopment of
existing areas and structures which are compatible with the Project Area; and
WHEREAS, in order to achieve the objectives of the Authority and City in creating the
Project Area the Authority is prepared to award the Grant Funds to Redeveloper for the costs of
Public Improvements and assist the Redeveloper with the costs of the Site Improvements in
accordance with this Agreement; and
WHEREAS, the Authority believes that the development and redevelopment of the
Redevelopment Property pursuant to this Agreement, and fulfillment generally of the terms of this
Agreement, are in the vital and best interests of the Authority and the health, safety, morals and
welfare of its residents, and in accord with the public purposes and provisions of applicable
federal, state and local laws under which the development and redevelopment are being
undertaken and assisted;
NOW, THEREFORE, in consideration of the premises and the mutual obligations of the
parties hereto, each of them does hereby covenant and agree with the other as follows:
3
ARTICLE I
Definitions
Section 1.1 Definitions. In this Agreement, unless a different meaning clearly appears
from the context:
"Act" means Minnesota Statutes Section 469.001 et M.
"Agreement" means this Agreement, as the same may be from time to time modified,
amended, or supplemented.
"Assessment Agreement" means an agreement, in the form of the agreement contained
in Schedule E attached to and made a part of this Agreement, among the Redeveloper, the
Authority, and the city assessor of the City, entered into pursuant to Section 10.2 of this
Agreement.
"Assessor's Minimum Market Value" means the agreed minimum market value of the
Redevelopment Project for calculation of real property taxes as determined by the city assessor
for the City pursuant to the Assessment Agreement.
"Authority" means the Housing and Redevelopment Authority in and for the City of
Fridley, Minnesota.
"Available Tax Increment" means 60% of the Tax Increment.
"Certificate of Completion" means the certification, in the form of the certificate
contained in Schedule C attached to and made a part of this Agreement, provided to the
Redeveloper, pursuant to Section 4.3 of this Agreement.
"City" means the City of Fridley, Minnesota.
"Construction Plans" means the plans, specifications, drawings and related documents on
the construction work to be performed by the Redeveloper on the Redevelopment Property which
(a) shall be as detailed as the plans, specifications, drawings and related documents which are
submitted to the building inspector or the City, and (b) shall include at least the following for
each building: (1) site plan; (2) foundation plan; (3) basement plans; (4) floor plan for each floor,
(5) cross sections of each (length and width); (6) elevations (all sides, except as to a side of
existing structure where no construction is to take place); (7) facade and landscape plan; and (8)
such other plans of supplements to the foregoing plans as the City may reasonably request.
4
"Council" means the Council of the City.
"County" means the County of Anoka, Minnesota
"DIED" means the Minnesota Department of Trade and Economic Development.
"Escrowed Funds" means the Grant from the Authority plus $84,377.00 from the
Redeveloper.
"Grant" means the sum of $871,763.00 to be provided by the Authority to the
Redeveloper in accordance with Article III to pay costs of the Public Improvements.
"Guarantee" means the guarantee of performance of this Agreement, which is attached
hereto as Schedule E.
"Hazardous Substances" shall have the meaning given to this term in the regulations
promulgated under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, and/or in
any other federal laws, statutes, rules or regulations or in the Minnesota Environmental Response
and Liability Act and/or in any other State laws, statutes, rules or regulations, and specifically
including petroleum and related hydrocarbons and their by- products, asbestos, and
polychlorinated biphenyls.
"Metropolitan Council" means the Metropolitan Council defined in Minnesota Statutes
Section 473.123 its successors or assigns.
"Minimum Improvements" means the construction of a warehouse building of
approximately 400,000 square feet on the Redevelopment Property with a total project cost of
approximately $10,677,000.00.
"Minnesota Environmental Policy Act" means the statutes located at Minnesota Statutes,
Sections 116D.01 et sM., as amended.
"Minnesota Environmental Rights Act" means the statutes located at Minnesota Statutes,
Sections 116B.01 et seq., as amended.
"UTCA" means the Minnesota Pollution Control Agency.
"National Environmental Policy Act" means the federal law located at 42 U.S.C. Sub.
Sect. 4331 et M., as amended.
5
"Project Area.°' means Redevelopment Project No. 1, as amended, established in
accordance with the Act.
"Public Improvements" means those improvements described on Schedule B as qualified
improvements of the Redevelopment Property.
"Redeveloper" means Shamrock Investments III, LLC, a limited liability company
organized under the laws of the State of Minnesota.
"Redevelopment plan" means the modified redevelopment plan adopted by the Authority for
its Redevelopment Project No. 1, as amended.
"Redevelopment Project" means the Redevelopment Property and the Minimum
Improvements.
"Redevelopment Property" means the real property described in Schedule A of this
Agreement.
"Revenue Note" means the Limited Revenue Tax Increment Note attached as Exhibit D.
The Revenue Note ,shall be payable from Available Tax Increment.
"Site Improvements" means those improvements described on Schedule B as qualified
improvements of the Redevelopment Property.
"State" means the State of Minnesota.
"Tax Increment" means only that portion of the real estate taxes paid with respect to the
Redevelopment Project which is remitted to the City as tax increment pursuant to the Tax
Increment Act.
"Tax Increment Act" means the Tax Increment Financing Act, Minnesota Statutes_
Sections 469.174 to 469.179, as amended and as it may be amended.
"Tax Increment District" means Tax Increment Financing District No. 9 created by the
Council within the Project Area through its adoption of a tax increment financing plan pursuant
to the Tax Increment Act.
"Tax Increment Plan" means the tax increment financing plan adopted by the Authority
in connection with the creation of the Tax Increment District.
C.
"Termination Date" means the date on which the Revenue Note is paid in full or this
Agreement is terminated in accordance with its terms.
"Unavoidable Delays" means delays which are the result of strikes, unforeseeable and
unavoidable casualties to the Minimum Improvements, the Redevelopment Property or the
equipment used to construct the Minimum Improvements, delays which are the result of
governmental actions, delays which are the result of judicial action commenced by third parties,
citizen opposition or action affecting this Agreement or adverse weather conditions or acts of
God.
7
ARTICLE II
Representations and Warranties
Section 2.1 Representations by the Authority. The Authority makes the following
representations as the basis for the undertaking on its part herein contained:
(a) The Authority is a public body duly organized and existing under the laws of the
State. Under the provisions of the Act, the Authority has the power to enter into this Agreement
and carry out its obligations hereunder.
(b) The Authority has created, adopted and approved the Tax Increment District
pursuant to the Tax Increment Act.
(c) The Authority has approved the Redevelopment Plan in accordance with the terms
of the Act.
(d) The Authority will provide the Grant Funds to the Redeveloper to pay the costs of
Public Improvements in accordance with the terms of this Agreement.
(e) The Authority will reimburse the Redeveloper for the Site Improvements in
accordance with the terms of this Agreement.
(f) The Authority will cooperate with the Redeveloper with respect to any litigation
commenced by third parties in connection with this Agreement.
(g) The Authority hereby agrees to file additional requests for grants from the
Minnesota Department of Trade and Economic Development's Contamination Cleanup Funds
and from the Metropolitan Council's Tax Base Revitalization Account (the "Grant
Applications ").
Section 2.2 Representations and Warranties by the Redeveloper. The Redeveloper
represents and warrants that:
(a) The Redeveloper will construct, operate and maintain the Minimum
Improvements in accordance with the terms of this Agreement, the Redevelopment Plan and all
local, state and federal laws and regulations (including, but not limited to, environmental, zoning,
building code and public health laws and regulations).
(b) The Minimum Improvements will be an allowed use under the zoning ordinance of
the City at the time the Redeveloper requests a building permit for the Minimum Improvements.
8
(c) As of the date of execution of this Agreement, the Redeveloper has received no
notice or communication from any federal official that the activities of the Redeveloper or the
Authority in the Project Area may be or will be in violation of any environmental law or
regulation.
As of the date of execution of this Agreement, the Redeveloper is aware of no facts, the
existence of which would cause it to be in violation of any federal environmental law, regulation
or review procedure or which would give any person a valid claim under the Minnesota
Environmental Rights Act.
(d) The Redeveloper will use its best efforts to obtain, in a timely manner, all required
permits, licenses and approvals, and will meet, in a timely manner, all requirements of all applicable
local, state and federal laws and regulations which must be obtained or met before the Minimum
Improvements may be lawfully constructed.
(e) The Redeveloper is a limited liability company organized under the laws of the
State of Minnesota.
(f) The Redeveloper shall cooperate with and use its best efforts in assisting the
Authority in making the Grant applications described in 2.1(g) and to secure the maximum
allowable grants.
(g) The financing arrangements which the Redeveloper has obtained or will obtain,
to finance acquisition or construction of the Minimum Improvements, together with the Grant and
the financing provided by the Authority pursuant to this Agreement, will be sufficient to enable
the Redeveloper to successfully complete the Minimum Improvements as contemplated in this
Agreement.
(h) The construction of the Minimum Improvements, in the opinion of the
Redeveloper, would not reasonably be expected to occur solely through private investment within
the reasonably foreseeable fidure without the assistance provided by the Authority pursuant to this
Agreement.
(i) The Redeveloper acknowledges that the Authority shall be listed as a party on the
"No Association" letter to be issued by the MPCA and that the Authority shall receive a copy of
the Certificate of Completion when it is issued by the MPCA.
0) The Authority has provided to the Redeveloper, and the Redeveloper acknowledges
receipt of, a copy of Laws of Minnesota for 1995, Chapter 224, Section 58, to be codified in
Minnesota Statutes, Section 1161991, and entitled "Public Assistance to Business; Wage and Job
Requirements," requiring that within 2 years of receiving the assistance provided pursuant to this
Agreement, which for this purpose shall be deemed to be the 2 year period beginning on the date the
0
Certificate of Completion is issued in accordance with Section 4.3, the Redeveloper shall comply with
certain jobs and other obligations stated in the above - mentioned statute. The Redeveloper hereby
covenants to comply with said obligations, and the Parties agree that said goal level shall be the
creation of jobs within the applicable 2 year period. The Redeveloper acknowledges and
agrees that, as required by this statutory provision, failure to meet said goals will result in an Event
of Default hereunder and in an obligation of the Redeveloper to repay all of the assistance provided
pursuant to this Agreement. The Redeveloper further agrees that said jobs shall have an hourly wage
of at least $ per hour. This subparagraph shall not be construed as imposing on the
Redeveloper any obligation beyond the scope and purpose of the above - mentioned statute to maintain
or provide minimum employment and wage levels. The Redeveloper further agrees to provide to the
Authority in a timely manner, or to the State of Minnesota, as may be applicable, any information that
is necessary to comply with the above - mentioned statute. If 1M iinnesota Statute 1165.991 is repealed
with retrospective application then the requirements of this paragraph shall terminate.
(k) For the construction of the Minimum Improvements the Redeveloper will pay
wages in accordance with the prevailing wage rate as that term is defined in Minnesota Statutes_
Section 177.42, Subdivision 6 and in the City Resolution No. 25 -1990. The City's Public Works
Department shall be responsible for monitoring Redeveloper's compliance of this requirement.
(1) The Redeveloper shall not allow any use or occupancy of the Redevelopment
Property or Minimum Improvements by a "Sexually Orientated Business" as defined in
Ordinance No. 965 of the City's Code.
10
ARTICLE III
Undertakings of Authority and Redeveloper
Section 3.1 Grant to Redeveloper for Public Improvements. As consideration for the
execution of this Agreement, the construction of the Public Improvements, the Site Improvements
and the Minimum Improvements by the Redeveloper and subject to the further provisions of this
Agreement, the Authority agrees to provide the Grant to the Redeveloper for the Public
Improvements on the Settlement Date (the "Settlement Date') which shall be April 1, 1999, or
such other date as mutually agreed to by the parties if all of the conditions precedent to Settlement
provided in Section 3.2 have been satisfied or waived by the Authority. However, the Settlement
Date shall be no later than 150 days after the daze of execution of the this Agreement. If the
Settlement has not occurred by that date then this Agreement shall automatically terminate and
become null and void and both parties shall be released from any fiuther obligation hereunder.
The Redeveloper shall construct and pay for all the Public Improvements and shall be reimbursed
as provided for in Section 3.3.
Section 3.2 Conditions Precedent to Authority Grant. The Authority's obligation to
provide the Grant in accordance with Section 3.1 shall be contingent upon the satisfaction by the
Redeveloper of the following conditions precedent on or before the Settlement Date:
(a) No Event of Default under Article V has occurred and has not been cured.
(b) Redeveloper shall have placed Redeveloper's share of the costs of the Public
Improvements which are estimated to be $84,377.00 into the escrow account
established pursuant to Section 3.3.
(c) Redeveloper shall have obtained written approval of the Remedial Action Plan
( "RAP ") by the MPCA and provided a copy of such approval to the Authority.
(d) The Security Fund, as defined in Section 3.7, shall have been established.
(e) Redeveloper shall have obtained a title commitment reasonably acceptable to
Authority evidencing marketable title to the Redevelopment Property in
Redeveloper's name.
(f) Redeveloper shall have provided to Authority evidence reasonably acceptable to the
Authority that Redeveloper can finance the Nliinimum Improvements, the Site
Improvements and the acquisition of the Redevelopment Property.
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(g) Authority shall have received an executed copy of the sublease for a portion of the
Minimum Improvements between Murphy Warehouse Company and the Onan
Company.
(h) Redeveloper shall have obtained all building permits and approvals required for the
construction of the Minimum Improvements.
(i) Redeveloper shall have obtained from Onan Company and Murphy Warehouse
Company, a release of all claims, including contribution claims that could be asserted
against the Authority related to site remediation and contamination cleanup activities
by either Onan Company and/or Murphy Warehouse Company. The form of such
release shall be subject to the Authority's approval.
Section 3.3 Escrow Agreement. On the Settlement Date the Authority shall deposit the
Grant and the Redeveloper shall deposit $84,377.00 less adjustments as provided for in Section 3.7
(the "Escrowed Funds ") into an escrow account to be established for the purpose of payment of the
costs of the Public Improvements. The Escrowed Funds shall be used for the completion of the
Public Improvements. The terms and format of the Escrow Agreement shall be established at least
ten (10) days before the Settlement Date and the Escrow Agreement shall provide, in part, that when
it has been determined to the reasonable satisfaction of both the Redeveloper and the Authority that
the costs of the Public Improvements shall not exceed the amount of the Escrowed Funds, then the
Authority shall deposit with the Escrow Agent an amount not to exceed the amount of the Grant, less
adjustments as provided for in Section 3.7.
In the event the estimated costs of the Public Improvements exceeds the amount of the
Escrowed Funds and the Redeveloper determines that it will not pay any costs in excess of the
Escrowed Funds then the Redeveloper shall promptly notify the Authority that the Redeveloper is
not willing to proceed with the Redevelopment Project and upon giving the Authority such notice,
this Agreement shall automatically terminate and become null and void and both parties shall be
released from any further obligations thereunder.
The release of the Escrowed Funds shall be as follows: 25% of the balance, not to exceed
the actual costs, at the time all the footings for the Minimum Improvements are installed as certified
by the Redevelopment Project architect; the balance, not to exceed the actual costs, at the time the
Minimum Improvements are enclosed as certified by the Redevelopment Project architect.
Any portion of the Escrowed Funds not needed to pay the costs of the Public Improvements
shall be returned to the Redeveloper and the Authority, in the same proportion as their deposit into
the Escrow.
In addition to the above - stated conditions precedent to disbursement of the Escrowed Funds,
the Escrow Agreement shall also provide that the Redeveloper shall at no cost to the Authority
provide the Authority with copies of periodic construction progress reports during the period that
any remediation activities or removal of contaminated soils or materials is being performed, copies
12
of all written communications with MPCA (including test results) and any other governmental
agencies and copies of any other materials requested by Redeveloper in order to confirm that
Redeveloper is satisfactorily performing the RAP. If the Redeveloper does not fully perform the RAP
or if the MPCA commences any action to compel Redeveloper to comply with the RAP, the
Authority may withhold further payments from the Escrowed Funds until the MPCA has notified the
Authority that the Redeveloper is in compliance with and performing its responsibilities under the
RAP.
Section 3.4 Reimbursement for Site Improvements.
As consideration for the execution of this Agreement, the construction of Public
Improvements, the Site Improvements and the Minimum Improvements and upon the completion of
the construction of the Minimum Improvements by the Redeveloper and the issuance of the
Certificate of Completion by the Authority to the Redeveloper pursuant to Section 4.3 of this
Agreement, the Authority agrees to reimburse the Redeveloper for the cost of the Site Improvements
the principal amount of the Revenue Note which shall be the lesser of. (i) the cost of Site
Improvements or (ii) One Million Two Hundred Thousand and No /100 Dollars ($1,200,000.00).
In the event that any grant funds are subsequently awarded to the City by the Metropolitan
Council or DTED in response to the City's request for contaminated property clean-up funds, the
Authority shall apply an amount equal to one -half (1/2) of the funds awarded to the City by the
Metropolitan Council and DTED as a prepayment to the Revenue Note. In the event of such
prepayment, the Revenue Note principal shall be reduced by the prepayment amount with any accrued
interest, current interest and remaining principal balance to be paid for in accordance with the terms
of the Revenue Note and this Agreement.
The Authority may receive and may retain, without claim for any portion thereof by the
Redeveloper, one -half (1/2) of the grant funds awarded to the City by the Metropolitan Council or
DTED.
Section 3.5 Limitations on Undertaking of the Citv.
(a) The Authority shall have no obligation to the Redeveloper under this Agreement to
provide the Revenue Note principal to the Redeveloper for the Site Improvements if the Authority,
at the time the reimbursement is to be made is entitled under Section 5.2 to exercise any of the
remedies set forth therein as a result of an Event of Default which has not been cured. If the
Authority has not exercised its remedies under Section 5.2(b) and if the reimbursement is withheld
due to an Event of Default which is later cured, such reimbursement shall be made after such Event
of Default has been cured.
Section 3.6 Conditions Precedent to Delivery of Revenue Note. The Authority's obligation
to reimburse the Redeveloper for the costs of the Site Improvements in accordance with Section 3.5
by delivery of the Revenue Note shall be contingent upon the satisfaction by the Redeveloper of the
following conditions precedent:
13
(a) The Redeveloper shall be in material compliance with all of the terms and provisions
of this Agreement.
(b) A Certificate of Completion shall have been issued in accordance with Section 4.3.
(c) That the Redeveloper shall be in compliance with all ordinances of the City.
(d) The execution of the Assessment Agreement attached as Schedule E.
Section 3.7 Security Fund. The Redeveloper shall deposit the sum of $200,000 and the
Authority shall deposit the sum of $100,000 into a security fund (the "Security Fund ") within 45 days
of the execution of this Agreement. The Security Fund shall be available for the payment of the
Public Improvements in the event that the Redeveloper determines that it will not proceed (the
Determination Not To Proceed ") with the Redevelopment Project as a result of the estimated costs
of the Public Improvements being greater than the Escrowed Funds as provided for in Section 3.3.
The Redeveloper shall make the Determination Not to Proceed within 120 days of the date of the
execution of this Agreement. The Security Fund shall be held by the same party designated by the
Authority and Redeveloper to hold the Escrowed Funds described in Section 3.3. On the date of the
Determination Not To Proceed, any amounts remaining in the Security Fund shall be returned to the
Redeveloper and the Authority in the same proportion as their deposit into the Security Fund. On
the Settlement Date, as defined in Section 3. 1, (i) any amount payable to the Authority shall be
deposited in the Escrowed Funds and the Grant amount shall be reduced by $100,000; and (ii) any
amount payable to the Redeveloper up to $84,377, shall be deposited in the Escrowed Funds.
Disbursements for Public Improvements from the Security Fund shall follow the same procedures as
disbursements of the Escrowed Funds.
14
ARTICLE N
Construction of Minimum Improvements
Section 4.1 Construction of Minimum Improvements. The Redeveloper agrees that it will
construct the Minimum Improvements on the Redevelopment Property in accordance with the
Construction Plans approved by the City.
Section 4.2 Completion of Construction. Subject to Unavoidable Delays, the Redeveloper
shall achieve substantial completion of the construction of the Minimum Improvements by
December 31, 1999. All work with respect to the Minimum Improvements to be constructed or
provided by the Redeveloper on the Redevelopment Property shall be in conformity with the
Construction Plans.
The Redeveloper agrees for itself, its successors and assigns, and every successor in
interest to the Redevelopment Property, or any part thereof, that the Redeveloper, and such
successors and assigns, shall diligently prosecute to completion the development of the
Redevelopment Property through the construction of the Minimum Improvements thereon, and
that such construction shall in any event be completed within the period specified in this Section
4.2 of this Agreement.
Section 4.3 Certificate of Completion.
(a) Promptly after substantial completion of the Minimum Improvements in
accordance with those provisions of the Agreement relating to the obligations of the Redeveloper
to construct the Minimum Improvements (including the date for completion thereof), the
Authority will furnish the Redeveloper with an appropriate instrument so certifying. Such
certification by the Authority shall be (and it shall be so provided in the certification itself) a
conclusive determination of satisfaction and termination of the agreements and covenants in the
Agreement with respect to the obligations of the Redeveloper, and its successors and assigns, to
construct the Minimum Improvements and the date for the completion thereof.
(b) If the Authority shall refuse or fail to provide any certification in accordance with
the provisions of this Section 4.3 of this Agreement, the Authority shall, within ten (10) days after
written request by the Redeveloper, provide the Redeveloper with a written statement, indicating
in adequate detail in what respects the Redeveloper has failed to complete the Minimum
Improvements in accordance with the provisions of the Agreement, or is otherwise in default, and
what measures or acts it will be necessary, in the opinion of the Authority, for the Redeveloper
to take or perform in order to obtain such certification.
[F:
(c) The construction of the Minimum Improvements shall be deemed to be
substantially completed when the Redeveloper has received an occupancy permit (or a temporary
occupancy certificate as provided by the City Ordinances) from the City's building inspector,
which permit shall not be unreasonably withheld.
ARTICLE V
Events of Default
Section 5.1 Events of Default Defined. The following shall be "Events of Default" under
this Agreement and the term "Event of Default" shall mean whenever it is used in this Agreement
any one or more of the following events:
(a) Failure by the Redeveloper to timely pay all ad valorem real property taxes
assessed with respect to the Redevelopment Property.
(b) Failure by the Redeveloper to complete the Minimum Improvements pursuant to
the terms, conditions and limitations of this Agreement.
(c) The holder of any Mortgage on the Redevelopment Property or any improvements
thereon, or any portion thereof, commences foreclosure proceedings as a result of any default
under the applicable Mortgage documents.
(d) Failure by the Redeveloper to substantially observe or perform any other covenant,
condition, obligation or agreement on its part to be observed or performed under this Agreement.
(e) If the Redeveloper shall
(A) file any petition in bankruptcy or for any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under the United
States Bankruptcy Act of 1978, as amended or under any similar federal or state law; or
(B) make an assignment for the benefit of its creditors; or
(C) admit in writing its inability to pay its debts generally as they become due;
or
(D) be adjudicated as bankrupt or insolvent; or if a petition or answer
proposing the adjudication of the Redeveloper, as bankrupt or its reorganization under any
present or future federal bankruptcy act or any similar federal or state law shall be filed
in any court and such petition or answer shall not be discharged or denied within ninety
(90) days after the filing thereof, or a receiver, trustee or liquidator of the Redeveloper,
or of the Minimum Improvements, or part thereof, shall be appointed in any proceeding
brought against the Redeveloper, and shall not be discharged within ninety (90) days after
17
such appointment, or if the Redeveloper shall consent to or acquiesce in such
appointment.
Section 5.2 Remedies on Default. Whenever any Event of Default referred to in
Section 5.1 occurs and is continuing, the Authority, as specified below, may take any one or more
of the following actions after providing thirty (30) days' written notice to the Redeveloper, but
only if the Event of Default has not been cured within said thirty (30) days:
(a) Suspend its performance under this Agreement until it receives assurances from
the Redeveloper, deemed adequate by the Authority, that the Redeveloper will cure its default and
continue its performance under this Agreement.
(b) Cancel and rescind the Agreement.
(c) Withhold the Certificate of Completion.
(d) Withhold payments on the Revenue Note.
Section 5.3 No Remedy Exclusive. No remedy herein conferred upon or reserved to the
Authority is intended to be exclusive of any other available remedy or remedies, but each and
every such remedy shall be cumulative and shall be in addition to every other remedy given under
this Agreement or now or hereafter existing at law or in equity or by statute. No delay or
omission to exercise any right or power accruing upon any default shall impair any such right or
power or shall be construed to be a waiver thereof, but any such right and power may be
exercised from time to time and as often as may be deemed expedient.
Section 5.4 No Implied Waiver. In the event any agreement contained in this Agreement
should be breached by any party and thereafter waived by any other party, such waiver shall be
limited to the particular breach so waived and shall not be deemed to waive any other concurrent,
previous or subsequent breach hereunder.
Section 5.5 Agreement to Pay Attorney's Fees and Expenses. Whenever any Event of
Default occurs and the Authority shall employ attorneys or incur other expenses for the collection
of payments due or to become due or for the enforcement or performance or observance of any
obligation or agreement on the part of the Redeveloper herein contained, the Redeveloper agrees
that it shall, on demand therefor, pay to the Authority the reasonable fees of such attorneys and
such other expenses so incurred by the Authority.
18
ARTTCLE VI
Tax Increment
Section 6.1 Tax Increment Certification. Pursuant to the Redevelopment Plan, the Tax
Increment Plan and this Agreement, the Authority hereby pledges and appropriates the Available
Tax Increment to the payment of the principal of and interest on the Revenue Note, said payment
to be made in accordance with the terms and provisions of the Revenue Note and this Agreement.
19
ARTICLE VII
Prohibitions Against Assignment and Transfer
Section 7.1 Renresentaxion as to Redevelopment. The Redeveloper represents and agrees
that its purchase of the Redevelopment Property, and its other undertakings pursuant to this
Agreement, are, and will be used, for the purpose of redevelopment of the Redevelopment
Property and not for speculation in land holding. The Redeveloper further recognizes that, in
view of (a) the importance of the redevelopment of the Redevelopment Property to the general
welfare of the Authority, and (b) the substantial financing that has been made available by the
Authority for the purpose of making such redevelopment possible the qualifications and identity
of the Redeveloper are of particular concern to the Authority. The Redeveloper further
recognizes that it is because of such qualifications and identity that the Authority is entering into
this Agreement with the Redeveloper, and, in so doing, is further willing to accept and rely on
the obligations of the Redeveloper for the faithful performance of all undertakings and covenants
hereby by it to be performed.
Section 7.2 Prohibition Against Transfer of Propertv and Assignment of Agreement.
Also, for the foregoing reasons the Redeveloper represents and agrees that prior to the issuance
of the Certificate of Completion as provided in Section 4.3, except for the purpose of obtaining
financing necessary to enable the Redeveloper to perform its obligations with respect to making
the Minimum Improvements under this Agreement, and any other purpose authorized by this
Agreement, the Redeveloper has not made or created and will not make or create or suffer to be
made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power,
or transfer in any other mode or form of or with respect to this Agreement or the Redevelopment
Property or any part thereof or any interest therein, or any contract or agreement to do any of the
same, without the prior written approval of the Authority which shall not be unreasonably
withheld, unless the Redeveloper remains liable and bound by this Redevelopment Agreement
in which event the Authority's approval is not required. Any such transfer shall be subject to the
provisions of this Agreement Notwithstanding the foregoing, the Redeveloper may transfer the
Redevelopment Property to any corporation, partnership or entity controlling, controlled by or
under common control with the Redeveloper. '
N11
ARTICLE VIII
Additional Provisions
Section 8.1 Conflict of Interests. No member, official, or employee of the Authority shall
have any personal interest, direct or indirect, in the Agreement, nor shall any such member,
official or employee participate in any decision relating to the Agreement which affects his
personal interests or the interests of any corporation, partnership, or association in which he is,
directly or indirectly, interested.
Section 8.2 Restrictions on Use. The Redeveloper shall not discriminate upon the basis
of race, color, creed, sex or national origin in the sale, lease, or rental or in the use or occupancy
of the Redevelopment Property or any improvements erected or to be erected thereon, or any part
thereof.
Section 8.3 Titles of Articles and Sections. Any titles of the several parts, Articles and
Sections of the Agreement are inserted for convenience of reference only and shall be disregarded
in construing or interpreting any of its provisions.
Section 8.4 Notices and Demands. Except as otherwise expressly provided in this
Agreement, a notice, demand, or other communication under this Agreement by either party to
the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail,
postage prepaid, return receipt requested, transmitted by facsimile, delivered by a recognized
overnight courier or delivered personally; and
(a) in the case of the Redeveloper, is addressed to or delivered personally to the
mailing or delivery address the Redeveloper will, from time to time, furnish to the Authority. The
Redeveloper's current address is as follows:
Shamrock Investments III, LLC
701 241' Avenue Southeast
Minneapolis, MN 55414
Attn: Richard T. Murphy, Jr., Chief Manager
Fax Number: (612) 623 -9108
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(b) in the case of the Authority, is addressed to or delivered personally to:
Housing and Redevelopment Authority
in and for the City of Fridley
6431 University Avenue N.E.
Fridley, Minnesota 55432
Attention: Executive Director
Fax Number: 571 -1287
Section 8.5 Indemnification of Authority.
(1) The Redeveloper releases from and covenants and agrees that the Authority, the
City and its governing body members, officers, agents, including the independent contractors,
consultants and legal counsel, servants and employees thereof (hereinafter, for purposes of this
Section, collectively the "Indemnified Parties') shall not be liable for and agrees to indemnify and
hold harmless the Indemnified Parties against any loss or damage to property or any injury to or
death of any person occurring at or about or resulting from any defect in the Minimum
Improvements or the Redevelopment Property.
(2) Except for any willful misrepresentation or any willful or wanton misconduct or
negligence of the Indemnified Parties, the Redeveloper agrees to protect and defend the
Indemnified Parties, now and forever, and further agrees to hold the aforesaid harmless from any
claim, demand, suit, action or other proceeding whatsoever by any person or entity whatsoever
arising or purportedly arising from the actions or inactions of the Redeveloper (or of other
persons acting on its behalf or under its direction or control) under this Agreement, or the
acquisition, construction, installation, ownership, and operation of the Minimum Improvements
or the Redevelopment Property; provided, that this indemnification shall not apply to the
warranties made or obligations undertaken by the Authority in this Agreement.
(3) All covenants, stipulations, promises, agreements and obligations of the Authority
contained herein shall be deemed to be the covenants, stipulations, promises, agreements and
obligations of the Authority and not of any governing body member, officer, agent, servant or
employee of the Authority.
Section 8.6 Counterparts. This Agreement is executed in any number of counterparts,
each of which shall constitute one and the same instrument.
Section 8.7 Law Governing. This Agreement will be governed and construed in
accordance with the laws of the State.
22
full. Section 8.8 Expiration. This Agreement shall expire when the Revenue Note is paid in
Section 8.9 Provisions Surviving Rescission or Expiration. Sections 5.5 and 8.5 shall
survive any rescission, termination or expiration of this Agreement with respect to or arising out
of any event, occurrence or circumstance existing prior to the date thereof.
23
ARTICLE IX
Assessment Agreement
Section 9.1 Real Pro2gM Taxes. (a) Prior to the Termination Date, the Redeveloper shall
pay when due, prior to the attachment of penalty, all real property taxes payable with respect to
the Redevelopment Project.
(b) The Redeveloper agrees that prior to the Termination Date it will not take any of
the following actions to the extent that such actions would result in a reduction of the market
valuation of the Redevelopment Property below the amounts specified in Section 9.2: (i) seek
administrative review or judicial review of the applicability of any property tax statute determined
by any tax official to be applicable to the Redevelopment Property or raise the inapplicability of
any such property tax statute as a defense in any proceedings, including delinquent tax
proceedings; (ii) seek administrative review or judicial review of the constitutionality of any
property tax statute determined by any tax official to be applicable to the Redevelopment Property
or raise the unconstitutionality of any such property tax statute as a defense in any proceedings,
including delinquent tax proceedings; (iii) cause a reduction in the assessed market value of the
Redevelopment Property below the Assessor's Minimum Market Value, as provided in Section
9.2, through: (A) willful destruction of the Redevelopment Property or any part thereof, (B)
willful refusal to reconstruct damaged or destroyed property as required by Article IX of this
Agreement; (C) a request to the city assessor of the City or the county assessor of the County to
reduce the assessed market value of all or any portion of the Redevelopment Property, (D) a
petition to the board of equalization of the City or the board of equalization of the County to
reduce the assessed market value of all or any portion of the Redevelopment Property, (E) a
petition to the board of equalization of the State or the commissioner of revenue of the State to
reduce the assessed market value of all or any portion of the Redevelopment Property, (F) an
action in a District Court of the State or the Tax Court of the State pursuant to Minnesota
Statutes. Chapter 278, or any similar State or federal law, seeking a reduction in the assessed
market value of the Redevelopment Property, (G) an application to the commissioner of revenue
of the State requesting an abatement of real property taxes pursuant to Minnesota Statutes
Chapter 270, or any similar State or federal law; and (I) any other proceedings, whether
administrative, legal or equitable, with any administrative body within the City, the County, or
the State or with any court of the State or the federal government. The Redeveloper shall not
prior to the Termination Date, apply for a deferral of property tax on the Redevelopment Property
pursuant to Minnesota Statutes Section 469.181, or any similar law.
Section 9.2 Assessment A eement. The Redeveloper shall agree to, and with the
Authority shall execute, as a condition precedent to the Authority's obligation to deliver the
Revenue Note, an Assessment Agreement pursuant to the provisions of Minnesota Statutes.
24
Section 469.177, Subdivision 8, specifying the Assessor's Minimum Market Value for the
Redevelopment Project for calculation of real property taxes. The aggregate amount of the
Assessor's Minimum Market Value shall not be less than $10,677,000.00 by January 2, 2000.
The minimum market value set forth in an Assessment Agreement is herein referred to as the
"Assessor's Minimum Market Value." Nothing in an Assessment Agreement shall limit the
discretion of the assessor to assign a market value to the property in excess of such Assessor's
Minimum Market Value nor prohibit the Redeveloper from seeking through the exercise of legal
or administrative remedies a reduction in such market value for property tax purposes, provided
however, that the Redeveloper shall not seek a reduction of such market value below the
Assessor's Minimum Market Value in any year so long as the Assessment Agreement shall remain
in effect. The Assessment Agreement shall remain in effect until the Termination Date.
IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed
in its name and behalf and the Redeveloper has caused this Agreement to be duly executed as of
the date first above written.
25
Dated:
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF FRIDLEY, MINNESOTA
By
Its Chairman
And by
STATE OF MINNESOTA
) ss
COUNTY OF ANOKA
On this day of
Anoka County, personally appeared
Its Executive Director
1999 before me, a notary public within and for
and
to me personally known who by me duly sworn,
did say that they are the Chairman and Executive Director of the Housing and Redevelopment
Authority in and for the City of Fridley, Minnesota, a political subdivision of the State of
Minnesota, and acknowledged the foregoing instrument on behalf of said Authority.
Notary Public
Authority Signature Page Redevelopment Contract
o :\WPDATAW\FRMLEY\10\D=XCONTRACf CLEAN 2- 26- 98.DOC
26
- •1
SHAMROCK INVESTMENTS III, LLC
By
STATE OF MINNESOTA )
) ss.
COUNTY OF )
Its
On this day of . 1999 before me, a notary public within and for
County, personally appeared , the
of Shamrock Investments III, LLC, a Minnesota limited liability company, and acknowledged the
foregoing instrument on behalf of said partnership.
Notary Public
Redeveloper Signature Page Redevelopment Contract
\\K M\VOL2\WPDATA*"TMLEY\10\DOCS=N ucT CLEAN 2.2&gS DOC
27
SCHEDULE A
DESCRIPTION OF REDEVELOPMENT PROPERTY
28
i
SCHEDULE B
SITE EMPROVEMENTS
AND
PUBLIC EM PROVEMENTS
Site Improvements
Infrastructure
Roadway access
Grading
Stormwater Treatment/Constructed Wetlands
Sanitary Sewer
Water
Debris and Site
Propane Tank Explosion Benin
Contingency
Public Improvements
Cleanup costs
Site Investigation & Remediation Development
RAP Implementation — Cleanup Costs
Contingency
Soil Correction, Dewatering
Dewatering
French Drain
Contingency
0!-;�
SCHEDULE C
CERTIFICATE OF COMPLETION
WHEREAS, the Housing and Redevelopment Authority in and for the City of
Fridley, Minnesota, a Minnesota municipal corporation (the "Authority") and Shamrock
Investments, III LLC, a Minnesota limited liability company (the "Redeveloper") have entered
into a Contract for Private Redevelopment (the "Agreement ") dated as of
1999, regarding certain real property referred to in the Agreement as the "Redevelopment
Property" located in Redevelopment Project No. 1, in the City, and
WHEREAS, the Agreement contains certain conditions and provisions requiring
the Redeveloper to construct improvements upon the Redevelopment Property (hereinafter
referred to and referred to in the Agreement as the "Minimum Improvements"); and
WHEREAS, Section 4.3 of the Agreement requires the Authority to provide an
appropriate instrument promptly after the substantial completion (as defined in the Agreement)
of the Minimum Improvements so certifying said substantial completion;
NOW, THEREFORE, in compliance with said Section 4.3 of the Agreement, this
is to certify that the Redeveloper has substantially completed the Minimum Improvements in
accordance with the conditions and provisions of the Agreement relaxing solely to the obligations
of the Redeveloper to construct the Minimum Improvements (including the dates for beginning
and completion thereof), and this certification shall be a conclusive determination of satisfaction
and termination of the agreements and covenants in the Agreement with respect to the obligations
of the Redeveloper, and its successors and assigns, to construct the Minimum Improvements and
the dates for the beginning and completion thereof.
Dated: '1999.
30
Dated:
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF FRIDLEY, MINNESOTA
By
Its Chairman
And by
Its Executive Director
STATE OF MINNESOTA )
ss
COUNTY OF ANOKA )
On this day of , 1999, before me, a notary public within
and for Anoka County, personally appeared and
to me personally known who by me duly sworn, did say that they
are the Chairman and Executive Director of the Housing and Redevelopment Authority in and
for the City of Fridley, Minnesota, a political subdivision of the State of Minnesota, and
acknowledged the foregoing instrument on behalf of said Authority.
Notary Public
Authority Signature Page Certificate of Completion
\\K M\VOL2 \WPDATA\F\RMLEY\IO\DOCS \CONTRACT CLEAN 2.26 -98 DOC
31
SCHEDULE D
Dated: . 1999 REVENUE NOTE $
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF ANOKA
HOUSING AND REDEVELOPMENT AUTHORITY
In and For
THE CITY OF FRIDLEY
LIMITED REVENUE TAX INCREMENT NOTE
(SHAMROCK INVESTMENTS PROJECT)
The Housing and Redevelopment Authority in and for the City of Fridley (the
"Authority "), hereby acknowledges itself to be indebted and, for value received, promises to pay
to the order of Shamrock Investments III, LLC (the "Registered Owner "), or its registered
assigns, solely from the source, to the extent and in the manner hereinafter provided, the principal
amount of this Revenue Note, being Dollars ($ )
(the "Principal Amount "), together with interest thereon from at a rate
of percent C____%) per annum on the dates (the "Scheduled Payment Dates ")
described below and in the amounts stated thereon (the "Scheduled Payments "). Scheduled
Payment Dates shall be February 1" and August 1" of each year commencing August 1, 2001, and
continuing until February 1, 2016.
Upon 30 days' prior written notice from the Authority to the Registered Owner, the
Principal Amount is subject to prepayment at the option of the Authority in whole or in part on
any Scheduled Payment Date.
Each payment on this Revenue Note is payable in any coin or currency of the United
States of America which on the date of such payment is legal tender for public and private debts
and shall be made by check or draft made payable to the Registered Owner and mailed to the
Registered Owner at its postal address within the United States which shall be designated from
time to time by the Registered Owner.
The Revenue Note is a special and limited obligation and not a general obligation of the
Authority, which has been issued by the Authority pursuant to and in full conformity with the
Constitution and laws of the State of Minnesota, including Minnesota Statutes, Section 469.178,
Subdivision 4, to aid in financing a "project ", as therein defined, of the Authority consisting
generally of defraying certain public redevelopment costs incurred and to be incurred by the
Authority within and for the benefit of its Redevelopment Project No. 1 (the "Project Area ").
32
THE REVENUE NOTE IS NOT A GENERAL OBLIGATION OF THE CITY, THE
AUTHORITY OR THE STATE OF MINNESOTA (TIC "STATE "), AND NEITHER THE
CITY, THE AUTHORITY, THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF
SHALL BE LIABLE ON THE REVENUE NOTE, NOR SHALL THE REVENUE NOTE BE
PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN AVAILABLE TAX
INCREMENT, AS DEFINED BELOW.
The Scheduled Payment of this Revenue Note due on any Scheduled Payment Date is
payable solely from and only to the extent that the Authority shall have received as of such
Scheduled Payment Date, "Available Tax Increment" which is defined in the Contract for Private
Redevelopment between the Authority and the Registered Owner (the "Agreement ") as tax
increment received as of a Scheduled Payment Date with respect to the certain Minimum
Improvements to the real property described in the attached Exhibit A (hereinafter referred to as
the "Redevelopment Property") which real property is located within the City's Tax Increment
Financing District No. 9.
The Authority shall pay on each Scheduled Payment Date to the Registered Owner the
Available Tax Increment. On February 1, 2016, the maturity date of this Revenue Note, any
unpaid portion shall be deemed to have been paid in full.
This Revenue Note shall not be payable from or constitute a charge upon any funds of the
Authority, and the Authority shall not be subject to any liability hereon or be deemed to have
obligated itself to pay hereon from any funds except the Available Tax Increment, and then only
to the extent and in the manner herein specified.
The Authority makes no representations or covenant, express or implied, that the revenues
described herein will be sufficient to pay, in whole or in part, the amounts which are or may
otherwise become due and payable hereunder.
33
0
The Authority's payment obligations hereunder shall be further conditioned on the fact
that there shall not at the time have occurred and be continuing an Event of Default under the
Agreement, and, ' further, if pursuant to the occurrence of an Event of Default under the
Agreement the Authority elects to terminate the Agreement, the Authority shall have no further
debt or obligation under this Revenue Note whatsoever. Reference is hereby made to the
provisions of the Agreement for a fuller statement of the obligations of the Redeveloper and of
the rights of the Authority thereunder, and said provisions are hereby incorporated by reference
into this Revenue Note to the same extent as though set out in full herein. The execution and
delivery of this Revenue Note by the Authority, and the acceptance thereof by the Redeveloper,
as the initial Registered Owner hereof, shall conclusively establish this Revenue Note as the
"Note" (and shall conclusively constitute discharge of the City's obligation to issue and deliver
the same to the Redeveloper) under this Agreement.
The Registered Owner shall never have or be deemed to have the right to compel any
exercise of any taxing power of the Authority or of any other public body, and neither the
Authority nor any director, commissioner, council member, board member, officer, employee or
agent of the Authority, nor any person executing or registering this Revenue Note shall be liable
personally hereon by reason of the issuance or registration hereof or otherwise.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things
required by the Constitution and laws of the State of Minnesota to be done, to have happened,
and to be performed precedent to and in the issuance of this Revenue Note have been done, have
happened, and have been performed in regular and due form, time, and manner as required by
law.
This Revenue Note may be assigned but upon such assignment the assignor shall promptly
notify the Executive Director of the Authority at the offices of the Authority by registered mail,
and the assignee shall surrender the same to the Authority either in exchange for a new fully
registered note or for transfer of this Revenue Note on the registration records for the Revenue
Note maintained by the Authority. Each such assignee shall take this Revenue Note subject to
the foregoing condition and subject to all provisions stated or referenced herein.
The Authority has elected to issue this Revenue Note as a non -tax exempt obligation and
accordingly does not anticipate that the interest on this Revenue Note is or will be generally
exempt from federal or state income taxes, and the Authority makes no representation or covenant
with respect to any such exemption.
34
IN WITNESS WHEREOF, the Authority has caused this Revenue Note to be executed
by the manual signatures of its Chairman and Executive Director and has caused this Revenue
Note to be dated , 1999.
Chairman
This instrument was drafted by:
Krass Monroe, P.A.
Suite 1100 Southpoint Office Center
1650 West 82nd Street
Bloomington, Minnesota 55431
(612) 885 -5999
35
Executive Director
1717..3m
LEGAL DESCRE ITON
36
SCHEDULE E
ASSESSMENT AGREEMENT
and
ASSESSOR'S CERTIFICATION
By and among
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR
THE CITY OF FRIDLEY, MINNESOTA
SHAMROCK INVESTMENTS III, LLC
and
CITY ASSESSOR OF THE CITY OF FRIDLEY
This Document was drafted by:
Krass Monroe, P.A.
Suite 1100 Southpoint Office Center
1650 West 82nd Street
Minneapolis, MN 55431
(612) 885 -5999
37
0
A
ASSESSMENT AGREEMENT
THIS AGREEMENT, made on or as of the day of . 1999 by
and among The Housing and Authority Redevelopment P in and for the City of Fridley, Minnesota
(the "City") Shamrock Investments III, LLC, a Minnesota limited liability company (the
"Redeveloper "), and the City Assessor of the City of Fridley, Minnesota (the "Assessor").
WTTNESSETH, that
WHEREAS, on or before the date hereof the Authority and the Redeveloper have
entered into a Contract for Private Redevelopment (the "Redevelopment Contract") regarding
certain real property located in the City of Fridley, legally described on Exhibit A attached hereto
and made a part hereof, (the "Redevelopment Property"); and
WHEREAS, it is pursuant to said Redevelopment Contract the Redeveloper has
agreed to construct an office/warehouse facility (the "Minimum Improvements ") upon the
Redevelopment Property; and
WHEREAS, the Authority and Redeveloper desire to establish a minimum market
value for said Redevelopment Property and the Minimum Improvements constructed thereon,
pursuant to Minnesota Statutes, Section. 469.177, Subdivision 8; and
WHEREAS, the Authority and the Assessor have reviewed the preliminary plans
and specifications for the Minimum Improvements and have inspected the Redevelopment
Property,
NOW, THEREFORE, the parties to this Agreement, in consideration of the
promises, covenants and agreements made by each to the other, do hereby agree as follows:
1 • The minimum market value as of January 2, 2000 which shall be assessed
for the Redevelopment Property described in Exhibit A, with the Minimum Improvements
constructed thereon, for ad valorem tax purposes, shall not be less than Ten Million Six Hundred
Seventy -seven Thousand and No /100 Dollars ($10,677,000.00).
2. The minimum market value herein established shall be of no further force
and effect and this Agreement shall terminate on the Termination Date of the Redevelopment
Contract which is defined in Article I of the Redevelopment Contract and shall be no later than
the last payment on the Revenue Note which is scheduled to be paid in full on or before
February 1, 2016.
38
3. This Agreement shall be promptly recorded by the Redeveloper who shall
pay all costs of recording.
4. Neither the preambles nor provisions of this Agreement are intended to,
nor shall they be construed as, modifying the terms of the Redevelopment Contract between the
Authority and the Redeveloper.
5. This Agreement shall inure to the benefit of and be binding upon the
parties hereto and the respective successors and assigns of the parties.
6. Each of the parties has authority to enter into this Agreement and to take
all actions required of it, and has taken all actions necessary to_authorize the execution and
delivery of this Agreement.
7. In the event any provision of this Agreement shall be held invalid and
unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof.
8. The parties hereto agree that they will, from time to time, execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered, such
supplements, amendments and modifications hereto, and such further instruments as may
reasonably be required for correcting any inadequate, or incorrect, or amended description of the
Redevelopment Property or the Minimum Improvements, or for carrying out the expressed
intention of this Agreement, including, without limitation, any further instruments required to
delete from the description of the Redevelopment Property such part or parts as may be included
within a separate assessment agreement.
9. Except as provided in Section 7 of this Assessment Agreement, this
Agreement may not be amended nor any of its terms modified except by a writing authorized and
executed by all parties hereto.
10. This Agreement may be simultaneously executed in several counterparts,
each of which shall be an original and all of which shall constitute but one and the same
instrument.
11. This Agreement shall be governed by and construed in accordance with the
laws of the State of Minnesota.
kS
s
R
Dated:
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF FRIDLEY, MINNESOTA
By
STATE OF MINNESOTA )
ss
COUNTY OF ANOKA )
Its
Its
On this day of . 1999 before me, a notary public within
and for Anoka County, personally appeared and to me
personally known who by me duly sworn, did say that they are the and
respectively, of the Housing and Redevelopment Authority in and for the
City of Fridley, Minnesota, and acknowledged the foregoing instrument on behalf of said
Authority.
Notary Public
Authority Signature Page Assessment Agreement
\\K M\VOL2 \WPDATAT%RMLEY\10\DOCS \CONTRACT CLEAN 2.,26.9gl=
40
Dated:
SHAMROCK INVESTMENTS III, LLC
By
STATE OF MINNESOTA )
COUNTY OF ) ss
Its
On this day of 1999 before me, a notary public within
and for County, personally appeared
the of Shamrock Investments
company, and acknowledged the foregoing instrument on behalf of said eartnership. liability
Notary Public
Redeveloper Signature Page Assessment Agreement
M
\\K 1MVOL2 \WMATA*VRMLEY\10M CON MCT MEM 2_2&991=
41
y
R
CERTIFICATION BY CITY ASSESSOR
The undersigned, having reviewed the plans and specifications for the
improvements to be constructed and the market value assigned to the land upon which the
improvements are to be constructed, and being of the opinion that the minimum market value
contained in the foregoing Agreement appears reasonable, hereby certifies as follows: The
undersigned Assessor, being legally responsible for the assessment of the above described
property, hereby certifies that the market value assigned to such land and improvements upon
completion of the improvements to be constructed thereon shall not be less than
Dollars ($ ) until termination of this Agreement
City Assessor for the City of Fridley, Minnesota
STATE OF MINNESOTA )
ss
COUNTY OF ANOKA )
The foregoing instrument was acknowledged before me this day of
1999, by . the City Assessor of the City of
Fridley, Minnesota.
\\K IMVOL2\WPDATA\FIFRIDI Hy�10\DOCSICONIRACT CLEAN 2.2698.DOC
42
Notary Public
LEGAL DESCRIPTION OF REDEVELOPMENT PROPERTY
43