Loading...
HRA 04/01/1999 - 6308HOUSING & REDEVELOPMENT AUTHORITY MEETING THURSDAY, APRIL 1, 1999 7:30 P.M. PUBLIC COPY (Please return to Community Development Department) V CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING THURSDAY, APRIL 1,1999, 7:30 P.M. AGENDA LOCATION: City Council Chambers CALL TO ORDER ROLL CALL: APPROVAL OF MINUTES: March 4, 1999 CONSENT AGENDA: Consider Subordination Agreement for Shorewood ...................... 1 Claims and Expenses ............. ............................... 2 ACTION ITEMS: Reconsider Maximum Loan Amount for Revolving Loan Program .......... 3 Project Plan Approval for Medtronic Project ........................... 4 INFORMATION ITEMS: HRABudget .................... ............................... 5 Medtronic Update ................ ............................... 6 Consider TIF Request, Waymore Trucking ............................ 7 Update on Home Improvement Grant Program ......................... 8 OTHER BUSINESS ADJOURNMENT CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING MARCH 4, 1999 CALL TO ORDER: Chairperson Commers called the March 4, 1999, Housing and Redevelopment Authority meeting to order at 7:30 p.m. ROLL CALL: Members Present: Larry Commers, Virginia Schnabel and John Meyer Members Absent: Pat Gabel, Jim McFarland Others Present: Grant Femelius, Housing Coordinator Bill Bums, City Manager Jim Casserly, Financial Consultant Rick Pribyl, Finance Director Julie Vogel, Accountant APPROVAL OF THE FEBRUARY 4. 1999 HOUSING AND REDEVELOPMENT AUTHORITY MEETING MINUTES: MOTION by Ms. Schnabel, seconded by Mr. Meyer, to approve the February 4, 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 RESOLUTION APPROVING CHANGE TO REVOLVING LOAN PROGRAM: 2. CLAIMS AND EXPENSES. Ms. Vogel, Accountant, distributed a list of additional expenses for consideration. Mr. Meyer requested that Item #1 be removed from the Consent Agenda for discussion. MOTION by Ms. Schnabel, seconded by Mr. Meyer, to approve the Consent Agenda as amended. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 4, 1999, PAGE 2 UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. Chairperson Commers stated that Item #1 would be discussed as the first item under Action Items. ACTION ITEMS: 1. CONSIDER RESOLUTION APPROVING CHANGE TO REVOLVING LOAN PROGRAM: Mr. Femelius, Housing Coordinator, explained that at the February HRA meeting, staff had made a recommendation to increase the maximum loan amount for the HRA's revolving loan program from $25,000 to $35,000. This recommendation was based upon the findings of the housing study which was recently completed for past recipients of HRA loan funds. In the study, approximately one -third of the respondents indicated that they felt the maximum loan amount should be increased. Mr. Meyer stated he agrees that there are people who would like to see the loan limit increased, as the interest rates are very attractive. However, he feels that the HRA is drifting farther and farther away from the real purpose of the loan program that is to improve the housing stock in Fridley. He feels $25,000 is a very liberal loan amount. These funds are public money that has been subsidized by the government. By increasing the loan limit, he feels the HRA is only increasing the people's appetites for building without actually improving the housing stock of the community. Therefore, he cannot support this resolution. Mr. Femelius stated the cost of rehab is expensive. Since he has been employed with the City, he has seen the cost of roof replacement increase three -fold, not to mention siding and other improvements. Just completing basic maintenance upgrades to a house can easily absorb the $25,000 loan limit. The HRA wants to give people, who have the ability to take on the additional debt, an opportunity to make improvements that do upgrade the housing stock of Fridley. Ms. Schnabel asked if any of the larger loans that have been made in the past are in default. Mr. Femelius stated he did not have that information available, but would be happy to analyze the data and report back as to what type of loans are typically delinquent. Ms. Schnabel asked if the value of the home to be improved is considered when approving a higher loan amount. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 4, 1999, PAGE 3 Mr. Femelius stated that the HRA would not issue a loan to an applicant if the combined debt on the property were more than 115% of the value of the property. This is to insure that there is adequate security in the event that there was a default. Ms. Schnabel asked if a contractor required completion of the improvements. Mr. Femelius stated that the HRA allows the work to be done by either the homeowner himself or by a contractor. However, when a homeowner chooses to do the improvements himself, the HRA does require a breakdown of material costs to show how the funds are being spent. In any case, however, necessary building permits are required and the work must meet code requirements. Ms. Schnabel asked if there have been applicants who were unable to complete the work scope due to the lack of sufficient loan funds. Mr. Femelius stated, yes. Mr. Meyer stated he would not object to the increase in the loan limit if the HRA could determine that the improvements would in fact improve the housing stock. He stated, however, that he feels that many of the allowable improvements have nothing to do with improving the housing stock. Additionally, he feels the income limits should be looked at again. Mr. Femelius stated that the housing study revealed that most of the improvements addressed health, safety, or maintenance issues. Furthermore, not every applicant will desire or be eligible for a $35,000 loan. The increase will merely give the HRA the flexibility to meet the cost of more substantial rehab projects. Mr. Commers suggested that this item be tabled until the next HRA meeting to allow staff an opportunity to go back and review past loans to see what the larger loans actually financed. MOTION by Mr. Meyer, seconded by Ms. Schnabel, to table this item until the April HRA meeting to allow staff to obtain additional information. UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 3. CONSIDER RESOLUTION AUTHORIZING EXECUTION OF REDEVELOPMENT CONTRACT, SHAMROCK INVESTMENTS III, LLC: Mr. Casserly, Financial Consultant, explained that this redevelopment contract is for a 400,000 square foot redevelopment of a portion of the Onan property. Great efforts have been made to try to define the pollution costs which need to be covered. He explained that the concept for this project is that the State and the Metropolitan Council would provide various clean -up grants. However, due to the geographical distribution HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 4, 1999, PAGE 4 requirements of the grant funds, this project was not funded in the last grant cycle. An application will now be submitted for the spring grant cycle. In order to allow the project to proceed, the HRA discussed and agreed to be the grant provider as a last resort and that the HRA would continue to make the application to try to recover those funds. The redevelopment of this site includes lots of pollution abatement costs and infrastructure and basic site preparation costs. The contract, as designed, states that the HRA will provide the pollution abatement assistance with HRA funds in a maximum amount of $871,763. The redeveloper would provide $84,377 as a match. If the HRA were successful in obtaining the grants, the agreement is that one -half of the grant proceeds will go back to the HRA to prepay the revenue note. The other one -half will go back into the HRA funds. Mr. Casserly noted that the project generates a substantial amount of tax increment. The market value, upon completion, will be a minimum of $10.8 million. With the increment generated, there should be more than adequate resources to repay the grant amounts in the event that the full amount were not recovered from the state, enough to pay the revenue note, and enough still to help with redevelopment of the area. Mr. Casserly briefly discussed the redevelopment contract. Since the memo included in the agenda packet was prepared, some changes have been made to the contract. He noted that Item #1 has been eliminated from the contract. Additionally, Item #6, line 3, has been changed to read " ...the interest rate will be the lesser of the actual interest rate charged by the lender or 8% ..." Mr. Richard Murphy of Murphy Warehouse, Mr. Paul Hyde of Real Estate Recyclers, Inc., Woody Nelson of Onan Corporation, and Gary Drizman of Onan Corporation were present to answer any questions. Mr. Murphy expressed his appreciation of the City /HRA staff assistance. He noted that this project takes a piece of property, which is basically of no value and turns it into over $500,000 per year in revenue which will benefit many. If the HRA approves the contract, they intend to begin the project within the next three to four weeks with an anticipated certificate of occupancy issued around November 1, 1999. Mr. Hyde provided the HRA with a brief summary of the environmental situation of the site. Mr. Commers asked Mr. Nelson if he anticipated the creation of any new jobs with this development. Mr. Nelson stated there will be some additional jobs created, but that most of the positions at the new site will actually be a transfer from the Main Street site. MOTION by Ms. Schnabel, seconded by Mr. Meyer, to approve Resolution No. HRA 01- 1999, Authorizing the Execution and Delivery of a 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. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 4, 1999, PAGE 5 UPON A VOICE VOTE, TWO MEMBERS VOTING AYE, SCHNABEL AND MEYER VOTING AYE, COMMERS ABSTAINING, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED. 4. CONSIDER PROPOSALS FOR ROBERT GERLOFF RESIDENTIAL ARCHITECTS: Mr. Femelius explained that staff has had several meetings with Mr. Robert Gerloff in regard to the City's scattered site in -fill redevelopment program. In the course of these meetings, he was asked to submit two proposals. Mr. Femelius stated the first proposal was to create a pattern book of general home designs to be used for homes to be built on the scattered site lots. The book would point out various issues of concern such as orientation of the garage to the street, the front entrance features, and use of different exterior materials. Mr. Gerloff has submitted a proposal for creating this pattern book at a cost of $10,050, which would include his time as well as that of an assistant to prepare the necessary drawings. Mr. Fernelius stated the second proposal was to develop concept plans for the HRA- owned lot at 1015 Mississippi Street. This particular site is rather large and would be an excellent site for a move -up style home. The HRA would like Mr. Gerloff to prepare three schematic designs (elevation drawings, site plans) and to meet with builders, realtors and neighbors to identify a desirable plan. After identifying a marketable plan, the HRA would attempt to solicit proposals from builders to construct the home. Mr. Gerloff has submitted a proposal for this work in the amount of $7,650. A second part of this proposal would be to actually develop the working drawings for the plan which would be an additional $7,300 cost. Mr. Gerloff has indicated that it would be very advantageous to work on both of these projects at the same time as he could combine many of his trips to Fridley and therefore offer savings to the HRA. He has indicated that he would be willing to reduce the overall cost of the projects by $5,000 if both projects were to proceed. Mr. Femelius stated staff recommends that the HRA move forward with both projects in an amount not to exceed $20,000. He stated that the HRA is not anticipating that Mr. Gerloff would actually prepare the working drawings, but staff would like to have the flexibility in the event that the full set of drawings was necessary. Mr. Commers stated his concern in spending the money to put the drawings together only to find few people willing to accept them "as is ". He wonders if people will want to start making changes to them. Mr. Meyer noted that if the plans were well done, it would not be difficult to modify them to suit individual tastes. HOUSING & REDEVELOPMENT AUTHORITY MEETING. MARCH 4. 1999. PAGE 6 Ms. Schnabel asked if the contractor could pay the additional cost of the working drawings. Mr. Fernelius stated that this is possible and would be a cost - effective option for the HRA. After a brief discussion, it was the general consensus of the HRA that staff should come back to seek HRA approval in the event that working drawings are necessary. MOTION by Ms. Schnabel, seconded by Mr. Meyer, to authorize staff to enter into a contract with Robert Gerioff to complete Proposals #1 and #2 to the extent of the schematic drawings for a total cost of $12,700. UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 5. CONSIDER PROPOSAL FROM BENSHOOF AND ASSOCIATES FOR PREPARATION OF FEDERAL FUNDING APPLOICATION FOR TH 65: Mr. Bums, City Manager, explained that staff is requesting that the HRA be authorized to hire Benshoof and Associates to prepare a grant application for ISTEA funds for the Highway 65 improvements which will be necessary to accommodate the Medtronic project once they develop 800,000 square feet. The contract costs for completing this work will not exceed $11,200. He noted that the City would also be seeking state funds for the local match on these costs. The highway improvements will need to be completed by the year 2004; therefore it is necessary to begin these improvements as soon as possible. MOTION BY Mr. Meyer, seconded by Ms. Schnabel, to authorize the Executive Director to execute the contract with Benshoof & Associates, Inc. for an amount not to exceed $11,200. UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 5.A CONSIDERATION OF CONTRACT WITH MS. BONNIE BOLUCH TO ASSIST WITH LOBBYING WITH REGARDS TO THE MEDTRONIC PROJECT. Mr. Bums explained that Ms. Bonnie Baluch has considerable experience working on legislative issues and is very knowledgeable with regard to tax increment financing. She has worked with various entities. Ms. Baluch has already been involved in the process, with her work mainly related to securing funding for the local match for highway improvements. MOTION by Mr. Meyer, seconded by Ms. Schnabel, to approve a contract with Ms. Bonnie Baluch to assist the HRA with lobbying for the Medtronic project, as set forth in the agreement, dated March 3, 1999. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 4, 1999, PAGE 7 UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. INFORMATION ITEMS: 6. MEDTRONIC UPDATE: Mr. Bums provided the HRA with an update on the Medtronic project. He stated that the AUAR document would be presented to the City Council at the April 12, 1999, meeting for review and approval. The master plan will be reviewed by the HRA at the April 8, 1999, meeting; the Planning Commission will review the various applications at their April 7, 1999, meeting, and the City Council will review them on April 26, 1999. Mr. Bums noted that a neighborhood meeting was held on Wednesday, March 3, 1999, regarding the status of Quincy and Jackson Streets (whether these streets will become cul -de -sacs or connected). Mr. Bums noted that Medtronic currently has five voluntary purchase agreements for properties to be acquired as part of the project. One property remains under negotiation and one property has been written out of the planning process. Mr. Casserly provided a brief update in regard to the development agreement, explaining that the third draft of the agreement would be sent out within the next few days. This draft will only address the issues that were outlined in the original letter of intent (without any extension of the tax increment district). The remaining issues will be dealt with separately. He stated that Medtronic and their lobbyist will handle issues relating to the extension of the tax increment district. As a companion effort, the City /HRA will be working to secure funding for the "local match" for the highway improvements. Mr. Bums stated that staff met with representatives from the Minnesota Department of Transportation, the Metropolitan Council, and the Department of Trade & Economic Development. Ms. Bonnie Boluch and Senator Novak organized the meeting, with the hopes of obtaining some type of commitment from the State for assistance in funding the improvements. These representatives indicated a strong commitment; however, the funding source has yet to be determined. 7. CONSIDER TRANSFER OF PROPERTY AT 8184 EAST RIVER ROAD FROM ANOKA COUNTY TO AL KELLNER: Mr. Femelius explained that Anoka County has requested the HRA to assist them in the transfer of excess right -of -way land to an adjoining property owner at 8184 East River Road. State law prohibits the County from directly selling excess right -of -way land to private parties. The HRA's role 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. He stated that a public hearing would be required prior to the sale of the property. The funds would be collected from Mr. Kellner upfront before proceeding any further. He stated that this was being brought forward as information and that no formal action was required by the HRA Board. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 4, 1999, PAGE 6 OTHER BUSINESS: Mr. Femelius provided the HRA with a summary of the HRA's Housing Programs as well as a Loan Service Report. He stated that three loans have been made in 1999 for a total dollar amount of $29,061.00, which is less than the loans made in years past. He noted however that the Home Show was held over the past weekend and that the programs are continuing to be promoted to Fridley residents. Mr. Commers extended a welcome to Ms. Julie Vogel, Accountant, who recently began employment with the City. ADJOURNMENT: MOTION by Ms. Schnabel, seconded by Mr. Meyer, to adjourn the meeting. UPON A VOICE VOTE, ALL MEMBERS VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MARCH 4, 1999, HOUSING AND REDEVELOPMENT AUTHORITY MEETING ADJOURNED AT 9:00 P.M. Respectfully submitted, amara D. Saefke Recording Secretary MEMORANDUM HOUSING REDEVELOPMENT AUTHORITY DATE: March 26, 1999 TO: William Bums, Executive Director of HRA!� FROM: Barbara Dacy, Community Development Director SUBJECT: Consider Subordination Agreement for Shorewood Inn, Inc. Background In 1986, the HRA approved a development contract for Shorewood Inn, Inc., to provide assistance for interior and exterior improvements. The development contract provided for assistance in the amount of $70,000 via a second mortgage. The term of the mortgage was for 15 years at 9% interest (see copy of original note). The owner is current on the payments. The amount remaining to be paid on the second mortgage is $32,722 over the next three years. Proposed Subordination Agreement According to the restaurant's attorney, Michael Hurley, of Bama, Guzy, & Steffen, the restaurant wants to refinance the existing first mortgage against the property with Northeast Bank as opposed to its existing lender. The proposed amount of the new loan is $600,000 (the assessed valuation of the property is $720,000). Hurley has requested that the HRA agree to subordinate the second mortgage. The proposed Subordination Agreement is attached. The Agreement has been reviewed by Jim Casserly. Adjustments have been made, and the final copy for the HRA approval is attached to this memo. The original development agreement did agree to subordinate the original loan. Recommendation Staff recommends that the HRA authorize the Executive Director and the Chairperson to execute the attached Subordination Agreement. BD:Is M -99 -76 1 NOTE US $70,000.00 Fridley, Minnesota October 30, 1987 FOR VALUE RECEIVED, the undersigned ('Borrower') promise(s) to pay to the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, -or order the principal sum of Seventy Thousand and no /hundredths Dollars ($70,000.00) with interest on the unpaid principal balance from the date three years after the date of this Note until paid, at the rate of Nine (98) per cent per annum, and due in installments as follows: $6,300.00 due and payable on October 30, 1.990 and on October 30, 1991 each, $10,907.41 due and payable on October 30, 1992 and a like amount on October 30 of each subsequent year until October 30, 2002, at which time the entire unpaid principal balance together with all unpaid accumulated interest shall be paid in full. Payments shall first be applied to interest with any excess applied to-prin- cipal. A late payment penalty of five percent (58) shall be charged on any payments not received at the mailing address designated by the Seller by 5:00 P.M. on the 15th day following the date on which the payment is due; Interest will be calculated based on a 360 day year and charged on a per diem basis in each month; Principal and interest shall be payable at Fridley Housing and Redevelopment Authority, 6431 University Avenue Northeast, Fridley, Minnesota 55432 or such other place as the Note holder may designate. If said installment under this Note is not paid when due and remains unpaid after a date specified by a notice to Borrower, which date shall not be less than thirty days after the date such notice is mailed, the Note holder may exercise this option to accelerate during default by Borrower regardless of any prior forbearance. If suit is brought to collect this Note, the Note holder shall be entitled to collect all reasonable costs and expenses of suit, including, but not limited to, reasonable attorney's fees. Borrower may prepay the principal amount outstanding in whole or in part. Any partial prepayment shall be applied against the principal amount outstanding. Presentment, notice of dishonor, and protest are hereby waived by all makers, sureties, guarantors and endorsers hereof. This Note shall be the joint and several obligation of all makers, sureties, guarantors and endorsers, and shall be binding upon them and their successors and assigns. 1 -A and shall pay any and all sums paid by the Mortgagee herein, its successors or assigns, in payment of principal or interest on the aforesaid First Mortgage, or taxes and assessments or insurance on said premises, as above provided, and perform all of the covenants herein and in said First Mortgage contained, then this Mortgage shall be null and void, otherwise to remain in full force and effect. But if default shall be made in the payment of said sums of money above mentioned, or interest, or in the payment of taxes and assessments or insurance on the aforesaid real estate when due, or in payment of the principal or interest on the aforesaid First Mortgage when due, or in any or all of the covenants or agreements contained herein, or in said First Mortgage, then the Mortgagee herein, its successors or assigns, may declare the whole principal sum for which this Mortgage is given at once due and payable; and said Mortgagee herein, its successors or assigns, is hereby authorized and empowered to sell the hereby granted premises and convey the same to the purchaser, agreeably to the statute in such case made and provided, and out of the moneys arising from such sale to retain the principal and interest then due or declared due on notes herein described and all sums of money paid by the Mortgagee herein, its successors or assigns, in payment of principal or interest on the aforesaid First Mortgage, or for taxes on said premises, or insurance, with interest as heretofore provided, together with the charges and disbursements, and also reasonable attorney's fees, and to pay the overplus, if any, to the Mortgagor herein, its successor - sor assigns. This Mortgage and said notes shall be construed according to the laws of the State in which the mortgaged premises are situate. IN TESTIMONY WHEREOF, Said Mortgagors have hereunto set their hands the day and year first above written. STATE OF MINNESOTA ) )ss. COUNTY OF ANOKA ) The foregoing instrument 30"` day of gctober, 1987 V«c of under the laws of Minnesota, vmr-. o►mum ae..�4.a.aaa T TED Herrick & Newman P.A. 6401 University Avenue N.E., Fridley, Minnesota 55432 Phone (612) 571 -3850 SHOREWOOD INN, INC. BY . f' Its i?1LMJs.,f was acknowledged before me this by -TiM+ -ts Ni c rcaw , the Shorewood Inn, Inc., a Corporation o behalf of the Corporation. l� , I a Notary Public BY: Suite 205 1 -8 sb-- ARTICLE III Undertakings of the Authority Section 3.1. Second Mortgage. (a) For the purpose. of providing certain assistance to the Developer for the construction of the Minimum Improvements, the Authority agrees to lend to the Developer the sum of $70,000.00. In consideration of this loan the Developer shall execute for the benefit of the Authority a second mortgage on the Development Property in the principal amount of $70,000.00. Interest on this second mortgage shall begin to accrue simple interest at the rate of nine percent (98) per annum on the third anniversary date of the execution of this mortgage. All payments shall first be applied to accrued interest. The entire unpaid principal together with all unpaid accrued interest shall be paid in full on the fifteenth anniversary of the execution of the second mortgage. The annual payments under the mortgage shall be as follows: Anniversary of Date Annual Mortgage of Mortgage Payment Year 4 $ 6,300.00 Year 5 $ 6,300.00 Year 6 through year 15 $10,907.41 An Event of Default by the Developer under this Agreement shall be treated as an Event of Default under the terms of the second mortgage in which event the remedies of the Authority shall include the right to foreclosure the second mortgage as well as all remedies provided for under the Agreement. (b) Conditions Precedent. The Authority's obligations to provide the second mortgage as required under Section 3.1. (a) above shall be contingent on the satis- faction by the Developer on the following conditions: (i) the Developer shall be in material compliance with all the terms and provisions of this Agreement; (ii) the Developer having submitted construction plans which shall have been approved by the Authority pursuant to Section 4.2 of this Agreement; (iii)there shall have been obtained from the City all special -use permits necessary for the construction of the Minimum Improvements; 3 - 1 1.0 MAR. -15' 99NON) 10-.07 BARNA GUZY STEFFE TEL:612 780 1777 F.002 SUBORDINATION AGREEMENT THIS SUBORDINATION AGREEMENT ( "Agreement ") is entered into this day of April, 1999, by and between the Housing and Redevelopment Authority in and for the City of Fridley (" RRA "), Shorewood Inn, Inc., a Minnesota corporation ( "Borrower ") and Northeast Bank, a Minnesota corporation ( "Bank "). WrINESSETH; WHEREAS, the HRA and Borrower have executed a Mortgage (the "BRA Mortgage ") dated October 30, 1987, and filed in the office of the Anoka County Registrar of Titles on February 4, 1998, as Document No. 172132 on the property described in Exhibit A attached hereto and incorporated herein by reference (the "Premises "); and WHEREAS, the Bank has agreed to lend to Borrower the sum of Six Hundred Thousand and 00 /100 Dollars ($600,000.00) (the "Loan ") pursuant to a Promissory Note dated March 17, 1999, in the principal amount of Six Hundred Thousand and 00 /100 Dollars ($600,000.00) (the "Note "); and WHEREAS, Borrower's obligations under the Note are secured, in part, by a Combination Mortgage, Security Agreement and Fixture Financing Statement dated March 17, 1999, therewith securing the Note (the "Bank Mortgage "), and recorded in the office of the Anoka County Registrar of Titles on , 1999, as Document No. WHEREAS, Bank has required the execution of this Agreement as a condition precedent to entering into the Loan and advancing the proceeds of the Loan to Borrower. NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows.. 1 -D 0.3/25/99 THU 15:15 FAX 612_885 5969 BRASS MONROE _ a002 �!ar•Yo 9:I2AM No-0306 P. 2 1. The HRA acknowledges receipt of copies of the Note, Mortgage and all other documents with respect to the Loan, and acknowledges that the financing as evidenced by the Note and secured by the Mortgage is acceptable to the HRA. 2_ To induce Bank to advance the Loan proceeds to Borrower, the HRA and Borrower hereby subordinate the FRtA Mortgage, by and between the HRA and Borrower, and all covenants, conditions, obligations and agreements of the parties thereto, to the lien of the Bank Mortgage, together with all modifications, extensions and renewals thereof. 3. Nothing contained herein shall be construed to subordinate the terms and conditions of that certain Assessment Agreement for Assessor's Certification dated October 30, 1987, and filed July 29,1991, as Document No. 210118, by and between the HRA and Borrower (the "Assessment Agreement ") to Bank's Mortgage, and Bank acknowledges that Bank's Mortgage will be subject to the terms and conditions of the Assessment Agreement. 4. The HRA, and Borrower aclaaowledge that the Bank is not a party to the HRA Mortgage (and, by executing this Agreement, does not become a party), nor does Barak assume any obligation thereunder, that this Agreement contains the entire agreement among the patties with respect to the mutters set forth herein; that this Agreement may be amended only in writing signed by all of the parties hereto; that this Agreement shall be construed under the laws of the State of Minnesota; that this Agreement shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns; and that this Agreement may be executed in any number of counterparts, each of which shall constitute the same instrument. HRA: Housing and Redevelopment Authority in and for the City of Fridley 0 Its p'resickur 0 Its Executive Director -2- 1 -E MAR. -15' 99(MON) 10:07 BORROWER: BANK: BARNA GUZY STEFFE STATE OF MINNESOTA ) ) ss. COUNTY OF ANOKA ) TEL :612 780 1777 Shorewood Inn, Inc., a Minnesota corporation By James A, Nicklow Its President Northeast Bank, a Minnesota corporation By Robert A. Jensen Its Senior Vice - President P. 004 The foregoing instrument was acknowledged before me this day of April, 1999, by and , the President and Executive Director, respectively, of the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, on behalf of the Authority. Notary Public -3- 1 -F MAR.- 15'99(MON) 10 :01 BARNA GUZY STEFFE TEL:612 780 1111 STATE OF MINNESOTA ) ss. COUNTY OF ANOI{A ) The foregoing instrument was acknowledged before me this 17(' day of March, 1999, by James A. Nicklow, the President of Shorewood Inn, Inc., a Minnesota corporation, on behalf of the corporation. Notary Public STATE OF MINNESOTA' ) ) ss. COUNTY OF ANOKA ) The foregoing instrument was acknowledged before me this 17`h day of March, 1999, by Robert A. Jensen, the Senior Vice - President of Nonheast Bank, a Minnesota corporation, on behalf of the corporation. THIS 1NSTR UMENT WAS DRAFTED BY: BARNA, GUZY & STEFFEN, LTD. 400 Northtown Financial Plata, 200 Coon Rapids Boulevard Minneapolis, MN 55433 (G 12) 780 -8500 (MFH) 47526_1 -4- Notary Public P. 0H 1 -G MAR. -15' 99 (MON) 10:08 BARNA GUZY STEFFE TEL.:-612 780 1711 P.006 EXHIBIT A All of that part of Lots Sixteen (16) and Seventeen (17), Auditor's Subdivision No. 88 or that part of the Southwest Quarter of Section 13, Township 30, Range 24, Anoka County, Minnesota, described M follows: Beginning at the intersection of the Southeasterly right of way line of State Highway No. 65 and the South line of said Southwest Quarter of Section 13; thence Fast along the South line of said Southwest Quarter for a distance of 232.0 feet to a point, said point being 1294.80 feet, more or less, West of S 1/4 corner of said Section 13; thence North at right angle to the last described line for a distance of 285.54 feet; thence Northwesterly with a deflection angle to the left of 78 degrees 54 minutes 09 seconds for a distance of 163.61 feet, more or less, to the said Southeasterly right of way line; thence Southwesterly along said Southeasterly right of way to the point of beginning, Anoka County, Minnesota. Parcel B: Tract A, Registered Land Survey No. 100, and a non - exclusive perpetual easement for ingress and egress over Tract C, Registered Land Survey No. 100 to run as a benefit to Tract A, Registered Land Survey No. 100, files of the Registrar of Titles of Anoka County, Minnesota. 1 -H Shore,woA I,jfj SHORE (AN8 ys9 ORIGINAL INTEREST NOS. MONTHLY PRINCIPAL RATE PAYMENTS PAYMENT $70,000.00 9% 15 $8,684.12 PAYMENT TOTAL REMAINING NUMBER DATE PRINCIPAL INTEREST PAYMENT BALANCE SHORE CRIGINAL INTEREST NOS. MONTHLY PRINCIPAL RATE PAYMENTS PAYMENT $70,000.00 9% 15 $8,684.12 PAYMENT TOTAL REMAINING NUMBER DATE PRINCIPAL INTEREST PAYMENT BALANCE -LA e r► $70,000.00 - 1988 3D 1 $0.00 $0.00 $0.00 �� 1989 2 $0.00 $0.00 $0.00"W $70, 000.00 1990 3 $6,300.00 $6,300.0a —$70,000.00 1991 4 $6,300.00 $6,300.00 --- $70,000.00 1992 5 $4,607.41 $6,300.00 $10,907.41 g.s5 $65,392.59 1993 6 $5,022.08 $5,885.33 $10,907.41 q o $60,370.51 1994 7 $5,474.06 $5,433.35 $10,907.419'%6 $54,896.45 1995 8 $5,966.73 $4,940.68 $10,907.411069 $48,929.72 1996 9 $6,503.74 $4,403.67 $10,907.411139 $42,425.98 1997 10 $7,089.07 $3,818.34 $10,907.41119; $35,336.91 1998 11 $7,727.09 $3,180.32 $10,907.411241 $27,609.83 1999 -- -- – 12 — $8,422.53 — $2,484.88 -- $10,907.41 -- $19,187.30 2000 13 $9,180.55 $1,726.86 $10,907.41 $10,006.75 2001 14 $10,006.75 $900.66 $10,907.41 ($0.00) . 2002 15 $70,000.00 ------------------------------------------- ------------------------------------------- $51,674.10 $121,674.10 c a5 C � anu�nck _I 1 J_.'_.5 1 4), o F- 1 m000mp omvr-8ono pO Q00 NpR O ��V 0 o z 9 I . .00mv9 .i11 9 0. r- 0: M.Pi QdQN HMN�M.di In 10F OVva�MM ~.pi ttl~ .O4 0. i 1 1 j! 1 'I ai 1 U I 1 YI i I i ZZ WW Q I I O txW X N ZJ YY� F t EM I E 100CEM CAI�J00¢MW H -Jjz¢J Oda 0 1 I A zwwoNQF- W�WJaWWW W&iLop 1 Qw 1 I WCWWCOZ ZWitlw ¢Z¢ Itl�t� 0. I ,JJCC 1JJ - �o-+@Y@ W I I 2M,! JF- xX55QZZ >mY W ~QZ ix LL L! II I WeuroCxwuuwfL gWQCCzoOWA wwzzZ O I W1Itt4W. CaLrZiz�' W�4S�l�[CJf1�OG10��Q�W.�OiWWI}- oom d 1 AOaziiYOCN1- J�Jj�I =NW JUat� j }WY 1.70yyU����fDL►Z+H�Q►Ui Q zZa~ ppNJOC�IC{{��'O~1Wd1 'rZiO }.N W4 tJ1lQC A (A } a¢ ZZO. } }OE T�LDMr M52 Y I wA CHOOCWQQa[CWWtY000W Hq wy�y� QQ O 1 �LxJJJUQi (LLA � o'xoSQ UQ�YI�JJm S >- vi I A aI I :I M 1 °1Jw a a0aaaaaaalaaaD. aaaTaDa0,aoaa I S E 1 10 10 o 10 *0 *0 10 10 10 *0 .0 10 *0 �0 10 10 %010 +0 1010 10 % .0 .0 1010 0, 00.1 u I NNNNNNNNNNNNNNNI'd!'dNNNNNNNNNN Im �I ! \ I Y NI I S M I I U I I s o1 I \ W I I Q 0. I 1 1>0 LUX u I mlz hw-Z 0f0LUlw --� Hz U' CC Z 1 I O >- MOU O }O.ZM mW�JQ' {a{�y� (9 CC ix x I I N t4W WO sUFM mwz ~U 0No S Lx ZHO re LL '1 I F- W JJIA F�y�jyfCM uWJ Jw dc Y. ' i THE 'aAZ Z'"JWZa dAZ >w �m }HO�~i I WUi"mM 19 QGC►4M }OfMfL!'G a }C-r 1 �F4 W OM ozF -�IOZ 7tAh -�-+O. F+ I I rt llLXccm a zmN lLx M z U I-ai��t=��I'- "WYOa'p"�aO �axtsoppgqMWiw �a II- i W I Wpl Wa =WAZOW WWaOCCO Iyyy�,,,.fL33pd Z I Z I �S�IW- OIppa.t[HOzuLL 10i F-} J��yYOQ =F > > > >8 O I it I aZft!ww'msW!iw0w.EO ' m'w CWJ4 zpEWzmwwp M {J I A I i��L1Q.JZ pO1.4 QwOp���j[JWOCmp�WQwpQw 2d UFUU- WZW�1ppCa��rr+�NUOWFWW�I�lb�14]eJJEL2 i7 ! i f4Q[�UIi.VEr+Ez COON •a -iz Ul I 607 1 N I pp,. pp.. pp.. pp.. pp,. pp,. pp.. ��.. ��.. pp.. AU I YW I Pa O,.0,ct O�• aTPOto�o�O .Op•0�•0.00.tt00•0•o•aPaO• lj d ei V4 rl �o4f -/ V4 �l .4 e1 .1 r4 -1 V4 ri nl .4 ni vl W9t41A� \ \� \ \ \ \ \ \ \ \ \ \ \ \� \ \ \ \ \ \ \ \ \ \\ IL EL I MMMMMMMMMMMMMMMMMMMMMMMMMMM DATE: March 26, 1999 MEMORANDUM HOUSING 4 _! REDEVELOPMENT AUTHORITY TO: William W. Bums, Executive Director of HRA 4� FROM: Barbara Dacy, Community Development Director Grant Femelius, Housing Coordinator SUBJECT: Reconsider Maximum Loan Amount for Revolving Loan Program At the March 4, 1999 HRA meeting, staff presented a recommendation to increase the maximum revolving loan amount from $25,000 to $35,000. The recommendation was based on the results of the housing study completed in January which found that about 1/3 of the borrowers needed more money to complete their home improvement projects. The HRA tabled the item pending more information on two issues: 1. The repayment history of borrowers who have received larger loans. 2. The types of improvements made with the larger loans. The following memo will respond to these concerns. Repayment History Currently, the HRA has 201 revolving loans in its portfolio. The total outstanding principal balance is $2,095,890 (Note: since the program began there have been 64 loans issued at more than $20,000). In the current portfolio, there are 43 loans with balances greater than $20,000. The total outstanding principal balance of this group is $1,016,269. In the current portfolio of 201 loans, there are 28 loans in delinquency. Most of these (22 loans) are less than 30 days late. In addition, there are 2 loans one to two months late and 4 loans that are over 3 months late. In terms of the breakdown of delinquencies based on loan size, the chart on the next page shows the delinquency rates for loans over $20,000 and loans under $20,000. K Revolving Loan Memo March 26, 1999 Page 2 Category Loans Over $20,000 Delinquencies Percent Loans Under $20,000 Loans Balance 43 $1,016,269 3 6% 158 $1,079,621 Months Delinauent <1 1 -2 2 -3 >3 2 0 0 1 4% 0% 0% 2% Delinquencies 25 20 2 0 3 Percent 15% 12% 1% 0% 2% TOTALS 201 $2,095,890 Delinquencies 28 22 2 0 4 Percent 13% 12% <1% 0% <1% Note: Information as of February 1999. Analvsis of Delinauencies It is somewhat risky to suggest that there is a correlation between the size of the loan and the delinquency rate (e.g. one group are better paying customers). The important issue to emphasize is that the larger loans don't seem to have an excessively high delinquency rate in comparison to the smaller loans. There is more risk to the Authority in making a larger loan, but with prudent underwriting standards these risks can be managed. Types of Improvements As mentioned earlier, over the life the program 64 loans have been issued for more than $20,000. A total of 237 improvements were made to these'homes. The chart on the next page shows the breakdown of improvements. 3 -A Revolving Loan Memo March 26, 1999 Page 3 %o Project Type 17% Other interior improvements (expansion or room addition) 15% Other exterior improvements (expansion or room addition) 12% Windows and doors 9% Plumbing 9% Roofing 9% Siding, stucco or exterior paint. 7% Heating systems 7% Kitchens 6% Bathrooms 4% Garage 2% Insulation 2% Landscaping 1 % Electrical Analysis of Improvements It seems clear the larger loans have been used to fund a wide variety of home improvement projects. In aggregate 56% of the improvements (e.g. other exterior, windows, doors, roofing, siding, etc.) fall into the exterior category. These types of improvements are very visible and have a noticeable impact on neighborhood appearance. Roughly 1/5 of the projects involved room additions or expansions. However, it must be emphasized that the vast majority of work involved upgrades for such items as windows, doors, roofing, siding, plumbing and heating. Many of the homes received more than one improvement. The remaining 46% of the improvements have also helped to upgrade the health, safety and livability of Fridley's housing Summary Ultimately, the goal of the Authority's housing program is to make it attractive for people to remain in the community. On a number of occasions we have heard from residents who feel their homes are too small or lack the amenities of modem homes in outlying suburbs. In some cases a substantial investment of several different types of improvements are required to upgrade 1950's style housing. The higher loan limit can make it more affordable and attractive to overcome this challenge. Raising the loan limit is responsive to the needs of the residents of the community, and at the same time keeps the revolving loan program as an attractive resource. W Revolving Loan Memo March 26, 1999 Page 4 Recommendation Staff recommends that the HRA approve the attached resolution authorizing an increase in the maximum loan amount from $25,000 to $35,000. gf M -99 -78 3 -C 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 (S) 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. " 3 -D Page 2 -- HRA Resolution No. _ -1999 PASSED AND ADOPTED BY THE HOUSING & REDEVELOPMENT AUTHORITY OF THE CITY OF FRIDLEY THIS DAY OF '1999. LAWRENCE R. COMMERS - CHAIRMAN ATTEST: WILLIAM W. BURNS - EXECUTIVE DIRECTOR 3 -E MEMORANDUM HOUSING REDEVELOPMENT AUTHORITY DATE: March 26, 1999 TO: William W. Bums, Executive Director FROM: Barbara Dacy, Community Development Director SUBJECT: Master Plan/Project Plan Approval; Medtronic Inc. Basis for Review Medtronic Inc. is requesting Master Plan /Project Plan approval for a several - phased corporate office redevelopment project at the Lake Pointe site at 1-694 and TH 65. The S -2 Redevelopment District requires written staff review on project compatibility to the overall redevelopment plan, and a written Housing and Redevelopment Authority report on project plan approval and considerations for Planning Commission and City Council review. The intent of the S -2 District is to: • Allow for a mixed use development within special redevelopment districts as set up under Chapter 462 of Minnesota State Statutes • Allow for the maximum flexibility in the promotion of difficult redevelopment projects • Allow for development by a plan which acceptable to, and in the best interest of the City and the overall district and development plan. The Planning Commission and City Council will review five land use applications on April 7 and April 26 respectively. The five applications are: • Master Plan /Project Plan Approval • Preliminary Plat Approval • Special Use Permit for nine foot wide parking spaces • Street Vacation of a portion of Came Lane • Zoning Text Amendment to create parking space requirements for parking ramps 3 Master Plan/Project Plan Approval; Medtronic Inc. March 26, 1999 Page 2 On April 12, the City Council will approve the Alternative Urban Areawide Review and Mitigation Plan (AUAR) for the development. A number of regional agencies provided comments on the AUAR but none of them were adverse or raised objections. An Indirect Source Permit application has also been filed with Minnesota Pollution Control Agency, and approval is anticipated without onerous stipulations. Proposed Project The proposed Master Plan contemplates the construction of 1,000,000 to 1,600,000 square feet of corporate office development supported by multi -level parking structures. Phase One construction is proposed on the east half of the site on a proposed lot of approximately 22 acres. Five buildings totaling 450,000 square feet and a six level parking ramp is proposed to be constructed beginning in May, assuming all approvals have been appropriately completed. It is anticipated that the total project will create 3,000 new jobs. The site will be served by a realigned Bridgewater Drive along the north side of the development just south of the existing buffer strip. Medtronic is proposing this street to be a "parkway" design that will establish a stately and campus feel to the project. Bridgewater will then be connected to 7t' Street at the northwest comer of the property (Medtronic is evaluating a new name for this street). It was determined that the existing roadway configuration created several safety and design issues, especially the reverse curve just south of the Carrie Lane loop (area is now a storm pond). Realignment of the roadway requires removal of single family homes and removal of Came Lane between Quincy Street and Jackson Street. Medtronic representatives have been negotiating with seven residential property owners. Six property owners have agreed to sell to Medtronic. The seventh property owner has declined the offer. The City is currently evaluating whether Quincy and Jackson Streets should be connected with a reconstructed Came Lane or if they should remain as cul -de -sacs. Two neighborhood meetings have been conducted in February and March and these issues have been discussed. Compatibility to the Overall Redevelopment Plan The proposed project by Medtronic Inc. achieves several objectives of the City's redevelopment plan. First, the size and design of the project maximizes the density of the site with the construction of Class A multi -level office buildings and parking ramp structures. It is consistent with the original concepts contemplated for the site by the City beginning in the mid- 1980s. Second, the value and nature of the project will create a substantial tax base for the community. Phase One alone will have a minimum value of $40 million. Ultimately, at 1,000,000 square feet, the project would create additional value of at least $100 million. Third, the project will create 3,000 new job opportunities and will spur additional redevelopment in the community. Finally, Medtronic Inc. is proposing the Lake Pointe site as its world headquarters, and will retain the existing campus at Rice Creek for its cardiology division. There are few communities in the State which have two campuses for a Fortune 500 company. 4 -A Master Plan /Project Plan Approval; Medtronic Inc. March 26, 1999 Page 3 Master Plan / Proiect Plan Considerations Because the proposed project as presented achieves the original vision for this site and several objectives of the redevelopment plan, it is appropriate for the Authority to recommend to the Planning Commission and the City Council approval of the proposed plan. There are several issues regarding the plan that need to be reviewed by the Planning Commission and City Council, but these are typical to their purview. The redevelopment contract is also being finalized and it is anticipated that it will be reviewed at the May meeting. Recommendation Staff recommends the Authority recommend approval to the Planning Commission and City Council of the enclosed Master /Project Plan by Medtronic Inc. subject to execution of the development contract, approval of the AUAR by City Council, and successful completion of all of the land use applications. .. M -99 -77 '-_ 205.22.5. S -2 REDEVELOPMENT DISTRICT REGULATIONS S -2 RE- DEVELOPMENT DISTRICT REGULATIONS PURPOSE PURPOSE The purpose of this special zoning district is to: A. Allow for a mixed use development within special redevelopment district s set up under Chapter 462 of Minnesota State Statutes for the health, *safety and general welfare of the City. B. Allow for the maximum flexibility in the promotion of difficult redevelopment projects. C. Allow for development by a plan which is acceptable to, and in the best interest of, the City and the overall district and development plan. 2. USES PERMITTED USES Permitted uses in S -2 Districts are: PERMITTED Those uses which are acceptable to the overall redevelopment plan and specific development plans as approved by the City. Upon approval of the specific development plans, the City shall determine the specific uses that are permitted within the development. USES ALLOWED AFTER PLAN.DEVELOPMENT Uses allowed in each individual building after construction will be the same as or similar to those uses approved in Section 205.22.2. above. 4. USES EXCLUDED USES Those uses unacceptable to the overall redevelopment plan and specific EXCLUDED development plans, as determined by the City, are excluded uses in S -2 Districts. 5. PROCESS FOR APPROVAL A. Plans for each individual project or combination of projects must be submitted to the Planning Commission for review and recommendation to the City Council. The City Council shall have final authority to approve all project plans. B. Project plans submitted to the Planning Commission and City Council shall include the following minimum criteria: (1) Site plans showing the location of.buildings, off - street parking, street and utility locations, auto and pedestrian access to and from the project, any modification to existing services, grading plans, storm water plans, building exterior finish, lighting and signing and landscape plans. 205.52 -1 4 -C 205.22.6. S -2 District (2) Written City staff review on project compatibility to the overall redevelopment plan. (3) A written Housing and Redevelopment Authority (HRA) report on project plan approval and considerations. C. Any substantial modification to the plan must be submitted through the Planning Commission and approved by the City Council. 6. PERFORMANCE STANDARDS PERFORMANCE STANDARDS All performance standards for uses in this district shall be comparable to other similar uses that are allowed in other districts. Parking space sizes may be reduced to nine (9) feet in width upon approval of a special use permit. (Ref. Ord. 952) 0 0 10/90 4-® 205.52 -2 SYNOPSIS OF MASTER PLAN/PROJECT PLAN MEDTRONIC INC. Project Size and Phasing The proposed master plan anticipates about 1,000,000 square feet of corporate office uses. The AUAR and Mitigation Plan however is written to gain approval of up to 1,600,000 square feet of development. It assumed build -out over 10 years in 400,000 square foot increments beginning in 1999. Phase I would be completed in 2001, Phase II would come on line beginning 2004, Phase III in 2007 and the last phase in 2009. Phase I Six buildings are proposed totaling 461,623 gross square feet: 1. Corporate headquarters building (138,310 gross square feet): • Administrative and corporate functions; predominantly office use. • Four office floors, a penthouse, and a minimal basement area • Overall height is 85 feet 2. Neurological building (128,066 gross square feet): • Three office floors with some laboratories • Penthouse and minimal basement area • Overall height is 70 feet 3. Research building (60,968 gross square feet): • Three floors consisting of labs and office space • Penthouse • Overall height is 55 feet 4. Education building (60,000 gross square feet): • Three floors, with one below grade and a penthouse • Training areas with a minimal office support function • Overall height is 55 feet 5. Campus Commons building (55,904 gross square feet): • Includes cafeteria, auditorium, fitness center, information resource center, and the central server room • Two levels of below grade parking • Overall height is 40 feet 4 -E • Directly south of and adjacent to parking ramp structure 6. Central Plant (18,375 gross square feet): • Two stories with one below grade • Houses central heating and cooling equipment for the campus • Rooftop screening to be provided • Overall height is 40 feet Parking Structure • Six levels, two proposed below grade • 1035 stalls at 8.5 feet wide and 18 feet deep • Approximately 160 to 200 each level depending on design • No other surface lots other than the main entry area • Two additional structures needed for Phases II and III Bridgewater Parkway • Two lane divided parkway running from 7h Street on the west to Highway 65 on the east • Four lanes divided near Highway 65 • 20 foot minimum lane widths • 15 foot medians Building Exterior • Warm tone brick or cut stone in gold or light gray range, with large areas of glass • Architectural details and building massing will be traditional in style • Accent areas may contain metal panel trim to match the aluminum window framing • Roofing materials may include standing seam metal or faux slate • Fire resistive construction proposed with required sprinkling Lighting • 20 foot poles proposed along parkway • 30 foot poles proposed on top level of parking structure • Kim lighting standards proposed Signaee • Detailed plans not submitted yet 4 -F • Entrance monument contemplated • Directional signs to be proposed Landsca ring • 560 trees proposed for Phase I • 91 shrubs • Parkway to be lined with Linden trees and Crabapple trees in the median • Red Oaks and Maples proposed around the campus Grading and utilities • Use existing water and sewer services below Bridgewater Drive and at the south of the site Two ponds proposed at east end of site for storm runoff 4 -G DATE: March 26, 1999 MEMORANDUM HOUSING REDEVELOPMENT AUTHORITY TO: William Bums, Executive Director of HRA FROM: Barbara Dacy, Community Development Director SUBJECT: HRA Budget Staff has been working on preparing the 1999 HRA budget for the last several weeks. It is suggested that a budget work session be completed with the HRA beginning at 6:30 p.m. at its May 6, 1999, meeting. (A box lunch could certainly be provided if desired by the HRA.) I have not been able to prepare the budget in a timely manner as done in previous years because of the magnitude of the Medtronic project; however, staff is also working on a new means of documenting tax increment expenses. The new approach means documenting expenses, expenses by district first, and then preparing a summary, as opposed to preparing a summary budget and cash flow analysis. In addition, Ehlers & Associates has been working with staff over the last year to analyze the transaction history of the tax increment district since 1979 in order to comply with the recent requirements of the Office of the State Auditor. The new budget format and additional information will be included in the May agenda. No action is needed on this item. BD:Is M -99 -82 DATE: March 26, 1999 MEMORANDUM HOUSING REDEVELOPMENT AUTHORITY TO: William Bums, Executive Director of HRA FROM: Barbara Dacy, Community Development Director SUBJECT: Medtronic Update In addition to the planning applications, staff has also been working on legislative requests for the TIF extension issue and to obtain funds for a variety of public improvements. To follow is a synopsis of the. current status. Updated information will be presented at the meeting. TIF Extension Legislation Medtronic has introduced legislation in the Senate that would enable the City to extend the TIF district to the year 2025. Representative Chaudhary has also introduced companion legislation in the House. Medtronic has agreed to have 200,000 square feet of Phase One become taxable in the year 2011 when the existing district expires. Andy Kozak, the lobbyist for Medtronic, has been working closely with Bonnie Balach (the City's lobbyist) on a number of issues and both have been meeting with legislators and responding to their questions. The initial hearing in the House will take place on Monday (3- 29 -99) in the Local Government Committee. Later, it will be heard in the House Tax Committee. Public Improvement Legislation Braun Intertec has completed the soil analysis of the embankments adjacent to Highway 65. Sheet pile wall construction can be used but more borings will be required to determine the exact depth of the pilings in certain areas. As a result, the engineer from SRF Consulting Group (who completed an initial analysis for Medtronic) increased the potential project cost to $5 million instead of the original $4 million estimate. In addition, there will be costs to treat the storm water from the highway, which as an example, may include creation of a separate pond prior to discharging into Rice Creek. Also, the West/East Moore Lake Drive intersection (near St. Phillips Church and the shopping area) will have to be modified to accommodate the additional lanes on Highway 65. The total project cost then could be as much as $6 million. Benshoof and Associates has begun work on preparing an application to receive federal funding which would pay for 80% of the construction costs. The deadline for submission is in July. The local share would equate to 20% of the construction costs ($1,200,000) plus 0 Medtronic Update March 26, 1999 Page 2 design and construction inspection costs ($1,500,000) for a total of $2.7 million. City staff met with MnDot staff on March 26, 1999. It was suggested that the City send a letter to MnDot requesting that the local share is split between the City and MnDOT at $1,350,000 each. In addition to the City's costs for Highway 65 is funding for a new sewer line west of the Medtronic site ($200,000) and the creation of a free right turn lane from 57th Avenue to University Avenue ($100,000). Total City costs, assuming MnDot help, would be $1.65 million. Senator Novak suggested that a $500,000 appropriation for a DTED grant be used for funding for fiscal year 2000. Legislation has already been introduced and heard by committee in the Senate. A committee chaired by Representative Chaudhary by the end of March will hear this legislation. Bill Bums has also been working on a $500,000 grant from DTED's 1999 budget. Another option under consideration is issuance of a general obligation bond that is paid by state aid funds. No action is needed by the HRA at this time. On a future agenda, however, there will be an item requesting the Authority's approval of a resolution supporting the application for federal funds for the TH 65 project. T. M -99 -80 DATE: March 26, 1999 161046 HOUSING REDEVELOPMENT AUTHORITY TO: William Bums, Executive Director of HRA FROM: Barbara Dacy, Community Development Director SUBJECT: Consider TIF Request, Waymore Trucking Background Waymore Trucking Company constructed a 19,980 square foot trucking facility at 8201 Hickory Street N.E. in 1990. The subject site is located in TIF District #3. Waymore Trucking also owns the vacant parcel immediately to the east which is 2.31 acres in size. They are proposing to add a 13,230 square foot refrigerated warehouse addition to their facility. Waymore Transportation will be handling the transportation requirements of the Cub Food chain and will use the refrigerated warehouse space for fresh produce. The existing facility has 24 dock doors, and the new facility will be primarily warehouse, although there will be six additional dock doors. The use is a conforming use in the M -3, Outdoor Heavy Industrial zoning. The City Council created this zoning district for five parcels in this area to contain the trucking facilities in one area of the City (the M -3 district does, however permit other industrial uses). Trucking facilities are prohibited now in the remaining industrial districts. As the HRA is aware, this area has been historically known as having poor soil conditions. The property to the east of the subject site was also under consideration by the Cintas Uniform Company, and the HRA did approve a development agreement to assist for soil correction (unfortunately, Cintas did not close on the property). Waymore Trucking currently employs 25 people. The company said it would hire at least 25 more employees if it proceeds with this expansion. 7 Waymore Trucking March 26, 1999 Page 2 Soil Conditions Staff has reviewed the soil tests prepared by Braun Intertec. The soil reports indicate that there are large deposits of peat below fill areas ranging in size from 5 -13 feet. It is also estimated that an average excavation depth of 13 feet will be required for the entire building area. The soil correction costs are estimated to range from $200,000 to $300,000. At best, this would represent about 16 -20% of the project costs $1.2 million. Proposed Assistance TIF District #3 expires in June 2007. If construction occurs in 1999, there are only about 6 Y2 years of tax increment. A preliminary analysis completed by Jim Casserly shows that approximately $112,239 (present value) of increment could be provided. This would represent approximately 9% of the current estimated project costs. Staff has presented this amount to the company, and they are currently evaluating if they should proceed. Staff will be meeting with the owners prior to the, HRA meeting on April 1, and an update can be presented at the meeting. Recommendation Unless otherwise directed, staff will continue to pursue negotiations with the owner with a tax increment package not to exceed 10% of the project cost. It is well documented that this area has considerable soil correction needs, and it is clear that this project will not proceed without HRA assistance. BD:Is M -99 -81 7 -A 7 °S 03/25/99 THU 15:48 FAX 812 885 5969 _ RRASS MONROE City of Fridley WAYMORE TRUCKING ASSUMPTIONS Original Market Value -1998 $0 Original Tax Capacity 3.50% $0 Estimated Market Value 13,230 9q. ft. @ $42.50 per sq. ft. = $562,275 Estimated Tax Capacity 3.50% $19,680 Estimated Taxes 13,230 sq. ft. @ $1.96 per sq. ft. = $25,931 Construction 1999 Valuation 2000 Taxes Payable 2001 Pay 1999 Tax Rate 1.31768 Inflation (2002 / 2003) 2.00% Administration Fees 10.00% Present Value Rate 06/01/99 7.00% 8062 7 -C Waymore Trucking.WK4 Prepared By Krass Monroe, P.A. 03/25/99 03/25/99 THU 15:48 FAX 612 885 5969 KRASS MONROE ' City of Fridley WAYMORE TRUCKING CASH FLOW AND PRESENT VALUE ANALYSIS [?10Q3 < ANNUAL ---- ---> <----' - ---- - SEMI -ANNUAL--------- (1) G) (a) (b) Original (c) Estimated (d) Captured (e) Estimated M Less: (9) Available (h) Cumulative -- Present Value ---> Tax Tax Tax Tax Admin Tax Avail. Tax Semi Annual Cumulative Date Capacity Capacity Capacity Increment Fees Increment Increment Balance Balance (see assumptions) (c) - (b) (d) x (e) x (e) - (f) Total of (g) P.V. (g) Total of (i) 20,073 19,680 (DreV. Year) 1.31768 10.00%_ 35,007 9,493 7 12/01102 06/01/99 0 0 0 0 0 0 0 0 0 0 0 0 0 0 12101199 06/01/00 0 0 0 19,680 0 0 0 0 0 0 0 0 0 12/01/00 06101/01 0 0 19,680 19,680 0 19,680 0 12,966 0 1,297 0 11,669 0 11,669 0 10,169 0 10,169 12/01/01 0 19,680 19,680 12,966 1,297 11,669 23,338 9,825 19,994 06/01102 0 20,073 19,680 12,986 1,297 11,669 35,007 9,493 29,487 12/01102 0 20,073 19,680 12,966 1,297 11,669 46,677 9,172 38,659 06/01/03 0 20,475 20,073 13,225 1,323 11,903 58,579 9,039 8,733 47,698 56,431 12/01/03 0 0 20,475 20,884 20,073 20,475 13,225 13,490 1,323 1,349 11,903 12,141 70,482 82,622 8,607 65,038 06101/04 12/01/04 0 20,884 20,475 13,490 1,349 12,141 94,763 8,316 73,353 06101105 0 21,302 20,884 13,759 1,376 1,376 12,383 12,383 107,146 119,530 8,195 7,918 81,548 89,466 12/01/05 06 /01/06 0 0 21,302 21,728 20,884 21,302 13,759 14,035 1,403 12,631 132,161 7,803 97,270 12/01/06 0 21,728 21,302 14,035 14,315 1,403 1,_432 12,631 12,884 144,792 157,675 7,539 7,430 104,809 * 06/01107 0 22,162 21,728 - -� w - _ -�_ _112,239 175.195 17,519_ 157,675 157,675 112.239 112,239 * According to Anoka County's records, the TIF District terminates in June, 2007. [AG-J Waymore Trucking,WK4 Prepared By Kress Monroe, P.A. 03/25199 MEMORANDUM HOUSING REDEVELOPMENT AUTHORITY DATE: March 26, 1999 TO: William W. Bums, Executive Director of HRA a�'y FROM: Barbara Dacy, Community Development Director Grant Femelius, Housing Coordinator SUBJECT: Update on Home Improvement Grant Program This week staff was notified by Anoka County that new income limits have been released by HUD for the CDBG and HOME programs. These'federal programs provide the underlying funding for the Home Improvement Grant Program. This program provides zero interest, deferred payment grants to lower income families for home improvements. In recent years demand for the program has fallen off. We believe one of the factors is that the existing income restrictions (see attached chart) exclude many families who really can't afford a loan, but have slightly more income than the grant program allows. The new income guidelines should make the program more attractive to homeowners and help alleviate some of the strain on the HRA's financial resources. Unless otherwise directed, we plan to implement the changes immediately (no action is required by the Authority). gf M -99 -79 E Home Improvement Grant Program Income Guidelines (1) (2) Household Old New Size Guideline Guideline 1 Person $ 21Y300 $ 33,450 2 Person $ 24;300 $ 38,250 3 Person $ 27,350 $ 43,000 4 Person $ 30,400 $ 479800 5 Person $ 32, 850 $ 535600 6 Person $ 35Y250 $ 55,450 Notes: (1) Based on 12/30/97 figures. Equal to 50% of metropolitan area median income. (2) Based on 12/30/98 figures. Equal to 70% of metropolitan area median income.