HRA 04/28/1999 - 6309r
e
HOUSING & REDEVELOPMENT AUTHORITY MEETING
WEDNESDAY, APRIL 28, 1999
7:30 P.M.
PUBLIC COPY
(Please return to Community Development Department)
I
s
CITY OF FRIDLEY
SPECIAL
HOUSING & REDEVELOPMENT AUTHORITY MEETING
WEDNESDAY, APRIL 28,1999,7:30 P.M.
AGENDA
LOCATION: Meeting Room 1 (Lower Level)
CALL TO ORDER
ROLL CALL:
ACTION ITEMS:
Consideration of Resolution Authorizing Execution of
a Purchase Agreement with Holiday Properties, Inc .................... 1
Consideration of ResolutiodDetermining that
Certain Parcels are occupied by Structurally
Substandard Buildings and are to be included
in the Tax Increment District ........... 2
Consideration of Resolutiolf Authorizing
Execution of a Development Contract with _
Senior Housing Construction, Inc .... ............................... 3
Consideration of a Resolutio�Authorizing Execution
of a Development Contract with Waymore Transportation ................. 4
OTHER BUSINESS
ADJOURNMENT
DATE: April 23, 1999
MEMORANDUM
HOUSING
AND
REDEVELOPMENT
AUTHORITY
TO: William Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Purpose of Special Meeting
The purpose of the special meeting is to approve some contractual agreements for
various projects in the HRH's redevelopment program which may be affected by
pending legislation (see attached) regarding "pooled tax increment" from districts
created between 1979 and 1982. For example, the source of funds to purchase the
Holiday Properties site will be from Tax Increment District #3 (North Area) that was
created in 1981. Legislation is pending in the Legislature that would ratify expenditures
outside the TIF district if contracts /binding agreements have been entered into by May
1, 1999. Based on the May 1, 1999, date currently placed in the legislation, legal
counsel has suggested that a special meeting of the HRA be approved to ratify these
projects.
In 1998, the State Auditors Office issued a number of policy interpretations concerning
the use of tax increment financing. Of particular concern is the issue of "pooling" tax
increment receipts from TIF districts created between 1979 and 1982. The practice of
most cities has been to pool these TIF revenues along with revenue from other districts
to carry out redevelopment activities. Last year, the State Auditors Office opined that
state law never authorized the pooling provision for 1979 through 1982 districts and
cities should discontinue the practice. It should be noted that the Auditors opinion is
contrary to numerous legal opinions over the years that have been the basis for most
redevelopment programs state -wide. The proposed legislation, if passed, would only
permit expenditures from TIF #3 and TIF #2 (Moore Lake) to be spent on pre - existing
obligations and would essentially require the districts to be decertified.
Purpose of Special Meeting
April 23, 1999
Page 2
In addition, the Noah's Ark senior housing project is now under construction. An item is
scheduled on this agenda to approve the same development contract but under a
different name. Gary Bidne, the developer, has sold the project to Senior Housing
Construction, Inc. The assistance to be provided in this contract is a pay- as- you-go
note which would create an obligation for the HRA until the year 2007. The timing of
reassigning the development agreement and the pending legislation deemed it
appropriate to have the HRA act on this item as well.
Finally, a resolution regarding approval of the development contract for the recent
Waymore Transportation tax increment financing request is also included in this
agenda. This project is located in Tax Increment District #3 as well. The proposed
assistance is to be a grant at certificate of completion.
Staff, legal counsel, and bond counsel also conferred about repayment of the $1.5
million loan from the City for the revolving loan program. It was determined that the
loan can be repaid from non -tax increment proceeds such as the tax levy and
unencumbered funds of the HRA.
Recommendation
Staff recommends that the HRA approve the items on the proposed agenda for the
special meeting as presented. Individual staff memos are prepared for each item.
BD:Is
M- 99-106
'04/19/99 MON 14:33 FAX 612 885 5969 KRASS MONROE 444 FRIDLEY IM 001
KRASS MONROE, P.A.
ATTORNEYS AT LAW
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FACSIMILE TRANSMITTAL SHEET
TO: COMPANY: FAX NUMBER:
Barbara Dacy City of Fridley 571 -1287
William Bums City of Fridley 571 -1287
Uiu% rnoyl Glty of Fridley 571 -1287
DATE:
April 19, 1999
FROM` TOTAL NO. OP PAGES INCLUDING COVER:
James R. Casseriy 5
RE: SENDER'S REFERENCE NUMBER:
Legislation 9571 -20
❑ URGENT ❑ FOR REVIEW O PLEASE COMMENT /REPLY
ORIGINAL BEING SENT VIA ❑ REGULAR MAIL ❑ OVERNIGHT MAIL ❑ OTHER
NOTES /COMMENTS:
Sections 3 and 4 of Article 10, House Tax Bill. Will talk to you later.
Jim.
Please call Jeanne Solberg at (612) 885 -5999 if you have any trouble receA ng this transmission.
SURE 1100 SOUTHPOINT OFFICE CENTER • 1660 WEST 82ND STREET • MINNEAPOLIS, MINNESOTA 55431 -1447
TELEPHONE 6121885 -5999 • FACSIMILE 612/885 -5969
www.kammonrce.com
04/19/99 MON 14:33 FAX 612 885 5969 BRASS MONROE
04/19/99 DRAFT [RMBOR ] JXR/XR • TAEBXLL
1 public improvements, equipment, or other items, if-
2 (1) the improvements, equipment, or other items are located
3 outside of the area of the tax increment financing district from
4 which the increments were colleatedt and
5 (2) the improvements, egui$ment, or items primarily serve
6 (1) a decorative or sesthetic purpose, or (iij serve a
7 functional Purpose, but their cost is increased by more than 100
8 percent as a result of the selection of materials, design, or
9 type as e.m red with more commonly used materials, designs, or
10 types for similar improvements, equipment, or items_
11 Sec. 3. Xinnesota Statutes 1998, section 469.1763, is
12 amended by adding a subdivision to read:
13 Subd. 6. (POOLING PERMITTED FOR DEFICITS.) a This
14 subdivision applies only to districts for which the request for
15 certification was made before June 2, 1997.
16 (b) The municipality for the district may transfer
17 available increments from another tax increment financing
18 district located in the municipality, if the transfer is
19 necessary to eliminate a deficit in the district to which the
20 increments are transferred. A deficit in the district for
21 purposes of this subdivision means the lesser of the following
22 two amounts:
23 (1)(1) the amount due during the calendar year to an
24 preezisting obligations of the district; minus
25 (ii) the total increments to be collected from properties
26 located within the district that are available for the calendar
27 year, plus
28 (iii) total increments from properties located in other
29 districts in the municipality that are available to be used to
30 meet the district's obligations under this section, excluding
31 this subdivision, or other provisions of law (but excluding a
32 special tax under section 469.1791 and the grant program under
33 Laws 1997, chapter 231, artiele 1, section 191; or
34 (2) the reduction in increments collected from properties
35 located in the distriee'for the calendar year as a result of the
36 changes in class rates in Laws 1997, chapter 231, article 1, and
Article 10 Section 3 189
�-�-� FRIDLEY R002
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L0 3JVd HOW-M 3INN09 T669480T59 OB :EZ 6661/6T/108
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@,04/19/99 MON 14:33 FAX 612 885 5969 BRASS MONROE aaa FRIDLEY lih 003
04/19/99 DRAFT - (RZVZSOR ) JM AR TAXBXLL
1 Laws 199a,-chapter 389, article 2.
2 (c) A pre - existing obligation means bonds issued and sold
3 before June 2, 1997, to the extent that the bonds are secured by
4 a pledge of increments from the tax increment financing district.
5. For purposes of this subdivision, bonds exclude an obligation to
6 reimburse or pay a developer or owner of property located in the
7 district for amounts incurred or paid by the developer or owner.
8 (d) The municipality may require a development authority,
9 other than a seawayjRrt authotity,'to transfer available
10 Increments for anZof its tax increment financing districts in .
11 the municipality to make up an insufficiency in another district
12 in the municipality, regardless of whether the district vas
13 established by the development authority or another development
14 authority. This authority applies notwithstanding any law to
15 the contrary, but applies only to a development authority that:
16 (1) was established by the municipality; or
17 (2) the governing body of which is appointed, in whole or
18 part, by the municipality or an officer of the municipality or
19 which consists, in whole or part, of members of the governing
20 body of the municipality.
21 (e) The authority under this subdivision to spend tax
22 increments outside of the area of the district from which the
23 tax increments were collected:
24 (1) may only be exercised after obtaining approval of the
25 use of the increments, in writing, by the comamissioner of
26 revenue;
27 (2) is an exception to the restrictions under the other
28 psovisions of this section and the percentage restrictions under
29 subdivision 2 must be calculated after deducting increments
30 -spent under this subdivision from the total increments for the
31 district; and '
32 (3) applies notwithstanding the provisions of the tax
33 increment financing actin effect for districts for which the
34 request for certification vas made before June 30, 1982, or any
35 other law to the contrary.
36 Sec. 4. (469.1764] IPRE -1982 DSSTUCTS; PDOL280 RULES.]
Article 10 Section 4 190
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1
Subdivision 1. (SCOPE; AMICATION.I (a) This section
2
applies to a tax increment financing district or area added to a
3
district, if the request for certification of the district or
4
the area added to the district was-made after July 31, 1979, and
5
before July 1, 1982.
6
(b) This section, section 469.1763, subdivision 6, and anY
7
special law applying to the district enacted before•the
8
effective date of this section are the exclusive authority to
9
spend tax increments on activities located outside of the
10
aeographie area of a tax increment financing district that is
11
subject to this section.
12
Subd. 2. [STATE AUDITOR NOTIFICATION.] By August 1, 1999,
13
the state auditor shall notify in writing each authority for
~
14
Which the auditor has records that the authority has a district
15
i
subject to this sect
16
Subd. 3. [RATIFICATION OF PAST SPENDING.] a The
17
following expenditures of increments on activities located
.:;..
18
outside of the geographic area of a district subject to this
19
section are permitted:
20
(1) expenditures rude before the earlier of (i)
21
notification by the state auditor or (ii) December 31, 1999; and
22
S2) expenditures to pay pre - existing outside - di strict, —.�
23
obligations.
24
Subd. 4. (DECERTMCATION RZOUM D.] La) The provisions of
25
this subdivision apply to any tax increment financing district
26
subject to this section, if increments from the district were
27
used on activities locate outside f the aeoaraohic area of the
28 district. —�
29 ' (b) After December 31, 1999, any tax increments received by
30 the authority from a district subject to this subdivision may be
31 expended only to M:
32 (1) pre- existing in- district obligational
33 j2) pre- existing outside- district obligations; and
34 (3) administrative expenses.
35 After all pre - existing obligations have been paid or
36 defeased, the district must be decertified and any remaining
Article 10 Section 4 191
80 3JVd HDVIVa 3INNOS T669LOlPM OVEZ 666t/6T/00
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04/19/99 DRAT= IRMSOA ) JXR /!R TwXBILL
1
2 469.176, subdivision 2.
3 Subd. S. IDEFMT101iS.1 1a) *Notification by the state
4 auditor" means the receipt by the authority or the municivalit
S of a written notification from the state auditor that its
6 ax
venditures of increments from the district on activities
7 located outside of the geograele area of the district were not
e
9
10
11
12
13
14
is
16
17
18
19
20
21
22
23
24
2s
26
27
28
29
30
31
32
33
34
35
36
this section and not used to finance activities outside of the
geographic area of the district, if the bonds were issued and
the pledge of increments was made before April 1, 19991
(2) bonds issued to .refund bonds qualifying under clause
(1), if the refunding bonds do not increase the total amount of
tax increments rgWired to pay the refunded bonds- and
(3) binding written agreements secured by increments from a
district subiect to this section and not used to finance
activities outside of the geographic area of the district, if
the agreements were entered into and the pledge of increments
was made before May 1, 1999.
sec. s. xinnesota Statutes 1994, section 469.1771,
Article l0 section S 192
TT 3Wd HOVIVH 31HN08 T669LBaT99 QZ :CZ 6661/6T/08
DATE: April 23, 1999
MEMORANDUM
HOUSING
REDEVELOPMENT
AUTHORITY
TO: William W. Burns, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
Grant Femelius, Housing Coordinator
SUBJECT: Consider Resolution Authorizing Acquisition of 5807 University
Avenue NE from Holiday Companies
This property is one of five sites that comprise the Gateway East Redevelopment
Project. This is the second site to be purchased by the HRA. An update on the
other sites will be addressed at the May 6t' HRA meeting. The following is a
summary of the issues involved in the Holiday transaction.
Site and Building
The subject property was used as a Holiday Station Store from the early 1960's
until the late 1980's. In 1987, Holiday closed the store and removed the
underground storage tanks. Additional information on environmental issues will
be discussed later in the memo. The building remained vacant until 1994 when
it was leased to Cash -N -Pawn, Ltd. -3 (CNP) for use as a pawn shop.
The parcel measures 200' by 129' or 25,970 square feet (approx. 60 /acre) in
size. The building is 4,300 square feet in size. A metal canopy in front of the
building is now used for covered parking.
Tenant's Status
The lease with CNP expires at the end of May 1999. Although Holiday has
expressed interest in selling the property to the HRA, they have not served
notice to tenant. They have said they will wait to do so until a purchase
agreement is executed with the HRA. Obviously, there is potential risk to the
6
5807 University Avenue Memo
April 23, 1999
Page 2
HRA for relocation claims by tenant. Preliminary estimates are that the costs
could be in the range of $20,000 to $25,000. It is uncertain whether the tenant
would be entitled to any relocation benefits since their lease expires in a month.
However, the good news is that Holiday has agreed to indemnify the HRA
against any claims by the tenant for relocation benefits.
Environmental Issues
In March of 1998 CNP hired their own environmental consultant to do soil testing
on the site. Apparently this was done in anticipation of buying the building,
however Holiday never granted permission to do the testing. (As background
information, Holiday had removed the underground storage tanks in 1988 and
had some contaminated soil removed from the site. A site closure letter was
issued by MPCA in 1990.) The tests that were done CNP revealed that some
contaminated soil still exists 18 to 25 feet below grade. The MPCA was
subsequently notified of the test results and in January 1999 Holiday was asked
to draft an action plan. Holiday has since hired a consultant to assess the
situation.
At this point, it appears that the contamination is far enough below grade that it
shouldn't impact redevelopment of the site. Therefore, the soil will be left in
place. Our legal counsel has had several conversations with the MPCA who have
indicated that Holiday is the responsible party for any clean -up costs should it be
necessary. MPCA has said they would issue a "no association" letter to the HRA
stating we are not a responsible party. MPCA has also said they have worked on
a number of former filling stations sites and believe there should be no problem
in redeveloping this site.
Nonetheless, Holiday has prepared an access agreement that allows them access
to the property in the event the contaminated soil has to be removed. We will
hire our own environmental consultant as a safeguard to verify the matter.
Term and Condition of Sale
Aside from the soil contamination issue, Holiday is selling the site and building
"as -is ". No representation has been made as to the condition of the building or
any other environmental issues, such as asbestos or electrical ballasts. Based on
the age of the building, it is possible that these materials may be encountered
during demolition. These costs have typically been absorbed by the HRA on
other redevelopment projects.
5807 University Avenue Memo
April 23, 1999
Page 3
The property is assessed for tax purposes at $168,000 ($48,900 land, $120,500
building). Our appraiser, Julie Schwartz of Lake State Realty Services, has done
a limited market appraisal and determined that the building is valued between
$215,000 to $225,000. Holiday has agreed to sell the building for $225,000 and
conduct the closing by mid -June. Holiday has added a restrictive covenant that
states that the site cannot be used for a convenience store or filling station for
30 years. Given the desire to redevelop the site for a residential use, this
stipulation shouldn't be a problem.
Recommendation
Staff recommends that the HRA approve the attached resolution authorizing the
purchase of 5807 University Avenue NE for $225,000 from the Holiday
Companies and further authorize the Executive Director to execute all documents
related to the transaction.
gf
M -99 -105
KRASS MONROE, P.A.
ATTORNEYS AT LAW
■ Robert W. Corey
Attomey at Law
Admitted In Wisconsin and Iowa
Emaffmbertc@kmsstnonroe.com
www.loassmonroe.com
Direct Dial (612) 885.5986
MEMORANDUM
To: City of Fridley
Attn: Grant Fernelius
From: Robert Corey
Date: April 19, 1999
Re: Holiday Stationstore, Inc. (Cash -N -Pawn Property)
Our File No. 9571 -35
Enclosed are two (2) duplicate originals of a proposed Purchase Agreement with Holiday
Stationstores for the property located at 5807 University Avenue. This agreement was negotiated over
several weeks and reflects a number of changes we previously discussed with you.
As you know, Holiday Stationstores is presently trying to obtain from UTCA an approval for
Holiday's proposal to allow the petroleum contaminated soils to remain in place with no further action
required. The NTCA approval would be in the form of a "site closure letter."
Future development of the site would be permitted without restriction however the Redeveloper
would be advised to have a Remedial Action Plan in place to address the situation in which
contaminated soils may be encountered during construction.
The property is being purchased in its "as -is" condition with knowledge that asbestos is in the
building and that it will need to be legally removed, at the Authority's expense, without reimbursement
from the Seller, and at an unknown cost. You have indicated that the Authority has performed asbestos
removal at another site and is willing to do so again in this situation.
In return the Seller has agreed to indemnify the Authority from and against any relocation
benefits claims that may be asserted by the existing tenant, Cash -N -Pawn. As you know, such a tenant
claim could be for a considerable amount.
SUITE 1100 SOUTHPOINT OFFICE CENTER • 1650 WEST 82ND STREET • BLOOMINGTON, MINNESOTA 554314447
TELEPHONE 61218855999 • FACSINgLE 61218855969
.a
This agreement is the product of extensive negotiations and reflects compromises made by both
parties. We believe it accurately states the parties' understanding and request that you carefully review
the document again to be certain that it is a complete agreement. If anything is incomplete or needs
clarification please let us know as soon as possible.
If no changes are required then this document is ready for signatures from both parties.
RWGemw
XW KAVOLZWMATANRMDLEY %351A WOWEMI=-U 1S R=2DOC
0 Page 2
3
Holiday Stationstore #815 (old)
5807 University Avenue NE
Fridley, MN
HOLIDAY STATIONSTORES, INC.
PURCHASE AGREEMENT
HCLD: CJR: 04/15/99
THIS AGREEMENT is made as of April 16, 1999, by and between HOLIDAY
STATIONSTORES, INC., a Minnesota corporation, 4567 West 80" Street, Bloomington,
Minnesota 55437 ( "Seller") and the FRIDLEY HOUSING AND REDEVELOPMENT
AUTHORITY, a public body corporate and politic organized under the laws of the State of
Minnesota, 6431 University Avenue NE, Fridley, Minnesota 55432 ('Buyer").
RECITALS:
A. Seller is the owner of certain real property, together with all improvements
located thereon (including without limitation a building), all of which is located in Anoka
County, Minnesota with an address of 5807 University Avenue NE, Fridley, Minnesota as
legally described on Exhibit A ( "Property ").
B. Seller desires to sell the Property to Buyer and Buyer now desires to
purchase the Property from Seller pursuant to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and
Buyer hereby agree to the sale and purchase of the Property upon the terms and
conditions herein set forth.
1. Purchase Price and Payment. The Purchase Price of Two Hundred
Twenty -Five Thousand Dollars ($225,000) is payable as follows:
1.1 Earnest Money. Five Thousand Dollars ($5,000) earnest money,
which shall be paid into escrow with Title (as defined in Section 4).
1.2 Payment at Closing. Two Hundred Twenty Thousand Dollars
($220,000) cash or certified funds on June 4, 1999, or the Extended Closing Date
defined in Section 11.1 ( "Closing Date ").
2. Title Matters. Subject to performance by Buyer, Seller agrees to execute
and deliver a Warranty Deed subject only to the exceptions described in this Section 2
(collectively, "Permitted Encumbrances ").
2.1 Laws. Building and zoning laws, ordinances, state and federal
regulations.
2.2 Mineral Rights. Reservation of any minerals or mineral rights.
2.3 Easements. Easements, restrictions and reservations of record.
2.4 Access Agreement. The Access Agreement set forth on Exhibit B
attached to this Agreement and more further described in Section 8 of this
Agreement ( "Access Agreement ").
2.5 Restrictive Covenant. The restrictive covenant set forth on Exhibit
C attached to this Agreement ( "Restrictive Covenant "), which shall expire thirty (30)
years after the Closing Date.
3. Possession. Seller shall deliver possession of the Property not later than
the Closing Date.
4. Evidence of Title. Seller shall, within fourteen (14) days, furnish Buyerwith
a commitment ( "Commitment ") for an owner's policy of title insurance insuring title to the
Property in the amount of the Purchase Price, issued by a title company of Seller's choice
('Title "). The Commitment will commit Title to insure title to the Property subject only to the
Permitted Encumbrances. Seller's only obligation pursuant to this Section 4 is to provide
Buyer with the Commitment. If Buyer desires to purchase title insurance, Buyer is solely
responsible for arranging for said purchase and any costs associated with said purchase.
4.1 Buyer shall be allowed twenty (20) days after receipt of the
Commitment for examination of said title and the making of any objections, which
objections shall be made in writing or deemed to be waived. If any objections are
so made, Seller shall be allowed ninety (90) days to make such title marketable.
Pending correction of title, the Closing shall be postponed, but upon correction of
title and within ten (10) days after written notice to Buyer, the parties shall perform
this Agreement according to its terms.
4.2 If title is not marketable and is not made so within ninety (90) days
from the date of written objections, Buyer may terminate this Agreement and neither
party shall be liable thereafter to the other party pursuant to this Agreement. All
earnest money paid by Buyer shall be refunded. If the title to the Property be found
marketable or be so made within said time, and Buyer shall default in any of the
agreements, then and in that case Seller may terminate this Agreement and on
such termination all the payments made upon this Agreement shall be retained by
Seller, as damages as Seller's sole remedy, time being of the essence hereof.
5. Real Estate Taxes and Special Assessments. Seller represents that as
of the Closing Date, all real estate taxes and installments of special assessments payable
for the Property ('Taxes ") in the year prior to Closing shall have been paid in full. Taxes
payable for the Property in the year of Closing shall be prorated between Seller and Buyer
as of the Closing Date. This proration shall result in Seller's payment of Taxes from
January 1st to the date immediately prior to the Closing Date and Buyer's payment of
Faxes from the Closing Date to December 31st.
6. Documents Included at Closing. Subject to full, complete and timely
performance by Buyer of its obligations hereunder, at Closing, documents shall be
delivered by the parties, as indicated in this Section 6, as follows:
6.1 Warranty Deed. Seller shall deliver to Buyer a Warranty Deed duly
executed and acknowledged by Seller, in recordable form, subject only to the
Permitted Encumbrances and such other matters as may be acceptable to Buyer.
6.2 Seller's Affidavit Seller shall deliver to Buyer an Affidavit, in the
customary form, relative to judgments, federal tax liens, mechanic's liens,
bankruptcy and outstanding interests in the Property, duly executed and
acknowledged by Seller.
6.3 FIRPTA Affidavit Seller shall deliver to Buyer an Affidavit satisfying
the requirements of IRS Section 1445 regarding the non - foreign status of Seller.
6.4 Access Agreement. Seller and Buyer shall each execute and deliver
to one another the Access Agreement.
7. Condition of Property. Buyer hereby acknowledges that Seller is selling the
Property AS IS, except for and subject to Seller's continuing right of access described in
Section 8 of this Agreement. Buyer agrees that in entering into this Agreement, it has not
relied upon any statements or representations, oral or written, made by Seller or anyone
acting on Seller's behalf. Buyer is relying entirely upon his own investigation, inspection
and review in making this purchase.
8. Clean -ua. Buyer acknowledges that the Property is currently the subject of
that certain Petroleum Storage Tank Release Investigation and Corrective Action Letter
dated January 14, 1999 ( "Corrective Action Letter"); Site I.D. # Leak 00002279 by the
Minnesota Pollution Control Agency ("MPCA!'). Pursuant to the Corrective Action Letter,
the Property is subject to certain clean -up requirements ( "Clean -up "). The parties
acknowledge that Seller shall complete the Clean -up pursuant to MPCA requirements.
Buyer shall (a) bear no responsibility for the cost or expense of nor (b) become in any
manner whatsoever associated with the Clean -up, except as specifically described in this
Section 8. Buyer hereby agrees that Buyer's use and occupancy of the Property shall not
contribute to the release which is the subject of the Clean -up. Notwithstanding any
requirements of this Section and its subparts, in the event a "site closure letter" is provided
by the MPCA for the Property before Buyer commences construction on the Property, then
this Section and its subparts shall be deleted and of no further force and effect.
3
8.1 Hazardous Substances. For purposes of this Agreement,
"Hazardous Substance" shall mean toxic or hazardous wastes or substances,
pollutants or contaminants, including, without limitation, asbestos, urea
formaldehyde, the group of organic compounds known as polychlorbiphenyls,
petroleum products including gasoline, fuel oil, crude oil and various constituents
of such products, and (a) any hazardous substance as defined in the
Comprehensive Environmental Response Compensation and Liability Act of 1980
( "CERCLA "), 42 U.S.C. Section 9601 -9657, as amended, (b) pollutants or effluents
in violation of the Clean Water Act, 42 U.S.C. Section 1251 et seq., the Clean Air
Act, 42 U.S.C., Section 7401 et seq., the Toxic Substances Control Act, 15 U.S.C.
Section 2601 et seq., the Safe Drinking Water Act, 42 U.S.C. Section 300(f) et seq.,
and any and all regulations promulgated thereunder, or (c) any of the foregoing in
violation of or as defined in any similar federal or state law or local ordinance
(collectively, "Environmental Law ").
8.2 Buyer's Obligations. Buyer shall promptly respond to any release
orthreatened release of any Hazardous Substance intothe drainage systems, soils,
groundwater, waters or atmosphere which release is the result of Buyer's use,
occupancy and /or operation of the Property by Buyer, its employees, agents,
contractors, customers and /or invitees ( "Buyer Release "). In no event shall the
Clean -up, matters associated with the Clean -up, or releases which are the result of
the actions or failures to act of parties other than Buyer be construed to be (a) a
Buyer Release or (b) Buyer's responsibility pursuant to any provision of this
Agreement. Buyer's response to any Buyer Release ( "Buyer's Response ") shall be
conducted (i) in a safe manner, (ii) in accordance with applicable law, (iii) within a
reasonable period of time after discovery of the same, or after being notified by
Seller of the existence of the same, (iv) as authorized or approved by all federal,
state, and /or local agencies having authority to regulate the permitting, handling and
cleanup of Hazardous Substances, and (v) by Buyer directly contracting for or
performing all such actions in its own name or the name of its subtenant or
franchisee, if any. Buyer may (and Seller shall have no right to) apply for and
receive any and all amounts from any available federal, state and /or local
reimbursement fund(s) for the costs and expenses associated with any Buyer's
Response, including without limitation, Petrofunds and Superfunds, however titled
at the time of reimbursement.
8.3 Responsibility to Prevent Future Releases. Buyer shall be solely
responsible to protect against intentional or negligent acts or omissions of Buyer,
its employees, customers, invitees and third parties which might result directly or
indirectly in a Buyer Release.
8.4 Buyer's Indemnification. Buyer hereby agrees to pay and protect,
indemnify and hold Seller harmless from and against any and all liabilities,
4
damages, costs, expenses (including attorneys' fees and expenses), causes of
action, suits, claims, demands or judgment, made or otherwise claimed by any
person or entity arising from, in connection with or in relation to (a) a Buyer Release
or (b) Buyer's breach of its obligations described in Section 8.7 of this Agreement.
8.5 Seller's Indemnification. Seller agrees to indemnify and release
Buyer from and hold Buyer harmless against any loss, cost, damage or expense
which Buyer incurs as a result of any claims, causes of actions, regulatory
proceedings or other actions against Buyer or the Property arising in connection
with or in relation to the Remedial Plan including, specifically, claims by adjacent
property owners for damages resulting from the contamination of adjacent
properties due to the migration of any such contamination, except where such loss,
cost, damage or expense is incurred by reason of the (a) breach of Buyer's
obligations described in this Section 8, or (b) negligent or intentional acts or
omissions by Buyer or its tenants, invitees, contractors, subcontractors, agents or
employees.
8.6 Site Closure Letter. Upon completion of the Clean -up, Seller shall
use reasonable efforts to obtain a "site closure letter" from the appropriate
governmental entity ( "Site Closure Letter"), if the Site Closure Letter is available,
and provide the Site Closure Letter to Buyer. The parties acknowledge and agree
that if the appropriate governmental entity does not or will not provide a Site Closure
Letter upon completion of the Clean -up, Seller shall have no obligation to obtain and
provide a Site Closure Letter.
8.7 Non - Interference with Clean -up. Buyer agrees that Buyer will not
use the Property in a manner which interferes in any manner whatsoever with the
Clean -up. Buyer agrees to provide Seller with plans and specifications for any
construction activities which Buyer proposes to undertake on the Property ( "Plans ")
until the Site Closure Letter has been obtained or is not required or otherwise
available. Seller shall have thirty (30) days to approve any Plans, which approval
shall be limited to a determination that the Plans will not interfere with the Clean -up
and which approval shall not be unreasonably withheld. The parties specifically
acknowledge that any construction requiring any removal of contaminated soils or
the replacement or removal of monitoring wells that may be in existence (a) may
interfere with the Clean -up and (b) will require approval by Seller. Seller shall have
a right to have its environmental consultant present on the Property during any
construction activity by Buyer to observe the construction activity, test excavated
soils for contamination, and direct the stock piling and storage of contaminated soils
on the Property (all at Seller's sole .cost and expense). Buyer and its Buyers,
invitees, contractors, subcontractors, agents and employees agree to temporarily
cease construction or otherwise take such reasonably necessary action as directed
by Seller's environmental consultant during any construction activity. In the event
contaminated soils are encountered, Seller shall obtain a permit forthe disposal and
shall dispose of the contaminated soils at Seller's sole cost and expense. Seller
agrees that the provisions of this Section 8.7 shall terminate and be of no further
force or effect as of the date upon which Seller provides Buyer with a copy of the
Site Closure Letter pursuant to Section 8.6 of this Agreement.
8.8 Survival. The representations, warranties and covenants and
agreements set forth in this Section 8 shall survive the closing of this transaction
and Seller's delivery of the Deed to the Property to Buyer. To confirm Seller's rights
to enter the Property following the Closing Date, at the Closing, the parties agree
to execute the Access Agreement.
9. Buyer's Right to Enter Upon the Property. From and after the execution
of this Agreement, Buyer shall have the right to enter upon the Property and make such
tests, measurements or other inspections of the Property as reasonably necessary,
provided, however, that Buyer shall have no right to inspect or test the Property for
environmental conditions, unless accompanied by Seller or its agent(s). Such tests,
measurements or other inspections of the Property shall be made at the sole cost and
expense of Buyer and Buyer agrees to indemnify, defend and hold harmless Seller and the
Property from any cost, charge, claim or lien arising therefrom (including liability under any
Environmental Law) and agrees to repair any damage to the Property occurring as a result
of such tests or measurements.
10. Commissions. Seller hereby warrants to Buyer and Buyer hereby warrants
to Seller that no broker, agent or finder has been retained by either party and that no
broker's commissions, finder's fees or like charges have been incurred in connection with
this transaction. Each party hereby indemnifies and agrees to hold harmless the other
from and against all losses, damages, costs, expenses (including reasonable fees and
expenses of attorneys), causes of action, suits or judgments of any nature arising out of
any claim, demand or liability to or asserted by any broker, agent or finder, claiming to have
acted on behalf of the indemnifying party in connection with this transaction.
11. Contingency. The obligations of each party under this Agreement are
contingent upon the following:
11.1 Vacation of Property by Tenant. The Property is presently occupied
by a Tenant under a Lease dated March 18, 1994 ( "Lease "). The Lease will expire
and terminate, and the Tenant will be required to vacate the Property on or before
May 24, 1999 ( "Lease Termination Date "). If the Tenant does not vacate the
Property within thirty (30) days of the Lease Termination Date, either party may
terminate this Agreement by June 24, 1999, by providing the other party with written
notice of termination, to be delivered to the other party on or before the Closing
Date, in which event all Earnest Money shall be immediately refunded to Buyer and
L
neither party shall have any further obligation under this Agreement. If this
Agreement is not terminated according to this Section, this Agreement shall remain
in full force and effect, and the Closing Date shall be that date which is ten (10)
days following the date Tenant actually vacates the Property ( "Extended Closing
Date ").
11.2 Tenant Relocation Claims. Seller hereby agrees to indemnify and
hold Buyer harmless from and against any relocation benefits claims that may be
made by Tenant.
12. Miscellaneous.
12.1 Time of the Essence. Each and every undertaking and obligation of
Seller or Buyer under this Agreement shall be performed when due, time being of
the essence of the Agreement. Specifically, but not by way of limitation, the parties
agree that if the Closing does not occur for any reason whatsoever, on or before
June 30, 1999, either party may immediately terminate this Agreement by written
notice to the other party. In the event of such termination (a) the parties shall
execute a written recordable termination agreement, (b) neither party shall have any
further rights or claims against each other, and (c) the Earnest Money shall be
retained by Seller in the event the failure to close is not due to any fault of Seller.
12.2 Notices. All notices, demands and requests which may be given or
served or which are required to be given or served by either party to the other shall
be in writing and shall be sent via United States mail, certified mail, return receipt
requested, postage prepaid, addressed as follows:
If to Seller: Holiday Stationstores, Inc.
Attn: Real Estate Department
4567 West 80th Street
Bloomington, Minnesota 55437
With a copy to: Holiday Stationstores, Inc.
Attn: Legal Department
4567 West 80th Street
Bloomington, Minnesota 55437
If to Buyer: Fridley Housing and Redevelopment Authority
Attn: Grant Fernelius
6431 University Avenue NE
Fridley, Minnesota 55432
7
Notices, demands and requests by the Seller or Buyer in the manner aforesaid shall
be deemed sufficiently served or given for all purposes hereunder at the time such
notice, demand or request shall be mailed. Either party may change the place to
which notice is to be sent by serving a written notice thereof upon the other in
accordance with the terms hereof.
12.3 Governing Law. This Agreement shall be construed in accordance
with the laws of the State of Minnesota.
12.4 Wells. Seller certifies and warrants that Seller does not know of any
"wells" on the Property within the meaning of Minn. Stat. § 1031. This
representation is intended to satisfy the requirements of that statute.
12.5 Individual Sewage Treatment Systems. Solely for purposes of
satisfying the requirements of Minn. Stat. § 115.55, Seller represents that there is
no "individual sewage treatment system" (within the meaning of that statute) on or
serving the Property.
12.6 Like -Kind Exchange Treatment Buyer acknowledges Seller's desire
to complete a like kind exchange of the Property for other like kind property upon
which Seller will relocate its business operations ( "Exchange Property "), which
exchange is intended to comply with the provisions of Internal Revenue Code §
1031. As of the date of this Agreement, Seller has not identified the Exchange
Property. If, within forty -five (45) days after the Closing, Seller identifies suitable
Exchange Property, Buyer agrees to cooperate with Seller to effect a § 1031 like -
kind exchange of the Property for the Exchange Property. Buyer acknowledges that
its cooperation may include, without limitation, placement of the sale proceeds of
the Property into an escrow account to be held for the benefit of Seller and to be
released upon a closing of the purchase of the Exchange Property. All interest from
the escrow account will be credited to the exchange or to Seller. Buyer shall not be
obligated to purchase or otherwise take title to the Exchange Property. The parties
acknowledge that the closing of Seller's purchase of the Exchange Property must
occur within the time periods required in § 1031. Accordingly, the parties agree to
perform their respective obligations in good faith and with due diligence as
described in this Section. If Seller fails to timely identify the Exchange Property or
the closing of the purchase of the Exchange Property does not occur in a timely
manner, any escrowed funds and all accrued interest shall be immediately released
to Seller.
IN AGREEMENT, the parties have executed this Agreement as of the date and year
first above written.
SELLER:
HOLIDAY STATIONSTORES, INC.
By
Title Assistant Secretary
Date
0
BUYER:
FRIDLEY HOUSING AND
REDEVELOPMENT AUTHORITY
By
Title
Date
EXHIBIT A
TO PURCHASE AGREEMENT
Legal Description of the Property
Parcel 1:
Lots Six (6) and Seven (7), and the South Fifteen (15) feet, front and rear of Lot Eight (8),
Block Four (4), Bennett- Palmer Addition, according to the plat on file and of record in the
office of the Registrar of Titles in and for Anoka County, Minnesota.
(Torrens Property)
Parcel 2:
Lot Eight (8), Block Four (4), except the South Fifteen (15) feet, front and rear thereof, and
all of Lot Nine (9), Block Four (4), Bennett- Palmer Addition, Anoka County, Minnesota.
(Abstract Property)
EXHIBIT B
TO PURCHASE AGREEMENT
Form of Access Agreement
[See Attached]
Holiday Stationstore #815
5807 University Avenue NE
Fridley, MN
HOLIDAY STATIONSTORES, INC.
ACCESS AGREEMENT
THIS AGREEMENT is entered into as of , 1999, by and between
HOLIDAY STATIONSTORES, INC., a Minnesota corporation, 4567 West 801' Street,
Bloomington, Minnesota 55437 ( "Holiday ") and the FRIDLEY HOUSING AND
REDEVELOPMENT AUTHORITY, a public body corporate and politic organized underthe
laws of the State of Minnesota, 6431 University Avenue NE, Fridley, Minnesota 55432
( "Purchaser").
RECITALS:
A. Holiday and Purchaser are parties to that certain Purchase Agreement dated
as of April ,1999 ( "Purchase Agreement ") regarding the sale and purchase of certain
real property located in Fridley, Anoka County, Minnesota as legally described on Exhibit
A attached ( "Property ").
B. As of the date of this Agreement, Holiday and Purchaser have closed the sale
and purchase of the Property.
C. Pursuant to the Purchase Agreement, Holiday has agreed to complete that
certain Clean -up of the Property (as defined in the Purchase Agreement).
D. In order to complete the Clean -up, Holiday requires access to the Property
notwithstanding the closing of Holiday's sale of the Property to Purchaser.
NOW, THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
agree as follows:
1. Access. Purchaser agrees that Holiday shall retain a right of access to the
Property for purposes of completing the Clean -up, provided, however, that (a) Holiday shall
provide Purchaser with reasonable notice of any such entry, except in the case of an
emergency in which event no notice shall be required, and (b) Holiday shall use reasonable
efforts, if possible, to not unreasonably interfere with Purchaser's business operations on
the Property.
2. Temporary Structure. In connection with the Clean -up, Holiday may place
temporary structures on the Property, at locations approved by Purchaser, to house
equipment required to conduct the Clean -up, including without limitation air sparging units
( "Structures "). Upon completion of the Clean -up, Holiday shall remove the Structures from
the Property.
3. Completion of Clean -up. Holiday shall use reasonable efforts to complete
the Clean -up as soon as reasonably possible. Upon completion of the Clean -up, Holiday
shall obtain a "site closure letter" from the appropriate governmental entity ( "Site Closure
Letter"), if available, and provide the Site Closure Letter to Purchaser. Purchaser
specifically acknowledges that Holiday is not obligated to provide the Site Closure Letter
if a Site Closure Letter is not available from the appropriate government entity.
4. Purchaser's Non - Interference With Clean -uo. Purchaser agrees that
Purchaser will not use the Property in a manner which unreasonably interferes in any
manner whatsoever with the Clean -up. Purchaser agrees to provide Holiday with plans
and specifications for any construction activities which Purchaser proposes to undertake
on the Property ( "Plans "). Holiday shall have thirty (30) days to approve any Plans, which
approval shall be limited to a determination that the Plans will not interfere with the Clean-
up and which approval shall not be unreasonably withheld. The parties specifically
acknowledge that any construction requiring the removal of any contaminated soils or the
replacement or removal of monitoring wells that may be in existence (a) may interfere with
the Clean -up and (b) will require approval by Holiday. Holiday shall have a right to have
its environmental consultant present on the Property during any construction activity by
Purchaser to observe the construction activity, test excavated soils for contamination, and
direct the stock piling and storage of contaminated soils on the Property (all at Holiday's
sole cost and expense). Purchaser and its tenants, invitees, contractors, subcontractors,
agents and employees agree to temporarily cease construction or otherwise take such
reasonably necessary action as directed by Holiday's environmental consultant during any
construction activity. In the event contaminated soils are encountered, Holiday shall obtain
a permit for the disposal and shall dispose of the contaminated soils at Holiday's sole cost
and expense. Holiday agrees that the provisions of this Section 4 shall terminate and be
of no further force or effect as of the date upon which Holiday provides Purchaser with (i)
confirmation that the Clean -up has been completed, or (ii) a copy of the Site Closure Letter
pursuant to Section 3 of this Agreement.
2
5. Holiday's Indemnification. Holiday agrees to indemnify and release
Purchaser from and hold Purchasers harmless against any loss, cost, damage or expense
which Purchaser incurs as a result of any claims, causes of actions, regulatory proceedings
or other actions against Purchaser or the Property arising in connection with or in relation
to the Clean -up, including, specifically, claims by adjacent property owners for damages
resulting from the contamination of adjacent properties due to the migration of the
contamination, except where such loss, cost, damage or expense is incurred by reason of
the (a) breach of Purchaser's obligations described in Section 4 of this Agreement or (b)
negligent or intentional acts or omissions by Purchaser or its tenants, invitees, contractors,
subcontractors, agents or employees.
6. Purchaser's Indemnification. Purchaser agrees to indemnify and release
Holiday from and hold Holiday harmless against any loss, cost, damage or expense which
Holiday incurs as a result of any damage to the Property or any claims, causes of actions,
regulatory proceedings or other actions against Holiday or the Property arising in
connection with or in relation to Purchaser's violation of the conditions set forth in Section
4 of this Agreement.
7. Environmental Reimbursement. Purchaser hereby assigns to Holiday any
interest of Purchaser in and to reimbursement funds available with regard to the Clean -up
( "Environmental Reimbursements "), provided, however, that Holiday agrees to apply all
Environmental Reimbursements to actual costs incurred by Purchaser and /or Holiday in
connection with the Clean -up.
8. Additional Environmental Agreements. Purchaser hereby warrants and
covenants with Holiday that Purchaser's use and occupancy of the Property shall comply
with any and all local, state and federal laws, ordinances, rules, regulations and
requirements regarding the environmental condition of the Property. Purchaser shall
immediately notify Holiday of any environmental condition, other than the Clean -up, which
is discovered on the Property ( "Subsequent Condition "). If (a) such Subsequent Condition
was due to any material released, brought upon, stored, produced, emitted, disposed of
or used upon, about or beneath the Property by Purchaser, its agents, employees,
contractors or invitees or (b) the same resulted from the acts or omissions of Purchaser,
its agents, employees, contractors, tenant, franchisees, invitees or assigns, Purchaser
shall be solely responsible for the entire cost of any Subsequent Condition. Purchaser
hereby agrees to pay and protect, indemnify and hold Holiday harmless from and against
any and all liabilities, damages, costs, expenses (including attorneys' fees and expenses),
causes of action, suits, claims, demands or judgment, made or otherwise claimed by any
person or entity arising from a Subsequent Condition.
9. Defined Terms. Defined terms used in this Agreement shall have the same
meaning as defined in the Purchase Agreement.
K
£ •.
IN AGREEMENT, the parties have executed this Agreement as of the date and year
first above written.
HOLIDAY STATIONSTORES, INC.
sy
Title Assistant Secretary
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
FRIDLEY HOUSING AND
REDEVELOPMENT AUTHORITY
sy
Title
The foregoing Access Agreement was acknowledged before me this day of
1999, by , the Assistant
Secretary of Holiday Stationstores, Inc., a Minnesota corporation, on behalf of the
corporation.
Notary Public
STATE OF MINNESOTA )
) ss.
COUNTY OF ANOKA )
The foregoing Access Agreement was acknowledged before me this day of
, 1999 by , the of the
Fridley Housing and Redevelopment Authority, a public body corporate and politic
organized under the laws of the State of Minnesota, on behalf of the public body corporate
and politic.
Drafted by:
Holiday Companies
Legal Department (CJR)
4567 West 801' Street
Minneapolis, MN 55437
612/830 -8700
4
Notary Public
TO ACCESS AGREEMENT
Legal Description of the Property
Parcel 1:
Lots Six (6) and Seven (7), and the South Fifteen (15) feet, front and rear of Lot Eight (8),
Block Four (4), Bennett- Palmer Addition, according to the plat on file and of record in the
office of the Registrar of Titles in and for Anoka County, Minnesota.
(Torrens Property)
Parcel 2:
Lot Eight (8), Block Four (4), except the South Fifteen (15) feet, front and rear thereof, and
all of Lot Nine (9), Block Four (4), Bennett- Palmer Addition, Anoka County, Minnesota.
(Abstract Property)
EXHIBIT C
TO PURCHASE AGREEMENT
Restrictive Covenant
The Property is hereby encumbered with the following restrictions:
No retail sales of gasoline, diesel or other motor fuel shall be made from the Property; and
No storage (above ground or underground) of gasoline, diesel or other motor fuel shall be
located on the Property; and
No cigarette store ( "Cigarette Store ") shall be located on the Property;
No dairy store ( "Dairy Store ") shall be located on the Property;
No grocery store or supermarket store ( "Grocery Store ") shall be located on the Property;
No convenience food store or superette ( "Convenience Store "), whether or not the
Convenience Store sells gasoline, diesel or other motor fuel, shall be located on the
Property; and
No car wash ( "Car Wash ") shall be located on the Property.
For purpose of this restriction, "Cigarette Store" shall be defined as a facility primarily
selling cigarettes and /or other tobacco products, at retail. For purposes of this restriction,
"Dairy Store" shall be defined as a facility primarily selling milk and other dairy products.
For purposes of this restriction, "Grocery Store" shall be defined as a facility selling retail
groceries, including without limitation, fresh produce, fresh vegetables, or operating a
bakery or delicatessen. For purposes of this restriction, "Convenience Store" shall be
defined as a facility selling primarily: (a) groceries, and /or (b) sundries, and which operates
in a building of less than fifteen thousand (15,000) square feet.
This Restrictive Covenant shall terminate and have no further force and effect on the date
which is thirty (30) years after the date this Restrictive Covenant is recorded.
04/23/99 FRI 15:46 FAX. 612 885 5969 BRASS MONROE
HRA RESOLUTION NO.
4 FRIDLEY 2003
RESOLUTION AUTHORIZING EXECUTION AND DELIVERY
OF A PURCHASE AGREEMENT BY AND BETWEEN THE
HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR
THE CITY OF FRIDLEY AND HOLIDAY STATTONSTORES,
INC.
BE IT RE-SOLVED 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 Purchase Agreement (the "Contract')
with Holiday Stationstore:s, Inc.
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 St rtes, Section 469.001 et seq.
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 if the following conditions are met:
Substantial conformance of a Contract to the Contract presented to the Authority as
of this date.
PASSED AND ADOPTED BY TM HOUSING AND REDEVELOPMENT AU"T"HORITY IN
AND FOR THE CITY OF FRIDLEY THIS DAY Or , 1999.
LAWRENCE R.. COMMERS - CHAIRMAN
ATTEST:
WILLIAM W. BURNS — EXECUTIVE DIRECTOR
o.%wPnATAUhFRmLEI'%35�DOC%HRA RL•SO4UTH)N1XX`
04/22/99 THU 16:45 FAX 812 885 5989 BRASS MONROE la 002
KRASS MONROE, P.A.
ATTORNEYS AT LAW
■ James R Casserly
Emar7lamesc@Jtrassmonroeoom
wwwArassrnenroecom
Direct Dial (612) 8851296
MEMORANDUM
To: City of Fridley
Attn: Barbara Dacy
Grant Ferrielius
From: James R. Casserly, Esq.
Date: April 22,1999
Re: HRA and City Council Resolutions for Gateway East
Our File No. 9571 -30
Attached you will find Resolutions for the HRA and the City Council. The purpose of the
Resolutions is to find that the 5807 University Avenue and 5755 University Avenue sites contain
structurally substandard buildings and that the sites may be incorporated into a Tax Increment
Financing District.
The Resolutions are helpful because it is preferable not to create a tax increment district until we
know that there is a strong potential for development. However, if the HRA or the City demolish
the buildings and prepare the parcels, then the City and HRA will no longer be able to qualify
those parcels for inclusion in a redevelopment tax increrrient district. The enclosed Resolutions
simply provide the HRA and the City with the option of including those parcels within a
redevelopment tax increment financing district even after the buildings are removed. The
City /HRA has three (3) years from the date of approval of the Resolutions to file a request for
certification of these sites as part of a district with the County Auditor.
Again, these Resolutions only preserve your options and do not commit you to any further action.
We recommend their approval.
JRC /jms
Enclosures
ra NPOATAWROLEYMCOMACY FEMEWS 4 D
SUITE 1100 SOUTHPOINT OFFICE CENTER • 1650 WEST 82ND STREET • BLOOMINGTON, MINNESOTA 55431.1447 2
TELEPHONE 612/8855999 • FACSIMILE 6111885.5969
RESOLUTION NO. HRA�- -1999
A RESOLUTION DETERMINING THAT CERTAIN PARCELS
ARE OCCUPIED BY STRUCTURALLY SUBSTANDARD
BUILDINGS AND ARE TO BE INCLUDED IN A TAX
INCREMENT FINANCING DISTRICT
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 in and for the City of Fridley has considered the acquisition of and /or
redevelopment of parcels identified as follows (the "Parcels "):
1. 5807 University Avenue
PIN 23- 30 -24 -24 -0014
2. 5755 University Avenue
PIN 23- 30 -24 -24 -0072
PIN 23- 30 -24 -24 -0073
1.02 Minnesota Statutes, Sections 469.174 through 469.179, inclusive, as amended and
supplemented from time to time (the "Tax Increment Act") provides for the establishment of a
Tax Increment Financing District as a Redevelopment District. The Tax Increment Act allows
for the inclusion of parcels within a Redevelopment District after substandard buildings have
been removed by complying with Minnesota Statutes 469.174, subd. 10(b).
Section 2. Findings.
2.01 The Authority hereby finds that the acquisition and /or redevelopment of the Parcels
further the goals and objectives of the Redevelopment Plan.
2.02 The Authority hereby finds that the Parcels are occupied by structures that are vacated
and structurally substandard as identified in the Tax Increment Act and that the structures must
be demolished and removed from the Parcels.
2.03 The Authority intends to demolish or cause to be demolished the substandard buildings
to prepare the Parcels for redevelopment.
Section 3. Declaration of Intent.
3.01 The Authority hereby declares its intent to include the Parcels within a type of a tax
increment financing district known as a redevelopment district within 3 years of the filing of the
request for certification of the Parcels as part of a district with the Anoka County Auditor.
Page 2 — Resolution No. HRA -1999
Section 4. Notice to County Auditor.
4.01 If the Authority establishes a tax increment financing district and includes the Parcels,
then upon filing the request for certification of the tax capacity of the Parcels as part of such
district, the Authority shall notify the Anoka County Auditor that the original tax capacity of the
Parcels must be adjusted as provided in Minnesota Statutes, Section 469.177, Subd. 1, Para.
(h).
PASSED AND ADOPTED BY THE FRIDLEY HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA, THIS DAY OF
1999.
LAWRENCE R. COMMERS, CHAIRPERSON
ATTEST:
WILLIAM W. BURNS, EXECUTIVE DIRECTOR
DATE: April 23, 1999
MEMORANDUM
HOUSING
REDEVELOPMENT
AUTHORITY
TO: William Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Resolution Authorizing Execution of Development Contract with
Senior Housing Construction, Inc.
Background
On March 13, 1997, the Fridley HRA approved a resolution authorizing execution of the
development contract to provide tax increment financing assistance to Noah's Ark, Inc., for
construction of a 108 -unit senior housing project. The approval was conditioned upon the
approval of a revenue bond by the City Council. The City Council authorized the issuance of a
$9.3 million senior housing revenue bond on June 8, 1998. Since that time, the HRA has
passed three additional resolutions authorizing an extension of the deadline to execute the
contract on or before July 1, 1999. Gary Bidne of Noah's Ark, has since sold the project to
Senior Housing Construction, Inc., that purchased the plans and has established the 501 C3
organization which will ultimately be the owner and manager of the project. The development
contract must, therefore, be approved under the new name of the developer.
The original amount of the TIF assistance was approximately $680,000. Since the date of
approval of the contract, there have been a number of changes to the class rates that would
affect the calculation of the amount of tax increment. More information will be available for the
HRA at Wednesday's meeting. The $680,000 was the present value amount at 8 %. The
amount of available tax increment (without the present value calculation) was approximately $1
million.
Recommendation
The resolution and associated documents will either be delivered on Monday or distributed
Wednesday evening. Staff recommends the HRA approve the resolution as presented.
BD:Is
M- 99-107
HRA RESOLUTION NO. S
RESOLUTION AUTHORIZING EXECUTION AND DELIVERY
OF A CONTRACT FOR PRIVATE REDEVELOPMENT BY AND
BETWEEN THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF FRIDLEY AND
SENIOR HOUSING CONSTRUCTION, INC.
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 Senior Housing Construction, Inc. (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 if the following conditions are met:
Substantial conformance of a Contract to the Contract presented to the Authority as
of this date.
PASSED AND ADOPTED BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF FRIDLEY THIS DAY OF '1999.
LAWRENCE R. COMMERS - CHAIRMAN
ATTEST:
WILLIAM W. BURNS — EXECUTIVE DIRECTOR
GAWPDATA\F,FRMLEY\01\D00HRA RPSOLUTION SHC.DOC
DATE: April 23, 1999
MEMORANDUM
HOUSING
REDEVELOPMENT
AUTHORITY
TO: William Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Consider Resolution Authorizing Execution of a
Development Contract with Waymore Transportation
Background
Waymore Transportation 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
Transportation 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). The
amount of assistance to be provided was $250,000 or 5% of the total project cost of
$4.9 million.
Waymore Transportation currently employs 25 people. The company.said it would hire
at least 25 more employees if it proceeds with this expansion.
2
Waymore Transportation
April 23, 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'/Z 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.
Recommendation
Staff recommends that the HRA pass the attached resolution as presented authorizing
execution of the development contract.
BD:Is
M- 99-108
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, MINNESOTA AND WAYMORE
TRANSPORTATION, INC.
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 Waymore Transportation, Inc. (the "Redeveloper ").
Section 2. Findings.
1
2.01. The Authority hereby finds that it has approved and adopted a development program
known as the 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.
Chairman
ATTEST:
Executive Director
'.\ K_ M\ VOL2\ WPDATAVIFRIDLEY\36U=SJWSOLUTION AUTHORIZING CONTRACT.DOC
APR -19 -1999 09:0? RSP ARCHITECTS
APPLICATMON FORK FOR TAX 11-CRMONT PIN PULG.
Business Nam4
Address: —S
612 339 6760 P.03i06
Type (Partnership, etc .):
Representative: bad S
A/I
Telephone: 4 /.A -• Zf4, - 9-0 7&
Name of Counsel:
Name and Telephone of Accountant: kV/;V 4AJ Oy 049-1196' - 1193%
List of Financial References: Name /Address /Contact /Telephone
d1vr.1,� Qa A �a��o i� g 6
-)YAi /G Aa fnrV
cop other Comments Pertinent to Your Application: _.
Have You Ever Filed fnr nankruptcy? Yee _
If Yes, provirir. details on separate shect
No
Have You Ever Defooltied on any Loan Co=itment? Yes No
if Yes, pxt,vide deteila on separate zheet
INFORMATTnw CON ZOPOSED PR91ECT3 LAT' _
Location of Proposes) Development: (Attach a Drawing)
Nature of Proposed Business.:
APR -19 -1999 09:07 RSP ARCHITECTS 612 339 6760 P.04i06
principal BUCineaa or product of the Company?
�AjbA /1 bVA'P p/C��•/I.- i/iy�Q Ce/�sw�s /i'c. ��iid bd ai. /%% ab
VL Gies f r 7 6acAliz
Is the Proposed Project. A New Facility or Rehabilitation and /or
Expancl`on of Existing Facility?
L KA S, &,w' G�i� /S�•�L 'jl�i li
r
Zndustra /Residential:
What is th Pressn, Employment of Your Firm: _
What is Your Estimate a Employment one Year After Completion or
Project: Qe
what is Your Estimate of Employment Five Years After Completion or
Project: eeeD10
Total Estimated Project Cost:
Total Estimated Construction Costs:
Potential other Use of Proposed Development:
Will this Development Attract other Related Industries:
Yes No
HOW?
What '17Pes? _.
What ie the Current. Zoning Status of the Project site ? - �✓�VSTt�i9�
in Resoninq, will Zoning variances or Conditional Use Permits be
rtequired in Connection with the Project?
-z-
APR -19 -1999 09:07 RSP ARCHITECTS
1
Is the Property Properly subdivided for the Proposed Use?
612 339 6760 P.05i06
Has site Approval been Obtained for thi. Project?
If 3o, When?
By Planning Commizzion ?.
By City Council? .
Have You Applied for Conventiunal Financing for the Project?
Yes so _
If Yes, Provide Details ur-A Separate Shect, "H. InZormat•ion to
Attach"
If No, Why Not?
INFQR14ATION TO ATTACH
Please include:
State Public Purpose
Description of Project
Schematic Drawing of Project.
Breakdown of Project costs
Amount of Subeidy Roquest
Conctruction Schedule
regal vaccription - (Include PIN's)
Other Pertinent Information
Deposit
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1,hchae! 1. Plau'z, A.I.A.
Stephen J. Fautsch, A.!.A
l m Fitzhugh, A.I.A.
Robert M. Luc!us. A.I.A.
David C. Ncrback, .A.1 A
Pat Parrish
Rchard Varda, A LA., A.S.L.A.
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Rf P
26 March 1999
►Ms. Barbara Dacy
Community Development Director
City of Fridley
Municipal Center
6431 University Avenue NE
Fridley, MN 55432
Re: Proposed Addition
Waymore Transportation, Inc.
8201 Hickory Street NE
RSP Comm. No.: 1117.001.00
Dear Ms. Dacy:
As requested during our phone conversation on 22 March 1999, we have prepared a very
preliminary estimate of project costs for a possible addition to the existing Waymore
Transportation facility. The proposed 13,380 square foot addition would consist of a
conventional spread footing, slab -on- grade, steel bar joist/steel roof deck structure built
on a reconstructed building pad prepared per recommendations made by Braun- Intertec
in their soil exploration report dated 31 December 1998. The exterior walls of the
addition would be constructed of insulated metal wall panels on the west, north and east
sides. The south elevation would be built out of both concrete masonry units and
insulated metal panels. A copy of the preliminary plan, elevations, and soils report were
previously submitted for your use.
Due to the preliminary stage of the project, hard cost data is not yet available. For
purposes of preliminary planning, cost data of $55 -$60 per square foot, excluding
refrigeration costs, was used based on a recently constructed warehouse project of similar
size.
In addition, a local contractor has reviewed the proposed plan and established a
preliminary price estimate of $690,000.00 (copy enclosed). At the time this estimate was
prepared, no concrete unit masonry was planned as an exterior wall treatment, and very
little was known about the specific site utility improvements required by City
Engineering or by local utilities. Also, it now appears that the cost for preparation of the
building pad and drive areas has increased beyond those costs originally assumed for this
estimate. A separate summary of costs for subsoil correction is being prepared by Braun -
Intertec and will be forwarded to you shortly. These items have added somewhere
between 10 — 20% to the cost of the project. The preliminary price estimate also did not
include the cost of refrigeration equipment and fees for Architectural and Consultant
services. A cost estimate of $190,000 for refrigeration equipment was received from
Twin City Mechanical of Blaine. We are estimating the fees for Architectural and
Consulting Engineering to run between $50,000 - $55,000.
RSP Architects Ltd.
120 First Avenue North
Minneapolis, MN 55401
http:/hmw.rsparch.com
FAX 612 • 339 • 6760
612 • 339 • 0313
Ms. Barbara Dacy
26 March 1999
Page 2
Based on the above information, we think that this project will cost in the range of
$975,000 - $1,075,000, not including the cost of the land.
Please contact us if you need additional information regarding this proposed project.
S
Stephen J.
Principal
Enclosure:
Copy: Don Schille - Waymore
Dave Wecker - Waymore
Kurt Carr - Waymore
APR -01 -1999 16:30 RSP ARCHITECTS 612 339 6760 P.02/02
B
MHM1. )U• t>>. ..
arr• {ntsrtac [arv�S_lh
6801 WMI091-
Mmue ou
B R Au N ~ P.O Bw 37108
An„ yapelic, FAA -ose 55b30d108
TERTEC 611.9d1Jb00 Far. Od1.4151
IN
[nginMn and Sccenllsn 9anlag
she Bull) and r-*u„a! Envbeemar,
Proposal BABX 98 -848A
March 30,1999
Waytnore Traa3POrman , Inc.
CIO )&. Steven Pautsch
RSP Architects
120 First Avenue North
M-Inneapolisl, MN
Dear Mr• r. aim lnr. t'ridleY,
1)c.
Required So.! Correction, Proposed Addition to W aymOre itansPortation'
Minaesnta you with cydtntttetl enst;
euoerhnioai repots, we ore pr0VIC Wa mma TrattsPwWlOn
for so upon the ftrtdings of our S O%ed addldw, to the Y
facillity a 820 oNE ll�leory Street n7 F dlry P
Of 0%11- otetlsnical evnlualdon, we completed three coil boring
Fill mad organio soil
Aa port
were encountered to dials of 1?. to 14 feet. I; �deT =o euthr. filll =a oorg9nic � t �r � 1poe
ncceprable lcveL,.icwi�berteeessaty to oomp >y w ovc{slEtng
than with ooatroUrd cosrtpactcd fill. The o.YWG s�tit��t it will aucrasor}'to excavate an
PT(Mdc lnteral stability below folmdations- building in order to provide the requu�cd loteral
additional 17. feet bOYottd the persmcta of the
smbility.
As iAdicated in our rePOM most of the All contains Organic material and is d a met condition. al
Br W t of this..ve indtcated that only a small p° lely 10 percent t of the excaYt -,tea m° Structural
would be suitable for use as thee Stru tnral fill pP�'t
we have sees $w-reaeed
Because of the Current high activity of consSoiln`w recommend that a cost of
dcatand and associated costs for impor�t� ri cost and also the import cost (rho actual
S14/per cubic yard be used Bern ks both the expo of fill and Ike availability of
cost wji,� Vane dependin8 t conditions and the availability
earthwork contractors. a anticipate that the lOOSa nook volume b will O approximately 20
ercent more than the mplace volume of the material winch is to be removed. w �ed �lacc the That the loose truck volume will be approximately 25 per"
that the parcular soil that is more
import fill rnatrrial. however, the actual percentage is dependent
imported, its moisture content. etc.
if there are questions regarding this letter, please colatact Lc= Braun at (612) 942.4617.
SIn eel.
Z y W
Loren W. Braun, PS
Senior ingineer
onald A. She
Scnier Engineer
�,�,Rtyyrtba�Upn98Ba8s -t
twbhesil�
TOTAL P.02