HRA 09/02/1999 - 63151�I
HOUSING & REDEVELOPMENT AUTHORITY MEETING
THURSDAY, SEPTEMBER 2, 1999
MEETING 7:30 P.M.
PUBLIC COPY
(Please return to Community Development Department)
CITY OF FRIDLEY
HOUSING & REDEVELOPMENT AUTHORITY MEETING
SEPTEMBER 2,1999, MEETING, 7:30 P.M.
AGENDA
LOCATION: City Council Chambers
CALL TO ORDER
ROLL CALL:
APPROVAL OF MINUTES:
July 28, 1999, Joint HRA/City Council
August 5, 1999
CONSENT AGENDA:
Consider Resolution Authorizing Application
for DTED Funds for Pollution Clean- up .. ............................... 1
Claims and Expenses ............... ............................... 2
ACTION ITEMS:
Consider fiesoloVen Authorizing
Scattered Site Acquisitions ........... ............................... 3
INFORMATION ITEMS:
Gateway East Update ................ ..............................4
TIF Assistance for Office Warehouse Project, Main Street .................. 5
Medtronic Development Update ....... ............................... 6
Miscellaneous Land Acquisition Update . ............................... 7
1999 -2000 Budget ................. ............................... 8
Rambler Rehab Update ............. ............................... 9
OTHER BUSINESS
ADJOURNMENT
CITY OF FRIDLEY
JOINT HOUSING AND REDEVELOPMENT AUTHORITY/
CITY COUNCIL MEETING
JULY 28, 1999
The joint meeting of the Housing and Redevelopment Authority and City was called to
order by Mayor Jorgenson at 7:09 p.m.
ROLL CALL:
CITY COUNCIL
MEMBERS PRESENT: Mayor Jorgenson, Councilmember Barnette,
Councilmember Billings, Councilmember Bolkcom
CITY COUNCIL
MEMBERS ABSENT: Councilmember Wolfe
HRA MEMBERS
PRESENT: Larry Commers, Virginia Schnabel, John Meyer,
Jim McFarland, Pat Gabel
CITY OF FRIDLEY
STAFF PRESENT: Barbara Dacy, Fritz Knaak, Rick Pribyl, Scott Hickok,
Missy Daniels, Grant Femelius, Jim Casserly
DISCUSSION ITEM:
Ms. Dacy stated that three important topics of discussion for the evening include talking
about philosophy for redevelopment priorities, numbers which will help decide these
issues, and thirdly end the session with what the next steps are. At minimum, members
should count on having another meeting one year from now. Staff is suggesting the
City should do some studies in the next 6 to 8 months so members can come back and
re- evaluate the outcomes of the studies and take another look at priorities.
Ms. Dacy stated that the first topic they should talk about tonight was how aggressive
should the City be planning for the Medtronic impact. The City Council and Commission
completed a survey relating to the Medtronic issue. The decision points this evening
are whether the City should do a study (if yes, how detailed should it be ?) and what are
the redevelopment priorities with two subtasks. The first subtask is the housing
programs and the second task is the redevelopment projects specifically Gateway East
and whether it should move forward now or wait until the Medtronic Study is analyzed.
The salvage yards and Frank's Used Cars need to be discussed as well. Finally, Ms.
Dacy wanted to discuss options for use of additional increment available in Tax
Increment Districts No. 2 and No. 3.
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JOINT CITY COUNCIL/HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 28, 1999
PAGE 2
Ms. Dacy stated that the first topic is how aggressive should the City of Fridley be in
planning for the impact from Medtronic. Should the City do a study, and if so, how
aggressive should it be? City of Fridley Staff suggests that a study be done. City of
Fridley consultant, Mark Koegler provided two options with a general approach for the
study and also a more detailed approach. City of Fridley Staff is suggesting a more
detailed approach.
Ms. Dacy stated that she fully realized that City Council preferred a more general
approach towards the study. The Commission seemed to favor a study that would be
more specific and would link the land uses to specific sites.
Ms. Dacy addressed some of the risks if the study was not completed. She stated that
the Wingate Hotel is a more business - oriented hotel, and she is not sure if it is in the
same class that Medtronic feels it wants. The point of bringing it up is that it represents
an interest from a private market. Mr. Hickok has been getting a lot of phone calls from
the Kelly Inn regarding expansion.
Ms. Gabel arrived at 7:20 p.m.
Councilmember Bolkcom asked if there were any Wingate Hotel sites in the Twin Cities
already.
Ms. Dacy stated that there was one in Oakdale.
Ms. Schnabel asked Ms. Dacy if she had a feel for the type of facility that Medtronic
would prefer, and how long are the Medtronic clients going to stay for their training.
Ms. Dacy explained that Mr. Donn Hagmann, Medtronic representative, was suggesting
that Medtronic wanted a 3 star hotel and she wasn't sure about the length of time the
clients would be staying for training. She felt that that very question should be part of
the analysis.
Mr. Bums, City Manager stated that he thought Medtronic told the City of Fridley that
they needed 5,000 hotel rooms a year when they were lobbying.
Ms. Dacy stated that the other issue she wanted to identify was what the City would
risk if they do not complete the study. Does the City want to encourage the hotels and
restaurants and other uses of land to end up in Fridley or elsewhere? She understood
New Brighton was redeveloping the 1 -694 and 35W interchange, and they have a couple
of redevelopment projects going on. She also stated that if a study is not completed
there might be a hodgepodge of architecture. If there is not a set plan there may be a
lack of sense of direction for the community. Private investment may occur that may or
may not be consistent depending again on what the City of Fridley wants. Despite the
approach, these are the types of issues the study would look at. There should be a
strong link between what the City wants in terms of land uses and what types of housing
impacts are going to be in connection to the commuter rail line on Main Street and 61St,
JOINT CITY COUNCIL/HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 28, 1999
PAGE 3
industrial and bikeway connections. Those are the types of issues the study would look
at.
Ms. Dacy explained what the City would expect for outcomes of the study. The study
would be a game plan, a tool for the Council to use in evaluating proposals or a tool for
the HRA to establish redevelopment plans. There are legal implications of a general
plan for the study versus the more specific study. She stated it was a planning tool
versus force of law. The decision was really up to the City Council. If the City adopts
the plan as part of the comprehensive plan then it will have to follow the course of law.
If the City wants a planning study, the City would use it to help evaluate problems as
they come up.
Councilmember Bolkcom asked Ms. Dacy how much the study would cost.
Ms. Dacy stated that the general study would be a shorter process, probably three to six
months and has the lower cost around $30,000. A more detailed study would have a
longer process anywhere from six to nine months. The more detailed study would be
more thorough in terms of identifying cost and time frames. She went to Mark Koegler
to provide these estimates and certainly in -house staff would love to do this type of work
for the studies but unfortunately the City staff has to work on a number of other things.
Councilmember Barnette stated that if say Hilton Hotel came to the City and said they
wanted to develop just west of the development between 57th Street and the freeway.
What would the City do if Hilton came to the City and asked for assistance in buying the
properties?
Ms. Dacy stated that that was one of the issues the study would address. Should
redevelopment proceed west, and if so, what are the consequences? Should the
development proceed south across the street where it is zoned commercial and what
are the consequences. Those questions are hard to answer right now without knowing
a whole bunch of answers and she doesn't think tonight is the time frame to say
whether development can move west. She believed they need the benefit of more
analysis.
Councilmember Bolkcom stated that the study wouldn't just focus on hotels. Some of
the other issues the City has are whether or not they can support a higher executive
type home and other housing issues. She would like the study to focus on the
commercial and housing issues.
Mayor Jorgenson stated she thought the City has to look at people who are coming to
the City now and want to build and hope that they are going to shirttail off of Medtronic
and pick up some of their clients. Does the City want a lower end motel that the people
of Medtronic aren't going to use and then have it sit there? Medtronic is going to be
looking for a first class hotel and restaurant. Shorewood is wonderful but they want a
first class restaurant that is going to be available when they can get into it that is
convenient for them. Mayor Jorgenson stated they have a lot to decide here but she
a
JOINT CITY COUNCIL/HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 28, 1999
PAGE 4
doesn't want to start lower quality development that Medtronic wouldn't be expecting
and does the City want to encourage that.
Mr. Meyer asked Ms. Dacy what the City could do to control the type of development.
There are zoning laws and building laws but how much more can the City influence the
type of use and quality of the use to say nothing of the appearance. He asked what the
City's legal restrictions were.
Councilmember Bolkcom asked that if the City had a master plan for the redevelopment
area can the City have more control over it.
Ms. Dacy stated that the S -2 redevelopment district in the zoning ordinance gives all of
the control to the City Council and the HRA and the Planning Commission to review the
plan. For example if they came in and wanted to move west that area is zoned R1 and
R3. The developer would have to receive a rezoning to get that developed. A good
example is where the United Store and Target is. That is a C -3 zone and a hotel is a
permitted use. So what about the quality and architectural controls. The City would
have to enact another overlay ordinance for architectural guidelines. If businesses
come in and want tax increment financing assistance then the City holds the club with
whether the City can give assistance until the City sees the designs they want. What
may be the issue is that the City may not be able to hold off some development
depending on where it is located.
Mr. Meyer stated they should face the fact that the City's powers are quite limited. For
example if Wingate Hotel comes in and the City really wants a Radisson but if the
Wingate Hotel fulfills all the concurrences the City is going to have a Wingate Hotel.
Councilmember Billings stated that if Wingate is the class of a Ramada and a little step
up from a Super 8 they have to realize that they are not going to get a lot of business
from Medtronic. Medtronic right now is taking 90% of their business at the Northland
Inn and the Marquette and Radisson in Minneapolis. A 3 Y2 star hotel adjacent to
Medtronic probably couldn't guarantee them 5,000 rooms a year. Many of the doctors
they are bringing in want to be close to the social amenities such as Orchestra Hall and
the Guthrie or whatever because they want to spend a little bit of time doing some other
things. If they want to bring their families they want their family to be close to some
things as well. Other than the zoning there is not a lot the City can do for restrictions if
they are not seeking public assistance. If they are seeking public assistance the City
takes care of that kind of stuff with the development agreements.
Mr. Meyer stated he thinks the City should bear that in mind while the City goes through
this even with the development district they have had several curtailing influences with
things they don't have much power over. The Wingate Hotel may not come in because
there isn't the clientele.
Mr. Commers stated that he believes Medtronic has a confidential report on hotel billing.
He believes the report tells them that it is very premature and they aren't going to get a
JOINT CITY COUNCIL/HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 28, 1999
PAGE S
4 star hotel in here unless there are significant incentives. He thought the City should
ask them about the report.
Councilmember Bolkcom stated that her concern is that someone will come in and want
the City to help them and they are not going to have money to do it. Should the focus
be whether the City should have a 4 star hotel and a restaurant or try to do something
with the housing and apartment issues they have.
Mr. Commers stated that was what everybody has to decide upon. That is the issue.
Mayor Jorgenson stated that it appears that the redevelopment project could expand
westward. If the City develops a study and puts together a redevelopment district and
there are houses in the district we just sealed their fate.
Ms. Dacy stated that the purpose of the study is to outline the options and the
consequences of each option. Part of the study would identify how many units for
development are there, how many are rental, how many are affordable, how much land
is needed for the support types of uses for Medtronic. In the next six months the City is
putting together the overall language for the comprehensive plan. In the housing
element they are going to have to put in some statements about how the City is trying to
meet the affordable housing demand, and if they have a significant amount of units that
are going to be demolished. Met Council is probably going to want to know how that
stacks up against their benchmarks.
Mayor Jorgenson stated that an interesting comment Ted Mondale gave her the day
they broke ground at Medtronic was "Well now all you have to do is get Medtronic to
build and fund an improved housing program." which would mean market rate housing,
low income housing, and executive housing. She thought that was kind of a foretelling
of what Met Council expects to come.
Councilmember Billings stated that he doesn't have a problem in doing a study and
taking a look at things but he is not sure that he wants something included in the
comprehensive plan at this point. He would like to proceed with their process of doing
the comprehensive plan and make that the focal point of getting the comprehensive
plan completed. He feels he wouldn't even want to know the results of the study until
after he has adopted the comprehensive plan because he doesn't want to be forced into
adding it to the comprehensive plan.
Councilmember Billings stated that Mr. Koegler's firm is up to their neck in
comprehensive plans so it might be hard for him to get it done before the
comprehensive plans are done anyway.
Ms. Dacy stated that Mr. Koegler's partner Mike Schroeder has done a study for the
City of Richfield. The City of Richfield is implementing findings of the impressive study
right now. She stated that Mark Koegler would still prioritize the comprehensive plan
and his partner would complete the Medtronic analysis.
s
JOINT CITY COUNCIL/HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 28, 1999
PAGE 6
Councilmember Bolkcom asked Councilmember Billings to explain why he didn't want
the Medtronic study.
Councilmember Billings stated the comprehensive plan, under current state statute,
takes precedence over the current zoning they have on a piece of property. It is
different if you have adopted it as part of the comprehensive plan or have it merely as a
planning tool.
Councilmember Billings stated his other question is how large of an area would they be
looking at.
Ms. Dacy stated they have thought about that and talked about that internally but do not
have a recommendation for tonight. It literally could be the whole city because of the
size of the project and, at minimum, it does have implications up and down 694. At
minimum, there needs to be a band from the river and from Mississippi Street on the
north and the City limits on the south and go east. Once they define the scope better,
they may have to come back and outline the boundaries.
Mayor Jorgenson asked what percentage of residential homes this would affect.
Ms. Dacy stated it would possibly be a third of it.
Mayor Jorgenson stated that most of it is low to moderate income.
Ms. Dacy stated that was true.
Mr. Meyer asked if it was realistic to even worry about doing something with executive
housing.
Ms. Dacy stated it was worthwhile to ask those questions.
Mr. Burns, City Manager, stated the City should talk to Medtronic and try to get a real
good feel for the secondary impacts of their project. They have an idea of what
industries they want to be near them and what other uses of land they want near them.
They told the City that they are going to generate two jobs for every one job they
generate.
Mr. Commers stated that he thinks they should talk to Medtronic more being that they
might have some information they may not be sharing as to where it is going. He also
agrees with Councilmember Billings that the comprehensive plan should be done first
because it gives us better leverage in many respects. Mr. Commers stated he is not so
sure the special study does any more than the comprehensive plan. He is not sure that
they should be paying for that again to spend $40,000 or $50,000 for a study that is
concurrent with the comprehensive plan. He asked what good what that study do if it
doesn't turn out to be compatible with the comprehensive plan. It seems to him they
need that in place for the various reasons Councilmember Billings cited and then you
are in a position to start figuring out what you are going to be able to do where, when,
JOINT CITY COUNCIL/HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 28, 1999
PAGE 7
and how. The comprehensive plan is for the benefit of the community as a whole. We
want to accommodate Medtronic but we don't want them lagging the deal. Do we want
Medtronic to tell the City how to operate?
Councilmember Billings stated that his vision of the plan is to find out what types of
businesses we think are going to be attracted because Medtronic is here. He feels it
isn't necessarily to accommodate them but maybe try to control or have input pertaining
towards the growth that will come as a result of Medtronic. He stated they should take a
look at some of the possibilities and see what kind of positive or negative impact and try
to position themselves so the better of the good happens and the lesser of the bad
happens.
Mr. Commers asked Barb Dacy why they needed someone to go out and develop
concept plans and start putting together infrastructure things, draft blueprints, etc. He
stated it is so far out yet and he doesn't understand why all of that is needed.
Ms. Dacy stated that the comprehensive plan will deal with the City as a whole and
certainly there is going to be some amount of census tract analysis and so on. The
direction of the comprehensive plan was to be more general and broadbrush. The more
detailed study would be more specific and get into a little more detail. The research
would be more intensive and detailed. A sewer line does need to be built prior to Phase
Two.
Mayor Jorgenson asked if they should wait to see if Medtronic will do Phase Two or
Phase Three because there is some question as to whether that will come into place.
Ms. Dacy stated that if it does happen, the City can be better prepared.
Mr. Commers asked what the contractual commitment for developing to the west was.
Ms. Dacy explained that there is not a contractual commitment.
Mr. Commers asked if that came out of the final deal for the City.
Ms. Dacy stated that was correct. In a number of meetings Medtronic made it quite
clear that they perceived the west area as an area for potential commercial support
types of uses.
Mr. Commers asked Mr. Casserly if Medtronic does take down the whole property, does
the City have any obligation to help with expansion?
Mr. Casserly stated that the City does not have any obligation.
Mr. Commers asked if the upgrade for 57th Place intersection was included based on
available funds.
JOINT CITY COUNCIL/HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 28, 1999
PAGE 8
Ms. Dacy stated it was based upon the City re- looking at the traffic at year 2008 or 2009
but it had to be done by the year 2009.
Councilmember Billings stated that rather than all of the detail Mr. Commers was talking
about, he would like to see more of a phased kind of study. He would like some of the
research for some of the latter elements to get done up front, but more of a stage type
plan to get more of the broader viewpoints. If something happens in three years they
kind of would know what direction to go but not necessarily have plans drawn. After
taking a look at the big picture maybe they would want to isolate in on some closer
things. In terms of the comprehensive plan he assumes they would be carrying out
some of the basic philosophy that they have had in prior comprehensive plans in the
sense that big is beautiful.
Ms. Dacy stated that she said the direction was to be general and broadbrush.
Mr. Commers stated that is the fine line. Being big and broad presents lawsuits every
time you turn somebody down. You have to determine where you want to draw the line
between it being broad and being specific but that is up to the City.
Mr. Casserly stated that New Brighton is finishing up with their visioning process and
doing the 35W corridor and they are now interviewing people that have been
interviewed for the Medtronic site. There is a 90 acre site in the Northwest Quadrant of
35W and 694, and it is clear this development is going to occur in about 18 months.
They will be selecting a master developer in the next 30 - 45 days. New Brighton is
trying to start a visioning process that impacts the major corridors. The City is probably
going to want to figure out some ways to interact or at least to try to do some
cooperative things with folks immediately to the east and west because it is really going
to impact what vision the City would have for this corridor. These are going to be
occuring right now and is going to be a 10 year buildup and is an enormous
redevelopment project.
Ms. Dacy stated there is a corridor coalition on 35W that does include a number of cities
such as Blaine, New Brighton, Arden Hills, and Roseville. The City may want to
consider joining in on the coalition effort and that is a topic for another night. The group
of communities are supposedly convincing Met Council to look at that area as a group
of cities instead of doing comprehensive plan revisions with each one and look at
market areas for all of them.
Ms. Gabel stated that she feels first they have to determine what Medtronic's real needs
are.
Mr. Commers stated that Mr. Hagmann should come to one of their meetings",—,
Ms. Dacy stated she is hearing a yes to the study with the qualification that the plan
process comes after the completion of the comprehensive plan with a phased approach,
that starts by looking at general issues and then gradually gets more specific and
Medtronic's participation is a big component.
JOINT CITY COUNCIL/HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 28, 1999
PAGE 9
Mr. Burns, City Manager, stated that they needed to think about the likely uses that are
generated from the Medtronic project and then identify the requirements for those uses
and the ramifications.
Ms. Dacy stated that item number two was redevelopment priorities. The first issue is
with housing programs and the second issue is with redevelopment projects. With the
new state law they have to tract expenditures and revenues by district and they have
created new funds for the Housing Program and a General Fund. Between now and
2011 the balance in the General Fund for the Housing and Redevelopment Authority will
fuel the Housing Rehabilitation Programs. After that point in time, the City will begin to
see some of the impacts of Medtronic, and they are good financial impacts. Between
now and the year 2011 Onan and Murphy will create $5 million dollars of increment with
about one million reimbursing the HRA for it's assistance to Onan Murphy and will fuel
redevelopment of the salvage yards. When the salvage yards are redeveloped into tax
producing properties, they will create increment as well.
Mr. Pribyl, Finance Director, explained that the financial records are the product of
many, many hours of work over the last 6 months or so and they are not completed yet.
The accomplishments thus far actually deal with loans back and forth between funds to
accomplish providing the basis for complying with the State Statute prior to the change
that allowed pooling on the districts established between 1981 and 1983.
Mayor Jorgenson asked Mr. Pribyl if he was talking about the HRA financial reports
rather than the City of Fridley.
Mr. Pribly stated they were talking about the HRA financial reports independent of any
of the City funds. The comprehensive annual financial report of the City of Fridley
would be aggregated into the total but these are completely separate. They have tried
to summarize the main fund types with the General Fund, Housing Funds, Debt Service
and the TIF Funds. The accumulative balance is $9,577,509. Ms. Dacy wanted to
make sure that she could show they had enough money to support the Housing
Programs and Mr. Pribyl feels they can support the Housing Programs in the future.
There is a negative cash balance of $1,000,000 on the Housing Funds but that is only
because that is the way it wound up in the end of 1998 prior to them transferring money
in to actually fund those programs and that goes away in 1999. The transfers were
accomplished in 1999.
Ms. Dacy stated that the cumulative balance of 1999 in the year 2000 for the General
Fund numbers have already assumed all of the expenditures for the Housing Program
including Scattered Site Acquisition, revolving loan program, and the Matching
Deferred Loan Program.
Mr. Commers asked why it was blank in the 1999 Housing Fund column.
Mr. Pribyl explained that it was because the program was fully funded and that cash
deficit is wiped out and all the cash needs to support their housing program is fully
JOINT CITY COUNCIL/HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 28, 1999
PAGE 10
funded so the impact on that year is zero. There are enough revenues from the
General Fund and all the supporting revenues such as the mortgage revenues to
support their program for that year.
Ms. Dacy stated that in general there are about $1,300,000 of housing expenditures in
1999 and they are predicting about the same amount in 2000. What the City is
suggesting is that they can continue as they have for the next 18 months. In the year
2007 the Revolving Loan Program becomes to be self - supporting and then you see
those housing funds increase. The City is also suggesting that one of the Housing
Coordinator functions in the next year is to come back with a recommendation and
approach regarding the apartment rehabilitation that could be a very expensive price
tag. One year from now HRA, City Staff and City Council should be having another
priority setting session because we should take another look at the financial picture and
how much money should be set aside and compare it to single family programs or
maybe what happens out of the Medtronic site.
Mr. Commers asked Mr. Pribyl if the City was going to take $1,300,000 out of the
General Fund to pay for the Housing.
Mr. Pribyl stated that was correct.
Mr. Commers asked if in the year 2000 they would take $1,300,000 out of the General
Fund and transfer that amount up to the year 2007.
Mr. Pribyl stated that in the year 1999 there is a transfer of $1,089,000 and in the year
2000 there is a transfer of $743,000. It begins to drop down based on the revenues
that are supporting the housing program increasing while the transfers are decreasing.
Ms. Dacy stated that the City did program the expenditures for the first six years for the
Scattered Site program to finish out the program they had already originally hoped to
accomplish with the special legislation in 1995. The only number that is missing to a
great degree is Apartment Rehabilitation and that could be much more than that.
Mr. Pribyl stated that financially the City will be okay pertaining to satisfying program
needs, statutory requirements, and housing requirements.
Councilmember Billings had a question pertaining to the TIF funds.
Mr. Pribyl stated that those are all of the tax increment districts themselves.
Councilmember Billings asked how much of the TIF fund in 2020 is locked into a
specific district and how much is free to use anywhere.
Mr. Pribyl stated that all of the money would be used in a district by district basis.
Councilmember Billings asked if in the year 2020, is there any money that can be used
outside of the district that the money came from.
JOINT CITY COUNCIL/HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 28, 1999
PAGE 11
Mr. Casserly stated it would be the Onan - Murphy money which would be 4 million
dollars. If we can conclude successfully the installment sale with Medtronic, those
revenues that will amount to about 15 million dollars will also become available.
Mayor Jorgenson asked if the revenues available in the year 2025 include all three
phases of Medtronic.
Mr. Casserly stated it was assuming all three phases were completed. If it was Phase 1
only, it would be about 7.4 million dollars by the year 2025.
Mayor Jorgenson stated they don't have any guarantee on Phases 2 and 3 so she
hates to make assumptions on what they are going to do.
Ms. Dacy stated that is why they should come back and revisit this one year from now
and they should probably only be doing projections from 3 - 5 years.
Ms. Dacy stated that for the next five years the City has the revenues they need due to
Phase 1 of Medtronic and Onan - Murphy.
Councilmember Billings stated that in the year 2005 there will be 3.8 million dollars in
the General Fund and 13 million in the TIF funds. He asked if they were going to decide
to do the Gateway Projects is there money to fund them between now and the year
2005.
Ms. Dacy stated that there was money to fund them.
Mr. Casserly stated that part of the available money was shown in the general fund.
Councilmember Billings stated that he was hoping the numbers he would see tonight
are the numbers that say this is how much money the HRA has available to things with
if any.
Mr. Commers stated they do have that but they don't know where or how to use it.
Mr. Pribyl stated that the General Fund is absolutely available and the goal the City has
is to move as much money into the General Fund as possible.
Ms. Dacy stated that they will create a TIF district for Gateway East and up until that
point in time TIF #3 or the General Fund will be the source of those funds. Eventually
the increment from the District will help to recoup some of those expenses as well and
then they intend to apply for the Livable Communities Act to fill the gap. The net is
$400,000 to $500,000.
Councilmember Billings stated that since there will be adequate revenues in the year
2012 and beyond would it be practical to issue some bonds right now and pay the
bonds off in 2012 and beyond when the cash is there.
JOINT CITY COUNCIL/HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 28, 1999
PAGE 12
Mr. Casserly stated he would want to wait 3 - 5 years to find out how things are
progressing. and make a decision at that time. The interest component is so high it
doesn't work very well.
Councilmember Billings stated that he thought he heard Ms. Dacy saying that the City
should be doing Gateway East and they need to seriously take a look at doing salvage
yards. He doesn't see 3 million dollars enough to satisfy those cash flow needs.
Mr. Casserly stated that it may not even be meritorious to even think about it but they
need to do a little due diligence to figure out where its at.
Councilmember Billings asked how they get the salvage yards going and how to pay for
them.
Ms. Dacy stated they have a rough idea of the market values of the property values.
Ms. Dacy feels they should do the diligence and get the appraisals done and come up
with a project budget because that project will probably take two to four years.
Councilmember Billings asked if there was money to pay for the project after the due
diligence.
Mr. Casserly stated that it was hard to give a straight answer. The salvage yards are in
the Onan - Murphy district. That district will be generating very substantial amounts of
revenue. That revenue can be spent inside the district or outside the district. The City
can probably go ahead assuming the clean -up costs are not exaggerated and
depending on what kind of grants they can get from the state because the state is
becoming more and more proactive in the system. The issue is getting a handle on
what kinds of costs that they need to deal with and secondly finding out if those
precious increments that can be spent outside the district have competing uses.
Mr. Pribyl stated that the numbers are based on cash flow from the Onan - Murphy
district. There are 5.8 million dollars of TIF revenues from the Onan - Murphy district
alone.
Mr. Commers asked the City's lawyer's opinion about replacement of Housing Units is.
Mr. Knaak stated that the settlement agreement and the Fair Housing Act would not
require the replacement of the duplex by the City with affordable housing. The Act itself
does not compel a city to engage in this kind of construction unless the city has a policy
in practice. He stated that the City is not required to construct a duplex as affordable
housing. That is not to say that somebody wont sue the City but it his assessment that
the City is in a very comfortable position.
Councilmember Barnette stated that he agrees with the location of Gateway East
because doing something on that side of University Avenue will stimulate the neighbors
on the other side to desire to have some improvements made also.
JOINT CITY COUNCIL/HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 28, 1999
PAGE 13
Mayor Jorgenson stated that she thought the old McDonalds property was also vacant
now.
Councilmember Barnette stated that about a month ago there were still cars there.
Councilmember Billings stated that one of the people who live right behind it works at
the school district and when he stopped in there about two weeks ago they indicated
that the church had vacated it. He sent an e-mail to staff saying that it may be vacant
and they should take a look at whether or not they think it would have any attractiveness
to including it in the project or not.
Ms. Dacy stated that it does provide additional land area and is a possibility. The City is
pursuing contacting the appropriate people to ask if it is available and at what price.
Mr. Commers stated that his reservation toward the Gateway East project is that they
are going to spend a lot of money today and in five years they find out something else
has to be done and they could look relatively foolish. He stated that maybe the property
is best utilized for some of the backup businesses that are needed to service Medtronic.
Councilmember Billings stated he would personally encourage the City to do the
Gateway East project. He stated that the big thing that stopped the City from doing
something near the Frank's Used Car site was the fact that there were a few vocal
people in the neighborhood that suspected the City was trying to dupe them in some
way shape or fashion. He stated that he when the neighbors see how nice it is across
the street with the Gateway East project the City might find the neighbors willing to
stand up to the neighbors opposing the expansion and say look what we are missing
out on because of you.
Councilmember Bolkcom stated that the City needed to do something on University
Avenue to update the look.
Councilmember Billings stated that they needed to start doing something because they
need to tear down J.R.'s Auto and Frank's Used Cars. He feels the City should decide
and take action.
Councilmember Barnette asked Mayor Jorgenson what her feelings were regarding
Gateway West and completing it as quickly as they can.
Mayor Jorgenson stated that she liked the idea of doing Gateway West but she didn't
know if there would be funds available.
Councilmember Barnette asked if she was in favor of moving ahead with Gateway East.
Mayor Jorgenson stated that she would like to head in that general direction but she
thinks they are going to have other projects competing with that project. It would
JOINT CITY COUNCIL1HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 28, 1999
PAGE 14
happen eventually but she didn't want to lead people on and say this year were going to
Gateway East and Gateway West would happen next year.
Mr. Commers stated they might have the same problems doing Gateway West as the
problems with Gateway East.
Mayor Jorgenson stated she didn't think they would have the same problems.
Councilmember Bolkcom stated that she thought it would be a different issue.
Councilmember Billings asked Ms. Dacy if Gateway East would cost about 1 million
dollars.
Ms. Dacy responded that that was the total expense in terms of cash flow. Some of that
has been charged against 2 and 3 already and we can do some more of that by the end
of this year.
Mayor Jorgenson asked if some of that money in 2 and 3 isn't used by the end of the
year literally unavailable if not used.
Ms. Dacy stated that the funds have to be committed.
Ms. Dacy stated that staff is suggesting that they would like to use as much of the 1.4
million dollars as possible in the next 3 - 6 months to finish up the acquisition and
Gateway East. The second option is that they could use those funds to pay for the
upgrade in the sewer line. The City would have to go through the bidding process and
award the contract to the contractor and probably have to escrow those funds from the
HRA to pay for that and the project could start as soon as next spring.
Mr. Bums, City Manager stated that they could use money from the Lake Point District
for that sewer line.
Councilmember Bolkcom asked where the costs associated with each of these items
were.
Ms. Dacy stated that with Gateway East, it was probably $200,000 to $400,000. The
sewer line has a rough estimate between $100,000 to $200,000. The Scattered Site
Acquisition program could be accelerated at 10 - 15 lots and that is %2 million dollars
right there. Executing purchase agreement with the salvage yards would be very
aggressive and she is not as confident the City can do that in the next three to six
months.
Ms. Dacy stated that the other option here is that maybe we start charging 2 and 3 with
the payments to pay the City Council back on the 1.5 million dollar loan.
Mr. Casserly stated that there is a real advantage from a structural and financial
perspective of doing ten to fifteen scattered site acquisitions because you can actually
JOINT CITY COUNCIL/HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 28, 1999
PAGE 15
create a scattered site redevelopment district which is nicer to work with. You can use
the revenue from all of them to support the activity in all of them.
Mr. Burns, City Manager asked Mr. Fernelius if he could negotiate acquisitions and get
appraisals for 10 - 15 properties in four months.
Mr. Fernelius stated he was unsure of that.
Ms. Dacy stated he would need help.
Mr. Casserly stated that they wouldn't have to close them. They just have to have a
purchase agreement that is irrevocably committed with no contingencies.
Councilmember Bolkcom stated she thought it was well worth the money to hire Mr.
Femelius help than to lose the money.
Ms. Dacy stated she felt she was hearing concurrence on these ideas, assuming they
could get Mr. Femelius some help.
ADJOURNMENT:
MAYOR JORGENSON AND CHAIRPERSON COMMERS DECLARED THE JULY 28,
1999, CITY OF FRIDLEY JOINT HOUSING AND REDEVELOPMENT /CITY COUNCIL
MEETING ADJOURNED AT 10:07 P.M.
Re pectfully Submitted,
SignA L. J066son
Recording Secretary
CITY OF FRIDLEY
HOUSING & REDEVELOPMENT AUTHORITY MEETING
AUGUST 5, 1999
CALL TO ORDER:
John Meyer was appointed as Acting Chairperson in the absence of Lary
Commers for the August 5, 1999 Housing and Redevelopment Authority meeting.
Acting Chairperson Meyer called the August 5, 1999, Housing and
Redevelopment Authority meeting to order at 7:58 p.m.
ROLL CALL:
Members Present: John Meyer, Pat Gabel, Jim McFarland
Members Absent: Lary Commers, Virginia Schnabel
Others Present: Barbara Dacy, Community Development Director
Grant Femelius, Housing Coordinator
Julie Vogel, Accountant
Jim Cassedy, Development Consultant
Gene and Mary Harstad, 500 Ironton St. N.E.
Al Kellner, 8182 E. River Rd
Brenda Mal, 8182 E. River Rd.
Robert Gerloff, Robert Gerloff Residential Architects
Pete Musty, Robert Gerloff Residential Architects
Michael Kelly, Anoka County Highway Department
APPROVAL OF THE JULY 1. 1999, HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES:
MOTION by Ms. Gabel, seconded by Mr. McFarland, to approve the July 1,
1999, Housing & Redevelopment minutes as written.
UPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPERSON MEYER
DECLARED THE MOTION CARRIED UNANIMOUSLY.
CONSENT AGENDA:
1. RYLUND PROPERTIES REVENUE NOTE:
MOTION by Ms. Gabel, Seconded by Mr. McFarland, to approve the Consent
Agenda as presented.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 1, 1999 PAGE 2
UPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPERSON MEYER
DECLARED THE MOTION CARRIED UNANIMOUSLY.
2. CLAIMS AND EXPENSES:
MOTION by Ms. Gabel, seconded by Mr. McFarland, to approve the Consent
Agenda as presented along with the additional expenses presented at the
meeting.
UPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPERSON MEYER
DECLARED THE MOTION CARRIED UNANIMOUSLY.
PUBLIC HEARING:
3. PUBLIC HEARING REGARDING THE SALE OF EXCESS PROPERTY
AT 8184 EAST RIVER ROAD:
MOTION by Ms. Gabel, seconded by Mr. McFarland, to open the public hearing.
UPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPERSON MEYER
DECLARED THE MOTION CARRIED AND THE PUBLIC HEARING OPEN AT
8:05 P.M.
Mr. Femelius explained that the sale of excess property at 8184 East River Road
was the focus of the hearing. The property is located in the Riverview Heights
neighborhood of Fridley in the northwest quadrant. The Anoka County Highway
Department owns the property. It was acquired as part of their road expansion
project last year. The house was too close to the roadway so they acquired the
property and tore the house down. The vacant lot then was available for sale. In
March of 1999, Mr. Al Kellner, the gentleman who lives on the adjoining lot to the
south at 8182 East River Road, expressed interest in buying the excess property.
Anoka County then contacted HRA staff about becoming involved in the
transaction. Anoka County is prevented from selling this site directly to Mr.
Kellner so they needed a third party to assist them and that is why the HRA has
become involved.
Mr. Femelius stated the HRA assisted Anoka County in another project on East
River Road located north of Locke Lake dam so the HRA does have some
precedent in doing this. Staff had scheduled this item for the July 1St HRA
meeting, had sent out a notice, and was subsequently contacted by Mr. Gene
Harstad. Mr. Harstad owns the adjoining property to the north at 500 Ironton
Street N.E. Mr. Harstad expressed some concern about the process involved in
selling the property so the item was taken off the July 1St Agenda for clarification.
Mr. Femelius stated the City discovered in talking with all of the parties involved
that Mr. Kellner was the first person to express interest to the County in the
HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 1, 1999 PAGE 3
property and that is how the negotiations began. Anoka County prepared a deed
and conveyed that to the HRA. Mr. Kellner deposited funds with the HRA in
advance of the sale. The City sought legal counsel, and it was determined that
they couldn't reverse the transaction and it had to proceed with conveyance of
the property. It is staffs recommendation to conduct the hearing and, as part of
the action, also prove conveying the property to Mr. Kellner.
Mr. Meyer thanked Mr. Fernelius and asked if any members of the HRA had any
questions or comments.
Ms. Gabel stated she did not and wanted to hear from the audience.
Mr. Meyer asked if any members of the audience wanted to come forward with
any questions or concerns.
Mr. Gene Harstad, the owner of the adjoining property at 500 Ironton St. N.E.,
stated he would like to know why he was not notified of the sale or given the
opportunity to buy the property. He had no knowledge of this until he heard the
last meeting was postponed.
Mr. Fernelius stated that the explanation given to him was that Mr. Kellner was
the one who contacted Anoka County first and that is how the discussion began.
The HRA was merely complying with the law and providing the public hearing
notice and that is how Mr. Harstad found out about it. Mr. Femelius stated that
the City has no ability to put this out for bid in this situation.
Ms. Gabel asked Mr. Fernelius what the process would have been if Mr. Kellner
had not contacted the county for handling this property.
Mr. Fernelius stated he didn't know. The County contacted them about assisting
them in conveying this property to Mr. Kellner. The City was merely acting as the
pass through. If it was an HRA site, they could sell it to any party they wanted to
and conduct a public hearing to notify people of what they are doing.
Acting Chairperson Meyer asked if the County is obligated to notify adjacent
property owners.
Mr. Fernelius stated that it was presented to him that the County does not even
have the ability to sell the property directly to a private owner and that is why the
City got involved.
Mr. Michael Kelly, Chief Right -of -Way for Anoka County, stated that Mr. Kellner
did not contact them. They contacted him because they were in the process of
purchasing a portion of his property as they are with Mr. Harstad's. In the
original discussion, in October of 1998, Mr. Kelly went out personally to make a
proposal to Mr. Kellner to purchase that portion of property that they needed. Mr.
i
HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 1, 1999 PAGE 4
Kellner raised the issue whether or not he could buy the property next door. That
was the point at which negotiations were started and there wasn't anything
magical about it. It came up as a part of the original negotiation. Mr. Kelly made
a commitment to Mr. Kellner subject to a series of things. He needed County
Board approval because they have to convey property and so they needed the
HRA to get involved and since that time they have been working on it. He stated
that when they transferred the balance of the property out, they purchased the
entire lot and needed a part of that lot for the right -of -way for the road. When the
balance of the property is sold, the County retains the right of access to that road
so technically it really isn't much good for much other than the extension of the
yard. He stated they haven't had a situation in the past when someone else has
expressed an interest in it. He stated the negotiations with Mr. Kellner date back
to October of last year. He stated it wasn't a formal process.
Mr. Meyer asked Mr. Kelly if he was under any obligation for a public hearing or
for a bidding process for the disposal of land.
Mr. Kelly stated that if the County had decided to sell the property, then there
would have been a requirement to do a public offering of some kind either
through a public bid or auction or something. He stated they were not selling to
the public because they can't sell without having a public offering. Selling the
parcel of land in this way negates having the requirement of having a public bid
so that is why the County needs to work with the HRA on this matter.
Ms. Gabel asked if in this type of situation it was a case -by -case basis.
Mr. Kelly stated that is correct. The County immediately acted on the interest of
Mr. Kellner in that faith. They made a commitment to Mr. Kellner and followed
through with it on that point.
Mr. Meyer asked if there were any other questions of Mr. Kelly by the HRA
members.
No members spoke.
Mr. Meyer thanked Mr. Kelly.
Mr. Meyer asked if there were any other members of the audience who wished to
be heard on this matter.
Mr. Al Kellner, 8182 East River Road, stated that he wanted to point out that his
property really has no front or back yard. He stated that Mr. Harstad's lot was just
as big as his lot and the adjacent lot combined.
Mr. Meyer asked Mr. Kellner if he approached Anoka County first regarding the
lot.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 1, 1999 PAGE 5
Mr. Kellner stated that Anoka County did not approach him first, he approached
the County initially.
Ms. Gabel asked Mr. Kellner more questions regarding his current yard
dimensions.
Mr. Kellner stated that when the appraiser came out to appraise his yard, they
stated that his house could never be built on his lot adhering to Fridley's current
codes.
Ms. Gabel asked if this was a nonconforming lot and if he could every rebuild on
that lot if something happened to his home.
Ms. Dacy stated that if it is a non - conforming lot, he would probably have to go
through the variance process to rebuild.
Mr. Harstad stated he is losing 32% of his property including both sides adjacent
to East River Road and off the front side. He has a nonconforming house also.
He stated that he tried to contact Mr. Kelly more than two years ago. He stated
that he called Mr. Kelly's direct line at the courthouse and left a message and to
this day he has not received one call back. He stated that Mr. Kelly has only
negotiated with the buyout houses; and since he did not have a buyout house, he
has never received a call. He stated that he tried to call him many times and was
always assuming he would be in the courthouse in the morning when he would
try to call.
Ms. Gabel asked Ms. Dacy and Mr. Femelius is they could tell her the square
footage of the lots without the two parcels.
Mr. Femelius stated that it does appear Mr. Kellner's situation has improved but
he couldn't tell her the actual numbers. The parcel in question that is being sold
to him is 50' by 110'.
Ms. Dacy stated that they are probably the old 25' wide lots so Mr. Kellner's 50'
by 110' is almost the same dimension at 5,500 square feet.
Ms. Dacy stated that Mr. Harstad's lot is a little bit bigger because it has part of
Lot 1,2 3, and 4. She stated that Mr. Kellner's lot would probably get toward
9,000 - 10,000 square feet. Mr. Harstad is suffering a little bit of a loss as he
pointed along Ironton as well. She stated that by estimating, there are probably
approximately within maybe 500 -1000 square feet of one another.
Ms. Gabel asked if both of the lots were nonconforming.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 1, 1999 PAGE 6
Ms. Dacy stated that for lots that were plotted prior to 1955, the minimum
boundary is 7,500 square feet. There may be some nonconformities about
structure but the lot area is always the most important part.
Mr. Meyer asked if there were any more comments.
No members in the audience spoke.
MOTION by Mr. McFarland, seconded by Ms. Gabel, to close the public hearing.
UPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPERSON MEYER
DECLARED THE PUBLIC HEARING CLOSED AT 8:25 P.M.
Ms. Gabel stated that she did not feel the HRA had the jurisdiction to make the
decision of who gets the sale. She stated she is in favor of the lot being sold to
Mr. Kellner.
MOTION by Mr. McFarland, seconded by Ms. Gabel, to approve the sale of the
excess property at 8184 East River Road to Mr. Kellner.
UPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPERSON MEYER
DECLARED THE MOTION CARRIED UNANIMOUSLY.
ACTION ITEMS:
4. CONSIDER RESOLUTION NO. HRA 9 -1999 FOR HRA TAX LEVY FOR
TAXES PAYABLE IN 2000:
Mr. Femelius stated that this is the fourth year that the HRA will utilize a tax levy.
The levy, which is equivalent to .0144% of the City's total taxable market value,
produces between $185,000 and $200,000 in revenue for the HRA. Most of the
revenue is used for the repayment of a loan that the HRA has received from the
City in 1995. That was a $1 Y2 million loan that was used to capitalize our
revolving loan program and each year the HRA makes principal and interest
payments of $143,000 to the City. The remaining funds are deposited into the
HRA's general fund for other activities that the HRA has carried out. As of
August 1, the HRA has paid off $358,000 of the $1.5 million loan leaving a
principle balance of $1,320,000. The term of this loan from the City runs through
February 1St of 2012. In addition to the resolution tonight, the City Council will
consider a separate resolution consenting to the HRA tax levy and that will take
place at their August 23`d meeting. Both of these actions have to occur by
September 15, which is the deadline for certifying the HRA tax levy to Anoka
County. Staffs recommendation is to approve the resolution adopting a 1999 tax
levy for taxes payable in 2000.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 1, 1999 PAGE i
Mr. Meyer thanked Mr. Fernelius and asked if there was a motion regarding this
matter.
MOTION by Ms. Gabel, seconded by Mr. McFarland to approve Resolution No.
HRA 9 -1999, Adopting a 1999 Tax Levy Collectible in 2000.
UPON A VOICE VOTE, ALL VOTING AYE, VICE CHAIRPERSON MEYER
DECLARED THE MOTION CARRIED UNANIMOUSLY.
INFORMATION ITEMS:
5. SCATTERED SITE ARCHITECTURAL DESIGN CONCEPTS (ROBERT
GERLOFF, GERLOFF RESIDENTIAL ARCHITECTS):
Mr. Femelius explained that at the HRA meeting in July he presented some
preliminary drawings and information that had been prepared by Robert Gerloff,
a residential architect the City has been working with since April of 1999. Mr.
Gedoff is working on a pattern book to suggest designs for new homes that are
to be constructed on the Scattered Site lots. Preparation is also needed for plans
for the site at 1015 Mississippi Street. He stated that Mr. Gerloff has some
information that he would like to share this evening.
Mr. Robert Gerloff and Mr. Pete Musty presented the plans they have been
working on. Mr. Gerloff explained that the processes they have been working on
involved three distinctly different plans, with one of those plans being selected for
further development. He explained that the consensus of the focus group
expressed interest in the one -story design and that design had the most
potential. Mr. Gerloff explained the enhancements they could also add to the
house. Those variations involved many changes to the appearance of the house
substantially. He explained that the one -story/ rambler /ranch house in America is
approaching historic status as they are reaching 50 years old. The first rambler
neighborhood in the country in Atlanta was just granted historic status this past
year by the National Park Service. The guiding principle they are operating on
for development of these plans is that the character of the neighborhood should
be protected and continued in the in -fill housing. Mr. Gerloff asked the HRA if
they were headed in the right direction on operating on that principle and,
secondly, do they have permission to continue to develop the plan itself?
Mr. Meyer asked if there were any questions of Mr. Gerloff.
Ms. Gabel stated that the HRA has talked about other styles and asked if it was a
goal of the HRA to include other styles of houses for consideration.
Mr. Meyer stated that it seemed to him they were searching for a style that would
fit in properly to a neighborhood. He questions whether they should carry it
through construction documents. Should they do more on that particular rambler
HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 1, 1999 PAGE 8
style house Mr. Gerloff presented, or should they see what contractors think of
building a different type of house?
Mr. Gerloff stated that many neighborhoods are taking on the in -fill housing issue
and being really aggressive with what they desire for their community. He stated
that what Fridley is doing is actually really well aligned with many other
communities.
Ms. Dacy stated that the City is very proud of the Scattered Site program to date.
When the Mississippi lot came up, it did raise a lot of issues about the style of
housing that the City wants to continue under the HRA's program. Ms. Dacy
stated that she thought the City was looking for a new plan so the architect came
in with three diverse options with the rambler, the modified split with the extended
garage, and the 1 Y 2 story with a detached garage. The rambler plan is a
traditional style in Fridley and certainly the enhancements Mr. Gerloff has added
to the plans could be considered by the HRA.
Ms. Gabel asked what site this plan would be considered for.
Mr. Femelius stated that the plan would be considered for the Mississippi Street
site, but elements of the plan could be duplicated elsewhere, ramblers are
predominant in many Fridley neighborhoods. He stated that the goal they are
trying to achieve is to use the rambler plan as a model and use elements
elsewhere in the City.
Ms. Gabel stated she thought it was appropriate for the Mississippi Street site
and asked what kind of costs were involved.
Mr. Gerloff stated that the goal would be to have it sell for around $150,000 -
$250,000 which would make construction costs of around $200,000, but it is hard
to be precise because of the greatly inflated construction climate.
Mr. Meyer stated what bothers him is that they are seeming to fixate on this as
being a bland average of ramblers. It seems to him it might be better for Mr.
Gerloff to develop the other two types of houses to the level of the rambler Mr.
Gerloff presented and use those for the general guidelines for contractors to
embellish upon. He stated $200,000 is a very rich amount of money for a house
on Mississippi Street. He stated to have a house brought in on a reasonable
budget they have to watch what interior finishes are added. He stated they might
be trying to establish a house that wouldn't get off the ground and maybe it would
be better to develop several other types of houses.
Mr. Gerloff stated that the uniqueness of the house at this point is very much in
the plan.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 1, 1999 PAGE 9
Mr. Meyer stated that the purpose of the meeting is neither to approve nor
disapprove but to review the options.
Ms. Dacy stated that maybe with both the Chairperson and Vice Chairperson
being absent, they could possibly come back again to discuss this.
Commissioner Meyer thanked Mr. Gerloff and stated that they appreciate his
work.
6. INTRODUCTION OF NEW REMODELING ADVISOR:
Mr. Femelius introduced the new Remodeling Advisor, Ginny Harrington. Ms.
Harrington started the first part of July and the City is excited to have her on
board. She has a lot of great skills and experience in the remodeling industry.
Ms. Harrington stated that she can offer contractor selection, material selection,
design ideas, and going over scope work. She stated she has a lot of
information handouts on zoning and building codes as well.
Mr. Meyer asked Ms. Harrington if she would be aiding in writing specifications
for remodeling for additions to houses or whatever a homeowner would want to
do, that decide the quality, scope of the work, cost, and agreement on price.
Ms. Harrington stated that remodeling involves the initial experience of prioritizing
what the project is and seeing what a person wants. There is education about
different levels of materials regarding material quality, different contractors, time
line, paying schedule, and prioritizing projects. Stipulations for building are
dictated by building codes, and she can help with that information pertaining to
what is required and review contracts possibly before signing.
Mr. Meyer stated that if she reviews contracts, can she spell out the quality so
the homeowner is not misled?
Ms. Harrington stated that is correct. It is an educational process and the City
has great informational handouts that can be mailed out. She stated that
remodeling could be a complicated process but does not have to be a difficult
process and the bottom line is that your home would be more enjoyable.
Mr. Meyer thanked Ms. Harrington.
7. TRUNK HIGHWAY 65 UPDATE:
Ms. Dacy stated that at the last meeting the HRA authorized staff to execute a
contract with an engineering firm to look at the feasibility of constructing a sheet
pile wall to support the construction of an additional northbound lane from Lake
Point Drive intersection on TH 65 north to approximately just beyond the
HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 1, 1999 PAGE 10
intersection with Moore Lake Drive. City staff had a meeting with the consultant,
S.E.H., last week, and it was their determination that a sheet pile wall can be
constructed with the appropriate ties. The Department of Transportation staff will
be reviewing the design to be assured that the sheet pile design would work.
Ms. Dacy stated the next step is to have the City make an application by
September 20, 1999, for federal funding to construct a project. Funds will not be
available until the year 2002 or 2003. One issue that the City Council has to
address in the next 2 - 3 three weeks is that they have to amend the
comprehensive plan to state that the project is of significance and community
concern and is consistent with transportation plans with the metropolitan areas.
The legislature last year allocated $500,000 to the City of Fridley to help with the
expenses for the design and engineering of this project. The City has completed
the paperwork of obtaining the funds that will be administered through the
Department of Trade and Economic Development. The HRA does not need to
take any action at this point in time, but staff will come back with further updates
on the project at the September meeting. A consultant should be completing the
final report by September.
Ms. Gabel asked Ms. Dacy exactly what she meant by tying things down by the
lake and what it meant aesthetically.
Ms. Dacy stated that it would all be done underground. The aesthetic issue is
that the sheet pile walls are kind of a rust brown. The consultants are evaluating
the cost of a concrete exterior with some type of impression or design. This
would be a very visible improvement for the next 30 - 50 years. The City is
evaluating the costs and options available.
Mr. Meyer asked if they were talking about putting anchors on the sides of the
lake at various points.
Ms. Dacy stated that at this point she did not see any details on that. Staff is
focusing on the tying system so the walls will be stable. There is a turnbuckle
that ties the two together right in the center.
Mr. Meyer asked Ms. Dacy if they need to resurface TH 65.
Ms. Dacy stated, yes. They will have to put in new pavement.
Mr. Meyer stated that would be inevitable because of the sheet piling and the
yielding and this and that. He also asked what color they would paint the sheet
piling.
Ms. Dacy stated that painting is an option however the engineer will alos look at
an "impression" in the concrete so as to avoid painting.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 1, 1999 PAGE 11
Mr. Meyer asked if they knew how much junk, mud, and muck they found in their
borings.
Ms. Dacy stated that there was a certain amount of peat but the depth of the wall
can go through that and hit better soil below. Staff is confident that it would be a
successful design with lateral ties.
8. NORTHSTAR CORRIDOR PROPERTY ACQUISITION:
Ms. Dacy stated another issue came up that staff would like the HRA to evaluate.
A number of jurisdictions are participatiing the Northstar Corridor Commuter Rail
Project. The transportation system would run from downtown Minneapolis
through Fridley all the way to St. Cloud. The purpose of the Commuter Rail Line
would be to decrease the amount of traffic on the highways due to the sudden
growth of the Metropolitan area north to the St. Cloud area. Transportation
analysis shows that there is a significant amount of the commuting public that live
in points north and commute into downtown Minneapolis or Coon Rapids or
Fridley. The Commuter Rail Line would provide express commuting peak hour
service. A number of trains would come in through the southbound corridor and
then in the afternoon head northbound. Fridley would be the first station site.
There are station sites strategically placed along the corridor north to St. Cloud.
Ms. Dacy stated the station site in Fridley being evaluated is located along 61St
Avenue near East River Road. The two vacant properties on either side of the
rail line tracks are being considered. Mr. Neilson owns the two -acre lot that is on
the west side and Commercial Property Investments owns the vacant land
adjacent to 61St Avenue and Main Street. The Northstar Corridor Development
Authority is evaluating connecting these two sites with a pedestrian underpass
under the railroad. Park and Ride lots are probably going to be placed on either
side of the tracks also.
Mr. Dacy stated the Northstar Authority also wants to locate a security station to
be the headquarters for the TV cameras to monitor what is going on along the rail
line as well as the station stops. The Neilson property on the west side of the
tracks is now platted as single family lots and zoned R 1. Mr. Neilson also owns
the vacant property to the north. The HRA evaluated this site as part of its
redevelopment project program. The reason they are suggesting this is that the
station stop is an important asset that would be very advantageous to Fridley for
residents and businesses and would form a very unique connection to the new
campus for Medtronic. Medtronic already has issued a letter of support of the
project. This new rail might relieve congestion along TH 65 and on University
Avenue. This site may want to be considered by the HRA to be included in its
redevelopment program at some point in the future. The HRA-could work with
the Northstar folks regarding the station site but also potential as a
redevelopment site for additional developers. Staff is suggesting that staff
proceed to negotiate an option agreement for the Neilson property and go
HOUSING & REDEVELOPMENT AUTHORITY MEETING, JULY 1, 1999 PAGE 12
through the process of including the land in the redevelopment project area. If
any of the land is used as a station site, the HRA would have to be reimbursed
by Northstar Authority. Staff would come back in September with more
information unless there are objections by the HRA. The Metropolitan Transit
Commission is evaluating obtaining federal funds for Park and Ride funds to
acquire the Commercial Property Investment site.
Mr. Meyer stated that his cynical comment is that the whole corridor won't have a
chance because it is far too inexpensive.
Ms. Dacy stated that recently the Northstar Authority received a significant
amount of federal funding. The project is supported by Mr. Oberstar so if the
environmental process is completed as planned by the end of next year,
construction could begin as soon as the year 2003.
Mr. Meyer asked how the Burlington Northern Railroad felt about this.
Ms. Dacy stated that the Burlington Northern Santa Fe Railroad is part of the
Northstar organization and is a very key actor in the whole project and is
cooperating 100 %.
Mr, Meyer asked if people are going to be willing to take public transportation
over their precious automobiles.
Ms. Gabel stated that she would rather take it if it takes her where she wants to
go.
9. 1999 - 2000 BUDGET UPDATE:
Ms. Dacy stated that the Budget Update would be discussed in September.
ADJOURNMENT:
MOTION by Mr. McFarland, seconded by Ms. Gabel to adjourn the meeting.
UPON A VOICE VOTE, ALL VOTING AYE, ACTING CHAIRPERSON MEYER
DECLARED THE MOTION CARRIED AND THE MEETING OF THE HOUSING
AND REDEVELOPMENT AUTHORITY WAS ADJOURNED AT 9:20 P.M.
Respectfully submitted,
Sig a L. hnson
Recording Secretary
HOUSING & REDEVELOPMENT W
AUTHORITY
Memorandum
DATE: August 27, 1999 /IV
TO. William Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
Grant Femelius, Housing Coordinator
SUBJECT: Application for DTED Redevelopment Grant Program
The Minnesota Department of Trade and Economic Development (DTED) has
announced $1.5 million in funding available through its Redevelopment Grant Program.
The program provides grants to cities and HRA's to help pay for expenses related to
redevelopment activities.
Eligible expenses include acquisition, demolition, relocation and infrastructure
improvements. Funding can be used to pay up to 50% of these costs. Redevelopment
costs incurred up to 12 months prior to the project approval can be included as the local
match.
Based on the criteria of the program, it appears that many of the expenses related to
the Gateway East project are eligible. Funding for the program is competitive and
points are awarded based on five criteria, including projects with any environmental
clean up, those that meet TIF criteria, have good redevelopment potential and are close
to public transit. DTED requires that the HRA authorize the application by adopting a
resolution; a copy of which will be presented at the meeting on Thursday evening.
Recommendation
Staff recommends that the HRA adopt a resolution authorizing an application to DTED
Redevelopment Grant Program.
. IYA
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HOUSING & REDEVELOPMENT
AUTHORITY
Memorandum
DATE: August 27, 1999
TO: William Bums, Executive Director of HRA��
FROM: Barbara Dacy, Community Development Director
Grant Femelius, Housing Coordinator
SUBJECT: Authorization to Acquire Scattered Site Properties
At the July 28, 1999, joint meeting between the City Council and HRA, staff was
directed to move aggressively on the acquisition of between 10 and 15 blighted
properties by the end of 1999. The bulk of these costs are to be paid out of the
additional funds available in TIF districts 2 and 3.
After analyzing the feasibility of acquiring this many sites, staff now feels it is more
realistic to cut this number in half (5 to 10 homes). However, to even accomplish this
task in the next four months, there are a number of issues that need to be addressed.
The following memo describes our implementation strategy.
Acquisition List
Staff has identified approximately twenty potential sites that are suitable candidates for
the program. The list was generated from a number of windshield surveys that have
been done in the last two years and additional information from City staff. A copy of this
list is attached.
Obviously, we cannot buy all of these sites. The concept is to work through the list and
obtain commitments from ten owners in total. We are uncertain how many owners will
want to sell at this point.
Acquisition Strategy
Dan Wilson, Wilson Development Services, will initiate the contacts with the
homeowners on the list. As of this writing, he has already contacted several
Owners and received some positive feedback. The next step will be to have each site
appraised by our contract appraiser Julie Schwartz from Lake State Realty Services.
Ms. Schwartz has worked on a number of HRA projects in the past and is very familiar
with the Fridley market.
Mr. Wilson will use the appraisal as the basis for negotiating with the seller. Staff has
directed Mr. Wilson to negotiate within ten percent of the appraisal figure ( + / -), which is
consistent with our past practice. Any offers above this figure would require special
K
Scattered Site Acquisition Memo
August 27, 1999
Page 2
HRA approval. In the event that he cannot reach agreement on price, he will proceed to
the next owner on the list.
If possible, we would like to close on the sale by the end of year. However, should this
not be possible we would escrow the funds with a title company for closing in early
2000. According to Dan Wilson we may also want to allow owners to remain in the
property through the spring of 2000, rent free, as an incentive to sell. This may make it
more attractive to homeowners who have little equity and aren't likely to receive much
money after selling their house. This practice would only be done on a case -by -case
basis.
Lake State Realty Services will act as the consulting agency and will charge a flat fee of
$425 per appraisal. Wilson Development Services will be paid on a time and materials
bass for their involvement in the project (see attached letters).
Arproval Process
Due to the limited amount of time to contact owners, conduct appraisals and
negotiations, staff is requesting concurrence from the HRA to proceed with the
acquisitions immediately. In essence, we are asking for "blanket" approval to buy up to
ten sites on the target list.
Staff will use the following procedures on all transactions:
1. Properties will be inspected to verify the interior and exterior condition of the
property. A checklist will be used to ensure that the properties meet the blight
requirements in State Statutes.
2. Sites will be appraised using a uniform residential appraisal.
3. The acquisition price shall be within ten percent ( + / -) of the appraisal amount. In
the event that a higher figure is reached, the deal will be brought back to the
HRA for special approval. Staff will review all final offers before they are made.
4. All transactions are voluntary and the seller will be required to sign a waiver of
relocation benefits.
Recommendation
Staff recommends that the HRA authorize the purchase of up to ten properties as
outlined in Exhibit A. The Executive Director shall be authorized to execute purchase
agreements and any other documents necessary to close the transactions.
M -99 -205
EXHIBIT A
1. List of potential sites
2. Photos of top priorities
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EXHIBIT B
1. Proposal from Lake State Realty Services and Wilson Development
Services.
From : THE LAKE STATE CO. PHONE No. : 612 653 1381 Aug.26 1999 10:59AM P01
Lake State Realty Services, Inc.
2140 Otter lake Dr ive white Hear Luke. MN SS 110 651 - 653-1788 Fnx 651.633 1381
H,Mail lake -hate 0gnldenpie.net
August 26, 1999
Mr. Grant Fernelius
The City of Fridley
6431 University Ave. NE
Fridley, MN 55432
RE: Proposal for Scattered Home Site Acquisition Program
Dear Mr. Fernelius:
Attached is a proposal from Wilson Development Services, Inc. for their activities in relationship to
the Scattered Home Site Acquisition Program. Additionally, a proposal for our services is detailed
below.
We propose to perform single family residential appraisals on a standard URAR 1004 form (similar
to the single family residential appraisals completed in the past for you) for a total of $350 each.
Additionally, we will complete the Blight Form Document for an additional $75. Although we have
requested further documentationtnstcuctions on how to complete this form, we are still awaiting them
from Jim Casserly. Assuming that the documentation/instructions do not make the form more
difficult to complete than it appears, the fee of $75 is sufficient. Any other services, including
attending meetings, etc. will be billed at $100 per hour.
Thank you for this opportunity to submit this proposal and be of further assistance to you. We look
forward to working with you on this project. If you agree to the terms of the Lake State proposal
and the Wilson Development proposal, please sign below and return to me (I will forward a signed
copy to Dan Wilson). Dan has already been successful obtaining two (out of three) interested parties
that need an appraisal.
Agreed by:
Grant Fernelius, The City of Fridley /Date
From : THE LAKE STATE CO. PHONE No. : 612 653 1381 Aug.26 1999 11:00AM PQ2
08/25/1999 1:45 6124484676
W=LSW DEVELOP SMV
WILSON DEVELOPMENT SERVICES
011ELPING CITIES AND BUSINESSES GROW
PROPOSAL FOR ACg418iTION BERVICE8
FRIDLEY SCA't''TIERED SITE ACaulamON PROGRAM
Wilson Development 9etvloes is pleased to Join with Lake Statos Realty Servin" fo
assiet the City /HRA with a. seattte%d ske single famlly property ooqul .itlon program. W hion
Development Swvlcaa Is a Ilaensed reel estate brokerage that has repnosented public
agencies In the acquisition of private property for the past 19 years.
PAGF 02
We Understand Uud the program will be a voluntary acquisition program on part of the
seller and fhat.no relocation benefits will be paid by the Clty/HRA. We fUrlher understand that
time Is of the 63906cm whh the TIF funds no longer being available After Uecember 31 d. 1889.
Tho:Clty/HRA will provide lists of proepectfve properties to be purchased.
Scope of Senr/ces
Wilson Development Services will provide the following selvicea:
1. Make contact with properly owners to explain proper and determine Initial lavoi of
Interest
2. Notify City staff and appraiser of Interested property owners.
3. Meet With property owners to present offer based upon the appraised value.
4. Prepare purchase agreements defining termo of the voluntary pumho .c tmnsactlon.
6. Present seller signed purchase agreement to City staff and HRA Board for
aoceptance.
6. Prepare lease back agreements where applicable.
7. Work with title company and attorney to obtain title Insurance and prepare documents
for dosing.
8. Attend dosing on behalf of Clty/HRA.
8. • Maintaln a file of all property owner contacts and correspondence.
10. Prepare monthly status roports to the City/1-111A.
510 Chestnut 1S1., Suite 200, Chaska, MIN 65518
Office-. (612) 4484630 PAX: (612) 448 -4676
% From : THE LAKE STATE CO. PHONE No. : 612 653 1381 Aug.26 1999 11:00AM P03
00125/1303 13:45 6124404676 WILMN DEVELOP SERV PACW R.4
Cost Of S91*99
We would propose• to provide the sm vlces on a limo and material basis. Monthly
Involoss will be prosented so that ataR can monitor the costs. The following charge rate would
apply:
AM 1AAA Ghiaran Rn
PrtncW $88.00/hour
Aiaodet a $96.00/hour
9earotary $37.001hour
• . Mileage $0096 /tnUa
Thank-you for the opportunity to submit thls.propoasl. We arc corment In our ability to
assist with a suooessful projccL .
anlal H. Wilson.
goquisttlon Welailat
3
HOUSING & REDEVELOPMENT
AUTHORITY
Memorandum
FINE
DATE: August 27, 1999
TO: William Bums, Executive Director of HRA dr
FROM: Barbara Dacy, Community Development Director
Grant Fernelius, Housing Coordinator
SUBJECT: Gateway East Update
Duplex
On August 26, 1999, staff met with representatives of Sentry Real Estate, Inc. who own
the duplex at 349 -353 57th Place. The meeting went very well and the owners are in the
process of notifying their tenants about the City's interest in the site. Within the next
couple of weeks the property will be appraised and our relocation consultant will begin
working with the tenants to find replacement housing. Our goal is to complete
negotiations and hopefully close on the site this fall; however we may need to allow the
tenants to remain in the property through next spring.
Sikh Society
Staff has also met with representatives from the Sikh's Society who own the former
McDonald's restaurant at 5831 University Avenue. Apparently they still use the facility
for religious activities and are not interested in selling. However, they were pleased to
learn of our project and want to work with the City on improving the appearance of their
building.
Other Sites
Staff has not received any response from the owners of two vacant sites in the Gateway
East Redevelopment Project. This is despite several attempts to contact the owners by
both mail and phone. Below is a brief description of each site.
348 -57th Place
This is a vacant lot located at the comer of 4th St. and 57th Place. The parcel is owned
by the Valvoline Company of Lexington, Kentucky. The property is currently zoned R -2,
but has been vacant for a number of years. The site measures 120' wide by 140' deep.
The legal description is Lots 5, 6 and 7, Block 6, City View Addition. In June of 1998,
staff had the property appraised by Julie Schwartz for $58,800.
Gateway East Update
August 27, 1999
Page 2
Lots 4. 5 and 6. Block 3. City View
This is a vacant lot located between the former JR's Automotive building and the duplex
at 353 -349 57th Place NE. Up until this past July, the site was in tax forfeit status and
held in trust by the State of Minnesota. However, earlier this year it was discovered that
the former owner, Richard Miller, had a bankruptcy pending at the time the County
declared the site as tax forfeit. The County is now in the process of canceling the tax
forfeiture and returning the property to Mr. Miller.
There are approximately $9,000 in back taxes still owing on the property which Mr.
Miller is responsible for paying. The site measures 120' wide by 140' deep and is zoned
R -2. In June 1998, the property was appraised by Julie Schwartz for $27,000.
Strategy
Our goal is to continue to try and contact the owners and negotiate a "friendly"
acquisition. However, should we be unable to initiate discussions with the owners, we
will need to start the condemnation process. Jim Casserly has advised staff that we first
need to update our appraisals on the sites and then adopt resolutions authorizing a 60
day quick take at the October meeting
Recommendation
No action is needed by the HRA at this time.
M -99 -206
HOUSING & REDEVELOPMENT r
AUTHORITY
Memorandum
OW
CF
DATE: August 27, 1999
TO: William Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Tax Increment Financing Assistance for Dick Peterson and Bill Penk
Dick Peterson and Bill Penk own the five acre property on the west side of Main Street just north
of A & R Trucking and the Craus Cartage site on 81' Avenue. This site was originally
considered for tax increment assistance a year ago for the Cintas Uniform Company. Cintas did
not pursue the acquisition of the property because of the expenses relating to correcting the soil
on the site.
The Legislature amended the rules pertaining to "gap year" districts. One of the changes that
affects this site is that the HRA cannot use future increment from a project to reimburse itself for
assistance. Any debt or financial obligations had to be completed by May 1, 1999. As an
example, at a special meeting in April, the HRA approved the development agreement for the
soil correction assistance for Waymore Transportation Company prior to this deadline.
Providing assistance for development of this parcel based on the new state law in this particular
district, therefore, is not possible unless the HRA makes use of the extra funds in TIF District
No. 2 and No. 3 by December 31, 1999.
The owners have recently received interest from a trucking company to purchase this property
and John Allen to develop an office /warehouse project. The owners now feel they could build
an office warehouse project themselves and act as the developer. Staff is suggesting that the
HRA assist the construction of an industrial/office/warehouse project up to two -thirds of the soil
correction costs or a $250,000 maximum (the same amount the HRA approved to assist
Cintas). In return, staff has suggested to the developers that they commit to a sizable project
and use quality construction materials such as brick or decorative block/masonry construction.
A metal exterior would not be authorized under this approach. Further, the HRA Chairperson
has suggested that an appropriate amount of the HRA's assistance be recovered somehow,
either through provision of a loan or some type of deferred loan at the time of sale of the
property.
The developers have prepared the attached letter that also agrees in concept to these general
terms. Unless otherwise directed, staff will continue to negotiate a development agreement with
the owners of the property based on the concepts outlined in this memo. There are very few
industrial parcels left to be developed in Fridley, less than 80 acres. Providing tax increment
assistance for soil correction will make this a buildable parcel and will create additional tax base
and job opportunities.
BD:ls
M -99 -202
91
TARGET ARCH TEL :6127613322 Aug 27 99 12:31 No.006 P.02
WILLIAM A. PENK
22 HAW THORNS ROAD
HOPKINS, MINNESOTA 59343
August 27,1999
Ms. Barbara Dscy
Director of Community Development
City of Fridley
6431 University Avenue N.E.
Fridicy, MN 55432
Dear Barbara:
Thank you very much for bringing to our attention the possibility that a grant or some
other form of financial assistance may be available to us for site correction and
preparation for our property on Main Street, north of W.
As you know this property was acquired by Dick Peterson's law firm and me as security
for unpaid fees from the former owner and has been a significant burden ever; hce.
property taxes were a significam cost during a flat market for this type of property .
location. Now the market has improved and our first serious prospect discovered flout the
soil conditions were much worse than we had ever expected. We have tried to remedy
some of that by engaging a contractor to remove some of the peat and he has done so,
however the progress, has been slow and there will be a need for a significant amount of
fill.
Dick and I have appreciated your assistance and concern about this matter and sincerely
hope that we can work on a solution acceptable to both of us. We have bean required to
borrow a significant amount of money to pay taxes over a lad 10 ears and dwefore
need to make arrangements for the development of this property
We would propose to build approximately 50,000 square feet of office. service and
warehousc building on tho site. Exterior wells facing the street or serving as the front of
the building ( most likely the south side) will be constructed of decorative concrete
masonry units and brick with aluminum and glass elements. The remaining walls will be
of punted concrete block. Automobile and truck parking areas will be asphalt paved.
There will be landscaping and holding ponds designed in part to provide visual protedion
ftom the adjoining uses.
We anticipate that this building would be marketed to Small and growing businesses
typical of the businesses found in other similar buildings in the area. Tenants will
probably be in the range of 5,000 to 1 5,000 square feet. We are in contact with several
TGRGET ARCH TEL:6127613322 Aug 27 99 12:32 No.006 P.03
leasing agents in the area and believe that there is a need for this type of building. I am an
architect and Dick is a real estate attorney and we have contacts with leasing agents, soil
contractors and general contractors who will be part of this team. We also have
confidence 'in our ability to arrange for the necessary financing and equity to do this
project.
It is our Understanding that this letter will be considered at the neat community
development meeting on Sept. 2 and that if approved the staff will be instructed to draft
an agreement with us. That agreement will be subject to our mutual agreement and will
provide for the grant or "IOW' of 2/3 of the site correction and preparation costs up to a
total amount of 5250,000. The terms of any pay back will be negotiated. We will attempt
to start the soil correction even before this is finalized and will keep records of all costs,
with the assumption that if we come to an agreement, those costs will be covered by the
terms thereof.
Please feel tiros to contact Dick Peterson or me if you have any questions. Again, thank
you for your assistance in this matter.
,6
HOUSING & REDEVELOPMENT
AUTHORITY
Memorandum c�
F�
DATE: August 27, 1999
TO: William Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Medtronic Update
Development Contract
A meeting has been established with the Medtronic negotiating team for Thursday,
September 2, 1999, at 3:00 p.m. to discuss a potential amendment to the development
contract regarding the installment land sale approach for the Medtronic corporate
campus. A verbal update will be provided at the HRA meeting. In the meantime, staff is
working on the necessary documents to extend TIF District No. 6. Both the County and
the School District have approved their required resolutions. Action by the HRA is
scheduled for October 7, 1999.
Also at the October meeting, various amendments to other TIF district plans will be
proposed. This is a result of the financial analysis completed recently by Ehlers &
Associates. The TIF plan budgets must correspond to actual expenditures.
Finally, staff is currently evaluating placing several properties in the "redevelopment
project area" (not a TIF district) so that the HRA has the ability to make expenditures, if
so determined. Adding the Maynard Nielsen property is one example. Adding areas in
Hyde Park may also be warranted for housing programs. The staff recommendation will
also be presented at the October meeting.
TH 65 Project Progress
Benshoof & Associates is currently preparing the application for federal funding that is
due at Met Council offices on September 20, 1999. MnDOT staff has agreed to prepare
a letter of support to accompany the application for the sheetpile wall design.
City staff has also submitted the required comprehensive plan amendment to identify
the TH 65 corridor north of 1 -694 as a priority traffic concern for the City. The City
Manager, Public Works Director, and myself met with the Met Council representative for
this area, Jim Nelson, from Columbia Heights. The purpose of the meeting was to
review the purpose of the plan amendment, the purpose of the project of adding
additional lanes along the TH 65 causeway, and to obtain some feedback about the
project from Met Council's perspective. Mr. Nelson was very supportive of the idea and
was very familiar with the transportation issues that face Columbia Heights and Fridley.
Le
Medtronic Update
August 27, 1999
Page 2
We are now establishing a meeting with the appropriate people on the Transportation
Advisory Board who would be reviewing the federal funding application.
Wingate Hotel
On Thursday, August 26, 1999, Dan Wright of U.S.P. Hotel Services, L.L.C., met with
me to discuss a proposed six -story hotel and Damon's Restaurant on the United Stores
site. Wingate would have to subdivide the property to create a lot for the restaurant and
a lot for the hotel.
The hotel would be approximately six stories tall, would have an indoor pool, and would
have approximately 100 suites. Wingate views its competition as the Hampton Inn and
the new Hilton Garden's product. The typical stay is approximately two nights; although
depending on the clients, it could be as short as one night or as long as several days.
Wingate sees this location as not only being advantageous to Medtronic, but also given
its location on 1 -694, they may attract some leisure travelers. Mr. Wright met with Roger
McCombs and Donn Hagmann of Medtronic who, apparently, were supportive of the
hotel idea, but preferred a "white tablecloth restaurant" as opposed to the Damon's
Restaurant that was suggested.
Dan Wright feels the Fridley market is not in a. position to support a white tablecloth
restaurant at this point in time. A Damon's Restaurant is located in Invergrove Heights.
A Wingate Hotel is also under construction on Highway 36 in Oakdale.
I had inquired if the hotel would be willing to amend its exterior construction to
complement the Medtronic development, either changing materials or emulating some
of the roof designs or design features of the campus. The hotel will not alter anything
about the architectural exterior except to provide one story of brick fascia along the
base of the hotel. The remainder of the hotel will be constructed of drivet (or EFIS).
As can be seen in the pictures (attached), the appearance of the hotel leads one to
believe that it is located in Southern California or Florida. Mr. Wright indicated that if the
City insisted on a certain architectural style, it would kill the project. Staff will be
contacting Medtronic regarding their reaction to this proposal; and, as directed at the
recent joint meeting, staff needs to meet with Medtronic regarding their perception of
their needs to serve their campus.
Staff is concerned, however, about two issues pertaining to the Wingate project. First, it
is better to wait until the impact analysis is completed before moving ahead with this
project. At this point in time, there is no public street that serves the United Store. The
access drive that serves those commercial businesses is privately owned at this time.
Adding additional uses and lots in that area may be beneficial; however, it should be
coordinated with an overall public improvement and land use plan.
Second, the HRA and City Council expressed some concern regarding architectural
control regarding additional development around the Medtronic campus. The market
will continue to build for the hotel and restaurant services and moving too quickly on the
first inquiry may preclude other uses that the City may want to explore. Therefore, City
Medtronic Update
August 27, 1999
Page 3
staff will continue to work on the Medtronic impact study and will update the HRA at the
October meeting regarding the status of our analysis. Pending comments to the
contrary by Medtronic, staff will advise the Wingate Hotel that the City is not supportive
of their request at this time based on their refusal to work with us regarding site design
issues.
No action is needed by the HRA at this item.
BD:ls
M -99 -200
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HOUSING & REDEVELOPMENT
AUTHORITY
Memorandum U�
�M
DATE: August 27, 1999
TO: William Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Miscellaneous Land Acquisition Update
Maynard Nielsen Property
At the August meeting, staff reviewed with the HRA the potential purchase of vacant
land on the west side of the railroad tracks along 61 st Avenue to preserve a potential
station site and redevelopment for the North Star Corridor Development Authority. An
appraisal is almost finished for the property and a phase one assessment is nearing
completion. Originally, an option agreement was going to be suggested for HRA
approval to preserve the HRA's option for purchase for 90 days; however, progress has
been made to the point that staff will be negotiating with the owner very quickly, and a
purchase agreement is hoped to be submitted to the HRA at the October meeting.
Werner's Furniture Acquisition
Grant Femelius has contacted Dan Wilson, Relocation Consultant, and Julie Jeffrey -
Schwartz, Appraiser, to act on the City's behalf to negotiate with the owner of Werner's
Furniture. The purpose of the acquisition would be to redevelop the site for single
family housing. The acquisition would be consistent with the removal of other
commercial nonconforming uses in Hyde Park including Custom Mechanical and
Frank's Used Cars.
The property owner of the house immediately to the south of Werner's Furniture was
also contacted regarding his /her interest in selling. This is the same property that the
HRA evaluated for acquisition last summer. Although purchased by a new owner after
the bank took over on a foreclosure, the property is still in disrepair.
No action is required on these items and another update will be provided at the October
meeting.
BD:ls
M -99 -201
7
HOUSING & REDEVELOPMENT
AUTHORITY
Memorandum
DATE: August 27, 1999
TO: William Bums, Executive Director of HRA 4p,
FROM: Barbara Dacy, Community Development Director
SUBJECT: 1999 -2000 HRA Budget
We are making progress on preparing the 1999 and 2000 budget. New spreadsheet
systems are being developed. I hope to distribute the 1999 HRA budget booklets at the
September meeting, for action ultimately at the October meeting. Then, the year 2000
budget booklets would be also be distributed for approval at the October meeting. I
appreciate the HRH's patience regarding this topic.
BD:ls
M -204
14
HOUSING & REDEVELOPMENT
AUTHORITY
Memorandum CIWOF
MID
DATE: August 27, 1999
TO: William Bums, Executive Director of HRA A14
FROM: Barbara Dacy, Community Development Director
Grant Femelius, Housing Coordinator
SUBJECT: Rambler Rehab Update
Last spring the Center for Energy and Environment (CEE) received funding from the
Minnesota Housing Finance Agency (MHFA) to purchase and rehabilitate an existing
single family home. The goal of the project is to renovate a rambler style home using
one of the plans from the Fridley Rambler Handbook.
So far, CEE has had difficulty finding a rambler in the right price range ($80,000 to
$90,000). The homes listed for sale have either been in the $115,000 to $130,00 range
or less than $75,000 and not really suitable for rehab.
Within the last few weeks staff has discussed the possibility of working with CEE to
acquire one of the homes being moved as part of the Medtronic project. One of the
homes has already been moved. Of the remaining six homes, three are for sale and
ready to be moved.
CEE has contacted Swift moving which purchased the homes from Medtronic. Swift is
selling the homes for $26,000, including the cost of the move. CEE is proposing to buy
one of the homes and moving it onto the HRXs lot at 5800 2nd St. The lot has been
vacant for 3 years and has received little interest from builders. The plan would also
call for the HRA to donate the land, via a deferred land sale to help keep the project
affordable to moderate income buyer.
Additional details need to be worked out. Staff will provide an update at the October
HRA meeting.
No action is needed by the HRA at this time.
M -99 -208
r
n
HOUSING & REDEVELOPMENT
AUTHORITY
Memorandum
FRIDm
DATE: August 27, 1999 A
TO. William Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Prevailing Wage Complaints
On Tuesday, August 17, 1999, prevailing wage allegations were made regarding the
roofing subcontractor at the Banfill Crossing construction site. Two union
representatives interviewed four roofing employees and obtained information to suggest
that the subcontractor was not paying prevailing wages and that the employees may be
illegal aliens. Since that time, staff contacted the general contractor and three
subcontractors, including the roofing contractor, and received sworn statements that
they will comply with the prevailing wage requirements.
On Monday, August 23, 1999, the City Council approved a resolution authorizing
reissuance of the bond to provide tax exempt financing for the project. The bonds had
to be reissued because there was not adequate investor interest at the previous sale in
July. At the meeting, a representative of the general contractor, Senior Housing
Construction, Inc., stated for the record that they will comply with the prevailing wage
rates. He did state that there are non -union subcontractors affiliated with the project,
but he is confident that they will comply with the requirements as well.
At this time, staff is still receiving complaints and inquiries regarding the subcontractors.
Staff is investigating whether the State or the County will be able to assist the City in
conducting an investigation, if it is determined to be warranted. The City Attorney has
also been very involved in review of the evidence for this matter.
No action is required by the HRA at this time; however, because the HRA does have a
development agreement with the developer, it is prudent to bring this to your attention.
Another update will be forthcoming.
BD:Is
M -99 -203