HRA 10/07/1999 - 6316HOUSING & REDEVELOPMENT AUTHORITY MEETING
THURSDAY, OCTOBER 7, 1999
MEETING 7:30 P.M.
PUBLIC COPY
(Please return to Community Development Department)
143 [9y ;U; Flip
HOUSING & REDEVELOPMENT AUTHORITY MEETING
OCTOBER 7,1999, MEETING, 7:30 P.M.
AGENDA
LOCATION: City Council Chambers
CALL TO ORDER
ROLL CALL:
APPROVAL OF MINUTES:
September 2, 1999
CONSENT AGENDA:
Claims and Expenses ............... ............................... 1
PUBLIC HEARINGS:
Public Hearing on Sale of Lots 9 -10, Block N, Riverview Heights ............. 2
Public Hearing on Sale of 5800 2nd Street ............................... 3
Public Hearing on Proposed Policies for Business Subsidies ................ 4
ACTION ITEMS:
Resolution Authorizing Execution of a Development Agreement
With William Penk and Richard Peterson, 8632 Main Street ................. 5
1999 Schoo District Agreements ...... ............................... 6
Resoluti odzing Condemnation of
Properties in the Gateway East Project .. ............................... 7
Resolution Adopting Modification to Redevelopment
Project Area and Tax Increment Financing Plans ......................... 8
1999 HRA Budget ................... ..............................9
INFORMATION ITEMS:
Medtronic Update .................. ............................... 10
Nielsen Acquisition Update ........... ............................... 11
2000 HRA Budget .................... .............................12
OTHER BUSINESS
ADJOURNMENT
CITY OF FRIDLEY
HOUSING & REDEVELOPMENT AUTHORITY MEETING
SEPTEMBER 2,1999
CALL TO ORDER:
Vice - Chairperson Schnabel called the September 2, 1999, Housing and Redevelopment
Authority meeting to order at 7:32 p.m.
ROLL CALL:
Members Present: Virginia Schnabel, John Meyer, Jim McFarland
Members Absent: Larry Commers, Pat Gabel
Others Present: Barbara Dacy, Community Development Director
Grant Femelius, Housing Coordinator
Julie Vogel, Accountant
Jim Casserly, Development Consultant
APPROVAL OF THE AUGUST 5. 1999. HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES:
MOTION by Mr. Meyer, seconded by Mr. McFarland to approve the August 5, 1999,
Housing and Redevelopment minutes as written.
UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL
DECLARED THE MOTION CARRIED UNANIMOUSLY.
MOTION by Mr. Meyer, seconded by Mr. McFarland, to approve the July 28, 1999, Joint
Housing and Redevelopment Authority and City Council minutes as written.
UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL
DECLARED THE MOTION CARRIED UNANIMOUSLY.
CONSENT AGENDA:
1. RESOLUTION AUTHORIZING APPLICATION TO THE MINNESOTA
DEPARTMENT OF TRADE AND ECONOMIC DEVELOPMENT FOR THE
REDEVELOPMENT GRANT PROGRAM:
Ms. Schnabel asked if this was a request for redevelopment grant. program funding.
Mr. Femelius stated that was correct.
MOTION by Mr. Meyer, seconded -by Mr. McFarland, to approve the Consent Agenda
as presented.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 2, 1999 PAGE 2
UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL
DECLARED THE MOTION CARRIED UNANIMOUSLY.
2. CLAIMS AND EXPENSES:
MOTION by Mr. Meyer, seconded by Mr. McFarland, to approve the Consent Agenda
as presented along with any additional expenses presented at the meeting.
UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL
DECLARED THE MOTION CARRIED UNANIMOUSLY.
ACTION ITEM:
3. CONSIDER RESOLUTION AUTHORIZING SCATTERED SITE ACQUISITIONS:
Mr. Femelius stated that at the July 28, 1999, joint meeting, the HRA and City Council
discussed the acquisition of ten to fifteen properties under the Scattered Site Program.
The goal is to acquire as many of the properties as possible through the end of the year
and replace the houses with new houses.
Mr. Femelius stated that Staff has determined that they would like to look at
approximately 21 sites. The number of homes for the Scattered Site Program has been
re- evaluated, because Staff wanted to have options in the event that some owners did
not want to negotiate. The list of properties was generated by a number of different
means including windshield surveys and information provided by City Staff.
Mr. Femelius stated that their goal was to approach the owners and give them an
opportunity to sell. City staff has contacted Dan Wilson, Wilson Development Services,
who will do a lot of the negotiating on behalf of the HRA and will work closely with City
staff. Julie Schwartz, an appraiser the City of Fridley has worked with in the past, will
be appraising the properties as necessary.
Mr. Fernelius stated that in terms of the City's strategy, once the owners who are
interested in selling are identified, negotiations will proceed in a range of ten percent
(10 %), plus or minus that appraisal amount. A closing will be scheduled hopefully
before the end of the year. Owners may possibly be allowed to continue to occupy the
properties throughout the spring for their convenience. The City does need to expend
the dollars and actually close on the properties by December of this year. Because of
the short time window, the City needs to move fairly aggressively. The City is asking for
approval this evening to negotiate with the owners on the list, have the properties
appraised, and make offers without bringing each acquisition back to the HRA for
review and approval. The same procedures used in the past to appraise the properties
to pay fair values will be used. All the activities will be done on a voluntary basis. If the
owners do not want to sell, the City will move on to the next one on the list. The City will
also require the seller to sign a waiver for relocation benefits so there will not be any
relocation benefits paid to the seller on top of the funds for the purchase.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 2, 1999 PAGE 3
Mr. Femelius stated that it is Staffs recommendation this evening for the HRA to
authorize purchase of up to ten properties on the Scattered Site Program list and
authorize the Executive Director to enter into purchase agreements and sign any other
documents related to the transactions.
Mr. Meyer asked Mr. Femelius why there seemed to be such a rush for a December
closing for the houses chosen for the Scattered Site Program.
Mr. Femelius stated that on the July 28, 1999, joint HRA ans City Council meeting, the
City has access to the TIF resources which have a deadline in terms of when the City
can use those dollars. The deadline is the end of 1999 and if the City does not use the
dollars by that time, the City will essentially lose access to the TIF Resource. It is an
opportunity to utilize the resources that will not be around after the first of the year.
Mr. Meyer asked Mr. Femelius if these houses for the Scattered Site Program were
chosen because they were small.
Mr. Femelius stated that Dan Wilson and Julie Schwartz have used a very detailed
checklist that identifies the substandard conditions. By law, these properties have to be
substandard with problems in structure, deficient mechanical systems, problems in
plumbing or electrical. The City is not in a position to acquire these properties if they
are not substandard by the City's inspections. These houses were identified based on
exterior conditions only. Inspections will be set up and documented for the criteria for
substandard conditions.
Mr. Meyer stated that he felt some of the houses showed no signs of anything
substandard except that they were smaller than other houses around them. He stated
that it seems to him that the sole criteria at this stage is size of the houses.
Mr. Femelius stated that is not correct. Properties they have looked at have been
involved in code enforcement issues. The size is not the sole criteria and was not the
screening tool used to identify them.
Mr. Meyer asked how many of them had a code violation.
Mr. Femelius stated that he didn't have that information at that moment. If these
properties do not meet the test for substandard conditions, then the City would not be
buying the properties. That is the purpose of making the initial contact and then doing
the inspections.
Mr. Meyer stated that he felt it was a superficial approach to pick these 20 houses and
then search for violations that may or may not be there and then ask the HRA to
approve purchasing 10 properties without any review by the HRA. He stated he
understood the time constraints, but he felt there was a high degree of superficial
judgment.on these chosen houses.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 2, 1999 PAGE 4
Mr. Femelius stated that they may not buy those properties and they would only
purchase the properties that meet the conditions of the program.
Mr. Meyer stated that he was against the procedure of by- stepping the HRA's
opportunity to review the process for acquisition of these properties.
Ms. Schnabel asked Mr. Meyer if he would feel more comfortable if Staff gave the HRA
a report before finalization of the purchase of any of these properties.
Mr. Meyer stated that would be fine, but the report should be a discussible item, not just
a presentation of the accomplished plan. He felt that the HRA should be able to review
five to ten houses in two evenings so all of them could have a chance to review them
all.
Ms. Schnabel stated that they need to keep in mind that maybe none of these people
would be interested in selling.
Mr. Meyer stated that the HRA has the prerogative to review any houses for the
Scattered Site Program. He believed the HRA is being asked to let that prerogative go,
and he doesn't believe that is a good procedure.
Ms. Schnabel asked where the dollar figures allotted for the asking price for the homes
on the report came from.
Mr. Femelius stated that these are taxable market values from the tax assessor, but in
reality the actual appraisal price could be higher.
Ms. Schnabel stated that it seemed to her that the HRA has a commitment to proceed.
If members of the HRA feel they should have an opportunity to review what negotiations
have been made, the HRA could possibly review these at the November or December
meeting.
Ms. Dacy, Community Development Director, stated that it was not the City's intent to
usurp the HRA; the intent was to carry out the direction that the City understood they
had from the joint HRA and City Council meeting.
Ms. Dacy stated that from a budget perspective, the amount allocated toward this part
of the activity is approximately $400,000. The goal is to acquire 5 -10 houses.
Ms. Dacy stated that from a timing perspective, this is an idea that will help speed the
process. The HRA can review all of the purchase agreements at the October and
November meetings if that is what the HRA prefers. There may be a need for a special
meeting, depending on how the acquisition goes. If the HRA wishes to maintain the
typical procedures, City staff can accommodate that, but the goal of the
recommendation is to speed the process along.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 2, 1999 PAGE 5
Mr. Casserly stated that he thought the concern is that there has to be criteria as more
and more numbers are involved. When there is a consensus on the criteria that they
are using, then they find the structures that fit into that criteria or they do not.
Mr. Casserly stated that he felt that in all of these instances, they want to determine that
all of these properties are blighted. A different kind of tax increment district will hold
together a number of these structures and create a scattered site redevelopment district
that hasn't been done in Fridley before. One of the criteria for that is each property
must qualify and it must be concluded that each structure is substandard and that is the
threshold. No involuntary acquisitions will be included because there simply is not the
time to be involved in those. They want to stay within 110 percent (110 %) of the
appraisal; and because the houses can be occupied until spring, it will be easier to
close these transactions. They are really in some time bonds and do not want to be
closing in December.
Mr. Meyer stated that he rejects the idea that a small house is a major criteria to be put
on the list. He does, not agree to turning the entire process over to City Staff. He
suggested that staff proceed with the appraisals and negotiations and then have a
special meeting for the houses that do work out for acquisition for the HRA to discuss.
Ms. Schnabel stated) that if they reach the point where the staff has an agreement from
the homeowner and there is an agreed dollar amount, that clearly indicates to her that
the homeowner would like to sell. She is not sure what the purpose of the meeting
would be to review that. She stated that this is purely voluntary for the homeowners.
Mr. Meyer stated that he sees nothing wrong with a tentative agreement between the
owner and the HRA, just in case the HRA rejects the deal for some reason or another
Ms. Schnabel asked Mr. Meyer why the HRA-would reject the approval of the sale if the
homeowner agreed to sell.
Mr. Meyer stated that the owner might be completely happy to sell, but it is the HRA's
job to review them. In the past, the HRA has bought properties that were unfit for
human habitation and they paid a dear price for them.
Mr. Casserly stated -the issue was not one of legality. They could insert a clause in the
agreement that the purchase is contingent upon approval by the HRA. The issue is a
practical matter. It will be created by encouraging people to participate and then not
consummating the deal. He stated that after acquisition, it may take 6 -18 months to
redevelop.
Ms. Dacy stated that this approach was structured because of the volume and for a
practical purpose more than anything else.
Mr. Meyer stated that he understood that.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 2, 1999 PAGE 6
Ms. Schnabel stated that a motion could include that the HRA would have opportunity to
review the status of the negotiations and in the next meeting in which staff is prepared
to present a report to the HRA.
Mr. Meyer stated he concurred with the motion.
Mr. McFarland asked Ms. Dacy if it was possible that in the negotiations that City Staff
would know about the deficiencies of the house prior to the appraisal.
Mr. Fernelius stated that they would only know about any after the
appraisal. City Staff would discuss the condition of the property with Mr. Wilson, but
they still need to negotiate with the owner. City staff does not know the condition of the
interior of these houses, and that is why they need to follow through with the appraisal
process.
Ms. Schnabel asked if the first step would be to approach the property owners and ask
them if they are interested in selling the property; the second step is to have the
appraiser go in and check for deficiencies as well as appraise the property; the third
step is to have the appraiser give that information to Mr. Wilson who on behalf of the
City, would make an offer to the homeowner based on the appraisal; and the fourth step
is to have the homeowner accept or make a counteroffer.
Mr. Femelius stated that was correct.
MOTION by Mr. Meyer, seconded by Mr. McFarland, to approve Resolution HRA 10-
1999, A Resolution Authorizing Application to the Minnesota Department of Trade and
Economic Development for the Redevelopment Grant Program, with the following
stipulation:
1. City staff shall proceed with the negotiations and the appraisal processes with
the understanding that the transaction must come before the HRA for
discussion and approval or disapproval.
UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL
DECLARED THE MOTION CARRIED UNANIMOUSLY.
INFORMATION ITEMS:
4. GATEWAY EAST UPDATE:
Mr. Femelius stated that City staff has met with the owner of the duplex at 348 -57th
Place. An introduction to the project and an explanation of the process was well
received. The next step involves having the property appraised and then negotiation
with the owners. The goal is to complete these negotiations by the end of the year. In
addition, the relocation consultant, Dan Wilson, will be working with the tenants on
relocation assistance.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 2, 1999 PAGE 7
Mr. Femelius stated that north of the Cash -N -Pawn property, the former McDonalds
restaurant currently owned by the Sikh Society is a possibility for the Gateway East
Project because it appears to be vacant. The owners of the property are not interested
in selling, but want to work with the City to improve and possibly expand the site so the
appearance of the building complements the development of Gateway East. In terms of
the other sites in the project area, there are two vacant lots for which the City has not
been successful in contacting the owners. One is owned by Valvoline Rapid Oil and
one was tax forfeit which has been since reversed. The owner is out of state.
Mr. Femelius stated that if City staff cannot reach an agreement with these parties, staff
will probably come back to the October HRA meeting with a resolution authorizing
condemnation. That would at least allow City staff to start the process and get closure
to that part of it. Staff is continuing to work as quickly as possible with those owners
under the same time constraints in using the TIF Resources. The goal is acquisition for
this year. _
5. TIF ASSISTANCE FOR OFFICE WAREHOUSE PROJECT, MAIN STREET:
Ms. Dacy stated that the property is located at the west side of Main Street and just
north of the former A & R Trucking facility. One year ago, the HRA approved a
development agreement for Cintas Uniform Company, but the company did not pursue
development because of the amount of soil correction work. Since that time the owners
continue to try to market the property and they are proposing to act as developers of the
site and build an office /warehouse site of about 50,000 square feet. They have been
getting some interest from a trucking company and also a developer of an
office /warehouse building similar to the one on 73`d Avenue.
Ms. Dacy stated that in order to provide assistance for the soil correction, staff is
suggesting that a development agreement be prepared so the company would be
required to produce a building of 50,000 square feet in size having an exterior of brick
and block construction. In return the HRA would provide up to two- thirds of the cost or
a maximum of $250,000 which is the amount of assistance that the authority authorized
for the Cintas company. Chairperson Lary Commers recommended providing some
type of recovery to the HRA for this assistance. The legislature has changed the rules
for this particular area of the tax - increment program, and the HRA would not be able to
use the increment created from the project to reimburse the HRA's expenses.
Ms. Dacy stated staff is evaluating some type of loan for the project. The developer has
agreed to those concepts in a letter. Staff is recommending that staff negotiate a
development contract to be brought back for the October agenda for approval.
Ms. Schnabel asked Ms. Dacy if staff was aware of the costs of the soil correction
previously so they are prepared for this type of expense.
Ms. Dacy stated, yes, and that has been a factor in some of their negotiations.
Ms. Schnabel asked if the developer was approached with the deferred loan concept.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 2, 1999 PAGE 8
Ms. Dacy stated, yes, and the developer is amiable to exploring that but have not had
the opportunity to discuss details.
Mr. Casserly stated that they do need some latitude on the ability to recover. Over the
last 3Y2 years, there has been soil costs that have ranged from $210,000 - $600,000.
Staff is suggesting that they would get reimbursed for two- thirds of the cost but the
City's share would not exceed $250,000 and they would try to work out some kind of
recovery with a combination of a grant and a loan.
6. MEDTRONIC DEVELOPMENT UPDATE:
Ms. Dacy stated she wanted to bring three issues to the HRA's attention. The first issue
was that the meeting scheduled that day with Medtronic was postponed to the following
week. _
Ms. Dacy stated that the second issue involved the TH 65 additional lane project. The
deadline is September 20 for the federal funding application. Metropolitan Council has
approved the Comprehensive Plan Amendment regarding the issues along that
highway. A final report about that project will be presented to the HRA in October.
Ms. Dacy stated the third issue is that the Wingate Hotel chain has an interest in
building on the United Stores' site south of 1 -694. The Hotel would have six stories and
about 100 rooms. A Damon's Restaurant would also be on site with the hotel. Staff has
a concern with the site issues with this particular location. The other issue for the HRA
is the architectural exterior. The Hotel does not want to change the plan at all. It is
essentially a drivet -type of exterior construction, and a flat roof. She is concerned that
they are so early in the comprehensive planning process about the City's goals and the
impact from the Medtronic project that this is exemplifying the case where the proposal
is inconsistent with the Medtronic image. With Wingate's refusal to amend the exterior,
Staff recommends that this design and appearance is not consistent with what the City
wants to see. Donn Hagmann of Medtronic had stated that it is a nice hotel with a
reputable chain, and the clients could stay there, but Medtronic is also hopeful of a four
or five star hotel and a restaurant facility different than the Damon's food chain.
Mr. Meyer stated that he felt the exterior of Wingate is bottom of the line. He believed,
too, that the interior quality could be cheated on by any builder. He feels it would be a
low - quality place to be near Medtronic.
Ms. Schnabel stated that she concurs with Mr. Meyer and supports Staffs position. She
stated it is her hope that whatever additional development occurs in the surrounding
area of Medtronic will keep some type of theme or cohesiveness in exterior finishes,
and she would like to see a nicer class of restaurant.
Mr. Meyer asked Ms. Dacy if Medtronic has given the City any idea of how many rooms
they would probably need pet night.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 2, 1999 PAGE 9
Ms. Dacy stated that Medtronic has a wealth of information of which the City needs to
take advantage. Having a meeting with Mr. Hagmann would answer a lot of questions,
but the meeting date has not yet been arranged.
7. MISCELLANEOUS LAND ACQUISITION UPDATE:
Ms. Dacy stated that there are two other sites under negotiation. The Maynard Nielsen
property on 61 st Avenue is the potential Northstar Corridor Development Authority site.
The appraisal is being finished, and staff hopes to negotiate a purchase agreement for
the HRA's review by the October meeting. The Werner's furniture site is being
discussed also. No action is required tonight.
8. 1999 - 2000 BUDGET:
Ms. Dacy stated that they are very close in completing the budgets for later years.
9. RAMBLER REHAB UPDATE:
Mr. Femelius stated that Center for Energy and Environment (CEE) has been working
on a rambler rehab project. Last spring the HRA and CEE applied jointly to the
Minnesota Housing Finance Agency to acquire and rehab an existing Fridley home.
The Rambler Remodeling Guidebook was used for direction. One of the problems that
CEE has run into is finding a house due to the demanding market. The properties they
have been looking at fall into the $115,00 - $130,000 price range which is above the
budget identified for the project. They have also found properties below $75,000 that do
not fit the style and characteristics that they are trying to achieve in the book.
Mr. Femelius stated that last week, staff looked at some of the homes Medtronic is
acquiring as part of it's campus along Quincy and Jackson Street. The property being
shown is located at 5675 Quincy Street. Medtronic has apparently sold these properties
to a moving company responsible for selling them and also moving the property. Staff
has discussed with CEE the possibility of CEE purchasing this property and moving it
on to a vacant lot and upgrading it and doing a rehab that would simulate one of the
plans in the plan book. Part of the project would involve providing the land on a deferred
sale basis similar to what they have done on a new construction project. The City would
get its money when that property sells to a homebuyer. It would help make the project
affordable so CEE could put more money into the actual rehab. Staff would like to
continue to work with CEE and possibly come back with a more detailed project at the
October meeting.
Mr. Meyer asked Mr. Femelius what needs rehabbing on this particular house.
Mr. Femelius stated that he suspects the house is a typical Fridley rambler with a
detached garage that would be included in the project. Some things that would include
reworking the interior space to include a kitchen and office /living room area. The goal is
to try and show people how they can update and modernize their rambler.
HOUSING & REDEVELOPMENT AUTHORITY MEETING, SEPTEMBER 2, 1999 PAGE 10
Ms. Dacy stated that there are code issues that need to be worked on in this part of the
preliminary stage of the rehab.
Mr. Meyer asked if the walls were going to be redone and insulated.
Mr. Femelius stated that would be done if necessary, but he is assuming it would be a
gut rehab going down to the studs and electrical and plumbing to really modernize it.
The budget CEE. received for upgrading is $90,000 for acquisition and rehab. The
purchase price of the house and moving costs are around $26,000 and the balance
would be used for rehab.
OTHER BUSINESS:
10. PREVAILING WAGE COMPLAINT:
Ms. Dacy stated that City Council did approve a resolution authorizing tax exempt
bonds for the Banfill Crossing construction site which is the Senior Housing construction
site under way south of Wal -Mart. The City received allegations that the prevailing
wage rates were not being paid for the contractor. Since that time, three sworn
statements have been submitted by three subcontractors verifying that they are and will
pay the prevailing wage rates as required by the development contract by the HRA.
There have been no other complaints about the project, but staff will continue to monitor
the situation.
MOTION by Mr. McFarland, seconded by Mr. Meyer, to adjourn the meeting.
UPON A VOICE VOTE, ALL VOTING AYE, VICE - CHAIRPERSON SCHNABEL
DECLARED THE MOTION CARRIED AND THE MEETING OF THE HOUSING AND
REDEVELOPMENT AUTHORITY ADJOURNED AT 8:54 P.M.
Respectfully submitted,
a
Sig a L. J nson -
Recording Secretary
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HOUSING & REDEVELOPMENT
AUTHORITY
Memorandum CMOF
FMEM
Date: September 27, 1999
To: William W. Bums, Executive Director
From: Barbara Dacy, Community Development Director
Subject: Public Hearing for Sale of Property, Lots 9 and 10, Block N, Riverview Heights
Background
The owner of 571 79th Way, the Holman's, inquired about purchasing a portion of the City
owned property immediately to the west of their property this past July. The City acquired Lots
9 and 10 in 1996 via the tax forfeit process. It is proposed that* Lot 9, or about 25 feet, would be
conveyed to the Holman's, and the City would retain Lot 10 as part of its land area for the recent
storm water improvement project in Riverview Heights. In order to convey Lot 9, the City
passed an ordinance declaring the property excess and authorized the Mayor and City Clerk to
execute the appropriate documents.
The City Attorney opined that the deed from the State of Minnesota to the City for the tax forfeit
lots may be "restricted" meaning that the parcels can only be used for a public purpose. If that
is the case, the City cannot convey the property to another owner for a non - public purpose.
Based on language in state statute, the City Attorney agreed with the staff suggestion to have
the City convey the property to the Fridley HRA who would then convey Lot 9 to the Holman's,
and convey Lot 10 back to the City.
PURPOSE OF PUBLIC HEARING
State Law requires the Authority to conduct a public hearing prior to sale of a property. In this
case, the Authority would first be accepting the property from the City, and then authorizing the
conveyance of Lot 9 to the Holman's, and Lot 10 back to the City. The additional lot for the
Holman's would make their lot a conforming lot of over 9,000 square feet, and would enable
them to build a new garage. The Authority will not incur any expenses with this transaction.
RECOMMENDATION
Staff recommends the Authority conduct the public hearing, and pass a motion authorizing
acceptance of the deed from the City, and authorizing the Chairperson and Executive Director
to execute the deeds to convey Lot 9 to the Holman's, and Lot 10 to the City.
BD /bd
M -99 -230
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MINNESOTA Department of Revenue SD -978
Conveyance of Forfeited Lands
#968
1247326
Issued Pursuant To Minnesota Statutes, Sections 282.01 to 282.12 inclusive, as amended.
THIS DEED, made this 1 Ith day of October, 1996, between the State of Minnesota, as party of the first
part, and City of Fridley, a governmental subdivision, party of the second part, WITNESSETH:
WHEREAS, the land hereinafter described, having been duly forfeited to the State of Minnesota for the
nonpayment of taxes, was sold under the provisions of Minnesota Statutes, Sections 282.0) to 282.12, inclusive, to
Ilse party of the second part, and.
WHEREAS, the said party of the second part has paid in full the purchase price of said land and has
otherwise fully complied with the conditions of said sale and is entitled to an appropriate conveyance thereof,
NOW, THEREFORE, the State of Minnesota, pursuant to said statutes, and in consideration of the
premises, does hereby grant and convey without warranty unto the said party of the second part, their heirs and
assigns, Forever, the following described land lying and being in the County of Anoka, and State of Minnesota, to-
wit:
is-
PIN#03 30 24 32 0172 (Fridley, MN)
Lots 9 and 10, Block N, Riverview Heights; subject to easements of record,
excepting and reserving to the said state, in trust for taxing districts concerned, all minerals and mineral rights, as
provided by law.
TO HAVE AND TO HOLD THE SAME, logctl►cr with all the hcrcditmnenls and appurtenances
thereunto belonging or in anylwisc appertaining, to the said party of the second pan, tlicir heirs and assigns,
Forever.
THE GRANTOR CERTIFIES that the Grantor does not know of any wells on the described real
property. The State of Minnesota is issuing this deed for the county and other taxing jurisdictions and in reliance
on the Auditor's certification stating no swells are located on the above described property.
IN TESTIMONY WHEREOF, the State of Minnesota has caused this deed to be executed in its name
in the City of St. Paul, County of Ramsey and State of Minnesota, the day and vear first above written.
In ever of: STATE OF MINNESOTA
JAMES IRARD
—� G t Cnmmi sio er Reve
J. •�a� Bw•
STATE OF MINNESOTA
County of Ramsey
Apwmed M the Astray C. —1
ThN h wm dmbed by lie
Cammiatleror a1 Revenue.
M 110 Depmeean d Revemie
s,. via, eau ssie6.
Revfad 3/96
awed = nslckd PqW wA un: Poo
.m=e =I wyb=M �&.
On this l ith day of October, 1996, before me personally appeared
MICHAEL P. WANDMACHER, the duly appointed representative of
the Commissioner of Revenue of the Slate of Minnesota, to me known
to be the person who executed the foregoing conveyance in behalf of
the State of Minnesota and acknowledged that he executed the same
as the free act and deed of said state pursuant to the statutes in such
case made and provided.
— - A121 -I z 19"�. �'-t A Z— . —
GAL L CIMBURA
NOTARY PUBLIC - MINNESOTA
.M Comm. Expim Jan. 31, 2000
rornl LIO. J9-m— WJI r ULAIM DEED Minnesota Unitocnl
Corporation. Parmersidp or Undted UabMW Company
to Corporation. Parmership or Umitcd Liability Company
No delinquent taxes and transfer entered; Certificate
of Real Estate Value ( ) filed ( ) not required
Certificate of Real Estate Value No.
(Ate)
County Auditor
by
Deputy
DEED TAX DUE:
Date:
Blanks (1/15/97) Miller -Davis Co.. St. Paul. MN
FOR VALUABLE CONSIDERATION, THE_CITLOE ERIDLEY
:a municipaLcotpolation under the laws of th�$late of Minn�Qta
Grantor, hereby conveys and quitclaims to HOUSING AND REDEYELAPMENT AUTHORITY OF THE CIT
OF FRIDLEY
Grantee, a comoration under the laws of __ the State of Minnesota
real property in Anoka County, Minnesota, described as follows:
Lots 9 and 10, Block N, Riverview Heights Addition.
together with all hereditaments and appurtenances.
Check box if applicable:
❑ The Seller certifies that the seller does not know of any wells on the described real property.
❑ A well disclosure certificate accompanies this document.
❑ I am familiar with the property described in this instrument and i certify that the status and number of wells
on the described real property have not changed since the last previously filed well disclosure certificate.
THE CITY OF FRIDLEY
Affix Deed Tax Stamp Here By W. 4jVdW!zW.'
STATE OF MINNESOTA ) Its G Ma
W-t
COUNTY OF _ _ ANOKA __ } 'J. By �� � C 0
J Its City Clerk
This instrument was acknowledged before me on -,Yk" M �
' r (nom)
by ? (k /c l �t c., and
the and ( ?. 4, _, "I ep 'b-1
of THE_CITV' OF FR 11711 FY j
laws of
,t.
NorARY PUBLIC OR OTHER OFRC1AL
Check here if part or all of the land is Registered (Torrens) ❑
Tax statements for the real property described in this instrument should
he acrd to (include tmme and address of Graince):
mutllCJpaLrDrPiatl4n
on behalf of the
municipaLes Wmt,
NOTARIAL STAMP OR SEAL (OR OTHER TITLE OR RANI
06-
—
r r rA 3 OLLIN3
! •
�.
! f i :' "' 1. • L11t ^lE30rA
A WA COUNTY
Cy Comm. Exp. Jan. 31.2000
laws of
,t.
NorARY PUBLIC OR OTHER OFRC1AL
Check here if part or all of the land is Registered (Torrens) ❑
Tax statements for the real property described in this instrument should
he acrd to (include tmme and address of Graince):
HD Form No. 32411-- QUIT CLAIM DEED Minnesota Uniform Conveyancing, Blanks (1/15/97) Miller -Davis Co., St. Paul. MN
Corporation, Partnership or Limited Liability Company
to Joint Tenants
No delinquent taxes and transfer entered; Certificate
of Real Estate Value ( ) filed ( ) not required
Certificate of Real Estate Value No.
(Dare)
County Auditor
by
Deputy
DEED TAX DUE:
Date:
FOR VALUABLE CONSIDERATION, THE CITY OF FRI BEY
a municipal corporation under the laws of lhe-State of Minnesota
Grantor, hereby conveys and quitclaims to KEYIN T. HOLMAN -ALGID PAULEEEE R_ HOI.MAN,wsband and
wife.
Grantee, as joint tenants, real property in Anoka County, Minnesota, described as follows:
Lot 9, Block N,, Riverview Heights Addition
together with all hereditaments and appurtenances.
Check box if applicable:
❑ The Seller certifies that the seller does not know of any wells on the described real property.
❑ A well disclosure certificate accompanies this document.
❑ I am familiar with the property described in this instrument and I certify that the status and number of wells
on the described real property have not changed since the last previously filed well disclosure certificate.
HOUSING AND REDEVELOPMENT AUTHORITY OF THE
CITY OF FRIDLEY
Affix Deed Tax Stamp Here By
STATE OF MINNESOTA Its
COUNTY OF By _ _ -
Its
This instrument was acknowledged before me on
(Date)
by and
the _ and
of TN�CIT�LOF FRIDLEY_
a municipal corpo=ion under the laws of the State of Minnesota
on behalf of the municipal cmWation
NOTARIAL STAMP OR REAL (OR OTVRR T M.R OR RANK)
SIGNATURE OF NOTARY PUBLIC OR OTHER OFFICUU.
Check here if part or all of the land is Registered (Torrcns) ❑
Tax statements for the real property described in this instrument abauld
be sera to (include narle and address of Grantee):
T IOS INSMtrNIF.Prr WAS DRAFTED BY QIASIR AND ADDRESS/:
HOUSING & REDEVELOPMENT
AUTHORITY
Memorandum
I"
DATE: October 1, 1999
TO: William Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
Grant Femelius, Housing Coordinator
SUBJECT: Public Hearing Regarding Sale of 5800 2nd Street
Background
This property is located in the Hyde Park neighborhood on the comer of 58th Avenue and 2 "d
Street. The site was originally acquired by the HRA in 1996 and the house was demolished.
Since that time the lot has remained vacant and very few builders have expressed interest in the
site.
Over the last several months, staff has been working with representatives from the Center for
Energy and Environment (CEE) on a pilot project to purchase and rehabilitate an existing
rambler. The goal of the project is to use one of the plans from the Remodeling Handbook, the
Rambler Edition.
CEE is looking for an existing rambler style home in the $85,000 to $90,000 price range in need
of between $25,000 to $30,000 worth of rehabilitation.' So far they have had difficulty finding a
home that meets these parameters. Homes are either priced far above the target range or
simply don't fall into the rambler category. Late last month, staff began working with CEE on
acquiring one of the ramblers being moved for the Medtronic project.
Proposed Project
CEE would act as the developer on the project and acquire one of the Medtronic homes for
between $25,000 to $30,000, which includes the cost of the move. Additional money ($50,000
to $60,000) would be required to rehabilitate the property. MHFA will provide the funding for
both the acquisition and rehabilitation. Once the home is completed, it would be used as model
for several months to showcase remodeling possibilities. Eventually, CEE will sell the property
directly to a moderate - income buyer.
HRA's Role
The HRA would provide the land for the project. In this case, the site is valued at $22,000. To
help keep the project affordable to a moderate - income buyer, the HRA would carry a deferred
mortgage for the land. This loan would only be repaid when the homeowner sells the house.
This approach was used for the lot the Authority sold to CEE at 5857 Main Street.
Due to the timing of the Medtronic project, it will be necessary to move aggressively on the
project and complete the sale and closing by the end of October. As a result, staff is also
seeking authorization from the Authority to enter into a development agreement with CEE.
3
CEE Memo
October 1, 1999
Page 2
Recommendation
Staff recommends that the Authority conduct the public hearing on October 7t'. After the hearing
is closed, staff recommends that the Authority take the following action:
1. Authorize the sale of 5800 2nd Street NE to the Center for Energy and Environment.
2. Authorize the Chair and Executive Director to execute a development contract and any other
necessary documents to complete the sale to CEE.
gf
M -99 -234
HOUSING & REDEVELOPMENT
AUTHORITY
Memorandum
CM
FRIO
DATE: September 28, 1999
TO: William Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Conduct Public Hearing to Adopt a Policy and Criteria for Granting
Business Subsidies
Background
The 1999 legislature passed a new law which requires each "local government agency" to hold
a public hearing and adopt its own policy regarding "business subsidies ". This particular section
of the law (Minnesota Statutes, Sections 116J.993 through 116J.995) has evolved over the past
four years from a job creation reporting requirement to the Department of Trade and Economic
Development to the current law which requires cities and Authorities to adopt their own policy
and criteria regarding business subsidies. Some have referred to this area of the statutes as
the "corporate welfare" law.
Jim O'Meara of Briggs & Morgan has prepared a proposed business subsidy policy which cities
and Authorities may use in order to comply with the recent law. Lobbyists tell us that this law is
sure to be amended to be less onerous in the upcoming session; however, if the Authority or the
City provides any type of assistance which would meet the "business subsidy" definition, a
policy must be in place in order to be in compliance with current state law.
Staff has advertised for the required public hearing for Thursday night's meeting and has used
O'Meara's proposed language as a basis to propose a policy for Authority adoption. According
to state law, the City Council will also need to hold its own public hearing and adopt its policy.
Staff intends to recommend similar language.
Corporate Welfare or Redevelopment Costs?
The State is trying to hold cities and Authorities accountable for any form of "assistance" to
businesses. For Fridley, the Authority and the Council have historically worked well together in
accomplishing its redevelopment goals as opposed to "competing" with other cities for new
businesses. Tax increment financing is the City's only tool to accomplish these goals. In each
and every case, the Authority has used its resources for eligible expenses under the law
including, but not limited to, soil correction, land assembly, removing blighted buildings,
demolition, environmental clean -up, etc. The State, to a certain extent, is confusing legitimate
redevelopment expenses as "welfare" when, in fact, these expenses must be incurred for
redevelopment to happen.
Proposed Pollcy
The intent of the proposed language is to provide the Authority with the ability to evaluate each
project on a case -by -case basis (see first bullet in the policy). Secondly, the policy identifies
T
Policy and Criteria for Granting Business Subsidies
September 28, 1999
Page 2
that the intent of "business subsidies" can, in addition to the creation of jobs, be for other viable
redevelopment purposes as may be permitted by applicable law (see bullets number 2 and 3).
As is better discussed in the attached memorandum from Jim O'Meara, the interpretation of
some of the terms enacted by this bill will encounter great debate. It is suggested that the
Authority adopt a general approach to the subsidy policy at this point in time and await future
clarifications by the Legislature. In short, the attached policy statement meets the intent of the
state law but provides the Authority with the flexibility to identify the appropriate justification for a
business subsidy on a case -by -case basis.
The law defines a "subsidy" as: "A state or local government agency grant, contribution of
personal property, real property, infrastructure, the principal amount of a loan at rates below
those commercially available to the recipient, any reduction or deferral of any tax or any fee, any
guarantee of any payment under any loan, lease, or other obligation, or any preferential use of
government facilities given to a business."
The law does not define "business", but does define "recipient" as any for - profit or nonprofit
business entity that receives a business subsidy. Providing tax increment financing assistance
on a project could be construed as providing a subsidy to a business. In general, if it is more
than $25,000, a "subsidy agreement" is now required by the new law and must establish the
public purpose of the subsidy, the goals of the subsidy, the financial obligations if the goals are
not met, and why the subsidy is needed. In the past, the focus of this law has been to report on
the job creation ability of the project. If there are other public purposes to the subsidy, those
should also be stated.
Staff will be undertaking an analysis of each request as it is presented to the Authority and will
determine the impacts of the new law on projects. The Authority should have some type of
policy statement in place, especially in preparation of the revised development agreement with
Medtronic.
Recommendation
Staff recommends that the Authority conduct the public hearing and adopt the policy statement
as presented.
BD:Is
M -99 -227
Business Subsidy Policy
This Policy is adopted for purposes of the business subsidies act (the "Act "), which is
Minnesota Statutes, Sections I I6J.993 through 116J.995. Terms used in this Policy are intended to
have the same meanings as used in the Act, and this Policy shall apply only with respect to subsidies
granted under the Act if and to the extend required thereby.
While it is recognized that the creation of good paying jobs is a desirable goal which benefits
the community, it must also be recognized that not all projects assisted with subsidies derive their
public purposes and importance solely by virtue of job creation. In addition, the imposition of high
job creation requirements and high wage levels may be unrealistic and counter - productive in the face
of larger economic forces and the financial and competitive circumstances of an individual business.
With respect to subsidies, the determination of the number of jobs to be created and the wage
levels thereof shall be guided by the following principles and criteria:
• Each project shall be evaluated on a case by case basis, recognizing its importance
and benefit to the community from all perspectives, including created or retained
employment positions.
• If a particular project does not involve the creation of jobs, but is nonetheless found
to be worthy of support and subsidy, it may be approved without any specific job or
wage goals, as may be permitted by applicable law.
• In cases where the objective is the retention of existing jobs, the recipient of the
subsidy shall be required to provide reasonably demonstrable evidence that the loss
of those jobs is imminent.
• The setting of wage and job goals must be sensitive to prevailing wage rates, local
economic conditions, external economic forces over which neither the grantor nor the
recipient of the subsidy has control, the individual financial resources of the recipient
and the competitive environment in which the recipient's business exists.
• Because it is not possible to anticipate every type of project which may in its context
and time present desirable community building or preservation goals and objectives,
the governing body must retain the right in its discretion to approve projects and
subsidies which may vary from the principles and criteria of this Policy.
Adopted by:
Date of adoption:
Date of public hearing:
1070590.1
BRIGGS :1 \D M0HGA N
PROFESSIONAL ASSOCIATION
MEMORANDUM
TO: Clientele et al.
FROM: Jim O'Meara
DATE: July 28, 1999
2200 FIRST NATIONAL, BANK BUILDING
332 MINNESOTA STREET
SAINT PAUL. MINNESOTA Wtol
TELEPHONE (651) 223 -6600
FACSIMILE (651) 223 -6450
WRITER'S DIRECT DIAL
WRITER'S E -MAIL
RE: Business Subsidies (Minnesota Statutes, Sections 1161993 through
1161995, copy attached)
WARNING: Review only at "peak" times. Drink plenty of fluids. Prolonged exposure to
this memo and the law which it summarizes may cause dizziness, headaches,
nausea, crankiness and loss of self - esteem. Side effects include memory loss,
aimlessness and staring blankly off into the distance, presumably in search of
one's retirement horizon.
The new Business Subsidies Band begins playing August 1 at a location near you.
The current "corporate welfare" law (Section 116J.991) is repealed on that date. Since the
legislative session ended, I've tried to persuade myself that this law really didn't pass. It died
in the House, but the Conference Committee resuscitated it. Maybe the Unicameralists are
on to something after all. The law appears as Article 12 of the 1999 Tax Bill (Laws 1999,
Chapter 243), and I guess it's time to face the music. Determining what is or isn't a
"subsidy" under this law, and what to do about it and when if it is, will be works in progress.
As usual, there are more questions than answers at this point. This memo focuses on the law
as it applies to local government, not the State.
1070094.1
MINNEAPOLIS OFFICE ■ IDS CENTER ■ WWW.BRIGGS.COM
MEMBER - LEX MUNDI. A GLOBAL ASSOCIATION OF INDEPENDENT LAW FIRMS
BRIGGS +-YD TNIORGAIT
Must Have Business Subsidy Policy
Step one is to hold a public hearing on and to adopt criteria for awarding subsidies.
These criteria "must include a policy regarding the wages to be paid for the jobs created."
Some comments:
• Each grantor or "local government agency" must hold a public hearing and
adopt its own policy. This includes each city, EDA, HRA, port authority,
community development agency, town, county, et al. For example, if your
city has an EDA and an LIRA, all three need to do the drill.
• The definition of "local government agency" also includes any "nonprofit
entity created by a local government agency, or any other entity created by or
authorized by a local government with authority to provide business
subsidies." This language may hook some local development corporations,
particularly those which the local government helped create and/or may
support financially.
• A public hearing, after published notice thereof, must be held on the policy.
.One publication of the notice is sufficient. There is no minimum or maximum
number of days prior to the hearing specified for the publication date.
• It appears that the "policy regarding the wages to be paid" does not require
specificity or any strict formula like "y jobs for every x thousand dollars of
subsidy." Instead, I would suggest more general guidelines since these
"subsidies," despite enumerated exceptions, cover a broad field, and
detailed/explicit policies on'num ers of jobs and wage levels are soon likely
to conflict with very worthwhile, real -world projects. It isn't all about jobs.
• I have drafted and enclosed a sample policy and a form of the related public
hearing notice. I mean only to suggest it as legally sufficient, realizing that
local goals and preferences may vary widely.
As the policy need not be specific, so it appears that the law itself does not
necessarily require that any jobs be created in connection with the subsidy+,
particularly where a rationale supports the fact that a project sunnly does not
primarily involve the creation of jobs. The law specifically allows retention
1070094.1 2
BRIGGS . -n INIORGAN
of existing jobs to be the goal, as long as the loss of those jobs is "imminent
and demonstrable. Fr
Subsidies can't be granted until the policy is adopted.
Definition of Subsidy; Exceptions
A subsidy is "a state or local government agency grant, contribution of personal
property, real property, infrastructure, the principal amount of a loan at rates below those
commercially available to the recipient, any reduction or deferral of any tax or any fee, any
guarantee of any payment under any loan, lease, or other obligation, or any preferential use
of government facilities given to a business." Keep this definition handy; review it every
time you're thinking of treating a business preferentially. Think ahead; compliance with this
law is complicate an U time - consuming.
The law doesn't define "business" but does define "recipient" (which is presumably
what is meant by business) as any for - profit or non - profit business entity that receives a
business subsidy. There's an exception for non -profit entities which either have fewer than
100 full -time equivalent positions or have a ratio of highest to lowest paid employees that
does not
to one determined on the basis of full -time equivalent osp itions): These
"small nonprofits" are not "recipients," so assistance to them isn't subject to this law.
The following are not business subsidies:
• A subsidy of less than $25,000.
• Assistance for housing, pollution control/abatement (including soils condition
TIF districts) or energy conservation.
• Assistance solely for renovating or bringing up to code old or decaying
building stock, provided the assistance is no more than 50% of the total cost.
• Redevelopment, but only when the recipient's investment (net ofthe subsid ?)
in site purchase and site preparation is at least 70% of the assessor's current
year's estimated market value of the site.
1070044.1 3
BRIGGS L 'MORGAN
Public improvements to buildings or land owned by the state /local government
that serve a public purpose and do not principally benefit a single business or
group of businesses.
Assistance that is generally available to all businesses or to a general class of
similar businesses, such as a line of business, size, location, or similar general
criteria.
• The proceeds of obligations/bonds which received an allocation of bonding
authority under Chapter 474A (for example, small issue manufacturing IDB's
and multi - family rental housing bonds; but note here that "501(c)(3) bonds"
for "charitable" users do not require allocations, so they may be subsidies but
may qualify for the "small nonprofit" recipient or "housing" exceptions).
There are a number of other exceptions, most of them of less widespread
application. Some of these are headscratchers on why they're even on the list
(e.g., "workers' compensation and unemployment compensation" and "benefits
derived from regulation ").
Are There More "Subsidies" Than You Think?
I encourage you to think expansively on all the ways in which local government action
results in the preferential financial treatment of a business. The analysis would go something
like this: First, is it a subsidy? Second, does it fall within one of the exceptions? And third,,
is it being ven to a "reci ient "? Which items on the following list are or might be subsidies
an which of those subsidies may fall within an exception?
• Tax increment financing.
• Abatement.
. __�> • Preferential utility rates.
• Special assessment projects financed other than in accordance with city policy
(e.g., the city assesses only 25% instead of the usual 50 %). What about
deferred assessments?
1070094.1 4
BRIGGS .YD 1IORGAN
• Planning and zoning decisions, for example, variances, PUD's or special use
permits which effectively increase the value of the property.
Definition of Benefit Date
The "benefit date" is the date the recipient receives the subsidy. If the subsidy
involves the purchase, lease or donation ofphysical equipment, the benefit date begins when
the recipient puts the equipment into service. If the subsidy is for improvement to property,
the benefit date is the earlier of (1) the date on which the improvements are finished for the
"entire project" and (2) the date on which the business (the recipient ?) occupies the property.
In general, the rec�n����m the benefit date to achieve the job /wage goals.
That period can be extended by one more year if the grantor holds a public hearing on and
approves the-c-!cten_ sue_
Public Purpose
Each business subsidymust meet a public purpose other than i
If there are new jobs, I suppose that's the public purpose under tl
qualifies only where job loss is imminent and demonstrable.
The Subsidy Agreement
easing the tax base.
law. Job retention
The grantor and the recipient must sign a subsidy agreement which:
• Describes the amount and type of the subsidy and type of TIF district, if there
is one.
• States the public purpose for the subsidy.
• States the goals for the subsidy.
• Describes the financial obligations of the recipient if the goals aren't met.
1070094.1 5
BRIGGS -so `IORGAN
• States why the subsidy is needed.
• Contains the recipient's commitment to continue operations at the site where
the subsidy is used for at least five years after the ene It ate (another
elaborate definition).
• States the names and address of the parent corporation of the recipient, if any.
• Lists all financial assistance by all grantors for the project ( ?), specifically
states the number of jobs to be created (if any) within two years of the benefit
date, which may be separately stated for full -time and part-time, or the number
of jobs to be retained if their loss is imminent and demonstrable, and the wage
goals for the jobs created/retained.
States the recipient's obligation if it defaults on the subsidy agreement. If the
recipient fails to meet the "subsidy agreement goals," it must either pay back
the assi�tu�e_�vith interest at the "implicit price deflator" of Section 275 70,
Subdivision 2 (don't ask). The�s�rantor may prorate the repayment based on _
partial fulfillment of the (jobs ?) goals. After a public hearing, the grantor may
also extend, or u one year the period for meeting the (jobs ?) goals.
A recipient that defaults on a subsidy agreement can't receive any other subsidy for
a period of five years from the date of that defaulor until the recipient satisfies its repayment
obligations, whichever occurs earlier. For its part, the grantor must check the "compilation
and summary report" to be prepared annually by the Department of Trade and Economic
Development to determine whether the recipient is eligible to receive a new subsidy.
Business subsidies which are grants must be structured as forgivable loans. If the
business subsidy is not structured as a forgivable loan (and hence, presumably, is not a
grant ?), the subsidy agreement must state the fair market value of the subsidy, including the
value of conveying property at less than fair market value or other in -kind benefits to the
recipient. If the subsidy benefits more than one recipient, the grantor must assign a
proportion of the subsidy to each recipient on a reasonable estimate of benefits basis.
The subsidy agreement must also be approved by the local elected governing body
(e.g., the City Council), except for the St. Paul Port Authority and any seaway port authority.
1070094.1 6
BRIGGS +-YD NIORGAI
Public Hearings Required for Subsidies in Excess of 5100,000
If the subsidy from a local grantor exceeds 5100,000, another public hearing must be
held, Nis one on a su sidv. This public hearing is not required "if a hearing and notice on
the subsidy is otherwise required by law." This exception is quizzical but presumably applies
in the case of tax increment financing where a City Council or County Board public hearing
is required, although the public hearing requirements for the subsidy are quite different from
the public hearing requirements for a TIF plan.
Pertaining to the public hearing on the subsidy:
• A notice must be published in a local paper of general circulation at least ten
days before the hearing. —'
• The notice must identify the location of information about the subsidy,
including where a copy of the subsidy agreement is available (meaning, of
course, that the agreement has to be negotiated prior to starting the public
hearing process).
• Published notice should be "sufficiently conspicuous in size and placement to
distinguish the notice from the surrounding text" (the hiring of a single engine
plane to tow a banner over the County Fair is not required).
• The grantor must make the information available in "printed paper copies"
and, if possible, on the Internet. (Videos and subsidy web sites may be next.)
Reporting by Recipients, Grantors and DTED
If you thought the law was "really rolling" based on the above, hang on. One of the
criticisms of the exgiring "corporate welfare" law was that reporting under it was spotty, not
enforced or resulted in
data as theme was, drew
tankers assembled such
inaccurate conclusions from it and set
out to correct the "problem." You'd think that doing "economic development" was like
storing spent uranium rods in your garage. As we know from the TIF front, in the brave new
1070094.1 7
BRIGGS -31 MORG A`
virtual world of accountability, it isn't what you do that counts, it's whether you can report
on it. Anyway.
On reporting by the recipient:
• Recipients must report until the job goals are met or the assistance is repaid.
• The forms are to be developed by DIED and copies of the completed reports
must be sent to the Commissioner of DTED and to the local government
agency that provided the-subsidy.
• The reports must include the type, public purpose, and amount of subsidies and
type of TTF district, if any (this was already required to be in the subsidy
agreement). The reports must also include:
• The hourly wage of each job created with separate bands of wages.
• The sum of the hourly wages and cost of health insurance provided by the
employer with separate bands of wages.
• The date the job and wage goals will be reached.
• A statement of goals identified in the subsidy agreement and an update of
achievement of those goals.
• The locations of the recipient prior to receiving the subsidy (it's a little late for
that).
• Why the recipient did not complete the project outlined in the agreement at its
previous location, if the recipient was previously located at another site in
Minnesota (there seems to be a trend here).
• The name and address of the parent corporation of the recipient, if any.
• A list of all financial assistance by all grantors for the project.
• Other information the Commissioner may request.
1070094.1 8
BRIGGS •4--D `IORGA`
Reports must be filed no later than Mamh 1 of each year for the previous year
and within 30 days after the deadline for meeting the job and wage goals. _
Recipients of assistance which falls under certain pollution and redevelopment
exceptions to the definition of business subsidy must nonetheless report based
on a slightly shorter list of requirements.
If the recipient doesn't make its reports, the local government agency must
mail the recipient a warning within one week of the required filing date. If,
after 14 days of the pbstmarked date (to be precise) of the warning, the
recipient fails to provide the report, then the recipient must pay the grantor a
penalty of $100 for each subsequent day until the report is filed, up to a
maximum of
Local government agencies with a population of more than 2,500 also have significant
reporting requirements to the Commissioner. These include:
A list of recipients that did not complete their reports.
A list of recipients that haven't met their job and wage goals and the steps
being taken to bring them into compliance or to recover the subsidy.
If the Commissioner doesn't receive the report by April 1, the Commissioner
must issue a warning to the government agency. If the report isn't in by June
1, the local government agency may not award any usb iness subsidies until the
report has been filed.
Finally, DTED has significant collating and publishing responsibilities on all this
information. Goodness.
JPO jvs
1070094.1 9
CHAPTER No. 243
H.F. No. 2420
1 Sec. 12. [APPROPRIATION.]
2 $18,731,000 is appropriated for fiscal year 2001 from the
3 general fund to the district courts for purposes of funding the
4 district court expenses under this article.
5 Sec. 13. [EFFECTIVE DATES; CONTINGENCY.]
6 (a) Sections 2 and 6 are effective for aids payable in
7 2000. The other provisions of this article providing for the
8 transfer of fees and fines to the state are effective January 1,
9 2000, with respect to counties in the eighth judicial district,
10 and July 1, 2000, with respect to counties in the fifth,
11 seventh, and ninth judicial districts.
12 (b) Notwithstanding paragraph (a), this article does not
13 take effect unless the state'issumes the district court costs
14 under 1999 S.F. No. 2221, article 7.
15 ARTICLE 12
16 BUSINESS SUBSIDIES
17 Section 1. [116J.993] [DEFINITIONS.]
18 Subdivision 1. (SCOPE.] For the purposes of sections
19 116J.993 to 116J.995, the terms defined in this section have the
20 meanings given them.
21 Subd. 2. [BENEFIT DATE.] "Benefit date" means the date
22 that the recipient receives the business subsidy. If the
23 business subsidy involves the purchase, lease, or donation of
24 physical equipment, then the benefit date begins when the
25 recipient puts the equipment into service If the business
26 subsidy is for improvements to property, then the benefit date
27 refers to the earliest date of either:
28 (1) when the improvements are finished for the entire
29 project; or
30 (2) when a business occupies the property. If a business
31 occupies the property and the subsidy grantor expects that•other
32 businesses will also occupy the same property, the grantor may
33 assign a separate benefit date for each business when it first
34 occupies the property.
35 Subd. 3. [BUSINESS SUBSIDY.] "Business subsidy" or
36 "subsidy" means a state or local government agency grant,
Article 12 Section 1 225
CHAPTER No. 243
H.F. No. 2420
1 contribution of personal property, real property,
2 infrastructure, the principal amount of a loan at rates below
3 those commercially available to the recipient, any reduction or
4 deferral of any tax or any fee, any guarantee of any payment
5 under any loan, lease, or other obligation, or any preferential
6 use of government facilities given to a business.
7 The following forms of financial assistance are not a
8 business subsidy:
9 (1) a business subsidy of less than $25,000;
10 (2) assistance that is generally available to all
11 businesses or to a general class of similar businesses, such as
12 a line of business, size, location, or similar general criteria;
13 (3) public improvements to buildings or lands owned by the
14 state or local government that serve a public purpose and do not
15 principally benefit a single business or defined group of
16 businesses at the time the improvements are made;
17 (4) redevelopment property polluted by contaminants as
18 defined in section 116J.552, subdivision 3;
19 (5) assistance provided for the sole purpose of renovating
20 old or decaying building stock or bringing it up to code,
21 provided that the assistance is equal to or less than 50 percent
22 of the total cost;
23 (6) assistance provided to organizations whose primary
24 mission is to provide job readiness and training services if the
25 sole purpose of the assistance is to provide those services;_
26 (7) assistance for housing;
27 (8) assistance for pollution control or abatement;
28 (9) assistance for energy conservation;
29 (10) tax reductions resulting from conformity with federal
30 tax law;
31 (11) workers' compensation and unemployment compensation;
,32 (12) benefits derived from regulation;
33 (13) indirect benefits derived from assistance to
34 educational institutions;
35 (14) funds from bonds allocated under chapter 474A;
36 (15) assistance for a collaboration between a Minnesota
Article 12 Section 1 226
CHAPTER No. 243
H.F. No. 2420
1 higher education institution and a business;_
2 (16) assistance for a tax increment financing soils
3 condition district as defined under section 469.174, subdivision
4 19;
5 (17) redevelopment when the recipient's investment in the
6 purchase of the site and in site preparation is 70 percent or
7 more of the assessor's current year's estimated market value;
8 and
9 (18) general changes in tax increment financing law and
10 other general tax law changes of a principally technical nature.
11 Subd. 4. (GRANTOR.] "Grantor" means any state or local
12 government agency with the authority to grant a business subsidy.
13 Subd. S. [LOCAL GOVERNMENT AGENCY.] "Local government
14 agency" includes a statutory or home rule charter city, housing
15 and redevelopment authority, town, county, port authority,
16 economic development authority, community development agency,
17 nonprofit entity created by a local government agency, or any
18 other entity created by or authorized by a local government with
19 authority to provide business subsidies.
20 Subd. 6. [RECIPIENT.] "Recipient" means any for - profit or
21 nonprofit business entity that receives a business subsidy.
22 Only nonprofit entities with at least 100 full -time equivalent
23 positions and with a ratio of highest to lowest paid employee,
24 that exceeds ten to one, determined on the basis of full -time
25 equivalent positions, are included in this definition.
26 Subd. 7. [STATE GOVERNMENT AGENCY.] "State government
27 agency" means any state agency that has the authority to award
28 business subsidies.
29 Sec. 2. [116J.994] [REGULATING LOCAL AND STATE BUSINESS
30 SUBSIDIES.]
31 Subdivision 1. [PUBLIC PURPOSE.] A business subsidy must
32 meet a public purpose other than increasing the tax base. Job
33 retention may only be used as a public purpose in cases where
34 job loss is imminent and demonstrable.
35 Subd. 2. [DEVELOPING A SET OF CRITERIA.] A business
36 subsidy may not be granted until the grantor has adopted
Article 12 Section 2 227
CHAPTER No. 243
H.F. No. 2420
1 criteria after a public hearing for awarding business subsidies
2 that comply with this section. The criteria must include a
3 policy regarding the wages to be paid for the jobs created. The
4 commissioner of trade and economic development may assist local
5 government agencies in developing criteria.
6 Subd. 3. (SUBSIDY AGREEMENT.) (a) A recipient must enter
7 into a subsidy agreement with the grantor of the subsidy that
8 includes: .
9 (1) a description of the subsidy, including the amount and
10 type of subsidy, and type of district if the subsidy is tax
11 increment financing;
12 (_2) a statement of the public purposes for the subsidy;
13 (3) goals for the subsidy;
14 (4) a description of the financial obligation of the
15 recipient if the goals are not met;
16 (5) a statement of why the subsidy is needed;
17 (6) a commitment to continue operations at the site where
18 the subsidy is used for at least five years after the benefit
19 date;
20 (7) the name and address of the parent corporation of the
21 recipient, if any; and
22 (8) a list of all financial assistance by all grantors for
23 the project.
24 (b) Business subsidies in the form of grants must be
25 structured as forgivable loans. If a business subsidy is not
26 structured as a forgivable loan, the agreement must state the
27 fair market value of the subsidy to the recipient, including the -
28 value of conveying property at less than a fair market price, or
29 other in -kind benefits to the recipient.
30 (c) If a business subsidy benefits more than one recipient,
31 the grantor must assign a proportion of the business subsidy to
32 each recipient that signs a subsidy agreement. The proportion
33 assessed to each recipient must reflect a reasonable estimate of
34 the recipient's share of the total benefits of the project
35 (d) The state or local government agency and the recipient
36 must both sign the subsidy agreement and, if the grantor is a
Article 12 Section 2 228
CHAPTER No. 243
H.F. No. 2420
1 local government agency, the agreement must be approved by the
2 local elected governing body, except for the St. Paul Port
3 Authority and a seaway port authority.
4 Subd. 4. [WAGE AND JOB GOALS.] The subsidy agreement, in
5 addition to any other goals, must include: (1) goals for the
6 number of jobs created, which may include separate goals for the
7 number of part-time or full -time jobs, or, in cases where job
8 loss is imminent and demonstrable, goals for the number of jobs
9 retained; and (2) wage goals for the jobs created :or-.retained.
10 In addition to other specific goal time frames, the wage
11 and job goals must contain specific goals to be attained within
12 two years of the benefit date.
13 Subd. 5. [PUBLIC NOTICE AND HEARING.) (a) Before granting
14 a business subsidy that exceeds $500,000 for a state government
15 grantor and $100,000 for a local government grantor, the grantor
16 must provide public notice and a hearing on the subsidy._ A
17 public hearing and notice under this subdivision is not required
18 if a hearing and notice on the subsidy is otherwise required by
19 law.
20 (b) Public notice of a proposed business subsidy under this
21 subdivision by a state government grantor must be published in
22 the State Register. Public notice of a proposed business
23 subsidy under this subdivision by a local government grantor_
24 must be published in a local newspaper of general circulation.
25 The public notice must identify the location at which
26 information about the business subsidy, including a copy of the
27 subsidy agreement, is available. Published notice should be
28 sufficiently conspicuous in size and placement to distinguish
29 the notice from the surrounding text The grantor must make the
30 information available in printed paper copies and, if possible,
31 on the Internet The government agency must provide at least a
32 ten -day notice for the public hearing.
33 (c) The public notice must include the date, time,"and
34 place of the hearing.
35 (d) The public hearing by a state government grantor must
36 be held in St. Paul.
Article 12 Section 2 229
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
CHAPTER No. 243
H.F. No. 2420
Subd. 6. (FAILURE TO MEET GOALS.] The subsidy agreement
must specify the recipient's obligation if the recipient does
not fulfill the agreement. At a minimum, the agreement must
require a recipient failing to meet subsidy agreement goals to
pay back the assistance plus interest to the grantor provided
that repayment may be prorated to reflect partial fulfillment of
goals. The interest rate must be set at the implicit price
deflator defined under section 275.70, subdivision 2. The
grantor, after a public hearing, may extend for up to one year
the period for meeting the goals provided in a subsidy agreement.
A recipient that fails to meet the terms of a subsidy
agreement may not receive a business subsidy from any grantor
for a period of five years from the date of failure or until a
recipient satisfies its repayment obligation under this
subdivision, whichever occurs first.
Before a grantor signs a business subsidy agreement, the
grantor must check with the compilation and summary report
required by this section to determine if the recipient is
eligible to receive a business subsidy.
Subd. 7. [REPORTS BY RECIPIENTS TO GRANTORS.] (a) A
business subsidy grantor must monitor the progress by the
recipient in achieving agreement goals.
(b) A recipient must provide information regarding goals
and results for two years after the benefit date or until the
goals are met, whichever is later. If the goals are not met,
the recipient must continue to provide information on the
subsidy until the subsidy is repaid. The information must be
filed on forms developed by the commissioner in cooperation with
representatives of local government. Copies of the completed
forms must be sent to the commissioner and the local government
agency that provided the business subsidy. The report must
include:
33 (1) the type, public purpose, and amount of subsidies and
34 type of district, if the subsidy is tax increment financing;
35 (_2) the hourly wage of each job created with separate bands
36 of wages;
Article 12 Section 2 230
CHAPTER No. 243
H.F. No. 2420
1 (3) the sum of the hourly wages and cost of health
2 insurance provided by the emplover with separate bands of wages;
3 (4) the date the job and wage goals will be reached;
4 (5) a statement of goals identified in the subsidy
5 agreement and an update on achievement of those goals;
6 (6) the location of the recipient prior to receiving the
7 business subsidy;
8 (7) why the recipient did not complete the project outlined
9 in the subsidy agreement at their previous location,'if the
10 reci ient was previously located at another site in Minnesota;
11 (8) the name and address of the parent corporation of the
12 recipient, if any;_
13 (9) a list of all financial assistance by all grantors for
14 the project; and
15 (10) other information the commissioner may request.
16 A report must be filed no later than March 1 of each year for
17 the previous year and within 30 days after the deadline for
18 meeting the job and wage goals.
19 (c) Financial assistance that is excluded from the
20 definition of "business subsidy" by section 116J.993,
21 subdivision 3, clauses (4), (5), (8), and (16) is subject to the
22 reporting requirements of this subdivision, except that the
23 report of the recipient must include:
24 (1) the type, public purpose, and amount of the _financial
25 assistance, and type of district if the subsidy is tax increment
26 financing;
27 (2) progress towards meeting goals stated in the subsidy
28 agreement and the public purpose of the assistance;
29 (3) the hourly wage of each job created with-separate bands
30 of wages;
31 (4) the sum of the hourly wages and cost of health
32 insurance provided by the employer with separate bands of wages;
33 (5) the location of the recipient prior to receiving the
34 assistance; and
35 (6) other information the grantor requests.
36 (d) If the recipient does not submit its report, the local
Article 12 Section 2 231
CHAPTER No. 243
H.F. No. 2420
1 government agency must mail the recipient a warning within one
2 week of the required filing date. If, after 14 days of the
3 postmarked date of the warning, the recipient fails to provide a
4 report, the recipient must pay to the grantor a penalty of $100
5 for each subsequent day until the report is filed. The maximum
6 penalty shall not exceed $1,000.
7 Subd. 8. [REPORTS BY GRANTORS.] (a) Local government
8 agencies of a local government with a population of more than
9 2,500 and state government agencies, regardless of whether or
10 not they have awarded any business subsidies, must file a report
11 by April 1 of each year with the commissioner. Local government
12 agencies of a local government with a population of 2,500 or
13 less are exempt from filing this report if they have not awarded
14 a business subsidy in the past five years. The local government
15 agency must include a list of recipients that did not complete
16 the report and of recipients that have not met their job and
17 wage goals within two years and the steps being taken to bring
18 them into compliance or to recoup the subsidy.
19 If the commissioner has not received the report by April 1
20 from an entity required to report, the commissioner shall issue
21 a warning to the government agency. If the commissioner has
22 still not received the report by June 1 of that same year from
23 an entity required to report, then that government agency may
24 not award any business subsidies until the report has been filed.
25 (b) The commissioner of trade and economic development must
26 provide information on reporting requirements to state and local
27 government agencies.
28 Subd. 9. [COMPILATION AND SUMMARY REPORT.] The department
29 of trade and economic development must publish a compilation and
30 summary of the results of the reports for the previous calendar
31 year by July 1 of each year. The reports of the government
32 agencies to the department and the compilation and summary
33 report of the department must be made available to the public.
34 The commissioner must coordinate the production of reports
35 so that useful comparisons across time periods and across
36 grantors_ can be made. The commissioner may add other
Article 12 Section 2 232
CHAPTER No. 243
H.F. No. 2420
1 information to the report as the commissioner deems necessary to
2 evaluate business subsidies Among the information in the
3 summary and compilation report, the commissioner_ must include:
4 (1) total amount of subsidies awarded in each development
5 region of the state;
6 (2) distribution of business subsidy amounts by size of the
7 business subsidy;
8 (3) distribution of business subsidy amounts by time
9 category, such as monthly or quarterly; '
10 (4) distribution of subsidies by type and by public
11 purpose;
12 (5)_percent of all business subsidies that reached their
13 og als;
14 (6) percent of business subsidies that did not reach their
15 goals by two years from the benefit date;
16 (7) total dollar amount of business subsidies that did not
17 meet their goals after two years from the benefit date;
18 (8) percent of subsidies that did not meet their goals and
19 that did not receive repayment;
20 (9) list of recipients that have failed to meet the terms
21 of a subsidy agreement in the past five years and have not
22 satisfied their repayment obligations;
23 (10) number of part -time and full -time jobs within separate
24 bands of wages; and
25 (11) benefits paid within separate bands of wages.
26 Sec. 3. (116J.995) (ECONOMIC GRANTS.)
27 An appropriation rider in an appropriation to the
28 department of trade and economic development that specifies that
29 the appropriation be granted to a particular business or class
30 of businesses must contain a statement of the expected benefits
31 associated with the grant. At a minimum, the statement must
32 include goals for the number of jobs created, wages paid, and
33 the tax revenue increases due to the grant.
34 Sec. 4. [REPEALER.)
35 Minnesota Statutes 1998, section 116J.991, is repealed.
36 Sec. 5. [EFFECTIVE DATE.]
Article 12 Section 5 233
CHAPTER No. 243
H.F. No. 2420
1 Sections 1 to 4 are effective for business subsidies
2 entered into or state appropriations authorized on or after
3 August 1, 1999.
4 ARTICLE 13
5 TAX FORFEITURE AND DELINQUENCY PROCEDURES
6 Section 1. Minnesota Statutes 1998, section 92.51, is
7 amended to read:
8 92.51 [TAXATION; REDEMPTION; SPECIAL CERTIFICATE.]
9 State lands sold by the director become taxable. A
10 description of the tract sold, with the name of the purchaser,
11 must be transmitted to the proper county auditor. The auditor
12 must extend the land for taxation like other land. Only the
13 interest in the land vested by the land sale certificate in its
14 holder may be sold for delinquent taxes. Upon - production -to -the
15 county - treasurer -of- the - tax - eertifieate- given -upon- tax - sale; -in
16 ease- the -lands -have- net - been - redeemed;- the - tax - purchaser -has -the
17 right -to -pay- the- princispal- and - interest- then -in- default -upon -the
18 lend - sale - certificate -as- its - assignee.- - -To- redeem - from -a -tax
19 sale;- the - person - redeeming -mast -pep- the - county - treasurer; -for
20 the - holder- and - owner -of- the - tax - sale - certificate; -in- addition -to
21 all -sums- required- to -be- paid -in- ether - eases;- all - amounts- paid -by
22 the - holder - and - owner- for - interest- and - principal -upon- the -lend
23 sale - eertifieate; -with- interest- at -12- percent- per - peer.- - -When
24 the - director- reeeives- the -tax- certificate-with- the - county
25 auditorys- certificate -of- the - expiration -of- the -time -for
26 redemption; -and- the - county- treasurer1s- receipt- for -all
27 delinquent - interest- and - penalty -on- the - land - sale - certificate;
28 the - director - shall - issue- the - holder - and - owner -of- the -tax
29 certificate-a- special- certificate- with - the - same - terms -end -the
30 same- effect -as- the - original - land - sale- certificate-
31 Sec. 2. Minnesota Statutes 1998, section 279.37,
32 subdivision 1, is amended to read:
33 Subdivision 1. [COMPOSITION INTO ONE ITEM.] Delinquent
34 taxes upon any parcel of real estate may be composed into one
35 item or amount by confession of judgment at any time prior to
36 the forfeiture of the parcel of land to the state for taxes, for
Article 13 Section 2 234
DATE: September 29, 1999
TO: William Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Resolution Authorizing Execution of Development Contract, Dick Peterson and
Bill Penk, Fridley Main L.L.C.
Background -
At the September HRA meeting, the Authority agreed to negotiate a development contract with
Dick Peterson and Bill Penk (Fridley Main L.L.C.) to provide soil correction assistance up to
$250,000 at the five acre property on the west side of Main Street just north of A & R Trucking
and the Craus Cartage site. Peterson and Penk are proposing to construct a 50,000 square
foot office warehouse project. 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 recently amended the rules pertaining to °gap year" districts. One of the
changes that affect 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 committed by May 1,
1999. The Authority stipulated its approval on the inclusion of some type of "recovery" method in
the contract in order for the Authority to recover its expenses.
Proposed Contract
After negotiation with the developer, it was agreed that the soil correction costs would be shared
such that the Authority's assistance would equal up to 2/3`d's of the cost with a cap of $250,000.
The proposed development agreement provides the assistance with a loan and a grant,
consistent with other projects that the Authority has approved in the past. Up to one third of the
soil correction costs with a cap of $125,000 will be loaned to the developers at the time of the
issuance of the certificate of completion. A grant of up to another third with a cap of $125,000
will also be made at the issuance of the certificate of completion. The loan will have an interest
rate of 5% and a term of 10 years, with the typical practice of not requiring payments for the first
two years of the loan term (these payments are rolled into the remaining portion of the
amortization schedule). The repayments on the loan, with interest, will recover half of the
authority's expenses on the project. The contract requires the developer to sign an assessment
agreement, and the developer would have to complete the building by the end of the year 2000.
After careful review of the new business subsidy law, staff believes that the new law does not
apply to this particular project and a subsidy agreement is not required. The law makes an
exception for site preparation and acquisition costs which exceed 70% of the current value of
the land.
5
Recommendation
Staff recommends that the Authority approve the attached resolution authorizing the Executive
Director and the Chairperson to sign the development agreement as presented.
BD:ls
M- 99-202
HRA RESOLUTION NO. l k
RESOLUTION AUTHORIZING EXECUTION AND DELIVERY
OF A CONTRACT FOR PRIVATE REDEVELOPMENT BY AND
BETWEEN THE HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF FRIDLEY,
MINNESOTA AND FRIDLEY MAIN L.L.C..
BE IT RESOLVED by the Board of Commissioners (the "Commissioners ") of the Housing and
Redevelopment Authority in and for the City of Fridley, Minnesota (the "Authority ") as follows:
Section 1. Recitals.
1.01. It has been proposed that the Authority enter into a Contract For Private Redevelopment (the
"Contract ") with Fridley Main L.L.C. (the "Redeveloper").
'Section 2. Findings.
2.01. The Authority hereby finds that it has approved and adopted a development program known as
the Redevelopment Plan for its Redevelopment Project No. 1 (the "Redevelopment Program ")
pursuant to Minnesota Statutes, Section 469.001 et seq.
2.02. The Authority hereby finds that the Contract promotes the objectives as outlined in its
Redevelopment Program.
Section 3. Authorizations.
3.01. The Chairman and the Executive Director of the Authority (the "Officers") are hereby
authorized to execute and deliver the Contract when the following conditions are met:
A. The Contract to be executed substantially conforms to the Contract presented
to the Authority as of this date with such additions and modifications as those Officers may
deem desirable or necessary as evidenced by the execution thereof,
3.02. Upon execution and delivery of the Contract, the Officers and employees of the Authority are
hereby authorized and directed to take or cause to be taken such actions as may be necessary
on behalf of the Authority to implement the Contract.
PASSED AND ADOPTED BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF FRIDLEY, MINNESOTA THIS DAY OF
1999.
LAWRENCE R. COMMERS - CHAIRMAN
ATTEST:
Page 2 -- Resolution No.
WILLIAM W. BURNS — EXECUTIVE DIRECTOR
G: \WPDATAT\RMLEY\06qX)CS%RA RESOLLMON.DOC
MEMO
To: WILLIAM W. BURNS
From: JULIE H. VOGEL, CPA
CC: RICK PRIBYL, BARB DACY
Date: 09/16/99
Re: 1999 SCHOOL DISTRICT AGREEMENTS
Possible agenda item
Would it be possible to get the 1999 School District Referendum Levy Return Agreements placed on
the HRA Commission agenda for the October 7,1999 meeting.
The annual agreements (which will end after year 2000) need to be approved by the HRA Commission
and then be approved and signed by the City Council.
The estimated total levy return for 1999 is $168,045. The returns are less this year because the State
of Minnesota has adopted a different approach of using market values.
The table below shows the breakdown of the referendum levy returns:
School
Actual
Estimated
District
1,998
1,999
11 $
9,500 $
-
13
11,514
8,481
14
162,129
132,259
16
26,451
27,305
Total $
209,594 $
168,045
HOUSING & REDEVELOPMENT
AUTHORITY
Memorandum CM
FRIER"
DATE: October 1, 1999
TO: William Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
Grant Femelius, Housing Coordinator
SUBJECT: Resolution Authorizing Condemnation of Properties in the
Gateway East Project . _
Staff is requesting authorization to proceed with the condemnation of two sites in the Gateway
East project. Additional action may be required at the November meeting for the duplex
depending on the success of negotiations with the property owner.
The resolution enables the Authority to use its Power of Eminent Domain to acquire the
properties. After adopting the resolution, the HRA may then deposit funds with the Court for the
purchase. The amount to be deposited will be based on our own appraisals of each site. In
addition, the HRA will file a petition with the Court requesting appointment of commissioners
who will review the pertinent information and determine the property value.
At the hearing, both sides will have an opportunity to present information on the value of the
site. Within 40 days of the hearing, the Commissioner's are required to make a
recommendation to the Court on a value. Assuming there are no appeals by either party, the
Court will then order release of the funds to the property owner and conveyance of title to the
HRA. If there were an appeal, a jury trial would be the next step.
As a practical matter, we are not anticipating contentious negotiations with the owners.
However, in order to keep moving on the project we need to initiate the process. The sense of
urgency is due to the deadline imposed by the State with regard to pre -1982 TIF districts. In
this case, the plan has been to use revenues from TIF districts #2 and #3 to pay for some of the
Gateway East project costs. After December 31, 1999 we will no longer be able to access
these revenues.
The sites to be included in this action are both vacant lots. Information on each property is
provided below. A map and a copy of the resolution are attached.
Pror)erty A
Legal: Lots 4, 5 and 6, Block 3, City View Addition
Address: 339 57th Place NE
Owner. Richard N. Miller
1520 San Carlos Bay Drive
Sanibel Island, FL 33957
7
Condemnation Memo
October 1, 1999
Page 2
Site:
120'x 140'(16,800 S.F.)
Zoning:
R -2 (two family residential)
Property B
Legal:
Lots 5, 6 and 7, Block 6, City View Addition.
Address:
348 - 57th Place NE
Owner:
Valvoline Instand Oil Change
3499 Blazer Parkway
Lexington, KY 40509
Site: 120'x 140'(16,800 S.F.)
Zoning: R -2 (two family residential)
Recommendation
Staff recommends that the Authority adopt the attached resolution authorizing staff to proceed
with the condemnation of the following properties:
Lots 4, 5 and 6, Block 3, City View Addition, Anoka County, Minnesota.
Lots 5, 6 and 7, Block 6, City View Addition, Anoka County, Minnesota.
9f
M -99 -233
HRA RESOLUTION NO. I� _IV
RESOLUTION DETERMINING THE NECESSITY FOR
AND AUTHORIZING THE ACQUISITION OF CERTAIN
PROPERTY BY PROCEEDINGS IN EMINENT DOMAIN
WHEREAS the Fridley Housing and Redevelopment Authority in and for the City of
Fridley, Minnesota (the "Authority") has heretofore determined the need for
redevelopment of certain property located in the City of- Fridley which is described on
Exhibit A, attached hereto and incorporated herein;
NOW THEREFORE be it resolved by the Authority as follows:
1. Acquisition by the Authority of the property described on Exhibit A is
necessary for the purposes of redevelopment.
2. The law firm of Holstad & Knaak, PLC is authorized and directed on
behalf of the Authority to acquire the real estate above - described in the
exercise of the power of eminent domain pursuant to Minnesota
Statutes, Chapter 117, and is specifically authorized to notify the
owners of intent to take possession pursuant to Minnesota Statutes,
§117.042 (the "quick take section "). The Authority's attorneys are
further authorized to take all actions necessary and desirable to carry
out the purposes of this Resolution.
PASSED AND ADOPTED BY THE FRIDLEY HOUSING AND REDEVELOPMENT
AUTHORITY THIS DAY OF OCTOBER, 1999.
Authority Chairperson
Attested to by:
Executive Director
G: \WPDATA\FTRMLEW0\DOC\RESOLUTION PRK DOC
EXHIBIT A
LEGAL DESCRIPTION
1. Lots 4, 5 and 6, Block 3, City View Addition to the City of Fridley.
2. Lots 5, 6 and 7, Block 6, City View Addition to the City of Fridley.
G: \WPDATA\F\FRIDLEY\30\DOC\EX 03rr A.DOC
DATE: September 29, 1999
TO: William Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Resolution Modifying the Redevelopment Plan and Tax Increment Financing
Plans to Reflect Enlargement of Redevelopment Project No. 1 and Increased
Project Costs to be Undertaken Therein.
PURPOSE OF RESOLUTION
The purpose of the resolution is to authorize the following changes in the City's redevelopment
program:
• Enlarge the redevelopment project area
• Modify the TIF budgets within the redevelopment plan
• Amend TIF Plan #6 to extend the duration of the district
The City Council will be acting on its corresponding resolutions at the meetings in October and
November. The Planning Commission must review the enlargement of the redevelopment
project area to determine if it is consistent with the Comprehensive Plan. Their review will occur
on October 6, 1999.
WHERE DO I LOOK FOR THE CHANGES?
Enclosed in the packet is a draft copy of the proposed amendment to the redevelopment plan.
A cover memo from Krass Monroe is the first page of the enclosure and is a copy of the cover
transmittal to Anoka County and the School District The County has already reviewed the
proposed amendment at its September 28, 1999 meeting. No comments about the modification
of the plan have been received as of yet from School District #13. The public hearing is
scheduled for the City Council on October 11, 1999. .
Beginning on page 1 -20 of the enclosure is the new text to add to the existing redevelopment
plan. At the top of the page will be a header, "As Modified October 25, 1999 ". This is the
projected date of Council action to amend the plan. The purpose of this new section is to
describe the type of public improvements proposed to be undertaken in the tax increment
districts and to identify a projected budget of expenditures. Exhibit I -C amends the tax increment
financing district budgets previously stated in the existing plan on pages 1 -11 through 1 -19.
ENLARGEMENT OF THE REDEVELOPMENT PROJECT AREA
An 11 x 17 map is enclosed in the packet which depicts the existing parcels in the
redevelopment project area and the existing Tax Increment Financing Districts. The map also
shows the proposed parcels to be included in the redevelopment project area. In general, the
proposed parcels extend from TH 65 west along 1-694 and include the land area generally
Ul
located in the southwest part of the City with 61' Avenue as the roughly the northern border.
The Riverview Heights neighborhood is also included as well as about 70 individual single
family residential parcels that were identified as possible candidates for the Housing
Replacement program.
The purpose of enlarging the project area is merely to plan for the future. State law enables the
Authority to spend tax increments in the project area (subject to other requirements in the TIF
law) for eligible activities including rehabilitation programs, land acquisition or site preparation
assistance. The Authority may also in the future choose to establish a tax increment financing
district for redevelopment projects. Gateway East is a case in point where the parcels are
included in the project area, but a district has not been established as of yet. When the TIF
district is proposed, another public hearing process before the Council will be required.
MODIFICATION OF TIF BUDGETS
The proposed tax increment budgets identified in Exhibit I -C merely clarifies the budgets for
respective districts to reflect anticipated expenditures. A good example is TIF #6 which
anticipates the expenditures for the Medtronic project (these are based on their estimates to
date). The amounts of these expenditures however do not exceed the projected revenues of the
respective tax increment district.
EXTENDING TIF #6
Chapter VII of the enclosure refers to TIF Plan #6. On page 7 -2, language is added to reflect
the recently passed law permitting the City to extend the duration of the district. Modifying the
redevelopment plan to incorporate the language to extend the duration of TIF District #6 is only
part of the required process for the Authority and the City Council. The Authority must also
approve a resolution authorizing the extension of the District This will be presented to the
Authority in November after approval of the amended development agreement with Medtronic.
The action by the attached resolution modifies the language in the redevelopment plan whereas
the resolution to extend the district implements the special law passed by the legislature. The
Council will not only have to approve a resolution extending the district, but must also pass a
resolution adopting the new "special law" enacted by the legislature. The County and School
District though have passed their respective resolutions agreeing to the adoption of the special
law and the extension of TIF #6 for the Medtronic project.
ADDITIONAL HOUSING PROGRAM LANGUAGE
Attached to this memo is the proposed language to include in the plan regarding the Authority's
housing programs. The proposed language bolsters the existing language about the public
purpose served by implementing the array of housing rehabilitation and replacement programs.
It also establishes several goals that the Authority is setting out to accomplish by completing a
variety of housing infill redevelopment projects.
RECOMMENDATION
Staff recommends the Authority approve the resolution as presented.
[INSERT AT THE END OF SUBSECTION 1.5 — END OF PAGE 1.91
b. Housing. Housing is essentially the determining factor by which a city is initially
judged, and as a result, reflects the character of the city and the characteristics of its resident
population. The Authority has determined that there are certain areas within the City which may
negatively reflect its character and that of its residents. These areas are potentially more
valuable, more productive and more stable than is currently realized because they contain parcels
that are vacant, under - utilized or blighted, due to poor planning and subdivision and zoning
practices and to existing structures, which because of (i) dilapidation, (ii) obsolescence, (iii)
overcrowding, (iv) faulty arrangement or design, (v) lack of ventilation, light and sanitary
facilities, (vi) inadequate land coverage, (vii) obsolete layout, or (viii) any combination of these
and other factors, are detrimental to the safety, health, morals and welfare of the community.
Consequently, the Authority has further determined that it is in the best interests of the City to
initiate a plan to assist in creating viable environments which would upgrade and maintain
housing stock, maintain housing health and safety quality standards, and maintain and strengthen
the character of individual neighborhoods.
In an effort to achieve these goals the Authority has adopted (Authority Resolution No.
18 -1995) through its Housing Replacement District Plan a program to acquire blighted,
undeveloped or underdeveloped parcels for redevelopment or rehabilitation and for ultimate
resale for housing. To assist in the implementation of this effort, the goals of the Housing
Replacement District Plan are hereby incorporated into this Modified Redevelopment Plan.
Additional public purpose goals that will be realized include:
1. restoration and improvement of the residential tax base
2. realization of comprehensive planning goals
3. revitalization of property to create a safe, attractive, comfortable, convenient and
efficient area for residential use
4. creation and maintenance of a healthy and safe environment
5. removal of non - conforming land uses
6. stimulation of private activity and investment to stabilize and balance the City's
housing supply
7. elimination of code violations and nuisance conditions that adversely affect
neighborhoods
8. recreation and reinforcement of a sense of residential place and security which creates
neighborhood cohesiveness through City investment in neighborhood infrastructure
and public improvements, including landscaping, park improvements, local street
modifications to reduce traffic impacts, repaving streets, replacing curbs and gutters
and updating street lighting
9. encouragement of infill development/redevelopment that is compatible in use and
scale with surrounding neighborhoods
10. rehabilitation of existing housing stock and preservation of existing residential
neighborhoods where possible
11. demolition and new construction, where necessary,- of aging residential buildings to
preserve neighborhoods
12. removal of substandard structures, as defined in Minnesota Statutes, Section 469.174,
Subd. 10
(AS MODWIIED OCTOBER 25, 1999)
G: \WPDATATTRIDLEY\T PREDE\INSERT TO REDEVELOPMENT PLAN.DOC
HRA RESOLUTION NO.
A RESOLUTION MODIFYING THE REDEVELOPMENT PLAN
FOR REDEVELOPMENT PROJECT NO. 1 AND THE TAX INCREMENT
FINANCING PLANS FOR TAX INCREMENT FINANCING DISTRICTS
NOS. 1 THROUGH 3, 6, 7 AND 9 THROUGH 16 TO REFLECT
ENLARGEMENT OF REDEVELOPMENT PROJECT NO. 1 AND
INCREASED PROJECT COSTS TO BE UNDERTAKEN THEREIN.
BE IT RESOLVED by the Board of Commissioners (the "Commissioners') of the Housing
and Redevelopment Authority in and for the City of Fridley, Minnesota (the "Authority'), as
follows:
Section 1. Recitals.
1.01. It has been proposed that the Authority modify, approve and adopt a Modified
Redevelopment Plan relating to Redevelopment Project No. 1 to reflect
enlargement of the project area and increased project costs to be undertaken
therein, pursuant to and in accordance with Minnesota Statutes, Sections 469.001
to 469.047, inclusive, as amended and supplemented from time to time.
1.02. It has been further proposed that the Authority modify, approve and adopt Modified
Tax Increment Financing Plans for Tax Increment Financing Districts Nos. 1
through 3, 6, 7 and 9 through 16 (the 'TIF Districts') to reflect enlargement of the
project area and increased project costs to be undertaken within Redevelopment
Project No. 1, pursuant to Minnesota Statutes, Section 469.174 through 469.179,
inclusive, as amended and supplemented from time to time.
1.03. The Authority has investigated the facts and has caused to be prepared with
respect thereto, a Modred Redevelopment Plan for Redevelopment Project No.1
and Modified Tax Increment Financing Plans for the TIF Districts (the "Modified
Tax Increment Financing Plans') to reflect enlargement of the project area and
increased project costs to be undertaken within Redevelopment Project No. 1.
1.04. The Authority has performed all actions required by law to be performed prior to the
modification, approval and adoption of the Modified Redevelopment Plan and the
Modified Tax Increment Financing Plans.
Page 2 - Resolution No.
1.05. The Authority hereby determines that it is necessary and in the best interests of the
City and the Authority ' at this time to modify, approve and adopt the Modified
Redevelopment Plan and the Modified Tax Increment Financing Plans to reflect
enlargement of the project area and increased project costs to be undertaken
within Redevelopment Project No. 1.
Section 2. Findin s.
2.01. The Authority hereby finds that the assistance to be provided through the adoption
and implementation of the Modified Redevelopment Plan and Modified Tax
Increment Financing Plans are necessary to assure the development and
redevelopment of Redevelopment Project No. 1.
2.02. The Authority hereby finds that the Modified Redevelopment Plan and Modified Tax
Increment Financing Plans conform to the general plan for the development and
redevelopment of the City as a whole in that they are consistent with the City's
comprehensive plan.
2.03. The Authority finds that the Modified Redevelopment Plan and Modified Tax
Increment Financing Plans afford ma)amum opportunity consistent with the sound
needs of the City as a whole for the development and redevelopment of
Redevelopment Project No. 1 by private enterprise and it is contemplated that the
development and redevelopment thereof will be carried out pursuant to
redevelopment contracts with private developers.
Section 3. Modification, Approval and Adoption of Modified Redevelopment Plan.
3.01. The modifications to the Modified Redevelopment Plan for Redevelopment Project
No. 1 reflecting enlargement of the project area and increased project costs are
hereby approved and adopted by the Commissioners of the Authority and are
forwarded to the Fridley City Council for public hearing, review and approval.
Page 3 - Resolution No.
Section 4. Modification. Approval and Adoption of Modified Tax Increment Financing
Plans.
4.01. The modifications to the Modified Tax Increment Financing
Plans for the TIF Districts reflecting enlargement of the project area and increased
project costs to be undertaken within Redevelopment Project No. 1 are hereby
approved and adopted by the Commissioners of the Authority and are forwarded
to the Fridley City Council for public hearing, review and approval.
Section 5. Filinq of Plans.
6.01. Upon approval and adoption of the Modified Redevelopment Plan and the Modified
Tax Increment Financing Plans (collectively the "Plans'), the Authority shall cause
said Plans to be filed with the Commissioner of Revenue.
PASSED AND ADOPTED BY THE FRIDLEY HOUSING AND REDEVELOPMENT
AUTHORITY OF THE CITY OF FRIDLEY, MINNESOTA THIS DAY OF
,1999.
LAWRENCE R. COMMERS - CHAIRPERSON
ATTEST:
WILLIAM W. BURNS - EXECUTIVE DIRECTOR
CERTIFICATION
I, William W. Bums, Executive Director of the Housing and Redevelopment Authority in
and for the City of Fridley, Minnesota, hereby certify that the foregoing is a true and
correct copy of Resolution No. passed by the Authority on the day of
,1999.
WILLIAM W. BURNS - EXECUTIVE DIRECTOR
G: \WPDATA \F \FRIDLEY \38 \TIF \HRA RES RE PROGRAM MOD -DOC
HOUSING & REDEVELOPMENT
AUTHORITY
Memorandum LK
&&
DATE: September 30, 1999
TO: William Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: 1999 HRA Budget
Proposed Budget
The 1999 budget is different from previous budgets because all of the HRH's revenues and
expenditures will now be tracked by "funds ". The categories of "funds" are as follows:
• General Fund
• Housing Funds
• Tax Increment Financing District Funds
As of January 1, 1999, there was an audited fund balance of approximately $11,023,053. At
year -end, the projected total fund balance is $9,803,499. Page One of the budget is the
summary sheet for all of the funds and provides both a summary of the revenues and the
expenditures for all of the funds.
Revenues
At the top of the page under the category of "Revenues ", there are six different types of
revenues applicable to all of the funds. The first row depicts the amount of tax increment.
Approximately $3,066,680 is the projected amount of tax increment for 1999. The second row
identifies the amount of "property taxes" which includes the HRA's levy and special assessment
income. The third row identifies the amount of "interest earnings" which is anticipated to be
accumulated this year. The fourth row is "rental" income which is the parking lot lease for the
area in front of the Fridley Office Plaza building. The "sale of real estate" row refers to land sale
revenue from the Housing Replacement Program. Finally, the "miscellaneous" row refers to any
other type of revenue. For 1999, $435,000 of grant money from Met Council and DTED is
anticipated for the Onan/Murphy project.
Expenditures
Expenditures are divided into the traditional expenditure categories that the HRA has seen
before. "Personal Services" represents the staff time and personnel costs for the Housing
Coordinator and Remodeling Advisor (see "Housing Operating Fund" on Page 6). The "General
Fund" contains the annual expenditure for "administrative expenses" of $166,127 (see Page 2
and 3 for General Fund). In the future, a percentage of these expenditures will be allocated to
appropriate tax increment financing districts since a lot of the staff work does relate to project -
related expenses. In preparation for this budget, staff completed another time allocation
analysis of city employees and the amount of time they spend on HRA- related issues. 9
1999 HRA Budget
September 30, 1999
Page 2
No significant changes are proposed in the "Supply" category. Expenditures are proposed at
the same amount as 1998 at $1,650.
The "Other Services & Charges" category refers to expenditures that include professional
service contracts, dues & subscriptions, legal ad expenditures, transportation costs, conference
& school expenditures, as well as property maintenance activities.
The "Capital Outlay" category contains the expenditures related to property acquisition, public
improvement costs, or any other construction- related activities. All of the property acquisitions
and public improvement costs have been allocated to the approMate tax increment districts,
primarily Tax Increment Financing Districts No. 2 and No. 3.
The school district payments have been allocated to the respective tax increment district funds
to which the tax increment is attributed. Page 10 shows that these payments are coming from
District No.1 ($62,000), District #2 ($78,000), and District No. 3 ($25,000).
The "Other Financing Sources & Uses" category on the summary sheet identifies an "operating
transfers out" of approximately $1.3 million. This represents the debt service payments on all
obligations of the HRA (see Page 30 for the Debt Service summary).
Pages 10 and 11 provide a summary of all of the acquisition and public improvement activity.
Gateway East and Werner's Furniture expenditures are in #2 and Onan/Murphy and Nielsen are
expenditures in #3. Relocation costs for Gateway East will be in the 2000 budget. The
additional single family acquisitions are split between #2 and #3 at $200,000 each.
Professional Services
In this year's budget and in future years, staff will be dividing the charges for Jim Casserly and
the Krass Monroe firm between the capital outlay budget and the professional services budget.
Because at least half of the work that Casserly completes are project- related expenses, staff will
charge these expenses to the appropriate tax increment financing district in which the project is
located. Work completed by Casserly in the housing area will be charged to the Housing Fund,
and work completed by Casserly that is not applicable to projects will be charged to the General
Fund. Page 29 provides a summary of legal expenses in 1998.
Public Improvements
In this month's claims and expenses, the 57th Avenue improvement project of approximately
$117,000 is proposed for approval. These charges have been made against the Tax Increment
Financing District No. 16 (57th Avenue /Steve Linn project). The other public improvement cost
anticipated this year is the remaining amount of money for the local match of the recently
completed TH 65- intersection improvement project. The original estimate for the local required
match was approximately $380,000. The HRA has expended approximately $200,000 in
previous years for design and engineering work. The 1999 budget, therefore, budgets
approximately $180,000 to fulfill the local match requirement.
Another public improvement cost prepared for inclusion in the budget is a "Welcome to Fridley"
sign similar to the signs proposed for construction by the 50th Anniversary Committee. The sign
would be located at the intersection of Mississippi Street and University Avenue, just behind the
limestone wall in the outlot still owned by the HRA in Christenson Crossing. Proposals for the
sign package are now being solicited, so the expense will not be incurred until next spring. If
approved by the Authority, the expense would be carried over to the 2000 budget. Staff
1999 HRA Budget
September 30, 1999
Page 3
recommends installation of the sign since it would add a "welcoming" feature to the Center City
District. The signs proposed by the Anniversary Committee will be located at major entrances
to the City on East River Road, University Avenue and TH 65.
Housing Funds
Page 5 of the budget booklet is the Housing Fund summary of three of the housing funds. The
Housing Operating Fund on page 6 represents the administrative expenses for the Housing
Coordinator and Remodeling Advisor. The Housing Programs Fund represents the
expenditures for the rehabilitation programs other than the 5% /Revolving Loan Program Fund.
The Revolving Loan 1.5 Fund is the fund to track the revenues and expenses related to the
Revolving Loan Program (the 1.5 refers to the amount of the loan from the City). It also
contains the fees charged by CEE to administer the program. The last Housing Fund is the
Housing Replacement Fund, which is a tax increment financing district, and its summary sheet
is located on page 27 of the budget. It contains the revenues and expenditures allotted toward
buying the single family properties and the expenditures related to demolition and selling the
properties for new development. Although $300,000 is budgeted for expenditures, all single
family acquisitions will be allocated to TIF Districts #2 and #3, as mentioned earlier.
Not shown in the budget sheets, but identified on pages 7A and 8A, are the "Mortgages
Receivables" pertaining to the rehabilitation programs. About $100,000 is projected for Hyde
Park Matching Deferred Loans and $50,000 is projected for Last Resort Loans. On page 8A,
$636,480 is projected as capital for the 5% Revolving Loan Fund.
Recommendation
Staff recommends that the HRA approve the 1999 budget as presented. The Authority's
approval is merely on the budget and not specific expenditures, other than routine
administrative expenses. Land acquisitions, public improvements, and other significant
expenditures require additional Authority review and action.
BD:Is
M -99 -232
HOUSING & REDEVELOPMENT
AUTHORITY
Memorandum C
�CM
DATE: September 29, 1999
TO: William Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Medtronic Update
Development Agreement Negotiations
Staff met with the Medtronic team on September 8, 1999, to discuss a proposed amendment to
the development agreement regarding an installment land sale. The meeting went well;
however, Medtronic wanted more information as to how the mechanics of the installment land
sale would work.
Another meeting will probably be scheduled in early to mid - October, and it is hoped that an
amended development agreement will be presented for the Authority's approval at the
November meeting.
TH 65 Update
City staff and the consultant submitted the federal funding application for the TH 65 sheet pile
wall/auxiliary lane expansion on the Moore Lake Causeway on September 20, 1999. Included
in the packet is the summary report by Short Elliott Hendrickson regarding the feasibility
analysis of the sheet pile wall (a full copy of the report was given to Commissioner Meyer, given
his expertise in structural engineering). The federal funding determination will probably be
made the early part of next year.
The Executive Director, the Public Works Director, and myself met with Natalie Steffen Hawes,
Fridley's representative on the Transportation Advisory Board (TAB). The TAB makes
recommendations to the Metropolitan Council about which projects should receive federal
funding. A meeting was also held with Jim Nelson, the City's representative on the Metropolitan
Council in August. Both these meetings were productive, and both representatives thought that
the project was well thought out and important to the City and the region.
Medtronic Impacts
Attached is a copy of the e-mail I sent to Donn Hagmann. The purpose of the e-mail was to
initiate discussion with Medtronic about their expectations for the future in terms of what uses
they perceive to be important to their operation. A response is anticipated within the next two
weeks. The next step would then be to determine the impacts from their expectations and
contrast them with the City's thinking to date.
No action is required on any of these issues.
BD:Is
M -99 -229
10
Dacy, Barb
From: Dacy, Barb
Sent: Friday, September 17, 1999 3:39 PM
To: 'donn.hagmann@medtronic.com'
Subject: Questions for Medtronic
Donn,
The City is in the midst of its comprehensive planning process and both the City Council and the HRA asked me to
contact you with a list of questions about the company's future needs. The City very much wants to plan appropriately for
the future and wants to insure that Medtronic's needs are appropriately assessed in the early stages of the process. If
you could get back to me in early October, that would be great. Let me know if I can be of further assistance!
1. Describe the characteristics of the preferred hotel for Medtronic clients; what is the company's definition of a "five
star hotel "?
• length of stay
• arrangement of suites "
• computer lines available to rooms
• # nights /year availability, present and future predicitions
• does the company care about architectural appearance of the hotel?
• what other amenities are desired by medtronic clients
2. What types of housing do you think existing and future employees need? What are the typical demographics of a
future employee: single /married; income ranges ect. Should the City move agressively to plan for "move up housing" of
$150,000 to $300,000? Should we plan for more townhomes in the $100,000 to $150,000 range? Should we plan for
apartment units?
3. What expectations do you have for architectural appearance of surrounding land uses? How aggressive should the
City be?
4. What types of businesses do you think you will attract to the area?
5. What businesses would be good to have in Fridley?
6. What other expectations or "visions" do you have?
7. What don't you want to happen ? ?! I Sometimes identifying what you dont want helps to clarify what you do want!
Thanks again Donn.
Barbara Davy. AICP
Community Development Director
City of FridleX
6431 University Avenue NE
Frld!ey, Minnesota 55432
612 572 3590 phone
612 571 1287 fax
HOUSING & REDEVELOPMENT rM
AUTHORITY
Memorandum
CIWOF
lH
DATE: September 29, 1999
TO: William Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Nielsen Acquisition Update
On Thursday, September 23, 1999, Bruce A. Liesch & Associates completed shallow
test pit excavations on the Nielsen property on 61St Avenue. It was determined that the
site had been used to bury construction debris. Staff has been trying to contact the
property owner about this situation, and at the writing of this memo, we have not been
able to connect. The Authority's environmental consultant is prepared to conduct
additional tests to determine if there are any hazardous substances on the site and to
determine the extent of contamination once the property owner is fully informed and
provides consent. It may be the case that the debris is pure demolition debris and may
not have any hazardous substance contamination; however, if it is contaminated, the
appropriate agencies must be notified.
No action is required by the Authority at this time. Staff needs to determine additional
information, advise Anoka County of the facts, and discuss the issue with the City
Council.
BD:Is
M -99 -228
11
DATE: September 29, 1999
TO: William Bums, Executive Director of HRA
FROM: Barbara Dacy, Community Development Director
SUBJECT: Draft 2000 HRA Budget
The draft 2000 budget will be distributed at the meeting on Thursday night. It is completed but
this agenda is so large, that adding more paper would seem to irritate more than informl No
action is required on Thursday evening, but the budget will be on the agenda in November for
approval.
The only major capital expenditures proposed for 2000 include the relocation, demolition, and
site preparation expenditures for the Gateway East project, which approximate $300,000, and
continuation of the single family revolving loan fund and the housing replacement program.
Budget expenditures in general will be less than 1999 activity.
The goals and objectives for 2000 for the Community Development Department include the
following projects:
• Completing the Comprehensive Plan
• Analyzing the impacts from the Medtronic Project
• Gateway East
• Developing an Apartment Rehab policy /program
• Revisiting the planning process for Frank's Used Cars site
• Evaluating options for salvage yard redevelopment
While there are many more tasks staff will be completing, these projects are very important to
the HRA and its budget. Once more analysis is completed on these projects in 2000, it is likely
that another joint meeting will be held next year to evaluate proposed expenditures against the
Authority's current budget and programs.
12
CONTRACT FOR PRIVATE REDEVELOPMENT
THIS AGREEMENT, made on or as of the day of , 1999 by
and between the Housing and Redevelopment Authority in and for the City of Fridley,
Minnesota (the "Authority'), a political subdivision of the State of Minnesota organized
under the Constitution and laws of the State of Minnesota and Fridley Main L.L.C., a
Minnesota limited liability company (the "Redeveloper"),
WITNESSETH:
WHEREAS, the Board of Commissioners (the "Board') of the Authority has
determined that there is a need for development and redevelopment within the
corporate limits of the City to provide employment opportunities, to improve the tax
base and to improve the general economy of the City and the State of Minnesota;
WHEREAS, in furtherance of these objectives, the Authority has adopted,
pursuant to Minnesota Statutes, Sections 469.001 et Se Q. (the "Act'), a development
program known as the Modred Redevelopment Plan (the "Redevelopment Plan ") and
established Redevelopment Project No. 1 (the Project Area ) in the City to encourage
and provide maximum opportunity for private development and redevelopment of
certain property in the City which is not now in its highest and best use;
WHEREAS, major objectives in establishing the Project Area are to:
1. Promote and secure the prompt redevelopment of certain property in the
Project Area, which property is not now in its highest and best use in a manner
consistent with the City's Comprehensive Plan and with a minimum adverse impact on
the environment, and thereby promote and secure the redevelopment of other land in
the City.
2. Provide additional employment opportunities within the Project Area and
the City for residents of the City and the surrounding area, thereby improving living
standards, reducing unemployment and the loss of skilled and unskilled labor and
other human resources in the City.
3. Prevent the deterioration and secure the increase . of
commercial/industrial property subject to taxation by the City, the Independent School
Districts, Anoka County, and the other taxing jurisdictions in order to better enable
such entities to pay for governmental services and programs required to be provided
by them.
4. Provide for the financing and construction for public improvements in and
adjacent to the Project Area necessary for the orderly and beneficial redevelopment of
the Project Area and adjacent areas of the City.
5. Promote the concentration of new desirable industrial, office, and other
appropriate redevelopment in the Project Area so as to maintain the area in a manner
compatible with its accessibility and prominence in the City.
6. Encourage local business expansion, improvement, and redevelopment,
whenever possible.
7. Create a desirable and unique character within the Project Area through
quality land use alternatives and design quality in new or rerhodeled buildings.
8. Encourage and provide maximum opportunity for private redevelopment
of existing areas and structures which are compatible with the Project Area; and
WHEREAS, in order to achieve the objectives of the Authority and City in
creating the Project Area the Authority is prepared to assist the Redeveloper with the
costs of the Site Improvements in accordance with this Agreement; and
WHEREAS, the Authority believes that the development and redevelopment of
the Redevelopment Property pursuant to this Agreement, and fulfillment generally of
the terms of this Agreement, are in the vital and best interests of the Authority and the with the public
health, safety, morals and welfare of its residents,
and local laws under which the
purposes and provisions of applicable federal, s
development and redevelopment are being undertaken and assisted;
NOW, THEREFORE, in consideration of the premises and the mutual
obligations of the parties hereto, each of them does hereby covenant and agree with
the other as follows:
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Section 1.1. Definitions.
appears from the context:
ARTICLE I
Definitions
In this Agreement, unless a different meaning clearly
"Act" means Minnesota Statutes, Sections 469.001 et seq.
"Agreement" means this Agreement, as the same may be from time to time
modified, amended, or supplemented.
"Assessment Agreement" means an agreement in the form of agreement
attached as Schedule G attached and made a of the City, entered into pursuant to
Redeveloper, the Authority and the City Assessor tY
Section 10.2 of this Agreement.
"Assessor's Minimum Market Value' means theagreed minimum
dmarminevalue
of the Redevelopment project for calculation of real p ro property rtY taxes
the City Assessor for the City pursuant to the Assessment Agreement.
"Authority" means the Housing and Redevelopment Authority In and For the
City of Fridley, Minnesota.
"Authority Mortgage" means a mortgage hereto as Schedule E and may
Redevelopment Property, the form of which is attached
be subordinate to the Mortgage.
"Certificate of Completion" means the certification, of this Agreement, provided to
contained in Schedule C attached to and made
the Redeveloper, pursuant to Section 4.4. of this Agreement.
"City" means the City of Fridley, Minnesota.
"Construction Plans" means the plans, specifications, drawings and related
documents on the construction work to be performed by the Redeveloper on the
Redevelopment Property which (a) shall be as detailed as the plans, specifications,
drawings and related documents which are submitted to the building inspector improvements of
b) shall
with an application for a building permit for the Min P
include at least the following for each building: (1) site plan; (2) foundation plan; (3) floor
plan for each floor; (4) elevations (all sides); (5) facade City landscape pan; d (6) request. uch
other plans or supplements to the foregoing plans as the itY n Y
3
"Council" means the City Council, the governing body of the City.
"County" means the County of Anoka, Minnesota.
"Event of Default" means any Event of Default described in Section 5.1 of this
Agreement.
"Grant" means a sum of up to one -third of soil correction costs incurred by the
Redeveloper, not to exceed One Hundred Twenty'- Five Thousand Dollars
($125,000.00).
"Holder" means the owner of a Mortgage.
"Minimum Improvements" means the improvements i t of the Redevelopment on of
Property to be constructed by the Redeveloper and consist
51,000 square feet
an office/warehouse /processing facility consisting of approximately
and shall include landscaping, parking and related facilities. The Minimum
Improvements are shown on the Site Plan attached as Schedule F to this Agreement.
"Minnesota Critical Areas Act" means the statutes located at Minnesota
Statutes, Section 116G.01 et seq., as amended.
"Minnesota Environmental Policy Act" means the statutes located at Minnesota
Statutes, Sections 116D.01 et seq., as amended.
"Minnesota Environmental Rights Act" means the statutes located at Minnesota
Statutes, Sections 11613.01 et seq., as amended.
"Mortgage" means any mortgage or security agreement in which the
Redeveloper has granted a security interest in the Redevelopment Property, or any
portion thereof, or any improvements constructed thereon, and which is a permitted
encumbrance pursuant to the provisions of Article VIII.
"National Environmental Policy Act" means the federal law located at 42 U.S.C.
Sub. Sect. 4331 et seq., as amended.
"Note" means the note in a principal amount equal Hundred Twenty Five Thousand
costs incurred by the Redeveloper, not to exceed One
ached to this
Dollars ($125,000.00), substantially in .the form of file to the order of the Authority
Agreement, and to be made by the Redeveloper paya
ten
in accordance with the terms of this Agreement. The term of the all be
for
only
(10) years and the interest rate shall be five percent (5 %). payments of
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which shall accrue during the first two (2) years of the term shall not become due and
payable until the third year of the term. Payments of the Note principal and interest
(including accrued interest) shall be amortized over an eight (8) year term commencing
at the beginning of the third year of the term.
"Project Area" means Redevelopment Project No. 1, as amended, established
in accordance with the Act.
"Redeveloper" means Fridley Main L.L.C., a Minnesota limited liability company,
and its permitted successors or assigns.
"Redevelopment Plan" means the modified redevelopment plan adopted by the
Authority for its Project Area, as amended.
"Redevelopment Project" means the Redevelopment Property and the Minimum
Improvements.
"Redevelopment Property' means the real property described in Schedule A of
this Agreement
"Site Improvements" means those costs described on Schedule B as qualified
improvements of the Redevelopment Property.
"State" means the State of Minnesota.
"Termination Date" means the date on which the Note is paid in full or this
Agreement is terminated in accordance with the provisions of Article V.
"Unavoidable Delays" means delays, outside the reasonable control of the Party
claiming its occurrence, which are the direct result of strikes, other labor troubles, acts
of third parties, unforeseen environmental issues and soil conditions, labor and/or
material shortages, unusually severe adverse weather, Acts of God, fire or other
casualty to the Minimum Improvements, litigation commenced by third parties which,
by injunction or other similar judicial action, directly results in delays, or acts of any
federal, state or local governmental unit (including the City and the Authority) which
directly result in delays.
ARTICLE II
Representations and Warranties
Section 2.1. Representations Py the Authori . The Authority makes the
following representations as the basis for the undertaking on its part herein contained:
(a) The Authority is a public body duly organized and existing under the laws
of the State. Under the provisions of the Act, the Authority has the power to enter into
this Agreement and cant' out its obligations hereunder.
(b) The Authority has created, adopted and approved the Redevelopment
Plan in accordance with the terms of the Act.
(c) To finance the costs of the activities to be undertaken by the
Redeveloper, the Authority proposes, in accordance with the provisions of this
Agreement, to provide the Grant and loan to the Redeveloper for Site Improvements
the Note principal.
(d) The Authority will cooperate with the Redeveloper with respect to any
litigation commenced by third parties in connection with this Agreement.
(e) The Authority makes no representation, guarantee, or warranty, either
express or implied, and hereby assumes no responsibility or liability as to the
Redevelopment Property or its condition (whether regarding soils, pollutants,
hazardous wastes or otherwise) or that the Redevelopment Property shall be suitable
for the Redeveloper's purposes or needs.
Section 2.2. Representations and Warranties !2y the Redeveloper. The
Redeveloper represents and warrants that:
(a) The Redeveloper will construct, operate and maintain the Minimum
Improvements upon the Redevelopment Property in accordance with this Agreement
and all applicable local, State and Federal laws and regulations (including without
limitation environmental, zoning, building code and public health laws and regulations).
(b) The Minimum Improvements will be an allowed use under the zoning
ordinance of the City.
(c) As of the date of execution of this Agreement, the Redeveloper has
received no written notice or written communication from any local, state or federal
W
official that the activities of the Redeveloper or the Authority may be or will be in
violation of any environmental law or regulation.
(d) The Redeveloper will obtain all required permits, licenses and approvals,
and will meet, in a timely manner, all requirements of all applicable local, state and
federal laws and regulations which must be obtained or met before the Minimum
Improvements may be lawfully constructed.
(e) The Redeveloper is a limited liability company organized under the laws
of the State of Minnesota and neither the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby, nor the fulfillment of or
compliance with the terms and conditions of this Agreement will constitute a breach of
any obligations of the Redeveloper under the terms and conditions of any
indebtedness, agreement or instrument of whatever nature to which Redeveloper is
now a party or by which it is bound, which breach will materially adversely affect the
ability of Redeveloper to perform its obligations under this Agreement.
(f) The Redeveloper agrees that they will cooperate with the Authority with
respect to any litigation commenced by third parties in connection with this Agreement.
(g) Whenever any Event of Default occurs and the Authority shall employ
attorneys or incur other expenses for the collection of payments due or to become due
or for the enforcement or performance or observance of any obligation or agreement
on the part of the Redeveloper under this Agreement, the Redeveloper agrees that
they shall, within ten (10) days of written demand, accompanied by a written
itemization of fees and expenses, by the Authority, pay to the Authority the reasonable
fees of such attorneys and such other expenses so incurred by the Authority.
(h) The financing arrangements which the Redeveloper has obtained or will
obtain, to finance acquisition or construction of the Minimum Improvements, together
with financing provided by the Authority pursuant to this Agreement, will be sufficient to
enable the Redeveloper to successfully complete the Minimum Improvements as
contemplated in this Agreement.
(i) The Redeveloper represents that they would not be able to undertake the
Project in the reasonably foreseeable future without the assistance to be provided by
the Authority under this Agreement.
U) The Redeveloper represents that the completed Project is reasonably
expected to have a value for the calculation of the ad valorem property taxes in
excess of $ on December 31, , and that the total cost of the Project
including fixtures, furnishing, equipment and move -in expenses will exceed
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(k) The construction of the Minimum Improvements, in the opinion of the
Redeveloper, would not reasonably be expected to occur solely through private
investment within the reasonably foreseeable future without the assistance provided by
the Authority pursuant to this Agreement.
(1) For the construction of the Minimum Improvements the Redeveloper will
pay wages in accordance with the prevailing wage rate as that term is defined in
Ordinance No. 1095 of the City ❑s Code.
(m) The Redeveloper shall not allow any use or occupancy of the Project by
a ❑Sexually Orientated Business❑ as defined in Ordinance No. 965 of the City ❑s
Code.
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ARTICLE III
Undertakings of Authority and Redeveloper
Section 3.1 Loan and Grant to Redeveloper for Site Improvements. As
consideration for the execution of this Agreement, the construction of the Minimum
Improvements by the Redeveloper and subject to the further provisions of this
Agreement, the Authority agrees to provide the Grant and loan to the Redeveloper
for Site Improvements the Note principal as provided in Section 3.3 and Article VIII.
Section 3.2 Limitations on Undertaking of the City.
(a) The Authority shall have no obligation to the Redeveloper under this
Agreement to provide the Grant and "loan the Note principal to the Redeveloper for
the Site Improvements if the Authority, at the time the loan and the Grant are to be
made, is entitled under Section 5.2 to exercise any of the remedies set forth therein
as a result of an Event of Default which has not been cured. If the Authority has not
exercised its remedies under Section 5.2(b) and if the loan and the Grant are
withheld due to an Event of Default which is later cured, such loan and Grant shall
be made after such Event of Default has been cured.
(b) The Authority shall have no obligation to provide the Grant and to loan
the Note principal to the Redeveloper for the Site Improvements unless the
Redeveloper has submitted to the Authority invoices for the Site Improvements
along with a certification signed by the Redeveloper's project architect to the effect
that the costs for which payment was made have been incurred in connection with
construction documents previously reviewed by the Authority. The Redeveloper
shall also provide lien waivers from the contractors, subcontractors and /or
construction managers for the Site Improvements. The Authority shall indicate its
acceptance of the amounts for the Grant and loan, assuming the conditions of this
section have been complied with and there is no Event of Default, when it issues a
Certificate of Completion in accordance with Section 4.3.
Section 3.3 Conditions Precedent to Authority Loan. The Authority's
obligation to provide the Grant and loan the Note principal in accordance with
Section 3.1 shall be contingent upon the satisfaction by the Redeveloper of the
following conditions precedent:
(a) The Redeveloper shall be in material compliance with all of the terms
and provisions of this Agreement.
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(b) The Redeveloper shall have received a Certificate of Completion from
the Authority, pursuant to Section 4.3 of this Agreement.
(c) The Redeveloper shall have delivered to the Authority the documents
required by Section 3.2 (b) above.
(d) There shall have been obtained from the City all special -use permits
and zoning approvals necessary for the construction of the Minimum Improvements.
City.
(e) That the Redeveloper shall be in compliance with all ordinances of the
(f) The execution by the Redeveloper of the Note attached as Schedule D.
(g) The execution by the Redeveloper of the Authority Mortgage attached
as Schedule E.
(h) The execution of the Assessment and Class Rate Agreement attached
as Schedule H.
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ARTICLE IV
Construction of Minimum Improvements
Section 4.1 Construction of Minimum Improvements. The Redeveloper
agrees that it will construct the Minimum Improvements on the Redevelopment
Property in accordance with the Construction Plans approved by the City.
Section 4.2 Completion of Construction. Subject to Unavoidable Delays, the
Redeveloper shall achieve substantial completion of the construction of the
Minimum Improvements by December 31, 2000. All work with respect to the
Minimum Improvements to be constructed or provided by the Redeveloper on the
Redevelopment Property shall be in conformity with the Construction Plans.
The Redeveloper agrees for itself, its successors and assigns, and every
successor in interest to the Redevelopment Property, or any part thereof, that the
Redeveloper, and such successors and assigns, shall diligently prosecute to
completion the development of the Redevelopment Property through the
construction of the Minimum Improvements thereon, and that such construction shall
in any event be completed within the period specified in this Section 4.2 of this
Agreement.
Section 4.3 Certificate of Completion.
(a) Promptly after substantial completion of the Minimum Improvements in
accordance with those provisions of the Agreement relating to the obligations of the
Redeveloper to construct the Minimum Improvements (including the date for
completion thereof), the Authority will furnish the Redeveloper with an appropriate
instrument so certifying. Such certification by the Authority shall be (and it shall be
so provided in the certification itself) a conclusive determination of satisfaction and
termination of the agreements and covenants in the Agreement with respect to the
obligations of the Redeveloper, and its successors and assigns, to construct the
Minimum Improvements and the date for the completion thereof.
(b) If the Authority shall refuse or fail to provide any certification in
accordance with the provisions of this Section 4.3 of this Agreement, the Authority
shall, within ten (10) days after written request by the Redeveloper, provide the
Redeveloper with a written statement, indicating in adequate detail in what respects
the Redeveloper has failed to complete the Minimum Improvements in accordance
with the provisions of the Agreement, or is otherwise in default, and what measures
or acts it will be necessary, in the opinion of the Authority, for the Redeveloper to
take or perform in order to obtain such certification.
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(c) The construction of the Minimum Improvements shall be deemed to be
substantially completed when the Redeveloper has received an occupancy permit
from the City's building inspector, which permit shall not be unreasonably withheld.
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ARTICLE V
Events of Default
Section 5.1 Events of Default Defined. The following shall be "Events of
Default" under this Agreement and the term "Event of Default" shall mean whenever
it is used in this Agreement any one or more of the following events:
(a) Failure by the Redeveloper to timely pay all ad valorem real property
taxes assessed with respect to the Redevelopment Property.
(b) Failure by the Redeveloper to complete the Minimum Improvements
pursuant to the terms, conditions and limitations of this Agreement.
(c) The holder of any Mortgage on the Redevelopment Property or any
improvements thereon, or any portion thereof, commences foreclosure proceedings
as a result of any default under the applicable Mortgage documents.
(d) Failure by the Redeveloper to substantially observe or perform any
other covenant, condition, obligation or agreement on its part to be observed or
performed under this Agreement.
(e) If the Redeveloper shall
(A) file any petition in bankruptcy or for any reorganization,
arrangement, composition, readjustment, liquidation, dissolution, or similar
relief under the United States Bankruptcy Act of 1978, as amended or under
any similar federal or state law; or
(B) make an assignment for the benefit of its creditors; or
(C) admit in writing its inability to pay its debts generally as they
become due; or
(D) be adjudicated as bankrupt or insolvent; or if a petition or answer
proposing the adjudication of the Redeveloper, as bankrupt or its
reorganization under any present or future federal bankruptcy act or any
similar federal or state law shall be filed in any court and such petition or
answer shall not be discharged or denied within ninety (90) days after the
filing thereof; or a receiver, trustee or liquidator of the Redeveloper, or of the
Minimum Improvements, or part thereof, shall be appointed in any proceeding
brought against the Redeveloper, and shall not be discharged within ninety
13
(90) days after such appointment, or if the Redeveloper shall consent to or
acquiesce in such appointment.
Section 5.2 Remedies on Default. Whenever any Event of Default referred to
in Section 5.1 occurs and is continuing, the Authority, as specified below, may take
any one or more of the following actions after providing thirty (30) days' written
notice to the Redeveloper, but only if the Event of Default has not been cured within
said thirty (30) days.
(a) The Authority may suspend its performance under this Agreement until
it receives assurances from the Redeveloper, deemed adequate by the Authority,
that the Redeveloper will cure its default and continue its performance under this
Agreement.
(b) The Authority may cancel and rescind the Agreement.
(c) Withhold the Certificate of Completion.
Section 5.3 No Remedy Exclusive. No remedy herein conferred upon or
reserved to the Authority is intended to be exclusive of any other available remedy
or remedies, but each and every such remedy shall be cumulative and shall be in
addition to every other remedy given under this Agreement or now or hereafter
existing at law or in equity or by statute. No delay or omission to exercise any right
or power accruing upon any default shall impair any such right or power or shall be
construed to be a waiver thereof, but any such right and power may be exercised
from time to time and as often as may be deemed expedient.
Section 5.4 No Implied Waiver. In the event any agreement contained in this
Agreement should be breached by any party and thereafter waived by any other
party, such waiver shall be limited to the particular breach so waived and shall not
be deemed to waive any other concurrent, previous or subsequent breach
hereunder.
Section 5.5 Agreement to Pay Attorney's Fees and Expenses. Whenever any
Event of Default occurs and the Authority shall employ attorneys or incur other
expenses for the collection of payments due or to become due or for the
enforcement or performance or observance of any obligation or agreement on the
part of the Redeveloper herein contained, the Redeveloper agrees that it shall, on
demand therefor, pay to the Authority the reasonable fees of such attorneys and
such other expenses so incurred by the Authority.
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ARTICLE VI
Prohibitions Against Assignment and Transfer
Section 6.1 Representation as to Redevelopment. The Redeveloper
represents and agrees that its undertakings pursuant to this Agreement, are, and will
be used, for the purpose of redevelopment of the Redevelopment Property and not
for speculation in land holding. The Redeveloper further recognizes that, in view of
(a) the importance of the redevelopment of the Redevelopment Property to the
general welfare of the Authority, and (b) the substantial financing that has been
made available by the Authority for the purpose of making such redevelopment
possible, the qualifications and identity of the Redeveloper are of particular concern
to the Authority. The Redeveloper further recognizes that it is because of such
qualifications and identity that the Authority is entering into this Agreement with the
Redeveloper, and, in so doing, is further willing to accept and rely on the obligations
of the Redeveloper for the faithful performance of all undertakings and covenants
hereby by it to be performed.
Section 6.2 Prohibition Against Transfer of Property and Assignment of
Agreement. Also, for the foregoing reasons the Redeveloper represents and agrees
that prior to the date of expiration as provided in Section 7.8, except for the purpose
of obtaining financing necessary to enable the Redeveloper or any successor in
interest to the Redevelopment Property, or any part thereof, to perform its
obligations with respect to making the Minimum Improvements under this
Agreement, and any other purpose authorized by this Agreement, the Redeveloper
has not made or created and will not make or create or suffer to be made or created
any total or partial sale, assignment, conveyance, or lease, or any trust or power, or
transfer in any other mode or form of or with respect to this Agreement or the
Redevelopment Property or any part thereof or any interest therein, or any contract
or agreement to do any of the same, without the prior written approval of the
Authority which shall not be unreasonably withheld, unless the Redeveloper remains
liable and bound by this Redevelopment Agreement in which event the Authority's
approval is not required. Any such transfer shall be subject to the provisions of this
Agreement. Notwithstanding the foregoing, the Redeveloper may transfer the
Redevelopment Property to any corporation, partnership or entity controlling,
controlled by, or under common control with the Redeveloper.
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ARTICLE VII
Additional Provisions
Section 7.1 Conflict of Interests. No member, official, or employee of the
Authority shall have any personal interest, direct or indirect, in the Agreement, nor
shall any such member, official or employee participate in any decision relating to
the Agreement which affects his personal interests . or the interests of any
corporation, partnership, or association in which he is, directly or indirectly,
interested.
Section 7.2 Restrictions on Use. The Redeveloper shall not discriminate
upon the basis of race, color, creed, sex or national origin in the sale, lease, or rental
or in the use or occupancy of the Redevelopment Property or any improvements
erected or to be erected thereon, or any part thereof.
Section 7.3 Titles of Articles and Sections. Any titles of the several parts,
Articles and Sections of the Agreement are inserted for convenience of reference
only and shall be disregarded in construing or interpreting any of its provisions.
Section 7.4 Notices and Demands. Except as otherwise expressly provided
in this Agreement, a notice, demand, or other communication under this Agreement
by either party to the other shall be sufficiently given or delivered if it is dispatched
by registered or certified mail, postage prepaid, return receipt requested, transmitted
by facsimile, delivered by a recognized overnight courier or delivered personally;
and
(a) in the case of the Redeveloper, is addressed to or delivered personally
to the mailing or delivery address the Redeveloper will, from time to time, furnish to
the Authority. The Redeveloper's current address is as follows:
Fridley Main, L.L.C.
C/o Meritide, Inc.
2817 Anthony Lane South
Minneapolis, Minnesota 55418
Attn: Dick Peterson
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(b) in the case of the Authority, is addressed to or delivered personally to:
Housing and Redevelopment Authority
in and for the City of Fridley
6431 University Avenue N.E.
Fridley, Minnesota 55432
Attention: Executive Director
Fax Number: 571 -1287
Section 7.5 Indemnification of Authority.
(1) The Redeveloper releases from and covenants and agrees that the
Authority, the City and its governing body members, officers, agents, including the
independent contractors, consultants and legal counsel, servants and employees
thereof (hereinafter, for purposes -of this Section, collectively the "Indemnified
Parties ") shall not be liable for and agrees to indemnify and hold harmless the
Indemnified Parties against any loss or damage to property or any injury to or death
of any person occurring at or about or resulting from any defect in the Minimum
Improvements or the Redevelopment Property.
(2) Except for any willful misrepresentation or any willful or wanton
misconduct of the Indemnified Parties, the Redeveloper agrees to protect and
defend the Indemnified Parties, now and forever, and further agrees to hold the
aforesaid harmless from any claim, demand, suit, action or other proceeding
whatsoever by any person or entity whatsoever arising or purportedly arising from
the actions or inactions of the Redeveloper (or of other persons acting on its behalf
or under its direction or control) under this Agreement, or the acquisition,
construction, installation, ownership, and operation of the Minimum Improvements or
the Redevelopment Property; provided, that this indemnification shall not apply to
the warranties made or obligations undertaken by the Authority in this Agreement.
(3) All covenants, stipulations, promises, agreements and obligations of
the Authority contained herein shall be deemed to be the covenants, stipulations,
promises, agreements and obligations of the Authority and not of any governing
body member, officer, agent, servant or employee of the Authority.
Section 7.6 Counterparts. This Agreement is executed in any number of
counterparts, each of which shall constitute one and the same instrument.
Section 7.7 Law Goveming. This Agreement will be governed and construed
in accordance with the laws of the State.
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Section 7.8 Expiration. This Agreement shall expire when the Note is paid in
full.
Section 7.9 Provisions Surviving Rescission or Expiration. Sections 5.5 and
7.5 shall survive any rescission, termination or expiration of this Agreement with
respect to or arising out of any event, occurrence or circumstance existing prior to
the date thereof.
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ARTICLE VIII
Mortgage Financing
Section 8.1 Limitation Upon Encumbrance of Property. Prior to the
substantial completion of the Minimum Improvements, as certified by the Authority,
neither the Redeveloper nor any successor in interest to the Redevelopment
Property or any part thereof shall engage in any financing or any other transaction
creating any mortgage or other encumbrance or lien upon the Redevelopment
Property, other than Permitted Encumbrances, whether by express agreement or
operation of law, or suffer any encumbrance or lien to be made on or attach to the
Redevelopment Property, other than Permitted Encumbrances, except:
(a) For the purposes of obtaining funds only to the extent necessary for
financing of the Minimum Improvements including, but not limited to, labor and
materials, equipment, professional fees, real estate taxes, construction interest,
organizational and other indirect costs of development, costs of constructing the
Minimum Improvements, an allowance for contingencies, costs of originating the
Mortgage and customary financing costs.
(b) Only upon the prior written approval of the Authority in accordance with
Sections 8.1 and 8.2.
The Authority shall not approve any Mortgage which does not contain terms that
conform to the terms of Section 8.5, except as provided in Section 8.6 of this
Agreement.
Section 8.2 Approval of Mortgage. The Authority shall approve a Mortgage if:
(a) The Authority first receives a copy of all Mortgage documents.
(b) The Mortgage loan, together with other funds available to the
Redeveloper, will, in the reasonable judgment of the Authority, be sufficient to pay
for the Site Improvements and construct the Minimum Improvements.
(c) The Authority is not entitled under Section 5.2 to exercise any of the
remedies set forth therein as a result of an Event of Default.
(d) The Authority determines that the terms of the Mortgage conform to the
terms of Section 8.5.
EP]
However, the approval of a Mortgage by the Authority shall not be unreasonably
withheld. Any Mortgage which is subordinated to the rights of the Authority under
this Agreement may be granted in all or any part of the Redevelopment Property
without the approval of the Authority.
Section 8.3 Notice of Default: Cow to Mortgagee. Whenever the Authority
shall deliver any notice or demand to the Redeveloper with respect to any breach or
default by the Redeveloper in its obligations or covenants under this Agreement, the
Authority shall at the same time forward a copy of such notice or demand to each
Holder of any Mortgage authorized by this Agreement at the last address of such
Holder shown in the records of the Authority.
Section 8.4 Mortgagee's Option to Cure Defaults. After any breach or default
referred to in Section 8.3, each such Holder shall (insofar as the rights of the
Authority are concerned) have the right, at its option, to cure or remedy such breach
or default (or such breach or default to the extent that it relates to the part of the
Redevelopment Property covered by its Mortgage) and to add the cost thereof to the
Mortgage debt and the lien of its Mortgage; provided, however, that if the breach or
default is with respect to construction of the Minimum Improvements, nothing
contained in this Section or any other Section of this Agreement shall be deemed to
require such Holder, either before or after foreclosure or action in lieu thereof, to
undertake or continue the construction or completion of the Minimum Improvements,
provided that any such Holder shall not devote the Redevelopment Property to a use
inconsistent with the Redevelopment Plan or this Agreement without the agreement
of the Authority.
Section 8.5 Authority's Option to Cure Default on Mortgage. Any Mortgage,
unless such requirement is waived by the Authority, executed by the Redeveloper
with respect to the Redevelopment Property or any improvements thereon shall
provide that, in the event that the Redeveloper is in default under any Mortgage
authorized pursuant to this Article VIII, the Holder shall notify the Authority in writing
of:
(a) The fact of the default.
(b) The elements of the default.
(c) The actions required to cure the default.
If the default is an "Event of Default" under such Mortgage, which shall entitle such
Holder to foreclose upon the Redevelopment Property, the Minimum Improvements
or any portion thereof, and any applicable grace periods have expired, the Authority
shall have, and each Mortgage executed by the Redeveloper with respect to the
20
Redevelopment Property or any improvements thereon shall provide that the
Authority shall have such an opportunity to cure the "Event of Default" within such
reasonable time period as the Holder shall deem appropriate.
Section 8.6 Subordination and Modification for the Benefit of Mortaaaees.
(a) In addition to the subordination of the Authority Mortgage, in order to
facilitate the obtaining of financing for the construction of the Minimum
Improvements by the Redeveloper, the Authority agrees to subordinate its rights
under this Agreement to the Holder of a Mortgage for'the purposes described in
Section 8.1(a) of this Agreement.
(b) In order to facilitate the obtaining of financing for the construction of the
Minimum Improvements, the Authority agrees that it shall agree to any reasonable
modification of this Article VIII or waiver of its rights hereunder to accommodate the
interests of the Holder of a Mortgage, provided, however, that the Authority
determines, in its reasonable judgment, that any such modification(s) will adequately
protect the legitimate interest and security of the Authority with respect to the
Redevelopment Property.
21
ARTICLE IX
Insurance and Condemnation
Section 9.1 Insurance. (a) The Redeveloper will provide and maintain at all
times during the process of constructing the Minimum Improvements and, from time
to time at the request of the Authority, furnish the Authority with proof of payment of
premiums on:
(i) builder's risk insurance, written on the so- called "Builder's Risk —
Completed Value Basis," in an amount equal to one hundred percent (100 %)
of the insurable value of the Minimum Improvements at the date of
completion, and with coverage available in nonreporting form on the so- called
"all risk" form of policy. The-interest of the Authority shall be protected in
accordance with a clause in form and content reasonably satisfactory to the
Authority;
(ii) comprehensive general liability insurance together with an
Owner's Contractor's Policy with limits against bodily injury and property
damage of not less than $2,000,000 for each occurrence (to accomplish the
above - required limits, an umbrella excess liability policy may be used); and
(iii) workers' compensation insurance, with statutory coverage.
(b) Upon completion of construction of the Minimum Improvements and
prior to the Termination Date, the Redeveloper shall maintain, or cause to be
maintained, at its cost and expense, and from time to time at the request of the
Authority shall furnish proof of the payment of premiums on, insurance as follows:
(i) Insurance against loss and /or damage to the Minimum Improvements
under a policy or policies covering such risks as are ordinarily insured against by
similar businesses, including (without limiting the generality of the foregoing) fire,
extended coverage, vandalism and malicious mischief, boiler explosion, water
damage, demolition cost, debris removal, and collapse in an amount not less
than the full insurable replacement value of such improvements, but any such
policy may have a deductible amount of not more than $25,000.00. No policy of
insurance shall be so written that the proceeds thereof will produce less than the
minimum coverage required by the preceding sentence, by reason of co-
insurance provisions or otherwise, without the prior consent thereto in writing by
the Authority. The term "full insurable replacement value" shall mean the actual
replacement cost of the Minimum Improvements (excluding foundation and
excavation costs and costs of underground flues, pipes, drains and other
22
uninsurable items) and equipment, and may be determined from time to time at
the request of the Authority, but not more frequently than once every five years,
by an insurance consultant or insurer, selected and paid for and approved by the
Authority. All policies evidencing insurance required by this subparagraph (1) with
respect to the Minimum Improvements shall be carried in the names of the
Redeveloper, the Redeveloper's Mortgagee and the Authority as their respective
interests may appear and shall contain standard clauses which provide for net
proceeds (the amount remaining after the deduction of expenses incurred in the
collection of such proceeds, the "Net Proceeds") of insurance resulting from
claims per casualty thereunder to the Minimum Improvements which are equal to
or less than $750,000.00 for loss or damage covered thereby to be made
payable directly to the Redeveloper and /or its Mortgagee, and Net Proceeds from
such claims in excess of $750,000.00 to be made payable jointly to the
Redeveloper, its Mortgagee and the Authority. The Authority, the Redeveloper
and its mortgagee shall jointly agree on the amount of settlement.
(ii) Comprehensive general pubic liability insurance, including
personal injury liability, against liability for injuries to persons and /or property,
in the minimum amount for each occurrence and for each year of
$2,000,000.00, and shall be endorsed to show the Authority as additional
insured.
(c) All insurance required in Article IX of this Agreement shall be taken out
and maintained in responsible insurance companies selected by the Redeveloper
which are authorized under the laws of the State to assume the risks covered
thereby. The Redeveloper will deposit annually with the Authority policies
evidencing all such insurance, or a certificate or certificates or binders of the
respective insurers stating that such insurance is in force and effect. Unless
otherwise provided in this Article IX of this Agreement each policy shall contain a
provision that the insurer shall not cancel nor modify it without giving written notice
to the Redeveloper and the Authority at least thirty (30) days before the cancellation
or modification becomes effective. Not less than fifteen (15) days prior to the
expiration of any policy, the Redeveloper shall furnish the Authority evidence
satisfactory to the Authority that the policy has been renewed or replaced by another
policy conforming to the provisions of this Article IX of this Agreement, or that there
is no necessity therefor under the terms hereof. In lieu of separate policies, the
Redeveloper may maintain a single policy, blanket or umbrella policies, or a
combination thereof, having the coverage required herein, in which event the
Redeveloper shall deposit with the Authority a certificate or certificates of the
respective insurers as to the amount of coverage in force upon the Minimum
Improvements.
23
(d) The Redeveloper agrees to notify the Authority immediately in the case
of damage exceeding $100,000.00 in amount to, or destruction of, the Minimum
Improvements or any portion thereof resulting from fire or other casualty. In the
event that any such damage does not exceed $750,000.00, the Redeveloper will
forthwith repair, reconstruct and restore the Minimum Improvements to substantially
the same or an improved condition or value as it existed prior to the event causing
such damage and, to the extent necessary to accomplish such repair, insurance
relating to such damage received by the Redeveloper shall be applied to the
payment or reimbursement of the costs thereof. Net Proceeds of any insurance
relating to such damage up to $750,000.00 shall be paid directly to the Redeveloper.
In the event the Minimum Improvements or any portion thereof are destroyed
by fire or other casualty and the damage or destruction is estimated to equal or
exceed $750,000.00, then the Redeveloper within one hundred and twenty (120)
days after such damage or destruction, shall proceed forthwith to repair, reconstruct
and restore the damaged Minimum Improvements to substantially the same
condition or utility value as existed prior to the event causing such damage or
destruction and, to the extent necessary to accomplish such repair, reconstruction
and restoration, the Redeveloper, its Mortgagee and the Authority will apply the Net
Proceeds of any insurance relating to such damage or destruction received by its
Mortgagee and the Authority to the payment or reimbursement of the costs thereof.
Any Net Proceeds remaining after completion of construction shall be disbursed to
the Redeveloper.
(e) If the Redeveloper is in compliance with the terms and conditions of
this Agreement, then any Net Proceeds of insurance relating to such damage or
destruction received by the Authority shall be released from time to time by the
Authority to the Redeveloper upon the receipt of:
(i) A certificate of an authorized representative of the Redeveloper
specifying the expenditures made or to be made or the indebtedness incurred
in connection with such repair, reconstruction and restoration and stating that
such Net Proceeds, together with any other moneys legally available for such
purposes, will be sufficient to complete such repair, construction and
restoration; and
(ii) If Net Proceeds equal or exceed $750,000.00 in amount, the
written approval of such certificate by an independent engineer.
The Redeveloper shall complete the repair, reconstruction and restoration of the
Minimum Improvements, whether or not the Net Proceeds of insurance received by
the Redeveloper for such purposes are sufficient to pay for the same. Any Net
24
Proceeds remaining after completion of such repairs, construction and restoration
shall be remitted to the Redeveloper.
Section 9.2 Condemnation. In the event that title to and possession of the
Minimum Improvements or any material part thereof shall be taken in condemnation
or by the exercise of the power of eminent domain by any governmental body or
other person (except the City) prior to the Termination Date, the Redeveloper shall,
with reasonable promptness after such taking, notify the Authority as to the nature
and extent of such taking. Upon receipt of any condemnation award the
Redeveloper shall elect to either: (a) use such portion of the condemnation award
as is necessary to reconstruct the Minimum Improvements (or, in the event only a
part of the Minimum Improvements has been taken, then to reconstruct such part)
within the District; or (b) prepay the remaining balance on the Note plus accrued
interest and repay any grant by the Authority which reduced the Note balance. If the
Redeveloper elects option (b) above, this Agreement shall terminate and the
Redeveloper shall be entitled to keep all of any condemnation award.
Section 9.3 Subordination. Notwithstanding anything to the contrary
contained herein, the rights of the Authority with respect to the receipt and
application of the proceeds of insurance shall be subject to and subordinate to the
rights of any holder of any Mortgage with respect to the Redevelopment Property as
of the date hereof or any Mortgage which is permitted by this Agreement.
25
ARTICLE X
Assessment Agreement
Section 10.1 Real Property Taxes. (a) Prior to the Termination Date, the
Redeveloper shall pay when due, prior to the attachment of penalty, all real property
taxes payable with respect to the Redevelopment Project.
(b) The Redeveloper agrees that prior to the Termination Date it will not
take any of the following actions to the extent that such actions would result in a
reduction of the market valuation of the Redevelopment Property below the amounts
specified in Section 10.2: (i) seek administrative review or judicial review of the
applicability of any property tax statute determined by any tax official to be
applicable to the Redevelopment Property or raise the inapplicability of any such
property tax statute as a defense in any proceedings, including delinquent tax
proceedings; (ii) seek administrative review or judicial review of the constitutionality
of any property tax statute determined by any tax official to be applicable to the
Redevelopment Property or raise the unconstitutionality of any such property tax
statute as a defense in any proceedings, including delinquent tax proceedings; (iii)
cause a reduction in the assessed market value of the Redevelopment Property
below the Assessor's Minimum Market Value, as provided in Section 10.2, through:
(A) willful destruction of the Redevelopment Property or any part thereof; (B) willful
refusal to reconstruct damaged or destroyed property as required by Article IX of this
Agreement; (C) a request to the city assessor of the City or the county assessor of
the County to reduce the assessed market value of all or any portion of the
Redevelopment Property; (D) a petition to the board of equalization of the City or the
board of equalization of the County to reduce the assessed market value of all or
any portion of the Redevelopment Property; (E) a petition to the board of
equalization of the State or the commissioner of revenue of the State to reduce the
assessed market value of all or any portion of the Redevelopment Property; (F) an
action in a District Court of the State or the Tax Court of the State pursuant to
Minnesota Statutes, Chapter 278, or any similar State or federal law, seeking a
reduction in the assessed market value of the Redevelopment Property; (G) an
application to the commissioner of revenue of the State requesting an abatement of
real property taxes pursuant to Minnesota Statutes, Chapter 270, or any similar
State or federal law; and (H) any other proceedings, whether administrative, legal or
equitable, with any administrative body within the City, the County, or the State or
with any court of the State or the federal government. The Redeveloper shall not,
prior to the Termination Date, apply for a deferral of property tax on the
Redevelopment Property pursuant to Minnesota Statutes, Section 469.181, or any
similar law.
W
Section 10.2 Assessment Agreement. The Redeveloper shall agree to, and
with the Authority shall execute, as a condition precedent to the Authority's
obligation to provide the Grant and loan the Note principal, an Assessmeni
Agreement pursuant to the provisions of Minnesota Statutes, Section 469.177,
Subdivision 8, specifying the Assessor's Minimum Market Value for the
Redevelopment Project for calculation of real property taxes. The aggregate
amount of the Assessor's Minimum Market Value shall not be less than $
by January 2, 200 . The minimum market value set forth in an Assessment
Agreement is herein referred to as the "Assessor's Minimum Market Value." Nothing
in an Assessment Agreement shall limit the discretion of the assessor to assign a
market value to the property in excess of such Assessor's Minimum Market Value
nor prohibit the Redeveloper from seeking through the exercise of legal or
administrative remedies a reduction in such market value for property tax purposes,
provided however, that the Redeveloper shall not seek a reduction of such market
value below the Assessor's Minimum Market Value in any year so long as the
Assessment Agreement shall remain in effect. The Assessment Agreement shall
remain in effect until the Termination Date.
IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly
executed in its name and behalf and the Redeveloper has caused this Agreement to
be duly executed as of the date first above written.
\\PDC\VOL2 \WPDATA\F TpMLEro6\D= \CONTRACT.DOC
Pal
Dated:
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF FRIDLEY, MINNESOTA
By
Its Chairman
And by
STATE OF MINNESOTA)
) ss
COUNTY OF ANOKA )
Its Executive Director
On this day of , 199 before me, a notary public
within and for Anoka County, personally appeared
and to me personally known who by me duly sworn,
did say that they are the Chairman and Executive Director of the Housing and
Redevelopment Authority in and for the City of Fridley, Minnesota, a political
subdivision of the State of Minnesota, and acknowledged the foregoing instrument
on behalf of said Authority.
Notary Public
Authority Signature Page C Redevelopment Contract
\\PMV OL2\ VIMATA \FTMLEY\06\DOCS \CONTRACT.DOC
28
Dated:
FRIDLEY MAIN, L.L.C.
M
STATE OF MINNESOTA)
) ss
COUNTY OF )
Its
On this day of , 199_ before me, a notary public
within and for County, personally appeared
, the of Fridley Main,
L.L.C., a Minnesota limited liability company, and acknowledged the foregoing
instrument on behalf of said limited liability company.
Notary Public
Redeveloper Signature Page C Redevelopment Contract
\\PDC \V OL2\ WPDATA \FTRIDLEY106\o= \CONTRACT.DOC
29
SCHEDULE A
DESCRIPTION OF REDEVELOPMENT PROPERTY
PIN: 3- 30- 24140005
(Legal Description)
30
SCHEDULE B
SITE IMPROVEMENTS
Site preparation which is limited to the following:
Export of poor soils
Import of fill
Testing
31
SCHEDULE C
CERTIFICATE OF COMPLETION
WHEREAS, the Housing and Redevelopment Authority in and for the
City of Fridley, Minnesota, a Minnesota municipal corporation (the "Authority") and
Fridley Main, L.L.C., a Minnesota limited liability company (the "Redeveloper") have
entered into a Contract for Private Redevelopment (the "Agreement ") dated as of
, 1999, regarding certain real property referred to in the Agreement
as the "Redevelopment Property" located in Redevelopment Project No. 1 in the
City; and
WHEREAS, the Agreement contains certain conditions and provisions
requiring the Redeveloper to construct improvements upon the Redevelopment
Property (hereinafter referred to and referred to in the Agreement as the "Minimum
Improvements "); and
WHEREAS, Section 4.3 of the Agreement requires the Authority to
provide an appropriate instrument promptly after the substantial completion (as
defined in the Agreement) of the Minimum Improvements so certifying said
substantial completion;
NOW, THEREFORE, in compliance with said Section 4.3 of the
Agreement, this is to certify that the Redeveloper has substantially completed the
Minimum Improvements in accordance with the conditions and provisions of the
Agreement relating solely to the obligations of the Redeveloper to construct the
Minimum Improvements (including the dates for beginning and completion thereof),
and this certification shall be a conclusive determination of satisfaction and
termination of the agreements and covenants in the Agreement with respect to the
obligations of the Redeveloper, and its successors and assigns, to construct the
Minimum Improvements and the dates for the beginning and completion thereof.
Dated: '19
32
Dated:
STATE OF MINNESOTA
COUNTY OF ANOKA
On this
public within
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF FRIDLEY, MINNESOTA
By
Its Chairman
And by
) ss
Its Executive Director
day of
and for Anoka County,
and
199 before me
personally
personally known who by me duly sworn, did say that they are th
Executive Director of the Housing and Redevelopment Authority in
of Fridley, Minnesota, a political subdivision of the State of
acknowledged the foregoing instrument on behalf of said Authority.
Notary Public
Authority Signature Page C Certificate of Completion
\\PMVOL2 \WMATA\F\FRMLEY\06\D MCONTRACTjXC
33
a notary
appeared
to me
e Chairman and
and for the City
Minnesota, and
SCHEDULE D
NOTE
US $
Fridley, Minnesota
,199
FOR VALUE RECEIVED, the undersigned (the "Borrower") promises
to pay to the Housing and Redevelopment Authority in and for the City of Fridley,
Minnesota (the "Note Holder'), or order the principal sum of
Dollars ($ ) with interest from ,
on the unpaid principal balance until paid, at the rate of 5% percent per
annum, and with payments due on the 1st day of each February and August in
installments set forth on the Payment Schedule attached as Exhibit A. The entire
unpaid principal balance together with accrued interest shall be due in full on August
1, 200_.
Payments shall first be applied to interest with any excess applied to
principal. A late payment penalty of five percent (5 %) shall be charged
on any payments not received at the mailing address designated by the
Note Holder by 5:00 P.M. on the 15th day following the date on which
the payment is due; interest will be calculated based on a 360 day year
and charged on a per diem basis in each month.
Principal and interest shall be payable at the Fridley Housing and Redevelopment
Authority, 6431 University Avenue N.E., Fridley, Minnesota, 55432 or such other
place as the Note Holder may designate.
If said installment under this Note is not paid when due and remains
unpaid after a date specified by a notice to Borrower, which date shall not be less
than thirty (30) days after the date such notice is mailed, the Note Holder may
exercise this option to accelerate during default by Borrower regardless of any prior
forbearance. If suit is brought to collect this Note, the Note Holder shall be entitled
to collect all reasonable costs and expenses of suit, including, but not limited to,
reasonable attomey's fees.
34
Borrower may prepay the principal amount outstanding in whole or in
part. Any partial prepayment shall be applied against the principal amount
outstanding.
Presentment, notice of dishonor, and protest are hereby waived by all
makers, sureties, guarantors and endorsers hereof. This Note shall be the joint and
several obligation of all makers, sureties, guarantors and endorsers, and shall be
binding upon them and their successors and assigns.
Any notice to Borrower provided for in ~this Note shall be given by
mailing such notice by certified mail addressed to Borrower at:
Fridley Main, L.L.C.
c% Meritide, Inc. - -
2817 Anthony Lane South
Minneapolis, Minnesota 55418
Attn: Dick Peterson
or to such other address as Borrower may designate by notice to the Note Holder.
Any notice to the Note Holder shall be given by mailing such notice by certified mail,
return receipt requested, to the Note Holder at the address stated in the first
paragraph of this Note, or at such other address as may have been designated by
notice to Borrower.
The indebtedness evidenced by this Note is secured by a Mortgage,
dated the day of , 199_, and reference is made to the Mortgage for
rights as to acceleration of the indebtedness evidenced by this Note.
FRIDLEY MAIN, L.L.C.
M
Its
35
EXHIBIT A
PAYMENT SCHEDULE
KT.I.
SCHEDULE E
AUTHORITY MORTGAGE
This Indenture, made this day of , 199, between
Fridley Main, L.L.C., a limited liability company organized under the laws of the State
of Minnesota (the "Mortgagor'7, and the Housing and. Redevelopment Authority in
and for the City of Fridley, Minnesota (the "Mortgagee'):
WITNESSETH:
That Mortgagor, in consideration of the Mortgagee's covenants and
agreements made under that certain Contract for Private Redevelopment by and
between the Mortgagee and Fridley Main, L.L.C., a limited liability partnership, dated
as of , 1999 (the "Agreement'), and in order to secure the payment by
the Mortgagor of all amounts required to be paid under the Agreement and the Note
as provided in the Agreement, and further in consideration of the sum of One Dollar
($1.00), to Mortgagor in hand paid by Mortgagee, the receipt whereof is hereby
acknowledged, does hereby convey unto Mortgagee, forever, real property in Anoka
County Minnesota, described as follows:
together with all hereditaments and appurtenances belonging thereto (the
"Property').
TO HAVE AND TO HOLD THE SAME, to Mortgagee forever.
Mortgagor covenants with Mortgagee as follows: That Mortgagor is lawfully seized
of the Property and has good right to convey the same; that the Property is free from
all encumbrances, except as follows:
(Legal Description)
that Mortgagee shall quietly enjoy and possess the same; and that Mortgagor will
warrant and defend the title to the same against all lawful claims not hereinbefore
specifically excepted.
37
PROVIDED, NEVERTHELESS, that if Mortgagor shall pay Mortgagee
all amounts payable by the Mortgagor under the Agreement and the Note in an
amount not exceeding Thousand Dollars ($ ), and
shall repay to Mortgagee, at the times and with interest as specified, all sums
advanced in protecting the lien of this Mortgage, in payment of taxes on the Property
and assessments payable therewith, insurance premiums covering buildings
thereon, principal or interest on any prior liens, expenses and attomey's fees herein
provided for and sum advanced for any other purpose authorized herein, and shall
keep and perform all the covenants and agreements herein contained, then this
Mortgage shall be null and void, and shall be released at -Mortgagor's expense.
AND MORTGAGOR covenants with Mortgagee as follows:
To pay the amounts as specked in the Agreement and the Note.
2. To pay all taxes and assessments now due or that may hereafter
become liens against the Property before penalty attaches thereto;
3. To keep all buildings, improvements and fixtures now or later
located on or a part of the Property insured against loss by fire, extended coverage
perils, vandalism, malicious mischief and, if applicable, steam boiler explosion, for at
least the amount of the Mortgage at all times while any amount remains unpaid
under this Mortgage. If any of the buildings, improvements or fixtures are located in
a federally designated flood prone area, and if flood insurance is available for that
area, Mortgagor shall procure and maintain flood insurance in amounts reasonably
satisfactory to Mortgagee. Each insurance policy shall contain a loss payable
clause in favor of Mortgagee affording all rights and privileges customarily provided
under the so- called standard mortgage clause. The insurance shall be issued by an
insurance company or companies licensed to do business in the State of Minnesota
and acceptable to the Mortgagee. the insurance policies shall provide for not less
than ten (10) days written notice to Mortgagee before cancellation, non - renewal,
termination, or change in coverage, and Mortgagor shall deliver to Mortgagee a
duplicate original or certificate of such insurance policies.
4. To pay, when due, both principal and interest of all prior liens or
encumbrances, if any, and keep the Property free and clear of all prior liens or
encumbrances.
5. To commit or permit no waste on the Property and to keep it in
good repair.
6. To complete forthwith any improvements which may hereafter be
under course of construction on the Property; and
38
7. To pay any other expenses and reasonable attorney's fees
incurred by Mortgagee by reason of litigation with any third party for the protection of
the lien of this Mortgage.
transferred
partnership
Mortgagor.
8. To immediately pay the Note balance if the Property is sold or
except that the Property may be transferred to any corporation or
or entity controlling, controlled by or under common control of the
In case of failure to pay said taxes and assessments, prior liens or
encumbrances, expenses and reasonable attorney's fees as above specified, or to
insure said buildings, improvements, and fixtures and deliver the policies as
aforesaid, Mortgagee may pay such taxes, assessments, prior liens, expenses and
attorney's fees and interest thereon,-or obtain such insurance, and the sums so paid
shall bear interest from the date of such payment at the same rate of 5% per annum,
and shall be impressed as an additional lien upon the Property and be immediately
due and payable from Mortgagor to Mortgagee and this Mortgage shall from date
thereof secure the repayment of such advances with interest.
In case of default in any of the foregoing covenants, and the passage
of any applicable periods of cure or notice set forth in the Agreement, Mortgagor
confers upon the Mortgagee the option of declaring the unpaid balance of the Note
and the interest accrued thereon, together will all sums advanced hereunder,
immediately due and payable without notice, and hereby authorizes and empowers
Mortgagee to foreclose this Mortgage by judicial proceedings or to sell the Property
at public auction and convey the same to the purchaser in fee simple in accordance
with the statute, and out of the moneys arising from such sale to retain all sums
secured hereby, with interest and all legal costs and charges of such foreclosure
and the maximum attorney's fees permitted by law, which costs, charges and fees
Mortgagor agrees to pay.
The terms of this Mortgage shall run with the Property and bind the
parties hereto and their successors in interest.
39
IN TESTIMONY WHEREOF, Mortgagor has hereunto set its hand the
day and year first above written.
FRIDLEY MAIN, L.L.C.
M
Its
STATE OF MINNESOTA)
) ss.
COUNTY OF )
On this day of , 199 before me, a notary
public within and for County, personally appeared
the of Fridley Main, L.L.C., a
Minnesota limited liability company, and acknowledged the foregoing instrument on
behalf of said company.
This document was drafted by:
Krass Monroe, P.A.
Suite 1100 Southpoint Office Center
1650 West 82nd Street
Minneapolis, MN 55431
40
Notary Public
SCHEDULE F
PERMITTED ENCUMBRANCES
The following shall be permitted encumbrances on the title to the
Redevelopment Property:
(a) Such encumbrances as are mutually agreed to in writing by the
Authority and the Redeveloper.
(b) Governmental regulations, if any affecting the use and
occupance of the Redevelopment Property and Minimum Improvements.
(c) Zoning laws of the City, County and State.
(d) All rights in public highways upon the land.
(e) Reservations to the State, in trust for the tax districts concerned,
of minerals and mineral rights in those portions of the Redevelopment Property the
title to which may have at any time heretofore been forfeited to the State for
nonpayment of real estate taxes.
(f) The lien of unpaid special assessments, if any, not presently
payable but to be paid as a part of the annual taxes to become due.
(g) The lien of unpaid real estate taxes, if any, not presently payable
but to be paid as a part of the annual taxes to become due.
(h) A Mortgage as permitted under Section 8.2.
(i) Any Mortgage subordinate to the Authority Mortgage as
permitted under Section 8.2.
41
SCHEDULE G
ASSESSMENT AGREEMENT
and
ASSESSOR'S CERTIFICATION
By and among
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR
THE CITY OF FRIDLEY, MINNESOTA
FRIDLEY MAIN, L.L.C.
and
CITY ASSESSOR OF THE CITY OF FRIDLEY
This Document was drafted by:
Krass Monroe, P.A.
Suite 1100 Southpoint Office Center
1650 West 82nd Street
Minneapolis, MN 55431
42
ASSESSMENT AGREEMENT
THIS AGREEMENT, made on or as of the day of
199 , by and among The Housing and Redevelopment Authority in and for the City
of Fridley (the "City"), of the State of Minnesota, Fridley Main, L.L.C., a Minnesota
limited liability company (the "Redeveloper'), and the City Assessor of the City of
Fridley (the "Assessor).
WITNESSETH, that
WHEREAS, on or before the date hereof the Authority and the
Redeveloper have entered into a Contract for Private Redevelopment (the
"Redevelopment Contract') regarding certain real property located in the City of
Fridley, legally described on Exhibit A attached hereto and made a part hereof, (the
"Redevelopment Property'); and
WHEREAS, it is pursuant to said Redevelopment Contract the
Redeveloper has agreed to construct an office/warehouse /processing facility
consisting of approximately 51,000 square feet, including landscaping, parking and
related facilities, (the "Minimum Improvements') upon the Redevelopment Property;
and
WHEREAS, the Authority and Redeveloper desire to establish a
minimum market value for said Redevelopment Property and the Minimum
Improvements constructed thereon, pursuant to Minnesota Statutes, Section
469.177, Subdivision 8; and
WHEREAS, the Authority
preliminary plans and specifications for
inspected the Redevelopment Property;
and the Assessor have reviewed the
the Minimum Improvements and have
NOW, THEREFORE, the parties to this Agreement, in consideration of
the promises, covenants and agreements made by each to the other, do hereby
agree as follows:
1. The minimum market value as of January 2, 200 which shall be
assessed for the Redevelopment Property described in Exhibit A, with the Minimum
Improvements constructed thereon, for ad valorem tax purposes, shall not be less
than Dollars
43
2. The minimum market value herein established shall be of no
further force and effect and this Agreement shall terminate on the Termination Date
of the Redevelopment Contract which is defined in Article I of the Redevelopment
Contract and shall be no later than the last payment on the Note which is scheduled
to be paid in full August 1, 200 .
3. This Agreement shall be promptly recorded by the Redeveloper
who shall pay all costs of recording.
4. Neither the preambles nor provisions of this Agreement are
intended to, nor shall they be construed as, modifying the terms of the
Redevelopment Contract between the Authority and the Redeveloper.
5. This Agreement shall inure to the benefit of and be binding upon
the parties hereto and the respective successors and assigns of the parties.
6. Each of the parties has authority to enter into this Agreement
and to take all actions required of it, and has taken all actions necessary to authorize
the execution and delivery of this Agreement.
7. In the event any provision of this Agreement shall be held invalid
and unenforceable by any court of competent jurisdiction, such holding shall not
invalidate or render unenforceable any other provision hereof.
8. The parties hereto agree that they will, from time to time,
execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered, such supplements, amendments and modifications hereto, and such
further instruments as may reasonably be required for correcting any inadequate, or
incorrect, or amended description of the Redevelopment Property or the Minimum
Improvements, or for carrying out the expressed intention of this Agreement,
including, without limitation, any further instruments required to delete from the
description of the Redevelopment Property such part or parts as may be included
within a separate assessment agreement.
9. Except as provided in Section 8 of this Assessment Agreement,
this Agreement may not be amended nor any of its terms modified except by a
writing authorized and executed by all parties hereto.
10. This Agreement may be simultaneously executed in several
counterparts, each of which shall be an original and all of which shall constitute but
one and the same instrument.
Ci!
11. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota.
45
Dated:
FRIDLEY MAIN, L.LC.
By
STATE OF MINNESOTA) _
) ss.
COUNTY OF )
Its- ..
On this day of , 199 before me, a notary
public within and for County, personally appeared
, the of Fridley Main, L.L.C., a
Minnesota limited liability company, and acknowledged the foregoing instrument on
behalf of said limited liability company.
Notary Public
Redeveloper Signature Page C Assessment Agreement
Gti
CERTIFICATION BY CITY ASSESSOR
The undersigned, having reviewed the plans and specifications for the
improvements to be constructed and the market value assigned to the land upon
which the improvements are to be constructed, and being of the opinion that the
minimum market value contained in the foregoing Agreement appears reasonable,
hereby certifies as follows: The undersigned Assessor, being legally responsible for
the assessment of the above described property, hereby certifies that the market
value assigned to such land and improvements upon completion of the
improvements to be constructed thereon shall not be less than
Agreement. Dollars ($ ) until termination of this
City Assessor for the City of Fridley
STATE OF MINNESOTA)
) ss.
COUNTY OF ANOKA )
The foregoing instrument was acknowledged before me this day
Of , 199, by , the City Assessor of
the City of Fridley.
Notary Public
48
1*V4
LEGAL DESCRIPTION OF REDEVELOPMENT PROPERTY
49
AGREEMENT
This Agreement is dated as of January 2, -1999, is
by and between the City of Fridley, Minnesota, and Independent
School District No. 13, and provides as follows:
1. Definitions. As used in this Agreement, the
following terms have the following meanings, respectively:
337153.4
"City" means the City Qf Fridley,
Minnesota.
"HRA" means the Housing and Redevelopment
Authority in and for the City of Fridley,
Minnesota.
" Proiect" means Redevelopment Project
No. 1 established and operated by the HRA
pursuant to Minnesota Statutes, Sections
469.001 through 469.047.
111985 Revenue Bonds" means the HRA's
$4,070,000 Tax Increment Revenue Bonds of
1985, dated May 1, 1985.
111997 G.O. Bonds" means the City's
$9,575,000 General Obligation Tax Increment
Refunding Bonds, Series 1997A, dated June 1,
1997.
111998 G.O. Bonds" means the City's
$4,185,000 Taxable General Obligation Tax
Increment Bonds, Series 1998B, dated
October 1, 1998.
"Tax Increment obligations" means the
1985 Revenue Bonds, the 1997 G.O. Bonds, the
1998 G.O. Bonds, and any other contractual
obligations of the HRA or the City which were
entered into prior to the date of this
Agreement and which commit the use of any tax
increments from the TIF Districts for
specified purposes, projects, or parties.
"Tax Increment Act" means Minnesota
Statutes, Sections 469.174 through 469.179.
"TIF Districts " - means Tax Increment
Financing District Nos. 1 through 3, 6 and 7,.
and 9 through 16 within the Project. The
337153.4
attached Exhibit A contains certification
dates and other information on the TIF
Districts.
"School District" means Independent
School District No. 13, the Columbia Heights
School District.
"Subdivision" means Minnesota Statutes
Section 469.177, Subdivision 10 (a copy of
which is attached hereto as Exhibit B).
2. Recitals.
(a) In certain cases, the Subdivision
either requires or allows by agreement certain
tax increments attributable to school district
referendum tax levies to be paid to school
districts.
(b) TIF District No. 6 is located
entirely within the boundaries of the School
District, and a portion of TIF District No. 2
is located within the boundaries of the School
District.
(c) None of the property within TIF
District Nos. 1, 3, 7, 9, 10, 11, 12, 13, 14,
15 and 16 is located within the boundaries of
the School District.
(d) It is the purpose of this Agreement
to provide for payment of certain tax
increments to the School District pursuant to
and in accordance with the provision of the
Subdivision.
(e) Nothing -in this Agreement is
intended to violate the covenants and
agreements heretofore made respecting the
application of tax increments from the TIF
Districts pursuant to the Tax Increment
Obligations.
3. Representations of the City.
(a) The Tax Increment Obligations were
issued to finance various activities of the
HRA within the Project.
(b) The 1985 Revenue Bonds are not
general obligations of the City or the HRA.
2
Tax increments from TIF District Nos. 1
through 5 are pledged to the payment of the
1985 Revenue Bonds, and there are no other
sources of funds pledged to the payment
thereof. The final scheduled principal
maturity of the 1985 Revenue Bonds is
February 1, 1999.
(c) The 1997 G.O. Bonds are payable from
tax increments derived from various TIF
Districts, including TIF District Nos. 1, 2,
3, and 6, and the final scheduled-. principal
maturity of those Bonds is August 1, 2009.
(d) The 1998 G.O. Bonds are payable, to
the extent permitted by applicable law, from
tax increments derived from TIF District Nos.
1 through 13, and the final scheduled maturity
of those Bonds is February 1, 2012.
(e) Portions of the principal of the
1985 Revenue Bonds, the 1997 G.O. Bonds, and
the 1998 G.O. Bonds were outstanding on May 1,
1988, and /or are outstanding on the date of
this Agreement.
4. Representations of the School District.
(a) On October 5, 1981, the electorate
of the School District approved a 5.0 mill
continuous levy first effective for the 1981
payable 1982 property taxes. This levy is
hereinafter referred to as the 111981 Levy ".
(b) On September 23, 1986, the
electorate of the School District approved a
7.0 mill continuous levy first effective for
the 1986 payable 1987 property taxes. This
levy is hereinafter referred to as the 111986
Levy".
(c) According to the Minnesota Depart-
ment of Education, for purposes of the above -
mentioned referendum levies the tax capacity
rate equivalents of 5 mills and 7 mills are
.06162496 and .07875910, respectively.
5. P_avment of Tax Increments to _School District. The
City and the School District hereby agree that, except as
otherwise provided pursuant to paragraph 6 of this Agreement,
tax increments shall be paid to the School District by the HRA
as and to the extent received by the HRA, with respect to the
337153.4 3
tax increments relating to the 1998 payable 1999 property
taxes, as follows:
(a) TIF District No. 6. Since the 1981
Levy was approved before the date of
certification of TIF District No. 6, the
Subdivision does not apply to that Levy with
respect to this District, and no tax
increments attributable to said Levy from this
District are payable to the School District.
Pursuant to clause b(2) of the Subdivision,
the tax increment from TIF District No. 6
which is attributable to the 1986 Levy shall
be paid to the School District.
(b) TIF District No. 2. Pursuant to
clause b(2) of the Subdivision, the tax
increment from TIF District No. 2 which is
attributable to the 1981 Levy and the 1986
Levy shall be paid to the School District.
6. Further Agreements. Nothing in this Agreement is
intended or shall be applied in such a manner as to violate
the obligations and covenants made by the City or the HRA in
connection with the Tax Increment Obligations, and to the
extent but only to the extent that the application of the
terms of this Agreement would give rise to a violation of said
obligations and covenants, including without limitation, the
default in the timely and full payment of the Tax Increment
Obligations, the applicable tax increments shall be applied
instead in the manner, but only to the extent necessary, to
avoid such default or other violation of said covenants or
obligations. Nothing in this Agreement shall restrict the
City or the HRA in the exercise of the powers which they may
have relating to the Project or the TIF Districts.
In addition, the City and the School District agree that
the provisions of paragraph 5 providing for payment of tax
increment to the School District shall be limited to and shall
apply only to such tax increment- attributable to the 1998
payable 1999 real estate property taxes, and at the conclusion
of said period, the City and the School District agree to
review the circumstances and to attempt to negotiate in good
faith such further agreement or agreements as may be permitted
by law and which are acceptable to both the City and School
District with respect to discretionary payments of such
applicable tax increment to the School District.
IN WITNESS WHEREOF, the City and the School District have
caused this Agreement to be executed by their duly authorized
representatives.
337153.4 4
CITY OF FRIDLEY, MINNESOTA
INDEPENDENT SCHOOL DISTRICT NO. 13
School Board Chair
Superintendent
337153.4
EXHIBIT A
Schedule of Tax Increment Financing Districts
Within Housing and Redevelopment
Project No. 1 of the Fridley HRA
TIF District
Name
1
Center City
2
Moore Lake
3
North Area
4'
Johnson Printing/
Skywood Mall
5'
Paschke
6
Lake Pointe
7
Winfield
8'
Shorewood
9
Onan /Old Central
10
Northco Phase III
11
Osborne Crossings
12
McGlynn Bakeries
13
Satellite Lane Apts.
14
Industrial Equities
15
MN Comm. Railway
16
57th Avenue
Terminated
337153.4
Certification
Date
5/11/79
7/31/81
5/19/82
1/20/84
3/15/84
12/24/85
10/22/86
10/24/86
9/7/89
4/10/90
1/31/92
3/5/92
6/20/95
5/30/96
9/9/97
9/9/97
Independent
School
District No.
14
13/14
11/16
13/14
16
13
16
14
16
16
16
14/16
14
16
16
14
.s
Exhibit B
Subd. 10. Payment to school for referendum le%- . (a) The provisions of this subdi%•i-
sion apply to tax increment financing districts and proieets for which certification was
requested before \fay I. 19SS, that are located in a school district in %%hich the Voters
have approved new local tae rates or an increase in local tax rates after the tae incre-
ment financing district -as certified.
(b)(1) Ifthere are no outstanding bonds on May 1, 19SS, to %,.hick increment from
the district is pledged, or if the referendum is approved after fay 1, 19SS, and there
are no bonds outstanding at the time the refercndum is approved, that %•ere issued
before May 1, 19S3, the authority must annually pay to the school district an amount
of increment equal to the increment that is attributable to the increase in the local tax
rate under the referendum.
(2) If clause (1) does not apply, upon approval by a majority vote of the governing
body of the municipality and the school board, the authority r,Just pay to the school
district an amount of increment equal to the iricrenent that is attributable to the
increase in the local tax rate under the referendum.
(c) The amounts of these increments mzy be expended a;:d must be treated by the
school district in the same manner as provided for the revenues derived from the refer-
endum levy approved by the voters. The provisions of this subdivision apply to projects
for v hick eerti5cation was requested before, on, and after August 1, 1979.
AGREEMENT
This Agreement is dated as of January 2, 1999, is
by and between the City of Fridley, Minnesota, and Independent
School District No. 14, and provides as follows:
337157.4
1. Definitions. As used in this Agreement, the
following terms have the following meanings, respectively:
"City" means the City of Fridley,
Minnesota. .
"H_ PR " means the Housing and Redevelopment
Authority in and for the City of Fridley,
Minnesota.
" Project" means Housing and Redevelopment
Project No. 1 established and operated by the
HRA pursuant to Minnesota Statutes, Sections
469.001 through 469.047.
111985 Revenue Bonds" means the HRA's
$4,070,000 Tax Increment Revenue Bonds of
1985, dated May 1, 1985.
111997 G.O. Bonds" means the City's
$9,575,000 General Obligation Tax Increment
Refunding Bonds, Series 1997A, dated June 1,
1997.
"1998 G.O. Bonds" means the City's
$4,185,000 Taxable General Obligation Tax
Increment Bonds, Series 1998B, dated
October 1, 1998.
"Tax Increment Oblicrations" means the
1985 Revenue Bonds, the 1997 G.O. Bonds, the
1998 G.O. Bonds, and any other contractual
obligations of the HRA or the City which were
entered into prior to the date of this
Agreement and which commit the use of any tax
increments from the TIF Districts for
specified purposes, projects, or parties.
"Tax Increment Act" means Minnesota
Statutes, Sections 469.174 through 469.179.
"TIF Districts" means Tax Increment
Financing District Nos'. 1 through 3, 6 and 7,
and 9 through 16 within the Project. The
attached Exhibit A contains certification
dates and
Districts.
other information on the TIF
"School District" means Independent
School District No. 14, the Fridley School
District.
"Subdivision" means Minnesota Statutes
Section 469.177, Subdivision 10 (a copy of
which is attached hereto as Exhibit B).
2. Recitals.
(a) In certain cases, the Subdivision
either requires or allows by agreement certain
tax increments attributable to school district
referendum tax levies to be paid to school
districts.
(b) TIF District Nos. 1, 13 and 16 are
located entirely within the boundaries of the
School District, and a portion of TIF District
Nos. 2 and 12 are located within the
boundaries of the School District.
(c) None of the property within TIF
District Nos. 3, 6, 7, 9, 10, 11, 14 and 15 is
located within the boundaries of the School
District.
(d) It is the purpose of this Agreement
to provide for payment of certain tax
increments to the School District pursuant to
and in accordance with the provision of the
Subdivision.
(e) Nothing in this Agreement is
intended to violate the covenants and
agreements heretofore made respecting the
application of tax increments from the TIF
Districts pursuant to the Tax Increment
Obligations.
3. Revresentations of the City.
(a) The Tax Increment Obligations were
issued to finance various activities of the
HRA within the Project.
(b) The 1985 Revenue Bonds are not
general obligations of the City or the HRA.
Tax increments from TIF District Nos. 1
337157.4 2
through 5 are pledged to the payment of the
1985 Revenue Bonds, and there are no other
sources of funds pledged to the payment
thereof. The final scheduled principal
maturity of the 1985 Revenue Bonds is
February 1, 1999.
(c) The 1997 G.O. Bonds are payable from
tax increments derived from various TIF
Districts, including TIF District Nos. 1, 2,
3, and 6, and the final scheduled principal
maturity of those Bonds is August Z, 2009.
(d) The 1998 G.O. Bonds are payable, to
the extent permitted by applicable law, from
tax increments derived from TIF District Nos.
1 through 13, and the final scheduled maturity
of those Bonds is February 1, 2002.
(e) Portions of the principal of the
1985 Revenue Bonds, the 1997 G.O. Bonds, and
the 1998 G.O. Bonds were outstanding on May 1,
1988, and /or are outstanding on the date of
this Agreement.
4. Revresentations of the School District.
(a) On September 23, 1986, the
electorate of the School District approved a
2.0 mill continuous levy first effective for
the 1986 payable 1987 property taxes. This
levy is hereinafter referred to as the 111986
Levy".
(b) On September 29, 1987, the elec-
torate of the School District approved (i) a
7.0 mill continuous levy first effective for
the 1987 payable 1988 property taxes and (ii)
a continuous additional 6.5 mill levy first
effective for the 1988 payable 1989 property
taxes. These levies are hereinafter
collectively referred to as the 111987 Levies ".
(c) According to the Minnesota
Department of Education, for purposes of the
above - mentioned referendum levies the tax
capacity rate equivalents of 2 mills and 13.5
mills are .02261395 and .15264411,
respectively.
(d) On November 4, 1997, the electorate
of the School District approved a levy
337157.4 3
increase of $68.52 per actual pupil unit,
effective for the 10 years ending with the
taxes payable in 2007, unless earlier reduced
or revoked; however, since the proceeds of
this levy are paid directly to the School
District by the applicable County taxing
authorities, it is not necessary or
appropriate to include said levy or its
proceeds under this Agreement.
5. Payment of Tax Increments to School District. The
City and the School District hereby -agree that, except as
otherwise provided pursuant to paragraph 6 of this Agreement,
tax increments shall be paid to the School District by the HRA
as and to the extent received by the HRA, with respect to the
tax increments relating to the 1998 payable 1999 property
taxes, as follows:
(a) TIF District Nos. 12. 13 and 16.
Since TIF District Nos. 12, 13 and 16 were
requested for certification after May 1, 1988,
the Subdivision does not apply to those
Districts, and no tax increments from those
Districts attributable to the 1986 Levy or the
1987 Levies are payable to the School
District.
(b) TIF District No. 2. Pursuant to
clause b(2) of the Subdivision, the tax
increment from TIF District No. 2 which is
attributable to the 1986 Levy and the 1987
Levies shall be paid to the School District.
(c) TIF District No. 1. Pursuant to
clause b(2) of the Subdivision, the tax
increment from TIF District No. 1 which is
attributable to the 1986 Levy and the 1987
Levies shall be paid to the School District.
6. Further Agreements. Nothing in this Agreement is
intended or shall be applied in such a manner as to violate
the obligations and covenants made by the City or the HRA in
connection with the Tax Increment Obligations, and to the
extent but only to the extent that the application of the
terms of this Agreement would give rise to a violation of said
obligations and covenants, including without limitation, the
default in the timely and full payment of the Tax Increment
Obligations, the applicable tax increments shall be applied
instead in the manner, but only to the extent necessary, to
avoid such default or other violation of said covenants or
obligations. Nothing in this Agreement shall restrict the
337157.4 4
City or the HRA in the exercise of the powers which they may
have relating to the Project or the TIF Districts.
In addition, the City and the School District agree that,
except in each case described in paragraph 5 of this Agreement
where payment of tax increment to the School District is
mandatory pursuant to clause b(1) of the Subdivision, all
other provisions of said paragraph 5 providing for payment of
tax increment to the School District shall be limited to and
shall apply only to such tax increment attributable to the
1998 payable 1999 real estate property taxes, and at the
conclusion of said period, the City and.the School District
agree to review the circumstances and to attempt to negotiate
in good faith such further agreement or agreements as may be
permitted by law and which are acceptable to both the City and
School District with respect to discretionary payments of such
applicable tax increment to the School District.
IN WITNESS WHEREOF, the " City and the School District have
caused this Agreement to be executed by their duly authorized
representatives.
CITY OF FRIDLEY, MINNESOTA
Ma or
City Manager
INDEPENDENT SCHOOL DISTRICT NO. 14
School Board Chair
Superintendent
337157.4 5
EXHIBIT A
Schedule of Tax Increment Financing Districts
Within Housing and Redevelopment
Project No. l of the Fridley HRA
Terminated
337157.4
Independent
Certification
School
TIF District
Name
Date
District No.
1
Center City
5/11/79
14
2
Moore Lake
7/31/81
13/14
3
North Area
5/19/82
11/16
4
Johnson Printing/
Skywood Mall
1/20/84
13/14
5*
Paschke
3/15/84
16
6
Lake Pointe
12/24/85
13
7
Winfield
10/22/86
16
8*
Shorewood
10/24/86
14
9
Onan /Old Central
9/7/89
16
10
Northco Phase III
4/10/90
16
11
Osborne Crossings
1/31/92
16
12
McGlynn Bakeries
3/5/92
14/16
13
Satellite Lane Apts.
6/20/95
14
14
Industrial Equities
5/30/96
16
15
MN Comm. Railway
9/9/97
16
16
57th Avenue
9/9/97
14
Terminated
337157.4
Exhibit B
*.
Subd. 10. Payment to school for referendum le;,.. (a) The provisions of this subdivi-
sion apply to tax ` in crement financing districts and projects for «•hich certification was
requested before May 1. 193S, that are located in a school district in which the voters
have approved nc%v local tax rates or an increase inlocal tax rates after the tae incre-
ment Financing district was certified.
(b)(1) If there are no outstanding bonds on.' lay I. 19SS. to :,. hich increment from
the district is pledged, or if the referendum is approved after \lay 1, 19SS, and there
are no bonds outstanding, at the time the referendum is approved, that -cre issued
before May 1, 1953, the authority must annually pay to the school district an amount
of increment equal to the increment that is attributable to the increase in the local tax
rate under the referendum.' "
(2) 1f clause (1) does not apply, upon approval by a majority vote of the governing
body of the municipality and the school board, the authority must pay to the school
district an amount of increment equal to the increment that is attributable to the
increase in the local tax rate under the referendum.
(c) The amounts of these increments may be expended and must be treated by the
school district in the same manner as provided for t.-:c revenues derived from the refer-
endum )cry approved by the voters. The prop isio; s of this subdivision apply to projects
for which certification 2s requested before, on, and after .august 1, 1979.
AGREEMENT
This Agreement is dated as of January 2, 1999, is
by and between the City of Fridley, Minnesota, and Independent
School District No. 16, and provides as follows:
1. Definitions. As used in this Agreement, the
following terms have the following meanings, respectively:
"City" means the City of '-Fridley,
Minnesota.
"HRA" means the Housing and Redevelopment
Authority in and for the City of Fridley,
Minnesota.
"Project" means Redevelopment Project No.
1 established and operated by the HRA pursuant
to Minnesota Statutes, Sections 469.001
through 469.047.
111985 Revenue Bonds" means the HRA's
$4,070,000 Tax Increment Revenue Bonds of
1985, dated May 1, 1985.
111997 G.O. Bonds" means the City's
$9,575,000 General Obligation Tax Increment
Refunding Bonds, Series 1997A, dated June 1,
1997.
111998 G.O. Bonds" means the City's
$4,185,000 Taxable General Obligation Tax
Increment Bonds, Series 1998B, dated
October 1, 1998.
"Tax Increment obligations" means the
1985 Revenue Bonds, the 1997 G.O. Bonds, the
1998 G.O. Bonds, and any other contractual
obligations of the HRA or the City which were
entered into prior to the date of this
Agreement and which commit the use of any tax
increments from the TIF Districts for
specified purposes, projects,-or parties.
"Tax Increment Act" means Minnesota
Statutes, Sections 469.174 through 469.179.
"TIF Districts" means Tax Increment
Financing District Nos. 1 through 3, 6 and 7,
and 9 through 16 within the Project. The
337158.4
attached Exhibit A contains certification
dates and other information on the TIF
Districts.
"School District" means Independent
School District No. 16, the Spring Lake Park
School District.
"Subdivision" means Minnesota Statutes
Section 469.177, Subdivision 10 (a copy of
which is attached hereto as Exhibit B).
2. Recitals.
(a) In certain cases, the Subdivision
either requires or allows by agreement certain
tax increments attributable to school district
referendum tax levies to be paid- to school
districts.
(b) TIF District Nos. 7, 9, 10, 11, 14
and 15 are located entirely within the
boundaries of the School District, and a
portion of TIF District Nos. 3 and 12 is
located within the boundaries of the School
District.
(c) None of the property within TIF
District Nos. 1, 2, 6 and 13 is located within
the boundaries of the School District.
(d) It is the purpose of this Agreement
to provide for payment of certain tax
increments to the School District pursuant to
and in accordance with the provision of the
Subdivision.
(e) Nothing in this
intended to violate the
agreements heretofore made
application of tax incremen
Districts pursuant to -the
Obligations.
Agreement is
covenants and
respecting the
is from the TIF
Tax Increment
3. Representations of the City.
(a) The Tax Increment Obligations were
issued to finance various activities of the
HRA within the Project.
(b) The 1985 Revenue Bonds are not
general obligations of the City or the HRA.
2
Tax increments from TIF District Nos. 1
through 5 are pledged to the payment of the
1985 Revenue Bonds, and there are no other
sources of funds pledged to the payment
thereof. The final scheduled principal
maturity of the 1985 Revenue Bonds is
February 1, 1999.
(c) The 1997 G.O. Bonds are payable from
tax increments derived from various TIF
Districts, including TIF District Nos. 1, 2,
3, and 6, and the final scheduled principal
maturity of those Bonds is August 1, 2009.
(d) The 1998 G.O. Bonds are payable, to
the extent permitted by applicable law, from
tax increments derived from TIF District Nos.
1 through 13, and the final scheduled maturity
of those Bonds is February 1, 2012.
(e) Portions of the principal of the
1985 Revenue Bonds, the 1997 G.O. Bonds, and
the 1998 G.O. Bonds were outstanding on May 1,
1988, and /or are outstanding on the date of
this Agreement.
4. Renresentations of the School District.
(a) On October 8, 1981, the electorate
of the School District approved a 5.0 mill
continuous levy first effective for the 1981
payable 1982 property taxes. This levy is
hereinafter referred to as the 111981 Levy ".
(b) On February 27, 1986, the electorate
of the School District approved a 6.0 mill
continuous levy first effective for the 1986
payable 1987 property taxes. This levy is
hereinafter referred to as the 111986 Levy ".
(c) According to the Minnesota
Department of Education, for purposes of the
above - mentioned referendum levies the tax
capacity rate equivalents of 5 mills and 6
mills are .05226653 and .06271984,
respectively.
337158.4 3
5. Payment of Tax Increments to School District. The
City and the School District hereby agree that, except as
otherwise provided pursuant to paragraph 6 of this Agreement,
tax increments shall be paid to the School District by the HRA
as and to the extent received by the HRA, with respect to the
tax increments relating to the 1998 payable 1999 property
taxes, as follows:
(a) TIF District Nos. 9, 10, 11, 12. 14
and 15. Since TIF District Nos. 9, 10, 11,
12, 14 and 15 were requested for certification
after May 1, 1988, the Subdivision does not
apply to those Districts, and no tax
increments attributable to the 1981 Levy or
the 1986 Levy from those Districts are payable
to the School District.
(b) TIF District No. 7. Since the 1981
Levy and the 1986 Levy were approved prior to
the date of certification of TIF District No.
7, the Subdivision does not apply to those
Levies with respect to this District, and no
tax increments attributable to said Levies
from this District are payable to the School
District.
(c) TIF District No. 3. Since the 1981
Levy was approved prior to the date of
certification of TIF District No. 3, the
Subdivision does not apply to the 1981 Levy,
and no tax increments attributable to said
Levy from this District are payable to the
School District. Pursuant to clause b(2) of
the Subdivision, the tax increment from TIF
District No. 3 which is attributable to the
1986 Levy shall be paid to the School
District.
6. Further Agreements. Nothing in this Agreement is
intended or shall be applied in such a manner as to violate
the obligations and covenants made by the City or the HRA in
connection with the Tax Increment Obligations, and to the
extent but only to the extent that the application of the
terms of this Agreement would give rise to a violation of said
obligations and covenants, including without limitation, the
default in the timely and full payment of the Tax Increment
Obligations, the applicable tax increments shall be applied
instead in the manner, but only to the extent necessary, to
avoid such default or other violation of said covenants or
obligations. Nothing in this Agreement shall restrict the
City or the HRA in the exercise of the powers which they may
have relating to the Project or the TIF Districts.
337158.4 4
In addition, the City and the School District agree that
the provisions of paragraph 5 providing for payment of tax
increment to the School District shall be limited to and shall
apply only to such tax increment attributable to the 1998
payable 1999 real estate property taxes, and at the conclusion
of said period, the City and the School District agree to
review the circumstances and to attempt to negotiate in good
faith such further agreement or agreements as may be permitted
by law and which are acceptable to both the City and School
District with respect to discretionary payments of such
applicable tax increment to the School District.
IN WITNESS WHEREOF, the City and the School District have
caused this Agreement to be executed by their duly authorized
representatives.
CITY OF FRIDLEY, MINNESOTA
M y r /
City Manager
INDEPENDENT SCHOOL DISTRICT NO. 16
School Board Chair
Superintendent
337158.4 5
EXHIBIT A
Schedule of Tax Increment Financing Districts
Within Housing and Redevelopment
Project No. 1 of the Fridley HRA
:rmianted
Independent
Certification
School
r ict Name
Date
District No.
Center City
5/11/79
14
Moore Lake
7/31/81
13/14
North Area
5/19/82
11/16
Johnson Printing/
Skywood Mall
1/20/84
13/14
Paschke
3/15/84
16
Lake Pointe
12/24/85
13
Winfield
10/22/86
16
Shorewood
10/24/86
14
Onan /Old Central
9/7/89
16
Northco Phase III
4/10/90
16
Osborne Crossings
1/31/92
16
McGlynn Bakeries
3/5/92
14/16
Satellite Lane Apts.
6/20/95
14
Industrial Equities
5/30/96
16
MN Comm. Railway
9/9/97
16
57th Avenue
9/9/97
14
:rmianted
Exhibit B
Subd. 10. PaN men to school for referend�urn levy. (a) Thep rovisions of this subdivi-
sion apply to tax increment financing districts and.*
nd projects for N%hich certification «as
requested before \fay I. 19SS, that are located in a school district in «hick the voters
have approved fie« local tax rates or an increase in local tax rates after the tax incre-
ment financing district was certified.
(b)(1) If there are no outstanding bonds on May 1, 19SS, to %%hick increment from
the district is pledged, or if the referendum is approved after May 1, 19SS. and there
are no bonds outstanding at the time the refcrenduT is approved. that were issued
before May I, 19SS, the authority must annually pay to the school district an amount
of increment equal to the increment that is attributable to the increase in the local tax
rate under the referendum.
(2) If clause (1) does not apply, upon approval by a majority %•o:e of the governing
body of tie municipality and the school board, the authority must pay to the school
district an amount of increment equal to the increment that is attributable to the
increase in the local tax rate under the referendum.
(c) The arnounts of these increments nay be expended aid must be treated by the
school district in the same manner as provided for the revenues derived from the refer-
endum levy approved by the voters. The provisions of this subdivision apply to projects
for %thich certification was requested before, on, and after August 1, 1979.
NEI
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0 M MAIR 0 L
KRASS MONROE, P.A.
A T T O R N E Y S A T L A W
we]
Anoka County Board of Commissioners
Anoka County Government Center
2100 Third Avenue
Anoka, MN 55303
Attention: Dan Erhart, Chair
Phone: (612) 323 -5680
Fax: (612) 323 -5682
Columbia Heights I.S.D. #13
1400 — 49`h Avenue Northeast
Columbia Heights, MN 55421
Attention: James Lindstrom, Chair
Phone: (612) 571 -3004
Fax: (612) 586 -4508
Spring Lake Park I.S.D. #16
8000 Highway 65 Northeast
Spring Lake Park, MN 55432
Attention: Marilyn Forsberg, Chair
Phone: (612) 786 -5570
Fax: (612) 784 -7838
FROM:
VIA FAX AND U.S. MAIL
Anoka- Hennepin I.S.D. #11
11299 Hanson Boulevard
Coon Rapids, MN 55433
Attention: Michael Sullivan, Chair
Phone: (612) 506 -1000
Fax: (612) 506 -1003
Fridley I.S.D. #14
6000 West Moore Lake Drive
Fridley, MN 55432
Attention: Gordon Backlund, Chair
Phone: (612) 571 -6000
Fax: (612) 586 -0234
City of Fridley
6431 - University Avenue Northeast
Fridley, MN 55432
Attention: Barbara Dacy, Community Development Director
DATE: September 10, 1999
RE: Proposed modifications to the Redevelopment Plan for Redevelopment Project
No. 1 and the Tax Increment Financing Plans for Tax Increment Financing
Districts Nos. 1 through 3, 6, 7 and 9 through 16.
---------------------------------------------------------------------------------------------------------------
The City Council of the City of Fridley, Minnesota (the "City ") will hold a public hearing at
7:30 p.m. Monday, October 11, 1999 at City Hall, 6431 University Avenue Northeast,
Fridley, Minnesota, 55432, regarding modifications to the Redevelopment Plan (the
Suite 1100 Southpoint Office Center
1650 West 82nd Street, Minneapolis, Minnesota 55431 -1447
Telephone 612.885.5999 Facsimile 612.885.5969
w A
"Redevelopment Plan ") for Redevelopment Project No. 1 (the "Project Area ") and the Tax
Increment Financing Plans (the "TIF Plans ") for Tax Increment Financing Districts Nos. 1
through 3, 6, 7, and 9 through 16 (the "TIF Districts "), to reflect the enlargement of the
Project Area, increased project costs to be undertaken within the Project Area and the
extension of the duration of Tax Increment Financing District No. 6 ( "TIF District No. 6 ").
Minnesota Statutes Section 469.175, Subdivision 2 requires that prior to the modification of
an existing tax increment financing district, the City must provide to members of the County
and School Boards a 30 day period in which to review. and comment on the fiscal and
economic implications of the modified tax increment financing district.
The City proposes to modify the Redevelopment Plan for the Project Area and the TIF Plans
for the TIF Districts as provided below:
1. To enlarge the Project Area to reflect current development goals of the Housing and
Redevelopment Authority, including the Scattered Site Housing Program;
2. To increase the project costs to be undertaken within the Project Area to provide
consistency with the tax increment reporting requirements of the Office of the State Auditor
and the new expenditures to be undertaken within TIF District No. 6 relating to the
Medtronic development; and
3. To extend the duration of TIF District No. 6, as provided by special law adopted as
Laws of Minnesota 1999, Chapter 243, Article 10, Section 23.
No additional property within the City will be included within a new or existing tax
increment district as a result of the proposed modifications.
Enclosed for your review is a draft of the proposed Redevelopment Plan for the Project Area,
including Exhibit I -C, outlining the amended and restated tax increment budget for the
respective TIF Districts, as well as a draft of the proposed TIF Plan for TIF District No. 6.
If you have any comments or questions, please direct them to my office at City Hall. My
direct dial number is (612) 572 -3590.
G: \WPDATA\F\FRIDLEY\38 \TIF\NOTICE TO COUNTY AND SCHOOL DISTRICTS.DOC
KRASS MONROE, P.A.
ATTORNEYS AT LAW
■ Pamela Frantum
Emailpamt@krassmonroe.com
www.krassmonroe.com
Direct Dial (612) 8854382
MEMORANDUM
To: City of Fridley
Attn: Barbara Dacy, Community Development Director
Julie Vogel, Accountant
Ehlers & Associates, Inc.
Attn: Shelly Eldridge, Associate Financial Advisor
Sid Inman, Vice President
From: Pamela Frantum, Development An
James R. Casserly, Esq.
Date: September 13, 1999
Re: Tax Increment Budget Modifications
Our File No. 9571 -38
Enclosed please find a copy of Exhibit I -C to the Redevelopment Plan for Redevelopment Project
No. 1, which is the proposed amended and restated budget for the underlying Tax Increment
Financing Districts.
We have also enclosed an additional schedule entitled "Working Budget" which sets out the
budget for each district in more detail. We derived the budget amounts as follows:
1. The "Cumulative Budget Amount," "Expended thru 1998" and "(Deficit) or
Surplus" columns were derived from the 1998 Authority reports to the Office of the State Auditor.
2. The first number in the upper right hand corner for each district's table is a
projection as to the amount of additional tax increment revenues which are expected to be
generated over the remaining life of each respective district. This number was determined based
upon the expected tax increment receipts in 1999 with a 2 percent inflation rate plus the increment
to be generated from new development coming on -line.
SUITE 1100 SOUTHPOINT OFFICE CENTER • 1650 WEST 82ND STREET • BLOOMINGTON, MINNESOTA 55431 -1447
TELEPHONE 6121885 -5999 • FACSIMILE 6121885 -5969
3. The second number in the upper right hand corner for each district's table is the
sum of the tax increment revenues expected to be received and the tax increment revenues which
had been expended through 1998, resulting in the total tax increment revenue expected to be
generated from within each respective district.
4. The "Additional Budget Amount" was calculated to first assure that any deficits
through 1998 had been covered, as well as those expenditures expected to occur in 1999 from
balances in the tax increment accounts for Tax Increment Financing Districts Nos. 2 and 3. After
deficits and anticipated expenditures were covered, we broke down the remaining available tax
increment revenue within each district, mainly by allocating expenditures to either land/building
acquisition or site improvements /preparation. We also adjusted the administrative costs for each
district at the statutory maximum. Under the Tax Increment Act, administrative costs are limited
to a percentage of the tax increment budget or a percentage of the total tax increment revenue
received, whichever is less.
5. The "Total Budget" column is the total of the Cumulative Budget Amount column
and the Additional Budget Amount column. You will notice the total for each budget is very
close to the total tax increment revenue generated by each district.
The categories under the "Use of Funds" were used to reflect those categories Shelly had
used in the reports to the Office of the State Auditor. This will make the tax increment budgets
more consistent with the State Auditor reports, and thereby more "user friendly" for preparing
future State Auditor reports.
Finally, with respect to Tax Increment Financing District No. 6, we have enclosed a copy
of the infrastructure costs estimates for the Medtronic development. We had to do some
estimating with respect to the breakdown of costs for Phases 2 and 3, but otherwise, again we
tried to make the budget consistent with the reports submitted to the State Auditor.
Exhibit I -C, showing the Cumulative Budget Amount, the Additional Budget Amount and
the Total Budget, rather than the more detailed Working Budget was submitted to the County and
School Districts on Friday, September 10, 1999, along with the proposed Modified
Redevelopment Plan and Modified Tax Increment Financing Plan for Tax Increment Financing
District No. 6.
We would appreciate your comments on these proposed budgets. If you have any
questions with respect to the enclosed, please let us know.
PJF/
Encl.
GAWPDATA\FIFRIDLEY\38\C0R\PF TO CITY - EHLERS RE BUDGET.DOC
• Page 2
DRAFT
SECTION I
MODIFIED REDEVELOPMENT PLAN FOR
REDEVELOPMENT PROJECT NO.1
Subsection 1.1. Definitions. The terms defined below shall, for purposes of this
Modified Redevelopment Plan and attached Tax Increment Financing Plans, have the meanings
herein specified, unless the context otherwise specifically requires:
"Authority" means the Housing and Redevelopment Authority of the City of Fridley.
"CC" means the City of Fridley, a municipal corporation and political subdivision of the
State of Minnesota, subject to the legal requirements of the City's Charter and in Minnesota
Statutes, Chapter 410 relating to Home Rule Charter Cities.
"Comprehensive Plan" means the City's comprehensive plan submitted to the
Metropolitan Council pursuant to Minnesota Statutes, Section 473.173, which contains the
objectives, policies, standards and programs to guide public and private land use, development,
redevelopment and preservation for all lands and water within the City through 1990.
"Council" means the City Council of the City.
"County" means the county of Anoka, Minnesota.
"Housina and Redevelopment Act" means the statutory provisions of Minnesota Statutes,
Sections 469.001 through 469.047, inclusive, as amended and supplemented from time to time.
"Housing and Redevelopment Authority" means a housing and redevelopment authority
created or authorized to be created by Minnesota Statutes, Sections 469.001 to 469.047.
"Master Plan" means the Modified Redevelopment Plan for Redevelopment Project No. 1
and the Tax Increment Financing Plans for all Tax Increment Financing Districts within.
"Modified Redevelopment Plan" means the plan approved and adopted by the Authority
and the City for the Redevelopment Plan as defined in Minnesota Statutes, Section 469.002,
Subdivision 16.
1 -1
"Project" means Redevelopment Project No. 1, the public improvements and facilities to
be constructed within Redevelopment Project No. 1, as more fully described in
Section I, Subsection 1.9. of the Modified Redevelopment Plan.
"Project Area" means the real property located within the geographic boundaries of
Redevelopment Project No. 1.
"Public Costs" means the costs eligible to be financed by tax increments under Minnesota
Statutes. Section 469.176, Subdivision 4.
"Redevelopment Project No. 1" means the Authority's Redevelopment Project as defined
in Minnesota Statutes, Section 469.002, Subdivision 14.
"Reserve Pro ram" means funding of a reserve program as authorized by Minnesota
Statutes. Section 469.176, Subdivision 4.
"Special Assessment Bonds" means the special assessment bonds issued by the City to
finance certain public improvements within Redevelopment Project No. 1 pursuant to the
Modified Redevelopment Plan. The term "Special Assessment Bonds" shall also include any
obligations issued to refund the Special Assessment Bonds.
"State" means the State of Minnesota.
"Tax Increment Bonds" means the general obligation tax increment bonds to be issued by
the City to finance the public costs associated with Redevelopment Project No. 1 as stated in the
Modified Redevelopment Plan and in the Tax Increment Financing Plans for the Tax Increment
Financing Districts within Redevelopment Project No. 1. The term "Tax Increment Bonds" shall
also include any obligations issued to refund the Tax Increment Bonds.
"Tax Increment Financing Act" means the statutory provisions of Minnesota Statutes.
Sections 469.174 through 469.179, inclusive, as amended and supplemented from time to time.
"Tax Increment Financine Agreement" means the statutorily required document pursuant
to Minnesota Statutes, Sections 469.042, Subdivision 4, and 469.178, Subdivision 2, constituting
a pledge for the payment of bonds issued by the City by written agreement on behalf of the
Authority and filed with the County Auditor.
1 -2
"Tax Increment Financing District" means any tax increment financing district presently
established or to be established in the future in Redevelopment Project No. 1."
"Tax Increment Financing Plan" means the respective Tax Increment Financing Plan for
each Tax Increment Financing District located within the Project Area.
(Subdivision 1.1. was adopted as a modification to the Redevelopment Plan on August
22, 1983.)
Subsection 1.2. Introduction. The City of Fridley is located on the east bank of the
Mississippi River just north of Minneapolis. Including Minneapolis, Fridley borders seven
municipalities: Columbia Heights, Mounds View, New Brighton, Spring Lake Park, Blaine, and
Coon Rapids. Fridley is located in the corridor of Anoka County and serves as the passageway
between Minneapolis and the North Central suburbs, and is an important center of development
in Anoka County.
Fridley is a first ring Minneapolis suburb and as such developed initially as a "bedroom
community" with only neighborhood convenience centers along major access routes. Fridley
failed to develop a commercial concentration because no areas were planned that would support
a large diversified center. Consequently, Fridley is served by regional centers outside its
boundaries and is served with scattered and strip commercial developments. Center City (Tax
Increment Financing District No. 1) is such a strip commercial development.
The City of Fridley has a long standing concern with its commercial development.
Immediately after the destructive tornado of 1965, the City began an effort to redevelop. This
1965 redevelopment effort was not implemented. Since that time, very little development has
taken place within the commercial area. The important aspect of recalling this 1965 effort is to
illustrate that the redevelopment project now being undertaken is an outgrowth of many past
decisions and is not a reaction to immediate problems.
Subsection 1.3. Statement and Finding of Public Purpose. The Commissioners (the
"Commissioners ") of the Housing and Redevelopment Authority (the "Authority") in and for the
City of Fridley, Minnesota (the "City") have determined that there is a need for development and
redevelopment within the corporate limits of the City to provide employment opportunities, to
improve the tax base and to improve the general economy of the City and the State of Minnesota.
It is found that there are certain parcels of property within the City which are potentially more
useful, productive and valuable than is being realized under existing conditions, and, therefore,
are not contributing to the tax base of the City to their full potential. The Commissioners have
determined that said parcels of property are deemed to be deteriorated areas, which means any
area, including slum areas with buildings or improvements which, by reason of dilapidation,
obsolescence, overcrowding, faulty arrangement or design, lack of ventilation, light, and sanitary
1 -3
facilities, excessive land coverage or deleterious land use or obsolete layout, or any combination
of these or other factors are detrimental to the safely, health, morals, or welfare of the
community, pursuant to Minnesota Statutes, Section 469.002, Subdivision 11.
SPECIFIC FINDINGS FOR REDEVELOPMENT PROJECT NO. 1, INCLUDED
WITHIN TAX INCREMENT FINANCING DISTRICT NO. 1 (CENTER CITY):
1. There is a severe traffic safety problem at two major traffic intersections within
Center City. University Avenue at the intersection" of Mississippi Street has an
average daily traffic count of 29,485 vehicles and Mississippi Street at the same
intersection has an average daily traffic count of 8,500 vehicles. At both the
University Avenue and 61st Street intersections, the Fridley Police and Safety
Department has recorded an unusually high incident of accidents to both property
and life.
2. The Center City area due to faulty planning has land areas of vacant land that are
stagnant and under- utilized. Specifically, that land lying north of 10,000 Auto
Parts has not been commercially developed or intensely developed due to severe
access and traffic problems, small land area and its location abutting a single
family residential area. This land area has had several proposals for development
but the above three factors have caused each proposal to fail. Additionally, vacant
land lying south of the Rice Creek Shopping Center is vacant due to poor traffic
circulation and faulty planning that has severely limited frontage exposure and
access, and its location abutting a residential neighborhood.
3. Existing development of the Christianson Shopping Center is blighted and
deteriorated in the following areas. The Center has insufficient parking by both
City code and practical experience. The parking is poorly designed and must back
into a highly traveled service road. The Center is in general disrepair, and lacks
land area for sound commercial expansion. This Center occupies a prime
commercial site on the southeast intersection of University and Mississippi. This
prime area is poorly utilized, poorly designed, in general disrepair, and causes
poor commercial land utilization in a prime community location.
4. Immediately adjacent to the Christianson Shopping Center is a warehouse land
use. This warehouse is owned and operated by Northwestern Bell Telephone
Company. The warehouse use requires outside storage of supplies and equipment
and utilizes a large land area within a prime commercial and employment area of
the City. This use also contributes to a general appearance of blight and unkempt
conditions.
5. The Fridley Shopping Center is also blighted by the fact of poor design, poor land
subdivision and zoning practices. Adjacent to the Fridley Shopping Center are
1 -4
two single family homes. This site restriction hampers orderly and economic
expansion of the commercial area. Sufficient land area for modem day
commercial expansion is limited, severe conflicting land uses are present, and
these factors lead to under- utilized and poorly utilized commercial land
development within a prime area of the City.
6. Holly Center located in the northwest quadrant of University and Mississippi
intersection is blighted and suffers from a safety hazard due to poor traffic design.
This Center, according to a business survey conducted in March, 1979, is
financially harmed due to traffic hazards and accessibility. The survey showed
over 90 percent of the businesses believe that poor traffic circulation has
negatively harmed the economic viability of this Center. Further, Holly Center is
poorly designed in terms of traffic circulation within its own parking lot and
egress and ingress onto City streets. This traffic situation and development design
is a safety hazard to property and persons as documented by traffic accident
counts and causes an under - utilization of prime commercial land in the City.
7. In a business survey conducted during March, 1979, the business respondents feel,
as does the City, that Center City is blighted by the fact of unkempt conditions,
high turnover of operating businesses and lack of pedestrian walking ways. These
conditions have been verified through photographs and a business survey. These
conditions cause one of the few prime commercial areas of the City to be under-
utilized, and to restrict employment opportunities within the City.
SPECIFIC FINDINGS FOR REDEVELOPMENT PROJECT NO. 1, INCLUDED
WITHIN TAX INCREMENT FINANCING DISTRICT NO.2 (MOORE LAKE):
AREA 1:
1. There is a severe traffic safety problem at Highway 65 and Rice Creek Road.
This intersection is serviced by inadequate frontage roads to the commercial strip
centers on both sides of the highway. This intersection presently carries almost
35,000 vehicles per day and generates a great deal of cross traffic flow through the
service drives. The Public Safety Department has recorded an unusually high
incident of accidents to both life and property.
2. The Shorewood Shopping Center, Sears Building and Shorewood Inn, is blighted
and suffers from safety hazards due to poor traffic design. The Center is serviced
by the Rice Creek Road - Highway 65 intersection and service roads. This creates
turning problems within the intersection stacking area in order to enter the parking
facilities. Lack of parking areas at the Shorewood Inn creates congestion on the
service road. Further, Shorewood Shopping Center is poorly designed in terms of
traffic circulation within its own parking lot and egress and ingress onto City
streets.
1 -5
3. The land area south and east of the shopping center is largely vacant and under-
utilized due to poor soil conditions. This area is the drainage inlet to Moore Lake
which is primarily unstable soil for development. This is the primary purpose that
this prime location property is not developed. This property is blighted because
of the cost to make this land developable. In addition to the soil problems, the
City will be initiating a restoration project for Moore Lake which will assess this
property with necessary costs of the project.
4. The shopping area to the west of Highway 65 is blighted due to inadequate
design, poor land subdivision and zoning practices. There are tracts of vacant
land which are unaccessible due to poor layout of strip commercial. The existing
traffic patterns create hazardous conditions due to poor parking egress and street
design. The vacant land requires substantial land costs due to poor soil
conditions.
1. This area is primarily under- utilized residential which is blighted due to poor
planning, subdivision and zoning practices. The existing structures are small
structures on large land tracts. Based on present land subdivision regulation,
approximately 80% of the land area would be vacant.
2. The land area just north of Rice Creek Road contains large areas of poor soil
conditions as part of the Moore Lake Drainage Basin. Substantial expenditures
will be needed in this area to allow for developments.
3. There also is a substantial number of structures which are blighted and require
major rehabilitation or removal due to unsafe housing conditions.
AREA 3:
1. There is a severe traffic safety problem at Highway 65 and Old Central. This
intersection presently carries approximately 44,000 vehicles per day and has a
confluence of 4 separate collectors (Highway 65, Central Avenue, Moore Lake
Drive, Hathaway Lane) and is considered a safety hazard due to poor traffic
design. The Public Safety Department has recorded an unusually high incident of
accidents to both life and property.
2. The area adjacent to Hillwind Road is a large tract of undeveloped land which is
blighted due to substantial development costs to correct poor soil conditions. This
area is also part of the Moore Lake Drainage Basin and will require renovation as
part of the Moore Lake Restoration Project.
IWO
3. The area west of Highway 65 is blighted due to under- utilization of prime
commercial land. The area is serviced by poor access through the intersection
described in #1 above, which requires substantial modification. This area needs
public assistance to encourage development because the present land use has
resulted in a stagnant and unproductive condition of land. This land has the
potential for contributing to the economic development and general welfare of the
City.
SPECIFIC FINDINGS FOR REDEVELOPMENT PROJECT NO. 1, INCLUDED
WITHIN TAX INCREMENT FINANCING DISTRICT NO.3 (NORTH AREA):
This Tax Increment Financing District is eligible as a publicly assisted redevelopment
district because the district is blighted by virtue of conditions of unusual and difficult physical
characteristics of the ground which has left the area primarily undeveloped. The entire district is
subject to unusually high water table levels with unstable soil conditions which has prevented the
normal development of the land by private enterprise and has resulted in a stagnant and
unproductive condition of this prime location property, potentially useful and valuable for
contributing to the public health, safety and general welfare.
The Commissioners have further determined that the establishment of this redevelopment
project will provide the Authority and the City with the ability to achieve certain public purpose
goals not otherwise obtainable in the foreseeable future without the intervention of the Authority
and the City in the normal development process. The public purpose goals include: the
restoration and improvement of the tax base and the tax revenue generating capacity of the
redevelopment project; increased employment opportunities; the realization of comprehensive
planning goals; the acquisition of blighted, undeveloped or open areas and land or space which is
vacant, unused, underused or inappropriately used which has prevented normal development of
the land by private enterprise and has resulted in a stagnant and unproductive condition of land
potentially useful and valuable, for the purpose of removing, preventing or reducing blight,
blighting factors, or the causes of blight; the elimination of unsafe traffic conditions and the
reduction of traffic hazards; and the revitalization of the property within the redevelopment
project to create an attractive, comfortable, safe, convenient and efficient area for industrial,
commercial and related uses.
Subsection 1.4. Statutory Authori . THE HOUSING AND REDEVELOPMENT ACT.
The Authority has determined that it is desirable and in the public interest to designate a specific
area within the corporate limits of the City as Redevelopment Project No. 1 ( "Redevelopment
Project No. 1 "), and to establish, develop and administer a redevelopment plan (the
"Redevelopment Plan") for Redevelopment Project No. 1, pursuant to the provisions of
Minnesota Statutes, Sections 469.001 through 469.047, inclusive, as amended and supplemented
from time to time (the "Housing and Redevelopment Act ").
1 -7
The financing of certain public improvements to be made within Redevelopment Project
No. 1 shall be accomplished, in part, through the use of funds which may be available to the
Authority from any source, including funds furnished to the Authority by the City which may
include the proceeds of bonds issued by the City, pursuant to Section 469.041(9) of the Housing
and Redevelopment Act, to pay all or any part of the activities of the Authority authorized by
Minnesota Statutes, Section 469.012, Subdivision 1, Clause 7.
THE MINNESOTA TAX INCREMENT FINANCING ACT. Minnesota Statutes,
Sections 469.174 through 469.179, inclusive, as amended and supplemented from time to time
(the "Tax Increment Financing Act "), provides the procedure f6r the establishment of tax
increment financing districts for the use of tax increment financing authorized by the Housing
and Redevelopment Act described above for the funding of qualified public activities and
improvements.
The Tax Increment Financing Act authorizes the establishment within any tax increment
financing district within Redevelopment Project No. 1 of one or more of the following types of
tax increment financing districts: (i) a redevelopment district; (ii) a housing district; (iii) an
economic development district; and/or (iv) a soils correction district. The requirements for
establishing each of the above are set forth in Section 469.174, Subdivisions 10, 11 and 12,
respectively, of the Tax Increment Financing Act. The Tax Increment Financing Act also
designates for each of the above types of tax increment financing districts the limitations and
requirements that apply to activities and public improvements which can be financed for each
type of tax increment financing district.
The modification of each Tax Increment Financing Plan shall be governed by the
requirements of Section 469.175, Subdivision 4, of the Tax Increment Financing Act, and the
City Council, by this Modified Redevelopment Plan, hereby establishes the last subsection of
each Tax Increment Financing Plan for each Tax Increment Financing District as the subsection
in which any modifications to the Tax Increment Financing Plan are stated. Appendix B of this
Modified Redevelopment Plan is hereby designated as the place where copies of each resolution
passed by the Council modifying in any manner the Redevelopment Plan or any Tax Increment
Financing Plan shall be located and shall become a part of this Modified Redevelopment Plan.
Subsection 1.5. Statement of Obiectives. The Authority and the City seek to achieve the
following objectives through the implementation of the Modified Redevelopment Plan:
a. To encourage, promote and publicly assist new commercial or housing
developments through the use of tax increment financing on undeveloped and
under- utilized property within Redevelopment Project No. 1. Such assistance
may include land "write down" costs, land acquisition and parcel assemblage to
provide large land tracts for development, property acquisition and clearance for
new developments, property acquisition and clearance of non - conforming land
uses that are near new developments, financial assistance in the provision of
1 -8
public utilities, financial assistance for the provision of necessary site
improvements, and such other assistance that is in conformance with State law;
b. To increase employment opportunities and employment alternatives
through an active program of commercial expansion and development;
C. To designate through official land use controls, areas best suited for
commercial, residential and industrial development;
d. To increase the tax base of the City through- cooperation and assistance to
commercial and housing developers with consideration of full utilization of
under- utilized residential, commercial and industrial properties;
e. To provide a plan and continued planning for
orderly commercial expansion which allows for the most economical utilization
of municipal services;
f. To provide development and redevelopment opportunities that will permit
a variety of retail office, housing and other commercial opportunities throughout
Redevelopment Project No. 1 which would effectively serve the housing and
commercial needs of the City;
g. To maintain a healthy and safe environment throughout Redevelopment
Project No. 1;
h. To provide various forms of financial assistance that are deemed
appropriate, legal and acceptable to private enterprise in their development efforts
such as industrial revenue bonding, tax exempt municipal revenue bonds, or state
and federal loans and grant monies;
i. To promote sound land use development procedures including area design
standards, landscaping, and lighting standards, traffic circulation and parking
standards, architectural review of new developments, and such other standards
that may be developed.
j. To continually update development and redevelopment plans, design
standards and other official controls that will promote sound development,
redevelopment, health and safety;
k. To establish a specific land redevelopment parcel plan as the
redevelopment efforts are begun;
1. To stimulate private investment to stabilize and properly balance the
housing supply.
1 -9
Subsection 1.6. Boundaries of Redevelopment Project No. 1. The property which
comprises Redevelopment Project No. 1 is legally described in Exhibit I -A of the Modified
Redevelopment Plan.
Subsection 1.7. Boundary Maus of Redevelopment Project No. 1. Maps showing the
boundaries of Redevelopment Project No. 1 are attached hereto as Exhibit I -B.
Subsection 1.8. Parcels to be Acquired in Whole or in Part Within Redevelopment
Project No. 1. It has been determined by the Authority and the -City that certain property
acquisitions may be necessary within Redevelopment Project No. 1. The properties to be
acquired will be determined on an individual basis with the development of any Tax Increment
Financing Districts within Redevelopment Project No. 1 during the redevelopment process. The
redevelopment process will include responding to private developers' proposals for land needs,
making parcels available for development that is of sufficient size to accommodate development,
the elimination of substandard structures, the removal of blighting conditions, the removal of
non - conforming land uses when such removal meets the goals and objectives of the Modified
Redevelopment Plan for Redevelopment Project No. 1 and such other factors that are necessary
to accomplish the overall redevelopment goals of Redevelopment Project No. 1.
The Modified Redevelopment Plan for Redevelopment Project No. 1 envisions and
establishes a need for property acquisition. The Modified Redevelopment Plan does not
establish specific properties, but rather allows for that determination to be made by the Authority
during the implementation of the Modified Redevelopment Plan. The determination of
properties to be acquired shall be based on the following goals or such other goals that may be
added to this Modified Redevelopment Plan:
1. Structures that are determined by the City's Building Inspector to be
structurally substandard;
2. Land and/or structures that will permit land development and
redevelopment parcels to be large enough to accommodate new
developments and corresponding parking requirements;
3. Land and/or structures that are needed to make necessary public
improvements in a proper relationship to the projected project;
4. Properties that are non - conforming land uses when such an acquisition
will benefit the overall redevelopment goals.
This land and property acquisition plan is intended to give flexibility of decision making to the
Authority and the City during the implementation phase of the Modified Redevelopment Plan for
Redevelopment Project No. 1. The land acquisition plan is intended to accomplish the overall
goals of redeveloping the property in and adjacent to Redevelopment Project No. 1 into a viable
1 -10
living/shopping /working area of the City. It is the intent of the Authority that no property shall
be acquired until a Tax Increment Financing Plan has been approved and adopted.
Subsection 1.9. Estimated Public Improvements Costs and Supportive Data. The
estimated costs of the public improvements to be made within Redevelopment Project No. 1 and
financed by tax increments derived from tax increment financing districts within Redevelopment
Project No. 1 are as follows:
TAX INCREMENT FINANCING DISTRICT NO. 1
(CENTER CITY)
$625,000 GENERAL OBLIGATION TAX INCREMENT REDEVELOPMENT BONDS OF
1982, DATED JUNE 21, 1982
Contract Costs $ 588,000
Legal Fiscal and Administrative 25,000
Allowance for Bond Discount 12,000
TOTAL BOND ISSUE $ 625,000
$600,000 GENERAL OBLIGATION TAX INCREMENT REDEVELOPMENT BONDS OF
1982, SERIES II (HRA- CENTER CITY OFFICE PROJECT), DATED
SEPTEMBER 27, 1982
Land Acquisition and Cost $ 498,858
Legal, Fiscal, Administrative Costs 12,000
Less: 1984 Tax Increment Receipt (23,033)
Plus: Capitalized Debt Service
(Offset by Investment Income 100,425
Discount Allowance 11,750
TOTAL BOND ISSUE $ 600,000
1 -11
$2,200,000 GENERAL OBLIGATION TAX INCREMENT REDEVELOPMENT BONDS OF
1981, DATED DECEMBER 8, 1980
Land Acquisition Costs $2,123,863
Legal, Fiscal, Administrative Costs 33,000
Allowance for Bond Discount 43,137
TOTAL BOND ISSUE -- $2,200,000
TAX INCREMENT FINANCING DISTRICT NO.2
(MOORE LAKE)
To date General Obligation Tax Increment Bonds have not been issued for Tax Increment
Financing District No. 2.
Without excluding any other type of available financing, it is the general intent that Tax
Increment Financing District No. 2 (Moore Lake) be financed by the use of Tax Increment
Financing, General Obligation Bonds or Tax Increment Financing Revenue Bonds, which shall
require subsequent City Council approval pursuant to Minnesota Statutes, Section 273.71. The
Authority and the City shall insure that all aspects of this project are in compliance with state law.
The actual summary of projected expenditures and revenues as of yet cannot be specifically
determined. Projected expenditures cannot be specifically determined until final determinations are
made, separately by project, in the Redevelopment Plan. When final decisions are made regarding
property acquisitions, the Authority and the City shall determine specific revenue and expenditure
projections for that phase of the Redevelopment Plan.
1 -12
TAX INCREMENT FINANCING DISTRICT NO.3
(NORTH AREA)
Estimated Cost of Phase I
Property Preparation Assistance $ 985,000
Public Improvement
Street/Utility
Drainage District Improvement 100,000
Administration 54,250
10% Overhead 113.925
Estimated Cost of Phase I $1,253,175
Project Bonded Indebtedness $1,253,175
Capitalized Interest Costs 600.000
Total Bonded Indebtedness $1,853,175
Most Recent Assessed Value/Phase I $ 164,360
Estimated Captured Assessed Value of
Phase I at Project Completion $3,908,853
Phase II III IV and V Financing Plan
Without excluding any other type of available financing, it is the general intent that Phase II,
III, IV and V shall be financed by use of tax increment funds from the entire district. The actual
summary of specified expenditures for Phases II through V as yet cannot be specifically determined
until final decisions are made by the Housing and Redevelopment Authority and the City Council
regarding the specific development for each phase. When final determination is made on property
acquisition, the Housing and Redevelopment Authority shall determine specific revenue and
expenditure projections for that phase of the tax increment financing plan and process it as a
modification to the plan.
1 -13
The following is the general development for each of Phases II through V with an indication
of the most recent assessed valuation. Included also is a very general anticipated captured assessed
value at the completion of all phases in the district.
It is the intent of the Housing and Redevelopment Authority to promote
industrial/commercial development in Phases II, III, IV and V, which will be consistent to existing
development in the general area and the overall City Comprehensive Plan.
Public improvements to these phases will include soil correction work, drainage district
improvement costs, intersection and street improvement to adequately handle traffic general, utility
and public right -of -way improvements.
(AS MODIFIED NOVEMBER 18, 1985)
Additional public improvement costs to be incurred within Redevelopment Project No. 1 and
to be financed by tax increments derived from all tax increment financing districts within
Redevelopment Project No. 1 are estimated to be:
Land Acquisition $3,500,000
Streets, Intersections, Walkways and Lighting 4,100,000
Parking Facilities 1,500,000
Soil Correction, Drainage and Landscaping 2,300,000
Engineering, Design and Planning,
Legal, Fiscal, Bond Issuance
Expenses and Discount and
Miscellaneous 1,050,000
Contingency 300,000
Bond Debt Service Reserves 2,612,000
Capitalized Bond Interest 3,138,000
Total Project Costs $18,500,000
Maximum Bonded Indebtedness $18,500,000
(AS MODIFIED SEPTEMBER 22, 1986)
Additional public improvement costs to be incurred within Redevelopment Project No. 1 and
to be financed by tax increments derived from all tax increment financing districts within
Redevelopment Project No. 1 are estimated to be:
Land Acquisition/Writedown Costs
1 -14
$ 100,000
(AS MODIFIED DECEMBER 22, 1986.)
Additional public improvement costs to be incurred within Redevelopment Project No. 1 and
to be financed by tax increments derived from all tax increment financing districts within
Redevelopment Project No. 1 are estimated to be:
University Avenue /84th Street Housing Project:
Land Acquisition /Improvement/Writedown Costs $ 850,000
Capitalized Interest 290,091
Bond Discount 23,330
Issuance Costs and Contingency 26,579
Total Additional Project Costs
and/or Bonded Indebtedness $1,190,000
Maximum Additional Administrative Costs $ 94,000
AS MODIFIED JUNE 26, 1989
TAX INCREMENT FINANCING DISTRICT NO. 9
(OLD CENTRAL /ONAN)
Land Acquisition
$5,026,000
Storm Sewer
525,000
Sanitary Sewer
307,000
Street Improvements
435,000
Soil Correction/Site Preparation
1,600,000
Ponding
310,000
Public Trails/Recreational
Improvements /Open Space
325,000
Parking
450,000
Street Lighting
200,000
Demolition
500,000
Relocation
500,000
Architectural/Engineering Fees
500,000
Administration Fees
400,000
Total $11,078,000
Maximum Estimated Total
Bonded Indebtedness* $14,401,400
*This amount includes capitalized interest in an amount sufficient to pay interest on the
bonds from the date of issue until the date of collection of sufficient tax increment revenues to meet
scheduled interest payments when due.
1 -15
AS MODIFIED FEBRUARY 26, 1990
TAX INCREMENT FINANCING DISTRICT NO. 10
(NORTHCO PHASE III)
Soils Correction $ 70,000
Administration Fees 4,967
Intersection Improvements to University Avenue
Frontage Road and 73rd Avenue 20,000
Total $ 94,967
Maximum Total Estimated
Bonded Indebtedness* $ 94,967
*This amount includes capitalized interest in an amount sufficient to pay interest on the
bonds from the date of issue until the date of collection of sufficient tax increment revenues to meet
scheduled interest payments when due.
AS MODIFIED JULY 1, 1991
TAX INCREMENT FINANCING DISTRICT NO. 11
(UNIVERSITY /OSBORNE SITE)
Acquisition $ 200,000
Demolition 40,000
Site Cleanup/Preparation and Utility Relocation 200,000
Street Modification
Ingress/Egress 60,000
Professional Fees 15,000
Administrative Fees 72.000
Total $ 587,000
Maximum Estimated
Total Bonded Indebtedness* $ 737,000
*This amount includes capitalized interest in an amount sufficient to pay interest on the
bonds from the date of issue until the date of collection of sufficient tax increment revenues to meet
scheduled interest payments when due.
1 -16
AS MODIFIED JANUARY 6, 1992
TAX INCREMENT FINANCING DISTRICT NO. 12
(MCGLYNN BAKERIES)
Acquisition
Ponding and Drainage
Professional Fees
Administrative Fees
Total
Maximum Estimated
Total Bonded Indebtedness*
$1,050,000
25,000
15,000
90.000
$1,180,000
$1,125,000
*This amount includes capitalized interest in an amount sufficient to pay interest on the
bonds from the date of issue until the date of collection of sufficient tax increment revenues to meet
scheduled interest payments when due.
AS MODIFIED JULY 6, 1992
(SHEET METAL CONNECTORS)
Acquisition $ 175,000
Soil Correction, Drainage and Landscaping 50,000
Design, Planning, Administrative Fees,
Professional Fees and Contingency 25,000
Total
Land Acquisition
Administrative Fees
Total
$ 250,000
AS MODIFIED SEPTEMBER 27, 1993
(ROSENBLUM)
Maximum Estimated
Total Bonded Indebtedness*
$ 250,000
20.000
$ 270,000
$ 315,000
*This amount includes capitalized interest in an amount sufficient to pay interest on the
bonds from the date of issue until the date of collection of sufficient tax increment revenues to meet
scheduled interest payments when due.
1 -17
AS MODIFIED FEBRUARY 13, 1995
TAX INCREMENT FINANCING DISTRICT NO. 13
(SATELLITE LANE APARTMENTS)
Land Acquisition
Relocation
Demolition
Public Improvements
Site Improvements
Issuance Costs
Contingency
Administrative Expenses
Total
Maximum Estimated Bonded Indebtedness *
$2,500,000
300,000
200,000
25,000
25,000
20,000
250,000
95,000
$3,415,000
$4,098,000
* This amount includes capitalized interest in an amount sufficient to pay interest on the bonds from
the date of issue until the date of collection of sufficient tax increment revenues to meet scheduled
interest payments when due.
AS MODIFIED DECEMBER 11, 1995
TAX INCREMENT FINANCING DISTRICT NO. 14
(FRIDLEY BUSINESS CENTER)
Storm Sewer Relocation
Land Acquisition
Soil Corrections including removal of poor
soils, import of clean fill, construction
of retention ponds and construction of
5 foot retaining wall
Administrative and Program Expense
Total
Maximum Estimated Bonded Indebtedness *
$ 44,000
$ 170,000
$ 541,000
$ 125,000
G. ::1 111
$1,100,000
* This amount includes capitalized interest in an amount sufficient to pay interest on the bonds from
the date of issue until the date of collection of sufficient tax increment revenues to meet scheduled
interest payments when due.
"Mt]
AS MODIFIED AUGUST 12, 1996
Additional public improvement costs to be incurred within Redevelopment Project No. 1 and to be
financed by Tax increments derived from all tax increment financing districts within Redevelopment
Project No. 1 are estimated to be:
Land Acquisition/Site Preparation
$150,000
AS MODIFIED APRIL 28, 1997
TAX INCREMENT FINANCING DISTRICT NO. 15
(MINNESOTA COMMERCIAL RAILWAY CO.)
Acquisition
Site Worl�, including Soil Corrections and
Site Preparation for unusual weight
bearing supports
Public Improvements
Administration
Total
Maximum Estimated Bonded Indebtedness *
$150,000
150,000
50,000
50,000
$400,000
$480,000
* This amount includes capitalized interest in an amount sufficient to pay interest on the bonds from
the date of issue until the date of collection of sufficient tax increment revenues to meet scheduled
interest payments when due.
AS MODIFIED APRIL 28, 1997
TAX INCREMENT FINANCING DISTRICT NO. 16
(LINN PROJECT)
Acquisition and Relocation $270,000
Demolition $ 25,000
Site Preparation $ 25,000
Administration $55.00 0
Total $375,000
Maximum Estimated Bonded Indebtedness * $450,000
* This amount includes capitalized interest in an amount sufficient to pay interest on the bonds from
the date of issue until the date of collection of sufficient tax increment revenues to meet scheduled
interest payments when due.
-19
AS MODIFIED OCTOBER 25, 1999
The estimated public improvement costs to be undertaken within Redevelopment Project No. 1 and
financed by tax increment revenues derived from tax increment financing districts located within
Redevelopment Project No. 1 have been amended and restated as set forth in Exhibit I—C attached
hereto.
Subsection 1.10. Public Improvements and Facilities Within Redevelopment Project No. 1.
Publicly financed improvements within Redevelopment Project No. 1 include but are not limited to:
a. The acquisition and sale and/or lease of the parcels identified in Subsection
1.7. hereof;
b. Soil corrections, including excavation and backfill;
C. Installation and/or upgrading of utilities and
other public improvements;
d. Development of proper traffic circulation patterns and improved ingress and
egress on public and private roadways;
e. Funding of the Reserve Program; and
f. Other authorized uses as provided by State law.
Subsection 1.11. Environmental Controls. The proposed development in Redevelopment
Project No. 1 does not present significant environmental concerns. All municipal actions, public
improvements and private development shall be carried out in a manner consistent with existing
environmental standards.
Subsection 1.12. Proposed Reuse of Property. The public improvements needed to bring
about development and redevelopment as set forth in Subsections 1.9. and 1.10. above include
acquisition and sale of land, relocation of existing public improvements, demolition and site
improvements.
The Modified Redevelopment Plan does not contemplate the acquisition of private property
until such time as a private developer presents an economically feasible program for the reuse of that
property. Proposals for the reuse of private property must be within the framework of the above
cited goals and objectives of the Authority and the City. Acquisition and sale of any private property
by the Authority shall be subject to a binding contract with the purchaser incorporating appropriate
restrictions regarding the reuse and redevelopment of the property. Before approving any such
contract or sale, the Authority shall be satisfied that adequate funds will be available to repay the
public costs associated with the proposed acquisition.
1-20
Subsection 1. 13. Administration and Maintenance of Redevelopment Project No 1
Maintenance and operation of the public improvements in Redevelopment Project No. 1 will be the
responsibility of the Executive Director of the Authority (the "Administrator ").
The Administrator will administer Redevelopment Project No. 1 pursuant to the provisions of
the Housing and Redevelopment Act; provided, however, that such powers may only be exercised at
the direction of the Authority. No action taken by. the Administrator pursuant to the above -
mentioned powers shall be effective without authorization by the Authority.
Subsection 1.14. Rehabilitation. Owners of properties within Redevelopment Project No. 1
will be encouraged to rehabilitate their properties to conform with the applicable state and local
codes and ordinances, as well as any design standards. Owners of properties who purchase property
within Redevelopment Project No. 1 from the Authority may be required to rehabilitate their
properties as a condition of the sale of the land. The Authority will provide such rehabilitation
assistance as may be available from federal, state or local sources.
Subsection 1.15. Relocation. The Authority accepts its responsibility for providing for
relocation pursuant to Minnesota Statutes, Section 469.030.
1-21
G: \WPDATA \F \FRIDLEY \TIF \RIDE \REDEPLAN.DOC
EXHIBIT I - C
AMENDED AND RESTATED BUDGET
AS OF OCTOBER 25, 1999
Use of Funds
Land /building acquisition
Site Improvements /preparation
Installation of public utilities
Parking facilities
Streets and sidewalks
Public park facilities
Social, recreational, etc.
Interest reduction payments
Capitalized interest
Administrative costs, 5%
Total
Cumulative Additional
Budget Budget Total
Amount Amount Budget
868,406
3,810,000
TIF No. 1
1,389,449
2,250,000
Cumulative
Additional
100,000
120,345
Budget
Budget
Total
Use of Funds
Amoupf
Amount
Budget
Land/building acquisition
4,192,079
9,000,000
13,192,079
Site Improvements /preparation
3,098,973
450,000
3,548,973
Installation of public utilities
-
10,000
10,000
Parking facilities
482,879
-
482,879
Streets and sidewalks
-
10,000
10,000
Public park facilities
-
-
-
Social, recreational, etc.
-
-
-
Interest reduction payments
-
-
-
Capitalized interest
-
-
-
Administrative costs, 10%
427,814
1,296,579
1,724,393
Bond Discount
66,887
66,887
Total
8,268,632
10,766,579
19,035,211
TIF No. 2
Use of Funds
Land /building acquisition
Site Improvements /preparation
Installation of public utilities
Parking facilities
Streets and sidewalks
Public park facilities
Social, recreational, etc.
Interest reduction payments
Capitalized interest
Administrative costs, 5%
Total
Cumulative Additional
Budget Budget Total
Amount Amount Budget
868,406
3,810,000
4,678,406
1,389,449
2,250,000
3,639,449
20,345
100,000
120,345
0
-
-
3,000
50,000
53,000
267,202
200,000
467,202
0
-
-
0
-
-
80,000
367,920
447,920
2,628,402
6,777,920
9,406,322
TIF No. 3
Cumulative Additional
Budget Budget Total
Use of Funds Amount Amount Budget
Land/building acquisition
1,710,446
5,750,000
7,460,446
Site Improvements /preparation
3,721,745
3,050,000
6,771,745
Installation of public utilities
154,250
400,000
554,250
Parking facilities
526,297
500,000
1,026,297
Streets and sidewalks
0
0
-
Public park facilities
0
0
-
Social, recreational, etc.
0
0
-
Interest reduction payments
0
0
-
Capitalized interest
-
Administrative costs, 5%
180,177
610,460
790,637
Total
6,292,915
10,310,460
16,603,375
TIF No. 6
Cumulative Additional
Budget Budget Total
Use of Funds Amount Amount Budget
Land/building acquisition
153,506
12,549,313
12,702,819
Site Improvements /preparation
245,609
12,008,116
12,253,725
Installation of public utilities
0
3,557,273
3,557,273
Parking facilities
47,233
74,302,500
74,349,733
Streets and sidewalks
0
4,961,294
4,961,294
Public park facilities
0
0
-
Social, recreational, etc.
0
0
-
Interest reduction payments
0
0
-
Capitalized interest
-
Administrative costs, 10%
5,948
10,776,536
10,782,484
Total 452,296 118,155,032 118,607,328
TIF No. 7
Cumulative Additional
Budget Budget Total
Use of Funds Amount Amount Budget
Land/building acquisition
123,370
520,000
643,370
Site Improvements /preparation
197,392
300,000
497,392
Installation of public utilities
37,960
50,000
_ 87,960
Parking facilities
0
0
-
Streets and sidewalks
0
0
-
Public park facilities
0
0
-
Social, recreational, etc.
0
0
-
Interest reduction payments
0
0
-
Pooled Debt
0
792,196
792,196
Administrative costs, 10%
4,781
197,311
202,092
Total
363,503
1,859,507
2,223,010
TIF No. 9
Cumulative
Additional
Budget
Budget
Total
Use of Funds
Amount
Amok
Budget
Land /building acquisition
5,026,000
5,026,000
Site Improvements /preparation
3,100,000
3,100,000
Installation of public utilities
1,342,000
1,342,000
Parking facilities
450,000
450,000
Streets and sidewalks
435,000
435,000
Public park facilities
0
-
Social, recreational, etc.
325,000
325,000
Interest reduction payments
0
-
Capitalized interest
-
Administrative costs, 10%
400,000
667,800
1,067,800
Total
11,078,000
667,800
11,745,800
Total 94,967 4,033 99,000
TIF No. 10
TIF No. 11
Cumulative Additional
Cumulative
Additional
Budget Budget
Total
Use of Funds
Amount Amount
Budaet
Land/building acquisition
0
_
Site Improvements /preparation
70,000
70,000
Installation of public utilities
0
_
Parking facilities
0
_
Streets and sidewalks
20,000
20,000
Public park facilities
0
_
Social, recreational, etc.
0
_
Interest reduction payments
0
_
Capitalized interest
0
_
Administrative costs, 10%
4,967 4,033
9,000
Total 94,967 4,033 99,000
Total 587,000 282,000 869,000
TIF No. 11
Cumulative
Additional
Budget
Budget
Total
Use of Funds
Amount
Amount
Budget
Land/building acquisition
200,000
150,000
350,000
Site Improvements /preparation
255,000
85,000
340,000
Installation of public utilities
0
_
Parking facilities
0
_
Streets and sidewalks
60,000
40,000
100,000
Public park facilities
0
_
Social, recreational, etc.
0
_
Interest reduction payments
0
_
Capitalized interest
_
Administrative costs, 10%
72,000
7,000
79,000
Total 587,000 282,000 869,000
Total 3,145,000 (40,000) 3,105,000
TIF No. 13
TIF No. 12
Cumulative Additional
Cumulative
Additional
Budget Budget
Total
Budget
Budget
Total
Use of Funds
Amount
Amount
Budaet
Land/building acquisition
1,050,000
500,000
1,550,000
Site Improvements /preparation
40,000
340,000
380,000
Installation of public utilities
0
0
-
Parking facilities
0
0
-
Streets and sidewalks
0
0
-
Public park facilities
0
0
-
Social, recreational, etc.
0
Administrative costs
_
Interest reduction payments
0
_
Capitalized interest
Administrative costs, 10%
90,000
103,000
193,000
Total
1,180,000
943,000
2,123,000
Total 3,145,000 (40,000) 3,105,000
TIF No. 13
Cumulative Additional
Budget Budget
Total
Use of Funds
Amount Amount
Budget
Land /building acquisition
2,500,000 -
2,500,000
Site Improvements /preparation
525,000 0
525,000
Installation of public utilities
0
_
Parking facilities
0
_
Streets and sidewalks
0 0
-
Public park facilities
0 0
-
Social, recreational, etc.
0
_
Interest reduction payments
0
_
Capitalized interest
0
_
Other public improvements
25,000
25,000
Administrative costs
95,000 (40,000)
55,000
Total 3,145,000 (40,000) 3,105,000
TIF No. 14
Cumulative Additional
Budget Budget Total
Use of Funds Amour Amount Budaet
Land /building acquisition
170,000
100,000
270,000
Site Improvements /preparation
541,000
250,000
791,000
Installation of public utilities
44,000
50,000
94,000
Parking facilities
0
0 -
_
Streets and sidewalks
0
0
-
Public park facilities
0
0
-
Social, recreational, etc.
0
_
_
Interest reduction payments
0
_
Capitalized interest
0
_
Other public improvements
25,000
25,000
50,000
Administrative costs
125,000
(31,500)
93,500
Total
905,000
393,500
1,298,500
TIF No. 15
Cumulative Additional
Budget Budget Total
Use of Funds Amount Amount Budget
Land /building acquisition
1,500,000
- 1,500,000
Site Improvements /preparation
150,000
0 150,000
Installation of public utilities
5,000
0 5,000
Parking facilities
0
_
Streets and sidewalks
0
0 -
Public park facilities
0
0 -
Social, recreational, etc.
0
-
Interest reduction payments
0
-
Capitalized interest
0
_
Administrative costs
50,000
115,500 165,500
Total 1,705,000 115,500 1,820,500
TIF No. 16
Total
375,000 538,000 913,000
123DATNCASSERLY/FRIDLEY/9.99 CUM TIF BUDGETXLS - WKSTS
Cumulative
Additional
Budget
Budget
Total
Use of Funds
Amount
Amount
Budget
Land /building acquisition
270,000
385,000
655,000
Site Improvements /preparation
50,000
125,000
175,000
Installation of public utilities
0
0
-
Parking facilities
0
_
Streets and sidewalks
0
0
-
Public park facilities
0
0
-
Social, recreational, etc.
0
_
Interest reduction payments
0
-
Capitalized interest
0
-
Administrative costs
55,000
28,000
83,000
Total
375,000 538,000 913,000
123DATNCASSERLY/FRIDLEY/9.99 CUM TIF BUDGETXLS - WKSTS
DRAFT
SECTION VII.
TAX INCREMENT FINANCING PLAN FOR
TAX INCREMENT FINANCING DISTRICT NO. 6
Subsection 7.1. Statement of Objectives. See Section I, Subsection 1.5. of the
Modified Redevelopment Plan.
Subsection 7.2. The Modified Redevelopment Plan See.Section I, Subsections 1.2.
through 1.15.
Subsection 7.3. Parcels to be Included in Tax Increment Financing District No 6 See
Section VII, Exhibit VII -A for the geographic description of property located in the City of
Fridley which is to be included in Tax Increment Financing District No. 6.
Subsection 7.4. Parcels in Acquisition. Properties identified for acquisition will be
acquired either by the City or the Authority as set forth in Section I, Subsection 1.8. of the
Modified Redevelopment Plan hereof.
Subsection 7.5. Estimated Public Improvement Costs and Supportive Data See
Subsections 1.9. and 1.10. of the Modified Redevelopment Plan for estimated costs
associated with Redevelopment Project No. 1.
Subsection 7.6. Sources of Revenue. Public improvement costs, acquisition, relocation
and site preparation costs and other costs outlined in Subsections 1.9. and 1.10. of the
Modified Redevelopment Plan will be financed through the issuance of general obligation
and/or revenue tax increment bonds to be repaid by the annual collection of tax increments.
Subsection 7.7. Original Assessed Value. Pursuant to Section 273.76, Subd. 1, of the
Tax Increment Financing Act, the original assessed value as of January 2, 1985, for Tax
Increment Financing District No. 6 is estimated to be $979,540, based on the assessed value
of all taxable real property within Tax Increment Financing District No. 6. Pursuant to
Section 273.76, Subds. 1 and 4, of the Tax Increment Financing Act, the County Auditor of
Anoka County (the "County Auditor ") shall certify in each year the amount by which the
original assessed value has increased or decreased as a result in a change in tax- exempt
property within Tax Increment Financing District No. 6, reduction or enlargement of Tax
Increment Financing District No. 6 or changes in connection with previously issued building
permits. In any year in which the current assessed value of Tax Increment Financing District
No. 6 declines below the original assessed value, no assessed value will be captured and no
tax increment will be payable to the Authority.
7 -1
Subsection 7.8. Estimated Captured Assessed Value. Pursuant to Section 273.74,
Subd. 1, and Section 273.76, Subd. 2, of the Tax Increment Financing Act, the estimated
captured assessed value in Tax Increment Financing District No. 6 when all development
contemplated by the Contract (as defined in Section 7.14 below) is completed will
approximate $40,809,46G. This estimated captured assessed value is determined in the
following manner:
Estimated Assessed Value at completion $41,789,000
Original Assessed Value 1985 payable 1986 -979,540
$40,809,460
Subsection 7.9. Tyke of Tax Increment Financing District. Tax Increment Financing
District No. 6 is, pursuant to Section 273.73, Subd. 10(a)(1) a redevelopment district and as a
redevelopment district is subject to the limitations of Subsection 7.10.
Subsection 7.10. Duration of Tax Increment Financing District No. 6. Pursuant to
Section 273.75, Subd. 1, of the Tax Increment Financing Act, the duration of Tax Increment
Financing District No. 6 will be up to twenty -five (25) years from the date of certification
thereof. Thus, it is estimated that Tax Increment Financing District No. 6, including any
modifications for subsequent phases or other changes, would terminate on December 31,
2010.
(AS MODIFIED OCTOBER 25, 1999)
Pursuant to Laws of Minnesota 1999, Chapter 243, Article 10, Section 23, the duration
of Tax Increment Finance District No. 6 has been extended to December 31, 2025.
Subsection 7.11. Estimated Impact on Other Taxing Jurisdictions. The estimated
impact of this Tax Increment Financing District and Plan on all taxing jurisdictions is
reflected in the total project expenditures stated in Subsections 1.9 and 1.10 of the Modified
Redevelopment Plan, including the maximum bonded indebtedness incurred therefor at the
assumed interest rates provided in Section 7.12 below.
7 -2
Subsection 7.12. Estimated Amount of Bonded Indebtedness. Pursuant to Section
273.74, Subd. 1, of the Tax Increment Financing Act, general obligation or revenue tax
increment bonds may be used as required to amortize the costs identified in Section I,
Subsections 1.9. and 1.10. Bond sales will be based on availability of tax increment. It is
contemplated that all bonds will not be issued at one time but as they are needed, at effective
interest rates estimated to range between 6.50% and 10.00% per annum.
Subsection 7.13. Tax Increment Financing Account for Tax Increment Financing
District No. 6. The tax increment received with respect to TaxJncrement Financing District
No. 6 will be segregated by the Authority in a special account or accounts (the "Tax
Increment Account ") on its official books and records or as otherwise established by
resolution of the City to be held for the benefit of owners of Tax Increment Bonds.
Subsection 7.14. Land Disposition and Redevelopers' Requirements All
Redevelopers or Developers will be required by contractual agreement to observe the
building requirements and zoning requirements of the City, and such other requirements as
may be established by the City Council. Land disposition parcels shall be made available
under separate cover as they are determined by the Authority.
The Authority proposes to consummate a certain Contract for Private Development
(the "Contract "), with Woodbridge Properties, Inc., a Minnesota corporation, concerning the
public and private development of the property within Tax Increment Financing District No.
6.
(AS MODIFIED OCTOBER 25, 1999)
Prior to October 25, 1999, the Authority and Medtronic, Inc., entered into a Contract for
Private Redevelopment relating to the development by Medtronic of a corporate office
campus not to exceed 1,600,000 square feet.
Subsection 7.15. Modification of Tax Increment Financing District No 6 As of
September 22, 1986 and December 22, 1986, the Tax Increment Financing Plan for Tax
Increment Financing District No. 6 was modified to reflect revised project costs to be
incurred within Redevelopment Project No. 1 as a result of the amendment of the Modified
Redevelopment Plan.
As of June 26, 1989, the Tax Increment Financing Plan for Tax Increment Financing
District No. 6 was modified to reflect increased project costs and increased geographic area
within Redevelopment Project No. 1.
7 -3
As of February 26, 1990, the Tax Increment Financing Plan for Tax Increment
Financing District No. 6 was modified to reflect increased project costs and increased
geographic area within Redevelopment Project No. 1.
As of July 1, 1991, the Tax Increment Financing Plan for Tax Increment Financing
District No. 6 was modified to reflect increased project costs and increased geographic area
within Redevelopment Project No. 1.
As of January 6, 1992, the Tax Increment Financing Plan for Tax Increment
Financing District No. 6 was modified to reflect increased project costs -and increased
geographic area within Redevelopment Project No. 1.
As of July 6, 1992, the Tax Increment Financing Plan for Tax Increment Financing
District No. 6 was modified to reflect increased project costs and increased geographic area
within Redevelopment Project No. 1.
As of September 13, 1993, the Tax Increment Financing Plan for Tax Increment
Financing District No. 6 was modified to reflect increased project costs and increased
geographic area within Redevelopment Project No. 1.
As of February 13, 1995, the Tax Increment Financing Plan for Tax Increment
Financing District No. 6 was modified to reflect increased project costs and increased
geographic area within Redevelopment Project No. 1.
As of December 11, 1995, the Tax Increment Financing Plan for Tax Increment
Financing District No. 6 was modified to reflect increased project costs within
Redevelopment Project No. 1.
As of April 28, 1997, the Tax Increment Financing Plan for Tax Increment Financing
District No. 6 was modified to reflect increased project costs and increased geographic area
within Redevelopment Project No. 1.
As of October 25, 1999, the Tax Increment Financing Plan for Tax Increment
Financing District No. 6 was modified to reflect increased project costs and increased
geographic area within Redevelopment Project No. 1, as well as the extension of the duration
of Tax Increment Financing District No. 6.
7 -4
G: \WPDATA\F\FRIDLEY\20\DOC\TIF PLAN.DOC
EXHIBIT VII -A
(Legal)
LOT 5 BLK 5 DONNAYS LAKEVIEW MANOR ADD -SUBJ TO 10 FT DRAIN & UTIL RASE
ALONG WLY LINE -SUBJ TO 5 FT DRAIN & UTIL EASE ALONG E LINE -SUBJ TO 5 FT
DRAIN & UTIL EASE ALONG E LINE -SUBJ TO 20 FT SEWER EASE -EX PT FOR HWY -EX
PT TAKEN FOR HWY PER L P 6/26/63 -(EX PT FOR HWY TAKEN BY STATE OF MINN
PER FINAL CERT 4/4/73
DONNAYS LAKEVIEW MANOR ADDN LOT 22 BLK 10 DONNAYS LAKEVIEW MANOR ADD
(SUBJ TO EASE TO NW BELL CO OVER N 5 FT) ( SUBJ TO EASE TO CITY OF
FRIDLEY FOR HWY & UTIL PURP OVER & ACROSS WLY 30 FT)
LOT 3 AUD SUB 155 -EX PT FOR HWY PT FOR HWY -SUBJ TO ST & UTIL EASE OVER
W 33 FT PER QOD 3/29/65 (EX PT TAKEN FOR HWY PER FC APPROVED 3/18/68)
(SUBJ TO & TOGETHER.WITH RT OF ACCESS)
LOT 5 AUD SUB 155 -EX .12 ACRE FOR HWY -EX PT TAKEN FOR HWY PER F C APPROVED
2/2/68
AUD SUB NO 155 CITY OF LOT 4 AUD SUB 155 -EX PT FOR HWY -EX PT FOR HWY -EX
PT FOR HWY PERFC APPROVED 3/18/68 (SUBJ TO & TOGETHER WITH RT OF ACCESS)
LU
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TH 65 at Sheet Pile Wall
Feasibility Study
Geotechnical Report
City of Fridley, Minnesota
SEH No. A- FRIDL9902.00
September 1999
=SEN
SHORT ELLIOTT HENDRICKSON INC
Multidisciplined.
Single Source.
TH 65 at Sheet Pile Wall
Feasibility Study
Geotechnical Report
City of Fridley, Minnesota
SEH No. A- FRIDL9902.00
September 1999
I hereby certify that this Report was prepared by me or under my direct
supervision, and that I am a duly Licensed Professional Engineer under
the laws of the State of Minnesota. ;
Date: September, 1999 Reg. No.: IJ Z 3
Reviewed by: /'/�✓. -" /, // ''
Date
r�
Short Elliott Hendrickson Inc.
3535 Vadnais Center Drive
200 SEH Center
St. Paul, Minnesota 55110
(651) 490 -2000
• 3535 VADNA/S CENTER DRIVE. 200 SEH CENTER, ST. PAUL. MN 55110 651490 -2000 800 325 -2055
ARCHITECTURE ENGINEERING ENVIRONMENTAL TRANSPORTATION
September 2, 1999 RE: Fridley, Minnesota
• Geotechnical Report
TH 65 at Sheet Pile Wall
• Feasibility Study
SEH No: A- FRIDL9902.00
Mr. John G. Flora
Director of Public Works
_ City of Fridley
Fridley Municipal Center
6431 University Avenue N.E.
Fridley, MN 55432
Dear Mr. Flora:
This report presents the results of our geotechnical investigation to determine if a sheet pile wall is
a viable option for support of embankment fill along the TH 65 Moore Lake Causeway. The purpose
of the embankment fill is to support an additional auxiliary, 12 -foot wide, lane for traffic in each
direction. The investigation included soil borings, laboratory testing and sheet pile wall analyses.
It was our opinion that in order to define soil conditions near the locations of the proposed sheet pile
_ walls, it would be necessary to complete soil borings from a barge in the lake near the causeway
shoreline. Accordingly, you authorized the completion of nine (9) additional soil borings. Seven
the borings were completed from a barge in the lake immediately adjacent to the shoreline of the
existing causeway. The remaining two borings were completed from the roadway shoulder in order
to complete a subsurface cross section at the location of the "worst case" soil conditions as
determined from the barge borings.
The soil borings indicate that deposits of organic soils (peat) and compressible clays exist beneath
and adjacent to the existing causeway embankment. These deposits are thicker and closer to the lake
bottom on the west (southbound) side of the causeway. The borings indicate that peat deposits are
on the order of 10 to 14 feet thick on the west side of the causeway and extend to within about 4 feet
of the lake bottom. On the east side, the deposits encountered in the borings are about 2 to 5 feet
thick and extend no closer than about 15 feet to the lake bottom. Thus, based on the results of the
soil borings, design conditions for the proposed sheet pile wall are more severe on the west side
of the causeway. Detailed descriptions of soils encountered in the borings are contained in the report
narrative.
a SHORT ELLIOTT
HENDRlCKSON INC. M/NNE4POL/S MN
ST. CLOUD, MN CHIPPEWA FALLS, WI MADISON, WI LAKE COUNTY, IN
EQUAL OPPORTUNITY EMPLOYER
t
aw
Mr. John G. Flora
September 2, 1999
Page 2
Sheet pile design analyses were completed for walls on both sides of the causeway at three locations
along the causeway alignment. The analysis for the east side (northbound) included an 8 -foot wide
cantilevered pathway. The results of the analyses indicate that tied -back sheet pile walls are a
ME viable option for support of the proposed highway embankment fill. On the west side, as a
minimum, PZ -27 sheet piling will most likely be required. On the east side, PZ -22 sheet piling
driven to about elevation 855 will likely be adequate. These elevations are approximate and based
on the information provided by Borings 1 through 12. As a minimuoi, the sheet piling should extend
through the organic soils and compressible clays and at least 2 feet into the alluvial sand layer. Tie-
- backs are required for both the southbound and northbound walls. Tie -back bulkheads or deadmen
MR should be placed on the order of 40 feet behind the sheet pile walls. The final distance should be
determined once the final design penetration of the sheet pile walls has been determined. Detailed
results of the sheet pile analyses are contained in the report narrative. Estimates of construction costs
for the sheet pile walls are contained in the feasibility study letter report.
We appreciate the opportunity to have worked with you on this challenging project. If you have
questions or require additional information, please do not hesitate to call me at 651 -490 -2139.
Sincerely,
Short Elliott Hendrickson Inc.
Ronald armer, P.E.
Sr. Geotechnical Engineer
F: \pratectclet\InJfl4)911_lrtgantto. wpd
r
w
Table of Contents
Certification Page
Letter of Transmittal
Table of Contents
Page
3.0 Subsurface Conditions ...............................
3
3.1
3.2
1.0 Introduction ..... ...............................
....
1
1.1 Background .......................... ..................
4
1
1.2 Previous Investigation .... ...............................
.
2
1.3 Scope of Work for this Investigation ...........................
.
3.3.2 Station 3 +00
4
2
Investigation for this Study ...................
. .. . : *:
2.0 Geotechnical
5
2
2.1 Purpose ........... ...............................
....
2
2.2 Field and Laboratory Investigations .......................
6
3
2.3 Boring Locations .. ...............................
.
3.0 Subsurface Conditions ...............................
3
3.1
3.2
General ..............................................
Compressible Organic Deposits .............................
. . 4
4
3.3
Cross Sections ........ ...............................
4
3.3.1 Locations
4
3.3.2 Station 3 +00
4
3.3.3 Station 8 +28
5
3.3.4 Station 12 +88
5
3.4
Soil Parameters for Sheet Pile Wall Design .......................
5
3.4.1 Sand Fill
6
3.4.2 Organic Deposits (Peat)
6
3.4.3 Clay (Non- Organic)
7
3.4.4 Alluvial Sand
7
3.4.5 Glacial Till
4.0 Preliminary Sheet Pile Wall Evaluation and Design .................. 7 7
4.1 General ................. ............................... 7
4.1.1 Design Requirements 7
4.1.2 Design Methodology 8
4.1.3 Earth Pressure Factors of Safety and Design Loading 8
4.1.4 Design Cases and Cross Sections
4.2 Results of Sheet Pile Wall Computations ......................... 8
8
4.2.1 Southbound
r 4.2.2 Northbound (without Pathway) 8
A- FRIDL9902.00
TH 65 at Sheet Pile Wall Feasibility Study Page i
City of Fridley, Minnesota
l
Table of Contents, Cont.
Page
4.2.3 Cantilevered Pathway
9
4.2.3.1 CWALSHT Analyses
9
4.2.3.2 Hand Solution
9
4.2.3.3 Northbound Critical Case Design
10
4.3 Tie -Back Loads ............. ...............................
11
4.4 Wall Settlement ...................... ....................
11
4.4.1 Problem Geometry
11
4.4.2 Overall Embankment Fill
11
4.5 Settlement of Sheet Pile Walls . ...............................
11
5.0 Conclusions and Recommendations ............................. 11
5.1 Sheet Pile Walls ............ ............................... 11
5.2 Sheet Pile Wall Design ....... ............................... 12
5.3 Tie -back Design ............ ............................... 12
5.4 Additional Geotechnical Investigations .......................... 12
6.0 References ................... ............................... 12
TH 65 at Sheet Pile Wall Feasibility Study A- FRIDL9902.00
City of Fridley, Minnesota Page ii
List of Figures
(Figures are presented at the conclusion of the narrative)
T
.. Figure 1
TH 65 Widening, Fridley, Minnesota, Station 3 +00
Figure 2
TH 65 Widening, Fridley, Minnesota, Station 8 +28
Figure 3
TH 65 Widening, Fridley, Minnesota, Station 12 +88
Figure 4
TH 65 Causeway with Cantilevered Sidewalk
TH 65 at Sheet Pile Wall Feasibility Study A- FRIDL9902.00
City of Fridley, Minnesota Page iii
List of Tables
Page
Table 1
Boring Location Stationing ......... ............................... 3
Table 2
Soil Parameters for Sheet Pile Wall Design ........................... 6
Table 3
Summary of Sheet Pile Wall Analyses - Anchored Walls... .............. 9
Table 4
Summary of Sheet Pile Wall Analyses - Anchored Walls
with Cantilever Trail N. B ....... ............................... 10
a
TH 65 at Sheet Pile Wall Feasibility Study A- FRIDI-9902.00
' City of Fridley, Minnesota Page iv
List of Appendices
Appendix A
Braun Intertec Project BBXX- 99 -018A
Preliminary Geotechnical Evaluation for the Proposed Sheet Pile Walls
for the Proposed Minnesota Highway 65 Improvements
Fridley, Minnesota
March 16, 1999
Appendix B
American Engineering Testing (AET)
Job No. 01 -00134
Report of Subsurface Borings and Vane Shear Tests
Moore Lake, Fridley, Minnesota
July 20, 1999
Appendix C
Sheet Pile Wall Computations
Moore Lake Causeway
Fridley, Minnesota
Appendix D
CWALSHT Guide for Data Input
TH 65 at Sheet Pile Wall Feasibility Study A- FRIDL9902.00
City of Fridley, Minnesota Page v
September 1999
Geotechnical Report
TH 65 at Sheet Pile Wall
Feasibility Study
City of Fridley, Minnesota
1.0 Introduction
1.1 Background
The City's proposal to add one lane in each direction across the Moore
Lake causeway requires that the additional embankment fill be supported
by a wall (or other means) so that the additional fill does not encroach
into the Lake below the ordinary high water level, El. 877.5. The initial
premise was that a sheet pile wall would adequately support the
approximately 6 feet (vertical) of fill that would be needed to build the
embankment. However, due to the presence of soft, compressible soils
along the alignment, there was some doubt as to whether or not a sheet
pile wall would be adequate.
1.2 Previous Investigation
Initially, at the request of the City, a geotechnical investigation was
conducted by Braun Intertec (Braun Project No. BB- XX- 99 -018A) that
included six (6) soil borings completed through the outboard shoulders
of the existing roadway. Organic deposits of peat were encountered in a
few of the borings conducted as a part of that investigation. The report
concluded that additional investigation would be required to determine
whether or not a sheet pile wall would work at the site due to the potential
for unacceptable deformations as a result of the organic deposits.
SEH geotechnical staff concurred with the findings of the Braun report
to the effect that additional subsurface investigation was necessary in
order to determine whether or not a sheet pile wall would perform
adequately. SEH staff concluded that it was necessary to complete soil
borings in the lake, just outside the limits of the existing causeway
embankment, because that is where the sheet pile wall would actually be
located and develop its resistance to overturning and lateral movement.
A- FRIDL9902.00
Page 1
1.3 Scope of Work for this Investigation
The geotechnical scope of work for this investigation included seven (7)
SPT (Standard Penetration Test) soil borings and two (2) field vane shear
strength test borings. Seven borings were completed in the lake from a
small barge. Two borings were completed on the roadway shoulder. The
purpose of the 7 SPT borings was to better define the extent of the peat
and any other soft compressible deposits. The purpose of the vane shear
strength borings was to aid in estimating the shear strength of the soft,
compressible peat deposits. One vane shear strength boring was
completed beneath the existing embankment and the other vane boring
was completed from the barge.:..
The remainder of the geotechnical scope of work included reviewing the
previous geotechnical report analyzing the penetration, section and tie-
. back requirements for a sheet pile wall and summarizing the findings of
the additional geotechnical investigation in this report.
2.0 Geotechnical Investigation for this Study
2.1 Purpose
The purpose of the geotechnical investigation was to determine if sheet
pile walls would be suitable for support of the additional embankment fill
required to add one -lane, each direction, to the TH 65 Causeway across
Moore Lake.
2.2 Field and Laboratory Investigations
Since the previous six borings from the Braun Report were completed
through the existing causeway embankment from the roadway shoulder,
it was considered imperative to determine subsurface conditions nearer
to the location of the proposed sheet pile wall at the causeway
embankment shoreline. This required that borings be taken from a barge
in the lake near the shoreline. Six borings were to be completed in the
lake. A boring was also taken from the roadway shoulder to provide a
more complete cross section of the embankment at the critical section.
American Engineering Testing (AET) of St. Paul, Minnesota, mounted
a small drill rig on a barge provided by Lametti and Sons Inc. of Hugo,
Minnesota. Two borings (8 and 13) were drilled on the east side of the
causeway. Four borings (7, 9,10 and 12) were completed on the west side
of the causeway. Three of the borings on the west -side and the east -side
borings were drilled just off of the causeway shoreline. Boring 9, on the
west side, was drilled approximately 100 feet from the shoreline to aid in
evaluating conditions outside of the influence of the causeway
embankment.
TH 65 at Sheet Pile Wall Feasibility Study
City of Fridley, Minnesota A- FRIDL9902.00
Page 2
Once general conditions, as defined by the SPT borings, were identified,
two boring locations were selected for vane shear strength testing. The
locations selected included the worst case from the west -side, near- shore,
SPT borings, which was located at Boring 10; and the roadway shoulder
boring (11). The vane borings were completed approximately 5 to 10 feet
from the associated SPT bore hole location(s). Vane shear strength tests
were generally completed at 2.5 -foot intervals within the organic
deposit(s).
Geotechnical laboratory tests were performed on selected samples from
the SPT borings and included water content and Atterberg limits tests of
the organic deposits. Atterberg limits ttsts are required in order to correct
the vane shear strength test results for plasticity index. The water contents
were completed to aid in comparison of soil conditions within the organic
deposit(s).
2.3 Boring Locations
The locations of the borings completed by Braun Intertec, Borings 1
through 6, are shown in Appendix A. The locations of the borings
completed by AET as part of this investigation, Borings 7 through 13, are
shown in Appendix B. With the box culvert through the causeway located
at approximately 9 +50 (as a reference), the borings are located at the
stations given in Table 1.
Table 1
Boring Location Stationing
Borings
Station
5 and 6
-2 +50
7 and 8
3 +00
9, 10, and 11
8 +28
3 and 4
9 +00
12 and 13
12 +88
1 and 2
19 +50
3.0 Subsurface Conditions
3.1 General
In general, soils encountered along the causeway included a layer of loose
sand fill overlying compressible organic deposits (peat and organic clay).
Beneath the organic deposits, typically, a layer of medium dense alluvial
sand was encountered overlying a glacial till comprised of clayey sand.
In some borings the till was not encountered because the borings did not
extend through the alluvial sand. In other borings the organic deposits
were absent. There were other minor exceptions to the general
stratigraphy.
TH 65 at Sheet Pile Wall Feasibility Study A- FRIDL9902.00
City of Fridley, Minnesota Page 3
The thicknesses of the various deposits was highly variable along the
causeway alignment. The variability of the deposits can be seen by
- reviewing the boring logs contained in Appendices A and B, and the
subsurface cross sections in Figures 1 through 3.
3.2 Compressible Organic Deposits
Significant compressible organic and/or clay deposits were encountered
in all of the borings completed as a part of this investigation, Borings 7
through 13; and in Borings 1 and 3 of the previous investigation. The
thickness of the organic/clay deposits ranged from about 14 feet in Boring
9 to 2 feet in Boring 8. These deposits were more predominant on the
west side of the causeway than on the east side. The thickness of the
compressible organic deposits on the west side of the causeway
(southbound) is on the order of 10 to 14 feet. On the east side
(northbound) the compressible deposits are on the order of 2 feet to 5 feet
thick.
3.3 Cross Sections
3.3.1 Locations
_ Subsurface cross sections were developed at three locations along the
causeway alignment using the results of the borings from this
investigation. Cross sections were developed at Stations 3+00, 8 +28 and
12 +88. The cross sections are presented on Figures 1, 2 and 3
respectively.
3.3.2 Station 3+00
The subsurface cross section for this station is presented on Figure 1.
Loose sand fill extends to about elevation 870 on the west side and
elevation 868 on the east side of the causeway. The fill is very loose near
the lakeshore. Borings 5 and 6, taken nearby, at Station -2 +50, indicate
that the fill beneath the roadway is typically medium dense near the road
surface and loose below about 3 feet. Beneath the fill, 10 feet of very soft,
highly compressible organic soil exists on the west side of the causeway
(Boring 7) while alluvial sand was encountered on the east side of the
causeway (Boring 8). At elevation 860 a soft alluvial clay deposit was
encountered which was 6 feet thick on the west side and 2 feet thick on
the east side. Beneath the clay, medium dense alluvial sand was
encountered. In Boring 8, on the east side, glacial till was encountered at
elevation 850. The till was not encountered on the west side to the
minimum elevation explored, elevation 848.
3.3.3 Station 8+28
The subsurface cross section for this station is presented on Figure 2.
Again, predominantly loose sand fill was. encountered beneath the
surface. As was suspected, the borings indicate that the thickness of the
fill decreases as one moves away from the causeway. The fill thickness
was on the order of 27 feet beneath the roadway, 5 feet thick just off of
TH 65 at Sheet Pile Wall Feasibility Study A- FRIDL9902.00
City of Fridley, Minnesota Page 4
the causeway shoreline and 2 feet thick at Boring 9, located
approximately 110 feet from the shoreline. Beneath the fill, organic
deposits were encountered on the west side of the causeway. Organic
deposits were not encountered on the east side of the causeway in Boring
4. However, no borings were taken out in the lake on the east side of the
causeway at this location, and so it cannot be concluded that organic
deposits are not present. The thickness of the organic deposits varied
from 7 to 14 feet on the west side of the causeway. Based on the SPT
blow counts, it appears that the organic soils have been compressed
beneath the embankment. It is not clear whether or not a portion of the
organic material was removed beneath the causeway prior to its
construction, or whether the fill has'merely compressed the entire organic
deposit over time. Beneath the organic deposit, alluvial sand was
encountered. In Borings 9 and 10 glacial till was encountered beneath the
alluvial sand at about elevation 850.
3.3.4 Station 12 +88
Loose sand fill was encountered from the surface to about elevation 867.
On the west side, soft organic soils were then encountered to about
elevation 856. On the east side, a 5 -foot thick layer of alluvial sand was
encountered between the fill and a 5 -foot thick organic soil deposit which
extended to about elevation 856. Alluvial sand was encountered beneath
the organic deposit on both sides of the causeway to the minimum
elevation explored, elevation 848.
3.4 Soil Parameters for Sheet Pile Wall Design
3.4.1 Sand Fill
Parameters for the sand fill were determined with the aid of Standard
Penetration Test (SPT) results (blow counts/N- values) and correlations
between SPT N- values and the necessary parameters. Charts in NAVFAC
DM 7 1" were utilized to determine relative density from SPT N- values.
The relative density was then used to determine the friction angle (phi)
and the unit weight. Because N- values in the lake borings were generally
less than N- values in borings completed through the embankment, the
strength (phi) of the sand fill near the embankment shoreline was taken
to be slightly less than the embankment sand fill beneath the roadway.
Unit weights for fill near the shoreline were also correspondingly lower.
Design parameters for sand fill are summarized in Table 2.
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Table 2
Soil Parameters for Sheet Pile Wall Design
Note. ' = 29130 - in front/behind retaining wall (typical where two values are shown)
3.4.2 Organic Deposits (Peat)
Undrained shear strengths of the peat deposits were determined with the
aid of field vane shear strength tests. Vane shear strength tests were
completed in Borings 9 and 11. The results of the tests are presented in
Appendix B. Of the four tests completed in Boring 9, three tests showed
signs of excessive soil disturbance at the test depth. The disturbance
could be due to vane insertion, movement (rocking) of the barge or other
causes. Only the test at 12.5 -foot penetration appeared to provide an
indication of the undisturbed strength of the peat. Because the consistent
water content data (see log of Boring 9) indicate that the peat is relatively
homogeneous throughout its depth, the undrained shear strength at 12.5 -
foot penetration, (150 psf), was taken as the raw vane shear strength of
the entire deposit. A 0.6 plasticity index correction factor was applied to
the raw vane shear strength to determine the design undrained shear
strength. A similar disturbance pattern was encountered in the Boring 11
vane shear strength tests and the test at a depth of 27.5 feet was taken as
representative of the entire deposit beneath the embankment. The
saturated unit weight of the peat was taken equal to 70 pounds per cubic
foot (pcf) outside the embankment limits and 90 pcf underneath the
causeway embankment. The organic deposit (peat) design parameters are
summarized in Table 2.
3.4.3 Clay (Non- Organic)
Deposits of non - organic clay were encountered beneath the organic soils
in Boring 7 (Station 3+00) and this deposit apparently extends beneath
the causeway because it was also encountered in Boring 8 on the east side
of the causeway. Because the deposit was not extensive, and was not field
tested for vane shear strength, organic soil parameters were assigned to
this layer to simplify the sheet pile design analysis. However, the
parameters for the organic material beneath the embankment were used
to model this layer both beneath and outside of the embankment limits
because the clay is probably not as soft and deformable as the organic
soils encountered outside of the embankment limits.
TH 65 at Sheet Pile Wall Feasibility Study A- FRIDL9902.00
City of Fridley, Minnesota Page 6
0
C
_m
_sat
0
C
_m
_sat
Material
(DEG)
(PSF)
(PCF)
(PCF)
(DEG)
(PSF)
(PCF)
(PCF)
Fill
29/30'
-
4115.6
122.6/123.4
29/30
-
4115.6
122.6/123.4
Peat
-
90/294
-
70/90
-
90/294
-
70/90
Alluvial Sand 1
33
1 -
I -
1 128.4
33
1 -
1 -
1 128.4
Till -
1 2000
1 -
1 132.4
-
1 2000
1 -
1 132.4
Note. ' = 29130 - in front/behind retaining wall (typical where two values are shown)
3.4.2 Organic Deposits (Peat)
Undrained shear strengths of the peat deposits were determined with the
aid of field vane shear strength tests. Vane shear strength tests were
completed in Borings 9 and 11. The results of the tests are presented in
Appendix B. Of the four tests completed in Boring 9, three tests showed
signs of excessive soil disturbance at the test depth. The disturbance
could be due to vane insertion, movement (rocking) of the barge or other
causes. Only the test at 12.5 -foot penetration appeared to provide an
indication of the undisturbed strength of the peat. Because the consistent
water content data (see log of Boring 9) indicate that the peat is relatively
homogeneous throughout its depth, the undrained shear strength at 12.5 -
foot penetration, (150 psf), was taken as the raw vane shear strength of
the entire deposit. A 0.6 plasticity index correction factor was applied to
the raw vane shear strength to determine the design undrained shear
strength. A similar disturbance pattern was encountered in the Boring 11
vane shear strength tests and the test at a depth of 27.5 feet was taken as
representative of the entire deposit beneath the embankment. The
saturated unit weight of the peat was taken equal to 70 pounds per cubic
foot (pcf) outside the embankment limits and 90 pcf underneath the
causeway embankment. The organic deposit (peat) design parameters are
summarized in Table 2.
3.4.3 Clay (Non- Organic)
Deposits of non - organic clay were encountered beneath the organic soils
in Boring 7 (Station 3+00) and this deposit apparently extends beneath
the causeway because it was also encountered in Boring 8 on the east side
of the causeway. Because the deposit was not extensive, and was not field
tested for vane shear strength, organic soil parameters were assigned to
this layer to simplify the sheet pile design analysis. However, the
parameters for the organic material beneath the embankment were used
to model this layer both beneath and outside of the embankment limits
because the clay is probably not as soft and deformable as the organic
soils encountered outside of the embankment limits.
TH 65 at Sheet Pile Wall Feasibility Study A- FRIDL9902.00
City of Fridley, Minnesota Page 6
3.4.4 Alluvial Sand
Parameters for the typically medium dense alluvial sand were determined
with the aid of the Standard Penetration Test (SPT) results and
correlations between SPT N- values, relative density, and the required
parameters. Charts in NAVFAC DM 7(_) were utilized to determine
relative density from SPT N- values and then to determine the friction
angle, (phi), and unit weight from the relative density. N- values near the
causeway shoreline were not significantly different than blow counts
obtained in the borings completed through the roadway embankment.
Thus, the strength of the alluvial sand was taken to be uniform across the
section. Design parameters for the- alluvial sand are summarized in
Table 2.
3.4.5 Glacial Till
Glacial till was encountered beneath the alluvial sand in some of the
borings. Because the till will not likely affect sheet pile wall design, shear
strength and unit weight values were assumed for the analyses. A unit
weight of 123.4 pcf and an undrained shear strength of 2000 pounds per
square foot (psf) were assumed for the analyses. These values are
included in Table 2.
4.0 Preliminary Sheet Pile Wall Evaluation and Design
4.1 General
4.1.1 Design Requirements
An evaluation was completed to determine if sheet pile walls could be
used to support the fill required to add one lane in each direction
(northbound and southbound) to the TH 65 causeway across Moore Lake.
The locations of the proposed walls are shown on Figure 4. Initially, there
was no requirement for a pedestrian or bike path, and computations were
completed accordingly. During the course of the evaluation, it was
determined that a pathway should be included on the east (northbound)
side of the causeway to provide access to a central, pile- supported fishing
pier. However, given that there is not sufficient space to add a pathway
without encroaching on the lake, it was suggested that the path be
cantilevered off of the sheet pile wall, over - hanging the lake.
Accordingly, the sheet pile wall evaluation was expanded to include a
wall with a cantilevered pathway on the east (northbound) side of the
causeway. The cantilevered pathway is shown on Figure 4.
4.1.2 Design Methodology
Standard sheet pile wall analysis methods were utilized to evaluate the
proposed walls. A computer program (CWALSHT) (2), developed by the
U.S. Army Corps of Engineers, was utilized to evaluate the walls initially.
The program evaluates both cantilever and tied- back -type walls. For tied -
back walls, the program calculates solutions using free -earth, fixed -earth
TH 65 at Sheet Pile Wall Feasibility Study A- FRIDL9902.00
City of Fridley, Minnesota Page 7
and equivalent -beam methods. The CWALSHT program does not have
the flexibility to evaluate a wall with a cantilevered overhang, such as the
proposed pathway on the east side of the causeway, when the overhang
is modeled as a pure moment, as is the case for the proposed pathway.
For that case a hand solution was generated.
4.1.3 Earth Pressure Factors of Safety and Design Loading
The Corps of Engineers typically utilizes a 1.0 factor of safety for active
earth pressure and a 1.5 factor of safety for passive earth pressure. Those
factors of safety were utilized for this study. A 250 psf continuous, live -
load surcharge was incorporated into the design on the retained side of
the wall.
4.1.4 Design Cases and Cross Sections
Sheet pile walls were evaluated for both the northbound (east side) and
southbound (west side) lanes at Stations 3+00, 8 +28 and 12 +88. Initially,
a cantilever wall was evaluated for the southbound lane at Station 3+00.
The CWALSHT results indicated that lateral deflection at the top of the
wall would be on the order of 6 inches or greater (which is considered
excessive) and so only tied -back walls were evaluated from that point on.
4.2 Results of Sheet Pile Wall Computations
4.2.1 Southbound
The southbound soil conditions were the by far more severe than the
northbound soil conditions. The presence of the very soft, compressible
peat deposit within four to six feet of the lake bottom presented a severe
design condition. The results of the CWALSHT runs indicate that a tied -
back PZ -27 sheet pile section, with a tie -back load of about 42 to 55 kips
for tie -backs spaced at nine feet along the wall, is adequate to support the
proposed lane with between 3/ -inch and 1 -inch lateral deflection. A
summary of the CWALSHT runs for each station results are included in
Table 3. The lateral deflection could be reduced with a more hefty sheet
pile section such as a PZ -35 or larger. The CWALSHT computer output
are included in Appendix C. (The output includes a summary of the input
values.) Appendix D includes the input instructions for CWALSHT.
4.2.2 Northbound (without Pathway)
Due to the presence of significant depths of sand fill and native granular
alluvium, the CWALSHT output indicates that a cantilever wall (without
tie- backs) would have been adequate for the northbound wall without a
cantilevered pathway. However, as a matter of prudent design, it would
have been recommended that the northbound wall be tied back to
TH 66 at Sheet Pile Wall Feasibility Study A- FRIDL9902.00
City of Fridley, Minnesota Page 8
minimize and control lateral deflection even if the cantilevered pathway
had not been included in the final design. A PMA -23 sheet pile section,
with tie -back spaced at nine feet, would have been adequate for the
northbound wall (without the cantilevered pathway). The tie -back loads
would have been on the order of 18 kips per tie -back. A summary of the
results of the analysis are included in Table 3 - Summary of Sheet Pile
Wall Analyses - Anchored Walls.
TABLS3
TH 65 (CENTRAL AVENUE) RETAINING WALL
FRIDLEY, MINNESOTA
SUMMARY OF SHEET PILE WALL ANALYSES - ANCHORED WALLS
Station
Minimum
Penetration
feet
Recommended
Penetration
feet
Mapmum
Bending
Moment
ft -lbs
Required
Section
Modulus
in 3
Sheet
Pile
Required
Actual
Section
Modulus
(in-3)
Ac al
Momentof
Inertia
(in-4)
Scaled
Deflection
b4n_3
Deflection
in.
Anchor
Force
b/ft
SB
31
31
31,872
15.30
PZ -27
302
1842
4.49E+09
091
4,716
NB
9
20
2,012
0.97
PMA -23
2.4
1 4.1
4.40E+07
0.36
11981
8+28 SB
30
30
33,724
16.19
PZ -27
302
1842
4.65E+09
094
4,749
28 NB
9
22
2,012
0.97
PMA -23
2.4
4.1
4.44E+07
036
1,981
12+88 SB
29
29
28,772
1391
PZ -27
302
1842
3.62E+091
0.65
6.047
12+88 NB
9
20
2,012
0.97
PMA -23
2.4
4.1
4.44E+07
0.36
1,981
4.2.3 Cantilevered Pathway
4.2.3.1 CWALSHT Analyses
The 8.67 -foot wide, reinforced concrete, cantilevered pathway was
modeled as a pure moment at the top of the sheet pile wall. The moment
(including the concrete dead load and an 85 psf live -load) was calculated
to be on the order of 7.5 ft -kips per linear foot of wall. CWALSHT does
not permit inclusion of a pure moment in the input. Attempts to model the
moment as a couple, or an outward lateral load at the top of the sheet pile,
were evaluated and the results considered unreliable. (In some cases
CWALSHT would terminate the run with an error statement to the effect
that the tie -back load was negative [in compression]). So, a hand solution
was generated for the cantilevered pathway design case.
4.2.3.2 )`land Solution
A hand solution was accomplished using the traditional earth pressure
diagrams for fixed- and free -earth methods with active earth pressures on
the loading side of the wall and passive pressures on the resisting side.
The results of this analysis confirmed what the CWALSHT runs had
indicated that the tie -back was in compression. Given this result, it
became apparent that the upper portion of the wall was attempting to
deflect into the roadway embankment due to the moment induced by the
cantilevered pathway. So, the earth pressure diagrams were reversed, with
passive pressures on the fill side (resisting) and active pressures on the
TH 65 at Sheet Pile Wall Feasibility Study A- FRIDL9902.00
City of Fridley, Minnesota Page 9
lake side (loading). A factor of safety of 2 was applied to the passive
pressures to ensure that deflections would not be excessive (because it
takes significantly more movement to mobilize passive resistance than
active pressure). The results of this analysis indicated that a sheet pile
wall penetrating to the lake bottom, elevation 875, would be satisfactory,
with no further penetration. Because this result appeared to be very
unconservative, an alternate methodology was sought.
To further evaluate the northbound wall an analysis was completed using
at -rest earth pressures on both sides of the wall to model a condition
where little or no wall movement would take place. The results of that
analysis indicate that a sheet pile` Penetrating 2.5 feet below the lake
bottom would be adequate to retain the backfill and support the moment
induced by the pathway. A PZ -22 sheet pile section would be required,
with a tie -back load of about 25.5 kips for tie -backs spaced at 9 feet.
.3 These results appear reasonable. However, to minimize settlement of the
wall, it is recommended that sheet pile extend through the peat and clay
layers to about elevation 853. A summary of the computation results are
included in Table 4 - Summary of Sheet Pile Wall Analyses - Anchored
Walls with Cantilever Trail N.B. The computations are included in
T Appendix C.
_,
t
1
i
4.2.3.3 Northbound Critical C'nse Design
rH 65 at sheet Pile Wall
City of Fridley, Minnesota
The critical case for the northbound sheet pile wall may not be the final
constructed condition. A more critical case may involve conditions where
the wall has been installed and backfilled, but before the cantilever is
formed and poured. Several additional design cases will need to be
evaluated during final design for the northbound wall.
Page 10
4.3 Tie -Back Loads
The tie -back loads for the northbound and southbound sheet pile walls are
not compatible. The southbound tie -back load is about double the load of
the northbound tie -back at some locations. Based on this condition, it is
recommended that each wall have separate deadmen or sheet pile tie-
backs and that the turnbuckle shown in Figure 4, (shown initially for
illustration), not be constructed.
4.4 Wall Settlement
4.4.1 Problem Geometry
The problem geometry is shown on Figure 4, which illustrates the amount
of fill being placed behind the proposed sheet pile walls. Based on the
geometry of the existing embankment and the proposed fill, it appears
that the amount of fill to be placed would not induce significant
settlement of the embankment. To minimize the potential for undesirable
settlement of the embankment, light- weight aggregate, or other light-
weight materials, could be utilized as fill behind the sheet pile walls. The
actual magnitude of settlement should be computed during final design
when actual grades are known. Measures to minimize settlement can be
incorporated into the design at that time.
4.4.2 Overall Embankment Fill
A greater threat to embankment settlement would be the addition of
overall embankment fill to raise the roadway; to say, facilitate drainage.
Again, the potential for any such settlement could be reduced through the
use of light - weight fill or other lightweight materials.
4.5 Settlement of Sheet Pile Walls
To minimize the potential for settlement of the sheet pile walls due to
continued consolidation of the organic deposits, it is proposed to drive the
sheet piling into the alluvial sand layer beneath the compressible organic
and clay deposits. This depth is in excess of the depth required for sheet
pile stability.
5.0 Conclusions and Recommendations
5.1 Sheet Pile Walls
Based on the results of the geotechnical investigations for this project and
preliminary sheet pile wall computations completed for this project, sheet
pile walls are considered a viable option for support of the fill required
to add one -lane in each direction to the Moore Lake, TH 65 Causeway
without encroaching on Moore Lake below the ordinary high water level,
elevation 877.5.
TH 65 at Sheet Pile Wall Feasibility Study A- FRIDL9902.00
City of Fridley, Minnesota page 11
5.2 Sheet Pile Wall Design
Based on preliminary computations, it appears that PZ -27 (southbound)
and PZ -22 (northbound) tied -back sheet pile walls will be adequate to
support the additional fill and proposed cantilevered pathway. The
computations included an additional foot of embankment fill and a 250
psf surcharge load on the embankment side of the sheet pile wall. Wall
penetrations would be on the order of 22 to 31 feet below the lake
bottom, or from about elevation 853 to 844, depending on the roadway
station.
5.3 Tie -back Design
A tie -back design was completed for a 6.5 kip per foot tie -back load,
which equals a 59 kip load for tie -backs spaced on 9 -foot centers. For this
loading, it is recommended that tie -bars consist of 150 kip per square inch
(ksi) steel (Dywidag -type thread bar). It is recommended that the thread -
bar be anchored to 10 -foot long sheet piling or suitable concrete deadmen
anchors, either type located at least 40 feet from the back of the sheet pile
walls.
5.4 Additional Geotechnical Investigations
The purpose of this geotechnical investigation was to determine if sheet
pile walls are considered feasible for support of the fill required to add
one lane in each direction to the TH 65 Moore Lake causeway. Based on
the results of the investigation and subsequent preliminary sheet pile
design computations, it has been concluded that sheet pile walls are
considered acceptable for that purpose. However, it is recommended that
additional geotechnical investigations be conducted to more precisely
define the subsurface stratigraphy and the shear strength parameters of the
various soil deposits for final design.
6.0 References
1 • Soil Mechanics, Design Manual 7.1,
Department of the Navy, Naval Facilities Engineering Command,
Alexandria, VA, May 1982 (Figure 3, pg. 7.1 -87 and Figure 7, pg. 71-
149).
2. Dawkins, William P., User's Guide - Computer Program for
Design and Analysis of Sheet Pile Walls by Classical Methods
(CWAISIT), Instruction Report ITC -90-1, Information Technology
Laboratory, Department of the Army, Wes, Vicksburg, MS, February
1990.
TH 65 at Sheet Pile Wall Feasibility Study A- FRIDL9902.00
City of Fridley, Minnesota Page 12
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