HRA 12/07/2000 - 6328e
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CITY OF FRIDLEY
HOUSING & REDEVELOPMENT AUTHORITY MEETING
DECEMBER 7, 2000, MEETING, 7:30 P.M.
AGENDA
LOCATION: City Council Chambers
CALL TO ORDER:
ROLL CALL:
APPROVAL OF MINUTES:
October 5, 2000
CONSENT AGENDA:
Claims and Expenses .............
Approve 2
Pp 001 Meeting .................... ...............................
g Dates .............. ....... 1
Resolution Authorizing P Employees 2
Pay Increase for HRA Employees.....
ACTION ITEMS: 3
Consider Resolution Authorizing Contract for Private Redevelopment with Gateway
Redevelopment LLC (Real Estate Equities) for Gateway East Project......... 4
Consider Resolution Approving Establishment of TIF District Igo. 17 and
Adoption of TIF Plan Modifications to Redevelopment Plan....
OTHER BUSINESS
ADJOURNMENT
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MEMORANDUM
1._1 ai
Deborah K Dahl
Director of Human Resources
(763) 572 -3507
To: Barbara J. Dacy, Director of Community Development
From: Deborah K. Dahl, Director of Human Resources
Subject: Resolution Authorizing Pay Increase for HRA Employees
Date: November 1, 2000
Since the HRA is a distinct entity it will be necessary for its board to authorize
salary increases for employees. I have adapted the resolution we use for the
Fridley City Council to apply to the needs of the HRA. In order to provide salary
increases effective January 1, 2001 it will be necessary for the HRA to take action
on this matter prior to the end of the year. I recommend that you present this
matter for action at the next HRA meeting. If I can be of any further assistance let
me know.
DKD /jn
RESOLUTION NO. HRA IrqL— -2000
A RESOLUTION AUTHORIZING AN INCREASE IN
COMPENSATION FOR k )LEY HOUSE AND
REDEVELOPMENT AUTHORITY EMPLOYEES FOR
THE 2000 CALENDAR YEAR
WHEREAS, it is the intention of the Fridley Housing and Redevelopment Authority
(HRA) to provide fair and equitable compensation to Employees within budgetary
constraints; and
WHEREAS, the Fridley HRA intends to comply with the-Minnesota Local
Government Pay Equity Act; and
WHEREAS, Staff of the City of Fridley have reviewed the HRA's financial position
as well as economic indicators and compensation adjustments by comparable
employers; and
WHEREAS, an adjustment of employee salaries and benefits is warranted;
NOW, THEREFORE, BE IT RESOLVED by the Fridley Housing and
Redevelopment Authority that the following adjustments be authorized for employees
of the Fridley HRA, with the exception of employees who are members of a
bargaining unit, effective January 1, 2001:
1. A general increase of 3.0 percent in employee salaries.
2. Mileage reimbursement at the rate designated by the Internal Revenue
Service.
3. Other benefits as promulgated by the City Council for 2001.
PASSED AND ADOPTED BY THE HOUSING AND REDEVELOPMENT
AUTHORITY OF THE CITY OF FRIDLEY THIS DAY OF
2000.
LAWRENCE R. COMMERS, CHAIRMAN
WILLIAM W. BURNS, EXECUTIVE DIRECTOR
HOUSING AND REDEVELOPMENT AUTHORITY
Memorandum
DATE: December 1, 2000
TO: William W. Burns, Executive Director of HRA Ap
FROM: Barbara Dacy, Community Development Director
Grant Fernelius, Housing Coordinator
SUBJECT: Consider Contract for Private Redevelopment with Gateway
Redevelopment LLC (Real Estate Equities) for the Gateway East
Project.
This item was originally scheduled for the November HRA meeting, but was removed from the
agenda (and the meeting was subsequently cancelled) because we were unable to conclude our
negotiations with Real Estate Equities. Over the last several weeks we have resolved most of
the developer's concerns and are pleased to report that we have a development agreement
ready for HRA review and approval. We are still finalizing some of the site improvement costs
and will have an update for the HRA on Thursday night.
Developer's Previous Concerns
Prior to the November meeting, the developer had expressed several concerns about the
development agreement. First, was the potential income tax implication of the HRA's assistance
for the project. Our legal counsel has determined that there shouldn't be any tax consequence
for the developer. The HRA is not reimbursing the developer for the site improvements, but
instead will pay the contractors and subs directly from the funds held in escrow. Even if the
assistance were viewed as a grant or source of income, it would be off -set by expenses and
therefore wouldn't result in any profit. The developer now agrees with this interpretation and
doesn't believe it is an issue.
Second, the developer was extremely concerned about environmental liability. The HRA is
selling the site "as -is" and will not make any representations as to the conditions of the soils
beyond what is already known. We have shared all our environmental reports and have been
told by our experts that the pocket of contaminated soil on the Cash 'n' Pawn site is so small
and deep enough that it should not affect the development. Nonetheless, the developer is
concerned that they could come in contact with the contaminated soil during utility excavation.
To address their concerns, the agreement will allow the developer to conduct their own
environmental testing /evaluation. Based on those reports, the developer will need to decide
whether or not they wish to proceed with the project. A decision will need to be made by
January 3, 2001. From a practical standpoint, this is an opportunity for both sides to learn
more about the site and if they identify a more significant problem, then both sides can
evaluate what to do next.
El
Gateway East Memo
December 1, 2000
Page 2
Update on Site Costs
Staff has had a number of meetings with the developer about the site plan and site
improvement costs. As you recall, the HRA agreed to contribute $546,000 toward the site
improvements, which were originally estimated at $616,400 including contingencies. Based on
the revised site plan, new costs to relocate a sanitary sewer line, burial of overhead utility
services and other street re- construction costs, the developer now estimates that the site costs
have increased by $100,552 to $717,002. A comparison of these costs are attached.
Staff is still evaluating ways to reduce some of the site costs. For example, we may be able to
reduce the decorative fence costs by installing fewer brick bollards.` In addition, the developer
has a fairly intensive landscaping plan which is far greater than what is typically required. We
are working cooperatively with the developer to try and keep the costs within the $546,000
contribution, however, we may need additional funds for the site work. We will have another
update for the HRA on Thursday night.
Valvoline Site
Staff has informed the owner of the Valvoline site at the corner of 57th Avenue and University
Avenue about the Gateway East project. We have also notified them that the project will close
their access to the frontage road. We believe the site can continue to operate and function
with internal circulation, however we have not had any substantive conversations with the
owners. Our preliminary estimate is that it could cost up to $17,000 to close off the access
point and re- pave /landscape a portion of their site to accommodate the changes. We have not
included these costs in the project budget. Ideally, it makes sense to have the developer's
contractor do the work next spring as the other site work is underway. We hope to have more
information for the HRA at January meeting.
Overview of Development Contract
The attached development contract reflects the changes that have been made since the last
meeting. This version of the contract was completed on November 30th and sent out to the
developer and their legal counsel on December 1'. As of this writing we have not received any
comments back. To follow is a brief summary of the major provisions.
Developer
The contract will be executed with Gateway East Redevelopment, LLC, a limited liability
company, jointly formed by Real Estate Equities Development Company and Bisanz Brothers
Development Company. Previously, Real Estate Equities was the developer named in the
agreement.
Gateway East Memo
December 1, 2000
Paae 3
Minimum Improvements
The developer shall construct twenty -eight (28) town homes on the project site. Attached is
the latest version of exterior elevations and floor plans for the project. The developer was able
to incorporate a front porch, additional landscaping and brick banding into the design, as
requested by staff. The units will be a split -entry design and have a two car tuck under garage
at grade; a kitchen, great room, dining room and bathroom on the main level; and two
Bedrooms, a bathroom and laundry on the upper level. Each unit will have an entry porch and
a private deck. The units will be priced in the $126,000 to $142,000 range. We should also
point out that the site plan has been slightly modified to shift some of the units on the south
side away from the Valvoline site. This change does not affect the density of site nor create
any adverse impacts on functionality of the site plan.
Purchase Price and Closing
As discussed previously, the Authority will sell the land for $1.00. The land price reflects the
extraordinary costs associated with developing on the Gateway East site (e.g. prevailing wage
requirement, site location, and surrounding neighborhood). The closing would take place on or
before April 2, 2001. The closing date will allow the developer to go through the land use
approval process before taking title. Staff has no objections to this approach since the land use
approvals will be required in order to undertake the project. It may be necessary for the
developer to start work (e.g. site improvements) before the closing date.
Construction
The construction of the town homes would take place on or about May 1, 2001 and be
completed by December 31, 2002. The term sheet identified an April 1, 2001 start date,
however the developer feels that May 1' is more acceptable.
Site Improvements
The developer will coordinate and construct all of the site improvements. Eligible improvements
include such things as site grading, roads, utilities, sidewalks, landscaping, lighting and
decorative fencing. The HRA has agreed to contribute $546,000 toward these costs and the
funds will be placed into an escrow account and drawn down by the developer as the work is
completed. Any remaining funds would be returned to the Authority. As mentioned earlier in
this memo, we are still looking at revisions to the site improvement budget; it may be necessary
to increase the HRH's contribution to cover these additional costs.
Revenue Participation
As a means of re- couping some of the Authority's investment in the project, the developer has
agreed to share in any profits or "net revenues" after the project is completed. The
development agreement stipulates that both parties shall receive an equal split of the net
Gateway East Memo
December 1, 2000
Page 4
revenues. For purposes of the agreement, net revenue is calculated as the total revenue for
the project, plus the Authority's contribution, less the developer's expenses. Article V (page 17)
and Exhibit F to the agreement describe the expenses that are eligible for deduction and the
method for determining net revenue.
Prevai /ing Wages
The developer has agreed to pay prevailing wages according the City Ordinance 1095. A wage
and benefit rate schedule are attached to the agreement and the developer shall be responsible
for compliance, including maintenance of payroll reporting forms, etc. The developer will be
responsible for communicating this information to their contractors and subs. The developer
shall furnish an affidavit that they are in compliance with the prevailing wage requirements.
Other Issues
The developer is in the process of preparing their land use applications. We anticipate that they
will submit this information in early December and complete the process some time in February.
Staff also needs to meet with the developer about a neighborhood meeting for early January.
The tax increment district also needs to be created, which is scheduled for HRA approval on
December 7t'. A separate memo can be found the agenda packet regarding this topic.
Recommendation
Staff recommends that the Authority approve the attached resolution which authorizes
execution and delivery of Contract for Private Redevelopment with Gateway East
Redevelopment LLC (Real Estate Equities) for the Gateway East Redevelopment Project.
M -00 -196
HRA RESOLUTION NO. l
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 GATEWAY EAST REDEVELOPMENT LLC
BE IT RESOLVED by the Board of Commissioners (the "Commissioners ") of the Housing and
Redevelopment Authority in and for the City of Fridley, Minnesota (the "Authority ") as follows:
Section 1. Recitals.
1.01. It has been proposed that the Authority enter into a Contract For Private Redevelopment (the
"Contract ") with Gateway East Redevelopment LLC (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 sea.
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 condition(s) is /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 92000.
LAWRENCE R. COM IERS - CHAIRMAN
Page 2 -- Resolution No.
ATTEST:
WILLIAM W. BURNS — EXECUTIVE DIRECTOR
GAWPDATATTRIDLEMOWC HRA RESOLUTION - DEV AGR.DOC
Gateway East Redevelopment Project
Budget for Site Improvements
(Based on HKS Estimates)
Landscape Costs
Sod
$ 12,000
6/15100
11/16/00
$ %
Site Work
$ 9,030
Est
Est
Chg. Chg.
Clear & Grub
$
3,750
$ 3,750
$ -
Grading/Excavation
$
60,000
$ 80,000
$ 20,000
Class 5 Agg. Base
$
21,000
$ 9,000
$ (12,000)
Curb & Gutter
$
26,100
$ 15,950
$ (10,150)
Sidewalk
$
29,800
$ 14,400
$ (15,400)
Bituminous
$
36,400
$ 17,100
$ (19,300)
Storm Sewer Pipe
$
24,000
$ 24,000
$ -
Storm Sewer Structures
$
14,400
$ 14,400
$ -
Watermain
$
23,750
$ 24,125
$ 375
Water Services
$
17,500
$ 17,500
$ -
Hydrants
$
13,200
$ 13,200
$ -
Fittings and Gate Valves
$
5,000
$ 8,000
$ 3,000
Sanitary Sewer
$
24,000
$ 26,550
$ 2,550
Sanitary Sewer Services
$
26,430
$ 24,000
$ (2,430)
Sanitary Sewer Manhole
$
17,500
$ 15,000
$ (2,500)
Lights, Conduit, Wiring
$
16,000
$ 16,000
$ -
Trensforrner
$
8,000
$ 8,000
$ -
Striping
$
1,000
$ 11000
$ -
Traffic Control Signage
$
4,000
$ 4,000
$ -
10,000
Sub -Total $
371,830
$ 335,975
$ (35,855)
15% Contingency $
55,775
$ 50,396
$ (5,378)
Total This Category $
427,605
$ 386,371
$ (41,233) -10%
Landscape Costs
Sod
$ 12,000
$
12,000
$ -
Shrubs
$ 9,030
$
9,030
$ -
Overstory Tres
$ 17,750
$
17,750
$ -
Evergreen Trees
$ 9,900
$
9,900
$ -
Ornamental Trees
$ 6,125
$
6,125
$ -
Ornamental Railing
$ 83,400
$
83,400
$ -
Mulch
$ 6,000
$
6,000
$ -
Irrigation
$ 15,000
$
15,000
$ -
Edging, Fertilizer, Peat Moss
$ 5,000
$
5,000
$ -
Sub -Total $ 164,205
$
164,205
$ -
15% Contingency
$ 24,631
$
24,631
$ -
Total This Category $ 188,836
$
188,836
$ - 0%
Roadway/Utility Re- Construction
Remove Bituminous
$ -
$
12,000
$ 12,000
Subgrade Excavation
$ -
$
12,000
$ 12,000
Class 5 Agg. Base
$ -
$
12,075
$ 12,075
Curb & Gutter
$ -
$
10,875
$ 10,875
Sidewalk
$ -
$
17,200
$ 17,200
Bituminous
$ -
$
18,900
$ 18,900
Adjust Storm Sewer Structure
$ -
$
2,400
$ 2,400
Sanitary Sewer
$ -
$
11,250
$ 11,250
Sanitary Sewer Manhole
$ -
$
10,000
$ 10,000
lights, Conduit Wiring
$ -
$
16,000
$ 16,000
Striping
$ -
$
600
$ 600
Sub -Total $ -
$
123,300
$123,300
150% Contingency
$ -
$
18,495
$ 18,495
Total This Category $ -
$
141,795
$141,795 100%
Hard Costs
$ 536,035
$
623,480
$ 87,445
Contigencies
$ 80,405
$
93,522
$ 13,117
Total Costs
$ 616,440
$
717,002
$100,562 160/6
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HOUSING AND REDEVELOPMENT
AUTHORITY
Memorandum
DATE: December 1, 2000
T0: William W. Burns, Executive Director of HRA �ew
FROM: Barbara Dacy, Community Development Director
Grant Fernelius, Housing Coordinator
SUBJECT: Consider Tax Increment Financing Plan and Resolution Establishing TIF
District No. 17 for the Gateway East Project.
Introduction
At the HRA meeting next Thursday evening, staff will recommend that the HRA
establish the tax increment financing district for the Gateway East project.
Obviously, the HRH's decision on the development contract with Real Estate
Equities will have an impact on whether or not we should proceed and create the
district. Assuming the HRA approves the contract, we are suggesting that the
Authority also take action to create the TIF district the same evening.
TIF Plan Overview
The attached TIF Plan is required by state law and spells out the details of the
TIF district. The TIF Plan includes the traditional "but for" test, plus an
estimated budget, a cash flow analysis with tax increment projections and an
estimate of the impacts on the other taxing jurisdictions.
The TIF plan anticipates that the new development will have an estimated
market value of $4,480,000 and generate $70,820 in new taxes. After deducting
the original tax capacity ($4,816) the project will produce about $65,144 in tax
increment per year. Over the life of the district (25 years) the cumulative tax
increment is estimated to be $2,113,124, less $211,312 for administrative
charges which results in $1,901,812 of net available tax increment. Using a
7.5% present value factor, the tax increment revenue stream has a present
value of $646,162.
5
Gateway East TIF Memo
December 1, 2000
Page 2
There are a number of assumptions in the financial analysis that should be
noted. First, the cash flow projection assumes a 2% annual rate of inflation,
beginning in 2005/2006. Second, the average sales price is estimated to be
$160,000. In our previous analysis we have used an average sales price
of $135,000. However, for purposes of the TIF Plan it is important to error on
the liberal side and over - estimate revenue since a conservative projection could
mean a loss of tax increment to the Authority (any increment over the
projected level would have to be returned). From a practical standpoint, the
Gateway East project already has a significant shortfall and whatever tax
increment is generated will simply "soften" the net cost to the Authority.
Intended Use of TIF
Legally, all of the tax increment that is generated must be used to pay for eligible
expenses incurred after the date the district is certified. In other words, the TIF
revenue cannot be used to reimburse the Authority for any expenses incurred to date.
However, the funds can be used for the site improvements that have been identified.
For example, the roads, utilities, storm ponding, fencing and lighting are all eligible
expenses. We have received preliminary estimates that these costs could exceed
$600,000 or more. The TIF plan contemplates that 100% of the tax increment will be
used to pay for eligible expenses.
Need for TIF
Creating the tax increment district is needed in order to facilitate redevelopment of this
important corner. The traditional "but for" test is met due to the fact that the Gateway
East area would not be redeveloped without public involvement. The tax increment will
help reduce the net cost to the Authority, which will have invested over $1,200,000 in
the project for such things as acquisition, relocation, demolition and site improvements.
Without the HRH's assistance, a redevelopment project would not take place. It would
be too costly for a private developer to acquire the sites and create a cohesive
development site. In all likelihood the project area would continue to adversely affect
the surrounding neighborhood and become a further blighting influence on a highly
visible corridor.
Other Issues
The Gateway East TIF district would be seventeenth TIF district created by the
Authority, however the number of active TIF districts is far less. For example, Districts
Gateway East TIF Memo
December 1, 2000
Page 3
No. 4, 5, 8 and 10 have all expired, and Districts No. 2 and 3 are restricted. In the case
of the last two districts, no additional expenditures can be made except inside those
districts. Using TIF for the Gateway East project is consistent with state statutes and
clearly meets the legislative intent of a redevelopment district.
Next Steps
The City Council conducted a public hearing on October 23, 2000 to review the
proposed TIF district and plan. There were no major issues raised during the hearing,
although Council member Billings inquired about the potential impact of the Governor's
tax plan on projects like Gateway East. Jim Casserly who was in attendance, felt that
any impact would be minimal because the State would have a difficult time adopting
legislation that would put a city or HRA in an adverse financial position without some
sort of corresponding revenue off -set.
In terms of the next steps, once the HRA has approved the TIF plan and established
the district, the City Council must take action to approve the TIF district. The City
Council will consider formal approval of the district on December 11, 2000. The plan
has already been submitted to Anoka County and the Fridley School District; to date we
haven't received any comments.
Recommendation
Staff recommends that the Authority approve the attached resolution which establishes
Tax Increment Financing District No. 17, adopts the Tax Increment Financing Plan and
TIF Plan Modifications to the Redevelopment Plan and related TIF Plans
M -00 -198
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, 21 31 69 7, 91
10, 11, 12, 13, 14, 15 AND 16 TO REFLECT INCREASED
PROJECT COSTS WITHIN REDEVELOPMENT PROJECT
NO. 1, AND CREATING TAX INCREMENT FINANCING
DISTRICT NO. 17 AND ADOPTING A TAX INCREMENT
FINANCING PLAN RELATING THERETO
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 increased project
costs, 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, 2, 3, 6, 7, 9,
10, 11, 12, 13, 14, 15 and 16 (the "Existing TIF Districts ") to reflect increased project
costs within Redevelopment Project No. 1, pursuant to Minnesota Statutes, Section
469.174 through 469.1791, inclusive, as amended and supplemented from time to time.
1.03. It has been further proposed that the Authority approve the creation of proposed
Tax Increment Financing District No. 17 (the AProposed TIF District@) and adopt a
proposed Tax Increment Financing Plan relating thereto, pursuant to and in accordance
with Minnesota Statutes. Section 469.174 to 469.1791, inclusive, as amended and
supplemented from time to time.
1.04. The Authority has investigated the facts and has caused to be prepared with
respect thereto, a Modified Redevelopment Plan for Redevelopment Project No. 1 and
Modified Tax Increment Financing Plans for the Existing TIF Districts to reflect increased
project costs within Redevelopment Project No. 1 and a proposed Tax Increment
Financing Plan for the Proposed TIF District, defining more precisely the property to be
included the public costs to be incurred, and other matters relating thereto.
Page 2 - Resolution No
1.05. The Authority has performed all actions required by law to be performed prior to the
modification, approval and adoption of the Modified Redevelopment Plan, the Modified
Tax Increment Financing Plans and the proposed Tax Increment Financing Plan.
1.06. 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
increased project costs within Redevelopment Project No. 1 and to create the,Proposed
TIF District and to approve and adopt the proposed Tax Increment Financing Plan
relating thereto.
Section 2. Findings
2.01. The Authority hereby finds that the assistance to be provided through the adoption
and implementation of the Modified Redevelopment Plan, Modified Tax Increment
Financing Plans and proposed Tax Increment Financing Plan are necessary to assure
the development and redevelopment of Redevelopment Project No. 1.
2.02. The Authority hereby finds that the Modified Redevelopment Plan, Modified Tax
Increment Financing Plans and proposed Tax Increment Financing Plan 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, Modified Tax Increment
Financing Plans, and proposed Tax Increment Financing Plan afford maximum
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 modification to the Modified Redevelopment Plan for Redevelopment Project
No. 1 reflecting increased project costs is hereby approved and adopted by the
Commissioners of the Authority and is forwarded to the Fridley City Council for public
hearing, review and approval.
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 Existing
TIF Districts reflecting increased project costs within Redevelopment Project No. 1 are
Page 3 - Resolution No.
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. Creation of Tax Increment Financing District and Adoption of Tax Increment
Financing Plan.
5.01. The establishment of the Proposed TIF District within Redevelopment Project No. 1
and the adoption of the proposed Tax Increment Financing Plan relating thereto 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 6. Filing of Plans.
6.01. Upon approval and adoption of the Modified Redevelopment Plan, the Modified
Tax Increment Financing Plans and the proposed Tax Increment Financing Plan
(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 THIS 4TH DAY OF DECEMBER, 2000.
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, County of Anoka, Minnesota, hereby certify that the foregoing
is a true and correct copy of Resolution No. adopted by the Authority on
the 4th day of December, 2000.
WILLIAM W. BURNS - EXECUTIVE DIRECTOR
01 \W?DATA \F \FRTI3T,FY \70 \TIF \I-MA TIF RES.DOC
SECTION XVIII
TAX INCREMENT FINANCING PLAN FOR
TAX INCREMENT FINANCING DISTRICT NO. 17
(GATEWAY EAST PROJECT)
Subsection 18.1. Statement of Obiectives. See Section I, Subsection 1.5,
Statement of Objectives.
Subsection 18.2. Modified Redevelopment Plan. See Section I, Subsections 1.2
through 1.15.
Subsection 18.3. Parcels to be Included. The boundaries of Tax Increment
Financing District No. 17 are described on the attached Exhibit XVIII-A and illustrated
on Exhibit XVIII-B.
Subsection 18.4. Parcels in Acquisition. The Authority may publicly acquire and
reconvey any or all of the parcels in Tax Increment Financing District No. 17 identified
on the attached Exhibit XVIII -A.
The following are conditions under which properties not designated to be
acquired may be acquired at a future date:
(1) The Authority may acquire property by gift, dedication, condemnation or
direct purchase from willing sellers in order to achieve the objectives of the Tax
Increment Financing Plan; and
(2) Such acquisition will be undertaken only when there is assurance of funding
to finance the acquisition and related costs.
Subsection 18.5. Development Activi for which Contracts have been Signed.
As of the date of adoption of the Tax Increment Financing Plan, the Authority intends to
enter into a Redevelopment Agreement with respect to the activities discussed below.
Subsection 18.6. S ecific .Development Expected to Occur. At this time it is
anticipated that an approximately 28 unit owner- occupied, residential housing
townhouse development with an estimated market value of $4,480,000, will be
constructed beginning in 2001 and will be completed in 2002.
Subsection 18.7. Prior Planned Improvements. The Authority shall, after due
and diligent search, accompany its request for certification to the County Auditor or its
notice of district enlargement with a listing of all properties within Tax Increment
Financing District No. 17 for which building permits have been issued during the
eighteen (18) months immediately preceding approval of the Tax Increment Financing
Plan by the Authority. The county Auditor shall increase the original tax capacity of Tax
18 -1-
Increment Financing District No. 17 by the tax capacity of each improvement for which
the building permit was issued. If said listing does not accompany the aforementioned
request or notice, the absence of such listing shall indicate to the County Auditor that
no building permits were issued in the eighteen (18) months prior to the Authority's
approval of the Tax Increment Financing Plan.
Subsection 18-.8. Fiscal Disparities. The Council hereby elects the method of
tax increment computation set forth in Minnesota Statutes, Section 469.177,
Subdivision 3, clause (a) if and when commercial /industrial development occurs with
Tax Increment Financing District No. 17.
Subsection 18.9. Estimated Public Improvement Costs. The estimated costs
associated with Redevelopment Project No. 1 are listed in Section I, Subsections 1.9
and 1.10.
Subsection 18.10. Estimated Amount of Bonded Indebtedness.
It is anticipated that $1,599,861 of bonded indebtedness could be incurred with respect
to this portion of Redevelopment Project No. 1. Pursuant to Minnesota Statutes,
Section 469.178, Subdivision 1, General Obligation Tax Increment Bonds may be used
as required to amortize the costs identified in Section I, Subsections 1.9 and 1.10. The
Authority reserves the right to pay for all or part of the activities listed in Section I.
Subsections 1.9 and 1.10 relating to Redevelopment Project No. 1 as tax increments
are generated and become available.
Subsection 18.11. Sources of Revenue. The costs outlined in Section I,
Subsection 1.9 will be financed through the annual collection of tax increments as well
as grants received from the State of Minnesota and the Metropolitan Council.
Subsection 18.12. Estimated Original and Captured Tax Capacities. The tax
capacity of all taxable property in Tax Increment Financing District No. 17, as most
recently certified by the Commissioner of Revenue of the State of Minnesota on
January 2, 2000, is estimated to be $5,016.
The estimated captured tax capacity of Tax Increment Financing District No. 17
upon completion of the proposed improvements on January 2, 2002 is estimated to be
$55,072. All the captured net tax capacity is necessary to finance the improvements to
be undertaken within Tax Increment Financing District No. 17, therefore the Authority
chooses to retain all the captured net tax capacity for purposes of tax increment
financing.
Subsection 18.13. Tax Increment. Tax increment has been calculated at
approximately $64,908 upon completion of the improvements assuming a static tax
capacity rate and a valuation increase of two percent (2 %) compounded annually.
Subsection 18.14. Tax Ca aci Rate. The estimated 1999/2000 total tax
capacity rate is estimated at 117.859 %.
18 -2
Subsection 18.15. Type of Tax Increment Financing District. Tax Increment
Financing District No. 17 is, pursuant to Minnesota Statutes, Section 469.174,
Subdivision 10, a Redevelopment District.
Subsection 18.16. Duration of Tax Increment Financing District. The duration of
Tax Increment Financing District No. 17 is expected to be twenty five (25) years from
receipt of the first tax increment. The date of receipt of the first tax increment is
estimated to be July, 2003. Thus, it is estimated that Tax Increment Financing District
No. 17, including any modifications for subsequent phases or other changes, would
terminate in the year 2028.
Subsection 18.17. Estimated Impact on Other Taxing Jurisdictions. The
estimated impact on other taxing jurisdictions assumes construction would have
occurred without the creation of Tax Increment Financing District No. 17. If the
construction is a result of tax increment financing, the impact is $0 to other entities.
Notwithstanding the fact that the fiscal impact on the other taxing jurisdictions is $0 due
to the fact that the financing would not have occurred without the assistance of the City,
the attached Exhibit XVIII -E reflects the estimated impact of Tax Increment Financing
District No. 17 if the "but for" test was not met.
Subsection 18.18. Election of City Contribution. The Council hereby elects a
qualifying local contribution equal to five percent (5.00 %) of the tax increment
generated from Tax Increment Financing District No. 17, as set forth in Minnesota
Statutes 273.1399.
Subsection 18.19. Modification of Tax Increment Financing District and/or Tax
Increment Financing Plan. On November 13, 2000, no modifications to Tax Increment
Financing District No. 17 or the Tax Increment Financing Plan therefore has been
made, said date being the date of initial approval and adoption thereof by the City
Council.
G: IWPOATAIFIFFIDLEYWTIRTIFPLAN .DOC
18 -3
EXHIBIT XVII I — A
PARCELS TO BE INCLUDED IN
TAX INCREMENT FINANCING DISTRICT NO. 17
AS ORIGINALLY ADOPTED NOVEMBER 13, 2000
PIN 23- 30 -24 -24 -0014
PIN 23 -30 -24-24 -0072
PIN 23- 30 -24 -24 -0073
PIN 23- 30 -24 -24 -0074
PIN 23- 30 -24 -24 -0075
PIN 23- 30 -24 -24 -0076
PIN 23- 30 -24 -24 -0101
PIN 23 -30 -24-24 -0102
PIN 23- 30 -24 -24 -0103
Including all adjacent rights -of -way.
XVIil —A -1
EXHIBIT XVIII - B
BOUNDARY MAP OF
TAX INCREMENT FINANCING DISTRICT NO. 17
AS ORIGINALLY ADOPTED NOVEMBER 13, 2000
XVIII -B -1
EXHIBIT XVIII - C
CASH FLOW ANALYSIS FOR
TAX INCREMENT FINANCING DISTRICT NO. 17
AS ORIGINALLY ADOPTED NOVEMBER 13, 2000
XVIII -C -1
EXHIBIT XVIII — D
"BUT FOR" ANALYSIS
TAX INCREMENT FINANCING DISTRICT NO. 17
The proposed redevelopment district consists of nine parcels, three of which contained
structures. The City Council and the Authority adopted resolutions determining that
those three parcels were occupied by structurally substandard buildings and such
parcels were to be included within a tax increment financing district. The substandard
structures were demolished in 2000.
The street pattern in this area is also inefficient. Four of the nine parcels are "double
frontage" lots.
The structurally substandard buildings consisted of J.R. Automotive, Cash `n Pawn (a
former service station) and a duplex. The property proposed to be included within the
district is also blighted due to incompatible land uses and contamination.
It is proposed that 28, owner - occupied, townhouse units be constructed within the
district and will be sold at prices starting at $126,000. It is expected the City's tax base
will increase by approximately $4,000,000.
The proposed tax increment district contains parcels that have land uses that are
incompatible with each other and with adjacent parcels, have required remediation and
require major infrastructure improvements. The new construction will improve the
currently underutilized property that is located in a highly visible area of the City along
University Avenue and will provide a buffer between existing commercial and single -
family, residential areas within the neighborhood. The existing University Avenue
frontage road will be reconstructed in a more conducive alignment for efficient
development and double frontage lots will be eliminated. Because of the substantial
costs of acquisition, relocation, demolition, remediation, and utility and street relocation,
all of which substantially exceed the market value of the land, this redevelopment
project could not proceed without the financial assistance of the Authority.
G: \wmmTA\r�rR=4=\ 30 \SZF\SZPPUW . DCC
XVIII —D -1
y; HOUSING AND REDEVELOPMENT
AUTHORITY
Memorandum
Date: December 1, 2000
Memo To: William W. Burns, Executive Director �nY
From: Barbara Dacy, Community Development Director
Subject: HRA Appointment
February 1, 2001, will unfortunately be Commissioner McFarland's last meeting. The
term that Jim is serving will expire June 9, 2002. Jim has suggested the City consider
Jay Bajwa as a potential candidate. Mr. Bajwa submitted a letter (attached) indicating
his interest and willingness to serve. The letter has been submitted to the Mayor and
Council for consideration. State Statutes require the Mayor to appoint commissioners
with the approval of the governing body. No action is needed by the Authority.
M -00 -197
##ql t
November 1, 2000
I must say that I am very much interested in doing so; and as such would like to present
my credentials as follows:
I was born in the country of India and completed primary and secondary school education
in Catholic mission schools there. I came to the United States to attend college and
graduated with Bachelor's degrees in English and Accounting from Washington State
University and Mankato State College respectively.
Upon graduation, I worked for The Pillsbury Company for eight years as an Auditor and
Mergers & Acquisitions Specialist. Thereafter, I started my banking career with Norwest
Bank (now known as Wells Fargo) where I made the systematic progression from
"Banking Trainee" to "Vice President" within a fifteen -year span. I started with
Northeast Bank as Senior Vice President in March of 2000.
Throughout my working career I have been closely associated with understanding and
servicing the needs of the businessman. I think a strong business environment is vital to
the overall health of any community.
Please feel free to contact me at 763 - 792 -3215 if you have any questions.
Sincerely,
/ay Bajwa
Your Independent
Ms. Barbara Dacy
Community Bank
Community Development Director
Housing and Redevelopment Authority
Coo Coon Rapids Blvd
Fridley MN 55432
y
Coon Rapids. MN 55433
612 -784 -3533
FAX. 612-784-3534
Dear Ms. Dacy:
Member F D I C
I was visiting with Jim McFarland, who urged me to approach you if I were interested in
stepping in as his replacement on your Board upon Jim's retirement in December.
I must say that I am very much interested in doing so; and as such would like to present
my credentials as follows:
I was born in the country of India and completed primary and secondary school education
in Catholic mission schools there. I came to the United States to attend college and
graduated with Bachelor's degrees in English and Accounting from Washington State
University and Mankato State College respectively.
Upon graduation, I worked for The Pillsbury Company for eight years as an Auditor and
Mergers & Acquisitions Specialist. Thereafter, I started my banking career with Norwest
Bank (now known as Wells Fargo) where I made the systematic progression from
"Banking Trainee" to "Vice President" within a fifteen -year span. I started with
Northeast Bank as Senior Vice President in March of 2000.
Throughout my working career I have been closely associated with understanding and
servicing the needs of the businessman. I think a strong business environment is vital to
the overall health of any community.
Please feel free to contact me at 763 - 792 -3215 if you have any questions.
Sincerely,
/ay Bajwa
,a
Memo To: William W. Burns, Executive Duecto r ie
From: Barbara Dacy, Community Development Director
Date: December 1, 2000
Subject: HRA Budget
Staff is now in the process of completing a draft 2001 budget. The challenge this year is to create a
working document that correlates the day -today operation of the Authority with the requirements of the
Office of the State Auditor. Aside from the typical expenditures of the authority (housing loan program
expenses and other routine items), there have not been significant amounts of funds expended in the year
2000 since the Authority has spent most of time preparing for the Gateway East project.