HRA 03/01/2007 - 6208AW INFORMATIONAL ITEM
M`` HRA/COUNCIL MEETING - MARCH 10 2007
CRY OF
FRIDLEY
Date: February 25, 2UU'/
To: William Burns, Executive Director
HRA Board of Commissioners
City Council members
From: Paul Bolin, Asst. Executive HRA Director
Scott Hickok, Community Development Director
Subject: HRA/Cily Role in Northstar Funding / Development
Over the past two months it has been confirmed by the NCDA that there is not enough
funding available to construct the Fridley station. In order to avoid missing out on the
opportunity to have a station in Fridley, the City Manager recently pulled together staff
from a number of City Departments to brainstorm options for getting the station site built
in Northstar's initial phase.
The brainstorming session happened just last week and resulted in more questions than
answers. If this memo seems to be very sketchy and lacking in detail, it is! The
brainstorming group will meet one more time before your meeting next Thursday and is
also scheduled to meet with Tim Yantos of the NCDA next Thursday afternoon.
The brainstorming group first tried to determine the costs associated with station
construction from land acquisition and parking ramp construction to construction of a
tunnel and elevator shaft. These potential uses and costs are listed below.
Uses
Tunnel $1,000,000
Nelson Property $3,300,000
Parking Ramp $3,300,000
Shaft $1,000,000
TOTAL $8,600,000
The group then began to identify potential funding sources for the different uses. Those
sources are listed on the following page.
Sources
ISTEA/MSA ( Tunnel/Shaft) $2,000,000
Special Legislation/TIF Districts (dist 10/11/12) $1,900,000
Internal loan HRA General Fund
(pay back with levy) $1,100,000
$8,600,000 $5,000,000 ($3,600,000)
After identifying potential sources and uses, the group identified a number of different
options for the development of the station site.
Options for Station Site
1.) NCDA Option as shown on all plans to date
2.) Build on west side with pedestrian and 57th Ave Underpass
3.) Build on west side with pedestrian tunnel
4.) Use # 3 above, with a park and ride at either Columbia Arena or Community Park
with shuttle
5.) Option #1; buy 4 acres from Nelson and let him develop the residential piece if he
wants
6.) Constructing a pedestrian overpass with a drop -down to the platform, rather than
a tunnel and connecting it to two parking ramps, one on either side of the tracks.
After discussing a number of options a series of next steps were identified, including
developing special legislation that would allow us to pool funds from TIF Districts
#10/11/12 that would otherwise be lost and creating at Transit TIF District. Federal
funding for the tunnel, as part of a trail project is also being investigated (see separate
memo from Jon Haukaas). Additionally, staff continues to further identify and refine the
costs while investigating potential funding resources.
What has happened since our brainstorming session?
Community Development and HRA'staff identified potential parcels for inclusion in the
Transit TIF District special legislation that has been prepared by Jim Casserly, Mary
Molzahn, and Bonnie Ballach. The proposed legislation is attached to this memorandum.
This legislation is also moving forward, with the help of Bonnie Ballach, to be introduced
at the capitol.
Public Works staff has identified sources for constructing the tunnel/shaft as part of a trail
enhancement project. It may be possible to obtain Federal funding from ISTEA and State
funding from the Municipal State Aid program. Mr. Haukaas has also identified some
additional public /private grant opportunities that he will continue to explore.
Finance staff has been working with Krass Monroe to further refine the potential sources
of funding that the HRA may have available for this project. Potential sources identified
include TIF, the HRA levy, and the HRA general fund.
Staff Recommendation
Staff recommends that the HRA and Council discuss these issues, ask questions, consider
options, and provide direction to staff as appropriate.
A bill for an act
relating to the city of Fridley; Tax Increment Financing;
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Sec 1 [CITY OF FRIDLEY• TAX INCREMENT FINANCING DISTRICT.1
Subdivision 1 [SPECIAL RULES.] (a) If the city elects upon the adoption of a
tax increment financing plan for a district the rules under this section shall apply to a
redevelopment tax increment district established by the city of Fridley or the housing
and redevelopment authority of the city which includes parcel numbers 223024120010,
223024120009 223024120017 223024120016, 223024120018 223024120012,
223024120011 223024120005 223024120004, 223024120003 223024120013,
223024120008 223024120007 223024120006 223024130005 223024130010,
223024130011 223024130003 153024440039 153024440037 153024440041,
153024440042 223024110013 223024110016 223024110017 223024140008,
223024130002 223024420004 223024410002 223024410002 223024410003,
223024110008 223024110007 223024110019 223024110018 223024110003,
223024140003 223024140009 223024140002, 223024140010, 223024410007, and
adjacent railroad property, and which area shall be referred to as the Northstar Transfer
Station District.
(b) The requirements for qualifying a redevelopment tax increment district under
Minnesota Statutes section 469.174, subdivision 10 do not apply to the parcels located
within the Northstar Transfer Station District which parcels shall be deemed eligible for
inclusion in a redevelopment tax increment district.
(c) In addition to the costs permitted by Minnesota Statutes section 469 176
subdivision 48, eligible expenditures within the Northstar Transfer Station District shall
include those costs necessary to provide for the development or expanded use of a
transfer station. For purposes of this subdivision, transfer station shall mean a physical
structure or designated area which supports the interconnection of various
transportation modes, including light rail, commuter rail and rapid bus transit and which
promotes and achieves the -loading, discharging and transporting of people.
(d) Notwithstanding the provisions of section 469.1763, subd. 2, the city of Fridley
may expend increments generated from its tax increment financing districts nos. 11 12
and 13 for costs permitted by section 469.176, subd. 40 and paragraph (c ) above
outside the boundaries of tax increment financing districts nos. 11, 12 and 13 but only
within the Northstar Transfer Station District.
(e) The five -year rule under Minnesota Statutes, section 469.1763, subdivision 3
shall not apply to the Northstar Transfer Station District or to tax increment financinq
districts nos. 11, 12 and 13 .
(f ) The use of revenues for decertification under Minnesota Statutes, section
469.1763, subdivision 4, shall not apply to tax increment financing districts nos. 11, 12
and 13 .
Subdivision 2. [EFFECTIVE DATE.1 This section is effective upon approval by the
governing body of the city of Fridley and upon compliance by the city with Minnesota
Statutes, section 645.021, subdivision 3.
G. \WPDATA\K&M\PUBLIC FINANCE\LEGISLATION 2007\FRIDLEY TIF DISTRICT.DOC
March 1, 2007
HRA Meeting
Regular Meeting Agenda
7:30 p.m.
City Hall, Council Chambers
Call to order
Roll call.
Action Items
1. Approval of expenditures
2. Approval of February 1, 2007 Meeting Minutes
3. TIF District #19 —Approve Development Agreement
4. Decertification of TIF District #14 —North Park Business Center
Approval to Fund Preparation of Federal Grant Application for Pedestrian
BikewayAValkway Tunnel (Under BNSF Tracks at 61St Avenue)
Informational Items
1. Gateway NE Update
2. Monthly Housing Report
Adjournment
H: \-- Paul's Documents \HRA\HRA Agenda Items\2007\March 1, 2007\March 1 -2007 Agenda Outline.docH: \Paul's
Docurnents\HRA\HRA Agenda Items\2007\March 1, 2007\March 1 -2007 Agenda Outline.doc
CITY OF FRIDLEY
HOUSING AND REDEVELOPMENT AUTHORITY COMMISSION
February 1, 2007
CALL TO ORDER:
Chairperson Commers called the Housing and Redevelopment Authority meeting to order
at 7:27 p.m.
ROLL CALL:
Members Present: Larry Commers
Pat Gabel
William Holm
John Meyer
Steve Billings
Others Present: Mike Jeziorski, City Accountant
Paul Bolin, HRA Assistant Executive Director
Jim Casserly, Development Consultant
Richard Pribyl, Finance Director /Treasurer
William Burns, HRA Director
APPROVAL OF MINUTES:
1. Approval of December 7, 2006, Meeting Minutes
MOTION by Commissioner Holm, seconded by Commissioner Gabel, to approve the
minutes as amended.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED UNANIMOUSLY.
ACTION:
2. Approval of Expenses
Commissioner Gable asked regarding removal of an uprooted spruce tree, where is that?
Mr. Bolin replied that was right next to our new fence.
MOTION by Commissioner Meyer, seconded by Commissioner Billings, to approve the
HRA checking for the period December 8, 2006, to February 1, 2007.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED UNANIMOUSLY.
3. Approval of Resolution to Create TIF District #19
Paul Bolin, Assistant HRA Director, stated John Allen of Industrial Equities plans to
redevelop the site at 5110 Main Street. This is the former location of Guardian Building
Products. They will recall a discussion they had on this item back in November where
the HRA gave preliminary authorization for staff to move forward with the creation of
TIF District #19. At the time Mr. Allen was actually proposing really two options for this
site: one being two buildings, totaling 202,000 square feet; and the other 240,000 square
feet, to be used for new office warehouse. The larger building was for a specific tenant
that Mr. Allen had been courting, and that tenant is no longer a possibility. At this time
Mr. Allen is moving forward with his two- building design and does anticipate high costs,
both for the demolition and soil corrections. After the 1965 tornado there was a trench
dug on this site, and debris from the building was pushed into that hole. Mr. Allen has
asked for $1.5 million in pay -as- you -go financing. That assistance makes the site
competitive with clean sites in outlying suburbs. Redevelopment is very expensive, but
for the assistance from the HRA, the redevelopment is not feasible for Industrial Equities.
Industrial Equities will clean the site, demolish the buildings, construct new, and they
plan to own and manage for the long term. This eliminates outdoor storage problems that
we had with the previous user of this site, corrects the soil problems, provides new
investment in this neighborhood, and creates new jobs.
Mr. Bolin stated, staff does recommend approval of the resolution creating TIF District
#19. The development agreement that would go along with the creation of this TIF
District, spells out the Authority's obligations to Mr. Allen, and Mr. Allen's obligations
to the City and to the HRA. If they have had a chance to read through that development
agreement and, if there are no substantial changes, staff would also recommend the
Authority approve that tonight.
Chairperson Commers asked if he is correct that this agreement is similar to what they
had before?
Jim Casserly, HRA Attorney, replied this is similar to agreements the City and HRA
have done. What he did is actually took the agreement the Authority had with Allen from
1996, a district that just ended. In that particular project they provided a grant, and it was
a little bit different structure in that project. It was essentially a grant and a loan, and the
City provided the cash up front. In this agreement the City is not providing any cash up
front. This is a pure pay -as- you -go type, project and, if the tax increment comes in and
the taxes are paid timely, then the revenue note would be paid. The new taxes are
pledged to the payment of the revenue note. So the City is not putting any funds up front
on this. The City would make a payment over time, representing reimbursement for
eligible expenses. It would be a maximum of 16 years that the City would make
payments on. At the end of that period of time, the note would be deemed paid in full.
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Chairperson Commers asked if anyone wanted to go through it? They have done these
before and it is no different. The one comment he has, and is what they constantly come
up against, is that the HRA has wanted in a way to have some control over the quality
and design of the construction. The minimum improvements here are as defined as
contained in the construction plans which of course they have never seen. They have had
different issues regarding the how the outside of the buildings look, landscaping, etc. He
asked how would staff propose to have that issue resolved?
Mr. Bolin replied at this time Mr. Allen is still far from getting building permits, he has
not submitted any building plans yet, and is still working on his platting. He had to
purchase a small parcel from the Rail, and he has not completed the platting process for
that . Scott Hickok has had a number of conversations with Mr. Allen about expectations
for the exterior of the building. City Code does require some masonry products on the
front and there not be overhead doors facing street right -of -ways. Mr. Bolin knows they
have had a number of conversations about the landscape plan for the new building as
well. Mr. Allen does plan on demolition this spring.
Dr. Burns asked Mr. Bolin whether he knew approximately when the new building will
be erected?
Mr. Bolin replied he estimated shortly after the demolition, however, he has not seen any
building plans yet.
Chairperson Commers asked if they are getting too far ahead on this? They do want to
look at those plans. He asked Commissioner Meyer if he had any comments?
Commissioner Meyer asked if they approve this agreement tonight, is that inferring they
already approved the construction plans?
Attorney Casserly replied there are different ways of doing this and, when the Authority
is different from the Council, they may want to provide a more complete description of
the kind of materials they want, appearances they are expecting, if there are some certain
or kinds of upgrades they are anticipating. The City clearly has control over the
permitting process. Most of the time when the City and the Authority are the same body,
generally there is a pretty clear line of how that is going to be done. When the bodies are
different and, if they are looking for something more than the City would be requiring
from the project, then they should specify what additional kinds of improvements,
qualities, upgrades, materials, etc. they are expecting. Clearly it has to do all of those
things and the City has to inspect it. They have to issue the Certificate of Occupancy.
Meeting the requirements of this agreement is triggered off of the Certificate of
Occupancy the City issues. So if they want to have something more than what the City
Code requires, then they really need to identify that. There is nothing wrong with that, it
is just they need to identify that.
Chairperson Commers stated he did not know that is what the Authority desires. He
thinks though what should come first are the plans so they can look at them and then
determine if in fact, understanding the minimum Code requirements, if there is anything
else that this group would then feel is appropriate. There may well not be anything else,
but he thinks Mr. Allen should submit those plans. To him it seems next to impossible
for them to start dictating what types of things the redeveloper should have in the plans.
Attorney Casserly replied oftentimes you do not have your construction plans. Those
end up being pretty detailed kinds of drawings. Most of the.time those would not be done
prior to the time they would approve agreements or create districts. The timing just does
not work out right for that. What they could do (and particularly since Mr. Allen has
• done so many buildings), they could ask him what his intentions are for the facing and
the appearance of this building, and they could very quickly determine if that is the
quality and type of building they are expecting out of this project. They can actually put
in the agreement that he is to meet the quality of whatever he has done on other projects
in the City.
Chairperson Commers stated his work has been good so it is not necessarily they expect
any type of issue. They just want to try and do this in an orderly manner.
Attorney Casserly replied he did not think there is anything unreasonable about that. He
thinks what they normally ' do is identify either style, type, criteria, other types of
buildings, and suggest or state that it needs to meet the criteria that are contained. They
could also work in the agreement the Authority would approve the building plans. They
need to have some kind of structure for this though. If they want to put a provision in
there that the building plans have to be approved by the Authority, they can certainly
work something like that in or however they want to approach it.
Commissioner Gabel suggested they state that this agreement is subject to their approval
of the building plans?
Attorney Casserly replied, no, they would just put in there that the City would have to
approve buildings plans or site plans. What they really want to know is more of an
appearance and quality. Clearly it is all going to meet Code, so what he thinks they are
concerned about is how does it look within the total framework and as part of the
community. If they want to have some additional review of that, there is nothing
inappropriate about that. Sometimes what they have done is they have specified various
appearances that they want, a certain look, sometimes there are site plans that become
attached to the agreement that give you a sense of the appearance of it.
Commissioner Billings asked attorney Casserly, regarding the two items on the agenda,
one is approval of the resolution to create the TIF district and the other is the approval of
the resolution to adopt the development agreement. Regarding the TIF District, he
assumes they. want to pass that resolution tonight. Is there is any need to do the
development agreement simultaneously? Can that be approved at any future time?
Attorney Casserly replied, yes.
0
Commissioner Billings asked Mr. Bolin whether he invited the redeveloper to attend
tonight's meeting?
Mr. Bolin replied, yes, he had spoken with Mr. Allen on Monday morning. He had a
prior engagement in Florida this evening but he was going to have Jeff Salzbern, his local
representative, here tonight.
Commissioner Billings stated he thought it would make sense to, assuming they are in
agreement on creating the TIF District, go ahead and create that tonight. He suggested
they table the resolution and then attorney Casserly can come up with some additional
language.
Attorney Casserly stated the creation of the District is really a straightforward matter.
Oftentimes you have districts and you do not have agreements for many months. So
there is absolutely no reason they could not do it. Also, he believed the Authority will
meet again before the City Council adopts the agreement. The HRA is going to meet on
it twice so it would be good to adopt the resolution on the District tonight. In the
meantime perhaps Industrial Equities will have pulled things together or have site plans
that are perhaps more specific that will start showing some exterior finishing.
Chairperson Commers stated he thinks those suggestions seem to make sense. They
have a project that is going to go forward so it is not as if adopting the District at this time
is going to start the time running or something needs to be done. As far as the
development agreement itself, perhaps John Allen or someone wants to be at the next
meeting and go over it a little bit. He would like to get something in hand so
Commissioner Meyer can at least look over it ahead of time which has been their.
practice.
Dr. Burns stated he was wondering whether it would be satisfactory to have building
elevations and a site plan or does the Authority want something more than that at this
point?
Commissioner Meyer stated they have done this many times before. They have had site
plans, elevations, materials, specifications, etc. It certainly is not unusual for them to
request this and to review them. In the definitions of the agreement, there are carefully
defined construction plans, specifications, drawings, etc. on page 3. He cannot find the
linkage of the phraseology, construction plans, to the rest of it.
Chairperson Commers pointed out there is a provision in there on minimum
improvements which is construction of minimum improvements as Article IV, page 10;
and it describes the minimum improvements to the redevelopment property to be in
accordance with the construction plans.
Commissioner Meyer stated if this is the rather specific verbiage of the agreement, they
should either drop the verbiage in the agreement or do something about it. It seems to
him it would be good just to leave this in and they can be somewhat informal about it.
5
He thinks if they leave that in there, they can use their discretion as to how tough they
want to be.
Chairperson Commers commented make it simple, stating the construction plans are
subject to the Authority's review and approval.
Commissioner Meyers commented they ultimately should, if they mean something,
define what control they have. Do they all want a brick fagade? They perhaps do not
have that power, but they should say these types of things. Failing that, if they just leave
it that the redeveloper should submit these plans, is not saying what the Authority or he
has to do with them.
Attorney Casserly replied what he thought would be prudent to do is spend a little time
with John Allen's building group, his architect, and see what they have put together. He
does not know if the Authority really wants to approve the plans. What they probably
want to do is to review the quality of the materials, the exterior perspectives; they want to
have an understanding of what is going on with the site.
Chairperson Commers stated they certainly have looked at the designs and type of
materials that are being used. They have had a couple of projects where they have told
people they wanted some additional aesthetic types of things done to the property. They
have tried to exercise a little bit of control, and the inability to do so on occasion has
created things that are not maybe the best.
Attorney Casserly stated he thinks the message is clear, and he thinks that will be
conveyed back.
Commissioner Holm asked whether the TIF district will last 26 years?
Attorney Casserly replied the maximum duration of the district allowed by law is 26
years. The agreement being suggested does not use 26 years, it is 16 years.
Commissioner Holm asked attorney Casserly to help him understand how repayment
works in terms of the $1.5 million. Does it go over $1.5 million in some cases? Is it
related at all to the extra costs involved with the site improvements and so on?
Attorney Casserly replied currently the land is valued by the assessor at $1,243,000; and
the building has a value of $1,215,000 for total market value of $2,548,000 in 2006.
When this project is ultimately valued and taxed, assuming that the project is built in
2007, it would have a market value then of $10,144,000.
Attorney Casserly stated the estimated tax capacity on that is calculated at $202,000;
and that is just really a function of using the commercial retail class rate and multiplying
that by its market value. The estimated taxes on the building would be $306,416. The
estimated tax increment is $139,000.
r
Chairperson Commers asked the 200,000 square feet is not phased, correct?
Attorney Casserly replied they did not put that in as phased. That is a practical matter.
It is probably going to take a year to build out. So as a real practical matter the full
valuation of this thing is probably not going to come on for another year.
Chairperson Commers stated they talked in the past about minimum assessment
agreement.
Attorney Casserly replied the reason they have used minimum assessment agreements,
is that they have issued debt of some kind. In the Industrial Equities project that they
participated in before, the HRA actually provided the money up front. The HRA wanted
to make sure that the valuation was there so they could recover it. In other instances, the
HRA has gone out and actually sold bonds. They wanted to know there is a value there.
In this instance the HRA is not doing that.
Commissioner Holm stated, okay, they are providing this assistance and in order to
provide a site that, without this assistance, no development would take place because of
the soil contamination, the fact the building has to be taken out, and so on. So they are
providing $1.5 million of pay -as- you -go assistance. If the costs of demolition and soil
correction, etc. are less than $1.5 million, then the developer benefits from it. If it
costs more than that, they get hurt by it. He assumes this $1.5 million is a reasonable
estimate of what those costs will be.
Attorney Casserly replied it is fairly correct. There has been quite a bit of analysis
actually done on this site, and some of the amounts are pretty clearly understood. As a
practical matter it is just part of the give and take. You have a developer who was
looking for more and we said, no.
Commissioner Meyer stated on the resolution, Section 1.04 on the bottom of the sheet,
they talk about the Authority has prepared a modified redevelopment plan and modified
existing plans for the existing districts. Have they modified a redevelopment plan for the
project area? Modified their existing plans for existing districts?
Attorney Casserly replied every time they create a district you modify all of your
previous districts. They have a single project area and a single development program. So
every time they create a tax increment district, they are doing it inside the program and in
fact they are amending all of their existing districts so that they have the ability, such as
what they did with Medtronic, to move some of their resources around because it is not
just this specific tax increment district. They are amending their entire program,
including these costs. MOTION to approve Resolution No. , creating TIF District
No. 19 by Commissioner Gabel. Seconded by Commissioner Holm.
7
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED UNANIMOUSLY.
4. Approval of Resolution to Adopt Development Agreement Between HRA &
Industrial Equities
MOTION by Commissioner Billings to table the resolution adopting the development
agreement until their March meeting. Seconded by Commissioner Gabel.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED UNANIMOUSLY.
Approval of City's Planning Division Request to Fund a Housing Condition
Survey.
Mr. Bolin stated that the HRA hired an intern in 1994 who completed a housing
condition survey for the HRA. That person went through the entire City, block by block,
and rated the exteriors of every home. That data was used to target promotional efforts
for the different loan programs and that was used to kind of set an overall baseline for the
condition of the housing stock in Fridley, and was used during the visioning sessions for
the 1998 Comprehensive Plan. The data was also used to set redevelopment priorities for
the Council and Commissions.
Mr. Bolin stated Planning staff has started to prepare for the upcoming visioning
meetings and working internally with the different City departments regarding the
different chapters for the 2008 Comprehensive Plan. A need for current housing
conditions data has surfaced as a result of these meetings and has been viewed by the
Planning staff as an essential piece to providing the most accurate view of Fridley's
housing stock.
Mr. Bolin stated based on research done for the code enforcement intern, it will cost
approximately $7,000 to fund this person for the summer. They have estimated about
$2,000 in gas and mileage. The total of the request is $9,000. The Planning division
respectfully requests $9,000 to perform the housing conditions study that will help both
their future planning efforts and housing efforts in the City of Fridley. This information
would be very helpful for our loan programs. It may identify different neighborhoods
that they should be targeting their programs into. These studies are a snapshot in time,
and a lot has happened since the last study was done in 1994. There were the storms in
1998 resulting in a lot of reinvestment in Fridley and also the storms in 2005 that again
caused people to get new roofs, etc. It would be interesting to see what effects those
storms, along with the City's own programs, have had on the housing stock in Fridley.
Mr. Bolin stated his instincts tell him that the age of our housing stock is not a reflection
of the quality of our housing stock. Mr. Bolin thinks they have had quite a bit of
reinvestment because of those storms and, although the average home is 40 -45 years old,
he believes those are in much better condition than age would lead us to believe. Scott
''3
Hickok did mention if the HRA had a number of concerns, he would be happy to wait
until March for an answer from them.
Commissioner Gabel asked whether they had budgeted for this?
Mr. Bolin replied, no, this came about in the last month. It has come up in a number of
the focus groups for -the Comprehensive Plan that it would be helpful to have this
information.
Commissioner Meyer commented regarding the discovery that 95 percent of Fridley's
housing stock will be 30 years or older or more, by 2009, just as a comment he stated
around the Twin Cities, a home being 80 -100 years old is not uncommon. Huge tracks of
those types of homes are going strong. So just as an aside he did not want them to
assume that just because Fridley's homes are 30 years old or more that they are going to
hell in a handbasket. We are a young suburban/community still in terms of housing
stock. He thinks this would be a good move to participate in.
Commissioner Billings asked the HRA if they found the last housing survey to be
beneficial to the HRA?
Chairperson Commers replied his recollection was that it was and he does think that
this would also be beneficial to them. He is somewhat happy to see it might also help the
City a little bit in their Comprehensive Plan. However, he thinks his vote for it is because
it would help assist the HRA and its different programs they have for the housing stock.
Commissioner Gabel replied, she does too.
Commissioner Billings asked for clarification be provided as to what the intern is going
to be looking for when conducting the housing survey.
MOTION by Commissioner Billings that the HRA staff bring back a pro forma of what
they would be expecting to be looking for with a view towards the HRA of financing an
amount not to exceed $9,000 for a housing survey in 2007. Seconded by Commissioner
Gabel.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED UNANIMOUSLY.
6. Approval of Purchase Agreements for GWNE
Mr. Bolin stated since they last met in December, the Authority has closed on and taken
ownership of the former Car Quest building located at 6005 University Avenue. The
Authority has also reached an agreement and has a closing set for February 28 on the
original Van- O -Lite building located at 6041 University. In December the Authority also
authorized staff to contact the neighbors who border those two properties, as well as the
Oriental House since it is currently vacant. The aerial he has up on the screen shows
0
those properties that were contacted. The owners of the Sinclair station indicated that
they were not necessary interested in a sale at this point but would discuss it among
themselves and contact the City if they were to change their minds.
Mr. Bolin stated he did order appraisals for the other four properties, and Dan Wilson
from Wilson Development has put together purchase agreements for those properties
based on the appraised values which they can find in their packet. At this time staff is
recommending the Authority move forward, making offers to purchase the Tae Kwon Do
Center. This would give them control of that entire block between 60th and where the
frontage road wraps around by 61". Il Kim, the owner of the Tae Kwon Do Center, is a
very willing seller and Dan Wilson anticipates fairly low relocation costs to move the Tae
Kwon Do Center. Staff also recommends that the Authority present offers to the owners
of the newer Van- O -Lite building and also the Oriental House while those properties are
vacant. That will eliminate the need to pay relocation benefits down the road. Of course
final terms would be subject to Authority approval, and they would also recommend (as
they did in December) Chairperson Commers to have the authority to go ahead and
execute any purchase agreements they would get back from the sellers prior to the March
meeting.
Mr. Bolin stated at this time staff would recommend that they further investigate
purchase of the Citgo site. The appraised value came in much higher than anyone
anticipated, and it definitely does have an impact on the City's image. However, being
that it is separated from the other properties by 61s` Avenue may not necessarily be
crucial to any future redevelopment they would do in this neighborhood. The appraisers
were shocked by the value of the Citgo station. They had a laundry list of identical -sized
gas stations, where just in the last year or so, all of a sudden these are selling for $300 a
square foot for the building.
Commissioner Gabel asked why because if you buy those you have to get rid of the
underground tanks at a significant cost?
Mr. Bolin replied, yes, they would have to get rid of the underground tanks. They went
out and looked at a number of those comparables. It was typically these older, smaller
gas stations have also become a gas station/tobacco shop and some other use besides the
gas station and typical convenience store.
Commissioner Gabel commented so if you retain it as a gas station, that market value
stays in that high bracket.
Mr. Bolin replied, yes, and even these people who have turned the buildings into other
uses are paying $300 a square foot.
Chairperson Commers stated it has a funny location across the street in front of
St. Williams, and it would be interesting to see what somebody could come up with in
terms of redeveloping the property. It actually does not interfere with what they would
like to do on the south side. It would still be nice to take it out of there.
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Mr. Bolin stated if they would like staff to make an offer on that one, they would be
more than happy to do that on their behalf.
Commissioner Meyer stated if they made an offer at the assessed value, rather than the
appraised value, he might be willing to go along with that. He asked whether a service
station has to have a special permit?
Mr. Bolin replied the Sinclair site has a special use permit for its vehicle repair portion of
it, but he believed gas stations themselves are a permitted use in that zoning district. He
believed some of the special uses that sometimes go along with them, for example, a car
wash or minor car repair, need a special use permit.
Commissioner Meyer asked if the assessor has factored in a possible soil contamination
cleanup for the Citgo site?
Mr. Bolin replied, yes, they do take that into consideration. However, surprisingly, in
conversations he has had with the appraiser for what those are worth, typically they find
that gas stations do not necessarily have the level of contamination you would think they
would have. Without doing any borings on the site, they do not know if there is any
contamination on this particular site.
Chairperson Commers stated usually those tanks will rust out and usually have a little
leakage. They have had that before. Down on the east side they had that problem.
Commissioner Meyer stated if they bought that site, they would be liable for the cleanup
so this is something where, if they get more serious about wanting that, he thinks they
should one way or another get some soil borings.
Chairperson Commers asked attorney Casserly if there is still in place the State
program where they reimburse some percent of the cost to clean up gas stations?
Attorney Casserly replied as far as he knows the petro fund is still functioning.
Mr. Bolin stated if they would like to, between now and the March meeting, staff can do
some more research on this site in particular and try and find out if there is any
contamination. They can look into the petro fund and try and figure out really what the
liability might be from contamination if they were to purchase that site.
Commissioner Meyer commented of course the only really good way to know is to put a
couple of borings in there, and it would be several thousands dollars of investment.
Mr. Bolin suggested in lieu of spending the money on the borings, he can check with the
Fire Department to see what they know about this site and any leaks there and they can
also check with the MPCA to see if there has been any records there as well.
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Commissioner Billings stated he has mixed emotions about this, while he does not want
to see that comer become blighted, the other concern he has is that even if they were to
acquire the
property he is having a difficult time visioning what might want to go on the property.
They could end up with a $400,000 piece of property with no inkling as to what kind of
development they could get on the site or sale price they could get. Maybe a reasonable
thing would be to take a half step back since it is not a key thing as to what they are going
to be doing on the south side of 61St, just let it go for a while, and see if maybe the private
market will scoop it up and turn it into something that is an improvement to the site
without having any financial influence from them.
Chairperson Commers agreed and stated he thought tonight they should at least go
forward with the other properties and keep the Citgo property in mind as to what they
want to do with it.
Commissioner Billings agreed.
Commissioner Meyer stated he really felt an architectural planning group should be
hired to tell them what their ideas are rather than going the other way and having
individual private developers come in with their own individual ideas. They have not
done that. It seems to him it is an opportunity.
Chairperson Commers stated he thought they are going to hear some of that tonight
from their guest from Corridor Housing Initiative.
Commissioner Holm asked regarding their having purchased the 6005 Building and not
having established a TIF District, do these buildings remain standing until they establish
a TIP
Mr. Bolin replied they do not have to remain standing until they create the district. He
would think that once they acquire a few more of these properties and have some sense of
how soon the development may happen down here then they can go ahead and pass a
resolution that says they have the intent to create a TIF district in this area and actually
take the properties down. He believed then they have to get the TIF district created
within three years of making that resolution.
Attorney Casserly replied, yes, that is correct. Within three years of the demolition.
Chairperson Commers commented that was an issue for them over on the west side.
MOTION by Commissioner Holm to approve the right to execute purchase agreements
if they come in and also authorize Commissioner Gabel as the vice - chairperson to
execute those agreements. Also, to approve submitting offers to these owners at the
values stated by Lake States Realty. Seconded by Commissioner Meyer.
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UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED UNANIMOUSLY.
INFORMATIONAL ITEMS:
7. Corridor Housing Initiative — Presentation by Gretchen Nicholls
Mr. Bolin welcomed Gretchen Nicholls from the Center for Neighborhoods that has
developed a very unique neighborhood planning process which they refer to as the
"Corridor Housing Initiative." He has invited Gretchen to give them more information
on the Corridor Housing Initiative as it may be very useful for them if they do move
forward with the project on the Gateway Northeast area or for any future redevelopment
areas that may come up.
Gretchen Nicholls, Corridor Housing Initiative, stated Commissioner Meyer stated it
quite nicely that oftentimes communities are kind of always reacting to developers as
they come forward with ideas. This resource and process helps get ahead of the
development opportunities and help the community and the City frame what they would
like to see happen. It would kind of set some goals and expectations for development
that they can then market out to developers and encourage for implementing. It is
building on the notion of a community visioning where they are identifying what their
ideas are for what they would like to achieve with development. However, it helps
further that conversation by integrating the market realities of the area. So often the
visions of communities become very grand, and you can almost expect they are going to
want a bookstore and a whole array of things they would like to see happen for their
community but the truth of it is, is that really doable in the current marketplace and is that
really viable for development. This process convenes a series of workshops and
integrates a variety of technical expertise to help facilitate the conversation to really look
at some of the examples and ideas around design and development and kind of insert
some of the market information for the conversations so people can become more
sophisticated and knowledgeable about what is really doable for their area.
Ms. Nicholls stated the Corridor Housing Initiative originated largely in partnership with
the City of Minneapolis, and they have really been exploring this resource in that city
now and have expanded into St. Paul. They have not yet been in a suburb with this
resource, and so they are interested in trying to explore whether this could be useful for
Fridley. They think there is a lot of transferability that they can adapt this resource very
easily to the suburban context, and do that in a respectful way that really appreciates and
acknowledges the identities of the community. The resources they have are based on a
lot of imagery. One of the technical supports they have is the Metropolitan Design
Center, University of Minnesota. They are a very gifted group of designers who have
really gathered a whole array of different housing types, different mixed use options,
different kinds of development scenarios that are in their experience and local
environment so people can kind of see and say, oh, yes, that is what the building feels
like.
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Ms. Nicholls stated density is another critical issue which they find is very cumbersome
in community process. They have actually found a variety of density scales throughout
the suburban area that models or identifies different subsidies. The configuration of the
whole idea is to help familiarize people with some of these terms and ideas and kind of
take it home. The density becomes less kind of scary or difficult to talk about.
Ms. Nicholls stated another facet of this process is that they also integrate some
information about what affordable housing looks like. There is also a lot of concern
about the appearance of affordable housing in a community and whether that is a good or
bad thing. They think there are a lot of stigmas or assumptions about that type of
development work, and they see there are a lot of very positive examples about that in the
community. There is less about they are serving an affordable population but more about
the design and the way that building is integrated into the community and can be viewed
as an asset.
Ms. Nicholls stated she thinks Fridley has an amazing opportunity with the parcels they
are aggregating along University Avenue and have actually something to talk about.
What they will do is work with the City to figure out kind of what are the goals and
outcomes that they would like to see come out of the process - at the front end. They
will ask who are some of the community partners they think are critical to be involved in
that dialogue? Because they have not worked in the suburban communities, they really
will rely on the City to help them identify who they need to help support bring to the
table and create that conversation so people can really create an ownership over the
directions they choose to go in.
Ms. Nicholls stated the first stage is kind of the agreement setting period. Then in that
stage they are also designing a series of community workshops they will staff and
support. The first workshop is often just kind of an informational setting where they are
understanding what is the City's zoning code, what are some of the critical issues around
these parcels. Some people want to learn about transit in development or if there is some
sort of specific information people would like to have incorporated in this dialogue.
Then they bring those pieces into play.
Ms. Nicholls stated regarding the dialogue about what do people want to achieve through
development and what are their concerns, it is a way of kind of sifting out all kinds of
ideas and expectations about what people have about the area. That
information has been used to inform the next exercise which is called the "block"
exercise. This is probably the most exciting because it is really interactive, and it is really
an incredible learning place for people to understand the area more effectively.
Essentially what the block exercise does is asks the participants to build a development
concept on a specific parcel. They take the dimensions etc. and put it into a form of
spreadsheet, pump the numbers, and instantly find out if that project made any money or
if it lost too many dollars. It is really a ballpark assessment but helps people appreciate
how hard it is to get development to work. Also, what are some of the variations that
they could explore to see what could really happen there. It is really interactive and
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becomes a fun process for people to learn. People are not very defensive because it is the
developer saying this is what we think needs to happen here. It is really a chance to learn
and understand and appreciate how this stuff works. Also, what are some of the leverage
points they can utilize in working with developers to get some of the goals they would
like to see happen.
Ms. Nicholls stated so participants create a development concept and then that gets run
through the pro forma. While that is happening, there is a designer there who is
sketching what that building could look like so you are getting an actual image of what
massing could be according to certain design priorities or things people have liked about
some of the different buildings in the area. So they are using some of the design facets
that people have liked and what could that building look like. She has some summary
sheets about what some of their block exercise results have been. It shows the parcel that
was explored, what it looks like currently, then some scenarios that people tended to like
or kind of rose to the top in terms of what they thought were a good idea. And then it
outlines the information. The example parcel she used had 67 units. They actually lost
$2,500 per unit on this but that is still within reason. There is also approximately 15,000
square feet of commercial square footage. Then she showed a the sketch that was
developed to display what that building would look like. That is the second workshop
which is often a very exciting exploration of some of these topics.
Ms. Nicholls stated the third workshop is then often a panel of developers with city
representatives, maybe some business leaders, to really talk about the potential for
redevelopment in the area. At that point the community has a much higher appreciation
for the obstacles or the difficulties that development would likely entail, and you could
really have a very interesting conversation where people are better suited to understand
what really is going to happen. It kind of helps to manage some of the expectations and
try to help guide some of the thinking further for the area. Typically in their process what
they have done through the cities is the community takes that information and develops a
set of development objectives. In that process they are really highlighting what they want
to see happen for development in their area, and this information that gets marketed or
promoted to
the developers they are building relationships with. Those developers in each of their
project areas then have come forward and actually proposed developments that fit within
these development guidelines. So it has been a very effective tool for setting the stage for
development, of helping the community become more sophisticated in their relationships
with developers, and actually get the products they would like to see created.
Ms. Nicholls stated she does not know if this is the exact product that would be
developed for Fridley's community or there would be a different kind of iteration of that.
They are really open to the City's thoughts and ideas for what kind of end products would
be helpful to them in a process like this but it has been a very exciting and stipulation
setting for people to kind of come into dialogue and people have found it incredibly
useful. This block exercise is often regarded as kind of transformational of people's
understanding of what is really doable.
15
Ms. Nicholls stated they have been getting some awards for this process. They just
received the National Award from the APA for this initiative, and they think it has a lot
of potential. They would really love to try it with Fridley in a suburban context.
Chairperson Commers stated it is certainly different than they have done. When they
had the developers come in with their ideas, ultimately, it has not been the best of all
worlds for them. They come in with some general ideas the City tries to convey to them.
However, he thinks generally regarding their projects, for instance the last one they were
talking about down on the river, they had some ideas but they certainly were not
consistent with what the developers thought should be done. He does not know if this
would have helped them get farther along before they turned it over to the developers or
not.
Commissioner Meyer asked Ms. Nicholls if they have a minimum size of a project that
would be feasible for something like this?
Ms. Nicholls replied, no, they have really allowed the community just to identify what
parcels they would like to explore. Often it is based on information such as who is
interested in selling their sites or, if the City owns something, and this seems ready to go,
can we talk about this. They worked on sites that were actually too small to develop and
so they have gone through this whole process and then ended up needing to throw it out
because it just was not doable, and another parcel needed to be aggregated to make
something by viable. Often the larger parcels have more potential to do many types of
things. They have really worked on a whole range of different scales of sites. So it is
really adaptable to whatever they have.
Chairperson Commers asked have they done mixed -use type things? Not just housing?
Ms. Nicholls replied, yes. Usually communities want to explore what those mixed use
options could be. In the recent market, where housing has been so strong, it is difficult to
actually pull those off but she thinks there may be some shifts going on.
Commissioner Meyer asked for an idea of the framework on how they work. For
instance, she says alright, let's get together and then there is a certain effort and finances
involved and you get to a certain point. He asked for a better idea of what happens.
Ms. Nicholls replied, again, the end point is really up for negotiation with them as their
partner because they have the resources to facilitate and coordinate this process but they
do not have resources to buy parcels of land or to do the development. So essentially
they are creating an educational forum and helping build information for the City and
community to take that out to developers to implement those goals.
Commissioner Meyer stated, alright, they develop it so they can take it to the developers
and they do something with it within the framework of what they have created and the
City has approved.
16
Ms. Nicholls replied essentially what they are asking to do is set the stage for
development — what do they want to see happening?
Commissioner Meyer asked what kind of financial outlay would the HRA be asked to
give for this?
Ms. Nicholls replied this package of resources is approximately $30,000 for the whole
piece. However, they have received funding from the Family Housing Fund to offer this
to the HRA for free. They are able to give this resource to two communities to see if this
is a useful tool, see how it would work in this kind of community, and to see if it is
helpful or not. So really they are offering this as an "in kind" support to the City of
Fridley and its work.
Dr. Burns stated in some situations the lots do not have a lot of depth and they are right
up against the residential neighborhoods. Does she see this as a problem that can be
overcome?
Ms. Nicholls replied that is a similar dilemma for the cities, Minneapolis as well. The
frontage along the corridors is fairly shallow or they are narrow parcels and the
residential is right behind it. Yes, she thinks it is an issue they are used to and they are
working with the city and trying to figure out if there some land use changes that need to
be in place and how to navigate that. It is true that they are often working with
developers who are very frustrated with that scenario. Their designers are comprised of a
team of creative thinkers. Because this process is more proactive you get a lot of creative
ideas emerging because people are not so defensive and reactive. So you are really
collaborating in a more effective way about how do you make this work and what can be
done. It just kind of shifts the whole feeling of the conversation, and you look for ideas
to help resolve those issues. She thinks they are ready for that and see what can happen.
Commissioner Meyer asked who are the participants in that? For the HRA it would be
them, the City Council, and how about in the neighborhood? How do they involve the
neighborhood?
Ms. Nicholls replied that would be part of the fun of this is to figure out who are the
stakeholders and how do they invite them into this conversation.
Commissioner Meyer asked they do not have any predisposed idea to include certain
groups?
Ms. Nicholls replied in the cities there are often neighborhood organizations that are kind
of overseeing a lot of these issues. In the suburbs that may not be the case. So they will
be looking for business associations or any sort of kind of organized groups who could
lend some insight or ideas into the process. People who have a stake in the corridor and
have an interest in what is going to happen. Again, one of their technical experts who
works with the process is the Center for Policy Planning and Performance. They are very
skilled with outreach strategies and help strategize about how to bring in folks into the
17
conversation and what are some of the techniques they can use. They will also use a lot
of communication strategies to get information out to people about the conversation,
what has been learned, and how to kind of share that information more broadly. They
will set up a website that will host all of the materials so people can access that
electronically. But it really is a process that tries to bring in as many voices as possible
and helps the dialogue get deeper.
Mr. Bolin stated when he had talked with Ms. Nicholls before he thinks she had
mentioned that in a lot or some of these neighborhoods, the city may not even own a
single parcel or maybe they own one but they do involve the other existing property
owners; and a lot of times they are very interested in participating and making changes
and improvements to their site.
Ms. Nicholls replied, yes, this is not about surprising anybody. They are letting people
know what is going on and often the community has a lot of information about who is
ready to go and what is the sense of the businesses' plan for the future. So a lot of that
findering information can come forward through this process, but they really work to
involve the business owners and the landowners in the area to make sure they understand
what is going on, that they can come in and involve their voices as well. In some cases
they have had some property owners participating in this process, and they own the site
adjacent to the site they are looking at and the go, well, it would be a lot easier to do
development if you include my area and so they just kind of
include their parcel into the conversation. So it is all in good will and there are no
surprises for people that could create kind of a fear of something underhanded going on.
Commissioner Gabel stated she likes what Ms. Nicholls is saying and it is all very
positive. She asked what are some of the pitfalls?
Ms. Nicholls replied, well, you are clearly signaling there is a lot of interest in the area so
there could some speculation from other property owners in the area that could-react in
ways that would make it harder for other developments to happen in the area. Otherwise
they have not seen a lot of negative things so far. Fundamentally the communities have
been very successful in drawing developers in and building very constructive
relationships with them and it works out quite well.
Commissioner Gabel asked how many projects have they done?
Ms. Nicholls replied, the first phase, they have done five project areas and were all in the
City of Minneapolis. Sometimes they front end the master planning process and so the
development proposals take a while after the master planning is accomplished. However,
in each of those project areas there has been a proposal that has come and is in the works,
in the pipeline. It always takes a fair amount of time for development to get underway.
Regarding the second phase, which they are in currently, they have done three more.
Two are in St. Paul that are underway. They are hoping to do two in suburban
communities. Again, they have been doing this since 2003; and they have been very
F.
pleased with what they have experienced so far and very interested in trying to transfer
this into different types of cities and see how it works.
Commissioner Gabel stated she is a little confused. She asked Ms. Nicholls if they have
just done this in Minneapolis and they are working in St. Paul, why does she have some
things on display which say Woodbury, Chaska, and a couple of other suburban cities?
Ms. Nicholls replied the Design Center, their technical parties, is a much broader
resource. They have an image bank that is quite vast and contains images of all sorts of
places. They anticipated trying to expand this into other kinds of communities; and so
they have started to collect information from suburban cities, small towns, and trying to
build some of these materials that are more relevant to Fridley's experience /development
forums.
Commissioner Meyer asked Ms. Nicholls regarding the five projects and have taken
them up to this point, have they then gone onto the next phase with developers on any of
these five to
get them into reality?
Ms. Nicholls replied they do not do that but the communities in the cities do. What they
have done sometimes is hosted developer forums and showcased these different project
areas. There was a developer firm in the City of Minneapolis where they showcased the
five project areas they did in the first phase. There were about 30 developers who
showed up. It was not a very talkative meeting, but there were a lot of cards being
exchanged and a lot of information. She thought the developers really appreciated
knowing where did the City want to see development happen and what kind. That
information seems very useful. The developers have raved about this and really
appreciate the chance to come into a known environment where they understand what
people are trying to do.
Commissioner Meyer asked whether any of them have picked up the ball and run with
actual development?
Ms. Nicholls replied, yes. The first project area the City actually ended up releasing a
site and did a RFP and there are developers who are now competing for that parcel, all in
alignment with these development objectives the community has outlined. Regarding the
second one, a developer was actually participating through the process, is getting them
one of the sites, and is moving forward with that project. The third, she believed it was
along Nicollet Avenue, and the Lander Group identified a parcel and started working
with the community and are moving forward with their proposal. South Lyndale was a
four- neighborhood process that funded a master planning process and now there is a
variety of proposals coming in because that is a very kind of upper -end area so there is a
lot stronger development interest in that area. And then West Broadway is another
corridor on the north side of Minneapolis, and there was a development that came
forward from that area as well. So in each case the process is preceded of with
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information the developer can utilize and prepare a concept the community has already
indicated that they would support. It is this streamline that makes the predevelopment
work a lot of efficient.
Commissioner Billings asked what areas of St. Paul are they working with?
Ms. Nicholls replied they are starting in two very different places. One is St. Anthony
community, up Como Avenue. The second is on Rice Street. So one is a wealthier area
and the other is a lower - income area. The City wanted to see how the resource worked in
each and kind of contrasting those two typologies of communities.
Commissioner Billings asked about her statement they have funding to do projects for
two suburban municipalities, is there going to be a competition? Does everybody need to
submit what they want to do? Or is she saying that they would like to do something in
Fridley, and all they have to do is say, yes?
Ms. Nicholls replied, almost that easy. She is actually out promoting this resource to
different cities. She has met with Coon Rapids also and some other cities such as
Richfield and is in just some initial conversations with others. So she is just spreading
the word. She does not know if it is first -come, first - served. They have an oversight and
advisory committee who will actually receive the letters of interest and make the
decisions for which project areas are chosen. They are very anxious to initiate something
in a suburban setting so they have a good bet if they can move fast.
Commissioner Billings asked what kind of timeline are they looking at then in terms if
they were to send them a letter of interest? Is there a deadline for their oversight
committee?
Ms. Nicholls replied their next application round is June 1, but she thinks they would not
need to hold that hard and fast. She thinks if they got a proposal in from a suburb they
would like to move on it as quickly as they could. They have this funding through the
end of the year would like to be sure and get some opportunities going. A lot of it
depends of the HRH's timing, too — is this the right time or would it be better to postpone
for a few months but in essence it would be great if they would just let them know if this
is a resource they think would be valuable and how.
Commissioner Billings stated they have already made an investment in two pieces of
property, and tonight they authorized three more pieces of property in this particular area
where, if the offers are accepted, to go ahead and close on them. He thinks it is an area of
their City that they are committed to redeveloping, and at this point in time they have
nothing they have identified as what they really think should happen there other than get
rid of some buildings that do not look so nice. It sounds to him like the Corridor is
looking for a partner and the HRA is looking for some help and maybe the time is right.
Chairperson Commers stated he thought that was a very good characterization of where
they are at right now.
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8. Monthly Housing Report
Mr. Bolin stated in regards to the HRA program, this being January, the first month of
the year was fairly slow for loans. There was one loan issued in Fridley by CEE, and that
was using some of their private bank funds they have access to. There were no
remodeling advisor visits and no home energy audit visits this month either. However,
they are working hard on improving those numbers for the next few months. Regarding
all of the programs, they have really been out promoting this past month. Dr. Burns
wrote a nice article on the HRA's home energy audit program that is going out in the
February newsletter. Brian Strand has run a number of public service announcements on
Channel 17. A post card will be making its way out to Fridley residents over the next
week or so and touches on the HRA's different programs and also plugs the upcoming
Home and Garden Show. The Home and Garden show will take place on Saturday,
February 24, will run from 9 a.m. to 2 p.m. and will be at the Schwan's Center in Blaine.
This year they have some very unique breakout sessions and seminars covering
gardening, home safety, energy efficiency, and some different hints on interior
decorating, as well as a demonstration on building your own patio walls.
Dr. Burns pointed out on February 7 the Southern Anoka County Community
Consortium will have Julie Parenteau as a speaker who is going to talk about housing
sales in 2006 in Anoka County, the metro area, and in Fridley.
Chairperson Commers asked the Commission what do they want to do about Corridor
Housing Initiative program?
Commissioner Meyer replied if they wish could they agree tonight to have staff prepare
a Letter? He personally thinks it is an interesting try.
Commissioner Gabel stated she would be willing to give it a shot.
Commissioner Holm stated he believed they should hold off until they come out on .
some of the offers.
Commissioner Meyer stated, one thing is, for example if these people go through with
this it could spark not only the HRA's enthusiasm but also the other people to see the
possibilities. In other words it could be something that feeds on itself. He hears what
they are saying but it could go the other way, too, to be a catalyst for interest and
development.
Commissioner Billings asked regarding the Tae Kwon Do owner, they have stated they
are likely interested in negotiating a deal?
Mr. Bolin replied, yes, they are interested.
Commissioner Billings asked about the "new" Van- O -Lite building on the market?
21
Mr. Bolin replied the realtor has called him just about every day for the last two weeks to
see if they have the appraisal back and are ready to make an offer.
Commissioner Billings pointed out the Oriental House is kind of down the block. If
they can throw something in down there it would be good, but the main focus he thinks
are the two properties they have acquired and the two properties on either side of it where
they understand there to be an interested seller. So he is kind of thinking with all due
respect they actually do go forward. Even if they come up with a vision with what the
corridor could look like, that does not mean they have to have control of it. It just means
they have the neighborhood and the City and all the interested players agree this is what
they kind of would like to see, whether it is the HRA or private development. He asked
Commissioner Holm to expand on what his reservations are.
Commissioner Holm replied his understanding was it was not that much of a slam -dunk
that these other sites are interested in selling with the offers they are planning to make. If
he is wrong then so be it. He guessed he did not understand why they wanted to move
ahead real fast before they know where they are.
Commissioner Meyer replied there is nothing wrong with that reservation.
Commissioner Gabel stated she did not think they have anything to lose by figuring out
what it is they would like to see there. They already bought some of the land and know
they are buying more land. By giving the community and all of them an opportunity to
go ahead and figure what their vision is and significantly reduce cost to the HRA — she
hates for them to pass up the opportunity.
Chairperson Commers commented it does sound like they have a couple of relatively
willing sellers. They know they have some vacant buildings. They are not going to let
them sit forever without planning to do something with them. So he would think the
chances are pretty good that they are going to be able to negotiate something on them and
move forward. There is no reason not to pick up the Oriental Restaurant at this time.
They have already talked about Citgo, that is a bit of a different story. At that point they
are going to be sitting on the property and want to acquire and get it under control, but
they do not have any real thoughts. By turning this over to developers they have seen
what they have gotten down there on the Gateway East side and they have been a little bit
disappointed at times about it. It is a nice project but maybe something could have been a
little bit different. There is no risk to them and, if they do not like it, they do not go
forward with it; there is really no risk.
Commissioner Holm stated his only concern was if they do not really have control of
that much property, they do not have much of a project area to work with, yes, they could
talk about a larger area but they could create more problems in terms of adjacent owners
wanting more money, etc. He thinks they all agree they want to do something to improve
the University Avenue corridor and they certainly do not have any objections to
proceeding with acquiring the adjacent properties at reasonable rates. However, would
22
they be prepared to pay substantially more than that? He does not know if they could
answer that in the same affirmative response.
Commissioner Meyer asked Commissioner Holm is he thinking there is a risk of jacking
the price up because somebody sees there is more potential than he might have realized
himself?
Commissioner Gabel commented that is probably the risk they take when they are
putting projects together.
Commissioner Meyer stated, yes, if you put a fine facility next to any one of these and
the guy next door .is thinking and, rightfully so, there is a little more money — there is
always that risk anyway. Who knows maybe in the process the HRA will see some use
of the Citgo property.
Commissioner Gabel commented they are just talking about a Letter of Interest, right?
Mr. Bolin stated Ms. Nicholls works with a lot of existing property owners. The Alano
Society may not want to move. One of their board members came in and asked if the
HRA planned on taking their property. Mr. Bolin responded no, everything is on a
voluntary basis. However, they would be involved in the planning process as well as a
pet care business down the road. It would put the HRA in a position to really be
proactive with the development rather than reactive. In this case they would be able to
get all the players involved and, even if they did not acquire any more properties, they
would have a vision for future private developers to take a look at before they come into
that neighborhood.
Chairperson Commers replied that seemed like it was the big benefit to it. He does not
see any risk to it and if they do not like it, reject it, or do not get all the properties to do
something, they do not have any downside to that.
MOTION by Chairperson Billings to request staff to contact the Corridor Housing
Initiative and find out what they are looking for in a Letter of Interest on behalf of the
HRA inviting them to be a partner with them. Seconded by Commissioner Meyer.
UPON A VOICE VOTE, CHAIRPERSON COMMERS, COMMISSIONER
GABEL, COMMISSIONER BILLINGS AND COMMISSIONER MEYER
VOTING AYE, AND COMMISSIONER HOLM VOTING NAY, THE MOTION
CARRIED ON A 4 -1 VOTE.
ADJOURNMENT:
MOTION by Commissioner Gabel to adjourn. Seconded by Commissioner Meyer.
UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MEETING ADJOURNED AT 9:45 P.M.
23
Respectfully submitted,
Denise A Johnson
Recording Secretary
24
A ACTION ITEM
M` HRA MEETING - MARCH 1, 2007
CITY of
FRUXEY
Date: February 25, 2007
To: William Bums, Executive DirectorPlp
From: Paul Bolin, Asst. Executive HRA Director
Scott Hickok, Community Development Director
Subiect: Development Agreement for TIF DISTRICT #19•— Industrial Equities
Attached is the most recently written development agreement between the Authority
and Industrial Equities for the redevelopment of 5110 Main Street. Attorney Casserly
has made the corrections and changes requested by the HRA at their last meeting, in
addition to incorporating changes proposed by Industrial Equities. This version has
been reviewed and approved by John Allen of Industrial Equities.
As was requested, detailed building elevations and site plans have been included for
your review. Please review the plans, attached development agreement, and updated
resolution approving the agreement, prior to Thursday night's meeting. HRA Attorney
Gay Cerney and John Allen will be attending the meeting to address any additional
questions or concerns you may have with the agreement or site design.
Recommendation:
Staff recommends that the Authority adopt the attached resolution approving the
attached development agreement between the Authority and Industrial Equities for the
redevelopment of 5110 Main Street.
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James R. Casserly
jcasserly@krassmonroe.com
Direct 952.885.1298
Gay L. Cemey
gcemey@krassmonroe.com
Direct 952.885.4393
Also admitted in New York
MEMORANDUM
To: City of Fridley HRA
Attn: Paul Bolin, HRA Assistant Executive Director
Attn: William Bums, City Manager
Attn: Scott Hickok, Community Development Director
From: James R. Casserly, Esq.
Gay L. Cemey, Esq.
Date: February 19, 2007
Re: Industrial Equities: 5110 Main Street Project
Our File No. 9571 -70
Enclosed please find the following for your March 1, 2007 HRA meeting:
A blacklined draft of the Redevelopment Contract between the HRA and
Industrial Equities;
2. A Resolution approving the Redevelopment Contract;
3. A memo describing the changes from the version last presented to the
HRA dated January 24, 2007; and
4. A Cash Flow and Present Value Analysis. Based on a conservative set of
assumptions, the Redeveloper would be receiving approximately $1.3
million of the principal of the revenue note. This amount and the year are
underlined on the analysis. For the Redeveloper to receive $1.5 million
the market valuation would have to be approximately $56 per square foot
as opposed to the $50 per square foot used in the analysis, or the tax rate
or class rate would have to increase. An increase in the rate of inflation,
which we are assuming to be the 2.5% per year compounded annually,
9000 Norman Center Drive, Suite 1000
Minneapolis, Minnesota 55437 -1178
TEL 952.8855999 FAX 952.885.5969
www.krassmonroe.com
City of Fridley HRA
February 19, 2007
Page 2
would also generate additional tax increment revenues for payment on the
note.
5. A Tax Distribution chart. This-pie chart reflects the allocation of a property
tax dollar in the first full tax payable year after the completion of the
project. Estimated Taxes including market value referendum taxes are
estimated to be $323,000 (the market value referendum taxes are
approximately $17,000 and are in addition to the estimated taxes shown
on the Assumptions attached to the Cash Flow). The estimated tax
increment is approximately $139,000 or 43% of the total taxes. As the pie
chart shows after the reduction of the HRA Admin. and overhead costs of
4.3 %, which is paid from the tax increment, there is available for the
revenue note 38.8% of the property tax dollar. It is worth noting that the
State's property tax levy is not tax increment and the State will receive
32.1 % of the property tax dollar. Base taxes payable to the school district,
County, City and other taxing jurisdictions, as well as the school district
referendum levies and the State taxes, as noted above, are not tax
increment.
Gay Cemey from our office and John Allen will be in attendance to answer any
questions.
JRC lilt
GAWPDATA+1MDLM701CORIBOLIN BURNS HICKOK JRC GLC 02.DOC
DRAFT COPY: 1AA11AR -Y 2 FEBRUARY 17, 2007
CONTRACT
FOR
PRIVATE REDEVELOPMENT
By and Between the
HOUSING AND REDEVELOPMENT AUTHORITY
In And For
THE CITY OF FRIDLEY, MINNESOTA
And
INDUSTRIAL EQUITIES — NORTH YARD, LLC
This document was drafted by:
James R. Casserly, Esq.
Krass Monroe, P.A.
8000 Norman Center Drive
Suite 1000
Minneapolis, MN 55437
9521885 -5999
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
Section 1.1 Definitions 3
ARTICLE 11
Representations and Warranties
Section 2.1 Representations by the Authority 67
Section 2.2 Representations and Warranties by the Redeveloper 6-7
ARTICLE [II
Undertakings of Authority and Redeveloper
Section 3.1 Note to Redeveloper for Site Improvements 84-0
Section 3.2 Limitations on Undertaking of the City 81.0
Section 3.3 Conditions Precedent to Authority Note 64.0
ARTICLE IV
Construction of Minimum Improvements
Section 4.1 Construction of Minimum Improvements 101-2
Section 4.2 Completion of Construction 104-2
Section 4.3 Certificate of Completion 1042
ARTICLE V
Events of Default
Section 5.1
Events of Default Defined
114.3
Section 5.2
Remedies on Default
124-4
Section 5.3
No Remedy Exclusive
1244
Section 5.4
No Implied Waiver
1244
Section 5.5
Agreement to Pay Attorney's Fees and Expenses
1244
ARTICLE VI
Prohibitions Against Assignment and Transfer
ISection 6.1 Representation as to Redevelopment 134-5
Section 6.2 Prohibition Against Transfer of Property and Assignment 1345
of Agreement
1 Section 6.3 Assignment of Note ' 134-5
ARTICLE VII
Additional Provisions
Section 7.1
Conflict of Interests
154-7
Section 7.2
Restrictions on Use
154-7
Section 7.3
Titles of Articles and Sections
154-7
Section 7.4
Notices and .Demands
154-7
Section 7.5
Indemnification of Authority
1� 8
Section 7.6
Counterparts
164-8
Section 7.7
Law Governing
164-8
Section 7.8
Expiration
164-8
Section 7.9
Provisions Surviving Rescission or Expiration
164-8
Section 7.10
Real Property Taxes.
11774 -9
ARTICLE Vlll
insurance and Condemnation
Section 8.1 Insurance 1833
Section 8.2 Subordination 202-
SIGNATURES 222-9
SCHEDULE A Description of Redevelopment Property 2431
SCHEDULE B Site Improvements - 2532
SCHEDULE C Certificate of Completion 2633
SCHEDULE D Note 283533
SCHEDLUE E Site Plans 29
G: \WPDATA\RMDIZY \701DOC\2 -17 -07 TOC BLACKUNERTO 1- 2407.DDC
CONTRACT FOR PRIVATE REDEVELOPMENT
THIS AGREEMENT, made on or as of the day of March, 2007 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 Industrial Equities — North
Yard, LLGR, a Minnesota limited liability companypa#nepaNg organized under the laws of
the state of Minnesota (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 provide adequate housing in the
City, including low and moderate income housing and housing for the elderly, 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 sea. (the "Act "), a development program known
as the Modified 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, in connection with the Project Area, Tax Increment Financing District
No. 19 (the "Tax Increment District") has been approved by the Authority and the City and
the Tax Increment Financing Plan will be forwarded to Anoka County for certification and to
the State for filing, pursuant to the. Minnesota Tax Increment Financing Act contained in
Minnesota Statutes, Sections 469.174 to 469.1799; and
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 remodeled 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 and adopting the Redevelopment Plan, 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 health, safety,
morals and welfare of its residents, and in accord with the public purposes and provisions
of applicable federal, state and local laws under which the 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:
ARTICLE I
Definitions
Section 1.1 Definitions. In this Agreement, unless a different meaning clearly
appears from the context:
"Act" means Minnesota Statutes, Section 469.001 et seg.
"Agreement" means this Agreement, as the same may be from time to time
modified, amended, or supplemented.
"Authority" means the Housing and Redevelopment Authority in and for the City of
Fridley, Minnesota.
"Available Tax Increment" means 90% of the Tax Increment from the Tax Increment
District.
"Certificate of Completion" means the certification, in the form of the certificate
contained in Schedule C attached to and made a part of this Agreement, provided to the
Redeveloper, pursuant to Section 4.3 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 or the City,
and (b) shall include at least the following for each building: (1) site plan; (2) foundation
plan; (3) basement plans; (4) floor. plan for each floor; (5) cross sections of each (length
and width); (6) elevations (all sides, except as to a side of existing structure where no
construction is to take place); (7) facade and landscape plan; and (8) such other plans of
supplements to the foregoing plans as the City may reasonably request.
"Council" means the Council of the .City.
"County" means the County of Anoka, Minnesota.
"Event of Default" means an action by the Redeveloper described in Section -5.1. of
this Agreement.
"Holder" means the owner of a Mortgage.
"Minimum Improvements" means the construction of an office /warehouse building of
approximately 202,880 square feet on the Redevelopment Property with a total project cost
of approximately 454,—XX8-iQW,_gnd and as illustrated on the Site Plans.
"Minnesota Environmental Policy Act" means the statutes located at Minnesota
Statutes, Sections 116D.01 et seq., as amended.
"National Environmental Policy Act" means the federal law located at 42 U.S.C. Sub.
Sect. 4331 et se g., as amended.
"Permitted Encumbrances" mean the encumbrances described on Schedule D to
this Agreement.
"Note" means the Limited Revenue Tax Increment Note in the principal amount of
One Million Five Hundred Thousand and no /hundredths Dollars ($1,500,000.00),
substantially in the form of Schedule D attached to this Agreement, and to be made by the
Authority payable to the order of the Redeveloper in accordance with the terms of this
Agreement.
"Project Area" means Redevelopment Project No. 1, as amended, as established in
accordance with the Act.
"Redeveloper" means Industrial Equities – North Yard, LLC42, a limited liability
companypaFtneFship organized under the laws of the State of Minnesota.
"Redevelopment Plan" means . the modified redevelopment plan adopted by the
Authority for its Redevelopment Project No. 1, 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.
"Site Plans" means the plans attached hereto in Schedule E showing the proposed
nature and location of the Minimum Improvements.
"State" means the State of Minnesota.
"Tax Increment" means only that portion of the real estate taxes paid with respect to
the Redevelopment Property which is remitted to the Authority as tax increment pursuant to
the Tax Increment Act.
`Tax Increment Act" means the Tax Increment Financing Act, Minnesota Statutes,
Sections 469.174 to 469.1799, as amended and as it may be amended.
`Tax Increment District" means Tax* Increment Financing District No. 19 which is
located within the Project Area and has been approved by the Authority and the City and
the Tax Increment Plan will be forwarded to the County for certification and to the State for
filing as soon as the County provides a parcel identification number for one of the parcels
included in the Tax Increment District.
"Tax Increment Plan" means the tax increment financing plan adopted by the
Authority for its Tax Increment Financing District No. 19.
"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 which are the result of strikes, unforeseeable
and unavoidable casualties to the Minimum Improvements, the Redevelopment Property or
the equipment used to construct the Minimum Improvements, delays which are the result of
governmental actions, delays which are the result of judicial action commenced by third
parties, citizen opposition or action affecting this Agreement or adverse weather conditions
or acts of God.
ARTICLE 11
Representations and Warranties
Section 2.1 Representations by the Authority. 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 approved the Redevelopment Plan in accordance with the
terms of the Act.
(c) The Authority has approved the Tax Increment District and will forward the
Tax Increment Plan to the County for certification and the State for filing as soon as the
County provides a parcel identification number for one of the parcels included in the Tax
Increment District, pursuant to the Tax Increment Act.
(d) The Authority proposes to assistthe Redeveloperforthe Site Improvements
in accordance with the Tax Increment Plan, Redevelopment Plan and this Agreement.
(e) The Authority proposed to make the Note payable to the Redeveloper in
accordance with the provisions of this Agreement and to pledge Tax Increment generated
by the Tax Increment District to the payment of the Note according to its terms.
(f) The Authority will cooperate with the Redeveloper with respect to any
litigation commenced by third parties in connection with this Agreement.
Section 2.2 Representations and Warranties by the Redeveloper. The Redeveloper
represents and warrants that:
(a) The Redeveloper will construct, operate and maintain the Minimum
Improvements in accordance with the terms of this Agreement, the Redevelopment Plan
and all local, state and federal laws and ' regulations (including, but not limited to,
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 notice or communication from any local, state or federal official that the activities of the
Redeveloper or the Authority in the Project Area may be or will be in violation of any
environmental law or regulation.
As of the date of execution of this Agreement, the Redeveloper is aware of no facts,
the existence of which would cause it to be in violation of any local, state or federal
environmental law, regulation or review procedure orwhich would give any person a valid
claim under the Minnesota Environmental Rights Act.
(d) The Redeveloper will use its best efforts to obtain, in a timely manner, 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 maybe lawfully constructed.
(e) The Redeveloper is a limited liability company*ef ship organized under
the laws of the State.
(f) The Redeveloper agrees that it will cooperate with the Authority and shall
indemnify the Authority against all costs, including the costs of defense incurred by the
Authority through an attorney reasonably acceptable to the Authority and Redeveloper,
with respect to any litigation commenced by third parties in connection with Redeveloper's
failure to perform according to the terms and conditions of this Agreement.
(g) 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.
(h) 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 use of tax increment financing
provided by the City pursuant to this Agreement.
(i) For the construction of the Minimum Improvements the Redeveloperwill pay
wages in accordance with the prevailing wage rate as that term is defined in Minnesota
Statutes, Section 177.42, Subdivision 6 and in the City Resolution No. 25 - 1990. The
City's- Public Works Department shall be responsible for monitoring Redeveloper's
compliance of this requirement.
(j) The Redeveloper shall not allow any use or occupancy of the Redevelopment
Property or Minimum Improvements by a "Sexually Orientated Business" as defined in
Ordinance No. 965 of the City's Code.
ARTICLE Ili
Undertakings of Authority and Redeveloper
Section 3.1 Note 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 Note to the Redeveloper for Site Improvements as provided in Section 3.3.
Section 3.2 Limitations on Undertaking of the City.
(a) The Authority shall have no obligation under this Agreement to provide the
Note to the Redeveloper for the Site Improvements if the Authority, at the time the Note is
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 Note is withheld due to an Event of Default
which is later cured, such Note shall be made after such Event of Default has been cured.
(b) The Authority shall have no.obligation to provide the Note to the Redeveloper
for the Site Improvements unless the Redeveloper has submitted to the Authority the
original purchase agreements whereby it acquired the Redevelopment Property and
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 forthe Note, 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.
_
(c) The principal of the Note shall be the lesser of $1 500 000 or the cost of the
Site Improvements and the acquisition cost of PIN 27 -30 -24-14 -0003 less the square
footage of the Redevelopment Property multiplied by $4.00 per square foot. The principal
of the Note shall be further reduced by the amount if any, that the acquisition cost of the
Redevelopment Property is less than $2,250,000.
Section 3.3 Conditions Precedent to Authority Note. The Authority's obligation to
provide the Note 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.
(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.
(e) The Redeveloper shall be in compliance with all ordinances of the City.
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 and the Site Plans.
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, 2008. 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 and the Site 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.
(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.
10
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' Redevelopmont Property.
(b) Failure by the Redeveloperto complete the Minimum Improvements pursuant
to the terms, conditions and limitations of this Agreement.
(c) Failure by the Redeveloper to submit to the Authority the documents required
by Section 3.2(b) of this Agreement prior to the issuance by the Authority of a Certificate of
Completion or December 31, 2008, whichever occurs earlier.
(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 underthe 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 actor 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 (90) days after such appointment, or if the
Redeveloper shall consent to or acquiesce in such appointment.
11
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 has cured its default and will 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 Attomey'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.
12
ARTICLE VI
Prohibitions Against.Assionment and Transfer
Section 6.1 Representation as to Redevelopment. The Redeveloper represents and
agrees that its purchase of the Redevelopment Property, and its other 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 the issuance of the Certificate of completion., 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.totat 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.
Section 6.3 Assignment of Note. The Redeveloper may assign and pledge the Note
to secure any construction loan and may transfer the Note to any entity controlling,
controlled by or under common control with the Redeveloper. Otherwise, no Note shall be
assignable nor transferable without the prior written consent of the Authority; provided,
however, that such consent shall not be unreasonably withheld or delayed if: (a) the
assignee or transferee delivers to the Authority a written instrument acknowledging the
limited nature of the Authority's payment obligations under the Note, and (b) the assignee
or transferee executes and delivers to the Authority a certificate, in form and substance
satisfactory to the Authority, pursuant to.which, among other things, such assignee or
13
transferee represents that (i) the Note is being acquired for investment for such assignee's
or transferee's own account, not as a nominee or agent, and not with a view to the resale
or distribution of any part thereof, (ii) the assignee or transferee has no present intention of
selling, granting any participation in, or otherwise distributing the same, (iii) the assignee or
transferee is an "accredited investor" within the meaning of Rule 501 of Regulation D under
the Securities Act of 1933, as amended, (iv) the assignee ortransferee, either alone orwith
such assignee's or transferee's representatives, has knowledge and experience in financial
and business matters and is capable of evaluating the merits and risks of the prospective
investment in the Note and the assignee or transferee is able to bear the economic
consequences thereof, (v) in making its decision to acquire the Note, the assignee or
transferee has .relied upon independent investigations and, to the extent believed by such
assignee or transferee to be appropriate, the assignee's or transferee's representatives,
including its own professional, tax and other advisors, and has not relied upon any
representation or warranty from the Authority or the City, or any of their officers,
employees, agents, affiliates or representatives with respect to the value of the Note, (vi)
neither the Authority nor the City has made any warranty, acknowledgment or covenant, in
writing or otherwise, to the assignee or transferee regarding the tax consequences, if any,
of the acquisition and Investment in the Note, (vii) the assignee or transferee or its
representatives have been given a full opportunity to examine all documents and to ask
questions of, and to receive answers from, the Authority and its representatives concerning
the terms of the Note and such other information as the assignee or transferee desires in
order to evaluate the acquisition of and investment in the Note, and all such questions have
been answered to the full satisfaction of the assignee or transferee, (viii) the assignee or
transferee has evaluated the merits and risks of investment in the Note and.. has
determined that the Note is a suitable investment for the assignee or transferee in light of
such party's overall financial condition and prospects, (ix) the Note will be characterized as
a "restricted security" under the federal securities.laws because the Note is being acquired
in a transaction not involving a,public offering and that under such laws and applicable
regulations such security may not be resold without registration underthe Securities Act of
1933, as amended, except in certain limitedcircumstances, and (x) no market for the Note
exists or is intended to be developed.
14
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:
Industrial Equities — North Yard, LLCP
321 First Avenue North
Minneapolis, Minnesota 55401
Attn: John N. Allen
15
(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
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 orwanton 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.
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.
16
Section 7.10 Real Property Taxes. (a) Prior t o
Redeveloper shall pay when due, prior to the attachment of
payable with respect to the Redevelopment Project.
17
the Termination Date, the
penalty, all real property taxes
ARTICLE VIII
Insurance
Section 8.1 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 fumish '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 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 (i) with respect to the Minimum Improvements shall be carried in the
18
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.
(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 orvalue 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.
19
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 bythe Redeveloper
for such purposes are sufficient to pay for the same. Any Net Proceeds remaining after
completion of such repairs, construction and restoration shall be remitted to the
Redeveloper.
Section 8.2 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.
20
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.
21
Dated:
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF FRIDLEY, MINNESOTA
By
Its Chairman
And by
Its Executive Director
STATE OF MINNESOTA )
) ss
COUNTY OF ANOKA )
On this day of , 20_ 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 - Redevelopment Contract
22
Dated:
INDUSTRIAL EQUITIES — NORTH YARD, LLCR
By
STATE OF MINNESOTA j
ss
COUNTY OF )
Its
On this day of , 20_ before me, a notary public within and
for County, personally appeared
the of Industrial Equities=
North Yard, LLCR, a Minnesota limited liability gpffipanypaFLqqF8hjp, and acknowledged the
foregoing instrument on behalf of said partnership.
Notary Public
Redeveloper Signature Page - Redevelopment Contract
23
SCHEDULE A
DESCRIPTION OF REDEVELOPMENT PROPERTY
PIN# 27- 30 -24 -14 -0003
Lot 1 Block 1 GLACIER PARK COMPANY ADDITION Anoka County, Minnesota
r .
PIN# TBD
That part of Lot 3 AUDITORS SUBDIVISION NUMBER 79 Anoka County Minnesota,
which lies westerly of Lot 1 Block 1 GLACIER PARK COMPANY ADDITION Anoka
County Minnesota according to the recorded plats thereof and described as follows:
Beginning at the northwest comer of said Lot 1 • thence on an assumed bearing of
North 89 degrees 33 minutes 54 seconds West along the north line of said Lot 3, a
distance of 115.37 feet said north line also being the westerly extension of the north line of
said Lot 1 • thence South 03 degrees 06 minutes 27 seconds West a distance of 577.06
feet thence southerly 224.04 feet along a tanaential curve concave to the east, having a
radius of 1246.83 feet and a central angle of 10 degrees 17 minutes 44 seconds, to the
westerly extension of the south line of said Lot 1 • thence South 89 degrees 33 minutes 54
seconds East along said westerly extension a distance of 94.77 feet to the southwest
comer of said Lot 1 • thence North 03 degrees 08 minutes 37 seconds East along the west
line of said Lot 1 to the point of beginning..
24
SCHEDULE B
SITE IMPROVEMENTS
Land acquisition of parcel containing the railroad lands
Building and utility demolition_ aFA- removeW or recycle
Removal of railroad spur
Removal and disposal of trees and eld-tomado debris buried on site
Installation of underground stormwater storage tank
Import of clean fill to correctaevel site to a grade that is required by the approved building
and parking elevations
Removal of asbestos pipe tile, shingles and any other dump materials
Environmental studies, analysis and remediation, and disposal not reimbursed by grants
Administration costs related to the above
Any interest costs paid for Site Improvements to unrelated parties
Fees paid to the Authority
25
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 Industrial
Equities — North Yard, LLCP -, a Minnesota limited liability companypa#ne sWp (the
"Redeveloper”) have entered into a Contract for Pnvate Redevelopment (the "Agreement ")
dated as of March , 20_, regarding certain real property located in Tax Increment
Financing District No. 19 in the City (hereinafter referred to and referred to in the
Agreement as the "Redevelopment Property'); 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: , 20
26
Dated:
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY
OF FRIDLEY, MINNESOTA
By
Its Chairman
And by
Its Executive Director
STATE OF MINNESOTA )
) ss
COUNTY OF ANOKA )
On this day of , 20_ 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 Certificate of Completion
27
SCHEDULE D
NOTE
US $1,500,000.00
Fridley, Minnesota
,20_
UNITED STATES OF AMERICA
STATE OF MINNESOTA
CQUNTY OF ANOKA
HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE
CITY OF FRIDLEY, MINNESOTA
LIMITED REVENUE TAX INCREMENT NOTE
The Housing and Redevelopment Authority in and for the City of Fridley, Minnesota
(the "Authority "), hereby acknowledges itself to be indebted and, for value received,
promises to pay to the order of Industrial Equities — North Yard, LLC, a limited liability
company (the "Owner"), solely from the source, to the extent and in the manner hereinafter
provided, the principal amount of this Note, being One Million Five Hundred Thousand
Dollars and 00/100 ($1,500,000.00) (the "Principal Amount "), together with interest of
seven percent (7.00 %) commencing from the date of issuance of the Note and payable on
the dates described below (the "Scheduled Payment Dates ") and in the amounts as
hereinafter defined (the "Scheduled Payments ").
The Scheduled Payment Dates are August 1, 2009, and on the 1 st day of February
and August thereafter until and including February 1, 2025, unless earlier paid, in
accordance with the terms of this Note.
Upon 30 days' prior written notice from the Authority to the Owner, the Principal
Amount is subject to prepayment at the option of the Authority in whole or in part at any
time.
Any payments on this Note shall be applied first to accrued interest and the balance
to the reduction of principal.
Each payment on this Note is payable in any coin or currency of the United States of
America which on the date of such payment is legal tender for public and private debts and
shall be made by check or draft made payable to the Owner and mailed to the Owner at its
postal address within the United States which shall be designated from time to time by the
Owner.
28
The Note is a special and limited obligation and not a general obligation of the
Authority, which has been issued by the Authority pursuant to and in full conformity with the
Constitution and laws of the State of Minnesota, including Minnesota Statutes, Section
469.178, subdivision 4, to aid in financing a project, as therein defined, of the Authority
consisting generally of defraying certain public redevelopment costs incurred and to be
incurred by the Authority within and for the benefit of its Redevelopment Project No. 1.
THE NOTE IS NOT A GENERAL OBLIGATION OF THE AUTHORITY, THE CITY
OF FRIDLEY (THE "CITY") OR THE STATE OF MINNESOTA (THE "STATE "), AND
NEITHER THE AUTHORITY, THE CITY, THE STATE NOR ANY POLITICAL
SUBDIVISION THEREOF SHALL BE LIABLE ON THE NOTE, NOR SHALL THE NOTE
BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN AVAILABLE TAX
INCREMENT, AS DEFINED BELOW.
The Scheduled Payment of this Note due on any Scheduled Payment Date is
payable solely from and only to the extent that the Authority shall have received as of such
Scheduled Payment Date the Available Tax Increment which is defined in the Contract for
Private Redevelopment By and Between the Authority and the Owner dated as of February
_, 2007.
The Authority shall pay on each Scheduled Payment Date to the Owner the
Available Tax Increment. On February 1, 2025, the maturity date of this Note, any unpaid
portion shall be deemed to have been paid in full.
This Note shall not be payable from or constitute a charge upon any funds of the
Authority, and the Authority shall not be subject to any liability hereon or be deemed to
have obligated itself to pay hereon from any funds except the available Tax Increments,
and then only to the extent and in the manner herein specified.
The Owner shall never have or be deemed to have the right to compel any exercise
of any taxing power of the Authority or of any other public body, and neither the Authority
nor any director, commissioner, council member, board member, officer, employee or
agent of the Authority, nor any person executing or registering this Note shall be liable
personally hereon by reason of the issuance or registration hereof or otherwise.
The Authority makes no representation or covenant, express or implied, that the
revenues described herein will be sufficient to pay, in whole or in part, the amounts which
are or may otherwise become due and payable hereunder.
The AuthodWs payment obligations hereunder shall be further conditioned on the
fact that there shall not at the time have occurred and be continuing an Event of Default
under the Agreement, and, further, if pursuant to the occurrence of an Event of Default
under the Agreement the Authority elects to terminate the Agreement, the Authority shall
have no further debtor obligation under this Note whatsoever. Reference is hereby made
to the provisions of the Agreement for a fuller statement of the obligations of the
29
Redeveloper and of the rights of the Authority thereunder, and said provisions are hereby
incorporated by reference into this Note to the same extent as though set out in full herein.
The execution and delivery of this Note by the Authority, and the acceptance thereof by
the Redeveloper, as the initial Registered Owner hereof, shall conclusively establish this
Note as the "Note" (and shall conclusively constitute discharge of the Authority's obligation
to issue and deliver the same to the Redeveloper) under the Agreement.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things
required by the Constitution and laws of. the State of Minnesota to be done, to have
happened, and to be performed precedent to and in the issuance of this Note have been
done, have happened, and have been performed in regular and due form, time, and
manner as required by law; and that this Note, together with all other indebtedness of the
Authority outstanding on the date hereof and on the date of its actual issuance .and
delivery, does not cause the indebtedness of the Authority to exceed any constitutional or
statutory limitation thereon.
IN WITNESS WHEREOF, the Board of Commissioners of the Housing and
Redevelopment Authority in and for the City of Fridley, Minnesota, by its Commission
Members, has caused this Note to be executed by the manual signatures of the President
and the Treasurer of the Authority and has caused this Note to be dated
,200—.
By
Its President
ATTEST:
Secretary
30
By
Its Treasurer
CERTIFICATE OF REGISTRATION
It is hereby certified that the foregoing Note, as originally issued as of the day
of , 200_, was on said date registered.in the name of the Housing and
Redevelopment Authority in and for the City of Fridley, Minnesota, a public body corporate
and politic and that, at the request of said Registered Owner of this Note, the undersigned
has this day registered this Note as to principal and interest on the Note in the name of
such Registered Owner, as indicated in the registration blank below, on the books kept by
the undersigned for such purposes.
Name of Date of
Registered Owner Reaistration
Industrial Equities -m North Yard, LLC,
a limited liability company
31
Signature of
Secretary
200_
SCHEDULE E
SITE PLANS
G: \WPDATA\FMDLM70\DOC\2.17 -07 CONTRACT BLACKUNED TO 1- 24- 07.DOC
32
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE
CITY OF FRIDLEY
COUNTY OF ANOKA
STATE OF MINNESOTA
RESOLUTION NO.
A RESOLUTION AUTHORIZING EXECUTION AND DELIVERY OF A
CONTRACT FOR PRIVATE REDEVELOPMENT BETWEEN THE
HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY
OF FRIDLEY AND INDUSTRIAL EQUITIES — NORTH YARD, 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 Industrial Equities — North Yard, LLC (the
"Redeveloper") providing for the construction of not less than 200,000 square feet of
commercial /retail space.
Section 2. Findin s.
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., as
amended and supplemented from time to time.
2.02 The Authority hereby finds that it has approved and created Tax Increment
Financing District No. 19 and approved and adopted a Tax increment Financing Plan
relating thereto pursuant to Minnesota Statutes, Section 469.174 et seq., as amended and
supplemented from time to time.
2.03 The Authority hereby finds that the Contract promotes the objectives set forth
in its Redevelopment Program.
Page 2 - Resolution No.
Section 3. Authorization for Execution and Delivery.
3.01 The Chairman and the Executive Director of the Authority are hereby
authorized to execute and deliver the Contract when the following conditions are met:
(a) Substantial conformity of the Contract to the form of Contract
presented to the Authority as of this date, with such additions and
modifications as the Officers may deem desirable or necessary as
evidenced by their execution of the Contract.
(b) Approval by the City Council of Tax Increment Financing District No.
19 and adoption of the Tax Increment Financing Plan relating thereto.
PASSED AND ADOPTED BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF FRIDLEY THIS DAY OF , 2007.
Lawrence R. Commers, Chairman
ATTEST:
William W. Bums, Executive Director
G.XWPDATA*VWDLE"70\D0CaW0LAUTHG REDEV AGREEDOC
MMONROE S
James Ii. Casserly
jcasserly@jcmssmonroo.com
Direct 952.885.1296
Gay L. Carney
gcemey@krassmonroe.com
Direct 952.885.4393
Also admitted In New York
MEMORANDUM
To: City of Fridley HRA
Attn: Paul Bolin, HRA Assistant Executive Director
Attn: William Bums, City Manager
Attn: Scott Hickok, Community Development Director
From: James R. Casserly, Esq.
Gay L. Cemey, Esq.
Date: February, 19, 2007
Re: HRA/Industrial Equities Contract for Private Redevelopment
Our File No. 9571 -70
Attached is the February 17, 2007 draft blacklined to the January 24, 2007 draft of the
Contract for Private Redevelopment between the HRA and Industrial Equities, LLC.
The changes are in response to issues raised by the HRA Commissioners, staff and the
Redeveloper. The changes are summarized below:
1. John Allen has created a corporate entity, wholly owned by him, to hold
the Redevelopment Property and construct the Minimum Improvements.
This is a common practice for redevelopment projects. The correct name
has been inserted.
2. The Redeveloper verified that he will not be building 242,000 square
which he had originally hoped to do but will be building 202,880 square
feet with a project cost of approximately $11 million.
3. Site plans are now a defined term. The minimum improvements must be
constructed to reflect not only the construction plans but also the site.
plans. The inclusion of site plans was to provide some additional
assurarice to the Authority regarding the proposed project. Previously, the
8000 Norman Center Drive, Suite 1000
Minneapolis, Minnesota 55437 -1178
TF1952.885.5999 FAX 952.885.5969
www.krassmonroe.com
Paul Bolin
February 19, 2007
Page 2
Authority has been more engaged in approving construction plans for
housing projects but generally has not done so for industrial projects
including the industrial building constructed by the Redeveloper in the
Northco Business Park.
4. The maximum amount of the revenue note has been further limited. As
the new language indicates, the note will be the lesser of $1.5 million or
the actual cost of the Site Improvements less the square footage of the
redevelopment property times $4.00 per square foot. The cost of the site
improvements are approximately $3.7 million while the value of the
redevelopment property is approximately $2.2 million. The new language
clearly describes how we' arrived at the principal of the note which, in any
event, cannot exceed $1.5 million.
5. We have included the cost of an underground storage tank for stormwater
as an unusual site improvement. Stormwater management on the
redevelopment property is extremely limited due to a sanitary sewer
easement. The stormwater pond cannot be designed on top of the
sanitary sewer easement. The City is apparently asking for a wider
easement than is currently of record. The underground storage tank will
allow for a wider easement and better utilization of the property. In
addition, we have more completely described the Site Improvements that
are reimbursed by the Note.
in the Tax Increment Financing Plan presented to the City Council for a public hearing,
we have made some minor changes to reflect the reduced market valuation.
Please keep in mind that neither the City nor the Authority has any risk with regard to
payment of the revenue note. The revenue note is paid only from the new taxes
generated by the increased market valuation. The Authority is pledging those increased
taxes only through .the year 2024. If the note is not paid off at that time, then it is
deemed paid in full.
cc: Industrial Equisites, LLC
Attn: John Allen, President
JRC /GLC /jlt
GAWPDATAWRIDLIMMCOMBOLIN BURNS HICKOK JRC GLC.DOC
C:1 I Y UI I-KIIJLCY
Industrial Equities - 5110 Main St NE
Industrial Equities 4c.xls Prepared by Krass Monroe, P.A. — I "'
FRIDLEY - --
Industrial Equities - 5110 Main St NE
A CQI IMD-rIrNdC
Industrial Equities 4c.xls Prepared by Krass Monroe, PA. 2/19/2007
Area of
Parcel
2006 Assessed Value(
a 2007)
Original Market Values
PIN #
Owner I
(Acres)
(Sq. Feet)
Land
Building
Total'
i
i
1
2
3
5110 Main Street NE
BNSF railroad
27 -30 -24-14 -0003
API Supply Co.
Railroad BNSF
10.33
2.08
449,849
90,593
1,034,700
208,373
1,215,300
2,250,000
208,373
0
Totals
12.41
540,442
$ 1,243,073
$1,215,3
$ 2,458,373
0
2.30
per sq. ft
Pay 2006 NN teased on new Tax Pefton Sattiemenl
Original
Tax Capaci
Commercia / /Refai!
% of new ETC
100.0%
2,458,373
Class Rate
@ 2.00%
=
49,167
49,167
Rental
0.00/0
0
@
125%
=
0
i
Owner Occupied
0.0%
100.00/9
0
2,458,373
@
1.00%
=
0
Phase 1
YEAR
;—
Estimated Market Value
Estimated Tax Capacity
Estimated Taxes
Estimated Tax Increment
Built - 2007
2008
2009
202,880
202,880
202,880
sq. fL @
sq. fL @
sq. fL @
$50.00
$1.51
$0.69
sq. it =
per ft =
per sq. ft =
10,144,000
11111 202,880
306,416
139,471
45.5%
of total taxes
Phase
2 (combined)
Estimated Market Value
Estimated Tax Capacity
Estimated Taxes
Estimated Tax Increment
Built - 2008
2009
2010
202,880
202,880
202,880
sq. ft @
sq. ft @
sq. ft @
50.00
1.51
0.69
per sq. it. =
per sq. fL =
er sq. R =
10,144,000
202,880
306,416
139,471
45.5%
of total taxes
Phase
3 (combined)
Estimated Market Value
Estimated Tax Capacity
Estimated Taxes
Estimated Tax Increment
Built - 2009
2010
2011
202,880
202,880
202,880
sq. fL Q
sq. fL @
sq. it @
50.00
1.51
0.69
per sq. ft =
per sq. ft =
per sq. ft =
10,144,000
202,880
306,416
139,471
4.1
45.5 °!°
times Incr. In NN
of total taxes
Buildable Area
540,442.0
sq. R
Coverage
1
37.5%
F.A.R.
Local Tax Rate -
Pay 2006
ISD #13; 6 City WS
0.91063
State Tax Rate -
1 Pay 2006
0.50827
(CA only)
Eff. Incr. on local tax rate for taxes at F.D. rate
0.09143
Combined Tax Rate - CA Property Only
1.51033
=used for tax increment calculations
Admin Fees
10.00%
State Auditor Fee
0.360%
Inflation I I (after 2 yrs of full value)
2.50%
Present Value Rate
12/112007
7.00%
Industrial Equities 4c.xls Prepared by Krass Monroe, PA. 2/19/2007
DATE: 2/20/07
TO: William W. Bums, Executive Director of HRA
FROM: Rick Pribyl, Finance Director
Mike Jeziorski, HRA Accountant
Paul Bolin, Assistant Director of HRA
SUBJECT: County Notification of Natural Decertification of TIF #14
On 5/30/96 the HRA approved the Economic Development TIF district #14 —North Park Business
Center. Throughout the districts life all associated project costs were paid using the increment
provided. On 12/31/06 the district naturally expired and was decertified— leaving the district with
an unused cash balance of $660,421.76. This cash was not able to be utilized in conjunction with
other districts due to restrictions in place regarding this district.
Staff has provided this brief memo in conjunction with the check that has been included within
your check register for your approval. The amount of the check is for the unused cash balance of
the fund which totals $660,421.76. This cash balance will be redistributed to the appropriate tax
authorities (City, County, and School District) this July with the 1st half tax settlement.
COMMUNITY DEVELOPMENT
F_ 3
DEPARTMENT
DEVELOPMENT DIRECTOR
Memorandum
DATE: February 22, 2007 4114
TO: William W. Burns, Exec. Dir., Fridley HRA
Paul Bolin, Asst. Exec. Dir., Fridley HRA
Members of the Fridley HRA
FROM: Scott J. Hickok, Community Development Director
SUBJECT: Intern Assignment for Housing Condition Study
At the Housing and Redevelopment Authority's February meeting the Commission
authorized an expenditure that would allow for the hiring of an intern to complete a city-
wide housing condition study. Results of this study will not only help the HRA with a
comparative analysis for our 1994 Housing Condition Study, but it will also provide
important information for HRA loan programs, and for the Housing Chapter of the
Comprehensive Plan; currently being revised. Commissioner Billings requested a
summary of the intern project as it has been planned. The purpose of this memo is to
provide that summary.
June 4, through August 31 st is the term in which the intern will be in our employ. A total
of 64 days will be devoted to this task. With 8,315 dwelling units to grade, the intern will
need to be highly trained, consistent, and very systematic. We anticipate that the intern
will grade an average of 190 dwelling units each day. A Geographic Information
Systems (GIS) map will be given to the intern with boundaries showing our daily
coverage expectations. Supervision of the intern will assure that the field work is being
done at the right pace and to match staff expectations. Supervision will be performed by
a planner on the City staff. The data will be recorded on easy to record, easy to
understand field maps and once back in the office, will be transferred to an electronic
format (Access data base).
Grading or scoring units will be completed using the identical methodology as the 1994
study. This will make it easy to make 1994 — 2007 progress comparisons. As in 1994,
each home will be assigned a numerical score from 1 — 5. A score of 5 will be the top
score and will be given to homes with no deferred maintenance and showing no
improvement required. By contrast, homes scoring a 1 will likely display a combination
of deferred siding and roofing maintenance, will require window repairs, and show
overdue eave and soffitt attention. Each grade level will have specific set of conditions
for the intern to observe, so that a house with a score of 2, for example, will be easily
distinguishable from a house with a score of 4.
Housing Conditions Study
February 22, 2007
PAGE 2
At a pace of 190 units per day, there will be a buffer of 20 days left in the internship.
This will allow for a slower start for training days, data entry and mapping coordination
with our GIS staff.
Staff has budgeted $7,000 for the personnel costs associated with this study. An
additional $2,000 has been budgeted for mileage. Staff has committed to a total HRA
expenditure not to exceed $7,000 (512 hours @ 13.67/hr total personnel cost). Further,
staff has committed to a mileage expenditure not to exceed $2,000 (4,124 miles @ .485
per mile). With a total of 115.16 miles of roadway in the City, we realize we bid the
mileage figure high. We anticipate actual mileage costs may be between $500 and
$1000, but did not want any mileage surprises. Of course, any unspent mileage dollars
will not be billed to the HRA.
Once the project is complete the HRA will receive a final report, the data from the city-
wide inspections and a map showing housing conditions city -wide. I hope this
information is helpful and I will be in attendance at the HRA's March meeting, if you
have further questions.
MEMORANDUM
TO: Willis W. s, City Manager PW07 -010
FROM: Jon . Haukaas, Public Works Director
DATE: February 26, 2007
SUBJECT: Funding Options for Bikeways/ Walkway Tunnel at NCDA Station Site
With the news that the Fridley Station site is not being funded in the current federal application for
the Northstar Corridor, staff has began investigating alternate ways to fund all or portions of that
project. One such scenario is to separate out the tunnel connection under the railroad tracks and
construct it as a separate project.
The tunnel connection for non - motorized traffic is a very worth while project regardless of the
station site. The NCDA development was seen as a means to enable this as part of a bigger
comprehensive transportation solution. The tunnel connection creates a valuable link between the
west side of the BNSF tracks, including Stevenson School and Georgetown Apartments, to the
east side, including City Hall, the Fridley Middle and High Schools, and the commercial areas
around Cub Foods and Home Depot. This would also create a link to the Mississippi Regional
Trail System leading from the Coon Rapids Dam area all the way to down town Minneapolis.
Two federally funded programs exist that the City is looking at to apply for funding. The first is a
special new program to be administered by Transit for Livable Communities. The City of
Minneapolis was selected as one of four areas across the country to implement a Non - Motorized
Transportation Pilot Program. $7.3 Million is available to Minneapolis and is contiguous cities for
Planning Operations, and Infrastructure projects. The focus will be on trail systems that promote a
modal shift in transportation away from cars to non - motorized options. Our trail project includes
the above mentioned links within Fridley plus the connection with a major trail corridor into
Minneapolis (the Mississippi River Regional Trail) and the opportunities presented with the
connection to an approved rail station site. This application is due by April 10, 2007. We have
asked the design consultant Kimley -Horn Associates to give us a proposal to separate out the
plans for the tunnel from the rest of the project t and help us complete this application. We are
requesting the HRA fund a contract with them to do this work.
The second option is through the Federal Transportation Program similar to what was used to
fund the 85th Avenue Trail. This application is due in the fall of 2007 and is very similar to the
Transit for Livable Communities grant application. Should we be unsuccessful in the first program
attempt, we would seek this avenue funding.
We hope to have the proposal from Kimley -Horn Associates in time for you're approval at the
upcoming meeting.'
JHH;jb
rd-W-1 INFORMATIONAL ITEM
11IN HRA MEETING OF MARCH 1, 2007
MY OF
FRUXEY
Date: February 21, 2007
To: William Burns, City Manager,���
From: Paul Bolin, Asst. Executive HRA Director
Scott Hickok, Community Development Director
Subject: Gateway Northeast Update
Corridor Housing Initiative
Immediately after last months meeting Staff sent a letter of interest to the Corridor
Housing Initiative's Selection Committee. The committee reviewed the letter on
February 14th and Gretchen Nicholls contacted staff the next day to inform us that
Fridley has been selected as the first suburb that they will partner with in their planning
endeavor. Staff will be meeting with Gretchen Nicholls to begin developing the
framework for the University Avenue study over the next few weeks and anticipate
finalizing this framework with the HRA in April.
Property Purchases
Staff is set to close on 6041 University (old Van- o -Lite /Unplugged Cities) on February
28th and 5945 University (new Van- o -Lite) on March 12th. Staff also anticipates
receiving a signed purchase agreement from the Oriental House restaurant prior to next
weeks meeting.
At this time, Mr. Kim of the Tae Kwan Do Center has not responded to the offer staff
hand delivered on January 29th. Acquisition of this property is not necessary to move
forward with the Corridor Housing Initiative planning study for this area. If Mr. Kim is
not enthusiastic to sell his property, as he had previously indicated, we will welcome his
participation in the future planning for this corridor.
Citgo Station Contamination
Last month staff recommended that we not move forward quickly with a purchase of the
Citgo site, as its appraised value seemed very exorbitant for the size of the parcel and
building condition. The HRA expressed concerns over contamination that may be
found on the site. Staff indicated that a review of the City's records could be done to
determine if there was any evidence of contamination on the site prior to the HRA
making any decision on purchasing the site.
A review of the sites history with the Fire Marshall revealed the following history relating
to petroleum releases and contamination, unfortunately there is not much detail in the
MPCA letters:
Q Superette — March 8, 1988 — Petroleum Release Leak 0000455
- June /July 1988 — 2 Leaking underground tanks removed and replaced 2
— 10,000 gallon tanks.
- May 7, 1991 — MPCA sent release letter regarding 1988 leak stating that
petroleum clean was adequate.
Total Station - June 2, 1992 — Investigation of Sinclairs monitoring wells (MPCA Leak
#00003963) indicated that petroleum was being detected from the Citgo
site, based on groundwater flows. MPCA indicated that groundwater
samples should be done quarterly.
- August, 1993 — (Leak # 00005738) — MPCA letter stated contamination
from 1988 leak may still exist and therefore reopened that file.
- 1995 — MPCA sent release letter stating that petroleum clean up was
adequate.
- June /July, 1999 — Fuel oil and waste oil tanks removed, Terracom did
soil report in September 1999 and reported removed tanks appeared to
be in good condition and there was no readily apparent leakage.
- January 2000 — Leak #00012877 was cleared by the MPCA, but the
City's Fire Marshall has no record of Leak #00012877.
Staff has done some preliminary investigation of various sources to assist in the
financial burden of cleaning contaminated sites. The MPCA offers the Petroleum
Remediation Program (PRP), the Petroleum Brownfields Program and the MN
Department of Commerce administers the Petrofund Program. All of these programs
may have some applicability to this site.
It is unclear at this time just how extensive contamination may be on this site and to
what it extent it would need to be cleaned up. If the HRA has a desire to continue
contemplating purchase of this site, staff would recommend a more formal
environmental review (including soil borings) prior to making any offer to purchase.
Monthly Housing Report
February 2007
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Fridley HRA
Loan Origination Report
February 21, 2007
Loan Oriainations
This Previous
Month Months YTD
HRA Loans (incl. CFUF Dicscount loans) - -
HRA Deferred Loans - -
Other Loans (non -HRA)
Total
Fundina Sources
Types of Improvements
Interior # of Projects % of Total
Bathroom remodel
- 0%
This
- 0%
Previous
- 0%
Heating system
1 50%
Month
- 0%
Months
YTD
Fridley HRA
$
-
$
-
$ '
MHFA
$
-
$
Roofing
$ "
Met Council
$
-
$
Driveway /sidewalk
$ '
CDBG /HOME
$
-
$
-
$ '
CEE
$
-
$
15,000
$ 15,000
Other
$
-
$
$
Total $
-
$
15,000
$ 15,000
Types of Units Improved*
*some households receive more than
1 loan, so the # of loans may not equal # of units improved
This
Previous
Month
Months
YTD
Single Family
1
1
Duplex
Tri-Plex
-
-
4 to 9 Units
-
-
10 to 20 Units
-
-
-
20+ Units
"
Total
Types of Improvements
Interior # of Projects % of Total
Bathroom remodel
- 0%
Kitchen remodel
- 0%
General plumbing
- 0%
Heating system
1 50%
Electrical system
- 0%
Basement finish
0%
Insulation
- 0%
Room addition
- 0%
Misc. interior projects
1 50%
Exterior
Siding /FascialSoffit
- 0%
Roofing
0%
Windows/Doors
- 0%
Garage
- 0%
Driveway /sidewalk
- 0%
Landscaping
- 0%
Misc. exterior projects
- 0%
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Fridley HRA
Performance Report
February 21, 2007 *' 2006 numbers also still included on this report
Loans 50 9
Loan Volume $625,000 $ 173,722.00
Origination Fees $27,500 $4,950.00
Inspection Fees $7,000 $ 2,080.00
Admin. Subtotal: $34,500 $7,030.00
18%
28%
20%
$451,278.00
Loans
Loan Volume
Origination Fees
Inspection Fees
20 6 30%
$200,000 $56,678.00 28%
$11,000 $3,300.00
$2,800 $0
$13,800 $3,300.00 24%
$143,322
All Programs $5,000.00 $3,154.53 31% $1,845.47
vok
FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY
March 1, 2007
T T 1
1. Islands of Peace Update
Legal wrangling continues as the sellers continue to get the properties back from Grant Rudolph. The
questions in ownership are causing a great deal of trouble for inspections staff as they try to get all code
issues resolved.
I will continue to keep you updated as things move (or don't) forward.
2. North Star Rail Station Site
You have been asked to attend a joint meeting with the City Council @ 6PM, Thursday, March V. The
focus of the meeting will be a discussion of what role the HRA /City should play in trying to get a rail
station site built. A separate memo will provide more detail.
3. Home & Garden Show
Hopefully you are reading this on Friday night and I will see you at the Home Show! Hopefully, the
predicted snow will not interfere with making this the most successful show yet.
9th Annual Noah Metro
Home and Garden Show
Sponsored by the Cities of Fridley, Blaine, Mounds View & New Brighton
Saturday, February 24, 2007 - 9 am - 2 pm
National Sports Center's Schwan Center
1750105th Avenue NE, Blaine, Minnesota
Silver Sponsor. CEE Financial Resources
Billboard advertising provided by Clear Channel Outdoor
Featuring informative seminars starting at 9:30, 11:00 and 12:30.
See web pages of sponsoring cities for specific topics and times.
New this year! Resource Center with "Ask the Pro" booths
staffed by Architects, Landscape Architects, Interior Designers
and Master Gardeners, plus a retaining wall demonstration!
Free Admissioni Great Door Prizes! Resource Centerl
4. Summer Intern Position
The City's Community Development Department has provided the attached memorandum further
detailing the tasks and expectations of the intern position to be funded by the HRA..
5. TIF Policies
Due to the special legislation being proposed for Transit TIF district in Fridley, and other TIF changes
being discussed this legislative session, Attorney Casserly and I determined that it would be best to
discuss changes to the existing TIF policy after the legislative session ends late this spring. All of the
proposed legislation could have an impact on the HRA's TIF policies.
4. Gateway West
111
Blueprint Homes continues to move forward with the building of homes, while staff continues to work
on getting the Gateway West Td Addition Plat approved and filed. Based on a discussion I had with the
Tide Examiner last week, I am very optimistic that the Plat will be recorded by the time we meet on
Thursday night.
G. Upcoming Meetings / Miscellaneous / Legislative Updates
Minnesota Solutions and the MN Chapter of NAHRO (National Association of Housing &
Redevelopment Organizations) do an excellent job of tracking legislation on our behalf. I have attached
the most recent updates from each group.
If there are any items you would like covered in upcoming issues of the Non - Agenda Update please send
mean e-mail. bolinp @ci.fridley.mn.us
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