HRA 02/07/2008 - 6351February 7, 2008
HRA Meeting
Regular Meeting Agenda
7.30 a.m.
City Hall, Council Chambers
Call to order
Roll call.
Action Items
1. Approval of expenditures
2. Approval of January 10, 2008 Meeting Minutes
3. Approval of Purchase Offer for Gateway NE Property
4. Approval of Contract Extension for CEE to Administer Home Loan Program
Informational Items
Northstar Rail Project Update
2. Monthly Housing Report
Adjournment
A
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Outline.doc
CITY OF FRIDLEY
HOUSING AND REDEVELOPMENT AUTHORITY COMMISSION
JANUARY 10, 2007
CALL TO ORDER:
Chairperson Commers called the Housing and Redevelopment Authority to order at 8:16 p.m.
ROLL CALL:
Members Present: Larry Commers
Pat Gabel
William Holm
John Meyer
Steve Billings
Others Present: Mike Jeziorski, City Accountant
Scott Hickok, Community Development Director
Paul Bolin, HRA Assistant Executive Director
Jim Casserly, Development Consultant
Richard Pribyl, Finance Director
William Burns, City Manager
ACTION ITEMS:
1. Approval of Expenditures
MOTION by Commissioner Billings to approve the Expenditures as submitted. Seconded by
Commissioner Gabel.
UPON UNANIMOUS VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED
2. Approval of October 25, 2007 Meeting Minutes
MOTION by Commissioner Holms to approve the minutes as presented. Seconded by
Commissioner Gabel.
UPON UNANIMOUS VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED
3. Approval of December 6, 2007 Meeting Minutes
MOTION by Commissioner Holms to approve the minutes as presented. Seconded by
Commissioner Gabel.
UPON UNANIMOUS VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED
e®
4. Approval of Interfund Loan: General Fund to TIF #19
Mike Jeziorski, City Accountant, presented the approval of the interfund loan to general fund
TIF District #19 in the amount of $40,000. TIF #19 is the most recent John Allen project at 5510
Main Street. During 2007 TIF #19 expended roughly $40,000 in a variety of professional
services. As you recall, TIF #19 has a $1.5M note that we anticipate beginning in 2009 which
will be paid by tax increment from the property. This note was set up in order to assist in the
high demolition and soil costs associated with the project. Staff recommends that the HRA make
a motion to approve this loan.
MOTION by Commissioner Billings to approve the Interfund Loan, General Fund to TIF #19.
Seconded by Commissioner Meyers.
UPON UNANIMOUS VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED
5. Approval of Resolution Authorizing the Acquisition of Property needed for Northstar
Commuter Rail
Paul Bolin, HRA Assistant Executive Director, stated that over the past 18 months, the City of
Fridley and the HRA have become very actively involved in the construction of Northstar after
the lack of federal funding had eliminated our station. HRA did enter into a Memorandum of
Understanding with the Anoka County Regional Rail Authority at the November Meeting. At
that time HRA agreed to pursue the acquisition the property needed for this site and the rail
authority agreed to go forward with guaranteeing the installation of the tunnel this summer. If
the HRA and the City of Fridley do not move forward with the acquisition of the property
needed, it is highly likely that Fridley will never have a rail station. Tonight staff is seeking the
approval necessary to move the station site construction forward. Two separate actions are
needed on this item. One is the approval of the resolution adopting the Memorandum of
Understanding between the HRA and the State Department of Transportation, the other item to
approve the resolution that authorizes city staff and legal counsel to move forward with the
acquisition of the property that is needed for the station site. Staff recommends the approval of
both items.
Chairperson Commers asked if the Memorandum of Understanding (MOU) with the State
Department of Transportation replaces the MOU with Anoka County Rail Authority.
Jim Casserly, Development Consultant, said this is complimentary with the MOU with the'
Anoka County Rail Authority.
Commissioner Holm asked what the obligations of the HRA and the State were under the
MOU.
Mr. Casserly said that the HRA would acquire the property by purchase or condemnation, pay
all costs associated with the acquisition of the property and provide periodic progress to
MN/DOT. MN/DOT will assist the HRA by providing advanced and final plans and other
necessary technical information relating to the Fridley Station and acknowledge that the financial
contribution made by the HRA in the acquisition of the property will be reimbursed or
considered part of the local contribution for the completion of the Fridley commuter rail station.
Commissioner Holm said that we would hope to acquire this property by agreement with the
property owner.
Mr. Casserly said that is the goal, to do it voluntarily. If that is not possible the city would go
forward with the process of eminent domain.
MOTION by Commissioner Billings to move the adoption of the resolution authorizing the
execution of the Memorandum of Understanding between the HRA and the State of Minnesota
Department of Transportation. Seconded by Commissioner Meyers.
UPON UNANIMOUS VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED
MOTION by Commissioner Holms to approve the resolution authorizing the acquisition of
property needed for the Northstar Commuter Rail. Seconded-by Commissioner Meyers.
UPON UNANIMOUS VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED
INFORMATIONAL ITEMS
1. Gateway Northeast Acquisition Update
Paul Bolin, HRA Assistant Executive Director, stated that Dan Wilson has been working with
the Sinclair Station and the Tae- Kwan -Do Center properties and confirming relocation costs. As
of this afternoon he has not been able to provide staff with firm numbers. We do anticipate
having these numbers within the next month. The owner of the Sinclair Station has cancelled 5-
6 meetings with Dan Wilson. It appears that the owner does have an interest in selling but trying
to figure out how to keep the relocation benefits for himself and not pass them on to his tenant.
Until we get firm numbers from Dan Wilson we will not have a recommendation on this
property. The Tae- Kwan-Do Center is having trouble finding comparable places within the city
but should have some numbers within the next month.
2. Monthly Housing Report
Paul Bolin, HRA Assistant Executive Director, stated that the report is pretty much the same as
last month. People are not investing in their homes at this time even though the interest rates are
very affordable. Overall for the year 2007 we ended up with 17 loans, which was comparable to
loans 6 -7 years ago. Staff will continue to promote the loan program and hopefully people will
start to reinvest in their homes again. Remodeling advisor visits were going very well through
August and then dropped off. Operation insulation was very dismal but these results were not
unique to Fridley. Other communities did not have much interest in this program either, even
though it is a great service offered at a reasonable price.
NON AGENDA ITEMS
1. Target -NOC, Onan- Cummins Building
2. John Allen Project — 5510 Main Street
3. Gateway West
ADJOURNMENT
MOTION by Commissioner Meyers to adjourn. Seconded by Commissioner Gabel.
UPON UNANIMOUS VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS
DECLARED THE MOTION CARRIED AND THE MEETING ADJOURNED AT 8:40
P.M.
Respectfully submitted by,
j�c�--M
Krista Monsrud
Recording Secretary
AM
MY OF
nZmXEY
INFORMATION ITEM
HRA MEETING OF FEBRUARY 7, 2008
Date: January 31, 2008
To: William Bums, City Manager
From: Paul Bolin, Asst. Executive HRA Director
Scott Hickok, Community Development Director
Subiect: Gateway Northeast Property Acquisition
Dan Wilson, the HRA's relocation consultant has met with representatives for both the
Sinclair Station and the Tae Kwan Do Center. Mr. Wilson was able to determine a cost
for the relocation benefits entitled to the business operating in the former Sinclair
Station and also had some frank discussions with a broker that the Tae Kwan Do
Center now has acting on their behalf.
Sinclair Station
In November of 2007, Lake States Realty conducted an appraisal of the Sinclair
property located at 6071 University Avenue,. You may recall that the appraisal came in
at $305,000, a value higher than the City assessors 2007 value ($246,100), as gas
station site comparables tend to have higher values than other commercial uses. The
2008 assessed value for the property is $270,700.
Dan Wilson, the City's relocation consultant, has now reviewed the existing lease, met
with the owner and was able to personally meet with the party running the business in
the facility. After meeting with all parties, the party operating in the former Sinclair
station has decided to voluntarily exit the gas /auto repair business in the event that the
building is sold. Mr. Wilson determined that a $20,000 lump sum for relocation would
protect the HRA from future claims by the property owner or business operator.
Recommendation
Staff recommends that the Authority authorize staff to purchase the Sinclair property in
order to provide more land for redevelopment north of the Gateway East Townhomes.
Staff also recommends, that Chairman Commers be given the authority to execute any
purchase agreements matching the appraised value and relocation benefits prior to the
Authority's next meeting. The total offer for property and relocation will total $325,000.
At the December HRA meeting, there was concern over paying the appraised value for
this property and the possibility of offering a lesser amount received some discussion.
A consultation with our legal counsel did clarify that the HRA is not bound to make the
appraised value the offer value. However, the HRH's long standing practice has been
to make an unbiased offer based on the fair market value determined by an outside,
independent appraiser. Staff strongly believes that our practice of offering the
appraised value has actually saved the HRA money over the years as we have
developed a reputation of making a fair offer up front and not negotiating upward.
Though it may appear to some that occasionally the HRA pays "too much" based on
their opinion of a property's value, it's hard to argue with an expert appraisers value.
It's even harder for a seller to claim that they were somehow shortchanged by selling to
the HRA. As always staff is looking out for the best interest of the Fridley tax -payer
and changing our longstanding practice would also open up the expectation that future
sellers can negotiate the price upwards with the HRA.
Tae - Kwan -Do - Update
Dan Wilson was recently informed that the Kim's, who still have not made any formal
response to our offer presented in January 2007, are now being represented by a real
estate broker named AI Hamel. Mr. Hamel indicated to Mr. Wilson that the Kim's were
considering listing their property for sale at $400,000.
Mr. Wilson made it very clear that the property was not worth $400,000 and that the
HRA would only pay the appraised amount plus relocation benefits. Mr. Hamel told Mr.
Wilson that he would have further discussions with the Kim's in regards to the City's
offer and make a formal response in the very near future.
Staff is hoping to come to an agreement with the Kim's in time to bring a
recommendation forward at the March HRA meeting.
Fridley Housing and Redevelopment
Authority
MEMORANDUM
DATE: January 31, 2007
TO: William W. Burns, Executive Director of HRA
FROM: Paul Bolin, Assistant HRA Director
SUBJECT: Contract Extension with CEE for Administration of Loan
Programs
Introduction
The Center for Energy and Environment (CEE) is the non -profit agency responsible for
administering the HRA's housing rehabilitation programs The Authority has contracted
with CEE since 1996 to oversee the housing programs. Partnering with CEE, allows the
HRA to outsource most of the administrative functions, including program marketing,
loan processing, underwriting, loan closing, and disbursements to the contractors.
CEE is able to provide technical assistance to Fridley homeowners on such topics as
remodeling, energy conservation, indoor air quality and related subjects. The partnership
with CEE allows the Authority to leverage its resources with outside dollars (e.g.
Minnesota Housing Finance Agency, Met Council, etc.) and customize loan packages to
meet individual homeowners' circumstances.
The current agreement with CEE expired on December 31, 2007. Staff believes it is
important to continue working with CEE and is recommending that the HRA renew its
commitment for another year. CEE is not seeking any changes in the rate of
compensation for their services.
Overview of Existing Agreement
Attached is a copy of the proposed extension that would run from January 1, 2008
through December 31, 2008. The following section summarizes the major contract
components.
Administrative Responsibilities
CEE is responsible for administering a number of different loan programs on behalf of
the Authority. Each of these programs is designed for a particular target market (e.g.
very-low income, low income, or middle- income). When CEE receives an inquiry from
an interested resident, several questions are.asked in order to identify which program best
meets their needs. At that point, CEE works with the resident to complete a loan
application and collect the necessary information to evaluate their eligibility. Among the
issues that will be examined are the borrower's income, credit history and related factors.
CEE then outlines the financing options and helps the homeowner select the best terms
and conditions. In some cases a loan might be fiznded by the Authority, while in other
cases the loan might be funded by MHFA. Once a loan is closed, the funds are held in
escrow until the work is completed; once the job is finished CEE verifies that all permits
have been obtained and that the work has been inspected. The exception is for loans
financed through MHFA, which does not have an escrow procedure in place.
Loan Fees
CEE is paid based on each loan that is made, rather than a flat administrative charge. If
loans are originated under an MHFA program, MHFA pays CEE an origination fee
($550.00 per loan). If loans are originated under one of the Authority's programs, the
HRA pays CEE an origination fee ($550.00 per loan). This rate of compensation is the
same as the last agreement.
Comprehensive Building Analysis (Remodeling Advisor)
CEE is paid a flat fee of $130.00 per visit by the remodeling advisor. Generally, these
visits take 1.5 to 2.0 hours to complete and are done on site at the resident's home. This
rate of compensation is the same as the last agreement.
Installation Verification
CEE is paid a flat fee of $70.00 per inspection. Generally, if a building permit is required
(and the work will be inspected by the city), CEE does not charge a fee. In cases where
the work does not require a permit (e.g. carpet, painting, landscaping, fencing, etc.), CEE
staff will make an inspection to verify that the work has been completed. This rate of
compensation is the same as the last agreement.
Recommendation
Staff recommends that the Authority approve the Loan Origination Agreement with the
Center for Energy and Environment for the term January 1, 2008 through December 31,
2008.
Amendment #1
To
Loan Origination Agreement
Between
Center for Energy & Environment
And
Housing and Redevelopment Authority in and for the City of Fridley
The Agreement dated 18th day of February, 2004 for the administration of the Comprehensive
Housing Rehabilitation Program for the City of Fridley is hereby amended.
Section 5 of the Agreement is amended to read as follows:
5. Term and Termination
5.1 Unless earlier terminated as provided in the following paragraphs, this Agreement shall
become effective on Januaryl, 2004 and continue through December 31, 2008.
All other sections of the contract shall remain as written in the original agreement.
IN WITNESS WHEREOF, the parties here hereunder set their hands as of the date written
below:
HOUSING AND REDEVELOPMENT CENTER FOR ENERGY AND ENVIRONMENT
AUTHORITY IN AND FOR THE CITY
OF FRIDLEY
By
Print Name
Date
LIM
Date
Sheldon Strom, Executive Director
By Federal Tax ID 41- 1647799
William W. Burns, Executive Director
Date
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2/1/2008
INFORMATIONAL ITEM
HRA MEETING OF FEBRUARY 712008
CfTY OF
FRIDLEY
Date: January 31, 2008
To: William Bums, City Manager
From: Paul Bolin, Asst. Executive HRA Director
Scott Hickok, Community Development Director
Subject: Northstar Rail Property Acquisition & Proiect Update
Since authorizing staff and legal counsel to move forward with acquisition of the
property needed for the Northstar Rail Station on January 10th, a number of tasks have
been completed. The 2006 Appraisal was updated to reflect the current value of the
property ($3,165,000), an offer based on that appraisal was presented to Main Street
Properties, LLC, and a condemnation petition to acquire the property (in the event that
a negotiated sale does not happen) has been filed.
Attorney Casserly will give a report on all of these activities at next weeks meeting and
provide an opportunity to answer any questions you may have on the process to date.
A summary of the appraisal, the offer letter, and condemnation petition have been
enclosed for your review.
MO OE
James R. Casserly
Jcasseriy@krassmonroe.com
Direct 952.885.1296
January 11, 2008
Attn: Tim Nelson
Main Street Fridley Properties, LLC
100 Village Drive, Suite 230
North Oaks, MN 55126
Re: Fridley Property — 61� and Main
Our File No. 9751 -51
Dear Tim:
I tried to reach you on Friday, January 11, 2008, to let you know that the Fridley Housing and
Redevelopment Authority has retained my firm, Krass Monroe, P.A., to assist it in negotiations
to acquire from Main Street Fridley Properties, LLC the approximately 10.7 acres adjacent to
61st and Main in the City of Fridley. To assist with these negotiations, I am enclosing two
appraisals prepared for Anoka County, which you have previously received.
I would like to meet with you as soon as conveniently possible and was hopeful that you would
have some time to meet the week of January 14.
It has been a while since we have connected, and I do look forward to discussing with you the
acquisition of this property. It is my client's hope that we can negotiate a purchase of this
property for a fair price.
Very truly yours,
J mes R. Casserly
orney at Law
JRC /al
Enclosures -
McKin2ie Metro Appraisal dated March, 2006
BRKW Appraisal dated March, 2006
GAWPDAfiAWRIDLl3'Y171RC0R\NELS0N JRC 1.DOC
8000 Norman Center Drive, Suite 1000
Minneapolis, Minnesota 55437 -1178
TEL 952885.5999 FAX 952885.5969
www.krassmonroe.com
James R. Casserly
jcasseriy@krassmonroe.com
Direct 952.885.1296
January 24, 2008
Main Street Fridley. Properties, LLC
100 Village Drive, Suite 230
North Oaks, MN 55126
Attn: Tim Nelson
Re: Fridley Property — 61 st and Main
Our File No.: 9571 -71
Dear Mr. Nelson:
Enclosed please find a revised appraisal by BRKW Appraisals, Inc. Marc Knoche, the
appraiser, has suggested that the land value estimate of the property is $3,000,000. He
has added an additional $165,000 as added value for predevelopment work and
approvals for a total market value of the property of $3,165,000.
While the HRA believes that the square foot market value of the land value estimate
may be somewhat aggressive, it is within an acceptable range. However, the added
value of the predevelopment work and approvals at $165,000, which adds an additional
5.5% to the land value estimate, should not be included. As Marc points out, the
owners have not yet pulled the building permits for the property. The problem with
suggesting a value for the predevelopment work and approvals is that the plans are no
longer valid. The City of Fridley disposes of any plans for which permits have not been
issued after one year and since May of 2001 there have been numerous building code
changes.
However, in order to conclude this transaction as quickly and as amicably as possible,
the HRA is offering $3,165,000 for the property. This offer assumes that (1) no
environmental remediation is required and (2) you will pay your own appraisal fees,
property taxes due and payable in the year 2008 and any pending or levied special
assessments.
Mr. Tim Nelson
January 24, 2008
Page Two
Please let us know as soon as conveniently possible if this offer is acceptable. If the
offer is acceptable,-we will prepare a purchase agreement for your approval.
In order to meet the construction timeline, we will be filing a petition in condemnation the
week of January 28, 2008. However, this, does not affect our good faith efforts to
negotiate a fair price with you.
We look forward to hearing from you.
Very truly yours,
James R. Casserly
Attorney at Law
JRC /jlt
cc: City of Fridley
Attn: William Bums, HRA Executive Director
Enclosure -
BRKW Appraisal dated January, 2008
G: \WPDATA\RFRIDLEY\71 \CORWELSON JRC 2.DOC
STATE OF MINNESOTA
COUNTY OF ANOKA
The Housing and Redevelopment Authority in
and for the City of Fridley, Minnesota, a public
body corporate and politic,
Petitioner,
V.
Main Street Fridley Properties, LLC,
Respondent
TO THE ABOVE -NAMED COURT:
Case Type: Condemnation
DISTRICT COURT
TENTH JUDICIAL DISTRICT
Court File No. CD-
Petitioner respectfully represents and alleges as follows:
PETITION
1. Petitioner is a duly constituted housing and redevelopment authority, which is
organized and existing under the laws of the State of Minnesota under Minn. Stat. § 469.001, et
seq., with all of the powers enumerated therein.
2. Petitioner is authorized by Minn. Stat. § 469.012, subd. 1(g) to acquire (pursuant
to the power of eminent domain -as set forth in Minn. Stat. § 117), such real estate interests as it
may require when it determines that doing so is necessary and for a public purpose. The
Resolution, dated January 10, 2008, providing such authorization (the "Resolution"), is marked
Exhibit A, attached hereto and incorporated herein.
3. Petitioner has found it necessary and for a public purpose to acquire fee simple
title to the real estate described in Exhibit B ("Subject Property "), attached hereto and
incorporated herein, in order to facilitate the construction and operation of a commuter rail
station and related facilities within the City of Fridley.
4. This acquisition is done in conjunction with the Anoka County Regional Railroad
Authority ("ACCRA"), the State of Minnesota, by and through its Department of Transportation
( "MN/DOT "), and Burlington Northern Santa Fe Railway Company ( "BNSF .'), pursuant to the
following agreements and resolutions: (1) ACRRA's Resolution 2007 -10, marked as Exhibit C
and attached hereto and incorporated herein by reference, which authorizes ACRRA to enter into
memoranda of understanding relating to a Fridley commuter rail station and to perform
obligations there under; (2) a Memorandum of Understanding between Petitioner and ACRRA,
marked as Exhibit D and attached hereto and incorporated herein by reference, whereby
Petitioner and ACRRA agree to work jointly to seek funding or reimbursement of funds to
acquire the site for, and to design, develop and construct the Fridley commuter rail station and
related facilities; (3) a Memorandum of Understanding between ACRRA and MN/DOT, marked
as Exhibit E and attached hereto and incorporated herein by reference, whereby ACCRA is
delegated Mn/DOT's designee to enter into an Underpass Construction Agreement with BNSF
and to contribute to the funding of the Underpass Construction project as part of the Fridley
commuter rail station; (4) the Underpass Construction Agreement with BNSF, marked as Exhibit
F and attached hereto and incorporated herein by reference, which provides for the construction
of the Fridley Station Underpass; (5) Resolution No. 2008 -02, marked as Exhibit G and attached
hereto and incorporated herein by reference, authorizing Petitioner to execute a Memorandum of
Understanding with MN/DOT pertaining to the acquisition of the Subject Property for a Fridley
commuter rail station and relaxed facilities; and (6) a Memorandum of Understanding between
Petitioner and MN/DOT, marked as Exhibit H and attached hereto and incorporated herein by
2
reference, executed for the purpose of having Petitioner acquire by purchase or eminent domain
land necessary and convenient for the Fridley commuter rail station and related facilities, which
station and facilities are "in the best interest of the State of Minnesota."
5. Petitioner deemed that it is necessary in order to accomplish a public purpose to
acquire the real estate interests described in Exhibit B, all of which are situated in the City of
Fridley, County of Anoka, by the exercise of the power of eminent domain and through use of
the "Quick Take" process described in Minn. Stat. § 117.042. The Petitioner therefore directed
its attorneys to acquire said real estate interests pursuant to the Resolution.
6. Exhibit I, attached hereto and incorporated herein, contains the names of all
persons and entities appearing of record and known to Petitioner as a result of due and diligent
inquiry to be the owners of or to potentially have an interest in the property described in Exhibit
B, together with the nature of the interest of each to the best of Petitioner's knowledge,
information and belief. The listing of the nature of such interest on Exhibit I is for informational
purposes only and is not intended- to limit the right, title, estate, lien or interest of the parties
named therein that the Petitioner is acquiring or encumbering in the property described in Exhibit
B. Without limitation, the Petitioner's intention is to acquire or encumber all of the rights, title,
interests, and possession which the persons and entities named in Exhibit I may have in the
property described in Exhibit B, including but not limited to the interests described in said
Exhibit I.
7. To the best of Petitioner's information and belief, none of said real estate is in
actual public use.
8. Petitioner has received from its appraiser, BRKW Appraisals, Inc., an updated
appraisal of the fair market value of the property described in Exhibit B. Petitioner will exercise
3
the authority provided in Minn.. Stat. § 117.042, commonly known as the "Quick Take"
provisions, and will deposit with the Court Administrator for this Court the amount of such
approved appraisal at some time subsequent to 90 days from the service of such notice given
pursuant to Minn. Stat. § 117.042 on each parcel owner to transfer all right, title, possession and
interest in some or all of the property- described in Exhibit B to Petitioner pursuant to such
Statute.
WHEREFORE, Petitioner prays for the order of this Court as follows:
1. Adjudging that said taking is for a public purpose, is necessary, 'and such as is
authorized by law and that Petitioner may acquire by condemnation the real estate interests
described on Exhibit I as against all persons and entities named in said Exhibit I.
2. Appointing three disinterested Commissioners, and at least two alternates,
residents of Anoka. County, to ascertain and report the amount of damages that will be sustained
by the owner on account of the taking; fixing the time and place of the first meeting of the three
Commissioners; prescribing their compensation; and requiring the Commissioners to file their
report with the Administrator nistrator of District Court within 180 days from the date of the order
appointing the Commissioners unless said time be further extended by order of the Court;
3. Ordering and fixing the time and place of the first meeting of such
Commissioners and prescribing their compensation.;
4. Directing and instructing the Commissioners to proceed according to law with
regard to all persons and entities named in Exhibit I, to make a fair and impartial assessment
and award of all damages that will be sustained by such persons and entities by reason of such
taking and report the same to this Court;
4
5. Authorizing that in all such cases where, for any reason, it shall be doubtful to
whom the award shall be paid, the payment be made to the Administrator of this Court to be
paid out under the direction of the Court;
6. That pursuant to Minn. Stat. § 117.041, as amended, the Petitioner and its
employees and agents be authorized to enter upon the Subject Property, following approval of
this Petition, upon reasonable notice to the owners and occupants thereof, for the purpose of
appraisals, surveys, tests, soil borings, inspections, including environmental inspections and
testing pursuant to Minn. Stat. § 117.041, and evaluations of the conditions present on such
Subject Property as Petitioner may elect;
7. Authorizing the Petitioner to obtain title and possession to the Subject Property
pursuant to Minnesota's "Quick Take" provisions, Minn. Stat. § 117.042, by depositing with the
Court Administrator the full amount of those certain appraisals of the Subject Property,
authorized and approved by the Petitioner, such deposits to be made at any time after 90 days
subsequent to the service of notice given pursuant to Minn. Stat. § 117.042, which notice is
contained in this Petition.
8. For such other and further relief as may be proper and pursuant to law.
Dated: January 2 1 , 2008 KRASS MONROE, P.A.
-l'.'M Z - 4---
Phillip R Krass ( #58 5 )
Molly R Hamilton ( #0349781)
8000 Norman Center Drive, Suite 1000
Minneapolis, MN 55437
Telephone: (952) 885 -5999
ATTORNEYS FOR PETITIONER
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BRKW APPRAISALS, INC,
REAL ESTATE VALUATION SERVICES
Mr. Mike Schadauer, Deputy Director, Project Controls
Northstar Project Office
155 Fifth Avenue South, Suite 755
Minneapolis, MN 55401
RE: A 10.673 -Acre Industrial Land Parcel
(Future Fridley Northstar Transit Station Site)
SWC of Main St. NE & 61" Avenue NE
Fridley, MN 55421
Fee Owner — Main Street Fridley Properties, LLC
Dear Mr. Casserly & Mr. Schadauer:
At your request, I have inspected the above referenced property and have made a study
of conditions affecting its value. The accompanying report contains a complete
summarized description of the property, presentation and analysis. of market data in
support of the value conclusion, and demonstrates the valuation techniques employed.
This appraisal is performed in accordance with the appraisal requirements of the
Uniform Standards of Professional Appraisal Practice (USPAP) and the Minnesota
Department of Transportation.
The subject of this appraisal is a vacant industrial land parcel located at the southwest
corner of Main St. NE and 61" Avenue NE in Fridley, Anoka County, Minnesota. The
land has a gross area of 11.521 acres (501,868 SF) and a net area of 10.673 acres
(464,933 SF), excluding existing street rights of way, according to a survey provided
by the property owner. The property is further identified as tax parcel numbers 22 -30-
24 -11 -0 -007, -0008, and - 0019. The land is zoned M -4, Manufacturing Only District.
The site is generally open and has a level to gently rolling topography. There is
railroad trackage along the entire west boundary of the site. The property owner has
completed predevelopment activity on the property, including the application for
building permits, city approvals, and has two alternate development plans for the
property.
SPRUCE TREE CENTRE SUITE 314
1600 UNIVERSITY AVE ST PAUL MN 55104
651 •646.6114 FAX 651-646-8086 brkw @brkw.com
The purpose of this appraisal is to assist the client in determining the market value of
this property for their acquisition, possibly through the power of eminent domain, for
use as a transit station site for the Northstar Commuter Line. The subject property has
been under consideration as a possible transit station site for several years. Since the
Minnesota Legislature approved funding in the spring of 2005 to begin planning the
Northstar Commuter Line, developers and city officials are focusing on transit -
oriented development projects (TODs) along this future transit route.
The land values in the local market for transit - oriented development project sites may
now be higher than the land values that were prevalent prior to the Northstar
Commuter Line project development. This could be a case of "Project Enhancement ",
which is an increase in a property's market value in anticipation of a public project
that may require condemnation action. Case law is clear that the condemnor cannot be
charged in condemnation proceedings for values which it has created by constructing
the project for which the property is taken. In this appraisal, the subject property
value is estimated at the highest and best use for industrial development, absent any
potential "project enhancement" factor.
The market value of the fee simple interest in the subject property has been appraised
in this report. In this appraisal, the Direct Sales Comparison Approach was utilized as
the most reliable and appropriate valuation methodology for valuing the land parcel.
The market value estimate is effective as of January 17, 2008, the last date the
property was physically inspected by the appraiser. Photos of the subject property, in
this report were taken on January 16, 2008 and on June 1, 2005, during a prior
inspection of the property when there was no snow cover.
The value estimate assumes that all levied real estate taxes and special assessment
balances, if any, have been paid in full. No personal property is included in the market
value estimate for the property. Therefore, based on my research and analysis, I have
concluded that the market value for the subject property as of January 17, 2008 is:
THREE MILLION ONE HUNDRED SIXTY -FIVE THOUSAND DOLLARS
($3,165,000)
This appraisal has been made in conformity with the Code of Ethics and Standards of
Professional Appraisal Practice of the Appraisal Institute and the Standards of
Professional Practice of the State of Minnesota. This appraisal assignment is not
based on a requested minimum valuation or specific valuation for approval of a loan.
The estimate of market value identified in this report was developed independent of
any undue influence.
This appraisal has also been prepared in conformity with the Uniform Standards of
Professional Appraisal Practice ( USPAP) of the Appraisal Foundation as mandated by
Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989
(FIRREA). The contents are also subject to the Code of Professional Ethics and
Standards of Professional Conduct, which are identified under the USPAP Guidelines.
BRKW APPRAISALS, INC. PAGE 2
The facts and information contained in this report were obtained from sources that are +
considered to be reliable and are true to the best of our knowledge and belief, but are
not guaranteed. This appraisal report is contingent upon the assumptions and limiting
conditions included within this report. Your attention is directed to the following
report for the supporting data, analyses and conclusions that support the market value
opinion.
Sincerely,
BRKW APPRAISALS, INC.
Marc E. Knoche, MAI
Certified General Real Property Appraiser
Minnesota License #4001101
0
BRKW APPRAISALS, INC.
PAGE 3
L
SALIENT FACTS AND CONCLUSIONS
Property Location:
Fee Owner:
Tax Parcel ID Numbers:
Valuation Date:
Date of Report:
Property Rights Appraised:
Market Value Estimate:
Property Data:
Gross Land Area:
Less Existing Street R /W:
Net Land Area:
Zoning:
Topography / Soils:
Environmental:
Highest and Best Use:
As Vacant:
As Improved:
Market Value Indications:
Cost Approach:
Sales Comparison Approach:
Income Approach:
Appraiser:
SWC Main St. NE & 61" Ave. NE
Fridley, MN 55421
Main Street Fridley Properties, LLC
22- 30 -24 -11 -0007
22- 30 -24 -11 -0008
22- 30 -24 -11 -0019
January 17, 2008
January 22, 2008
Fee simple interest
$3,165,000, including $165,000 for
development plans and approvals
11.521 acres 501,868 SF
0.848 acres 36,935 SF
10.673 acres 464,933 SF
M -4, Manufacturing Only District
Level to gently rolling site, mostly
open land with assumed stable soils.
Assumed to be clean site with no
detrimental environmental
contamination issues.
Industrial development in accordance
with the current zoning.
N /A. Vacant land parcel
Not Applicable
$3,165,000
Not Applicable
Marc E. Knoche, MAI
BRKW APPRAISALS, INC. PAGE 1
i,
x
SCOPE OF WORK
The Scope of Work describes the extent of the investigative process, which includes
collecting, confirming, and reporting data used in completing this appraisal
assignment. Marc E. Knoche, MAI, originally inspected and photographed the subject
property on June 1, 2005 at the time of the first appraisal of this property. The
property was inspected again on March 23, 2006 for an updated appraisal report. I
again inspected and photographed the subject property on January 17, 2008, which is
the effective date for the current valuation. A tour of the immediate neighborhood and
surrounding market area was also completed on all three inspection dates.
Timothy J. Nelson, representing the property owners, personally met with me at the
property on 6/1/05 at the time of the first appraisal. Mr. Nelson was interviewed and
provided relevant property information including a survey, a full set of development
plans dated 5/10/01 for two industrial buildings on the property, two building permit
application forms dated 5/10/01, and copies of two appraisal reports completed on the
property for the owner dated 11/15/00 and 12/18/01. Mr. Nelson was interviewed by
telephone and provided information by e-mail as part of the appraisal done on 3/23/06,
but did not meet with me in person.
For the current appraisal, I sent an email to Timothy J. Nelson on 1/15/08 requesting
updated information on the property, marketing of the property and current list price,
and offered to me with him at the property for another inspection. On 1/16/08 I spoke
on the telephone with Timothy Nelson and Jeffrey Nielsen, representing the property
ownership. They provided the requested updated information on the subject property
and declined the offer to meet with me personally at the property. They also confirmed
and verified the pertinent data on a recent industrial land sale in Fridley that I was
researching (See Land Sale 1 in this report), which they had marketed and sold.
General and specific information pertaining to the subject property and its location
was analyzed as a basis to determine the highest and best use of the land. The highest
and best use analysis conclusion determines the market data research required to
properly apply the three valuation methods considered in estimating market value of
the property. Market data regarding recent land sales and current listings of land for
sale was obtained by researching county records, city records, local data exchanges,
and interviews with real estate brokers, appraisers, and developers. Information and
market data from these various sources was then verified and checked for accuracy and
completeness. The most relevant and pertinent of the market data collected has been
presented and analyzed within appraisal report.
The Direct Sales Comparison Approach is the most reliable and applicable
methodology for estimating the value of vacant land parcels, and will be the only
approach used in this appraisal. The Cost Approach and Income Approach are
typically not applicable to valuation of vacant land, and for that reason they have not
been utilized in this appraisal. The Direct Sales Comparison Approach will result in
an estimate of value for the subject land, as vacant, through the analysis of recent
comparable land sales, with adjustments made for the value related differences
between the comparable properties and the subject.
BRKW APPRAISALS, INC. PAGE 13
e
Per agreement with the client, this is a summary e 2 2 (b) of the USPAP in compliance with
the reporting requirements of Standards
PROPERTY RIGHTS APPRAISED
The property rights appraised are those of the fee simple estate. The source of the
following definition of fee simple estate is the D nary of Real Estate Appraisal, 4`h
edition, published in 2002 by the Appraisal Insti tute
"Absolute ownership unencumbered by any other interest or estate,
subject only to the limitations imposed by power, the ng governmental powers
e
of taxation, eminent domain, poll
MARKET VALUE DEFINITION
Market Value as defined by the United States Department of the Treasury through the
Comptroller of the Currency and the Office of Thrift Supervision is:
The most probable price which a property should bring in a
competitive and open market under all conditions requisite to a fair
sale, the buyer and seller, each acting prudently, knowledgeably
and assuming the price is not affected by undue stimulus. Implicit
in this definition is the consummation of a sale as of a specified
date and the passing of title from seller to buyer under conditions
whereby:
♦ buyer and seller are typically motivated;
♦ both parties are well informed or well advised, and each acting in what he
considers his own best interest;
♦ a reasonable time is allowed for exposure in the open market;
♦ payment is made in terms of cash in U.S. dollars or in terms of financial
arrangements comparable thereto; and
♦ the price represents the normal consideration for the property sold
unaffected by special or creative financing or sales concessions granted by
anyone associated with the sale.
PAGE 14
BRKW APPRAISALS, INC.
HISTORY OF OWNERSHIP
The Uniform Standards of Professional Appraisal Practice (USPAP) requires that
appraisers report and analyze any sale transactions involving the subject property that
occurred during the three years prior to the effective date of an appraisal. Any current
listing, pending sale, or purchase option involving the subject property should also be
disclosed.
The recorded fee owner of this property is Main Street Fridley Properties LLC, who
has owned the property for many years. Timothy Nelson reported that there are no
arms - length market transfers of the property in the ten years prior to this appraisal.
The property has "For Sale" signs on it at the time of the inspection. Mr. Nelson and
Mr. Nielsen reported that the asking price for the land has been $3,010,000 since
about the summer of 2006. This price does not include the development plans and the
approvals they have received from the City of Fridley. The owner's preference is to
find a build to suit buyer for the property, as they would also like to do the
development /construction of the buildings rather than simply sell the land.
They reported that the current list price is based on $6.00 /SF of gross land area, which
also equates to $6.47/SF of net land area, excluding street rights of way. In their
stated opinion, the current asking price for the subject land is well supported by their
recent sale of another industrial land parcel in Fridley (See Land Sale 1 later in this
report). They intend to hold firm to the current asking price for the subject land.
TAXES AND ASSESSMENT DATA
The tax and assessment data presented below was obtained from the Anoka County
website. The property is appraised with all taxes and special assessments, if any,
current and paid in full. Presented below is the pertinent information on the subject
property for payable 2007 taxes.
BRKW APPRAISALS, INC. PAGE 15
TAXES AND ASSESSMENT DATA
#
Land
Area -
Acres
Land
AEMV*
Improv.
AEMV*
Total
AEMV*
R. E.
Taxes
Spec.
Asmts.
Total Tax &
Specials
-0007
3.78
$325,900
$0
$325,900
$9,260.38
$0
$9,260.38
1 -0008
7F'
3.50
289,500
0
289,500
9,221.70
0
91221.70
1 -0019
3.23
289,600
0
289,600
9,225.00
0
9,225.00
s
10.51
$905,000
SO
$905,000
$27,707.08
$0
$27,707.08
oka County Website
essor's Estimated Market Value — 2006 for payable 2007 taxes
• County Assessor's Estimated Market Value for payable 2008 taxes is $995,500.
BRKW APPRAISALS, INC. PAGE 15
Fridley HRA
Housing Program Summary
Cover Page
February 7, 2008 HRA Meeting
Report Description
Loan Application Summary Loan application activity (e.g. mailed
out, in process, closed loans) for
January and year -to -date.
Loan Origination Report
Remodeling Advisor &
Home Energy Audit
Loan originations for January and year -
to -date.
Shows the number of field appointments
scheduled and completed the Home
Energy Audit and Remodeling Advisor
Services administered by Center for
Energy and Environment.
* This information will be provided at the meeting on Thursday.
H: \—Paul's DOCUments\HRAWRA Agenda Items\2008Tebruary 7, 2008\Housing Program Cover PageFebruary2008.doc
Vokr e
FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY
February 7, 2008
Mae a =poo I rl
1. Home & Garden Show
All of our booth spots have been filled by vendors and our informational seminars are all set up to make this the
most successful show yet. Hopefully the weather is better than last years! Attached you will find a flyer with all
of the important information.
2. City Comprehensive Plan
The City Planning Staff has the Comprehensive Plan Update nearly complete. Hearings were held at the
Planning Commission and the Plan is set to be approved by the City Council at their V meeting in
February. The Plan will then be distributed to neighboring communities and sent on to the Met Council
for approval.
3. Columbia Arena
In early January, City & HRA Staff met with Arnie Gregory of Greco Development on the Columbia Arena site.
He has a very ambitious plan that moves the City's Public Works building and Fire Training Center in addition
to creating a pedestrian walkway over University Avenue. He is proposing to knock down the arena and then
build over 280,000 sq. ft of industrial warehouse office and upwards of 250 senior units. We have had a
number of discussions since the initial meetings and all of the plans are subject to change. Mr. Gregory
estimates that he needs approximately $10M in TIF to make the project work. Though he has yet to make a
formal TIF application, Staff has pointed out a number of potential problems with his proposed uses of the TIF,
as public buildings and excessive decorative street projects are not eligible expenses. We will keep you
informed as this proposal continues to evolve.
4. Gateway West
Jeff Magdic, of Blueprint Homes continues to be optimistic, despite the severe slowdown in the housing .
market. He continues to get calls on the properties and is currently in discussions with a number of
potential homebuyers and says that he just needs a little luck in having these folks sell their existing
homes. He does plan to begin another model home shortly.
In a discussion with Jeff earlier this week we agreed to see what happens in the next couple of weeks with
the people he is currently in negotiations with. If the stars align just right, he could have a number of
starts this spring and catch up with the existing construction schedule. We agreed to talk again in a
couple of weeks and then adjust the construction schedule in the development agreement if the project
remains slow.
If there are any items you would like covered in upcoming issues of the Non - Agenda Update please send
me an e-mail. bolinp @ci.fddley.mn.us
R
1 othAnnuid orth Metro Ifome and Garden Shoary
Saturday, February 23, 2008 '
9:00 am until 2:00 pm — Free Admission!
Schwan Center
(next to the Schwan Super Rink at the National Sports Center)
1750 105th Avenue Northeast, Blaine, Minnesota �v
■ Informative and Educational Seminars
at 9:30, 11:00, and 12:30.
The complete seminar schedule, with times and
descriptions, can be found on the web pages of
the sponsoring cities (see addresses, below).
IN Staff from the sponsoring cities of Fridley,
Mounds View, New Brighton and Blaine to
answer questions about housing, development
or city planning.
Plus:
■ Local specialists providing everything you
need, including inspiration and financing, for
remodeling or improving your home and yard.
IN Door Prizes. Register to win one of several
great prizes! Drawings will be held throughout
the day.
Entrants must be 18 years or older, and need
not be present to win.
■ 80+ vendors will be on hand to answer
■ Resource Center with "Ask the Pro" booths questions about home improvement projects
staffed by architects, interior designers, Master for inside and outside the home.
Gardeners and landscape designers.
Sponsored by the Cities of
Fridley a Mounds View a New Brighton • Maine
www.d.fridley.mmus • www.ci.mounds- view.mn.us • www.newbriahtommn.aov • www.ci.blaine.mmus
Co- Sponsors:
Billboard advertising provided by: CLEAR CHANNEL
OUTDOOR
Questions? Contact Marsha Wagner, 612- 338 -2122, email Marsha()-Castlevisions.com .
or call one of the following Planning Committee Members;
Paul Bolin Jeremiah Anderson Janice Gundlach Linda Barthel
City of Fridley City of Mounds View City of New Brighton City of Blaine
763- 572 -3591 763 - 717 -4023 651- 638 -2059 763 - 717 -2648