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HRA 11/06/2008 - 30952CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY COMMISSION NOVEMBER 6, 2008 CALL TO ORDER: Chairperson Commers called the Housing and Redevelopment Authority to order at 7:05 p.m. ROLL CALL: MEMBERS PRESENT: Larry Commers Pat Gabel William Holm Steve Billings John Meyer OTHERS PRESENT: Paul Bolin, HRA Assistant Executive Director Jim Casserly, Development Consultant Gay Cerney, HRA Attorney Scott Hickok, Community Development Director Mike Jeziorski, Accountant William Burns, City Manager ACTION ITEMS: 1. Approval of Expenditures MOTION by Commissioner Holm to approve the expenditures as presented. Seconded by Commissioner Gabel. UPON UNANIMOUS VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED. 2. Approval of October 2, 2008 Meeting Minutes Commissioner Gabel asked for the word week to be changed to month on page three. MOTION by Commissioner Gabel to approve the minutes as amended. Seconded by Commissioner Holm. UPON UNANIMOUS VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED. 3. Approval of 2009 Meeting Schedule MOTION by Commissioner Gabel to approve the 2009 Meeting Schedule as presented. Seconded by Commissioner Holm. UPON UNANIMOUS VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED. 3A. Approval of Purchase Agreement — Alano Society Commissioner Billings asked if the purchase price included relocation costs. Paul Bolin, HRA Assistant Executive Director, said that this is a voluntary sale so any relocation costs are an additional benefit. Commissioner Billings said that the seller may want relocation costs. Mr. Bolin said that is correct. Chairperson Commers asked if there were any environmental issues with this site. Mr. Bolin said that the building is new enough that the building officials have no concerns with hazardous materials. Before the demolition of the building the city will be required to test for hazardous materials. Chairperson Commers asked about insurance while the Alano Society leases the building. Mr. Bolin said that he has not had a chance to go through the paperwork and check on insurance. Chairperson Commers asked about the liability coverage on page 13. Commissioner Billings asked if a motion could be made to agree on the principal and after the attorney's have had a chance to look at the agreement and rest could be approved at the December meeting. Mr. Bolin said that the seller is looking for more of a commitment tonight. The Board could give the Chair authorization to sign the purchase agreement if certain criteria are met, this way the process wouldn't be delayed another month. Commissioner Billings asked how long negotiations have been going on with the Alano Society. Mr. Bolin said the first discussions started back in January 2008. Commissioner Billings asked how long the seller has known about this meeting and how many times has a representative from Alano showed up at the meetings prior to tonight. Now, the seller faxes in a purchase agreement late this afternoon leaving HRA no opportunity to review the agreement and wants an agreement signed tonight? Do they really expect HRA to react without review of the paperwork? Chairperson Commers asked what would happen if there were property damage when the Alano Society is leasing the building. Gay Cerney, HRA Attorney, said that because HRA intends to demolish the building, HRA shouldn't worry about property damage. There should be no concern other than keeping the building maintained. Only enough coverage would be needed to keep the building in safe condition. Commissioner Meyer asked if there were a fire, for example, with no insurance, who would be responsible for replacing the losses in the building. Attorney Cerney said that a typical lease would say HRA would not be responsible for the liability of private property. Commissioner Gabel agreed not to rush to sign the purchase agreement until the paperwork is reviewed. Mr. Bolin said that a lot has transpired this past week, especially in the price negotiations. Mr. Spahn, working on behalf of the Alano Society is here and maybe HRA could ask him if they could wait until December. Mike Spahn, Caldwell Bankers and a Board Member of the Alano Society, said that the timing of this purchase agreement was delayed mostly due to the nonprofit organization rules and regulations. 30 day notices and approval from all members is required for this sale. The Alano Society has been in Fridley for over 20 years and wants to stay in Fridley. Tomorrow the Alano Society would like to sign a purchase agreement for their new building. In order to go to the next step, they would need a signed purchase agreement. The seller needs to keep the nonprofit statue according to their rules. Mr. Spahn said regarding the liability and renters insurance for personal property, no liability would be the responsibility of the city. The Alano Society may be able to move out early depending on the new building. The Alano Society services a lot of people from this organization, wants to continue business in Fridley and would like to know the purchase is complete. If there were some type of disaster and everything was destroyed, there would be no cost to the City of Fridley. Chairperson Commers asked about the idea of agreeing on the purchase agreement and wait on the lease. Mr. Spahn said that he would need the purchase agreement signed tonight. Chairperson Commers asked who drafted the purchase agreement. Mr. Bolin said Dan Wilson and Attorney Cerney and Jim Casserly reviewed the documents. Mr. Casserly said that they wanted to be sure the 5tate and Federal laws were covered in the purchase agreement. Mr. Spahn said the only change was the final price and the lease time. Commissioner Billings said that if HRA took possession what would happen to the real estate taxes. Mr. Spahn said that the Alano Society is a nonprofit organization and currently doesn't pay property taxes. Renting to a nonprofit would exempt from property taxes. Mr. Casserly said that he has gone through the documents and the only thing that changed was the price. All terms have been addressed. If the Authority is okay with the price, it would be okay for the Commission to accept the purchase agreement. Chairperson Commers said the problem is if the organization is getting another purchase agreement tomorrow, they probably need this signed tonight. He asked if the agreement could be approved subject to review by Council in the next few days. Mr. Cassery said that all the information is in the office and could be reviewed tomorrow. Attorney Cerney said that there should be no problem executing the purchase agreement and it wouldn't be signed until the closing. Commissioner Holm said� he hasn't seen the purchase agreement and was concerned that it has not been reviewed. He would agree on the price and would like the agreement looked over to make sure all provisions were agreed upon. Commissioner Meyer said that the purpose is to accommodate the Alano Society and they had a valid reason for the last minute actions. He thought the Commission should give them assurance to proceed tomonow with their business. Dr. Burns said that the Authority should be careful on what is agreed upon so they would not be required to come back to meet to approve the purchase agreement at a later date. Maybe they could approve the purchase agreement subject to being the same as the one previously considered that way it would not reyuire the Authority to come back for approval. Mr. Casserly said all the Authority needs to do is make sure the body of the agreement is the same as before. MOTION by Commissioner Meyer to approve the purchase agreement contingent upon Council review and approve form of lease to conform with the information that was received earlier. Seconded by Commissioner Holm. UPON UNANIMOUS VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 4. Approval of 2009 Home and Garden Show Admin. Contract Paul Bolin, HRA Assistant Executive Director, said that Fridley has been the fiscal agent for the Home & Garden Show for 11 years. (Blaine, MV, & NB). The revenues from booth rental cover the expenses for show. Since 2005, the H&G Show has contracted with Marsha Wagner/Castle Visions to perform all administrative tasks for show. Her work has been excellent and much appreciated by all. Staff recommends approval of the contract authorizing Castle Visions to perform admin work for 2009 H&G Show. MOTION by Commissioner Gabel to approve the 2009 Home and Garden Show Contract. Seconded by Commissioner Meyer. UPON UNANIMOUS VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 5. Approval of Resolution Adopting Construction Easement for NS Rail Paul Bolin, HRA Assistant Executive Director, reviewed the CTIB Grant. The grant was approved for $9.921M for the Fridley Station Construction. The total estimated cost of station is $13.34M. The HRA land, ACRRA land and tunnel are local contribution to project. HRA Attorneys worked with ACRRA Counsel to draft the easement necessary to start construction & have developed an early draft of ground lease. Staff recommends approval of the resolution granting a construction easement to the ACRRA. MOTION by Commissioner Billings to approve the resolution adopting construction easement for the Northstar Rail. Seconded by Commissioner Gabel. Commissioner Meyer said he had a question about the bids, if they came in higher than budgeted who would cover the difference. Mr. Bolin said that in the past three months the estimated total went from $11 M to $13.SM. The estimates have been conservative to avoid that situation. Staff is pretty sure that the bids will come in under the estimate. If there is a shortfall in the building process, the ACRRA will have to come up with the funds. They may come to the Fridley HRA to help with that but are trying to plan for the numbers to be close to the estimate. Commissioner Meyer asked about delays and if the station couldn't operate until January or February, what is magic about November 2009. Mr. Bolin said that is when the rest of the stations will open. They would like all the stations open at the same time. ACRRA has been great through the entire process and if things come up causing delay, the plans will need to be adjusted accordingly. Commissioner Meyer asked if there would be any sort of penalty if the sta.tion was not ready to open in November. Mr. Bolin said that the City would not be penalized as it is a Regional Rail project. The language in the grant states for certain parts of construction to happen in a certain time frame. William Burns, City Manager, asked if the $1.6M to build the tunnel would be reimbursed by the CTIB. Mr. Bolin said that the County would not be reimbursed. Dr. Burns asked what the remaining cost was for the station. Mr. Bolin said $9.9M. Dr. Burns said that it seems true that there is room for errors or contingency funds. Chairperson Commers said that HRA did get a breakdown for the cost of the construction. Scott Hickok, Community Development Director, said that the Fridley Station used some methodology as other stations so there is some kind of formula to build in contingency funds. Currently there aze eager contractors which will lead to favorable pricing. Dr. Burns asked staff to email HRA with the contingency factor. He feels confident the funds will be okay as the past experiences have been good. Winter presents a good opportunity to get competitive bids. Commissioner Meyer said sometimes a surprise can come and he wanted to make sure we were prepared if something comes up. UPON UNANIMOUS VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED. INFORMATIONAL ITEMS: 1. Northstar Rail Station Update Paul Bolin, HRA Assistant Executive Director, reviewed the construction schedule. NCDA is currently working on the final design and it should be finished by late November. The bidding process will be December 12th through January and the notice to proceed is targeted for February 2009. T'he significant construction should be completed in September 2009, final construction complete in October 2009 and the Northstar operation will begin in November 2009. HRA and the City can now turn their focus to the development around the station. Revisit early plans and examine successful stations with the Biko Associates, Dunbar Group. A joint work session with Council will be scheduled in January. 2. Gateway Northeast Update Paul Bolin, HRA Assistant Executive Director, said that in regards to the Tae Kwan Do building we are still awaiting official response to HRA's offer and the Sinclair Sta.tion is still waiting for MPCA ruling. 3. Housing Loan Program Update Paul Bolin, HRA Assistant Executive Director presented the Monthly Housing Report. The Fridley HRA Loan Program Summary for October Loans Closed: RLF —1, Def — 0 and Others — 0. Year to Date Loans Closed: RLF —14, Def — 0 and Others — 3. (TOTAL YTD —17) Remodeling Advisor Visits for October —1, YTD — 15. ADJOURNMENT: MOTION by Commissioner Meyer to adjourn. Seconded by Commissioner Billings. UPON UNANIMOUS VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED AND THE MEETING ADJOURNED AT 9:15 P.M. Respectfully Submitted, ¢�Ci1,�� -?� � Krista Monsrud Recording Secretary CITY OF FRIDLEY SIGN-IN SHEET HOUSING & REDEVELOPMENT AUTHORITY MEETING V � Name and Address S�� v! N, v-v. s o J`. Agenda Item of Interest i i i i i i i i