HRA 11/03/2011 - 6562November 3, 2011
HRA Meeting
Regular Meeting Agenda
7.00 p.m.
Call to order
Roll call
Action Items
1. Approval of expenditures
2. Approval of October 6, 2011, Meeting Minutes
3. Award GWNE Broker Contract
4. Approve exclusive Development Agreement with Real Estate Recyclers
5. Interfund Loan - HRP
6. Approve Administration Contract for 2012 H &G Show
7. Approve Workers Comp Insurance for Commissioners
Informational Items
1. Home Improvement Demonstration Project Update
2. Housing Replacement Program Update
3. Housing Loan Program Update
Adjournment
HAMy Documents\HRA\2011 HRA Agenda \11 11 03.docxHAMy Documents\HRA\2011 HRA Agenda \11 11 03.docx
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Housing Redevelopment Authority Meeting of October 6, 2011 2
bedrooms, one bathroom, three garage stalls and an unfinished basement to keep the home price down and
allow for future expansion.
n
Mr. Bolin said that the builder is asking the Authority to change the terms on our standard lot reservation
agreement to nine months. The builder and his realtor will actively market the home sketch and lot on the
MLS. Once a buyer is found a development agreement will be signed to ensure the home is built to the
Authorities criteria for the Gateway West neighborhood.
Mr. Bolin said that the builder would like an approval prior to creating blue prints and ordering materials
etc.; some kind of assurance from HRA that they are in favor of doing this. The goal is to keep the home
in the proper price range; around $185,000. Staff would recommend the Authority authorize staff to enter
into a lot agreement with Mr. Torkelson. The price of the lot will be somewhere above $35,000 and
below $40,000. There is no risk to the Authority to enter into this agreement. The contractor will either
build a home in nine months or they will not find a buyer and the agreement would expire in nine months.
The contractor will show a house plan on MLS which will advertise all vacant lots in that area.
Commissioner Gabel asked why they were interested in that particular lot.
Mr. Bolin said that they spent quite a bit of time looking at the different lots and they have their own
ranking system. This lot was has a little more depth and is towards the top where the bend goes to the
east. They like the lot at this location and it is the one they would like to build on.
Commissioner Gabel asked if it would be better to fill up a vacant lot between homes rather than putting
a home where there is no development. /1�
Mr. Bolin thought that making something happen down the block where there is no activity may be a
good thing. This site is very visible and not surrounded by other homes. Construction will be visible for
anyone driving on University and may plant a seed for others to be inspired to build in the area. From a
marketing stand point they want to do something on that southern block and see opportunity there.
Commissioner Gabel thought that one bathroom seemed strange; she wanted to make sure that is what
they were proposing. She also noted that the photo only had a two car garage, not three.
Mr. Bolin said it is a three car garage but half of the stall is two cars deep. They are trying to get all the
design elements in on the home and be able to market it at a good price. There is room to expand and the
buyer may choose to put more into the home.
Commissioner Gabel asked if nine months was long enough to build a home with winter coming.
Mr. Bolin clarified that nine months was just for the lot reservation agreement. The development
agreement would be in the next phase.
Commissioner Eggert asked how many lots were left in that development.
Mr. Bolin answered nine.
Commissioner Eggert asked if the Authority had put different prices on the lots. 11�
Mr. Bolin answered yes; 10% is taken off from the City Assessors appraised value. Most lots in this
development were between $37,000 and $44,000.
4
Housing Redevelopment Authority Meeting of October 6, 2011
Commissioner Eggert asked if the intent of the developer is to build one home and look at more in that
area.
Mr. Bolin answered yes; if they sell the first one they would more than likely be interested in building
more of these homes.
Chairperson Commers asked what the size of the lot was.
Mr. Bolin answered approximately 65' wide by 180' deep.
Chairperson Commers asked what the last appraised value for the land price was; he seemed to recall
something like this has been done before.
Mr. Bolin said that an appraisal was done three years ago but he did not recall what it was on a square
footage basis, but the average was between $14,000 — $21,000. The appraisals were extremely low due to
the foreclosures at that time.
Commissioner Holm asked if there were any financial implications for the builder in terms of the
agreement.
Mr. Bolin said that in this case staff proposes one dollar for a lot reservation fee because there is not a
known buyer and the builder is going to have over $1,000 in expenses. The builder will have to prepare
estimates for construction materials, blue print plans and list the property on MLS. The Authority will
benefit from having these lots on the MLS.
Commissioner Holm asked if the lot reservation would include the price of the lot if they find a buyer.
Mr. Bolin said that before the lot reservation agreement is signed, a price for the lot, which everyone
agrees on, will go into the lot reservation agreement.
Commissioner Gabel asked if this was the largest lot in the development.
Mr. Bolin answered no, there is one larger.
Chairperson Commers said he did not see any risk to try to do something in this area to move the lots.
He was surprised a developer is interested in wanting to build something new in this economy.
Commissioner Holm agreed with the plan but was concerned that the price of the lot may be too high to
accommodate construction of the type of house the Authority would like to see in that area.
MOTION by Commissioner Gabel to approve the agreement to market and build the home on 5735 3
Street. Seconded by Commissioner Eggert.
UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE
MOTION CARRIED UNANIMOUSLY
4. Awarding of Demolition Contract — Housing Replacement Program
Housing Redevelopment Authority Meeting of October 6, 2011 4
Paul Bolin, HRA Assistant Executive Director, said that the City Public Works Department ran a formal
bid process on the Authority's behalf. Bids opened on September 23, 2011 and four bids were received
(slight error in calculations). Bids ranged from $53,423.93 to $115,000 to demolish three residential
properties. Staff recommends the contract be awarded to Veit Companies in the amount of $53,423.93.
This bid price was within staff estimates and they will be able to complete the demolition in the desired
timeframe
Commissioner Eggert asked how this estimate compared to previous demolitions.
Mr. Bolin said the price is similar; most of the single family demolitions have been in this price range.
MOTION by Commissioner Holm to award demolition contract housing replacement program.
Seconded by Commissioner Gabel.
UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE
MOTION CARRIED UNANIMOUSLY
INFORMATIONAL ITEMS:
1. Home Improvement Demonstration Project Update
Paul Bolin, HRA Assistant Executive Director, said that some action is starting to happen from the open
houses. Anyone who wants to look at the home outside of these times, contact staff and they will show
them the home.
2. GWNE Broker Solicitation Update
Paul Bolin, HRA Assistant Executive Director, said that the Authority authorized staff to issue a request
for qualifications (RFQ) to real estate brokers interested in marketing the properties in Gateway Northeast
along University Avenue. Information was sent to over 25 real estate companies and the statements of
qualifications were due back on 10/7/11. Brokers will be evaluated on experience, marketing methods,
and experience in different market segments. Interviews will be conducted with the most qualified and
their references will be checked. Staff will bring forward a recommended broker to the November 3rd
meeting.
3. Housing Loan Program Update
Paul Bolin, HI A Assistant Executive Director, said that there were no loans closed in September making
a total of eight year to date. There were also no remodeling visits making a total of seven year to date.
CEE is going to send out a post card to residents to promote these programs. They are also offering a zero
percent energy loan for residents to look into increasing the energy efficiency in their homes.
Chairperson Commers noted that nine applicants were rejected; he asked what the reason was for the
rejection. 11 �
Housing Redevelopment Authority Meeting of October 6, 2011
Mr. Bolin said it may be credit score, payment history, too much debt, or owe too much on their home.
—� This loan program isn't any different than a loan from any other bank.
Scott Hickok, Community Development Director, said that the White Pines Development recently had an
open house. Very good comments were received on the finished product and it will house 14 residents.
Once 20 residents are booked phase two will begin. They hope to finish up the second phase yet this
year. The Sandy Site is under development of a 70 unit, three story, senior building. This will be a nice
looking project. The developer has a sign out on the corner showing what the building will look like and
who to call to ILT about pricing etc.
Mr. Hickok also �noted thaWiidents have called to ask about a Habitat for Humanity home that was built
in Fridley off of Main Street. This is a County HRA project not a City HRA project.
Chairperson Commers asked for an update on Cub Foods.
Mr. Hickok said that the developer seemed confident that the financing will be done to start the interior
of the store around the first of the year and the outside in the spring.
Chairperson Commers asked who owned the building.
Mr. Hickok answered the Triland Development Company owns the property.
Chairperson Commers asked if anything was happening on the arena site.
11'
Mr. Hickok answered no; the developer isn't even responding to phone calls.
ADJOURNMENT:
MOTION by Commissioner Gabel to adjourn. Seconded by Commissioner Holm.
UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE
MOTION CARRIED UNANIMOUSLY AND THE MEETING ADJOURNED AT 7:45 P.M.
Respectfully Submitted,
Krista Monsrud, Recording Secretary
ACTION ITEM
HRA MEETING OF NOVEMBER 3, 2011
CrrY OF
FRIDLEY
Date: October 24, 2011
To: William Burns, City Manager
From: Paul Bolin, Asst. Executive HRA Director
Subiect: Gatewav Northeast Commercial Broker Selection
Staff sent a request for qualifications to nearly 30 commercial property brokers doing work in the
north metro area of the Twin Cities. A total of 2 brokers responded back stating their interest in
the property, their experience with brokering and developing in Fridley, and provided examples of
their work along with references.
Staff worked with members of the Community Development staff to evaluate and interview the
candidates. While both brokerage groups were very knowledgeable about the Fridley market area,
Premier Commercial Properties (Rod Lee & Myles Borstad) were the most qualified to assist the
Authority on the Gateway Northeast Properties. Premier has experience in the local market place
not just as a property broker, but as a developer and property manager. The group also has key
contacts with the market segments likely to move to the site (medical and specialized senior
housing).
Staff is working with Premier and Attorney Casserly to develop an agreement that anticipates
different development scenarios. Staff anticipates having this agreement completed prior to the
Authority's meeting next week. Staff also invited Mr. Lee and Mr. Borstad to attend the
Authority's meeting to give a brief presentation and take questions from the group.
Recommendation:
Staff recommends the Authority select Premier Commercial Properties to be the broker for the
Gateway Northeast properties.
LISTING AGREEMENT: GATEWAY NE
Date:
IN CONSIDERATION OF the Agreement of Premier Commercial Properties, Inc. (hereinafter referred to as "BROKER ")
to undertake to sell the premises hereinafter described, the Housing and Redevelopment Authority in and for the City of
Fridley (hereinafter referred to as "SELLER ") grants to BROKER the exclusive right to sell or contract to sell the property
known as Gateway NE as shown on the attached Exhibit A (hereinafter referred to as the "Property") for the period from
the date hereof through and including November 1, 2012, for the price, terms or exchange to which SELLER may consent.
SELLER understands that BROKER may list other properties during the term of this Agreement which may compete with
SELLER'S property for potential buyers.
SELLER'S OBLIGATIONS
It is agreed that SELLER shall promptly furnish BROKER with complete information concerning any person who during the
period of this Agreement makes inquiry to SELLER regarding the sale, exchange or lease of the Property.
SELLER hereby agrees to furnish to Buyer an Abstract of Title, or a Registered Property Abstract, certified to date, to
include proper searches covering bankruptcies and state and federal judgments and liens, and to execute or cause to be
executed a deed of general warranty conveying a marketable title to the Property to the Buyer and any further documents
as may be required to consummate the sale to Buyer in accordance with the terms above designated or with the terms to
which SELLER may hereafter consent.
SELLER hereby agrees to furnish to any Buyer, before signing an agreement to sell, a written disclosure of all known wells
on the Property and further to provide Buyer at closing with a Well Disclosure Certificate or certification of no known wells.
SELLER further agrees to promptly notify BROKER of any notices pertaining to the Property which are hereafter received
during the term of this Agreement.
It is further agreed that SELLER shall permit BROKER to erect a "For Sale" sign on the Property and to remove all other
"For Sale" signs from the Property during the period of this Agreement. It is further agreed that SELLER shall permit
i� BROKER to erect a "Sold" sign on the Property for a period of 30 days following the sale or exchange of the Property by
BROKER.
COMMISSION
It is further agreed that SELLER shall pay BROKER a brokerage fee of $0.50 /square foot for each square foot of Property
that is sold or exchanged, upon occurrence of any of the following conditions:
1. The sale, contract for sale, exchange, or conveyance of the Property during the period of this Agreement by BROKER
or any other person, including but not limited to SELLER, or any other agent or broker not a party to this Agreement,
in accordance with the price, terms or exchange as consented to by SELLER.
2. If SELLER agrees to sell the Property before this contract expires, and SELLER refuses to close the sale.
3. SELLER removes Property from the market before expiration of this Listing Agreement.
4. If SELLER grants an option to purchase the Property, SELLER shall pay BROKER a sales commission in the event
such option is exercised, whether during the term of this Agreement, or within 24 months thereafter.
5. SELLER contributes or conveys the Property or any interest therein to a partnership, joint venture or other business
entity during the term of this Agreement in lieu of a sale of the Property during the term of this Agreement.
6. If within 90 days after the end of this Agreement, SELLER sells or agrees to sell the Property to anyone who has
made an affirmative showing of interest in the Property by responding to an advertisement or by contacting the
BROKER or salesperson involved or has been physically shown the Property by the BROKER or salesperson. It is
understood that BROKER shall not seek to enforce collection of a commission under this Paragraph 6 unless the
name of the prospect is on a written list given to SELLER within 72 hours after expiration of this Listing Agreement.
SELLER further agrees that in the event a lease of the Property in lieu of sale is entered into (a) during the term of this
Listing Agreement, or (b) during the period set forth in Paragraph 6 above with a person or entity as described therein, then
SELLER shall pay BROKER a leasing commission of $0.50 /square foot for each square foot that is leased which shall be
due and payable upon execution of the lease or as otherwise agreed in writing.
SELLER'S REPRESENTATIONS
SELLER has full legal right to sell the Property.
SELLER represents that as of the date of execution of this Agreement, SELLER has not received any notice of building,
health or fire code violations, nor notice of hazardous waste on the Property.
Page 2
�a
FORFEITURE OF EARNEST MONEY
If a Buyer of the Property defaults and as a result forfeits the earnest money, SELLER will receive 75 percent and
BROKER will receive 25 percent of the earnest money but not to exceed $0.50 /square foot for each square foot contained
in a purchase agreement.
SUB - AGENTS AND BUYER'S BROKERS
I hereby permit you to share part of your commission with other real estate brokers, including brokers only representing the
Buyer.
DUAL AGENCY DISCLOSURE
If a Buyer represented by the Broker wishes to purchase your property, a Dual Agency will be created. This means that
the Broker will represent both you and the Buyer and owe the same duties to the Buyer that the Broker owes to you. This
conflict of interest will prohibit the Broker from advocating exclusively on your behalf. Dual agency will limit the level of
representation the Broker can provide. If dual agency should arise, you will need to agree that confidential information
about price, terms and motivation will still be kept confidential unless you instruct the Broker in writing to disclose specific
information about you. All other information will be shared. Broker cannot act as a dual agent unless both the Buyer and
you agree to it. By agreeing to a possible dual agency, you will be giving up the right of exclusive representation in an in-
house transaction, however, if you should decide not to agree to a possible dual agency and you want the Broker to
represent you, you may give up the opportunity to Sell your property to Buyer represented by the Broker.
SELLER will agree to dual agency representation and will consider offers made by Buyers represented by Broker.
However, no commission shall be paid if the Broker or any employee, equity owner, principal or agent of the Broker shall
have a legal, equitable or lender's interest in the Buyer or the Property at the time of sale or within 180 days of the date of
sale.
Seller may arrange for a qualified closing agent or attorney to conduct the closing, or SELLER may ask BROKER to
arrange for the closing.
MISCELLANEOUS
7. This Agreement is binding upon the heirs, successors, and assigns of the parties.
B. All of the representations and covenants of this Agreement shall survive and be enforceable after termination of the
Agreement. ,
9. This Agreement constitutes the complete agreement between the parties and supercedes any prior oral or written
agreements between the parties relative to the provisions herein. No amendment, modification or extension of this
Agreement shall be valid or binding unless made in writing and signed by both SELLER and BROKER.
10. This contract shall be governed by the laws of the State of Minnesota.
Premier Commercial Properties, Inc.
Broker
By:
Date
Housing and Redevelopment Authority in and for the City of
Fridley, MN
serer
By:
Date
By:
Date
MMB: 4833- 2960 -8973, v. 3
0
1_0'�
EXHIBIT A
61ST AVE ..
City of FrWey
HRA Properties
16,610 Sq Ft with Zoning
Along University Ave
1,051 Sq Ft
i �. [- - - - ,
2,781 Sq F
ce I
J
L
.19,334.sq Ft
J:
22,091 Sq Ft
60TH AVE 60TH-AVE
24,626 Sq Ft
'146 Sij Ft;
N
it I r IL
37,790 Sq
GGl
0 50 100 200 NtSU I A
Feel
Map Date: November 2nd, 2011
4.
SOURCES:
Cfty Of Faft Co
. _T"y Devw_
58TH AVE
W.
4,050 Sq Ft
I w
0,802 Sq
HRA Property
2.,7.50..S.q. Ft;
Zoning
R-I - One Family Units
R-2 -Two Family Units
SA - Hyde Park Neighborhoods
S-2 - Redevelopment District
C-2 - General Business
ROW
Road
,327,Sj Ft
2):
U)
57 1/2 AVE -
INFORMATIONAL ITEM
HRA MEETING OF NOVEMBER 3, 2011
CrrY OF
FRIDLEY
Date: October 24, 2011
To: William Burns, City Manager
From: Paul Bolin, Asst. Executive HRA Director
Subject: Exclusive Pre - Development Agreement
Staff has been approached by Real Estate Recyclers (RER), a redevelopment group specializing in
polluted sites, to discuss the potential for Authority assistance with the clean up and
redevelopment of the BAE site. Real Estate Recyclers is in the process of purchasing the
property from the current owner and is seeking an exclusive agreement to discuss redevelopment
of the site with the Authority.
The agreement was drafted by Attorney Casserly and reviewed by Staff and RER. As the
acquisition of a site like this takes time, RER is simply seeking the ability to negotiate the
potential for assistance from the Authority. The following statement from the agreement itself,
best summarizes the purpose of the agreement:
"Before the Authority and the Redeveloper can make a decision on whether to proceed with the
Project, it will be necessary to assemble and consider information relating to the economics, site
assembly, phasing, environmental remediation and other aspects of the Project. The purpose of
this Agreement is to allow the Redeveloper an opportunity to assemble such information, to
prepare a preliminary concept oncept plan and to negotiate with the Authority concerning the approval
of a term sheet (the "Term Sheet ") with a view to eventual execution of a contract for private
redevelopment (the "Redevelopment Agreement ") which will set forth the rights and
responsibilities of the Authority and the Redeveloper with respect to the Project. "
A brief memorandum from Attorney Casserly and a copy of the agreement are attached to this
memorandum.
Staff recommends the Authority approve this preliminary pre- development agreement. The
agreement will provide RER the confidence they need to move forward with the project.
MONROE
MOXNESS
BERG
James R. Casserly
jcasserly @mmblawfirm.com
Direct 952.885.1296
MEMORANDUM
8000 Norman Center Drive r 952.885.5999
Suite 1000 F 952.885.5969
Minneapolis, MN 55437 -1178 www.MMBLawFirm.com
To: City of Fridley Housing and Redevelopment Authority
Attn: Paul Bolin, HRA Assistant Executive Director
Attn: Scott Hickok, Community Development Director
From: James R. Casserly, Esq.
Date: October 27, 2011
Re: Interim Agreement for the BAE Site
Our File No. 9571 -77
Attached is an Interim Agreement (the "Agreement ") for the BAE Site. RER Acquisitions
LLC (the "Redeveloper ") has asked the HRA to approve this Agreement.
The Agreement protects the Redeveloper while it is negotiating for the acquisition of the
site (approximately 135 acres adjacent to East River Road, the "Site "). Issues covered
by the Agreement include the following:
1. The Agreement is intended to be preliminary in nature and provides the
Redeveloper and the HRA time to consider information relating to the
"economics, site assembly, phasing, environmental remediation and other
aspects of the project."
2. The deadlines are detailed on page two of the Agreement. Deadlines are
identified for blight analysis, a preliminary concept plan, TIF projections, approval
of TIF District, approval of a term sheet and ultimately approval of contract for
private redevelopment. The deadlines are designed to allow the Redeveloper to
meet its due diligence obligations that are to be included in the Redeveloper's
purchase agreement with the owner of the Site. Negotiations between the
Redeveloper and the HRA should be completed by April 5, 2012 at which time
the HRA will be asked to approve the establishment of a tax increment financing
district and a term sheet which will address the terms to be incorporated into a
redevelopment contract.
A
3. The Agreement is effective until November 1, 2012. The goal of the Redeveloper
and the HRA is to have executed the redevelopment contract substantially before
but certainly no later than November 1, 2012.
4. The parties are responsible for costs they incur except that the Redeveloper will
pay 50% of development counsel's costs, 100% of a blight analysis (up to
$10,000), 100% of any costs associated with environmental testing, an EAW, EIS
and AUAR or related expenses, and all normal and customary City fees
associated with the plan review and approval processes.
The HRA has used interim agreements over the years, most notably for Bancor (Islands
of Peace), Rottlund (Mississippi Street Townhouses) and MEPC (100 Twin). The
interim agreement is an excellent way to focus the parties on what has to be
accomplished within certain timelines. Paul Hyde, representing the Redeveloper, will be
in attendance at the HRA meeting to answer questions.
J RC /al
Enclosures
MMB: 4848 -1956 -9162, v. 1
2
i
RESOLUTION NO.
A RESOLUTION AUTHORIZING AN INTERIM AGREEMENT BETWEEN
THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE
CITY OF FRIDLEY AND RER ACQUISITIONS LLC FOR THE
REDEVELOPMENT OF THE 4800 EAST RIVER ROAD SITE
BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City
of Fridley (the "Authority ") as follows:
Section 1. Recitals.
1.01 The East River Road site (the "Site ") consists of approximately 135 acres of
land with two tax parcels at 4800 East River Road, Fridley, MN 55421.
1.02 The HRA, the City and RER Acquisition, LLC (the "Redeveloper ") plan to
redevelop the Site to include bulk warehouse, office warehouse, office showroom and
other uses, if appropriate, as agreed upon by the parties.
1.03 The Authority and the Redeveloper propose to enter into an Interim
Agreement effective as of November 3, 2011 and expiring November 1, 2012, setting forth
responsibilities and deadlines for each of the parties.
Section 2. Findings.
2.01 The Authority hereby finds that the redevelopment of the Site and the Interim
Agreement promotes the objectives outlined in its Modified Redevelopment Plan for its
Redevelopment Project No. 1 (the "Redevelopment Program ") established pursuant to
Minnesota Statutes, Section 469.001 et seq.
Section 3. Authorizations.
3.01 The Authority hereby approves execution and delivery of the Interim
Agreement dated November 3, 2011.
3.02 The Chairman, the Vice Chairman, the Executive Director or the Assistant
Executive Director of the Authority are each hereby authorized to execute and deliver any
documents necessary to effect the Interim Agreement.
PASSED AND ADOPTED BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN
AND FOR THE CITY OF FRIDLEY, MINNESOTA, THIS DAY OF
.2011.
ATTEST:
William W. Burns, Executive Director
MMB: 4826 - 2769 -8701, V. 1
(1101
W
Lawrence R. Commers, Chairman
W
DRAFT: October- 27;November 3, 2011
INTERIM AGREEMENT
This INTERIM AGREEMENT entered into effective the 3rd day of November, 2011, by
and between the Housing and Redevelopment Authority (the "HRA ") in and for the City of
Fridley, Minnesota, a Minnesota public body corporate and politic (the "Authority ") and RER
Acquisitions LLC , a Minnesota limited liability company (the "Redeveloper ").
WHEREAS, the property to be redeveloped is approximately 135 acres, has a building
address of 4800 East River Road, Fridley, MN, 55421 and its Property ID numbers are
27- 30 -24 -13 -0002 and 27- 30 -24 -42 -0002 (the "Site "); and
WHEREAS, the Authority and Redeveloper intend for the Site to be redeveloped primarily
as bulk warehouse, office warehouse and office showroom with at least fifty percent (50 %) of the
building space used for office warehouse and office showroom; and
WHEREAS, the Redeveloper is proposing a redevelopment (the "Project ") for the Site and
has requested that the Authority negotiate exclusively with the Redeveloper while the Project is
being studied.
WHEREAS, the Authority is willing to negotiate exclusively with the Redeveloper until
November 1, 2012, provided that deadlines for certain milestones described below are met.
NOW, THEREFORE, in consideration of the premises and mutual obligations of the
parties contained herein, each of them does hereby agree as follows:
1. Interim Nature of Agreement. The Authority and the Redeveloper agree that this
Agreement is intended to be preliminary in nature. Before the Authority and the
Redeveloper can make a decision on whether to proceed with the Project, it will be
necessary to assemble and consider information relating to the economics, site assembly,
phasing, environmental remediation and other aspects of the Project. The purpose of this
Agreement is to allow the Redeveloper an opportunity to assemble such information, to
prepare a preliminary concept plan and to negotiate with the Authority concerning the
approval of a term sheet (the "Term Sheet ") with a view to eventual execution of a contract
for private redevelopment (the "Redevelopment Agreement ") which will set forth the
rights and responsibilities of the Authority and the Redeveloper with respect to the Project.
2. Agreements of the Authority.
(a) The Authority agrees to cooperate with the Redeveloper in the Redeveloper's
undertakings and agrees that during the term of this Agreement the Authority will
not negotiate with any third party in connection with redevelopment of the Site.
(b) The Authority «411 negotiate erees to cooperate with the Redeveloper in good faith,
inekidin the financial options for (assisting with public
improvements, demolition, remediation, infrastructure improvements, and the
creation of a tax increment financing ( "TIF ") district or districts for the Site.
(c) The Authority will provide to the Redeveloper any of the following which the
Authority may have in its possession and which relate to the Site: blight reports,
surveys, soil, engineering, and geotechnical reports, previous concept plans and
estimates of environmental remediation and soils correction costs.
3. Undertakings of the Parties.
(a) By December 1, 2011, the Authority and its redevelopment counsel will
determine, on a preliminary basis, whether the Site parcels qualify for inclusion in a
new redevelopment TIF district and will share their findings with the Redeveloper.
(b) On an ongoing basis, the Redeveloper will review such findings and the reports and
other materials provided by the Authority on an as- needed basis. The Redeveloper
and Authority will identify additional issues and concerns.
(c) By January 1, 2012, the Authority's redevelopment counsel will complete its
initial analysis of projected TIF revenues from the Project and the Redeveloper and
the Authority will jointly determine if redeveloping the Site in phases is financially
feasible, given the amount of TIF or other Authority assistance potentially
available to the Project.
(d) By February 1, 2012, the Redeveloper will, in consultation with the Authority and
the City, develop a preliminary concept plan. The Redeveloper will provide
information requested by the Authority's redevelopment counsel in order to
perform a TIF revenue analysis, including the projected product types, taxable
value and completion dates of the buildings to be constructed in the Project.
(e) By February 1, 2012, the Authority will complete its third party analysis of the
suitability of the parcels in the Site for inclusion in a redevelopment tax increment
financing district.
(f) By April 5, 2012, the Authority will approve and promptly forward to the City for
its approval of a redevelopment tax increment district for the Site if the appropriate
findings can be made. The Authority and Redeveloper will jointly designate the
first year in which tax increment will be collected. The Authority is willing to
consider a hazardous substance subdistrict within the district if eligible costs exist
and for such period of time and for such parcels as permitted by statute.
(g) By April 5, 2012, the Authority and the Redeveloper shall have approved the Term
Sheet which will address the terms to be incorporated into a Redevelopment
Contract.
(h) The Redeveloper will continue to work with the City to refine its redevelopment
plans for phases on the Site, and the HRA and Redeveloper will continue to work
together to refine the TIF revenue analyses for various phases in an effort to make
all phases of the Project financially feasible.
(i) The City and Authority will assist the Redeveloper in pursuing federal, county,
state and regional grants to assist in making the project financially feasible.
(j) If all of the proceeding steps have occurred to the City's and Redeveloper's
satisfaction, the City and Redeveloper shall enter into a Contract for Private
Redevelopment by the termination of this Agreement.
4. Responsibility for Costs and Redeveloper Deposit.
(a) During the term of this Agreement, the Authority or the City shall be responsible
for fees and costs of 4s1hg=Ci=ty planning and engineering - i—staff (except
as set forth in subparagraph (d) below and the City Attorney (except as set forth in
subparagraph (b)(3) below).
(b) The Redeveloper shall be responsible for:
(1) fees and costs of its counsel and consultants,
(2) the cost of any additional market studies, environmental analyses, soil
borings, or surveys performed by the Redeveloper,
(3) fifty percent (50 %) of the fees incurred after the date of this Agreement by
the Authority's redevelopment counsel relating to TIF district qualification,
creation and certification, financial feasibility analysis of the Project and
drafting and negotiation of the Term Sheet, Redevelopment Agreement and
related documents,
(4) one hundred percent (100 %) but not to exceed $10,000.00 of the cost of a
third party blight analysis which is necessary to determine the suitability of
the parcels for inclusion in a redevelopment TIF District, and
(5) any costs associated with many environmental review or testing including
but not limited to an EAW, EIS or AUAR�(iil anv transportation study that
may be required, and (iii) any utility capacity study necessitated by the
redevelopment. f
(c) The Redeveloper shall make a deposit o 10,000.00t be applied by the Authority
to reimburse costs and fees incurred by the Aut ority for which the Redeveloper is
responsible under 4(b)(3), (4) and (5). The Redeveloper shall replenish this deposit
when the balance falls below $1,000.00 upon request by the Authority. The HRA
shall meet and confer with the Redeveloper regarding costs identified in this
i"'� paragraph.
(d) In accordance with City policy, the Redeveloper will pay all normal and customary
City fees associated with the plan review and approval process.
5. Term of Agreement. This Agreement shall be binding upon the parties until November 1,
2012, unless terminated sooner by the Authority for the Redeveloper's failure to timely
comply with any of the deadlines set forth in Paragraph 3 or by mutual agreement of the
parties.
6. City and Authority Use of Work Product. If the Redeveloper decides not to proceed with
redevelopment of the Site, the Redeveloper shall make available at no cost to the City and
the Authority for their unrestricted use all available non - proprietary work product,
including market analyses, soil and engineering reports, geotechnical reports,
environmental reports, studies and testing, construction budgets and other documentation
produced specifically for the Site.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed in
each of their names as of the date first above written.
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF FRIDLEY, MINNESOTA
By:
President
Executive Director
By:
Its:
MM13: 4834 - 7986 -3053, v. 34
(REDEVELOPER)
2
Approval of Interim Agreement:
Real Estate Recycling a redevelopment group led by Paul Hyde and
specializing in heavily polluted sites is currently working to secure
ownership of the 135 acres located at 4800 East River Road, currently the
home of BAE, Industries.
Mr. Hyde has approached the Authority to discuss the potential for
assistance with the clean up and future redevelopment of the BAE site.
Tonight, Mr. Hyde is simply seeking an interim agreement to discuss
redevelopment of the site with the Authority.
The purpose of the Interim agreement is quite simple. The agreement
states that as Mr. Hyde works to secure the property, develop concept
plans, and complete his due diligence; the Authority will not allow other
developers to take Mr. Hyde's work and ask us for assistance on the same
site ... the agreement also says the HRA will consider providing some
assistance if the project turns out to be feasible.
The Interim agreement is just that.... temporary and preliminary and does
not obligate the Authority to provide any assistance to a future
redevelopment project.
The interim agreement allows Mr. Hyde and the Authority to explore all of
the potential costs and benefits to doing a redevelopment project on this
site.
There are a number of key steps that need to happen in a very short
timeframe to keep the interim agreement in place.... deadlines are spelled
out for completing a blight analysis, a concept plan for the design and
phasing of the redevelopment and financial feasibility analysis.
Based on the schedule, the Authority will really know sometime between
February and April if it is worthwhile to pursue a project with Mr. Hyde on
this site. It will not be until all of this analysis is completed that the
Authority will need to make a decision on whether or not to actually provide
any assistance to Mr. Hyde.
In the interim, the agreement requires Real Estate Recycling to pay for all
studies and 50% of our development counsels time, if and when the $7,500
retainer we have already received is exhausted.
The Authority has very little financial exposure entering into an interim
agreement with Real Estate Recycling. The Authority will know within a
matter of 3 -5 months if it is feasible to pursue a long term redevelopment
agreement with Real Estate Recycling. For these reasons, Staff
recommends the Authority adopt the resolution found in the packet that
approves the interim agreement. The agreement will provide RER the
confidence they need to move forward in their purchase negotiations.
Mr. Hyde is here to entertain your questions and fill in the details to the
information I have presented.
ACTION ITEM
HRA MEETING OF NOVEMBER 3, 2011
CFFY OF
FRIDLEY
To: William W. Burns, Executive Director
Paul Bolin, Asst. Executive Director
From: Darin R. Nelson, Finance Director
Rebecca Kiernan, Accounting Specialist
Date: October 10, 2011
Re: Resolutions Approving Interfund Loan between General Fund & Scattered Site
Housing Replacement Program (Fund 501)
Attached is Resolution 2011 -09 approving Interfund Loans granted between the General Fund and
the scattered site Housing Replacement Program.
In 2010 & 2011 the HRA acquired 6 dilapidated homes that are in the process of being demolished
and being incorporated into our Housing Replacement Program. The cost of the demolition and
the purchase prices have depleted our funds in this fund balance. Staff is proposing an interfund
loan in the amount of $600,000 to be able to continue to purchase additional homes to be
incorporated into this program.
Staff recommends a motion adopting Resolution 2011 -09 for Interfund Loan from the General
fund to the scattered site Housing Replacement Program (Fund 501).
HRA RESOLUTION NO. 2011 -09
RESOLUTION APPROVING INTERFUND LOAN BETWEEN GENERAL FUND
AND HRA FUND 501 TAX INCREMENT FINANCE DISTRICT HOUSING REPLACEMENT
PROGRAM
BE IT RESOLVED by the Board of Commissioners (the "Commissioners ") of Housing and Redevelopment
Authority in and for the City of Fridley, Minnesota (the "Authority ") as follows:
Section 1. Recitals.
1.01. The Authority is authorized by Minnesota Statutes 2001 Supplement Section 469.174,
subdivision 3 and Section 469.178, subdivision 7 to approve by resolution any interfund loans
made after July 31, 2001 that are to be repaid with tax increment from any of the Authority's tax
increment financing districts.
1.02. The Authority is authorized to disclose by resolution the terms of the interfund loan, i.e.
principal amount of loan, interest rate, and length of loan.
1.03. The Authority is authorized to limit the principal amount of the interfund loan to the largest
negative cash balance that existed at any one time in the fund receiving the loan.
Section 2. Findings.
2.01. The Authority hereby finds it necessary to create an interfund loan between its general fund and
the 501 fund for the TIF District known as Housing Replacement Program. This loan is for the
express purpose of providing financing for Housing replacement projects until such time that
enough tax increment is generated in the TIF district as needed to pay back the interfund loan.
Section 3. Adoption of Interfund Loan.
3.01. The following are the terms of the interfund loan to be approved:
Loan Amount:
Interest Rate:
Length of Loan:
$ 600,000
1.5%
December 31, 2027
3.02. The Authority will create and maintain a loan payment schedule for the interfund loan that will
be approved by this resolution.
3.03 The TIF District Housing Replacement Program - will pay off the loan early if sufficient tax
increment is available.
PASSED AND ADOPTED BY THE FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF FRIDLEY, MINNESOTA, THI 11.
- 644&4� / 4
LAWRENCE R. COMMERS, CHAIRPERSON
ATTEST:
- wa.". 4Z"7�
Wil,I,Ih vl VV. ,�����, , �, . u v Lin,,CTOR
ACTION ITEM
HRA MEETING OF NOVEMBER 3, 2011
CrrY OF
FRIDLEY
Date: October 24, 2011
To: William Burns, Executive Director
From: Paul Bolin, Asst. Executive HRA Director
Subiect: Home & Garden Show Admin. Contract
Background
The Fridley HRA has been the fiscal agent for the Home & Garden Show since its
inception 14 years ago. The Cities of Mounds View and Blaine are partners in
sponsoring the show. The revenues from booth rentals more than cover all of the
expenses associated with the show.
Since 2005, the group has contracted with Marsha Wagner (dba- Castle Visions) to
perform the administrative tasks necessary for producing the Show. Marsha has
become a valuable asset to those involved with the show.
The Home & Garden Show planning group would again like to contract with Marsha
Wagner for the 2012 Home & Garden Show. Marsha's rates are very reasonable and
the show generates adequate revenue to cover the cost of contracting with Marsha.
Staff Recommendation
Staff recommends that the HRA approve the contract between the HRA and Marsha
Wagner /Castle Visions to provide assistance with the 2012 Home and Garden Show,
as detailed in the attached contract.
CV Draft — 10/10/11
CUSTOMER CONTRACT
CLIENT NAME: Housing and Redevelopment Authority in and for the City of Fridley, 6431 University
Avenue N. E., Fridley MN 55432, 763-572-3591 (hereinafter referred to as "Client")
CONTRACTOR: CastleVisions, Young Quinlan Building, 81 S. 9t' Street, Suite 415, Minneapolis, MN
55402, 612 - 338 -2122 (hereinafter referred to as "Contractor")
SCOPE OF SERVICES: Contractor will provide administrative services as described in the attached
Schedule 1 — Services and Compensation and other administrative duties agreed to between the parties
during the term of the contract, all of which relate to the coordination of the 2012 North Metro Home and
Garden Show.
RATES: Contractor shall bill Client at the rate of $55.00 per hour for administrative services provided
during the term of this contract, as further described in the attached Schedule 1 — Services and
Compensation.
Rush projects or work performed on weekends or evenings (excluding services provided on the day of the
Show) will be performed at the rate of 150% of the hourly rate of the rush project.
The rates set forth in this Agreement will not be increased for at least one year from the date of the
agreement. Contractor reserves the right to increase its rates beyond that date with no less than 30 days'
advance written notice.
Contractor will invoice Client on a monthly basis for the duration of the project
CONFIDENTIALITY: Contractor will keep confidential any and all documents of Client (electronic or
paper). Any and all documentation, information, files (electronic or paper) will be returned to Client upon
completion of each project unless directed otherwise by Client.
APPOINTMENTS: Client shall deliver and pick up work by appointment only. Client shall pay a fee of
$55.00 for missed appointments (including over % hour late) unless Contractor is noted at least one
hour prior to the appointment.
CONSULTATION: Time spent conferring about Client's project shall be billed at the hourly rate of
$55.00.
CHARGES AND PAYMENT: Work shall be estimated according to the Industry Production Standards
established and published by the Association of Business Support Services International Inc. and billed at
the rates described in Schedule 1. Because of the varying nature and unpredictability of different projects,
it is not possible to give formal estimates. Payment is due when client picks up the work, whether in draft
or final form (unless otherwise agreed to by Contractor). Payment for first -time customers should be made
in cash unless otherwise arranged. A fee of up to $100 may be charged for any returned check.
Contractor shall retain work until payment is received.
In the event of changes to the scope of work or other factors outside of Contractor's control, Contractor
shall reserve the right to renegotiate this Agreement and collect for all services performed up to the date
of renegotiation.
PROOFREADING & REVISIONS: Work will be copy edited in pen on Client's rough draft unless Client
specifically requests otherwise. An updated printout of Client's document shall be returned to Client for
proofreading, and the final copy printed only after Client approves the draft. Corrections and revisions
shall be billed at the regular hourly rate. Final responsibility for proofreading and approving the final
draft lies with Client. Contractor cannot be held liable for typographical omissions, content, etc.
North Metro Home Garden Show Admin Contract -2012 10/10/2011
Client will include a hard (printed) copy of the most recent version of the document when submitting work
for revision, making any revisions directly on the copy in red pen. Client will also keep a copy at Client's
office for reference in case of telephone questions.
REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION: Client shall indemnify, defend and
hold Contractor, its agents and employees, harmless from loss, damage, liability, claims, demands, suits,
and expenses, including but not limited to reasonable attorneys' fees, based on fines or penalties
resulting from any failure on the part of Client to comply with any laws, ordinances, rules or regulations or
failure to obtain licenses or permits as may be required on any patent, copyright, trade secret, or other
intellectual property or contract rights of any person or entity. In the event that any of the services
performed by Contractor are determined to be infringing, Contractor shall, at its own expense, modify or
replace the same so that it is not infringing, provided that the replacements and modifications shall
perform substantially the same as the replaced items.
STORAGE: Files will be stored on disk for one month at no charge. Resumes are stored permanently at
no charge. Client may purchase a disk and backup disk if planning to return for revisions after one month.
If Client brings work in on a floppy disk or cassette tapes, Client shall first make and retain a backup copy.
Contractor cannot be responsible for loss due to error or damage.
TERM AND TERMINATION: This Agreement shall commence on October 1, 2011, for one year and may
be terminated by either party upon two (2) weeks written notice to the other without cause and further
provided that either party hereto may terminate this Agreement immediately upon a breach by the other of
its duties hereunder. In the event of termination, Client shall pay contractor for all hours and expenses
accrued up to the date of termination. In the unlikely event litigation is commenced between the parties of
this Agreement, the party prevailing shall be entitled, in addition to other relief, to a reasonable sum for
attorney's fees.
APPROVED:
CASTLEVISIONS
By
Marsha Wagner
President
Date: / Co -
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF FRIDLEY
By:
By:
Its: Chairperson Its: Executive Director
Date: Date:
-2-
SCHEDULE 1
SERVICES AND COMPENSATION
A. Contractor will perform the following Services, as requested by Client, subject to the terms and
conditions of the Customer Contract:
1. Administrative services related to the coordination of the North Metro Home and Garden
Show, including the following specific duties:
a. Prepare Planning Committee meeting agendas and minutes
b. Vendor registration: mail registration materials and receive /track registrations
c. Coordinate marketing and advertising efforts
d. Event logistics
e. Sponsor solicitation
f. Coordinate workshops
g. Assistance at event
B. Contractor will provide no more than one hundred thirty (130) hours of services for client during
the term of this contract.
C. Payment for Services shall be at the following rates during the tern of this Agreement:
• $55.00 per hour, not to exceed $7,150.00 during the entire term of the contract.
D. Reasonable expenses incurred by Contractor in performing Services will be subject to review and
approval by Client. These costs include postage, printing, signs, and other out -of- pocket
expenses.
E. All fees and approved expenses will be paid within thirty (30) days after receiving Contractor's
invoice.
i"1
QTY OF
FRIDUY
ACTION ITEM
HRA MEETING OF NOVEMBER 35 2011
t�
To: William W. Burns, Executive Director
Paul Bolin, Asst. Executive Director
From: Darin R. Nelson, Finance Director
Rebecca Kiernan, Accounting Specialist
Date: October 24, 2011
Re: Resolution Enabling appointed Officials of the Fridley HRA to be covered by the
Minnesota Workers' Compensation Law as Employees of the Fridley HRA
It has come to staffs attention that the Commissioners of the Housing and Redevelopment
Authority should have the same benefit as those on our City Council. Workers Compensation
law covers any employee if they were to become injured at a City function.
The cost for Workers' Compensation insurance is less than $100 for the entire Commission per
year.
Staff recommends a motion adopting Resolution 2011 -10 Enabling Appointed Officials of the
Fridley HRA to be covered by the Minnesota Workers' Compensation Laws as Employees of the
Fridley HRA. n
�J
HRA RESOLUTION NO. 2011 -10
A RESOLUTION ENABLING APPOINTED OFFICALS OF THE FRIDLEY HRA TO
BE COVERED BY THE MINNESOTA WORKERS' COMPENSATION LAW AS
EMPLOYEES OF THE FRIDLEY HRA
WHEREAS, the law enables elected or appointed officials of the City to be covered under
workers' compensation; and
WHEREAS, it is the intent of the Fridley Housing and Redevelopment, in and for the City of
Fridley, that the Commissioners be included as employees of the Fridley HRA.
NOW THEREFORE BE IT RESOLVED that the Commissioners of the Fridley Housing and
Redevelopment Authority, in and for the City of Fridley, be hereby covered by the Minnesota
Workers' Compensation Law.
PASSED AND ADOPTED BY THE FRIDLEY HOUSING AND REDEVELOPMENT
AUTHORITY, IN AND FOR THE CITY OF FRIDLEY, THIS 3' DAY OF NOVEMBER,
2011.
Lawrence R. Commers, Chairperson
ATTEST:
William W. Burns, Executive Director
INFORMATIONAL ITEM
HRA MEETING OF NOVEMBER 3, 2011
CrrY OF
FRIDLEY
Date: October 25, 2011
To: William Burns, City Manager
From: Paul Bolin, Asst. Executive HRA Director
Subject: Fridley Foundations Home Update
Since the Authority's October meeting, the home has had 6 showings to potential purchasers. The
feedback we have received has been very positive. There is no other home like this in the
community.
Staff held the final finished open house on Wednesday October 19th. We had a better turn out,
with approximately 24 residents stopping by during the 2 hour open house. The City's website
and cable station were used to promote the event.
Staff will keep the Authority updated on the marketing of the home.
INFORMATIONAL ITEM
HRA MEETING OF NOVEMBER 3, 2011
CrrY OF
FRIDLEY
Date: October 25, 2011
To: William Burns, Executive Director
From: Paul Bolin, Asst. Executive HRA Director
Subiect: Housina Realacement Proaram — Uadate
Veit Companies is currently demolishing the following properties:
465 Mississippi Street
551 Hugo Street
381 Ironton Street
The three homes were purchased for inclusion in the City's housing replacement
program. After demolition the lots will be placed into the program's scattered site TIF
District and eventually sold to a buyer /builder team. The Authority will use the
increment to pay a portion of its acquisition and demolition expenses.
Staff has initiated the process to split the Hugo Street property into two buildable lots,
75' in width. Kurth Surveying will complete the plat drawing needed for the lot split and
stake the lot corners when the demolition work is completed. Staff anticipates the
Planning Commission on will hold a hearing on the lot split on December 21 st.
Fridley HRA
Housing Program Summary
Cover Page
November 3, 2011 HRA Meeting
Report Description
Loan Application Summary Loan application activity (e.g. mailed
out, in process, closed loans) for Sep. to
Oct. 15th and year -to -date.
Loan Origination Report
Remodeling Advisor
Monthly loan originations and year -to-
date.
Shows the number of field appointments
scheduled and completed for the
Remodeling Advisor Services
administered by Center for Energy and
Environment.
K: \HRA \Agenda Packets \November 2011 \ii - 3.1 Housing Program CoverOctober.docx
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�^ 1
INFORMATIONAL ITEM
HRA MEETING OF NOVEMBER 3, 2011
CrrY OF
FRIDLEY
Date: October 25, 2011
To: William Burns, Executive Director
From: Paul Bolin, Asst. Executive HRA Director
Subiect: Gatewav West Uadate - 5735 3rd Street
Staff came to an agreement on lot price with realtor Tim Golie & builder Mike
Torkleson. The team appears eager to deliver a salable product that will add value to
the neighborhood while respecting the variety of home designs already found in the
Hyde Park/Gateway West neighborhood. The builder and staff have reached
agreement on a home design that will incorporate cement board, stone and wide trim
boards on the exterior of the home. The home is proposed to have 2 bedrooms, 1
bathroom, 3 garage stalls and an unfinished basement to keep the home price down
and allow for future expansion.
The builder is asking the Authority to change the terms on our standard lot reservation
agreement to 9 months. The builder and his realtor will actively market the home
sketch and lot on the MLS. Once a buyer is found a development agreement will be
signed to ensure the home is built to the Authorities criteria for the Gateway West
neighborhood.
At the time of writing this memo, staff is waiting for the revised home plan and a signed
lot reservation form, with an acceptable purchase price from the builder. Staff expects
to bring both to the Authority at next week's meeting. Provided the builder delivers his
final plan and signed lot reservation form, staff will recommend the Authority approve
the 9 month lot reservation agreement with Mike Torkelson Development.