Loading...
HRA 11/03/2011 - 30019CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY COMMISSION November 3, 2011 CALL TO ORDER: Chairperson Commers called the HRA Meeting to order at 7:05 p.m. ROLL CALL: MEMBERS PRESENT: Larry Commers William Holm Stephen Eggert Pat Gabel John Meyer NONMEMBERS PRESENT: Paul Bolin, HRA Assistant Executive Director Scott Hickok, Community Development Director Becky Kiernan, Accountant Jim Casserly, Development Consultant 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 VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 2. Approval of October 6, 2011 Meeting Minutes Commissioner Gabel noted a correction for the last page: change Sandy Site to Sandy's Restaurant. MOTION by Commissioner Holm to approve the minutes as amended. Seconded by Commissioner Eggert. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 3. Award GWNE Broker Contract Housing Redevelopment Authority Meeting of November 3, 2011 2 Paul Bolin, HRA Assistant Executive Director, said that for a number of months staff and the Authority have discussed hiring a broker to help market the five acres of vacant land along University Avenue in what we have been calling the Gateway Northeast area. Mr. Bolin said that in September the Authority authorized staff to move forward with issuing a request for qualifications to select a broker for these properties. Brokers were evaluated based on their commercial experience in the area, their marketing methods, and their ability to work with and attract different mazket segments to the Fridley area. Mr. Bolin said that two very professional brokerage groups were interviewed and after doing some follow up staff unanimously selected Premier Commercial Properties. Premier has expertise in the local market, key contacts in various market segments; including medical offices and senior housing. Premier also has a proven record as both a broker and as a development partner; one of their more visible projects is the Fridley Medical Center on Osborne Road. Mr. Bolin said that staff believes that Premier has the right combination of ability, experience and contacts to bring a project to the Gateway Northeast Area and is recommending that the Authority approve a motion awarding Premier a one year contract to broker the properties. Mr. Bolin said that rather than a straight 6% commission on any land sold, the Authority will pay fifty cents per square foot for any land transferred during the listing period. This would allow the Authority more options in disposing of the property for example if the project of a lifetime is proposed for the site, and the Authority must give the land to the developer for the project to happen, the broker would be reimbursed for their time and efforts. Mr. Bolin said that in order to address any potential conflicts with the fact that Premier is both a Property Broker and at times a Developer, language has been added to the Dual Agency Disclosure portion of the agreement. Specifically, no commission will be paid to Premier if they have any ownership share in any development group that purchases land. Mr. Bolin said that while this is a fairly short notice, we have discussed the listing of this property for some time and the Authority formally authorized the Request For Qualification process to select a broker back in September. If the Authority has major concerns that can't be addressed tonight, we can always wait until December for approval. However, this document is simply the mechanism needed to engage the broker selected from the thoroughly conducted Request for Qualification selection process. Staff believes that Premier has the ability, experience, and contacts to bring a project to GWNE. Chairperson Commers noted that the developer has worked on several developments in Fridley. Housing Redevelopment Authority Meeting of November 3, 201 ] 3 Rodney Lee, Premier Commercial Properties, answered yes; the Fridley Medical Center is just one of the property's they worked on, all other properties are featured in the brochure. Chairperson Commers asked if Mr. Lee had any preliminary thoughts about developing this parcel of land. Mr. Lee said this site is difficult because the lots are so narrow which isn't ideal for retail development, but there are different options to consider. He doesn't personally deal with development in senior housing but does work with developers that do. Maybe a medical condo would work with the light rail being so close; he has several ideas in mind. More people were looking for space than what was available when they were building the Fridley Medical Center so he may go back to those people to see if they are interested in space in this area. Chairperson Commers asked if Jim Casserly looked at the listing agreement. Jim Casserly, Development Consultant, answered yes; this agreement requires a good working relationship because we don't have a set price. We need flexibility because we are not sure what will go on that site. 'The broker has to assume that we will respond positively to good projects. That is why the arrangement written this way. We think that paying a brokerage fee based on 50 cents per square foot on any property that is closed is a reasonable arrangement. Commissioner Meyer asked if inedical facilities were tax exempt. Mr. Lee replied that medical facilities pay full real estate taxes. Fridley Medical Center pays full taxes; almost $500,000 per year. Commissioner Eggert asked for Mr. Lee to define what role he played in the developments; broker or developer. Mr. Lee replied that he was the broker of the volleyball courts and on other projects he played both broker and developer or co-developer. He doesn't see himself as the developer on this site unless a situation would arise. T'hey have relationships with other developers who would have interest in working in this area and it may be split between two or even three developers. The site is long and narrow with areas that are not continuous. Commissioner Eggert asked if a client wanted to do something without development ability if Mr. Lee would develop for them. Mr. Lee answered yes. When they look at a project like this, they have ideas; staff has ideas and quite often they will get a call from someone they didn't think of that will offer a nice fit. You don't know until you go out there to market the property who will come forward. They have very strong marketing experience. Commissioner Holm asked what happens if a plan is presented that the Authority doesn't like. Mr. Lee said they don't pay. Housing Redevelopment Authority Meeting of November 3, 2011 4 Mr. Casserly said that is why we have to consent to whatever the sale is and there needs to be a good working relationship. Mr. Lee said that as brokers, if someone has a concept they have to bring it to the Authority for approval. Commissioner Gabel asked for confirmation that they don't expect to find one developer to develop the entire site. She was concerned about continuity and the flow of the buildings if there was more than one developer. Mr. Lee did not know. Because of the layout of this area with streets breaking up the area, it will be hard to lay out a single development. If the area were five acres in one chunk, one piece of property that would be much easier. This is 135 feet wide and very long; it will be hard to have one developer figure out what to do with the space. If we go with a medical condo and all of a sudden we have a developer who would do it all; that would be wonderful. But you may have senior housing, medical condos and one other user, we just don't know. Commissioner Gabel wants to make sure there is continuity if there is more than one developer. MOTION by Commissioner Gabel to Award the GWNE Broker Contract. Seconded by Commissioner Holm. Commissioner Holm asked for confirmation that this is a one year agreement. Chairperson Commers replied yes. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 4. Approve Exclusive Development Agreement with Real Estate Recycling Paul Bolin, HRA Assistant Executive Director, said that Real Estate Recycling is 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. Bolin said that 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. Mr. Bolin said that 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 Housing Redevelopment Authority Meeting of November 3, 2011 5 assistance on the same site. The agreement also says the HRA will consider providing some assistance if the project turns out to be feasible. Mr. Bolin said 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. Mr. Bolin said that there are a number of key steps that need to happen in a very short timeframe to keep the Interim agreement in place. Deadlines aze spelled out for completing a blight analysis, a concept plan for design and phasing of the redevelopment and financial feasibility analysis. Mr. Bolin said that 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 complete 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. Mr. Bolin said that the Authority has very little financial exposure entering into an Interim agreement with Real Estate Recycling. T he Authority will know within a matter of three to five 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 that approves the Interim agreement. The agreement will provide Real Estate Recycling the confidence they need to move forward in their purchase negotiations. Paul Hyde, Real Estate Recycling, said he is excited to work on this significant important project in Fridley. Great progress has been made so faz and they are ready to sign the purchase agreement for this site. Chairperson Commers said that this is a new agreement that was received tonight as some changes were made on page one in response to some concerns that were raised. Jim Casserly, Development Consultant, said that we wanted to make sure there was no opportunity for the Authority to be responsible for any relocation expenses; that is the principal reason for that change. On page three there are some language changes. We don't know if there will be other costs associated with the project or requirements for studies of any kind. We don't want to have that exposure if the project doesn't proceed. We are trying to make language read if studies are needed Real Estate Recycling would be responsible for those charges. The blight analysis should not exceed the amount that is in the contract. This is a complicated project; a lot of things need to be done. We need to figure out if the parcel will qualify for a development in a tax increment district; we need to refine the analysis. Real Estate Recycling needs to figure out Housing Redevelopment Authority Meeting of November 3, 2011 6 how to phase this project; this is a long term multi-year phased in project. T'his agreement focuses us on what needs to be started in order to go forward with other decisions. It will take a few months to sort all the issues out and we have provided the framework to do that. Commissioner Holm said that he read the agreement and thought it does a good job at protecting both parties. A lot of work needs to be done to see if this project is feasible. This is a one year agreement with 4-5 deadlines before spring. These deadlines may or may not be achieved. He asked what happens if the deadlines are not met. Mr. Casserly answered that if there were reasons the deadlines cannot be achieved Real Estate Recycling would be before the Authority letting them know why they can't be achieved. We have to have the basic deal put together before we can establish a tax increment district. I'm assuming they have put enough time in the purchase agreement so we will respond positively within that time frame. All these things have to mesh together. It is an aggressive time table that will be starting in the next few weeks. Chairperson Commers said that an agreement has never been done quite like this before. The Authority has always controlled the property beforehand so this is a little different. The assumptions and budgets were just received today so he hasn't had a good chance to study the numbers. He wasn't sure what all the numbers meant or if they had real meaning. Mr. Casserly said that the numbers were very preliminary. They were done to find out if there was any way this could be feasible. We are not sure what the cost will be. The revenue side is a function of what they think can be built on the site and the timing that goes into it. Chairperson Commers said he would not spend a lot of time looking at numbers if they were very preliminary. Mr. Casserly said that the goal is to come back to the Authority in a few months with a better analysis. Chairperson Commers asked how the taac increment would come into play when the project is done in phases. Mr. Casserly replied that tax increment would come in as new values come into the project. Each time there is an addition or increase in value then the increment comes in 18-24 months after that. The first phase may not create any increment; that is why we have to understand better how some of this will come together. The increment will increase over a period of years. Chairperson Commers asked what the relationship was with BAE and their lease and if anyone knew how many employees they have working there. Mr. Hyde said that they have five years left on that lease. Half is on the market for sublease and a number people have been moved out of the building. Part of our goal is to learn more about their thoughts on the future once the lease is up. We would like to consolidate them to one area and are talking about building a new building. I don't know the exact number of jobs on the site. Housing Redevelopment Authority Meeting of November 3, 2011 7 Mr. Bolin said that currently 675 staff work there. William Burns, City Manager, added that more staff would be moved out of that location; the alternative location in Louisville. Mr. Hyde said that the site could have 3,000-4,000 jobs once a project is fully developed. Commissioner Meyer asked what would happen, for example, if Real Estate Recycling deposited $10,000 to the city to pay for soil information and surveys that are necessary. Then the project doesn't go through and Real Estate Recycling is out the $10,000 or additional money is needed because of the soil, who pays for that. Mr. Casserly said that the way we tried to design the agreement that is the studies that are required as result of reusing the site are their expense. What we need to sort out is how to pay for restructure, utilities etc. The cost of the testing is the responsibility of the developer. We do not have control of the site and can share any information we have. If everything falls through and money is spent for exploratory reasons, such as soil reports etc., the reports go back to the city for other people to use. Mr. Hyde said that Real Estate Recycling will be spending a lot more than $10,000. We will take some risk on that and that is why we want an interim agreement; then we will try to get reimbursed through grant funds. Money will also be spent on site surveys and infrastructure. Once we have figured it out and closed on the site, then it's just executing. This could be a 7-10 year program. Real Estate Recycling is happy to share whatever information they have with the HRA; they will be public documents. Commissioner Meyer asked if there was anything in the agreement that precludes the city from using that information. Chairperson Commers said no, that information is covered in paragraph six. Commissioner Eggert said that it was mentioned that they were close to putting together a contract; what is close? Mr. Hyde said that they are exchanging drafts and should have it signed in a week. Commissioner Eggert is excited about the project. A project like this takes a lot of time and a solid partnership. He takes comfort in working with this organization going forward. They have worked in our community and they have handled more complex projects than this. Chairperson Commers said he was glad to see this property in redevelopment. We are all glad to be able to work in this partnership with Real Estate Recycling. He does have concerns about what will be developed on this property; he did not want a total warehouse going in there. Fridley was fortunate to get Medtronic to develop a 135 acre campus. He hopes it will be a development that makes the Authority proud and satisfy the financial tax requirements. He does Housing Redevelopment Authority Meeting of November 3, 2011 8 not see any reason not to go forward. He asked if anything can be done with the BAE property on the south end. Mr. Hyde said that most of the south side of the property has been vacated. That is part of what we need to figure out. We are not dead set anything for development. This isn't going to be a low budgeted project; we plan to preserve the front part of the site for something special. We don't know what the numbers will be but we will figure out that in the next six to nine months. Commissioner Gabel said that it would be nice to have something nice out front to anchor the area. MOTION by Commissioner Eggert to approve the Exclusive Development Agreement with Real Estate Recycling. Seconded by Commissioner Meyer. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 5. Intrafund Loan — HRP Becky Kiernan, Accountant, said that seven homes were acquired and demolished in 2010 and 2011. T'he HRP fund currently has a negative balance. Loaning $600,000 from the interfund will eliminate the negative balance and provide funds for additional purchases. Staff recommends approval of the resolution approving the Interfund Loan. Commissioner Holm was wondering why we call this a loan as we understand this will involve more expenditures than what we will receive. He thought it should be a transfer rather than a loan. Jim Casserly, Development Consultant, said that because the HRP creates some revenue this is the way we need to proceed. If we don't create this type of document we have no way to repay those expenses. We need to document that we are paying and have authorized a number of parcels to be included. Commissioner Gabel wondered when we say can we can't pay this back. Mr. Casserly said that the Authority would need to acknowledge that they can't repay and then the general fund can't receive that amount; we leave that part to the accounting experts. Whether they write it off or schedule a repayment it is up to them. Without documenting this we have no ability to revoke the funds we have invested. MOTION by Commissioner Holm to approve the Intrafund Loan. Seconded by Commissioner Gabel. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY Housing Redevelopment Authority Meeting of November 3, 2011 9 6. Approve Administration Contract for 2012 Home and Garden Show Paul Bolin, HRA Assistant Executive Director, said that Fridley has been the fiscal agent for the Home and Garden Show for 14 years. (Blaine & Mounds View) Revenues from booth rental cover the expenses for the show. Since 2005, the Home and Garden Show has contracted with Marsha Wagner of Castle Visions to perform a11 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 2012 Home and Garden Show. Commissioner Gabel asked what the date was for the event. Mr. Bolin answered it is the last Saturday in February. Commissioner Holm asked for the date to be corrected where Marsha Wagner's signature is listed. MOTION by Commissioner Holm to approve the Administration Contract for 2012 Home and Garden Show. Seconded by Commissioner Gabel. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 7. Approve Workers Compensation Insurance for Commissioners Paul Bolin, HRA Assistant Executive Director, said that State Statute allows the HRA Commissioners to be covered by Workers Compensation insurance. Commissioners often attend off-site locations at HRP sites, RD Homes, etc. City Council added workers compensation three years ago. The total cost is less than $100/year. Staff recommends adopting the resolution enabling Commissioners to be covered by workers compensation in their duties as HRA Commissioners. Commissioner Holm did not think this is necessary and he was not in favor of it. MOTION by Commissioner Meyer to approve the workers compensation insurance for Commissioners. Seconded by Commissioner Eggert. UPON VOICE VOTE, COMMISSIONER GABEL, COMMISSIONER EGGERT, COMMISSIONER MEYER AND CHAIRPERSON COMMERS VOTING AYE, COMMISISONER HOLM VOTING NAY, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED ON A 4-1 VOTE INFORMATIONAL ITEMS: 1. Home Improvement Demonstration Project Update Housing Redevelopment Authority Meeting of November 3, 2011 10 Paul Bolin, HRA Assistant Executive Director, said that the home on 4757 Second Street had six showings since the October meeting and over 300 viewings on line. At the open house on October 19 almost two dozen people went through the home. All comments about the home are positive and no comments have been received that the price is too high. It is not the price but may be that the location is not desirable to the buyer. Staff will continue to mazket this home. William Burns, City Manager, said that he has asked Brian Strand to promote the home on the city's cable channel. Chairperson Commers commented that the home looks nice and thought it would be a good idea to market the home on cable. He thought that is something that should be done on all the remodeled properties HRA completes. 2. Housing Replacement Program Update Paul Bolin, HR.A Assistant Executive Director, said that the homes on Mississippi, Hugo and Ironton Street will start demolition next week. Those lots will be graded and seeded by November 18. All asbestos has been abated from the properties. The recycling and salvage is complete and the bulk of the hazazdous materials has been removed. Public Works staff hand delivered a schedule to neighbors so they know what is happening. Just yesterday staff sent off earnest money and the purchase application for the home at 561 Ironton Street. This is a 74 x 1101ot. Staff will keep looking and try to buy a few more properties over the winter and schedule another demolition for late spring. Chairperson Commers asked if residents were giving any feedback on the homes the Authority is buying, demolishing and rebuilding. Mr. Bolin said that staff do get some comments, but not too many. Most comments are very positive. We are buying the worst of the worst, the ones that should be demolished. 3. Housing Loan Program Update Paul Bolin, HRA Assistant Executive Director, said that for the month of October there were no loans closed and a total of nine loans have been closed year to date. There were two remodeling advisor visits making a total of nine year to date. William Burns, City Manager, reported good news; the Metro Transit did a survey of local employers a few years ago and the survey came back that people want a shuttle service and one will start up in March. The shuttle will run in the morning and evening for local employers. A preliminary map was passed around for Commissioners to review. Dr. Burns is also in the process of looking at the preliminary budget for Fridley and employment has improved. Unemployment is 6.6% for Fridley and 6.3% for Anoka County. Retail has went down and we continue to lose retail jobs. Housing is better than what it was; we are seeing more sales and a decline in the housing inventory. Property values still continue to be Housing Redevelopment Authority Meeting of November 3, 2011 11 down but the number of foreclosures in 2011 has dropped dramatically in Fridley. Public assistance still high but not as high as it was in the past; it is up only 9% rather than 16%. ADJOURNMENT: MOTION by Commissioner Gabel to adjourn. Seconded by Commissioner Eggert. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED AND THE MEETING ADJOURNED AT 8:20 P.M. Respectfully Submitted, . �r0►�.u� � Krista Monsrud, Recording Secretary CITY OF FRIDLEY SIGN-IN SHEET HOUSING � REDEVELOPMENT AUTHORITY MEETING l�10 �e.vnbQ�` � , 2� � f --------------------------------------------------------------------------- --------------------------------------------------------------------------- Name and Address :�. ��\(� cQwa-i'1 �u�� i1 I'�' S � �Si ;��� I �-��„a�. � �v�r�r+.er-r.-c.� �rc�;�,`k. �► t► il �� Agenda Item of Interest