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HRA 11/06/2014 November 6, 2014 HRA Meeting Regular Meeting Agenda 7:00 p.m. Call to order Roll call. Action Items 1. Approval of Expenditures 2. Approval of October 2, 2014 Meeting Minutes 3. Approval of Lot Sale - 521 Fairmont St. 4. Approval of Lot Sale - 281 57th Place 5. Approval of Lot Sale - 611 Buffalo St. 6. Approval of 2015 Preliminary Budget 7. Approval of Resolution Supporting Grant Application - DEED Redevelopment 8. Approval of Resolution Supporting Grant Application - Met Council TBRA 9. Approval of Modification to Northern Stacks Redevelopment Contract Informational Items 1. MN CEE Housing Programs Update Adjournment K:\HRA\Agenda Packets\2014 Agenda Packets\2014 11 06\11-06-14 HRA Agenda.docxK:\HRA\Agenda Packets\2014 Agenda Packets\2014 11 06\11-06-14 HRA Agenda.docx CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY COMMISSION October 2, 2014 CALL TO ORDER: Chairperson Commers called the HRA Meeting to order at 7:00 p.m. ROLL CALL: MEMBERS PRESENT: William Holm Larry Commers Pat Gabel Stephen Eggert Gordon Backlund OTHERS PRESENT: Paul Bolin, HRA Assistant Executive Director Jim Casserly, Development Consultant ACTION ITEMS: 1.Approval of Expenditures MOTION by Commissioner Holm to approve the expenditures. Seconded by Commissioner Eggert. Commissioner Gabel asked what the CEE check what for. PaulBolin, HRA Assistant Executive Director, replied the bulk of the funds were for the loan program. Commissioner Gabel asked if part of the home energy audit was to insulate around the doors. Mr. Bolin replied yes; that is part of the service. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 2.Approval of September 4, 2014, Meeting Minutes MOTION by Commissioner Eggert to approve the minutes. Seconded by Commissioner Backlund. Commissioner Gabel noted the following changes: th Page 2, 6 in City of Fridley Housing and Redevelopment Meeting of October 2, 2014 2 th Page 2, item 4, 4 sentence should read administrative UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MINUTES APPROVED AS AMENDED 3.Approval of 2015 HRA Meeting Dates MOTION by Commissioner Holm to Approve the 2015 HRA Meeting Dates. Seconded by Commissioner Backlund. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 4.Approval of Amendment to Cielo Redevelopment Agreement Paul Bolin , Assistant HRA Executive Director, stated that last June, the Authority approved a development agreement and authorized the sale of the Gateway Northeast property to Cielo Partners. Since that time the final land use approvals were granted and the plat was delivered in place and the closing will happen as soon as the County has the plat recorded. Mr. Bolin said that staff has continued to move towards closing on the property and Trident recently raised an issue with the timing of installing the underground stormwater system for Phase 2 of the development. In the redevelopment contract, under SCHEDULE F SITE IMPROVEMENTS it reads that the stormwater system for phase 2 would be installed during phase 1. The developer intended it to mean that the systems would be constructed in their respective phases, as the systems are approximately $200,000 each. After discussion with the developer, legal counsel and Chairman Commers it was determined that so long as the cost was capped at $200,000 for each system, this change does not impact the Authority. Mr. Bolin said that staff recommends the Authority approve the minor change to the interpretation of SCHEDULE F SITE IMPROVEMENTS Extraordinary Site Costs, for the Underground stormwater infiltration systems (Phase 1 and 2) found in the Cielo Gateway Northeast Redevelopment Agreement. Commissioner Eggert noted that phase 2 of the project will not be completed at this time so this filtration system will not be needed and the area is currently grass. He asked if there was any concern about runoff. Mr. Bolin replied yes, the storm water system will not be needed until phase 2 is added and there is no concern about runoff until that is installed. Chairperson Commers stated that if this is not done it will not get credited against the land purchase price so it is a set off. Mr. Bolin replied that is correct City of Fridley Housing and Redevelopment Meeting of October 2, 2014 3 Roger Fink , Developer, stated that they knew they had to build it but thought it could be done during either the first or second phase. and a cap has been set on the dollar amount for protection against inflation. Commissioner Holm asked if phase 1 and phase 2 were the same size. Mr. Fink replied yes. Commissioner Holm asked if there was any advantage or disadvantage in terms of this delay for phase two in terms of the cap of $200,000; this will protect the city. Mr. Bolin replied yes; the city will be protected from inflationary increases. MOTION by Commissioner Gabel to Approve Amendment to the Cielo Redevelopment Agreement. Seconded by Commissioner Backlund. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 5.Approval of Amendment to DEED Grant Agreement Paul Bolin , Assistant HRA Executive Director, stated that last month the Authority approved an amendment to the DEED contamination cleanup grant for the Northern Stacks project to a local match. This month the Authority is being asked to make a change to the DEED redevelopment Grant in order to accurately reflect the amount of demolition and other eligible work being done on the site. Mr. Bolin said that as the development is now underway, there have been changes to what is actually happening on the site. Demolition costs, which were expected to be over $1.1M for the first phase ended up being just over $200,000, and raised as part of the first phase. The amendment to the agreement will allow the grant funds to also be used for drive lanes, curbing and major utility installation. Mr. Bolin Redevelopment Grant Contract to accurately reflect improvements being constructed in the first phase of this large redevelopment project. Commissioner Holm asked when DEED makes adjustments to the formal language if it will be sent back to the City and be signed in the normal manner. Mr. Bolin replied yes. Commissioner Gabel asked if BAE would be moving the things at a later date or if they were leaving it there permanently. City of Fridley Housing and Redevelopment Meeting of October 2, 2014 4 Mr. Bolin replied that the data center will eventually be moved. Commissioner Gabel asked if moving it would incur any additional costs. Mr. Bolin replied no; there is for BAE to move everything to the north end. Commissioner Gabel said this is irrelevant to the demolition money. Mr. Bolin replied that is correct. Commissioner Gabel said that it is amazing they ha. Commissioner Backlund asked if the Navy needed to be involved. Chairperson Commers replied that Mr. Hyde has negotiated any involvement with the Navy. Their liability and obligation for that, reached some kind of accommodation. MOTION by Commissioner Backlund to Approve the Amendment to DEED Grant Agreement. Seconded by Commissioner Gabel. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 6.Approval of Amendment to MNCEE Home Energy Squad Contract Paul Bolin , Assistant HRA Executive Director, said that the Home Energy squad program provided through the Center for Energy and Environment has been a huge success since its launch in April of this year. As of early September, 78 homes in Fridley have gone through the program, making them more energy efficient. Mr. Bolin said that this program has no income limitations, making it available to all residents of the community. The total cost for each visit is $120, with the HRA paying $70 towards each home visit. For $50 out of pocket, the homeowner receives a visit from two energy experts. During the 2 hour visit, diagnostic tests are run to identify inefficiencies in the home. The experts then install door weather stripping, water heater blankets, programmable thermostats, high efficiency light bulbs and efficient shower heads as needed. Mr. Bolin reported that the Authority initially authorized an investment of $5,000 to write down the cost of these visits. Due to the popularity of the program, staff is recommending authorizing another $5,000 to continue the program. The Authority has adequate funds in its revolving loan fund to allocate another $5,000 for these visits. As staff begins to work on the 2015 budget, they will incorporate funding to continue this program into 2015. Staff recommends approval of the amendment to the Home Energy Squad contract, allowing the program to be funded through December 31, 2015. City of Fridley Housing and Redevelopment Meeting of October 2, 2014 5 MOTION by Commissioner Gabel to Approve the Amendment to MNCEE Home Energy squat Contract. Seconded by Commissioner Eggert. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 7.Authorization to Solicit Bids for Demolition of 7011 University Avenue NE Paul Bolin , Assistant HRA Executive Director, stated that staff is anticipating a late October closing on the Columbia Arena site. Staff would like the ability to move forward with soliciting bids to demolish the property. Due to potential liabilities, the deteriorated condition of the buildings and the expense associated with maintenance, staff is recommending the buildings be demolished and parking lot removed as quickly as possible. In August, the HRA and City Council adopted resolutions declaring the properties blighted which will preserve the ability to put the parcels into a future TIF District. Mr. Bolin said that this property has been vacant and is an attractive nuisance. Besides presenting a poor image, staff continues to have problems with truckers illegally parking in the lot, vandals breaking in and spray painting the interior, thieves stealing the copper and sea of asphalt is the only way to address these problems. Mr. Bolin said that staff will work to solicit bids in anticipation of awarding the demolition th contract on November 6. Depending on cooperation from the seller and the closing date, th staff may not be able to award the contract on November 6. Staff recommends the Authority authorize staff to begin the bid solicitation process. Commissioner Eggert noted that it has taken while for Braun to get out there, the contract needed to be extended and they needed to take more soil borings. Commissioner Eggert noted that another issue of delay is the pollution control work with proper disposal of whatever is found. Mr. Bolin said that is not part of the delay yet but that is part of further data gathering. Staff will need to come up with a solution with MPCA to address the vapors in the soil. Commissioner Gabel asked if staff will be able to get concrete information from the MPCA in order to close by 10/30. Mr. Bolin replied yes. Chairperson Commers noted that this is a partnership with the City of Fridley and asked if the demo costs and miscellaneous costs incurred would be considered as part of the purchase agreement and divided 50/50 between the Authority and the City. City of Fridley Housing and Redevelopment Meeting of October 2, 2014 6 Mr. Bolin replied that so far the City has allocated $1.5M toward this project and the Authority has about $2.6M in acquisition and demolition costs as well. As of right now the City has committed $1.5M. Chairperson Commers asked if that information was documented, the partnership with the City. recall seeing anything as to who is contributing what to this effort. Mr. Bolin replied that staff has not written up a formal contract. Chairperson Commers asked if an agreement should be written up going forward as to who is paying for what. He asked if it will be taxed for one year, next year Jim Casserly, Development Consultant, said that taxes were paid even though the buildings are being removed. After the first year the property is tax exempt. sure how long it can be tax exempt. A discussion needs to be held about how the Authority will be allocating the expenses going forward. Commissioner Backlund said that discussion was held regarding the landfill and wetland that was covered up. He doesnwhat year this was built, maybe He asked if a date was provided if they would know if the fill is there. nd Mr. Bolin replied that the arena construction started the first building in 1968 and 2 building in 1971 or 1972. When Anoka County bought the land they bought it from a small regional railroad. It looks like a lot of the fill came in 1964 and 1965. The air photos show a lot of construction happening down there in the same time frame. MOTION by Commissioner Backlund to Authorize Staff to Solicit Bids for Demolition of 7011 University Avenue NE. Seconded by Commissioner Eggert. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY Informational Items 1.Housing and Loan Update Paul Bolin, HRA Assistant Executive Director, reported that one loan was closed for a total of 10 year to date and there was one remodel advisor visit making a total of 5 year to date. There were 11 Home Energy Squad visits for a total of 84 year to date. Adjournment MOTION by Commissioner Holm to adjourn. Seconded by Commissioner Eggert. City of Fridley Housing and Redevelopment Meeting of October 2, 2014 7 UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE MEETING ADJOURNED AT 7:52 P.M. Respectfully Submitted, Krista Peterson, Recording Secretary ACTION ITEM HRA MEETING OF NOVEMBER 6, 2014 Date: October 29, 2014 To: Wally Wysopal, City Manager / Executive HRA Director From: Paul Bolin, Asst. Executive HRA Director Subject: Public Hearing - Sale of 521 Fairmont - HRP Mike Nelson, of Habitat for Humanity, has submitted a lot reservation agreement to build a new home on the lot located at 521 Fairmont Street. Habitat plans to build a two-level home with just over 1,400 square feet of finished living area. The home will have 3 bedrooms and 2 bathrooms. The exterior of the home will utilize a blend of maintenance free materials and incorporate stone on the front of the home. STAFF RECOMMENDATION: Staff recommends approval of the attached resolution, authorizing the sale of the lot to Habitat for Humanity for $30,000. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY COUNTY OF ANOKA STATE OF MINNESOTA HRA RESOLUTION NO. 2014-___ A RESOLUTION AUTHORIZING THE SALE OF RESIDENTIAL PROPERTY BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA BE IT RESOLVED by the Board of Commissioners (the "Commissioners") of the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota (the "Authority") as follows: Section 1. Recitals. 1.01. It has been proposed that the Authority sell certain residential property (the "Property") described below: PIN: Street Address 03-30-24-23-0088 521 Fairmont Street NE Section 2. Findings. 2.01. The Authority hereby finds that it has approved and adopted a development program known as the Modified Redevelopment Plan for its Redevelopment Project No. 1 (the "Redevelopment Program") pursuant to Minnesota Statutes, Section 469.001 et seq. 2.02. The Authority hereby finds that it has approved and adopted a Housing Replacement District Plan (the "Plan") and created Housing Replacement District No. 1, pursuant to and in accordance with Laws of Minnesota 1995, Chapter 264, Article 5, Sections 44 through 47; Laws of Minnesota 1996, chapter 471, article 7, section 22; Laws of Minnesota 1997, chapter 231, article 10, section 13; Laws of Minnesota 2002, chapter 377, article 7, section 6; Laws of Minnesota 2008, chapter 154, article 9, section 19, and Laws of Minnesota 2010, Chapter 216, Section 42 2.03. The Authority hereby finds that it has performed all actions required by Minnesota Statutes for the sale of the Property. 2.04. The Authority hereby finds that the sale of the Property promotes the objectives as outlined in its Redevelopment Program and the Plan. Section 3. Approval of the Sale. 3.01 The sale of the Property is hereby approved for a price of not less than $30,000. HRA Resolution 2014-__Page 2 Section 4. Authorization for Execution and Delivery. 4.01. The Chairman, the Executive Director and Assistant Executive Director are hereby authorized to execute and deliver any documents necessary to effect the sale of the Property. PASSED AND ADOPTED BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA, THIS 6th DAY OF NOVEMBER, 2014. _____________________________________ LAWRENCE R. COMMERS - CHAIRMAN ATTEST: ____________________________________________ PAUL BOLIN - ASSISTANT EXECUTIVE DIRECTOR ACTION ITEM HRA MEETING OF NOVEMBER 6, 2014 Date: October 29, 2014 To: Wally Wysopal, City Manager / Executive HRA Director From: Paul Bolin, Asst. Executive HRA Director Subject: Public Hearing - Sale of 281 57th Place - HRP Igor Migalyuk, has submitted a lot reservation agreement to build a new home on the lot located at 281 57th Place. The buyer has not yet submitted building plans, but will within the next two weeks. STAFF RECOMMENDATION: Staff recommends approval of the attached resolution, authorizing the sale of the lot to Mr. Migalyuk for $30,000, provided that home plans meeting the requirements of the Housing Replacement Program are provided to and approved by staff prior to closing. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY COUNTY OF ANOKA STATE OF MINNESOTA HRA RESOLUTION NO. 2014-___ A RESOLUTION AUTHORIZING THE SALE OF RESIDENTIAL PROPERTY BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA BE IT RESOLVED by the Board of Commissioners (the "Commissioners") of the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota (the "Authority") as follows: Section 1. Recitals. 1.01. It has been proposed that the Authority sell certain residential property (the "Property") described below: PIN: Street Address 23-30-24-23-0164 281 57th Place NE Section 2. Findings. 2.01. The Authority hereby finds that it has approved and adopted its Redevelopment Plan for its Redevelopment Project No. 1 (the "Redevelopment Program") pursuant to Minnesota Statutes, Section 469.001 et seq. 2.02. The Authority hereby finds that it has approved and adopted TIF District #18, Gateway West, pursuant to and in accordance with Minnesota State Statutes. 2.03. The Authority hereby finds that it has performed all actions required by Minnesota Statutes for the sale of the Property. 2.04. The Authority hereby finds that the sale of the Property promotes the objectives as outlined in its Redevelopment Program and the Plan. Section 3. Approval of the Sale. 3.01 The sale of the Property is hereby approved for a price of not less than $30,000. HRA Resolution 2014-__Page 2 Section 4. Authorization for Execution and Delivery. 4.01. The Chairman, the Executive Director and Assistant Executive Director are hereby authorized to execute and deliver any documents necessary to effect the sale of the Property. PASSED AND ADOPTED BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA, THIS 6th DAY OF NOVEMBER, 2014. _____________________________________ LAWRENCE R. COMMERS - CHAIRMAN ATTEST: ____________________________________________ PAUL BOLIN - ASSISTANT EXECUTIVE DIRECTOR ACTION ITEM HRA MEETING OF NOVEMBER 6, 2014 Date: October 29, 2014 To: Wally Wysopal, City Manager / Executive HRA Director From: Paul Bolin, Asst. Executive HRA Director Subject: Public Hearing - Sale of 611 Buffalo Street NE Allen Hoffer, owner of 581 Buffalo Street, has submitted an offer to purchase the HRA owned lot located at 611 Buffalo Street. Mr. Hoffer owns the adjacent property and would like to add this additional 50 foot wide lot to his property. The property is located in the flood plain and has been flooded a number of times over the years. The lot sits across the street from a large flood mitigation pond installed by the City in the 1990's. The City Public Works and Planning Staff discourage anyone from building a home on the site because of its location in the flood fringe. After reviewing Mr. Hoffer's request, it was determined that the best use for the property would be for him to increase the size of his yard. Sale of this lot will put the parcel back on to the tax rolls and eliminate the expense of mowing the lot ($35/mowing). We will require that Mr. Hoffer combine the parcels so that the lot at 611 Buffalo cannot have an additional home built on it in the future. STAFF RECOMMENDATION: Staff recommends approval of the attached resolution, authorizing the sale of the lot to Mr. Hoffer for $10,000 and requiring the parcel be combined with Mr. Hoffer's property at 581 Buffalo Street. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY COUNTY OF ANOKA STATE OF MINNESOTA HRA RESOLUTION NO. 2014-___ A RESOLUTION AUTHORIZING THE SALE OF RESIDENTIAL PROPERTY BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA BE IT RESOLVED by the Board of Commissioners (the "Commissioners") of the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota (the "Authority") as follows: Section 1. Recitals. 1.01. It has been proposed that the Authority sell certain residential property (the "Property") described below: PIN: Street Address 03-30-24-32-0124 611 Buffalo Street NE Section 2. Findings. 2.01. The Authority, in conjunction with City Engineering and Planning Staff, hereby finds that it is not in the City's best interest to construct a home on the lot located at 611 Buffalo Street, as it is located in the flood plain. 2.02. The Authority hereby finds that the best use for the property is to sell it to a neighboring property, combining this property with the property at 581 Buffalo Street, for an expansion of their yard area 2.03. The Authority hereby finds that it has performed all actions required by Minnesota Statutes for the sale of the Property. Section 3. Approval of the Sale. 3.01 The sale of the Property is hereby approved for a price of not less than $10,000. HRA Resolution 2014-__Page 2 Section 4. Authorization for Execution and Delivery. 4.01. The Chairman, the Executive Director and Assistant Executive Director are hereby authorized to execute and deliver any documents necessary to effect the sale of the Property. PASSED AND ADOPTED BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA, THIS 6th DAY OF NOVEMBER, 2014. _____________________________________ LAWRENCE R. COMMERS - CHAIRMAN ATTEST: ____________________________________________ PAUL BOLIN - ASSISTANT EXECUTIVE DIRECTOR COMMUNITY DEVELOPMENT DEPARTMENT HOUSING AND REDEVELOPMENT AUTHORITY Memorandum DATE: October 30, 2014 TO: Wally Wysopal, City Manager / Executive Director of HRA FROM: Darin Nelson, Finance Director Paul Bolin, Assistant Director of HRA SUBJECT: Approval of Preliminary 2015 Budget On Thursday night, staff will present a draft of the 2015 budget for HRA review. Darin Nelson and Paul Bolin will be available to answer any questions that the Commissioners may have on the proposed budget. , and final TIF numbers from Anoka County, will lead to staff making revisions to the draft budget and then presenting a final version for consideration at the December HRA meeting. The budget is divided into three separate categories. The General Fund covers the bulk of the administrative and overhead costs of the HRA. The Housing Loan Program Fund covers the housing related programs and services (CEE programs, etc.). The Capital Outlay Funds include all of the tax increment (TIF) districts. You will notice that an additional column labeled "2014 Revised" has been added to the budget sheets. This was done to account for some large expenditures (Columbia Arena) that were not accounted for when drafting the 2014 budget. This column also includes transfers between different funds that will occur before the end of the year. ` ACTION ITEM HRA MEETING OF NOVEMBER 6, 2014 CRY OF FRIDLEY DATE: October 29, 2014 TO: Wally Wysopal, City Manager 6�` FROM: Scott J. Hickok, Community Development Director Paul Bolin, Assistant Executive HRA Director SUBJECT: MN DEED Contamination Cleanup Grant Application INTRODUCTION Hyde Development, has requested the Authority's assistance to obtain a second grant through the Minnesota Department of Employment and Economic Development's "Contamination Cleanup" grant program. As Hyde Development moves forward with redeveloping the second phase of the BAE site, they have identified a need for approximately $8M in grant funds. At this time, Hyde Development has a deadline of November 4th to apply for$850,000 in this grant funding cycle. DEED's Contamination Cleanup program assists with contamination investigations and cleanup of contamination in accordance with a Minnesota Pollution Control Agency approved response action plan (RAP). This program provides funding to sites that are the most likely to be redeveloped in the very near future and its goal is to clean up contamination in order to allow a site to retain and create new jobs. RECOMMENDATION Staff recommends approval of the attached resolution supporting Hyde Development's application for a grant through DEED's Contamination Cleanup Grant Fund. HRA RESOLUTION 2014 - RESOLUTION APPROVING APPLICATION TO ENTER INTO FUNDING AGREEMENT WITH THE DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT (DEED) FOR GRANT ASSISTANCE FOR THE 4800 EAST RIVER ROAD REDEVELOPMENT BE IT RESOLVED that the Housing and Redevelopment Authority in and for the City of Fridley (hereafter Fridley HRA) act as the legal sponsor for project contained in the Contamination Cleanup and Investigation Grant Program to be submitted on November 1, 2014 and that Assistant Executive Director is hereby authorized to apply to the Department of Employment and Economic Development for funding of this project on behalf of the Fridley HRA. . BE IT FURTHER RESOLVED that the Fridley HRA has the legal authority to apply for financial assistance, and the institutional,managerial, and financial capability to ensure adequate project administration. BE IT FURTHER RESOLVED that the sources and amounts of the local match identified in the application are committed to the project identified. BE IT FURTHER RESOLVED that the Fridley HRA has not violated any Federal, State or local laws pertaining to fraud,bribery, graft,kickbacks, collusion, conflict of interest or other unlawful or corrupt practice. BE IT FURTHER RESOLVED that upon approval of its application by the state,the Fridley HRA may enter into an agreement with the State of Minnesota for the above referenced project(s), and that the Fridley HRA certifies that it will comply with all applicable laws and regulation as stated in all contract agreements. NOW,THEREFORE BE IT FINALLY RE50LVED that the Chauperson and the Executive Director,are hereby authorized to execute such agreements as are necessary to implement the project on behalf of the applicant. PASSED AND ADOPTED BY THE FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA, THIS 6th DAY OF NOVEMBER,2014. LAWRENCE R. COMMERS,CHAIRPERSON WITNESSED: WALTER T. WYSOPAL, EXECUTIVE DIRECTOR I CERTIFY THAT the above resolution was adopted by the Housing and Redevelopment Authority in and for the City of Fridley,Minnesota on November 6, 2014. DEB A. SKOGEN, CITY CLERK ACTION ITEM HRA MEETING OF NOVEMBER 6, 2014 DATE: October 29, 2014 TO: Wally Wysopal, City Manager FROM: Scott J. Hickok, Community Development Director Paul Bolin, Assistant Executive HRA Director SUBJECT: Met Council Tax Base Revitalization Account Grant Application INTRODUCTION Hyde Development, has requested the Authority obtain a grant through the Metropolitan Council's Tax Base Revitalization Account (TBRA) grant program, for the second phase of the Northern Stacks Redevelopment project. Hyde Development has identified a need for approximately $8M in outside grant funds to complete the second phase of the BAE site. At this time, Hyde Development has a deadline of November 4th to apply for $550,000 in this Met Council grant funding cycle. The TBRA awards $5M annually to clean up contaminated land for redevelopment. The goals of the program are to clean up polluted sites, increase the local tax base, add jobs and support projects that are "poised for development". The second phase of the BAE redevelopment accomplishes the goals of the TBRA program by keeping a large tenant on site. The second phase involves refurbishing and demolishing portions of the existing building. A copy of the development phases is attached to this memorandum. RECOMMENDATION Staff recommends approval of the attached resolution supportingHyde Development's application for a grant through the Metropolitan Council's Tax Base Revitalization Account Grant Fund. HRA RESOLUTION 2014 - RESOLUTION AUTHORIZING THE SUBMISSION OF A GRANT APPLICATION TO THE METROPOLITAN COUNCIL FOR THE TAX BASE REVITALIZATION ACCOUNT FOR THE REDEVELOPMENT OF 4800 EAST RIVER ROAD WHEREAS, the City of Fridley is a participant in the Livable Communities Act's Local Housing Incentives Account Program for 2014, as determined by the Metropolitan Council, and is therefore eligible to make application for funds under the Tax Base Revitalization Account (TBRA); and WHEREAS Hyde Development has purchased the Northern Stacks Site, formerly BAE, located at 4800 East River Road and has made substantial progress towards the industrial clean up and redevelopment of this property; and WHEREAS the 122 acre site is still heavily contaminated with pollution and the proposed uses of the requested funds is consistent with goals of the TBRA; and WHEREAS the Fridley Housing & Redevelopment Authority (Fridley HRA) has the legal authority to apply for financial assistance, and the institutional, managerial, and financial capability to ensure adequate project administration. NOW, THEREFORE BE IT RESOLVED that upon approval of its application by the Metropolitan Council, the Fridley HRA may enter into an agreement with the Metropolitan Council for the above referenced project(s), and that the Fridley HRA certifies that it will comply with all applicable laws and regulation as stated in all contract agreements. NOW, THEREFORE BE IT FURTHER RESOLVED that the Chairperson and the Executive Director,are hereby authorized to execute such agreements as are necessary to implement the project on behalf of the applicant. PASSED AND ADOPTED BY THE FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA, THIS 6th DAY OF NOVEMBER, 2014. _______ _______________________________________ LAWRENCE R. COMMERS, CHAIRPERSON WITNESSED: ____________________________________ _ WALTER T. WYSOPAL, EXECUTIVE DIRECTOR I CERTIFY THAT the above resolution was adopted by the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota on November 6th, 2014. ___________________________________ DEB A. SKOGEN, CITY CLERK ACTION ITEM HRA MEETING - NOVEMBER 6, 2014 Date: October 30, 2014 To: Wally Wysopal, City Manager / Executive HRA Director From: Paul Bolin, Assistant Executive HRA Director Subject: Amendment #2 to Development Agreement for Hyde Development The Northern Stacks redevelopment project has been moving forward quickly and, as is often the case in large phased redevelopments, the sequencing of some of the phasing has changed. In order to accommodate an existing tenant on the site, what was formerly phase 3 or 4, has now become phase 2. To accommodate the timeline needed to move the project forward, some minor modifications are needed in the development agreement. Attached you will find a packet of information and a detailed memorandum from Attorney Casserly regarding the necessary changes to the development agreement with Hyde Development. Staff recommends approval of the attached resolution authorizing the amendment to the contract for private redevelopment between the Authority and Hyde Development's Fridley Land LLC. ` MONROE MOXNESS 7760 France Avenue South r 952.885.5999 BERG s�,�te�oo F ss2.ea�.ssss Mi�aeapotis,MN 55435-5844 MMBLaw�rm.00m James R.Casserly jcasserly@mmbla�rm.com Direct 952-885-1296 MEMORANDUM To: Housing and Redevelopment Authority in and for the City of Fridiey Attn: Paul Bolin, Assistant Executive Director � Attn: Wally Wysopal, Executive Director From: James R. Casserly, Esq. Date: October 30, 2014 Re: Second Amendment to the Fridley Land/HRA Contra�t for Private Redevelopment Our File No. 9571-77 Attached is a Second Amendment to the Fridley Land LLC/HRA Contract for Private Redevelopment (the "Agreement"). The Second Amendment allows the Authority Grants to be issued on a more timely basis. The Agreement currently provides that the Phase II $1,000,000 grant funds are not available unti{ after the City has approved a building permit for the Phase II improvements. The problem is that the Phase 11 building permit may not be issued until February or March 2015. In the meantime substantial Authority grant funds are needed to do required remediation. To solve the timing problem, the Second Amendment provides that Authority Grant funds will be available after the Redeveloper and BAE Systems have executed a lease for the Phase II space. The execution of the lease is the actio� required by the Redeveloper's Lender to allow additional construction funds to be made available. Since the Second Amendment is amending the Agreement, as amended by the First Amendment, we thought it would be helpful if we provided a Restated Article III which is also enclosed. The language being changed is in Section 3.5 which is on page 3. The changes proposed by the Second Amendment, which only affect Section 3.5(a)(2), are blacklined to make them easier to follow. The Authority grants are very secure since they are repaid from the already existing taxes on the entire site. To help facilitate the ongoing redevelopment, we recommend adoption of the Second Amendment and will be available to answer any questions at the HRA meeting. JRC/rl MMB:4848-4844-8544,v. 1 Execution: November 6, 2014 " SECOND AMENDMENT TO THE CONTRACT � FOR PRIVATE REDEVELOPMENT By and Between the HOUSING AND REDEVELOPMENT AUTHORITY In and For THE CITY OF FRIDLEY, MINNESOTA And FRIDLEY LAND LLC This document was drafted by: James Casserly, Esq. Monroe Moxness Berg PA 7760 France Ave South, Suite 700 Minneapolis, Minnesota 55435 952-885-1296 SECOND AMENDMENT TO THE � CONTRACT FOR PRIVATE REDEVELOPMENT TH/S SECOND AMENDMENT is made on or as of this 6'h day of November, 2014, by and between the Housing and Redevelopment Authority in and for the City of Fridiey, Minnesota (the "Authority") and Fridley Land LLC, a Minnesota limited liability company (the "Redeveloper"). WITNESSETH: WHEREAS, the Authority and the Redeveloper entered into a Contract for Private Redevelopment dated as of October 3, 2Q1.3 and a First Amendment to the Contract for Private Redevelopment dated as of May 1, 2014 (the "First AmendmenY') (collectively the "Contract") (Capitalized terms not defined in this Agreement are defined in the Contract); and WHEREAS, the Redeveloper is performing all of its obligations required by the Contract and is ready to initiate the Phase II Minimum Improvements; and WHEREAS, the Authority is performing its obligations in accordance with the Contract; and WHEREAS,the Authority and Redeveloper desire to amend the Contract to further the purposes set forth therein; NOW,THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, the parties hereby agree as follows: Section 1. Authoritv Grants - Timina. Section 2(a) of the First Amendment is deleted and the following substituted in its place: (a) $1,000,000 for Phase II: after the Redeveloper and BAE Systems Land & Armaments LP have executed a lease for Phase II. In addition the guarantee by Hyde Development LLC and Paul Hyde shall continue until the new wall separating the Phase I( Minimum Improvements and the building being demo(ished is under construction and a certificate of completion has been issued for the first Phase I building. Section 2. Agreement Supersedes Contract. The terms and conditions contained in this Second Amendment shall supersede any conflicting provisions contained in the Contract. IN WITNESS WHEREOF,the Authority has caused this Second Amendment to the Contract for Private Redevelopment to be duly executed in its name and behal#and the Redeveloper has executed this Second Amendment to Contract for Private Redevelopment on or as of the date first above written. [Signature Pages Follow] 2 Dated: HOUSiNG AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA By its By its STATE OF MINNESOTA ) )ss COUNTY OF ANOKA) On this day of , 201 before me, a notary public, personally appeared and to me personally known who by me duly swom,did say that they are the and respectively, of the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, and acknowledged the foregoing instrument on behalf of said Authority. Notary Public Authority Signature Page Second Amendment to Contract for Private Redevelopment 3 Dated: � FRIDLEY LAND LLC BY Its STATE OF MINNESOTA ) ) ss. COUNTY OF ) On this day of , 201 before me, a notary public, personally appeared of Fridley Land LLC, a Minnesota limited liability company, and acknowledged the foregoing instrument on behalf of said company. Notary Public Redeveloper Signature Page Second Amendment to Contract for Private Redevelopment MMB:4819-4081-0272,V. 1 4 RESTATED ARTICLE III TO INCLUDE MAY 1ST 2014 FIRST AMENDMENT AND BLACKLINED CHANGES PROPOSED BY THE 2ND AMENDMENT ARTICLE III Undertakinqs of AuthoriN and Redeveloper Section 3.1. Undertakinqs. (a) The Redeveloper shall seek grants and shall construct or cause to be constructed the Minimum Improvements, the Site Improvements and the Public Improvements in accordance with the terms of this Agreement. (b) The Authority shall seek grants and disburse the proceeds, provide Authority Grants, issue Notes and may issue Bonds in accordance with the terms of this Agreement. Section 3.2. Relocation. (a) The Redeveloper warrants and represents that it wifi pay, or obtain written relocation waivers in a form satisfactory to the Authority regarding all Relocation Costs. Any Relocation Costs paid by the Redeveloper are reimbursable Eligible Costs. (b) Without limiting the Redeveloper's obligations under Section 9.5, the Redeveloper will indemnify, defend, and hold harmless the Authority, the City, and their goveming body members, employees, agents, and contractors from any and all claims for benefits or payments arising out of the relocation or displacement of any person from the Redevelopment Property as a result of the implementation of this Agreement. Section 3.3. Environmental Undertakinqs. (a) The parties acknowledge that MPCA has received the Redeveloper request for one or more VRAPs providing for remediation of hazardous wastes and contaminants on the Redevelopment Property. A separate VRAP may be issued for each Phase or a single VRAP issued for the Redevelopment Property and then amended or modified for each Phase. Redeveloper shall promptly undertake remediation and any other actions required under the VRAPs, subject to the reimbursement as further described in this Agreement. (b) The Redeveloper acknowledges that the Authority makes no representations or warranties as to soil and environmental condition on the Redevelopment Property or the fitness of the Redevelopment Property for construction of the Minimum Improvements or any other purpose for which the Redeveloper may make use of such property, and that the assistance provided to the Redeveloper under this Agreement neither implies any responsibility by the Authority or the City for any contaminatian of the Redevelopment Property or poor soil conditions nor imposes any obligation on such parties to participate in any cleanup of the Redevelopment Property and or correction of any soil problems (other than the financing described in this agreement). (c) Without limiting its obfigations under Section 9.5 of this Agreement the Redeveloper further agrees that it will indemnify, defend, and hoid harmless the Authority, the City, and their governing body members, officers, and employees, from any claims or actions arising out of the presence, if any, of hazardous wastes or pollutants existing on or in the Redevelopment Property unless and to the extent that such hazardous wastes or pollutants are present as a result of the actions or omissions of the indemnities. Further, Redeveloper expressly agrees that the provisions of the VRAP are incorporated herein by reference. Nothing in this section will be construed to limit or affect any limitations on liability of the City or Authority under State or federal law, including without limitation Minnesota Statutes Sections 466.04 and 604.02. Section 3.4. Grant Disbursement. (a) To finance a portion of the environmental remediation costs on the Redevelopment Property, the Authority intends to obtain grants from DEED and the Met Council and, in addition, will provide Authority Grants. (b) The Authority will pay or reimburse the Redeveloper for Grant-Eligible Costs from and to the extent of the grant proceeds from DEED, the Met Council and the Authority Grants in accordance with the terms of the DEED Grant Agreement, the Met Council Grant Agreement and HSS provisions of the Tax Increment Financing Act, respectively, and the terms of this Section. Nofinrithstanding anything to the contrary herein, if Grant-Eligible Costs exceed the amount to be reimbursed under this Section, such excess shall be the sole responsibility of the Redeveloper except to the extent reimbursable under the Notes. (c) All disbursements will be made subject to the conditions precedent that on the date of such disbursement: (1) The. Authority has received a written statement from the Redeveloper's authorized representative certifying with respect to each payment: (a) that none of the items for which the payment is proposed to be made has formed the basis for any payment previously made under this Section (or before the date of this Agreement) or has been submitted as an Eligible Cost under Section 3.5 hereof; (b) that each item for which the payment is proposed is a Grant-Eligible Cost, including a statement specifying which grant is the eligible funding source; and (c) the Redeveloper reasonably anticipates completion of the Grant-Eligible Costs and the Minimum Improvements in accordance with the terms of this Agreement. (2) No Event of Default under this Agreement or event which would constitute such an Event of Default but for the requirement that notice be given or that a period of grace or time elapse, shall have occurred and be continuing. (3) No license or permit necessary for undertaking the Grant-Eligible Costs or construeting the Minimum Improvements shall have been revoked, or the issuance thereof subjected to a challenge before any court or other governmental authority having or asserting jurisdiction thereover that has been finally determined in a manner adverse to Redeveloper's obligations hereunder. (d) Whenever the Redeveloper desires a disbursement to be made hereunder, which shall be no more often than monthly, the Redeveloper shall submit to the Authority a draw request in the form attached as Schedule I duly executed on behalf of the Redeveloper accompanied by invoices or other comparable evidence that the cost has been incurred and paid, or is payable by Redeveloper. Each draw request shall constitute a representation and warranty by the Redeveloper that all representations and warranties set forth in this Agreement are true and correct as of the date of such draw request. (e) If the Redeveloper has perFormed all of its agreements and complied with all requirements theretofore to be performed or complied with hereunder, including satisfaction of all applicable conditions precedent contained in Article III hereof, the Authority shall make a disbursement to the Redeveloper in the amount of the requested disbursement or such iesser amount as shall be approved, within finrenty (20) Business Days after the date of the Authority's receipt of the draw request, or, if later, upon receipt of grant proceeds from DEED or the Met Council or the Authority Grant, as the case may be. Each disbursement shall be paid from the grant designated by the Authority at its discretion, subject to the Authority's determination that the relevant Grant-Eligibte Cost is payable from the designated source under the DEED Grant Agreement and the Met Council Grant Agreement or the HSS provisions of the Tax Increment Act and this Agreement. (fl The making of the final disbursement by the Authority under this Section for each Phase shall be subject to the condition precedent that the Redeveloper shall be in compliance with all conditions set forth in this Section and further, that the Authority shall have received a lien waiver from each contractor for all work done and for all materials furnished by it for the Grant-Eligible Costs attributable to such Phase. (g) The Authority may, in its sole discretion, without notice to or consent fram any other party, waive any or all conditions for disbursement set forth in this Article. However, the making of any disbursement prior to fulfillment of any condition therefor shall not be construed as a waiver of such condition, and the Authority shall have the right to require fulfillment of any and all such conditions prior to authorizing any subsequent disbursement. Section 3.5. Authoritv Grants. (a) The Authority shall provide the Authority Grants in the following amounts at the times indicated: (1) $1,000,000 for Phase I: upon (i) City Council Final Rezoning approval of the Redevelopment Property to S2 Redevelopment District; and (ii) the Redeveloper executing a note to the Authority (the "Redeveloper Note") in the amount of $1,000,000 with interest at three and a half percent (3.5%) per annum guaranteed by Hyde Development LLC and its principal shareholder. The Redeveloper Note and any accrued interest shall be deemed paid in full upon the commencement of the pouring of concrete in connection with the installation of the footings or foundation for the first Phase i building. (2) $1,000,000 for Phase II: after the �+#Redeveloner �and BAE Svstems Land & Armaments LP have executed a lease for�#e Phase II . In addition the guarantee by Hyde Development lLC and Paul Hyde sha{I continue until the new wall separating the Phase II Minimum Improvements and the building being demolished is under construction— and a certificate of comoletion has been issued for the first Phase I buildina. (3) $1,000,000 for Phase III: upon the occurrence of either (A) a certificate of completion is issued for a Phase I building or (B)footings are commenced for both Phase I buildings and the Phase II wall described in Section 2(a) above is under construction. (4) $1,500,000 for Phase IV: after substantial completion of any two Phases. (b) The Authority's limitations in providing the Authority Grants inctude the following: (1)The Authority's source of funds for the Authority Grants are interfund loans. The principal balance plus accrued interest of such interFund loans shall not exceed $3,500,000. The repayment of the interfund loans from the tax increment revenues generated by the HSS shall use the following assumptions: interest rate, three and a half percent (3.5%) per annum; administrative expenses, five percent (5.0%) of available HSS tax increments; reserve fund, seven and a half percent (7.5%) of available HSS tax increments; payments, semiannually. The Authority Grant Scenarios attached a's Schedule J reflect the interfund loan balances using Slow Buildout and Fast Buildout scenarios as described therein. (2) Any Authority Grant that results in the balance exceeding $3,500,000 shall be delayed and may only be made on February 1 or August 1 and in the amount that such balance will not be exceeded. (3) Substantial completion of a Phase occurs when Certificates of Completion are issued for each building in that Phase except the last building in each Phase need only be enclosed. (4) Authority Grants not needed for an earlier Phase are available for a subsequent Phase. (5) In the event that Grant Eligible costs are recovered from a third party and the Authority Grants are reimbursed, then additional Authority Grants will be available for subsequent Phases in accordance with the limitations noted above. (6) The total of the authority Grants to the Redeveloper to be paid from the HSS, by interfund loans, shall not exceed $4,500,000 plus any recovered costs with the principal outstanding balance of the interFund loans, plus accrued interest, not to exceed $3,500,000 using the assumptions noted above. (7) The HSS shall have been certified by the County. Section 3.6. Issuance of Notes. (a) The Redeveloper and Authority agree and understand that Redeveloper expects to incur certain costs in excess of proceeds of the grants described in Section 3.4 and 3.5. In order to reimburse the Redeveloper for such additional costs and for the other Eligible Costs, the Authority shall issue and the Redeveloper shaU purchase the Notes. The terms of the Notes, including maturity and payment dates, will be substantially those set forth in the form of the Note shown in Schedule E. The Notes will bear interest at the greater of 0°lo per annum, or the actual "blended rate" on the loan or loans Redeveloper obtains from the State or lending institutions to initially finance the Eiigibfe Costs, such rate being the "Note Interest Rate". The blended rate shall be the weighted average interest rate on the loans, based on their respective rates and originaf principal amounts. The Authority agrees and understands that Redeveloper may pledge the Notes as collateral to Redeveloper's State loans, and agrees to issue the Notes in such denominations as Redeveloper requests to facilitate such pledge; provided that the minimum denomination for aN Notes shall be $100,000. The Notes will be dated as of the date of delivery, and interest wi11 accrue from such date. (b) Before issuance and delivery of each Note, Redeveloper must submit to the Authority one or more certificates signed by the Redeveloper's duly authorized representative, containing the following: (i) a statement that each cost identified in the certificate is an Eligible Cost, incurred after the date of this Agreement and that no part of such cost has been included in any previous certification under this Section or in any draw request under Section 3.4; (ii) evidence that each identified cost has been paid or incurred by or on behalf of the Redeveloper; (iii) a statement that no uncured Event of Default by the Redeveloper has occurred and is continuing under the Agreement, and (iv) evidence of Redeveloper's interest rate on State or private loans as described in paragraph (a) of this Section. The Authority may, if not satisfied that the conditions described herein have been met, return any certificate with a statement of the reasons why it is not acceptable and requesting such further documentation or clarification as the Authority may reasonably require. The Authority will deliver each Note upon receipt and approval of certificates evidencing the relevant Eligible Costs in at least the principal amount of the Note. (c) The Redeveloper understands and acknowledges that the Authority makes no representations or warranties regarding the amount of Available Tax Increment, or that revenues pledged to the Notes will be sufficient to pay the principal and interest on any Note. Any estimates of Tax Increment prepared by the Authority or its financial advisors in connection with the TIF District or this Agreement are for the benefit of the Authority, and are not intended as representations on which the Redeveloper may rely. If the Eligible Costs exceed the principal, amount of the Notes, such excess costs are the sofe responsibility of Redeveloper. (d} In addition to the limitations above, the following limitations shall apply to the issuance of the Notes: (1) Only Avai{able Tax Increment shall be pledged. (2) On the Reconciliation Date interest rates for each Note will continue at the applicable Note Interest Rate. However, any Note payable to the Redeveloper and not pledged or used as security with the State or a lending institution will have an initial interest rate equivalent to the yield of ten year treasury notes on the date of issue plus two percent (2%); and these Notes will have their interest rates adjusted on the Reconciliation Date to the yield of 10 year treasuries on that date plus two percent(2%). (3)The term of any Note may not extend more than 32 days beyond the duration of the Tax Increment District. (4)All Notes will be issued on a parity basis. (5) Any amounts unpaid at the maturity date shall be deemed paid in full. (6)The first Note, at Redeveloper's request, can be issued upon the commencement of the first Phase I building. Commencement means the installation of the footings. (7) Subsequent Notes shall only be issued upon the completion of a Phase. A Phase is completed when each building in that Phase has received a Certificate of Completion. (8) Notes shall not be issued after the Reconciliation Date. (9) The Reports required by Section 4.4 shall have been received by the Authority and no Note shall be issued if it will result in an "Excess Percentage" as defined in Section 3.12. (e) The Aggregate principal of the Notes shall not exceed the lesser of (i) the Eligible Costs or (ii) the present value of the Available Tax Increment from the Phase(s) for which Certificates of Completion have been issued or (iii) $20,000,000. The Authority's financial advisor, in consultation with the Redeveloper, shall use reasonable assumptions in making the present value analysis including Note Interest Rate(s) described in Section 3.6 (d) above and will assume no inflation and market values determined by the County Assessor. Eligible Costs not reimbursed by a Note issued for an earlier Phase may be reimbursed by a Note issued in a subsequent Phase. Section 3.7. Issuance of Bonds. The Authority understands that the majority of the Eligible Costs will be paid by Redeveloper borrowing funds from a lending institution and pledging Notes and that there will be practical limitations on the amounts of funds that can be obtained in this manner. The Redeveloper will be asking the Authority, after completion of a Phase, to issues Bonds to replace the Notes to allow the Redeveloper to secure additional funding. While acknowledging the foregoing, the Authority, in its sole discretion, may issue bonds as follows: (a) Bonds will either be taxable or tax exempt as allowed by law in amounts that meet reasonable underwriting standards and upon terms then available in the public marketplace. (b) Bond proceeds may only be used to refund or replace Notes. (c) Bonds will be issued on a parity basis, will be payable only from Availabte Tax Increment and will not be a general obligation of the City, County, State or any other political subdivision. (d) Bonds may be issued with each Phase but only in the tax payable year in which all buildings in that Phase have their fully constructed market value. (e)The Authority will cooperate with the Redeveloper in the selection of an undervvriter in the event Bonds are issued. The Authority will consult with the Redeveloper regarding timing, terms; coverage, reserves and costs of issuance of any Bonds. Section 3.8. Application of Tax Increment. Available tax increment will be applied in the following priority: (a) Authority's administrative fee of 10% (b) Bonds (c) Notes Section 3.9. EPA Loans. Subject to the limitations in this Article III, the Authority will cooperate with the Redeveloper in its efforts to obtain low interest EPA clean-up loans by issuing Notes to the purchaser or lender. Section 3.10. Business Subsidv. Provisions. (a) The parties agree and understand that the assistance provided to Redeveloper in this Agreement (including both grant proceeds and issuance of Notes) does not constitute a "business subsidy" under the Business Subsidy Act, because the grants and Note represent assistance that is exempt from the Business Subsidy Act under Sections 116J.993, Subdivision 3, clauses (4) and (8). ' (b) Redeveloper acknowledges that under Section 116J.994, subdivision 7(c) of the Business Subsidy Act, the Redeveloper is nevertheless required to file annual reports containing the information described therein. If the Redeveloper fails to timely file any required report, the Authority will mail the Redeveloper a waming within one week after the required filing date. If, after 14 days of the postmarked date of the warning, the Redeveloper faiis to provide a report, the Redeveloper must pay to the Authority a penalty of $100 for each subsequent day until the report is filed. The maximum aggregate penaity payable under this Section is $1,000. Section 3.11. Repavment. of DEED or Met Council Grants. The Redevefoper sha{I repay to the Authority any portion of such grants that the Authority is required to repay for DEED or Met Council Grants resulting from Redeveloper's actions in violation of the terms of the applicable grant agreement. Section 3.12. Reqavment of Assistance. (a) On the Reconciliation Date the Redeveloper shall deliver to the Authority evidence of its annualized cumulative internal rate of return from the Redevelopment Property and the Minimum Improvements related thereto (the "IRR"), calculated as of the Reconciliation Date. The IRR shall be calculated with equity, revenues and expenses all determined in accordance with generally accepted accounting principles, provided that the amount of Redeveloper's equity must exclude any developer's fee in excess of 7.0 percent of total development costs. The IRR calculation shall include the Eligible Costs paid by the Redeveloper and not reimbursed by grants, HSS Grants or Notes. (b) The amount by which the IRR exceeds 14.0 percent(14%) is a percentage referred to as "Excess Percentage." Fifty percent(50%)of the Excess Percentage shall be credited to the reduction of the principal plus accrued interest of the Notes in reverse order of their issuance as of the Reconciliation Date. (c) For purposes of caicuiating revenues for the IRR from sales of property the following adjustments shall be made: (1) If property (improved or unimproved) is sold to an unrelated party in an arm's length transaction, those prices will be determinative of the sales price. The Redeveloper will certify to the City that such party would be considered unrelated under applicable lnternal Revenue Code regulations. (2) If property is sold to a related party (as defined in Internal Revenue Code regulations), the property sale price will be determined by agreement befinreen the Authority and Redeveloper or, if agreement cannot be reached, the sale price will be the higher of an appraisal conducted by an appraiser mutually agreeabie to the parties or the actual sale price. This provision is not applicable to a transfer befinreen the Land LLC and a Building LLC as defined in Article I as part of the definition of Redeveloper. (3) For property still owned by the Redeveloper on the Reconciliation Date, an "imputed" sales price based on an appraisal, or other method acceptable to both parties for valuing the property or its rate of return, will be used. Section 3.13. Other Grants. In the event the Authority is able to obtain grants from any other source, the disbursement of such grant proceeds shall be subject to the terms of this Agreement and in particular Section 3.4 Grant Disbursement. nnMS:as2�-�ssa-2sao,�. � Fridley HRA Housing Program Summary Cover Page November 6, 2014 HRA Meeting ReportDescription 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 Monthly loan originations and year-to- date. Remodeling Advisor Shows the number of field appointments scheduled and completed for the Remodeling Advisor Services administered by Center for Energy and Environment. Home Energy Squad Shows number of home energy squad visits. K:\HRA\Agenda Packets\2014 Agenda Packets\2014 11 06\Housing Program CoverNov 14.docx FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY November 6, 2014 Non-Agenda Update 1. Building Permit Monthly Report - October 2012 The report for October was not available at the time of creating this packet. The October report will be distributed at next week's meeting. 2. JLT Site / Northstar Transit TIF District Last month I reported that staff and the Planning Department met with a group that was interested in purchasing the JLT Site. The group proposed to construct 2 large office warehouse buildings on the site that did not meet the City's Zoning Code or provide the density desired and envisioned for the site. After making minor revisions to the site plan, it became clear that thproduct, were not a good fit for the site and are no longer pursuing the parcel. Staff has heard from the broker that there are at least 2 more p property, more in line with the City's Comprehensive Plan visionfor the site. Staff will keep you updated as we learn more. 3. Columbia Arena No City or Authority staff have heard from Bill Fogerty, Columbia Arena owner, since he received City Council approval for the SUP and plat needed for his proposed senior housing project on September 10th. 4. BAE / RER Update Staff has had an additional meeting with Mr. Hyde, his consultan. Mr. Hyde's consultants are starting on the AUAR and Mr. Hyde is filing the paperwork fo for innovative businesses. A follow up meeting is tentatively set to take place on Tuesday October 30th. 5. Gateway Northeast Over the past month staff has worked with legal counsel on a draft re former Sinclair Site. David McNutt, McNutt Companies, is propos new retail space. There are still many moving pieces to this puzzle and details to finalize before the agreement is ready for action by the Authority. Staff also expects proposals from 2 other groups, over the next land. The Non-Agenda Update is simply a means for Staff to provide the Authority information on items that are not regular agenda items. Topics covered include proposed pr existing projects, construction updates and other items that mayt not requiring public discussion or action. If there are any items yo the Non-Agenda Update please send me an e-mail. bolinp@ci.fridley.mn.us ii