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HRA 05/12/1983 City of Fridley AGENDA HOUSING & REDEVELOPMENT AUTHORITY MEETING, THURSDAY, MAY 12, 1983 7:30 P.M. Location: Council Chamber (upper level ) CALL TO ORDER: ROLL CALL: APPROVAL OF MINUTES: Housing & Redevelopment Authority Meeting, March 10, 1983 Housing & Redevelopment Authority Meeting, March 31 , 1983 Housing & Redevelopment Authority Meeting, April 27, 1983 ADOPTION OF AGENDA CONSIDERATION OF A PETITION FOR THE REMOVAL OF 6028-44-62-70-80 OLD-CENTRAL AVENUE FROM THE MOORE LAKE REDEVELOPMENT DISTRICT 1 -1T CONSIDERATION OF A REQUEST FOR "RIGHT OF DEVELOPMENT" BY ST. PHILLIPS HUMAN SERVICES INC 2 -2F FINANCIAL REPORT 3 CHECK REGISTER 4 ADJORNMENT: HOUSING & REDEVELOPMENT AUTHORITY MEETING THURSDAY, MAY 12, 1983 7:30 P.M. CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING APRIL 27, 1983 CALL TO ORDER: Vice-Chairperson Prieditis called the April 27, 1983, Housing & Redevelopment Authority meeting to order at 7:43 p.m. ROLL CALL: Members Present: Elmars Prieditis,, Carolyn Svendsen, Duane Prairie, Walter Rasmussen Members Absent: Larry Commers Others Present: Jerrold Boardman, City Planner Nasim Qureshi , City Manager Sid Inman, City Finance Director Dave Newman, City Attorney Bob Olmstead, Fridley Lions Bob Cook, Fridley Lions Norm Reznicow, Fridley Lions Mike Murphy, Fridley Lions APPROVAL OF MARCH 10, 1983, HOUSING & REDEVELOPMENT AUTHORITY MINUTES: MOTION BY MR. PRAIRIE, SECONDED BY MS. SVENDSEN, TO APPROVE THE MARCH 10, 1983, HOUSING & REDEVELOPMENT AUTHORITY MINUTES AS WRITTEN. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON PRIEDITIS DECLARED THE MOTION CARRIED UNANIMOUSLY. APPROVAL OF MARCH 31 , 1983, SPECIAL HOUSING & REDEVELOPMENT AUTHORITY MINUTES: Mr. Prieditis recommended that the approval of these minutes be delayed until Mr. Commers could be present. 1 . CENTER CITY DISTRICT A. Hardware Building Update 1 . Status on Existing Lease Property (Memo #83-23 from Executive Director) Mr. Newman stated Clothing Liquidators, Inc. , has been removed from the hardware building by an unlawful detainer, and the City has commenced action against them for the unpaid rent. Mr. Carson has filed an answer which means the City has to go to trial to get the judgement. He suspected the case would come to trial within the next 3-4 months, and then there would be the problem of trying to HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 27, 1983 PAGE 2 collect the rent. It was his understanding that Mr. Carson does not have much in the way of assets, but they will take certain steps to find out what he does have. If he hasn't much, there isn't much the City can do but wait and hope that sometime within the next ten years, Mr. Carson acquires some real estate so the City can collect the rent. Mr. Rasmussen asked if the HRA had collected any money at all from Mr. Carson as nothing was indicated on the breakdown of "HRA Rent". Mr. Boardman stated they did not receive any rent, but did receive a deposit. Mr. Inman stated the breakdown refers only to rents and not to deposits. Staff was requested to report only the rents. They do not consider the first time deposits to be rent, but under the new process, they are going to consider the first and last months as a security deposit. Actual rent received was "none". Mr. Rasmussen asked about any liens against the property for improve- ments made by Mr. Carson. Mr. Boardman stated there is one lien and that is about $1 ,200. Mr. Newman stated the lien is part of the lawsuit filed against Mr. Carson. He thought the total amount due the HRA is around $11 ,000. Mr. Rasmussen asked what the legal work is costing the City. Mr. Newman stated the hourly rate is $50. He stated they have put about 3-4 hours into this particular project. They have a separate action they have filed for restitution of the property. Mr. Rasmussen stated he felt it was fair to find out exactly where they stand with this property. He did not like to spend a lot of money on something they probably cannot collect. Legal fees mount up. Mr. Newman stated that as far as collecting a judgement against Mr. Carson, they can do that rather speedily. As far as a lot of legal time, it is going to take some waiting to get into the courts. He did not think the total time for attorneys' fees was going to be significant, particularly when they are talking about a $11 ,000 sum owed the HRA and considering the fact that the judgement is valid for a minimum of ten years and is accruing interest as they wait. Mr. Prairie stated he thought the HRA should have a breakdown of all the transactions concerning Clothing Liquidators, Inc. HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 27, 1983 PAGE 3 Mr. Inman stated there was a $1 ,291 deposit paid on Dec. 6, 1982. Mr. Carson owes four months' rent at $3,140/mo. for a total of $12,560. Mr. Prairie stated that a deposit is usually one month's rent. Mr. Newman stated that in looking at the lease, it was his recollec- tion that the HRA reduced that deposit because of certain repairs to the building which Mr. Carson has made. Mr. Newman stated he thought Mr. Carson made in excess of $3,000 in repairs to the property. Mr. Rasmussen stated he recalled that they were going to receive one month's rent and now that amount has been reduced to $1 ,291 . Mr. Prieditis asked Mr. Newman how much he expected a case like this to cost in legal fees.. Mr.Newman stated it depended upon how much Mr. Carson tries to contest the case. If Mr. Carson does not do much, he would think the legal work would take another 6-10 hours in drafting the necessary docu- ments and making the necessary court appearances. Mr. Rasmussen stated he felt the HRA should know exactly what the HRA has spent in this process. He felt the HRA has to have that informa- tion. He was not trying to deny good legal work, but to go ahead and spend a lot of money trying to collect a "dead horse" was as bad as leasing the building to Mr. Carson in the first place. Mr. Prairie stated if they have been unable to collect the rent now, he felt the chances of collecting the rent in the future were very slim. Mr. Rasmussen stated he would like to see them send this to a collection agency before spending any more money in legal work. He did not mind spending money for good legal work if there was some kind of recovery. Mr. Boardman stated the way it should have been and the way they have set the process up now is to have the first month's rent and the last month's rent before letting a leasee move in. In the lease the HRA looked at, it was set up that because of the amount of expenditures, the deposit was reduced. Mr. Prieditis stated he would like Staff to get all the documentation together on the hardware building lease--past minutes, expenses, copies of agreements, what has been collected, etc. HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 27, 1983 PAGE 4 Mr. Newman stated they do not intend to do anything on this for the next 30 days anyway so he did not have any problem with delaying this for 45 days until the HRA has had a better chance to review all the information. Mr. Boardman stated he would get that information together for the HRA. Mr. Newman stated that if the HRA does decide to go to a collection agency, he would suggest that Staff get an opinion from the collec- tion agency on what the chances are of collecting with or without a judgement. 2. Lease Process Mr. Boardman stated that in the agenda is the Standard Lease Process the HRA asked Staff to establish. It is for the HRA's review. Also included are a couple of standard letters that would be sent out as a matter of the process for non-payment within a certain period of time. Mr. Boardman stated that also included in the agenda was a breakdown of the rents, the leasees, monthly rents, and the arrears. This information was requested by the HRA. The leasee owing the most rent, of course,was Clothing Liquidators, Inc. Gary's, the garage just north of City Hall , is behind in rent. At this time, Gary has paid but is still behind in one month's rent at $225 plus interest. A letter has been sent to him, but no response has been received. He stated Gary's has been in operation in this location for many years, and did the HRA want to take an unlawful detainer to have the business removed? Mr. Rasmussen suggested Mr. Boardman talk to the owner of Gary's personally to see what the problem is before making any further decision. Mr. Prairie stated he would agree with Mr. Rasmussen's suggestion. At least this leasee continues to pay rent, even though he is behind. Mr. Prairie stated that #2 under "New Leases" in the Standard Lease Process stated that: "There will be a staff review of required financial documentation (such as asset/liability report, bank/ financial credit reference checks, financial statements of existing businesses, etc. ). This review shall include the HRA Executive Director, City Manager, Finance Director, and the HRA Attorney." He felt there would be some worth to include the HRA in that review. Mr. Boardman stated he had no problem with including the HRA in the review of the financial documentation. HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 27, 1983 PAGE 5 MOTION BY MS. SVENDSEN, SECONDED BY MR. PRAIRIE, TO AMEND #2. UNDER "NEW LEASES" TO INCLUDE "THE HRA" AFTER THE "FINANCE DIRECTOR". Mr. Rasmussen stated that if the NRA agrees to #2, be thought they would be going through an exercise that is going to be quite costly. He thought a very simple report from the Executive Director with normal credit references and a financial statement was all that was necessary for the HRA to review. He thought it was too expensive to include the legal review and other staff review. If, in review- ing the report from the Executive Director, there was something the HRA did not like, then they could turn down an obvious bad lease or they could include the attorney at that time. • Mr. Boardman stated he would rewrite #2 and bring it back to the HRA. MS. SVENDSEN WITHDREW THE ABOVE MOTION WITH THE CONSENT OF THE SECONDER. Ms. Svendsen asked if the HRA could get a report on the status of all leases and rent payments on a regular basis. Mr. Inman stated the HRA will be receiving that information on a monthly basis. Mr. Rasmussen stated he did not like the wording of #3 under "New Leases": "The signing of the lease must be approved by the HRA with a report from the Executive Director with written approval from the HRA attorney." If the city attorney is going to do the approving, why was the HRA needed? He felt that statement was a little top-heavy. Mr. Boardman stated the following process would be followed for new leases: (1 ) All leases would be executed on standard lease forms; (2) The Executive Director would provide a report to the HRA with all the financial documentation. He stated that if, at that time, the HRA felt it was necessary to go to the attorney for further review of the lease, they could do so. However, he would like to send the lease to the attorney as a standard process to make sure all the legal things are taken care of. The attorney is not necessarily approving but changing any wording that is- necessary in the contract itself. The approval will come from the HRA when they look at all the financial documentation. He felt it was very important to include the attorney, but it was up to the HRA whether they wanted the attorney involved in the beginning or the end of the process. Mr.Rasmussen stated he felt it would be better to involve the attorney afterwards as he felt the HRA could probably intelligently weed out some of the leases that were obviously bad leases. HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 27, 1983 PAGE 6 Mr. Boardman stated the HRA has to take into consideration the fact that all of the leases are temporary leases. All they are trying to do is occupy the buildings to keep some income coming in. They try to set up the leases on a month-to-month basis so the HRA can take the property within 30 days if there is a project. Ideally, they would rather not own any property at all . When the hardware building was purchased, the HRA felt they had a pretty good package, and there was some matching federal monies to reduce the cost. The building was empty at the time, and some additional money was saved in relocation and moving costs. Mr. Rasmussen stated it seemed they just keep putting out money as though it is never going to end, and there is no master plan for any of it. There is a proposal on the agenda from some very responsi- ble people from Fridley, and the HRA would really like to help them, but without a major plan, again they are getting into the same "flea market" kind of thing. He felt there should be a major plan that is going to encompass everything, rather than handling one crisis at a time. Mr. Prieditis stated this should probably be a subject for discussion when their agenda is not so lengthy. MOTION BY MS. SVENDSEN, SECONDED BY MR. PRAIRIE, TO CONTINUE DISCUSSION ON THE STANDARD LEASE PROCESS UNTIL THE NEXT MEETING, BASED ON 'THE PREVIOUS DISCUSSION. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON PRIEDITIS DECLARED THE MOTION CARRIED UNANIMOUSLY. 3. Inquiry by Lions Club on Hardware Building Property Mr. Bob Olmstead stated he was from the Fridley Lions Club and was standing in for John Gargary, who previously made some inquiries about the hardware property. Mr. Olmstead stated the Fridley Lions Coub is a substantial club, and they are in their 30th year. They are interested in the hardware building. He stated they have gone through the club process, the Board, and the general membership, and that is why they are at this HRA meeting. Mr. Olmstead stated they have been informed by some city officials that to bring the hardware building up to code and to use it as a club/meeting place and assembly area, there would need to be some extensive repairs. The Lions Club would like to know if the HRA would be willing to lease the hardware building to them on a long term lease or possibly even purchase the building. The reason they need a long-term lease (5 yr. ) is because of the repairs needed to bring the building up to code. It has to be economically feasible to them. A conservative estimate on bringing the building up to code is $40-50,000. If they did lease or purchase the building, they would make the building a credit to the community. The club intends • HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 27, 1983 PAGE 7 to stay in Fridley and the club needs a home. Right now their club meetings are held in a retail restaurant. Mr. Olmstead stated the building would be used as a club meeting place. They have bingo two nights a week, Thurs. and Sat. evenings, with two club meetings a month on the second and fourth Tuesdays. They would be interested in putting in a wall and getting some income by having a rental hall for community and private functions. Mr. Prairie asked how many vehicles were generated by the bingo. Dr. Reznicow stated there are approximately 95-100 people on Thurs. nights now, and about 160-165 people on Sat. nights. Maximum cars would probably be about 100. Parking would have to be arranged with Mr. Levy. Mr. Prieditis stated that, as Mr. Rasmussen had stated earlier, the HRA is really going to have to seriously look at the future for the west side of University. He thought they should spend a whole meeting discussing what would be a realistic development for that area. He liked the Lions Club proposal , but he did not want the HRA to mislead them or the public. Mr. Bob Cook stated that surprised him as he was under the impression that there was some kind of overall plan for this area. Mr. Rasmussen stated that even though the Lions Club is an outstand- ing organization, he would suggest they try to develop a major plan before they start piecemealing parcels away. That was why he was not in favor of leasing the hardware store to Clothing Liquidators, Inc. Mr. Prairie stated that at one time, there was a plan for the whole area, divided up into phases. This area was Phase 3. There were two developers who felt they needed all the acreage to make the project viable and it included tying the hardware building into the shopping center. However, after 3-4 years of not being able to get the area developed, the HRA should discuss if there are better uses for that area than was originally proposed. Mr. Boardman stated it was going to take more than a discussion by the HRA to make those determinations. If the HRA really feels they would like to develop a plan for the area, it is going to take a market analysis on that property so they can determine what is and what isn't feasible. With that market analysis, there is the expense of drawing up the plan. It could cost around $20-40,000 and will take time. Before the HRA takes that kind of step, they should discuss it. HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 27, 1983 PAGE 8 Mr. Mike Murphy stated he is the incoming president of the Lions Club. He stated from what he understood, the HRA would first have to come up with a comprehensive management plan which would take time. Then they would have to get a market analysis which could take another six months. It was also his understanding that there was no developer or any financial backing to develop at this time, and a couple of developments have already fallen through. It could be at least five years before anything happens and,in the meantime, the Lions Club could be paying rent and the building would not be sitting empty. He hoped the HRA would take this into consideration. Mr. Prieditis suggested the HRA set up a special meeting to discuss their ideas and plans for this area so they can respond to the Lions Club. The HRA set a special meeting for Wednesday, May 4, 1983. B. Property Acquisition Update 1. Dr. Ryan Automotive (Resolution HRA 6-1983) Mr. Boardman stated the HRA's appraisal was $113,000 on the land with $19,746 for fixtures. That offer was made to Dr. Ryan. His attorney responded recommending condemnation action. Through the quick-take process (90 days), they have worked out an agreement with Dr. Ryan to take the property sooner than that. Mr. Boardman stated they have contract documents they have to meet with Columbia Park Properties. With this process, they will meet those contract documents. MOTION BY MR. RASMUSSEN, SECONDED BY MS. SVENDSEN, TO APPROVE RESOLUTION HRA 6-1983, "A RESOLUTION OF THE HOUSING & REDEVELOPMENT AUTHORITY OF THE CITY OF FRIDLEY DIRECTING CONDEMNATION AND DETER- MINING THE NECESSITY FOR AND AUTHORIZING THE ACQUISITION OF CERTAIN PROPERTY BY PROCEEDINGS IN EMINENT DOMAIN ON LOTS 12, 13, AND 14, BLOCK 4, REE'S ADDITION TO FRIDLEY PARK, 6389 UNIVERSITY AVE. N.E.". UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON PRIEDITIS DECLARED THE MOTION CARRIED UNANIMOUSLY. 2. Community Credit (Resolution HRA 7-1983) MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRAIRIE', TO APPROVE RESOLUTION HRA 7-1983, "A RESOLUTION OF THE HOUSING & REDEVELOPMENT AUTHORITY OF THE CITY OF FRIDLEY DIRECTING CONDEMNATION AND DETER- MINING THE NECESSITY FOR AND AUTHORIZING THE ACQUISITION OF CERTAIN , PROPERTY BY PROCEEDINGS IN EMINENT DOMAIN ON THE LEASEHOLD INTEREST HELD BY COMMUNITY CREDIT CO., 6339 UNIVERISTY AVE. N.E.". UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON PRIEDITIS DECLARED THE MOTION CARRIED UNANIMOUSLY. HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 27, 1983 PAGE 9 Mr. Boardman stated they need to get a leasehold appraisal on Community Credit. Community Credit's objection is that the HRA is hurting their leasehold interest. He stated he has gotten a couple of quotes--one around $900 and one around $800. He would like authorization to proceed with the lowest quote. MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRAIRIE, TO AUTHORIZE THE EXECUTIVE DIRECTOR TO PROCEED WITH THE LEASEHOLD APPRAISAL WITH THE LOWEST QUOTE. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON PRIEDITIS DECLARED THE MOTION CARRIED UNANIMOUSLY. Ms. Svendsen stated it was her understanding that when the HRA bought Gus Doty's building, the HRA paid some additional monies over the appraised value of the property to go for buying out leases to prevent this type of thing from happening. Mr. Boardman stated they will first have to determine if there is any leasehold damage. If there is leasehold damage, they will have to determine if they should go back to Gus Doty with that leasehold damage based on the intent of the sale. 3. Awarding Bids on Sale & Removal of 332 - 64th Ave. N.E. (Resolution HRA 8-1983) MOTION BY MR. PRAIRIE, SECONDED BY MR. RASMUSSEN, TO APPROVE RESOLUTION HRA 8-1983, "A RESOLUTION OF THE HOUSING & REDEVELOPMENT AUTHORITY OF THE CITY OF FRIDLEY APPROVING THE SALE OF THE RESIDENTIAL STRUCTURE AT 332 - 64TH AVE. N.E. AND AWARDING THE BID TO SAFEWAY MOVERS". UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON PRIEDITIS DECLARED THE MOTION CARRIED UNANIMOUSLY. II. GENERAL RESERVE SYSTEM DISCUSSION: Mr. Boardman stated Mark Haggerty and representatives from O'Connor & Hannan and Piper, Jaffray were at the March 10th HRA meeting to make a presentation on the General Reserve System. The HRA gave the authorization to go ahead and prepare materials. He stated he, Mr. Qureshi , and Mr. Inman have been working with Piper, Jaffray and O'Connor & Hannan for the last 3-4 weeks to put a package together. They felt it was best to bring this back to the HRA to discuss Staff's feelings about the General Reserve System. Mr. Boardman stated he would review the purpose of the General Reserve System. Generally, under a normal industrial revenue bond, a company comes in and requests money for development. That money for development comes from indus- trial development bonds (IDB). If they choose to sell those, industrial development bonds are classified as tax exempt bonds and the tax exempt bonds reduce the interest rate. HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 27, 1983 PAGE 10 Mr. Boardman first reviewed the present system of industrial revenue devel- opment bonds to show the similar acharacteristics of the two systems. Under the present system, the City Council approved the bond sale after an in-depth review of the company's financial report. The ID bonds then go to the market as a tax exempt issue. As a part of that issue, the bond holders require (1 ) one year debt service to be deposited with the trustee as security on default. Interest that is generated from that debt service account goes to the property owner for bond payments or other property related costs. In the General Reserve System, the basic principal is the same as a normal IDB except the City/HRA is giving additional security to the bond holders by setting up two reserve pools of funds that could be used in case of any default. This additional security is what allows the bond holders to reduce the interest rate on a particular issue by as much as 2% or allow a rated bond on a project that may not normally be rated. The first reserve pool is made up of those funds that are held as (1 ) one year debt service funds under the normal IDB process. The only difference is that under the general reserve system, all of these funds from the IDB sales are pooled and are used as protection against all IDB' s. This pool of funds are called the "Common IDB fund". If, for example, a company defaults on their IDB, the one year debt service for that company is drawn on first, then, if necessary all other funds in the pool can be drawn on. The more companies involved in the system. the better the security on one single issue. The second reserve pool is called the general reserve fund. This funs is made up of money placed in reserve by the City/HRA from tax increment sources. This pool is called the secondary reserve because it backs up the common IDB fund. The fund is initially established with a minimum amount and a maximum ceiling. As is aoparent with the system, the pool of funds is most important in the early stages until the Common IDB fund is so strong that the secondary system is no longer a factor of security. The minimum reserve is generally $200,000 to $250,000 with a maximum ceiling of five million. The minimum and maximum will be determined by the HRA in the final documents with input from the financial consultants. The general reserve fund is increased in several ways. Initially, the HRA will put in funds from TIF reserves or from a specific project to the minimum amount necessary to operate the fund. From that point on, the HRA will increase the fund based on new project imcome and interest earnings from both the Common IDB fund and the General reserve fund. An example of this, if a company wants to develop in the tax increment district with the system and requires a $1 ,000,000 IDB issue, $100,000 or approximately 10% (1 year debt service) would go to the Common IDB fund. The HRA through Tax Increment would put in $150,000 or 15% of the IDB issue into the General Reserve fund. The $150,000 would come from the TIF bonds that would be sold for assistance as needed. In this situation, we will say that the TIF that is generated by this develop- ment is $500,000. This means that $150,000 is taken for the reserve fund, $350,000 is still available for other assistance as needed for development. The benefit to the company is an overall reduction of interest rated on the IDB issue of approximately 2% (or approximately $200,000 on a $1,000,000 issue) . The benefit to the HRA is that the $150,000 in TIF funds that is put into the general reserve fund is an investment that will eventually be returned to the HRA as the system grows. When the system grows, the general reserve fund HOUSING AND REDEVELOPMENT AUTHORITY MEETING, APRIL 27, 1983 PAGE 11 eventually reaches the maximum ceiling so that TIF funds are no longer needed to support the system. In fact, at that point the HRA will start drawing off any excess funds from the system for use with project development. The example that was shown was with eleven IDB' s equalling $30,000,000 of issues with the upper ceiling of $3,000,000 already reached. The NRA could draw-off between $300,000 and $600,000 per year depending on interest earnings from the common IDB funds. These funds would go back in the HRA for additional . projects. This sytem could provide a long term source of assistance to the City that could continue even after the use of tax increment districts or Industrial Development Bonds. An important issue to now consider is the security that is provided by the system. To do that we have to look at the default stream, or what are the steps and protection that is available if a company defaults on the IDB and TIF bonds. Under the current system with an IDB and TIF bonds sold on a specific development, if the IDB goes into default, the TIF sold on the development based on tax income would fall back on the HRA to carry until the IDB bond holders foreclose on the project and put the project back on the market as a taxed property. The IDB default stream is as follows: 1 . Trustee begins forclosure on building. 2. Trustee begins suit against personal security. 3. One year debt service is drawn off to make bond payments. 4. Building goes to Bond Holders for disposal . In the meantime, taxes are not being paid, so the County after four years, starts tax forfeit procedure. Bond payments fall on the HRA for that period of time until the building is leased or sold. The HRA is highly restricted in its recourse. Under the Reserve System, the company is making monthly payments to the trustee for the City/HRA as owners of the property. The company is removed within 30-60 days in case of default on its lease payment. The City/HRA immediately begins efforts to re-lease or sell the building. In the meantime, the City/HRA begins a personal guarantee suite against the company. Because the reserve system in in place, the City/HRA has several levels of security backing up the default. 1 . First, the Individual IDB one year debt service can be drawn on. 2. Second, the remainder of common IDB fund can be drawn on. 3. Third, the existing general reserve funds can be drawn on up to the amount in the fund. 4. Forth, the building as security would go back to the bond holders. This sytem of security is so solid and gives the City such a quick recourse that it gives the HRA immediate protection on TIF bonds sold for that development. The City/HRA can initiate immediate action to release or sell instead of waiting for the County to foreclose for non-payment of taxes. HOUSING AND REDEVELOPMENT AUTHORITY MEETING, APRIL 27, 1983 Page 12 This is as simple as we can describe a very complex program and looked at it very carefully at staff level prior to presenting it to the HRA and the City. Mr. Inman and Mr. Qureshi are also here in case you have any questions of them about the system. Mr. Prieditis asked Mr. Inman that the system seems too good, are there any negatives to that program that he sees. Mr. Inman responded that the staff has looked at the system wtih O'Conner & Hannon; Piper, Jaffrey & Hopwood; and feels that the system is very sound and as far as he can see, has no negative aspects over the present system. Mr. Boardman stated the City Council discussed this on Monday, April 25, at their conference meeting and approved it informally. At their next meeting, they will be approving a resolution based on those discussions. He stated they are looking for approval from the HRA of the Reserve System process. He stated there is still a lot of work and legal documents to be done, but this would just authorize Staff to work with O'Connor & Hannan. He stated Mr. Commers has approved of the concept of this system, but if the HRA would prefer to wait until their May 12th meeting to give this approval , that was all right. MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRAIRIE, TO PASS RESOLUTION HRA 9-1983 APPROVING THE RESERVE SYSTEM PROCESS AND TO AUTHORIZE STAFF TO WORK WITH O'CONNOR & HANNAN. Mr. Qureshi stated there are some areas regarding the roles of the HRA and the City that will have to be discussed and negotiated between the HRA and the City Council . UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON PRIEDITIS DECLARED THE MOTION CARRIED UNANIMOUSLY. III. MOORE LAKE DISTRICT: A. Request for Assistance by Tom Brickner for Property Development at 6211 Central Ave. N.E. (Memo #83-37 from Executive Director) Mr. Boardman suggested the HRA discussion on this item be tabled until he had gotten more information from Mr. Brickner. B. Request for "Right of Development for '202' Application by St. Phillips Human Services, Inc. Mr. Boardman stated he has given St. Phillips the date of May 12th to come back to the HRA with more information. He stated it looked like the project will be 40 units rather than 60 units because of the number of units HUD is giving out. With tax increment monies, the amount of money the HRA has available is about $310-315,000. The estimates on HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 27, 1983 PAGE 13 the acquisition in the amount of property needed for the project are about $355,000. There is a shortfall in that level and also a shortfall in the actual amount needed--about $25,000 needed for soil correction. Mr. Boardman stated that Judy Lee of the Ebenezer Society asked him if the City Council was going to be giving any block grant monies like they did last time. He told her that at this time there is no commitment for block grant monies. Ms. Lee stated it was necessary for them to have a block grant commitment to even submit an application to HUD. He had suggested they approach the City Council and request block grant monies if block grant monies are available in 1984. That was a question he could not answer. Mr. Boardman stated more information will be coming to the HRA at their May 12th meeting. One question the HRA has to consider is: With 40 units rather than 60, do they still want to proceed with the project? IV. FINANCIAL REPORT: A. Financial Report Mr. Inman stated the HRA had the Cash Flow information Mr. Commers had requested for the new figures on the plaza, the quarterly report, and the unaudited annual report. No action was needed. B. Check Register MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRAIRIE, TO APPROVE THE CHECK REGISTER DATED 4/11/83 IN THE AMOUNT OF $25,911.28 AND CHECK REGISTER DATED 4/12/83 IN THE AMOUNT OF $32,500. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON PRIEDITIS DECLARED THE MOTION CARRIED UNANIMOUSLY. V. OTHER BUSINESS: A. Authorization of Payment for Demolition of Fridley Garage Mr. Boardman stated the Fridley Garage has been demolished and the work has been completed satisfactorily. H & S Asphalt was the low quote on the project. He stated the bill was just received, and he would like authorization to pay $3,750 to H & S Asphalt. He stated this check will show up on the next check register. MOTION BY MR. RASMUSSEN, SECONDED BY MS. SVENDSEN, TO AUTHORIZE PAYMENT OF A CHECK IN THE AMOUNT OF $3,750 TO H & S ASPHALT FOR THE DEMOLITION OF THE FRIDLEY GARAGE. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON PRIEDITIS DECLARED THE MOTION CARRIED UNANIMOUSLY. HOUSING & REDEVELOPMENT AUTHORITY MEETING, APRIL 27, 1983 PAGE 14 ADJOURNMENT: MOTION BY MS. SVENDSEN, SECONDED BY MR. PRAIRIE, TO ADJOURN THE MEETING. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON PRIEDITIS DECLARED THE APRIL 27, 1983, HOUSING & REDEVELOPMENT AUTHORITY MEETING ADJOURNED AT 10:30 P.M. Respectfully submi ted, Lynf� Saba �` ..� Recording Secretary 1 THE CITY OF ! HOUSING .. .., i . € 00 7::jiiiir andSO110 REDEVELOPMENT ...� MEMORANDUM. .41 IDS ,,. 000 AUTHORITY i 60.0000 FRIDLEY ' FROM EXECUTIVE DIRECTOR MEMO NO. 83-46 DATE May 6, 1983 TO ACTION INFO. SUBJECT Housing & Redevelopment Authority PETITION FOR REMOVAL OF 6028-44-62-70-80 OLD CENTRAL FROM MOORE LAKE REDEVELOPMENT DISTRICT • Please see attached information on the above noted request. The property owners concerned with this matter has requested the opportunity to speak with the HRA and present their position on the removal of their property from the Redevelopment and Tax Increment District. The alternatives that the HRA has in this matter are as follows: 1. The HRA can act to retain the property in the district in which no direct action is taken other than responding to the petition. 2. The BRA can act in favor of the petition and start the process to remove the property from the district. This would require public hearings before the HRA & the City Council as an amendment to the overall plan. 3. The HRA can attempt a compromise on this matter either through time delays or first right of purchase. (I have discussed this with the Nelson's Attorney and they were not willing to talk compromise at this point in time) . In any of the above cases, the responsibility for action lies with the Housing & Redevelopment Authority. Any amendment to the plan must be initiated by the Authority. In the establishment of the Redevelopment district, there were public hearings in which decisions were made by both the HRA and the City Council that the properties in question were included in the district. Being in a Redevel- opment District does not mean that the property will be redeveloped or even acquired by the HRA. The Redevelopment District only allows the HRA to set up tax increment districts for the development of projects. Any establishment of additional tax increment projects would require Public Hearings and approval by both the HRA and the City Council. The land area base established in setting up a Redevelopment District gives the Housing & Redevelopment Authority the flexibility that it needs in order to accomplish very complex development packages which include traffic, drainage, and other broad base considerations other than a specific building. Careful consideration should be given prior to any action which might limit that flexibility. 14 PEPIN, DAYTON, HERMAN, GRAHAM & GETTS (H.ARLJ -h. DALTON ATTORNEYS AT LAW' RICHARD L;. I'M' JK. JOHN H HERMAN . 930 LUMBER EXCHANGE KATHIE -, M GRAHAM TEN SOUTH FIFTH STREET MINNEAPOLIS. MINNESOTA 55402 ;f)I 2i3.3"h:;', PHILIP N GETTS .JAMt:'A. PAYNE JOt1^C ht.EHN BRADLEY J.GILL.AN C.AROLYn CHALMERS MENTOR C. "DUKE ADDICKS .1K JONATHAN L.EISENBERG March 1, 1983 M.AK\BETH DORN ROSEMARY HANSEN Mr. Jerrold Boardman Executive Director Fridley Housing and Redevelopment Authority G431 University Avenue N.E. Fridley, MN 55432 RE: Our File No. 1892-02 Dear Mr. Boardman: We represent Mr. and Mrs. Dan Nelson and have met with most of the other persons who reside between Central Avenue and Moore Lake within the Moore Lake Redevelopment District. I have drafted a Petition on their behalf requesting the exclusion of all of the residential property located between Central Avenue and Moore Lake located within both the Moore Lake Redevelopment District and the Moore Lake Tax Increment District. I expect this Petition to be signed and forwarded to you next week, together with the Petitions of other neighbors supporting the Petition of the persons residing in the districts. I understand from our telephone conversation of today that you will be placing this request for exclusion from the districts on the HRA' s agenda for March 10th, as an information item only. I further understand that the HRA may direct you to prepare a staff report and recommendation on this issue for discussion and that there will be a decision made on the Petition at a . later meeting of the HRA. I will not be present at the March 10th meeting but expect one of the Petitioners to be there to monitor the meeting. I would like to meet with you to review the original formation of these districts and discuss my clients' concerns, and will be calling for an appointment in advance of the March 10th meeting. Please let me know if I can provide any additional in- formation. Sincer ly our 141 Mentor C. "Duke" Addicks , Jr. MCA/lme cc: Mr. and Mrs. Dan Nelson 1B CITY OF FRIDLEY PETITION COVER SHEET Petition No. 2-83 Date Received March 8, 1983 object Requesting the Housing and Redevelopment Authority and City Council for the exclusion of the residential properly Tocated befween— Central Avenue and Moore Lake from the existing Moore Lake redevelopment-District and Moore takeTax-Increment uistrict. Petition Checked By Date Percent Signing Referred to City Council Disposition 1C PETITION TO: The Fridley Housing and Redevelopment Authority and the Fridley City Council. From: The Undersigned Persons Residing between Moore Lake and Central Avenue in the Moore Lake Redevelopment District and the Moore Lake Tax Increment District. WE HEREBY PETITION the Housing and Redevelopment Authority and City Council for the exclusion of the residential pro- perty located between Central Avenue and Moore Lake from the existing Moore Lake Redevelopment District and Moore Lake Tax Increment District. • NAME = ADDRESS CelZ&46 JillirFir 66L 2 d,44.61,.• XE). LAFMT AFAM...5r;Ivataretifinii 464i leSO gd1/ 52._ t 6,,gt.) at,/ A F . 444.41.4 f t .u- 6 0 c28 — de,4*a-e N. E 1D PEPIN, DAYTON, HERMAN, GRAHAM & GETTS (114Ki t ATTOK'`C.ls Al LA11 KIS t14ht t, Pt 'I` .IK Witt` It tit 1{.44% 9JU I Mfit F_\l itA-ul 1441til H M 0K4t14`1 TCV' SOL Tit FIF1i STR[t 1 `11",",1 A1'OL "11"`"'t',Of A r,r+-31'= t ;_ t` I'tt,1 ll'N IdTTS 4 4 t'41'`t Attt`. 141 Hr, K144It!Cl J.6ILLA^ t 4tWL1"CHALMEKS Mt`10K c DUNE ADDII 1k•_ 4TMay 5, 1983 J ` HA^LEISEN . BEKI, `14K11ifTii DOR" K `14K1 HANSEN Mr. Jerrold Boardman, Executive Director FRIDLEY HRA 6431 University Avenue N.E. Fridley, MN 55432 RE: Our File No. 1892-01 Dear Mr. Boardman: Enclosed please find a copy of a letter which we have sent to the following members of the Fridley HRA committee: Larry Commers; Walter Rasmussen; Elmars A. Prieditis; Carolyn Svendsen, and Duane Prairie. If you have any questions or comments , please feel free to write or call Mr. Addicks. Very truly yours, PEPIN, DAYTON, HERMAN, GRAHAM & GETTS Jr-hl (14 ' Lisa M. Eliason, Secretary to Mentor C. "Duke" Addicks, Jr. /lme Enclosure r'EF',1 I1ER'1A^ GR:tMA`i lE t....,,. !'N , I t '1!s! I; t,\t. .a!til•.. t,K1t'1" Tl-� �t�t it. `I( T`t ♦ik t "TI"":''V "11s"! ._ ,'AN-'1 .. MLt1" A:'; • ' Gil t 0.0;1-:I1MMM!K' May 5, 1983 Dt.t1( ,I)pl\t\- R �at11� tISr'BLKu "4K1Br,i DOW' C st.`1•00 11VtS[" Mr. Walter Rasmussen 7806 Alden Way N.E. Fridley, MN 55432 RE: Our File No. 1892-01 Dear Mr. Rasmussen: This is to confirm our recent telephone conversation. I represent four homeowners who would like to have their properties excluded from the "Moore Lake Redevelopment Plan. " These persons are as follows: Mr. and Mrs. Dan Nelson, 6080 Central Avenue N.E. The Nelsons also own some rental property next to their home which they would also like excluded. Mr. and Mrs. Thomas A. Gray, 6062 Central Avenue N.E. ; Mr. and Mrs. Edward E. Rush, 6028 Central Avenue I .E. ; and Ms. Gloria J. Wiemann, 6044 Central Avenue N.E. These persons have petitioned the HRA and City Council for this exclusion. The HRA has scheduled a hearing on this for May 12th. At the time the HRA had a public hearing on the "Moore Lake Redevelopment Plan, " your Executive Director , Jerrold Boardman, explained that, and I quote from the minutes of that hearing: "Mr. Boardman stated under State Law in setting up a redevelopment district, there are findings that have to be made by the HRA. Those findings are laid out in the definitions. First of all, the HRA must determine an area is blighted or deteriorated. He read the de- finition of "deteriorated" into the record: 'Deteriorated area means any area, including slum areas with buildings or improvements which, by reason of dilapidation, obsolescence, overcrowding, faulty arrangement or design, lack of ventilation, licht, and sanitary facilities, excessive land u . IF Walter Rasmussen Page 2 May 5, 1983 coverage or deleterious land use or obsolete layout, or any combination of these or other factors are detrimental to the safety, health, morals, or welfare of the community. ' i•Ir. Boardman stated that through testimony at this public hearing, they will be determining the need of the redevelopment district based on a redevelopment project. The redevelopment project under Chapter 462. 421 lays out the criteria by which the HRA can take action within a redevelopment district. That action is generally undertaken to acquire blighted areas or real property for the purposes of removing, preventing , or reducing the blighting factors or the causes of blight. " At that hearing, there was no testimony concerning the existing residences. We will demonstrate at the public hearing on my clients' petition, that their homes are cer- tainly not dilapidated or in disrepair. These single family residences are, in fact, in very good condition and are very nice homes. I would invite you to drive by and take a look at these homes so that you will have a first-hand knowledge of this property. The persons I represent are very concerned and upset about being included in this plan. It seems unfair to hold the threat of the destruction of their homes over their head, especially since it appears unlikely that redevelop- ment of this property is likely to occur in the near future. Also, I believe these homes and the rental properties were wrongfully included in the plan because this area is not "blighted" by any stretch of the imagination. I am asking, on behalf of my clients, that you vote to exclude their property from the redevlopment area outlined in the plan. And, I am also requesting that you by reso- lution agree to notify my clients by U. S. mail of any hearing in the future on the subject of including these properties in the future in any plan. It is costing these homeowners money to get themselves excluded when, it appears to me, they were improperly included in the plan in the first place. _T_�, 1G "2 1):%-7:' tr.:!17% '.� '.li;: iA^ . Walter Rasmussen Page 3 May 5, 1963 Thank you again for your time in talking with me. If you have any more questions, please feel free to Give me a call. Sincerely yours, . PEPIN, DAYTON, HERMAN, GRAHAM Li GETTS MillOglik;401f Mentor C. "Duke" Addicks, Jr. MCA/lme cc: Mr. and Mrs. Dan Nelson Mr. and Mrs. Thomas A. Gray Mr. and Mrs. Edward E. Rush Ms. loria J. Wiemann 4rrold Boardman, xecutive Director Fridley HRA 6431 University Avenue N.E. Fridley, MN 55432 1 : • ,i +sr �, irtfc'r.i.k l . . :1t- _ ..' - ��•' .v (.- �. SII i _f. -...."_,Z.`.-..*: 1 1i II / [ ;PI Di•I airai) :-:V -,,...,-"q t a• oi•::,,. ' a 1 j '•�1F7710%;_. . . •�• _wr: -''a w nw �1 — j L 1 f, v 1',: r...,....7,.....1,1•11-,-...1.i` • ~I,• i t l _ ~•I �,� - }1 ; 1t � 1. •„�� rY + �. �_ .,. ;1 it •.«. , 'o • ., •I k,• i ? JDA' i_.... so:, - 7. • i . ••,K• ilt[ 1 I .r_. 'moi `. .7 .-11-_,_L. .-2:::1.--.17:-.-...:-M_:H. :::12:7:2--.11. - ' f'.. “.:1:.. ilj-- -- (L) —"---.1 f E •~i t' _.! , JJ rte .+ .f.' f . 'I ` - ?rt.. ?CoPEArrY 1 tJ ,,! _ —`~ • ' / ti Quef."T1o� I t 1 -/ r 'i4. r E - ♦ , i • ii • 1 I / �. ; . ---=-----. r- MOORE LAKE • ....•---alt- REDEVELOPMENT PLAN i:. 1AREA1\ - • AREA 2 i rt �/ .�� R t cam_lt , �' AREA 3 o � t i. f �•' '7N.I MYR • A OCI•T .''O E. r` - _.�. 1 --'- r t - — _--. � • • ..._ • -,..........:1".4%.*- �`:i---.— —_-_-_-_—J-:14-1 : t. a` .I •frt•!.t r ..l 7.e./•" ..r t - ��i --•az H i 1 • t t 1J FORE LAKE REDEVELOPMENT PLAN DESCRIPTION OF THE DISTRICT Introduction: The City of Fridley is located along the East Bank of the Missis- sippi River just north of the City of Minneapolis. Fridley is located in the corridor of Anoka County and serves as the passage way between Minneapolis and the North Central Suburbs, and is an important center of development in Anoka County. The City is a first ring Minneapolis suburb and as such developed initially as a "bedroom community" with only neighborhood convenience centers along major access routes creating strip commerical and pockets of incompatible uses. The Moore Lake Redevelopment District is a com- bination of this type of development. District Area: The Moore Lake Redevelopment District is legally described in a separate section of this plan and constitutes the complete land area for the District. DISTRICT ELIGIBILITY A. Authority Under Minnesota State Law, local housing and redevelopment authorities may undertake the redevelopment projects for areas that are deterio- rated. M.S.A. 462.421 Subdivision 11 "Deteriorated areas mean any area, including slum areas with buildings or improvements which, by reason of dilapidation, obsoles- cence, overcrowding, faulty arrangement or design, lack of ventilation, light, and sanitary facilities, excessive land coverage or deleterious land use or obsolete layout, or any combination of these or other factors, are detrimental to the safety, health, morals, or welfare of the community." Local housing and redevelopment authorities may undertake rede- velopment projects that are directed at improving said deteriorated area. (M.S.A. 462.421 Subdivision 13). Minnesota State law permits any work or undertaking. 1. To acquire blighted areas or other real property for the purpose of removing, preventing, or reducing blight, blight- ing factors, or the causes of blight. 2. To acquire open or undeveloped land which is determined to be blighted . . . due to the existence of faulty planning -1- 1I ._ TAX INCREMENT MST. # 1 - - , :;{ 1 ,;,. - REDEVELOPMENT PROJECT :: A• i iri , 0. I IIT.N. _aila . •_„:_lior_z-i:13.:. 3 '+ ;ALM— / C/aP r 3_" -. � It-it 15— I e. . g g i I a ti :1 . i n V. = rk IL fikt ti ff-.... =Ili 1,1:_ iii OXii. ...:414'./ ' iuggi Aims ERR" SIMPlipsp7= a ..tir. K :ii• i 1..., rg: t t 311 7P ! Spirt il,. vo, e- 1 _PillI A eters SIM �'� Zit �!!S !!t I� `o 3C? I'.ajmitAl-z A � . . - A �lcR.: ` i tn; Vit-- rt,�J • A 1aI�A< EA• gal j Y. 1 • �►' - d7. "-w,4115.-"Ai. •�� l �� • }�, i •/, r iQI�.---444, ' d tir t �Tj - e'•t' L-� iii .4-L$L t.:-L-It... --. : r,N ,r0.7.1%6 1. ;*.in dis .-' - rail jyA. 41-'74 2-1f;"414. 7----7- :-: - iO 11:11:W14:-1-nig-i ..• gho ,y , r —.-7. ,,!_:::---,._.._,_-. ".:2*- : 1. pihncs,;.4 .,,l' -14...., ,Illips 1,11.`rr%; i i Aro f r 4 16, : .-..--::: ---_jif-7::--j..-: ..• 'W, ..4"",ia .We pit i Aillt ,_za—,_sar- -.-•-_,M 1110111a141i "-=CPU=-;41 i • i A 6 .--- ... r..._,,...... .1,i. .,• jiiit,-”,..i..c.-4--1,,,,,, 10.-- . v,.e.... w...142, _ - or 7_ A dee_it 70 , T.---:LP-.74-=`' a w'''''-'trit'14-- in.."'Sr. TE_-1 _-_,,, . _- �S �- It �a . _ : _ IRE: -Ta ..Lie . ,,, : '.... ,/.ri1 I. - • .. , ••-or" • / L a 0 5 myIrv ' • Re4per , ., 4 ' .t. ‘.4c` 166------ e aldfr 's-0 144 jil etai. V pie # to n .5 IN uEsT10N • �, e" .;r--- op wax A A IC I .t t.4p,' s 1 _ : IN r2 .4 . W, ' - :'-F• II jimwei i 0 .1 AM,. •: -...... ' :-. Bit'E 4. ittPlir:S1 / AL . • • -_' Pq .I bit ,sft f 7001 . ..-- .woli it fig- ..i.NNW -'. A ='ill It Asit t.int4=aisi--Jit:`�e�`l� wiilei AoS4t,4t �l• V��'t aph°•"� *. : 4 ..701.--ff ig ri• i! . eel _.. tiAfilir -3,..„..„._ , "41.41..45-4 ,. / .- NI, .-40-4,_,..1T),___ - emia. ,„,ca i . as , : - i• ' -"I ..21%). ell A ' • 4 Ati4t4tiV40. Afakit,_ NW..; -4 7F43::: . a_300,- ,., - rill 4 . IO� �"t. i�-i �" XI . �� .3.u,_ w .-4-4.1-1 vi-g-. • agr• iTIT.IMIPMT-AliTIT. girt t11,20 • ri MLA'. stctilko.fiAglika.1. ".• r __:.4 la.:...' t s+r • ..--4 .i. 0., Jar - IT ae.S111A . it \ /. . . -,,,sulak icioNy-- -ii y.arAtilbgtolifi' ti. Znicel5r-14 4") ' nil :a IMO T/I• `t 7R' A 1511M 1K characterized by the subdivision of sale of lots laid out. . . or inadequate size. . . which have prevented normal develop- ment of the land by private enterprise and have resulted in a stagnant and unproductive condition of land potentially useful and valuable. . . 3. To acquire land or space which is vacant,` unused, underused, or inappropriately used. . . B. Eligibility The Moore Lake Redevelopment District is eligible as a publicly as- sisted redevelopment district for the following reasons: AREA 1: 1. There is a severe traffic safety problem at Highway 65 and Rice Creek Road. This intersection is serviced by inadequate frontage roads to the commercial strip centers on both sides of the highway. This intersection presently • carries almost 35,000 vehicles per day and generates a great deal of cross traffic flow through the service drives. The Public Safety Department has recorded an unusually high incident of accidents to both life and property. 2. The Shorewood Shopping Center, Sears Building and Shore- wood Inn, is blighted and suffers from safety hazards due to poor traffic design. The Center is serviced by the Rice Creek Road - Highway 65 intersection and service roads. This creates turning problems within the inter- section stacking area in order to enter the parking fa- cilities. Lack of parking areas at the Shorewood Inn creates congestion on the service road. Further, Shore- wood Shopping Center is poorly designed in terms of traffic circulation within its own parking lot and egress and ingress onto city streets. 3. The land area south and east of the shopping center is largely vacant and underutilized due to poor soil condi- tions. This area is the drainage inlet to Moore Lake which is primarily unstable soil for development. This is the primary purpose that this prime location property is not developed. This property is blighted because of the cost to make this land developable. In addition to the soil problems, the City will be initiating a restora- tion project for Moore Lake which will assess this proper- ty with necessary costs of the project. -2- 1L 4. The shopping area to the west of Highway 65 is blighted due to inadequate design, poor land subdivision and zoning practices. There are tracts of vacant land which are unaccessible due to poor layout of strip commercial . The existing traffic patterns create hazardous condition due to poor parking egress and street design. The vacant land requires substantial land costs due to poor soil conditions. AREA 2: 1. This area is primarily underutilized residential which is blighted due to poor planning, subdivision and zoning practices. The existing structures are small structures on large land tracts. Based on present land subdivision regulation, approximately 80% of the land area would be vacant. 2. The land area just north of Rice Creek Road contains large areas of poor soil conditions as part of the Moore Lake Drainage Basin. Substantial expenditure will be needed in this area to allow for developments. 3. There also is a substantial number of structures which are blighted and require major rehabilitation or removal due to unsafe housing conditions. AREA 3: 1. There is a severe traffic safety problem at Highway 65 and Old Central . This intersection presently carries approx- imately 44,000 vehicles per day and has a confluence of 4 separate collectors (Highway 65, Central Avenue, Moore Lake Drive, Hathaway Lane) and is considered as a safety hazard due to poor traffic design. The Public Safety Department has recorded an unusually high incident of accidents to both life and property. 2. The area adjacent to Hiliwind Road is a large tract of un- developed land which is blighted due to substantial devel- opment costs to correct poor soil conditions. This area is also part of the Moore Lake Drainage Basin and will require renovation as part of the Moore Lake Restoration Project. 3. The area west of Highway 65 is blighted due to underutili- zation of prime commercial land. The area is serviced by poor access through the intersection described in #1 above, which requires substantial modification. This area needs public assistance to encourage development because the present land use has resulted in a stagnant and unproductive condition of land. This land has the potential for con- tributing to the economic development and general welfare of the City. -3- REDEVELOPMENT GOALS AND OBJECTIVES The Fridley Housing and Redevelopment Authority and the Fridley City Council establish the following goals and objectives for the Moore Lake Redevelopment Project. These goals and objectives are an outgrowth of the Fridley Comprehensive Development Plan. A. To redevelop the Shorewood Shopping Area into a Neighborhood Shopping Center to service the surrounding neighborhood population. B. To promote and publicaliy assist the development of the undevel- oped and underutilized property in the Redevelopment District. This shall include the use of Tax increment financing to develop commercial and housing developments. Such assistance may include land "write down" costs, land acquisition and parcel 'assemblage to provide large land tracts for development, property acquisition and clearance for new developments, property acquisition and clear- ance of non-conforming land uses that are near new developments, financial assistance in the provision of public utilities, finan- cial assistance for the provision of necessary site improvements, and such other assistance that is in conformance with State Law. C. To stimulate private investment to stabalize and properly balance the housing supply. D. To increase employment opportunities and employment alternatives through an active program of commercial development in those areas best suited for this development. E. To increase the tax base of the City through cooperation and as- sistance to commercial and housing developers with consideration of full utilization of underutilized residential , commercial and industrial properties F. To provide a plan and continued planning for orderly commercial and residential expansion which allows for the most economical utilization of municipal services. G. To provide development and redevelopment opportunities that will allow for the construction of a variety of residential units and commercial services throughout the Moore Lake Redevelopment Pro- ject which would effectively serve the housing and commercial service needs of the City. H. To designate through official land use controls, areas best suited for residential and commercial development. I. To maintain a healthy, safe environment through out the Moore Lake Project Area. -4- IN J. To provide various forms of financial assistance that are deemed appropriate, legal and acceptable to private enterprise in their development efforts such as industrial revenue fonding, tax ex- empt municipal revenue bonds, or state and federal loan and grant monies. K. To promote sound land use development procedures including area design standards, landscaping and lighting standards, architec- tural review of new developments, and such other standards that may be developed that promotes sound land resource management. L. To continually update development and redevelopment plans, de- sign standards, and other official controls that will promote sound development, redevelopment, health and safety. SPECIFIC GOALS AND OBJECTIVES More specific goals and objectives will be developed with each tax increment financing plan for specific projects in the Moore Lake Re- development District. -5- 1-0 REDEVELOPMENT PLAN The Moore Lake Redevelopment Plan includes all of the goals and objectives included herein plus all other information included in this plan and each tax increment plan as submitted by the Fridley Housing and Redevelopment Authority. The Moore Lake Redevelopment Plan establishes three (3) major areas of redevelopment. Each of these areas will be in- cluded in a project related tax increment plan as required by Minnesota Statutes 1979 Supplement Chapter 273.74. Each plan will require financial findings of feasibility, separate contractural agreements between the City and developers, City approvals of land use, zoning and such other requirements that may be established, and compliance with the goals and objectives of this plan. There may be more than one project for each area as established by the tax increment financing plans. The determination for projects will be made by the Housing and Redevelopment Authority with the approval of the Fridley City Council after careful consideration by the Planning Com- mission. The three (3) areas of Redevelopment are as follows: AREA 1: The land located West of Highway 65 and North of Rice Creek Road including: Maple Lanes Bowling Alley, Chanticlear Pizza, Sinclair Gas Station, Kjeseth Animal Hospital and Moore Lake Funeral Chapel . The land East of Highway 65 north and south of Rice Creek Road including: Shorewood Shopping Center, Sears Surplus Store, Shore- wood Inn and 7 residential homes. The area is suitably located for strong commercial with supporting residential development in the vacant land east of Highway 65. This area shall be referred to as the Shorewood Area. AREA 2: The land located East of Old Central to Arthur Street and North of Rice Creek Road to 66th Avenue N.E. including mostly single family homes. The land South of Rice Creek Road and East of Central in- cluding the unplatted residential land of Auditors Subdivision Number 22 and those large residential tracts as designated by the following addresses: 1490 - 1540 and 1626 - 1632 Rice Creek Road and 6175 Central Avenue. The land West of Old Central north of Rice Creek Road including all of Herwal Rice Creek Terrace and the property south of Sandee's. The Area is suitably located for residential development. This area shall be referred to as the Spring Valley Area. -6- 1 AREA 3: The land located east of Highway 65 and north of I-694 generally located between Polk Street and Filmore Street. The land west of Highway 65 and north of I-694 including the 100 Twin Drive-in. This area is suitably located for commercial development on the western portion with residential development on the eastern portion. This area shall be referred to as the South Moore Lake Area. In each of these areas the Housing and Redevelopment Authority may establish a development prospectus for the development or redevelopment of the proposed land area. The development prospectus shall be in compliance with the goals and objectives of this plan and such other requirements as may be established. The development prospectus may call for the Fridley Housing and Redevelopment Authority to acquire some or all of the property that are a part of this redevelopment plan. The determination of which properties are to be acquired will be based on sound development practices, financial feasibility, needs of the private developer, conformance with the goals and objectives of this plan and such other considerations deemed • appropriate. In each area, a separate tax increment plan will be developed for each project which will become a part of this document. The Housing and Redevelopment Authority and the City Council shall make separate deter- mination on the use of other financial incentives that may assist private enterprise in the redevelopment effort. These financial incentives may include the use of industrial revenue bonding, tax exempt revenue bonds or other Federal and State loans and grant monies. -7- 1Q RESOLUTION NO. 1 - 1981 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF FRIDLEY, FINDING THE FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY'S MOORE LAKE REDEVELOPMENT PLAN IS CONSISTENT WITH THE COMPREHENSIVE DEVELOPMENT PLAN OF THE CITY OF FRIDLEY WHEREAS, the Fridley Housing and Redevelopment Authority has submitted the Moore Lake Redevelopment Plan to the Fridley Planning Commission as per Minnesota Statute, Chapter 462; and WHEREAS, the Fridley Planning Commission has reviewed the Redevelopment Plan to determine consistency of said plan to the Fridley Comprehensive Development Plan. NOW, THEREFORE, BE IT RESOLVED BY THE PLANNING COMMISSION OF THE CITY OF FRI DLEY: That the Moore Lake Redevelopment Plan is consistent with the Comprehensive Development Plan of the City of Fridley and the Commission recommends approval of the plan to the City Council. • PASSED AND ADOPTED BY THE PLANNING COMMISSION OF THE CITY OF FRIDLEY THIS 4th DAY OF MARCH , 1981 . CHAIRMAN - RICHARD HARRIS ATTEST: CITY CL K - SID C. INMAN OO90A/1006A lU RESOLUTION HRA A - 1981 RESOLUTION APPROVING THE MOORE LAKE REDEVELOPMENT PLAN AND FILING OF A PROJECT APPLICATION TO THE CITY COUNCIL OF THE CITY OF FRIDLEY WHEREAS, It is desireable and in the Public interest that the Housing and Redevelopment Authority of Fridley, Minnesota, undertake the Moore Lake Redevelopment Project as outlined in a report titled "The Moore Lake Redevelopment Plan" and dated February 26, 1981 ; and WHEREAS, The Housing and Redevelopment Authority has determined that the area described in the above said plan situated in the City of Fridley, County of Anoka, and State of Minnesota, is that area proposed as the Moore Lake Redevelopment Project area; and WHEREAS, The said Redevelopment Project area is blighted and deteriorated due to economic obsolescence of commercial and residential structures, poor soil conditions, development patters, traffic and parking design and unsightly general conditions; and WHEREAS, The Housing and Redevelopment Authority has determined it is necessary to undertake a Redevelopment project for the purpose of removing, preventing or reducing blight, blighting factors or causes of blight through any work or undertakings as are allowed by MSA Chapter 462. 421 Subdivision 13. WHEREAS, The Housing and Redevelopment Authority has considered the legal requirements of relocating displaced persons and businesses in the Moore Lake Redevelopment Area; and WHEREAS, The Housing and Redevelopment Authority has reviewed the Finance Plan and Acquisition Plan and concurs that said plans are in conformance with state law and overall objectives; and WHEREAS, The redevelopment of the Moore Lake Project area cannot be accomplished without governmental assistance as provided under the Municipal Housing and Redevelopment Act, Chapter 462, and know specifically as a Tax Increment Development Project; and WHEREAS; The Moore Lake Redevelopment Plan will afford maximum opportunity, consistant with the sound needs of the City of Fridley as a whole, for the redevelopment of the project area by private enterprise; NOW THEREFORE BE IT RESOLVED BY THE HOUSING AND REDEVELOPMENT AUTHORITY OF FRIDLEY, MINNESOTA: 1. That the Moore Lake Redevelopment Plan is approved and adopted by the Housing and Redevelopment Authority, and said plan will be financed by tax increments and such other methods as may deemed necessary and desireable; 1R Page 2 -- RESOLUTION NO. HRA 6 - 1981 2. That the Housing Redevelopment Authority shall insure that all relocation shall be in accordance with all appropriate state and Federal relocation requirements; 3. That all real property acquisition shall be determined in accordance to the conditions of the Tax Increment Plans for the district as required by Chapter 273.74 Subdivision 1 of the Laws of the State of Minnesota; 4. That application be made by the Fridley Housing and Redevelopment Authority to the City Council of the City of Fridley for approval of the Moore Lake Redevelopment Project, in the manner required by law; PASSED AND ADOPTED BY THE HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF FRIDLEY THIS 26th DAY OF MARCH , 1981. LARRY COMMERS- CHAIRMAN HOUSING AND REDEVELOPMENT AUTHORITY ATTEST: 11111F // EXECUTI U REC OR - JER D L. BOARDMAN • 0031A/1131A is RESOLUTION NO. 39 - 1981 RESOLUTION OF THE CITY COUNCIL OF FRIDLEY, MINNESOTA APPROV- ING THE MOORE LAKE REDEVELOPMENT PLAN WHEREAS, under provisions of the 1973 Housing and Redevelopment Act, Minnesota Statutes, Section 462, 411 et. seq. , the City Council of Fridley, Minnesota must approve redevelopment projects to be executed by the Housing and Redevelopment Authority of Fridley; and WHEREAS, the Fridley Housing and Redevelopment Authority has determined that a redevelopment project as set forth in the Moore Lake Redevelopment Plan dated February 26, 1981, should be undertaken in the area legally described in said plan, and has made application to the City Council for approval of the project, which application complies with the provisions of Chapter 462 Minnesota Statutes; and WHEREAS, the project and the plan was reviewed and approved by the Fridley City Planning Commission on the 4th day of March, 1981 ; and WHEREAS, the Fridley Housing and Redevelopment Authority has included a relocation plan, redevelopment plan, finance plan, and acquisition plan, as part of the Moore Lake Redevelopment Project; and WHEREAS, pursuant to notice given as required by the provisions of Minnesota Statutes, Section 462.521, the City Council conducted a public hearing regarding the Moore Lake Redevelopment Project; NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF FRIDLEY HEREBY FINDS AND DETERMINES: 1. That the project area is blighted and deteriorated due to economic obsolescence of commercial and residential structures, poor soil conditions, development patterns, traffic and parking design, and unsightly general conditions; and 2. That the execution of the Moore Lake Redevelopment Plan by the Fridley Housing and Redevelopment Authority is authorized by the Municipal Housing and Redevelopment Act, and 3. That the land in the project area would not be made available for redevelopment without the financial aid to be sought. 4. That the redevelopment plan conforms to a general plan for the redevelopment of the City of Fridley. 5. That the Moore Lake Redevelopment Plan will afford maximum opportunity, consistent with the sound needs of the City of Fridley as a whole, for the redevelopment of the project area by private enterprise. 6. That the Moore Lake Redevelopment Project shall require an undetermined number of commercial and residential relocations of which the City shall insure that all applicable State and Federal laws shall be adhered to. Page 2 -- RESOLUTION NO. 39 - 1981 1T 7. That the Moore Lake Redevelopment Project will require real property acquisitions of which the City shall determine on an on-going basis during the implementation phases of the plan, and that all real property acquisitions will be done in conformance with Minnesota law. 8. That the Moore Lake Redevelopment Plan has been reviewed and recommended for approval by the Fridley Planning Commission. • 9. That the Moore Lake Redevelopment Plan and Project as set forth be and hereby is approved; that the City Clerk is hereby directed to file a copy of the Moore Lake Redevelopment Plan with the minutes of the meeting during which this resolution was passed; and that the City Manager is hereby directed to inform, in writing, the Housing and Redevelopment Authority of the approval hereby accomplished. The resolution shall become effective upon passage and without publication. PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY THIS 6th DAY OF April , 1981 . MAYOR - W'ILLIAM J. NEE ATTEST: CITY CLK - SIDNEY C. INMAN • 1231A CITY OF' FRIELEr 2 MEMORANDUM 10: HOUSIN3 AUTHORITY MOM: JERROLD BOAR] AN, EXECUTIVE DIRECTOR SUBJECT: ST. PHILIP'S REQUEST FOR "RIGHT 10 DEVELOP" A PROPOSED 202 PROJECT IN THE PHASE III OF THE FRIDLEY MORE LAKE REDEVELOPMENT DISTRICT MEMO NO. 83-45 DATE: MAY 6, 1983 St. Philip's Human Services, Inc. has requested a "right-of-development" from • the HRA for the above noted project to be located at the southwest corner of Old Central and Rice Creek Road. As you are aware the HRA gave a similar right-of-development to St. Philip's Human Services, Inc. for an elderly project in 1982. Unfortunately, the application did not get any funding from HUD so they were unable to proceed with the project. This year they feel confident that they will be able to get project approval from HUD if they can show that they are covering all objections that they had on last. year ' s application. The project (for units) will support approximately $320,000.00 in tax increment funds. (See attached financial report from Ehlers & Associates, Inc.) Included with this memo is the right-of-development along with other support information on this project. The City Council at their May 2, 1983 meeting has agreed to support this project with $80,500.00 of Community Development Block Grant Funds that was requested by St. Philip's Human Services, Inc. These funds would be combined with TIF funds so that the project would be workable. The determination by HUD on a 202 application would be given in October. The right-of-development and the use of CDBG funds, if granted, should be conditioned on that approval. JB/bd Attachment 3/1/20/24 2A THE CITY OF -7:1;1 HOUSING3 E andAlliiif :: REDEVELOPMENT AUTHORITY ' FRIDLEY ••• May 13, 1983 St. Phillips Human Services, Inc. 6180 Highway #65 N.E. Fridley, Mn 55432 RE: Right to development 202 Project is Phase III of the Fridley Moore Lake Redevelopment Project Dear St. Phillips Human Services, Inc. ; The Fridley Housing and Redevelopment Authority at their May 12, 1983 meeting approved your request for Right to Develop a portion of Phase III of the Moore Lake Redevelopment Project. This approval is based on your preliminary presentation to the Housing and Redevelopment Authority on May 12, 1983, for the minimum development of a 40 unit Elderly/Handicap Housing Project. This approval is also contingent upon the following factors and these contingencies shall only be removed by decision of the Fridley Housing and Redevelopment Authority. 1 . That until final plans are accepted by the Fridley Housing and Redevelopment Authority, (final plans include final architectural drawings, letter of commitment for financing and a signed disposition agreement between the Fridley HRA and St. Phillips Church). St. Phillips Church is acting on its own risk and shall not assume that the Fridley HRA is morally or legally bound. 2. That St. Phillips Church proceed to work on the submission of a 202 applica- tion to the Department of Housing and Urban Development. Approval of site plan by the HRA will require St. Phillips Church to proceed on a schedule of work leading to financial commitment for construction to begin October, 1984. This time period will be extended only by the approval of the HRA. The schedule of work shall be jointly established by the HRA and St. Phillips church upon acceptance of this selection. Each party shall keep the other informed of potential problems and delays. If, in the opinion of the Housing Authority, St. Phillips Church is not proceeding in a timely and positive fashion, or if the application submitted to HUD is denied, the HRA may withdraw this selection. 3. That the selection herein given allows St. Phillips Church exclusive rights within the law to promote, study and plan for the redevelopment of that portion of land area in Phase III generally described as follows: The southwest corner of Central Avenue N.E. and Rice Creek Road N.E. 2B St. Phillips Human Services, Inc. Page 2 May 13, 1983 4. That the HRA shall guarantee St. Phillips Church that they will acquire the necessary property for the project. (The actual site can be redefined based on the actual cost of the site to the HRA provided the site meets the necessary City codes) and sell the project site to St. Phillips Church for the project. The purchase price to St. Phillips Church shall be determined by a Court established or negotiated value on the original acquisition less $320,000 in tax increment funds. (The $320,000 in tax increment funds are based on the development of 40 units with a building value of $1 ,360,000 paying an estimated $47,649.99 in taxes). Other reasonable and legal alternatives for public assistance to the developer shall be explored by the HRA. These funds may be available to write down additional cost on the project. These funds includ, but are not limited to, 1984 Community Development Block Grant funds, addition tax increment funds from the overall district, delayed assessments, donations, etc. 5. That St. Phillips Church agrees to provide the HRA and its staff such plans and financial projections as necessary as determined by the HRA to allow for accurate land use analysis, site plan analysis, financial analysis and legal analysis. 6. It is understood and agreed by St. Phillips Church that this selection may be terminated for cause by the HRA at any time prior to the execution of the disposition agreements and that St. Phillips Church agrees to hold the HRA harmless for any damages or expenses incurred under this selection. Please contact me when it is convenient for you so that we may be able to set up the necessary work schedules so that the project can move ahead in a timely manner, Also, would you sign a copy of the letter enclosed and return it to me so I know that you have received and understood the conditions laid out by the HRA and will proceed in a timely mannor toward final action between yourself and the Fridley Housing and Redevelopment Authority. If you have any questions, or if I can be of assistance to you, please feel free to call me at 571-3450. Sincerely, JERROLD L. BOARDMAN Executive Director Fridley Housing & Redevelopment Authority JLB/de St. Phillips Human Services, Inc. C-83-26 By: PLEASE SIGN AND RETURN 21. EHLERS AND ASSOCIATES, INC. FINANCIAL SPECIALISTS FIRST NATIONAL-SOO LINE CONCOURSE 507 MARQUETTE AVE. MINNEAPOLIS, MINNESOTA 55402 339-8291 (AREA CODE 612) 0 April 29, 1983 Mr. Jerrold Boardman City Planner City of Fridley 6431 University Avenue N.E. Fridley, MN 55432 Dear Jerry: This letter is to confirm yesterday's phone conversation regarding your tax increment project. The bond issue shown below is based on a $46,000 increment received over 17 years with the first full increment collected in 1987 and a 20% increment collected in 1986. Any reinvestment earnings on bond proceeds would augment the dollars available for project expenditure. The bond issue is structured as follows: Construction Cost $ 321 ,100 Legal , fiscal & administrative 12,000 Subtotal 333,100 Less: 20% partial increment received in 1986 (9,200) Subtotal 323,900 2.5 years capitalized interest @ 8.00% 83,000 Proceeds 406,900 Discount allowance 8,100 Total Bond Issue $ 415,000 If you have any questions, please call . Sincerely, EH S & SOCIATES, INC. Richard E. Ehlers REE:nad • 43' KE4 ; 2/ •1�A {r i , t: w� LA 41,1 rW ./ . •-., ,'G3,5t'` nU) - I— ' 3 'z d g . ' X20 °`'/� o �- -� N 2- , s•�� 13g/GkL� � Or� ° ` � ; 33� . � v : y.. 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