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HRA 07/14/1983 HOUSING & REDEVELOPMENT AUTHORITY MEETING THURSDAY, JULY 14, 1983 7:30 P.M. City of Fridley AGENDA HOUSING & REDEVELOPMENT AUTHORITY MEETING THURSDAY, JULY 14, 1983 7:30 P.M. Location: Council Chambers (upper level ) CALL TO ORDER: ROLL CALL: APPROVAL OF MINUTES: Housing & Redevelopment Authority Minutes: June 9, 1983 ADOPTION OF AGENDA: CONSIDERATION OF LEASE AGREEMENTS FOR STANDARD STATION 1 - 1K Ao Nt ouvN. CONSIDERATION OF GENERAL RESERVE SYSTEM DOCUMENTS 2 FINANCIAL REPORT 3 CHECK REGISTER 4 ADJOURNMENT: CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING JUNE 9, 1983 CALL TO ORDER: Chairperson Commers called the June 9, 1983, Housing & Redevelopment Authority meeting to order at 7:50 p.m. ROLL CALL: Members Present: Larry Coroners, Elmars Prieditis, Carolyn Svendsen, Duane Prairie, Walter Rasmussen Members Absent: None Others Present: Jerrold Boardman, City Planner Sid Inman, City Finance Director Dave Newman, City Attorney Duke Addicks, 930 Lumber Exchange, Mpls. Lorraine & Dan Nelson, 6080 Central Ave. N.E. Elaine & Thomas Gray, 6062 Central Ave. N.E. Gloria Wiemann, 6044 Central Ave. N.E. APPROVAL OF MAY 121 1983, HOUSING & REDEVELOPMENT AUTHORITY MINUTES: MOTION BY MR. PRIEDITIS, SECONDED BY MR. PRAIRIE, TO APPROVE THE MAY 12, 1983, HOUSING & REDEVELOPMENT AUTHORITY MINUTES. Mr. Commers indicated that on page 14 of the minutes, in paragraph 5 and paragraph 7,"$240,000" should be changed to"$24,000". UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MINUTES APPROVED AS AMENDED. ADOPTION OF AGENDA: Mr. Boardman stated the following items should be added to the agenda: Item #6: "Bid Tabulation for Demolition Project for 6339 - 6389 University Avenue N.E. and Awarding of Bid" Item #7: "Discussion of Community Credit - Presentation by Dave Newman" MOTION BY MR. PRAIRIE, SECONDED BY MS. SVENDSEN, TO ADOPT THE AGENDA WITH THE ABOVE ADDITIONS. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. HOUSING & REDEVELOPMENT AUTHORITY MEETING, JUNE 9, 1983 PAGE 2 1 . CONTINUATION OF DISCUSSION ON MOORE LAKE PETITION: Mr. Commers stated that continued from the last meeting was the discussion of the Moore Lake Redevelopment District, particularly the petition with respect to amending the Moore Lake Redevelopment Plan to delete from it the subject properties contained in the petition. Mr. Boardman stated that after the last meeting, Mr. Newman had prepared a resolution in an attempt to work with the petitioners. If was Staff's recommenda- tion that the HRA enter into this resolution if they so chose. Primarily, the resolution stated that the HRA will give the petitioners written notice of any actions which deal with their properties so the petitioners can attend any meetings. Mr. Boardman stated that at this meeting, Mr. Addicks has presented a substitution for the last page of the proposed resolution. Mr. Commers stated that as he understood it, the proposed resolution as prepared by Mr. Newman, was not acceptable to the petitioners. Mr. Addicks stated that was correct. He stated he was representing the petitioners in this matter. He stated this is the third time they have appeared before the HRA and the second time on this issue. At the last meeting, along with the petitions, they showed slides of the four residences that presently exist in an attempt to demonstrate to the HRA that the initial inclusion of these properties in the redevelopment area was improper. Mr. Addicks stated he believed the inclusion of these properties to be improper because (1 ) the houses are not blighted; and (2) the argument was made by City Staff that because the lots are large and inappropriately laid out and could accommodate more than one residence, that in itself constituted blight under the law. He stated he disagreed with the conclusion legally. Perhaps if these houses were scattered amongst blighted houses, the City might have an argument; but because these are four nice houses isolated on the fringe of the redevelopment area adjacent to each other, he did not believe that legally there was any blight. In any event, there was no evidence presented at the public hearing about a year ago on the condition of the houses, and he felt that was a question the HRA would have to correct before they could proceed with the redevelopment of this property. Mr. Addicks stated the HRA seems to have plans for most of the areas within the other redevelopment areas. There seems to be no formal plan for redevelopment of this area. A condominium proposal has come and gone--a proposal in which the City proposed to spend public money to subsidize luxury condominiums. The neighborhood obviously opposed that, and he felt that, no matter how good a plan there is, any type of development like that would always be opposed by the neighborhood. Mr. Addicks stated the argument was made earlier informally that the HRA should probably hold off on a decision at this meeting on whether or not to exclude this property pending some plans that are going to be developed to give the people more of a clue as to what is going to happen in this redevelopment area. He was HOUSING & REDEVELOPMENT AUTHORITY MEETING, JUNE 9, 1983 PAGE 3 convinced it was an economic problem. They can plan for condos and have a nice plan saying there is going to be a luxury condominium there, but he did not know how that would ever happen. Mr. Addicks stated he did not see the sense or the need to include the petitioners' properties under such nebulous circumstances when there is really no definite proposal or even a tentative proposal or even any ideas on what is to be done with the property. The petitioners want to be excluded from the redevelopment area. The resolution drafted by the City Attorney indicates that the HRA can always move to amend the redevelopment plan to include these properties whenever there are definite plans on what is to be done with the property: "WHEREAS, if the 'petitioners' petition was granted, the 'H.R.A. ' would still be empowered by Minnesota Statute to later amend the Moore Lake Redevelopment Plan to include the 'petitioners' real property...." Mr. Addicks stated he felt the HRA could plan what to do with the property with- out having these properties included and then later when there is a more definite plan for development that the neighborhood can understand, again go through the process to include the petitioners' property. He thought the decision at this meeting to exclude the properties would not be a precedent for including it some years from now when there is a definite proposal or plan. Mr. Addicks stated that concerning being kept informed about the proposal , no matter what action the HRA takes at this meeting, he will be writing a letter to the HRA Chairperson requesting to be kept informed by first-class mail of any agenda items concerning development, and he would expect that request to be honored. There is a case law saying a request like that should not be ignored. Out of fair- ness, he felt the HRA should keep the petitioners informed as to what is going to happen to their homes. Mr. Addicks stated they did not bring in a lot of people in an attempt to keep the meeting as simple as possible. He stated he believed some of his clients may want to make statements, and he thought it was appropriate for them to do so. He stated if the HRA had any questions of him or his clients, they would be happy to answer those questions. Mr. Addicks stated that one other argument presented at the last meeting was the possibility of setting a precedent by letting these four homes out of the redevelop- ment district. He stated there are no other petitions before the HRA for exclusion and this has certainly been publicized in the newspapers so if people were interested in getting out, they would be here. Since no one has petitioned to be excluded, he did not foresee an avalanche of homeowners coming in. He stated that for his clients, everything is nebulous and up in the air; they are not sleeping nights, and the uncertainty of this whole thing is making them physically sick. Mr. Boardman stated it has always been his recommendation and the recommendation of the legal counsel that these properties not be taken out of the redevelopment area. They were added in under a great deal of public hearing process which went through the Planning Commission, City Council , and HRA. The Planning Commission said it met the overall Comprehensive Plan for the City of Fridley. HOUSING & REDEVELOPMENT AUTHORITY MEETING, JUNE 9, 1983 PAGE 4 Mr. Boardman stated Mr. Addicks had stated that these homes were on the fringe of the redevelopment district. He disagreed. He felt these homes are right in the middle of the overall district. One of the HRA's responsibilities in the establishment of the district was to do an overall district--not just for those parcels that are excluded from the district by petition of the residents. Mr. Boardman stated Mr. Addicks had said this would not set a precedent. Mr. Boardman stated he wanted to point out that this district has been in effect for over a year, and these petitioners did not come before the HRA with a petition until a development was proposed in that redevelopment district. He felt that whenever there is a proposal for development, there is the possibility of people petitioning to be out of the district. As long as the HRA is involved in redevel- opment, he felt they were going to have this situation repeated over and over again. Mr. Boardman stated he understood that this was not an easy decision for the HRA to make. If the HRA was uncomfortable with making a decision at this meeting, he would recommend a moratorium be placed on the property for further study. He stated it is easy to say that these properties can be put back into the district at a later time, but that may not be the case. Ten years from now, there may be a problem with these homes (the homes may have different owners, may become dilapidated, or there could be a tornado go through there). He stated the state law may change, and they may never be able to put the property back in if they would want to put it back in. Ms. Lorraine Nelson, 6080 Central Ave., stated she was tired of hearing the words, "might", "maybe", "I don't know". The City does not have plans or any alternate plans for this area. She stated public notices sound good, but she did not know anyone who could interpret what they meant. Whenever she tries to get any information, she always gets the run-around. How do they find out what is going to happen to their homes? • Mr. Addicks stated he worked for the League of Cities for ten years, primarily in the area of land use and land use legislation. It seemed to him that the plans are supposed to be flexible and not be cast in iron. The plan is an on- going process over a period of years. He knew the district was supposed to last another 20+ years , but during that time, the HRA is going to expand in some areas and contract in some areas. If the redevelopment project boundary remains the sane for that length of time, he would be very surprised. He did not believe that taking a parcel out or adding a parcel later was going to make any difference. They are talking about a plan, not a tax increment district which is much harder to amend. Amending the redevelopment plan is a fairly simple procedure, and he HOUSING & REDEVELOPMENT AUTHORITY MEETING, JUNE 9, 1983 PAGE 5 could not see why the HRA was so afraid of providing more flexibility in the plan. Also, he did not see the legislature changing this part of the law which has been around for years and years. Ms. Gloria Wiemann, 6044 Central Ave. , stated her husband has been in the hospital since a few days before she received the letter of this process, so she has been handling all this by herself. She stated she doesn't feel that her home and yard are blighted. She stated she understood that both Mr. Boardman and the HRA have a job to do. In the meetings she has attended, she has always appreciated the concern the members of the HRA and Staff have shown, and she wanted to thank them for that. Mr. Dan Nelson, 6080 Central Ave. , stated he has a contractor interested in buying the front acre of his property for the purpose of building two nice homes. This contractor has been waiting for a decision as to whether they can continue negotiations or not. By postponing this decision, it is working an additional hardship for him. He stated he pays taxes on this land, and he cannot even sell it, so this is something else the HRA should take into consideration in making their decision. Mr. Commers stated as he understood it, the petitioners would like a decision from the HRA on whether they are in or out of the district. Staff has recommended there be a moratorium for a period of six months for the purpose of doing some further study. He was not sure if further study would make the decision any easier. Mr. Prairie stated he had a real problem with keeping the petitioners' property in the district. He could also understand that if they delay this decision, it is a burden on the petitioners. Mr. Prieditis stated he thought a moratorium of six months would only be delaying the decision and it would not be helping anybody. He did not see them having a plan for development even within a year. He still felt that any development can work around something; it is not an absolute. If,by having the petitioners' properties in the district, it is creating so many problems for these families, he did not think they would be gaining that much by keeping the properties in the district. Mr. Rasmussen stated he sympathized with the homeowners. There is nothing worse than having built a home and then not know what is going to happen to it. Me stated he would like to see them have some kind of study done. Even when the district was created, he did not know how much study was actually put into it. Ms. Svendsen stated that Mr. Addicks had a point when he said they do not have a firm plan for this area. As a homeowner, she could understand how the home- owners felt. She stated that when they first talked about the redevelopment area, she thought there were a couple of problems that were involved with the Moore Lake area, and she did not think those problems have been solved. One was the lake itself, and the other was the traffic pattern on Old Central , particularly the intersection at Highway 65 and Old Central. It was her understanding that HOUSING & REDEVELOPMENT AUTHORITY MEETING, JUNE 9, 1983 PAGE 6 those problems were part of the reason why they put this area in the redevelop- ment plan, but not in the tax increment plan, because they really didn't have any plans for developing it but wanted it in the redevelopment plan to try to remedy these two problems that still exist. Ms. Svendsen stated she would like to see more information on a timetable of when they are going to do something with Moore Lake, the street and the inter- section. Mr. Boardman stated those things won't happen until development happens--until they know what they can get into that property. Mr. Addicks stated a study sounds good in principle, but really until they have gotten development to the north, he was not sure if the HRA was going to know how they could best utilize this property or if they even want to utilize it. He did not see a study making the HRA's decision any easier or even changing the facts. By excluding the petitioners' properties, the City would have more time to do a better study. MOTION BY MR. RASMUSSEN, SECONDED BY MS. SVENDSEN, TO GRANT A SIX-MONTH MORATORIUM ON THE PROPERTY TO ALLOW FOR FURTHER STUDIES TO BE CONDUCTED. Mr. Prieditis stated he still did not think they could accomplish much in six months or even a year. He looked at the northern end of the district as the main area they would like to see developed, and he saw the southern end, except for the intersection and the possibility of redevelopment of Old Central , as being of lesser importance. Mr. Prairie stated he had problems with all three of the choices: (1 ) leaving the petitioners' properties in the district; (2) taking the properties out of the district; or (3) delaying for six months to make a study. He did not know if he could vote for any one of those choices. Mr. Addicks stated the HRA will be putting these people through hell if they make the decision to have a study done. He expected a study would just say that the properties should be kept in the plan because of the uncertainties in the future. This area should be of only minor concern to the HRA. They have the whole area to the south and the area to the north to worry about developing. It seemed the HRA should let the petitioners out of the district and then maybe consider putting them back in if that is an appropriate decision based on what- ever development occurs. Ms. Lorraine Nelson stated she wanted to thank the HRA members that came to look at their home. She stated this whole situation has been very psychologically damaging to her. She used to be in good health, but since this has all happened, her health has gone down hill. She stated this lobbying is too much, and she will not wait six months. UPON A VOICE VOTE, RASMUSSEN VOTING YES, COMMERS, SVENDSEN, AND PRIEDITIS VOTING NOI PRAIRIE ABSTAINING, CHAIRPERSON COMMERS DECLARED THE MOTION FAILED. HOUSING & REDEVELOPMENT AUTHORITY MEETING, JUNE 9, 1983 PAGE 7 Mr. Newman stated it seemed to be implied that if the HRA would want to add this property back into the redevelopment plan at a later date, it was relatively simple. He wanted to make it clear that there was no guarantee that that would be the case. Like everything, they are dealing with uncertainties in the future. Mr. Addicks stated he had prepared a new last page to replace the last page of the resolution drafted by Mr. Newman. Basically, the change states that: "it is the intention of the 'H.R.A. ' to exclude the 'petitioners' real property from the Moore Lake Redevelopment Plan and the 'H.R.A. ' hereby directs the Executive Director of the 'H.R.A. ' to take the proper steps to enable the 'H.R.A. ' and City Council to exclude the 'petitioners' real property from the Moore Lake Redevelopment Plan." He stated that if the HRA adopts what he is proposing, they are instructing City Staff to implement that procedure. Mr. Newman stated it was his suggestion that the HRA delete the second paragraph of the page Mr. Addicks had prepared. That paragraph states: "WHEREAS, if the 'petitioners' petition were granted, the 'H.R.A. would still be empowered by Minnesota Statute to later amend the Moore Lake Redevelopment Plan to include the 'petitioners ' real property. If either of these two options were exercised by the 'H.R.A. ' , the 'petitioners' would not be entitled to individual notice other than that the 'H.R.A. ' would only be required to publish in a newspaper of general circulation, notice of a public hearing." Mr. Newman stated this paragraph did not serve any purpose and did not benefit the HRA and he would suggest it be deleted. MOTION BY MR. PRIEDITIS, SECONDED BY MS. SVENESEN, TO APPROVE RESOLUTION NO. PO REMOVE THE RESIDENTIAL PROPERTY LOCATED BETWEEN CENTRAL AVENUE AND MOORE LAKE FROM THE MOORE LAKE REDEVELOPMENT PLAN, WITH THE DELETION OF PARAGRAPH 2 ON THE LAST PAGE OF THE RESOLUTION. Mr. Commers stated that as he understood it, approval of this resolution would initiate the mechanics to have the subject properties excluded from the redevelopment district. Mr. Prairie stated that at one time, the HRA talked about if the properties were removed from the district, there would still be some ability to correct the street if that was deemed feasible? Was that part of this? Mr. Newman stated the City will always retain the right to condemn property, if needed, to expand streets. Depending on the right-of-ways the City presently holds, the City may be able to improve Central Ave. without condemnation. But, if these properties are not in the redevelopment plan, the HRA will not have any power in that area. Mr. Boardman stated they cannot use tax increment monies outside the redevelop- ment district. The redevelopment district is the district that empowers the HRA to spend money within the district. HOUSING & REDEVELOPMENT AUTHORITY MEETING, JUNE 9, 1983 PAGE 8 Mr. Rasmussen stated he still thought it would be appropriate to have a study done so that everyone would know what direction the HRA wants to go with this area. Mr. Prieditis stated there seemed to be the concern that if these properties were excluded from the district that it might be difficult to develop. He did not feel that was true, and he did not see the importance of those properties being in the district to make the development work. UPON A VOICE VOTE, PRIEDITIS AND PRAIRIE VOTING YES, COMMERS, SVENDSEN, AND RASMUSSEN VOTING NO, CHAIRPERSON COMMERS DECLARED THE MOTION FAILED. Mr. Commers stated he was sorry about this, but the HRA did their best and tried to arrive at a decision under very difficult circumstances. They hoped things would work out better in the future. 2. CONSIDERATION OF GENERAL RESERVE SYSTEM: Mr. Boardman stated the HRA had received a packet of information on the General Reserve System. He stated he had included a Reserve Finance System Schedule based on the information received from O'Connor & Hannan. He stated they are looking at taking an action on the "General Reserve Resolutions" and the "Redevelop- ment/Tax Increment Plan Amendment Resolutions" at the HRA's July 14th meeting. Mr. Boardman stated that at the last meeting, the HRA approved the General Reserve System and authorized Staff to proceed with the mechanics to get action going. The City Council also approved the system and right now Staff is doing all the necessary resolutions and mechanics to make the system a more viable system. Mr. Commers stated he had a lot of questions concerning the system, and maybe the way to handle it would be to have a work meeting. One question he had was if the HRA adopts the General Reserve System, does the adoption and approval of this document require the HRA to fund it? Mr. Inman stated, no, with the acceptance of the resolution, not a single dollar will transfer. Mr. Commers asked what the requirement was for the initial deposit of $200,000 (Item B-1 , page 2, of the report from James Casserly, O'Connor & Hannan). He wanted to clarify where these first funds are coming from. Mr. Inman stated that would be the first IDB the HRA sells. At that point in time, the HRA would make the decision as to where the source of funds would come from. He stated it is clear the HRA has the choice of where the funds are to come from to reserve that system. However, he would check with James Casserly and clarify this. HOUSING & REDEVELOPMENT AUTHORITY MEETING, JUNE 9, 1983 PAGE 9 Mr. Commers stated he also had questions about the debt service funds and some of the administration funds, also the requirements of staff. Mr. Boardman stated they won't have the other documents from Mr. Casserly until about June 30. After they have all the documents and have had a chance to review them, he would suggest they sit down at a work meeting, possibly the first part of July. (Ms. Svendsen left the meeting at 9:05 p.m.) MOTION BY MR. PRIEDITIS, SECONDED BY MR. RASMUSSEN, TO CONTINUE DISCUSSION ON THE GENERAL RESERVE SYSTEM WHEN ALL THE DOCUMENTS HAVE BEEN RECEIVED AND REVIEWED. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. Mr. Boardman stated the Reserve Finance System Schedule is not cut and dried. The main thing is that the HRA feel comfortable with what they are doing and what they will be approving. It all takes time. 3. CONSIDERATION OF AGREEMENT WITH TOM RYAN: Mr. Commers stated this was discussed at the earlier pre-meeting with Mr. Qureshi , City Manager. He stated the proposal is contained in a letter dated June 9, 1983, from Mark Haggerty and is signed by Mr. Ryan. As Mr. Commers understood the proposal , the HRA will take Mr. Ryan's present property for $113,000 on the real estate, $24,000 on the personal property, and they will still go forward with the condemnation. In addition, the HRA will allow Mr. Ryan to move into the Standard Station rent-free for 24 months, he will receive a relocation fee, and at the end of the 24 months, the HRA can either re-negotiate with Mr. Ryan or ask him to leave. The HRA would allow the use of the alignment rack, the modeco air compressor, and the 300,000 BTU heating system. MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRAIRIE, TO ACCEPT IN CONCEPT THE PROPOSAL AS CONTAINED IN THE JUNE 9, 1983, LETTER FROM MARK HAGGERTY, AND THAT DETAILED DOCUMENTATION BE WORKED OUT BETWEEN MR. HAGGERTY AND LEGAL COUNSEL FOR THE HRA. Mr. Haggerty stated he is acting as Mr. Ryan's attorney in place of Mr. Feikema who has been unavailable for the past couple of days. Mr. Ryan has looked at a number of other sites, but has not found any that meet his needs. Because Mr. Ryan has been in this location for 22 years, he has a real personal attach- ment for the building. Mr. Haggerty stated that if they can work something out where Mr. Ryan can move out and have something to go into would be in the best interest of everyone. Mr. Ryan is willing to move but not very far away. He felt what they have accomplished in the proposal is a move situation where Mr. Ryan is satisfied, and there are some accommodations that are really not costing the HRA that much more. HOUSING & REDEVELOPMENT AUTHORITY MEETING, JUNE 9, 1983 PAGE 10 Mr. Commers stated it was his understanding that after the move, the alignment rack, the modeco air compressor, and the 300,000 BTU heating system will belong to the HRA and will remain in the Standard Station if Mr. Ryan moves. Mr. Haggerty stated that was correct. Mr. Prairie stated the HRA has been reluctant in Phase 3 to give anyone a lease over 12 years. This would be a commitment for 2 years. Was there any problem with that? Mr. Boardman stated that based on the inactivity in this area, he felt comfort- able that nothing was going to happen for two years and possibly three years. Mr. Prieditis stated the HRA is paying Mr. Ryan for personal property that after two years will probably be worthless. He felt they were giving Mr. Ryan a break that they have not given anyone else, and he hoped this would not set a precedent. Mr. Commers stated what he did not like about this is that Mr. Ryan will not be paying any taxes on the facility for the two years. Mr. Newman stated he had seen this letter for the first time this evening. He would assume the motion was to approve the proposal in concept, thereby instruct- ing Staff to execute the necessary documents. The question asked by Mr. Commers about who will retain ownership of the personal property and some other questions should be spelled out a little more clearly. Mr. Coroners stated he was assuming that by approving the concept, they were not violating any ordinance. Mr. Haggerty stated that if the HRA approves the concepts in the letter, then the Staff and City Attorney can draft the appropriate documents and proceed as quickly as possible. He was not asking them to violate any ordinance. UPON A VOICE VOTE, COMMERS, PRAIRIE' AND RASMUSSEN VOTING YES, PRIEDITIS ABSTAINING, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED. Mr. Commers asked Staff to get the documents together and bring them to the next meeting for signing. 4. FINANCIAL REPORT: Mr. Inman stated Item No. 1 was a progress billing for the Fridley Plaza. The HRA in their cash flow projection anticipated paying $200,000 in May of 1983. As of May 31 , 1983, the progress billing shows $72,720 expended. He had met with Mark Burch, Assistant Public Works Director, and Mr. Burch has suggested they make the transfer of $200,000 as soon as possible because with the additional projections of the billings before the HRA's next meeting, they could be very close to that figure. Therefore, he was requesting the HRA to authorize the transfer of the $200,000 to ensure proper cash flow and that no interest expense accrue. HOUSING & REDEVELOPMENT AUTHORITY MEETING, JUNE 9, 1983 PAGE 11 MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRIEDITIS, TO APPROVE THE TRANSFER OF $200,000 TO COMPLETE THE FRIDLEY PLAZA PROGRAM. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. Mr. Inman stated Item No. 2 was a copy of the expenses due the City of Fridley from the HRA for services rendered from Jan. 1 , 1983, to April 30, 1983, in the amount of $5,442.71. Mr. Inman stated Item No. 3 was the Rent Report from Jan. 1 to May 31 , 1983, as requested by the HRA. Mr. Inman stated they anticipate having the detailed expenditures for January to June 30, 1983, at the HRA's July meeting. including the audited financial report and an updated cash flow based on any payments made In the interim. Mr. Coroners stated the NRA was also supposed to get some kind of breakdown from Mr. Inman with respect to projected administration and personnel costs for the HRA. Mr. Inman stated he had prepared an Hours Audit showing the actual hours charged including time spent at the commission meetings. It was his understanding the HRA wanted an hours audit of what had been spent in terms of staff hours. Mr. Commers stated he would like to see a budget so they can see what is being projected, how the City arrived at the numbers put into the budget for the coming year. That is the $98-100,000 allocated for administrative expenses. He would like to see how it is broken down, both historically for last year and what is being projected for this year. He asked if Mr. Inman made a budget projection for the HRA. Mr. Inman stated they do not make a budget projection per se for the HRA because the law does not require it. He stated they have attempted to project based on the HRA's activity last year and the anticipated additional development north of City Hall and across the street which hasn't taken place yet. Mr. Commers stated he thought the HRA would like to see the data used in arriving at that number and those projections, so the HRA can get a feeling on how much it is costing the HRA in terms of administration dollars and whether or not there are some other types of arrangements that would be feasible in terms of staffing. Mr. Inman stated he would be happy to prepare that information for the HRA's next meeting. 5. CHECK REGISTER: MOTION BY MR. PRIEDITIS, SECONDED BY MR. PRAIRIE, TO APPROVE THE CHECK REGISTER DATED JUNE 7, 1983, IN THE AMOUNT OF $28,959.82. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. HOUSING & REDEVELOPMENT AUTHORITY MEETING, JUNE 9, 1983 PAGE 12 6. BID TABULATION FOR DEMOLITION PROJECT FOR 6339-6389 UNIVERSITY AVE. N.E. AND AWARDING OF BID: Mr. Boardman stated this includes all the Doty property as well as Dr. Ryan's property. MOTION BY MR. PRAIRIE, SECONDED BY MR• RASMUSSEN, TO ACCEPT THE BID FROM TED RENOLLET TRUCKING IN THE AMOUNT OF $12,950. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 7. DISCUSSION OF COMMUNITY CREDIT - PRESENTATION BY DAVE NEWMAN: Mr. Newman stated that, as the HRA was aware, Community Credit was claiming to have a valid leasehold interest. In order to get Community Credit out of the building, the City commenced condemnation procedures and Community Credit is now out of the building. Mr. Newman stated the City was approached this week by Community Credit's attorney asking about the likelihood of a settlement. Mr. Newman stated he told the attorney he would bring this to the HRA to see if there was any likelihood of a settlement. Mr. Newman stated he feels very comfortable that as far as the actual value of the leasehold, there is no value to which Community Credit is entitled to compensation. He felt comfortable that as they proceed through the legal process, Community Credit will be awarded enough compensation. It was the concensus of the HRA that the legal counsel go forward and see what ' can be done. ADJOURNMENT: MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRIEDITIS, TO ADJOURN THE MEETING. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE JUNE 9, 1983, HOUSING & REDEVELOPMENT AUTHORITY MEETING ADJOURNED AT 9:45 P.M. Respectfully submitted, Lynn Saba Recording Secretary lA AGREEMENT OF LEASE THIS AGRElT, made this T day of , 1983, by and between the City of Fridley (hereinafter designated as "Lessor") and Thomas Ryan, d.b.a. Ryans Automotive Clinic, (hereinafter designated as "Lessee") . WITNESSETH : That the Lessor, for and in consideration of the terms, convenants, rents and conditions herein mentioned, to be paid and performed by Lessee, does hereby demise and let unto said Lessee, and the said Lessee does hereby hire and take from the Lessor, the following described premises situated in the City of Fridley, County of Anoka, State of Minnesota, to-wit: Lowell Addition, part Block 12, that part of NW 1/4 of SW 1/4 of Section 14, Township 30, Range 24 described as follows: Canmencing at a point on the North line of said NW 1/4 of SW 1/4 distance 1,043 .58 feet East from NW corner thereof, then Southerly, including N 1/2 of 64 1/2 Avenue NE line adjacent thereto per Ordinance 299, 1/18/65, subject to street and utility easements over Northerly 15 feet to the City, 1972. TO HAVE AND 70 HOLD the same just as they are, without liability on the part of the Lessor to make alterations, improvements or repairs of any kind in and about the demised premises, except as and if otherwise set forth herein, for the term of two years from the day of _, 1983 through and until the day of , 1985 for the following purposes, and for no other purposes, to-wit: Automotive service and repairs. This purpose does not include the sale of gasoline. 1. Lesser agrees to and with Lessor to pay Lessor as and for rent for the - 1 - 16 above-mentioned premises, in monthly installments of ($270.00) Dollars eadi,- in advance on the first day of each and every month during the full term of this Lease at the office of the Lessor, or at such other place as Lessor may in writing designate. In addition to the rent specified in the preceding paragraph (the "base annual rental") , Lessee agrees to provide for and pay the cost of maintaining the parking areas, grounds and sidewalks serving the Leased premises. Such costs shall include lighting, snow removal , line painting and replacmnent of paving, curbs and sidewalks, if necessary. The cost of operation and maintenance shall not include taxes, assessments, or depreciation of the original investment. Further, the lessee shall promptly pay the costs of all utilities, including, but not limited to, electricity, telephone, sewer, water, refuse removal and natural gas. 2. Lessee agrees that it will not sublet the demised premises or any part thereof, and will not assign this Lease or any interest therein. 3. Lessee shall provide or pay for all repairs and maintenance of the pranises including, but not limited to, glass breakage, furnace, hot water heater, air conditioning, plumbing, electrical systems, structural repairs, parking and other exterior maintenance. 4A. Lessee shall at its sole expense procure and maintain comprehensive public liability insurance for the demised premises during the term hereof in the minimum amount of One Hundred Thousand — Three Hundred Thousand ($100,000 -- $300,000) bodily injury and Sixty Thousand - 2 - 1C (860,000) Dollars property damage. Lessee shall provide Lessor with evidence of such insurance prior to occupancy. Lessee shall at its sole expense procure and maintain insurance for its fixtures and equipment within the demised premises. 4B. Lessee to obtain workers compensation insurance. Lessee shall maintain and keep in force all employees compensation insurance required under the laws of the State of Minnesota, and such other insurance as may be necessary to protect Lessor against any other liability to person or property arising hereunder by operations of law, whether such law is now in force or is adopted subsequent to the execution hereof. 4C. Lessee to furnish certificate of insurance. Lessee shall furnish to Lessor, certificate of insurance showing that its liability insurance policies are in full force and effect, and naming Lessor as an insured thereon. The policy shall further provide, that Lessor shall be given a minimum of ten (10) days notice by the insurance company prior to cancellation, termination or change of such insurance. Such policies or duly executed certificates of insurance shall be delivered to Lessor prior to the oornmencement of Lessee's occupancy hereunder and renewals thereof shall be delivered to Lessor at least thirty (30) days prior to expiration of the respective policy terms. 5A. The Lessor consents to allow the Lessee to make the necessary alterations to the said property in the manner necessary for the Lessee to operate his business. The Lessee shall be required to provide all plans necessary for the remodeling to the Lessor and shall get all necessary permits as needed from the City. The Lessor may, upon _ 3 _ 1D request of the Lessee, provide some assistance in these modifications. 5B. Lessee covenants and agrees that it will make no structural change or major alteration without the Lessor's consent, which consent shall not be withheld, providing that the proposed improvements are consistent with the use of the property, do not significantly reduce the value of the property and do not violate any local, state or federal laws; and without first furnishing the Lessor five (5) days' advance written notice outlining the proposed changes or alterations. Upon the City consenting to the alterations, then the City will issue all necessary permits without unreasonable delay. The tenant will not in any manner deface or injure said denised prenises or any pert thereof; and that it will return said prenises peaceably and promptly to the Lessor at the termination of this Lease in as good condition as the same are now in, loss by fire or other hazard or by ordinary wear and tear excepted. The Lessee further covenants that it will promptly pay for any alterations, repairs or maintenance made to the demised property so that no mechanics liens will be filed against the property. In the event, a mechanics lien is filed, the lessee shall have 20 days to pay or in the alternative to post 1 1/2 times the lien amount with the district court in order to contest it. Failure to do either of the above mentioned lien corrections shall be deemed as a default under this lease. In any event, the lessee shall indemnify and hold harmless, the lessor for any and all cost of removing said lien. 5C. The Lessee agrees that upon termination of this Lease, all improvements to the property together with all fixtures, with the exception of the - 4 - lE ten (10) foot garage door and the hoist, shall become the property of the Lessor. In addition, the 300,000 BTU heating system, alignment rack and modeco air compressor, which the Lessee transferred from his prior location at 6389 University Avenue NE, are the property of the Lessor and although the Lessee may have reasonable use of these items, they shall continue to be owned by the Lessor and shall remain with the property upon the termination of this Lease. 6. Lessee agrees that all goods, chattels, fixtures and personal property belonging to said Lessee, which are or may be put into said demised premises, shall at all times be bound with a lien in favor of the Lessor, to be chargeable for all rents hereunder and the fulfillment of all other terms and covenants herein contained, and that in case of default by the Lessee, the Lessor may without notice remove the same or any part of the same in such a manner as the Lessor may choose, and the Lessor shall have the right to sell all or any part of the same at public or private sale, without giving notice to the Lessee of such sale, and to apply the proceeds of such sale first to the payment of the costs and expenses of conducting said sale and caring for and storing such property, and apply the balance, if any, to the amount then due from the Lessee to the Lessor. 7. Lessor shall at all times have the right to enter upon said premises to inspect their condition and at his election to make reasonable and necessary repairs thereon for the protection and preservation thereof, but nothing herein shall be construed to require the Lessor to make such repairs except as may be herein provided for, and the Lessor shall - 5 - 1F not be liable to the Lessee for failure or delay in making such repairs, or for damage or injury to persons or property caused in or by the making of such repairs, or the doing of such work. 8. Lessee agrees to pay for all special requirements for utilities such as gas, steam, water and electricity and for all other alterations, modifications or other services to the devised premises. Charges for any such utilities or services shall be paid by Lessee, and in the event such charges are not paid when due, the same shall constitute a default hereunder on the part of the Lessee. 9. Lessor covenants and agrees with Lessee that upon Lessee paying the rent and additional rent and observing and performing all the terms, covenants and conditions on Lessee's part to be observed and performed, Lessee may peaceably and quietly enjoy the premises hereby danised. 10. In the event that any additional locks or bolts of any kind shall be placed upon any of the doors or windows by the Lessee, or in the event any changes shall be made in existing locks or the mechanism therof, Lessee covenants and agrees that it will, within five (5) days of the installation thereof, furnish Lessor with the necessary keys to give Lessor ingress and egress to said premises. 11. The premises shall not be used for lodging or sleeping or for any immoral or illegal purposes. Lessee covenants that Lessee will not commit or knowingly permit to be committed upon the demised premises any violation of any present or future federal or state law or municipal ordinance, and Lessee specifically agrees that it will not — 6 — 1G sell or distribute intoxicating beverages or liquors and/or drugs on or about the demised prenises. 12. The parties hereto mutually agree that if the demised premises are partially or totally destroyed by fire or other hazards, then Lessor may, but is not obligated to, repair and restore the demised premises as soon as is reasonably practicable, to substantially the same condition in which the demised premises were before such damage. The Lessee may repair the damage as allowed under paragraph 6A at his own expense. In the event the demised premises are completely destroyed or so badly damaged as not to be useable by the Lessee for the purposes herein provided, then this Lease shall be terminable by either party hereto by serving written notice upon the other; and provided, further, that in any event if repairs have not been commenced within thirty (30) days from the date of said damage and thereafter completed within a reasonable time, in no case to exceed three (3) months, this Lease may be immediately terminated by the Lessee by serving written notice upon the Lessor. In the event the demised premises are completely destroyed or so damaged by fire or other hazard that it cannot reasonably be used by the Lessee for the purpose herein provided, and this Lease is not terminated as above provided, then there shall be a total abatement of rent until said premises are made useable. In the event the premises are partially destroyed or damaged by fire or other hazard so that the same can only be partially used by the Lessee for the purposes herein provided, then there shall be a partial abatement in the rent - 7 - 1H corresponding to the time and extent to whidi said premises cannot be used by the Lessee. 13. Except as provided in paragraph 5C, any trade fixtures, equipment and other property installed in or attached to the demised premises by or at the expense of the Lessee shall remain the property of the Lessor and the Lessee agrees that the Lessor shall have the right at any time and frau time to time to remove any and all of its trade fixtures, equipment and other property whidi it may have stored upon or affixed to the demised premises; provided, however, that in the event of such removal Lessee shall restore the premises to substantially the same condition in which the premises were at the time Lessee took possession. 14. In the event that the Lessee shall continue to occupy the demised premises after the expiration of the term of said Lease, such "holding over" shall be on a month to month basis. Either party may terminate said "holding over" by giving the proper notice, as required by Minnesota law, to terminate a month to month tenancy. 15. The Lease shall be subject to the attachment as part of the base of a "Waiver of Rights and Benefits of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of (1970 40 U.S.C. 4601) ". It is understood that the parties have entered into this Lease as an acoomodation to each other in an effort to facilitate the condemnation proceeding of the Lesee's property at 6389 University Avenue NE. Upon the proper termination of this Lease, the Lessee will not be entitled _ 8 _ 1I to any compensation or damages for the termination the Lessee' s leasehold interest. 16. No sign shall be painted or affixed by the Lessee on any part of the outside of the demised premises without prior written consent of the Lessor. In the event of a violation of this clause by the Lessee, Lessor may remove said sign without any liability, and may charge the expense incurred by such removal to the Lessee. The Lessee is permitted to attach his current "Bear Alignment" sign, his present "Dr. Ryan" sign and his current red letters on the exterior of the leased premises. 17. If the Lessee shall make default in any covenant or agreement to be performed by it and if after written notice from Lessor to Lessee, such default shall continue for a period of five (5) days or if the Leasehold interest of the Lessee shall be taken on execution or other process of law or if the Lessee shall petition to be or be declared bankrupt or insolvent according to law, then, and in any of said cases, the Lessor may immediately or at any time thereafter, without further notice or demand, enter into and upon said premises or any part thereof and take absolute possession of the same fully and absolutely without such re-entry working a forfeiture of the rents to be paid and the convenants to be performed by the Lessee for the full term of this Lease and at Lessor's election, Lessor may either lease or sublet such premises or any part thereof on such terms and conditions and for such rents and for such time as the Lessor may be reasonable elect and after crediting the rent actually collected by the Lessor from such - 9 - 1J re-letting on the words in parting such covenants and agreements were used in each separate paragraph hereof and that all of the parties hereto, their respective heirs, legal representatives, successors and assigns, such rental stipulated to be paid under this Lease by the Lessee, collect frau the Lessee any balance renaining due on the rent reserved under this Lease, or Lessor may declare this Lease forfeited and may take full and absolute possession of said premises free from any subsequent rights of the Lessee. That in the event of default by the Lessee, the Lessee shall compensate the Lessor for all reasonable attorneys fees, expenses and costs incurred by the Lessor in either re-acquiring possession of the prcperty or for bringing an action for the recovery of unpaid rent. In the event that the Lessee vacates the premises and defaults in any of the terms of this Lease without giving formal notice of termination of the Lease, the Lessor has a right to re-enter and take possession of the premises. 18. Wherever in this Lease it shall be required or permitted that notice or demand be given or served by either party to this Lease to or on the other, such notice or demand shall be given or served and shall not be cleaned to have been given or served unless in writing and forwarded by mail addressed as follows: To the Lessor: Jerrold L. Boardman, Executive Director Fridley Housing & Redevelopment Authority 6431 University Avenue Fridley, MN 55432 To the Lessee: Thanas Ryan 6390 University Avenue N.E. Fridley, !'V 55432 - 10 - 1K Such addresses may be ganged fran time to time by either party by service notices as above provided. Me Lessor and Lessee agree that all the provisions hereof are to be construed as covenants and agreements. • - 11 - 2 THE CITY OFI. -7:7),01, HOUSING •. •• • •• Airis... and •,, I ••• REDEVELOPMENT '•MEMORANDUM 011b .: 7ii AUTHORITY ••• .SOO •• ii FRIDLEY •••m ••• FROM EXECUTIVE DIRECTOR MEMO NO.83-54 DATE July 8, 1983 TO ACTION INFO. SUBJECT Housing & Redevelopment Authority Amendment Documents for the Redevelopment and Tax Increment Plans - General Reserve System I am including in your envelope copies of the amendment documents for the Redevelopment and tax increment plans necessary to use the General Reserve System. We will be request- ing that the O'Conner, Hannon & Piper, Jaffrey people be at the July 14, 1983 meeting so that we can discuss these amendment documents and the General Reserve Fund Documents that you received at the June 9, 1983 meeting. These are all of the necessary documents and Resolutions required to put the General Reserve System into operation as requested by the HRA on May 27, 1983. We have given City Council all documents as they are presented to the HRA. If the HRA approves the Resolutions, we will be requesting City Council concurrence with the "General Reserve Resolutions" along with Public Hearing and concurrence by the City Council on the plan amendments. JLB/de