HRA 09/08/1983 HOUSING & REDEVELOPMENT AUTHORITY MEETING
THURSDAY, SEPTEMBER 8, 1983 7:30 P.M.
City of Fridley
AGENDA
HOUSING & REDEVELOPMENT AUTHORITY MEETING THURSDAY, SEPTEMBER 8, 1983 7:30 P.M.
Location (Council Chambers (upper level )
CALL TO ORDER:
ROLL CALL:
APPROVAL OF MINUTES:
Housing & Redevelopment Authority Minutes: July 14, l"83
Housing & Redevelopment Authority Minutes: July 21 , 1983
ADOPTION OF AGENDA:
REQUEST FOR CONTRACT CHANGES BY VON KLUG & ASSOCIATES 1 to 1N
(HRA Relocation Consultants)
PUBLIC HEARING ON JOHNSON PRINTING AND PACKAGING COMPANY 2 to 2B
REQUEST FOR IDB ASSISTANCE
CONSIDERATION OF A REDRAFT OF RIGHT OF DEVELOPMENT WITH 3 to 3E
ST. PHILLIPS HUMAN SERVICES, INC.
CONSIDERATION OF NEGOTIATED SETTLEMENT WITH COMMUNITY 4 to 4A
CREDIT COMPANY (Letter from Virgil Herrick)
DISCUSSION ON HARDWARE BUILDING 5 A
CONSIDERATION OF HRA NEWLETTER 6
FINANCIAL REPORT (at meeting) 7
CHECK REGISTER 8 to 8 A
ADJOURNMENT:
1
ID: a ES1 * .— REOBVEUJIRIENT AMR
PIM JET WARM% 'lUrivs DJR8u CF BRA
831BJI : R$XumST PCR INCRIOSE IN coreaucrimmes BY
BILL VON KLUG PCR VON PUG & ASSOCIATES
DATE: AUGUSTS, 1983
We have received a request for an increase to the relocation contract that we
have with Von Rlug & Associates. This request is based on present
expenditures which he claims are over and above the contract cost. I have
turned this matter over to legal counsel for review of existing contracts and
respond. That report will be submitted to you prior to the meeting on August
11, 1983.
I received this request in a letter dated July 27, 1983. At that time, I had
requested a follow-up letter with a complete breakdown of what they felt were
contract hours versus noncontract hours so that we would have the opportunity
to analyze those tasks based on the contract. Instead of the follow-up that I
requested, I received a letter of August 2, 1983. This letter raises some
issues that I feel need direct response. First of all, there has never been
any discussion or authorization from HRA or Staff for additional payments
beyond the $9,000 provided in the contract. The work that was being done by
Van Rlug & Associates was, in my opinion, all part of their normal process for
relocation. If it was any different than this, it was never brought up by Von
Rlug & Associates in our initial meetings or any of the meetings that they had
with Staff or the HRA throughout the process. Mr. Von Klug stated that they
recognized early on and assumed Staff knew that they were doing
noncontractural work. Yet, there was no discussion from Van Klug & Associates
that would lead us to believe there was anything that was not part of the
contract. Mr. Von Klug did advise us that fixture appraisals were not done
for the Fridley Center and that they were needed for the protection of the
HRA. He also offered to contact the appraisers that he knew did fixture
appraisals. These appraisers then contacted me and we selected, based on low
quote, through our normal process. Mr. Von Klug stated that 2 separate events
solidified their change in course. (More extensive site search and the fact
that 2 businesses were put on hold.) There has never been an indication from
Van Aug & Associates as to what is meant by more extensive sight search
efforts or the number that constitutes this claim. We supplied Von Rlug &
Associates with a timetable for the relocation of businesses and at no point
was any business put on hold because of CDBG Funding. In fact, it was not
determined to use CMG until the end of January for the Dr. Ryan building.
A
Mr. Von Aug indicated that they informed the HRA Staff in writing, in March,
and received no response. The notioe to the HRA only consisted of a statement
that they may be having problems. They stated that it was being reviewed and
a contract adjustment may be requested. At that tine, I did follow this up
with a telephone call to Bill Von Aug who indicated that they would work it
out and to disregard the correspondence. With that conversation, we did not
follow-up with any further discussion on this matter which indicated to me
that Mr. Von Aug had worked out any problems that he may have had with the
contract.
MV done primary concern with the contract was to ensure that the contract was being
in a timely manner, not to watch to see if Mr. Von Klug's costs were
exceeding the amount to be provided in the contract. I have no =plaint with
the job being done by Von Aug & Associates. I do, however, have a problem
with making changes to the contract after expenditures are made for items that
should have been brought specifically to our attention in writing prior to
those expenditures. I would not reoasnend that the HRA increase the contract
to $15,000.
JB/bd
3/0/19/9
16
MEMORANDUM
To: Jerry Boardman, Executive Director - H.R.A.
From: David P. Newman
Re : Von Klug Contract
Dated: August 5, 1983
At your request, I have reviewed letters of July
27 , 1983 and August 2 , 1983 , from Von Klug & Associates, Inc .
and your contract of September 17 , 1982. Although the H.R.A.
has the authority to pay this additional sum, it is in no way
legally obligated to do so.
This type of problem is not unusual with consultant
contracts in that the consultant ' s duties are often described
in general terms and the terms used are rarely defined in the
contract . That is the case here. However, since the consultant
is the one who drafted the contract , if any of its terms have
more than one meaning, the Courts generally will interpret
it in favor of the H.R.A.
I have reviewed in detail Section A of the contract
which describes the services that the consultant is to provide,
I have also compared it with the itemization provided by the
consultant, of the work performed. Admittedly, the consultant ' s
description of the work performed is very sketchy. It appears,
though, that almost all , if not all of the work performed falls
within the scope of the contract .
Of particular interest is Paragraph A-8 of the con-
tract . This paragraph outlines the type of work which is not
included in the contract . None of the items which the consultant
claims he should be paid for are described in this section.
1C
Most importantly, I would direct your attention to
Paragraph J of the contract which states that all changes in
the contract must be in writing. At no time has the consultant
sought to amend this agreement in order to cover the additional
services which he has claimed to perform. From the information
you have provided me, the consultant has never even written
to you, until now, to suggest that he was doing any work beyond
the scope of the contract.
The consultant places great reliance on his notice
contained in his invoice of March 23 , 1983 . I would disagree.
The invoice merely states that the situation is under review
and that an adjustment may be requested. It is my understanding
that you talked to the consultant about this matter and he
told you to disregard it . I don' t believe that this is effective
notice but even if it were, only a total of $2 ,480.00 in servic-
es has been rendered since that date.
The consultant has also argued that he was instructed
verbally by the staff to do work beyond the terms of the con-
tract. I question the accuracy of that allegation. I suspect
that what actually happened was that the consultant was asked
by the staff to perform certain services but that there was
never any discussion of whether the work was covered under
the contract . As the consultant stated in his letter of August
2 , 1983 , he assumed that the staff knew the work was beyond
the terms of the contract . It should be noted, though, that the
consultant never verbally or in writing advised the H.R.A.
that this work was not covered by the contract .
I have reviewed the consultant ' s letter of August
10, 1982 , which contained the two proposals. To be candid,
I have great difficulty in determining the difference between
these two proposals. The consultant states that from the beginn-
ing, he could tell that the approved proposal would not work.
This admission, coupled with his failure to notify you of excess
work being performed and the vagueness of the agreement gives
the H.R.A. a good legal basis upon which to deny the consult-
ant ' s claim for fees.
I
Your consultant states that the reason he did not
earlier advise you of the excess hours was because he had your
"best interest" in mind . However, it would not have been necess-
ary to completely stop work once he became aware of the problem.
He merely could have sent a written notice advising you of
the non-contract work. In fact , I believe a Court would require
such a notice.
There are a number of assertions made by the consult-
ant which are either contrary to the terms contained in the
contract or from what you have advised me are misstatements
of fact.
Regardless, I trust that it is not necessary at this
time to enumerate on each of these items, with one exception.
The consultant has argued that if for no other reason than
the fact that he has saved the H.R.A. some money, he should
be provided additional compensation. Again, this position is
unsupported in law. The very reason that you entered into this
contract was because of a belief that he could provide a service
more cheaply or efficiently than the H.R.A. staff could. It
is for this reason that the H.R.A. entered into this agreement
and they are clearly entitled to the benefit of this bargain.
IE
4725 EXCELSIOR BOULEVARD/SUITE 401
MINNEAPOLIS. MINNESOTA 55414 •
' $S12)429-5557 DENVER AREA I3O31 431•S1E3
August 2, .983
Jerrold Boardman, Executive Director
Housing and Redevelopment
Authority of Fridley
6431 University Avenue NE
Fridley, MN 55432
Dear Jerry:
Per your request, the following is a more detailed report on
our activities for the Center City Project. I would like to
begin by reviewing the services the HRA hired us to deliver .
We were to go into each building to be acquired , interview the
tenants on site, estimate the relocation compensation each
could receive, search for several replacement site referrals for
each, and compile individual written reports forwarding the
above.
If anything, our current problem is the result of our putting
our client's welfare (the HRA) ahead of our own. When we com-
piled our proposal, we had ample reason to assume under both
alternatives that the HRA was acquiring trade fixtures, particu-
larly those owned by tenants with the express right of removal .
Not only had staff attended conferences where the importance of
this was discussed, but we had also met with same on this very
topic, along with other acquisition procedures, which we did for
no cost.
Therefore, we could have, when we got on site and found that
fixtures were not being acquired, simply have listed them in
the personal property inventories, secured moving bids, turned
in our reports, and collected our money. But we didn't. Instead ,
We calledthe IL A_staffAnd_snet�gn this.--IDattez— We reviewed leases
to determine the HRA' s exposure. We assisted with the hiring of
afixture_kuraiser on short notice and facilitated his work
whenever possible. We explained applicable requirements to the
HRA staff and also met with the HRA on this matter. We helped
negotiate _fixture_ settlements _with the tenants ; and in one case
we were even forced to draw the Bill of Sale to complete the trans-
Von Klug 6 Associates, Inc. Specialists in Redevelopment Relocation
1F
Mr. Jerrold Boardman, Executive Director
August 2, 1983
Page 2
action on schedule.
Ne secognized._at. the._time_all _of_this_ was happening, particularly
in relation to Lennie's and Magic Swirl, that we were expending
a significant number of hours on non-contractual work. However,
the _stafi_xEgvested our continual involvement; we assumes!_
the staff also knew it was non-contractual; our priority was
to complete the job stasifactorily; and given all of the above
to this point plus the fact that our work saved the HRA far more
than our services cost, we finally assumed it would not be
difficult to receive payment for the extra services rendered.
Perhaps at this point we still could have turned things around
to our contractual services. However, th_e. businesses__were calling
us_regularly about their relocations and had seen us in an ex-
tensive role which would have been difficult to reverse. Remember ,
evaluations are less expensive because we go in and out fairly
quickly rather than establishing an on-going relationship through
to the actual move. Two separate events, though, solidified our
change of course.
First , more ex_tensive_ site search .effprts were_requested by the
HRA staff for Dr. Ryan and Community Credit. Again, this was done
to minimize the HRA's total financial exposure by negating any
future claims for "loss of going concern" by businesses claiming
they had to terminate business for a lack of an adequate replace-
ment site. As a result of our extra efforts not required under
the Uniform Act, it is our opinion that the HRA can successfully
defend itself against any such claims.
Secondly, two businesses were put on hold, since their relocations
were to be funded with CDBG _funds. The fast-track evaluation
method cannot be used in that circumstance; hence our contractual
reference to a tax increment project, wherein the evaluation
method is allowed. The one thing that is stressed in the Uniform
Act is uniform treatment of displacees within a project. It would
obviously not be fair to afford complete service to two businesses
and streamlined services to the rest, particularly when all are
located in the same general area and being displaced for the same
general project. Again, since HRA staff had attended conferences
where this was stressed and we had additionally. talked_ to. staff
on an individual basis.and stressed this concept, we mistakenly
assumed the. staff_knew. the implications__of_ the fgnding,change.
In retrospects perhaps we should_havehalted work to iron out these
differences. Instead we put the HRA'_s objectives ahead- of our
company' s welfare, as we at this point are "out" about $5,000,
and have been carrying $3,000 under our contract since February,
when we exceeded $9,000 in actual hours expended.
Von Klug € Associates, Inc. Specialists in Acquisition/Relocation
•
Mr. Jerrold Boardman, Executive Director 1G
August 2, 1983
Page 3
In March, then, we informed the HRA of the contract discrepancy
via our second invoice for payment. A_copy of this billing is
jQ_$ed; and we note that at n_ o time thereaft_e_r_did_staff .contact
us, or egress surprise_ at_our statement that non-contractual
services were rendered, or note t�iat thele •woulc3_be:any::protaem
in_adjusting our _contract_for the work__actua.11y. requested by
the HRA_ and subsequently completed for same. We sincerely
wish the HRA would have responded to that billing if it disAgreed
Pith —Pkemise, rather than waiting until an additional $4 , 930
had been expended in hourly services and we submitted our
reconciliation in July.
Speaking frankly, the HRA resuested additional services; we did
not exceed the contract without verbal instructions _to_do_so
from staff. We informed the HRA of_ the •situation_ in writing in
Ysaxch� Seceived no response. It is therefore reasonable to
expect payment. However, if additional justification is needed,
it can certainly be found in the dollars our work ultimately
saved the HRA.
Each of these businesses had improved their leased sites with
trade fixtures which they were entitled to remove when they
vacated. The cost to move these fixtures could therefore have
been correctly included in their relocation payments. However ,
we saw that the cost to move the items greatly exceeded their
acquisition value and helped the HRA acquire them at a savings .
Also given, then, for each business is the savings secured ,
i.e. our estimate ofthe
cthee HRAst to mtoethe acquirexthees samedfixturesation,
minus the amount paidby
Lennie's Laundromat $76 , 000
7 , 000
Discount Battery 2 ,000
Dr. Ryan' s 6 ,000
House of Dragon 10, 000
Magic Swirl
As can be seen by the listing, our pointing out this situation and
correcting it saved the HRA an estimated $119, 000. 00. This does
not consider the potentwhetherl tanys fsuchlactionsowerever lsuccessfuigoing
which
concern, regardless of
were negated by our extra site searching.
Our first letter requested that our original proposal of $14 , 500. 00
for full relocation services be accepted and that an additional
$1,500. 00 be alloted for acquisition services. This proposed
on
add-on is less than the estimated 58 hours actually expended
acquisition-related services. However, we seldom hit ourto maximu
um
not-to-exceed figures, as we build in the time necessary
with people to satisfactorily resolve problems. Fridley would
have been no exception, and the savings in relocation were first
applied to acquisition services before determining the add-on
amount.
Von Klug 6 Associates. Inc. Specialists in Acquisition/Relocation
•
Mr. Jerrold Boardman
August 2, 1983
Page 4
Also in computing the amount of add-on, we assumed delivery of
some additional site search hours for Dr. Ryan's and some
additional acquisition hours to review the HRA's parcel files
for documentation as required for CDBG-related projects and to
write a report on same. This was in keeping with our philosophy
of providing complete services to our clients. For example, in
the latter case, technical errors in documenting files can result
in problems with present and future HUD/State funding.
However, given that the HRA is reticent to secure specialized
services, we would propose that our original proposal of $14 ,500
for standard business relocation services be accepted with an
add-on of $500, for a total of $15,000. We will complete the
written relocation claim for the last one business, Dr. Ryan' s,
but will not site search any more for Dr. Ryan's or review
your acquisition files and provide a written report on same. If
you want either of these two non-contractual services , we will need
a letter of authorization for same.
Given that we saved $119,000. 00, and provided complete and uniform
services to all businesses, as specified in our proposal last
fall for $14 , 500, a total contract addition of $6 ,000 and a real
overage of $500 is in our opinion not unreasonable. I will
be glad to meet with the Housing and Redevelopment Authority to
amicably resolve this matter.
Sincerely,
William Von Klu
President
sl
Von Mug 6 Associates, Inc. Specialists in Acquisition/Relocation
Wil WOW. Oft.. diONNb
lI K44 Von Klug E Associates, Inc.
4723 EXCELSIOR BLVD/SUITE•O1
MINNEAPOLIS.MN 514111j
111121 s2�•sss7 INVOICE
DENVER AREA 1!031113s
1- 1� March 23, 1983
Sousing and Redevelopment
Authority of Fridley
Attention: Jerrold Boardman,
Executive Director
6431 UniversityAvenue N.E.
Fridley, MN 55432
RELOCATION SERVICES FOR CENTER CITY PROJECT
Payment is requested in the amount of
$3,000. 00 for relocation services for
the Center City Project. This repre-
sents 67 percent of the total original
contract amount, and the percentage of
completed services exceeds 67 percent.
It should be noted that the original
agreement specified different services
than those which have been and are going
to be required. This situation is current-
ly under review, and a contract adjustment
may be requested. At this time, though,
Von Klug i Associates is definitely due
another payment for its services to date.
$3, 000.00
TOTAL AMOUNT DUE
•
Specialists In Redevelopment Relocation
1
1
ii
4725 EXCELSIOR BOULEVARD/SUITE 401
MINNEAPOLIS. MINNESOTA 55416
1612/929-5597 DENVER AREA 1303 431-5123
July 27 , 1983
Jerrold Boardman, Executive Director
Housing and Redevelopment
Authority of Fridley
5431 University Avenue NE
Fridley, MN 55432
Subject: Agreement for Professional Services dated
September 17 , 1982
Center City Project
Dear Jerry:
Back in August, 1982 , when our company discussed alternatives
for our services for the above-referenced project , twoproposals
were given. One was for a fast-track approach, app
when the work can be done before the businesses are ready to
move and when no Federal (HUD) money is used to finance a por-
tion of the project. The other was for standard relocation
services . No acquisition services were included in either
alternative. The prices quoted were $9, 000 and $14 , 500 respect-
ively; and a copy of our letter in this regard is enclosed for
your easy reference.
The HRA chose the streamline option; and the second enclosure is our
contract for services. The third enclosure is our alternate
contract for standard services. As you can see, our work has
been the standard scope, not the streamlined method. This is our
problem.
To date, we have been paid the first two installments under our
contract totalling $6, 000, leaving a balance owed of $3 , 000.
However , as of May 30 , we have expended 335: hours, which at
$40.00 an hour equals $13 ,410. This is obviously m
o
te
cinaline
with the proposal for standard services as well, p
arconsidering that our work is
almost
exampleanwethat
negotiatedcforstheor
services were also rendered
sale of fixtures to the agency, counseled on the cancellation
'eases, prepared Notices of Displacement, and drew Bills of
Sa
Von Klug 6 As4i1ciates, Inc. Specialists in Redevelopment Relocation
(
Jerrold Boardman, Executive Director
July 27 , 1983.
Page 2
You might remember back to the start of our work that it never
was possible after our agreement to implement the streamlined
method. First, some parcels were released to us for immediate
work and the businesses were already planning their actual
moves, which naturally increases the amount of assistance they
ask from the agency or in this case, us. This is why the stream-
lined method is only practical before the businesses are ready
to move. Second, some were displaced with HUD money. The stream-
line approach is not accepted by HUD and use of two different
methods within the same project area results in non-uniform treat-
ment among the affected businesses. Therefore, all were afforded
the standard, full, on-going assistance program, not just those
displaced by HUD monies. Finally, the streamlined procedure does
not provide an extensive referral search for each individual
business, as does the standard contract. The HRA asked us to
continue to provide referrals for several of the concerns in the
area to assist with their reestablishments.
As noted in our letter of August 10, the major advantage to the
standard method is "that the businesses affected would have
available to them members of our staff to assist them, from the
execution of the contract until displacement , to determine costs
and alternatives to their special needs. The possibility of persons
claiming inadequate assistance from the city in the relocation
process is nil under this procedure. " Also as noted , the major
disadvantage is the cost to the HRA. It is unfortunately not
possible for us to provide standard services at the streamlined
cost.
We are therefore asking for an increase in our contract amount to
$16 , 000 , which is the sum quoted last fall for standard services
and an allotment for the acquisition services provided and for one
review of your acquisition files in the future for compliance
with HUD regulations.
If agreement can be reached on the above, the last detail is how to
make payment for services from September through May for actual
hours expended. Normally, we send a monthly invoice giving the
dates services were rendered, a brief description by the day, and
the number of hours (by quarter hours) expended each day detailed .
However , in this case, with 335+ hours expended it would be a
hardship for us to detail out all these hours. On the premise that
you are generally familiar with the services we have rendered, we
would propose to compile a monthly summary instead of a daily one
which would highlight the major work activities and note the total
hours expended for each monthly period.
With so much money outstanding, I am sure you can understand that
I am anxious to resolve this matter. I will be glad to meet with
you and the HRA if you wish to answer any questions or clarify any
Von Klug 6 Associates, Inc. Specialists in Acquisition/Relocation
Mr. Jerrold Boardman, Executive Director
July 27 , 1983
Page 3
of the above if necessary.
Thank you for your assistance and cooperation.
Sincerely,
A' t1 ton Klug
President
sl
Enclosures
Von Klug 6 Associates, Inc. Specialists in Acquisition/Relocation
11
Monthly Summary of Time
Fridley Center City Project
Each month the following general services were delivered:
1. Telephone calls with businesses
2. Telephone calls with HRA Executive Director
3 . Staff update/coordination discussions
4 . Filework
5. Weekly perusal of MLS commercial listings for site
search
The remainder of this Summary notes the areas in which services
were concentrated each month and the total monthly charge for
general and specific services.
August , 1982 2 Hours
Begin project set-up in office $ 80 . 00
September , 1982 22 .75 Hours
Complete file set-up; meet
with project appraisers;
conduct initial meetings
with Lennie' s, Fridley Auto,
and Community Credit; site
search for Lennie' s $ 910 . 00
October , 1982 62 .25 Hours
Meet with Magic Swirl , House
of Dragon, Community Credit ,
and Lennie' s; meet with
appraisers , HRA Attorney, HRA
Executive Director , movers, and
Lennie' s on Lennie' s negotiations;
work on written monetary claim
for Fridley Auto; site search
for Lennie' s, Magic Swirl , House
of Dragon, and Community Credit;
meet with movers on other
businesses (besides Lennie' s) $2 , 490. 00
November , 1982 80.75 Hours
Negotiate with Lennie ' s, in-
cluding meetings with all parties
detailed above in October;
present report to Fridley HRA;
work on written monetary claim
for Fridley Auto; concentrate
on site search and claim work
for Community Credit; remain in
contact with all businesses and
HRA; site search for most busi-
nesses and meet with them on same $3 ,230. 00
Von Klug 6 Associates, Inc. Specialists in Acquisition;Relocation
-2- ]!J
December, 1982 11.50 Hours
Meet with Fridley Auto; write
House of Dragon; site search $ 460. 00
January, 1983 14.75 Hours
Concentrate on Magic Swirl, in-
cluding the sale of its fixtures
to the HRA and the problems
associated with this case; meet
with the business at least twice
on same; prepare Bill of Sale
for its fixtures $ 590. 00
February, 1983 62. 00 Hours
Concentrate on Dr . Ryan' s,
House of Dragon, and Discount
Battery; complete and submit
written monetary claims for
Discount Battery and for House
of Dragon; site search, par-
ticularly for Dr. Ryan' s, House
of Dragon, and Community Credit $2 , 480. 00
March, 1983 30. 25 Hours
Work on direct moving costs for
Magic Swirl , including bids by
commercial movers; draft letters
to Community Credit; meet with
HRA Executive Director on leasehold
improvements; site search for re-
maining businesses $1 , 210. 00
April, 1983 38 . 50 Hours
Concentrate on replacement
sites for Dr. Ryan; meet with
business on same three times;
also site search for Community
Credit during the month $1 , 540. 00
May, 1983 10.50 Hours
Work on written monetary claim
for Magic Swirl; update with re-
maining businesses; work with
Community Credit on its direct
moving costs $ 420. 00
June, 1983 13. 00 Hours
Finish monetary claim for Magic
Swirl; begin writing one for
Community Credit; meet with both
of these businesses; site search
for Dr. Ryan' s and draft letter to
same; evaluate contract status $ 520. 00
TOTAL EXPENDED TO DATE $13 , 930. 00
PAYMENTS TO DATE $ 6, 000. 00
BALANCE REQUESTED FOR PAYMENT $ 7 , 930. 00
Von KIue 6 Associates, Inc. Specialists in Acquisition/Relocation
2
THE CITY OF r
----ElJmeir HOUSING " ; ` � -'
and ..
•
( . REDEVELOPMENT ...u.. MEMORANDUM ..
AUTHORITY 4 k 3 iii
FRIDLEY
FROM EXECUTIVE DIRECTOR MEMO NO. 83-69
DATE September 1, 1983 TO ACTION INFO.
SUBJECT Housing & Redevelopment Authority X
IDB Request for Assistance for New
Faciltiy at 40 77th Avenue N.E.
We have been successful in attracting Johnson Printing & Packaging Company
to Fridley. They have acquired the option on the property at 40 77th Avenue
N.E., where they plan on building a 100,000 sq. ft. facility with approximately
100 employees. We are still working on the details of the project which will
be discussed at the September 8, 1983 meeting. Attached is a location map
of the property that they have optioned.
JLB/de
2B
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HOUSING AND REDEVELOPMENT ADMIX= MEMO NO. 83-58
PROS: JERRY BONNIUM, Hx(ITriVB DIRH4`m a' BRA
SUBJECT: PROPOSED ('iICel BY ST. PHILIP'S HUMAN SERVICW, INC.
DR2E: JULY 14, 1983
I have been approached by Howard Helgen of St. Philip's Human Services, Inc.
on the possibility of their entering into an option agreement for the Moore
View Project property with Max Soliterman. Mr. Helgen has discussed this with
Max and has come to a tentative agreement on an overall purchase price of
$300,000 ( per sq. ft.). It is my understanding that Max has agreed to
correct any oblens with the soil for the project as part of the proposed
agreement. 2.0(r
After discussing this with Mr. Helgen, I met with Virgil Herrick and JoAnn
Wright (CMG co-ordinator for Anoka County) to determine what the overall
effects of the option would have on the "right-of-development" agreement of
the HRA and the CDBG Funds committed by the City Council for the project
specifically as it relates to the purchase agreement not based on an appraisal
of the property.
Ms. Wright stated that there are no problems with the use of CDGB Funds in
regard to an appraisal since the option would be entered into by a private
organization and not a public agency. An appraisal is only required when
purchasing entity is a public agency. The CDBG Funds could be given directly
to St. Philip's Human Services, Inc. to assist the project based on the
purchase agreement.
Mr. Herrick also noted that the HRA can use tax increment finance funds to
purchase property without appraisals and can give funds directly to St.
Philip's Human Services, Inc. However, the Housing Authority has, in almost
all cases, approved acquisition or negotiation for acquisition based on an
appraised value. If St. Philip's Human Services, Inc. enters into an option
agreement with Mr. Soliterman, they have essentially removed the BRA from the
direct acquisition of the property. The assistance that they would be
requesting then would be a direct payment of funds to them so that they could
acquire the property frau Max directly. St. Philip's Human Services, Inc. has
made it clear that they will not be able to put any money in land acquisition
in order to make the project feasible. They also feel that the option would
give them maximm consideration for BUD approval of the project.
JB,/bd
cc: Nasim Qureshi
John Flora
Sid Inman
3/0/19/6
3A
August 11, 1983
Ms. Judy Lee
St. Philip's Human Services, Inc.
6180 Highway 65 N.E.
Fridley, MN 55432
Re: Redraft of the right to develop 202 Project in Phase III of the
Fridley Moore Lake Redevelopment District
Dear Ms. Lee:
The Fridley Housing and Redevelopment Authority, at their August 11, 1983
meeting, approved the redraft of your request for right to develop a portion
of Phase III of the Moore Lake Redevelopment District. This approval is based
on your option on the property presented to the HRA on August 11, 1983 as well
as 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 St. Philip's Human Services, Inc. proceed to work on the submission
of a 202 Application to the Department of Housing and Urban Development.
Approval of the site plan by the HRA will require St. Philip's Human
Services, Inc. to proceed on a schedule of work leading to contract
documents which shall be entered into no later than April 1, 1984 , with
financing committment for construction to begin in October, 1984. This
time period will be extended only by approval of the HRA. The schedule of
work shall be jointly established by the HRA and St. Philip's Human
. Services, Inc. upon acceptance of this selection. Each party shall keep
the other informed of potential problems and delays. If, in the opinion
of the HRA, St. Philip's Human Services, Inc. is not proceeding in a
timely and positive fashion, if financing and scope of the project is
substantially changed from the preliminary proposal, or if the application
submitted to HUD for this project is denied, the HRA may withdraw this
selection.
2. That the selection herein given allows St. Philip's Human Services, Inc.
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:
3B
Page 2
St. Philip's Human Services, Inc.
August 11, 1983
The Southwest corner of Central Avenue NE and Rice Creek Road
NE also described as that part of Lot 17, Auditor 's
Subdivision No. 88 being that part of the Southwest quarter of
Section 13, T30, R24 Anoka County. (Approximately 2.92 acres)
3. That the HRA shall guarantee, in support of the option agreement that St.
Philip's Human Services, Inc. has entered into for the purchase of the
property, that they shall provide assistance for that acquisition in the
amount of $2.20 per square foot. (Approximate value $279,829 for 2.92
acres) This does not, however, preclude St. Philip's Human Services, Inc.
from requesting additional assistance from the HRA for soil correction or
other needed public improvements. Nor does it obligate the HRA to commit
additional sums. The total HRA assistance, including future cammittments,
shall not exceed $320,000 or that value of tax increments generated based
on the development of 40 units with a building value of $1,360,000, paying
an estimated $47,649 in taxes. In no way does this right of development
obligate St. Philip's Human Services, Inc. to expend any funds for land
acquisition.
Other reasonable and legal alternatives for public assistance available to
the developer shall be explored by the HRA. These funds may be available
to write down additional costs on the project. These funds include, but
are not limited to, CDBG funds, additional tax increment funds from the
overall district, delayed assessments, donations, etc.
4. That St. Philip's Human Services, Inc. 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.
5. It is understood and agreed by St. Philip's Human Services, Inc. that this
selection may be terminated for cause or in accordance with the terms of
this document by the HRA at any time prior to the execution of the
contract documents and that St. Philip's Human Services, Inc. agrees to
hold the HRA harmless for any damages or expenses incurred by St. Philip's
Human Services, Inc. under this selection.
Please 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 manner toward final action between yourself and the
Fridley HRA.
7(`
Page 3
St. Philip's Human Services, Inc.
August 11, 1983
If you have any questions or if I can be of any assistance to you, please feel
free to call me at 571-3450.
Sincerely.
Jerrold L. Boardman St. Philip's Human Services, Inc.
Executive Director Representative
Fridley Housing and
Redevelopment Authority By
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HERRICK & NEWMAN, P.A.
VIRGIL C. HERRICK ATTORNEYS AT LAW 6279 UNIVERSITY AVENUE N E
DAVID►.NEWMAN FRIDLEY. MINNESOTA 55432
JAMES E. SCHMECK►E►ER 571-3850
August 18, 1983
Mr . Jerrold L. Boardman
Executive Director
Fridley Housing and Redevelopment
Authority
Fridley City Hall
6431 University Avenue Northeast
Fridley , Minnesota 55432
RE: Community Credit Co .
Dear Jerry:
Enclosed please find a copy of a letter that I received from
Mr . Brian J . Hurd . Please note that they have agreed to
settle the claim for leasehold damages for the sum of $16 , 802 . 00 .
I would suggest that the HRA accept this offer . Please send
me a copy of the settlement agreement that you have been
using or that you propose to use for Community Credit Co . ,
so that I might forward the same to Mr . Hurd .
If you have any questions , give me a call .
Sincerely,
VCH : JJH Virgil C. Herrick
Enclosure
„ co...1.4s /IA
ty1y
\ ctNsJCOMMUNITY CREDIT CO.
EXECUTIVE OFFICE
3101 West 69th Street
Edina,Minnesota 3S435
Phon..920.9270
August 12, 1983
Mr. Virgil Herrick
HERRICK & NEWMAN, P.A.
6279 University Avenue N .E.
Fridley, Minnesota 55432
Re: Fridley HRA vs . Community Credit Co.
Dear Mr. Herrick,
We disucssed by telephone the terms under which Community
Credit Co. would agree to settle the lawsuit. Under the
terms , we would receive the following amounts :
Leasehold fixtures & improvements $12,752 . 00
Leasehold damages 3 ,750 . 00
Appraisal fees 300 . 00
$1b,b02 . 00
We would specifically reserve our right, however, to claim
further amounts for relocation and related expenses which are
not covered by the payment for fixtures and improvements.
Our offer is also contingent upon our approval of the form of
any document that you require us to sign in connection with
the payment for fixtures and improvements .
Please communicate our offer to the HRA and advise us of
their response. Since the hearing before the Commissioners
is scheduled for September 7th, it will be necessary for us
to begin preparing for the hearing during the week of August
22nd .
Yours truly, �
•
Brian J. 'Hurd
Law Department
BJH:sz
5
11415 CITY OF 4
7----Jimeir HOUSING •• Aend ,� .,. I . € :c
DO
•
REDEVELOPMENT ..,� MEMORANDUM
(\\Nt AUTHORITY ::000 *OD
DOD •
E 6 3
FRIDLEY .....ft
FROM EXECUTIVE DIRECTOR MEMO NO. 83-56
DATE August 5, 1983 TO ACTION INFO.
SUBJECT HARDWARE BUILDING Housing & Redevelopment Authority
This item has been continued for a number of meetings since the request
from the Lions Club for use of that building. I feel that it is essential
to discuss the use of the building so that I can respond to the Lions on the
direction of the HRA. As indicated to you at prior meetings, the leasing of
the building for short term retail at $3 per sq. ft. will be very difficult .
We have talked to Jim Benson of Benson & Malkerson who does commercial leasing
in this area. He indicated that the market for that size of space is nearly
non-existant.
JLB/jh
6
THE CITY OF j.
L ...
HOUSING I �,
and ••
(4,1111. REDEVELOPMENT MEMORANDUM
AUTHORITY :_• E k •••
FRIDLEY •"'"• •
FROM EXECUTIVE DIRECTOR MEMO NO. 83-70
DATE September 1, 1983 TO ACTION INFO.
SUBJECT Housing & Redevelopment Authority X
HRA Newsletter
As was discussed with each of you on the phone, we will be developing a
newsletter/yearly report for the HRA to mail out to Fridley residents on
HRA activities.
We hope to have a rough draft for your review and approval at the September
8, 1983 meeting.
JLB/de
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