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HRA 11/10/1983 HOUSING & REDEVELOPMENT AUTHORITY MEETING THURSDAY, NOVEMBER 10, 1983 7:30 P.M. 4- CITY OF FRIDLEY AGENDA HOUSING & REDEVELOPMENT AUTHORITY MEETING THURSDAY, NOVEMBER 10, 1983 7:30 P.M. Location: Council Chambers (upper level ) CALL TO ORDER: ROLL CALL: APPROVAL OF MINUTES: Housing & Redevelopment Authority Minutes: October 13, 1983 ADOPTION OF AGENDA: 4x INCREMENT PLAN (will be sent separately) /ION'S CLUB PROPOSAL FOR HARDWARE LEASE (information at meeting) (Memo) fMMISSIONER FINDINGS (discussion at meeting on previous material ) FINANCIAL REPORT CHECK REGISTER ADJOURNMENT: CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING OCTOBER 13, 1983 CALL TO ORDER: Chairperson Coroners called the October 13, 1983, Housing & Redevelopment Authority meeting to order at 7:40 p.m. ROLL CALL: Members Present: Larry Commers, Elmars Prieditis, Carolyn Svendsen, Walter Rasmussen Members Absent: Duane Prairie Others Present: Jerrold Boardman, City Planner Sid Inman, Finance Director Dave Newman, City Attorney Jim Casserly, O'Connor & Hannan Jim O'Meara, O'Connor & Hannan Mark Haggerty, 6401 University Ave. N.E. Charles Silverman, 300 First Ave. N. , Mpls. Louis J. Langer, 54 E. Marshland Ave. , West St. Paul Stuart Weitzman, 300 First Ave. N. , Mpls. APPROVAL OF SEPTEMBER 8L 1983, HOUSING & REDEVELOPMENT AUTHORITY MINUTES: MOTION BY MR.PRIEDITIS, SECONDED BY MS. SVENDSEN, TO APPROVE THE SEPT. 8, 1983, HOUSING & REDEVELOPMENT AUTHORITY MINUTES AS WRITTEN. UPON A VOICE VOTE,ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 1. CONSIDERATION OF FRANK SHEAR ASSOCIATES PROJECT (Johnson Printing & Packaging) Continued Item from Sept. 8, 1983, HRA Meeting) Mr. Boardman stated the HRA members had received the contract documents and a resolution document with their agenda materials. At the meeting, the HRA members had received modified documents. He stated Mr. Jim O'Meara and Mr. Jim Casserly from O'Connor & Hannan were at the meeting to point out the modifications and explain the modifications. After a review of the modifications in the contract documents, Mr. Boardman stated he would like the HRA to approve Resolution No. HRA-16-1983 approving and authorizing the execution of a contract for private development with Frank Shear Associates. However, before the approval of that resolution, the HRA must hold a public hearing as outlined in Item #2 of that resolution. HOUSING & REDEVELOPMENT AUTHORITY MEETING, OCTOBER 13, 1983 PAGE 2 Mr. Coroners asked if the City Council had approved the modified project area. Mr. Boardman stated the City Council did approve it, and this property is within the North Redevelopment Project Area. 2. PUBLIC HEARING ON DISPOSAL OF PROPERTY AT 40 - 77TH AVE. N.E. (Frank Shear Associates) Chairperson Commers declared the public hearing open at 8:00 p.m. He stated the HRA was open to any comments with respect to the proposed contract for private development between the HRA and the City of Fridley and Frank Shear Associates, a Minnesota General Partnership. Mr. Boardman stated he had no other comments at this time. The proposal was presented to the HRA at their last meeting. Mr. Commers asked if there was anyone in the audience who would like to address the HRA with respect to this project. Hearing no comments or suggestions, Chairperson Commers declared the public hearing closed at 8:07 p.m. MOTION BY RASMUSSEN, SECONDED BY MS. SVENDSEN, TO APPROVE THE "CONTRACT FOR PRIVATE DEVELOPMENT BY AND BETWEEN THE HOUSING & REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA, AND FRANK SHEAR ASSOCIATES, A MINNESOTA GENERAL PARTNERSHIP". UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. Mr. Boardman stated he would also need a motion approving Resolution No. HRA-16-1983. MOTION BY MR. PRIEDITIS, SECONDED BY MR. RASMUSSEN, TO APPROVE RESOLUTION NO. HRA-16-1983, "A RESOLUTION APPROVING AND AUTHORIZING THE EXECUTION OF A CONTRACT FOR PRIVATE DEVELOPMENT WITH FRANK SHEAR ASSOCIATES". UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. Mr. O'Meara stated he had signature pages for the contract itself that had to be signed. Because the company wishes to get an early start on this project, they are contemplating closing this entire transaction in the next few days. The way they will do it, with the approval of the HRA, is to have all the documents done simultaneously. The development agreement will not be signed by the company and will not become a binding obligation by the HRA until all the deeds both into and out of the Authority have been signed and delivered and because it does obligate the Authority to buy the property. So, they envision a simultaneous transaction in that regard. He stated they were expect- ing the deeds to be available, but apparently the deeds have not yet been HOUSING & REDEVELOPMENT AUTHORITY MEETING, OCTOBER 13, 1983 PAGE 3 prepared. He stated he did have the signature pages for the contract which - require the signature of the chairman and the executive director. He believed the executive director would also be authorized under the terms of the resolution the HRA had adopted as an officer of the Authority to sign the deed of the property back to Frank Shear Associates, and it doesn't negate the necessity of the chairman becoming involved unless his involvement was desirable. Mr. Commers stated that Item #2 of the Resolution stated that "The Board hereby approves the Contract for Private Development and hereby authorizes the Chairman and Secretary of the Board to execute the same on behalf of the Authority..." He stated this should be amended to "the Chairman and the Executive Director" since the HRA does not have a designated secretary of its corporation. MOTION BY MS. SVENDSEN, SECONDED BY MR. PRIEDITIS, TO AMEND ITEM #2 OF RESOLUTION NO. HRA-16-1983 BY DELETING "SECRETARY" AND INSERTING "EXECUTIVE DIRECTOR" FOR THE PURPOSE OF EXECUTING THE DOCUMENTS. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. Mr. Boardman stated the last action needed from the HRA was the authorization by the HRA to transfer $30,000 to a separate account when all documents are signed, sealed, and delivered. MOTION BY MS. SVENDSEN, SECONDED BY MR. PRIEDITIS, TO AUTHORIZE THE TRANSFER OF $30,000 TO A SEPARATE ACCOUNT AT FRIDLEY STATE BANK TO BE HELD IN ACCORD- ANCE WITH THE TERMS OF THE CONTRACT. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MTOION CARRIED UNANIMOUSLY. 3. CONSIDERATION OF SKYWOOD MALL/MOTEL PROJECT: Mr. Boardman stated Mark Haggerty was at the meeting to explain what is going on with the Skywood Mall/Motel project. This project has been before the City Council. This area is also within the pro.iect area that was approved by the City Council . Mr. Commers asked about the time line with the two tax increment districts. Mr. Boardman stated he had included a timetable on the TIF plan for Frank Shear Associates and the Skywood Motel. Over the next month, they are planning on putting together all the necessary documents needed for the HRA's approval on Nov. 10. At the Nov. 10th meeting, with the approval of the documents, the documents will then be sent to the school district and the County. There is a 30-day process where the documents would then be going to the City Council for a public hearing. They intend to have that public hearing on Dec.. 19th. He stated this timetable falls well within the requirements of the State as far as the amount of time necessary to establish a tax increment financing plan HOUSING & REDEVELOPMENT AUTHORITY MEETING, OCTOBER 13, 1983 PAGE 4 once the actual building permit is issued. He stated they have been working _ very closely with Jim Casserly of O'Connor & Hannan on the timing. Mr. Haggerty stated he had brought along a site plan for the HRA to look at. He stated they will be going before the City Council on Monday for the preliminary hearing in industrial development bonds. Mr. Haggerty stated the existing Skywood Mall consists of approx. 67,000 sq. ft. of retail space and another 6-7,000 sq. ft. of enclosed mall area. The intention of the existing owners (10 owners) of Skywood Mall is to enclose the existing mall and upgrade it with a facade. They would add another 10,000 sq. ft. of retail shopping center. To the south and adjacent to the project, they would add a 105-room, two-story, motel , restaurant and courtyard area. To the northwest and adjacent to the property, they would add 20,000 sq. ft. of office building which would be on stilts to allow for parking under- neath. They would take more of the office-oriented tenants out of the shopping center and put them in the office building to allow for more retail space in the shopping center. Underneath the motel would be a 300-person banquet facility. Mr. Haggerty stated they have provided for about 420 parking spaces. The overflow parking will be where the miniature golf is now. Mr. Haggerty stated the City will be putting in a semi-four at 52nd and Central , and there is already a semi-four at 53rd and Central , which he thought would provide plenty of traffic control . He stated he had presented this proposal to the Chamber of Commerce that day and an interesting point was brought up about some of the congestion that exists at 53rd & Central . He had pointed out that with the motel and restaurant closer to 52nd, he felt the new semi-four should help the traffic substantially. Mr. Haggerty stated that one of the things he would like to point out is that they are only adding 10,000 sq. ft. of retail. Most of the motel traffic will be coming in on off hours, so he hoped it would not create that much more of a traffic problem. Mr. Haggerty stated that regarding the financing situation. they are request- ing a $7 million IDB from the City; and, as the HRA was aware, it has been proposed that this area be made part of the tax increment area. His clients are not asking for any additional assistance at this time. They are paving $84,000/yr. now in taxes. He would suspect that with the addition which is going to cost them in excess of $5 million that they were going to be generating another quarter of a million dollars in increment which the City would be able to capture, which he thought would be very beneficial for other development within the City. His clients are fully aware of that factor and have no objec- tion to their increment being used for other projects within the City. Mr. Haggerty stated that if the City gives them the go-ahead, they are pro- posing to break ground in the middle of November. It will take eight months to construct, and they plan to open on July 1 , 1984. HOUSING & REDEVELOPMENT AUTHORITY MEETING, OCTOBER 13, 1983 PAGE 5 _ Mr. Haggerty stated that he had received positive feedback and a lot of encouragement from the Chamber of Commerce. • Mr. Commers asked if any assistance was being requested from the HRA. Mr. Haggerty stated that right now they are not requesting any assistance from the HRA. The only thing that might come up in the future would be some erosion control for the steep hill. There has been some discussion that since this would affect the people on the hill , they might ask for some assistance. The HRA members agreed the project was a very good project for the City of Fridley. Mr. Haggerty stated he was very excited about it. They have worked very lona and very hard at getting this type of project going, but it wasn't until People saw what was happenina in Center City, that this project really got under way. Mr. Rasmussen stated Mr. Haggerty should be commended for the work he has done in gettina development goina in the City. Mr. Commers asked if there was any action needed on this proposal by the HRA? Mr. Boardman stated no formal action is needed at this time. Mr. Commers said that Mr. Boardman should forward the HRA support of the project to the City Council . Mr. Inman stated he would also like to point out that Mr. Hagaerty had met with the residents in the area, and other than for the IDB, he would not have had to do that. 4. CONSIDERATION OF MODIFICATION TO RELOCATION PAYMENT FOR COMMUNITY CREDIT: Mr. Boardman stated that at the Sept. 8th meeting. the HRA had authorized a total of $18,360.54 in payments to Community Credit. An additional $1 ,558.54 was added for relocation because they had received the consultant's report at the meeting. On Sept. 9, Mr. Boardman had discussed the HRA's action with Mr. Hurd. attorney for Community Credit, who indicated he was satisfied with the HRA action with the exception of the cost excluded from the relocation report by Von Klug & Associates in the amount of $854.34. Mr. Hurd felt the move notices of $214.34 and the new signage facia and canisters of $640 as sub- mitted as part of their cost documentation is clearly part of their relocation expenses allowed to the company under law. In further discussions with Mr. Hurd and Mr. Newman, they reached an agreement for payment of $214.34 for the move notices with no reimbursement for sign costs. He would request the HRA authorize this payment to Community Credit. MOTION BY MR. RASMUSSEN, SECONDED BY MR. PRIEDITIS, TO AUTHORIZE A PAYMENT TO COMMUNITY CREDIT IN THE AMOUNT OF $214.34 FOR THE MOVE NOTICES. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THF MOTION CARRIED UNANIMOUSLY. HOUSING & REDEVELOPMENT AUTHORITY MEETING, OCTOBER 13, 1983 PAGE 6 5. CONSIDERATION OF GEORGE M. HANSON COMPANY AS HRA AUDITORS: Mr. Boardman stated the HRA had received a letter of understanding dated Aug. 23, 1983, for the authorization of George M. Hanson Company as auditor for the HRA for the year ending Dec. 31 , 1983. The company is proposing that their services will be limited to $1 ,200 for the year. MOTION BY MS. SVENDSEN, SECONDED BY MR. PRIEDITIS, TO APPROVE THE LETTER OF UNDERSTANDING DATED AUG. 23, 1983, AUTHORIZING GEORGE M. HANSON COMPANY AS HRA AUDITOR FOR THE YEAR ENDING DEC. 31, 1983. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 6. INFORMATION ON LIONS CLUB: Mr. Boardman stated that at the last meeting, the HRA had asked Staff to contact the Lions Club to see if they were still interested in the hardware building. He stated he did contact the Lions Club, and they are still interested. They will try to sit down and discuss this before the end of October, so he hoped to have some information for the Nov. 10 HRA meeting. 7. DISCUSSION ON VON KLUG & ASSOCIATES CONTRACT: Mr. Boardman stated they had a meeting with Von Klug & Associates that day. Because of the late hour of the meeting, they did not have time to put together a memo or resolution. Mr. Newman would explain what went on at that meeting, and if the HRA agreed with what is being proposed. they could make a motion approving it. Mr. Newman stated that. basically, the discussion with Von Klug & Associates centered around the additional work performed without first getting authoriza- tion from the City. He wanted to emphasize to the HRA that at no time did the Staff have any dispute with the quality of the work performed by Von Klug & Associates. They have been totally satisfied with Von Klug's work, and there was no question about whether the hours submitted to the HRA were accurate. Obviously, there was no way of verifying those hours, but there was no doubt on the part of Staff that Von Klug & Associates had put in those hours, and that they had performed a valuable service to the City of Fridley. Mr. Newman stated they are trying to resolve this matter without incurring an excessive amount of legal fees and staff time. So far, the HRA has paid $6,000 to Von Klug & Associates. The contract was for $9,000. In Von Klug's last letter to the HRA, they were requesting a total payment of $13,930. Since then. Von Klug & Associates has done some additional work on the Community Credit, some additional work on Dr. Ryan, and apparently there is more work with Dr. Ryan to finish everything up. Von Klug & Associates is requesting $2,070 for this additional work, so the total amount requested from Von Klug & Associates is $16,000. HOUSING & REDEVELOPMENT AUTHORITY MEETING, OCTOBER 13, 1983 PAGE 7 Mr. Newman stated the proposal is to pay the contract amount agreed upon ($9,000) plus $3,500 for a total payment of $12,500. The rationale behind this is the City first received notice from Von Klug & Associates in March 1983. After that there was an additional billing of $2,480. It was dis- cussed with Von Klug & Associates to split that amount in half ($1 ,240). In addition, there was the $2,070 for additional work since the last billing, which the City and the HRA clearly received notice of. The $1 ,240 plus the $2,070 totals $3,310. They are just adding $190 to make the $3,500. He stated Von Klug & Associates are in agreement with the $12,500. MOTION BY MR. RASMUSSEN, SECONDED BY MS. SVENDSEN, TO APPROVE THE PROPOSAL AS PRESENTED BY MR. NEWMAN FOR A SETTLEMENT IN FULL TO VON KLUG & ASSOCIATES OF $12,500 FOR ALL CLAIMS BY VON KLUG & ASSOCIATES AND FOR ALL SERVICES RENDERED THROUGH DR. RYAN. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THF. MOTION CARRIED UNANIMOUSLY. 8. CHECK REGISTER: MOTION BY MR. PRIEDITIS, SECONDED BY MS. SVENDSEN. TO APPROVE THE CHECK REGISTER DATED OCT. 7, 1983, IN THE AMOUNT OF $157,217.78. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. ADJOURNMENT: Chairperson Commers declared the October 13, 1983, Housing & Redevelopment Authority meeting adjourned at 9:10 p.m. Respectfully submitted, tynne Saba Recording Secretary THE CITY OF �J HOUSING ....� .,. r MEMORANDUM REDEVELOPMENT and AUTHORITY : ; E FRIDLEY FROM EXECUTIVE DIRECTOR MEMO NO. 83-85 DATE November 4, 1983 TO ACTION INFO. SUBJECT Housing & Redevelopment Authority X Lion's Club Proposal for Hardware Lease The Lion's Club Board will be discussing the possibility of leasing the hardware building for their club facility. It is their intent to be at the HRA meeting on November 10th to discuss this item. JLB/de