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HRA 11/08/1984 HOUSING & REDEVELOPMENT AUTHORITY MEETING THURSDAY, NOVEMBER 8, 1984 7:00 P.M. CITY OF FRIDLEY AGENDA HOUSING & REDEVELOPMENT AUTHORITY MEETING NOVEMBER 8, 1984 7:00 P.M. Location: Council Chambers (upper level ) CALL TO ORDER: ROLL CALL: APPROVAL OF MINUTES: Housing & Redevelopment Authority Minutes: OCTOBER 11 . 1984 ADOPTION OF AGENDA: CONSIDERATION OF AN AGREEMENT BETWEEN THE HRA AND HEARTLAND REALTY INVESTORS, INC. , OWNER OF HOLLY SHOPPING CENTER 1 - 1F FINANCIAL STATEMENT 2 CHECK REGISTER 3 OTHER BUSINESS: ADJOURNMENT: • CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING OCTOBER 11 , 1984 CALL TO ORDER: Chairperson Commers called the October 11 , 1984, Housing & Redevelopment Authority meeting to order at 7:03 p.m. ROLL CALL: Members Present: Larry Commers, Elmars Prieditis , Carolyn Svendsen, Duane Prairie Members Absent ; Walter Rasmussen Others Present: Nasim Qureshi , HRA Director Sid Inman, City Finance Director APPROVAL OF AUGUST 9, 1984, HOUSING & REDEVELOPMENT AUTHORITY MINUTES: MOTION BY MR. PRIEDITIS, SECONDED BY MR. PRAIRIE, TO APPROVE THE AUGUST 9, 1984, HOUSING & REDEVELOPMENT AUTHORITY MINUTES AS WRITTEN. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. 1 . CONSIDERATION OF APPROVAL OF LEASE BETWEEN THE CITY OF FRIDLEY AND THE HRA FOR THE HARDWARE BUILDING: Mr. Qureshi stated the Staff had presented some initial information on this at a previous HRA meeting. The City now has a formal letter from the Holly Shopping Center owners releasing the City from its lease for the liquor store. That has triggered the City's ability to move out of Holly into the old hard- ware building. He stated the City is now looking into how the building can be upgraded and adjusted to suit its needs for a warehouse liquor store. The City has laid out some terms for the lease, and it is the City's hope that the liquor store could be open for business by December of this year. Mr. Qureshi stated that when this was discussed before, the HRA seemed agreeable to this approach. The City's only request would be that the HRA approve a lease with the City when they actually start conducting busi- ness in the building. Mr. Qureshi reviewed the terms outlined in Mr. Inman's memo dated Oct. 3, 1984: 1. The City of Fridley Liquor Stores have agreed to rent approx. 8,500 sq. ft. of the hardware store at a cost of $2.50 per square foot. HOUSING & REDEVELOPMENT AUTHORITY MEETING, OCTOBER 11 , 1984 PAGE 2 2. The length of the lease will be 2 years. 3. There will be one year extension after the initial 2 years. 4. The HRA agrees to pay 1/3 of the improvements per year up to 3 years if they (HRA) terminate the lease before the end of the 3 year period. 5. There will be no relocation fees. 6. The liquor store will pay for the heat, light, water, upkeep, and maintenance. Mr. Qureshi stated that if the HRA was in general agreement with these terms, he would put together a formal lease to be presented to the HRA for its approval. The HRA members were in general agreement with the terms of the lease with the City for a municipal warehouse liquor store in the hardware building. 2. CONSIDERATION OF DEVELOPMENT AGREEMENT WITH NEW HOLLY CENTER OWNERS: Mr. Qureshi stated he would give the HRA some background on what has been happening with the new Holly Center owners. He showed the HRA members the overall plan the City has been working on with the owners of Holly. Mr. Qureshi stated• that at the last meeting, he had reported to the HRA that the City was working with the owners of Holly to apply for a low interest HUD loan. The application was submitted; but, unfortunately, they did not get the grant application approved by HUD. Mr. Qureshi stated the owners of the Holly Center and the HRA Staff still feel they should still work toward achieving the goal they set out to achieve in upgrading the center. Mr. Qureshi stated one of the improvemnts is facade and signage improvement. The estimate for improving the facade and signage is $200,000. That was the amount of the HUD loan the owners of Holly had applied for, but didn't receive. Mr. Qureshi stated they had discussed before that the Phillips Station was in poor repair, tended to hide the Holly Center, and area-wise was very small (14, 300 sq. ft.) They had discussed eliminating the Phillips Station and the service road in order to open up the view to the Center, compliment what they are trying to do with the Center, and allow us to take more right-of- way for traffic improvement. Mr. Qureshi stated they would like to carry the same walkway system theme and landscaping theme from the Center City area into the Holly Center. HOUSING & REDEVELOPMENT AUTHORITY MEETING, OCTOBER 11 , 1984 PAGE 3 Mr. Qureshi stated that presently the City is carrying a value for the Holly Center of $1.5858 million for 82-83-84. He has asked the owners of Holly if they would be willing to upgrade the value of the center, after all improvements, to $2.5 million. Once they have almost a million dollar increment generated by the increase in value, that would bring in almost $40,000 in increased taxes. Mr. Qureshi stated the owners of Holly Center are willing to put in $200,000 on the building, $50,000 in other improvements, and about $50,000 in improve- ments they are willing to accept as assessments, so they are willing to put in almost $300,000 in upgrading the Center. They are willing to accept almost a million dollar increase in value, which gives about $40,000 per year in increased taxes. Mr. Qureshi stated one approach would be the removal of the gas station and service road and the redoing of the parking lot which would cost the HRA about $150,000. Other improvements along Mississippi might cost about another $100,000. If they do get the $40,000 in increased taxes, that amount could be recovered in 5-6 years. Mr. Qureshi stated the improvements are not necessarily just for Holly Center. It includes the traffic improvements that are for the general public. It also provides the theme they want to continue in this area. Mr. Qureshi stated he was proposing that the owners of the Holly Center pur- chase the gas station. The HRA would purchase the gas station from the owners of Holly. Then the HRA would sell the property back to the owners of Holly about 9,000 sq. feet in finished form, retaining 4,500 sq. ft. of the 14,300 sq. ft. for additional turning lane, sidewalk and landscaping. Mr. Qureshi stated these improvements would be done in four different phases. Mr. Qureshi stated he was looking for some direction from the HRA that they were in agreement with the general concept of the points discussed so that Staff could proceed to put together a development agreement with the owners of Holly Center. Mr. Prieditis stated he was in agreement with the general concept. He felt it would certainly add to the whole area, not just the shopping center. Opening up that northwest corner was going to make it more pleasant for all four corners and might attract interest in the southwest corner. He stated he liked the idea, and it would solve some of the traffic problems at this intersection. Ms. Svendsen agreed with Mr. Prieditis that it was more than just the aesthetics. They know they have to do something with that corner. It definitely needs modification to the intersection to help the traffic flow. She felt that was an important part. Also, removing the gas station would open up the area from all directions and would show off what is being done. She agreed that the concept was excellent. HOUSING & REDEVELOPMENT AUTHORITY MEETING, OCTOBER 11 , 1984 PAGE 4 Mr. Prairie stated he thought it was a good idea, assuming they have adequate funds to not back them into a corner should something else come up later. Mr. Commers stated he was in agreement with the other HRA members and would authorize the Staff to proceed to negotiate a development agreement and bring it back to the HRA for approval . Mr. Qureshi stated that when the HRA was doing the plaza, they had chosen four architects and given each $1 ,000 to come up with plans from which the HRA had selected one for the plaza. He stated Staff had discussed using this same technique to get ideas for a design for the intersection. He stated it was one of the most critical intersections in the City, because of the traffic, it is a central location, and the focal point they are trying to create for the whole development. Staff was recommending holding a contest for 2-3 months and offering $1 ,000 for first prize, $500 for second prize. They could invite art schools, sculpture schools , schools of architect, colleges, etc. , to enter. Mr. Prieidits stated he thought the contest was a good idea. It would also be good publicity for the City. The HRA members were in agreement with the concept of running a contest. 3. FINANCIAL STATEMENT: Mr. Commers asked Mr. Inman to review the financial statement from Jan. 1 ,1984, to Oct. 11 , 1984. He stated the members could review it further and approve it at the next meeting. 4. CHECK REGISTER: MOTION BY MR. PRIEDITIS, SECONDED BY MR. PRAIRIE, TO APPROVE THE CHECK REGISTER DATED OCT. 5, 1984, IN THE AMOUNT OF $106,578. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. ADJOURNMENT: Chairperson Commers declared the Oct. 11 , 1984, Housing & Redevelopment Authority meeting adjourned at 8:20 p.m. Respectfully submitted, v-X-4, >,h/A-eft- ynn Sata Recording Secretary 1 LETTER CFLIDERSTArD l NG BE 11rEEN THE FEW C ERS CF HOLLY SHOPPING CENu R, -EARvrf ��•�� p 1 S,l I STAv 5 gRS�� 0 V I,EMT At� ET-IFIN REA TY FR 1 DL�f }-IQIE I NG A�'�D RECEVELCPh'F1�1T AI,lTHCR I TY, HEREAFTER CALLED FRAD THIS LETTER CF LkDERSTANDING, ONCE INITIALED BY BOTH PARTIES, WILL BE FORMALIZED INTO A FORMAL AGREEMENT. WHEREAS, THE OWNERS ARE INTERESTED IN UPGRADING THE HOLLY SHOPPING CENTER; AND WHEREAS, THE HRA HAS INCLUDED THIS PROPERTY IN THE FRIDLEY CENTER CITY REDEVELOPMENT PLAN AND IT IS THE DESIRE OF BOTH PARTIES TO UPGRADE THE CENTER TO MAKE IT A MORE VIABLE SHOPPING CENTER FOR THE CM/UNITY; AND WHEREAS, THE MISSISSIPPI STREET AND UNIVERSITY AVENUE INTERSECTION IS CONGESTED AND IN NEED OF ADDITIONAL RIGHT-OF-WAY TO MAKE TRAFFIC IMPROVEMENTS TO ALLOW BETTER FLOW OF TRAFFIC IN THIS INTERSECTION; AND WHEREAS, THERE IS A NEED FOR ADDITIONAL RIGHT-OF-WAY ON MISSISSIPPI STREET ALONG HOLLY CENTER PROPERTY; AND WHEREAS, BY ACQUISITION OF THIS RIGHT-OF-WAY HOLLY CENTER WOULD BE LOSING SOME OF THE PARKING SPACES; IT IS AGREED THE HRA WILL ACQUIRE ABOUT 15,000 SQUARE FEET OF RIGHT-OF-WAY FROM HOLLY SHOPPING CENTER AND WILL COMPENSATE THE OWNERS AT THE RATE OF $2.50 PER SQUARE FEET FOR THE LAND. BECAUSE THE CENTER WILL BE LOSING PARKING SPACE DUE TO4 THIS TAKING, HFROM THE E HRA WIL BUY THE PHILLIPS PETROLEUM CCWANY PROPERTY (PIN #R2A23 0AND 0 T 83 CLEARTHE OWNERS AT THE COST CF $90,000, WILL TEAR DOWN THE BUILDING, LAND AND REPLACE IT WITH A PAVED PARKING LOT TO PROVIDE SOME REPLACEMENT OF PARKING SPACES TAKEN ALONG MISSISSIPPI STREET. THE FRA. W I LL RETAIN ABORT 4530 �ETTOTHE GAINERS EFEET P�CEL TMERATE OF $2,50PER(PIN 14 30 24 23 )) AND SELL BACK ABOUT 9325 SQUARE FOOT. 14 THE OWNERS HEREBY AGREE THEY WILL SPEND UP TO $350,000 TO UPGRADE THE CENTER ACCORDING TO FOLLOWING PRIORTIZED ORDER: 1 . ROOF REPAIR (ESTIMATED AT $35,000) 2. BUILDING FACADE AND SIGNAGE IMPROVEMENT 3. BUYING THE PROPERTY IN THE S.E. QUADRANT FROM THE ERA 4. PYLON SIGN IMPROVEMENTS 5. ARCHITECTURAL FEES 6. IMPROVING PARKING LOT WITH CENTER GREENWAY, LANDSCAPING AND SIDEWALK 7. ADDITIONAL PARKING LOT LANDSCAPING 8. PARKING LOT LIGHTING MODIFICATION 9. COST OF PUBLIC IMPROVEMENTS UP TO $100,000 TO THE CENTER THE HRA WILL APPROVE ALL IMPROVEMENTS PLANNED IN HCLLY CENTER AND THE OWNERS WILL SUPPLY THE HRA THE COST AND EXPENDITURE DETAIL WHICH WILL SHOW THEY HAVE EXPENDED A TOTAL OF $350,000 FOR THE ITEMS LISTED IN THE PARAGRAPH ABOVE. THE OWNERS WILL BE WILLING TO ACCEPT UP TO $100,000 FOR THE COST OF PUBLIC IMPROVEMENTS TO THIS PROPERTY AND THIS COST WILL BE ASSESSED TO THE PROPERTY AND BE ON THE TAX ROLL IN 1986 OR LATER. THE HRA WILL REQUEST THE CITY TO VACATE THE ROAD AROUND THE PHILLIP PETROLEUM COMPANY (PIN #R 14 30 24 23 0083) . THE OWNERS AGREE THAT THE CITY CAN ESTABLISH THE MINIMUM MARKET VALUE OF THE CENTER TO BE $2,500,000 IN 1985 FOR THE TAXES TO BE PAID IN 1986. S I G ED 1H I S 2 d DAY CF J k.(ci kit►y.c,e f , 1984 HEARTLAND REALTY INVESTORS, INC. FR I DLEY HC IJS I NG APD REDEVELOPf€ENT AUTWR I TY '0\L6valln (A/.414% H. WILLIAM WALTER, PRESIDENT LARRY Ca*ERS, CHAIRMAN NASIM M. 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