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HRA 04/08/1982 City of Fridley AGENDA HOUSING & REDEVELOPMENT AUTHORITY MEETING THURSDAY, APRIL 8, 1982 7:30 P.M. Location: Community Room II (lower level ) CALL TO ORDER: ROLL CALL: APPROVE HOUSING & REDEVELOPMENT AUTHORITY MINUTES: MARCH 11 , 1982 APPROVE HOUSING & REDEVELOPMENT AUTHORITY MINUTES: MARCH 24, 1982 1 . CENTER CITY PROJECT A. Columbia Park Clinic 1. Review of Contract Documents (Enclosed in Folder) 2. Review of Financial Commitment (at meeting) a. Memo #82-24 from Executive Director B. 73rd Avenue Partnership 1 . Review of Contract Documents (At meeting - will be similar to Columbia Park Clinic) 2. Review of Financial Commitment (at meeting) a. Memo #82-25 from Executive Director 3. City Council Discussion on City Property Purchase a. Memo #82-26 from Executive Director D. Center City Financial Analysis 1 . Report from Ehlers & Assoc. 2. Report on Cash Flow Analysis (See Memo #82-27 from Ex. Dir. ) 3. Assessment Analysis a. Memo #82-28 from Executive Director E. Discussion on Project Design Consultant See Memo #82-28 from Executive Director F. Approval of Final Estimate and Authorization of Payment of Contract 1 . Letter from John Flora, Public Works Director Housing & Redevelopment Authority Agenda - April 8, 1982 Page 2 G. Letter to Earl Wyatt on Purchase of Telephone Building (Information) 2. MOORE LAKE PROJECT A. Cheryl Nybo Proposal 1 . Memo #82-30 from Executive Director 3. NORTH PARK PROJECT A. Letter from G. W. Paschke 1 . Memo #82-31 from Executive Director 4. FINANCIAL A. Check Register 5. OTHER BUSINESS: ADJOURNMENT: CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING MARCH 11 , 1982 CALL.TO ORDER: Vice-Chairperson Houck called the March 11 , 1982, Housing & Redevelopment Authority meeting to order at 7:00 p.m. ROLL CALL: Members Present: Russell Houck, Elmars Prieditis, Carolyn Svendsen, Duane Prairie Members Absent: Larry Commers Others Present: Jerrold Boardman, City Planner Scott Wheeler, Planning Intern Dennis Schneider, Councilman See attached list APPROVAL OF FEBRUARY 17, 1982, HOUSING & REDEVELOPMENT AUTHORITY MINUTES: MOTION BY MR. PRIEDITIS, SECONDED BY MR. PRAIRIE, TO APPROVE THE FEBRUARY 17, 1982, HOUSING & REDEVELOPMENT AUTHORITY MINUTES AS WRITTEN. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON HOUCK DECLARED THE MOTION CARRIED UNANIMOUSLY. I. CENTER CITY PROJECT A. Phase III - Development Selection Mr. Boardman stated three development teams were at the meeting to give presentations. Each development team was being given one-half hour for the presentation and to answer questions from the HRA. 1 . American Redevelopers, Inc.(7:00 - 7:30) Mr. Orrin Ericson stated he is the President of American Redevelopers, Inc. He introduced Paul Pink, his architect, and three other gentlemen from the office who are in leasing and management, Jim Peterson, Scott Ericson, and Tom Quosius. He stated they would like to show what they have done, what they are doing, and what they are interested in. He stated Mr. Pink would show slides of a redevelopment project they did in Mankato, Minnesota, along with some other redevelopments they have worked with. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH' 11 , 1982 PAGE 2 Mr. Pink stated the Mankato redevelopment was a downtown redevelop- ment and was completed in 1978. It consisted of mailing over the downtown area to the extent that all of the main street became a mall . There were 17 existing tenants, and they brought in 60 new tenants. Mr. Pink stated that Barclay Square is a fashion mall they will begin construction on in Rochester, Minnesota, in July 1982. They anticipate completion by July 1983. He stated it is a two-level high fashion mall . It has a split level parking lot so that the lower lot goes into the first floor, and the upper lot goes into the second level . The mall will contain about 120,000 sq. ft. of fine shops and restaurants. Mr. Pink stated the largest project they are working on is a $100,000 project in New York City. They have been working on it for about three years. It is a four-level mall and nine-story office tower. Construction will probably begin about one year from now. Mr. Pink stated this was just a brief background and scale of the work they do. He stated he has been the architect for Holly Shopping Center and Rice Plaza and what was the Fridley Hardware Store. He has been the architect on those parcels for the last 18 years, so he is familiar with the problems in the area, the drainage, traffic, and the other problems--both architecturally and engineering-wise. If they are selected as the architects and developers, it will just be a continuation of an 18-year history in the same area. Mr. Ericson stated Fridley has a population of 30,000 people spread over a two-mile radius, and he felt those people are sorely lacking in good quality stores put into one area. He thought if they put something here with quality, whether one-story or two-story, the City would be surprised and pleased at the number of tenants who would come in. He stated they felt all three corners could stand some rehabilitation, and they are prepared to do and submit various plans on a periodic basis until they arrive at one that is agreeable to everyone. They have already talked to a number of tenants, and they know they can get it pretty well leased, but it has to be done very professionally in order to let the people know there is going to be something with substance instead of just a bunch of stores. Mr. Ericson stated the first small enclosed center they did was in Willmar, Minnesota, and that turned out very well . He stated they are proposing a 100,000 sq. ft. shopping center and 40,000 sq. ft. entertainment/office on Fridley's site. He stated he has some ideas for making the best use of the Holly area where they would eliminate all the old buildings and put in multiples and/or offices. He stated if they are selected, they could present some projections on that. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 11 , 1982 PAGE 3 Mr. Prairie asked if Mr. Ericson saw financing or interest rates as a problem. Mr. Ericson stated they are a problem, but they see a light at the end of the tunnel . Just recently they have been talked to by a couple of pension funds, as well as small insurance companies, who are interested in coming into these kind of situations. If the interest rates don't come down, they would sell the project to an institution, either a pension fund or insurance company, so they could get the job done. They would be prepared to come in with some good plans and explain how long it would take to do the job. If they are not able to do it, they will be honest and tell the City that. He stated they believe in quality in their projects. Mr. Prieditis asked Mr. Ericson what the time period would be to get lease commitments. Mr. Ericson stated it would take six months and then about another six months to start construction. He would estimate about 12-2 yrs. from now until everything was completed. Mr. Prieditis asked what Mr. Ericson visualized as the major tenants. Mr. Ericson stated he would like to see the area anchored by a good drugstore, good market, a junior department store, a hardware store, and some children's and ladies' ready-to-wear stores. Mr. Boardman stated he has briefly discussed with Mr. Ericson the limitations that the HRA has in assisting with the project. Knowing these limitations, was American Redevelopers still interested in the project? Mr. Ericson stated they know what the limitations are with state and local governments, and they would have to work within those confines. He stated they are very interested in the project. Mr. Houck thanked Mr. Ericson and Mr. Pink for their presentation. 2. Holmen Development Company (7:30 - 8:00) Mr. Holmen stated he had brought with him Pat Hallisey, Vice President in charge of Leasing, and Duane Nelson, their director of construction on shopping centers. He stated they are a small company, and he would leave a brochure that outlined some of their capabilities, some projects they have done, and some references. Mr. Holmen stated Holmen Development Co. was formed in 1975 to develop, lease, manage, and own shopping centers. Since that time, they have developed a 260,000 sq. ft. center in Watertown, S.D. Major tenants are J.C. Penney, K-Mart, and Herberger's Dept. Store. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 11 , 1982 PAGE 4 Mr. Holmen stated that within the past year, they have built and opened an enclosed shopping center in Beaver Dam, Wisc. Major tenants are J. C. Penney, F. W. Woolworth and Woolco Store, Herberger's, and approx. 100,000 sq. ft. of small shops. They are presently under development for a center of about the same size in Williston. N.D. Mr. Holmen stated their method of operating to date has not been to operate in larger metropolitan areas. They have generally been operating in the mid-western cities in North & South Dakota, Iowa, Minnesota, Wisconsin, and they build shopping centers that range in size from 100,000 sq. ft. to 350-400,000 sq. ft. They are presently involved in the development of a major downtown mall in Mason City, Iowa. In that development, they have a joint venture agreement with the center companies, which were formerly Dayton-Hudson Properties. With that same company, they are developing a major mall in Dekalb, Ill . , and the center companies have joined them in that particular endeavor. Mr. Holmen stated they are also working on several downtown redevelop- ment projects, including one major redevelopment in Walla Walla, Washington. In addition to suburban malls, they made the decision to include in their concentration several urban redevelopment and downtown projects. Mr. Holmen stated his personal experience in the shopping center development field goes back to 1964 when he came from Texaco, Inc., as a Division Real Estate Agent and joined a company called Crossroads Centers, which was a successful company that developed centers, ranging in size from 110,000 to 750,000 sq. ft. Following that, he joined Watson Construction Co. as head of their development team. He worked with them for several years and developed more centers in the Midwest. Then, in 1975,they founded their own company. Mr. Holmen stated they will not have a slide presentation, but he can tell the HRA that they do have substantial experience in developing shopping centers. They have a very capable leasing staff, and they are quite capable and have considerable knowledge and experience in construction. Duane Nelson has been with some of the largest builders in the Twin Cities area, and he has had substantial experience in shopping centers and commercial buildings, free standing buildings, ski lodges, etc. For the project here in Fridley, they would bring in an additional equity partner, because they feel this project is going to need a substantial equity partner in order to become a successful development. They have interested equity partners who join them in these ventures. He stated their contractor would be a strong and experienced general contractor in the Twin Cities, and they have two they would like to choose from. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 11 , 1982 PAGE 5 Mr. Holmen stated he has had several conversations with Mr. Boardman about the project here in Fridley, and they have prepared several approaches to this project. One approach he really liked and felt would be very interesting but may not be too workable or realistic, is the relocation of Mississippi St. He stated it would be most interesting if they could pull the proposed entertainment center on the east side of University into the project and meld that with the retail portion that is proposed for the west side of University and include a rather nice enclosed mall at that time so they would have a project that would more incorporate and bring functions together. Again, he did not know if that was practical or feasible. Mr. Holmen stated it was their understanding that the City wanted an enclosed mall shopping center on the proposed site. Their feelings at this time is that it would not be practical. They think an enclosed sidewalk might be more practical , and their second approach would include using the existing hardware store (probably using it as a hardware store) and bend an enclosed sidewalk center around in a rather interesting fashion and include three major tenants in the mall . The major tenants would be a hardware store, supermarket, and drugstore, together with a restaurant, and some interesting mall shops, most generally focused toward the service type of shopping center. He thought if they were looking for an enclosed type mall center in this location, they would be disappointed, given the restrictions on the property. Mr. Holmen stated they have several layouts they have worked on and would like the opportunity to show what they can do on the site. They do know the problems on site and with the tenants. He felt they were practical enough to know what can be built on the site and would like the opportunity to do that. Mr. Prairie asked how many centers Holmen Development Co. has started or gotten off the ground in the last 2-22 years. Mr. Holmen stated there was just one major one, but there are many in the development process. He invited any of the HRA members to visit their latest center in Beaver Dam, Wisc. , in order to see the type of work they do. Mr. Houck thanked Mr.Holmen for his presentation. 3. Jim Vassar (Barthel Construction) (8:00 - 8:30) Mr. Dean Doyscher stated it has always been his feeling that there were some local people involved in the previous project who showed good faith. The limited partnership that was put together did involve local people, and he had told Ken Barthel of Barthel Con- struction that it would be important to keep that partnership together. That has, in fact, happened. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 11 , 1982 PAGE 6 Mr. Vassar stated Dr. Suh, Ron Shoeneman, and Dave Fuerstenberg are those interested people. He stated he has been trying to help formulate a team that can work together and get something done. He stated he thought they now had a good action group. Mr. Doyscher stated a lot of people had come with them to the meeting, but the important thing is that every one of these people has a skill level that needs to be involved all the way through this process. He stated one of the things a development team with an effort of this size needs is to coordinate these efforts with the City. There are going to be relocation schedules and acquisition schedules on the part of the City. Those schedules must be coordinated with the developer, and he will act as coordinator between the developer and the City. Mr. Doyscher introduced Dick Larsen and Marlin Hutchinson, who are both architects. Mr. Hutchinson stated they had a preliminary drawing that was put together without a great deal of input from the HRA or the community. They intend to refine it and make it suitable. He stated Mr. Larsen is a long term architect with a lot of experience in shopping centers. He is presently an HRA member in the City of Minnetonka and a former City Council member, so he is well versed in governmental action. He asked Mr. Larsen to explain the preliminary drawing. Mr. Larsen stated this is just a concept plan for the development of a small mall shopping center. He understood the site is approx. 8.7 acres, and they did not include the Burger King property. They felt they could develop about 86,000 sq. ft. of new retail space. He stated they picked up on some of the features from the previous plan that Jim Vassar's group had worked on. He stated all the shops will work off the interior mall with the exception of a proposed restaurant on the corner. He stated that as far as landscaping, they like to design shopping centers with some of the green area up around the building. Typically, especially with smaller centers, all the landscaping is out at the street where it looks nice, but no one can really use it, and the rest is paved right up to the front door. He stated they have done a couple of centers where they have reversed that and put a majority of the greenery around the building. It really gives a different kind of atmosphere and different feeling. Mr. Hutchinson stated they have indicated a larger open space in the center of the mall where some community-type activities can take place. Mr. Larsen stated there are 86,000 sq. ft. of leaseable area. The malls are about 9,200 sq. ft. for a total of appox. 95,000 sq. ft. which does include the free-standing restaurant. They have 431 parking spaces which works out to a parking ratio of 5 cars per 1 ,000 sq. ft. of gross leaseable area. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 11 , 1982 PAGE 7 Mr. Hutchinson introduced Laura Manske, who is with Barthel Construction, and is mainly concerned with leasing and lease negotiations. He stated she is also an attorney. Ms. Manske stated she is actively working in-house with Barthel in the leasing department. She has been very active in the leasing field and feels most confident they can put together a leasing package for this project. She would like to describe one of the shopping center projects they have going at this time in Elk River. The reason she wanted to describe it was because it does have a lot of similarities to Fridley. (1 ) They are approximately the same size; (2) it is a project that others have tried to develop in the past, but have never gotten off the ground. Barthel now has it off the ground and well on the way to putting it together; (3) a lot of the tenants they have been dealing with in Elk River are the same tenants that have been proposed for Fridley. Ms. Manske stated that although it may seem premature, she has been talking to the anchor tenants in the Elk River shopping center about the Fridley project and has gotten a mutual agreement that future talk may be in order, assuming they get the development rights to the Fridley project. Ms. Manske introduced Ken Barthel , President of Barthel Construction. Mr. Barthel stated that in the past year, they have completed projects totalling approximately $17 million. These projects con- sisted of shopping centers, office warehouses, restaurants, etc. Mr. Barthel introduced Jerome Hertel of Juran & Moody, who has done some other projects with them, and who is very familiar with the financing portion of it. Mr. Hertel stated Juran & Moody has done some projects in the City of Fridley. He stated they have given the HRA a brochure which outlines the activities they have been involved with. They have worked with Mr. Barthel for a couple of years in putting together financing for some of the commercial projects he has developed. They are very familiar with financing shopping centers, as well as free-standing retail centers. They are involved with the Elk River project. He stated it is their intention at some point in time to approach the City of Fridley and request tax exempt financing for this project and to work with Mr. Barthel and the rest of the group in completing that financing. Mr. Barthel introduced Bob Zeller from M. A. Mortenson & Co. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 11 , 1982 PAGE 8 Mr. Zeller stated M. A. Mortenson would act as the general contractor on this project and would work closely with the architects and city planners and designers in doing value engineering and cost estimating on the project. They have worked with Mr. Barthel in the past and feel very confident this development would be suitable for Fridley. Mr. Barthel introduced Darrell Greedy from the leasing division of Caldwell Bankers, who would be basically involved in management. Mr. Greedy stated they have both the management and leasing aspects. Their main role in this project would be property management of the center. With that, they would have one full-time person from the Property Management Dept. , plus the whole division working on the project. In addition, they would work hand in hand with Laura Manske with assisting in leasing, especially in promoting the leasing. They would probably work on the basis that the management end of it would require one full-time person and the back-up staff, and the leasing end of it would require one or more full-time persons assist- ing Ms. Manske. As far as the marketing aspects of shopping center development right now, the major firms and chains are saying that basically no one is coming to them and presenting projects because no one can get them in the ground. He stated these firms are hungry for sites and he felt they have a good site here in Fridley. He stated they are looking forward to doing this project. Mr. Barthel stated they are willing and able to assist the City of Fridley as quickly as possible and will do everything they can to make this a successful project. Mr. Doyscher stated he feels confident with this development team and their skills. This project just needs the right kind of people with the right kind of commitment level . Mr. Boardman stated that once a developer is selected, the HRA will give the developer 30 days to submit an initial site design to the HRA. At that time, if the site design is acceptable to the HRA, they would give the developer an additional six months to put the financing together. He stated what the HRA is looking for is a secure enough financing commitment in order to take an action to start acquisition. Mr. Hertel stated it has been their experience in putting these types of projects together that it is a long process, just by the very nature of a commercial center. When there are multiple tenants, it is typically more involved and difficult to get financing. They have already financed centers of this size. He stated he would not like to see them placed in the situation where things are moving along as well as anticipated, but then all of a sudden they run into a deadline they cannot meet, even though they feel from their stand- point and based on their history and experience that things are moving along as well as can be expected. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 11 , 1982 PAGE 9 Mr. Boardman stated the HRA sets timetables primarily for performance. If at some time, the developer has been making adequate performance, there is the possibility of an extension. The HRA will be looking at performance, and extensions will be based on performance. Mr. Houck thanked everyone representing Barthel Construction for coming and making their presentation. (Mr. Houck declared a ten-minute recess at 8:40 p.m.) Mr. Boardman stated he would like the HRA to take some action tonight in selecting a developer. He would also like them to rank the development teams or put them in some kind of priority so that in 30 days if the HRA feels the #1 development team's drawings are not adequate, they can go to the next development team. Mr. Boardman stated the HRA members had a "Reference Review" report included in their agenda which outlined the findings he had gotten about the different development teams from talking to outside people. Mr. Prieditis stated he liked to see the local people involved, and most of the locals are involved with the Barthel group. As far as the design potential , it really depends upon the monies the group has and how successful they are in getting tenants in. He thought American Redevelopers had the most impressive looking project and the best feel , but he did not think they should go just by that. The most impressive group for imagination and excitement was the Barthel group, and maybe that group is in the position to do a more successful project. He stated Mr. Holmen was very realistic and seemed to know what he was talking about. Mr. Prairie stated he thought it was just too difficult to make a decision on a developer based on a one-half hour presentation. There is just not enough information to go on. Mr. Boardman stated the main thing the HRA has to look at is that, realistically, each of these development teams is going to do approximately the same job, in the sense that all of them are talking about 80-90,000 sq. ft. of commercial/retail . He did not think the City would get involved in the relocation of Mississippi St. or with the purchase of Holly Center, because of the expense involved. It is a matter of which developer's presentation gave the HRA a comfortable feeling about their ability to produce. Mr. Prairie stated that Mr. Holmen may be the most practical of all the developers. Ms. Svendsen stated that, after their first experience with Mr. Remmen, she was very concerned about the level of commitment on the part of the developer to get the project done. She felt the Barthel group had perhaps HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 11 , 1982 PAGE 10 a little edge on that because they have so many local people involved, putting in their own money, and some of whom will be tenants in the project. She also thought maybe they need to take a little more time to do more investigating. Mr. Prairie asked if they could ask each of the developers to present something more detailed within a month. Mr. Prieditis stated a sketch of the project does not take too long to put together, and it would give the HRA an indication of each developer's interest. Mr. Boardman stated he had no problem with that if it would help the HRA make a decision. If they do that, then he would ask Watson Centers if they could make a presentation at that time also. They were unable to come to this meeting. The HRA members agreed they would like each developer to present some type of concept drawing in a proposal to the HRA. They asked Mr. Boardman to send a letter to each developer requesting that each developer submit some conceptual plans and any other meaningful informationat a special meeting on Thursday, April 1, at 7:30. The HRA will make a decision on a developer at that meeting. B. Phase I 1 . Award Bid for Removal of Christensen Building Mr. Boardman stated Ted Renollet was the lowest bidder at $10,840. He would recommend the HRA award the bid to him. MOTION BY MR. PRAIRIE, SECONDED BY MR. PRIEDITIS, TO AWARD THE BID FOR THE REMOVAL OF THE CHRISTENSEN BUILDING TO RENOLLET TRUCKING, INC., OF ANDOVER, MINNESOTA. - UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON HOUCK DECLARED THE MOTION CARRIED UNANIMOUSLY. 2. Update on Telephone Building (Memo No. 82-14 from Executive Director) Mr. Boardman stated that after writing this memo, he has discussed acquisition of the telephone building with Mr. Wyeth, owner of the property. Mr. Wyeth is not interested in selling and is firm at $275,000. There is no room for acquisition. Mr. Boardman stated Mr. Wyeth will be going into a contract with Northwestern Bell . The contract they are looking at is $16,000/yr. It is a five-year contract with two 5-year options. Mr. Prairie asked what happens one year from now if the HRA does not buy the property. Is there any kind of a time problem? HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 11 , 1982 PAGE 11 Mr. Boardman stated it was hard to say. If they get construction underway with the clinic and an office building, they may be able to put in another project relatively quickly. If they did acquire the telephone building, they would try to enter into a year lease agreement with Northwestern Bell . He did not feel anything would happen for at least a year. Mr. Haggerty stated Mr. Wyeth has built a number of office/warehouses in recent years in Blaine, so he is very cognizant of the cost of building a building like that. He is looking at what it would cost to replace the building. From that perspective, Mr. Wyeth feels $275,000, considering the location and the tenant, is a very reasonable offer. Mr. Boardman stated the fact is that Mr. Wyeth is a willing seller at $275,000. The lease is up with Northwestern Bell , and it looks positive to release with the telephone company. The question is: Does the HRA want to purchase at this time or delay? The HRA has the money to purchase, they have the opportunity to lease the building, and he felt it will just cost more money if they wait and have to go into acquisition and condemnation. Mr. Prieditis stated that because the owner of the property is not willing to negotiate and because he did not think the HRA should set a precedent of not having negotiations to arrive at a reasonable price, he would recommend they not acquire this property at this time. MOTION BY MR. PRIEDITIS, SECONDED BY MS. SVENDSEN, TO NOT PROCEED WITH THE ACQUISITION OF THE TELEPHONE BUILDING PROPERTY AT THIS TIME. Ms. Svendsen stated she felt it may be five yars before the City would even need that property, and she also did not like the idea of setting a precedent of not compromising on a price. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON HOUCK DECLARED THE MOTION CARRIED UNANIMOUSLY. Ms. Svendsen asked if there was any way the lease could be set up so that it would not be renewable. Mr. Boardman stated he would talk to Mr. Haggerty about this to see if there was any way Mr. Wyeth could put in a stipulation that if the property is condemned by the City, he has no obligations and all options are terminated. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 11 , 1982 PAGE 12 C. Letter from Andy Merry, Juran & Moody, on Financing for Columbia Park Clinic (Memo No. 82-19 from Executive Director) MOTION BY MR• PRIEDITIS, SECONDED BY MS. SVENDSEN, TO RECEIVE THE LETTER FROM ANDY MERRY OF JURAN & MOODY DATED MARCH 5, 1982. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON HOUCK DECLARED THE MOTION CARRIED UNANIMOUSLY. Mr. Boardman stated he was trying to get a formalizedJcommitment on financing from Juran & Moody, and this really was not that firm a commitment, because there are still some conditions. He stated Mr. Haggerty has talked to Tim Signorelli , and Mr. Signorelli is pushing Juran & Moody. Mr. Boardman stated that based on the conditions that have come up with Mr. Haggerty and the building he is proposing (Item I-D) , he would like to get some appraisals at this time on the properties so the City is in the position to start acquisition as soon as possible. Juran & Moody are saying they can commit to a financing, but they cannot commit to a percentage. So, they would recommend the HRA take an option on the property until they get the financing put together. Mr. Boardman stated he did not think the HRA wanted to get involved in that kind of thing, but he thought they should get the appraisals and start moving toward acquisition. MOTION BY MR. PRIEDITIS, SECONDED BY MS. SVENDSEN, TO AUTHORIZE THE EXECUTIVE DIRECTOR TO GET APPRAISALS ON THE COLUMBIA PARK CLINIC/ OFFICE PROPERTIES. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON HOUCK DECLARED THE MOTION CARRIED UNANIMOUSLY. D. Phase II 1.. 30,000 sq. ft. Office Building (Memo No. 82-18 from Executive Director) Mr. Boardman stated that Mark Haggerty has presented a letter to the HRA. He asked Mr. Haggerty to review the letter with the HRA. Mr. Haggerty stated that he had lunch with Mr. Chuck Michaelson of Owens, Ayers Company on Monday, March 8. They discovered they hot a lot of ideas in common. He stated he knew the building next to his law firm will be coming down, and they had to make some decisions about relocating. On Friday, he had gone to market with an industrial revenue bond and discovered the market is turning around tremendously. He stated Owens, Ayers is also looking for an office building. Since his law firm has the financing and the financial strength and Owens, Ayers has the financial strength and tenants, he and Mr. Michaelson mutually agreed to build the building at lunch on Monday. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 11 , 1982 PAGE 13 Mr. Haggerty stated that since Monday, they have come up with the equity, so they now have the financing and the equity. They are proposing to buy 20,000 sq. ft. from the City for $2/sq. ft. and they would ask that the City defer the payments over a period of time. The other thing would be to have the City build the parking lot that is partially the City's and theirs, and the cost estimate for landscaping and the parking lot would be $104,000. ,He would ask that they be allowed to go on a long term lease paying $1 ,000/month, which would be a fully amortized 30-year mortgage at 11% for $104,000. Then, on the 31st year, they would buy the parking lot for $1 . Mr. Haggerty stated the maximum bond they can get for this building is $1 ,250,000 because of the rents. They were $500,000 short, so they have to come up with $500,000 in cash. Owens, Ayers has agreed to put in about 75% of that. Owens, Ayers would build the building, put in their profits, do the architectural and engineering, and that would roughly equal 75%. The law firm would do the legal work, plus put in the cash difference, which would give them approximately 25% ownership. That is how they arrived at the ownership. Mr. Haggerty stated the reason he requested this be on the agenda tonight is because they need to find out if they can actually sell bonds with a firm commitment from the City saying 64th Ave. would be vacated and this land would be purchased. He stated he would like to issue bonds in the first week of April . Then he would know they would have 100% financing with their equity and would definitely be able to construct in May. Mr. Haggerty stated they will work with the Columbia Park Clinic's architects so their building and the Clinic's building will be built in tandem and constructed so they are aesthetically compatible. Mr. Haggerty stated the building will have 24,000 sq. ft. of rentable space. Smith, Juster, Feikema will rent 2,000 sq. ft. and Owens, Ayers will have 5,000 sq. ft. They would master lease the rest of the building. Mr. Boardman stated that if the City knows the financing is there, they would like to put this into their street project, which is going to be let out for bids in April . They will get a better price that way. Mr. Haggerty stated all they need from the City is a commitment that would allow them to build the building basically the way it is proposed as far as the layout of the parking. The HRA would still have a say in what the building looks like and the type of land- scaping. They are basically going to match it to the Columbia Park Clinic building. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 11 , 1982 PAGE 14 Mr. Boardman stated the HRA should consider that it is not only a right to proceed, but a right to proceed with the conditions that are laid out. He did not think the HRA was in any position at this meeting to take that action. He stated he would want to have contract documents drawn up so contract documents can be entered into prior to the time Mr. Haggerty goes for a sale of bonds. He thought that could be done relatively quickly. Mr. Boardman stated that Mr. Haggerty is concerned about the following three issues: 1 . $2/sq. ft. for 20,000 sq. ft. of land under the building, delay the purchase price on that for maybe four years with interest starting at the fourth year. 2. Parking lease at 11 .25% interest at $1 ,000/month, starting one year after they pull the building permit. 3. A firm commitment from the City that the City acquire the road and the private property so they can obtain good title. Mr. Prairie stated he thought they should move ahead with this. He saw a lot of pluses and no minuses. Mr. Prieditis stated he agreed. The HRA set a special meeting for Wed. , March 24, at 5:30 p.m. , at which time they would have the development contracts from Mr. Haggerty for approval . Mr. Haggerty could then take the necessary action for the sale of bonds. Mr. Boardman stated he and Mr. Haggerty will sit down and get all the documents set up so they can enter into contract documents at the March 24th meeting. It is his understanding that the HRA feels these conditions are acceptable conditions if the figures work out. He stated that, so far, everything looks good. MOTION BY MS. SVENDSEN, SECONDED BY MR. PRAIRIE, THAT THE CONDITIONS LAID OUT BY MR. HAGGERTY FOR A PROPOSED 30,000 SQ. FT. OFFICE BUILDING SEEM AGREEABLE, CONDITIONED ON THE ARRANGEMENT OF THE DEVELOPMENT CONTRACTS WHICH WILL BE BROUGHT BACK TO THE HRA FOR APPROVAL AT A SPECIAL MEETING ON WED., MARCH 24, 1982, AT 5:30 P.M. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON HOUCK DECLARED THE MOTION CARRIED UNANIMOUSLY. Mr. Haggerty stated he appreciated the HRA's good response and apologized for the time factor. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 11 , 1982 PAGE 15 IT. MOORE LAKE PROJECT A. Phase I 1 . Update from Cheryl Nybo on Office Project Mr. Boardman stated they do have documents from Cheryl Nybo from Eberhardt for the financing commitment. At this time, Ms. Nybo has not signed those commitment documents. One of the reasons is she is looking at alternative forms of financing to get the best rate. The market is starting to come down, and she is looking at the possibility of conventional financing, rather than industrial revenue bonds. Ms. Nybo stated she is looking at the industrial revenue bonds and trying to firm up a commitment on that from the legal aspect. She is also taking steps to look at the conventional market. The market seems to be trending down a little, and she would like some time to look at it. She is asking for an extension of 60-90 days. Mr. Boardman stated Mr. Ted Burandt is in the audience. Mr. Burandt is the owner of this property, and he is interested in selling the property. At this point in time, the HRA has not commited to buy the property because they do not have a formal commitment on financing. He stated one of his suggestions has been that the HRA go ahead and get an appraisal on the property, negotiate a value with Mr. Burandt, and set up an option arrangement on the property for option to purchase. The HRA would be protected on that option price by Ms. Nybo. Within that period of time as set up on the option, if Ms. Nybo does not pick up the financing that is needed, she has two alternatives: (1) either fulfilling the option on the property and buying the property herself; or, (2) losing the option. Mr. Boardman stated it was his understanding that this would be acceptable to Mr. Burandt. Mr. Burandt stated that was acceptable as long as they can get something worked out. He stated he is getting tired of getting dragged along. He can emphasize his position on his side, but he could also understand Ms. Nybo's position, but Ms. Nybo's side doesn't cost money and his does. He stated that if they can get this worked out within 30 days, and then Ms. Nybo has a 60-day option, he would have no problem with that. But, he would want to have the option worked out within those 30 days. He did not want it to go any longer than that. MOTION BY MR. PRIEDITIS, SECONDED BY MR. PRAIRIE, TO AUTHORIZE THE EXECUTIVE DIRECTOR TO GET AN APPRAISAL ON MR. BURANDT'S PROPERTY. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON HOUCK DECLARED THE MOTION CARRIED UNANIMOUSLY. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 11 , 1982 PAGE 16 Mr. Boardman stated he would also like the HRA to extend the right of development for Ms. Nybo to the HRA's regular meeting on April 8th. MOTION BY MS. SVENDSEN, SECONDED BY MR. PRIEIDITS, TO EXTEND A 30-DAY RIGHT OF DEVELOPMENT FOR MS. NYBO TO THE HRA'S REGULAR MEETING ON APRIL 8, 1982. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON HOUCK DECLARED THE MOTION CARRIED UNANIMOUSLY. III. NORTH AREA PROJECT A. ELO Engineering Proposal Mr. Benson stated he and Mr. Sackrison were at the Feb. 17 HRA meeting with this proposal . Mr. Owczarzak has a purchase agreement on a 6.9 acre lot on the corner of 81st and Main St. Mr. Owczarzak's company is currently located on Rancher's Road and has approx. 26,000 sq. ft. of industrial . He is proposing to build a 70,000 + sq. ft. manufacturing plant on the new site employing up to 85 people. Mr. Benson stated they looked at quite a few sites in Fridley and kept encountering soil problems. They are now approaching the HRA for some assistance for ELO in soil correction so Mr. Owczarzak can build the new facility. Mr. Owczarzak is at the meeting to answer any questions the HRA may have. Mr. Benson stated that since the last meeting, they have been able to take a much closer look at the soil borings, and they now feel fairly comfortable with a cost of $174,100 for just soil correction. That figure does not include the normal excavation. Mr. Boardman stated he has talked to the bond people and the situation is that with the construction of ELO Engineering, they would be able to sell a bond issue of $200,000. The problem with that is if they sell a bond issue to do the soil correction, because of the lag time between time of sale until the property is paying full taxes, they have a capitalized interest cost of $60,000. That leaves the City with $140,000 of usable money for the project. At this time, they could tell Mr. Owczarzak that the City has up to $140,000 for soil correction. He thought Mr. Owczarzak is looking for some commitment from the HRA that the HRA will commit "x" amount of dollars for soil correction so he can enter into contract documents for the purchase of the property. After the HRA gives Mr. Owczarzak that assurance, then as part of the tax increment district, the City would assist him in soil correction work. During the period of time before construction, Mr. Boardman stated he would like to look into seeing if there was some way the City could do the soil correction by assessment. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 11 , 1982 PAGE 17 MOTION BY MR. PRIEDITIS, SECONDED BY MS. SVENDSEN, TO APPROVE THE PROPOSAL BY ELO ENGINEERING AND THAT THE CITY WILL HELP WITH SOIL CORRECTION COSTS UP TO $140,000, PROVIDED THE DETAILS ARE WORKED OUT SATISFACTORILY TO BOTH PARTIES. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON HOUCK DECLARED THE MOTION CARRIED UNANIMOUSLY. IV. FINANCE A. Check Register MOTION BY MR. PRAIRIE, SECONDED BY MS. SVENDSEN, TO APPROVE THE CHECK REGISTER. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON HOUCK DECLARED THE MOTION CARRIED UNANIMOUSLY. B. Financial Report MOTION BY MR. PRAIRIE, SECONDED BY MS. SVENDSEN, TO APPROVE THE FINANCIAL REPORT. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON HOUCK DECLARED THE MOTION CARRIED UNANIMOUSLY. ADJOURNMENT: MOTION BY MR. PRAIRIE, SECONDED BY MS. SVENDSEN, TO ADJOURN THE MEETING. UPON A VOICE VOTE, ALL VOTING AYE, VICE-CHAIRPERSON HOUCK DECLARED THE MARCH 11, 1982, HOUSING & REDEVELOPMENT AUTHORITY MEETING ADJOURNED AT 11:30 P.M. RESPECTFULLY SU:MITTED, LYNNE SABA RECORDING SECRETARY HOUSING & REDEVELOPMENT AUTHORITY MEETING MARCH 11 , 1982 NAME ADDRESS COMPANY Orrin Ericson 6600 France Ave. So. , Edina American Redevelopers, Inc. Paul Pink 430 Oak Grove Paul Pink & Assoc. & American Redevelopers, Inc Scott L. Ericson 6600 France Ave. So. , Edina American Redevelopers, Inc. Thomas R. Quosius 6600 France Ave. So. , Edina " Jim Peterson 6600 France Ave. So. , Edina " " " Bob Levy 700 Pillsbury Center, Mpls. Attorney for Proj. #61 Corp. Pat Hallisey 7701 York Ave. So. , Edina Holmen Development Co. C. H. Holmen II II II II II " II Duane C. Nelson H H " II II II " James Vassar, Pres. Chaska, Mn. Vassar & Assoc. , Inc. Laura Manske Rogers, Mn. Barthel Companies Mark Haggerty Fridley, Mn. Smith, Juster, Feikema James Benson Mpls. Benson & Malkerson E. R; Owczarzak Fridley, Mn. ELO Engineering, Inc. Jim Sackrison Bloomington, Mn. Jim Sackrison Construction Cheryl Nybo 1612 Berne Circle Felling, Felling & Nybo Ted Burandt 6211 Riverview Terrace Dick Larsen 15612 Hwy. 7, Minnetonka Larsen/Rova Assoc. , Inc. Ken Barthel Rogers, Mn. Barthel Construction Dean Doyscher Mankato, Mn. Professional Planning & Development Marlin Hutchison 3633 Elmo Rd. , Hopkins Barthel Construction J. M. Suh 12 Island Rd. , St. Paul Jerome Hertel 114 E. 7th St. , Mpls. Juran & Moody, Inc. Bob Zeller M. A. Mortenson Co. Darrell Greedy Caldwell Bankers CITY OF FRIDLEY HOUSING & REDEVELOPMENT AUTHORITY MEETING MARCH 24, 1982 CALL TO ORDER: Chairperson Commers called the March 24, 1982, Housing & Redevelopment Authority meeting to order at 5:31 p.m. ROLL CALL: Members Present: Larry Commers, Russel Houck, Carolyn Svendsen, Elmars Prieditis Members Absent: Duane Prairie Others Present: Jerrold Boardman, City Planner Corinne Prindle, 6870 Washington St. N.E. Dorothy Smith, 362 - 64th Ave. N.E. ' Len Schollen, 6381 University Ave. N.E. Judy Schollen, 6381 University Ave. N.E. Curtis Radebaugh, 7449 Concerto N.E. Dick Harris, 6200 Riverview Terrace Al Singer, 378 - 64th Ave. N.E. Mark Haggerty, 6441 University Ave. N.E. Stan Kowalski APPROVAL OF MARCH 11 , 1982, HOUSING & REDEVELOPMENT AUTHORITY MINUTES: MOTION BY MR. PRIEDITIS, SECONDED BY MR. HOUCK, TO POSTPONE THE APPROVAL OF THE MARCH 11, 1982, HOUSING & REDEVELOPMENT AUTHORITY MINUTES UNTIL THE REGULAR MEETING ON APRIL 8, 1982. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. I. CENTER CITY PROJECT A. Phase II - Office Building Mr. Boardman stated that at the March 11th meeting, the HRA received a letter from Mark Haggerty dated March 10, 1982, that laid out some points on the development of an office building. The way the office building was laid out when they were working with Columbia Park Clinic was with 64th Ave. going straight through. They were going to do some kind of development with an office building on the south side of 64th Ave. When they actually started working with an office development to tie a package together with the Clinic, they found it would be easier for both the office and the Clinic to pull the office away from the Clinic a little and separate them with a road system. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 24, 1982 PAGE 2 Mr. Boardman stated the Clinic people are very concerned about not having controlled parking. This way all the parking is controlled parking and it is the Clinic's parking. Parking for the office building will be leased from City Hall . At the present time, they have 50 parking stalls in the City Hall space. Since the Court is moving out of City Hall , they do not feel there is going to be a parking problem. They will have adequate parking with 166 spaces for the office and City Hall . Mr. Boardman stated that in Mr. Haggerty's letter, he talked about purchasing the land under the building and leasing the parking spaces necessary for that building. It was set up with payments of 1 ,000/month for leasing parking spaces and that would carry over 31 years. After 31 years, they had the option of buying the parking for $1 . Mr. Boardman stated that was not acceptable to the City, and after, a negotiation session, they are now looking at $800/month for leasing parking spaces and after the 31 years, there was an acquisition cost of $100,000 on the parking land. Mr. Boardman stated that as far as the building, Mr. Haggerty is looking at $2/sq. ft. for the property under the building (20,000 sq. ft.) for a total purchase price of $40,000. They will delay any payment on that purchase price for the first four years. After that, they will pay it off in 10 years at 11 3/4% interest rate. Mr. Boardman stated these terms are agreeable with City Staff at this time, and they are now coming to the HRA with these terms. However, there are some other conditions, and Mr. Qureshi , the City Manager, has been working on this thing. He stated the HRA would not be owners of the property, they would not want to own the parking; and, therefore, the lease arrange- ment would not come back to the HRA. The question of whether the HRA is going to purchase the land from the City and the HRA would get the lease monies, or whether the lease monies would go directly to the City and the City would retain control of the property has not yet been worked out in detail in the lease agreements. Mr. Boardman stated that at this point, they have done the contract docu- ment work, they have given all of it to Mark Haggerty to look over, and maybe Mr. Haggerty could give the HRA more information from that point. Mr. Haggerty stated they did not really want to finish the contract docu- ments until they knew for sure where they were with the HRA. They have no problems with the overall substance of the documents. It is just a matter of "fine tuning" what is going to be done. Once they know it is a viable project in terms of numbers, they can have those documents completed and back to City Staff within a few days. Mr. Commers asked if the HRA was in any position to take any action at this meeting without that information. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 24, 1982 PAGE 3 Mr. Boardman stated that if the conditions of (1 ) the payment of the property over the ten year period at 11 3/4% and (2) the lease of the parking are acceptable conditions to the HRA, he thought Staff was in the position where they can move ahead with the documents, complete the documents, and bring them back to the HRA. He stated he has looked at the cash flow on the whole thing and that is looking fairly good. Mr. Boardman handed out a copy of a "Cash Flow Analysis - Phase II". He stated Dick Ehlers, Ehlers & Associates, has done a quick run on the bonding. They have a bonding capacity with the Clinic and the office building of $1 .1 million. One thing that is very clear is that if the Clinic doesn't go, the office will not go. So, they are trying to out both projects together about the same time. Mr. Commers stated that, knowing the office is contingent upon the Clinic, he did not know how they could approve the office building without knowing the final situation with the Clinic. Mr. Boardman stated they expect a letter from Juran & Moody on financing for the Clinic next week, and Mr. Haggerty is expecting a letter on his financing commitment. These are just commitment letters for the financing. Mr. Boardman stated he would like to get approval from the HRA to start negotiations for purchase based on those commitment letters. He stated there are several things they are working on. The Clinic will not be able to sell bonds until they have actual control of the property, so Staff would like to move as quickly as possible but still stay within the limits acceptable to the Clinic people and the office people. Mr. Boardman stated that with the situation on the Clinic, they may have to negotiate with Gus Doty as far as the purchase of a portion of his property. He would like to have the authorization from the HRA to get appraisals on Mr. Doty's property. He stated he has talked with Mr. Doty, and Mr. Doty is a willing seller, but Mr. Boardman stated he needs a price with which to start negotiations. The other properties they need to acquire are the properties to the east of the Fourth Right-of-Way, and they have gotten appraisals on all of those properties. Mr. Boardman stated that when the commitment letters come in, he wants the authority to go ahead and start negotiating purchase prices. Otherwise, he would have to wait until the April 8th HRA meeting. By that meeting, he would like to be able to come back with the negotiated prices they have worked on. Mr. Commers stated he did not see a problem with whether they lease the land from the City or whether they acquire the land from the City, it is just that they need to get the final numbers in some kind of format so they can review those numbers to see how it will work and how the overall project will work. The cash flow helps, but they still need to see it in terms of overall project, bond retirement, etc. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 24, 1982 PAGE 4 Mr. Boardman stated he will not know that until he gets the actual runs on the bond retirement from Ehlers & Associates. They are looking at 15-year bonds. Again, they are looking at all of the construction work, the street relocation, the plaza, landscaping, as a street improvement bond. That will be done as an assessment project. When they get into the contract documents, they will have to negotiate with the property owners on how they are going to break up those assessments. Mr. Commers asked Mr. Boardman to put a proposal together with that information and get it to the HRA for their April 8th meeting. Mr. Haggerty stated that at the last HRA meeting, he had stated he hoped to go to market the first week in April , but now they are not going to be able to do that. He stated he could live with the April 8th date, . but at that time, he would need a pretty firm commitment from the HRA in order to proceed any further. Mr. Commers stated the office building is still dependent upon what the Clinic does. If the HRA is not in a position to have a commitment from the Clinic, he did not see how they could make a commitment to Mr. Haggerty. Mr. Haggerty stated maybe the best thing for him to do in the meantime is to assist the Columbia Park Properties in making their decision. Mr. Haggerty stated one thing he has discussed with Mr. Boardman is that if they would ever want to expand their office building, they would like to have the option to buy, sooner than 30 years, a portion of land that would be in the form of a lot, and actually have their northerly boundary be a "zero" lot line, so they could expand without having to get some kind of mortgage lease from the bond holders. That was the only major consideration; otherwise, everything else was the same as in his first proposal . Mr. Commers asked what Staff's position was on this option. Mr. Boardman stated the City is not ready to give that kind of option. They can look at it at some point in time, but the City would like the option to relocate them in another area. Mr. Haggerty stated the only thing he would ask in that regard is that when the City goes to plat this area, they be cognizant of the fact that maybe there should just be a lot there or something that would save every- one if the City did decide the office building could expand. That would be a feasible alternative to them, because then they would know the expansion was still a possibility. Mr. Boardman stated the City could consider that possibility in the platting. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 24, 1982 PAGE 5 Mr. Boardman stated he had some problems with the HRA in a long-term lease arrangement, because this is being looked at as a 31-year lease agreement. He is not sure where the HRA is going to be after 31 years, because the District is completed in 25 years. He stated they are going to have to work with the City on this. Mr. Commers asked Mr. Boardman if he and the City Manager would have something put together in a plan to present to the HRA at their April 8th meeting so the HRA can make that decision. Mr. Boardman stated he would. Mr. Haggerty stated that, other than the option he had mentioned earlier, he would go on that basis and plug in all the recommended changes into the contract documents and get those back to Mr. Boardman the first part of the next week, along with their commitment letter. Mr. Prieditis stated he was in agreement with the conditions as outlined by Mr. Boardman earlier, and he thought it seemed reasonable to make provisions for the future by separating a portion of the property in the plat for possible future expansion. Mr. Commers asked what Staff would have available to the HRA at their April 8th meeting. Mr. Boardman stated he planned to have the following: (1 ) commitment letters from the Clinic and Mr. Haggerty (2) contract documents 3 a more detailed breakdown on costs (if possible) (4) a general understanding from the City's point of view on how the lease arrangements are going to work and what costs are going to be involved to the HRA on land acquisition or land purchase. Mr. Commers stated they should also have a written summary of what Mr. Boardman is proposing as far as assessments. Mr. Boardman stated Mr. & Mrs. Smith (362 - 64th Ave.) are very concerned about the timing. He stated he has assured Mr. Smith that the City will be working with them and will do everything they can to make the relocation easier for them. There are relocation monies available, and the City will pay any moving expenses. He stated he has discussed with Mr. Smith that at some point in time, the City will have a real estate person try to find a property that is acceptable to them for repurchase. Mr. Commers stated that if the HRA approves the Clinic's proposal on April 8th, what is the timing going to be for these people? HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 24, 1982 PAGE 6 Mr. Boardman stated that as far as taking the actual title to the properties, they are looking at taking title as soon as possible. That doesn't mean the people have to move at that time. As far as timing, they are looking at at least 90 days. Mr. Commers asked Mr. Boardman to review the letter from Mr. Al Singer to Mr. Boardman dated 3/19/82. Mr. Boardman stated he has talked to Mr. Singer, and Mr. Singer will accept $58,900, as long as there is $15,000 in relocation costs. He stated they now want to get a multiple listing from a real estate company and check to see if $15,000 is an acceptable relocation. Mr. Singer is entitled to relocation with an acquisition. Mr. Commers stated they needed a legal opinion to see if they can do that without an actual relocation taking place. He asked Mr. Boardman to have the City Attorney give the HRA a letter stating the relocation is, in fact, something that is permissible to meet Mr. Singer's request that the relocation monies be given directly to him. Mr. Len Schollen, 6381 University Ave. N.E. , stated that if this project ever gets off the ground and construction is started, he is concerned about the impact this construction is going to have on the access to their business. Their business is a convenience business, and people are going to go where it is more convenient, Their business is going to suffer. Mr. Commers stated that Mr. Boardman should negotiate with Mr. Schollen and maybe his building can be taken down sooner. B. Phase II - Clinic - Re-evaluation of Site Layout due to Office Plan Mr. Boardman stated he had a meeting Monday with Columbia Park Clinic and Juran & Moody. They are now reworking the contract documents. Before, the City was selling the Clinic the property up to 64th Ave. , and the City was retaining the right for buy-back on the office building, etc. Now, 64th Ave. has been changed and they are reworking the Phase II documents. They have gotten the rewrites of the documents to Columbia Park Clinic's attorney, the Clinic people are going to get their recommendations/ modifications/changes back to the City, and then the City's legal counsel will review it, also. C. Phase I - Purchase of Northwestern Bell Building Mr. Boardman stated that Mr. Wyeth has said he will come down from $275,000 to $270,000. Now it was up to the HRA as to whether they want to purchase the building at $270,000. He stated Mr. Wyeth is at the point where he is ready to sign a 5 year lease with two 5-year options with Northwestern Bell at $16,000 yr. If the HRA decides they want to HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 24, 1982 PAGE 7 acquire the building, he thought it would be a good idea and the HRA would not lose money on the project. They could acquire the building and lease it to Northwestern Bell . Mr. Haggerty stated it is a very favorable lease to Northwestern Bell in terms of dollars and cents and also location-wise, and they would like to stay here as long as they can. Mr. Prieditis stated they had voted against proceeding with the acquisition at the last meeting, because it was a situation where there was no room for negotiations and they felt the $275,000,compared to the City's appraisal of $250,000,was too high. He stated there has now been an indication that there was some attempt to negotiate. Mr. Commers asked what this does to their overall plan, because they would be tying up $270,000. Mr. Boardman stated that in looking at the cash flows and the project on the other side of University, they had a flexibility of about $500,000. between the two projects, and that is a very conservative figure. He stated he did not feel at this time that the $270,000 would be a major deficit to the HRA. MOTION BY MR. PRIEDITIS, SECONDED BY MR. HOUCK, TO PROCEED WITH THE ACQUISITION OF THE NORTHWESTERN BELL BUILDING PROPERTY. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. D. Phase III - Letters from Developers on HRA Action - Discussion on Selection Mr. Boardman stated that at the last meeting, the HRA agreed they would like each developer who had made a presentation to present some type of concept drawing in a proposal to the HRA. He stated both American Redevelopers, Inc. , and Holmen Development Co. declined to put any money into design proposals at this time. They wished to be considered on the merits of their past performances and their presentations at the meeting. Mr. Boardman stated he had only received a schematic concept from Barthel Construction. Mr. Boardman showed the HRA the schematic concept. He stated Barthel is proposing 98,000 sq. ft. of retail space, including the hardware building. Mr. Boardman stated he would urge the HRA to make their decision on the development teams' presentations and their merits and to go with the development team they felt most comfortable with. Mr. Commers asked what Staff's recommendation was for a developer. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 24, 1982 PAGE 8 Mr. Boardman stated he has worked with all the developers. He stated he felt most comfortable with Barthel Construction with Ken Barthel as the developer and with Dean Doyscher as the coordinator. He also felt quite comfortable with the rest of the development team. Mr. Boardman stated he felt Al Holmen was a very honest and forthright man. Mr. Holmen doesn't do anything he doesn't say he is going to do. If something cannot be done, he will say so. In Mr. Boardman's short association with Mr. Holmen, he felt he was very honest and could probably do the job, but Mr. Boardman still felt most comfortable with Barthel Construction. Mr. Prieditis stated that at the last meeting, his choice was between Mr. Ericson of American Redevelopers and Barthel Construction. He stated he now felt that Barthel may be the most likely development team to put together a package and proceed instead of dragging this out any longer. He also liked the idea of local people being involved in the limited partnership, who are interested and have been working on it. He felt that was very positive. He stated he also felt very comfortable with the design Barthel had presented. MOTION BY MR. HOUCK, SECONDED BY MR. PRIEDITIS, TO GRANT PRELIMINARY RIGHT OF DEVELOPMENT TO BARTHEL CONSTRUCTION, WITH THE UNDERSTANDING THAT THEY HAVE 30 DAYS IN WHICH TO COME IN WITH SITE DRAWINGS AND SIX MONTHS TO PUT THE PACKAGE TOGETHER. Mr. Prieditis stated he would like to see something said about the quality of workmanship that is going to go into the project. Mr. Commers stated that was a good suggestion, and if this motion passes, Barthel Construction should be notified that the HRA would like them to indicate something about the quality that would go into the project. Mr. Boardman stated they should probably give the right of development for the site designs to be presented to the HRA at their regular May meeting. UPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY. II. APPRAISAL FOR TED BURANDT - CHERYL NYBO PROJECT: Mr. Boardman stated the appraisal on Mr. Burandt's property came in at around $46,000. He stated he has not yet contacted Mr. Burandt, because there is a substantial difference between the appraisal and what Mr. Burandt thinks his property is worth. Mr. Burandt wants $65,000. He stated he has talked to Ms. Nybo and asked her to get her financing committed before the April 8th meeting so they can start acquisition. They will plan to move ahead with acquisition at the April HRA meeting. HOUSING & REDEVELOPMENT AUTHORITY MEETING, MARCH 24, 1982 PAGE 9 ADJOURNMENT: Chairperson Commers declared the March 24, 1982, Special Housing & Redevelopment Authority meeting adjourned at 7:10 p.m. Respectfully su,mitted, y '- Saba Recording Secretary CENTER CITY PROJECT 1 THE CITY OF -- HOUSING r.....: .-'.. re- and •.•...,\ ( . REDEVELOPMENT 1' MEMORANDUM .. AUTHORITW. Y i 1 i FRIDLEY _ FROM EXECUTIVE DIRECTOR MEMO NO. 82-24 DATE April 2, 1982 TO ACTION INFO. SUBJECT Housing & Redevelopment Authority X Columbia Park Properties Contract and Commitment Virgil Herrick and myself met with Eric Anderson, Attorney for Columbia Park Properties, to review the final draft of the Contract Documents on April 1 , 1982. Virgil is satisfied that these documents as written provide adequate protection to the HRA for the construction of the Clinic project as proposed. We also had a chance to review the commitment to underwrite that has been given to Columbia Park Properties by their underwriter, Juran & Moody, Inc. This document is still being modified so I could not enclose it at the time the agenda was sent. However, Mr. Erickson assured me that this would be finalized in time for our meeting on April 8, 1982. In reviewing the present document, we feel that the commitment document will be adequate for the HRA to start acquisition on the Redevelopment Properties. JLB/de THE CITY OF HOUSING ... :: .. Arisio..... and -0, ,� I :: REDEVELOPMENT . MEMORANDUM ., ,.. AUTHORITY : 3 THE CITY OF """'" I. "" �] HOUSING ' ® and »::�. .. y MEMORANDUM_ REDEVELOPMENT ',,. �� .::�, AUTHORITY ,,,,,' E i Ail 4111 • FRIDLEY MEMO N0.82-26 FROM EXECUTIVE DIRECTOR ACTION INFO. DATE April 2, 1982 TO X SUBJECT Housing & Redevelop errt.`ALth•ori.ty City Council Discussion on Office Project The City Council discussed the Phase II office project at their March 29, 1982 conference meeting. They discussed the options that they have in regard to the use of City property for this development. (See attached memo dated March 26, 1982). that the The City Council concurred with the etmentrisegivenand bysthegofficegpartnership� take the following steps when final comm 1 . uthe sA ocatdse atthat valuepconsistent wowned iththe the1arean(9which ,310 sqe ft. building is located @ $2.00 per sq. ft. - $18,620.00. ) 2. That the HRA purchase that property associated with the required parking for the office building at a value consistent with the area (30,100 sq. ft. @ $2.00 per sq. ft. = $60,200.00). This purchase will be conditioned with the lease as being proposed by the office building and will extend to the termination of the Redevelopment District (Maximum date of November, 2009). At that time the HRA would deedthe continueptheyback to lease forthe theCity termCofnthe lease for $1 .00. The Council would then contract. This would mean that the HRA wouleasepaymentsontheparking dheinitial expenditure approximately amount $78,800.00 and would in return receive of $800.00 per month for the life of the district. JLB/de ifr{ THE CITY OF me� ;••. ■..�o=...nvi:oure:.f puma H O U y ..E.... Er. ... I N G i:.eeec efff:� impus and :f a=', M IFC3.7REDEVELOPMENT MEMORANDUM REDEVELOPMENT .: N._ . d. OAUTHORITY u ihWI. is gnu{e ::_. .c..;..: 1 f:► �. =fe FRIDL.EY :.E ROM EXECUTIVE DIRECTO MEMO NO. 82-22 O ACTION INFO. ATE March 26, 1982 T - X OBJECT Nasim Qureshi City Council Consideration for Phase II- Center City Projects In the Center City district, the Columbia Park Clinic and Office projects are very close to final contract commitment with the HRA. We expect to make these commitments by April 8, 1982. There are several issues that have to be discussed with the City Council relative to these projects so that the HRA can have a good understanding by that meeting. CITY PROPERTY The proposed projects that are being developed would require the use of some of the City's property around City Hall . The options that are available to the HRA are as follows: The office project as proposed will acquire approximately 10,000 sq.ft. of land from the City for the building location. This, property will be deeded to the office structure and paid over a ten year period. The parking will be a joint parking arrange- ment with the City Hall by which the office will lease parking for 31 years with option of purchase after that period. These terms have been reviewed by the HRA who have given tentative approval based on discussion with the City Council . The options as we see them are as follows: 1. The HRA will purchase the land under the building (10,000 sq. ft.) directly from the City at $2.00 per sq. ft. so it can be deeded to the office building, with the following parking options: A. The HRA purchase that portion of property to be used for parking by the the office and do the necessary improvements. They will then lease that parking to the office for the full term of the mortgage (31 years) , at _ which time it would sell the property to the office for a set purchase price. B. The City retain the property whichttimethe itparking would sellitheovements propertyato thelease the parking for 31 years office for a set purchase price. C. The HRA would purchase the property from the City, would do the necessary improvements and would lease the parking for the life of the Center City Page 2, MEMO #82-22 March 26, 1982 Project at which time the property would revert back to City ownership for the term of the lease. After 31 years the office would purchase the property for a set purchase price 2. The City would sell the property under the office directly to the office developer, with the payment over ten years as stated above with the options on parkiig as noted above. EISENHOWER SQUARE MONUMENT We have discussed this item briefly with the V.F.W. who are willing to work with us in the relocation of the monument. We have been looking at the following options and would like some direction from the Council. 1. Locating the monument in a special area in Commons Park or the Community Park. 2. Keeping the monument in the City Hall Plaza area. • JLB/de EHLERS AND ASSOCIATES, INC. FINANCIAL SPECIALISTS FIRST NATIONAL-SOD LINE CONCOURSE 507 MARQUETTE AVE. MINNEAPOLIS. MINNESOTA 55402 339-8291 (AREA CODE 612) April 1, 1982 Mr. Jerry Boardman City Planner City Hall 6431 University Avenue N.E. Fridley, Minnesota 55432 - Dear Jerry: Enclosed are the computer runs analyzing the cash flow of a tax increment bond issue based on captured assessed value generated by the clinic and office projects, as you gave them on the phone. This shows a $1.1 million bond issue, dated July 1, 1982, with the first principal payment coming due January 1, 1986. We assume a 1982 base value of $14,400 and a 90-mill tax rate, along with 4% inflation. Please note also that, per your instructions, no allowance has been made for capitalized interest, assuming this will be financed from another source. After allowing for a discount and for cost of sale, the $1.1 million will yield roughly $1,050,000 for construction. Page 1 of the run shows the development of revenues to service the bonds. The total projected assessed value of this project is shown on the column labelled "Projected Assessed Value." This is followed by the captured assessed value, upon which the actual tax increment is figured. The tax increment is shown in the next column, in the year following the captured assessed value which generates it. This is to allow for the one-year lag in the collection of taxes. The figures shown in the column labelled "Other Revenue" reflect revenue, in addition to tax increments, necessary to pay debt service. These figures are then totalled and then carried across the page to show the net revenue available for debt service annually. 7 Mr. Jerry Boardman April 1, 1982 Fridley, Minnesota Page 2 This net revenue is then carried over to the first column on page 2 of the exhibit and supplemented by investment earnings to arrive at a total dollar amount available for debt service. The maturity schedule and the total debt service for the bond issue is shown in the middle two columns of the page. The debt service is subtracted from the total revenues to arrive at an annual surplus or deficit. The column labelled "Reserve or Mill " then shows the cumulative debt service fund balance; the fact that this fund balance remains positive following the capitalized interest period shows that this tax increment cash flow does work. If you have any questions, please feel free to call . Very truly yours, EHLER AND ASSOCIATES, INC. Richard E. Ehlers REE:ds Enclosures EHLERS AND ASSOCIATES, INC. 1% /0 THE CITY OF -71� HOUSING and ....� ,� ..iari .. REDEVELOPMENT AUTHORITY y MEMORANDUM ' FRIDLEY "' FROM EXECUTIVE DIRECTOR MEMO NO.82-27 DATE April 2, 1982 TO ACTION INFO. SUBJECT Housing & Redevelopment Authority X Cash Flow Analysis Please see attached cash flow analysis of the Clinic/Office project. This analysis is based on our projected costs for the project and anticipated revenues that we can reasonably expect. We are working on some long term computer analysis which will allow us to make quick modifications to this cash flow so that we can keep the HRA informed of the project changes. JLB/de PROGRAM FUND FUND FUND FUND 145 30 75 80 85 DATE ACTIVITY TOTAL CITY HRA HRA HRA HRA ACCOUNTS ACCOUNTS ACCOUNTS ACCOUNTS ACCOUNTS DEC. 82 Fund Balance 2197896 21847 287381 1813697 46098 2887= JAN. 82 Purchase Christianson 1914935 -282961 JAN. 82 Removal of Christianson 1904935 -10000 JAN. 82 Investment 1926029 21094 FEB. 82 Investment 1947369 21340 FEB. 82 Bond Payment 1856794 -9057` MAR. 82 Investment 1878383 21589 APR. 82 Half Telephone Building Purchase 1743383 -135000 APR. 82 C .P. Clinic Property 1569383 -174000 APR. 82 Investment 1587619 18236 MAY. 82 Half Telephone Building Purchase 1452619 -135000 MAY. 82 Relocation Costs 1421619 -31000 MAY. 82 Acquisition Gus Doty Property 1341619 -80000 MAY. 82 Bond Sale Clinic Office 2412619 1071000 MAY. 82 Investment 2440693 28074 MAY. 82 Tax Inc . 2566493 12580 JUN. 82 Investment 2594894 28401 JUL. 82 Administration 2564894 -30000 JUL. 82 Investment 2593277 28383 AUG. 82 City Property Acquisition 2513277 -80000 AUG. 82 Bond Payment 2422702 -9057 711GnLIA 277R() SEP. 82 Acquisition of CPC Property 1853932 -596550 SEP. 82 Investment 1875077 21145 ( 1 OCT. 82 Tax Inc . 2000877 12580C NOV. 82 Bond Payment 1934877 -66000 OCT. - APR. 83 Investment 2089964 155087 DEC. 82 Administration 2059964 -30000 APR. 83 Relocation 1964964 -95000 FEB. 83 Bond Payment 1874389 -9057E JAN. - APR. 83 Lease of Parking 1912789 38400 MAY. 83 Tax Inc . 2046137 13331 MAY. 83 Assessment Payment 1966137 • -80000 MAY. 83 Investment 1987744 21607 MAY. 83 Bond Payment 1921744 -66000 JUN. - OCT. 83 Lease of Parking 1969744 48000 JUL. 83 Administration 1939744 -30000 AUG. 83 Bond Payment 2030319 9057' JUN. - OCT. 83 Investment 2145063 114744 OCT. 83 Tax Inc . 2278411 13334 . OCT. 83 Assessment Payment 2253411 -25000 OCT. 83 Bond Payment 2187411 -66000 TOTAL 2187411 -68153 635261 1208186 46098 36601' TME CITY OF--7::;;? HCIUSING ' re and I REDEVELOPMENT , MEMORANDUM \ 1 . .. ; AUTHORITY "" E ► FRIDLEY FROM EXECUTIVE DIRECTOR MEMO NO.82-28 DATE April 2, 1982 TO ACTION INFO. SUBJECT Housing & Redevelopment Authority X Assessments of Public Improvement on Phase II Projects We are presently reviewing our project estimates for the necessary public improvements with the development of the Office and Clinic. The City Engineering staff has been doing an excellent job in working with us on getting these estimates which will be _., available to us early next week. I will be reviewing these estimates and preparing an approximate assessment schedule for you so that you can make the necessary determinations on whether we should assess or pay directly for such improvements. This will be available for you to discuss at the April 8, 1982 meeting. JLB/de / 3 THE CITY OF ---FI HOUSING .. Ni R •... - .. and '� • :: REDEVELOPMENT • MEMORANDUM ( . .: .. AUTHORITYSOO 0.0 E FRIDLEY maim .os FROM EXECUTIVE DIRECTOR MEMO NO. 82-29 DATE April 2, 1982 TO ACTION INFO. SUBJECT Housing & Redevelopment Authority X Hiring of a Project Design Consultant We are at the stage in the Center City Project where we should hire a Landscape Architect to act as a project Design Consultant and Designer for all public space so we can set the design standards that are to be used throughout the over-all project. We would want to set minimum standards on things like lighting, signing, street furniture, landscaping, so that a theme can be carried throughout the enire district. I feel that it is important to select the best firm so that the Center City Project is one that we can all be proud of. The process that I recommend to this selection is as follows: 1. That the City staff interview 12 to 15 firms that we know have done this type of project and can be looked at for similarity, project performance, design quality, etc. 2. That the City staff narrow the selection to 3 or 4 firms who will present themselves to the HRA. 3. That if the HRA is satified with staff selection of firms, a closed com- petition between those firms, in which they will provide concept plans for the redevelopment district, should be done. This competition will provide you a means of selecting the best design for the District. (It is our experience that we will receive better results in the competition if there is some renumeration to the competing firms depending on the amount of design detail). 4. The firm that is selected by the HRA (City Council should be involved also in the final selection) will then carry out detail design of the project with controlling minimum standards that can be carried throughout the project. JLB/de 10 CITY OF FRIDLEY PUBLIC WORKS DEPARTMENT ENGINEERING DIVISION 6431 University Avenue N.E. Fridley, Minnesota 55432 April 9, 1982 Housing and Redevelopment Authority City of Fridley c/o Jerrold Boardman, Executive Director 6431 University Avenue Northeast Fridley, Minnesota 55432 Authority Members: CERTIFICATE OF THE ENGINEER We hereby submit the Final Estimate No. 1 for Ted Renollett Construction, 927 Andover Road Northeast, Anoka, Minnesota 55303, for demolition of the building at 6471 University Avenue Northeast. Original Contract $10,840.00 Final Construction Cost $10,840.00 AMOUNT DUE FINAL ESTIMATE #1 . . . $10,840.00 We have viewed the work under contract for the Demolition of Building Project and find that the same is substantially complete in accordance with the contract documents. I recommend that final payment be made upon acceptance of the work by your Honorable Body, and that the one- year contractual maintenance bond commence on the date listed. Respectfully submitted, sem' t JOHN G. FLORA, P.E. Public Works Director JGF:ijk Prepared jr-4 Checked by: /%/7c CITY OF FRIDLEY Engineering Department 6431 University Avenue Fridley, Minnesota 55432 Date March 30, 1982 rrTTITO: Mousing and Redevelopment Authority RE: Est. No. 1 �City of Fridley Per. Ending April 8. 1982 6431. University Avenue Northeast For Fridley, Minnesota 55432 Ted Renollett Construction 927 Andover Road N.E. Anoka, MN 55303 STATEMENT OF WORK OFMOI ITION OF BUDDING CONTRACT PROGRESS Contract Item Estimated Unit Quantity Quantity Amount Quantities Price This Est. To Date To Date flpmnlitinn R rPmnval and • grading of 671 Ilni varsi ty AvanuP N_F. , and PntirP rnmplP: lump Sum $in,R4n_nn Tntal Proj. Total Proj_ . $10,840.00 $10,840.00 TOTAL t I' SUMMARY: Original Contract Amount $ 10,840.00 Contract Additions - Change Order Nos. 0 $ -0- _ Contract Deductions - Change Order Nos. 0 $ -0- Revised Contract Amount $ 10,840.00 Value Completed To Date $ 10,840.00 SUB TOTAL $ 10,840.00 Amount Retained (10%) $ -0- Less Amount Paid Previously $ -0- AMOUNT DUE THIS ESTIMATE $ 10,840.00 CERTIFICATE OF THE CONTRACTOR I hereby certify that the work performed and the materials supplied to date under terms of the contract for reference project, and all authorized changes thereto, have an actual value under the contract of the amounts shown on this estimate (and the final quantities of the final estimate are correct), and that this estimate is just and correct and no part of the "Amount Due This Estimate" has been received. By 22 /' , // iv Date ,49, e, /982 Contractors Authorized Representative (Title) CERTIFICATE OF THE ENGINEER I hereby certify that I have prepared or examined this estimate, and that the contractor is entitled to payment of this estimate under the contract for reference project. CITY FRIDLEI"NSP OR ,, '� EL (Z Dates"`'"' /yere Checked By Respecfully submitted, CITY OF FRI, EY By i I .. G. FLORA, P.E. • blic Works Director 100A/1091A April 8, 1982 To: Public Works Director City of Fridley REPORT ON FINAL INSPECTION FOR DEMOLITION OF BUILDING AT 6471 UNIVERSITY AVENUE N.E. We, the undersigned, have inspected the above mentioned project and find that the work required by the contract is substantially complete in con- formity with the plans and specifications of the project. All deficiencies have been corrected by the contractor. Also, the work for which the City feels the contractor should receive a reduced price has been agreed upon by the contractor. So, therefore, we recommend to you that the City approve the attached FINAL ESTIMATE for the contractor and the one-year maintenance bond, starting from the day of the final inspection, that being April 8, 1982. L cV1c/\\\2) /EN-TGRAF ° Construction Inspector -72;V i TED RENOLLETT Contractor if April 8, 1982 Demolition of Building at 6471 University Avenue N.E. CERTIFICATE OF THE CONTRACTOR This is to certify that items of the work shown in this statement of work certified herein have been actually furnished, and done for the above mentioned project in accordance with the plans and specifica- tions heretofore approved. The final contract cost is $10,840.00, and the final payment of $10,840.00 for this project would cover in full , the contractor's claims against the City for all labor, materials and other work done by the contractor under this project. I declare under the penalties of perjury that this statement is just and correct. Ted Renollett Construction -;:27e:P6 / TED RENOLLETT President 1? TME CITY OF HOUSING w:.+ .., c`..• y and frif REDEVELOPMENT f\f AUTHORITY :::::: : i : FRI®LEY J 1•41/111•41/11.. .. .. . _.�......._, owl .. April 2, 1982 Mr. Earl Wyatt Wyatt Brother Redi-Mix 8502 Central Avenue Mpls., MN 55434 RE: Purchase of Property at 6450 - 5th Avenue N.E. Dear Mr. Wyatt: I have discussed the purchase of the property owned by you as noted above with the Housing and Redevelopment Authority at their March 24, 1982 Special Meeting. The Housing Authority has authorized me to make an offer to purchase the above said property for $270,000. This offer is based on a negotiated purchase price that was worked out between the Housing Authority and you and your attorney, Mark Haggerty. This offer is based on the following conditions: 1. That the purchase of the property will take place in two equal payments, one in April, 1982, and one in May, 1982. (This timing is to be worked out to the satisfaction of both parties.) 2. That the payment of payable 1982 taxes on the property shall be pro-rated to the date of final purchase payment and closing on the property. 3. That the balance of assessments on the property ($145.97) be paid by the Seller. 4. That the Seller not enter into any new lease contracts prior to HRA purchase. If these terms are agreeable to you, it will be necessary to have the property abstracts brought up-to-date and submitted to our attorney, Virgil Herrick, at 6279 University Avenue N.E., Fridley, MN 55432. I will be contacting you in the next couple of weeks to set the closing date on the property. If you have any questions concerning this item, please feel free to call me at 571-3450. Sincerely, jay errold L. Boardman, Executive Director Fridley Housing and Redevelopment Authority JI,B/bd 0/18/2 C-82-20 MOORE LAKE PROJECT QV THE CITY OF —EJ HOUSING .. avarg,-- and 'v REDEVELOPMENT y MEMORANDUM .. AUTHORITY cee E ... owe FRIDLEY FROM EXECUTIVE DIRECTOR MEMO NO. 82-30 DATE April 2, 1982 TO ACTION INFO. SUBJECT Housing & Redevelopment Authority X Purchase Agreement with Ted Burandt on the Property at 1001 Hillwind Road. I am attaching a copy of the appraisal we have recieved for the above stated property owned by Mr. Burandt. I have discussed this value with Mr. Burandt and have attempted to reach a compromise on his requested value of $65,000.00. He stated he would sell the property for $60,000.00 if he could retain the existing structure to be moved off the site. He has not agreed to a compromised value of $55,000.00 which is midway between the two values. I am having Leon Madsen, City Assessor's Department, review the appraisal to give me his opinion on the accuracy of the document. I will have this information to you at your meeting of April 8, 1982. Without agreement on a purchase price, we cannot come to any agreements on options on the property. I' ve discussed this situation with Ms. Nybo and have suggested that she be able to respond to the HRA on her progress in financing. JLB/de • • Reat Estate Appy eX 7259 COMMERCE CIRCLE WEST MINNEAPOLIS, MN 55432 (612) 511-3857 March 17, 1982 Mr. Jerrold L. Boardman Executive Director Fridley Housing and Redevelopment Authority 6431 University Avenue Northeast Fridley, Minnesota 55432 Dear Mr. Boardman: I submit herewith, my Market Value Appraisal Report of the Unimproved Property located at : 1001 Hiliwind Road Fridley, Minnesota 55432. The purpose of my appraisal is to estimate the current Market Value, in fee simple of the property for the function of a proposed purchase. Market Value has been defined as the highest probable price that a real prop- erty will command in the open market place, having been exposed for sale for a reasonable length of time, that this sale is consurnated between willing in- formed buyers and sellers and that neither the buyers nor sellers are forced to buy or sell. In my opinion, the Market Value of subject property is the sum of: FORTY SIX TOUSAND THREE HUNDRED AND 00/100 DOLLARS ($46,300.00). This opinion of value is based upon my personal inspection of the land and its improvements as of the date, March 16, 1982. The date of this appraisal is March 16, 1982. Respectfully submitted, 1 Curt is A. Larson _r � 3. • ea44:, w0/44,10vip Re.aL Waft to App► 1259 COMMERCE CIRCLE WEST MINNEAPOLIS, MN 55432 (612) 571-3857 IDENTIFICATION OF PFOPF IY Property Name: Theodore Burandt Street Address: 1001 Hiliwind Road City and State: Fridley, Minnesota 55432 Ownership: Theodore Burandt Legal Description: Lot 3, Auditor's Subdivision No. 25 (Except part for Highway) (Except Fast 650 feet to school) (Except Parcels 1270 and 1120). Zoning: R-3 General Family Multiple Dwellings Highest and Best Use: Office Buildings Taxes and Special Assessments: The 1981 real estate taxes are $1002.20 per annum and a $37,500 market valuation. The prepayable special assessments are no balance due but a proposed sewer lateral with cost unknown as of March 15, 1982. Lot Description: This is a fairly level grade with blacktop surfaced public access on the west. There is a blacktop curb, no public sidewalk and no alley. The land is approximately 25,740 square feet in area with main approximate 100 foot frontage on Hillwind Road. Utilities: Subject property is serviced with public water, storm and sanitary sewer systems, natural gas and public electric power utilities. Neighborhood: The area is 75 per cent built up with single family, multiple family, comnercial, family and office building properties with a typical age range of 4 to 20 years and valuations of $74,500 to $350,000. Subject is located north of I-694 and east of Highway #G5 with access by a service drive known as Hillwind Road. The area appears stable and well maintained. Thu new office buildings and a house type office building have been built to the south of subject property in the past five years. An area of land southeast of the subject is presently open and being considered for development. Access to the Metro Minneapolis-St. Paul area is good. Develop- ment is presently at a standstill due to economic factors. • ),:i React Ea Mate Appna ib Cit 7259 COMMERCE CIRCLE WEST MINNEAPOLIS, MN 55432 (612) 511-3857 MARKET VALUE ANALYSIS Sales Comparison Approach - Land TINSIDERATIONS SUBJECT COMP #1 Data COMP #2 Data CDM1 #3 Data + - + - + - :Udress 1001 Hiliwind 79th Way NE & 5055 Central 5101 Central Road E River Road Avenue NE Avenue NE IDeation to Subject Subject 2 miles +$5000 3/4 Mile -$62,300 3/4 Mile -$62,300 !Iighest & Best Use Office Cbrmlercial Cbmmercial Commercial Topography Level Level Law low Soil Conditions Unknown Unknown Unknown Unknown Some Trees Yes Yes None None Public Utilities: Street Surface Blacktop Blacktop Blacktop Blacktop Type Curb-Gutter Blacktop Blacktop Blacktop Blacktop Storm Sewer Public Public Public Public Water Public Public Public Public Sewer Public Public Public Public Electrical Public " Public Public Public Ces Public Public Public Public 'Size: Square Feet 25,740 39,745 41,000 41,600 Dote of Sale NA 1/79 4/80 1/78 Sale Price NA $68,000 $136,000 $130,000 ?lus Adjustments --- +$5000 +$0 +$0 ';inns Adjustments ---- -$-0- -$62,300 -$62,300 ;et Adjustment ---- +$5000 -$62,300 -$62,300 ndieated Value: Per Square Foot ---- $1.84 $1.80 $1.63 :',UICATED VALUE OF LAND: $1.80 per square foot x 25,740 square feet = $46,332 Funded = $46,300 ll � • Rea t Ea tate Appko2a e4. 1259 COMMERCE CIRCLE WEST MINNEAPOLIS, MN 55432 (612) 511-3851 CORRELATION The value estimates developed by three valuation approaches are as follows: Estimate of Value by Replacement Cbst Approach Not Applicable Estimate of Value by Income Approach Not Applicable Estimate of Value by Market Data Comparison Approach - $46,300 CORRELATION OF VALUE ESTIMATES The correlation phase of the appraisal process involves a reevaluation, an analysis and finally a decision as to which estimates of value are most indicative of the actual market situation. The correlation is in no way, nor should it ever be, an average of the results of the two or three approaches used in the valuation process. Instead, the correlation is an evaluation and review of each approach and subsequent weighing of the approaches with respect to their reliability as a measure of value of the subject property. FINAL ESTIMATE OF VALUE The value opinion is the result of the conclusions reached in the corre- lation. It is purely a subjective opinion based on data collected in the market and modified by the appraiser's judgment. Although the final estimate of value need not be equal to any one of the value indicators, it should fall within their range. Correlating the above Estimates of Value measured by the Cost, Income and Market Data Approach to Value, the most probable indication of Market Value is the amount, $46,300.00. FINAL ESTIMATE OF MARKET VALUE $46,300.00 • • R 62 y O 2ttat9,1 I.F.A.S.• React E3'ate Appkaisvc 7259 COMMERCE CIRCLE WEST MINNEAPOLIS, MN 55432 (612) 571-3857 • CERTIFICATE OF APPRAISAL I cb hereby certify that I have personally examined the property de- scribed in this appraisal report. I further certify that I have no present or contemplated interest in the property appraised, and that neither my employment nor the fee therefor was in any manner contingent upon the estimate of value re- ported. I have assumed the title of the property to be good and merchantable and in the appraisal have disregarded any liens, mortgages and all other matters legal in nature; That my fee for this appraisal is in no way contingent on a predeter- mined value, nor is there any obligation on my part to testify in court on any matter pertaining to this property unless special arrange- ment is agreed upon for such testimony. The possession of this report or any copy thereof does not imply the right of publication, nor may the report be used by anyone but the applicant without the consent of the appraiser. Having made an appraisal of the property in conformity with the Code of Ethics of the National Association of Independent Fee Appraisers and according to the methods and procedures prescribed by them, my estimate of market value of the subject property, as of the date, March 16, 1982 , is the sum of: FORTY SIX THDUSAND T:RFE HUNDRED AND 00/100 DOLLARS ($ 46,300.00 ) (; LC / 61- 1"*"C- Independent Fee Appraiser NORTH PARK PROJECT P/ THE CITY OF ---17-::;;/ �•� HOUSING ;;� ,,,,: i - •O. • .. firr and '�. .� .. 1\ REDEVELOPMENT y MEMORANDUM 'i. ♦ AUTHORITY ..... . • .•• .610 FRIDLEY 111.• mmSOO FROM EXECUTIVE DIRECTO MEMO NO.82-31 DATE April 2, 1982 TO ACTION INFO. SUBJECT Housing & Redevelopment Authority X North District Projects Because the North District is a unique area due to severe soil corrections problems and limitation on our tax increment district through loss of fiscal disparities funds, I feel it is essential to delay any further action on requested proposals until we can establish some realistic guidelines, by which we can analyze each project and possibly establish a reserve fund by which we can assist these projects. I will have some guidelines for your review by the May 13, 1983 meeting so that we can continue to assist developers,.in this area. JLB/de G- G. W. PASCHKE PROPERTIES r j >:,o- a 7260 UNIVERSITY AVENUE NORTHEAST, SUITE 345. FRIDLEY, MN. 55432 i + yrs -. t "?+ . i- TELEPHONE 612-571-6466 March 10, 1982 Mr. Jerry Boardman CITY OF FRIDLEY 6431 University Avenue NE Fridley, Minnesota 55432 Dear Jerry, This letter is in regard to the land we have in the University Industrial Park. As you know, the land in most of the park is unbuildable because of the extent of the bad ground. It is my understanding, now that the Tax Increment District has been formed, that we can ask for help. We have stopped construction on the building on Lots 4,5,6 ,7,8 , Block 3 because of the amount of money it cost to correct anymore of the land. We have a project in the planning for lots 8,7,4 , Block 4. Also we feel because things are slow this year, we would like to correct the land on lots 5 & 6, Block 4. It would take some time to correct and with financial help we would not have a delay. We feel that it will take about $1. 05 per sq. ft. We are not sure at this time how many sq. ft. would have to be excavated. I would appreciate any guidance you could give me on this, or Industrial Revenue Financing. I would like to meet with you at your earliest concenience. S' Gere y, rry Paschke G. W. PASCHKE PROPERTIES GWP:ds 3d FINANCIAL 3 / • OTHER BUSINESS