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HRA 04/08/1993 - 29640�� CITY OF FRIDLEY HOIIBING & REDEVELOPMENT AIITHORITY MEETINC,� APRIL 8, 1993 CALL TO ORDER• Chairperson Commers called the April 8, 1993, Housing & Redevelopment Authority meeting to order at 7:30 p.m. ROLL CALL• Members Present: Larry Commers, Virginia Schnabel, John Meyer, Duane Prairie, Jim McFarland Members Absent: None Others Present: William Burns, City Manager Barbara Dacy, Community Development Director Rick Pribyl, Finance Director Craig Ellestad, Accountant Grant Fernelius, Housing Coordinator Appointee APPROVAL OF JANUARY 9, 1993. JOINT CITY COUNCIL/HRA MINUTES AND JANUARY 14, 1993, HOUSING & REDEVELOPMENT AUTHORITY MINUTES: ,—� MOTION by Ms. Schnabel, seconded by Mr. Meyer, to approve the - January 9, 1993, Joint City Council/HRA minutes and January 14, 1993, Housing & Redevelopment Authority minutes as written. IIPON A VOICE VOTE, ALL VOTIN(3 AYE, CBAIRPERBON COMMERB DECLARL�D T8E MOTION CARRIED IINANIMOIISLY. 1. CONSIDER APPOINTMENT FOR HOUSING COORDINATOR Ms. Dacy stated staff is recommending that the HRA appoint Mr. Fernelius as Housing Coordinator. Out of 77 candidates, five were interviewed and Mr. Fernelius was the top candidate. Mr. Fernelius stated he was honored to be considered a finalist. He looks forward to the opportunity to work with the HRA. MOTION by Mr. Prairie, seconded by Mr. Meyer, to accept the recommendation of staff to appoint Mr. Grant Fernelius as Housing Coordinator. IIPON A VOICE VOTE, ALL VOTIN(i AYE, CBAIRPERHON COl�lERS DECLARED THE MOTION CARRIED IINANIMOIISLY. Ms. Dacy stated a related item has come up which is a cooperative purchase agreement. Because the HRA has essentially hired an i"� HOIIBING & REDEVELOPMENT AIITHORITY MEETING, APRIL 6. 1993 PAG� 2 ,� employee, this document is a joint powers agreement between the HRA and Anoka County so this employee can be put on the group insurance coverage similar to what the City now does for its current employees. Staff recommends the HRA approve the joint powers agreement and authorize the Executive Director and the , Chairperson to sign the agreement. Mr. Meyer asked if this was ongoing for things other than insurance. Is there not something already in force? Ms. Dacy stated there is an agreement in force with the City but not the HRA as a separate entity. MoTION by Ms. Schnabel, seconded by Mr. McFarland, to recommend approval and to authorize the Executive Director and Chairperson to sign the joint powers agreement. IIPON A VOICE DOTE, ALL VOTING AYE, CHAIRPLRBON CONIIKERS DECLARED THE MOTION CARRIED UNANIMOIIBLY. 2. AWARD BID FOR MAINTENANCE OF LAKE POINTE SITE Ms. Dacy stated bids were received for the Lake Pointe Development � Maintenance Project No. 244 and the low bidder was Jon Isaacson � Lawn Care with a bid of $24,173.00. Mr. Commers asked if the company was bonded. Ms. Dacy stated, yes. They are bonded and must submit it to the Public Works Department. She believed the City had received this from the Jon Isaacson Lawn Care company. MOTION by Mr. Prairie, seconded by Mr. Meyer, to approve awarding the bid for the Lake Pointe Development Maintenance Project No. 244 to Jon Isaacson Lawn Care for $24, 173.00. Mr. Commers asked what was included in Alternates A and B. Ms. Dacy stated she was not sure and did not have the documents at this time. Mr. Prairie stated he would assume these were items that, if above budget, would not be done. Mr. Meyer asked if the deletion or acceptance of the alternates would change the low bidder. Ms. Dacy stated, no. ^� IIPON A VOICE VOTE, ALL VOTING AYE, CHAIRPER80N CONIIKERB DECLARED THE MOTION CARRIED IINANIMOIISLY. � HOIIBINa & REDEVELOPMENT AIITHORITY MELTINC�. APRIL 8, 1993 PA(�iT 3 3. CONSIDER APPROVAL OF SATISFACTION OF MORTGAGE FOR 5831 - 3RD STREET N.E. Mr. Commers stated the HRA is asked to approve the satisfaction of the Peterson mortgage, and the HRA has one other home on this program. Staff is recommending the HRA give the Executive Director authority to satisfy that mortgage when it comes due. Ms. Schnabel stated the satisfaction has already been done, and it looks as if the Petersons have lived up to the terms of the agreement. MOTION by Mr. Schnabel, seconded by Mr. Prairie, to endorse the mortgage satisfaction to Orlin and Darlene Peterson and to authorize the Executive Director to execute the remaining mortgage satisfaction when necessary as long as the program requirements are met. IIPON A VOICE VOTE, ALL VOTIN6 AYE, CHAIRPER80N COI�iERB DECLARED THE MOTION CARRIED IINANIMOIISLY. 4. HRA BUDGETS FOR 1993 �'� Ms. Dacy stated a copy of the 1993 budget was included in the agenda. Projects occurring in 1993 include: 1) the Mississippi Street reconstruction project; 2) Lake Pointe marketing; 3) housing programs; 4) University Avenue signal improvements; 5) Fridley Town Square and Dairy Queen issue; and 6) redevelopment of the southwest quadrant. Ms. Dacy referred to the Projection of Annual Accumulated Balance and stated staff has verified all revenue columns and expenditure columns. In 1995 and 1999, while there is a negative annual balance, the cumulative balance is positive. In 1995, the bond payment for Lake Pointe is due and in 1999 the final bond payment for another issue is due. Staff has estimated the revenue side very conservatively, assuming there is no new growth. For example, the tax increment from WalMart is not included. Ms. Dacy stated that in terms of operating expenses, given the initial focus on housing programs, staff has separated the budget into two budgets for better tracking. The HRA is right on budget for the housing coordinator fund. In the operating budget, staff is projecting approximately a 2o increase in the overall operating expenses. Because there will be a number of one-time expenses in 1993, some expenses will drop off in 1994. Ms. Dacy stated that at a previous meetings, the HRA wanted staff ^ to analyze legal services and how much is being spent. The amount HOIIBING & REDEVELOPMENT AIITHORITY MEETING. APRIL 8, 1993 PAGE 4 � A`, spent is on budget for both legal firms, Barna, Guzy, and Casserly. Ms. Dacy stated that the HRA also asked staff to look at Rice Plaza. In 1992, they had a positive balance. However, in 1993, they can expect a negative balance because of the current tenant mix. Later this year, she recommends revisiting that issue and determining whether or not to proceed with demolition of the building. All leases will expire by the end of this year. Mr. Commers stated the tax increment projection is based without WalMart and Springbrook and is based on the current growth. Is there any appreciation on taxes included? Mr. Pribyl stated these are the numbers received for pay 1992 and inserted any increases that we know of in the next year. There is no appreciation of property for future years. Revenues are actual based on the agreements in existence today. Ms. Commers asked if interest earnings were calculated at 5�. Mr. Pribyl stated that was correct. That is 5� on the cumulative balance. ,s� Mr. Commers stated that the worksheet is good planning purposes, but the school district refunds should be footnoted that this is not an obligation. Mr. Pribyl stated this spread sheet is a planning device for the HRA and not a public document. Mr. Commers is correct in saying that at any point these can be discontinued. Mr. Commers stated that for planning purposes, this is good to include. Mr. Pribyl stated he would add a footnote. Mr. Burns stated this number has been considerably less when taking into account delinquencies. Mr. Pribyl stated, yes. It is dependant on the property. Mr. Commers asked if the 1992 refund was short. Mr. Pribyl stated they are actually still working on the last half of pay 1992. It is probably closer to the upper $200,000 figure. That amount includes Lake Pointe. Mr. Prairie asked if this is the one that was discussed by the Council. It might be good to put in the new numbers on the whole � thing. ,r"� HOIIBING & REDEVELOPMENT AIIT80RITY MEETING, APRIL 8. 1993 PAGE 5 Mr. Pribyl stated these are projections and these will be updated. Next year, he will have the newest projection for 1993. All they can do is use the last actual figures for future projections. Mr. Burns stated staff does not have that information. The best they can do is provide 1990 and 1991 actual. Mr. Pribyl stated for 1992 it is something less than $100,000 but still between $50, 000 and $100, 000 but he did not know exactly what that figure is. Mr. Burns stated staff can provide projected actuals for the next meeting. Ms. Schnabel asked if they wanted actual as well as projected. Mr. Prairie stated that if the projection is off by 30�, he did not want it at this time. Mr. Pribyl stated it is only at this part of the fiscal year that staff can provide this to the HRA. In June and July, staff will get the "pay for 1993" and will be processing�that for the next agreement period. It is still a guess because they do not know � what the abatements and other tax petitions will be. ti Mr. Prairie stated he thought the school districts need it in May. Mr. Pribyl stated he can only give the most current numbers that are available. Mr. Commers stated the next issue relates to the salaries for the City and referred to the document on how much is spent on HRA time. Mr. Burns stated the City estimates the time allocated for the HRA and charges that percentage of salaries to the HRA. Each person is asked approximately how much time is spent for the HRA and that is the amount of time they include. Mr. Pribyl stated they are still using the same percentages used in the last two budgets. Mr. Prairie stated this is the equivalent of three full-time staff. Mr. Burns stated this seems correct. It was calculated before and he thought that is what they came up with. Mr. Prairie stated $168,000 is more than the previous year. Mr. Burns stated this reflects 3% increase over last year. � 80II8ING � REDEVELOPMENT AIITHORITY MEETING, APRIL 8, 1993 PAGE 6 � Ms. Schnabel asked if the Housing Coordinator position was included. Mr. Burns stated, no. Staff thought it best to keep track of that separately. Mr. Commers stated the legal fees seemed high. Ms. Dacy stated the budgeted amount is the same as last year and the year before. Ms. Dacy stated professional services includes more than attorney fees. Staff is recommendinq reserving $30,000 for Lake Pointe consultant services. In terms of attorney fees, Barna, Guzy are under budget and Casserly is within $2,000. Mr. Prairie stated fees were less last year. Ms. Dacy stated Casserly had a lot of time involved with Lake Pointe. Mr. Commers asked if staff anticipates any major projects at this time. �� Ms. Dacy stated the projects are included in the capital improvements section. Mr. Commers stated none of that takes legal services. Ms. Dacy stated this is correct. Mr. Prairie stated there is another $30,000 for Lake Pointe for a total of $60,000. Ms. Dacy stated $30,000 is for the consultant fee and $30,000 for advertising. Mr. Burns stated this is a best guess at this point. Mr. Commers stated it was his understanding that the City would do the rental inspections. Mr. Burns stated the budget includes rehab inspections. Ms. Dacy stated these are single family rehab programs which are separate from the rental unit inspections. Mr. Burns stated that when they start talking about the screening process, inspections will be discussed more. � SOIIBING & REDEVELOPMENT AIIT80RITY MEETINGr. APRIL 8. 1993 PAt3E 7 %�� Ms. Schnabel asked if the inspector is someone who will be hired to inspect for the HRA. Ms. Dacy stated these will be contracted services. Mr. Fernelius will be responsible for evaluating to see that they are qualified, and inspectors will be assigned to applicants who are receiving monies. He will have a pool of inspectors and will have contracts based on an hourly rate. Mr. Commers asked if it is necessary to have certification so, as government agencies approve property and they say it meets requirements, it is accepted. Ms. Dacy stated if property is inspected for NIIiFA the property may have different requirements. Staff is setting up minimum requirements for these inspectors. Staff has contacted communities with truth in sales ordinances and has a list of inspectors who work in these cities. Staff will contact these people to see if they are interested in providing service here. Mr. Commers referred to Rice Plaza. It seemed that for the condition of that Plaza and the income generated, the taxes should be abated. �� Ms. Dacy stated that as long as this is an income generating property, taxes will have to be paid. Mr. Commers stated he believed the taxes should be reduced significantly. What is the fair market value from the appraiser? Ms. Dacy stated taxes went up from 1992 because of class rate changes. She did not think the value was raised but there was a different method of calculating. Mr. Burns stated he also thought the taxes should have come down. Ms. Dacy stated that sometime in the future the HRA needs to decide whether to continue or get out. Mr. Commers stated the building does not have a great deal of value. The only value is the land value. As a result, it would seem that they could ask the County to significantly reduce the taxes. Mr. Pribyl stated they can file a request when paying the first half taxes. He can check and provide a report from the assessor. Mr. Prairie asked when the HRA needs to discuss what to do. It is not fair to the renters to wait until the last 60 to 90 days. �� Ms. Commers stated they should also look at what it will cost to demolish the building. HOIIBING & REDEVELOPMENT AIITHORITY MEBTIN(�. APRIL 8, 1993 PAGE 8 ,~� Ms. Dacy stated that about one year ago, an estimate for demolition was about $25,000. Staff is planning to schedule this discussion during June or July. Mr. Commers stated they don't have what all of the debt services are. Mr. Pribyl stated they have three different bond issues that are still outstanding. There is no other long term debt. Mr. Commers stated that based on the analysis, if they assume these numbers are accurate, what is available for development between now until the year 2000. Mr. Pribyl stated that if the HRA does nothing now until the year 2000, they would have accumulated a balance of $4.4 million. If funds are used, the cumulative balance would be less because less interest would be earned. Mr. Commers asked, out of this amount, what is the accumulated interest? ,.� Mr. Pribyl stated there is a significant amount of interest, perhaps $2.5 million to $3 million. Mr. Commers stated that if they use funds, they have only $1 million. What happens on Lake Pointe if they want to put $4 million into it? Mr. Pribyl stated they have a cumulative balance that will carry the 1995 debt service payment. There is a huge incentive at Lake Pointe which is the land value. Mr. Burns stated the incentives are the land writedown and the parking ramp. They need intensive development to warrant a parking ramp. Mr. Commers stated there is no balance sheet to show the HRA what they have. Mr. Pribyl stated he is working on it now. He does not have it for 1992. What the Commission is seeing in the cumulative balance is what the balance actually is. This is the cash position but not the property that is owned. Mr. Commers stated this is not as good as it should be. Mr. Pribyl stated that with the situations at Lake Pointe and the �, City Center, they have still kept cumulative balance. � HOIIBING & REDEVELOPMENT AIITHORITY MEETINa. APRIL 8. 1993 PAGE 9 Mr. Commers stated that `the HRA will have to be much more careful and be sure projects will break even. Mr. Pribyl stated that with Lake Pointe, he thought the land incentive is attractive if they get a developer that can handle that size of property. Mr. Commers stated that assuming that takes place, that is a balance sheet item and will have no effect on the budget. Mr. Burns stated that in terms of economic development items, it is going to orient them to a pay-as-you-go approach for economic development projects that arise. Mr. Commers asked how pay-as-you-go affects this. Mr. Pribyl stated it does in that they have income on the tax increment side and expenses going out. Mr. Burns stated you cannot pay out more than what you are getting. If the increment is not there, you don't pay. At a minimum, they get the 10� administrative fee up front. Mr. Pribyl stated ordinarily it would positively impact that statement. Mr. Commers asked what made up the rental income. Ms. Dacy stated they received rental revenue from Fridley Liquor Warehouse, Fridley Plaza Office parking lot, Dairy Queen, the oil changing facility, and Rice Plaza. The worksheet assumes no income from Rice Plaza in 1994; and, as of 1997, the southwest quadrant would be redeveloped. The Fridley Office Plaza parking lot rent is for 30 years. Mr. Commers asked, other than Rice Plaza properties, are there any other asrsociated maintenance expenses? Ms. Dacy stated there Office building, but charges to the HRA on said they would like coating and striping. showing wear. Rental that lot. is parking lot maintenance for the Plaza rent exceeds costs. There are no direct that in the last year or two. Owners have to talk 'to us about a schedule for seal The project is about eight years old and is income will cover maintenance expenses for Ms. Dacy stated that because of the housing issues, staff could not do the budget earlier but will try to go through this discussion for 1994 in November or December. For clarification of the utility � services #4338, Lake Pointe has an irrigation system and she - received a late bill from the utility department for 1992. HOII8IN�3 � REDEVELOPMENT AUT80RITY MEETINa, APRIL 8. 1993 PAGiE 10 � Budgeted was $3,000 and she would like the HRA to allocate an additional $3,400 to cover the existing expenses for the water bill. The total should be $6,400. Mr. Commers asked if trees would be replaced in the plaza. Ms. Dacy stated that nothing has been done with the tree replacement project for two years. 'I°wo years ago, several locust trees were removed and budgeted for replacement but staff did not move on it. This is to bring it to the Commissiqn's attention and the HRA can eliminate it or direct staff to do the project. Mr. Commers asked what is done on litigation settlements. There is another potential $40,000 for the Dairy Queen. Ms. Dacy stated that number represents that Fitch to date has been awarded $125,000 and this reflects the remaining funds. MOTION by Mr. McFarland, seconded by Mr. Prairie, to approve the budget as presented with the amendment to #4338 for a total of $6,400 for utility services (water). IIPON A VOICE VOTE, ALL VOTING AYE, CHAIRPERBON COMMERS DECLARED THE ,-� MOTION CARRIED IINANIMOIIBLY. 5. CLAIMS AND EXPEATSES • Mr. Pribyl stated there are some additions to the check register. Mr. Ellestad stated it is difficult to present a complete register because of when the meetings are scheduled so he will present additions. These are #2307 to Steve and Paul Barnacle for February and March snow plowing in the amount of $230.00. There are two checks #2305 which will be combined and go out in one check. The next is to First Choice for $446.98 for a modem for Mr. Casserly. Mr. Commers stated he thought that should be his expense. It should be his responsibility to provide for the needs of his clients. Mr. Burns stated they tried to work with his equipment and his equipment did not work. He thought this would reduce legal fees. Mr. Ellestad stated the next is to American Express for $94.00 for lunches to discuss Lake Pointe; Casserly Law offices for $2,273.50 March legal services, and Kordiak Company for $135.99 for the March management fee. MOTION by Ms. Schnabel, seconded by Mr. Meyer, to approve the %'i'�, claims and expenses as amended. ,'"1 HOIISING & REDEVELOPIKENT AIITHORITY MEETINt3, APRIL 8. 1993 PAGE_ il IIPON A VOICE VOTE � ALL VOTING AYE, CHAIRPERSON COMMERB DECLARED THE MOTION CARRIED. 6. ADDITIONAL FINANCING FOR FRIDLEY TOWN SOUARE Mr. Commers asked if Mr. Burns had any meetings with Mr. Wagner. Mr. Burns stated he has not met with Mr. Wagner personally. Mr. Casserly has met with them. He talked with Lowell Wagner over the phone and reiterated his position. Mr. Fitch has asked for a $35,000 additional settlement on the Dairy Queen. Staff believes the HRA should stay with the original proposal. This is to update the Commissioners unless the HRA decides otherwise. Mr. Meyer asked if the option was to face the possibility of taking legal action. Mr. Burns stated Mr. Fitch has filed an appeal and it could be that he will follow it through the court system. It could cost additional money. Mr. Commers stated three independent appraisers have made an assessment of value. When these people testify that this is the ^ value, it will be very hard to overcome that. Usually the court ' will put the greatest weight on what these people say. He has moving benefits also and an allowance for fixtures. � 7. REVIEW SCREENING PROCESS FOR REHAB LOAN APPLICATIONS Ms. Dacy stated what staff heard at the joint meeting was that the HRA wants to pursue a pre-screening method. She talked to the Minneapolis Community Development Association (MCDA), City of St. Paul and some of the bankers to see what they want in terms of an application. Staff talked to Mr. Gene Malis who has helped set up some rehab programs. Ms. Dacy stated she has tried to set up an application review schedule with a rating schedule to score applicants. The potential time frames are to start advertising in May, 1993, and establish the application window to send out application and receive them back allowing approximately 30-45 days. They would close applications, then have two weeks where the Housing Coordinator would look at the applications and sort by income for CDBG, MHFA, etc. Using a rating system, the Housing Coordinator would go through and score the applications that could be funded. If they get a flood of applications, they may have to tell some applicants that the HRA cannot fund their application. If that happens, once the first set of applications gets up and running, they could open another window in August. Potentially, depending on the response and funding, they could possibly have four opportunities for � � �"� HOIIBING & REDEVELOPMENT AIITHORITY MEETING, APRIL 8. 1993 PAGE 12 residents to apply for these programs. She thought the City would get a lot of response and thought funds would go fast. Ms. Dacy stated that in terms of the rating system, they started with a list of 15 criteria and then set priorities according to the HRA and Council recommendations. The rating will be according to age of home, income, a priority list of homes, and the value of code-related work. When the Council reviewed this, they liked the system, but asked the HRA to use how long an owner has lived in the community as a tiebreaker if necessary. Ms. Dacy stated staff also developed a potential application form. The first page is basic information about who the owner is and the type of dwelling. No application will be approved if there is illegal activity at the home. At the bottom is a list of code- related work which will help in reviewing applications. The last page is to get preliminary information as to the range of debt and range of income. They are asking for a copy of 1040 or 1040A to verify income. After the grant goes through and they determine who will be receiving money, the next step is to call a rehab inspector to look at the building, see if the work to be done is okay and if there is any other work that needs to be done. The inspector will review the results with the Housing Coordinator and implement the program from there. Ms. Schnabel asked if the questions on the application are in keeping with questions that are needed for the CDBG or the other programs that are potential funding for these projects. Ms. Dacy stated the financial information is more for the loan programs. The banks and administrative programs will need this information up front before creating loans. This is probably asking for more than is needed for CDBG, but staff is trying to create one all purpose form. Ms. Schnabel asked if marital status is necessary information. Ms. Dacy stated it is necessary for refinancing debt. They want to see if there are agreements for child support or other issues like alimony. Mr. Meyer asked what procedure will be used to advertise the program and the dates. Ms. Dacy stated that, first, a direct mail approach will be used to contact people on the priority list. Staff will develop a brochure and let them know these programs are available. Second, an ad in the Focus or an article on the programs will be printed. Staff has budgeted for the program up to eight 1/4 page ads. Further, she wants to crosstrain all inspectors to be aware that these programs are available and ask people to call. /'1 T, � HOIISING & REDEVELOPMENT AIITHORITY MEETING, APRIL 8. 1993 PAGE 13 Mr. Meyer asked when the City Newsletter comes out. Ms. Dacy stated the newsletter comes out four times per year. This probably will not give them the best timing, but she can put in some information about the programs. Last year the HRA used the newsletter for their annual report. She has received about 15 calls from the article in the winter edition. Mr. Meyer stated he thought this sounded very good. The tie breaker seems somewhat academic, but an applicant can be picked up the next time a program is offered. Ms. Dacy stated this could depend on the number of applicants. There may be just one window depending on the number of applications. Mr. Meyer stated a person may be waiting regardless. If the Council feels the applicants should not be on a first-come, first- serve basis, then they can use length of residence. Mr. Commers stated he had no preference. Do whatever is fair. Ms. Schnabel stated she had a problem with page 7.7. She did not know how widespread this information goes but she thought the information should be confidential. Ms. Schnabel asked that on the priority list, did staff think anyone might be offended if they are on a list like this? Ms. Dacy stated that while she cannot control their reaction, the sites are in need of work. Perhaps the program is better served if they identify specific addresses. The Council and HRA wanted to revisit the programs every six months. She was concerned that many people would end up being missed and not have property included that the City wanted included. Mr. Commers stated they need to get started. If something comes up, it can be discussed and adjustments made as necessary. 8. DESCRIBE FUTURE MARKETING ACTIVITIES FOR LAKE POINTE AND SOUTHWEST QUADRANT Mr. Burns stated he is recommending a meeting with the HRA and City Council on May 8th. In January, Mr. Commers, the Mayor, Mr. Casserly, Ms. Dacy, and he talked about marketing Lake Pointe. Staff talked to Jim Winkels to identify a list of realtors to market the site and then interviewed them. He believed they all agree that this is an attractive site but at the same time they think the original vision will be difficult to accomplish. There is no market for office space and a worse market for hotel/ HOIIBING & REDEVELOPMENT AIITHORITY MEETING. APRIL $. 1993 PAGE 19 ;� conference center space. A more real focus would be high tech office building for manufacturing and office space. The other thing is that they are probably going to focus on the metro area because of the tax climate and adverse business factors. Mr. Burns stated the group talked about the name but the majority thought it should be called the Lake Pointe Business Center. Mr. Burns stated another suggestion was that they not spend as much on marketing but spend money for a monument at the site entrance. A market brochure needs to be prepared that can be sent to prospective clients. A number of decisions need to be made about uses and timing for those uses. The tax increment district expires in the year 2009. Do they want to try to attract uses in two to three years or wait five to ten years? Uses and timing are two very important things. They also need to focus on how to market. He is leaning toward a broker approach because of the limitations of staff. When talking about a real estate broker approach, some provide only a broker service. Others are also developers and builders. They can also use a developer approach. It is too early to rule that out. Perhaps the market is not right for anything and they may want to consider not doing anything for several years. ,,—� Mr. Burns stated he is recommending hiring Bill Tobin to organize , a strategic planning session and to meet with the HRA and Council on May 8 for a fee of $2,000. Mr. Tobin was brought to his attention by Mr. Winkels. Mr. Tobin has worked with Medtronic. He is interested in being a consultant. He thought Mr. Tobin would serve the City well, and he would be very helpful in wording and designing an RFP and helping to evaluate responses. He stated he would like to move ahead as quickly as possible. Mr. Commers asked if Mr. Tobin would do the meeting, planning, and report for $2,000 and after that he would be on an hourly basis. Mr. Burns stated, yes. He is willing to go on a fee per project if the City needs that. Mr. Meyer stated it would be nice to get together on May 8 but it seems the things to be discussed and things the HRA is being asked for decisions on are things he does not know much about. He thought these are things that Mr. Tobin should tell us. The HRA needs someone who will tell the HRA what they will be faced with or what approach to use in marketing. Mr. Burns stated it is important to know that the City Council and HRA are buying into a particular set of guidelines. A quality development on this site is a priority. Mr. Tobin is in a good position to steer them in the right direction for the uses the HRA �''1 might identify and to help bring them to a consensus. HOIISING & REDEVELOPMENT AIITHORITY MEETING. APRIL 8. 1993 PAGE 15 � Mr. Prairie stated that if they want to develop at the level they want, they may have to wait seven or eight years. Mr. Meyer stated he wants the expert's guidance as opposed to guiding the expert. Mr. Commers asked if he wanted alternatives. Mr. Meyer stated he wants to be told the facts of what is out there and what is realistic. He wants to hear his e�ertise. ° Mr. Burns stated he has not yet structured the meeting. He can structure it so the HRA can hear the types of things Mr. Tobin feels they can do now and do two or three years out. Mr. Meyer stated to inform us of what is out there is important. Mr. Prairie asked if Mr. Tobin could present what would happen if the HRA waited two years or five years and the consequences. Ms. Schnabel asked if there are people in the corporate development center. ^ Mr. Burns stated the biggest tenant is a company called Multi-Tech. Ms. Schnabel asked if it would be of some value to get someone who is involved in that development to talk to the HRA to find out how they proceeded, or has Mr. Burns talked to them? Mr. Burns stated he has talked to them. Ms. Schnabel asked if they want someone geared to a suburban area as opposed to downtown. Mr. Burns stated that if they start focusing on a person who has developed a particular parcel or who is currently developing, they will hear a sales pitch as opposed to a person who is obj ective about it. That is the kind of person I have tried to bring to you. This individual has demonstrated strong knowledge of real estate. Mr. Commers stated he thought this was a good start. They may raise even more questions and may need to do something else. It would be a good idea if he did have some things in mind as to what would be viable choices. Ms. Schnabel asked what about the southwest quadrant. Mr. Burns stated they have not talked about this. In conversations with one broker, he recommended the City try to attract a medical � project such as a clinic. He thought Lake Pointe took priority. � HOIISING & REDEVELOPMENT AIITHORITY MEETING. APRIL 8. 1993 PAGT 16 Mr. Meyer asked if the meeting needed to be three hours. He would prefer 9 a.m. to il a.m. or 9 a.m. to 12 noon. Then everyone has the afternoon free. Mr. Burns stated he can make it earlier. He would recommend that this be considered an HRA meeting rather than a Council meeting. He will tentatively assume the meeting is May 8 from 9 a.m. to 12 noon. 9. HOME PROGRAM Ms. Dacy stated she is requesting the Commission concur with the recommendation that, if necessary, the local match would come out of reserves that have been identified. She will find out more at a later point in time. The Commission concurred. 10. RICE PLAZA UPDATE Mr. ComYners stated they had talked about and have the March rental information. This is for the Commission's information. ,.,-� 11. MISSISSIPPI STREET IMPROVEMENT PROJECT Ms. Dacy stated that as part of the Mississippi Street improvement, she has requested the contractor park their trailer behind Rice Plaza and access by 3rd 5treet. Ms. Dacy is requesting the HRA pass a motion for the County to make a minor modification to save a 100-year-old oak tree next to the Target property on Mississippi Street. This is a double trunk tree and she is asking the public works department to route the sidewalk around the tree rather than remove it. Siah St. Clair has looked at the tree and stated this is a white oak which is very hardy. There will be a two-foot grade cut and with the sidewalk rerouted, he is confident the tree will survive. These trees have a life expectancy of 300-500 years. Mr. Commers asked why not do the sidewalk on the side away from the curb. Ms. Dacy stated they could do it that way also. There is another oak tree in the median and the sidewalk would have to be routed in between the two trees. Mr. Prairie asked if there were any safety concerns. Ms. Dacy stated it is better to have the sidewalk separated from ^ the curb but there are instances where sidewalks butt up against the curb. �-1 HOIISINa & REDEVELOPMENT AIITHORITY MEETING. APRIL 8. 1993 PA�3E 17 Mr. Commers asked if there would be extra cost. Ms. Dacy stated she thought it would even out. They would have to build a two foot retaining wall which would even out with the cost of brick. MOTION by Mr. McFarland, seconded by Ms. Schnabel, to recommend rerouting the sidewalk to save the white oak tree. IIPON A VOICE VOTE � ALL VOTIN(3 AYE, CHAIRPER80N COMMERB DECLARED T8E MOTION CARRIED IINANIMOIIBLY. 12. OTHER BUSINESS Mr. Burns stated there are signs the industrial sector of the economy is improving. He has been getting contacts at the City. This is on behalf of the All-Temp Corporation located on Ninth Street just north of Kurt Manufacturing. They sent a letter describing a 50,000 square foot addition they would like to build on to their building, but they have some problems building it in Fridley as far as sprinkler systems in refrigerated space. They also have to provide for storm water detention and that is ,� difficult with the lack of storm drains on Main Street. They will still have to provide for storm detention, but next year the County is planning to install a storm drain line so that will help. They do have a customer in Monticello that needs the frozen storage, and this customer and the City of Monticello is offering financial incentives to build a facility there. They are asking how they can solve these problems and asking what financial incentives Fridley may have. Mr. Burns stated Mr. Holman represents two companies - All-Temp Distribution and All-Data Storage. The two companies employ 53 people. They occupy 425,000 square feet next to Kurt Manufacturing. One-third of the building is leased to American Converters and Land O'Lakes. All-Temp provides food distribution services for a number of frozen food producers. All-Temp has annual sales of $3.5 million and All-Data, a records storage business, has $1.0 million in sales. The project is a 50,000 square foot facility to be built to serve two prospective customers. Estimated cost is $3.0 million with an expected tax value of $20 per square foot. They plan to hire 15 to 20 new employees with an average salary of $28,000. They hope to begin construction in 1993. There is the potential of another client requiring 10,000 to 15,000 square feet and, if that happens, they will have to go somewhere else. They also need a rail site. Mr. Burns stated he has asked Mr. Casserly to review the project. ^ The project can legally be funded through TIF and an Economic Development Tax Increment District could be created. If they � HOIIBING & REDEVELOPMENT AIITHORITY MEETING, APRIL 8. 1993 PAGE 18 accept $3 million as the project costs and apply the 5� guideline, they could provide up to $150,000 as a grant incentive or a pay- as-you-go incentive. Alternatively, Mr. Casserly suggests considering a combination loan and revenue note package. Mr. Burns stated there are issues other than space. The site is tight and Kurt uses the property for parking. If All-Temp is to build, Kurt would not have use of the property and Kurt is at maximum lot coverage. There are some density problems for Kurt. They are looking at a site across from Holiday Plus. Mr. Prairie asked why not go ahead with it. Mr. Burns stated he did not see anything wrong. He recommended going ahead, but he did not want to go with a grant. He has not given an opportunity to Mr. Casserly to present his idea. Mr. Commers stated he agreed with the concept to go ahead and see where it goes. Mr. Burns stated this is a distribution business rather than a manufacturing business but it is a worthwhile enterprise and it is worthwhile to support an existing industry. � Mr. Commers stated to go forward and see what can be done. Mr. Meyer asked that regarding the sprinkler system, is it the City that must approve? Mr. Burns stated it is the State Building Code which the City interprets as requiring a sprinkler system. Mr. Burns stated the building is very cold and it is very expensive to install a sprinkler system. Ms. Dacy stated they can get an opinion. MOTION by Ms. Schnabel, seconded by Mr. McFarland, to adjourn the meeting. IIPON A VOICE VOTE, ALL VOTING AYE, CBAIRPER80N COMMERB DECLARED THE MOTION CARRIED AND THE APRIL 8, 1993� HOIISING & REDEVELOPMENT AIITHORITY MEETING ADJOIIRNED AT 10:10 P.M. Res ectfully submitted, � Lavonn Cooper � p Recording Secret ��