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02/26/2007 - 6125_ -- ., � � Cf1Y OF FRIDLEY FRIDLEY CITY COUNCIL MEETING OF FEBRUARY 26, 2007 T:30. p.m. - City Council Chambers Attendance Sheet ALFASF PR/NT NAMF, Aa�RFSS AND /T�M NUMBFR YaU ARF /NTFRFSTFD /M. pr�int Name (Clearly) Address Item No, �C. � v c, `�C�.� vv.. � �� S6 `ho r�i�. c:p � c— � _ -J Z l � � � �� ;� � � � � 5 l � �U � .� �//- �s `�� :��.�. � cL 7�� y1c��,c�, d9r��v� /�. FRIDLEY CITY COUNCIL MEETING OF FEBRUARY 26, 2007 ., _ �/ � CfTY OF FRIDLE1f The City of Fridley will not discriminate against or harass anyone in the admission or access to, or treatment, or employment in its services, programs, or activities because of race, color, creed, religion, national origin, sex, disability, age, marital status, sexual orientation or status with regard to public assistance. Upon request, accommodation will be provided to allow individuals with disabilities to participate in any of Fridley's services, programs, and activities. Hearing impaired persons who need an interpreter or other persons with disabilities who require auxiliary aids should contact Roberta Collins at 763-572-3500 at least one week in advance. (TTD/763-572-3534) PLEDGE OF ALLEGIANCE. APPROVAL OF PROPOSED CONSENT AGENDA: APPROVAL OF MINUTES: City Council Meeting of February 12, 2007 OLD BUSINESS: 1. Second Reading of an Ordinance Amending Chapters 11 and 108 of the Fridley City Code Pertaining to Fees and Open Burning; and, Adopt Official Title and Summary Ordinance (Tabled February 12, 2007) .............................. NEW BUSINESS: 1-7 2. Receive Bids and Award Contract for the 2007 Street Improvement Project No. ST. 2007 - 1 ................................. 8-10 3. Appointment — City Employee ......... 4. Claims .............................................. ADOPTION OF AGENDA. OPEN FORUM (VISITORS): Consideration of Items not on Agenda —15 Minutes PUBLIC HEARINGS: 6. Consider Revocation of Special Use Permit, SP #06-08, for Sinclair Fridley, Generally Located at 6071 University Avenue N.E. (Ward 1) (Continued November 20, 2006) ................................... 14 7. Consider the Building Located at 136 Horizon Circle Hazardous and Order its Removal or Repair Pursuant to Minnesota Statutes, Section 463 (Ward 3) (Continued January 8, 2007) ................................... 15 - 18 8. Consider the Creation of TIF District No. 19 (Industrial Equities Project Generally Located at 5110 Main Street N.E.) (Ward 3) ... 19 - 30 OLD BUSINESS: 11 9. Second Reading of an Ordinance Amending and Recodifying Chapter 508 Pertaining to Alcoholic Beverages ................................... 31 - 34 12 5. Licenses ............................................. 13 10. Resolution Ordering the Removal or Repair of a Hazardous Building Pursuant to Minnesota Statutes, Section 463, Located Within the City of Fridley, Minnesota (136 Horizon Circle) (Ward 3) (Tabled January 8, 2007) .................. 35 - 37 d - FRIDLEY CITY COUNCIL MEETING OF FEBRUARY 26, 2007 PAGE 2 NEW BUSINESS: 11. Resolution Modifying the Redevelopment Plan for Redevelopment Project No. 1 and the Tax increment Financing Plans for Tax Increment Financing District Nos. 1-3, 6-7, 9, 11-14 and 16-18 to Reflect Increased Bonding Authority within Redevelopment Project No. 1, Creating Tax Increment Financing District No. 19 and Adopting a Tax Increment Financing Plan Relating Thereto (Industrial Equities Project Generally Located at 5110 Main Street N.E.) (Ward 3) . 38 - 46 12. Resolution of the City of Fridley, Minnesota, Directing Its Attorney to Obtain a Legal Opinion from the Minnesota Attorney General Pursuant to Minnesota Statutes, Chapter 8.31 ....................... 47 — 50 13. Informal Status Reports ..................... 51 ADJOURN. � � CITY COUNCIL MEETING OF FEBRUARY 26, 2007 CffY OF FRIQLEY The City of Fridley will not discriminate against or harass anyone in the admission or access to, or treatment, or employment in its services, programs, or activities because of race, color, creed, religion, national origin, sex, disability, age, marital status, sexual orientation or status with regard to public assistance. Upon request, accommodation will be provided to allow individuals with disabilities to participate in any of Fridley's services, programs, and activities. Hearing impaired persons who need an interpreter or other persons with disabilities who require auxiliary aids should contact Roberta Collins at 763-572-3500 at least one week in advance. (TTD/763-572-3534) PLEDGE OF ALLEGIANCE. APPROVAL OF PROPOSED CONSENT AGENDA: APPROVAL OF MINUTES: City Council Meeting of February 12, 2007 OLD BUSINESS: 1. Second Reading of an Ordinance Amending Chapters 11 and 108 of the Fridley City Code Pertaining to Fees and Open Burning; and, Adopt Official Title and Summary Ordinance (Tabled February 12, 2007) ............................................................. 1- 7 NEW BUSINESS: 2. Receive Bids and Award Contract for the 2007 Street Improvement Project No. ST. 2007 - 1 .................................................. 8- 10 FRIDLEY CITY COUNCIL MEETING OF FEBRUARY 26, 2007 PAGE 2 NEW BUSINESS (CONTINUED): 3. Appointment — City Employee ......................................................................... 11 4. Claims ............................................................................................................. 12 5. Licenses .......................................................................................................... 13 ADOPTION OF AGENDA. OPEN FORUM (VISITORS): Consideration of Items not on Agenda — 15 Minutes PUBLIC HEARINGS: 6. Consider Revocation of Special Use Permit, SP #06-08, for Sinclair Fridley, Generally Located at 6071 University Avenue N.E. (Ward 1) (Continued November 20, 2006) ......................................................... 14 7. Consider the Building Located at 136 Horizon Circle Hazardous and Order its Removal or Repair Pursuant to Minnesota Statutes, Section 463 (Ward 3) (Continued January 8, 2007) ........................................................................................................ 15 - 18 8. Consider the Creation of TIF District No. 19 (Industrial Equities Project Generally Located at 5110 Main Street N.E.) (Ward 3) .................................................................... 19 - 30 FRIDLEY CITY COUNCIL MEETING OF FEBRUARY 26, 2007 PAGE 3 OLD BUSINESS: 9. Second Reading of an Ordinance Amending and Recodifying Chapter 508 Pertaining to Alcoholic Beverages........................................................................................................ 31 - 34 10. Resolution Ordering the Removal or Repair of a Hazardous Building Pursuant to Minnesota Statutes, Section 463, Located Within the City of Fridley, Minnesota (136 Horizon Circle) (Ward 3) (Tabled January 8, 2007) ................................................................................... 35 - 37 NEW BUSINESS: 11. Resolution Modifying the Redevelopment Plan for Redevelopment Project No. 1 and the Tax Increment Financing Plans for Tax Increment Financing District Nos. 1-3, 6-7, 9, 11-14 and 16-18 to Reflect Increased Bonding Authority within Redevelopment Project No. 1, Creating Tax Increment Financing District No. 19 and Adopting a Tax Increment Financing Plan Relating Thereto (Industrial Equities Project Generally Located at 5110 Main Street N.E.) (Ward 3) .................................................................. 38 - 46 12. Resolution of the City of Fridley, Minnesota, Directing Its Attorney to Obtain a Legal Opinion from the Minnesota Attorney General Pursuant to Minnesota Statutes, Chapter 8.31 ....................................................................................... 47 — 50 13. Informal Status Reports ...................................................................................... 51 ADJOURN. CITY COUNCIL MEETING CITY OF FRIDLEY FEBRUARY 12, 2007 The City Council meeting for the City of Fridley was called to order by Mayor Lund at 7:32 p.m. ROLL CALL: MEMBERS PRESENT: Mayor Lund Councilmember-at-Large Barnette Councilmember Saefke Councilmember Varichak Councilmember Bolkcom OTHERS PRESENT: William Burns, City Manager Fritz Knaak, City Attorney Scott Hickok, Community Development Director Jon Haukaas, Public Works Director 7ack Kirk, Director of Parks and Recreation APPROVAL OF PROPOSED CONSENT AGENDA: APPROVAL OF MINUTES: City Council Meeting of January 22, 2006 APPROVED. POLICE DEPARTMENT UPDATE: Officer Chris Knight, Fridley Police Department, presented an update on their predatory offender checks. He stated currently the Fridley has 60 sex offenders and predatory offenders. They are now lumped together and listed as predatory offenders. They are grouped into different levels: Level III, Level II, and Level I and Not Assigned. Level III is the most likely to offend of which the City has none. The Bureau of Criminal Apprehension has a lack of resources in this area when it comes to doing checks, so they ask for assistance from the Police Department in every community to assist them in doing the checks. Police Chief Abbott takes these checks very seriously and has dedicated resources to complete this function. The Police Department performs three to four random checks per calendar year. He has done these checks for approximately the past ten years. One or two officers meet in person with each one of the offenders each time they do the checks. Officers verify the offender's residence and update photographs as needed. He said he completed the Police Department's checks in December. He personally made contact with all 60 offenders in Fridley. There are three violations that he is in FRIDLEY CITY COUNCIL MEETING OF FEBRUARY 12, 2007 PAGE 2 the process of charging out. This is common. They usually find anywhere between three and five violations. Officer Knight stated he always completes any intake and exit paperwork and any updated paperwork as needed. He works directly with the Bureau of Criminal Apprehension and the County Attorney on any violations that take place. Per state law, all offender information is private and it cannot be released to the public for any reason. Changes can be made, but they must be done by the legislature. The Police Department completes these checks to stay informed and updated on each offender's information and will continue to do so. If there are any questions, please feel free to contact him. Councilmember Barnette asked what the range of age was for the offenders. Officer Knight replied 15 to 16 years old is the youngest. The oldest are in their 60s. Mayor Lund asked if 60 offenders were considered a lot for a community the size of Fridley. Officer Knight said it was considered average. Mayor Lund asked how much time he spent on this. Officer Knight replied he sets aside one week every couple of months. He will take another officer with him or do them himsel£ During that week he dedicates his 40 hours to doing the checks and follow-ups with the individuals and then any prosecution that is needed. Councilmember Saefke asked whether the offenders are obligated to check in with the local police department on a regular basis. Officer Knight replied the BCA gives them two options: the first is based on sending paperwork once a year to each offender in every community and giving them ten days to reply and return the paperwork If they do not reply, the police track them down. That is considered the reactive approach. The proactive approach is what the Fridley Police Department is taking in which they do random checks at multiple times throughout the year. APPROVAL OF PROPOSED CONSENT AGENDA: APPROVAL OF MINUTES: City Council Meeting of January 22, 2007 Councilmember Saefke stated the adjournment was moved by Councilmember Barnette. APPROVED AS AMENDED. FRIDLEY CITY COUNCIL MEETING OF FEBRUARY 12, 2007 PAGE 3 OLD BUSINESS: 1. Second Reading of an Ordinance Amending Chapters 11 and 108 of the Fridley City Code Pertaining to Fees and Open Burning; and Adopt Official Title and Summary Ordinance. Williams Burns, City Manager, stated the ordinance would require a permit for the burning of trees, brush, grass, and other vegetative matter. The ordinance outlines the materials allowed to be burned under the permit. He said that while no permit was required for recreational fires, the ordinance also spells out the conditions under which these recreational fires may occur. An open burning permit may be obtained from the Fire Department at a cost of $95. There is also a summary ordinance attached to the second reading of tonight's ordinance that will be used for publication purposes. The first reading of this ordinance was approved by Council at their meeting on January 22. Staff recommends Council's approval. THIS ITEM WAS REMOVED FROM THE CONSENT AGENDA AND PLACED ON THE REGULAR AGENDA. NEW BUSINESS: 2. Receive the Minutes from the Planning Commission Meeting of January 17, 2007. RECEIVED. 3. Receive Bids and Award Contract for the Repair of Well Nos. 5 and 10. William Burns, City Manager, stated Public Works Director, Jon Haukaas, is recommending the Council awards this year's preventative maintenance contract for two of wells to the two contractors submitting the lowest bids. He is recommending that the repair of Well No. 5 be awarded to E.H. Renner & Sons of Elk River for the amount of $8,881. He is also recommending that the contract for repair of Well No. 10 be awarded to Bergerson-Caswell, Inc. of Maple Plain for the amount of $50,075. The amount of $60,000 has been budgeted for well repair in the 2007 budget. Staff recommends Council's approval. THIS ITEM WAS REMOVED FROM THE CONSENT AGENDA AND PLACED ON THE REGULAR AGENDA. 4. Approve Contract Amendment for the 85t'' Avenue Trail Design Project. William Burns, City Manager, stated in 2004, the City was successful in getting a federal transportation ISTEA grant for the design and construction of the 85th Avenue bikeway. Our design consultant, Bonestroo, Rosene, Anderlik, and Associates, have been acquiring right-of- way and designing the project for the last two and one-half years. The legislation before them FRIDLEY CITY COUNCIL MEETING OF FEBRUARY 12, 2007 PAGE 4 provides an additional $26,818 in compensation for Bonestroo in recognition of the expended time and additional work they have been doing. Bonestroo estimates the project cost will be $1.2 million. Their original contract was for $78,042. Of the cost, 80 percent will be covered by federal transportation money. The 20 percent local match will be covered by the City's MSAS money. Staff recommends Council's approval. THIS ITEM WAS REMOVED FROM THE CONSENT AGENDA AND PLACED ON THE REGULAR AGENDA. 5. Resolution Supporting the Improvement for the Rice Creek West Regional Trail. William Burns, City Manager, stated the Anoka County Parks and Recreation Department is asking for Council's support of their federal recreation trail grant application which is about $30,000. If funded, it will serve to upgrade the portion of the trail that extends from Highway 65 to Old Central Avenue. Staff recommends Council's approval. ADOPTED RESOLUTION NO. 2007-13. 6. Claims (130329-130603). APPROVED. 7. Licenses. APPROVED THE LICENSES AS SUBMITTED AND AS ON FILE. 8. Estimates. Palda & Sons 1462 Dayton Avenue St. Paul, MN 55104 Mill and Overlay Proj ect No. 2005 - 1 FINA ESTIMATE .....................................................$ 48,427.16 APPROVED. APPROVAL OF PROPOSED CONSENT AGENDA: Councilmember Saefke asked that Item No. 3 be removed. Councilmember Bolkcom asked that Item Nos. 1 and 4 be removed. MOTION by Councilmember Barnette to approve the consent agenda as presented with the removal of Items 1, 3 and 4. Seconded by Councilmember Saefke. FRIDLEY CITY COUNCIL MEETING OF FEBRUARY 12, 2007 PAGE 5 UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. ADOPTION OF THE AGENDA: MOTION by Councilmember Bolkcom to approve the agenda with the addition of Items 1, 3 and 4 from the consent agenda. Seconded by Councilmember Varichek. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. OPEN FORUM: Paul Westby, owner of a business at 6425 Highway 65, referenced a letter he had received from Scott Hickok whose recommendations came from Attorney Knaak. He said he is a chiropractor but is also licensed in acupuncture. He is also a board certified nutritionist and is licensed and practices in integrated health and wellness programs. He asked for some guidance from Council. Mayor Lund stated he recalled that memorandum related to a legislative or state statute regarding the definition of chiropractic use and that is what Dr. Westby's limited special use permit was for. Dr. Westby stated said his special user permit was dated January 11, 1999, and was signed by Barbara Dacy. Under the permit, he had to extend and pave the frontage alongside the west line of the property, install an asphalt driveway, line the parking lot with a concrete curb, had to have parking spaces which he extended, and had to have final drainage, landscaping and irrigation plans that had to be submitted with the building permit, have a storm pond, and had to have a variance for the driveway. Looking at the Fridley City Code, Section 205.09, the R-3 Multiple Dwelling District Regulations, under No. 7, "Hospitals, Clinics and Nursing Homes," were all okayed by an R-3. So he is a little confused on the limiting of who can be there. The letter he received from Mr. Hickok stated, in the third paragraph, it has a very important distinction, as revealed through Mr. Knaak's opinion, staff has in the past indicated that a medical clinic use would be acceptable as a tenant in the basement. Attorney Knaak has concluded that staff's generosity with the interpretation is not in keeping with the precise language of the special use permit. He said he does not agree with that. Any use of the special use permit will need to be linked to procedures to chiropractic adjustments. When he first moved in, he requested a massage studio and was told he could not do that and yet that would be covered. An acupuncture clinic would also be covered. In the clinic they also have Pilates, massage, and other integrated health procedures, so this limiting is pretty restrictive. Mayor Lund stated he knows that he has tried to get it rented for some time. Also, when he first brought this up, the recollection was that the basement issue was an after-thought. Dr. Westby said commented it was not an afterthought. If it were an afterthought, he would not have spent an extra $13,000 paving the back parking lot to add additional spaces. It was designed to be leased. FRIDLEY CITY COUNCIL MEETING OF FEBRUARY 12, 2007 PAGE 6 Mayor Lund asked Attorney Knaak if this matter should be revisited. Fritz Knaak, City Attorney, replied Mr. Westby can make any application he wishes. He said he was requested by staff to do a legal opinion with respect to what would or would not be an allowed use under a special use permit issued at that site for a chiropractic clinic. He did an analysis and research that included research of state law as to what constitutes the chiropractic practice. As a result of that research, state law itself was quite focused and limited on what is defined as chiropractic. Echoing that and applying it to the ordinances, he reached a conclusion as to what could or could not happen in a chiropractic practice at that site. He thinks Dr. Westby has raised issues with respect to what he would include as part of his chiropractic practice. Obviously the City is not in a position to be regulating what is or is not the practice of chiropractic in the State of Minnesota. So when they had a discussion, he told Dr. Westby that if Dr. Westby could establish that the practice of chiropractic, which was allowed in his special use permit, is in effect broader than what he was able to find in state law and state regulations, that was something he could bring to the City's attention and something they would consider. He said he has not seen anything from Dr. Westby that would influence him to change is opinion as to what is allowed under a special use permit. He said if Dr. Westby would like to fill out a special use permit application and indicate what he wants to do, Dr. Westby can do that, but he cannot provide Dr. Westby with any assurance that his opinion would change. William Burns, City Manager, stated there is a fee for special use permits. Dr. Westby replied, $1,500. Mayor Lund asked if it was overly strict. He asked what the intent of the City Council was when the original special use permit was issued. Councilmember Bolkcom said with respect to the special use permit, she thought Dr. Westby was originally going to build his clinic. She believed it was the contractor who suggested putting in a basement and adding more square footage. She thinks they need to go back and review the minutes. It was basically for him to have a chiropractic clinic. She thinks if he is bringing in these other uses, he does need to revisit the special use permit and he would have to bring another special use permit request. When they initially talked, she thought he wanted to put a spa there and do more hair type of things. They were great services to offer, but she thought they were different than what was included in the special use permit. Dr. Westby stated the reason the building was changed was because the land slopes down to the east so he would have had to bring in an estimated 500 to 800 truckloads of fill. So his building consultant and the architect changed it from a single level to a split-level to save money, but the intent still would have been to have somebody else there. Councilmember Bolkcom stated she did not think anyone is debating that having a spa in there now would be doing things different than the original intent. Dr. Westby stated he can understand the spa thing. If he understands the letter correctly though, only chiropractors can go downstairs. Their definition of chiropractic did not include FRIDLEY CITY COUNCIL MEETING OF FEBRUARY 12, 2007 PAGE 7 acupuncture, but he is licensed by the State of Minnesota to do acupuncture. Although that was not included in the definition, he is still regulated by the Minnesota Chiropractic Board of Examiners. So if they want to go by straight definition of chiropractic, that does not really explain what he does, only a part of what he does. He is looking through the Fridley Comprehensive Plan, on page 425, No. 7, Future Land Use Goals, which encourages a variety of high quality commercial services and employment opportunities for Fridley residents and businesses. Going to page 427, No. 18, it encourages and facilitates in-field commercial and industrial development on remaining vacant parcels to ensure maximum efficiency of land use. That is exactly what he did, and his building sits between R-1 and R-3, so his building also provides a buffer for the R-1 people. His neighbors have told him that. He said he really needs some clarity. He thinks if they were to restrict it just to chiropractic, it would be unfair to him. They can develop that in a very good way and, as he said before, whoever leases from him downstairs is going to be more of an issue for him than they will be for the City because they will be in his house. So he is going to be strict. Mayor Lund replied he would be willing to have it looked at. Councilmember Bolkcom said she thinks they have to be careful. She feels for Dr. Westby, but he basically knew when he made the application what he could and could not do. She thinks Dr. Westby needs to sit down with the City's Planning Department again and look at what he has, what his application said he had, and go from there. She asked for Attorney Knaak's response to this. Attorney Knaak stated he thinks there seems to be some confusion about normal conditions that are imposed as part of a special use permit. A special use permit is allowed for certain kinds of uses that otherwise would not be allowed in some zones. Those tend to be very limited but you must grant them with reasonable restrictions based on health and safety and those kind of things. That does not relate to what is or is not the allowed use, which in this case is actually defined as medical clinic or clinic. He said he thought chiropractic was included by interpretation by the City at that point. Chiropractic is what the permit allows. It is important to know that if a different kind of inedical clinic or if a different kind of clinic were to go in there, they would have to come in and get their own special use permit. This is not something that, you have a special use permit now, you are automatically applied. It is the use that is allowed with the conditions that are imposed. Dr. Westby replied he just wanted to make sure he is not limited to chiropractic in the basement. Attorney Knaak replied right now as he reads the State law as it goes into the Code, he is limited. Regarding that use on the site, unless he modifies it in some way by application or somebody else comes in, he is limited to a chiropractic clinic. Mayor Lund thanked Mr. Knaak for the clarification. He asked if they were being overly restrictive. Attorney Knaak responded in his research of statute and regulations, he did not see that. He was a little surprised as he knows that acupuncture and some of the things Dr. Westby is talking about are certainly what he associates with individuals he knows who practice chiropractic and FRIDLEY CITY COUNCIL MEETING OF FEBRUARY 12, 2007 PAGE 8 that is something else they do. He invites Dr. Westby or his association or anyone else to show that in fact standard chiropractic practice in Minnesota includes these things. Mayor Lund suggested to Dr. Westby that he have further discussions with staff. He asked that staff get back to Dr. Westby. NEW BUSINESS: 9. First Reading of an Ordinance Amending and Recodifying Chapter 508 Pertaining to Alcoholic Beverages. Jack Kirk, Director of Parks and Recreation, stated the City's current ordinance allows some alcoholic beverages, but is very restrictive. It does allow 3.2 percent malt liquor in Locke Park and he believes that was a covenant that came attached to the donation of the land many, many years ago. It is not real often. It also allows 3.2 percent malt liquor by permit for clubs, charitable, religious, non-profit, public, and private organizations at Community Park For the most part, that has always been done in conjunction with an organized softball tournament. Mr. Kirk said during the 30 years he has been involved with the Fridley `49er Days, it has always included a beer garden component. With the changes coming to Columbia Arena and the need for the Fridley `49er Days to locate to another location, the `49er Days Committee looked at other venues. Their most desirable site in the City was somewhere in the center of the community, and that would be Commons Park The `49er Days Committee has also received approval to hold some of their events on school district property. They will be having a carnival at the High School, and a number of events at the Community Center. Mr. Kirk stated if a beer garden component were to be part of the `49er Days, it would necessitate a change in the City's ordinance because the way it reads right now, Community Park is the only park that allows a 3.2 percent malt liquor license. It might be helpful to know that having beer at Commons Park is not without precedent in Fridley. That was the main venue for softball tournaments until Community Park was built. When the athletic complex at Community Park opened, the ordinance was changed to just read Community Park because that was where all the softball tournaments were going to take place. Mr. Kirk stated the second part of their recommendation to this chapter deals with allowing malt liquor and wine for receptions and/or social events that would take place at Springbrook Nature Center. The main reason for promoting this change is to provide an opportunity for some revenue for the operation of Springbrook Nature Center. While they have talked about this many times in the past, it became important about three or four years ago when they had the major budget crises affecting Springbrook At that point, they were charged with having to bring in a larger percentage of their operation through programs or rentals. They did try to market the rental of Springbrook for wedding receptions and anniversary parties. They had very little action in that area primarily because alcohol was not allowed. FRIDLEY CITY COUNCIL MEETING OF FEBRUARY 12, 2007 PAGE 9 Mr. Kirk said he reviewed the ordinance with Public Safety Director pon Abbott and they both agreed that a reference to the state statute should be included in Subdivision 4 to make sure the City Code is in compliance with the state statute. Mr. Kirk stated they would look at having beer and wine at Springbrook under four conditions. First, a club, charitable, religious, non-profit, public, or private organization that wished to sell or allow buyers to consume malt liquor, beer, or wine, would need to get a temporary on-sale intoxicating liquor license and there would be certain requirements they would have to go through. Mr. Kirk stated the second condition is if someone just wanted to have 3.2 beer, they could apply for a temporary on-sale 3.2 percent malt liquor license. Once again there would be certain requirements. Mr. Kirk stated the third condition would be if an organization may allow guests to consume malt liquor or wine at their own organizational social gathering. The fourth condition would be a private party. If a private party wants to have a wedding reception, a SOth anniversary party, something of that nature, they would have to contract with an approved licensed caterer. The City would preapprove one, maybe two or three, licensed caterers who would be allowed to serve beer and wine at Springbrook A private party could not come in and sell it on their own or they could not come in and give it to their guests on their own. They would have to work with a caterer and the caterer would have to be licensed. They would have the insurance so that liability would fall on the caterer that would be providing the beverages. The Parks and Recreation Commission addressed this at the February 5 meeting. Mr. Kirk stated staff's original recommendation regarding Springbrook Nature Center was that they would only allow the beer and wine within the interpretative building. There would be nothing outside. The Parks and Recreation Commission discussed this and the members felt they would like to see an adjacent area next to the interpretive center that would also allow for guests to go outside. They did discuss fencing the area off to only provide access from inside the building, so it would basically be a connection to the building. That was written into the proposed amended ordinance and would have to be if somebody wanted to come there and wanted to that with their rental permit, they would have to give them a specially-designated area and once again, it would have to be fenced off. Mr. Kirk said staff recommends that Council approve the first reading of this ordinance. Councilmember Barnette stated they always allowed beer sales and so on at Community Park and that worked out fine. When they start including wine, he has some questions. Most wine to his knowledge is up to 12 percent alcohol. If on one hand they are limiting it to 3.2 beer and wine, why would you not be able to have 6 percent beer? If they are allowing it at weddings at Springbrook, how do they restrict that then at Community Park or some other facility. He asked about problems they may have about requiring a caterer who is a licensed liquor dispenser. Mr. Kirk said there is actually a different license that is needed to sell what they term "strong beer and wine." You have to get a temporary intoxicating liquor license. They are not FRIDLEY CITY COUNCIL MEETING OF FEBRUARY 12, 2007 PAGE 10 recommending that. That is a totally separate license you would have to get. What they are saying is, even if somebody were to do that at Springbrook, they would have to get the intoxicating liquor license. However, they want to be more restrictive. They do not want just any type of liquor being served. They want to restrict it to beer and wine. Councilmember Barnette asked can they do that if a licensed caterer who has a liquor license comes in and wants to sell drinks. Mr. Kirk said they can be more restrictive. He thinks Mr. Knaak can probably speak to that. Councilmember Bolkcom said with respect to Commons Park, the change is being made in the ordinance because they are now going to have the `49er Days. She asked if that was the only reason why Commons Park was being included. She thinks they are doing an injustice to the community without them having any input on this. She asked if the change was not just for `49er Days but could any group--charitable, religious, or non-profit, public or private organization come into Commons, want to have a tournament there, and now se113.2 malt liquor. Mr. Kirk replied, if the City chose to do it. Councilmember Bolkcom asked would they be hard-pressed allowing one group to do it and not let another group. Mr. Kirk stated there was some discussion about that at the Parks and Recreation Commission meeting. He thinks the Commission members looked at it and felt that they did not want to single out the City's celebration. It is possible the City would have some type of a celebration and one of these clubs that met this definition would want to have beer sales as part of their celebration. It might not be Fridley `49er Days. Also, most of the soccer fields they have are on school district property. By State law liquor cannot be on school district property. Councilmember Bolkcom stated they do have one at Commons. Mr. Kirk stated, yes, there is one. He said Community Park is ideal for running fundraising tournaments, because there are six ball fields right together. Commons Park does not have that. While it is possible there could be a tournament request at Commons Park, it would be a very, very small tournament. In his opinion it would be unlikely someone would ask for it because they do not have the facilities there. Councilmember Bolkcom stated she is not sure how "club" is defined, as she belongs to a "book" club. It says, a club, charitable, religious, or non-profit, public, or private organization. Could her book club apply for a permit. Mr. Kirk replied the City has only allowed that in conjunction with an event where someone is renting the facilities from them. They had a softball tournament and a soccer tournament. He is unaware of any case ever where the City has allowed somebody to go and sell beer when there has not been an official event, such as a tournament. FRIDLEY CITY COUNCIL MEETING OF FEBRUARY 12, 2007 PAGE 11 Councilmember Bolkcom asked if by changing this, they are allowing that. Mr. Kirk replied it is the same ordinance as they have at Community Park. He is not advocating any additional change to the wording except adding Commons Park after Community Park. Councilmember Bolkcom asked if she could hold something at the Springbrook Nature Center and get a permit for beer and wine. Mr. Kirk replied, if it is within the Springbrook building, and she is renting the facility for an event. Councilmember Bolkcom said she did not see that in the ordinance. Mr. Kirk replied it does say for receptions or social events within the Springbrook Nature Center. They cannot just come up there and take over the Nature Center for an event. They would have to rent the facility from them. Councilmember Bolkcom asked how much it cost to rent the building for one day. Mr. Kirk said if they wanted both the exhibit area and the back room, it was around $400 for a large reception area. Councilmember Bolkcom said as she reads Section C, any group could rent Springbrook and serve their own malt liquor or wine as long as they had a permit. Mr. Kirk replied, in the facility. If they wanted to add a fenced-off area, and they paid to have it put up, that could happen. Councilmember Bolkcom asked so how does she become a"C" vs. a"D"; that is, a private party in a club. Mr. Kirk replied the ordinance does state that it has to be a Fridley organization and it has to be in e�stence for three years. That is how it is defined in Chapters 602 and 603. Councilmember Bolkcom asked so all of the definitions of "C" are in that ordinance? Mr. Kirk replied in the City Code under the heading "Liquor and Liquor License." Councilmember Bolkcom said she knows it has happened at Community Park all the time, but it is sort of a change in that Commons Park is still a neighborhood park to her. She knows they have not had that many problems. She thinks it would make more sense to put something in allowing something to happen because it is a city-wide celebration versus opening it up to anyone. FRIDLEY CITY COUNCIL MEETING OF FEBRUARY 12, 2007 PAGE 12 Mayor Lund stated many times there is a list of definitions in the proposed language of these ordinances. He assumes the definitions are in the other chapters that Mr. Kirk cited about what constitutes a club versus a private party. He thought it might be a question for Mr. Knaak. Mr. Kirk stated that was certainly an option. There is a possibility there could be another event that the City was involved with, for example, the SOth anniversary. As the Commission talked about this, he thinks the general feeling was they did not want to tie it into just that one event. There could be something else that would fall under that. The same as Community Park, it is not tied to softball tournaments. The reality is that is all it has been used for. That facility was also built to accommodate touch football, some soccer fields and so it is possible somebody could come up here and say they have a four-person passing football league and maybe they want to hold a touch football tournament in the fall and wanted to have beer sales in conjunction with that. They have not had that yet but it is a possibility. It was just left open from the standpoint that there could be other events that might fit. Councilmember Bolkcom stated she is just a little confused about the Parks and Recreation Commission coming forward with this ordinance change. It seems to her the Parks and Recreation Commission is saying it makes sense to do the celebration there, but she is struggling with this. They have had things at Community Park, with no problems there, but to her Commons Park is more of a neighborhood park It is not a big community park where they have had this history there. Perhaps put in the ordinance, city-sponsored or city-wide celebrations. Mr. Kirk stated the only event they are aware of is `49er Days. He said they could narrow it down. Councilmember Varichak stated when she was on the Parks and Recreation Commission, the questions about where to hold `49er Days was brought to the commission and options were discussed. She thought that in conjunction with all of the `49er Days activities it felt okay to add the beer and wine sale there as well as at Columbia Arena. Councilmember Bolkcom stated it is her understanding it is only beer at Commons. Mr. Kirk stated it is 3.2 percent malt liquor and he believed there are some wine coolers that fall into that description. Once again he thinks the Lions have done that in the past, but it legally falls into that description. Councilmember Bolkcom stated she was just surprised it was going to be held at Commons Park, because she thought the City was concerned about issue related to the trailers parking there, the traffic, and what it was going to do some of the fields. She is not against having the activities at Commons Park She is against opening up Commons Park to liquor other than the `49er Days city-wide celebration. Once you open something up, you never know what is going to happen. Councilmember Bolkcom said at Springbrook it is more controlled, in a building and an enclosed area, so there are less issues related to that. It will be more of a planned event or group. FRIDLEY CITY COUNCIL MEETING OF FEBRUARY 12, 2007 PAGE 13 She is a little concerned about the fenced-in area outside. She does not think the City should take on the expense to put up a fence to have activities outside. Mr. Kirk replied that was discussed at the Commission meeting, and they felt that if the City did have to put one up, it would have to be charged back to he renter. The other option is if it was with a wedding reception, the caterer would take charge of putting that up as part of their package with the private party. Councilmember Bolkcom asked if the City would have any liability if something were to happen. Mayor Lund said restricting it further is a possibility to consider. Another option is they could look at a sunset of this legislation and they could look at it a year or two from now. Mr. Kirk is correct in that it is not going to get a heavy usage because the facility is not conducive to having sufficient sales there. Many times it is for civic organizations. They donate money to the City, and they want to have a venue of some sort to raise funds. In that conte�t, he is a little more apt to say yes to something when he knows it is going to benefit our own community. Each time the `49er Days' venue has changed, there has been complaints. They have fewer and fewer sites to hold even something that significant. They are going to have to weigh those things and he thinks it is worth it. Councilmember Saefke stated he is less concerned about the ordinance than he is about `49er Days being at Commons. He is not opposed to `49er Days events being there, but he asked if the two dances would be held in the parking lot by the water filter plant. Mr. Kirk said they would be held across from the Community Center. Councilmember Saefke stated they can get a little noisy. He is sure they are going to be able to handle that sufficiently, but he is certain they are going to get some complaints. He is also concerned about parking and where everything would be set up. He asked where they would put the people. Councilmember Barnette said there is middle school parking lot, the senior high parking lot and the Community Center parking lot. None of them are huge, but he is sure that is where they will all spill out to. Councilmember Bolkcom asked if there was support to include something in the ordinance related to a city-wide celebration in Commons Park It is a neighborhood park and she does have some concerns. She said she did not what the cost was for a liquor license if you wanted to have a two-day event, and she does not have any idea how much dram insurance is. Mr. Kirk replied dram shop insurance is fairly expensive. He thought it might be around $1,500 for a one-time event. A group like the Lions Club generally has several events during the year when they sell beer. When you spread that insurance over three or four events, it is a manageable thing. In the past 15 to 20 years it has basically been the Fridley Lions Club that has come under this in terms of selling 3.2 percent malt liquor at any event. The only exception to FRIDLEY CITY COUNCIL MEETING OF FEBRUARY 12, 2007 PAGE 14 that has been the Fridley Wrestling Boosters. They went out and got their own dram shop insurance. However, to his knowledge he does not recall any other groups who have done this. Councilmember Bolkcom asked what a neighborhood group was. Mr. Kirk stated that has been in the City's ordinance for a long time. He thinks the idea behind that was if a neighborhood block club wanted to have a National Night Out event at their local park, the City Council has the ability to give them a permit for that one event. Councilmember Bolkcom asked if the City charges them. Mr. Kirk replied he did not believe they were charged, but he does not anyone ever getting one. Most of the neighborhood block parties are done on the street, not necessarily at the park. Councilmember Bolkcom said any time you are looking at an ordinance, it is also a time to look at whether it makes sense. It might be worthwhile to look at the definition. Attorney Knaak stated the definitions unfortunately do not look at all clear. It simply says that no club shall sell beer except to members and guests in the company of inembers. Councilmember Bolkcom said it could be a club. Attorney Knaak stated the concern about setting precedent is always important. They have far more discretion in the issuance of alcohol permits than they do in just about any other area as a City Council. The amount of leeway that they have in denying a beer or intoxicating liquor license is almost total. Someone literally cannot come in and challenge them even though they have issued a virtually identical permit to someone prior. They do have an awful lot of authority in this area. It is not quite like what they are used to in zoning cases. Councilmember Saefke said with Mr. Knaak telling them that they have this tremendous leeway of issuing temporary 3.2 percent malt liquor sales licenses, he does not see why they even need to include language concerning Commons in this ordinance at all. He asked if they could grant it to the `49er Days group or to the Lions Club without it. Attorney Knaak said he believed right now there were dealing with prohibition at City parks and public places. Mr. Kirk said it is prohibited in all parks except Locke Park because that was a covenant when the land was donated and at Community Park if you fall into one of the organizations that qualify. If it was going to be allowed in Commons Park, it would have to be specified. Councilmember Bolkcom stated but they could put language in there that Attorney Knaak could come up with. Mr. Kirk stated they could put in "city-wide" or limit it to the Fridley `49er Days celebration. Mayor Lund stated it sounds like that is the direction Council wants to go. FRIDLEY CITY COUNCIL MEETING OF FEBRUARY 12, 2007 PAGE 15 Councilmember Bolkcom said she thought they need definitions. What she is hearing from Attorney Knaak is there is no definition for club, charitable, etc. She asked if No. 4 only applies to Springbrook. Mr. Kirk replied, yes, just to Springbrook. Councilmember Bolkcom stated so it is almost two separate issues. Nos. 1-3 relate more to Community Park and Commons Park and No. 4 relates to Springbrook Before this comes back to them, she thinks there should be some definitions related to club and some of those things or the wording should be changed. Mayor Lund stated his suggestion is that they leave No.4 and include "as defined by Minn. Stat. Ch. 340A." In No. 3 there should be some wording about a city-sponsored or city-wide celebration and/or Fridley `49er Days or something like that. Councilmember Bolkcom said it is only the first reading. Mayor Lund suggested if Council make a motion about the first reading and also ask that Chapters 602 and 603 be included in their packet. In the case of the Springbrook Nature Center, if there is a permit for beer and wine in an outside area, in what cases do they require a security or person. Mr. Kirk stated in talking with Chief Abbott, a police officer is not required and he was comfortable with that as long as the restriction was beer and wine. If there was going to be hard liquor, they might need to change it. The Springbrook facility is very limiting in terms of size of a group. Councilmember Saefke asked if Locke Park belonged to the City. Mr. Kirk replied that is actually a City park that is operated and maintained by Anoka County. MOTION by Councilmember Bolkcom to approve the first reading of this ordinance with the suggested changes and to provide Council with a copy of Chapters 602 and 603 from the Fridley City Code. Seconded Councilmember Barnette. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 10. Approve Preliminary Plat Request, PS #07-01, by Gordon Sangster, to Divide One Single Family Lot into Two Single Family Lots, Generally Located at 7169 Riverview Terrace N.E. Ward 3) Scott Hickok, Community Development Director, stated the petitioner is seeking to replat the property in order to create two single-family lots. The property is on 71 '/z Way and Riverview Terrace. The e�sting home and attached garage was constructed in 1966, and a porch was added FRIDLEY CITY COUNCIL MEETING OF FEBRUARY 12, 2007 PAGE 16 to the home in 1980. The existing lot is approximately 95 x 226 feet, and petitioner plans to subdivide the lot into two single-family lots, one which will accommodate the e�sting home, and another which will allow for the construction of a new single-family home. City Code requires that lots in the R-1 Single Family District be a minimum of 75 feet in width and a minimum lot area of 9,000 square feet. Proposed Lot 1 would be 103 feet in width and 11,200 square feet in size after the replat. Lot 2 would be 110 feet in width and 10,000 square feet in size. Mr. Hickok stated City staff has heard from three neighboring property owners who are in opposition of the proposed preliminary plat request. From discussions with them, they are in opposition to the request because they do not want to see another single-family house on the subject property. The City received a letter on January 9 from Maynard Nielsen and Michelle Wold indicating they strongly oppose the division of the lot, stating the house would have to face a different direction than the two homes now; and they would not like to have a home put in their backyard. Michelle Wold's house would back up to the new lot. The letter was signed by Maynard Nielsen on behalf of Michelle Wold. The City also received a letter from Michelle Wold on January 11. The letters were entered into the record at the Planning Commission. Mr. Hickok stated the Planning Commission held its public hearing on January 17. The Commission heard from two neighboring property owners who were in opposition to the request. After a brief discussion, the Planning Commission agreed with the preliminary plat request in that it meets the minimum standards and, therefore, recommended approval of PS #07-01 with eight stipulations. That motion carried unanimously. Staff recommends concurrence with that Planning Commission's recommendation. Councilmember Bolkcom stated both the lots will exceed the minimum size, and there really is no reason she can see why they could not do this. Mr. Hickok said it is a large lot on a corner that not only has the land area to devote to a second lot, but has street access. As long as it meets the minimum standards in the subdivision ordinance, it can be done. Councilmember Bolkcom stated the petitioners would actually sell the lot to someone after the lot split. Mr. Hickok replied that is his understanding. Councilmember Barnette said if the Sangsters split the lot, he is assuming the home that would be built on the lot would be facing south. Mr. Hickok replied that is correct. Maynard Nielsen, 7144 Riverview Terrace, stated he wrote one of the letters. It is for his daughter's house. They were unhappy with a house being north and south between two that are east and west. Gordon Sangster, 7169 Riverview, stated they have lived in the house for the last 40 years. He FRIDLEY CITY COUNCIL MEETING OF FEBRUARY 12, 2007 PAGE 17 said it is true, that they are moving, but they do care. They raised four kids there. It was a big lot and it worked out well. With not many R-1 lots available, he though it made sent to split the lot. They are both larger than required. MOTION by Councilmember Bolkcom to approve Plat Request, PS #07-01, by Gordon Sangster, with the following eight stipulations: 1. Property owner of record at time of building permit application to pay required $1,500 park fee prior to issuance of building permits. 2. Property owner of record at time of building permit application to pay all water and sewer connection fees prior to issuance of a building permit. 3. Property owner of record at time of building permit application shall obtain a permit from the City of Fridley for curb cut. 4. Petitioner to properly maintain Lot #2 until sale occurs. 5. Provide proof that any existing wells or individual sewage treatment systems located on the site are properly capped or removed. 6. Petitioner shall provide easements as shown on preliminary plat drawing. 7. Grading and drainage plan to be approved by City's engineering staff prior to issuance of any building permits, in order to minimize impacts to the surrounding properties. Seconded by Councilmember Barnette. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. Second Reading of an Ordinance Amending Chapters 11 and 108 of the Fridley City Code Pertaining to Fees and Open Burning; and Adopt Official Title and Summary Ordinance. Councilmember Bolkcom stated she received a telephone call from a resident who asked if the time could be changed from 1:00 a.m. to 12 midnight. William Burns, City Manager, said he did not see why it could not be 12 midnight if that is what Council wanted. Councilmember Barnette stated he would not have a problem with that. Mayor Lund stated he did not think it was a big deal either way. Attorney Knaak stated he thinks they should table this item and have the change made. MOTION by Councilmember Bolkcom to table the second reading of an Ordinance Amending Chapters 1 and 108 of the Fridley City Code Pertaining to Fires and Open Burning and also table FRIDLEY CITY COUNCIL MEETING OF FEBRUARY 12, 2007 PAGE 18 the adoption of the Official Title and Summary Ordinance to February 26, 2007, and to change the time in the Section 12 of the ordinance from 1:00 AM to 12 Midnight. Seconded by Councilmember Varichek. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 3. Receive Bids and Award Contract for the Repair of Well Nos. 5 and 10. Councilmember Saefke stated he did have a question because the bidding procedure seems to be a little different. He asked Mr. Haukaas to explain the process. Jon Haukaas, Public Works Director, stated these are open-ended but there is a certain amount of repairs they need to do on these wells each year, but they do not know the full extent of that until it is pulled apart. They did change how they are doing this a little bit to more reflect the bid based on things they knew were absolutely going to happen which is the best case scenario. They would hope it would be that way, they know it will not be. They will probably have more costs, but they will not know what they will be until they are pulled apart. It is just a different way of looking at the bidding process. He felt it was a safer way for the City. Councilmember Saefke asked if they looked at the alternate bids, when they looked at the base bid. Mr. Haukaas said they did look at those. As a general rule, everyone was in step with each other. Councilmember Saefke asked about Well No. 10 and the cleaning of the screen. He did not see in the base bid where televising would be appropriate. He is just wondering how they are going to be able to tell if it needs to cleaned if they cannot see it first. Mr. Haukaas said it would be part of their inspection and their evaluation as it is pulled apart. Councilmember Saefke asked why videoing was not part of the base. Mr. Haukaas said one of the things they talked about is the amount of history they have on these wells. They have not seen a lot of change and there may be an instance especially in the City's current financial situation where they might be looking for minor parts they could drop of£ If they have not had changes in 30 years on something, maybe they could skip it every now and then. It was a judgment call and they put it as an alternate this time around. Councilmember Bolkcom asked what would happen if they see all these other problems that are there. She asked where the funds would come from in a worst case scenario. Mr. Haukaas replied that is why they budgeted $60,000 for this. They could basically completely rebuild this well, as a catastrophic condition, with the $60,000. In the years they have been doing this, they have never had to do that. They do a lot of preliminary maintenance FRIDLEY CITY COUNCIL MEETING OF FEBRUARY 12, 2007 PAGE 19 annually, constant inspections and upkeeping, so they do not expect that but want to prepare for the worst, which is again the reason for the higher budget number. In his recollection, they have never hit the budgeted amount. William Burns, City Manager, stated he seemed to remember numbers like $38,000 for a total for this well repair work. He does not think it has ever been near $60,000. Mr. Haukaas stated it is not unusual to be in the $30,000 range. He knows within the last couple of years, in one instance, they may have been in the $54,000 range. That probably included throwing in emergency repair because it happened during the bidding process. He thinks it is easier to have it budgeted, be prepared for a worse case scenario, then to come back and ask for more. MOTION by Councilmember Saefke to receive the bids and award the contract for the repair of Well No 5 to E.H. Renner & Sons, Inc., and Well No. 10 to Bergerson-Caswell. Seconded by Councilmember Bolkcom UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 4. Approve Contract Amendment for the 85t'' Avenue Trail Design Project. Councilmember Bolkcom said staff indicated that no direct City funds will be need to be expended on this project. She said the City had already spent $78,000 and asked if they had been paid for that. Jon Haukaas, Public Works Director, replied he has submitted a request for reimbursement of the $78,000 just recently. They have had the discussions with State Aid staff, and it is an approved expenditure. The federal funds have been allocated and earmarked for us. It cannot be taken back at this point. Councilmember Bolkcom asked if he had any idea when this might happen. Mr. Haukaas replied as it is slated right now, they expect to begin construction this fall. William Burns, City Manager, stated this project only takes them from University Avenue down to Springbrook Nature Center, he believed. It does not take the bikeway all the way to East River Road, and that will become a project when the County decides to reconstruct g5tn Avenue. Mr. Haukaas replied that is one of the options. Coon Rapids could take it on themselves to work with the County to put in a trail. The state representative from Coon Rapids is pushing to get some of this surplus money and put something into the bonding bill to pay for a trail. There are some difficulties involved in this. Because it is a County controlled right-of-way, they have a say in how it gets designed. They have held the position that when 85th gets rebuilt and widened, it will be the local city's responsibility to relocate that trail. So if the County came in and said FRIDLEY CITY COUNCIL MEETING OF FEBRUARY 12, 2007 PAGE 20 we are rebuilding 85th next year, the City would be paying for this a second time which is why the City of Fridley chose to do it outside of the County right-of-way. This is why we are going through the City-controlled Nature Center. The City also obtained easements from Slumberland and Wal-Mart. It was the safer route to go. The process actually began in 2001 when he made his original TEA21 application, so it is kind of nice to finally see something happen with it. Councilmember Barnette stated he received a telephone call from one of the County Commissioners about this. The commissioner was asking him questions with regard to the trail beyond the railroad tracks and into the Coon Rapids city area, and he replied he did not know. The commissioner was concerned about any kind of design because of the berms there. The commissioner asked if the City of Coon Rapids had made any decisions on this. Mr. Haukaas said this grant application is for the Fridley portion from University Avenue across the railroad tracks which actually does go into Coon Rapids but his thought was that the railroad crossing was the most important safety feature of this whole trail and, therefore, he included it in this application to get it done now. Our portion of the trail is almost 4,300 feet; and the remaining section is about 1,400 feet (about a third of the line). As he said in his e-mail to their state representative, there needs to be some kind of decision on where it is going to be, just a preliminary study, before they could put together cost estimates. They need to know what they are going to do before they can tell them how much it is going to cost. Councilmember Bolkcom said it is really needed there and it is unfortunate that only part of it is going to be built. Mr. Haukaas stated the reasoning for the costs is because of the wetlands involved in the Springbrook complex, and it has to be a very low impact design. Several sections of the trail will be elevated. They will actually go right over the wetlands and add additional viewing for the Springbrook area. It will be a wood construction walkway that is capable of supporting a pickup truck for maintenance. A paved trail could be done for about $30 per foot. This elevated trail is close to $500 a foot. Mayor Lund said he thought Coon Rapids was ready to go with this project and it was the County that was the holdup. He asked if there were plans in the foreseeable future for the County to improve 85th under the County's jurisdiction and relocate the walkway. Mr. Haukaas said the City of Fridley's portion is not on County property. It is on City property or city-obtained easements. The 85th Avenue reconstruction is not currently in the County's 20- year plan. That does not mean it cannot change. So we do not know what their ultimate buildout is going to be. They are not going to expend time or funds on doing a preliminary design until it is at the point where they need to. That has really been the holdup on the whole issue. They do not know when and what they are going to finally build. He said when he originally started this project in 2001, he did have some discussions with Coon Rapids. They do have a sidewalk capital improvement program and funds set aside to do trails and sidewalks throughout their city. They could do this project, again, if they knew where they could build it, but right now, they have no plans to do it until some catalyst or some future decision is made. MOTION by Councilmember Bolkcom to approve the contract amendment for the 85th Avenue FRIDLEY CITY COUNCIL MEETING OF FEBRUARY 12, 2007 PAGE 21 Trail Design Project. Seconded by Councilmember Barnette. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 11. Informal Status Reports Councilmember Bolkcom said the 9th Annual Home and Garden Show will be held on February 24, 2007, at the Schwan Center in Blaine. Julie Jones, Planning Manager, gave a video presentation regarding neighborhood planning meetings for updating the City's Comprehensive Plan. There will be two series of ineetings: the first will be on Monday, March 19, at 7 p.m. The meetings will be held at Stephenson Elementary School in the gymnasium, the Fridley Community Center in Room 109 (the media center room), and Totino-Grace High School in their library conference center. If that date does not work, they will also be having neighborhood planning meetings on Monday, April 2, at 7 p.m. The locations will be Stephenson Elementary School in the gymnasium, the Fridley Community Center in Room 109, and North Park Elementary School in the gymnasium. They would also like to give presentations at community groups that meeting in Fridley. They would be happy to do a 10 to 15 minute presentation about the Comprehensive Plan. If anyone is interested, they could contact her. Councilmember Barnette announced on February 20, the senior citizens have their annual Mardi Gras event. ADJOURN. MOTION by Councilmember Barnette, seconded by Councilmember Saefke, to adjourn. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MEETING ADJOURNED AT 9:42 P.M. Respectfully submitted by, Denise M. Johnson Scott J. Lund Recording Secretary Mayor � � CffY OF FRIDLEI' To: From Date: Re: AGENDA ITEM CITY COUNCIL MEETING OF FEBRUARY 26, 2007 William W. Burns, City Manager John Berg, Fire Chief February 22, 2006 Second Reading of an Ordinance Amending Chapter 108 of the Fridley City Code Pertaining to Open Burning The City does not have a permit process for open burning which includes fires used to remove vegetation like prairie grass at Springbrook Nature Center, Medtronic World Headquarters and other commercial sites. By establishing a permit process, the Fire Department has the ability to review plans and monitor open burning and ensure that the burning is conducted in a safe manner. Minnesota State Statutes and Fire Code do not prohibit open burning of vegetation and other material in burners or on snow covered ground. Given the City's suburban setting, I do not believe it is in our best interest to allow people to burn leaves and other material in the City of Fridley creating a nuisance and perceived fire hazard for residents. At one time, the Minnesota Pollution Control Agency prohibited this type of open burning. When the Minnesota DNR was given authority for enforcing open burning and the statutes changed, the Fire Department continued to discourage this type of burning but without legislation to enforce the rules. Like the statutes on open burning, the Minnesota State Fire Code allows recreational fires that are less restrictive and may not be suited to a suburban setting. The Fire Department's published "rules" are not enforceable under the current legislation. I am proposing the attached legislation be added to City Code, Chapter 108, Fire Prevention. By adding this legislation, the City of Fridley will establish a permit process for open burning and provide legislation for enforcement of the currently practiced rules for open burning and recreational fires. At the request of City Council, Section 12 A. was amended as follows: A. Burnin� shall be prohibited between �:�� 12:00 Midni�ht and 9:00 AM durin� any day of the week. The first reading of this ordinance was held by the City Council on January 22, 2007. Staff recommends approval of the second reading of this ordinance and the summary of this ordinance. ORDINANCE NO. AN ORDINANCE AMENDING CHAPTERS 11 AND 108 OF THE FRIDLEY CITY CODE PERTAINING TO FEES AND OPEN BURNING The City Council of the City of Fridley hereby finds, after review, examination and recommendation of staff, that the Fridley City Code be hereby amended by: Section 1. Ordain that Chapter 108 be amended by adding the following language: 108.12 OPEN BURNING 1. Open Burnin� Prohibited. Except as otherwise permitted by this section, all open burnin� is prohibited in the City of Fridle� 2. Definitions. For the purposes of this section the followin� definitions shall a�plv: A. "Open Fire" or "Open Burnin�" means the burnin� of materials wherein products of combustion are emitted directly into the ambient air without passin� throu�h a stack or chimney from an enclosed chamber. Open burnin� does not include road flares, smud�epots and similar devices associated with safety or occupational uses typically considered open flames or recreational fires. For the purposes of this definition, a chamber shall be re�arded as enclosed when, durin� the time combustion occurs, onl�pertures, ducts, stacks, flues or chimne� necessary to provide combustion air and permit the escape of e�aust �as are open. B. "Person" includes any natural person actin� either personally or in an�presentative capacit� a corporation, a firm, a co-partnership, or an association of any nature or kind. C. "Starter Fuels" mean dry, untreated, unpainted wood or charcoal fire starter. Paraffin candles and alcohols are permitted as starter fuels and as aids to i�nition only. Propane �as torches or other clean �as burnin� devices causin� minimal pollution may be used to start an open fire. D. "Wood" means dry, clean fuel only such as twi�s, branches, limbs, commercially made lo�s for heatin�, charcoal, cord wood or untreated dimensional lumber. "Wood" does not include wood that is �reen, leaves or needles, rotten, wet, oil soaked or treated with paint, �lue or preservatives. Clean pallets may be used for recreational fires when cut into three foot len�ths. E. "Recreational Fire" means a fire set for cookin�, warmin� or ceremonial purposes which is not more than three (3) feet in diameter by two (2) feet hi�h, and has had the �round five (5) feet from the base of the fire cleared of all combustible material. F. `Burnin� Permit" is a permit issued by the Fire Chief or desi�nee authorizin� fires exempted from the �eneral provisions hereof and settin� conditions therefore. G. `Burner" means a firebox, barrel or similar container used for an outdoor fire, but not includin� �rills or barbecues used principally for the cookin� of food, or outdoor fireplaces. H. "Outdoor Fire Place" means a manufactured freestandin� fire pit or barbecue pit a�proved and listed by a nationally reco�nized a�ency such as Underwriters Laboratories (UL) for the purpose of recreational fires that is enclosed with spark arrestin� screenin� and is used per the manufacturer's instructions. Ordinance No. Page 2 L`Bon Fire" means an outdoor fire utilized for ceremonial purposes. J. "Fire E�tin�uishin� Equipment" means an��proved equipment and material such as a fire extin�uisher with a minimum 4-A ratin�, �arden hose and water su�plv, or shovel and sand, that is used for the purpose of extin�uishin� a fire. 3. Exemptions. The followin� tvpes of open burnin� shall be exempt from the prohibition of Section 108.11-1: A. Recreational fires subject to the conditions of Section 108.11-12. B. Fires purposely set under the supervision of the Fire Department for the instruction and trainin� of fire fi�htin� personnel. C. Fires for which a burnin� permit has been obtained. 4. Burnin� Permit. Except for permits issued by the Minnesota Department of Natural Resources for fire trainin� and permanent burn sites, the Fire Chief or desi�nee may issue a burnin� permit for any ofthe followin�: A. Fires set for the elimination of a fire hazard which cannot be abated b�.�practical means. B. Fires purposely set for forest, prairie and �ame mana�ement purposes when no other alternative methods are practical. C. The burnin� of trees, brush, �rass and other ve�etable matter in the clearin� of land, the maintenance of street, roadway, hi�hway or railroad ri�ht-of-wa�park land and in accepted a�ricultural land mana�ement practices where chi�pin�, compostin�, landscapin� or other alternative methods are not practical. D. The disposal of diseased trees �enerated on site or diseased or infected nursery stock. E. Ground thawin� for utilit�pair and construction. F. Bon Fires under the direct supervision of the Fire Department. 5. Prohibited Materials. A. No permit may be issued for the open burnin� of oils, petro fuels, rubber, plastics, chemically treated materials or other materials which produce excessive or noxious smoke such as tires, railroad ties, treated, painted or �lued wood, composite shin�les, tar paper, insulation, composition board, sheetrock, wirin� paint or paint filters. B. No permit shall be issued for the open burnin� of hazardous waste or salva�e operations, solid waste �enerated from an industrial or manufacturin� �rocess or from a service or commercial establishment, or buildin� material �enerated from demolition of commercial or industrial structures, or discarded material resultin� from the handlin�, processin�, stora�e, preparation, servin� or consumption of food. Ordinance No. Page 4 D. Availability at the burn site of a�propriate communication and fire extin�uishin� equipment as required by the permit or any fire safet�plan a�proved by the Fire Chief, or desi�nee, as part of the permit process. E. Not allowin� the fire to smolder. F. Bein� sure that the fire is completely extin�uished before the permit holder or representative leaves the site. G. All costs incurred as a result of the burn includin�, but not limited to, fire su�pression, administrative fees, property dama�e and personal injuries. Revocation of Permit. An officer of the Minnesota Department of Natural Resources, the Fire Chief, or desi�nee, may revoke any burnin� permit for a�propriate reasons includin�, but not limited to: A. A fire hazard exists or develops durin� the course of the burn. B. Pollution or nuisance conditions develop durin� the course of the burn. C. The fire smolders with no flame present. D. Any of the conditions of the permit are violated durin� the course of the burn. 10. Burnin� Ban or Air Quality Alert. No recreational fire or open burn will be permitted when the City or the Minnesota Department of Natural Resources has officially declared a burnin� ban due to potential hazardous fire conditions or when Minnesota Pollution Control A�ency has declared an air qualit. a� 11. Use of Burners Prohibited. No person shall use a burner within the Cit� 12. Recreational Burnin�. Recreational fires shall com�lv with the followin� requirements: A. Burnin� shall be prohibited between 12:00 Midni�ht and 9:00 AM durin� any day of the week. B. The fire shall not exceed three (3) feet in diameter and a flame hei�ht of appro�mately two (2) feet. C. Only clean wood or charcoal may be burned. No burnin� of trash, leaves or brush is allowed. D. The fire is i�nited with an a�proved starter fuel. E. The fire is constantly attended by an adult person knowled�eable in the use of fire extin�uishin� equipment and an adult attendant supervises the fire until the fire has been totally extin�uished. F. Fire-extin�uishin� equipment is readily available. Ordinance No. Page 5 G. Fire is not conducted within twenty-five (25) feet of a structure or combustible material. This distance may be reduced to within fifteen (15) feet of a structure or combustible material when contained in an outdoor fireplace or container a�proved by the Fire Chief. H. Any conditions that could cause a fire to spread to within twenty-five (25) feet of a structure shall be removed or eliminated prior to i�nition. L Recreational fires are not permitted on windy days when smoke may create a nuisance. 13. Severabilit. .�y sections, subsection, sentence, clause or phrase of this code section is for any reason held to be invalid, such decision shall not affect the validity of the remainin� portions of the code section. � Section 2. Ordain that Section 108.12 be enumbered as follows: 108.1�3 VIOLATION PENALTIES. A person who violates a provision of this code shall be guilty of a misdemeanor. Section 3. Ordain that Chapter 11 be amended as follows: 11.10. Fees 105.6.31 CHAPTER 11. GENERAL PROVISIONS AND FEES. 108. Permitted Business Open burning ��`T^��* ^'�� — Processes and Activities Fees �4 $95.00 PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY THIS DAY OF 200_. SCOTT J. LUND, MAYOR ATTEST: DEBRA A. SKOGEN, CITY CLERK First Reading: January 22, 2007 Second Reading: Published: ORDINANCE NO. AN ORDINANCE AMENDING CHAPTERS 11 AND 108 OF THE FRIDLEY CITY CODE PERTAINING TO FEES AND OPEN BURNING AND SUMMARY I. Title. An ordinance of the City of Fridley, Minnesota, to amend the Fridley City Code pertaining to fees and open burning and to align code language with existing practices. II. Summary. The City Council of the City of Fridley does hereby ordain as follows: That Chapter 11 is hereby amended to reflect a change in the fees for open burning. That Chapter 108 is hereby amended to establish a permit process for open burning and provide legislation for enforcement of the currently practiced rules for open burning and recreational fires. III. Notice This title and summary has been published to clearly inform the public of the intent and effect of the City of Fridley's Open Burning code and fee. A copy of the ordinance, in its entirety, is available for inspection by any person during regular business hours at the offices of the City Clerk of the City of Fridley, 6431 University Avenue N.E., Fridley, Minnesota. PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY THIS DAY OF 200 . SCOTT J. LUND, MAYOR ATTEST: DEBRA A. SKOGEN, CITY CLERK First Reading: January 22, 2007 Second Reading: Published: � � CffY OF FRIdLEY TO: FROM: DATE: SUBJECT AGENDA ITEM CITY COUNCIL MEETING OF February 26, 2007 William W. Burns, City Manager Jon H. Haukaas, Public Works Director Layne Otteson, Assistant Public Works Director February 26, 2007 Award of ST2007 - 1 Street Improvement Project PW07-09 On Thursday, February 22, 2007, at 10:00 a.m. bids were opened for the 2007 Street Improvement Project. Seventeen sets of plans and specifications were sent out and nine bids were received. The estimated cost for this project was $3.2 million. There has been a slow- down in the construction industry that has led to very competitive pricing this year. In fact, asphalt prices are actually lower for 2007 than they where in 2006. The low bid was received from Forest Lake Contracting, Inc. of Forest Lake, MN in the amount of $2,429,062.50. Approximately $330,000 will be available from the City's annual State Aid population allocation for off-system use to offset the street improvement costs. Approximately $600,000 will be assessed to property owners. $220,000 will be charged to our various utility funds for water, sanitary sewer, and storm sewer improvement. $30,000 will be reimbursed from Centerpoint Energy for the removal of abandoned gas mains. The remaining $1,250,000.00 will be paid for through the 2007 Street Reconstruction General Obligation bonds. Recommend the City Council receive the bids and award the 2007 Street Improvement Project No. ST. 2007 - 1, to Forest Lake Construction, Inc. of Forest Lake, MN, in the amount of $2,429,062.50. LO/JHH:,Ig Attachments BID FOR PROPOSALS 2007 STREET IMPROVEMENT PROJECT NO. ST 2007 - 1 February 22, 2007, 10�00 A.M. ��'� PLANHOLQ!ER BfD BOND Bl'�D ��'�ADDENDUM��'� � Forest Lake Contracting, Inc. Western $2,429,062.50 Acknowledge 14777 Lake Drive 1 &2&3 Forest Lake, MN 55025 Palda & Sons, Inc. Western Acknowledge 1462 Dayton Avenue $2,493,273.86 1 &2&3 St. Paul, MN 55104 Hardrives, Inc. Western $2,567,585.50 Acknowledge 14475 Quiram Drive 1 &2&3 Rogers, MN 55374 Northwest Asphalt, Inc. United Fire $2,687,999.20 Acknowledge 1451 Stagecoach Road 1 &2&3 Shakopee, MN 55379 Park Construction Co. Western $2,732,721.98 Acknowledge 500 73�d Avenue, NE, Suite 123 1&2&3 Fridley, MN 55432 Midwest Asphalt, Inc. Travelers �2,��107.65 Acknowledge 5929 Baker Road, Suite 420 1&2&3 Minnetonka, MN 55345 Pemper Co. Western $2,778,906.00 Acknowledge N4449 469th Street 1 &2&3 Menomonie, WI 54751 T. A. Shifsky & Sons, Inc. Ohio Farmers $2,983,468.75 Acknowledge 2370 E. Hwy 36 1&2&3 North St. Paul, MN 55109 C.S. McCrossan Construction Travelers $3,130,773.00 Acknowledge 7865 Jefferson Hwy; Box 1240 1&2&3 Maple Grove, MN 55311 GL Contracting, Inc. NO BID Acknowledge 4300 Willow Drive 1 &2&3 Medina, MN 55340 Midwest Concrete Specialties NO BID Acknowledge 13700 Chippendale Ave. 1 &2&3 Rosemount, MN 55068 Halvorson Concrete NO BID Acknowledge 1345 157th Ave. NE 1&2&3 Ham Lake, MN 55304 ��'� PLANHOLD'�ER BfD BOND Bl'�D ��'�ADDENDUM��'� � Penn Contracting NO BID Acknowledge 1&2&3 13025 Central Ave. NE Blaine, MN 55434 Northdale Construction Co. NO BID Acknowledge 14450 Northdale Blvd. 1 &2&3 Rogers, MN 55374 Halvorson Concrete, Inc. NO BID Acknowledge 1345 157th Avenue NE Ste C 1&2&3 Ham Lake, MN 55304 Jay Bros. Inc. NO BID Acknowledge 9218 Lake Drive 1 &2&3 Forest Lake, MN 55025 National Waterworks, Inc. 15801 W. 78th Street NO BID Acknowledge 1&2&3 Eden Prairie, MN 55344 United Rentals-Highway Tech #229 NO BID Acknowledge 4700 Lyndale Avenue North 1&2&3 Minneapolis, MN 55430 Bergman Companies, Inc. NO BID Acknowledge P. O. Box 659 1&2&3 Eau Claire, WI � � CffY OF FRIDLEI' Name Jeffrey Guest AGENDA ITEM CITY COUNCIL MEETING OF FEBRUARY 26, 2007 Position Sergeant Appointment Starting Salary $36.35 per hour 2007 Contract Starting Date Mar. 05, 2007 Replaces Gregory Salo � AGENDA ITEM COUNCIL MEETING OF FEBRUARY 26, 2007 CffY OF FRIDLEI' CLAIMS 130606 -130773 � � CffY QF FRIDLEY AGENDA ITEM CITY COUNCIL MEETING OF FEBRUARY 26, 2007 LICENSES Type of License � TREE REMOVAL Reliable Tree Service, Inc. Peter Vagovich 6600 Brookview Dr. Fridley, MN 55432 Asplundh Tree Scott Bailey 8236 Arthur St NE Spring Lake Park, MN 55432 Rainbow Tree Co., Inc. Gregory Krogstad 2239 Edgewood Av. St. Louis Park, MN 55426 Central Minnesota Tree Service James Savre 480 Rice Creek Blvd. Fridley, MN 55432 FOOD ESTABL/SHMENT Hong Kong Kitchen Karen Kwan 6562 University Av NE Fridley, MN 55432 Benh Thanhn Oriental Grocery Jennifer Nguyen 6566 University Av NE Fridley, MN 55432 Dolly Belle LLC Steven Gudin DBA Dunn Bros Coffee 7610 University Av NE Fridley, MN 55432 Bob's Produce Ranch Michael Schroer 7620 University Av NE Fridley, MN 55432 Fridley Alano Society Manuel Arechiga 5925 University Av NE Fridley, MN 55432 MOTOR VEH/CLE BODYREPA/R Riverside Services (Maaco) Randal Olenefske 148 Osborne Rd. Fridley, MN 55432 Approved By: Public Works Director Public Safety Director Fire Marshall Community Development << << << Public Safety Director Community Development Fire Marshall � � CffY OF FRIdLEY Date: To: From: Subject: AGENDA ITEM CITY COUNCIL MEETING OF FEB. 26, 2007 February 26, 2007 Wlliam Burns, City Manager Scott Hickok, Community Development Director Julie Jones, Planning Coordinator Rachel Harris, Environmental Planner Continuation of public hearing for consideration of revocation of special use permit #06-08 for Sinclair Fridley, generally located at 6071 University Avenue NE M 07-02 INTRODUCTION At the November 20, 2006, City Council meeting, the Council held a public hearing for Sinclair Fridley, generally located at 6071 University Ave NE to revisit the stipulations of the Special Use Permit (SP) #06-08 and review how the property owner has brought the site into compliance with City Code. The property owner informed staff that a new tenant would take over the lease on January 1, 2007. At that meeting, Council Member Billings requested that the public hearing be tabled until the February 26, 2007 meeting to give the new tenant a chance to establish operations. Staff has received no complaints from neighboring property owners since the new tenant moved in January 1, 2007. RECOMMENDATION Staff has observed minor violations of the current stipulations by the new tenant, but find there is insufficient reason to warrant revoking the special use permit at this time. Staff is optimistic that the property owner will comply with the stipulations. The special use permit may be brought back for review by the City Council as needed. � � CffY OF FRIDLEY DATE: TO: FROM: SUBJECT AGENDA ITEM CITY COUNCIL MEETING OF FEBRUARY 26, 2��7 February 20, 2007 William W. Burns, City Manager Scott J. Hickok, Community Development Director Ronald Julkowski, Chief Building Official PUBLIC HEARING - Hazardous Building at 136 Horizon Circle INTRODUCTION You may recall, in late 2006 staff brought your attention to a hazardous/abandoned property at 136 Horizon Circle. Soil conditions had damaged the home's foundation wall beyond repair. Since that recommendation, new owners have submitted an acceptable hazard elimination plan. After further consideration; however, staff recommends holding the action on the resolution over until Council's first meeting in May to assure the work has been completed according to their plan and to City satisfaction. ELEMENTS This item was scheduled for a public hearing before the City Council on December 11, 2006. The property was subsequently purchased by new owners, Ken Zahorski and Valerie Tatley. The hearing was held over until January 8, 2007. On January 8, 2007, staff recommended that, due to the new owner's progress toward a solution, Council should continue to hold the hearing open until February 26, 2007. We also recommended that if an acceptable repair or removal plan is in place by that date, staff would prepare a memo to Council describing the homeowner's proposed plan to eliminate the hazard and recommend denial of the resolution to deem the structure hazardous at that time The new homeowners have determined that they will not try to salvage the house. Their analysis included having several contractors look at the foundation. All experts came to the same conclusion. The home and foundation should not be saved and should be removed. As a result, the homeowners have committed to having the structure completely removed the foundation excavation filled, and the site properly seeded by May 4, 2007. 136 Horizon Circle February 21, 2007 PAGE 2 RECOMMENDATION Staff recommends Council receives final comment and close the public hearing. Staff also recommends that Council allow the homeowners to proceed as they have planned and have the home removed and all work completed by May 4, 2007. This approval includes the caveat that the homeowners are to secure and monitor the home and any excavation, until the hazard has been completely removed. Finally staff recommends a separate motion holding action on the Hazardous Building resolution over until May 7, 2007. RESOLUTION NO. RESOLUTION ORDERING THE REMOVAL OR REPAIR OF A HAZARDOUS BUILDING PURSUANT TO MINNESOTA STATUTES SECTION 463, LOCATED WITHIN THE CITY OF FRIDLEY, MINNESOTA BE IT RESOLVED by the City Council of the City of Fridley, Minnesota as follows: In the matter of the hazardous building located at 136 Horizon Circle: Legally Described as: Lot 12, Block 3, Carlson's Summit Manor North Addition, Anoka County, as on file and of record in the County Recorder's office of said County. TO: Mr. Harvey B. and Ms. Jean A Johnson, and any tenants, occupants, or other persons claiming an interest in the above described premises 1. Pursuant to Minnesota Statutes, Section 463.15 to 463.61 the City Council of the City of Fridley, having duly considered the matter, finds the above- described building to be a hazardous building for the following reasons: the Chief Building Official of the City of Fridley has inspected the exterior of the home and has determined that the essential structural items of this home such as foundation walls have been compromised by an unusual geological condition on this property. Clay soils often referred to as, "Fatty Clay" have damaged the foundation of this home beyond service. The foundation has buckled and is depressed an inch and a half or more across one face of the foundation. Section 1300.0180.2000 NIN State Building Code, states in part, "any structure that constitutes a hazard to safety, health, or public welfare by reason of disaster or damage, shall be considered unsafe. All unsafe buildings shall be declared a public nuisance and shall be abated by repair or demolition, as referenced in the MN. State Statutes Sections 463.15 to 463.26. The above mentioned property was posted as a hazard in accordance with MN Statute 463.17. 2. The Council further orders that unless such corrective action is taken or an answer is served upon the City of Fridley and filed in the office of the clerk of District Court of Anoka County, Minnesota within 20 days from the date of the service of this order, a motion for summary enforcement of this Court will be made to the District Court of Anoka County. Enforcement of this order shall include, in the City's discretion, the option of razing the structure. The Council orders that all personal property or fixtures that may unreasonably interfere with the razing and removal of the building shall be removed within 20 days, and if not so removed by the owner, and the City then Resolution No. Page 2 determines to raze the structure, the City of Fridley may remove and sell such personal property or fixtures at public auction in accordance with law. 3. The Council further orders that if the City is compelled to take any corrective action herein, all necessary costs expended by the City will be assessed against the real estate concerned and collected in accordance with Minnesota Statutes, Section 463.22. 4. The mayor, clerk, city attorney and other officers and employees of the City are authorized and directed to take such action, prepare, sign, and serve such papers as are necessary to comply with this order and to assess the costs thereof against the real estate described above for collection along with taxes. PASSED AD ADOPTED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY THIS 26TH DAY OF FEBRUARY, 2007 Scott J. Lund, Mayor ATTEST Debra A. Skogen, City Clerk � � arr aF FRIDLEY AGENDA ITEM CITY COUNCIL MEETING FEBRUARY 26, 2007 Date: February 21, 2007 To: William Burns, City Manager �� From: Paul Bolin, Asst. Executive HRA Director Subject: Public Hearing to Create TIF District #19 (Industrial Equities) M-07-04 At the City Council's December 11, 2006 meeting, a resolution was passed that set February 26, 2007 as the date for the Council to hold the public hearing necessary for the creation of TIF District #19. TIF District #19 is being created to fund portions of the redevelopment activities for the former Guardian Building Products site located at 5110 Main Street. The creation of this district will allow Industrial Equities to feasibly redevelop this site by paying for some of the extraordinary clean up and demolition costs. Staff has been working diligently with legal counsel to ensure all of the proper steps towards the creation of TIF District #19 have been taken. A notice of intent to create the district was provided to Commissioner Kordiak; a draft TIF Plan was provided and presented to Anoka County and to ISD #14; and Monday night's hearing has been advertised in the Fridley Focus. On February 1, the HRA, adopted a resolution that modified the redevelopment plan for Redevelopment Project #1 and the TIF Plans for Districts #1-3, 6, 7, and 9-18 to reflect increased project costs and increased bonding authority within Redevelopment Project #1. The resolution also gives their authorization for the creation of TIF District #19 and adopts the TIF Plan for District #19. Staff recommends that the Council hold the public hearing for the creation of TIF District #19, which is necessary to proceed with the redevelopment of the former Guardian Building Products property. 19 J:\Planning\Council Items By Meeting\2007 Council Items\February 26, 2007\TIFHEARINGDist# 19Memo.doc n1 � 1 ONROE James R. Cassarly jcasserly@krassmonroe.com Direct 952.885.1296 Greg D. Johnson g jo h nso n@krassmon ros. com DirectS52.885.5994 MEMORANDUM To: City of Fridley Attn: Paul Bolin, HRA Assistant Executive Director r Attn: William Burns, City Manager Attn: Scott Hickok, Community Development Director From: James R. Casserly, Esq. Greg D. Johnson, CPA, Senior Public Finance Analyst Date: February 19, 2007 Re: Industrial Equities Project at 5110 Main Street and Tax lncrement Financing District No. 19 Our File No. 9571-70 � � To assist with the public hearing on the establishment of Tax Incrernent Financing District No. 19,. enclosed you will find the following: 1. A Tax lncrement Financing Plan for TIF District No. 19. This Plan is identical to other plans which the City has adopted. The Plan states that the City is establishing a redevelopment tax increment financing district and may coflect tax increment revenues for up to 25 years from the date of receipt of the first tax increment. The Plan defines the area to be included in the Tax Increment District, contains a cash flow estimating the amount of tax increment, provides a"But For" analysis and includes an estimated impact on other taxing jurisdictions. 2, A Budget for TIF District No. 19. The Budget follows the guidelines and reporting format of the Office of the State Auditor. 3. A Resolution modifying your Redevelopment Plan, amending existing TIF districts, creating TIF District No. 19 and adopting a TIF Plan. This is a standard resolution which . we have used previously. Fridley has an 8D�0 Norman Center Drive, Suite 1400 Minneapolis, Minnesota 55437- I 178 TE� 952.865.5999 PAX 952.685.5969 20 www.krassmonroe.com February 19, 2007 Page 2 integrated Redevelopment Plan for the entire HRA project area. The Resolution contains the findings required for the establishment of the TIF District. 4. A Cantract for Private Redevelopment between the HRA and lndustrial Equities, LLC. This is a draft of the contract that we are recommending that the HRA adopt to facilitate the redevelopment at 5110 Main Street. The Redeveloper has been warking on the redevelopmen# properly for almost a year. Early last summer, he approached the City for tax increment assistance to help with very substantial redevelopment costs. The HRA has identified a number of those costs and has agreed to assist the Redeveloper to allow the site to be competitive with a greenfield site. Article III of the Redevelopment Contract states that assistance to the Redeveloper will be lesser of $1.5 million or the actual site improvement costs, including land acquisition, less the cost of the redevelopment property multiplied by $4.00 per square foot. The assistance to the Redeveloper is a revenue note that is payable only from tax increment resulting from the increased market value of the new project. The Redevelopment Contract has the HRA pledging tax increment through the year 2024, 16 tax increment years, to the payment of the note. At that time, if the note is not fully paid, it is deemed paid in full and the HRA may decertify the district. Neither the City nor the HRA has any risk with regard•to the payment of the note. The Redeveloper is assuming market vafuatior� risk, tax rate and class rate risks and any other changes in State law. 5. A Cash Flow and Present Value Analysis. Based on a conservative set of assumptions, the Redeve(oper would be receiving approximately $1.3 million of the principal of the revenue note. This amount and the year are under)ined on the analysis. For the Redeveloper to receive $1.5 million the market valuation would liave to be approximately $56 per square foot as opposed to the $50 per square foot used in the analysis, or the tax rate or class rate would have to increase. An increase in the rate of inflation, which we are assuming to be the 2.5% per year compounded annually, would atso generate additional tax increment revenues for payment on the note. 6. A Tax Distribution cha�t. This pie chart reflects the allocation of a property tax dollar in the first full tax payable year after the completion of the project. Taxes including market value referendum taxes are estimated to be $323,000 (the market value referendum taxes are approximately $17,000 and are in addition to the estimated taxes shown on the Assumptions attached to the Cash Flow). The estimated tax increment is 21 February 19, 2007 Page 3 approximately $139,000 or 43% of the total taxes. As the pie chart shows, after the reduction of the HRA Admin. and overhead costs of 4.3%, which is paid from the tax increment, there is available for the revenue note 38.8% of the property tax dollar. It is worth noting that the State's property tax levy is not tax increment and the State will receive 32.1 % of the property tax dollar. Base taxes payable to the school district, County, City and other taxing jurisdictions, as well as the school district referendum levies and the State taxes, as noted above, are not tax increment. The City has complied with all the statutory requirements for the establishment of a tax increment financing district and the HRA has recommended to the City that it establish the TIF district. The HRA and the City are providing assistance that is in keeping with past practices and the payment of the assistance through the tax increment revenue note does not pose a risk to either the City or the HRA. At the public hearing on February 26, 2007, John Allen, representing the Redeveloper, will be in attendance. Greg Johnson, a CFA and financial analyst from our office, will also be in attendance to respond to any of the financial issues. cc: Industrial Equities, LLC Attn: John Allen, President JRC/GDJ/jlt G:\WPDATAtF1FRIDLE11701COR�BOLIN BURNS HICKOK JRC GDJ.DOC 22 RESOLUTION NO. A RESOLUTION M.ODIFYING THE REDEVELOPMENT PLAN FOR REDEVELOPMENT PROJECT NO. 1 AND THE TAX INCREMENT FINANCING PLANS FOR TAX INCREMENT FINANCING DISTRICTS NOS. NOS. 1-3, 6-7, 9, 11-14 AND 16-18 TO REFLECT INCREASED PROJECT COSTS AND INCREASED BONDING AUTHORITY WITHIN REDEVELOPMENT PROJECT NO. 1, CREATING TAX INCREMENT FINANCING DISTRICT N0.19 AND ADOPTING A TAX INCREMENT FINANCING PLAN RELATING THERETO BE IT RESOLV.ED by the City Council (the "Council") of the City of Fridley, Minnesota (the "City"), as follows: Section 1. Recitals. 1.01. It has been proposed by the Housing and Redevelopment Authority (the "Authority") that the Council approve and adopt the proposed modifications to its Redevelopment Plan for Redevelopment Project No. 1(the "Project Area") reflecting increased project costs and increased bonding authority, pursuant to and in accordance with Minnesota Statutes, Sections 469.001 to 469.047, inclusive;, as amended and supplemented from time to time. 1.02. It has been further propo.sed by the Authority that the Council approve and adopt the proposed modifications to the Tax lncrement Financing Plans (the "Existing Plans") for Tax Increment Financing Districts Nos. 1-3, 6-7, 9., 11-14 and 16-18 (the "Existing Districts") reflecting increased project costs and increased bonding authority within the Project Area, pursuant to Minnesota Statutes, Section 469.174 through 469.1799, inclusive, as amended and supplemented from time to #ime.. -, 1.03. It has been further proposed by the Authority that the Council approve the creation of proposed Tax Increment Financing District No. 19 (the "Proposed District") and adopt a proposed Tax Increment Financing Plan (the "Proposed Plan") relating thereto, pursuant to and in accordance with Minnesota Statutes. Section 469.174 to 469.1799, inclusive, as amended and supplemented from time to time. 1.04. The Authority has caused to be prepared, and this Council has investigated the facts with respect thereto, a modified Redevelopment,Plan for the Project Area and modified Existing Plans for the Existing Districts reflecting increased project costs and increased bonding authority within the Project Area and a Proposed Plan for the Proposed District, defining more precisely the property to be included, the public costs to be incurred, and other matters relating thereto. 1.05. The Council has performed all actions required by law to be performed prior to the approval and adoption of the modifications to the Redevelopment Plan and Existing Plans and the approval and adoption of the Proposed Plan. Page 2 - Resolution No. 1.06. The Council hereby determines.that it is necessary and in the best interests of the City and the Authority at this time to approve and adopt the modifications to the Redevelopment Plan and Existing Plans reflecting increased project costs and increased bonding authority within the Project Area, to create the Proposed District and to approve and adopt the Proposed Plan relating thereto. Section 2. General Findings. 2.01. The Council hereby finds, determines and declares that the assistance to be provided through the adoption and implementation of the modified Redevelopment Plan , modified Existing Plans and Proposed Plan (collectively, the "Plans") are necessary to assure the development and redevelopment�of the Project Area. 2.02. The Council hereby finds, determines and declares that the Plans conform to the general plan for the development and redevelopment of the City as a whole in that they are consistent with the City's comprehensive plan. 2.03. The Council hereby finds, determines and declares that the Plans afford maximum opportunity consistent with the sound needs of the City as a whole for the development and redevelopment of the Project Area by private enterprise and it is contemplated that the development and redevelopment thereof will be carried out pursuant to redevelopment contracts with private developers. 2.04. The Council hereby finds, determines and declares that the modification, approval and adoption of the Plans is intended and, in the judgment of this Council, its effect will be to promote the purposes and objectives specified in this Section 2 and otherwise promote certain public purposes and accomplish certain objectives as specified in the Plans. 2.05. The Council hereby finds, determines and declares that the City made the above findings stated in this Section 2 and has set forth the reasons and supporting facts for each determination in the Plans and Exhibit A to this Resolution. Section 3. Specific Findings for the Proposed District. 3.01. The Council hereby finds, determines and declares that the Proposed District constitutes a"tax increment financing district" as defined in Minnesota Statutes, Section 469.174, Subd. 9, and further constitutes a"redevelopment district" as defined in Minnesota Statutes, Section 469.174, Subd. 10. 3.02. The Council hereby finds, determines and declares that the proposed development or redevelopment in the Proposed District; in the opinion of this Council, would not reasonably be expected to occur solely through private investment within the reasonably 2 Page 3 - Resolution No. foreseeable future and, therefore, the use of tax increment financing is deemed necessary. 3.03. The Council hereby finds, determines and declares that the increased market value of a project not receiving tax increment assistance would be less than the increased market value of a project receiving tax increment assistance after deducting the present value of projected tax increments for the maximum duration of the Proposed District. 3.04. The Council hereby finds, determines and declares that the expenditure of tax increment within the Proposed District serves primarily a public purpose. 3.05. The Council hereby finds, determines and declares that the City made the above findings stated in this Section 2 and has set forth the reasons and supporting facts for each determination in the Plans and Exhibit B to this Resolution. Section 4. Approvals and Adoptions. 4.01. The modifications to the Redevelopment Plan reflecting increased project costs and increased bonding authority within the Project Area are hereby approved and adopted by the Council of the City. 4.02. The modifications to the Existing Plans reflecting increased project costs and increased bonding authority within the Project Area are hereby approved and adopted by the Council of the Cify. 4.03. The creation of the Proposed District within the Project Area and the adoption of the Proposed Plan relating thereto are hereby approved by the Council of the City. Section 5. Filing of Plans. 5.01. Upon approval and adoption of the Plans, the City shall request the Authority to cause said f?lans to be filed with the Minnesota Department of Revenue, the Office of the State Auditor and Anoka County. 3 Page 4 - Resolution No PASSED AND ADOPTED BY THE COUNCIL OF THE CITY THIS DAY OF . 2007. ATTEST: DEBRA SKOGEN - CITY CLERK SCOTT LUND - MAYOR CERTIFICATION I, Debra Skogen, the duly qualified Clerk of the City of Fridley, County of Anoka, Minnesota, hereby certify that the foregoing is a true and correct copy of Resolution No. passed by the City Council on the day of , 2007. DEBRA SKOGEN - CITY CLERK 0 Page 5 - Resolution No. EXHIBIT A — GENERAL FINDINGS The reasons and facts supporting the findings for the modification of the Plans for the Project Area, Existing Districts and Proposed District pursuant to Minnesota Statutes, Section 469.175, Subdivision 3, are as follows: 1. Finding that the assistance to be provided through the adoption and implementation of the Plans is necessary to assure the development and redevelopment of the Project Area. The tax increment assistance resulting from the implementation of the Plans is necessary for the proposed project to proceed. Please refer to Exhibit XX-D of the Proposed Plan. 2. Finding that the redevelopment of the Comprehensive Plan. Plans conform to the general plan for the development and City as a whole in that they are consistent with the City's The Council has reviewed the Plans and has determined that they are consistent with the City's comprehensive plan. 3. Finding that the Plans afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development and redevelopment of the Project Area by private enterprise, and it is contemplated that the development or redevelopment thereof will be carried out pursuant to development contracts with private developers. Please refer to the attached Exhibit B for specific information relating to the Proposed District. 4. Finding that the approval and adoption of the Plans is intended and, in the judgment of this Council, its effect will be to promote the public purposes and accomplish the objectives specified in the Plans. The tax increment that will be generated due to the approval and adoption of the Plans will assist in financing the public improvements and eligible expenses as detailed in the Plans. � Page 6 - Resolution No. EXHIBIT B— SPECIFIC FINDINGS FOR PROPOSED DISTRICT 1. Finding that the Proposed District is a"redevelopment district" as defined in Minnesota Statutes, Section 469.174, Subd. 10. The Proposed District consists of a parcel of land and a portion of an adjacent parcel which has been determined eligible for inclusion in a redevelopment district pursuant to Minnesota Statutes 469.174, subdivision 10, which requires that (1) parcels consisting of 70% of the proposed tax increment district contain improvements and (2) more than 50% of the buildings are determined to be substandard. Ifi has been determined thafi (1) the two parcels total approximately 540,442 square feet and that parcels containing at least 83% of that total square footage contain improvements which exceeds the required 70%, and (2) that the single existing structure, or 100% of the structures, is deemed substandard which exceeds the required 50% of buildings. These findings are documented in a Report of Inspection Procedures and Results prepared by LHB, Inc. and dated January 31, 2007 2. Finding that the proposed development or redevelopment, in the opinion of the Council, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and, therefore, the use of tax increment financing is deemed necessary. , - Development activities proposed to occur in the Proposed District include land acquisition, demolition and removal of an eXisting building, removal of a railroad spur, removal of old tornado debris buried on the site, import of clean fill, removal of an asbestos pipe, additional remediation and ;site preparation as required and the construction of an approximate 202,880 square fo.ot office/warehouse development in 2007. Upon completion of the development,.it is anti,cipate.d that the City's tax base will increase by approximately $7,685,627. , City staff has reviewed the estimated, development costs and the available methods of financing and has determined that tax incremen# assistance is necessary to make the development project economically feasible� and to allow the Redeveloper to proceed at this time. 3. Finding that the increased market value of a project not receiving tax increment financing assistance would be less than the increased market value of a project receiving tax increment financing assistance after deducting the present value of the projected tax increments for the maximum duration of the Proposed District. The original market value of the Proposed District is $2,458,373. City staff has determined that without tax increment assistance these parcels would not be developed within the foreseeable future and that only minimal remodeling would probably occur. Therefore, an increase in market value would be minimal. 6 Page 7 — Resolution No. City staff has further determined that with tax increment assistance it is possible to construct an approximate 202,880 square foot office/warehouse development with an estimated market value of approximately $10,144,000. After deducting the original market value of $2,458,373 from the estimated market value of $10,144,000, City staff has further determined that the increased market value that could reasonably be expected to occurfrom a project receiving tax increment assistance would be approximately $7,685,627. City staff has further determined that the total amount of tax increment generated over the 25 yearterm of the Proposed District approximates $5,163,175. Assuming the same term and a present value rate of 7.0%, the present value of $5,163,175 approximates $1,972,847. After deducting the present value of the tax increment ($1,972,847) from the increase in estimated market value occurring as a result of utilizing tax increment assistance ($7,685,627), the net increase in estimated market values approximates $5,712,780. City staff has further determined that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing ($0) is less than the increased market value of the site occurring with the use of tax increment financing after subtracting the present value of the projected tax increments forthe maximum duration of the Proposed District ($5,712,780). Further information supporting this Finding is attached as Schedule 1. , . 4. Finding that expenditure of tax incremerit serves a primarily public purpose. The expenditure of tax increment is not intended as a private benefit and any such benefit is incidental. Public benefits resulting from the proposed project include (i) an increase in the State and City tax bases and (i'i) the acquisifion and redevelopment of property which is not now in its highest or best use. � Page 8 - Resolution No. EXHIBIT C — NUMERICAL "BUT FOR" ESTIMATED MARKET VALUE INCREASE FOR A DEVELOPMENT PROJECT WITHOUT TIF ASSISTANCE Without tax increment assistance the parceis would not be developed within the foreseeable future and only minimal remodeling may occur Estimated Market Value .......................:.:...................................... $ -0- Original Market Value .................................:................................. $ 2,458,373 Increased Market Value ................................................................ $ -0- ESTIMATED MARKET VALUE INCREASE FOR A DEVELOPMENT PROJECT WITH TIF.ASSISTANCE With tax increment assistance it is proposed that an approximate 202,880 square foot office/warehouse development be constructed in 2007. Estimated Market Value ................................................................ OriginalMarket Value ............................:...................................... Increased Market Value .............:.................................................. Less: Present Value of the Tax Increment generated at 7.0% for the duration of the Proposed District (see attached Schedule 1) ................................................ $10,144,000 $ 2,458,373 $ 7,685,627 $ 1,972,847 Net Increased Market Value ......................................................... $ 5,712,780 G:\WPDATA\F\FRIDLEY\70\TIF\COUNCIL RESOLUTION.DOC 0 � � CffY OF FRIDLEI' To: From: Date: Re: AGENDA ITEM CITY COUNCIL MEETING OF FEBRUARY 26, 2007 William W. Burns, City Manager Jack Kirk, Director of Parks and Recreation February 23, 2007 Second Reading of Proposed Change in City Code Pertaining to Alcoholic Beverages in City Parks At the first reading of the proposed City Code change pertaining to alcoholic beverages in City Parks, the City Council requested some additional information on several items. They specifically asked about a definition of "club" as it would pertain to this ordinance. Minnesota State Statute 340A has a definition of Club in Subdivision 7. The definition is as follows: Subd. 7. Club. "Club" is an incorporated organization organized under the laws of the state for civic, fraternal, social, or business purposes, for intellectual improvement, or for the promotion of sports, or a congressionally chartered veterans' organization, which: (1) has more than 30 members; (2) has owned or rented a building or space in a building for more than one year that is suitable and adequate for the accommodation of its members; (3) is directed by a board of directors, executive committee, or other similar body chosen by the members at a meeting held for that purpose. No member, officer, agent, or employee shall receive any profit from the distribution or sale of beverages to the members of the club, or their guests, beyond a reasonable salary or wages fixed and voted each year by the governing body. The remaining groups that are referred to in this ordinance (charitable, religious, or nonprofit public or private organization) would most easily be identified or defined by their IRS filing status. They would be identified as charitable (501 c 3), religious (also 501 c 3) or non-profit (registered with the State of Minnesota Secretary of State as a not for profit corporation). The City Council also asked for copies of Chapters 602 and 603 of our Fridley City Code that are referenced in this proposed ordinance change. These Chapters detail what these groups or organizations need to comply with in order to obtain a temporary liquor license. A copy of these chapters is included in your packet. Alcoholic Beverages in City Parks February 23, 2007 Page 2 The City Council also indicated that they would like the allowing of alcoholic beverages at Commons Park to be more restrictive and only allow beer sales as part of a community festival. While community festivals are referenced in Minnesota State Statute 340A, a definition is not included. I would suggest that we add some language to the proposed Chapter 508.21 (3) to limit the sales/ consumption of beer in Commons Park. With the suggested change, 508.21 (3) would now read: 3. Notwithstanding any laws to the contrary, upon approval of the City Council and issuance of a temporary on-sale license for the sale of 3.2% malt liquor, a club, charitable, religious or nonprofit public or private organization may sell and allow buyers to consume 3.2% malt liquor in Community Park and Commons Park. Sale and consumption of 3.2% malt liquor at Commons Park shall be limited to that occurring during, and as part of, a community festival. Community festivals shall include Fridley `49er Days and other festivals of broad community appeal and participation as designated by City Council. With the addition of the above wording, I am recommending the City Council amend Chapter 508 of the Fridley City Code related to alcoholic beverages in the City Parks. Please let me know if you need any additional information on this proposed change. � FRIDLEY CITY CODE CHAPTER 602. BEER LICENSING (Ref. 14, 47; 250, 294, 451, 463, 501, 550, 602, 647, 675, 743, 769, 783, 806,909, 932, 958, 982,1110, 1197,1201, 1211,1212)) 602.01. DEFINITIONS The following definitions shall apply in the interpretation and application of this Chapter and the following words and terms, wherever they occur in this Chapter, are defined as follows: 1. Beer or 3.2 Percent Malt Liquor. Any malt liquor with an alcoholic content of more than one-half of one percent (.5%) by volume and not more than 3.2 percent (3.2%) by weight. 2. Entertainment. Includes, but is not limited to, music; singing; plays; dancing, either by the public or performers; motion pictures; exposition; performances; male or female reviews; fashion shows; TV, other than regular public channels; concerts; or any other deliberate act intended to amuse or entertain patrons and/or employees. 3. Sale, Sell, or Sold. All barters and all manners or means of furnishing beer or 3.2 percent malt liquor including such furnishing in violation or evasion of law. 4. Tavern. An establishment for the sale of beer, cigars, cigarettes and all forms of tobacco, beverages, and soft drinks sold at retail for consumption on the premises. 602.02. LICENSES REQUIRED 1. Licenses. No person, except wholesalers and manufacturers to the extent authorized by law, shall deal in or dispose of by sale or keep or offer for sale, any beer within the City without iirst having received a license as hereinafter provided. Licenses shall be of three kinds: (1) Regular "on-sale"; (2) Temporary "on-sale"; and (3) "Off-sale". 2. Regular "On-sale". Regular "on-sale" licenses shall be granted only to bona fide clubs, taverns, exclusive "on-sale" liquor stores, restaurants, and hotels where food is prepared and served for consumption on the premises. "On-sale" licenses shall permit the sale of beer for consumption on the premises only. Fridley City Code Chapter 602 Section 602.04.2. � 3. Temporary "On-sale". Temporary "on-sale" licenses shall be granted only to bona fde clubs and charitable, religious, and nonprofit organizations for the sale of beer for consumption on the premises only. Said temporary licenses shall be granted upon written application to the City Council upon forms provided by the City. The provisions of Chapter 602 of the Fridley City Code, as applicable, shall be observed by said nonprofit organizations. 4. "Off-sale". "Off-sale" licenses shall permit the sale of beer at retail, in the original package for consumption off the premises only. 5. Exemption. The serving or disposing of "free" beer without consideration of purchase of tickets, coupons, goods, services or any means of payment is allowed without a license. Notwithstanding the license requirements, persons who serve or otherwise dispose of "free" beer must comply with all laws pertaining to the serving or disposing of beer. If in the opinion of the Public Safety Director or such Director's designee, the serving of "free" beer is creating a public safety danger or infringement of peace and tranquility or violation of laws, persons serving or disposing of "free" beer shall cease serving or disposing of "free" beer upon order of a law enforcement officer. Persons who continue to serve or dispose of "free" beer after being ordered to cease shall be guilty of a misdemeanor. (Ref. 74 ��-�----�� 6. ate Night License Endorsement. An on-sale license may be amended to include a] ight License Endorsement subj4ect to the terms and conditions imposed by the City Coc within its discretion and otherwise m accordance with the provisions of this Chapter. No pe: may sell any beer under any permit issued pursuant to this chapter after 1:00 a.m. without bbtaining a Late Night License Endorsement. No Late Night License Endorsement shal ef�iective after Apri130, 2006. (Ord 1197) � 602.03. Every application for a license to sell beer shall be made to the City Clerk on a form supplied by the City and containing such information as the Clerk or the City Council may require. It shall be unlawful to make any false statement in an application. 602.04. LICENSE FEES l. Payment Required. Each application for a license shall be accompanied by a receipt from the City Treasurer for payment in full of the required fee for the license. All fees shall be paid into the General Fund of the City. Upon rejection of any application for a license, the Treasurer shall refund the amaunt paid. 2. Expiration; Pro Rata Fees. Every license except a temporary license shall expire on the last day of April of each year. Each license except a temporary license shall be issued for a period of one (1) year, except that if a portion of the license year has elapsed when the license is granted, the license shall be issued for the remainder of the year for a pro rata fee. In computing such fee, any unexpired fraction of a month shall be counted as one (1) month. A temporary license shall be issued for a specific period in which a special event to which the sale is incident is being held and such period shall be stated on the license. 1 Fridley City Code Chapter 602 3. Fees. Section 602.OS.1.E. Every "on-sale" license shall include an "off-sale" license. Each "on-sale" license fee shall include an "off-sale" license at no additional expense. The annual and temporary license fees and initial investigation fee shall be as provided in Chapter 11 of this Code. 602.05. GRANTING OF LICENSES 1. Initial Licenses A. In order to assist the City Council in investigating the facts set out in the application and in order to determine the eligibility of the applicant for a license, pursuant to the provisions of this Chapter and of the State Law, the City Council may appoint a License Board. In the event that such License Board is established, it shall be organized in such a manner as the City Council shall determine by resolution. B. All applications for a license shall be referred to the Public Safety Director and to such other City Departments as the City Manager shall deem necessary for verifcation and investigation of the facts set forth in the application. The Public Safety Director shall cause to be made such investigation of the information requested in Section 602.03 as shall be necessary and shall make a written recommendation and report to the License Board, or to the City Council, as the case may be, which shall include a list of all violations of Federai or State law or Municipal ordinance. The License Board, or City Council may order and conduct such additional investigation as it shall deem necessary. C. Upon receipt of the written report and recommendation by the Public Safety Director and within twenty (20) days thereafter, the City Clerk shall cause to be published in the official newspaper, ten (10) days in advance, a notice of a hearing to be held by the License Board or the City Council, setting forth the day, time and place when the hearing will be held, the name of the applicant, the premises where the business is to be conducted, tlie nature of the business and such other information as the License Board may direct. At the hearing, opportunity shall be given to any person to be heard for or against the granting of the license. A license, other than a renewal, shall not be approved before the next regular meeting of the City Council following such hearing. D. After receiving such report, recommendation and public comment for the initial license, the City Council shall conduct within a reasonable time such additional hearing as it may deem advisable and thereafter shall grant or refuse the application in its discretion. E. Each license shall be issued to the applicant only. Each license shall be issued only for the premises described in the application. No license may be transferred to another person or to another place without complying with the requirements of an original application, including the approval of the City Council and the Liquor Control Commissioner as required. % Fridley City Code Chapter 602 Section 602.06.2. F. The City Clerk shall, within ten (10) days after the issuance of any license under this Chapter, submit to the Liquor Control Commissioner the full name and address of each person granted a license, the trade name, the effective license date, and the date of expiration of the license. The City Clerk shall also submit to the Liquor Control Commissioner any change of address, transfer, cancellation or revocation of any license by the Council during the license period. G. Where a license is granted to premises where the building is under construction or otherwise not ready for occupancy, the City Clerk shall not issue the license until notifcation by the Building Inspection Department that a Certificate of Occupancy has been issued and the building is ready for occupancy. 2. Renewal Licenses A. Applications for the renewal of an existing license shall be made at least 60 days prior to the date of the expiration of the license and shall be made in such abbreviated form as the City Council may approve. If, in the judgment of the City Council, good and sufficient cause is shown by an applicant for their failure to file for a renewal within the time provided, the City Council may, if the other provisions of this Chapter are complied with, grant the application. A review shall be made of all facts set out in the application. The City Council shall grant or refuse the, application in its discretion. B. Each license holder shall be given written notice, by mail, at least ten (10) days but not more than thirty (30) days before the City Council acts upon their license renewal. This notice shall be in a form as designated by the CiTy Clerk and shall specify the date and time when the renewal application will be considered by the City Council. The license holder shall be permitted an opportunity to address the City Council on its license renewal application. (Ref. 806) 3. Late Night License Endorsement. An on-sale license may be amended to include a Late Night License Endorsement subject to the terms and conditions imposed by the city council within its discretion and otherwise in accordance with the provisions of this Chapter. An application for a Late Night License Endorsement shall be made at the same time as, but separate from, an initial license or license renewal. No Late Night Endorsement granted by the City of Fridley will be effective after Apri130, 2006. (Ord 1197) 602.06. PERSONS INELIGIBLE FOR LICENSES No license shall be granted to or held by any person who: 1. Is under twenty-one (21) years of age; (Re£ 909) 2. Has, within five (5) years prior to the application for such license, been convicted of a felony, or of violating any law of this State or local ordinance relating to the manufacture, sale, distribution, or possession for sale or distribution of intoxicating liquors or beer, and cannot show competent evidence under Minnesota Statutes, Section 364.03, of sufficient rehabilitation and present fitness to perform the duties of a beer licensee; Fridley City Code Chapter 602 Section 602.08.3. 3. Is a manufacturer of beer or is interested in the control of any place where beer is manufactured; 4. Is not of good moral character and repute. If the applicant has been an owner, manager, or employee of a saloon, hotel, restaurant, cafe, tavern, or other business of a similar nature, the City Council may consider the applicant's past performance record in determining whether a license shall be granted or renewed; 5. Is or during the period of this license becomes the holder of a federal retail liquor dealer's special ta�c stamp for the sale of intoxicating liquor at any place, unless there has also been issued to him or her a local license to sell intoxicating liquor at such place; or 6. Is not the proprietor of the establishment for which the license is issued. (Ref. 14) 602.07. PLACES INELIGIBLE FOR LICENSE 1. Distance from Schools and Churches. Except for those organizations who have been issued temporary licenses to sell 3.2 percent malt liquor pursuant to Section 602.02.3, no license shall be granted for any place within 300 feet of any public or parochial school or within 300 feet of any church. In applying this restriction, the distance shall be measured in a straight line from the school or church building to the main public entrance of the premises described in the application. (Ref. 294) 2. Unpaid Financial Claims. No license shall be granted for operation on any premises upon which taxes or assessments or other fnancial claims of the City are delinquent and unpaid. 602.08. CONDITIONS OF LICENSE 1. General Conditions. Every license shall be granted subject to the conditions in the following subdivisions and all other provisions of this Chapter and of any other applicable ordinance of the City or State law. 2. Sales to Minors or Intoxicated Persons. No beer shall be sold or served to any intoxicated person or to any person under twenty-one (21) years of age. (Ref. 47, 909) 3. Consurnption by Minors. No person under the age of twenty-one (21) years shall be permitted to consume beer on the licensed premises. (Ref. 909) Fridley City Code Chapter 602 4. Employment Of Minors. Section 602.08.9. No person under eighteen (18) years of age shall be employed on the premises of a tavern, except that persons under eighteen (18) years of age may be employed as musicians, bus-boys and kitchen help. (Ref. 675) 5. Gambling No gambling or any gambling device shall be permitted on any licensed premises. Prohibited gambling shall include private social bets not part of or incidental to organized, commercialized, or systematic gambling. Gambling device shall include slot machines, roulette wheels, punchboards, dice, video game of chance and pin-ball machines which return coins or slugs, chips, or tokens of any kind which are redeemable in merchandise, cash or other item of value. Gambling is prohibited whether or not licensed by the State. (Re£ Ord 1211) 6. Interest of Manufacturers or Wholesalers. No manufacturer or wholesaler of beer shall have any ownership or interest in an establishment licensed to sell at retail contrary to the provisions of Minnesota Sta.tutes. No retail licensee and manufacturer or wholesaler of beer shall be parties to any exclusive purchase contract. No reta.il licensee shall receive any benefts contrary to law from a manufacturer or wholesaler of beer and no such manufacturer or wholesaler shall confer any benefits contrary to law upon a retail licensee. 7. Liquor Dealer's Stamp. No licensee shall sell beer while holding or exhibiting in the licensed premises a federal retail liquor dealer's special tax stamp unless he or she is licensed under the laws of Minnesota to sell intoxicating liquors. 8. Sales of Intoxicating Liquor. No licensee who is not also licensed to sell intoxicating liquor and who does not hold a"public drinking place license" shall sell or permit the consumption and display of intoxicating liquors on the licensed premises or serve any liquids for the purpose of mixing with intoxicating liquor. The presence of intoxicating liquors on the premises of such a licensee shall be prima facie evidence of possession of intoxicating liquors for the purpose of sale. 9. Inspection. Any police officer or health inspector may enter, inspect and search the premises of a licensee during business hours without a search and seizure warrant and may seize all intoxicating liquors and other evidence of violations found on the licensed premises in violation of this Chapter. Fridley City Code Chapter 602 10. Licensee Responsibility. Section 602.08.12.A.(5) Licensees shall be responsible for the conduct of their place of business and shall maintain conditions of sobriety and order. The act of any employee on the licensed premises authorized to sell or serve beer shall be deemed the act of the licensee as well and the licensee shall be liable to all penalties provided by this Chapter equally with the employee. 11. Certain Exhibitions and Conduct Prohibited. No licensee shall permit in any licensed establishment, or any adjoining property owned or leased by the licensee, any boxing, wrestling, or any other form of entertainment whose primary purpose is physical contact by striking or touching an opponent with hands, head, feet, or body. Team sports in which physical contact is incidental to the primary purpose of the game such as basketball, volleyball, soccer, football, baseball, hockey, and softball, are not included among activities prohibited by this section. 12. No licensee shall use or permit to be used any playing cards on the licensed premise except that playing cards may be used during a tournament of a social skill card game as defined by Minnesota Statute 609.761, subdivision 3, and conducted pursuant to regulations contained therein and this City Code. A. Social Skill Card Game Tournament (1) A social skill card game tournament means one separate and distinct organized contest involving contestants who compete in a series of elimination card games of social skill as defined by Minnesota Statute 609.761, subdivision 3. (2) No licensee shall permit or conduct more than one social skill card game tournament at any one time on the licensed premise or any adjoining property owned or leased by the licensee and no social skill card game tournament shall be permitted or conducted except during the normal hours of operation of the licensed premise. (3) No licensee shall charge or permit to be charged any fee, cover charge, or buy-in, or require or permit to be required purchase or consideration of any kind to enter the place where a social skill card game tournament is occurring as a participant or spectator. (4) No licensee shall charge or permit to be charged, to either participants or spectators of a social skill card game tournament, a price for consumer goods which is higher than the price that is normally charged. (5) No licensee shall permit wagers in a social skill card game tournament to be made with currency or any other thing of value except tournament chips or tokens. Tournament chips or tokens shall represent tournament points only and shall have no cash value or be redeemable for cash or for any other thing of value, except the point total represented by the players' accumulation of tournament chips or tokens shall be used to determine winners and/or final place in a tournament. Fridley City Code Chapter 602 Section 602.08.12.B.(4) (6) No licensee shall permit players or spectators to make any side bets or back bets, or engage in any other form of gambling, at a social skill card game tournament. (7) No licensee shall permit the aggregate amount or fair market value of prizes offered or given in any single social skill card game tournament to exceed $200 and no licensee shall award or permit to be awarded prizes exceeding a$200 value to any one social skill card game tournament participant on any one day. (8) No licensee shall award or permit to be awarded any prize consisting of intoxicating liquor, beer, or wine, or certificate for future consideration of same, in a social skill card game tournament. (9) No person, partnership, corporation, or other organization, other than the licensee, shall conduct or be permitted to conduct a social skill card game tournament on a licensed premise without first having obtained a tournament service provider license pursuant to this Chapter. B. Social Skill Card Game Tournament Service Provider (1) A person, partnership, corporation, or other organization, other than the licensee, who conducts, organizes supplies or promotes a social skill card game tournament on a premise licensed under this Chapter, is a social skill card game tournament service provider. (2) No person, partnership, corporation, or other organization shall act as a social skill card game tournament service provider without first having obtained a license to do so from the City Council. (3) All applications for tournament service provider licenses shall be made to the City setting forth all information necessary to show whether or not the person, partnership, corporation, or other organization qualifies for such a license under this Chapter, together with such additional information as may be required by the City Council. A completed application form must include the full true names, dates of birth, social security numbers and addresses of all persons financially interested in the business and/or all persons who are either on the Board of Directors of or hold offices in the entity or organization. The term "persons financially interested in the business" shall include all persons who share in the profits of the business. (4) All applications for a license shall be referred to the Public Safety Director for verifcation and investigation of the facts set forth in the application. The Public Safety Director shall cause to be made such investigation of the information requested as shall be necessary and shall make a written recommendation and report to the City Council which shall include a list of all violations of Federal or State law or Municipal ordinance. The City Council may order and conduct such additional investigation as it shall deem necessary. In making a determination of suitability for a tournament service provider license, the City Council shall consider the background of each person, partner, corporate officer or individual applicant. Fridley City Code Chapter 602 Section 602.10 (5) No license shall be granted or held by any person who has been convicted, within 15 years prior to the application of such license, of any felony violation of any law of the United States, the State of Minnesota, or any other state or territory, or of any local ordinance involving or related to theft or gambling. (6) The annual license fee and expiration date shall be as provided in Chapter 11 of this Code. 602.09. HOURS 1. Closing Hours. No sale of beer or 3.2 percent malt liquor may be made between 1:00 a.m. and 8:00 a.m. on the days of Monday through Saturday, nor between 1:00 a.m. and 12:00 noon on Sunday. No sale may be made on Christmas Day, December 25; or after 8:00 p.m. on Christmas Eve, December 24. (Re£ 501, 550, 602, 647, 783, 932, 982) 2. Remaining on Premises. It shall be unlawful for any persons or customers, other than the licensee or their employees, to remain on the premises after 1:30 a.m. There shall be no consumption of wine, 3.2 percent malt liquor, or any intoxicating liquor by any persons, including licensees or their employees, after 1:30 a.m. � 3. Notwithstanding the foregoing, a sale of beer or 3.2 percent malt liquor may occur on a licensed premises between the hours of 1:00 a.m. and 2:00 a.m. if the licensee has been granted by the city a Late Night License Endorsement for that license. No sale of beer or 3.2 percent intoxicating liquor for consumption on any license premises for which a Late Night Endorsement has been granted by the city shall occur between 2:00 a.m. and 8:00 a.m. on the days of Monday through Saturday. It shall be unlawful for the persons or customers, other than the licensees or their employees, to remain on a licensed premises for which a Late Night License Endorsement has been granted by the city, nor shall there be any consumption by any persons, including the licensees and their employees on such premises, more than one half-hour after closing of operations for that day and, in no event, later than 230 a.m. (Ord 1197) 602.10. CLUBS No club shall sell beer except to members and to guests in the company of inembers. Fridley City Code Chapter.602 602.11. RESTRICTIONS ON PURCHASE AND CONSUMPTION l. Age Misrepresentation. Section 602.13.1.A. Persons under twenty-one (21) years of age shall not misrepresent their age for the purpose of obtaining beer. (Ref. 909) 2. Inducing Purchase. No person shall induce a person under the age of twenty-one (21) years to purchase or procure 3.2% malt liquor or beer. 3. Procurement. No person other than the parent or legal guardian shall procure 3.2% malt liquor or beer for any person under the age of twenty-one (21) years. This section shall not prohibit the use of a person under the age of twenty-one (21) to attempt to purchase or procure 3.2% malt liquor or beer from a licensee in a test of the licensing department, or in conjunction with a compliance check effort that has been pre-approved by the Fridley Police Department. 4. Possession. Persons under twenty-one (21) years of age shall not have beer in their possession with the intent to consume it at a place other than the household of their parents or guardians. (Ref. 909) 5. Liquor Consumption and Display. No person shall consume or display any intoxicating liquor on the premises of a licensee unless said licensee is also licensed to sell intoxicating liquors or holds a"public drinking place license". 602.12. ENTERTAINMENT LICENSE REQUIRED No person operating an establishment in the business of selling, permitting to be displayed or consumed an intoxicating liquor or 3.2 percent malt liquor shall permit any entertainment on the premises without having secured a license from the City Council to permit such entertainment. 602.13. LIABILITY INSURANCE 1. Every person licensed to sell at retail intoxicating liquor or 3.2 percent malt liquor at on-sale or off-sale or on-sale wine shall demonstrate proof of financial responsibility with regard to liability imposed by Minnesota Statutes, Section 340A.409 to the City Clerk as a condition of the issuance or renewal of his or her license. Proof of financial responsibility may be given by filing: (Ref. 1110) A. A certificate that there is in effect for the period covered by the license an insurance policy or pool providing the following minimum coverages: Fridley City Code Chapter 602 Section 602.13.6. (1) $50,000 because of bodily injury to any one person in any one occurrence, and, subject to the limit for one person, in the amount of $100,000 because of bodily injury to two or more persons in any one occurrence, and in the amount of $10,000 because of injury to or destruction of property of others in any one occurrence. (2) $50,000 for loss of ineans of support of any one person in any one occurrence, and, subject to the limit for one person, $100,000 for loss of ineans of support of two or more persons in one occurrence; or B. A bond of a surety company with minimum coverages as provided in clause (A) above, or C. A certifcate of the State Treasurer that the licensee has deposited with the State Treasurer $100,000 in cash or securities which may legally be purchased by savings banks or for trust funds having a market value of $100,000. 2. A liability insurance policy required by Section 602.13.1 shall provide that it may not be canceled for any cause, either by the insured or the insurance company without first giving ten (10) days notice to the City of Fridley in writing of the intention to cancel it, addressed to the City Clerk of the City of Fridley. 3. A liability insurance policy required by Section 602.13.1 shall provide that the insurance company agrees to contact the City of Fridley in writing and addressed to the City Clerk of the City of Fridley, within ten (10) days of any claim made against the policy. 4. A liability insurance policy required by Section 602.13.1 that conta.ins, annual aggregate limits of liability shall require the insured to buy additional coverage after any claim is made that reduces the coverage under the policy below the requirements of Section 602.13.1. 5. The operation of a retail intoxicating or 3.2 percent malt liquor business at on-sale or off-sale or on-sale wine, without having on file at all times with the City of Fridley the liability insurance policy or other evidence of financial responsibility required under Section 602.13.1 shall be grounds for immediate revocation of the license. Notice of cancellation of a current liquor liability policy serves as notice to the licensee of the impending revocation and unless evidence of compliance with the financial responsibility requirements of Section 602. 13. 1 is presented to the City Clerk before the termination is effective, the license will be revoked instantly upon the lapse. 6. The City Clerk shall submit the provided proof of financial responsibility to the Commissioner of Public Safety. Fridley City Code Chapter 602 602.14. ADMINISTRATIVE OFFENSES Section 602.14.4. 1. Administrative Civil Penalties: Administrative offense procedures established pursuant to this chapter are intended to provide the public and the City with an informal, cost effective, and practical alternative to traditional criminal charges for violations of this ordinance. The procedures are intended to be voluntary on the part of those who have been charged with administrative offenses. 2. Every licensee shall be responsible for the conduct of its employees while on the licensed premises and any sale or other disposition of any intoxicating liquor, 3.2% malt liquor, beer or wine by an employee to any person under twenty-one (21) years of age shall be considered an act of the licensee for purposes of imposing an administrative penalTy, license suspension, or revocation. A. Individual. At any time prior to the payment of the administrative penalty as is provided for hereafter, the individual may withdraw from participation in the procedures in which event the City may bring criminal charges in accordance with law. Likewise, the City, at its discretion, may bring criminal charges in the first instance. In the event a party participates in the administrative offense procedures but does not pay the monetary penalty which may be imposed, the City will seek to collect the costs of the administrative offense procedures as part of a subsequent criminal sentence in the event the party is charged and is adjudicated guilty of the criminal violation. , B. Licensee. At any time prior to the payment of the administrative penalty as is provided for hereafter, the licensee may withdraw from participation in the procedures in which event the City may permanently revoke the license issued to the licensee under this Chapter in accordance with law. Likewise, the City, in its discretion, may revoke the license issued to the licensee under this Chapter in the first instance. In the event a licensee participates in the administrative offense procedures but does not pay the monetary penalty which may be imposed, the City will suspend the license issued to the licensee under this Chapter in accordance with section 602.15.B of this ordinance. 3. Notice. Any officer of the Fridley Police Department shall, upon determining there has been a violation, notify the violator of the violation. Said notice shall set forth the nature, date and time of violation, the name of the officer issuing the notice and the amount of the scheduled penalty. 4. Payment. Once such notice is given, the alleged violator may, within twenty (20) days of the time of issuance of the notice pay the amount set forth on the notice, or may request a hearing in writing, as provided for hereafter. The penalty may be paid in person or by mail, and payment shall be deemed to be an admission of the violation. Fridley City Code Chapter 602 Section 602.15.1. 5. Hearing. Any person contesting an administrative offense pursuant to this Chapter may request a hearing before the Hearing Examiner. Such request shall be fled in writing with the office of the Public Safety director within twenty (20) days of the offense. The Public Safety Director shall notify the Hearing Examiner, who will notify the person contesting and the licensee of the date, time, and place of hearing. The hearing shall be conducted no more than twenty (20) days after the Hearing Examiner receives notice of the request, unless a later date is mutually agreed to by the Hearing Examiner, the licensee, the person contesting and the City. Within ten (10) days after such hearing, the Hearing Examiner shall affirm, repeal, or modify the charge against the licensee or the person contesting. Any person aggrieved by the decision of the Hearing Examiner may appeal with the Public Safety Director within twenty (20) days of receiving notice of the Hearing Examiner's decision. At its next available regular meeting following the filing of a notice of appeal, the Council shall review the decision and iindings of fact of the Hearing Examiner and shall affirm, repeal or modify that decision. 6. Hearing Examiner. The position of Hearing Examiner is hereby created. The City Manager may, at his discretion and with the approval of the Council, contract with third parties for the furnishing of all services of the Hearing Examiner as contained in this Chapter and set the rate of compensation therefore. 7. Qualifcations. The Hearing Examiner shall be an individual trained in law; however, it shall not be required that the Hearing Examiner be currently licensed to practice law in the State of Minnesota. Duties: The Hearing Examiner shall have the following duties: A. Set dates and hear all contested cases. B. Take testimony from all interested parties. C. Make a complete record of all proceedings including findings of fact and conclusions of law. D. Affirm, repeal or modify the penalty accessed. 9. Failure to Pay. In the event a party charged with an administrative penalty fails to pay the penalty, if an individual, the party will be charged with the criminal offense; if a licensee, the Council will suspend the license issued to the licensee under this Chapter. 10. Disposition of Penalties. All penalties collected pursuant to this Chapter shall be paid to the City's treasurer and will be deposited in the City's general fund. 602.15. VIOLATIONS l. Administrative Civil Penalties: Individuals. Any person in the employ of a licensee who sells any intoxicating liquor, 3.2% malt liquor, beer or wine to a person under the age of twenty- one (21) years is subject to an administrative penalty; and any person under the age of twenty- one (21) years who attempts to purchase any intoxicating liquor, 3.2% malt liquor, beer or wine from a licensee is subject to an administrative penalty. The administrative penalties are as follows: Fridley City Code Chapter 602 Section 602.17. First violation. The penalty for the first violation is $250.00. Second violation within 12 months. The penalty for the second violation is $500.00. Third violation within 12 months. The penalty for the third violation is $750.00. 2. Administrative Civil Penalties; Licensee. If a licensee or an employee of a licensee is found to have sold any intoxicating liquor, 3.2% malt liquor, beer or wine to a person under the age of twenty-one (21) years, the licensee shall be subject to an administrative penalty as follows: First violation. The penalty for the frst violation is $500.00 If the fine is not paid within 20 days the City may suspend the license issued to the licensee under this Chapter for a period not to exceed 10 days Second violation within 12 months. The penalTy for the second violation is $1000.00. If the fine is not paid within 20 days the City may suspend the license issued to the licensee under this Chapter for a period not to exceed 30 days. Third violation within 12 months. The city may permanently revoke the license issued to the licensee under this Chapter. 3. Defense. It is a defense to the charge of selling intoxicating liquor, 3.2% malt liquor, beer or wine to a person under the age of twenty-one (21) years, that the licensee or individual, in making the sale, reasonably and in good faith relied upon representation of proof of age described in State Statute Section 340A.503. subdivision 6, paragraph (a). 4. Exemption. A person, no younger than 18 and no older than 20, may be enlisted to assist in the tests of compliance. The person shall at all times act only under the direct supervision of a law enforcement officer or an employee of the licensing department, or in conjunction with a compliance check effort that has been pre-approved by the Fridley Police department. A person who purchases or attempts to purchase intoxicating liquor, 3.2% malt liquor, beer or wine while in this capacity is exempt from the penalties imposed by subdivision A above. 602.16. REVOCATION The violation of any provision or condition of this Chapter by beer licensees or their agents is ground for revocation or suspension of the license. The license of any person who holds a federal retail liquor dealer's special tax stamp without a license to sell intoxicating liquors at such place shall be revoked without notice and without hearing. In all other cases, except where mandatory revocation is provided by law without notice and hearing and except where suspension may be made without a hearing, the holder of the license shall be granted a hearing upon at least ten (10) days notice before revocation or suspension is ordered. The notice shall state the time and place of hearing and the nature of the charges against the licensee. 602.17. PENALTIES Any violation of the provisions of this Chapter is a misdemeanor and is subject to all penalties provided for such violations under the provisions of Chapter 901 of this Code. FRIDLEY CITY CODE CHAPTER 603. INTOXICATING LIQUOR (Ref. 188, 435, 502, 524, 548, 579, 601, 611, 660, 752, 770, 784, 807, 847, 849, 882, 910, 933, 959, 983, 991, 993, 1023,1042, 1159,1172,1197, 1200,1201,1211, 1212) 603.01. DEFINITIONS The following definitions shall apply in the interpretation and application of this Chapter and the following words and terms, wherever they occur in this Chapter, are defned as follows: (Ref. 435) 1. Bowling Center An establishment under the control of a single proprietor or manager, having a minimum of 20 lanes for the sport of bowling and where, in consideration of payment therefore, the general public is permitted to participate in the sport of bowling. Such establishment shall have a kitchen and other facilities to serve meals and where, in consideration of payment therefore, meals are regularly served at tables to the general public. Such establishment employs an adequate staff for the usual and suitable service to its guests, and the business of bowling, including sale or rental of bowling equipment and supplies, for a license year is a minimum of 60% of the total gross sales of the business. 2. Church. A building which is principally used as a place where persons of the same faith regularly assemble for public worship. 3. Floor Area. All. of the floor area of the various floors of a licensed premise measured to the centers of all partitions, except those areas primarily for non-service purposes including, but not limited to, dead storage, building management, toilets or restrooms, mechanical equipment rooms and kitchens. Floor area is used to calculate the license fee. Banquet facilities used less than five (5) times per week, on the average, are counted at one-half (1/2) actual size. (Ref. 660) 4. Hotel. Any establishment having a resident proprietor or manager, where, in consideration of payment therefore, food and lodging are regularly furnished to transients. Such establishment mainta.ins for the use of its guests not less than 50 guest rooms with bedding and other usual, suitable and necessary furnishing in each room; is provided at the main entrance with a suitable lobby, desk, and office for the registration of its guests on the ground floor; employs an adequate staff to provide suitable and usual service under the same management and control as the rest of the establishment; and has a kitchen and dining room with a total minimum floor area of 2,000 square feet where the general public are, in consideration of payment therefore, served meals at tables. (Re£ 1172) Fridley City Code Chapter 603 Section 603.02 5. Intoxicating Liquor. Ethyl alcohol and distilled, fermented, spirituous, vinous, and malt beverages containing in excess of 3.2% of alcohol by weight. 6. Manufacturer. Every person who, by any process of manufacturing, fermenting, brewing, distilling, refining, rectifying, blending, or by the combination of different materials, prepares or produces intoxicating liquors for sale. 7. On-Sale. The sale of intoxicating liquor by the glass or by the drink for consumption on the premises only. 8. Restaurant. Any establishment, other than a hotel or bowling center, under the control of a single proprietor or manager, having kitchen and other facilities to serve meals and where, in consideration of payment therefore, meals are regularly served at tables to the general public. Such establishment employs an adequate staff for the usual and suitable service to its guests, and the business of serving food and/or intoxicating liquors for a license year is a minimum of 40% of the total gross sales of the business. (Ref. 1172) 9. Sale (Sell). All barters and all manners or means of furnishing intoxicating liquor or liquors, including those in violation or evasion of law, and also including the usual dictionary meaning. 10. Wholesale. Any sale for purposes of resale. The term "wholesale" means any person engaged in the business of selling intoxicating liquor to retail dealers. 603.02. LICENSE REQUIRED No person, except wholesalers or manufacturers to the extent authorized under State License, shall directly or indirectly deal in, sell, or keep for sale any intoxicating liquor without first having received a license to do so as provided in this Chapter. No person shall sell any intoxicating liquor on Sundays without obtaining a separate license for Sunday sales, as required by Minnesota State Statues. No person shall sell any intoxicating liquor after 1:00 a.m. without obtaining a special Late Night License Endorsement for an existing liquor license as provided in this Chapter. No Late Night License Endorsement granted pursuant to this Chapter will be effective after April 30, 2006. (Ord 1197) On-Sale intoxicating liquor licenses shall only be granted to bowling centers, hotels and restaurants, as defined in Section 603.01, where food is prepared and served for consumption on the premises. (Ref 1172) Fridley City Code Chapter 603 603.03. APPLICATION Section 603.03.3.J. Every application for a license to sell intoxicating liquor shall be verified and filed with the City Clerk. In addition to the information which may be required by the State Liquor Control Commissioner's form, the application shall contain the following information: 1. Whether the applicant is a person, corporation, partnership, or other form of organization. 2. The type of license the applicant seeks. 3. If the applicant is a natural person, the following information: A. True name, place and date of birth, and street resident address. B. Whether the applicant has ever used, or been known by, a name other than the applicant's true name and, if so, what was such name, or names, and information concerning dates and places where used. C. The name of the business if it is to be conducted under a designation, name or style other than the full individual name of the applicant; in such case a copy of the certification, as required by Chapter 333, Minnesota Statutes, certified by the Clerk of District Court, shall be attached to the application. D. Whether the applicant is married or single. If married, true name, place and date of birth, and street residence address of applicant's present spouse. E. Whether applicant and present spouse are registered voters and, if so, where. F. Street addresses at which applicant and present spouse have lived during the preceding ten (10) years. G. Kind, name and location of every business, or occupation, applicant or present spouse have been engaged in during the preceding ten (10) years. H. Names and addresses of applicant's and spouse's employers and partners, if any, for the preceding ten (10) years. I. Whether applicant or spouse, or a parent, brother, sister, or child of either of them has ever been convicted of any felony, crime or violation of any ordinance, other than traffic. If so, the applicant shall furnish information as to the time, place and offense for which convictions were had. J. Whether applicant or spouse, or a parent, brother, sister, or child of either of them has ever been engaged as an employee or in operating a saloon, hotel, restaurant, cafe, tavern or other business of a similar nature. If so, applicant shall furnish information as to the date, place and length of time. Fridley City Code Chapter 603 Section 603.03..07 K. Whether applicant has ever been in military service. If so, applicant shall, upon request, e�ibit all discharges. L. The name, address and business address of each person who is engaged in Minnesota. in the business of selling, manufacturing or distributing liquor and who is nearer to kin to the applicant or spouse than second cousin, whether of the whole or half blood, computed by the rules of civil law, or who is a brother-in-law or sister-in-law of the applicant or the applicant's spouse. 4. If the applicant is a partnership, the names and addresses of all partners and all information concerning each partner as is required of a single applicant in Section 603.033 above. A managing partner, or partners, shall be designated. The interest of each partner in the business shall be disclosed. A true copy of the partnership agreement shall be submitted with the application and, if the partnership is required to file a certificate as to a trade name under the provisions of Chapter 333, Minnesota. Statutes, a copy of such certificate certified by the Clerk of District Court shall be attached to the application. 5. If the applicant is a corporation or other organization and is applying for an "on-sale" license, the following: A. Name, and if incorporated, the state of incorporation. B. A true copy of the Corporation's Certificate of Incorporation, Articles of Incorporation or Association Agreement and By-laws, and if a foreign corporation, a Certifcate of Authority as described in Chapter 303, Minnesota Statutes. C. The name of the manager or proprietor or other agent in charge of the premises to be licensed, giving all the information about said person as is required of a single applicant in Section 603.03.3. D. Notwithstanding the definition of interest as given in Section 603.08, the application shall contain a list of all persons who, singly or together with their spouse, or a parent, brother, sister or child or either of them, own or control an interest in said corporation or association in excess of 5% or who are officers of said corporation or association, together with their addresses and all information as is required of a single applicant in Section 603.03.3. 6. The exact legal description of the premises to be licensed together with a plot plan of the area showing dimensions, locations of buildings, street access, parking facilities and the locations of distances to the nearest church building and school grounds. . 7. The floor number and street number where the sale of intoxicating liquors is to be conducted and the rooms where liquor is to be sold or consumed. An applicant for an "on-sale"' license shall submit a floor plan of the dining room, or dining rooms, which shall be open to the public, shall show dimensions and shall indicate the number of persons intended to be served in each of said rooms. Fridley City Code Chapter 603 Section 603.03.15.B. 8. If a permit from the Federal government is required by the laws of the United States, whether or not such permit has been issued, and if so required, in what name issued and the nature of the permit. 9. The amount of the investment that the applicant has in the business, building, premises, fixtures, furniture, stock in trade, etc., and proof of the source of such money. 10. The names and addresses of all persons, other than the applicant, who have any financial interest in the business, buildings, premises, fxtures, furniture, stock in trade; the nature of such interest, amount thereof, and terms for payment or other reimbursement. This shall include, but not be limited to, any lessees, lessors, mortgagees, lenders, lienholders, trustees, trustors, and persons who have co-signed notes or otherwise loaned, pledged, or extended security for any indebtedness of the applicant. 11. The names, residences and business addresses of three (3) persons, residents of the State of Minnesota, of good moral character, not related to the applicant or fnancially interested in the premises or business, who may be referred to as to the applicant's character or, in the case where information is required of a manager, the manager's character. 12. Whether or not all real estate, special assessments, and personal property taxes for the premises to be licensed which are due and payable have been paid, and if not paid, the years and amounts which are unpaid. 13. Whenever the application for an "on-sale" license to sell intoxicating liquor, or for a transfer thereof, is for premises either planned or under construction or undergoing substantial alteration, the application shall be accompanied by a set of preliminary plans showing the design of the proposed premises to be licensed. (Re£ 579) 14. Whenever the applicant for an "on-sale" license to sell intoxicating liquor is made for a proposed or existing establishment, the following items are to be provided with the application: A. Site plans of the premises indicating property and building location, parking area, landscaping and screening. Minimum parking requirements are to be a ratio of one (1) ten by twenty (10 x 20) foot parking stall for every three (3) seats of total seating capacity. B. Plans and specifications for the proposed esta.blishment of for enlargement, alteration or extension of an existing establishment, showing floor plans with total seating capacity. (Ref Ord 1159) 15. Other requirements are: A. All plans and specifcations must be reviewed and approved by the Building Inspection Department before issuance of building permit. (Ref. 579) B. Such other information as the City Council shall reasonably require. (Ref Ord 1159) Fridley City Code Chapter 603 603.04. EXECUTION OF APPLICATION Section 603.05.7. If the application is by a natural person, it shall be signed and sworn to by such person; if by a corporation, by an officer thereof; if by a partnership, by one of the partners; if by an unincorporated association, by the manager or managing officer thereof. If the applicant is a partnership, the application, license and insurance policy shall be made and issued in the name of all partners. 603.05. FEES 1. The annual license fee and expiration date shall be as provided in Chapter 11 of this Code. 2. The annual license fee shall be paid in full before the applicant for a license is accepted. All fees shall be paid into the General Fund of the City. Upon rejection of any application for a license, or upon withdrawal of application before approval of the issuance by the City Council, the license fee shall be refunded to the applicant except where rejection is for a willful misstatement in the license application. 3. The fee for an "on-sale" license granted after the commencement of the license year shall be pro-rated on a monthly basis. 4. The fee may be paid in two installments if the license is for a full twelve (12) month period. The frst half of the fee shall be due and payable with the original application. For a renewal license fee, the fee will be paid with the renewal application sixty (60) days prior to the expiration of the existing license in'accordance with Section 603.07.02. The second half shall be due and payable by September 30 of each year. If the fee is not received in accordance with this section, the non-payment would be cause for immediate and automatic suspension. (Ref. 993) 5. When the license is for premises where the building is not ready for occupancy, the time fixed for computation of the license fee for the initial license period shall be ninety (90) days after approval of the license by the City Council or upon the date the building is ready for occupancy, whichever is sooner. 6. No transfer of a license shall be permitted from place to place or person to person without complying with the requirements of an original application, except as provided by Section 603.05.9 and except where a new application is filed for a transfer of license from place to place and is for premises where the building was not ready for occupancy at the time of the original application and the new application is filed within ninety (90) days after approval of the original license by the City Council but before a Certificate of occupancy for the original location has been issued, no additional license fee is required and the investigating fee shall be as specified in Section 603.05.8. (Ref. 579) 7. No part of the fee paid for any license shall be refund (1, except in accordance with this Section. Fridley City Code Chapter 603 Section 603.07.1.B. 8. At the time of each original application for a license, the applicant shall pay in full an investigating fee. For a single person, the investigating fee shall be $200.00. For a corporation, partnership or other association, the investigation fee shall be $400.00. No investigating fee shall berefunded. 9. At any time that an additional investigation is required because of a change in ownership or control of a corporation or because of an enlargement, alteration, or extension of premises previously licensed, or because of a transfer from place to place which transfer comes within the exception expressed in 603.05.5, the licensee shall pay an additional investigating fee in the amount of $50.00. 10. Where a. new application is filed as a result of incorporation by an existing licensee and the ownership control and interest in the license are unchanged, no additional license fee will be required. 11. Where approval has been granted as provided by this Chapter, for the transfer of a license from person to person and where the successor licensee has paid the fee for the balance of the license year, then the transferring license holder shall have refunded to it on a pro-rata basis, that portion of the license fee which represents the unused portion of the license year. However, this provision does not prevent the City from charging to the successor license holder an additional investigation fee as provided in Section 603.05.07. (Ref. 849) 603.06. SUNDAY LIQUOR SALES The annual license fee for "Sunday Liquor Sales" shall be provided in Chapter 11. The annual fee for a license endorsement for late hour liquor sales after 1:00 a.m., but before 2:00 a.m. shall be provided in Chapter 11. This fee is in addition to the fee charged for an "On-Sale" license. All provisions of this Chapter pertaining to the "On-Sale" license shall apply to the "Sunday Liquor Sales" license, and the Late Night License Endorsement insofar as practicable. (Ord 1197) 603.07. GRANTING OF LICENSES 1. Initial Licenses A. In order to assist the City Council in investigating the facts set out in the application and in order to determine the eligibility of the applicant for a license, pursuant to the provisions of this Chapter and of the State Law, the City Council may appoint a License Board. In the event that such License Board is established, it shall be organized in such a manner as the City Council shall determine by resolution. B. All applications for a license shall be referred to the Public Safety Director and to such other City Departments as the City Manager shall deem necessary for verification and investigation of the facts set forth in the application. The Public Safety Director shall cause to be made such investigation of the information requested in Section 603.03 as shall be necessary and shall make a written recommendation and report to the License Board, or to the City Council, as the case may be, which shall include a list of all violations of Federal or State law or Municipal ordinance. The License Board, or City Council may order and conduct such additional investigation as it shall deem necessary. Fridley City Code Chapter 603 Section 603.07.2.A. C. Upon receipt of the written report and recommendation by the Public Safety Director and within twenty (20) days thereafter, the Chairman of the License Board or the City Council, shall instruct the City Clerk to cause to be published in the official newspaper, ten (10) days in advance, a notice of a hearing to be held by the License Board or the City Council, setting forth the day, time and place when the hearing will be held, the name of the applicant, the premises where the business is to be conducted, the nature of the business and such other information as the License Board may direct. At the hearing, opportunity shall be given to any person to be heard for or against the granting of the license. A license, other than a renewal, shall not be approved before the next regular meeting of the City Council following such hearing. D. After receiving such report, recommendation, and public comment for the initial license, the City Council shall conduct within a reasonable time such additional hearing as it may deem advisable and thereafter shall grant or refuse the application in its discretion. E. Each license shall be issued to the applicant only. Each license shall be issued only for the premises described in the application. No license may be transferred to another person or to another place without complying with the requirements of an original application, including the approval of the City Council and the Liquor Control Commissioner as required, except as provided by Sections 603.05.5 and 603.05.9. (Ref. 579) F. The City Clerk shall, within ten (10) days after the issuance of any license under this Chapter, submit to the Liquor Control Commissioner the full name and address of each. person granted a license, the trade name, the effective license date, and the date of expiration of the license. The City Clerk shall also submit to the Liquor Control Commissioner any change of address, transfer, cancellation or revocation of any license by the Council during the license period. G. Where a license is granted to premises where the building is under construction or otherwise not ready for occupancy, the City Clerk shall not issue the license until notifcation by the Building Inspection Department that a Certificate of Occupancy has been issued and the building is ready for occupancy. (Ref. 579) 2. Renewal Licenses A. Applications for the renewal of an existing license shall be made at least 6U days prior to the date of the expiration of the license and shall be made in such abbreviated form as the City Council may approve. If,. in the judgment of the City Council, good and sufficient cause is shown by an applicant for their failure to file for a renewal within the time provided, the City Council may, if the other provisions of this Chapter are complied with, grant the application. A review shall be made of all facts set out in the application. The City Council shall grant or refuse the application at it discretion. Fridley City Code Chapter 603 Section 603.08.7. B. At the earliest practicable time after application is made for a renewal of an "on-sale" license and in any event prior to the time that the application is approved by the City Council, the applicant shall file with the City Clerk a statement made by a certified public accountant that shows the total gross sales and the total food sales of the restaurant for the twelve (12) month period immediately preceding the date for fling renewal applications. A foreign corporation shall file a current Certificate of Authority. e. Each license holder shall be given written notice, by mail, at least ten (10) days but not more than thirty (30) days before the City Council acts upon their license renewal. This notice shall be in a form as designated by the City Clerk and shall specify the date and time when the renewal application will be considered by the City Council. The license holder shall be permitted an opportunity to address the City Council on its license renewal application. (Ref. 807) 603.08. PERSONS INELIGIBLE No license shall be granted or held by any person: 1. Under twenty-one (21) years of age. (Ref. 910) 2. Who is not of good moral character and repute. If the applicant has been an owner, manager or employee of a saloon, hotel, restaurant, cafe, tavern or other business of a similar nature, the City Council may consider the applicant's past performance record in determining whether a license shall be granted or renewed. (Re£ 579) 3. Who, if an individual, is an alien. 4. Who has been convicted, within 15 years prior to the application of such license, of any willful violation of any law of the United Staxes, the State of Minnesota., or any other state or territory, or of any local ordinance regarding the manufacture, sale, distribution or possession for sale or distribution of intoxicating liquor, or whose liquor license has been revoked for any willful violation of any law or ordinance. 5. Who is a manufacturer or wholesaler of intoxicating liquor. No manufacturer or wholesaler shall either directly or indirectly own or control or have any financial interest in any retail business selling intoxicating liquor. 6. Who is directly or indirectly interested in any other establishment in the City of Fridley to which an "on-sale" license has been issued under this Chapter. 7. Who, if a corporation, does not have a manager who is eligible pursuant to the provisions of this Section. Fridley City Code Chapter 603 Section 603.09.4. 8. Who is the spouse of a person ineligible for a license pursuant to the provisions of Subdivisions 4, 5, or 6 of this Section or who, in the judgment of the City Council, is not the real party in interest or beneficial owner of the`business operated, or to be operated, under the license. The term "interest" as used in this Section includes any pecuniary interest in the ownership, operation, management or profits of a retail liquor establishment, but does not include bona fide loans; bona fide fixed sum rental agreements; bona fide open accounts or other obligations held with or without security arising out of the ordinary and regular course or business of selling or leasing merchandise, fxtures or supplies to such establishment; or an interest of ten per cent (10%) or less in any corporation holding a license. A person who receives monies from time to time directly or indirectly from a licensee, in the absence of a bona fide consideration therefor and excluding bona fide gifts or donations, shall be deemed to have a pecuniary interest in such retail license. In determining "bona fide" the reasonable value of the goods or things received as eonsideration for any payment by the licensee and all other facts reasonably tending to prove or disprove the existence of any purposeful scheme or arrangement to evade the prohibitions of this Section shall be considered. 603.09. PLACES INELIGIBLE l. No license shall be granted or renewed for operation on any premises on which financial claims of the State are due, delinquent or unpaid. (Ref. 993) 2. No license shall be granted for premises located within 400 feet of a public school or of any church, the distance to be measured in a straight line from the nearest point of building to building, excepting the existing on-sale municipal establishments at the time of the enactment of this Chapter. The erection of a public school or church within the prohibited area after an original application has been granted shall not, in and of itself, render such premises ineligible for renewal of the license. 3. No license shall be issued for the premises owned by a person to whom a license may not be granted under this Chapter. 4. No "on-sale" license shall be granted for a restaurant and/or hotel that does not have a minimum total building area of 5,000 square feet, with a minimum kitchen and dining area of 2,000 square feet and with a minimum seating capacity that is open to the general public of 130. (Re£ 579) Fridley City Code Chapter 603 603.10. CONDITIONS OF LICENSE Section 603.10.10. Every license shall be granted subject to the condition of all Sections of this Chapter and of any other applicable provision of this Code or State law, including the following: . l. The license shall be posted in a conspicuous place in the licensed establishment at all times. 2. Licensees shall be responsible for the conduct of their place of business and the conditions of sobriety and order in the place of business and on the premises. 3. No "on-sale" licensee shall sell intoxicating liquor "off-sale". 4. No license shall be effective beyond the space named in the license for which it was granted 5. No intoxicating liquor shall be sold or furnished or delivered to any intoxicated person, to any habitual drunkard, to a person under twenty-one (21) years of age, or to any person to whom sale is prohibited by State law. (Ref. 910) 6. No person under eighteen (18) years of age shall be employed in a room where sales are made, except that persons under eighteen (18) years of age may be employed as musicians, busboys and dishwashers. (Ref. 579) 7. No licensee shall keep, possess, operate or permit the keeping, possession, or operation of any dice, video game of chance, or gambling device including slot machines, roulette wheels, punchboards, and pin ball machines which return coins or slugs, chips, or tokens or any kind which are redeemable in merchandise, cash or other item of value on the licensed premises. Pull-tabs and other expressly authorized forms of legal gambling may be conducted on licensed premises when such activity is licensed by the State pursuant to Minnesota Statute, Chapter 349, and conducted pursuant to the regulations contained in this City Code. (Ref. 1211) 8. Licensees shall not knowingly permit the licensed premises or any room in those premises or any adjoining building directly or indirectly under their control to be used as a resort for prostitutes. 9. No equipment or fixture in any licensed place shall be owned in whole or in part by any manufacturer or distiller of intoxicating liquor, except such as shall be expressly permitted by State law. 10. Any police officer, or any properly designated officer or employee of the City shall have the right to enter, inspect and search the premises of the licensee during the business hours without a warrant. Fridley City Code Chapter 603 Section 603.10.18. 11. No licensee shall sell, offer for sale, or keep for sale, intoxicating liquors in any original package which has been refilled or partially refilled. No licensee shall directly or through any other person delete or in any manner tamper with the contents of any original package so as to change its composition or alcoholic content while in the original package. Possession on the premises by the licensee of liquor in the original package differing in composition or alcoholic content in the liquor when received from the manufacturer or wholesaler from whom it was purchased, shall be prima facie evidence that the contents of the original package have been diluted, changed or tampered with. 12. No "on-sale" liquor establishment shall display liquor to the public during hours when the sale of liquor is prohibited by the Chapter. 13. No licensee shall apply for or possess a Federal Wholesale Liquor Dealers special tax stamp or a Federal Gambling stamp. 14. No licensee shall keep ethyl alcohol or neutral spirits on any licensed premises or permit their use on the premises as a beverage or mixed with a beverage. 15. The business records of the licensee, including Federal and State tax returns, shall be available for inspection by the City Manager, or other duly authorized representative of the City or the City Council, at all reasonable times. 16. Changes in the corporate or association officers, corporate charter, articles of incorporation, by-laws, or partnership agreement, as the case may be, shall be submitted to the City Clerk within thirty (30) days after such changes are made. Notwithstanding the defnition of interest as given in Section 603.08, in the case of a corporation, the licensee shall notify the City Clerk when a person not listed in the application acquires an interest which, together with that of spouse, parent, brother, sister, or child, exceeds 5%, and shall give all information about said person as is required of a person pursuant to the provisions of Section 603.03.3. 17. At the time licensees submit their applications for renewal of a license, they shall list all direct or indirect contributions made to or on behalf of a candidate for Fridley City Councilperson or Mayor, including, but not limited to, Candidates, Committees, Volunteer Committees, etc., for all City elections within the last 365 days. 18. A restaurant shall be conducted in such a manner that, of that part of the total business attributable to or derived from the serving of foods and intoxicating liquors, a minimum of 40% of the business for a license year is from the serving of food. A hotel shall be conducted in such a manner that, of that part of the total business attributable to or derived from the serving of foods and intoxicating liquors a minimum of 40% of the business for a license year is from the serving of food. A bowling center shall be conducted in such a manner that, of that part of the total business attributable to or derived from the sale of food and intoxicating liquors, a minimum of 30% of the gross sales of the food and liquor is from the serving of food. (Re£ 1172) Fridley City Code Chapter 603 Section 603.10.23.A.(1) 19. At the time of application for renewal of application of an "on-sale" license, the applicant shall submit proof to the City that the minimum percentage provided above in Section 603.10.18 of the gross sales, derived from the sale of food and intoxicating liquors of the establishment, for which the "on-sale" license is to be used, is in the serving of food. (Ref. 1172) A. Late Night License Endorsement In addition to any other reporting requirement that may be imposed by the municipal code, any licensee holding a Late Night License Endorsement shall also provide proof to the city that the minimum percentage provided in Section 603.10.18 of the gross sales, derived from the sale of food and intoxicating liquors of the establishment, for which the "on-sale" license is to be used, is in the serving of food. "Proof' for purposes of this section, shall consist of not less than a statement of accuracy, attested to by a certified public accountant, accompanying a verifiable, semiannual report of sales receipts based upon accepta.ble and recognized accounting and bookkeeping standards. Separate statements are required for a license renewal and the renewal of any Late Night License Endorsement to that license. (Ord 1197) 20. No licensee shall hold events which are exclusively for persons under the age of 21 except social functions that are held in a portion of the establishment where liquor is not sold. Social functions that are held in a portion of the restaurant where liquor is not sold shall be limited to persons age 18 and older. (Ref. 1042) 21. No licensee shall permit any person under the age of 18 to enter a licensed establishment except for the purpose of consuming meals or performing work for the establishment, or in the case of bowling centers, for the purpose of bowling and related activities, unless accompanied by a parent or guardian. (Ref. 1042) 22. No licensee shall permit in any licensed establishment, or any adjoining property owned or leased by the licensee, any boxing, wrestling, or any other form of entertainment whose primary purpose is physical contact by striking or touching an opponent with hands, head, feet, or body. Team sports in which physical contact is incidental to the primary purpose of the game such as basketball, volleyball, soccer, football, baseball, hockey, and softball are not included among activities prohibited by this section. (Ref 1201) 23. No licensee shall use or permit to be used any playing cards on the licensed premise except that playing cards may be used during a tournament of a social skill card game as defined by Minnesota Statute 609.761, subdivision 3, and conducted pursuant to regulations contained therein and this city code. (Ref Ord 1211) A. Social Skill Card Game Tournament (1) A social skill card game tournament means one separate and distinct organized contest involving contestants who compete in a series of elimination card games of social skill as defined by Minnesota Statute 609.761, subd. 3. Fridley City Code Chapter 603 Section 603.10.23.B.(1) (2) No licensee shall permit or conduct more than one social skill card game tournament at any one time on the licensed premise or any adjoining property owned or leased by the licensee and no social skill card game tournament shall be permitted or conducted except during the normal hours of operation of the licensed premise. (3) No licensee shall charge or permit to be charged any fee, cover charge, or buy-in, or require or permit to be required purchase or consideration of any kind to enter the place where a social skill card game tournament is occurring as a participant or spectator. (4) No licensee shall charge or permit to be charged, to either participants or spectators of a social skill card game tournament, a price for consumer goods which is higher than the price that is normally charged. (5) No licensee shall permit wagers in a social skill card game tournament to be made with currency or any other thing of value except tournament chips or tokens. Tournament chips or tokens shall represent tournament points only and shall have no cash value or be redeemable for cash or for any other thing of value, except the point total represented by the players' accumulation of tournament chips or tokens shall be used to determine winners and/or final place in a tournament. (6) No licensee shall permit players or spectators to make any side bets or back bets, or engage in any other form of gambling, at a social skill card game tournament. (7) No licensee shall permit the aggregate amount or fair market value of prizes offered or given in any single social skill card game tournament to exceed $200 and no licensee shall award or permit to be awarded prizes exceeding a$200 value to any one social skill card game tournament participant on any one day. (8) No licensee shall award or permit to be awarded any prize consisting of intoxicating liquor, beer, or wine, or certificate for future consideration of same, in a social skill card game tournament. (9) No person, partnership, corporation, or other organization, other than the licensee, shall conduct or be permitted to conduct a social skill card game tournament on a licensed premise without first having obtained a tournament service provider license pursuant to this Chapter. B. Social Skill Card Game Tournament Service Provider (1) A person, partnership, corporation, or other organization, other than the licensee, who conducts, organizes supplies or promotes a social skill card game tournament on a premise licensed under this Chapter, is a social skill card game tournament service provider, Fridley City Code Chapter 603 Section 603.1 l.l. (2) No person, partnershi�, corporation, or other organization shall act as a social skill card game tournament service provider without first having obtained a license to do so from the City Council. (3) All applications for tournament service provider licenses shall be made to the City setting forth all information necessary to show whether or not the person, partnership, corporation, or other organization qualifes for such a license under this Chapter, together with such additional information as may be required by the City Council. A completed application form must include the full true names, dates of birth, social security numbers and addresses of all persons financially interested in the business and/or all persons who are either on the Board of Directors of or hold offices in the entity or organization. The term "persons financially interested in the business" shall include all persons who share in the profits of the business. (4) All applications for a license shall be referred to the Public Safety Director for verification and investigation of the facts set forth in the application. The Public Safety Director shall cause to be made such investigation of the information requested as shall be necessary and shall make a written recommendation and report to the City Council which shall include a list of all violations of Federal or State law or Municipal ordinance. The City Council may order and conduct such additional investigation as it shall deem necessary. In making a determination of suitability for a tournament service provider license, the City Council shall consider the background of each person, partner, corporate offcer or individual applicant. (5) No license shall be granted or held by any person who has been convicted, within 15 , years prior to the application of such license, of any felony violation of any law of the United States, the State of Minnesota., or any other state or territory, or of any local ordinance involving or related to theft or gambling. (6) The annual license fee and expiration date shall be as provided in Chapter 11 of this Code. 603.11. HOURS OF OPERATION 1. No sale of intoxicating liquor for consumption on the licensed premises may be made between 1:00 a.m. and 8:00 a.m. on the days of Monday through Saturday, nor between 1:00 a.m. and 10:00 a.m. on Sunday. No sale may be made on Christmas Day, December 25; or after 8:00 p.m. on Christmas Eve, December 24. (Ref. 752, 784, 933, 983) 2. It shall be unlawful for any persons or customers, other than the licensees or their employees to remain on the premises after 1:30 a.m. There shall be no consumption by any persons, including the licensees and their employees, after 1:30 a.m. Fridley City Code Chapter 603 Section 603.13.3. 2. Notwithstanding the foregoing, a sale of intoxicating liquor for consumption may occur on a licensed premises between the hours of 1:00 a.m. and 2:00 a.m. if the licensee has been granted by the city a Late Night License Endorsement for that license. No sale of intoxicating liquor for consumption on any licensed premises for which a late Night License Endorsement has been granted by the city shall occur between 2:00 a.m. and 8:00 a.m. on the days of Monday through Saturday. It shall be unlawful for any persons or customers, other than the licensees or their employees, to remain on a licensed premises for which a Late Night License Endorsement has been granted by the city, nor shall there be any consumption by any persons, including the licensees and their employees on such premises, more than one-half hour after closing of operations for that day and, in no event, later than 2:30 a.m. (Ord 1197) 603.12. HOTELS No sale of intoxicating liquor shall be made to, or in, guest rooms of hotels unless the following conditions exist: l. The rules of such hotel provide for the service of rneals in guest rooms; 2. The sale of such intoxicating liquor is made in the manner required for "on- sale"; 3. Such sale accompanies and is incident of the regular service of ineals to guests therein; and, 4. The rules of such hotel and the description, location, and number of such guest rooms are fully set out in the application for a license. 603.13. RESTRICTIONS INVOLVING MINORS 1. No licensees, their agents or employees shall serve or dispense upon the licensed premises any intoxicating liquor or non- intoxicating malt liquors to any person under twenty-one (21) years of age; nor shall such licensees, or their agents or employees, permit any person under twenty-one (21) years of age to be furnished or consume any such liquors on the licensed premises. (Ref. 910) 2. Persons under twenty-one (21) years of age shall not misrepresent their age for the purpose of obtaining intoxicating liquor or non- intoxicating malt liquor; nor shall they enter any premises licensed for the retail sale of intoxicating liquor, or non- intoxicating malt liquor, for the purpose of purchasing or having served or delivered to them for consuming any such intoxicating liquor or beer; nor shall they purchase, attempt to purchase, consume, or have another person purchase for them any intoxicating liquor or beer. (Re£ 910) 3. No person shall induce a person under twenty-one (21) years of age to purchase or procure or obtain intoxicating liquor or 3.2% malt liquor. This Section shall not prohibit the use of a person under the age of twenty-one (21) years to attempt to purchase or procure any intoxicating liquor, 3.2% malt liquor, beer or wine from a licensee in a test of compliance under the direct supervision of a law enforcement officer or an employee of the licensing department, or in conjunction with a compliance check effort that has been pre-approved by the Fridley Police Department. (Ref. Ord 1212) Fridley City Code Chapter 603 Section 603.13.6. 4. Any person who may appear to licensees, their employees or agents to be a minor shail, upon demand of the licensees, their employees or agents, produce and permit to be examined a valid driver's license or a current nonqualification certificate issued pursuant to Minnesota Statutes, Section 340.039. 5. In every prosecution, for a violation of the pravisions of this Chapter relating to the sale or furnishing of intoxicating liquor or non- intoxicating malt beverage to a person under twenty-one (21) years of age, and in every proceeding before the City Council with respect thereto, the fact that the person under twenty-one (21) years of age involved has obtained and presented to the licensees, their employees or agents, a verified identification card from which it appears that said person was twenty-one (21) years of age and was regularly issued such identification card, shall be priina facie evidence that the licensees, their agents or employees are not guilty of a violation of such a provision and shall be conclusive evidence that a violation, if one has occurred, was not willful or intentional. (Ref. 910) 6. Persons who may appear to the licensees, their employees or agents to be under twenty-one (21) years of age and who do not have in their possession any identifcation certiiicate as above described, may sign and execute a statement in writing as follows: READ CAREFULLY BEFORE SIGNING It shall be unlawful for persons to misrepresent or mis-state their age, or the age of any other person for the purpose of inducing any licensee, their employee or agent, or any licensee, or any employee of any municipal liquor store, to sell, serve or deliver any alcoholic or non- intoxicating malt liquor beverage to a person under twenty-one (21) years of age. It is also unlawful for persons under twenty-one (21) years of age to have in their possession any intoxicating liquor with intent to consume the same at a place other than the household of their parent or guardian. Any person who shall violate any of the foregoing provisions of law shall be punished accordingly. VIOLATION OF THE ABOVE MINNESOTA LAW IS A MISDEMEANOR PUNISHABLE BY A FINE OF $700.00 OR A 90 DAYS WORKHOUSE SENTENCE, OR BOTH. My age is _. Date of Birth Place of Birth My address is Dated: Type of Identification, if any W itness Signed The above form shall be furnished at the expense of a11 licensees desiring to use the same and when properly executed may be considered as evidences in any prosecution and by the City Council in any proceeding before the Council or a committee thereof relating to the business or operations of the licensee. Such forms after execution shall be kept on file by the licensee for a period of one (1) year. (Ref. 910) Fridley City Code Chapter 603 603.14. OTHER RESTRICTIONS ON PURCHASE OR CONSUMPTION Section 603.15.5 l. No person shall give, sell, procure or purchase intoxicating liquors to, or for, any person to whom the sale of intoxicating liquor is forbidden by law. 2. No person shall mix or prepare intoxicating liquor for consumption, or consume, in any public place not licensed in accordance with the ordinances and laws of the City of Fridley and the State of Minnesota. 3. No intoxicating liquor shall be sold or consumed on a public highway or in an automobile. 603.15. BONDS 1. Each application for an "on-sale", "off-sale" liquor license or "on-sale" wine license shall be accompanied by a surety bond in the amount of $3,000.00 running to the City of Fridley, or in lieu thereof, cash or United State Government bonds of eyuivalent market value, as provided in Minnesota Statutes, Section 340.12. The bond shall be in effect for the period covered by the license. 2. The bond's conditions are as follows: A. The licensee will obey the laws relating to the licensed business B. The licensee will pay to the City, when due, all taxes, licenses, penalties, and other charges. C. In the event of any violation of any liquor laws, the bond shall be forfeited to the City, as obligee. 3. Bonds for "on-sale" licenses shall be filed with the City Clerk and approved by the City Council. Bonds for "off-sale" licenses and "on-sale" wine licenses shall be filed with the City Clerk and approved by the City Council and the Commissioner of Public Safety. 4. All bonds shall be for the beneft of the City, as obliges, and all persons suffering damages by reason of the violation of the conditions of 603.15.2. Upon forfeiture of the bond for violation of the law, the District Court of Anoka County may forfeit the bond's penal sum or any part thereof to the City. 5. Operation of a licensed business without having on file at all times with the City of Fridley effective security as required above shall be grounds for immediate revocation of the license. (Ref. 807) . Fridley City Code Chapter 603 603.16. LIABILITY INSURANCE Section 603.16.5 l. Every person licensed to sell at retail intoxicating liquor or non-intoxicating malt liquor at on-sale or off-sale or on-sale wine shall, after August 1, 1983, demonstrate proof of financial responsibility with regard to liability imposed by Minnesota Statutes, Section 340.95, to the City Clerk as a condition of the issuance or renewal of his or her license. Proof of fnancial responsibility may be given by fling: A. A certificate that there is in effect an insurance policy or pool providing the following minimum coverages: (1) $50,000 because of bodily injury to any one person in any one occurrence, and, subject to the limit for one person, in the amount of $100,000 because of bodily injury to two or more persons in any one occurrence, and in the amount of $10,000 because of injury to or destruction of property of others in any one occurrence. (2) $50,000 for loss of ineans of support of any one person in any one occurrence, and, subject to the limit for one person, $100,000 for loss of ineans of support of two or more persons in one occurrence; or B. A bond of a surety company with minimum coverages as provided in clause (A) above, or C. A certificate of the State Treasurer that the licensee has deposited with the State Treasurer $100,000 in cash or securities which may legally be purchased by savings banks or for trust funds having a market value of $100,000. 2. A liability insurance policy required by Section 603.16.1 shall provide that it may not be canceled for any cause, either by the insured or the insurance company without iirst giving ten (10) days notice to the City of Fridley in writing of the intention to cancel it, addressed to the City Clerk of the City of Fridley. 3. A liability insurance policy required by Section 603.16.1 shall provide that the insurance company agrees to contact the City of Fridley in writing and addressed to the City Clerk of the City of Fridley, within ten (10) days of any claim made against the policy. 4. A liability insurance policy required by Section 603.16.1 that contains annual aggregate limits of liability shall require the insured to buy additional coverage after any claim is made that reduces the coverage under the policy below the requirements of Section 603.16.1. 5. The operation of a retail intoxicating or non-intoxicating malt liquor business at on- sale or off-sale or on-sale wine, without having on file at all times with the City of Fridley the liability insurance policy or other evidence of financial responsibility required under Section 603.16.1 shall be grounds for immediate revocation of the license. Notice of cancellation of a current liquor liability policy serves as notice to the licensee of the impending revocation and unless evidence of compliance with the financial responsibility requirements of Section 603.16.1 is presented to the City Clerk before the termination is effective, the license will be revoked instantly upon the lapse. Fridley City Code Chapter 603 Section 603.20.2.C. 6. The City Clerk shall submit the provided proof of financial responsibility to the Commissioner of Public Safety. 603.17. SUSPENSION OR REVOCATION The City Council may suspend or revoke any license for the sale of intoxicating liquor for the violation of any provision or condition of this Chapter or of any State law or Federal law regulating the sale of intoxicating liquor, and shall revoke such license for any willful violation which, under the laws of the State is grounds for mandatory revocation, and shall revoke for failure to keep the insurance required by this Chapter in full force and effect. 603.18. NOTICE Except in the case of suspension pending a hearing or immediate revocation for failure to have on file at all times with the City the liability insurance policy or other evidence of fnancial responsibility required under Sections 603.15 and 603.16, a revocation or suspension by the Council shall be preceded by written notice to the licensee and a public hearing. The notice shall give at least ten (10) days notice of the time and place of the hearing and shall state the nature of the charges against the licensee. 'The Council may, without any notice, suspend any license pending a hearing on revocation for a period not exceeding 30 days. The notice may be served upon the licensee personally or by leaving the same at the licensed premises with the person in charge thereof. No suspension shall exceed 60 days. 603.19. ALTERATION OF PREMISES Proposed enlargement, alteration or extension of premises previously licensed shall be reported to the City Clerk at or before the time application is made for a Building Permit for any such change. 603.20. MANAGERIAL LICENSE l. No person shall work as a manager of a premises licensed under this Chapter, and no licensee shall permit any such person to be so employed, unless such person, within seven (7) days after first being so employed, shall apply for a license to engage in such business. No persons may be so employed for any length of time if their license is denied or revoked. (Re£ 1023) 2. An application for such. license shall be filed with the City Clerk upon forms provided by the City and such application shall be verified under oath and shall contain the following information: A. The names and addresses of two (2) residents of the State of Minnesota, who have known the applicant for a period of two (2) years and who will vouch for the sobriety, honesty, and general good character of the applicant. B. A concise history of the applicant's previous employment. C. The record, if any, of arrests and of convictions for crimes and misdemeanors other than traffic offenses. Fridley City Code Chapter 603 Section 603.22.4. 3. The annual license fee and expiration date shall be provided in Chapter 11 of this Code. Application for renewal of an existing license shall be made at least 15 days prior to the date of the expiration of the license on such form as the City Council may approve. 4. The application shall be referred to the Police Department which shall investigate the facts set forth in the application and make a written report thereon at the earliest practicable time. If the Police Department recommends that such person be licensed, the City Clerk shall issue the license forthwith. If the Police Department makes a recommendation that the license not be issued, the applicant, upon request, shall be entitled to a hearing before the City Council and may offer evidence to prove the license should be issued. 5. No persons shall be issued a license if it appears that they had committed an act which is a willful violation of Minnesota Statutes Sections 340.07 through 340.40. 6. Any license issued hereunder may be revoked for any violation of this Chapter or of Minnesota Statutes Sections 340.07 through 340.40 or for conviction of any crime or misdemeanor involving moral turpitude. 603.21. AUTHORIZATION TO ISSUE "ON-SALE" WINE LICENSES The City is hereby authorized to issue "on-sale" wine licenses pursuant to authority of Minnesota Statutes. Licenses may be issued to "restaurants" as defined above. (Ref. 611) 603.22. WINE LICENSE 1. No person operating a resta.urant shall sell or permit to be sold on said premises any wine without having been issued either an "On-Sale Wine License" or an "On-Sale Intoxicating Liquor License". An "On-Sale Wine License" permits only the "on-sale" of wine not exceeding 14 percent (14%) alcohol by volume in conjunction with the sale of food. (Ref. 611) 2. The annual license fee and expiration date for "On-Sale Wine Licenses" shall be provided in Chapter 11 of this Code. 3. No wine license shall be issued to any restaurant having seating capacity of less than fifty (50) persons. (Ref. 847) 4. The provisions of Sections 603.01 to 603.21 above shall apply to "On-Sale Wine Licenses" insofar as practicable, as they relate to: Definitions: Applications; Granting of Licenses; Persons and Places Ineligible; Conditions of License; Hours of Operation; Restrictions Involving Minors; Other Restrictions on Purchase or Consumption; Bonds; Liability Insurance; Notice and Hearing on Suspension or Revocation of License; Alteration of Premises; and Penalties. (Ref. 611) Fridley City Code Chapter 603 603.23. TEMPORARY LICENSES Section 603.24.2 1. The City is hereby authorized to issue a temporaty on-sale intoxicating liquor "license" to any club, charitable, religious, or other non-proft organization which has its principal location within the City of Fridley and which has been in existence for a period of not less than three (3) years at the time of making application for this license. This temporary on-sale intoxicating liquor license shall only be issued for a social event occurring within the City limits and which is being sponsored by the license. 2. The license shall be for, a period of not more than three (3) consecutive days and no more than two licenses may be issued to the same organization in the same calendar year. 3. The license may authorize the on-sale of intoxicating liquor on premises other than premises which the licensee owns or permanently occupi�s. Further, the licensee may contract for intoxicating liquor catering services with the holder of a full year, on-sale intoxicating liquor license issued under the conditions of this Chapter. 4. Except in those instances where the license holder contracts for the catering of liquor services as provided in paragraph 3 above, the licensee shall meet the requirements of Section 603.16. 5. Application for this temporary license must be made in duplicate on the form as prepared by the Minnesota Department of Public Safety, Liquor Control Division. The original of this application shall be forwarded by the City Clerk to the Minnesota Department of Public Safety, Liquor Control Division. The copy of this application shall be retained by the City. This application must be made at least thirty (30) days prior to its requested date. This license shall not be effective unless approved by both the Minnesota Commissioner of Public Safety and the Fridley City CounciL 6. The annual license fee shall be provided in Chapter 11 of this code. (Ref. 849) 603.24. GAMBLING ENDORSEMENT l. Statement of Policy On-sale licensees under the provisions of this Chapter or Chapter 606 may request permission of the City Council to permit State licensed organizations to conduct lawful gambling on the licensed premises. Application for a gambiing endorsement shall be made to the City Clerk with payment of the specified fee in Chapter 11 of the City Code. (Ref 1200) 2. Regulations Gambling endorsements on on-sale licenses issued either under this Chapter or Chapter 606 shall be subject to the following regulations which shall be deemed as a part of the license, and failure of compliance may constitute grounds for adverse action as prescribed in the City Code. (Ref 1200) Fridley City Code Chapter 603 Section 603.25.2. A. Use of the licensed premises shall be by means of a Sta.te approved lease agreement between the licensee and the licensed organization. A copy of the lease shall be filed with the City Clerk, and also a copy must be kept on the premises and available for public inspection upon request. Leases shall be governed by the following: (1) Any form of (awful gambling permitted by the state of Minnesota as defined by Chapter 349 and otherwise approved or licensed by the ciTy may be conducted on the licensed premises. (Ref 1200) (2) Pull-tabs shall only be conducted from a booth used solely by the licensed lawful gambling organization. Lawful gambling shall neither be conducted by employees of the licensee or conducted from the bar service area. (Ref 1200) (3) The construction and maintenance of the booth used by the licensed lawful gambling organization shall be the sole responsibility of the licensed lawful gambling organization. (Ref. 991) B. Only one licensed lawful gambling organization shall be permitted to conduct lawful gambling on the licensed premises. (Ref 1200) C. The licensee may not be reimbursed by the licensed lawful gambling organization for any license or permit fees, and the only compensation which the licensee may obtain from the licensed lawful gambling organization is the rent fixed in the lease agreement. D. The licensee shall be responsible for the licensed lawful gambling organization's conduct. The City Council may suspend the licensee's permission to allow lawful gambling on the premises for a period up to 60 days for any violation of State or local gambling laws or regulations that occur on the premises by anyone, including the licensee or the licensed lawful gambling organization. A second violation within a 12 month suspension, and any additional violations within a 12 month period shall result in the revocation of the lawful gambling permission, and may also be considered by the Council as grounds for suspension or revocation of the on-sale liquor license. (Re£ 1200) 603.25. ADMINISTRATIVE OFFENSES 1. Administrative Civil Penalties: Administrative offense procedures established pursuant to this chapter are intended to provide the public and the City with an informal, cost effective, and practical alternative to traditional criminal charges for violations of this ordinance. The procedures are intended to be voluntary on the part of those who have been charged with administrative offenses. 2. Every licensee shall be responsible for the conduct of its employees while on the licensed premises and any sale or other disposition of any intoxicating liquor, 3.2% malt liquor, beer or wine by an employee to any person under twenty-one (21) years of age shall be considered an act of the licensee for purposes of imposing an administrative penalty, license suspension, or revocation. Fridley City Code Chapter 603 Section 603.25.6. A. Individual. At any time prior to the payment of the administrative penalty as is provided for hereafter, the individual may withdraw from participation in the procedures in which event the City may bring criminal charges in accordance with law. Likewise, the City, at its discretion, may bring criminal charges in the frst instance. In the event a party participates in the administrative offense procedures but does not pay the monetary penalty which may be imposed, the City will seek to collect the costs of the administrative offense procedures as part of a subsequent criminal sentence in the event the party is charged and is adjudicated guilty of the criminal violation. B. Licensee. At any time prior to the payment of the administrative penalty as is provided for hereafter, the licensee may withdraw from participation in the procedures in which event the City may permanently revoke the license issued to the licensee under this Chapter in accordance with law. Likewise, the City, in its discretion, may revoke the license issued to the licensee under this Chapter in the first instance. In the event a licensee participates in the administrative offense procedures but does not pay the monetary penalty which may be imposed, the City will suspend the license issued to the licensee under this Chapter in accordance with section 603.26.B of this ordinance. 3. Notice. Any officer of the Fridley Police Department shall, upon determining there has been a violation, notify the violator of the violation. Said notice shall set forth the nature, date and time of violation, the name of the officer issuing the notice and the amount of the scheduled penalty. 4. Payment. Once such notice is given, the alleged violator may, within twenty (2Q) days of the time of issuance of the notice pay the amount set forth on the notice, or may request a hearing in writing, as provided for hereafter. The penalty may be paid in person or by mail, and payment shall be deemed to be an admission of the violation. 5. Hearing. Any person contesting an administrative offense pursuant to this Chapter may request a hearing before the Hearing Examiner. Such request shall be filed in writing with the office of the Public Safety director within twenty (20) days of the offense. The Public Safety Director shall notify the Hearing Examiner, who will notify the person contesting and the licensee of the date, time, and place of hearing. The hearing shall be conducted no more than twenty (20) days after the Hearing Examiner receives notice of the request, unless a later date is mutually agreed to by the Hearing Examiner, the licensee, the person contesting and the City. Within ten (10) days after such hearing, the Hearing Examiner shall affirm, �epeal, or modify the charge against the licensee or the person contesting. Any person aggrieved by the decision of the Hearing Examiner may appeal with the Public Safety Director within twenty (20) days of receiving notice of the Hearing Examiner's decision. At its next available regular meeting following the filing of a notice of appeal, the Council shall review the decision and findings of fact of the Hearing Examiner and shall affirm, repeal or modify that decision. 6. Hearing Examiner. The position of Hearing Examiner is hereby created. The City Manager may, at his discretion and with the approval of the Council, contract with third parties for the furnishing of all services of the Hearing Examiner as contained in this Chapter and set the rate of compensation therefore. Fridley City Code Chapter 603 Section 603.26.2. 7. Qualifications. The Hearing Examiner shall be an individual trained in law; however, it shall not be required that the Hearing Examiner be currently licensed to practice law in the State of Minnesota. Duties: The Hearing Examiner shall have the following duties: A. Set dates and hear all contested cases. B. Take testimony from all interested parties. C. Make a complete record of all proceedings including iindings of fact and conclusions of law. D. Affirm, repeal or modify the penalty accessed. 9. Failure to Pay. In the event a party charged with an administrative penalty fails to pay the penalty, if an individual, the parly will be charged with the criminal offense; if a licensee, the Council will suspend the license issued to the licensee under this Chapter. 10. Disposition of Penalties. All penalties collected pursuant to this Chapter shall be paid to the City's treasurer and will be deposited in the City's general fund. 603.26. VIOLATIONS l. Administrative Civil Penalties: Individuals. Any person in the employ of a licensee who sells any intoxicating liquor, 3.2% malt liquor, beer or wine to a person under the age of twenty- one (21) years is subject to an administrative penalty; and any person under the age of twenty- one (21) years who attempts to purchase any intoxicating liquor, 3.2% malt liquor, beer or wine from a licensee is subject to an administrative penalty. The administrative penalties are as follows: � First violation. The penalty for the first violation is $250.00. Second violation within 12 months. The penalty for the second violation is $500.00. Third violation within 12 months: The penalty for the third violation is $750.00. 2. Administrative Civil Penalties; Licensee. If a licensee or an employee of a licensee is found to have sold any intoxicating liquor, 3.2% malt liquor, beer or wine to a person under the age of twenty-one (21) years, the licensee shall be subject to an administrative penalty as follows: First violation. The penalty for the first violation is $500.00 If the fine is not paid within 20 days the City may suspend the license issued to the licensee under this Chapter for a period not to exceed 10 days Second violation within 12 months. The penalty for the second violation is $1000.00. If the fine is not paid within 20 days the City may suspend the license issued to the licensee under this Chapter for a period not to exceed 30 days. Third violation within 12 months. The city may permanently revoke the license issued to the licensee under this Chapter. Fridley City Code Chapter 603 Section 603.27. 3. Defense. It is a defense to the charge of selling intoxicating liquor, 3.2% malt liquor, beer or wine to a person under the age of twenty-one (21) years, that the licensee or individual, in making the sale, reasonably and in good faith relied upon representation of proof of age described in State Statute Section 340A.503. subdivision 6, paragraph (a). 4. Exemption. A person, no younger than 18 and no older than 20, may be enlisted to assist in the tests of compliance. The person shall at all times act only under the direct supervision of a law enforcement officer or an employee of the licensing department, or in conjunction with a compliance check effort that has been pre-approved by the Fridley Police department. A person who purchases or attempts to purchase intoxicating liquor, 3.2% malt liquor, beer or wine while in this capacity is exempt from the penalties imposed by subdivision A above. Revocation. The City Council has the authority to revoke any license as noted in 11.08. 603.27. PENALTIES Any violation of this Chapter is a misdemeanor and is subject to all penalties provided for such violation under the provisions of Chapter 901 of this Code. ORDINANCE NO. AN ORDINANCE AMENDING AND RECODIFYING CHAPTER 508 PERTAINING TO ALCOHOLIC BEVERAGES The Fridley City Council hereby finds after review, examination and recommendation of staff and Parks and Recreation Commission that Chapter 508 related to alcoholic beverages be hereby amended and ordains as follows: CHAPTER 508. PARKS AND PARKWAYS 508.21. ALCOHOLIC BEVERAGES It shall be unlawful for any persons to have in their possession or to consume any intoxicating liquor or �e��g 32% malt liquor in or upon any City, r^��+�� ^r ^+'�°r ��'�'�^ park or bathing beach T-��*'��r *'�° r�*�� except as provided in subdivisions 1, 2,3 and 4 below: 1. Notwithstanding laws to the contrary, possession and consumption of �e��g 3.2% malt liquor is permitted in Locke Park. 2. The City Council may grant permission to consume �e��g 3.2% malt liquor in City; r^„r+�, ^r ^*�°r r„��;� parks to neighborhood groups. 3. Notwithstanding any laws to the contrary, upon approval of the City Council and issuance of a temporary on-sale license for the sale of 3.2% malt liquor �i�, a club, charitable, religious or nonprofit public or private organization may sell and allow buyers to consume �e��g 3.2% malt liquor in Community Park and Commons Park Sale and consumption of 3.2% malt liquor at Commons Park shall be limited to that occurrin� durin�, and as part of, a communitX festival. Communitv festivals shall include Fridlev 49er Davs and other festivals of broad communitv a�eal and participation as desi�nated bv Citv Council. 4. Notwithstandin� anv laws to the contrarv, malt liquor or wine, as defined bv Minnesota State Statute 340A, may be sold and or consumed for receptions or social events within the Sprin�brook Nature Center Interpretive Buildin� and/or in an adj acent outdoor desi�nated space allowed onl��pecial permit under the followin� conditions: A. Upon issuance of a temporary on-sale intoxicatin� liquor license, as provided for in Chapter 603 of the Fridley City Code, a club, charitable, reli�ious or nonprofit public or private or�anization mav sell and allow buvers to consume malt liquor and/or wine. B. Upon issuance of a temporarv on-sale 3.2% malt liquor license, as provided for under Chapter 602 of the Fridley City Code, a club, charitable, reli�ious or nonprofit public or private or�anization mav sell and allow �uests to consume 3.2% malt liquor. Ordinance No. Page 2 C. A club, charitable, reli�ious or nonprofit public or private or�anization may allow �uests to consume malt liquor or wine at their own or�anizational social �atherin�. D. A. private party may contract with a City of Fridle��proved licensed caterer to allow their �uests to purchase and or consume malt liquor or wine if thev are rentin� the Sprin�brook Nature Center Interpretive Buildin� for a reception or social event. PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY THIS DAY OF 2007. Scott J. Lund, Mayor ATTEST: Debra A. Skogen, City Clerk First Reading: Second Reading: Publication: � � CffY OF FRIDLEY DATE: TO: FROM: SUBJECT AGENDA ITEM CITY COUNCIL MEETING OF FEBRUARY 26, 2��7 February 20, 2007 William W. Burns, City Manager Scott J. Hickok, Community Development Director Ronald Julkowski, Chief Building Official RESOLUTION - Hazardous Building at 136 Horizon Circle 1NTRODUCTION This hazardous building item was scheduled for a public hearing before the City Council on December 11, 2006. The property was subsequently purchased by new owners; Ken Zahorski and Valerie Tatley. The hearing was held over until January 8, 2007. On January 8, 2007, staff recommended, that due to the new owner's progress toward a solution, Council should continue to hold the hearing open until February 26, 2007. The new owners have committed to having the home completely removed from the site, the excavation filled, and the site seeded by May 4, 2007. RECOMMENDATION Staff recommends holding action on the Hazardous Building resolution over until May 7, 2007. RESOLUTION NO. RESOLUTION ORDERING THE REMOVAL OR REPAIR OF A HAZARDOUS BUILDING PURSUANT TO MINNESOTA STATUTES SECTION 463, LOCATED WITHIN THE CITY OF FRIDLEY, MINNESOTA BE IT RESOLVED by the City Council of the City of Fridley, Minnesota as follows: In the matter of the hazardous building located at 136 Horizon Circle: Legally Described as: Lot 12, Block 3, Carlson's Summit Manor North Addition, Anoka County, as on file and of record in the County Recorder's office of said County. TO: Mr. Harvey B. and Ms. Jean A Johnson, and any tenants, occupants, or other persons claiming an interest in the above described premises 1. Pursuant to Minnesota Statutes, Section 463.15 to 463.61 the City Council of the City of Fridley, having duly considered the matter, finds the above- described building to be a hazardous building for the following reasons: the Chief Building Official of the City of Fridley has inspected the exterior of the home and has determined that the essential structural items of this home such as foundation walls have been compromised by an unusual geological condition on this property. Clay soils often referred to as, "Fatty Clay" have damaged the foundation of this home beyond service. The foundation has buckled and is depressed an inch and a half or more across one face of the foundation. Section 1300.0180.2000 NIN State Building Code, states in part, "any structure that constitutes a hazard to safety, health, or public welfare by reason of disaster or damage, shall be considered unsafe. All unsafe buildings shall be declared a public nuisance and shall be abated by repair or demolition, as referenced in the MN. State Statutes Sections 463.15 to 463.26. The above mentioned property was posted as a hazard in accordance with MN Statute 463.17. 2. The Council further orders that unless such corrective action is taken or an answer is served upon the City of Fridley and filed in the office of the clerk of District Court of Anoka County, Minnesota within 20 days from the date of the service of this order, a motion for summary enforcement of this Court will be made to the District Court of Anoka County. Enforcement of this order shall include, in the City's discretion, the option of razing the structure. The Council orders that all personal property or fixtures that may unreasonably interfere with the razing and removal of the building shall be removed within 20 days, and if not so removed by the owner, and the City then Resolution No. Page 2 determines to raze the structure, the City of Fridley may remove and sell such personal property or fixtures at public auction in accordance with law. 3. The Council further orders that if the City is compelled to take any corrective action herein, all necessary costs expended by the City will be assessed against the real estate concerned and collected in accordance with Minnesota Statutes, Section 463.22. 4. The mayor, clerk, city attorney and other officers and employees of the City are authorized and directed to take such action, prepare, sign, and serve such papers as are necessary to comply with this order and to assess the costs thereof against the real estate described above for collection along with taxes. PASSED AD ADOPTED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY THIS 26TH DAY OF FEBRUARY, 2007 Scott J. Lund, Mayor ATTEST Debra A. Skogen, City Clerk � � CffY OF FRIdLEY Date To: From AGENDA ITEM CITY COUNCIL MEETING FEBRUARY 26, 2007 February 21, 2007 William Burns, City Manager Paul Bolin, Asst. Executive HRA Director Subject: Resolution to Create TIF District #19 (Industrial Equities) M-07-04 In addition to holding a public hearing on the creation of TIF District #19, the Council is required to adopt a resolution authorizing the creation of the District. Adopting the resolution will allow the developer to move forward with demolition of the property and begin construction later this spring. The removal of the former Guardian Building Products building and addition of 200,000 square feet of new office/industrial space will be a welcome addition to the City of Fridley. The new investment is likely to spur private reinvestment in the neighboring industrial properties. Staff recommends that the Council adopt the attached resolution allowing for the creation of TIF District #19. J:\Planning\Council Items By Meeting\2007 Council Items\February 26, 2007\ResolutionMemoDist#19Memo.doc ! � MO ROE James R. Casserly jcasserly@krassmonroe.com Direct 952.885.1296 Greg D.Johnson gjoh nson@krassmonroe.com Direct852.885.5994 MEMORANDUM To: City of Fridiey Attn: Paul Bolin, HRA Assistant Executive Director Attn: William Burns, City Manager Attn: Scott Hickok, Community Development Director From: James R. Casserly, Esq. Greg D. Johnson, CPA, Senior Public Finance Anafyst Date: February 19, 2007 Re: Industrial Equities Project at 5110 Main Street and Tax Increment Financing District No. 19 . Our File No. 9571-70 . � � To assist with the public hearing on the establishment of Tax Increment Financing District No. 19,. enclosed you will find the folfowing: A Tax Increment Financing Plan for TlF District No. 19. This Plan is identical to other plans which the City has adopted. The Plan states that the City is establishing a redevelopment tax increment financing district and may collect tax increment revenues for up to 25 years from the date of receipt of the first tax increment. The Plan defines the area to be included in the Tax lncrement District, contains a cash flow estimating the amount of tax increment, provides a"But For" analysis and includes an estimated impact on other taxing jurisdictions. 2. A Budget for TIF District No. 19. The Budget fo0ows the guidelines and reporting format of the Office of the State Auditor. 3. A Resolution modifying your Redevelopment Plan, amending existing TIF districts, creating TIF District No. 19 and adapting a TIF Plan. This is a standard resolution which . we have used previously. Fridley has an 8000 Norman Center Drive, Suite 1000 Minneapolis, Minnesota 55437-I178 TE� 952.885.5999 FAX 952.885.5969 www.krassmonroe.com ! February 19, 2007 Page 2 integrated Redevelopment Plan for the entire HRA project area. The Resolution contains the findings required for the establishment af the TIF District. 4. A Contract for Private Redevelopment beiween the HRA and Industrial Equities, LLC. This is a draft of the contract that we are recommending that the HRA adopt to facilitate the redevelopment at 5110 Main Street. The Redeveloper has been working on the redevelopment properly for almost a year. Early last summer, he approached the City for tax increment assistance to help with very substantial redevelopment costs. The HRA has identified a number of those costs and has agreed to assist the Redeveloper to allow the site to be campetitive with a greenfield site. Article III of the Redevelopment Contract states that assistance to the Redeveloper will be fesser of $1.5 million or the actual site improvement costs, including fand acquisition, less the cost of the redevelopment property multiplied by $4.00 per square foot. The assistance to the Redeveloper is a revenue note that is payable only from tax increment resulting from the increased market value of the new project. The Redevelopment Contract has the HRA pledging tax increment through the year 2024, 16 tax increment years, to the payment of the note. At that time, if the note is not fully paid, it is deemed paid in full and the HRA may decertify the district. Neither the City nor the HRA has any risk with regard•to the payment of the note. The Redeveioper is assuming market valuation risk,. tax rate and class rate risks and any other changes in State law. 5. A Cash Flow and Present Value Analysis. Based on a conservative set of assurnptions, the Redeveloper would be receiving approximately $1.3 million of the principal of the revenue note. This amount and the year are underlined on the analysis. For tfie Redeveloper to receive $1.5 million the market valuation would have to be approximately $56 per square foot as opposed to the $50 per square foot used in the analysis, or the tax rate or class rate would have to increase. An increase in the rate of inflation, which we are assuming to be the 2.5% per year compounded annually, would also generate additional tax increment revenues for payment on the note. 6. A Tax Distribution chart. This pie chart reflects the allocation of a property tax dollar in the first full tax payable year after the completion of the project. Taxes including market value referendum taxes are estimated to be $323,000 (the market value referendum taxes are approximately $17,000 and are in addition to the estimated taxes shown on the Assumptions attached to the Cash Flow). The estimated tax increment is February 19, 2007 Page 3 approximately $139,000 or 43% of the total taxes. As the pie chart shows, after the reduction of the HRA Admin. and overhead costs of 4.3%, which is paid from the tax increment, there is available for the revenue note 38.8% of the property tax dollar. It is worth noting that the State's property tax (evy is not tax increment and the State wiil receive 32.1 % of the property tax doliar. Base taxes payabie to the school district, County, City and other taxing jurisdictions, as well as the school district referendum levies and the State taxes, as noted above, are not tax increment. The City has complied with all the statutory requirements for the establishment of a tax increment financing district and the HRA has recommended to the City that it establish the TIF district. The HRA and the City are providing assistance that is in keeping with past practices and the payment of ihe assistance through the tax increment revenue note does not pose a risk to either the City or the HRA. At the public hearing on February 26, 2007, John Allen, representing the Redeveloper, wilf be in attendance. Greg Johnson, a CPA and financial analyst from our office, will also be in attendance to respond to any of the financial issues. cc: Indus#rial Equities, LLC Attn: John Allen, President JRC/GDJ�It G:IWPDATA\FIFRIDLEY170\CORIBOLIN BURNS HICKOK JRC GDJ.DOC SECTlON XX TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 19 (5110 MAIN STREET PROJECT) Subsection 20.1. Sta#ement of Obiectives. See Section !, Subsection 1.5, Statement of Objectives. � Subsection 20.2. Modified Redevelopment Plan. See Section I, Subsections 1.2 through 1.15. � Subsection 20.3. Parcels to be Included. The boundaries of Tax Increment Financing District No. 19 (the "TIF District°) are described on the attached Exhibit XX-A and illustrated on Exhibit XX-B. Subsection 20.4. Parcels in Acquisition. The Authority may write down ar acquire and reconvey real properly, or interests therein, within this TIF District or elsewhere within the Project.Area, at the time or times as the Authority may determine to be necessary or desirable to assist: or� irnplement development or redevelopment within the Project Area or the TIF District. The City may acquire any of the parcels described on Exhibit I-A and �illustrated �on �Exhibit I-B by gift, dedication, condemnation or direct purchase from willing �sellers. in: order to achieve the objectives of the Redevelopment Plan or the. TIF Plan. : �. Subsection 2Q.5. Development�Activ� for which Contracts have been Signed. As of the date of adoption of the TIF Plan, the Authority intends to enter into a Redevelopment Contract with Industrial Equities LLP, a limited liability partnership for the activities discussed below, . Subsection 20.6. Specific Development Expected to Occur. At this time it is anticipated that approximately 202,880 sguare feet of office/warehouse space will be constructed in 2007 with an estimated ma�ket value of $10,144,000. . Subsection 20.7. Prior Planned lrnprovements. After due and diligent search, the Authority has determined that. no b,uilding permits have been issued during the eighteen (18) months immed'iately preceding approval of the TIF Plan by the Authority. Subsection 20.8. Fiscal Disparities. The Council hereby elects the method af tax increment computation. set forth�, in Minnesota Statutes, Section 469.177, Subdivision 3, clause (a) if .and when commereial/industrial development occurs within the TIF Districi. � Subsection 20.9, Estimated Public lmprovement Costs. The estimated public 20=1 � � improvement costs and the amount of bonde.d indebtedness, including interest thereon, to be incurred for the benefit,of and within the TIF District and the Project Area are set forth on Exhibit I-C. Subsection 20.10. Estimated Amount of.Bonded Indebtedness. It is anticipated that approximately $2,000 000 of bonded indebtedness may be incurred with respect to this portion of the Project Area. � . Subsection 20.11. Sources of Revenue. Anticipated revenue sources to assist in the financing of the public improvement costs, pursuant to Subsection 19.9. above, include (1) general obligation and/o.r revenue�tax increment obligations with interest; (2) the direct use of tax increments; (3) the �borrowing of available funds, including without limitation interest-bearing Ciiy short-term or long-term loans; (4) intertund Ioans or advances; (5) interFund transfers, both in and out; (6) land sale or lease proceeds; (7) levies; (8) grants from any public or private source; (9} developer payments; (10) loan repayments or other advances originally made with tax increments as permitted by Minnesota Statutes; and (11) any other revenue source derived from the Ci#y's or Authority's activities within the Project Area as required to finance the costs as set forth in Exhibii I-C. A!I revenues are available for tax increment eligible expenses within the Project Are as allowed by Minne.sota Statutes. Subsection 20.12. Estimated Oriqinal and Captured Tax Capacities. The tax capacity of all taxable property in the TIF District, as most recently certi�ed by ihe Commissioner of Revenue of the State._,of Mi�nesota on January 2, 2006, is estimated to be $49,167. , � � _ . , The captured tax cap.acity of the TIF District upon completion of the proposed improvements on January 2, 2008 is estimated to be $153,713. The Authority intends to utilize 100% of the capfured. �tax : capacity . for the duration of the TIF District for purposes of determining tax incr.ement revenues.� . Subsection 20.13. Tax Incr:emen#. Annual tax increment generated from the TIF District has been calculated , at approximately $139,976 upon the initial completion of the improvements. This estimate is provided on the attached Exhibit XX-C. Revenue has also been projected for the duration of the TIF District and is shown on Exhibit I-C- 13. . Subsection 20.14. Local Tax Rate. The pay 2006 local tax rate is .91063. Subsection 20.15. Tvpe of TIF District. The TIF District is a redevelopment district pursuant to Minnesota. Statutes; Section 469.174, Subdivision 10. Subsection 20.16. Duration of TIF District. The duration of the TIF District is expected to be twenty �ve (25) years from receipt of the first tax increment. The date of 20-2 receipt of the first tax increment is estirnated to be July, 2009. Thus, it is estimated that the TIF District, including any modifications for subsequent phases or other changes, wou(d terminate in the year 2034. �� Subsection 20.17. Estimated Impact on Other Taxinq Jurisdictions. The estimated impact on other taxing jurisdictions assumes construction would have occurred without the creation of the TIF District. ff the construction is a result of tax increment financing, the impact is $0 to other entities. Notwithstanding the fact that the �scal impact on the other taxing.jurisdic#ions is $0 due to the fact that the financing would not have occurred withoui the as�istance of the Authority, the attached Exhibit XX-E reflects (I) the estimated impaci of the TIF District if the "but for" test was not met; (ii) the estimated amount of tax increment .generated annually and over the duration of the TIF District; and, (iii) the estimated amount of tax increment attributable to the County, School District and other taxing districts. At this time the Authority anticipates there will be no impact on Gity services due to the creation of the TIF District. Additiona[ly, since the City has no current plan to issue general obligation debt for project costs, it further anticipates that there will be no impact on its borrowing cos#s due to the creation of the TIF District. Please refer to Exhibit XX-D for the narrative "but for" analysis. � Subsection 20.18. Modification of the TIF District and/or the TIF Plan. As of March 12, 2007, no modifications to the TIF District or the TIF Plan have been made, said date being the date of initial approval. and adoption thereof by the City Council. G:\VPPDATA\F\FRIDLfiY\70�TIF\TIF PLAN & EXEiI82TS.DOC � 20-3 EXHIBIT XX—A PARCELS TO BE INCLUDED 27-30-24-14-0003 a portion of 34-30-24-43-0018 and all easements, rights-of-way and adjacent roads and streets XX—A-1 �+:�•��, :�; , PRO�OSSD TIF DISTRiCY' #ig Psrcets: PJN# - 27-30-�4-14-QQ03 ,•�� I Lo: i, B(otk 1, GGICIER PARK COMPANY ADOITION. Anoko Counfy, b.linnesoEo `� PIN n - 7BD ---I .' KK Ii eI � i' Tl�at port of Lo! 3, AGOtTORS SUBDtkTS(ON NUMBER 79. Anoko County. 1�linnesoto, �vhich lies westerly of Lot 1, $lock 1, CLAG£R PARK C01dPANY ADDITION. Moko Covnfy, Minnesoto, according to fhe recorded ylots th�reof and deacn'bed os fo�lows: 8eginn;ng of the nwthwast comer ol soid tot i; tirertce on on assumed beoring or Ncrth &9 degreea 33 minutes 54 seconds West, olonq !he north fine ol soid Lot 3. o�stonee of ti5.37 faet, soJd north line olso baing the westerly extension of the rtorfh Iine ol said Lot 1; ihence South 03 degrees OS mf�utes 2� seconds West o distonce ol 577.06 /eet: thence southerly �24.04 /eet along o tangen(io1 curve, concovs !o the east, hoving o rodlus o! 1246.83 faet and o centrol ortgie o! it1 degrees f7 minutes 44 seconds, to !he westerfy extension of fha south line of sofd Lot 1; lhence South 89 deqrees 3� minutes 54 seconds Eosi, orong soid westerly exlension a disfonce o1 94.77 /eet !o the soulhwest corne� oI said Lot 1; therrce Morth 03 degrees 08 minutes 37 seconds Fast afong the west tine of soid Lot i, to the point o( beginninp, � � � t : ' 4 \ ' ii � __ zci, y a t ti� w 0 � �d � �+ b � �� B-1 � . { � �sd�} ` • �1 .46r//-/iGws Gcsia�Y • # i 1 f �yy,�t) �.(ri� �lrr� Ca �4 � s a� � i af Market Values 10 Main Street NI SF railroad �inal Tax Capacity Commercia/ / Retall Phase 1 Estimated Market Value EsUmated Tax Capacity Estimated Taxes Estimated Tax Increment Phase 2 combined) Estimated Market Value Estimated Tax Capacity Estimated Taxes :�� Estimated Tax Increment Phase 3 (combined) � � Estimated Market Value 1 Built - 2007 2008 2009 Built - 2008 2009 2010 Built - 2009 Buildable Area Coverage Local Tax Rate - Pay 2006 ISD #13; B Ci State Tax Rate - Pay 2006 Eff. Incr. on Ixal tax rate for taxes at F.D. rate Combined Tax Rate - C/I Property Only �- * used for tax Inflation � �(after2 Present Value Rate TIF PLAN REVISED.xIs 1 industrial Equities • 5110 Main St. NE ASSUMPTIONS Owner I API Supply Co. Railroad BNSF 0.91063 1 ft XX-G1 10.33 2.08 D 1,243,073 $ 1,215,300 $ 2,456,373 2.30 per sg. ft. 2D06 NN based on new Tax Petitlon Settlement 49.167 0�� _ �� ' �� ' �� ! 4.1 Itimes incr. in MV 1 • -- - � TIF PLAN REVISED.xis �'C'Z EXHIBIT XX—D "BUT FOR" ANALYSIS The proposed T1F District will provide the City an opportunity to promote redevelopment in one of its older industrial areas. An existing struciure located at 5110 Main Street NE, which has been deemed to be substandard, would be demolished and redeveloped along with the property immediately to the west of the structure and east of the railroad tracks. Following an inspection and analysis provided by LHB, Inc. and the findings which are presented in a Report of Inspection Procedures and Results dated January 31, 2007, it has been determined that this property qualifies for inclusion in a redevelopment tax increment financing district. Upon completion of the proposed redevelopment which includes the construction of approximatefy 202,880 square feet of office/warehouse space, the city's market value will increase by $7,685,627. The costs of the substantial redevelopment activities, inc(uding land acquisition, demolition and removal of existing building, removal of railroad spur, removal of old tomado debris buried on the site, impor� of clean fill to level the site, installation of an underground stormwater storage tank, removal of asbestos pipe and additional remediation and. ;site preparation, are estimated at approximatefy $3.7 million. However, the market value of the site for new development is estimated to be $2.2 million. It is this difference of approximately $1.5 million for which tax increment generated from the TIF District will be applied. But for the use of tax increment, the Authority and City � have determined that this development would not occur in the reasonably foreseeable future. : . � XX-D-1 EXHIBIT XX - E ESTIMATED IMPACT OF TAX INCREMENT �INANCING DISTRICT N0.19 IMPACT ON TAX BASE . ORIGiNAL ESTIMATED CAPTURED DISTRICT TAX TAX TAX TAX AS % ENTITY BA$E CAPACITY � CAPACITY CAPACITY OF TOTAL City of Fridley 23,531,354 49,167 202,880 153,713 0.653% County of Anoka 260,700,152 . 49,167 202,880 153,713 0.059% ISD #13 17,024,811 49,167 202,880 153,713 0.903% IMPACT ON TAX RATE * TqX � % OF TAX TAX RATE ENTITY RATE TOTAL INCREMENT INCREASE City of Fridley 0.31941 35.08% 49,097 0.210% County of Anoka 0.3�2096 �35.25% 49,336 0.019% ISD #13 0.19571 21.49% 30,083 0.178% Other 0.07455 8.19% 11,459 0.91063 ' � � '�100.00% � � 139,976 * Assumes construction would have occurred without the creation of a Tax Increment Financing District. If construction is a result of Tax Increment Financing, the impact is $0. XX-.E-1 EXHIBIT C - continued Source of Funds Tax Increment Revenue Investment Earnings Bond Proceeds Loan Proceeds Special Assessments Sales/Lease Proceeds Loan/Advance Repayments Grants Other Transfers In Total Source of Funds Use of Funds Land/building acquisition : Site )mprovements/prepar�tion costs Instailation of public utilities Public Parking facilities Streets and sidewaiks Public park facilities Social, recreational or conference facilities Interest reduction payments Bond principal `payments Bond interest paymen�s , Loan principal payments � Loan/note interest payments Administrative costs Other Transfers out Total Use of Funds I-C-13 TIF No. 19 $ 5,000,000 50,000 2,000,000 $ 7,050,00� $ 600,000 900,000 2,000,000 1,250,000 1,250,OOQ 500,000 550,000 $ 7,050,000 0 RESOLUTION NO. A RESOLUTION M.ODIFYING THE REDEVELOPMENT PLAN F4R REDEVELOPMENT PROJECT NO. 1 AND THE TAX INCREMENT FINANCING PLANS FOR TAX INCREMENT FINANCING DISTRICTS NOS. NOS. 1-3, 6-7, 9, 11-14 AND 16-18 TO REFLECT INCREASED PROJECT COSTS AND INCREASED BONDING AUTHORITY WITHIN REDEVELOPMENT PROJECT NO. 1, CREATING TAX INCREMENT FiNANCING DISTRICT N0.19 AND ADOPTING A TAX INCREMENT FINANCING PLAN RELATING THERETO BE 1T RESOLVED by the City Council (the "Council") of the City of Fridley, Minnesota (the "City"), as follows: Section 1. Recitals. 1.01. It has been proposed by the Housing and Redevelopment Authority (the "Authority") that the Council approve and adopt the proposed modifications to its Redevelopment Plan for Redevelopment Project No. 1(tl�e "Froject Area"} reflecting increased project costs and increased bonding authority, pursuant to and in accordance with Minnesota Statutes, Sections 469.001 �to 469.047, inclusive;. as amended and supplemented frorn time to time. . ., 1.Q2. It has been further propo.sed by the Authority that the Council approve and adopt the proposed modifications to the Tax Increment Financing Plans (the "Existing Pfans") for Tax Increment Financing Districts Nos. 1-3, �6-7,.�9, 11-14 and 16-18 (the "Existing Districts") reflecting increased project costs �nd increased�bonding authority within the Project Area, pursuant to Minnesota Statutes, Section 469.174 through 469.1799, inclusive, as amended and supplemented from time to time.. � ,; 1.03. It has been further proposed by the Authority that the Council approve the creation of proposed Tax Increment Financing. District No. 19 (the "Proposed DistricY') and adopt a proposed Tax Increment Financing Plan (the "Proposed Plan") relating thereto, pursuantto and in accordance with Minnesota Statutes. Section 469.174 to 469.1799, inclusive, as amended and supplemented from time to time. 1.04. The Authority has caused to be prepared, and this Council has investigated the facts with respect thereto, a modified FZedevelopment,Plan for the Project Area and modified Existing Plans for the Existing Districts reflecting increased project casts and increased bonding authority within the Project Area and a Proposed Plan for the Proposed District, defining more precisely the property to be included, the public costs to be incurred, and other matters relating thereto. . 1.05. The Council has performed all actions required by law to be performed prior to the approval and adoption ofthe modifications to the Redevelopment Plan and Existing Plans and the approval and adoption of the Proposed Plan. Page 2 - Resolution No. 1.06. The Council hereby determines.that it is necessary and in the best interests of the City and the Authority at this time to approve and adopt the modifications to the Redevelopment Plan and Existing Plans reflecting increased project costs and increased bonding authority within the Projec# Area, to create the Proposed District and to approve and adopt the Proposed Plan relating thereto. Section 2. General Findings. � 2.01. The Council hereby finds, determines and declares that the assistance to be provided through the adoption and implementation of the modified Redevelopment Plan , modified Existing Plans and Proposed Plan (collectively, the "Plans") are necessary to assure the development and redevelopment'of the Project Area. 2.02. The Council hereby finds, determines and declares that the Plans conform to the general plan for the development and redevelopment of the City as a whole in that they are consistent with #he City's comprehensive plan. 2:03. The Council hereby finds, determines and declares that the Plans afford maximum opportunity consistent with the sound needs of the City as a whole for the development and redevelopment of the Project Area by private enterprise and it is contemplated that the development and redevelopment thereof will be carried out pursuant to redevelopment contracts with private developers. � � 2.04. The Council hereby finds, determines and declares that the modification, approval and adoption of the Plans is intended and, in the judgment of this Counci{, its effect will be to promote the purposes and objectives specified in this Section 2 and otherwise promote certain public purposes and accomplish certain objectives as specified in the Plans. 2.05. The Council hereby finds, determines and declares that the City made the above findings stated in this Section 2 and has set forth the reasons and supporting facts for each determination in the Plans and Exhibit A to. this Resolution. Section 3. Specific Findings for the Froposed District. 3.01. The Council hereby finds, determines and declares that the Proposed District constitutes a"tax increment financing district" as defined in Minnesota Statutes, Section 469.174, Subd. 9, and further constitutes a"redevelopment district" as defined in Minnesota Statutes, Section 469.174, Subd. 10. 3.02. The Council hereby finds, determines and declares that the proposed development or redevelopment in the Proposed District; in the opinion of this Council, would not reasonably be expected to occur solely through private investment within the reasonably 2 Page 3 - Resolution No. foreseeable future and, therefore, the use of tax increment financing is deemed necessary. 3.03. The Council hereby finds, detem�iines and decfares that the increased market value of a project not receiving tax increment assistance would be less than the increased market value of a project receiving tax increment assistance after deducting the present value of projected tax increments for the maximum duration of the Proposed District. 3.04. The Council hereby finds, determines and declares that the expenditure of tax increment within the Proposed District serves primarily a pubfic purpose. 3.05. The Council hereby finds, determines and declares that the City made the above findings stated in this Section 2 and has set forth the reasons and supporting facts for each determination in the Plans and Exhibit B to this Resolution. Section 4. Approvals and Adoptions. 4.01. The modifications to the Redevelopment Plan reflecting increased project costs and increased bonding authority within the Project Area are hereby approved and adopted by the Council of the City. 4.02. The modifications to the Existing Plans reflecting increased project costs and increased bonding authority within the Project Area are hereby approved and adopted by the Council of the Ciiy. . 4.03. The creation of the Proposed District within the Project Area and the adoption of the Proposed Plan relating thereto are hereby approved by the Council of the City. Section 5. Filing of Plans. 5.01. Upon approval and adoption of the Plans, the City sha{I request the Authority to cause said Plans to be filed with the Minnesota Department of Revenue, the Office of the State Auditor and Anoka County. Page 4 - Resolution No. PASSED AND ADOPTED BY THE COUNCIL OF THE CITY THIS DAY OF , 2007. ATTEST: DEBRA SKOGEN - CITY CLERK SCOTT LUND - MAYOR CERTIFICATION I, Debra Skogen, the duly quafified Clerk of the City of Fridley, County of Anoka, Minnesota, hereby certify that the foregoing is a true and correct copy of Resolution No. passed by the City Council on the day of , 2007. DEBRA SKOGEN - CITY CLERK 4 Page 5 - Resolution No. EXHIBIT A — GENERAL FINDINGS The reasons and faets supporting the findings for the modification of the Pians for the Project Area, Existing Districts and Proposed District pursuant to Minnesota Statutes, Section 469.175, Subdivision 3, are as follows: 1. Finding that the assistance to be provided through the adoption and implementation of the Plans is necessary to assure the development and redevelopment of the Project Area. The tax increment assistance resulting from the implementation of fhe Plans is necessary for the proposed project to proceed. Please refer to Exhibit XX-D of the Proposed Plan. 2. Finding that the Plans conform to the general plan for the development and redevelopment of the City as a whole in that they are consistent with the City's Comprehensive Plan. The Council has reviewed the Plans and has determined that they are consistent with the City's comprehensive plan. 3. Finding that the Plans afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development and redevelopment of the Project Area by private enterprise, and it is contemplated that the development or redevelopment thereof will be carrisd out pursuant to development contracts with private developers. Please refer to the attached Exhibit B for specific information relating to the Proposed District. 4. Finding that the approval and adopfron of the Plans is intended and, in the judgment of this Council, its effect will be to ,promote the public purposes and accomplish the objectives specified in the Plans. The tax increment that will be generated due to the approval and adopiion of the Plans will assist in financing the public improvements and eligible expenses as detailed in the Plans. E Page 6 - Resolution No. EXHIBIT B— SPECIFIC FINDINGS FOR PROPOSED DISTRICT 1. Finding that the Proposed District is a"redevelopment district" as defined in Minnesota Statutes, Section 469.174, Subd. 10. The Proposed District consists of a parcel of land and a portion of an adjacent parcel which has been determined eligible for inclusion in a redevelopment district pursuant to Minnesota Statutes 469.174, subdivision 10, which requires that (1) parcels consisting of 70% of the proposed tax increment district contain improvements and (2) more than 50% of the buildings are determined to be substandard. : It has been determined thafi (1) the finro parcels total approximately 540,442 square feet and that parcels containing at least 83% of that total square footage contain improvements which exceeds the required 70%, and (2) that the single existing structure, or 100% of the structures, is deemed substandard which exceeds the required 50% of buildings. � These findings are documented in a Report of Inspection Procedures and Results prepared by LHB, Inc. and dated January 31, 2007 2. Finding that the proposed development or redevelopment, in the opinion of the Council, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and, therefore, the use of tax increment financing is deemed necessary. . , . . Development activities proposed to occur, in the Proposed District include land acquisition, demolition and removal of an ezisting building, removal of a railroad spur, removal of old tomado debris buried on the site, import of clean fill, removal of an asbestos pipe, additional remediation and site preparation. as required and the construction of an approximate 202,880 square foot office/warehouse development in 2007. Upon completion of the development,.it is anticipa�ed that the City's tax base will increase by approximately $7,685,627. . . . �. City staff has reviewed the estimated, develo.p.ment costs and the available methods of financing and has determined that tax .in.cremen# assistance is necessary to make,the development project economically feasible�.and�to allow the Redeveloper to proceed at this time. . �. � � 3. Finding that the increased market value of a project not receiving tax increment financing assistance would be less than the increased market value of a project receiving tax increment financing assistance after deducting the present value af the projected tax increments for the maximum duration of the Proposed District. The original market value of the Proposed District is $2,458,373. City staff has determined that without tax increment assistance these parcels would not be developed within the foreseeable future and that only minimal remodeling would probably occur. Therefore, an increase in market value would be minimal. � 6 Page 7 — Resolution No. City staff has further determined that with tax increment assistance it is possible to construct an approximate 2�2,880 square foot office%warehouse development with an estimated market value of approximately $10,144,000. After deducting the originai market value of $2,458,373 from the estimated market value of $10,144,000, City staff has further determined that the increased market value that could reasonably be expeeted to occur from a project receiving tax increment. assistance would be approximaiely $7,685,627. City staff has further determined� that the total amount of tax increment generated over the 25 yearterm of the Proposed District approximates $5,163,175. Assuming the same term and a present value rate of 7.0%, the present valu� of $5,163,175 approximates $1,972,847. After deducting the present value of the tax increment ($1,972,847) from the increase in estimated market value occurring as a result of utilizing tax increment assistance ($7,685,627), the net increase in estimated market values approximates $5,712,780. City staff has further determined that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing ($0) is less than the increased market value of the site occu�ring with the use of tax increment financing after subtracting the present value of the�projected tax increments for the maximum duration of the Proposed District ($5,712,780). Further information supporting this Finding is attached as Schedule 1. � � 4. Finding that expenditure of.tax increment serves a primarily public purpose. The expenditure of tax increment is not�intended. as a private benefit and any such benefit is incidental. Public benefits resulting from the�proposed project include (i) an increase in the State and City tax bases�and (ii) the acquisition and redevelopment of properly which is not now in its highest or best use. .. � ..� Page 8 - Resolution No. EXHIBIT C — NUMERICAL "BUT FOR" ESTlMATED MARKET VALUE iNCREASE FOR A DEVELOPMENT PROJECT WITHOUT TIF ASSISTANCE Without tax increment assistance �the parceis would not be developed within the foreseeable future and only minimal remodeling may occur Estimated Market Value .......................:.:..... ••• $ -�- .............................. Original Market Value ...............................:..:................................ $ 2,458,373 Increased Market Value ................................................................. $ -0- ESTIMATED MARKET VALUE INCREASE FOR A DEVELOPMENT PROJECT . WITH T1F,ASSISTANCE With tax increment assistance it is proposed that an approximate 202,880 square foot office/warehouse develapment be: construcfed in 2007. Estimated Market Value ................................................................ Original Market Value ............................:...................................... Increased Market Value .............:..............:.....:..............:............... Less: Present Value of the Tax Increment generated at 7.0% for the duration� of the Proposed District (ses attached Schedule 1) ................................................ Net Increased Market Value ........................................................ G:\WPDATA\F\FRIDLEY\70�TIF\COUNCIL RESOLOTION.DOC � $10,144, 000 $ 2,458,373 $ 7,685,627 $ 1,972,847 $ 5,712,780 TIF PLAN REVISED.xIs �'C-Z Section 1.1 Section 2.1 Section 2.2 TABLE OF CONTENTS ARTICLE I Definitions Definitions ARTICLE I[ Representations and Warranties Representations by the Authority Representations and Warranties by the Redeveloper ARTICLE III Undertakinqs of Authoritv and Redeveloper Section 3.1 Note to Redeveloper for Site Improvements Section 3.2 Limitations on Undertaking of the City Section 3.3 Conditions Precedent to Authority Note ARTICLE IV Paae 3 � : . . Construction of Minimum Improvements Section 4.1 Construction of Minimum Improvements 10 Section 4.2 Completion of Construction 10 Section 4.3 Certificate of Completion 10 ARTICLE V Events of Default Section 5.1 Events of Default Defined Section 5.2 Remedies on Default � Section 5.3 No Remedy Exclusive Section 5.4 No Implied Waiver Section 5.5 Agreement to Pay Attorney's Fees and Expenses ARTICLE VI Prohibitions Aqainst Assiqnment and Transfer Section 6.1 Representation as to Redevelopment 11 12 12 12 12 13 Section 6.2 Prohibition Against Transfer of Property and Assignment of Agreement Section 6.3 Assignment of Note � Section 7.1 Section 7.2 Section 7.3 Section 7.4 Section 7.5 Section 7.6 Section 7.7 Section 7.8 Section 7.9 Section 7.10 Section 8.1 Section 8.2 SIGNATURES ARTICLE VII Additional Provisions Conflict of Interests Restrictions on Use Titles of Articles and Sections Notices and Demands Indemnification of Authority Counterparts � Law Governing Expiration Provisions Surviving Rescission or Expiration Real Property Taxes. ARTICLE VIII lnsurance and Condemnation Insurance Subordination SCHEDULE A Description of Redevelopment Property SCHEDULE B Site Improvements �. SCHEDU�E C Certificate of Completion SCFFEDULE D Note � SCHEDULE E Site Plans G:\WPDATAV�IFRIDLEY�70�DOC�CLEAN 2-17-07 TOC.DOC 13 13 15 15 15 15 16 16 16 16 16 17 18 20 22 24 25 26 28 29 CONTRACT FOR PRIVATE REDEVELOPMENT THIS AGREEMENT, made on or as of the day of March, 2007 by and between the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota (the Authority ), a political subdivisian of the State of Minnesota organized under the Constitutian and laws of the State of Minnesota and Industrial Equities — North Yard, LLC, a Minnesota limited liability company organized under the laws of the state of Minnesota (the "Redeveloper"), WITNESSETH: WHEREAS, the Board of � Commissioners (the "Board") of the Authority has determined that there is a need for development and redevelopment within the corporate limits of the City to provide employment opportunities, to provide adequate housing in the City, incfuding low and moderate income housing and housing for the elderly, to improve the tax base and to improve the general economy of the City and the State of Minnesota; WHEREAS, in furtherance of these objectives, the Authority has adopted, pursuant to Minnesota Statutes, Sections 469.001 et se�c .(the "Act"), a development program known as the Modified Redevelopment Plan {the Redevelopment Plan ) and established Redevelopment Project No. 1(the "Project Area") in the City to encourage and provide maximum opportunity for private development and redevelopment of certain property in the City which is not now in its highest and best use; WHEREAS, in connection with the Project Area, Tax Increment Financing District No. 19 (the "Tax Increment District") has been approved by the Authority and the City and the Tax Increment Financing Plan will be forwarded to Anoka County for certification and to the State for filing, pursuant to the Minnesota Tax Increment Financing Act contained in Minnesota Statutes, Sections 4fi9.174 to 469.1799; and WHEREAS, major objectives in establishing the Project Area are to: 1. Promote and secure the prompt redevelopment of certain property in the Project Area, which property is not�now in its highest and best use in a manner consistent with the City's Comprehensive Plan and with a minimum adverse impact on the environment, and thereby promote and secure the redevelopment of other land in the City. 2. Provide additional employment opportunities within the Project Area and the City for residents of the City and the surrounding area, thereby improving living standards, reducing unemployment and the loss of skilled and unskilled labor and other human resources in the City. 3. Prevent the deterioration and secure the increase of commercial/industrial property subject to taxation by the City, the Independent Schooi Districts, Anoka County, and the other taxing jurisdictions in ord'er to better enable such entities to pay for governmental services and programs required to be provided by them. 4. Provide for the financing and construction for public improvements in and adjacent to the Project Area necessary for the orderly and beneficial redevelopment of the Project Area and adjacent areas of the City. 5. Promote the concentration of new desirabie industrial, office, and other appropriate redevelopment in the Project Area so as to maintain the area in a manner compatible with its accessibility and prominence in the City. 6. Encourage local business expansion, improvement, and redevelopment, whenever possible. 7. Create a desirable and unique character within the Project Area through quality land use alternatives and design quality in new or remodeled buildings. 8. Encourage and provide maximum opportunity for private redevelopment of existing areas and stnactures which are compatible with the Project Area; and WHEREAS, in order to achieve the objectives of the Authority and City in creating the Project Area and adopting the Redevelopment Plan, the Authority is prepared to assist the Redeveloper with the costs of the . Site Improvements in accordance with this Agreement; and WHEREAS, the Authority believes that the development and redevelopment of the Redevelopment Property pursuant to this Agreement, and fulfillment generally of the terms of this Agreement, are in the vital and best interests of the Authority and the health, safety, morals and welfare of its residents, and in accord with the public purposes and provisions of applicable federal, state and local laws under which the development and redevelopment are being undertaken and assisted; . NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, each of them does hereby covenant and agree with the other as follows: ARTICLE I Definitions Section 1.1 Definitions. In this Agreement, unless a different meaning clearly appears from the context: "Act" means Minnesota Statutes, Section 469.001 et seg. "Agreement" means this Agreement, as the same may be from time to time modified, amended, or supplemented. "Authoriiy" means the Housing and Redevelopment Authority in. and for the City of Fridley, Minnesota. "Available Tax lncrement" means 90% of the Tax Increment from the Tax Increment District. "Certificate of Completion" means the certification, in the form of the certificate contained in Schedule C attached to and matle a part of this Agreement, provided to the Redeve{oper, pursuant to Section 4.3 of this Agreement. "City" means the City of Fridley, Minnesota. "Construction Plans" means the plans, specifications, drawings and related documents on the construction work to be performed by ihe Redeveloper on the Redevelopment Property which (a) shall be as detailed as the plans, specifications, drawings and related documents which are submitted to the building inspector or the�City, and (b) shall include at least the following for each building: (1) site plan; (2) foundation plan; (3) basement plans; (4) floor plan for each floor; (5) cross sections of each (length and width); (6) elevations (all sides, except as to a side of existing structure where no construction is to take place); (7) facade and landscape plan; and (8) such other plans of supplements to the foregoing plans as the City may reasonably request. "Council" means the Council of the City. "Gounty" means the County of Anoka, Minnesota. "Event of DefaulY' means an action by the Redeveloper described in Section 5.1. of this Agreement. � "Holder" means the owner of a Mortgage. "Minimum Improvements" means the construction of an office/warehouse building of approximately 202,880 square feet on the Redevelopment Property with a total project cost of approximately $11,000,000 and as illustrated on the Site Pians. "Minnesota Environmental Policy Act" means the statutes located at Minnesota Statutes, Sections 116D.01 et se�c ., as amended. "Nationa! Environmental Policy Act" means the federal law located at 42 U.S.C. Sub. Sect. 4331 et sea•, as amended. "Permitted Encumbrances" mean the encumbrances described on Schedule D to this Agreement. "Note" means the Limited Revenue .Tax Increment Note in the principal amount of One Million Five Hundred Thousand and nolhundredths Do(lars ($1,500,000.00), substantialfy in the form of Schedule D attached to this Agreement, and to be made by the Authority payable to the order of the Redeveloper in accordance with the terms of this Agreement. "Project Area" means Redevelopment Project No.1, as amended, as established in accorclance with the Act. . "Redeveloper" means Industrial Equities — North Yard, LLC, a limited liability company organized under the laws of the State of Minnesota. "Redevetopment Plan" means the modified redevelopment plan adopted by the Authority for its Redevelopment Project No. 1, as amended. "Redevelopment Project" means the Redevelopment Property and the Minimum Improvements. "Redevelopment Property" means the real property described in Schedule A of this Agreement. "Site Improvements" means those. costs described on Schedule B as qualified improvements of the Redevelopment Property. "Site Plans" means the plans attached hereto in Schedule E showing the proposed nature and location of the Minimum Improvements. "State" means the State of Minnesota. "Tax Increment" means only that portion of the real estate taxes paid with respectto the Redevelopment Property which is remitted to the Authority as tax increment pursuant to the Tax Increment Act. "Tax Increment AcY' means the Tax Increment Financing Act, Minnesota Statutes, Sections 469.174 to 469.1799, as amended ancl as it may be amended. 'Tax Increment District" means Tax Increment Financing District No. 19 which is located within the Project Area and has been approved by the Authority and the City and the Tax Incremeni Plan will be forwarded to the Countyfior certification and to the State for filing as soon as the County provides a parcel identification number for one of the parcels included in the Tax Increment District. "Tax Increment Plan" means the tax increment financing plan adapted by the Authority for its Tax Increment Financing District No. 19. "Termination Date" means the date on which the Note is paid in full or this Agreement is terminated in accordance with the provisions of Article V. "Unavoidable Delays" means delays which are the result of�strikes, unforeseeable and unavoidable casualties to the Minimum Improvements, the Redevelopment Property or the equipment used to construct the Minimum Improvements, delays which are the result of governmental actions, delays which are the result of judicial action commenced by third parties, citizen opposition or action affecting this Agreement or adverse weather conditions or acts of God. � ARTICLE Il Representations and Warranties Section 2.1 Representations bv the Authoritv. The Authority makes the following representations as the basis for the undertaking on its part herein contained: (a) The Authority is a public body duly organized and existing under the laws of the State. Under the provisions of the Act, the Authority has the power to enter into this Agreement and carry out its obligations hereunder. (b) The Authority has approved the Redevelopment Plan in accordance with the terms of the Act. (c) The Authority has approved the Tax Increment District and will forward the Tax Increment Pfan to the County for certification and the State for filing as soon as the County provides a parcel identification number for one of the parcels included in the Tax Increment District, pursuant to the Tax Increment Act. (d) The Authority proposes to assist�the Redeveloperforthe Site Improvements in accordance with the Tax Increment Pian, Redevelopment Plan and this Agreement. (e) The Auihority proposed to make the Note payable to the Redeveloper in accordance with the provisions of this Agreement and to pfedge Tax Increment generated by the Tax Increment District to the payment of the Note according to its terms. (fl The Authority will cooperate with the Redeveloper with respect to: any litigation commenced by third parties in connection with this Agreement. Section 2.2 Representations and Warranties bvthe Redeveloper. The Redeveloper represents and warrants that: (a} The Redeveloper will construct, operate and maintain the Minimum Improvements in accordance with the terms of this Agreement, the Redevelopment Plan and all local, state and federaf faws and �regulations (including, but not limited to, environmental, zoning, building code and public health laws and regulations). (b) The Minimum Improvements will be an allowed use under the zoning ordinance of the City. . (c) As of the date of execution of this Agreement, the Redeveloper has received no notice or communication from any local, state or federal official that the activities of the Redeveloper or the Authority in the Project Area may be or will be in violation of any environmental law or regulation. . As of the date of execution of this Agreement, the Redeveloper is aware of no facts, the existence of which would cause it to be in violation of any local, state or federal environmental law, regulation or review procedure or which would give any persan a valid claim under the Minnesota Environmental Rights Act. (d) The Redeveloper will use its best efforts to obtain, in a timely manner, all required permits, licenses and approvals, and will meet, in a timely manner, a(I requirements of all applicable local, state and federal laws and regulations which must be obtained or met before the Minimum Improvements may be lawfully constructed. (e) The Redeveloper is a limited liability company organized under the laws of the State. (f) The Redeveloper agrees that it will coaperate with the Authority and shall indemnify the Authority against all costs, including the costs of defense incurred by the Authority through an attomey reasonably acceptable to the Authority and Redeveloper, with respect to any litigation commenced by third parties in connection with Redeveloper's failure to perform according to the terms and conditions of this Agreement. (g) The financing arrangements which the Redeveloper has obtained orwill obtain, to finance acquisition or construction of the Minimum Improvements, iogether with financing provided by the Authority' pursuant to this Agreement, will be sufficient to enable the Redeveloper to successfully complete the Minimum Improvements as conternplated in this Agreement. � (h) The construction of the Minimum Improvements, in the opinion of the Redeveloper, woutd not reasonably be expected to occur solelythrough private investment within the reasonably foreseeable future without the use of tax increment financing provided by the City pursuant to this Agreement. (i) Forthe canstruction of the Minimum Improvements the Redeveloperwill pay wages in accordance with the prevailing wage rate as that term is defined in Minnesota Statutes, Section 177.42, Subdivision 6 and in the City Resolution No. 25 - 1990. .The City's Public Works Department shall be responsible for monitoring Redeveloper's compliance of this requirement. (j) The Redeveloper shall not allow any use or occupancy of the Redevelopment Property or Minimum Improvements by a"Sexually Orientated Business" as defined in Ordinance No. 965 of the City's Code. ARTiCLE !II Undertakinqs of Authoritv and Redeveloper Section 3.1 Note to Redeveloper for Site Improvements. As consideration for the execution of this Agreement, the construction of the Minimum Improvements by the Redeveloper and subject to the further provisions of ihis Agreement, the Authority agrees to provide the Note to the Redeveloper for Site Improvements as provided in Section 3.3. Section 3.2 Limitations on Undertakinq of the Citv. (a) The Authority shall have no obligation under this Agreement to provide the Note to the Redeveloper for the Site Improvements if the Authority, at the time the Note is made, is entitled under Section 5.2 to exercise any of the remedies set forth therein as a result of an Event of Default which has not been cured. If the Authority has not exercised its remedies under Section 5.2(b) and if the. Note is withheld due to an Event of Default which is later cured, such Note shal( be made after such Event of Default has been cured. (b) The Authority shal( have no obligation to provide the Note to the Redeveloper for the Site Improvements unless the Redeveloper has submitted to the Authority the original purchase agreement(s) whereby it acquired the Redevelopment Property and invoices for the Site lrnprovements along w'ith a certification signed by the Redeveloper's project architect to the effect that the costs for which payment was•made have been incurred in connection with construction documents previously reviewed by the Authority. The Redeveloper shall also provide lien waivers from the contractors, subcontractors and/or canstruction managers for the Site lmprovements. The Authority shall indicate its acceptance of the amounts for the Note, assuming the conditions of this section have been complied with and there is no Event of Default, when it issues a Certificate of Completion in accordance with Section 4.3. (c) The principal of the Note shall be the lesser of $1,500,000 or the cost of the Site Improvements and the acquisition c.ost of PIN 27-30-24-14-0003 less the square footage of the Redevelopment Property multipfied by $4.00 per square foot. The principal of the Note shall be further reduced by the amount, if any, that the acquisition cost of the Redevelopment Property is less than $2,250,000. Section 3.3 Conditions Precedent to Authoritv Note. The Authority's obligation to provide the Note in accordance with Section 3.1 shall be contingent upon the satisfaction by the Redeveloper of the following conditions precedent: _ (a) The Redeveloper shall be in material compliance with all of the terms and provisions of this Agreement. (b) The Redeveloper shall have received a Certificate of Complefion from the Authority, pursuant to Section 4.3 of this Agreement. (c) The Redeveloper shall .have delivered to the Authority the documents required by Section 3.2 (b) above. (d) There shall have been obtained from the City all special-use permits and zoning approvals necessary for the construction of the Minimum Improvements. (e) The Redeveloper shall be in compliance with all ordinances of the City. ARTICLE IV Construction of Minimum Improvements Section 4.1 Construction of Minimum Improvements. The Redeveloper agrees that it will construct the Minimum Improvements on the Redevelopment Property in accordance with the Construction Plans approved by the City and the Site Plans. Section 4.2 Completion of Construction. Subject to Unavoidable Delays, the Redeveloper shall achieve substantiaf completion of the construction of the Minimum Improvements by December 31, 2008. All work with respect to the Minimum Improvements to be constructed or provided by the Redeveloper on the Redevelopment Property shall be in conformity with the Construction Plans and the Site Plans. The Redeveloper agrees for itself, its successors and assigns, and every successor in interest to the Redevelopment Property, or any par� thereof, that the Redeveloper, and such successors and assigns, shall diligently prosecute to completion the development of the Redevelopment Property through the construction of the Minimum Improvements thereon, and that such construction shal� in any event be completed within the period specified in this Section 4.2 of this Agreement. Section 4.3 Certificate of Completion. (a) Promptly after substantial completion of the Minimum Improvements in accordance with those provisions of the Agreement relating to the obligations of the Redeveloper to construct the Minimum Improvements (including the date for campletion thereofl, the Authority will fumish the Redeveloper with an appropriate instrument so certifying. Such certification by the Authority shall be (and it shall be so provided in the certification itsel� a concfusive determination of satisfaction and termination of the agreements and covenants � in the Agreement with respect to the obligations of the Redeveloper, and its successors and assigns, to construct #he Minimum Improvements and the date for the completion thereof. (b) If the Authority shall refwse or fail to provide any certification in accordance with the provisions of this Section 4.3 of this Agreement, the Authority shall, within ten (10) days after written request by the Redeveloper, provide the Redeveloper with a written statement, indicating in adequate detail in what respects the Redeveloper has failed to complete the Minimum Improvements in accordance with the provisions of the Agreement, or is otherwise in default, and what measures or acts it will be necessary, in the opinion of the Authority, for the Redeveloper to take .or perform in order to obtain such certification. (c) The construction of the Minimum Improvements shall be deemed to be substantially completed whe.n the Redeveloper has received an occupancy permit from the City's building inspector, which permit shall not be unreasonably withheld. 10 ARTICLE V Events of Defauit Seetion 5.1 Events of Default Defined. The following shail be "Events of Default" under this Agreement and the term "Event of Default" shall mean whenever it is used in this Agreement any one or more of the foliowing events: (a) Failure by the Redeveloper to timely pay all ad valorem real property taxes assessed with respect to the Redevelopment Property. (b) Failure bythe Redeveloperto complete the Minimum Improvements pursuant to the terms, conditions and limitations of this Agreement. (c) Failure by the Redeveloper to submit to the Authority the documents required by Section 3.2(b) of this Agreement prior to the issuance by the Authority of a Certificate of Completion or December 31, 2008, whichever occurs earlier. (d) Failure by the Redeveloper to substantially observe or perform any other covenant, condition, obligation or agreement on its part to be observed or pe�Formed under this Agreement. (e) If the Redeveloper shall (A) file any petition in bankruptcy or for any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief underthe United Sta#es Bankruptcy Act of 1978, as amended or under any similar federal or state law; or . (B) make an assignment for the benefit of its creditors; or (C) admit in writing ifs inability to pay its debts generally as they become due; or (D) be adjudicated as bankrupt or insolvent; or if a petition or answer proposing the adjudication of the Redeveloper, as bankrupt or its reorganization under any present or future federal bankruptcy act or any similarfederal or state law shall be filed in any court and such petition or answer shall not be discharged or denied within ninety (90) days after the filing thereof; or a receiver, trustee or liquidator of the Redeveloper, or of the Minimum Improvements, or part the�eof, shall be appointed in any proceeding brought against the Redeveloper, and shall not be discharged within ninety (90) days after such appointment, or if the Redeveloper shall consent to or acquiesce in such appointment. ii Section 5.2 Remedies on Default. Whenever any Event of Default referred to in Section 5.1 occurs and is continuing, the Authority, as specified below, may take any one or more of the following actions after providing thirty (30) days' written notice #o the Redeveloper, but only if the Event of Defau(t has not been cured within said thirly (30) days. (a} The Authority may suspend its performance under this Agreement until it receives assurances from the Redeveloper, deemed adequate by the Authority, thaf the Redeveloper has cured its default and will continue its performance underthis Agreement. (b) The Authority may cancel and rescind the Agreement. (c) Withhold the Certificate of Completion. Section 5.3 No Remedv Exclusive. No remedy herein conferred upon or reserved to the Authority is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. � . . Section 5.4 No Imalied Waiver. In the event any agreement contained in this Agreement should be breached by any party and thereafter waived by any other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach hereunder. Section 5.5 Aareement to Pav AttomeV's Fees and Expenses, W henever any Event of Default occurs and the Authority shall employ attorneys or incur other expenses forthe collection of payments due or to become,due or for the enforcement or performance or observance of any obligation or. agreement on the part of the Redeveloper herein contained, the Redeveloper agrees that it shall, on demand therefor, pay to the Authority the reasonable fees of such attorneys and such other expenses so incuRed by the Authority. 12 ARTICLE VI Prohibitions Aaainst Assiqnment and Transfer Section 6.1 Representation asto Redevelopment. The Redeveloper represents and agrees that its purchase of the Redevefopment Property, and its other undertakings pursuant to this Agreement, are, and will be used, forthe purpose of redevelopment of the Redevelopment Property and not for speculation in land holding. The Redevefoperfurther recognizes that, in view of (a) the importance of the redevelopment of the Redevelopment Properly to the general welfare of the Authority, and (b) the substantial financing that has been made available by the Authority for the purpose of making such redevelopment possible, the qualifications and identity of the Redeveloper are of particular concern to the Authority. The Redeveloper further recognizes that it is because of such qualifications and identity that the Authority is entering into this Agreement with the Redeveloper, and, in so doing, is further willing to accept and rely on the obligations of the Redeveloper for the faithful performance of all undertakings and covenants hereby by it to be performed. Section 6.2 Prohibition Aqainst Transfer of Propertv and Assianment of Agreement. Also, for the foregoing reasons the Redeveloper represents and agrees that prior to the date of the issuance of the Certi�cate of completion., except for the purpose of obtaining financing necessary to enable the Redeveloper or any successor in interest to the Redevelopment Property, or any part thereof, to perform its obligations with respect to making the Minimum Improvements under this Agreement, and any other purpose authorized by this Agreement,, the Redeveloper has not made or created and will not make or create or suffer to be made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or transfer in any other mode or form af or with respect to this Agreement or the Redevelopment Property or any part thereof or any interest therein, or any contract or agreement to do any of the same, without the prior written approval of the Authority which shall not be unreasonably withheld, unless the Redeveloper remains liable and bound by this Redevelopment Agreement in which event the Authority's approval is not required. Any such transfer shall be subject to the provisions of this Agreement. Noiwithstanding the foregoing, the Redeveloper may transfer the Redevelopment Property to any corporation, partnership or entity controlling, controlled by, or under common control with the Redevefoper. Section 6.3 Assiqnment of Note. The Redeveloper may assign and pledge the Note to secure any construction loan and may transfer the Note to any entity controlling, controlled by or under common control with the Redeveloper. Otherwise, no Note shall be assignable nor transferable without the prior written consent of the Authority; provided, however, that such consent shall not be unreasonably withheld or delayed if: (a) the assignee or transferee delivers to the Authority a written instrument acknowledging the limited naiure of the Authority's payment ob(igations under the Note, and (b) the assignee or transferee executes and delivers to the Authority a certificate, in form and substance satisfactory to the Authority, pursuant to which, among other things, such assignee or 13 transferee represents that (i) the Note is being acquired for investment for such assignee's or transferee's own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, (ii) the assignee or transferee has no present intention of selling, granting any participation in, or otherwise distributing the same, (iii) the assignee or transferee is an "accredited investo�" within the meaning of Rule 501 of Regulation D under the Securities Act of 1933, as amended, (iv) the assignee ortransferee, eitheralone orwith such assignee's ortransferee's representatives, has knowledge and experience in financial and business matters and is capable of evaluating the merits and risks of the prospective investment in the Note and the assignee or transferee is able to bear the economic consequences thereof, (v) in making its decision to acquire the Note, the assignee or transferee has relied upon independent investigations and, to the extent believed by such assignee or transferee to be appropriate, the assignee's or transferee's representatives, including its own professional, tax and other advisors, and has not relied upon� any representation or warranty from the Authority or the City, or any of their officers, employees, agents, affiliates or representatives with respect to the value of the Note, (vi) neither ihe Authority nor the City has made any warranty, acknowledgment or covenant, in writing or otherwise, ta the assignee or transferee regarding the tax consequences, if any, of the acquisition and investment in the Note, (vii) the assignee or transferee or its representatives have been given a full opportunity to examine all documents and to ask questions of, and to receive answers from, the Authority and its representatives conceming the terms of the Note and such oth'er in�Formation as the assignee or transferee desires in order to evaluate the acquisition of and investment in the Note, and all such questions have been answered to the full satisfaction of the assignee or transferee, (viii) the assignee or transferee has evaluated the merits and risks of investment in the Nate and �as determined that the Note is a suitable investment for the assignee or transferee in light of such party's overall financial condition and.prospects, (ix) the Note will be characterized as a"restricted security" underthe fede.ral securities laws because the Note is being acquired in a transaction not involving a public offering and that under such �laws and applicable regulations such security may not be resold, without registration under the Securities Act of 1933, as amended, except in certain limited circumstances, and (x) no market forthe Note exists or is intended to be developed. � 14 � ARTICLE Vll Additional Provisions Section 7.1 Conflict of Interests. No member, official, or empfoyee of the Authority shall have any personal interest, direct or indirect, in the Agreement, nor shall any such member, official or employee participate in any decision relating #o the Agreement which affects his personal interests or the interests of any corporation, partnership, or association in which he is, directly or indirectly, interested. Section 7.2 Restrictions on Use: The Redeveloper shall not discriminate upon the basis of race, color, creed, sex or national origin in the sale, lease, or rental or in the use or occupancy of the Redevelopment Property or any improvements erected or to be erected thereon, or any part thereof. Section 7.3 Titles of Articles and Sections. Any titles of the several parts, Articles and Sections of the Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 7.4 Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under this Agreement by either party to the other shall be sufficiently given or defivered if it is dispatched by registered or certified mail, postage prepaid, retum receipt requested, transmitted byfacsimile, delivered by a recognized overnight courier or delivered personally; and (a) in the case of the Redeveloper, is addressed to or delivered personally to the mailing or delivery address the Redeveloper will, from time to time, fumish to the Authority. The Redeveloper's current address is as follows: Industrial Equities — North Yard, LLC 321 First Avenue North Minneapolis, Minnesota 55401 Attn: John N. Allen is (b) in the case of the Authority, is addressed to or delivered personally to: Housing and Redevelapment Authority in and for the City of Fridley 6431 University Avenue N.E. Fridley, Minnesota 55432 Attention: Executive Direcior Section 7.5 Indemnification of Authoriiy. (1) The Redeveloper releases from and covenants and agrees that the Authority, the City and its goveming body members, officers, agents, inc{uding the independent contractors, consultants and legal counsef, servants and employees thereof (hereinafter, for purposes of this Section, collectively the "lndemnified Parties") shall not be liable for and agrees to indemnify and hold harmless the Indemnified Parties against any loss or damage to property or any injury to or death of any person occurring at or about or resulting from any defect in the Minimum lmprovements or the Redevelopment Property. (2) Except for any willful misrepresentation or any willful or wanton misconduct of the Indemnified Parties, the Redeveloper,agrees to protect and defend the Indemnified Parties, now and forever, and further agrees to hold the aforesaid harmless from any claim, demand, suit, action or other proceeding whatsoever by any person or entity whatsoever arising or purportedly arising from the actions or inactions of the Redeveloper (or of other persons acting on its behatf or under its direction or control) under this Agreement, or the acquisition, construction, installation, ownership, and ope�ation of the Minimum Improvements or the Redevelopment Property; provided, that this indemnification shall not apply to the warranties made or obligations undertaken by the Authority in this Agreement. (3) All covenants, stipulations, promises, agreements and obligations of the Authority contained herein shall be deemed to be the covenants, stipulations, promises, agreements and obligations of the Autharity and not of any governing body member, officer, agent, servant or employee of the Authority. Section 7.6 Counterqarts. This Agreement is executed in any number of counterparts, each of which shall canstitute one and the same instrument. Section 7.7 Law Governinq. This Agreement will be govemed and construed in accordance with the laws of the State. Section 7.8 .Expiration. This Agreement shall expire when the Note is paid in full. Section 7.9 Provisions Survivinq Rescission or Expiration. Sections 5.5 and 7.5 shal� survive any rescission, termination or expiration of this Agreement with respect to or arising out of any event, occurrence or circumstance existing prior to the date ihereof. 16 Section 7.10 Real Propertv Taxes. (a) Prior to the Termination Date, the Redeveloper shall pay when due, prior to the attachment of penalty, all real property taxes payable with respect to the Redevelopment Project. 17 ARTICLE VIII Insurance Section 8.1 Insurance. (a) The Redeveloper will provide and maintain at all times during the process of constructing the Minimum Improvements and, from time to time at the request of the Authority, fumish the Authority with proof of payment of premiums on: (i) builder's risk insurance, written on the so-called "Builder's Risk -- Completed Value Basis," in an amount equal to one hundred percent (100%) of the insurable value of the Minimum Improvements at the date of campletion, and with coverage available in nonreporting form on the so-called "all risk" form of policy. The interest of the Authority shall be protecied in accordance with a clause in form and content reasonabfy satisfactory to the Authority; (ii) comprehensive general liability insurance together with an Owner's Contractor's Policy with limits against bodily injury and property damage of not less than $2,000,000 for each occurrence (to accomplish the above-required limits, an umbrella excess liability policy may be used); and (iii} workers' compensation insurance, wiih statutory coverage. (b) Upon completion of construction of the Minimum Improvements and prior to the Termination Date, the Redeveloper shall maintain, or cause to be maintained, at its cost and expense, and from time to ti�me at the request of the Authority shall furnish proof of the payment of premiums on, insurance as follows: (i) Insurance against loss and/or damage to the Minimum Improvements under a policy or policies cover�ng such risks as are ordinarily insured against by similar businesses, including (without limiting the generality of the foregoing} fire, extended coverage, vandalism and malicious mischief, boiler explosion, water damage, demolition cost, debris removal, and collapse in an amount not less than the fuN insurable replacement value of such improvements, but any such policy may have a deductible amount of not more than $25,000.00. No policy of insurance shall be so written that the proceeds thereof will produce less than the minimum coverage required by the preceding sentence, by reason of co-insurance provisions or otherwise, without the prior consent thereto in writing by the Authority. The term full insurable �� replacement value" shall mean the actuai replacement cost of the Minimum Improvements (excluding foundation and excavation costs and costs of underground flues, pipes, drains and other uninsurable items) and equipment, and may be determined from time to time at the request of the Authority, but not more frequently than once every five years, by an insurance consultant or insurer, selected and paid for and approved by the Authority. All policies evidencing insurance required by this subparagraph (i) with respect to the Minimum Improvements shall be carried in the �s names of the Redeveloper, the Redeveloper's Mortgagee and the Authority: as their respective interests may appear and shall contain standard clauses which provide far net proceeds (the amount remaining after the deduction of expenses incurred in the collection of such proceeds, the "Nef Proceeds") of insurance resulting from claims per casualty thereunder to the Minimum Improvements which are equal to or less than $750,000.00 for loss or damage covered thereby to be made payable directly ta the Redeveloper and/or its Mortgagee, and Net Proceeds from such claims in excess of $750,000.00 to be made payable jointly to the Redeveloper, its Mortgagee and the Authority. The Authority, the Redeveloper and its mortgagee shall jointly agree on the amount of settlement. � (ii) Comprehensive general pubic liability insurance, including personal injury liability, against liability for injuries to persons and/or property, in the minimum amount for each occurrence and for each year of $2,000,000.00, and shall be endorsed to show the Authority as additional insured. (c) All insurance required in.Articte IX of this Agreement shall be taken out and maintained in responsible insurance companies selected by the Redeveloper which are authorized under the laws of the State to assume the risks covered thereby. The Redeveloper will deposit ann�ally with the Authority policies evidencing all such insurance, or a certificate or certificates or binders of the respective insurers stating that such insurance is in force and effect. Unless otherwise provided in this Article lX of this Agreement each policy shalf contain a provision that the insurer shall not cancel nor modify it without giving written notice to the Redeveloper and the Authority at least thirty (30) days before the cancellation or modification becomes effective. Not less than fifteen (15) days prior to the expiration of any policy, the Redeveloper shall fumish the Auihority evidence satisfactory to the Authority that the policy has been renewed or replaced by another policy conforming to the provisions of this Article IX of this Agreement, or that there is no necessity therefor under the terms hereof. ln lieu of separate policies, the Redeveloper may maintain a single policy, blanket or umbrella policies, or a combination thereof, having the coverage required herein, in which .event the Redeveloper shall deposit with the Authority a certificate or certificates of the. respective insurers as to the amount of coverage in force upon the Minimum Improvements. (d) The Redeveloper agrees to notify the Authority immediately in the case of damage exceeding $100,000.00 in amount to, or destruction of, the Minimum Improvements or any portion thereof resulting from fire or other casualty. In the event that any such damage does not exceed $750,000.00, the Redeveloper will forthwith repair, reconstruct and restore the Minimum Improv�ments to substantially the same ar an improved condition or value as it existed prior to the event causing such damage and, to the extent necessary to accomplish such repair, insurance relating to such damage received by the Redeveloper shall be applied to the payment or reimbursement of the costs thereof. Net Proceeds of any insu�ance relating to such damage up tv $750,000.00 shall be paid directly to the Redeveloper. 19 In the event the Minimum Improvements or any portion thereof are destroyed byfire or other casualty and the damage or destruction is estimated to equal or exceed $750,000.00, then the Redeveloper within one hundred and twenty (120) days after such damage or destruction, shall proceed forthwith to repair, reconstruct and restore the damaged Minimum lmprovements to substantially the same condition or u#ility value as existed prior to the event causing such damage or destruction and, to the extent necessary to accomplish such repair, reconstruction and restoration, the Redeveloper, its Mortgagee and the Authority will apply the Net Proceeds of any insurance relating to such damage or destruction received by its Mortgagee and the Authority to the payment or reimbursement of the costs thereof. Any Net Proceeds remaining after completion of construction shall be disbursed to the Redeveloper. � (e) If the Redeveloper is in compliance with the terms and conditions of this Agreement, then any Net Proceeds of insurance refating to such damage or destruction received by the Authority shall be released from time to time by the Authority to the Redeveloper upon the receipt of: (i) A certificate of an authorized representative of the Redeveloper specifying the expenditures made or to be made or the indebtedness incurred in connection with such repair, reconstruction and restoration and stating that such Net Proceeds, together with any other moneys legaily available for such purposes, will be sufficient to complete such repair, construction and restoration; and (ii) If Net Proceeds equal or exceed $750,000.00 in amount, the written approval of such certificate by an independent engineer. The Redeveloper shall complete ihe repair, reconstruction and restoration of the Minimum Improvements, whether or not the Net Proceeds of insurance received by the Redeveloper for such purposes are sufficient to pay for the same. Any Net Proceeds remaining .after completion of such repairs, construction and restoration shall be remitted to the Redeveloper. Section 8.2 Subordination. Notwithstanding anything to the contrary contained herein, the rights of the Authority with respect to the receipt and application of the proceeds of insurance shall be subject to and subordinate to the rights of any ho(der of any Mortgage with respect to the Redevelopment Property as of the date hereof or any Mortgage which is permitted by this Agreement. ao IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf and the Redeveloper has caused this Agreement to be duly executed as of the date first above written. 21 Dated: HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA By Its Chairman And by � Its Executive Director STATE OF MINNESOTA ) � ) ss COUNTY OF ANOKA ) On this day of , 20_ before me, a notary public within and for Anoka County, personally appeared and to me personally known who by me duly swom, did say that they are the Chairman and Executive Director of the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, a political subdivision of the State of Minnesota, and acknowledged the foregoing instrument on behalf of said Authority. Notary Public Authority Signature Page -Redevelopment Contract 22 Dated: IIVDUSTRIAL EQUITIES — NORTH YARD, LLC By STATE OF MINNESOTA ) ) ss COUNTY OF _ ) its On this day of , 20_ before me, a notary public within and for County, personally appeared , the of industrial Equities— North Yard, LLC, a Minnesota limited liability company, and acknowledged the foregoing instrument on behalf of said partnership. Notary Public Redeveloper Signature Page - Redevelopment Contract 23 SCHEDULE A DESCRIPTION OF REDEVELOPMENT PROPERTY PIN# 27-30-24-14-0003 Lot 1, Block 1, GLACIER PARKCOMPANYADDITION, Anoka County, Minnesota PIN# TBD That part of Lo# 3, AUDITORS SUBDIVISION NUMBER 79, Anoka County, Minnesota, which lies westerly of Lot 1, Block 1, GLACIER PARK COMPANY ADDITION, Anoka County, Minnesota, according to the recorded plats thereof and described as follows: Beginning at the northwest corner of said Lot 1; thence on an assumed bearing of North 89 degrees 33 minutes 54 seconds West, along the north line of said Lot 3, a distance of 115.37 feet, said north line also being the westerly extension ofthe north line of said Lot 1; thehce South 03 degrees 06 minutes 27 seconds West a distance of 577.06 feet; thence southerly 224.04 feet along a iangential curve, concave to the east, having a radius of 1246.83 feet and a central angle of 10 degrees 17 minutes 44 seconds, to the westerly extension of the south line of said Lot 1; thence South 89 degrees 33 minutes 54 seconds East, along� said westerly extension a distance of 94.77 feet to the southwest comer of said Lot 1; thence North 03 degrees 08 minutes 37 seconds East along the west line of said Lot 1, to the point of beginning. 24 SCHEDULE B , SITE IMPROVEMENTS Land acquisition of parcel containing the railroad land Building and utility demofition. remove or recycle Removal of railroad spur Removal and disposal of trees and tornado debris buried on site Installation of underground stormwater storage tank Import of clean fill to correct site to a grade that is required by the approved building and parking elevations Removal of asbestos pipe, tile, shingles and any other dump materials Environmental studies, analysis and remediation, and disposal not reimbursed by grants Administration costs related to the above. � Any interest costs paid for Site Improvements to unrelated parties Fees paid to the Au#hority 25 SCHEDULE C CERTIFICATE OF COMPLETION WHEREAS, the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, a Minnesota municipal corporation (the "Authority") and lndustrial Equities — North Yard, LLC, a Minnesota limited liability company (the "Redeveloper") have entered into a Contract for Private Redevelopment (the "Agreement") dated as of March , 20_, regarding certain real property located in Tax Increment Financing District No. 19 in the City (hereinafter referred to and referred to in the Agreement as the "Redevelopment Propert�'); and WHEREAS, the Agreement contains certain conditions and provisions requiring the Redeveloper to construct improvements upon the Redevelopment Property (hereinafter referred to and referred to in the Agreement as the "Minimum Improvements"); and WHEREAS, Section 4.3 of the Agreement requires the Authority to provide an appropriate instrument promptly after the substantial completion (as defined in the Agreement) of the Minimum Improvements so certifying said substantial completion; NOW, THEREFORE, in compliance with said Section 4.3 of the Agreement, this is to certify that the Redeveloper has substantially completed the Minimum Improvements in accordance with the conditions and provisions of the Agreement relating salely to the obfigations of the Redeveloper to construct the Minimum Improvements (including the dates for beginning and completion thereofl, and this certification shall be a conclusive determination of satisfaction and tecmination of the agreements and covenants in the Agreement with respect to the obligations of the Redeveloper, and its successors and assigns, to construct the Minimum Improvements and the dates forthe beginning and completion thereof. Dated: , 20 26 Dated: HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA BY Its Chairman And by Its Executive Director STATE OF MINNESOTA ) ) ss COUNTY OF ANOKA ) On this day of , 20_ before me, a notary public within and for Anoka County, personally appeared and to. me personally known who by me duly sworn, did say that they are the Chairman and Executive Director of the Housing and Redevelopment Authority in and for the City of Fridley, Minnesota, a political subdivision vf the State of Minnesota, and acknowledged the foregoing instrument on behalf of said Authority. Notary Public Authority Signature Page C Certificate of Completion 27 SCHEDULE D NOTE US $1,500,000.00 Fridley, Minnesota , 20_ UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF ANOKA HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF FRIDLEY, MINNESOTA LIMITED REVENUE TAX 1NCREMENT NOTE The Housing and Redevelopment Authority in and forthe City of Fridley, Minnesota (the "Authority"), hereby acknowledges itself to be indebted and, for value received, promises to pay to the order of Industriai Equiti�s — North Yard, LLC, a limited liability company (the "Owner"), solely from the source; to the extent and in the manner hereinafter provided, the principal amount of this Note, being One Million Five Hundred Thousand Dollars and 00/100 ($1,500,000.00) (the "Principal Amount"), together with interest of seven percent (7.00%) commencing from the date of issuance of the Note and payable on the dates described below (the "Scheduled Payment Dates") and in the amounts as hereinafter defined (the "Scheduled Payments"). The Scheduled Payment Dates are�August 1, 2009, and on the 1 st day of February and August thereafter until and including �February 1, 2025, unless earlier paid, in accordance with the terms of this Note. Upon 30 days' prior written notice from the Authority to the Owner, the Principal Amount is subject to prepayment at the option of the Authority in whole or in part at any time. Any payments on this Note shall be applied first to accrued interest and the balance to the reduction of principal. Each payment on this Note i's payable in any coin or currency of the United States of America which on the date of such payment is legal tender for public and private debts and shall be made by check or draft made payable to the Owner and mailed to the Owner at its postal address within the United States which shall be designated from time to time by the Owner. � 2s The Note is a special and limited obligation and not a general obligation of the Authority, which has been issued by the Authority pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Section 469.178, subdivision 4, to aid in �nancing a project, as therein de�ned, of the Authority consisting generally of defraying certain public redevelopment costs incurred and to be incurred by the Authority within and for the benefit of its Redevelopment Project No. 1. THE NOTE IS NOT A GENERAL OBLIGATION OF THE AUTHORITY, THE CITY OF FRIDLEY (THE "CITY") OR THE STATE OF MINNESOTA (THE "STATE"}, AND NEITHER THE AUTHORITY, THE CITY, THE STATE NOR ANY POLITICAL SUBD(VISION THEREOF SHALL BE LIABLE ON THE NOTE, NOR SHALL THE NOTE BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN AVAlLABLE TAX INCREMENT, AS DEFINED BELOW. � The Schedufed Payment of this Note due on any Scheduled Payment Date is payable solely from and only to the extent that the Authority shall have received as of such Scheduled Payment Date the Available Tax Increment which is defined in the Contract for Private Redevelopment By and Between the Authority and the Owner dated as of February _, 2007. The Authority shall pay on each Scheduled Payment Date to the Owner the Available Tax Increment. On February 1, 2025, the maturity date of this Note, any unpaid portian shall be deemed to have been paid in full. This Note shall not be payable from or constitute a charge upon any funds of the Authority, and the Authority shall not be subject to any liability hereon or be deemed to have obligated itself to pay hereon from any funds except the available Tax Increments, and then only to the extent and in the manner herein specified. The Owner shall never have or be deemed to have the right to compel any exercise of any taxing power of the Authority or of any other public body, and neither the Authority nor any director, commissioner, council member, board member, officer, employee or agent of the Authority, nor any person executing or registering this Note shall be liable personally hereon by reason of the issuance or registration hereof or otherwise. The Authority makes no representation or covenant, express or implied, that the revenues described herein will be sufficient to pay, in whole or in part, the amounts which are or may otherwise become due and payable hereunder. The Authority's payment obligations hereunder shall be further conditioned on the fact that there shall not at the time have occurred and be continuing an Event of Default under the Agreement, and, further, if pursuant to the occurrence of an Event of Default under the Agreement the Authority elects to terminate the Agreement, the Authority shall have no further debt or obligation under this Note whatsoever. Reference is hereby made to the provisions of the Agreement for a fuller statement of the obligations of the 29 Redeveloper and of the rights of the Authority thereunder, and said provisions are hereby incorporated by reference into ihis Note to the same extent as though set out in full herein. The execution and delivery of this Note by the Authority, and the acceptance thereof by the Redeveloper, as the initial Registered Owner hereof, shall conclusively establish this Note as the "Note" (and shall conclusively constitute discharge of the Authority's obligation to issue and deliver the same to the Redeveloper) under the Agreement. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required by the Constitution and laws of the State of Minnesoia to be done, to have happened, and to be pertormed precedent to and in the issuance of this Note have been done, have happened, and have been performed in regular and due form, time, and manner as required by law; and that this Note, together with all other indebtedness of the Authority outstanding on the date hereof and an the date of its actual issuance and delivery, does not cause the indebtedness of the Authority to exceed any constitutional or statutory limitation thereon. IN WITNESS WHEREOF, the Board .of Commissioners of the Housing and Redevelopment Authority in and for the Ciiy of Fridley, Minnesota, by its Commission Members, has caused this Note to be executed by the manual signatures of the President and the Treasurer of the Authority and has caused this Note to be dated , 2Q0_. , By Its President ATTEST: Secretary 30 By Its Treasurer CERTIFICATE OF REGISTRATION It is hereby certified that the foregoing Note, as originally issued as of the day of , 200_, was on said date registered in the name of the Housing and Redevelopment Authority in and for the City of Fridiey, Minnesota, a public body corporate and politic and that, at the request of said Registered Owner of this Note, the undersigned has this day registered this Note as to principal and interest on the Note in the name of such Registered Owner, as indicated in the registration blank below, on the books kept by the undersigned for such purposes. Name of Reaistered Owner Date of Reqistration Industrial Equities — North Yard, LLC, a limited liability company 31 Signature of SecretaN , . 200_ SCHEDULE E SITE PLANS G:\WPDATA�FIFRIDLEYVO�DOC12-17-07 CONTRACT BLACKUNED 7'O 1-2407.DOC 32 SCHEDULE E SITE PLANS G:IWPDATA�FIFRIDLEY�70�DOGICLEAN 2-17-07 CONTRACT.DOC 32 industrial Equifies - 5110 Main St NE industrial Equities 4c.xis Prepared by Krass Monroe, P.A. 2/19/2007 -----•-------.�..�.- ------ CITY OF FR[DLEY �_ �_..._�..._.___._----- Industrial Equities - 5110 Main St NE ' ASSUMPT(ONS Area of Parcei 2006 Assessed Value Pay 200T) ': Orininal Market Values PIN # Owner (Acres) (Sq. Fee� Land Buiiding Total*' I . I ! � Main Street NI railroad�- Tax Maricet Value Martcet Value Tax Caoacitv Built - 2007 2008 2009 Built - 2008 2009 2010 Ruilt - 2(b9 Co. i LoCa) Tax Rate - Pay 2006 ISD #13; 6 City WS 0.91 �3 ; State Tax Rate - Pay 2006 0.50827 �i Eff. incr, on local tax rate for taxes at F.D. rate 0.09143 Combined Tax Rate - C/I Property Only 1.51033 " used for tax increment calculatioi � ': Admin Fees 10.00% ; $tate Auditar Fee 0_360% Inflation (after 2 yrs of full value) 2-�°� i Present Value Rate 12/1/2007 7.00% �� ft 50.00 0.69 � � � � � � � � � � � � � F;� -- 0; 1,243,Q73 $1,215,300 $ 2,458,�� 2.30 per sq. ft 2008 NN based on new Tax Petitlai Setdemerrt' 49,167 45.5% of totai taxes : � 4.1 �mes incr. in NN : 45.5% of tota( taxes '• industrial Equities 4c.xls Prepared by Krass Monroe, P.A. 2/19/2007 '�1^.� v/ _ .� G O �+ r G� r � � 'i ' W t� � .d O = .�' � a' (,� W ca .i •F•+ � � � � C O �:+ � .Q �L � N � K H � U .` � � � 0 _ N O � O t U U) � c 0 � U � � .` � o � � �� C (D �X ca H— � � t � O �. X W a-. U N �O /L� LL � 0 Z > � � H � O � � M �� U � � \° 0 M �i' RESOLUTION NO. A RESOLUTION M.ODIFYING THE REDEVELOPMENT PLAN FOR REDEVELOPMENT PROJECT NO. 1 AND THE TAX INCREMENT FINANCING PLANS FOR TAX INCREMENT FINANCING DISTRICTS NOS. NOS. 1-3, 6-7, 9, 11-14 AND 16-18 TO REFLECT INCREASED PROJECT COSTS AND INCREASED BONDING AUTHORITY WITHIN REDEVELOPMENT PROJECT NO. 1, CREATING TAX INCREMENT FINANCING DISTRICT N0.19 AND ADOPTING A TAX INCREMENT FINANCING PLAN RELATING THERETO BE IT RESOLV.ED by the City Council (the "Council") of the City of Fridley, Minnesota (the "City"), as follows: Section 1. Recitals. 1.01. It has been proposed by the Housing and Redevelopment Authority (the "Authority") that the Council approve and adopt the proposed modifications to its Redevelopment Plan for Redevelopment Project No. 1(the "Project Area") reflecting increased project costs and increased bonding authority, pursuant to and in accordance with Minnesota Statutes, Sections 469.001 to 469.047, inclusive;, as amended and supplemented from time to time. 1.02. It has been further propo.sed by the Authority that the Council approve and adopt the proposed modifications to the Tax lncrement Financing Plans (the "Existing Plans") for Tax Increment Financing Districts Nos. 1-3, 6-7, 9., 11-14 and 16-18 (the "Existing Districts") reflecting increased project costs and increased bonding authority within the Project Area, pursuant to Minnesota Statutes, Section 469.174 through 469.1799, inclusive, as amended and supplemented from time to #ime.. -, 1.03. It has been further proposed by the Authority that the Council approve the creation of proposed Tax Increment Financing District No. 19 (the "Proposed District") and adopt a proposed Tax Increment Financing Plan (the "Proposed Plan") relating thereto, pursuant to and in accordance with Minnesota Statutes. Section 469.174 to 469.1799, inclusive, as amended and supplemented from time to time. 1.04. The Authority has caused to be prepared, and this Council has investigated the facts with respect thereto, a modified Redevelopment,Plan for the Project Area and modified Existing Plans for the Existing Districts reflecting increased project costs and increased bonding authority within the Project Area and a Proposed Plan for the Proposed District, defining more precisely the property to be included, the public costs to be incurred, and other matters relating thereto. 1.05. The Council has performed all actions required by law to be performed prior to the approval and adoption of the modifications to the Redevelopment Plan and Existing Plans and the approval and adoption of the Proposed Plan. Page 2 - Resolution No. 1.06. The Council hereby determines.that it is necessary and in the best interests of the City and the Authority at this time to approve and adopt the modifications to the Redevelopment Plan and Existing Plans reflecting increased project costs and increased bonding authority within the Project Area, to create the Proposed District and to approve and adopt the Proposed Plan relating thereto. Section 2. General Findings. 2.01. The Council hereby finds, determines and declares that the assistance to be provided through the adoption and implementation of the modified Redevelopment Plan , modified Existing Plans and Proposed Plan (collectively, the "Plans") are necessary to assure the development and redevelopment�of the Project Area. 2.02. The Council hereby finds, determines and declares that the Plans conform to the general plan for the development and redevelopment of the City as a whole in that they are consistent with the City's comprehensive plan. 2.03. The Council hereby finds, determines and declares that the Plans afford maximum opportunity consistent with the sound needs of the City as a whole for the development and redevelopment of the Project Area by private enterprise and it is contemplated that the development and redevelopment thereof will be carried out pursuant to redevelopment contracts with private developers. 2.04. The Council hereby finds, determines and declares that the modification, approval and adoption of the Plans is intended and, in the judgment of this Council, its effect will be to promote the purposes and objectives specified in this Section 2 and otherwise promote certain public purposes and accomplish certain objectives as specified in the Plans. 2.05. The Council hereby finds, determines and declares that the City made the above findings stated in this Section 2 and has set forth the reasons and supporting facts for each determination in the Plans and Exhibit A to this Resolution. Section 3. Specific Findings for the Proposed District. 3.01. The Council hereby finds, determines and declares that the Proposed District constitutes a"tax increment financing district" as defined in Minnesota Statutes, Section 469.174, Subd. 9, and further constitutes a"redevelopment district" as defined in Minnesota Statutes, Section 469.174, Subd. 10. 3.02. The Council hereby finds, determines and declares that the proposed development or redevelopment in the Proposed District; in the opinion of this Council, would not reasonably be expected to occur solely through private investment within the reasonably 2 Page 3 - Resolution No. foreseeable future and, therefore, the use of tax increment financing is deemed necessary. 3.03. The Council hereby finds, determines and declares that the increased market value of a project not receiving tax increment assistance would be less than the increased market value of a project receiving tax increment assistance after deducting the present value of projected tax increments for the maximum duration of the Proposed District. 3.04. The Council hereby finds, determines and declares that the expenditure of tax increment within the Proposed District serves primarily a public purpose. 3.05. The Council hereby finds, determines and declares that the City made the above findings stated in this Section 2 and has set forth the reasons and supporting facts for each determination in the Plans and Exhibit B to this Resolution. Section 4. Approvals and Adoptions. 4.01. The modifications to the Redevelopment Plan reflecting increased project costs and increased bonding authority within the Project Area are hereby approved and adopted by the Council of the City. 4.02. The modifications to the Existing Plans reflecting increased project costs and increased bonding authority within the Project Area are hereby approved and adopted by the Council of the Cify. 4.03. The creation of the Proposed District within the Project Area and the adoption of the Proposed Plan relating thereto are hereby approved by the Council of the City. Section 5. Filing of Plans. 5.01. Upon approval and adoption of the Plans, the City shall request the Authority to cause said f?lans to be filed with the Minnesota Department of Revenue, the Office of the State Auditor and Anoka County. 3 Page 4 - Resolution No PASSED AND ADOPTED BY THE COUNCIL OF THE CITY THIS DAY OF . 2007. ATTEST: DEBRA SKOGEN - CITY CLERK SCOTT LUND - MAYOR CERTIFICATION I, Debra Skogen, the duly qualified Clerk of the City of Fridley, County of Anoka, Minnesota, hereby certify that the foregoing is a true and correct copy of Resolution No. passed by the City Council on the day of , 2007. DEBRA SKOGEN - CITY CLERK 0 Page 5 - Resolution No. EXHIBIT A — GENERAL FINDINGS The reasons and facts supporting the findings for the modification of the Plans for the Project Area, Existing Districts and Proposed District pursuant to Minnesota Statutes, Section 469.175, Subdivision 3, are as follows: 1. Finding that the assistance to be provided through the adoption and implementation of the Plans is necessary to assure the development and redevelopment of the Project Area. The tax increment assistance resulting from the implementation of the Plans is necessary for the proposed project to proceed. Please refer to Exhibit XX-D of the Proposed Plan. 2. Finding that the redevelopment of the Comprehensive Plan. Plans conform to the general plan for the development and City as a whole in that they are consistent with the City's The Council has reviewed the Plans and has determined that they are consistent with the City's comprehensive plan. 3. Finding that the Plans afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development and redevelopment of the Project Area by private enterprise, and it is contemplated that the development or redevelopment thereof will be carried out pursuant to development contracts with private developers. Please refer to the attached Exhibit B for specific information relating to the Proposed District. 4. Finding that the approval and adoption of the Plans is intended and, in the judgment of this Council, its effect will be to promote the public purposes and accomplish the objectives specified in the Plans. The tax increment that will be generated due to the approval and adoption of the Plans will assist in financing the public improvements and eligible expenses as detailed in the Plans. � Page 6 - Resolution No. EXHIBIT B— SPECIFIC FINDINGS FOR PROPOSED DISTRICT 1. Finding that the Proposed District is a"redevelopment district" as defined in Minnesota Statutes, Section 469.174, Subd. 10. The Proposed District consists of a parcel of land and a portion of an adjacent parcel which has been determined eligible for inclusion in a redevelopment district pursuant to Minnesota Statutes 469.174, subdivision 10, which requires that (1) parcels consisting of 70% of the proposed tax increment district contain improvements and (2) more than 50% of the buildings are determined to be substandard. Ifi has been determined thafi (1) the two parcels total approximately 540,442 square feet and that parcels containing at least 83% of that total square footage contain improvements which exceeds the required 70%, and (2) that the single existing structure, or 100% of the structures, is deemed substandard which exceeds the required 50% of buildings. These findings are documented in a Report of Inspection Procedures and Results prepared by LHB, Inc. and dated January 31, 2007 2. Finding that the proposed development or redevelopment, in the opinion of the Council, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and, therefore, the use of tax increment financing is deemed necessary. , - Development activities proposed to occur in the Proposed District include land acquisition, demolition and removal of an eXisting building, removal of a railroad spur, removal of old tornado debris buried on the site, import of clean fill, removal of an asbestos pipe, additional remediation and ;site preparation as required and the construction of an approximate 202,880 square fo.ot office/warehouse development in 2007. Upon completion of the development,.it is anti,cipate.d that the City's tax base will increase by approximately $7,685,627. , City staff has reviewed the estimated, development costs and the available methods of financing and has determined that tax incremen# assistance is necessary to make the development project economically feasible� and to allow the Redeveloper to proceed at this time. 3. Finding that the increased market value of a project not receiving tax increment financing assistance would be less than the increased market value of a project receiving tax increment financing assistance after deducting the present value of the projected tax increments for the maximum duration of the Proposed District. The original market value of the Proposed District is $2,458,373. City staff has determined that without tax increment assistance these parcels would not be developed within the foreseeable future and that only minimal remodeling would probably occur. Therefore, an increase in market value would be minimal. 6 Page 7 — Resolution No. City staff has further determined that with tax increment assistance it is possible to construct an approximate 202,880 square foot office/warehouse development with an estimated market value of approximately $10,144,000. After deducting the original market value of $2,458,373 from the estimated market value of $10,144,000, City staff has further determined that the increased market value that could reasonably be expected to occurfrom a project receiving tax increment assistance would be approximately $7,685,627. City staff has further determined that the total amount of tax increment generated over the 25 yearterm of the Proposed District approximates $5,163,175. Assuming the same term and a present value rate of 7.0%, the present value of $5,163,175 approximates $1,972,847. After deducting the present value of the tax increment ($1,972,847) from the increase in estimated market value occurring as a result of utilizing tax increment assistance ($7,685,627), the net increase in estimated market values approximates $5,712,780. City staff has further determined that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing ($0) is less than the increased market value of the site occurring with the use of tax increment financing after subtracting the present value of the projected tax increments forthe maximum duration of the Proposed District ($5,712,780). Further information supporting this Finding is attached as Schedule 1. , . 4. Finding that expenditure of tax incremerit serves a primarily public purpose. The expenditure of tax increment is not intended as a private benefit and any such benefit is incidental. Public benefits resulting from the proposed project include (i) an increase in the State and City tax bases and (i'i) the acquisifion and redevelopment of property which is not now in its highest or best use. � Page 8 - Resolution No. EXHIBIT C — NUMERICAL "BUT FOR" ESTIMATED MARKET VALUE INCREASE FOR A DEVELOPMENT PROJECT WITHOUT TIF ASSISTANCE Without tax increment assistance the parceis would not be developed within the foreseeable future and only minimal remodeling may occur Estimated Market Value .......................:.:...................................... $ -0- Original Market Value .................................:................................. $ 2,458,373 Increased Market Value ................................................................ $ -0- ESTIMATED MARKET VALUE INCREASE FOR A DEVELOPMENT PROJECT WITH TIF.ASSISTANCE With tax increment assistance it is proposed that an approximate 202,880 square foot office/warehouse development be constructed in 2007. Estimated Market Value ................................................................ OriginalMarket Value ............................:...................................... Increased Market Value .............:.................................................. Less: Present Value of the Tax Increment generated at 7.0% for the duration of the Proposed District (see attached Schedule 1) ................................................ $10,144,000 $ 2,458,373 $ 7,685,627 $ 1,972,847 Net Increased Market Value ......................................................... $ 5,712,780 G:\WPDATA\F\FRIDLEY\70\TIF\COUNCIL RESOLUTION.DOC 0 RESOLUTION NO. 2007 - A RESOLUTION OF THE CITY OF FRIDLEY, MINNESOTA, DIRECTING ITS ATTORNEY TO OBTAIN A LEGAL OPINION FROM THE MINNESOTA ATTORNEY GENERAL PURSUANT TO MINNESOTA STATUTES, CHAPTER 8.31 WHEREAS, the City of Fridley, Minnesota, is a Charter City organized under the laws of the State of Minnesota; and WHEREAS, as part of its duties and obligations under Minnesota law, it operates utilities for sewer and storm water collection, as well as the distribution of water to the residents and businesses in the City; and WHEREAS, the City is authorized by law to collect a fee for the purpose of ineeting the cost of proving the aforesaid utility services; and WHEREAS, many of the key costs for providing those services to its residents are outside of the management and control of the City, but are, rather, costs and fees imposed by outside governmental agencies; and WHEREAS, the actual cost to the City of providing the aforesaid services has been well in excess of five percent (5%); and WHEREAS, in 2001, the citizens of the City of Fridley amended their Charter to include a restriction limiting any increase in fees imposed by the City, including for the foregoing utility services, to the lesser of the rate of inflation or five percent (5%); and WHEREAS, as the result of the Charter restriction, the utility funds of the City of Fridley, which are based on fee collections for those services, have been running at deficits which will be in excess of $600,000 for the year 2007 and are projected to be in excess of $800,000 annually by the year 2011; and WHEREAS, the current deficits have created a very significant hardship for the City of Fridley in the form of significant use of utility fund cash reserves; and WHEREAS, a serious legal issue has been raised by the City's former outside bond counsel and financial advisors as to whether the imposition of such restrictions by the City in its Charter represents a direct conflict with the provision of Minnesota law as it applies to the obligations of cities to provide such services; and WHEREAS, the City has determined that it is essential that, prior to taking any other action, it obtains a binding legal opinion as to whether the restrictive provisions of its Charter are beyond the scope of authority authorized under Minnesota law; and Resolution No. 2007 - Page 2 WHEREAS, Minnesota law, under Minnesota Statutes Section 8.31, provides a procedure for obtaining a legal opinion from the Minnesota Attorney General on important legal matters for Minnesota cities. NOW, THEREFORE, BE IT RESOLVED, that the City Manager is hereby directed to seek and obtain, through legal counsel or any other appropriate means, a legal opinion from the Minnesota Attorney General to determine whether the current restrictions contained in the City Charter are authorized by law, and, if not, the extent to which any such restrictions may properly be imposed in the Charter. PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY THIS DAY OF FEBRUARY, 2007. SCOTT J. LUND — MAYOR ATTEST: DEBRA A. SKOGEN, CITY CLERK February 22, 2007 Ms. Lori Swanson Minnesota Attorney General 75 Rev.Dr. Martin Luther King, Jr. Blvd. St. Paul, MN 55155 (ATTENTION: Kris Eiden, Chief Deputy) RE: Opinion Request for the City of Fridley, Minnesota Dear Attorney General Swanson: The City of Fridley, Minnesota, my client, has directed me to obtain from you, pursuant to your duties and authority under Minnesota Statutes Chapter 8.07, a legal opinion on a matter of great and immediate importance to Fridley and other similarly situated cities. In 2001, the citizens of the City amended the Fridley City Charter to impose restrictions on the rate of any growth in fees or taxes imposed by the City. Included in the restrictions were increases in utility rates for water and sewer services. The limitation for any increase is capped at the lesser of the rate of inflation or five percent (5%). An increase could be permitted beyond the limits only after a vote by the citizens in a general election in which 51% of all persons voting in the election voted in favor of the change on the ballot question. Costs in providing sewer and water utility services are driven primarily by pass-through charges determined by metropolitan agencies outside of the City. Since the passage of the restrictions in its Charter, Fridley's actual expenses for providing water and sewer services have risen to a rate significantly higher that the limits allowed. In fact, the combined utility funds are operating at deficits in excess of six hundred thousand dollars annually, and are projected to be operating at a deficit in excess of eight hundred thousand dollars within four years. In the last election, a ballot question was put before Fridley voters seeking to exempt the utility rates from the Charter cap language. While a maj ority of voters on the question favored the proposal, it failed because the favorable votes did not outnumber those voting against and those not voting. Experience indicates that voter falloff on municipal elections and ballot issues during general elections make it unlikely, at best, that Fridley could ever succeed at obtaining voter approval for such a measure, even where surveys indicate strong public support. In the face of growing deficits in the utility accounts, the City's financial consultants and bond counsel began to raise questions as to whether the City was developing a potential, serious conflict between the financial conditions being imposed on it by its new Charter provisions, and the state statutory requirements imposed on Fridley and all Minnesota cities for the purpose of assuring safe and sanitary drinking and disposal systems. Letter to Attorney General Swanson Page 2 Much of the legal analysis done by outside counsel is contained in the attached memorandum, which should be considered as having been incorporated by reference into this request. Based upon the foregoing, we ask your opinion on the following QUESTIONS: 1. Does Minnesota state law relating to the provision of utilities by municipalities preempt a city charter provision such as Fridley's where the Charter language effectively reduces the funds available to pay for the necessary cost of maintaining those utility systems? 2. If the answer to the foregoing question is "yes," what, if any, restrictions may a city place in its charter limiting such expenditures? Thank you in advance for your consideration of this matter. Please let me know at your earliest convenience if we can provide any other information or assistance in addressing this matter. Sincerely, Frederic W. Knaak Fridley City Attorney � AGENDA ITEM CITY COUNCIL MEETING OF FEBRUARY 26, 2007 CffY OF FRIDLEI' INFORMAL STATUS REPORTS