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HRA 08/01/2013 CITY OF FRIDLEY HOUSING AND REDEVELOPMENT AUTHORITY COMMISSION August 1, 2013 CALL TO ORDER: Chairperson Commers called the HRA Meeting to order at 7:00 p.m. ROLL CALL: MEMBERS PRESENT: Larry Commers Pat Gabel Stephen Eggert William Holm MEMBERS ABSENT: Gordon Backlund OTHERS PRESENT: Paul Bolin, HRA Assistant Executive Director Becky Kiernan, Accountant ACTION ITEMS: 1.Approval of Expenditures MOTION by Commissioner Gabel to approve the expenditures. Seconded by Commissioner Eggert. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY Commissioner Gabel asked what the Service Link charge was on the last page. Paul Bolin, HRA Assistant Executive Director, said that is the third party property managers used by CitiBank and Wells Fargo when they sell properties. Commissioner Gabel asked about the administrative operating expenses. Becky Kiernan, Accountant, said that $51,000 is for administrative charges that are applied every quarter, for City staff time and HRA overhead. Commissioner Gabel asked about the Star Tribune charges for the public hearing notices, if it was just one hearing or multiple hearings. Mr. Bolin said that charge was for multiple hearings. 2.Approval of June 6, 2013 Meeting Minutes HRA Meeting of August 1, 2013 2 MOTION by Commissioner Holm to approve the minutes as presented. Seconded by Commissioner Gabel. Commissioner Gabel asked for the following changes to be made: th Page 6, 4 paragraph, second to the last sentence should be MPA MPCA th Page 8, 6 paragraph, should read Commissioner Gabel stated asked th Page 8, 8 paragraph, should read what the rental fee structure th Commissioner Eggert asked on page 6, 5 paragraph, should read development plan team UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MINUTES APPROVED AS AMENDED rd 3.Approval of Resolution Authorizing Sale of 5755 3 Street MOTION by Commissioner Eggert to open the Public Hearing. Seconded by Commissioner Gabel. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED AND THE PUBLIC HEARING OPENED AT 7:08 P.M. Paul Bolin, HRA Assistant Executive Director, stated that Home Detail is proposing to construct a home on this property. The home will have a different roof line and a mix of exterior materials. This home is already sold and the layout was designed specifically for the buyers. The home has over 2,100 finished sq. ft., 4 bedrooms, 4 bathrooms and a finished basement. The projected value is $230,000-$235,000. Staff recommends approval of the resolution authorizing Home Detail to create a new investment in the neighborhood and the proposed home design is consistent with HRP guidelines. Chairperson Commers asked how many more Gateway West lots were left. thrd Mr. Bolin replied four lots; two on 57 and two on 3 Street. MOTION by Commissioner Gabel to close the Public Hearing. Seconded by Commissioner Holm. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED AND THE PUBLIC HEARING CLOSED AT 7:11 P.M. rd MOTION by Commissioner Gabel to approve the resolution authorizing sale of 5755 3 Street. Seconded by Commissioner Eggert. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY 4.Approval of Motion Authorizing Staff to Develop Documents Needed to Consider TIF Assistance for 5601 East River Road HRA Meeting of August 1, 2013 3 Paul Bolin, HRA Assistant Executive Director, stated that Mr. John Allen of Industrial equities purchased the former JLT/Tiro/Lamaur site at 5601 East River Road in late 2012 for $1.3M. The th property is in the Northstar Transit TIF District and it is anticipated that 57 Avenue may eventually be extended through the site. Mr. Allen is planning to develop this site in three phases. The first phase consists of a high finish flex office/warehouse/showroom building of 134,000 square feet. The second phase includes two, five story office buildings totaling 300,000 square feet. The third phase includes approximately 120 residential rental or assisted living units. Mr. Bolin said that beyond typical development costs the city has asked Industrial Equities, John th Allen, to accommodate the extension of 57 Avenue. Mr. Allen needs to acquire a triangular piece of property, from a neighboring property owner to accommodate the extension of 57th Avenue. When Mr. Allen puts in the access road into his site, rather than just a driveway with 2-3 lanes, it th will be built to the proper roadway standards to accommodate 57 Avenue coming over the tracks. This would involve more turn lanes, more medians and a minimum of 4-5 lanes built in that area. Based on the numbers that Mr. Allen has from his construction contractors, that would add $180,000 to that drive access area. Mr. Allen is asking the Authority to give consideration to providing assistance to cover the extra cost associated with building the driveway to public roadway standards. Mr. Bolin stated that tonight staff is not asking the Authority to make a decision on providing Mr. Allen with assistance. Staff is asking for a motion to allow staff to move forward in developing documents necessary to provide Industrial Equities with assistance, not to exceed $180,000, for installation of the proposed 4-5 lane access into this site. Actual approval for assistance will not take place until documents are brought back to HRA for approval, at a future meeting. Staff will come back to the Authority after everything is documented. Chairperson Commers asked for clarification of who owns the property in the orange box. Mr. Bolin replied that John Allen owns all of it. th Chairperson Commers asked if the 57 Avenue extension happens, will Mr. Allen give up property for an easement up to the railroad tracks. Mr. Bolin answered yes. He has been working with the City Council to get his master plan approvals done. Council has agreed to let Mr. Allen know within five years if they are going to put th 57 Avenue through. Five years from now if Council decides it is not feasible then Mr. Allen can develop over that area. Chairperson Commers asked for clarification that five years relates to when Council says to go forward with the project; five years. Mr. Bolin replied yes. Commissioner Eggert asked if that would be made a public road; that section would be built to standards for a public road. Mr. Bolin answered yes; that is where the additional expenses come in. HRA Meeting of August 1, 2013 4 Commissioner Eggert asked if the city would take over the maintenance of that road or if Mr. Allen would maintain that road. Mr. Bolin replied that if it is a public road the city would maintain that road. Commissioner Gabel asked if he would maintain the road until the city took it over. Mr. Bolin answered that the first 300 feet could be a public road. Chairperson Commers said that the down side is if HRA puts in assistance and the public road never goes through. Mr. Bolin replied yes. Chairperson Commers asked about the traffic generated from this development. Mr. Bolin replied that Mr. Allen had to review traffic and potential environmental impacts as part of the EAW process. Commissioner Eggert noted that five years is not a long time, many projects take 10 years. He was wondering if a five year term should be placed on this. Mr. Bolin said that City Council has given Mr. Allen five years and Mr. Allen agreed on five years. This extension was first talked about 7-8 years ago when the City started working on the Comprehensive Plan that was updated in 2008. Last year staff met with BNSF and they said the th road could go over or under but would not allow any supports in the rail bed. Any bridge over 57 Avenue will have to span the entire section of tracks and the estimate is $18M for a bridge. A tunnel is questionable too because there et Council sewer line under the tracks and staff are not sure how to work around that. Commissioner Gabel asked about the increment, when it would be paid back and if the increment could be lost. Mr. Bolin replied that he found out today the increment would start to be collected in 2017 and the increment would be collected regardless if the HRA helped out Mr. Allen or not. The first building will generate $182,000 a year in increment and 5% interest on top of that would take about 15 months to pay back the $180,000. Commissioner Gabel road reverts back to Mr. Allen if increment would still be collected. Mr. Bolin replied that increment would still be collected on what is generated by the building. The worse case is the Authority issues a pay-as-you-go note, he builds the entrance to standards and th 57 Avenue ; the Authority has helped him make nice entrance into his site. That is the risk. Chairperson Commers asked what development agreement the Council had. HRA Meeting of August 1, 2013 5 Mr. Bolin answered it has to do with the master plan approval. Chairperson Commers asked if that was separate from the Authority development agreement Mr. Bolin replied yes; this agreement is not as detailed and talks about landscaping, storm ponds etc. Chairperson Commers asked why five years because nothing will interfere with this development if this goes to 7-8 years. Mr. Bolin stated that if Mr. Allen had his way he would have pushed this building up to the north and east and made it larger to begin with. In order to help the city try to make this extension happen Mr. Allen is willing to leave the space, for the roadway, if it can be done. Chairperson Commers said that the City Council should have consulted with the HRA so everyone is on the same page. Mr. Bolin stated that the city master plan is completely separate from anything the Authority does. th The 5 year timeframe for 57 Avenue to go through, was and agreement between Industrial Equities and City Council. Mr. Allen has acquired the property and now is asking the Authority for assistance to build the road to the standard the city needs to accommodate a future extension of 57th Avenue. th Chairperson Commers asked what happened if 57 years is too short of time. Commissioner Eggert asked if the five years started when construction is completed. Is that the solution we are forced with; to build the road? Is that a possibility? agreement is but would like more information. CommissionerHolm said that the worst case scenario is we proceed with the $180,000 TIF note th and the ultimate result is 57 Avenue ough; we helped improve the access and egress th for that site. bad outcome. It is not feasible at this stage to determine if 57 Avenue will ever go through. It is worthwhile to have staff proceed with the documents. Chairperson Commers agreed. Mr. Bolin will get a date as to when the five years would start and report back to the Authority. His understanding is the date for the 5 years started the night of the Council meeting approving the master plan for the site. Mr. Bolin will invite Scott Hickok to the next meeting to discuss the city actions on this item. MOTION by Commissioner Gabel to approve the motion authorizing staff to develop documents needed to consider TIF assistance for 5601 East River Road. Seconded by Commissioner Eggert. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED UNANIMOUSLY HRA Meeting of August 1, 2013 6 INFORMATIONAL ITEMS: 1.Development Agreement Hyde Development Paul Bolin, HRA Assistant Executive Director, stated that the Hyde Development closed on the th 122 acres located at 4800 East River Road on July 10. Hyde Development has been working towards acquiring this property since August of 2011 and the Authority created TIF District #20 in the spring of 2012 to provide assistance with the clean up and future redevelopment of the BAE site. Mr. Bolin said that on June 6, 2013, the Authority adopted a Term Sheet for the redevelopment project. The Term Sheet outlined the redevelopment and public finance terms that were to be put th in the Development Agreement between the Authority and Hyde Development. Since June 6, the Developer, HRA Attorney and staff have worked to put together the attached Draft Development Agreement. Mr. Bolin said that the Development Agreement further formalizes the terms previously approved. The Agreement covers how upfront assistance (grants) would be provided by the Authority and reimbursed by the Hazardous Substance Subdistrict (HSS), pay-as-you-go assistance from the Redevelopment District, the disbursement of third party grant and loan funds that will flow through the HRA and is perform as promised. Mr. Bolin said that Mr. Hyde had a conflict to meet tonight and would like to have more time to review the Agreement with his legal counsel. The developer has asked that the Authority consider th approval of the agreement on September 5. Staff will continue to work with Attorney Casserly, th Mr. Hyde and his legal Counsel on the agreement and bring this item to the September 5 meeting. 2.Housing Loan Program Update Paul Bolin, HRA Assistant Executive Director, reported that in July, one Deferred Loan was closed making six year to date and there was one remodel advisor visit for a total of four year to date. The quarterly report for outstanding loans includes the same three that have been on there for the last few years. One of them will be a write off because the person is deceased and the home was foreclosed. There is a chance we may be able to collect on the other two. Mr. Bolin provided a Gateway Northeast Update the Vet Clinic's last day of business was yesterday at this site and they will move out this month. The plan is to get the hazardous material removed the first week of September, then the property has to sit empty for 10 days and then the property will be demolished. The owners of the Citgo Station from Florida have been talking with staff about knocking down their building and assessing the costs back to them. This will be coordinated by the city. Mr. Bolin said that Roger Fink from Lyons Contracting would like to purchase the Gateway Northeast property. Yesterday a rough draft of a purchase agreement was sent over for the site. A typical staff will work with him over the next few weeks until a suitable agreement is made. This site would need master plan approval with platting, street HRA Meeting of August 1, 2013 7 vacations etc. Mr. Fink is looking for documentation to give him comfort to spend money on the site as the Authority will keep control of the land until he is ready to build. Chairperson Commers said that the Authority just wants control of what he builds on that site. Commissioner Eggert suggested considering a deposit of a certain amount of funds applicable to the sale that would be non refundable if he pulls out of the agreement. Chairperson Commers thought that was a good suggestion. ADJOURNMENT: MOTION by Commissioner Gabel to Adjourn. Seconded by Commissioner Eggert. UPON VOICE VOTE, ALL VOTING AYE, CHAIRPERSON COMMERS DECLARED THE MOTION CARRIED AND THE MEETING ADJOURNED AT 7:57 P.M. Respectfully Submitted, Krista Peterson, Recording Secretary