03-884r
HRA RESOLUTION NO. 884
58
A RESOLUTION APPROVING SETTLEMENT
OF PENDING LITIGATION
WHEREAS, the HRA is the petitioner in a condemnation action docketed in
Hennepin County District Court as Housinq and Redevelopment Authority in and for the
City of Richfield v. Walser Auto Sales, Inc.. et aI., Case No. CD-2604 (the "condemnation
action"); and
WHEREAS, the HRA together with the City of Richfield is a party defendant in a
legal action challenging the validity of the Interchange West tax increment financing
district, which action is docketed in Hennepin County District Court as Walser Auto Sales,
Inc. v. AP 00-11927 (the "TIF action"); and
WHEREAS, the City of Richfield is a party defendant in a legal action challenging
the validity of certain zoning approvals granted by the City Council, which action is
docketed in Hennepin County District Court as Walser Auto Sales. Inc.. et al. Y. City of
Richfield, Case No. AP01-005147 (the "zoning action"); and
WHEREAS, the zoning action, TIF action and condemnation action all concern the
same property, formerly owned by R. J. Walser, Paul Walser, Andrew Walser and other
Walser-affiliated entities (the "Walsers"); and
WHEREAS, the various actions are all related to the redevelopment of the property
as the site of the corporate campus of Best Buy Co., Inc., which is a party to a Contract for
Private Redevelopment with the HRA; and
WHEREAS, representatives of the City, HRA, the Walsers and Best Buy Co., Inc.
recently participated in a court-ordered mediation session for the purpose of reaching a
negotiated settlement of the TIF action and other disputes among the parties.
NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners Of the
Housing and Redevelopment Authority in and for the City of Richfield, Minnesota as
follows:
1. It is in the best interests of the HRA to resolve the pending legal actions with
the Walsers, as described above.
2. The Chair, Executive Director and HRA Attorney are authorized and directed
to prepare and execute appropriate settlement stipulation(s) that incorporate the
settlement terms as enumerated on the attached E,xtt~"""/,,,.,,;fA, and to sUb,mit the settlement
stipulation(s) to the Hennepin County District Court !1r~pt:>roval.l
Dated this 14th day of February, 2003. ~pd~,
Thomas E. Harms, Chair
EXHIBIT A
SETTLEMENT POINTS (Mediation)
The City, HRA, Best Buy and Walser interests agree as follows:
1. Walser is to be paid $18.5 million (less the $9,450,228 previously paid) as a
settlement amount. City/HRA will contribute $300,000 (funded by LMCIT insurance)
toward the settlement amount, and Best Buy will contribute the remainder.
2. Payment and terms herein are intended to settle all issues of compensation
and interest in the condemnation case (HRA v. Walser Auto Sales. Inc.. et aI., Henn. Co.
District Court File No. CD-2604), all issues in TIF case (Walser Auto Sales. Inc.. et al. v.
City and HRA, Henn. Co. District Court File No. AP 00-11927), all issues in the zoning
case (Walser Auto Sales. Inc.. et al. v. City, Henn. Co. District Court File No. AP01-
005147) and all issues of attorneys' fees and costs in those actions. The relocation claims
of Walser, however, are not settled.
3. The zoning case will be qismissed with prejudice.
4. Appropriate court orders will be submitted jointly to court for approval. For
the TIF case, the order will include, without limitation, findings that tax increment
assistance to the Best Buy project serves primarily a public purpose. The order will direct
the City and the HRA to conform their practices in establishing Redevelopment TIF
Districts to address the concerns expressed in the Court of Appeals decision. The order
will provide that the TIF District will be preserved in its entirety and will provide that the
HRA shall continue to collect and distribute TIF proceeds as provided in the TIF Plan and
the Development Agreement, as amended.
5. Development Agreement (HRAlBest Buy), is to be amended to restate the definition
of Available Tax Increment, by providing for application of tax increment (prior to payments to
Developer under the Note): i) to pay a fixed amount of administrative expenses having a present
value of $1,000,000; ii) to pay a fixed amount to the Housing Fund having a present value of
$7,000,000; and, iii) to pay principal and interest on the TIF Bonds or TIF Refunding Bonds as
those terms are used in the Development Agreement. The amendment will also revise the
assessment agreement to provide for a minimum market value for the Best Buy Campus of not more
than $118,500,000.
6. All points to be reduced to appropriate written agreements and orders.
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