08-05-02 Special
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HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES
Richfield, Minnesota
Special Meeting
August 5,2002
The meeting was called to order by Chair Harms at 7:00 p.m.
HRA Members
Present:
Thomas Harms; Kristal Stokes; Joan Heimberger; and Dan Linnihan.
HRA Members
Absent:
Michael Sandahl.
Staff Present:
Samantha Orduno, Executive Director; John Stark, Community
Development Manager; Bruce Nordquist, Housing and Redevelopment
Manager; and Steven Devich, Acting City Clerk.
Item #1
The agenda was approved by unanimous consent.
Item #2
Sid Inman, Ehlers & Associates, Inc., presented the annual HRA tax increment report. He
stated the HRA is in good financial condition and in a position to meet debt obligations.
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August5,2002
Mr. Inman made the following recommendations:
. Take action to shut the Lyndale/Hub/Nicollet (LHN) down which will add a significant
pool of money to the City, County and School taxing jurisdictions.
. Start work on permanently setting rates on Richfield Rediscovered bonds.
Commissioner Linnihan asked if Richfield Rediscovered could be done by a developer
without financial assistance.
Mr. Inman responded that it was not very likely that any builder would try to do such a
project without providing financial assistance in buying the property.
Mr. Linnihan asked about initiating a campaign to inform residents about the $425,000 back
on the tax roles.
Chair Harms asked that staff prepare an Editorial Opinion on the subject. He also
suggested looking at a larger track of homes to do a bigger Richfield Rediscovered program.
Commissioner Heimberger asked if the new tax laws would still provide a benefit to the
schools.
Mr. Inman responded that there would be some taxes back to the schools even under the
new law.
Chair Harms directed staff to prepare the following for consideration at the Regular HRA
Meeting on September 16:
. A resolution for the decertification of the LHN Tax Increment district.
. An action plan to convert the Richfield Rediscovered 1999 Temporary Bonds to fixed
rate financing.
Item #3
Community Development Manager Stark reviewed Staff Report No. 30 regarding
consideration of a Contract for Private Redevelopment with Lyndale Gateway L.L.C. for Phase III
of the Lyndale Gateway redevelopment project.
Mr. Stark described the proposed contract for development for a mixed use project in the
Lyndale Gateway project area, specifically the 7600 black of Lyndale Avenue. The developer
would be the Cornerstone Group operating as Lyndale Gateway, L.L.C., a distinct corporate entity
to be associated with this project.
Mr. Stark described the following major components of the project:
. 92 for-sale loft condominium units.
. 15 for-sale market rate townhomes.
. 28,580 sq. ft. of retail space
. 114 stall underground parking structure, 139 surface parking spaces and 15 two-car
garages.
He stated that the major aspect of the financing for the project is a $5 million loan from
Fannie Mae's American Communities Fund.
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August 5, 2002
Chair Harms asked about the "take out" financing.
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Mr. Inman responded that the take out financing would first be the tax increment funds in
addition to sale of the final homes.
He concluded that the rate of return on this project is very marginal and that depending on
the acquisition costs, the project may not be feasible.
Commissioner Linnihan asked if the L.L.C. diminishes the financing guarantee.
Heidi Kurtz, Cornerstone Group, responded that the Cornerstone Group would be standing
behind the financing guarantee.
Community Development Manager Stark stated that after lengthy work on this project, he
believes if the project is not financially feasible, no project may be.
Executive Director Orduno restated that the whole project hinges on the land sale prices.
She stated that if the land were too expensive, the project would not be feasible.
M/Stokes, S/Helmberger to approve and execute the Contract for Private Redevelopment
with Lyndale Gateway L.L.C. for Phase III of the Lyndale Gateway redevelopment proiect.
Motion passed 4-0.
I Item #4
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Executive Director Orduno reviewed Staff Report No. 31 regarding consideration of a
proposed repayment plan from Richfield Senior Housing, Inc.
Community Development Manager Stark presented the specific components of the
repayment plan proposed by Richfield Senior Housing, Inc.
Chair Harms asked what the remedies for default would be.
Mr. Stark responded that tax increment could be withheld, which would jeopardize the
financial stability of the Twin City Christian Homes.
Chris Schmidt, Chief Financial Officer of Richfield Senior Housing, Inc., addressed the HRA
concerning the specifics for the financial situation.
Chair Harms asked City Attorney Dean to carefully review the Subordination Agreement
with Twin City Christian Homes to ensure that it does not jeopardize any previous financial security
of the H RA.
M/Helmberger, S/Stokes to approve the basic terms proposed repayment plan from
Richfield Senior Housinq, Inc. (as an eiqht-year repayment at 6.5%-interest with payments to be
made prior to the issuance of tax increment financinq payments due to RSH) after review by the
City Attorney and authorize the Executive Director and Housinq and Redevelopment Authority
Chair to execute a contract addendum reflectinq those terms.
Special HRA Meeting Minutes
Motion carried 4-0.
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August 5, 2002
2002
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