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06-17-02 agendaCITY OF RICHFIELD, MINNESOTA HOUSING AND REDEVELOPMENT AUTHORITY MONDAY, JUNE 17, 2002 RICHFIELD CITY HALL 6700 PORTLAND AVENUE COUNCIL CHAMBERS 7 P.M. AGENDA Call to order Approval of minutes of Regular HRA Meeting of May 20, 2002 1. Opportunity for citizens to address the HRA on items not on the agenda Notes: 2. HRA approval of agenda 3. Consent Calendar contains several separate items which are ac#ed upon by the HRA in one motion. Once the Consent Calendar has been approved, the individual items and recommended actions have also been approved. No further HRA action is necessary. However, any HRA Commissioner may request that an item be removed from the Consent Calendar and placed on the regular agenda for HRA discussion and action. All items listed on the Consent Calendar are recommended for approval A. Consideration of approval of extension for development planning agreement with David Gepner and Harold Teasdale for adjacent residential sites at 6833 and 6855 Penn Avenue S.R. No. 20 B. Consideration of approval of resolution approving elimination of parcels from Gramercy Tax Increment Financing District within Richfield Redevelopment Project Area S.R. No. 21 C. Consideration of approval of third amendment to Contract for Private Redevelopment between HRA and Gramercy Park Cooperative S.R. No. 22 Notes: 4. Consideration of continuation of public hearing to July 15, 2002 regarding determination of business subsidy for City Bella (continuation at developer's request) Staff Report No. 23 Notes: 5. Public hearing regarding resolution authorizing sale of 6529 Emerson Avenue to McDevitt Homes, Inc. for new construction of single family home Staff Report No. 24 Notes: 6. Consideration of presentation by The Cornerstone Group, outlining progress in planning redevelopment of Phase III of Lyndale Gateway area Staff Report No. 25 Notes: 7. Claims and payroll Adjournment Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at least 96 hours in advance to the Administrative Services Director at 612-861- 9702. AGENDA ITEM # 6 REPORT # 25 J STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING JUNE 17, 2002 JOHN STARK, REPORT PREPARED BY: COMMUNITY DEVELOPMENT MANAGER NAME, TITLE . JOHN STARK, REPORT PRESENTER: COMMUNITY DEVELOPMENT MANAGER NAME, T/TLE DEPARTMENT DIRECTOR REVIEW: SIGNATURE REVIEWED BY EXECUTIVE DIRECTOR: ITEM FOR HRA CONSIDERATION: Consideration of a presentation by The Cornerstone Group, outlining their progress in planning for the redevelopment of Phase III of the Lyndale Gateway area. I. RECOMMENDED ACTION: By Motion: Direct staff to draft a Contract for Private Development with The Cornerstone Group for Phase III of the Lyndale Gateway area. III. BACKGROUND ~ At the December 2001 Housing and Redevelopment Authority (HRA) meeting, staff identified The Cornerstone Group as the "preferred developer" for the redevelopment of Phase III of the Lyndale Gateway area. That designation came as a result of the request for proposal (RFP) process that staff undertook for the selection of a developer for the area. At that time, The Cornerstone Group presented their development concept for the area. While the HRA was enthusiastic about the plan, they directed staff to work with The Cornerstone Group to eliminate the financing gap that existed. Since that time, there have been modifications to the density and pricing of the development in order to generate additional tax increment financing. There have also been discussions on various funding methods that will help lower the financing costs. One of these funding methods would involve a Fannie Mae construction loan to the HRA, which the HRA would then commit to The Cornerstone Group. This is a concept which staff has just begun to explore. Another strategy in maximizing funding would be to remove these parcels from the existing Lyndale Gateway TIF District and reestablish this area as a distinct district; this would be helpful because 2 years of TIF funding in the existing district have already lapsed. HRA staff has proceeded very cautiously with the review of the site plan and the structuring and amount of the proposed public assistance. This caution has been in an attempt to identify issues upfront so that once the HRA grants any formal approval (such as executing a development agreement), the potential obstacles are minimized. In this review process, staff has identified the site assembly costs as the greatest potential issue. When CSM had previously proposed a development for this site, they had drafted language in their development agreement which limited their site assembly costs at $2.5 million. The Cornerstone Group, in their initial proposal had estimated site assembly costs at $4.1 million. Since that time, The Cornerstone Group has increased their site assembly budget to $5.5 million. The difficulty in estimating the site assembly costs is founded in a jury's condemnation award for a property in Phase I of the Lyndale Gateway area that far exceeded typical real estate values in the area. The remaining concern is that property owners in the Phase III area may be expecting comparable compensation for their property as was awarded in this unusual judgement. If that, indeed, is the expectation, then site assembly costs could exceed $5.5 million and render this or any other, project financially infeasible. It is, therefore, important for the commercial property owners to understand that, to a great degree, the likelihood for success of this project depends upon their expectation for compensation. Assuming a site assembly cost of $5.5 million, the amount of private and public financing being proposed by The Cornerstone Group results in a financially feasible project with no financing "gap." If the HRA is satisfied with the current site plan, some of the next steps would be: • The drafting and HRA consideration of a Contract for Private Development; • The provisions of a short-term Fannie Mae "American Communities Fund" loan to the Richfield HRA which would then be committed to The Cornerstone Group provided that the financial risk to the HRA is minimal; • The re-establishment of a TIF District for the development area • The consideration of a Business Subsidy Agreement with The Cornerstone Group; • The consideration of land use approvals for the site, and; • The Cornerstone Group's successful negotiations with most (if not all) of property owners for contingent purchase agreements. Once the above items are successfully completed or approved, The Cornerstone Group would be able to remove contingencies from purchase agreements and then move ahead with the project. Staff is hopeful that a Contract can be ready for HRA consideration by August. In a "best case scenario", if all approvals are granted and no additional financial issues are identified, The Cornerstone Group could be able to close on property purchases early in 2003. III. BASIS OF RECOMMENDATION A. POLICY • The Cornerstone Group was identified as the "preferred developer" in a Request for Proposal process. • The HRA was generally supportive of the inifial redevelopment concept proposed by The Cornerstone Group. • Staff has been working with The Cornerstone Group to identify and address any potential financing and site planning issues. B. CRITICAL ISSUES • HRA staff has been attempting to identify any potential obstacles early in the process so that once approved, the development can proceed as smoothly as possible. C. FINANCIAL • The modified financing scenario eliminates any financing gap. D. LEGAL • Legal counsel has been involved in staff review of the proposal and is prepared to begin drafting a Contract for Private Development upon HRA approval to proceed. IV. ALTERNATIVE RECOMMENDATION(S~ • Suggest modifications to the proposed site plan prior to consideration of a Contract for Private Development. • Defer any motion. • Instruct staff to delay or discontinue discussions with The Cornerstone Group for the development of Phase III of the Lyndale Gateway area. V. ATTACHMENTS • A conceptual site plan. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Colleen Carey, of The Cornerstone Group, who will make a brief presentation of the conceptual site plan. AGENDA ITEM # 5 REPORT # 24 J STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING JUNE 17, 2002 REPORT PREPARED BY: PAM BOOKHOUT, REHABILITATION SPECIALIST NAME, TITLE BRUCE NORDQUIST, REPORT PRESENTER: HOUSING AND REDEVELOPMENT MANAGER NAME, TITLE DEPARTMENT DIRECTOR REVIEW: SIGNATURE REVIEWED BY EXECUTIVE DIRECTOR: ©' ITEM FOR HRA CONSIDERATION: Public hearing and approval of the attached resolution authorizing the sale of 6529 Emerson Avenue South to McDevitt Homes Inc. for new construction of a single family home. I. RECOMMENDED Conduct and close a public hearing and by motion: Approve the attached resolution authorizing the sale of property located at 6529 Emerson Avenue to McDevitt Homes Inc. III. BACKGROUND The Housing and Redevelopment Authority (HRA) purchased the property at 6529 Emerson Avenue South for redevelopment under the Richfield Rediscovered Program. The HRA authorized sale to a builder in August 2001. The builder's financing fell through, and therefore the relationship of the builder and the buyer fell through. The buyer's second builder was not accustomed to infill development, and backed out. The buyer has now selected a builder, McDevitt Homes, who has experience with all types of construction, has participated in the Parade of Homes in metropolitan area communities, and has the necessary financial capability. Demolition of the existing house and garage has already occurred. The new home will be a two-story home with approximately 2,230 finished square feet. Its end 0617Sa1e of 6529 value is anticipated to be approximately $260,000. It will contain four bedrooms, three baths and a main floor laundry. Construction is anticipated to start immediately after closing, which could occur at the end of June. The Contract for Private Development is similar in form and content to past contracts. III. BASIS OF RECOMMENDATION A. POLICY • The HRA acquired the site for development under the Richfield Rediscovered program. • The builder has demonstrated an acceptable level of experience and qualification. • The terms of the Contract for Private Development have been negotiated and are in conformance with program guidelines. B. CRITICAL ISSUES • Timely processing by the HRA will facilitate the process for the end buyer. C. FINANCIAL • According to the program guidelines, the builder must provide a Letter of Credit upon closing to secure the purchase price of the land, $44,000, and a separate Letter of Credit for performance security in the same amount. D. LEGAL • Notice of public hearing on sale of the property was published on June 5, 2002 in the Sun-Current. IV. ALTERNATIVE RECOMMENDATION(S~ • Do not proceed with the Contract for Private Development with the recommended builder and direct staff to find another buyer. V. ATTACHMENTS • Resolution • House plans/elevations VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A HRA RESOLUTION NO. RESOLUTION AUTHORIZING THE SALE OF PROPERTY LOCATED AT 6529 EMERSON AVENUE TO MCDEVITT HOMES INC. WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA) desires to develop certain real property pursuant to and in furtherance of the Richfield Rediscovered program adopted by the HRA, said real property being described as 6529 Emerson Avenue South, and whose legal description is the north 60 feet of Lot B, Silverwood Second Addition to Richfield, Hennepin County, Minnesota; and WHEREAS, the HRA is authorized to sell real property within its area of operation after a public hearing; and WHEREAS, the purchaser of the described property has been identified as McDevitt Homes Inc.; and WHEREAS, a Contract for Private Development has been prepared, and the sale price of the land is $44,000 with performance security in the same amount; and WHEREAS, a public hearing has been held after proper public notice. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota: 1. A public hearing has been held and 6529 Emerson Avenue is authorized to be sold for $44,000 to McDevitt Homes Inc.; and 2. The Chairperson and Executive Director are authorized to execute a Contract for Private Development and other agreements as required to effectuate the sale to McDevitt Homes Inc. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 17th day of June, 2.002. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary 0617Sa1e of 6529 ri'Il I7 I II ~~~ ur~t .~ rrrir _ .... mow.: .I i -.4Z ~;. ., _a~ I~~I 0 o 0 0 ~ p m S 4~? - 0 A` ~_ '~,.' _ v ~ ~ ~ ~ N /~f ~ ~.~ N F~ ~ .~ `f ~6_' x ~ ~ ~~~~ " rJ s ~ ~ ..~.~ f~ ~~ & ~ j~ - `C~51a I ~ ..t ~C--..,,.A s -~` ~ ~~ ~~ o. Z W ~ ~ -° ~~ ,d~ .~ ~-. ->~~ ~ ; ~~.~ ~u ~: ~i ~ z~ '~-~ JI !I =°I , ..,I i `=(~. - I I I1 II ~ ~ ~~~ ~x~ ~ '~S II I I ~ ~ ~~~ II ry II -- ~F-0 ...i i Q ~ ...... II r _ I I W ii 11 .......:::.:::I.I W W ~ a II \ II ~., i. 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IIW I I II II II II II II- II -- - --LJ AGENDA ITEM # !+ REPORT # 23 STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING JUNE 17, 2002 REPORT PREPARED BY: ' `BRUCENORDQUIST, HOUSING AND REDEVELOPMENT MANAGER NAME, TITLE REPORT PRESENTER: BRUCE NORDQUIST, HOUSING AND REDEVELOPMENT MANAGER NAME, TITLE DEPARTMENT DIRECTOR REVIEW: ©'~ SIGNATURE ~_ REVIEWED BY EXECUTIVE DIRECTOR: ~ ~ ~ : y~-"'''~ ITEM FOR HRA CONSIDERATION: A request to continue the June 17 public hearing on business subsidy for City Bella to July 15, 2002. I. RECOMMENDED ACTION: By Motion: Continue the June 17 public hearing concerning the determination of a business subsidy for City Bella to July 15, 2002. III. BACKGROUND In the last few weeks, the City Bella project elements have undergone adjustments such that the financial aspects of the project are also changing. As these changes are being finalized, the financial analysis and "business subsidy" determinations will take a few weeks to complete. To summarize, the changing elements are: The original 38-unit apartment building was reduced to 33 units and most recently, 27 units to accommodate expanding retail space. Expanding retail increases parking demand and the need for additional parking spaces. The construction of the apartment building and the proposed affordable housing was contingent on $800,000 in federal financing competitively applied for through Hennepin County. Preliminary notice has been received that these 061702Continue CityBella funds will not be secured. Thus, the financial aspects and funding sources must be reviewed again. • These adjustments are not a radical change. Rather at this stage of the project, it is the normal pre-development fine tuning. III. BASIS OF RECOMMENDATION A. POLICY A public hearing on the City Bella business subsidy has been scheduled and public notice has been published. • The Housing and Redevelopment Authority (HRA) must announce a continuation on June 17 for it to occur. The proposed date to continue the public hearing to is the next regularly scheduled HRA meeting on July 15, 2002. B. CRITICAL ISSUES • It would be premature to finalize the business subsidy with adjustments underway. • Persons may have been planning to present their views at the public hearing on June 17, 2002. C. FINANCIAL • N/A D. LEGAL • N/A IV. ALTERNATIVE RECOMMENDATION(S~ • Proceed with the public hearing with insufficient financial information. V. ATTACHMENTS • N/A VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A AGENDA ITEM # REPORT # STAFF REPORT r ~ HOUSING AND REDEVELOPMENT AUTHORITY MEETING JUNE 17, 2002 3C 22 REPORT PREPARED BY: BRUCE NORDQUIST, HOUSING AND REDEVELOPMENT MANAGER NAME, TITLE REPORT PRESENTER: BRUCE NORDQUIST, HOUSING AND REDEVELOPMENT MANAGER NAME, TITLE DEPARTMENT DIRECTOR REVIEW: ~/~~~ REVIEWED BY EXECUTIVE DIRECTOR: ITEM FOR HRA CONSIDERATION: Consideration of a third amendment to the Contract for Private Redevelopment between the Housing and Redevelopment Authority and Gramercy Park Cooperative that clarifies eligible costs in the Contract. I. RECOMMENDED ACTION: By Motion: Authorize a third amendment to the Contract for Private Redevelopment. III. BACKGROUND ~ A technical correction to the Contract for Private Redevelopment dated July 20, 1998 and amended in March, 2001 is required. Contract clarification is needed for the Gramercy Park project in order to ensure that the Housing and Redevelopment Authority's (RBA's) $1,977,000 Limited Revenue Tax Increment Note, Series 2001 will reimburse eligible costs up to the principal amount of the note. Currently, the contract could be read to limit reimbursement to the costs of acquiring the property. Sid Inman from Ehlers, the HRA's financial consultant has concluded these costs, alone, do not support the entire principal amount of the note. Legal counsel has opined that the intent of the HRA and Gramercy has always been to allow reimbursement of any eligible costs up to the principal amount of the note. 061702Gramercy III. BASIS OF RECOMMENDATION A. POLICY • The intent of the HRA and Gramercy has been to allow reimbursement of eligible costs, not just acquisition costs, up to the principal amount of the note. • The Gramercy Park Board has reviewed and approved the Contract amendment. • This amendment is meant only to reflect the original intentions of the parties, not to otherwise expand the Developer's rights or the HRA's obligations. B. CRITICAL ISSUES • Without the technical corrections eligible reimbursable costs to satisfy the note might be limited by misinterpretation. • The reimbursement of costs is always limited to the tax increment revenue received and does not further obligate the HRA. C. FINANCIAL • Ehlers, the HRA's financial consultant, has recommended the Contract amendment to clarify reimbursable costs. D. LEGAL • Legal counsel has prepared the Contract amendment. IV. ALTERNATIVE RECOMMENDATION(S~ • Clarify a different intent. • Do not amend the Contract. V. ATTACHMENTS • Third Amendment to Contract for Private Redevelopment. Note the amendment identifies Parcels A, B and C, which comprised the site prior to redevelopment. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Sid Inman, Ehlers and Associates, Inc. • John Dean, Kennedy & Graven THIRD AMENDMENT TO CONTRACT FOR PRIVATE REDEVELOPMENT THIS AMENDMENT, made and entered into as of the day of 2002 by and between GRAMERCY PARK COOPERATIVE AT LAKE SHORE DRIVE, a Minnesota Cooperative Corporation ("Redeveloper") and THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, a Minnesota public body corporate and politic ("HRA"). WITNESSETH: WHEREAS, the HRA and the Redeveloper did on July 20, 1998 execute and deliver that certain document entitled Contract for Private Redevelopment, which has subsequently been amended by that First Amendment to Contract for Private Redevelopment dated December 21, 1998 and that Second Amendment to Contract for Private Redevelopment dated March 22, 2001 (such Contract and Amendments collectively referred to herein as the "Contract"); and WHEREAS, the HRA and the Redeveloper wish to clarify the costs for which the Redeveloper will be reimbursed pursuant to the Contract; and WHEREAS, the HRA has reviewed the proposed amendments, has received the reports and recommendations of its staff and consultants, and has concluded that the proposed amendments are necessary and appropriate and in furtherance of the proposed Redevelopment. NOW THEREFORE, based upon the mutual covenants and undertakings of the parties, the Contract is hereby amended as follows: Section 3.6 is amended to read as follows: Section 3.6. Purchase Price. (a) The HRA shall pay the Redeveloper as purchase price for Parcel A, and as reimbursement for site improvement costs and other costs for which the Redeveloper may be reimbursed pursuant to the Tax Increment Act, the aggregate principal amount contained in the Note. Payment of the purchase price and other amounts for which the Redeveloper is entitled to reimbursement will be made entirely and exclusively in accordance with the terms of said Note. The Note is to be executed by the HRA and delivered to Redeveloper upon the Redeveloper's request. Prior to or simultaneously with the HRA's delivery of the Note, the HRA shall deliver to Redeveloper the Certificate of Completion. (b) The purchase price to be paid by the Redeveloper for the reconveyance of the Parcel A and conveyance of Parcels B and C from the HRA shall be $1.00. 2. Except as specifically amended herein, the Contract remains unaltered and in full force and effect. DJG-201466v1 RC 125-1 3. The HRA may record this Third Amendment in the public land records in and for Hennepin County, Minnesota. The Redeveloper shall pay all costs for recording. [REST OF PAGE INTENTIONALLY BLANK] DJG-201466v1 2 RC125-1 IN WITNESS WHEREOF, the parties hereto have set their hands and seals as of the day and year first above written. STATE OF MINNESOTA ) SS COUNTY OF ) THE HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF RICHFIELD, MINNESOTA By: _ Its: By: _ Its: GRAMERCY PARK COOPERATIVE AT LAKE SHORE DRIVE By: _ Its: The foregoing instrument was acknowledged before me this day of 2002, by and ,the Chairperson and Executive Director of The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota. STATE OF MINNESOTA ) )SS. COUNTY OF HENNEPIN ) Notary Public The foregoing instrument was acknowledged before me this day of , 2002, by the of , a cooperative corporation under the laws of Minnesota, by and on behalf of said corporation. Notary Public DJG-201466v1 3 RC125-1 AGENDA ITEM # 3B REPORT # 21 J STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING JUNE 17, 2002 REPORT PREPARED BY: BRUCE NORDQUIST, HOUSING AND REDEVELOPMENT MANAGER NAME, TITLE REPORT PRESENTER: BRUCE NORDQUIST, HOUSING AND REDEVELOPMENT MANAGER NAME, TITLE DEPARTMENT DIRECTOR REVIEW: ~ ~~ SIGNATURE REVIEWED BY EXECUTIVE DIRECTOR: /~ ~ ~~ ,~_ Cl ITEM FOR HRA CONSIDERATION: The removal of parcels in the Gramercy Tax Increment District to create the City Bella Tax Increment District. I. RECOMMENDED ACTION: By Motion: Authorize the Resolution approving the Elimination of Parcels from the Gramercy Tax Increment Financing District within the Richfield Redevelopment Project Area. II. BACKGROUND The Housing and Redevelopment Authority (HRA) (on May 20, 2003) and City Council (on June 11, 2002) have both approved the formation of the City Bella Tax Increment District. To complete the policy decisions related to the formation of the District, the HRA is required to remove the following seven parcels from the June 22, 1998 approved Gramercy Tax Increment District: 061702Parcels Address 6617 Lake Shore Drive 6633 Lake Shore Drive 6639 Lake Shore Drive 6700 Lyndale Avenue 709 Graham Avenue 6630 Lyndale-Avenue 6620 Lyndale Avenue Property Lynch residence Lake Shore Drive Condominium (vacant parcel) HRA - (former Davis property- vacant parcel) Checker Auto H RA Trestman Music Lyndale Hardware Staff will notify the County Auditor of the reduction in the geographic area of the Gramercy Tax Increment District. III. BASIS OF RECOMMENDATION A. POLICY • The HRA effectuates the decertifcation of parcels, by resolution. • In accordance with State Statute, a public hearing is not required. • The HRA approved the City Bella District on May 20, 2002. • The City Council approved the City Bella District on June 11, 2002. B. CRITICAL ISSUES • The City Bella District can not be created without the removal of parcels from the previously established Gramercy Tax Increment District. C. FINANCIAL • The removal of the seven parcels from the Gramercy District does not have a ne ative im act on the district. D. LEGAL • The resolution was reviewed and approved by legal counsel. IV. ALTERNATIVE RECOMMENDATION(S~ • N/A V. ATTACHMENTS • Resolution • Map VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Sid Inman, Ehlers and Associates, Inc. 061702Parcels HRA RESOLUTION NO. RESOLUTION APPROVING THE ELIMINATION OF PARCELS FROM THE GRAMERCY TAX INCREMENT FINANCING DISTRICT WITHIN THE RICHFIELD REDEVELOPMENT PROJECT AREA. WHEREAS, on June 22, 1998, the City of Richfield (the "City") created the Gramercy Tax Increment Financing (the "Gramercy TIF District") within its Richfield Redevelopment Project Area (the "Project"); and WHEREAS, the Gramercy TIF District included the following parcels, which were previously certified in the District: Parcel Numbers Address 28-028-24-41-0015 6617 Lake Shore Drive 28-028-24-41-0016 6633 Lake Shore Drive 28-028-24-41-0017 6639 Lake Shore Drive 27-028-24-32-0006 6700 Lyndale Avenue South 27-028-24-32-0117 709 Graham Avenue 27-028-24-32-0005 6630 Lyndale Avenue South 27-028-24-32-0115 6620 Lyndale Avenue South; and WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield desires by this resolution to cause the elimination of the listed parcels within the Gramercy TIF District thereby reducing the size of the Gramercy TIF District; and WHEREAS, since the current net tax capacity of the parcels to be eliminated from the Gramercy TIF District equals or exceeds the net tax capacity of the parcels in the Gramercy TIF District's original net tax capacity, the holding of a public hearing is not required pursuant to Minnesota Statutes, Section 469.175, Subd. 4: NOW THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield that the parcels are hereby eliminated from the Gramercy TIF District and the staff shall take such action as is necessary to notify the County Auditor of the reduction in the geographic area of the Gramercy TIF District caused by the elimination of such parcel Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 17th day of June, 2002. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary 061702Parcels CITY BELLA PROJECT AREA 66TH ST. 50 0 50 100 150 200 250 300 Feet ~~== PL. ~y ST ,~ 1-30-02 Q AGENDA ITEM # 3A REPORT # 2O STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING JUNE 17, 2002 PAM BOOKHOUT, REPORT PREPARED BY: REHABILITATION SPECIALIST NAME, TITLE BRUCE NORDQUIST, REPORT PRESENTER: HOUSING AND REDEVELOPMENT MANAGER NAME, TITLE DEPARTMENT DIRECTOR REVIEW: ~~ REVIEWED BY EXECUTIVE DIRECTOR: ITEM FOR HRA CONSIDERATION: Consideration of an extension for the development planning agreement with David Gepner and Harold Teasdale for the adjacent residential sites at 6833 and 6855 Penn Avenue South. I. RECOMMENDED ACTION: By Motion: Authorize the Chairperson and Executive Director to execute an agreement extending the development planning opportunity for David Gepner and Harold Teasdale for the sites at 6833 and 6855 Penn Avenue South. III. BACKGROUND ~ In October 2001, the Housing-and Redevelopment Authority (HRA) approved an agreement with David Gepner and Harold Teasdale to explore the development of the residential parcels at 6833 and 6855 Penn Avenue. The City's Comprehensive Plan calls for higher density residential development along Penn Avenue. Gepner and Teasdale expressed interest in developing the site with a higher density development. Gepner and Teasdale would like to build seven attached single family homes on the site. Each unit would have a double car garage with access off of 69th Street, 061702 extend dev planning eliminating the need for curb cuts on Penn Avenue. Garages would be detached, creating a protected courtyard area for the townhome residents. Each townhome unit would have three levels of 704 s.f. each, for a total floor area of 2,112 s.f. Although Richfield's Comprehensive Plan calls for higher density housing on arterial streets such as Penn Avenue, the zoning code does not currently allow for such developments without applications for a variety of zoning changes. The Planning Commission has sought to address these issues by recommending certain changes to the Comprehensive Plan. One change reviewed by the Planning Commission was to allow living spaces above detached garages in cluster home developments. This change was not approved by City Council. Another change, approved by the City Council in April 2002, increases the allowable density from 12 units to 15 units per acre for parcels designated as high density single family residential. The Metropolitan Council has reviewed the proposed amendment, and in response has asked Richfield to conduct a sanitary sewer capacity study for the sanitary sewer, which traverses the City along 76th Street. The Engineering Division has begun this and anticipates completing it in 6 to 8 weeks. It is anticipated that completion of the study and a final review by the Metropolitan Council should occur before Gepner and Teasdale's final zoning application is complete. The result of these actions is that Gepner and Teasdale's current proposal will not need variances for the proposed seven units since the new allowable density applies to the site (unless approval by the Metropolitan Council is delayed). Changes to the design of the units has eliminated the need for any other variances that would have been needed: living spaces above garages has been removed from the plan; and height and setback requirements have been met. A Conditional Use Permit (CUP) will still be required. Extending the development planning opportunity would give Gepner and Teasdale time to refine the new design, submit a zoning application for the CUP, and develop a construction schedule. The elevations as proposed have some unique features that the developer will get neighborhood feedback on during the development planning period. It is the goal of the developer to provide a unique product for buyers who might be looking for a live/work environment for their home, or might be seeking a totally different product than what Richfield generally provides. David Gepner and Harold Teasdale will be present to respond to any questions. III. BASIS OF RECOMMENDATION A. POLICY • The HRA purchased the sites for housing redevelopment, and approved Gepner and his developmen# team to explore the development planning opportunity at its October 2001 meeting. An extension was granted in January 2002. • The agreement with David Gepner and Harold Teasdale expires in June. They would like to extend the agreement to September 30, 2002 to take the planning to the next level, which would include finalizing the development design, completing a zoning application, meeting with the neighborhood and developing a construction schedule. B. CRITICAL ISSUES • Gepner and Teasdale would like to be able to continue their planning and design efforts. C. FINANCIAL • Gepner and Teasdale have provided a $2,000 participation fee to be able to examine the development opportunity. D. LEGAL • David Gepner is the chairperson of the Planning Commission. He would not participate in any decisions related to a proposed development, which the Planning Commission would need to consider, to prevent conflict of interest. IV. ALTERNATIVE RECOMMENDATION(S~ • Do not allow Gepner and Teasdale to work further on a development concept for the site. V. ATTACHMENTS • Development concept: elevations, floor plans, site plan. • Proposed agreement extension. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • David Gepner and Harold Teasdale ~c townhouses for David Gepner B~ Narold Teasdde _ __ I _ ~~aaae ~ ~ e ae W ~ PENN PLACE ~ ='" "' ° y ~ r~ `) i j ig 69th & Penn Avenue _ ' ~ ;, ~ ~ ~ ~ ~ ~ ~ I Richfield. Minnesota 55423 _- w .: ~ +v ~ SITE PLAN SHOWING NEIGIiBOR1100D CONTEXT scntl:: 2a = r-a F ai -~ .A r EZ7SS etosauu~L4 `p~agya~ } •ee-' C ~ W a c anuany uuad ~ 4169 8 m~~_a ~, ~' ~ '_` __ _= 3~~'Id NN~d v~ C W W s e . e~ eo ~ ~ =~ atapsaa,~ plo~ny ~ ~auda~ p~nnQao,/ sasnoyuao~ a i AGREEMENT ' THIS AGREEMENT is made and entered into this 17th day of June, 2002, by and between the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, a public body corporate and politic ("HRA") and David Gepner, 7503 18th Avenue South, Richfield, Minnesota, and Harold Teasdale, 5407 Excelsior Boulevard, Suite B, St. Louis Park, MN 55416 (collectively the "Redeveloper"). RECITALS WHEREAS, Redeveloper is interested in pursuing the redevelopment of that certain area identified on Attachment A (hereinafter the "Project Area"); and WHEREAS, Redeveloper is proposing development within the Project Area which will be for residential use ("Redevelopment"); and WHEREAS, the parties acknowledge that Redeveloper may expend substantial time and effort, and incur substantial expense in pursuing plans for the Redevelopment; and WHEREAS, Redeveloper is willing to undertake the Redevelopment with the reasonable assurance from the HRA that it will support and cooperate with Redeveloper in its Redevelopment efforts; and WHEREAS, the HRA wishes to cooperate with Redeveloper's efforts with the Redevelopment and is willing to proceed as described in this Agreement; and WHEREAS, the HRA initially entered into a similar Agreement in October 2001 and Redeveloper has made reasonable progress with the redevelopment but has found it necessary to revise the redevelopment plans; and WHEREAS, HRA and Redeveloper have executed this Agreement to document their understanding vvith respect to the proposed Redevelopment. AGREEMENTS NOW, THEREFORE, in consideration of the premises and mutual obligation of the parties contained herein, each of them does hereby represent, covenant and agree with the other as follows: 1. Statement of Intent. It is the intention of the parties that Redeveloper will proceed with the development activities necessary to permit Redevelopment in a manner, and on terms and conditions, which are mutually acceptable to Redeveloper and the HRA. This Agreement does not, however, constitute any type of plan approval nor agreement to provide financial assistance, nor does it obligate the HRA to provide plan approval or financial assistance. Any such requests are independent of this Agreement. 2. Undertaking and Agreement by Redeveloper. During the term of this Agreement, Redeveloper intends to undertake and pursue certain activities with respect to the Redevelopment. Redeveloper's activities will include the following: site planning feasibility, the development of plans for the Redevelopment, application for necessary government approvals, and such other activities as would be customary and necessary to permit the Redevelopment. 3. Undertaking and Agreement by HRA. The HRA agrees to cooperate with Redeveloper in Redeveloper's undertakings, and specifically agrees that during the term of this Agreement, the HRA will not assist nor facilitate development by any third party within the Project Area, nor enter into an agreement with any third party in connection with Redevelopment within the Project Area. 4. Term. The term of this Agreement shall be until July 15, 2002, provided that, either party may terminate this Agreement upon thirty (30) days written notice to the other, in the event that: (a) the HRA determines, in good faith, that Redeveloper is not diligently pursuing the Redevelopment, or (b) Redeveloper determines; in good faith, that the Redevelopment is not feasible. The HRA may also terminate the Agreement for failure of Redeveloper to meet its obligations under paragraphs 5D or 5E. Redeveloper will provide the HRA, on the first business day of each month or as requested, written reports regarding the status of its activities related to the Redevelopment. Any notices shall be deemed delivered if either actually delivered, or if faxed and mailed to the parties at the following addresses: David Gepner Harold Teasdale 7503 18th Avenue South 5407 Excelsior Boulevard, Suite B Richfield, MN 55423 St. Louis Park, MN 55416 Phone: (612) 861-1703 Phone: (952) 922-4405 Richfield Housing and Redevelopment Authority Attn: Executive Director 6700 Portland Avenue South Richfield, MN 55423 Phone: (612) 861-9760 Fax: (612) 861-8974 5. Miscellaneous. A. This Agreement constitutes the entire agreement between the parties relative to the proposed Redevelopment. Unless specifically described herein, no obligation shall be inferred or construed. B. Redeveloper understands that further and separate action, for which no obligation is created hereunder, will be required before the HRA is obligated to take various actions with respect to the Redevelopment. Those actions may include, but are not limited to, negotiation and approval of the Contract for Private Development and the sale of publicly owned land. C. Redeveloper further understands that many of the actions which the HRA may be called upon to take require the reasonable discretion and in some instances the legislative judgement of the HRA and City Council; such actions may be made only following established procedures, and the HRA may not, by agreement, agree in advance to any specific decision in such matters. D. Ultimate approval of the Redevelopment is subject to approvals by the Planning Commission, City Council, Building Official. Those actions and/or approvals are independent and separate from the HRA. E. Redeveloper hereby indemnifies, holds harmless and agrees to defend the HRA, its officers, agents and employees from any claim or cause of action of whatever nature occasioned by or arising out of this Agreement or the HRA's pertormance thereunder. F. Redeveloper agrees that it will pay anon-refundable $2,000 payment upon signing of this Agreement. IN WITNESS WHEREOF, the parties have executed this. Agreement effective the date and year first above written. THE HOUSING AND REDEVELOPMENT DAVID GEPNER AUTHORITY IN AND FOR THE CITY OF RICHFIELD By: By: Its: Chairperson HAROLD TEASDALE By: By: Its: Executive Director ATTACHMENT A "Project Area" STREET ADDRESSES The site consists of three platted lots, often collectively referenced as 6855 Penn Avenue South: 6833 Penn Avenue South, Richfield (one lots) 6855 Penn Avenue South, Richfield (two lots) Legal Descriptions Legal 6833 Penn Avenue: Lot 11, Block 9, Tingdale Bros.' Lincoln Hills Addn Descriptions North parcel of 6855 Penn Avenue: Lot 11 Subject to road, Block 9, Wood Lake Highlands Addn South parcel of 6855 Penn Avenue: Lot 10 Subject to road, Block 9, Wood Lake Highlands Addn PIN 6833 Penn Avenue: 28-028-24-33-0045 6855 Penn Avenue: 28-028-24-33-0146 Parcel Size 184' x 133'