04-16-01 agendaCITY OF RICHFIELD
MONDAY, APRIL 16, 2001
REGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING
RICHFIELD CITY HALL
COUNCIL CHAMBERS
7 P.M.
AGENDA
Call to order
Approval of minutes of Regular HRA Meeting of March 19, 2001
1. Opportunity for citizens to address the HRA on items not on the agenda
Notes:
• 2. HRA approval of agenda
3. Consideration of options for continuation of redevelopment process for Lyndale
Gateway area
Staff Report No. 35
Notes:
4. Discussion regarding City-Bella development's contract provisions with Gramercy
Corporation
Staff Report No. 36
Notes:
r~
U
• 5. Public hearing and consideration of resolution authorizing sale of real property
identified as Remnant Parcel 1, Remnant Parcel 2, Remnant~Parcel 3;-~Remnant
Parcel 4, Remnant Parcel 5 and Remnant Parcel 6; Interchange West
Redevelopment Area
Staff Report No. 37
Notes:
6. Public hearing and consideration of resolution authorizing safe of property at 1015
East 69th Street to Steven Marlin Grant Homes; and continue public hearing for
6800 Logan Avenue to May 21, 2001 HRA meeting
Staff Report No. 38
Notes
• 7. Consideration of (1) resolution adopting modifications to Tax Increment Financing
Plan for Interchange-Lyndale-Nicollet Tax Increment Financing District; and (2)
resolution authorizing decertification of parcels from Interchange-Lyndale-Nicollet
Tax Increment Financing District
Staff Report No. 39
Notes:
8. Executive Director report
9. 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.
s
AGENDA ITEM #
REPORT # 39
REPORT PREPARED BY:
REPORT PRESENTER:
DEPARTMENT DIRECTOR REVIEW:
REVIEWED BY
EXECUTIVE DIRECTOR:
I'CATIA MEDVETSKI,
REDEVELOPMENT SPECIALIST
NAME, TITLE
BRUCE PALMBORG,
COMMUNITY DEVELOPMENT DIRECTOR
NAME. TITLE
ITEM FOR HRA CONSIDERATION:
Consideration of a (1.) resolution adopting the modifications to the Tax Increment Financing
Plan for the Interchange-Lyndale-Nicollet (ILN) Tax Increment Financing District; and (2.)
resolution authorizing the decertification of parcels from the Interchange-Lyndale-Nicollet (ILN)
Tax Increment Financing District
RECOMMENDED ACTION:
By Motion: Approve the (1.) resolution adopting the modifications to
the Tax Increment Financing Plan for the Interchange-Lyndale-
Nicollet (ILN) Tax Increment Financing District; and (2.) resolution
authorizing the decertification of parcels from the Interchange-
Lyndale-Nicollet (ILN) Tax Increment Financing District _
•
II. BACKGROUND
The 2001 Legislature has before it a bill that places certain restrictions upon tax
increment financing districts that were certified before May 1, 1990. One of the
key provisions of the bill is to not allow the modification of tax increment financing
plans after April 30, 2001. The only tax increment financing district that would be
04161LNTif
• impacted by this legislation is the Interstate-Lyndale-Nicollet (ILN) tax increment
financing district (TIF District) that was certified by the county on December 5,
1985. The ILN TIF District would be negatively impacted by this legislation if
passed because the Richfield Housing and Redevelopment Authority (HRA)
would be unable to undertake any future TIF assisted activities (for parcels
located in the ILN TIF District that have not been "treated" to date, primarily the
area north of 76th Street along Lyndale Avenue (11 parcels). (Staff has explored
renovation and possible parking solutions for the west side of Lyndale Avenue
and redevelopment for the east side of Lyndale which would accommodate a
new Daily Queen.) Also, the HRA would not be able to implement budget
revisions in order to bring it into compliance with. the State Auditor's TIF reporting
forms and opinions rendered by the. auditors. In order to better plan-for the future
should this legislation be enacted, a modification to the ILN TIF District is being
proposed that:
• Brings the TIF Plan and TIF District into compliance with the various
rulings by the State Auditor and changes in the law;
• Updates the budget line items, including providing a composite total of all
bonding authority;.
• Memorializes past actions taken for accounting transactions;
• Provides authorization- for all interfund loans; and
• Decertifies 11 parcels.
• In accordance with legal counsel opinion, a public. hearing is not required for this
modification because the amount of bonded indebtedness did not increase and
the value of the ILN TIF District parcels proposed for decertification have not
declined below the original, certified .value. (Also see paragraph "D. Legal" in this
staff report.)
III. BASIS OF RECOMMENDATION
A. POLICY
• The HRA undertakes TIF Plan modifications as deemed necessary
to carry out their charge for redevelopment in accordance with
prudent planning measures, state law, and rulings of the Office of
the State Auditor.
B. CRITICAL ISSUES
• A bill currently under proposal at the Legislature could prohibit
future modifications to the ILN TIF District, limit the use of tax.
increment revenue produced by the district, and hamper the HRA's
ability to bring the district's accounting transactions into compliance
with the State Auditor's rulings.
n
LJ
• C. FINANCIAL
• The total ILN TIF Plan Sources and Uses budget balances to
$102,637,750.
• Bonding authority available to the district cannot exceed
$14,650,000.
• Line items have been modified to reflect interfund loan transfers
and accounting transactions taken.
D. LEGAL
• Legal counsel has reviewed the modified ILN TIF Plan and
approving resolutions attached hereto and is of the opinion that the
proposed modification to the ILN TIF Plan does not require: (a.)
notification to the County Board member representing the affected
area; (b.) providing an opportunity to the members of the affected.
County Board to review the fiscal and economic implications of the
proposed modification to the TIF Plan 30 days from the transmittal
of the fiscal implications or until the County Board has presented
written comment on the proposal, whichever is less; (c.) review by
the Planning. Commission as to the conformance of the modified
TIF Plan to the Comprehensive Plan of the City; (d.) a legal notice
for public hearing; .and (e.) a public hearing.
• The City Council is scheduled to consider the proposed
modification to the ILN TIF Plan on April 23, 2001.
• Following approval by the City Council, the modification to the ILN
TIF Plan will be filed with the County Auditor and State Revenue
Department.
IV. ALTERNATIVE RECOMMENDATION~S~
• Delaying action or not taking action on the proposed modification to the
ILN TIF Plan could jeopardize future redevelopment activities in the ILN
TIF District and not allow compliance in budget authority.
V. ATTACHMENTS
• Modification to the Tax Increment Financing Plan for the ILN TIF District.
• Resolution adopting the modifications to the Tax Increment Financing Plan
for the Interchange-Lyndale-Nicollet (ILN) Tax Increment Financing
District.
• Resolution authorizing the decertification of parcels from the Interchange-
. Lyndale-Nicollet (ILN) Tax Increment Financing District.
VI. PRINCIPAL PARTIES EXPECTED AT
• MEETING
• Sid Inman, Ehlers & Associates, Inc.
• RESOLUTION NO.
RESOLUTION ADOPTING THE MODIFICATIONS
TO THE TAX INCREMENT FINANCING PLAN
FOR THE INTERCHANGE-LYNDALE-NICOLLET (ILN)
TAX INCREMENT FINANCING DISTRICT
WHEREAS, it has been proposed that the Board of Commissioners (the "Board")
of the Housing and Redevelopment Authority (the "HRA)" for the City of Richfield (the
"City") adopt the Modifications to the Tax Increment Financing. Plan for the Interchange-
Lyndale-Nicollet ("ILN") Tax Increment Financing District (the "Modifications"), all
pursuant to and in conformity with existing law, including Minnesota Statutes, 469.001
through 469.047, and Sections 469.174 to 469.179, inclusive, as amended, all as
reflected in the Modifications and presented for the Board's consideration; and
WHEREAS, the HRA has investigated the facts relating to the Modifications and
has caused the Modifications to be prepared;..and
WHEREAS, the proposed developments as described in the Modifications, in the
opinion of the HRA, would not reasonably be expected to occur solely through private
investment within the reasonable foreseeable future and, therefore, the use of tax
. increment financing is deemed necessary; and
WHEREAS, the HRA has performed all actions required by law to be performed
prior to the adoption of the Modifications.
NOW, THEREFORE, BE IT RESOLVED as follows:
1. .The HRA hereby finds that the ILN Tax Increment Financing District as
modified herein. is in the public interest and is a "redevelopment district" under
Minnesota Statutes, Section 469.174, subd. 10 (a)(1), and finds that the adoption of the
proposed Modifications will advance the HRA's and City's objectives of encouraging
development within the Richfield Redevelopment Project Area.
2. Conditioned upon the approval thereof by the City Council, the
Modifications; as presented to the HRA on this date, are hereby approved and adopted
and shall be placed on file in the office of the Community Development Director.
3. Upon approval of the Modifications by the City Council, the staff, the
HRA's advisors and legal counsel are authorized and directed to proceed with the
implementation of the Modifications and for this purpose to negotiate, draft, prepare and
present to this Board for its consideration all further plans, resolutions, documents and
contracts necessary for this purpose. Approval of the Modifications does not constitute
approval of any project or a Development Agreement with any developer.
• 4. Upon approval of the Modifications by the City Council, the Community
Development Director is authorized to forward a copy of the Modifications to the
• Minnesota Department of Revenue pursuant to Minnesota Statutes 469.175,
subdivision 2.
5. The Community Development Director is authorized and directed to
forward a copy of the Modifications to the Hennepin County Auditor as described in the
Modifications, all in accordance with Minnesota Statutes 469.177.
Adopted by the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota this 16th day of April, 2001.
Thomas E. Harms, Chair
ATTEST:
Michael Sandahl, Secretary
•
•
• HRA RESOLUTION NO.
RESOLUTION APPROVING THE DECERTIFICATION OF PARCELS
FROM THE INTERCHANGE-LYNDALE-NICOLLET (ILN)
TAX INCREMENT FINANCING DISTRICT
WHEREAS, the Housing and Redevelopment Authority in and for the City of
Richfield (the "HRA") adopted the Tax Increment Financing Plan for the Interchange-
Lyndale-Nicollet (ILN) Tax Increment Financing District (the "ILN District") within the
Richfield Redevelopment Project Area (the "Project"); and-
WHEREAS, the HRA desires by this resolution to cause the decertification of
eleven (11) parcels in the ILN District after which all property taxes generated by
property within the District will be distributed in the same manner as all other property
taxes. The eleven (11) parcels to be decertified in the ILN District include the following:
PID Number Address
33-028-24-41-0151 7500 Lyndale Ave.
33-028-24-41-0152 7512 Lyndale Ave.
33-028-24-41-0153 7516 Lyndale Ave.
33-028-24-41-0154 7520 Lyndale Ave.
33-028-24-41-0155 7524 Lyndale Ave.
33-028-24-41-0156.
• 33-028-24-41-0157 7528
7532 Lyndale
Lyndale Ave.
Ave.
33-028-24-41-0158 7544 Lyndale Ave.
34-028-24-32-0054 7545 Lyndale Ave.
34-028-24-32-0055 7533 Lyndale Ave.
34-028-24-32-0056 7529 Lyndale Ave.
NOW THEREFORE, BE IT RESOLVED thafi the HRA's staff shall take .such
action as is necessary to cause the County Auditor of Hennepin County to decertify the
eleven (11) parcels in the ILN .District and to no longer remit tax increment from the
eleven (11) parcels to the City.
Adopted by the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota this 16th day of April, 2001.
Thomas E. Harms, Chair
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ATTEST:
Michael Sandahl, Secretary
L'
~s of April 9> ?DDI
Druftfor City StaffRerietiv
MODIFICATION TO THE
TAX INCREMENT FINANCING PLAN
for the
•
INTERSTATE-LYNDALE-NICOLLET (ILN)
TAX INCREMENT FINANCING
(a redevelopment district)
RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY
CITY OF RICHFIELD
HENNEPIN COUNTY
STATE OF MINNESOTA
As Modified for: HRA consideration: April 16, 2001
and City Council consideration: April 23, 2001
E H L E R S Prepared by: FREERS & ASSOCIATES, INC.
3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105
& ASSOCIATES i N c (651) 697-8500 fax: (651) 697-8555 WWW.ehlers-inc.com
•
C7
TABLE OF CONTENTS
(for reference purposes only)
SECTION ll -MODIFICATION TO THE TAX INCREMENT FINANCING PLAN FOR THE ILN TAX
INCREMENT FINANCING DISTRICT ....................................... 2-1
Introduction .........................' ....:..:..:.............."..:.:... 2-1
Sources of Revenue/Bonded Indebtedness .................................. 2-1
Uses of Funds ......................................................... 2-2
APPENDIX- Parcels to be Decertified in the ILN District ........................... A-1
•
SECTION lI
MODIFICATION TO THE TAX INCREMENT FINANCING PLAN FOR THE
INTERSTATE-LYNDALE-NICOLLET (ILN) TAX INCREMENT FINANCING DISTRICT
Introduction
(Modified to add the following as of April 23, 2001)
The Housing and Redevelopment Authority in and for the City of Richfield (the "HRA"), the City of
Richfield (the "City"), staff and consultants have prepared the following information to expedite a
modification to the Tax Increment Financing Plan (the "TIF Plan") for the ILN Tax Increment Financing
District ("the District"), a redevelopment tax increment financing district, located in the Richfield
Redevelopment Project Area.
Modifications are being made to bring the TIF Plan and District into compliance with the various rulings by
the State Auditor and the changes in the laws. The purpose of the modifications is as follows: update the
budgets in the TIF Plan; add to the TIF Plan the authorization for all of the interfund loans; decertify 11
parcels from the District; and memorialize the past actions taken. These modifications do not add any
geographic area to the District, nor do they increase the amount of spending.
Sources of Revenue/Bonded Indebtedness
• (Modified to read as follows as of April 23, 2001)
Public improvement costs, acquisition, public utilities and site improvement costs, interest costs, and other
costs outlined in the Uses of Funds will be financed primarily through the annual collection of tax
increments. The HRA or City reserves the right to use other sources of revenue legally applicable to the HRA
or City and in accordance with the modified TIF Plan, including, but not limited to, special assessments,
general property taxes, state aid for road maintenance and construction, proceeds from the sale of land, other
contributions from the developer and investment income, to pay for the estimated public costs.
The HRA or City reserves the right to incur bonded indebtedness or other indebtedness as a result of the
modified TIF Plan. The total principal amount of bonded indebtedness or other indebtedness related to the
use oftax increment financing will not exceed $14,650,000 without additional modifications to the TIF Plan,
pursuant to applicable statutory requirements.
This provision does not obligate the HRA or City to incur debt. The HRA or City may issue bonds or incur
other debt only upon the determination that such action is in the best interest of the City. The HRA or City
may also finance the activities to be undertaken pursuant to the modified TIF Plan through loans from funds
of the HRA or City or to reimburse developers on a "pay-as-you-go" basis for eligible costs paid for by
developers.
The estimated sources of funds for the District are contained in the table on the next page.
•
Richfield Housing and Redevelopment Authority Modification to the Tax Increment Financing Plan for the ILN TIF District 2-I
SOURCES OF FUNDS As Modified As Modified Total
pre-2001 4/23/2001
•
Tax Increment Revenue $86,050,000 ($3,513,000) $82,537,000
Bond Proceeds $14,650,000 $0 $14,650,000
Interest on Invested Funds $499,750 $2,590,000 $3,089,750
Real Estate Sales $753,000 $753,000
Special Assessments $49,000 $49,000
Rent Lease Revenue $59,000 $59,000
Storm Water Utility & $663 000
~
($663,000)
$0
Developer Contribution
Municipal State Aid Rd. Fund $750,000 $750,000 $1,500,000
MnDOT Appropriation $25,000 ($25,000) $0
TOTAL PROJECT & $102,637,750 $0 $102,637,750
FINANCING REVENUES
Uses of Funds
(Modified to read as follows as of April 23, 2001)
The HRA and City have determined that it will be necessary to provide assistance to the project for certain
costs. The HRA and City have studied the feasibility of the development or redevelopment of property in
and around the District. To facilitate the establishment and development or redevelopment of the District,
this modified TIF Plan authorizes the use of tax increment financing to pay for the cost of certain eligible
expenses. The estimate of public costs and uses of funds associated with the District is outlined in the table
on the next page.
Richfield Housing and Redevelopment Authority Modification to the Tax Increment Financing Plan for the ILN TIF District 2-2
•
USES OF FUNDS As Modified As Modified Total
pre-2001 4/23/2001
LandBuilding Acquisition $47,269,010 ($11,968,300) $35,300,710
Site Improvements $65,000. ($65,000) $0
Public Utilities $1,335,000 $325,000 $1,660,000
Streets & Sidewalks $6,164,000 $400,000 $6,564,000
Bond Principal Payments $2,000,000 $12,650,000 $14,650,000
Bond Interest Payments $1,300,000 $2,100,000 $3,400,000
Loan/Note Interest Payments $34,660,000 $0 $34,660,000
Administrative Costs $9,555,000 ($3,555,000) $6,000,000
Bond Discount $289,740 $100,000 $389,740
Arbitrage Rebate $13,300 $13,300
PROJECT COSTS TOTAL $102,637,750 $0 $102,637,750
The above budget is organized according to the Office of the S tate Auditor (OSA) Tax Increment Financing
Authority Report forms.
Estimated costs associated with the District are subject to change among categories without a modification
to this Plan. The cost of all activities to be considered for tax increment financing will not exceed, without
formal modification, the budget above pursuant to the applicable statutory requirements. Pursuant to M.S.,
Section 469.1763, Subd. 2, no more than 25 percent of the tax increment paid by property within the District
will be spent on activities related to development or redevelopment outside of the District but within the
boundaries of the Richfield Redevelopment Project Area, (including administrative costs, that may be
considered to be spent outside of the District) subject to the limitations as described in this Plan.
•
Richfield Housing and Redevelopment Authority Modification to the Tax Increment Financing Plan for the ILN TIF District 2-3
•
APPENDIX
Parcels to be Decertified in the ILN District:
33-028-24-41-01 S 1 7500 Lyndale Avenue South
33-028-24-41-01 S2 7S 12 Lyndale Avenue South
33-028-24-41-01 S3 7S 16 Lyndale Avenue South
33-028-24-41-O1S4 7520 Lyndale Avenue South
33-028-24-41-O1SS 7524 Lyndale Avenue South
33-028-24-41-O1S6 7528 Lyndale Avenue South
33-028-24-41-O1S7 7532 Lyndale Avenue South
33-028-24-41-O1S8 7544 Lyndale Avenue South
34-028-24-32-OOS4 7S4S Lyndale Avenue South
34-028-24-32-OOSS 7533 Lyndale Avenue South
34-028-24-32-OOS6 7529 Lyndale Avenue South
•
APPENDIX
A-1
•
AGENDA ITEM #
REPORT #
~~ STAFF REPORT
6
38
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
APRIL 16, 2001
PAM BOOKHOUT,
REPORT PREPARED BY: REHABILITATION SPECIALIST
NAME, TITLE
BRUCE PALMBORG,
REPORT PRESENTER: COMMUNITY DEVELOPMENT DIRECTOR
NAME, TITLE
DEPARTMENT DIRECTOR REVIEW:
SIGNATURE
REVIEWED BY EXECUTIVE DIRECTOR: ~ <~ cy.~~ /, _ n
ITEM FOR HRA CONSIDERATION:
Public hearing and consideration of a resolution authorizing the sale of real property located at
1015 East 69th Street to Steven Marlin Grant for new construction of a single family home and
continue the public hearing for 6800 Logan to the Housing and Redevelopment Authority
meeting Mav 21, 2001 meeting.
I. RECOMMENDED ACTION:
Conduct and close a .public hearing and by motion: Approve the
attached resolution authorizing the sale of real property located at
1015 East 69th. Street to Steven Marlin Grant Homes; and, continue
the public hearing for 6800 Logan to the May 21, 2001 Housing and
Redevelopment Authority meeting.
II. BACKGROUND
In 2000, the Housing and Redevelopment Authority (HRA) purchased the property
at 1015 East 69th Street under the Richfield Rediscovered Program. A
builder/buyer team has been identified to develop a new home on the site. The new
home will be a two-story 1,975 sq. ft. home with attached garage. The end value is
anticipated to be approximately $235,000.
0416-1015E69th
Demolition of the existing building is complete. Construction is anticipated to start
soon after closing on the sale of the parcel in April. The Contract for Private
Development is similar in form and content to past contracts.
6800 Logan Avenue is continued to the May HRA meeting due to a change in
contractor by the purchaser.
III. BASIS OF RECOMMENDATION
A. POLICY
• The HRA acquired the site for development under the Richfield
Rediscovered program.
• Steven Marlin Grant Homes is experienced, qualified, and has built
under the program previously.
• The terms of the Contract for Private Development has been
negotiated and is in conformance with program guidelines.
B. CRITICAL ISSUES
• N/A
C. FINANCIAL
• • According to the program guidelines, the builders must provide a
Letter of Credit or other acceptable security upon closing to cover the
purchase price of the land and performance security. For 1015 East
69th Street, the land sale price is $55,211.51 (amount of bid), and
performance security must be in the amount of $47,000.
D. LEGAL
• Notice of public hearing on sale of the property was published on April
4, 2001 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 REAL PROPERTY LOCATED AT
1015 EAST 69TH STREET TO STEVEN MARLIN GRANT HOMES
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:
1015 East 69th Street, legally described as: the north 69 feet of east'/2 of Lot 15,
Baumgartner's First Addition, Hennepin County, Minnesota
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 properly has been identified as Steven
Marlin Grant Homes; and
WHEREAS, a Contract for Private Development has been prepared, and the sale
price of 1015 East 69th Street is $55,211.51 with performance security in the amount of
$47,000; 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 1015 East 69th Street is authorized to be
sold for $55,211.51 to Steven Marlin Grant Homes; 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
the builder.
Adopted by the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota this 16th day of April, 2001.
Thomas E. Harms, Chair
ATTEST:
Michael Sandahl, Secretary
•
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AGENDA ITEM #
REPORT #
STAFF REPORT
r
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
APRIL 16, 2001
37
REPORT PREPARED BY: JOHN STARK,
COMMUNITY DEVELOPMENT MANAGER
NAME, TITLE
REPORT PRESENTER: BRUCE PALMBORG,
COMMUNITY DEVELOPMENT DIRECTOR
NAME, TITLE
DEPARTMENT DIRECTOR REVIEW:
SIGNATURE
REVIEWED BY EXECUTNE DIRECTOR; ~ ~ u ell ` ~
ITEM FOR HRA CONSIDERATION:
Public hearing and consideration of the attached resolution for the sale of real property
identified as Remnant Parcel 1, Remnant Parcel 2, Remnant Parcel 3, Remnant' Parcel 4,
Remnant Parcel 5 and Remnant Parcel 6.
I. RECOMMENDED ACTION:
By Motion: Conduct and close a public hearing and approve the
attached resolution authorizing the sale of real property identified as
.Remnant Parcel 1, Remnant Parcel 2, Remnant Parcel 3, Remnant
Parcel 4. Remnant Parcel 5 and Remnant Parcel 6.
•
II. BACKGROUND
On March 20, 2000, the Richfield Housing and Redevelopment Authority (HRA)
adopted, and entered into a Contract for Private Development (Contract) with Best
Buy for the redevelopment of the Interchange West area. The Contract
contemplates the private acquisition of properties by Best Buy wherever possible.
Section 3.2 of the Contract, however, allows the HRA to acquire properties through
condemnation and then transfer title to Best Buy.
Since that time, the HRA has approved the acquisition of six "remnant" parcels
through condemnation. Remnant parcels are generally properties without an
0416transfer
assigned parcel identification number and are undevelopable unless assembled into
a larger site. Ownership of such properties is typically difficult to determine.
• The condemnation proceedings have not yet concluded on the remnant parcels, this
is expected to happen within the next 30 to 90 days. According to the terms of the
Contract, Best Buy is obligated to compensate the HRA for all costs associated with
the condemnation of parcels.
III. BASIS OF RECOMMENDATION
A. POLICY
• On March 20, 2000 the HRA entered into a Contract for Private
Development with Best Buy Co., Inc. for the redevelopment of the
Interchange West area.
• In accordance with the terms of the Contract, the HRA acted to
proceed with the acquisition of certain. properties through
condemnation.
• Best Buy, in accordance with the Contract, has provided or will
provide the HRA with funding for the aforementioned deposit.
• On March 7, 2001, the Richfield Planning Commission made a finding
that the sale of the affected properties is in conformance with the
Comprehensive Plan.
B. .CRITICAL ISSUES
• • These properties must be transferred. to Best Buy in order for the site
to be completely assembled.
C. FINANCIAL
• In accordance with the terms of the Contract for Private Development,
Best Buy is responsible for all condemnation costs incurred in the
Interchange West area.
D. LEGAL
• Legal counsel has reviewed the attached resolution.
• A public hearing notice was published in the Sun-Current on
Wednesday, April 4, 2001.
IV. ALTERNATIVE RECOMNIENDATIONMiS~
• Defer action on this item until final condemnation awards have been made on
.the properties.
V. ATTACHMENTS
• A resolution authorizing the sale of real property identified as Remnant
Parcel 1, Remnant Parcel 2, Remnant Parcel 3, Remnant Parcel 4, Remnant
• Parcel 5 and Remnant Parcel 6.
VI. PRINCIPAL PARTIES EXPECTED AT MEETING
• HRA-legal counsel
HRA RESOLUTION NO.
RESOLUTION AUTHORIZING THE SALE OF REAL PROPERTY IDENTIFIED AS
. REMNANT PARCEL 1, REMNANT PARCEL 2, REMNANT PARCEL 3, REMNANT
PARCEL 4, REMNANT PARCEL 5 AND REMNANT PARCEL 6
WHEREAS, the Housing and Redevelopment Authority in and for the City of
Richfield (HRA) has acquired, or has initiated steps to acquire, property identified as
remnant parcel 1, remnant parcel 2, remnant parcel 3, remnant parcel 4, remnant parcel 5
and remnant parcel 6; legally described in Exhibit A; and
WHEREAS, the HRA has identified the Best Buy Co., Inc. as a buyer of the
property; and
WHEREAS, Best Buy Co., Inc. has agreed to purchase the property from the HRA
in accordance with-the terms of the Contract for Private Redevelopment by and between .
the HRA and Best Buy Co., Inc., dated March 20, 2000; the First Amendment to Contract
for Private Redevelopment dated November 27, 2000; and the Second Amendment to
Contract for Private Redevelopment, dated February 20, 2001; and
WHEREAS, the HRA is authorized to sell real property within it's area of operation
after a public hearing; and
WHEREAS, the public hearing has been held after proper notice; and
• WHEREAS, the Planning Commissionof the City of Richfield, on March 7, 2001,
has made a determination that the disposition of the property for project purposes is
consistent with the Comprehensive Plan.
NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment
Authority in and for the City of Richfield, Minnesota as follows:
1. A public hearing has been held on the sale of real property described above.
2. The sale of property to Best Buy Co., Inc. in accordance with the terms of the (a)
Contract for Private Redevelopment by and between the HRA and Best Buy Co.,
Inc., dated March 20, 2000, (b) First Amendment to Contract for Private
Redevelopment dated November 27, 2000, and (c) Second Amendment to
Contract-for Private Redevelopment, dated February 20, 2001, is hereby
approved.
3. -The Chairperson and Executive Director are authorized to execute any and all
documents and agreements necessary to implement this resolution.
.Adopted by the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota this 16th day of April, 2001.
Thomas E. Harms, Chair
• ATTEST:
Michael Sandahl, Secretary
EXHIBIT A
LJ
Remnant Parcel 1:
Street address: None assigned; part of 77t" Street West
Tax parcel PID: None
Legal Description:The North 60 feet of Tract M as measured along the East and
West lines of said Tract M, Registered Land Survey No. 800, Files of Registrar of
Titles, County of Hennepin (Torrens property; Certificate of Title No. 474766)
Remnant Parcel 2:
Street address: None assigned, part of 77t" Street West
Tax parcel PID: None
Legal Description:Tracts Band C, Registered Land Survey No. 618, Files of
Registrar of Titles, County of Hennepin. (Torrens property; Certificate of Title No.
376258)
Remnant Parcel 3:
• Street address: None assigned; part of 77t" Street West
Tax parcel PID: None
Legal Description:The North Thirty (30) feet of that part of the tract lying in the
South half (S'/2) of the Southwest Quarter (SW'/4) of the Southwest Quarter (SW
'/4) of Section Thirty Three (33), Township Twenty Eight (28), Range Twenty. Four
(24) West, 4t" Principal Meridian, and described as follows: commencing at a
point on the East line of the Southwest Quarter (SW'/) of the Southwest Quarter
(SW'/4) of said section, distant 897.62 feet South from the Northeast corner
.thereof; thence North 711.32 feet; thence West parallel with the North line of the.
Southwest Quarter (SW'/4) of the Southwest Quarter (SW'/4) of said section to
the West line of the East one-eighth (E 1/8) thereof; thence South 711.31 feet;
thence East parallel with said North line to the point of beginning.
Remnant Parcel 4:
That part of Tract A described below:
Tract A:
The south one-half of that part of the Southwest Quarter of the Southwest Quarter
of Section 33, Township 28, Range 24 West, Hennepin County, Minnesota
• described as follows: Commencing on the southwest corner of said Section 33;
thence running north 1313.7 feet; thence east 327.6 feet; thence south 1313.33
feet; thence west 328. feet to the point of beginning;
Which lies easterly of the easterly line of Penn Avenue, northerly of Line 1
described below, easterly and northerly of Line 2 described below and southerly
• and westerly of Line 3 described below:
Line 1: Beginning at a point on a line run parallel with and distant 656 feet east of
the west line of said Section 33, distant 120 feet north of the south line of said
Section 33; thence run northwesterly to a point on the west line of said Section
33, distant 355. feet north of the southwest corner thereof and there terminating;
Line2: Beginning at a point on the west line of said Section 33; distant 501.24
feet north of the southwest corner thereof; thence run easterly at an angle of 91
degrees 30 minutes 00 seconds from said west section line (measured from south
to east) for 125.65 feet; thence deflect to the right. on a curve having a radius of
53 feet (delta angle 91 degrees 30 minutes 00 seconds) for 84.64 feet; thence on
tangent to said curve to an intersection with Line 1 described above and there
terminating;
Line 3: Beginning at a point on the west line of said Section 33, distant 535.26
feet north of the southwest corner thereof; thence run easterly at an angle of 88
degrees 30 minutes 00 seconds from said west section line (measured from north
to east) for 150.44 feet; thence deflect to the right on a .curve having a radius of
62 feet (delta angle 91 degrees 30 minutes 00 seconds) for 99.01 feet; thence on
tangent to said curve for 210 feet and there terminating;
• also together with a triangular piece, being that part of Tract A herein before
described, which lies southerly of Line 2 described above, easterly of the easterly
line of Penn Avenue and northwesterly of the following described line: Beginning
at a point on the easterly line of Penn Avenue, distant 30 feet southerly of its
intersection with said Line 2; thence run northeasterly to a point on said Line 2,
distant 30 feet easterly of said intersection and there terminating;
also together with a triangular piece; being that part of Tract A herein before
described, which lies easterly of a line run parallel with and distant 33 feet
easterly of the west line of said Section 33, northerly of line 3 described above
and southwesterly of the following described line: Beginning at a point on said 33
foot parallel line, distant 31.37 feet northerly of its intersection with said Line 3;
thence run southeasterly to a point on said Line 3, distant 31.37 feet easterly of
said intersection and there terminating.
Remnant Parcel 5:
Street address:. None assigned; part of 78th Street West
Tax parcel PID: None
Legal Description:That part of the Southwest Quarter (SW'/4) of the Southwest
Quarter (SW'/4) of Section Thirty Three (33), Township Twenty Eight (28), Range
Twenty Four (24) West, 4th Principal Meridian, lying southwesterly of the following
• described Line 1:
Beginning at a point on a line run parallel with and distant 656 feet east of the
west line of said Section 33, distant 120 feet north of the south line of said Section
33; thence run northwesterly to a point on the west line of said Section 33, distant
355 feet north of the southwest corner thereof and terminating.
.And lying northerly of a line run parallel with and distant 180 feet northerly the
following described Line 2:
From a point on the southwest corner of said Section 33, run easterly at an angle
of 89 degrees 46 minutes 00 seconds from.. the west line of said Section 33
(measured from north to east) for 1359.14 feet to the point of beginning of Line 2
to be described; thence run westerly on the last described course for 89.23 feet;
thence deflect to the right on a 00 degree 30 minutes 00 second curve (delta
angle 04 degrees 39 minutes 00 seconds) for 930 feet; thence on tangent to said
curve for 77.19 feet; thence deflect to the left on a 01 degree 00 minute 00
second curve (delta angle 07 degrees 31 minutes 48 seconds) for 753 feet and
there terminating.
And lying easterly of the following described Line 3:
Beginning at a point on the west line of said Section 33, distant 501,24 feet north
of the southwest corner thereof; thence run easterly at an angle of 91 degrees 30
minutes 00 seconds from said west section line (measured from south to east) for
125.65 feet; thence deflect to the right on a curve having a radius of 53 feet (delta
angle 91 degrees 30 minutes 00 seconds) for 84.64 feet; thence on a tangent to
said curve to an intersection with Line 1 described above; then run southerly to a
point distant 165 feet northerly (measured at right angles) to a point on Line 2
described above distant 656.32 feet easterly of its point of termination and there
• terminating.
said lines forming a triangle with dimensions of 226.47 feet along Line 1 and
216.21 feet along Line 2.and 59.91 feet along Line 3.
All according to the United States Government Survey thereof, 'and situate in
Hennepin County, Minnesota.
Remnant Parcel 6: .
The North thirty (30) feet of the following described tract of land:
The South % of the following described tract of land:
That part of the Southwest '/4 of the Southwest '/4 of Section 33,
Township 28, Range 24, described as follows: Commencing at the
Southwest corner of said Section 33;
thence running North 1313.33 feet; thence East 327.60 feet; thence
South 1313.33 feet; thence West 328 feet to the point of beginning,
according to the United States Government Survey .thereof and
situated in Hennepin County, Minnesota.
That part of the above described tract of land described as follows:
• Commencing at the Southwest corner of Section 33, Township 28,
Range 24; thence North along the West line of the Southwest'/4 of the
Southwest '/4 of said Section 33, a distance of 355.0 feet; (said West
line of Southwest '/4 of the Southwest '/4, having an assumed bearing
of North) thence South 70 degrees 35 minutes 06 seconds East, a
distance of 34.99 feet, to the actual point of beginning of the land to
be described; (said point being the point of intersection of the East
right of way line of Penn Avenue and the North right of way line of
Interstate Highway No. 494) thence North along the East right of way
line of Penn Avenue, a distance of 313.48 feet, to the North line of the
above described tract of land; thence North 89 degrees 40 minutes
05 seconds East, along the North line of the above described tract, a
distance of 294.80 feet, to the Northeast corner of the above
described tract; thence South 0 degrees 01 minutes East, along the
East line of the above described tract, a distance of 419.14 feet, to the
North right of way line of Interstate Highway No. 494; thence North
70 degrees 35 minutes 06 seconds West, along the North right of way
line of Interstate Highway No. 494, a distance of 312.70 feet, to the
point of beginning, and situate in Hennepin County, Minnesota.
•
•
AGENDA ITEM # [~
REPORT # 36
•
J STAFF REPORT
HOUSING AND REDEVELOPMENT AUTHORITY
MEETING
APRIL 16, 2001
•
REPORT PREPARED BY: SAMANTHA ORDUNO, EXECUTIVE
DIRECTOR
NAME, TITLE
REPORT PRESENTER: SAMANTHA ORDUNO, EXECUTIVE
DIRECTOR
NAME, TITLE
REVIEWED BY EXECUTNE
DIRECTOR ~ ~~~~~
ITEM FOR COUNCIL CONSIDERATION:
Discussion regarding the City Bella development's contract provisions with Gramercy
Cor oration..
I. RECOMMENDED ACTION:
By Motion: Determine a meeting date to address reporting provision
of the contract.
II. BACKGROUND
The Contract for Private Redevelopment (Contract) between the Housing and
Redevelopment Authority (HRA) and Gramercy Corporation has several
components that address specific timeframes for reporting and action steps.
The first of these reporting provisions expires on April 26, 2001, in between HRA
meetings.
During the Concurrent HRA/City Council meeting on April 10, 2001, the developer
reported on the status of his efforts to secure financing. He is moving forward with
the provisions of the Contract.
•
III. BASIS OF RECOMMENDATION
. A. POLICY
• The Contract calls for a report, by the developer, within 100 days of the
execution of the Contract in regards to the status of the provisions of the
development. As this timeframe occurs in between HRA meetings, it is
necessary for the HRA to decide the appropriate meeting date for the
status report.
The HRA has two options:
1. Schedule a special meeting on or before April 26, or;
2. Extend the report timeframe requirement-to the next-HRA meeting.
B. LEGAL
• The HRA attorney, John Dean, will be present at the meeting to respond
to questions regarding this matter.
IV. ALTERNATIVE RECOMMENDATION~S~
• None
V. ATTACHMENTS
• None
• VI. PRINCIPAL PARTIES EXPECTED AT MEETING
• Interested parties may be present. It should be noted that this is a discussion
item only.
•
•
•
AGENDA ITEM #
REPORT #
35
REPORT PREPARED BY:
REPORT PRESENTER:
DEPARTMENT DIRECTOR REVIEW:
REVIEWED BY EXECUTIVE DIRECTOR:
JOxN STAN,
COMMUNITY DEVELOPMENT MANAGER
NAME, TITLE
JOHN STARK,
COMMUNITY DEVELOPMENT MANAGER
ITEM FOR HRA CONSIDERATION:
Consideration of options for the continuation of the redevelopment process for the .Lyndale
Gateway area.
I. RECOMMENDED ACTION:
By Motion: Approve one of the Alternative Recommendations for the
continuation of the redevelopment process for the Lyndale Gateway
area.
III. BACKGROUND ~
On January 18, 2000, the Richfield Housing and Redevelopment Authority (HRA)
entered into a Contract for Private Redevelopment (Contract) with CSM Investors II,
Inc. (CSM) for the redevelopment of Phase III of the Lyndale Gateway development.
That Contract included a number of provisions which have not been met by CSM.
On March 19, 2001, the HRA requested that staff and legal counsel prepare a
Termination Agreement for the April 16, 2001 meeting. The purpose of this
Termination Agreement would be the formal termination of the Contract with CSM in
. the event that .CSM could not provide confirmation. from Walgreens of their intent to
locate in the Lyndale Gateway area. That Termination Agreement has been drafted
and is attached.
0416CSM
NAME, TITLE
CSM did, however, receive a written confirmation from Walgreens on March 29,
2001. That confirmation, which is also attached, states that Walgreens' real estate
committee has approved the Lyndale Gateway location. The letter goes on to state
that acceptable lease provisions have been drafted and should be signed within two
weeks (April 12).
III. BASIS OF RECOMMENDATION
A. POLICY
• The HRA entered into a Contract for Private Redevelopment with
CSM forPhase III of the Lyndale Gateway redevelopment on January
18, 2000.
• That contract contains certain Closing Contingencies, including site
assembly and standards for the required degree of pre-leasing.
• CSM has not completed the Closing Contingencies in accordance with
the Contract, thus rendering CSM in a state of non-compliance.
• .The Contract contains language to "self-terminate" in the event that
CSM is in non-compliance with certain provisions of the Contract;
legal counsel has opined, however, that a formal agreement on the
termination should be executed in order to fully protect both parties.
• The HRA requested the drafting of a Termination Agreement for
consideration at the April 16 meeting in the event that CSM could not
• .provide evidence of Walgreens' intentions to locate in the Lyndale
Gateway area.
B. CRITICAL ISSUES
• If the project with CSM does proceed, the Contract must be amended
in order to address difficulties in the cost and schedule for the
roadway improvements as well as other issues.
C. FINANCIAL
• There may be additional costs associated with the City's planned
roadway improvements due to delays in the development schedule.
D. LEGAL
• Legal counsel drafted the attached Termination Agreement.
IV. ALTERNATIVE RECOMMENDATION~S~
• If CSM provides an executed lease with Walgreens, direct staff to draft a
contract amendment with CSM for consideration at the May 21 HRA meeting.
• Continue the consideration of the Termination Agreement until the May 21
HRA meeting to allow CSM additional time to execute their lease agreement
with Walgreens.
. Adopt a motion approving the attached Termination Agreement.
V. ATTACHMENTS
• Agreement Terminating the Contract for Private Redevelopment
• Letter from Walgreens to CSM dated March 29, 2001.
VI. PRINCIPAL PARTIES EXPECTED AT 1VIEETING
• A CSM representative
•
•
AGREEMENT TERMINATING
CONTRACT FOR PRIVATE
• REDEVELOPMENT
THIS AGREEMENT, made and entered into as of the day of April, 2001 by
and between the HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE
CITY OF RICHFIELD, Minnesota, a Minnesota public body corporate and politic (the
"HRA"), and CSM INVESTORS II, INC., a Minnesota corporation (the."Redeveloper").
WITNESSETH:
WHEREAS, the parties hereto did on or about , 2000 enter into that
certain agreement entitled: Contract for Private Redevelopment_(the "Contract") providing
for the acquisition and redevelopment of certain lands within the area of operation of the
HRA; and
WHEREAS, said Contract contained numerous provisions imposing time limits,
commencement dates, completion dates and- other deadlines on the parties; and
WHEREAS, the parties have jointly determined that due to circumstances and
events beyond their reasonable control, it will not be possible to proceed in the manner
required by the Contract, and therefore desire to recognize its termination; and.
WHEREAS,. it is the mutual desire of the parties by this Agreement to memorialize
the termination of the Agreement.
NOW THEREFORE, the parties hereto hereby stipulate and agree as follows:
• 1. The parties recognize that the Contract has terminated according to its
terms, and the parties are thereby released from any further obligation of performance
thereunder.
2. Each party acknowledges that there are no monetary obligations created by
the Contract due and owing such party from the other party
3. Each party hereby releases the other party, and waives any claim or cause of
action against the other party occasioned by or arising out of the performance or the
termination of the Contract.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals
as of the day and year first above written.
HOUSING AND REDEVELOPMENT
AUTHORITY OF THE CITY OF
RICHFIELD, MINNESOTA
By:
Its Chairperson
n
U
sy:
Its Executive Director
. STATE OF MINNESOTA )
ss
COUNTY OF )
The foregoing instrument was acknowledged before me this day of
by and ,the Chairperson and
Executive Director, respectively, of the Housing and Redevelopment Authority in and for
the City of Richfield, Minnesota, a public body corporate and politic, on behalf of such
public body.
STATE OF MINNESOTA )
ss
COUNTY OF )
Notary Public
CSM INVESTORS II, INC.
By:
Its
The foregoing instrument was acknowledged before me this
2001, by ,the
Investors II, Inc., a Minnesota corporation, on behalf of the corporation.
Notary Public
_ day of
of CSM
•
Attachment B
•
March 29, 2001
.t~cd.
?l'tirlg~
1Nh. tNturtsy Kornberg
CSM Co~poratioa
25?5 University Ave.. W.
St. Paul. MN 55114
RE: N1WC Lyodtle 77"' Stroet
Ricbfieid~ Milainesots
bear Mr.lGoruberg:
Thin correapo~ence wilt caunfit>n our. discussions concerning Walgreea's eot7nmitrttert ro locrsfe
s store at tt~e';have captioned tocatio><~.
As Y have indicated to ynu previously. this store location leas been approved by our real estate
wmmittee> as have sU of the cconomac terms of ow proposed lcnae. The store ~ plruuled for
opcreing m otQ fiscal year 2002,
• r havc confirmed with our legal depertmaut that ntl of the final .kale rnodif cations that we
discutscd dueistsg out test wtr~lronce call lutive becla incorporated into tI>~a knee form. whic..h we
will s~ to you today for your final review. It is our cxpaetetion that finalizatioan and execution
of this tcame cs>ti be completed within ~ next Z weeks.
'OVe took ferward to opat~ing this store is Ricbfleld
Sincerely yours,
Wna. Michmt Frerne
Rent Frstatc Manager
WALGAEfN C..O. CORPORATE OFfIGES 200 WR,N~pT ROAD OL-ERHEEO. Il41NUl$ G11pi5
www.waigrcaM,mm