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06-19-00 agendaCITY OF RICHFIELD, MINNESOTA HOUSING AND REDEVELOPMENT AUTHORITY • MONDAY, JUNE 19, 2000 RICHFIELD CITY HALL 6700 PORTLAND AVENUE COUNCIL CHAMBERS 7 P.M. AGENDA Call to order Approval of minutes of Regular HRA Meeting of May 15, 2000 1. Opportunity for citizens to address the HRA on -items not on the agenda 2. HRA approval of agenda 3. Consent Calendar contains several separate items which are acted 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 resolution authorizing issuance of Certificate of Completion to Gerold Bros.' Construction, Inc. for 7025 Nicollet Avenue S.R. No. 35 B. Consideration of approval of consent to conditional assignment of note and release and indemnity for The Limited, Inc. S.R. No. 36 C. Consideration of approval of resolutions authorizing acquisition of 6856 Park Avenue and 6800 Logan Avenue under Richfield Rediscovered Program S.R. No. 37 Notes: ADMINISTRATIVE REPORTS AND OTHER BUSINESS 4. Consideration of presentation by Lake Shore Drive Condominium Association concerning goals, objectives and concerns about proposed City Bella Redevelopment Concept Staff Report No. 38 Notes: • 5. Consideration of authorizing staff to negotiate for purchase of Walser properties at and adjacent to 2100 West 78th Street, Interchange West Redevelopment Project • Staff Report No. 39 Notes: 6. Consideration of possible Penn Avenue and 66th Street area futures Staff Report No. 40 Notes: 7. Executive Director report 8. 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 SECTION: AGENDA ITEM # REPORT # STAFF REPORT Admin. Reports 40 HOUSING AND REDEVELOPMENT AUTHORITY MEETING JUNE 19, 2000 BRUCE PALMBORG, REPORT PREPARED BY: COMMUNITY DEVELOPMENT DIRECTOR NAME, TITLE _. REPORT PRESENTER: BRUCE PALMBORG, COMMUNITY DEVELOPMENT DIRECTOR NAME, TITLE DEPARTMENT DIRECTOR REVIEW: ~/ REVIEWED BY EXECUTIVE DIRECTOR: ITEM FOR HRA CONSIDERATION: Consideration of possible Penn Avenue and 66th Street area futures. I. RECOMMENDED ACTION: Discussion of possible Penn Avenue and 66th Street area futures. III. BACKGROUND In May 1998, the Richfield Housing and Redevelopment Authority (HRA) entered into an exclusive rights agreement with Ryan Companies US, Inc. (Ryan) to study the feasibility of redevelopment activities in the Penn Avenue and Sixty-Sixth Street (PASSS) area (see attached map). The agreement was extended and is now set to expire June 30, 2000. In 1998 and early 1999, staff and representatives of Ryan met with the PASSS Planning Commission Community Advisory Team (Team), which included a mix of -- PASSS area residents, business people and Planning Commission members as well as the Chamber of Commerce. During the Advisory Committee meetings, several concepts were formulated. • Assessing the market feasibility of the concepts, which included office-warehouse general office., including medical office and retail, was daunting. In summary, there was no feasibility. Given the position of this location in the marketplace, the rents which could be achieved were not high enough to make structured parking feasible. 0619penn Therefore, the extensive'amount of land consumed for surface parking minimized the density which, in turn, minimized the tax increment which made redevelopment with these uses impractical at this time. More recently, the concept of mixed use was studied. In this situation, mixed use included residential and commercial in a unified development. Initially, it appeared this would be a feasible combination. However, the margins were very slim and when coupled with the extensive amount of existing commercial uses, a suitable residential environment could not be created to the satisfaction of developers with whom the. concept was discussed. There has been considerable interest in one area. That. is the blocks bounded by Penn Avenue, 63rd Street, Oliver Avenue and the Crosstown right-of--way -- actually 1.5 blocks with the half block being the east side of Oliver. One developer proposed a concept which envisioned a mixed commercial and housing development on the Penn Avenue block. and an apartment sharing the east side of Oliver with the existing church. Avery preliminary evaluation indicated that there may be feasibility with the concept. The developer is interested in pursing the development this year. While moving ahead with this project would be dependent on a number of items, one would be a successful funding application with the Minnesota Housing Finance Agency (MHFA). However, there is yet no overall strategy for improving Penn Avenue into which such a development could fit. As this report was literally being written, a reputable, experienced developer called to indicate a strong interest in exploring the possibility of developing a new residential concept along Penn Avenue just south of Lund's. This would be a "resort" apartment community for active empty nestors. There would be a strong emphasis on `active'. The rental apartments would number approximately 200. While the above may present an opportunity for redevelopment, the upgrade of Penn Avenue would in all likelihood involve several strategies. Possible additional elements of the strategy would be a streetscape, undergrounding of the powerlines, business sign reconstruction and possibly a storefront renovation, program in selected locations. There may be a national model worth examining. It is a strategy operated by the National Main Street Center of Washington, D.C. and looks at the needs of a commercial area from the prospective of four elements: organization, promotion, design and revitalization. This is a grass-roots effort to try to organize the business owners and get them to talk about improvements and business developments. A periodic newsletter may also be an element. Overall, the objective is to develop a cooperative spirit rather than having a collection of separate businesses trying to make it on their own. III. BASIS OF RECOMMENDATION A. POLICY • .The HRA formally recognized the need for redevelopment of the Penn Avenue area when it established a redevelopment project in 1989. • When Ryan Companies US, Inc. expressed an interest in evaluating the redevelopment potential, the HRA entered into agreement with Ryan. • Upgrading of this area would be consistent with the HRA actions to focus on redevelopment in commercial areas not only to realize their potential but to also protect the heart of the community -its vast expanse of single family homes. B. CRITICAL ISSUES • Considering the multiple redevelopment projects already underway or in process; the critical issue is-should additional resources (staff and funds) be committed to pursue at least finro emerging potential projects at this time? • The pursuit of any strategy in this area would necessitate additional staff assistance in the form of a hire or contract. • What might be the role of other strategies noted such as streetscape, undergrounding, facade treatments, the Main Street Center? • The HRA and City Council are meeting jointly June 29, 2000 to discuss the city-wide redevelopment strategy, projects underway and those being processed. C. FINANCIAL • Sources of funding beyond tax increment financing need to be identified.. This would not be an easy task. D. LEGAL • N/A IV. ALTERNATIVE RECONIMENDATION~S~ • None at this time. V. ATTACHIVIENTS • Map of the Penn Avenue and. Sixty-Sixth Street Area (PASSS). VI. PRINCIPAL PARTIES EXPECTED AT MEETING • None. PASSS AREA BOUNDARY cROSSroNVrv i-nnnr. ~I a ~~ ~a ~~ ~~ ~_ ~~ ~~~ r ~~ ~~ ~~~,~~ ~€ /.J N 200 0 200 400 600 800 1000 Feet 4149 • STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING JUNE 19, 2000 • AGENDA SECTION: AGENDA ITEM # REPORT # Admin. Reports 5 39 BRUCE PALMBORG, REPORT PREPARED BY: COMMUNITY DEVELOPMENT DIRECTOR NAME, TITLE BRUCE PALMBORG, REPORT PRESENTER: COMMUNITY DEVELOPMENT DIRECTOR NAME, TITLE DEPARTMENT DIRECTOR REVIEW: ~ ~%~~~ ~~ REVIEWED BY EXECUTIVE DIRECTOR: TU2E ITEM FOR HIZA CONSIDERATION: Consideration of a motion authorizing staff to negotiate for the purchase of the Walser property; Interchange West. RECOMMENDED ACTION: By Motion: Authorize staff to negotiate for the purchase of the Walser properties located at and adjacent to 2100 West 78th Street, Interchange West Redevelopment Project. III. BACKGROUND Negotiations for the purchase of property in the Interchange West area are continuing. As of this writing, conditional purchase agreements have been executed by approximately- 50 percent of the homeowners. Offers have been made to all commercial and apartment property owners. Representatives of Opus Northwest are continuing their negotiations with representatives of Walser Inc. based on appraisal reports they had prepared. However, the negotiations have stalled. In an effort to progress negotiations, staff has ordered appraisals of the two parcels of real estate and the fixtures. Two real estate appraisers will be submitting reports on each of the two parcels and two fixture appraisers are also preparing reports. The real estate appraisers are Robert Lunz and Robert Strachota. The fixture appraisers are Roger Ramberg and Robert Pelton. Don Hennessy is the 0619walser review appraiser. Upon completion of the four reports, they will be subjected to a review by a review appraiser.. Once a value is determined, an offer will be made to Walser on behalf of the Richfield Housing and Redevelopment Authority (HRA). III. BASIS OF RECOMMENDATION A. POLICY • The property is located within an established redevelopment project. • A contract for redevelopment exists between the HRA and Best Buy Co., Inc. B. CRITICAL ISSUES • To maintain the project schedule, it is important to keep negotiations for the purchase of property moving.. C. FINANCIAL • Under terms of the redevelopment contract, Best Buy Co., Inc. will be paying for the costs related to this acquisition. D. LEGAL • The process being followed bystaff is in compliance with the "Uniform Act". • E. TIMING • The. appraisal process is expected to be completed by June 30, 2000. With completion an offer could be made to Walser virtually immediately. IV. ALTERNATIVE RECOMMENDATION(S) • Delay authorization to staff to negotiate until after the July HRA meeting at which time the values would be known. V. ATTACHMENTS- • N/A VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A • AGENDA SECTION: Admin. Reports AGENDA ITEM # 4 REPORT # ~ g ~' STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING .TUNE 19, 2000 • REPORT PREPARED BY: REPORT PRESENTER: DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTIVE DIRECTOR: BRUCE NORDQUIST; HOUSING AND REDEVELOPMENT MANAGER NAME, TITLE BRUCE PALIVIBORG, COMMUNITY DEVELOPMENT DIRECTOR NAME, TITLE ITEM FOR HRA CONSIDERATION: Presentation by the Lake Shore Drive Condominium Association concerning their goals, objectives, and concerns about the proposed City Bella Redevelopment Concept. I. RECOMMENDED ACTION: By Motion: Receive the Lake Shore Drive Condominium. Association's presentation and direct staff and the developer to review and consider their concerns, as redevelopment plans are further developed. III. BACKGROUND ~ Gramercy Corporation introduced the "City Bella" redevelopment concept in January 2000. The Housing and Redevelopment Authority (HRA) approved an exclusive rights agreement with Gramercy at that time. Since then, Gramercy has in furtherance of the concept: C: • Negotiated successfully the acquisition of Lyndale Hardware. • Negotiated successfully the purchase of the Lynch property on Lake Shore Drive. 0619Lakeshoredrive • Revised the concept to ensure there is no encroachment or disturbance on the primarily portion of Lake Shore Drive Condominium Association property, gardens, and pathways. • Removed an internal road system found objectionable to the Association. • Shifted buildings north and east to be closer to Lyndale Avenue, which results in providing more open plaza space adjacent to Association property. • Revised the concept for housing on the remaining single family lot owned by the Association (identified as Lot 17 in material presented by the Association) between the Association's main property on 66th Street and ..the new Gramercy.cooperative.building.- The new concept is.a lower profile, three level 40 to 45 unit cooperative. The revised concept has given the Association the opportunity to raise more detailed specific concerns based on a June 10 letter, (attached), and their hiring of a St. Paul planning firm to present their concerns. The following summarizes the Association's goals: • Ensure development is sensitive to Association concerns and needs. • To have the Association be even more actively involved in the design of the area. • Request a site survey and inventory be prepared. • Confirm there is no encroachment onto Association property. • Respond to the developer's need for vacated right-of--way for successful development and landscape buffer versus the Association's position that vacated right-of--way only be used as open space. • Clarification and calculation of open space provided by City Bella. • Protect trees. • Control access but allow connections to the new development. • Clarify views and changed views as a result of the development concept. • Respond to potential parking and traffic impacts. • Evaluate noise, construction activity, and other potential environmental impacts. Staff has scheduled the HRA's consideration of a City Bella development agreement for the July meeting. The developer and staff will address the Association's concerns at that time. III. BASIS OF RECOMMENDATION A. POLICY • The HRA has an exclusive rights agreement with Gramercy to evaluate the redevelopment of this area. The Association will be affected by the new development and owns a portion of the site needed for redevelopment. B. CRITICAL ISSUES • The Association has prepared important feedback that should be considered during the project approval process. • The relationship between staff, the developer, and the Association has been a good one with much dialog and exchanging of ideas. The developer has been very responsive in plan revisions to date. C. FINANCIAL • The financial aspects of the project are being studied by Ehlers and Associates, Inc., the HRA's financial consultant and lenders contacted by the developer. • Expenses by Ehlers are being covered by the developer. D. LEGAL • The exclusive rights agreement between the HRA and Gramercy ends in December 2000. IV. ALTERNATIVE RECOMMENDATION(S~ • Delay the receiving of the report to coincide with HRA consideration of the Development Agreement. However, receiving this information in advance provides the opportunity for the developer to respond to concerns now. V. ATTAC~IMENTS • June 10 letter from Lake Shore Drive Condominiums. • Site plan from the Condominium's planning consultant, identifying key issues for discussion between the developer and the Association. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Raymond Johnson, President, Lake Shore Drive Condominiurra. • Mary George, Chair, Lake Shore Drive Task Force. • David Wandberg, Sanders, Wacker, Bergly, Inc.; planning consultant for Lake Shore Drive Condominium. • Residents, Lake Shore Drive Condominium. Lake ShoreDrive CONDOMINIUMS June 10, 2000 Mr. Bruce Nordquist Housing and Redevelopment Manager, Community. Development City of Richfield 6700 Portland Avenue- Richfield, MN 55423-2599 Dear Mr. Nordquist and Members of the Housing and Redevelopment Authority: We understand the City is considering approving Gramercy Corporation as the developer of the property next to Lake Shore Drive Condominiums. In response to this pending development, the residents of the Lake Shore Drive Condominium Association (LSDCA) formed a task force to address how they might work with the City and developer to ensure that future development in this area sensitively considers the needs and desires of the existing residents. This letter describes the task force's planning process, goals, objectives, and concerns regarding the proposed development. TASK FORCE PLANNING PROCESS The task force consists of 9 residents, who represent.178 unit owners at Lake Shore Drive Condominium Association. The association's Board of Directors has taken an active role in the task force deliberations. We have received assistance from our attorney, Jonathon Scoll of Lindquist and Vennum, and Amy Gourlay, a City appointed ombudsman, Bruce Nordquist, Richfield Housing & Redevelopment Manager. John Connors from the Mediation Center at Hamline University spoke with us on issues involving land acquisition and relocation. We have also retained a planning firm, Sanders Wacker Bergly, Inc., to assist us in articulating our key concerns. We first met in December of 1999 and since then have had roughly 17 meetings. The City and developer have willingly met with us to discuss our initial reaction to the proposed development. We hope to continue our discussions with both the City and developer throughout this process. • 6615 LAKE SHORE DRIVE • RICHF{ELD, MINNESOTA 55423 • (612) 861-7595 Although not all residents at Lake Shore Drive may agree with the findings of the task • force, it is the task force's job to represerit the LSDCA and to negotiate the best possible position for the Association. The Task Force's position and findings were presented to the membership at its Annual Meeting May 10th. Generally the membership has supported the work of the Task Force. GOALS AND OBJECTIVES OF THE TASK FORCE Our goal is not to fight the City's vision for redevelopment. Nor is it to fight all of the developer's proposals for redevelopment of land adjacent to LSDCA. Simply put, we want the City and developer to carefully consider and sensitively respond to the potentially negative impacts future development may have on LSDCA residents. We appreciate the steps the City and developer has already taken to address concerns of LSDCA. However, the design plan presented by Mike Conlan and Lou Stucco on May 4th does not address many areas of concern to LSDCA. We would like to clearly articulate our goals, objectives, and concerns. Goal of the LSDCA Task Force: We have one primary goal • To ensure that any development is sensitive to the concerns and needs of the residents of LSDCA. Objective of the LSDCA Task Force: To help us meet this goal, we want to work cooperatively with the City and developer throughout the redevelopment of the land adjacent to Lake Shore Drive to accomplish the following objective: • To be involved in the design process so that any development meets the needs and concerns of LSDCA residents. ISSUES LSDCA residents expressed many concerns over a development concept sketch presented by the developer early this year. We appreciate that the developer addressed some of our concerns by refining the concept drawings to eliminate the road and preserving ow garden space. However, in reviewing the developer's refined concept sketch presented to the LSDCA task force in early May, we have identified several issues that still greatly concern the residents. We recognize the drawings are in a conceptual or preliminary development stage. and that the developer is likely planning to address many of these issues as the design work proceeds. Nevertheless, we believe that presenting our concerns now will help facilitate the design process. The following provides an overview of our primary concerns: 1. Existing Conditions and Property Ownership a) Detailed Site Inventory and Analysis. We realize that at this early stage in the design process; the developer has not yet conducted a detailed site inventory and analysis. Hotivever, before the project goes much further, we ask that the developer prepare a site inventory and analysis that includes the LSDCA property. Specifically, we ask that the developer identify existing trees, walks, structures, and elevations so that the City, the developer, and the . task force can evaluate the proposed plan in relation to existing conditions. b) Clear Definition of Property Lines. The proposed co-op building on the developer's concept sketch appears to encroach onto LSDCA property. The developer should provide a drawing that accurately shows the proposed concept in relation to the existing property lines. We would not support any encroachment of the proposed development onto our properly. c) Roads and Alleys Vacation. The developer's concept sketch appears to show all vacated roads and alleys will be incorporated into the new develapment. Although it is possible that this maybe the end result, we would like to discuss the LSDCA's rights for obtaining "our" half of the vacated roads and alleys. Ideally, we would like to see the vacated roads and alleys dedicated to open space so that a wider buffer between the two developments might occur. d) Open Space Covenant on Lot 17. The LSDCA owns Lot 17 on Block 3 and we have acity-required covenant that protects this lot as open space. Approval of the City of Richfield is required to remove the covenant. If Lot 17 is needed for new development we ask that the City require that the developer protect land equivalent to the amount of land Lot 17 as green space, specifically as buffers between-LSDCA and the new development. • e) Protection of LSDCA Trees. We understand that trees will be lost as part of this proposed development. We insist that the proposed development will not adversely affect the existing trees on our property. 2. Privacy a) Controlled Access between Sites. We value our privacy. We enjoy our gardens and our quiet green space. We want to see clear boundaries between our site and all proposed developments so that the general public does not cross onto our site and use our facilities. However, we also feel that being linked would be valuable for the LSDCA. This issue should be addressed with creative landscaping, fences, and controlled gates. 3. Open Space and Views. a) View of the Proposed Co-op Building. We recognize LSD residents who live on the south side of our building, will no longer have a view of the present green space or a partial view of Woodlake Nature Center. This vista will be replaced by views of two sides of the proposed 40-unit .cooperative. Therefore, we propose a heavily landscaped area between our building and the proposed building. This would likely require more open space between the two buildings than is currently shown. Also given that our- building is I 1 stories high, many of our units will be looking down on the proposed building. Therefore, we would like to insist that the roof is attractively designed and the mechanical units cannot be viewed from units. at LSDCA. b} Co-op Building Design. The developer should design the building so that it does not encroach on our property. The developer should also explore ways to minimize the impact of the building on our site. We want the building to be an attractive, low profile building, preferably no higher than the current Lynch house is now. 4. Circulation and Parking a) Control Pedestrian Traffic between the Sites. As stated earlier, we would like to see a controlled link between our sites. We do not want to see the. general public using our site as a shortcut to get to the proposed development. Again, we feel landscaping, fencing and controlled gates may .adequately address this. b) Parkin. Given the prominence of our existing parking ramp and our front parking lot, our concern is that the general public may illegally park in our lot if they fmd the proposed parking lot is too inconvenient to use or is full. c} Traffic. We aze concerned about the additional level of traffic that redevelopment of this area will generate. At a minimum, we expect that future traffic congestion will not block vehicular access to our site. d) Access to Wood Lake Nature Center. We want to maintain the existing at- grade crossing to Wood Lake Nature Center and are concerned about the • increased traffic causing a danger to those who cross at this site. However, if this development includes anabove-grade crossing, we would like to discuss how access to this crossing would relate to our property. 5. Other Issues. a) Again, we realize the proposed development is in the concept phase and we cannot comment in detail on hypothetical conditions. Nevertheless, there are several additional concerns that we would like to see addressed as this project moves forward. b) Noise. We are particularly concerned about the placement of proposed mechanical units and how their noise may. affect us. c) Construction Adiacent to our Parking Ramp: We are concerned about the " effect of construction, both above and below ground, on the land adjacent to our parking ramp. We'd like the developer to post a bond or other guarantee in the name of the association that would pay for any resulting damage. d) Other Issues. Other issues including drainage, lighting, commercial uses, glare, wind turbulence, etc., may concern us. However, we expect the developer and City will look at these issues in more detail as the design process moves forward. • 7 7 CONCLUSION Thank you for the opportunity to share our goals, objectives, and concerns with you. We want development that is sensitive to the concerns and needs of the residents of LSDCA. We look forward to working cooperatively with the City and developer as this process moves forward. Respectfully, Mary Geo ge, Chair Task Force Ra on Johnson esident Bo d of Directors ~~. V, m D D 0 N °o 0 0 ~ • ®~~~~a ~~aG~Z rm'in~~ ~~~qpm v,ZNgvz 1 ~ ~~~ '~ ~' ~a ~ m ~.. O .~~N ~ ~ ~,~e ~ ~_ ~ 70 ~ ~~~` ~~~ ~~~~ ~ ~ m ~ ~~ ~ ® ~ m ~ ts`,~Qy'o~ '9~~ s ` ~ e ~ '~ n \ O Fd / / ~~ p X ~ / ~} ~ Z ~ /~, ` y~0 ~ ~ ~ z ~ 4. ~ ® ~~ c ~ j ~ ~~\ ~ ~ , ' ~ ~; n, ~ R+ i ~ ~ ~ 1 / Z O O / ~ ;~ ~ ~ ~ W ®~~~ ~ ~ ~m OaX ~, ~ i ~ ~ ~0~~~5 ~~; ® ~ ~ ~ e ~ ~~ ~ ~ ~ ~~ aR~~~~ ~~"' a~ c~~ ~'~ ~ : ~ ~ ~ 5 ~ ~~ o , ~ ~A • ~ A ~` t rC FNU~ ~\\ ~®: Z ~ I ~ ®`® ~ rn 8 ~ , ~ -+ ~ r N ~\\ ®`~ .~\ I t \\~ z~ '. z~ C71 ~ W N O C) 0 ~ , 9 x n rn ~ ~ ~' ~ a n m z m ~ ~ ~Z z Z ° O v g ~ j rn ~ N v ~ ~ ° ~ O o a ~ - ~i Z n ~. ~ zo~~ m mvmn D z~z~ ~ ~~~Z ~ omvo ~ r t~l~ mxvmim fil t°n~Z~ fJ~ oZ~~ r,vnGO m Z cv~acn~ mo0< -~ m~c0 ~~mim r ~-~o imD mnN ~~ m~n hoc ~ ~ ~~~ Ooc° =mom r c~'i~m D~z DN -~ ~ my -~ Z mm vv ~N ~o Z~ Om m~ ~~ rDn v C7 0 2 r v D n rn ~~ ~ ~ zm ~ m z c r i i 'fl ~m Q m C ~ ~ zi ~ ~ v ~ z~ _ ~ C rn o ill ~ m o< ~ ~ m cn m fA v OO r "~ ° I Z m m m ~ ~ °~ ' m m m~ D mm ~ ' z ri ~ ~ ' m ~D Om ~ ~ ~ ~ j ~ m ~o m ~ Z ~~ ~ 9m ~ v ~~ ,Z i C m Cn r m v 0 0 m N m • AGENDA SECTION: Consent AGENDA ITEM # 3 C REPORT # 3 ~ REPORT PREPARED BY: PAM BOOKHOUT, REHABILITATION SPECIALIST NAME, TITLE REPORT PRESENTER: BRUCE PALMBORG, COMMUNITY DEVELOPMENT DIRECTOR NAME, TITLE DEPARTMENT DIRECTOR REVIEW: SIGNATURE REVIEWED BY EXECUTIVE DIRECTOR: ~ ~ _ ~~,~._~ e . ~ ITEM FOR HRA CONSIDERATION: Consideration of resolution. regarding authorization to acquire 6856 Park Avenue and 6800 Logan Avenue under the Richfield Rediscovered Program. RECOMMENDED ACTION: By Motion: Authorize the Chair and Executive Director to execute Purchase Agreements and other required documents to purchase 6856 Park and. 6800 Logan Avenues in accordance with the attached resolution. III. BACKGROUND I Two properties have been identified for purchase under the Richfield Rediscovered Program. The property at 6856 Park Avenue is currently owned by the Department of Housing and Urban Development (HUD) and is vacant due to foreclosure. The house has one legal bedroom and consists of 762 sq. ft. on the first floor, and 334 sq. ft. in the upper level.. The house has a very poor layout and would require significant rehabilitation and reworking the walls to produce functional living space. Interior wood is rotten in several locations, and all windows need replacement due to being broken and non-functioning. HUD's sale price is $103,000. Because it is a local unit of government, the Richfield Housing and Redevelopment Authority (HRA) will receive a ten percent deduction, reducing the sale price to $92,700 at closing. 0619park&logan The property's dimensions are 111 feet by 132 feet, making it wide enough to divide into two buildable lots. The property at 6800 Logan Avenue consists of a small 760 sq. ft. house and a single car attached garage. The house has a partial basement. The deteriorated roof has caused interior water damage. The flooring, walls and fixtures are deteriorated and dated. -The house is located at the rear of the lot. The owner is willing to sell the properly for its appraised value of $89,000. In the last two years, as property values of homes in Richfield. have increased, the value of very small, deteriorated and functionally obsolete homes has also increased significantly. However, proceeds from the sale of vacant lots on a percentage basis continue to match proceeds received during the 100 home history of the program. The Logan Avenue property is a certified parcel under the 1999 Richfield Rediscovered tax increment plan: The Park property was recently foreclosed and therefore was unanticipated. It would need to be added as a certified parcel in the next plan modification. In order to purchase within HUD's time frame, the property would be purchased with interim funds from the bonds of 1996, which would be reimbursed with 1999 Richfield Rediscovered bond funds after the plan modification. Legal counsel has agreed that this is a proper path to pursue. III. BASIS OF RECOMMENDATION A. POLICY • .The properties meet the physical program requirements for acquisition. • The property at 6856 Park Avenue is available for sale by HUD and is currently vacant. The property at 6800 Logan Avenue is voluntarily for sale by the owner-occupant. • Funding is available under the Richfield Rediscovered Program. However, because the property at 6856 Park Avenue is not yet .certified to the tax increment district, a source of interim funding is required; the bonds of 1996 is the proposed source. • The purchase price of 6856 Park Avenue is $103,000. As a local unit of government, the HRA will receive a 10 percent discount, yielding a $92,700 purchase price. The lot is large and could be subdivided into two lots, making this a cost effective purchase like similar opportunities in the past. • The purchase price of 6800 Logan Avenue is $89,000. B. CRITICAL ISSUES • If the HRA does not purchase 6856 Park Avenue now, HUD will sell it "as is" to someone else. • The 6800 Logan Avenue property, especially due to its location, offers a high value replacement home site. C. FINANCIAL • Funds are available from the 1999 Richfield Rediscovered bond sale for program expenditures in 2000 and 2001. • Funds are currently available from the bonds of 1996. The process to certify the parcel at 6856 Park Avenue and modify the plan to include the parcel, is planned to occur within the next six months. After that time, the funds borrowed from the bonds of 1996 could be reimbursed. D. ,LEGAL • Language will be added to the plan during its-modification,-which will reference the fact that opportunities to purchase qualifiable properties not listed in the plan occur with some regularity. The language will .further state that purchases will be made as appropriate, and that a .plan modification will follow to include the identified parcel(s). This flexibility is necessary to keep the program responsive to community needs. IV. ALTERNATIVE RECOMMENDATION(S~ • Do not authorize purchases. V. ATTACHMENTS • HRA resolution authorizing purchase of 6800 Logan Avenue • HRA resolution authorizing purchase of 6856 Park Avenue VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A • HRA RESOLUTION NO. RESOLUTION AUTHORIZING PURCHASE OF REAL PROPERTY LOCATED AT 6800 LOGAN AVENUE FOR THE RICHFIELD. REDISCOVERED PROGRAM WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA) desires to purchase certain real property pursuant to and in furtherance of the Richfield Rediscovered Redevelopment project (Project) heretofore adopted by the City of Richfield (City) and the HRA, said real property being described as: Lot 1, Block 6, Tingdale Bros.' Lincoln Hills Second Addition, whose street address is 6800 Logan Avenue; and WHEREAS, the HRA is authorized by Minnesota Statues Section 469.012 to acquire real property within its area of operation; and WHEREAS, the property meets all program requirements for acquisition; and WHEREAS, the negotiated purchase price of 6800 Logan Avenue is based on its estimated market value; and WHEREAS, 1999 Richfield Rediscovered bond funds are available for program acquisition. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota. 1. The purchase price of 6800 Logan Avenue is approved at $89,000. 2. The Chairperson and Executive Director are authorized to execute a Purchase Agreement or other documents to allow purchase for the amount set forth in this resolution. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield', Minnesota this 19th day of June, 2000. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary • HRA RESOLUTION NO. RESOLUTION AUTHORIZING PURCHASE OF REAL PROPERTY LOCATED AT 6856 PARK AVENUE FOR THE RICHFIELD REDISCOVERED PROGRAM WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA) desires to purchase certain real property pursuant to and in furtherance of the Richfield Rediscovered Redevelopment project (Project) heretofore adopted by the City of Richfield (City) and the HRA, said real property being described as: That part of Lot 4, lying south of north 121.3 feet of Block 3, Portland Avenue Acres Addition, whose street address is 6856 Park Avenue; and WHEREAS, the HRA is authorized by Minnesota Statues Section 469.012 to acquire real property within its area of operation; and WHEREAS, the property has verifiably met program requirements for acquisition, furthering program goals by removing a substandard structure, and which would likely not occur without HRA involvement; and WHEREAS, the U.S. Department of Housing and Urban Development, seller of 6856 Park Avenue, is selling the property at a discount from its estimated market value, and a quick response is required by the HRA in order to acquire the substandard property; and WHEREAS, the availability of the property happened quickly due to foreclosure, and the time required to add it to the existing plan is longer than the period of time available for purchase; and WHEREAS, purchase will be made from the 1996 bond funds, and will be reimbursed by the 1999 Richfield Rediscovered bond funds at the appropriate time. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and #or the City of Richfield, Minnesota. 1. The purchase price of 6856 Park Avenue is approved at $92,700. 2. The Chairperson and Executive Director are authorized to execute a Purchase Agreement or other documents to allow purchase for the amount set forth in this resolution. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 19th day of June, 2000. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary AGENDA SECTION: Consent AGENDA ITEM # 3g REPORT # 36 STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING JUNE 19, 2000 • REPORT PREPARED BY: REPORT PRESENTER: DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTIVE DIRECTOR KATIA MEDVETSKI, REDEVELOPMENT SPECIALIST NAME, TITLE BRUCE PALMBORG, COMMUNITY DEVELOPMENT DIRECTOR ITEM FOR HRA CONSIDERATION: Consent to Conditional Assignment of Note and Release and Indemnity. I. RECOMMENDED ACTION: By Motion: Approve the Consent to Conditional Assignment of Note and Release and Indemnity. III. BACKGROUND ~ On October 28, 1996, the HRA approved a Contract for Private Redevelopment (Contract) with The Limited, Inc. (Developer) for the Galyan's Trading Company Store (Project) on the former Naegele site. The Contract was signed and dated December 31, 1996. The Project is part of the Interchange Tax Increment Financing District. On April 19, 1999, the Limited Revenue Tax Increment Note (Note) with a principal amount is $3,323,309, was delivered to the Developer. On July 27, 1999, the Richfield Housing and Redevelopment Authority (HRA) approved the Certificate of Completion which released the Developer from its obligations for the construction of minimum improvements under the Contract. 0619galyans.doc NAME, TITLE The Developer, whose parent company was Galyan's Property Holding Company, • underwent reorganization and sold a portion of its interest to an investor group. Included in this reorganization was a Conditional Assignment of the Note. The Conditional Assignment will make it possible for the HRA to make payments directly to the new assignee, CP Gal Ritchfield, LLC, rather than to the Developer. Paragraph 1 on page 3 of the Note indicates that the Note cannot be assigned without the approval of the HRA. (See Exhibit A to the Consent to Conditional Assignment of Note and Release and Indemnity (Consent)). Also, please note that the Limited Revenue Tax.lncrement Note appears in two places -namely (1) Exhibit A to the Consent; and (2) Exhibit B as Exhibit A to the Conditional Assignment. III. BASIS OF RECOMMENDATION A. POLICY • The Limited Revenue Tax Increment Note provides the specifications for transferring or assigning the Note to third parties. B. CRITICAL ISSUES • The Consent requires the approval of the HRA. • The next tax increment payment due date under the Note is August 1; 2000. . • The new assignee would like the HRA to expedite this approval prior to the next payment. C. FINANCIAL • All tax increment payments due under the Note from August 1, 2000 to February 1, 2019 will be assigned to CP Gal Ritchfield, LLC upon approval of the Consent by the HRA. D. LEGAL • Staff consulted with legal counsel on this matter. • Legal counsel prepared the Consent. • The Consent contains harmless language to prevent the Developer and new assignee from claiming tax increment payments under the Note that are not legally due them. • The Developer's legal counsel reviewed and approved the Consent. IV. ALTERNATIVE RECOMNlENDATION(S~ • .Delay approval of the Consent. • Do not approve the Consent. (This may have legal implications.) V. ATTACHMENTS • • Consent to Conditional Assignment of Note and Release and Indemnity. I V1. PRINCIPAL PARTIES EXPECTED AT MEETING I CONSENT TO CONDITIONAL . ASSIGNMENT OF NOTE AND RELEASE AND INDEMNITY THIS AGREEMENT, made and entered into as of the day of , 2000, by and between, THE LIMITED, INC.. a Delaware corporation (the "Assignor"), CP GAL RITCHFlELD, LLC, a Delaware limited liability company, (the "Assignee") and THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MIlVNESOTA, a Minnesota public body corporate and politic (the "HRA"). WITNESSETH: WHEREAS, The HRA and Assignor did on or about December 31, 1996 enter into an agreement entitled Contract for Private Development {the "Contract") calling for the. redevelopment of certain lands within the -City of Richfield; and WHEREAS, pursuant to the Contract the HRA did execute and deliver to the: Assignor its Limited Revenue Tax Increment Note dated April 19, 1999 in the principal amount of $3,323,309 a copy of which is attached as Exhibit A (the "Note"); and WHEREAS, the Assignor has presented the HRA with a proposed Conditional Assignment of Note to Assignee a copy of which is attached as Exhibit B (the "Assignment") and has asked the HRA to consent to the Assignment; and WHEREAS, the HRA is willing to grant such consent subject to the provisions hereinafter contained. NOW THEREFORE, in consideration of the mutual promises hereinafter contained, the parties hereto do stipulate and agree as follows: 1. Consent. The HRA hereby consents to the assignment- of the Note from the Assignor to theAssignee. 2. Release and Indemnitv. The Assignor hereby acknowledges that the HRA will make future payments under the Note to the Assignee, and hereby releases the HRA, its officers agents and employees from any .claim or cause of action based on making of such payments to the Assignee. The Assignee agrees to indemnify and save harmless the HRA, its officers agents and employees from any claim or cause of action by the Assignor based on the HRA's payment to the Assignee of amounts due under the Note. 3. No Ri ht~xpanded. The Assignee agrees that the assignment does not confer on it .any rights with respect to the Note that were not available to Assignor at the time of assingment. 4. Continuing Obli~ Assignor acknowledges thax the Assignment does not relieve it of any obligations that it may still have under the Contract. JBD-181455v1 RC125-131 IN TESTIMONY WHEREOF, the parties have set their hands to this Agreement as of the • day and year first above written. THE LIMITED, INC. CP GAL RITCHFEELD, LLC, a Delawaze corporation a Delawaze limited liability company By: By: Its: Its: THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA By: Its: STATE OF MINNESOTA ss.. COUNTY OF The foregoing instrument was acknowledged before me this day of 2000, by the of THE LIMITED, INC., a corporation under the laws of Delawaze, by and on behalf of said corporation. Notary Public STATE OF IV~TNESOTA ss.. COUNTY OF The foregoing instrument was acknowledged before me this day of 2000 by the of CP GAL RITCHFEELD, LLC, a limited liability company under the laws of Delaware, by and on behalf of said limited liability company. • Notary Public JBD-181455v1 2 RC125-131 STATE OF MINNESOTA ss.. COUNTY OF The foregoing instrument was .acknowledged before me this day of 2000, by the of THE HOUSING .AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA, a Minnesota public body corporate and politic on behalf of the Authority. Notary Public • • Jsn-]slass~l 3 RC12s-131 EXHIBIT A • Limited Revenue Tag Increment Note • .~sn-isiass~i 4 xci2s-iii t • ~v~-V $3,323,309 UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD LIMITED REVENUE TAX INCREMENT NOTE The Housing and Redevelopment Authority in and for the City of Richfield (the "Authority"), hereby acknowledges itself to be indebted and, for value received, promises to pay to the order of The Limited, Inc., a Delaware corporation, (the "Owner"), to the extent and in the manner hereinafter provided, the original principal amount of this Note, being Three. Million Three Hundred Twenty-Three Thousand Three Hundred Nine Dollars ($3,323,309) (the "Principal Amount"), together with interest thereon accrued from the date of this Note, at the rate of interest of eight and one half percent (8.5%) per annum (the "Stated Rate"), in the amount and on the dates (the "Scheduled Payment Dates") set forth on the Payment Schedule attached as Schedule A hereto and in the amounts stated thereon (the "Scheduled Payments"). Unpaid interest accruing from the date of this Note, shall be added to principal on a semi-annual basis on each August 1 and February 1 until February 1, 2005. Any payments on this Note shall be applied first to accrued interest-and then to the Principal Amount in respect of which such payment is made. Each payment on this Note is payable in any coin or currency of the United States of America which on the date of such payment is legal tender for public and private debts and shall be made by check or draft made payable to the Owner and mailed to the Owner at it postal address within the United States which shall be designated from time to time by the Owner. The Note is a special and limited obligation and not a general obligation of the Authority, ` which has been issued by the Authority to aid in financing a "project," as defined in Minnesota Statutes, § 469.174, of the Authority within and for the benefit of the Interchange .Tax Increment Financing District ("District"). THE NOTE IS NOT A DEBT OF THE AUTHORITY, THE CITY OF RICHFIELD, OR THE STATE. OF MINNESOTA (THE "STATE"), AND NEITHER THE AUTHORITY, THE CITY OF RICHFIELD, THE STATE NOR ANY POLITICAL SUBDIVISION .THEREOF ' SHALL BE LIABLE ON THE NOTE, NOR SHALL THE NOTE BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN AVAILABLE TAX INCREMENT, AS DEFINED .BELOW. The Scheduled Payment of this Note due on any Scheduled Payment Date is payable solely from and only to the extent that the Authority shall have received as of such Scheduled Payment -Date "Available Tax Increment." For the purpose of this Note, "Available Tax Increment" means: " JBD-160891 1 RC125-131 Tax increment received from the real estate described in Schedule B the "Redevelopment Property" for years beginning with-July, 1999, after first deducting therefrom the following: a) .the. HRA administrative charge of 10%; b) any required .fiscal disparity payment; c) any amount needed to make a previously due but unpaid Scheduled Payment to Owner. For purposes of this Note, a "Payment -Date" shall mean each of the Scheduled Payment Dates set forth on Schedule A attached hereto. Notwithstanding .anything to the .contrary in this Note, on each of the Payment Dates, the Authority shall pay to the Owner the Available Tax Increment up to a maximum of an amount. necessary to amortize over the term of this Note, at the Stated Rate, all expenditures made by the Redeveloper (as defined in the Development Contract) to .acquire and develop the Redevelopment Property. The Authority's fiscal agent will review the statement of such expenditures and will determine the amount payable annually and during the full term of this Note, said determination to be final. To the extent that on any Payment Date the Authority is unable to make a payment from Available Tax Increment as a result of having received, as of such date, no Available Tax Increment, such failure shall not constitute a default under this Note and the amount of such Scheduled Payment (principal and interest) shall be deemed paid and, except as provided below, the Authority shall have no obligation under this-Note, or otherwise, to subsequently pay. any such deficiency unless. the deficiency is the direct result of the failure of the County to timely remit the proper amount of Tax Increment, in which case,such deficiency shall be paid promptly upon remittance by the County. This Note shall terminate upon the earlier of i) the date when the Redeveloper has been fully reimbursed according to the tenors hereof; or ii) February 1, 2019. This Note shall also terminate and the Authority's obligation to make any .payments under this Note shall be discharged and the Authority shall have no obligation and incur no liability to make any payments hereunder immediately upon the occurrence of an Event of Default under the Contract for .Private Development, dated DECEMBER 31, 1996 (the "Development Contract") between the Authority and the Owner, subject to the notice and cure provisions of Section 10.2 thereof. This Note shall not be payable from or constitute a charge upon any funds of the Authority or the City of Richfield and the Authority shall not be subject to any liability hereon or be deemed to have obligated itself to pay hereon from any funds except the Available Tax Increments, and then only to the extent and in the manner herein specified. The Owner shall never have or be deemed to have the right to compel any exercise of any ..taxing power of the Authority or the City of Richfield or of any other-.public body, and neither .the - :Authority or the City of Richfield nor any director, commissioner, council member, board member, officer, employee or agent of the Authority or the City of Richfield, nor any person executing or registering this Note shall be liable personally hereon by reason of the issuance or registration hereof or otherwise. JBD-160891 2 RC125-131 - - • r This Note shall not be transferable or assignable, in whole or in part, by the Owner without the prior written consent of the Authority; provided that the Owner may pledge the payments hereunder to a lender or assign the payments hereunder to a subsequent purchaser of the Development, but only with prior written notice thereof to the Authority. The Owner may also, without prior notice to or consent of the Authority transfer or assign the Note or the right. to receive payments under the Note to a wholly-owned subsidiary of the Owner. This Note may be prepaid in full at anytime at-the option of the Authority; and may also be prepaid at the request of the Owner, but in either instance only if the Authority first determines that sufficient tax increment is or will be .generated to permit such prepayment, and .the parties agree upon the actual prepayment amount. This Note is issued pursuant proper action of the Authority by Resolution and the Owner is entitled to the benefits thereof, which Resolution is incorporated herein by reference. IT IS HEREBY CERTIFIED AND RECITED that any acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to have happened, and to be performed precedent to and in the issuance of this Note have been done, have happened, and have been performed in regular and due form, time, and manner as required by law; .and that this Note, together with all other indebtedness of the Authority or the City of Richfield outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the Authority or the City of Richfield to exceed any constitutional or statutory limitation thereon. IN WITNESS WHEREOF, the Board of Commissioners of the Authority has caused this Note to be executed by the manual signatures of the Chai and the Executive Director: of the Authority and has caused this Note to be dated April 19, 1999 G Chairperson JB0.160891 RC125-131 3 ~ ..: • • SCHEDULED PAYMENT DATES SCHEDULED PAYMENTS SCHEDULED PAYMENT DATES SCHEDULED PAYMENTS 8/1/99 90,536. 2/1/12 283,771 2/1/00 90,536 .8/1/12. 299,857 8/1/00 ~ 144,727 ..:2/1/13 299,857 2/1/01. 14427 8/1/13 316,627 8/1/01 154,904 2/1/14 316,627 2/1/02 154,904 8/1/14 334,110 8/1/02 165,514 2/1/15 334,110 2/1/03 165,514. 8I1/15 352,336- 8/1/03 176,574 2/1/16. 352,336 2/1/04 ; 176,574 8/1/16 371,337 8/1/04 188,105 2/1/17 371,337. 2/1/05 188,105 8/1/17 391,145 8/1/05 200,126 2/1/18 391,145 2/1/06 200;126 8/1/18 411,794 8/1/06 212,657 2/1119 411,794 2/1/07 212,657 8/1/07 225,721 2/1/08 225,721 8/1/08 239,341 2/1/09 239,341 8/1/09 253,539 2/1/10 253,539 8/1/10 ~ 268,640 __ - _ _ __ 2/1/11 268,640 8/1/11 - 283,771 JBD-160891 4 RCI25-131 EXHIBIT B Conditional Assignment of Note to Assignee • ~. JBD-181455v1 5 RC125-131 CONDITIONAL ASSIGNMENT OF NOTE Mr Effective upon the date the Lease Agreement, dated: August 31, 1999, between CP Gal Ritchfield, LLC, a Delaware limited liability company (the "Assignee"), and Galyan's Property Holding Co., a Delaware corporation, is terminated (the "Effective Date"), the undersigned hereby assigns and conveys all of its right, title and interest in the $3,323,309 Limited Revenue Tax Increment Note (the "Note"), a copy of which is attached hereto as Exhibit A, unto Assignee, to have and to hold the same unto the successors, Jegal representatives and assigns of Assignee forever. No assignment of .any of the undersigned's right, title or interest in the Note shall occur or. b_e deemed to have occurred on the date of this assignment. The Note was made for the benefit of the undersigned pursuant to that certain Contract For Private Development dated as of December 31, 1996, by and between the undersigned and The Housing And Redevelopment Authority in and for the. City of Richfield, Minnesota, a Minnesota public body corporate and politic ("HRA"). The undersigned represents and warrants to Assignee that if has provided written notice of the foregoing conditionalassignment to HRA. This assignment will terminate on the date that all amounts due under the Note are paid or forgiven by the holder of the Note and upon such date, this assignment will. be of no further force or effect.. IN WITNESS WHEREOF, the undersigned has duly executed this assignment this ~'L day of February, 2000. THE LIM~E~iQ~~~,/ By: Vice eside t & Senior Cou I- al Estate • CO: 1036150x2 . ~ (( 111 L.J) \~// - -_ - - X3,323,309 UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD LIMITED REVENUE TAX INCREMENT NOTE The Housing and Redevelopment Authority in and. for the City of Richfield (the "Authority"), hereby acknowledges itself to be indebted and, for value received, promises to pay to the order of The Limited, Inc., a Delaware corporation, (tt~e "Owner"), o the extent and in the manner hereinafter provided, the original principal amount of this Notc, being Three Million .Three Hundred Twenty-Three Thousand Three Hundred Nine Dollars ($3,323,309) (the "Principal Amount"), together with interest thereon accrued from the date of this Note, at the rate of interest of eight and one half percent (8.5%) per annum (the "Stated Rate"), in the amount and on the dates (the "Scheduled-Payment Dates") set forth on the Payment Schedule attached as Schedule A hereto and. in the amounts stated thereon (the "Scheduled Payments"). Unpaid interest accruing from the date of this. Note, shall be added to principal on asemi-annual basis on each August 1 and February 1 until February 1, 2005. i Any payments on this Note shall be applied first to accrued interest and then to the Principal Amount in respect of which such payment is made. Each payment on this Note is payable in any coin or currency of the United States of America which on the date of such payment is legal tender for public and private debts and shall be made by check or draft made payable to the Owner and mailed to the Owner at it postal address within the United States which shall be designated from dme to time by the Owner. The Note is a special and Iimited obligation and not a general obligation of the Authority, which has been issued by the Authority to aid in financing a "project," as defined in Minnesota Statut tes, § 469.174, of the. Authority within and for the benefit of the Interchange Tax Increment Financing District ("District"). THE NOTE IS NOT A DEBT OF THE AUTHORITY, THE CITY OF RICHFFIELD, OR THE STATE OF bv~1NESV OTA (Tf~iE "STATE"), AND NEITHER THE AUTHORITY, THE CITY OF RICHFIELD, THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF SHALL BE LIABLE ON THE NOTE, NOR SHALL THE NOTE BE PAYABLE OUT OF ANY FUNDS OR PROPERTIES OTHER THAN AVAILABLE TAX INCREMENT, AS DEFINED BELOW. ___ - - - - The Scheduled Payment of this Note due on any Scheduled Payment Date is payable solely from and only to the extent that the Authority shall have received as of such Scheduled Payment . • Date "Available Tax Increment." For the purpose of this Note, "Available Tax Increment" means:- J8D-!60891 1 RCi 25-131 _-- Z ` d bG66- T 98-Z i 9 O'13A3tI Jll I Nf1WW00 dZ t ~ EO 00 T i qa~ . Tax increment received from the real estate described in Schedule B the "Redevelopment Property" for years beginning with July, 1999, after first deducting therefrom the following: a) the HRA administrative charge of 10°k; b) any required fiscal disparity payment; c) any amount needed to make a previously duebut unpaid Scheduled Payment to Owner. • For purposes of this Note, a "Payment Date" shall mean each of the Scheduled Payment Dates set forth on Schedule A attached hereto. Notwithstanding anything to the contrary in this Note, on each of the Payment Dates, the Authority shall .pay to the Owner the Available Tax Increment np to a maximum of an amount necessary to amortize-over the term of this Note, at the Stated Rate, all expenditures made by the Redeveloper (as defined in the Development Contract) to acquire and develop the Redevelopment Property. The Authority's fiscal agent will review ,the statement of such expenditures and will determine the amount payable annually and during the full term of this Note, said determination to be final. To the extent that on any :Payment Date the Authority is unable to make a payment from Available Tax Increment as a result of having received, as of such date, no Available Tax Increment, such failure shall not constitute a default under this Note and the amount of such Scheduled Payment (principal-and interest) shall be deemed paid and, except as provided below, the Authority shall have no obligation under this Note, or otherwise, to subsequently pay any such deficiency unless the deficiency is the direct result of the failure of the County to timely remit the proper amount of Tax Increment, in which case, such deficiency shall be paid promptly upon remittance by the County. This Note shall terminate upon the eazlier of i) the date when the Redeveloper has been fully reimbursed according to the terms hereof; or ii) February 1, 2019. This Note shall also terminate and the Authority's obligation to make any payments under this Note shall be discharged and the Authority shall have no obligation and incur no liability to make any payments hereunder immediately upon the occurrence of an Event of Default under the Contract .for Private Development, dated DECEMBER 31, 1996 (the "Development Contract") between the Authority and the Owner, sub}ect to the notice and cure provisions of Section 10.2 thereof. This Note shall not be payable from or constitute a charge upon any funds of the Authority or the City of Richfield and the Authority shall not be subject to any liability hereon or be deemed to have obligated itself to pay hereon from any funds except the Available Tax Increments, and then only to the extent and in the manner herein specified. The Owner shall never have or be deemed to have the right to compel any exercise of any taxing power of the Authority or the City of Richfield or of any other public body, and neither -ahe Authority or the City of Richfield nor any director, commissioner, council member, board member, officer, employee or agent of the Authority or the City of Richfield, nor any person executing or registering this Note shall be liable personally hereon by reason of the issuance or registration . hereof orotherwise. - - 18D-160891 RCI25-t31 2 E'd bG66-T98-ZT9 013A30 ~llINfiWWO~ dEt ~EO 00 TT qa~ , This Note shall not be transferable or assignable, in whole or in part, by the. Owner without the prior written consent of the Authority; provided that the Owner may pledge the payments hereunder to a .lender or assign the payments hereunder to a subsequent purchaser of the Development, but only with prior written notice thereof to the Authority. The Owner may also, without prior notice to or consent of the Authority transfer or assign [he Note or the right to receive payments under the Note to a wholly-owned subsidiary of the Owner. This Note may be prepaid in full at any time at the optson of the Authority; and may also be prepaid at the request of the Owner, but in either instance only if the Authority first determines that sufficient tax increment is or will be generated to permit such prepayment, and the .parties agree upon the actual prepayment amount. • ~•d • This Note is issued. pursuant proper action of the Authority by Resolution and .the Owner is entitled to the benefits thereof, which Resolution is incorporated herein by reference. TT IS HEREBY CERTIFIED AND RECTI'ED that any acts, conditions, and things required by the Constitution and laws of the State of Minnesota to be done, to have happened, and to be performed precedent to and in the issuance of this Note have been done, have happened, and have. been performed in regulaz and due foam, time, and manner as required. by law; and that this Note, together with all other indebtedness of the Authority or the City of Richfield outstanding on the date hereof and on the date of its actual issuance and delivery, does not cause the indebtedness of the Authority or the City of Richfield to exceed any constitutional or statutory limitation thereon. IN WITNESS WHEREOF, the Board of Commissioners of the Authority has caused this Note to be executed by the manual signatures of the Chai and the Executive Director of the April 19, 1999 Authority and has caused this Note to be dated L . Chairperson rso-16oa91 3 RC125•l3i _ __ _ bLEB-t98-Zt9 013A3Q J,lItJf1WW00 dEt =E0 00. TT 4a~ • S•d SCHEDULED PAYMENT DATES SCHEDULED .PAYMENTS. SCHEDULED PAYMENT DATES SCHEDULED PAYMENTS 8/1!99 90,536 2/1/12 283,771 2/1/00 90,536 8/1/12 299,857 8/1/00 144,727 2/1/13 299,857 2/1/01 144,727 8/1/13 316,627 8/1/01 154,904 2/1/14 316,627 2/1102 154,904 8/1/14 334,110 8/1/02 165,514 Z/1/15 334,110 2/1/03 165,514 8/1/15 352,336 8!1/03 176,574 2/1/16 352,336 2/1/04 176,574 8/1/16 371,337 8/1/04 188,105 2/1/17 371,337 2/1/05 188,105 8/1/17 391,145 8/1/OS 200,126 Z/1/I8 391,145 :2/1/06 200;126 8/1118 411,794 8/1/06 212,657 2/1/19 411,794 2/1/07 212,657 8/1/07 225,721 2/1/08 225,721 8/1/08 239,341 2/1/09 239,341 8/1/09 253539 2/1/10 253,539 8/1/10 268,640 2/1/11 268,640 8/1/11 283,771 7[iD-160891 4 ~ .. RCt25-131 bG6B-T9B-ZT9 013A3(I ~1111JnWW07 dRT:Rn nn rr aa-1 • • AGENDA SECTION: AGENDA ITEM # REPORT # Consent 3A 35 REPORT PREPARED BY: REPORT PRESENTER: DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTIVE DIRECTOR: t~i PAM BOOKHOUT REHABILITATION SPECIALIST NAME, TITLE BRUCE PALMBORG COMMUNITY DEVELOPMENT DIRECTOR ITEM FOR HRA CONSIDERATION: Consideration of resolution regarding authorization to issue a Certificate of Completion to Gerold Bros.' Construction, Inc. for 7025 Nicollet Avenue. I. RECOMMENDED ACTION: By Motion: Authorize the Chair and Executive Director to execute the Certificate of Completion in accordance with the attached resolution. III. BACKGROUND The HRA authorized development of the above referenced property in November 1999. The development agreement provides for the issuance of a Certificate of Completion when construction is completed. (A sample certificate is attached.) The. home has- been completed, so a Certificate of Completion may be provided at this time. An escrow has been withheld to cover completion of landscaping. • III. BASIS OF RECOMMENDATION A. POLICY • The HRA must authorize the issuance of Certificates of Completion. 0619-7025nicolett NAME, TITLE B. CRITICAL ISSUES • Construction has been completed and the Inspections Division has issued a Certificate of Occupancy. • The issuance of a Certificate of Completion is required to properly close the sale of the home. C. FINANCIAL • N/A D. LEGAL • N/A IV. ALTERNATIVE RECOMMENDATION(S). • Do not issue a Certificate of Completion at this time. V. ATTACHMENTS • HRA Resolution • Sample Certificate of Completion. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A • HRA RESOLUTION NO. RESOLUTION AUTHORIZING ISSUANCE OF CERTIFICATES OF COMPLETION FOR NEWLY CONSTRUCTED RESIDENTIAL PROPERTY AT _7025 NICOLLET AVENUE WHEREAS, the Richfield Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA) entered into contract with Gerald Bros.' Construction, Inc.; and WHEREAS, the new home located at 7025 Nicollet Avenue is completed. .NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield, the Certificate of Completion for 7025 Nicollet Avenue can be issued. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 19th day of June, 2000. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary • CERTIFICATE OF COMPLETION ''~- The undersigned hereby certifies that has fully and completely complied with its obligations under Article IV of that document entitled "Contract for Private Development", between the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota and dated , filed as Document No. with respect to the construction. of the approved construction plans at legally described as and is released and forever discharged from its obligations to construct under such above- referenced Article. DATED: THE HOUSING AND .REDEVELOPMENT AUTHORITY 1N AND FOR THE CITY RICHFIELD, MN By Its Chairperson By Its Executive Director STATE OF MINNESOTA ) SS COUNTY OF HENNEPIN The foregoing instrument was acknowledged before me this day of 200 , by Thomas E. Harms and Samantha Orduno the Chairperson and Executive Director of the Housing and Redevelopment Authority in and for the City of Richfield, a public body corporate and politic under the laws of the State of Minnesota on behalf of the public body corporate and politic. Notary Public This instrument was drafted by: The Housing and Redevelopment Authority in and for the City of Richfield 6700 Portland Avenue South Richfield, MN 55423 612-861-9760 r