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05-17-99 agendaCITY OF RICHFIELD MONDAY, MAY 17, 1999 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 APRIL 19, 1999 1. OPPORTUNITY FOR CITIZENS TO ADDRESS THE HRA ON ITEMS NOT ON THE AGENDA 2. CONSIDERATION OF RESOLUTION REGARDING APPROVAL OF MODIFICATION TO REDEVELOPMENT PLAN FOR RICHFIELD • REDEVELOPMENT PROJECT AREA; AND ESTABLISHMENT OF INTERCHANGE WEST AND LYNDALE GATEWAY TAX INCREMENT FINANCING DISTRICT AND TAX INCREMENT FINANCING PLAN HRA LETTER NO. 24 3. CONSIDERATION OF REQUEST FROM CSM PROPERTIES TO AMEND THE CONTRACT FOR PRIVATE DEVELOPMENT FOR INTERCHANGE WEST AREA HRA LETTER NO. 25 4. PRESENTATION OF ANNUAL STATUS REPORT ON TAX INCREMENT DISTRICTS HRA LETTER NO. 26 5. CONSIDERATION OF KEY PROVISIONS OF PROPOSED MASTER DEVELOPMENT AGREEMENT BETWEEN CITY OF RICHFIELD, RICHFIELD HRA AND RYAN COMPANIES US, INC. HRA LETTER NO. 27 6. PUBLIC HEARING AND CONSIDERATION OF RESOLUTION AUTHORIZING SALE OF 6824 PARK AND 6805 IRVINE AVENUES TO WINDWOOD HOMES INC. AND 7315 THOMAS AVENUE TO STEVE MARLIN GRANT HOMES, INC. HRA LETTER NO. 28 7. CONSIDERATION OF RESOLUTION AUTHORIZING HRA TO ACQUIRE 7545 PENN AVENUE FROM CITY FOR APARTMENT REMODELING PROGRAM, AND CONDUCT PUBLIC HEARING AND CONSIDERATION OF RESOLUTION AUTHORIZING SALE OF REMNANT PARCEL AT 7545 PENN AVENUE TO FLOYD SJOSTRAND HRA LETTER NO. 29 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. • n HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 29 Agenda May 17, 1999 Issue Statement: Authorize the acquisition of 7545 Penn Avenue from the City of Richfield and then hold a public hearing which authorizes the sale of the Richfield Housing and Redevelopment Authority interest in the property to the adjoining property owner as part of the Richfield Housing and Redevelopment Authority Apartment Remodeling Program. Background: Hennepin County and the City of Richfield jointly participated in installing improvements to the intersection at 76th Street and Penn Avenue. The City's portion of the cost was funded by the Minnesota State Aid (MSA) account. Upon project completion, remnant parcels remained and have been vacant approximately two years. Exhibit A, attached, represents the complete legal description for the. parcel known as 7545 Penn Avenue. An "existing conditions" map shows the remnant parcel and is also attached as Exhibit B. The County is in the process of conveying the parcel to the City. With support from a Metropolitan Council Livable Communities Grant, the Richfield Housing and Redevelopment Authority (HRA) has been working with the adjacent four apartment owners to improve the existing five buildings and add a new building. There are several elements to the project plan (Exhibit C): • Off-street parking will be modified to improve appearance and access, and provide additional parking spaces for the buildings. The off-street parking contract was approved by the City Council on May 10. • One driveway at 7544 Oliver Avenue will be closed, reducing driveways onto 76th Street. • The parcel at 7544 Oliver Avenue is buildable and afour-unit building with attached garages is underway. The owners of 7536 Oliver Avenue are constructing the building at 7544 Oliver Avenue. • The parcel at 7545 Penn Avenue is not buildable but provides an area for additional off-street parking and an attractively landscaped corner. The owner of 7539 Penn Avenue, Floyd Sjostrand, would like to acquire the remnant parcel from the HRA and combine it with 7539 Oliver Avenue. • A landscaping plan is being developed for the parking area to compliment the landscaped corner. The parcel at 7545 Penn Avenue is valued at $25,196. The County is requiring payment for their one-half interest in the value or $12,598. The City's MSA fund also must be reimbursed an amount of $12,598. The Livable Communities Grant to the HRA will cover both the County's and City's shares. The property would be sold to the adjoining owner for $1.00 given the owner's agreement for an easement for a future right turn lane and the willingness to enter into cross easements with regards to the • off-street parking. Recommended Motion: Adopt a resolution (Exhibit D), which authorizes the HRA to acquire 7545 Penn Avenue from the City; and adopt a resolution (Exhibit E), following a public hearing, which authorizes the sale of the property to Floyd Sjostrand. Basis of Recommendation: 1. The City jointly participated in a road improvement project with Hennepin County, and the County has expressed an interest in conveying the County interest in the remnant parcel to the City. The second reading of a transitory ordinance occurred on May 10 and allows the City to convey the 7545 Penn Avenue property to the H RA. 2. The HRA, in partnership with adjacent apartmenf owners, has initiated an apartment improvement initiative funded by a Metropolitan Council Livable Communities Grant that revitalizes the parcel 3. One element of the HRA's apartment initiative is to acquire the remnant parcel at 7545 Penn Avenue from the City and convey the parcel to the adjacenf owner at 7539 Penn Avenue to provide off-street parking and Jandscaping improvements. 4. A public hearing notice has been published. for the May 17 HRA meeting. 5. The County and City MSA accounts are each being compensated $12,598 as the cost of acquisition from the Livable Communities Grant. 6. The property, once conveyed to the adjoining owner, would improve the appearance and function of the apartment community at 76th Street and Penn Avenue. Alternative Recommendation: The HRA may choose not to acquire and sell the property. However, the vacant lot would continue to be unfinished, and this apartment community may not be as extensively improved. Discussion/Decision Mode: Amid-summer purchase of the property by the HRA and sale to the adjoining owner is anticipated followed by the installation of the parking lot and landscaping improvements. ng Executive Director SLD:cak • Exhibit A LEGAL DESCRIPTION FOR 7545 PENN AVENUE SOUTH That part of the West 182 feet of the South '/a of the Northwest % of the Southwest '/< of Section 33, Township 28, North Range 24 West of the Fourth Principal Meridian, lying South of the North 222 feet thereof, according to the Government Survey thereof. Reserving unto said Grantor a permanent easement for highway purposes over all that part of the above described tract which lies westerly of a line drawn parallel with and distant 23 feet easterly of the following described line: Commencing at the Southwest comer of the Northwest Quarter of the Southwest Quarter of Section 33, township 28, Range 24; thence run .easterly along the south line of said Northwest Quarter of the Southwest Quarter on an assumed bearing of North 89 degrees 30 minutes 54 seconds East for a distance of 18.75 feet to the actual point of beginning of the line being described; thence North 2 degrees 30 minutes 37 seconds West for 41.69 feet; thence deflect right along a tangential curve having a radius of 3819.72 feet, for 100.00 feet and said line there terminating. Also, reserving unto said Grantor a permanent easement for highway purposes over all that part of the above described tract which lies southerly of a line drawn parallel with and distant 22.50 feet northerly of the following described Line A: Commencing at the Southwest comer of the Northwest Quarter of the Southwest Quarter of Section 33, Township 28, Range 24; thence run northerly along the west line of said Northwest Quarter of the Southwest Quarter for a distance of 31.50 feet to the actual point of beginning of the line being described; thence deflect right 89 degrees 43 minutes 31 seconds for 200.00 feet and said line there terminating. Also, reserving unto said Grantor a permanent easement for highway purposes over all that part of the above described tract which ties Southwesterly of a line drawn from a point on the West line of the Northwest Quarter of the Southwest Quarter of Section 33, Township 28, Range 24 distant 115 feet Northerly of the Southwest comer thereof, as measured along said West line, to a point on the South line of said .Northwest Quarter of the Southwest Quarter, distant 123 feet Easterly of the Southwest comer thereof, as measured along said South line. Subject to a 26 foot easement strip for driveway purposes over that part of the east 45 feet of the above described tract lying northerly of a line drawn parallel with and distant 22.50 feet northerly of the above described Line A for the benefit of the following described tract: The South 74 feet of the North 222 feet of the West 182 feet of the South Quarter of the Northwest Quarter of the Southwest Quarter of Section 33, Township 28, Range 24. • t• W 2 W Q ~ Z W a 6' ' ~xhib' --- ----- t ---- --- ~ APT. i 7527 i ~ APT. I~ 7530 '' 1 t 1 _ ~~ APT, 7533 - - - - --- i ~~ APT. W `o ~ 7539 z¢ Y 4 CI W L~ = M i . _ APT. 7536 .. .. ~~ 7544 ~ - - ------ :j - ' .. ~:~ ~ ~ ~ ?S' .~ ~ ~ 76TH STREET EXISTING CONDITIONS I I' >~ ~, i _~ NORTH scnt.E ~ ~ = so ~ i E Exhibit C --~---- to o I ~ ~ 1 m 7527 PENN ~ 7530 OLIVER I I i W Z W Q Z Z a I 7533 PENN PROPERTY LINE ------ i 1 yM17539 PENN ~'~ I • 1 ~, TREES ~ 76TH STREET ;: H -_T --Q -- •~._~ ~. ~ 7544 - z-" '~' ~OLIVER ~ ~ - Q-- -•-•1 li a I ik PROPERTY LINE _ - -- ---i t 7536. I OLIVER 1 ------- ---i W Z W Q W O After_ HRA apartment project at 76th and Oliver/Penn Ave SITE PLAN ,, . PLANNING ® ZONING NORTH Cady Darelopn~nt O~pa~amnt SCALE 1' = 50' .] HRA RESOLUTION NO. EXHIBIT D RESOLUTION AUTHORIZING PURCHASE OF REAL PROPERTY LOCATED AT 7545 PENN AVENUE FOR THE APARTMENT REMODELING 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 Apartment Remodeling Program said real property being described as follows: Address: 7545 Penn Avenue; and as further described on Exhibit D-1, attached. WHEREAS, the HRA is authorized by Minnesota Statutes Section 469.012 to acquire real property within its area of operation; and WHEREAS, the property meets all program requirements for acquisition; and WHEREAS, funds have been provided by the HRA and are available for 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 7545 Penn Avenue is approved at $25,196 2. The Chairperson and Acting Executive Director are authorized to execute purchase agreements and other documents to effectuate the 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 17th day of May, 1999. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary • • Exhibit D-1 LEGAL DESCRIPTION FOR 7545 PENN AVENUE SOUTH That part of the West 182 feet of the South '/< of the Northwest %a of the Southwest % of Section 33, Township 28, North Range 24 West of the Fourth Principal Meridian, lying South of the North 222 feet thereof, according to the Government Survey thereof. Reserving unto said Grantor a permanent easement for highway purposes over all that part of the above described tract which lies westerly of a line drawn parallel with and distant 23 feet easterly of the following described line: Commencing at the Southwest corner of the Northwest Quarter of the Southwest Quarter of Section 33, township 28, Range 24; thence run easterly along the south line of said Northwest Quarter of the Southwest Quarter on an assumed bearing of North 89 degrees 30 minutes 54 seconds East for a distance of 18.75 feet to the actual point of beginning of the line being described; thence North 2 degrees 30 minutes 37 seconds West for 41.69 feet; thence deflect right along a tangential curve having a radius of 3819.72 feet, for 100.00 feet and said line there terminating. Also, reserving-unto said Grantor a permanent easement for highway purposes over all that part of the above described tract which lies southerly of a line drawn parallel with and distant 22.50 feet northerly of the following described Line A: Commencing at the Southwest corner of the Northwest Quarter of the Southwest Quarter of Section 33, Township 28, Range 24; thence run northerly along the west line of said Northwest Quarter of the Southwest Quarter for a distance of 31.50 feet to the actual point of beginning of the line being described; thence deflect right 89 degrees 43 minutes 31 seconds for 200.00 feet and said line there terminating. Also, reserving unto said Grantor a permanent easement for highway purposes over all that part of the above described tract which lies Southwesterly of a line drawn from a point on the West line of the Northwest Quarter of the Southwest Quarter of Section 33, Township 28, Range 24 distant 115 feet Northerly of the Southwest corner thereof, as measured along said West line., to a point on the South line of said Northwest Quarter of the Southwest Quarter, distant 123 feet Easterly of the Southwest corner thereof, as measured along said South line. Subject to a 26 foot easement strip for driveway purposes over that part of the east 45 feet of the above described tract lying northerly of a line drawn parallel with and distant 22.50 feet northerly of the above described Line A for the benefit of the following described tract: The South 74 feet of the North .222 feet of the West 182 feet of the South Quarter of the Northwest Quarter of the Southwest Quarter of Section 33, Township 28, Range 24. • HRA RESOLUTION NO. EXHIBIT E RESOLUTION AUTHORIZING THE SALE OF REAL PROPERTY LOCATED AT 7545 PENN AVENUE TO FLOYD SJOSTRAND WHEREAS, the Housing and Redevelopment Authority in and for the. City of Richfield, Minnesota (HRA) desires to sell certain real property pursuant to and in furtherance of the Apartment Remodeling Program adopted by the HRA, said real property being described as follows: Address: 7545 Penn Avenue: Leclal: Exhibit E-1, attached. WHEREAS, the HRA is authorized to sell real property within its area of operation after a public hearing; and WHEREAS, the purchaser of the described property is Floyd Sjostrand, the adjacent property owner, at a price of $1.00; 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 7545 Penn Avenue is authorized to be sold to Floyd Sjostrand in accordance with an Apartment Remodeling Program Agreement. 2: The Chairperson and Acting Executive Director are authorized to execute agreements necessary to complete the transaction. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 17th day of May, 1999. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary • Exhibit E-1 LEGAL DESCRIPTION FOR 7545 PENN AVENUE SOUTH That part of the West 182 feet of the South'/ of the Northwest'/4 of the Southwest'/< of Section 33, Township 28, North Range 24 West of the Fourth Principal Meridian, lying South of the North 222 feet thereof, according to the Government Survey thereof. Reserving unto said Grantor a permanent easement for highway purposes over all that part of the above described tract which lies westerly of a line drawn parallel with and distant 23 feet easterly of the following described line: Commencing at the Southwest corner of the Northwest Quarter of the Southwest Quarter of Section 33, township 28, Range 24; thence run easterly along the south line of said Northwest Quarter of the Southwest Quarter on an assumed bearing of North 89 degrees 30 minutes 54 seconds East for a distance of 18.75 feet to the actual point of beginning of the line being described; thence North 2 degrees 30 minutes 37 seconds West for 41.69 feet;. thence deflect. right along a tangential curve having a radius of 3819.72 feet, for 100.00 feet and said line there terminating. . Also, reserving unto said Grantor a permanent easement for highway purposes over all that part of the above described tract which lies southerly of a line drawn parallel with and distant 22.50 feet northerly of the following described Line A: Commencing at the Southwest corner of the Northwest Quarter of the Southwest Quarter of Section 33, Township 28, Range 24; thence run northerly along the west line of said Northwest Quarter of the Southwest Quarter for a distance of 31.50 feet to the actual point of beginning of the line being described; thence deflect right 89 degrees 43 minutes 31 seconds for 200.00 feet and said line there terminating. Also, reserving unto said Grantor a permanent easement for highway purposes over all that part of the above described tract which lies Southwesterly of a line drawn from a point on the West line of the Northwest Quarter of the Southwest Quarter of Section 33, Township 28, Range 24 distant 115 feet Northerly of the Southwest corner thereof, as measured along said West line, to a point on the South line of said Northwest Quarter of the Southwest Quarter, distant 123 feet Easterly of the Southwest corner thereof, as measured along said South line. Subject to a 26 foot easement strip for driveway purposes over that part of the east 45 feet of the above described tract lying northerly of a line drawn parallel with and distant 22.50 feet northerly of the above described Line A for the benefit of the following described tract: The South 74 feet of the North .222 feet of the West 182 feet of the South Quarter of the Northwest Quarter of the Southwest Quarter of Section 33, Township 28, Range 24. HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 2s Agenda May 17,1999 Issue Statement: Public hearing and authorization to se116824 Park and 6805 Irving Avenues to Windwood Homes Inc., and 7315 Thomas Avenue to Steven,Marlin Grant Homes, Inc. Background: The Housing and Redevelopment Authority (HRA) acquired 6824 Park, 6805 Irving and 7315 Thomas Avenues under the Richfield Rediscovered Program. As part of the 66th Street widening at I-35W, three properties are being taken by the Minnesota Department of Transportation (MnDOT). One of the properties is a duplex, with both occupants sharing ownership. Both of these families have chosen to stay in Richfield and would like to participate in the Richfield Rediscovered Program. The families are using the same builder, Windwood Homes Inc. who builds approximately 80 homes a year in communities such as Rosemount, Lakeville, Prior Lake and Savage It is proposed that the HRA sell 6824 Park and 6805 Irving Avenues to Windwood Homes Inc. for development of a single family home on each site. Although negotiations are in process, the buyers will not be able to decide upon a final home design until they have settled with MnDOT. However, each home will have a minimum of three bedrooms, a double car garage and a completed end value of at least $140, 000. It is proposed that the HRA sell 7315 Thomas Avenue to Steven Marlin Grant Homes, Inc. for the development of a new single family home. The new home will have three bedrooms, an attached double garage and an end value of approximately $169,000. The project would be conducted in accordance with a development agreement. Recommended Motion: Following a public hearing, approve a motion, which adopts the resolution authorizing the sale of 6824 Park Avenue and 6805 Irving Avenue to Windwood Homes Inc., and 7315 Thomas Avenue to Steven Marlin Grant Homes, Inc. Basis of Recommendation: 1. Windwood Homes Inc. is building under the program for the first time. They have built in the southern area of the Twin Cities for almost ten years. Steven Marlin Grant Homes, Inc. has built several homes under the Richfield Rediscovered Program. The company has evidenced experience, capability and financial security. 2. The HRA acquired 6824 Park, 6805 Irving and 7315 Thomas Avenues for the Richfield Rediscovered Program. • 3. The terms of the development agreements have been negotiated and are in conformance with program guidelines. 4. Notice of public hearing on sale of the properties was published on May 5, 1999 in the Sun-Current. Alternative Recommendation: Do not proceed with the development agreements with the recommended builders and direct staff to find another buyer. Discussion/Decision Mode: Closing on the Thomas Avenue property would occur in late May with construction starting soon afterwards. Closings on the other two properties would occur as soon as the purchase of the buyers' properties by MnDOT is completed. Respectfully sub fitted r~ even L. evich Acting Executive Director SLD:cak • HRA RESOLUTION NO. RESOLUTION AUTHORIZING THE SALE OF REAL PROPERTY LOCATED AT 6824 PARK AND 6805 IRVING AVENUES TO WINDWOOD HOMES INC. AND 7315 THOMAS AVENUE TO STEVEN MARLIN GRANT HOMES, INC. WHEREAS, the Richfield 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 follows: Address Legal Description 6824 Park Avenue That part of Lot 1 lying south of the north 150 feet thereof and the north 1.3 feet of Lot 4, Block 3, Portland Avenue Acres Addn. 6805 Irving Avenue Lot 9, Block 2, Tingdale Bros. Lincoln Hills Second Addn. 7315 Thomas Avenue Lot 14, Block 4, Penn Lake Terrace First Addn. WHEREAS, the HRA is authorized to sell real property within its area of operation after a public hearing; and WHEREAS, the purchaser of the described property has been identified and development agreements negotiated as follows: Performance Address Sale Price Securi Builder 6824 Park Avenue $34,000 $34,000 Windwood Homes Inc. 6805 Irving Avenue $34,000 $34,000 Windwood Homes Inc. 7315 Thomas Avenue $38,500 $38,500 Steven Marlin Grant Homes, Inc. 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: 1. A public hearing has been held and 6824 Park Avenue and 6805 Irving Avenues are authorized to be sold to Windwood Homes Inc. for $34,000 each, and 7315 Thomas Avenue is authorized to be sold for $38,500 to Steven Marlin Grant Homes, Inc. r~ 2. The Chairperson and Acting Executive Director are authorized to execute Contracts for Private Development and other agreements necessary to complete the transactions. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 17th day of May, 1999. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary r~ • 6824 Park Avenue Concept Plan • j:l i~ ~~i I! ~~~ j `~ ~i ~I n~ ~~j i'I ,~ I ''•~ ~ ml ,, :~ ~~i i, i~ ~:~ ~; l~ ; ;~ ~~ ~ ~- -- I:: Ii -~~~_ Main Level --- ~ ~s~ ~~:~ 1 L ~ C i £ . ~~~ ~. ~, ,~a `~i ice, t o ~~ ~~ sl ~, A. z~ T~ Ac OA ,S 1 Ir.~ ~~ I~~ v1 ~~ ~~ m' ---j O_ Z Z c • • Upper Level Right Elevation 6805 Irving Avenue Concept .Plan 00 00 00 Front Elevation Rear Elevation eft Elevation r~, • C~-EN ..~ ~. Main Level G/1RAGE • • Lower Level .J • • 715 THOMAS AVENUE CONCEPT PLAN • ~ .~ .: ;;. x ,~ ,. ~~.r r , ;:_ ~.~ ~~ [~Q~OC~ • fK~~~~C;i~l~l ~Q(~~° ~~ MAIN LEVEL UPPER LEVEL w ~ GEC Q I~ G'~il. ®OG~Of~C~ f~~il. 7o s . ~°(~L~r~i~li. 1„ rug ~9/®~ U9/~ ~ Q~ ~b~ ~ J ~ _ ®~~~ s (~®G~ MM. HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 27 Agenda May 17, 1999 Issue Statement: Consideration of approval of key provisions of a proposed master development agreement between the City of Richfield, the Richfield Housing and Redevelopment Authority and Ryan Companies US, Inc. Background: The Metropolitan Airports Commission (MAC) has initiated construction of the new North-South Runway, to be completed in 2003. Completion of the runway will result in substantial increases in low frequency noise in the area west of Trunk Highway 77. The mitigation plan approved by the City Council in June 1998 envisions the removal of homes, apartments and older commercial buildings, replacing them with land uses and buildings more suitable for a location so close to the new runway. This is a general plan and lacks the specificity needed to proceed with :redevelopment when funding becomes available. At the October 19, 1998 Housing and. Redevelopment Authority (HRA) meeting, there was a discussion about Ryan Companies US, Inc.'s (Ryan) interest in the mitigative area. Ryan Companies has expressed an interest in preparing the detailed plans. They are also interested in facilitating and coordinating the redevelopment as well as being a redeveloper. A relationship with Ryan would be regulated. by an agreement.. The proposed key provisions of such an agreement are contained in the attached document, as recommended by staff, legal counsel and the HRA Chair. Representatives of Ryan have also agreed to these provisions. Mr. John Dean, legal counsel to the HRA, will be present at the May 17 meeting to discuss the key provisions, which are briefly highlighted below. Ryan Serves as Project Coordinator • Funding • Preliminary plans • Neighborhood communication/development planning City/HRA Activities • Provisions for governmental action • Determination of financial assistance to be provided • Establishment of project area and TIF district Note among other things that this section identifies the type of decision, which would need to be made by the City Council and HRA. It does not diminish the discretion with which they may act. Public Financial Assistance The principles for guiding the structure of the public assistance will be formulated. Phased Development Within the project area,. development will be phased over several years. Development Agreements It is anticipated that each phase will have a separate agreement. Development Opportunities • Section a. lists criteria to be met by development proposals. Item (8) also states that a formula will be established for reimbursing Ryan for a portion of their costs attributable to the area proposed and for redevelopment associated with performing the responsibilities of Coordinating Developer. • Section b. discusses a process to be followed by Ryan when they would like to initiate redevelopment in a particular area. • Section c. outlines a process to be followed, which. is driven by the City/HRA. It provides that if Ryan and the City/HRA cannot agree on terms of a development agreement for the particular area the City/HRA wish to have developed they are free to consider proposals for that area from other developers. If another developer is selected, Ryan is entitled to be reimbursed for a prorated portion of their expenses associated with the Coordinating Developer role. • Section d. provides that a third party developer may approach the City/HRA about redeveloping an area. Ryan must be notified immediately and is then entitled to submit a proposal for the same area. Should Ryan submit a proposal the City/HRA must consider both proposals at the same time. In this situation, should the third party developer proposal be accepted, Ryan must be reimbursed for a prorated portion of their expenses associated with the Coordinating Developer role. • Section e. restricts the City/HRA from providing condemnation and financial assistance. until certain conditions are met. • Section f. relates to ownership of plans and drawings. Recommended Motion: It is recommended that the HRA approve these key provisions and direct staff to negotiate the final terms of a master development agreement with Ryan Companies US, Inc. for subsequent presentation to the HRA. Basis of Recommendation: 1. The size and complexity of the area strongly suggest the need for a coordinating developer. 2. The key provisions protect the interests of the community and at the same time .provide incentives for acoordinating-developer. Alternative Recommendation: 1. Refuse to approve the key provisions. 2. Modify the provisions. 3. Delay consideration of the provisions. Discussion/Decision Mode: Approval by the HRA would make it possible for negotiations with Ryan to advance. When they are concluded staff will report back to the HRA. R pe tfully submitt - ~• ev . Devich Acting Executive Director SLD:cak .C~ V V L • SUMMARY' OF KEY PROVISIONS OF PROPOSED 1VIASTER DEVELOPMENT AGREEMENT BETWEEN . CITY OF RICHFIELD, RICIIFIELD HRA AND RYAN COMPANIES 1. ~ The designation of Ryan Companies iJS, inc. as the Coordinating Developer for the r~levelopment of the Froject Area, setting forth the scope of services to be provided by Ryan and the procedures to be followed by the City1HRA in the redevelopment of the Project Area. Z. g]~9~~ The area generally located between Crosstown Highway 62 an the 1Varth, Highway 494 on the Svuth, Cedar Avenue on the East, and Bloomington Avenue on the West (the "Project Area"J. 3. a, ~j~j~,~Qy~. Assist the City/HRA in obtaining federal, state, and local funding of sufficient scope to support the redevelopment of the Project Area. The types of funding will vary, but will include special state legislation; federal, state, and local grant monies; state and local gavenunent funding allocations; and low interest loans. Services relating to obtaining Project Area funding will include the following: • Research all possible funding alternatives that may be available and appropriate for the proposed redevelopment project. • In conjunction with the City/HIiA, identify those funding sources or programs that may be most likely to support the redevelopment project. • In conjunction with the City/HRA, develop a strategy for securing the necessary funding sources- . Take necessary steps to secure redevelopment funding. Again, this znay vary but will likely include introducing and supporting special legislation for redevelopment financing, writing and submitting grant applications to federal, state, and local agencies, etc. Prepare cost estimates for the redevelopment of the Project Area. lViajor cost categories may include land acquisition and consolidation, • VJ! 1G/ PP fiLY iV V•l i"[i/i ViG V4f 1 V 1 ( iawYa~iaavvi. N Y1a~va. a ..i. L- vvv • environmental remediation, building demolition, and the cost of new construction. b 1 tyg. prepare preliminary plans for consideration by the Cityll~RA relating to land use and infrastructure for the Project Area in order to assist the City/HRA with regard to obtaining funding, understanding land use alternatives, phasing of redevelopment, allocation of financial resources over the Project Area and assisting the low frequency study group's evaluation of the extent of potential noise mitigation resulting from the redevelopment of the Project Area. ~ ~~1,3,.,rhnnri f nmm~mics~tinn evelopment Planning. Solicit neighborhood input; inform ibe neighborhood on certain aspects of the redevelopment process; and develop a detailed land use, uxban design, and infrastructure plan for the Project Area. Neighborhood communication will include the fallowing steps: The assessment stage is used to solicit resident input for determining how best to resolve likely disputes associated with the redevelopment project. From this assessment, the Mediation Center ve~ill make a recommendation on the most appropriate process for working with the neighborhood. • • The implementation stage is based on information gathered during the assessment stage. Techniques typically used by the Mediation Center include neighborhood informational meetings, surveys, and focus groups. Following the assessment and implementation stages, a detailed land use, design standards, landscape architecture, and open space plan will be prepared. This will be accomplished in conjunction, with City staff and policy-makers, and consistent with the City's Mitigation Plan for the New North South Runway (17135}, dated June 15,1998. This work will accomplish the following goals: Reduce the North-South Runway noise and visual impact on the remaining neighborhoods in east Richfield. Develop a comprehensive park and open space system far east Richfield residents .that connects with existing Richfield, Bloomington, and Minneapolis park and open space systems. • rievelop a comprehensive land use and redevelopment plan for east Richfield that ensures future development activities. 2 VJ/ 1L! LIa n)r'.y 1J. VY 117A V1G t7Y1 1 V ( ! rl\GY1~lAav1~ R Dli~vl~ r .ll. • Ensure that future development is consistent with the International Airport and generates the highest possible tax base and head of household employment opportunities for the City of Richfield. d, t~nle entatio~~• Implementation of a redevelopment financing program, property acquisition, demolition and relocation, and the development of private space, and public improvements, park and open space based on funding sources and neighborhood input. e. .Ryan shall provide the City/FiRA with development advice and information with regard to market conditions, type and mix of improvements, feasibility and other development information relating to the redevelopment of the Project Area in order to assist the City/HRA in determining the actions to be taken by them with regard to the redevelopment of the Project Area. 4. ' a. Take necessary and appropriate governmental action with regard to the redevelopment of the Project Area, including, but not limited to actions pertaining to, amending the comprehensive plan and zoning, obtaining appropriate financial assistance from federal, state and local authorities for the redevelopment of the Project Area, including contributions from the MAC, authorize the use of eminent domain, provide financial assistance and enter into development agreements for phase developments within the Project Area. b_ Determine whether, and to what extent financial and/or site assembly assistance will be necessary to induce redevelopment within the Project Area c Exercise reasonable efforts to establish in accordance with all applicable statutory requirements a Project Area and a Tax Increment District for the Project Area and adopt a Tax Increment Financing Plan for the TIF District. HRA. may allocate available ta~c increment to assist particular developments within the Project Area in a manner which it deems appropriate to promote the fullest development of the entire Project Area. Ryan acknowledges that many of the actions of the HRA/City described in this section, and throughout the agreement call for the HRA~/City to act in their reasonable discretion and in many instances to exercise their legislative judgment. Such actions may only be made following established procedures; and the HRAJCity may not, by agreement, agree in advance to any specific decision in such matters. • ~'J 4VY 3 ~, ,,..,, ~ ~ With regard to the structure of the public assistance to be provided to the Project Area, the parties will set forth the guiding principles for such financial assistance. 6, 1 n • It is anticipated that the Project Area will be redeveloped in non-contiguous phases over a number of years. The redevelopment of the Project Area will be subject to such priorities as the GitylHRA in their reasonable judgment deem consistent with the then current market conditions for the various types of improvements within the Project Area. 7. In light of the phased development of the Project Area, separate development agreements will be required for each phase of development of the Project Area. The terms and conditions of the development agreements are subject to the mutual agreement of the developers and the CityCfiRA. 8. u a a. All proposals for development within the Project Area must conform to the following criteria: (I) It shall designate the area of the development and which properties, if any, would need to be acquired in order to accomplish the development. (Z} It shall comply with the development standards and plans for the area covered by the proposal and must be consistent with the comprehensive plan for the area, or if not, indicate how the plan would need to be modified. (3) It shall be consistent with any recognized plan for mitigation of environmental impacts arising from development of the new North-South Runway at the Minneapolis - St. Paul 1Vletropolitan Airport. (4) It shall describe in sufficient detail the amount, purpose and need for any financial assistance to be requested from the HRA. (5) It shall include concept plans which contain sufficient detail to allow far a clear understanding of the proposal. • 4 VV/ 1GI PP 1iLY 1V. VV i'lila VJ.i VYi i V I i 1aaYYlaaaaN Va. N Liaava. a .ai. (6} If the proposal is for less than the entire Project Area, the proposal will address the interface with the balance of the Project Area. {7) It shall not be for speculative developz~nent. The developer will be required to commit to proceeding with development, even though it is in phases, within a relatively short period of tune (i.e. 6 months of executing the Development Agreement) with sufficient evidence of the viability of the proposed development, including leasing, equity, financing and market analysis. (&} It shall include a payment to the City equal to the (i} portion of the contribution by Ryan and by the City to the overall development of the Project ,Area allocated to the area proposed to be developed and (ii) staff time to analyze the development proposal. Ryan and the FiRAJCity are to agree on the categories, allocations, and any limits to be placed on such amounts. {9) Any additional or further information which the City1FIRA in its reasonable discretion determines useful in fully evaluating the proposal. b. Ryan Proposal- « Ryan shall have the first opportunity to enter into a development agreement "for that portion of the Project Area proposed to be developed by Ryan. • Negotiate mutually agreeable terms of the development agreement for the proposal. • If Ryan and the HR.A/City are unable to conclude the terms of a development agreement, the portion will remain subject to future development proposals as outlined in subparagraphs a, b, c and d of this Secrion_ c. City/HRA Proposal CityiHRA shall provide Ryan with the first opportunity tv enter into a development agreement for that portion of the Project Area the CityrHRA determines should be opened for redevelopment, If the parties are unable to agree on the terms and conditions for the development agreement, then the CityIHRA shall be &ee to consider proposals from others to develop the portion subject to the following: • Any such proposal must conform to the criteria contained in Section 8(a} of this agreement unless the I~t,A/City determines in the exercise 'C:J v v v • v..= ~.., .... ,,.+.. ~... vv •.ae. vas vv r . u r r ravc,aravanaviv a Dia~trly r . n. of their reasonable discretion some or all should be waived; provided, however, no waiver shall relieve the HRAJCity from making the reimbursement to Ryan described in Section 8(a}{$). • The proposals shall be subject to the requirements set forth in subparagraph "d." d. Third Party Developer Proposal • Fn the event the HRA/City is approached by a third party seeking to develop a portion of the Project Area which is not subject to an existing development, the 1:iRP-/City will immediately notify Ryan of the general nature of the type of development and the location of the development. Ryan shall then be entitled to submit its flwn proposal for development of that portion to be considered at the same time the third party proposal is being considered. • Unless waived by the I~RAlCity, the criteria contained in Section 8(a} shall be applicable; and no waiver shall relieve the ~IR.A/City from making the reimbursement to Ryan described in Section 8(a}(8} in the event a third party is selected. e. Restrictions on Development within the Project Area. Prior to the adoption of the comprehensive plan for the Project Area, and identification of all funding sources, including the settlement with the MAC and the allocation of those funding sources throughout the Project Area, the Cityl~iRA will not provide any condemnation assistance for the acquisition of properties or financial assistance for the development of properties within the Project Area. f. Ownership of Plans and Drawings. Any material created by Ryan for which reimbursement is made in accordance with Section 8(a}{8) above shall be the exclusive property of the CityIHRA and may be used by them for any purpose. The HRA/City will indemnify, release and agree to defend Ryan from any claim made relating to the subsequent use of such material. 9. Tgtlm• The agreement will no longer be of fozce or effect as to those portions of the Project Area which are covered by redevelopment contracts_ WJUVt • a HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 26 Agenda May 17, 1999 Issue Statement: Presentation of annual status report on tax increment districts. Background: Each year, financial consultant Sid Inman of Ehlers & Associates, Inc. prepares the attached report entitled Richfield HRA Tax Increment District Status Update. This document is compiled annually by staff and Mr. Inman and reports the condition of the City's tax increment financing (TIF) districts. TIF districts which were recently approved (such as Gramercy and Urban Village) are not included as these districts are not yet producing increment. The current report is dated May 1999. The introduction to the report provides a brief summary on the overall status of the TIF projects. Following this, a review of all increment-producing TIF districts and their respective financial cashflows is given. Throughout the report, the following assumptions apply: • Values stated reflect conservative estimates; • Inflationary market value increases are not included; • Interest earnings are not included; • Reductions in tax class rates for commercial/industrial property for taxes payable 2000 and beyond are reduced by 7% to reflect potential legislative • changes; • Local tax rate is reduced to reflect school district referendum levies conversion beginning in the year 2001; and • Fiscal disparities are projected out based on tax increment districts terminating and new, approved districts beginning. All districts remain healthy and have sufficient reserves to pay outstanding obligations on outstanding bonds and tax increment note payables. Please note the highlights of the summary information: • The LHN District will no longer have a reserve balance after the year 2001. All funds are pledged to service the debt on the outstanding bonds and to Richfield State Agency for the outstanding amount due under the tax increment notes payable for the Wood Lake Medical Clinic project. • The ILN District will continue to maintain a reserve balance. The remaining tax exempt bonds proceeds from the 1988 issue are pledged to undertake public improvements within the overall redevelopment project area. A portion of these proceeds have been used for the design work related to the I- 35W/66th Street bridge. The most significant measure of success in the ILN district is the rise in market value from the Shops at Lyndale and Meridian Crossings projects which restored the deteriorated base market value for the district in the early 1990's. • The Interchange District anticipates a reserve balance based on increment received prior to the time payments due under the tax increment note payable to • The Limited, Inc. for the Galyan's project. • The increment received from all of the Richfield Rediscovered Districts • continue to pay off the seed money to the City which the HRA borrowed to implement the original program. The latter part of the report contains the financial cashflows. The last page in this series is a composite cashflow of the year end balances for all of the previous cashflows, and therefore, all of the current increment-producing districts. Under this report, the ending balance for 1999 is approximately $2.93 million. When the ILN is decertified in the year 2011, the balance will be approximately $2.37 million. Other funds, represented by the last four columns of this cashflow, however, will also be available and amount to approximately $197,000 annually. This small amount reflects the funds available to the HRA from Phase I of the land sale related to Meridian Crossings and increment produced by the Candlewood Motel project. The aggregate total of all reserve fund balance approximate $2.95 million in the year 2011. The use of all reserve fund balances are restricted by TIF law related to spending and pooling rules as well as tax increment plan budgets. These cashflows, again, take into account only existing districts producing increment and do not reflect any potential increment or payments related to recently approved, new TIF districts. As part of the regular budget cycle, staff will propose uses for the fund balances consistent with state law. Sid Inman of Ehlers & Associates, Inc. will be present at the meeting to review this report and respond to any questions or concerns that you may have. Recommended Motion: Discuss and accept the 1999 Richfield HRA Tax Increment District Status Update, dated May 1999, prepared by Ehlers & Associates, Inc. Basis of Recommendation: The HRA requested annual reporting on tax increment districts and projects. Alternative Recommendation: Delay presentation of the report. Discussion/Decision Mode: The annual report allows the HRA to review the status of the increment produced and obligations made to various redevelopment projects. :.tfully sub ~ ed, ~~ ~/ i L. a ich Executive Direc r SLD:cak • • Q W x U w F A a d F C-~ A E~ Z W W U z o, v~ ¢' a .~ 3 ~¢ ~ a ~~ ~. W~ ~a ~~ ~z a `V ~ ° 0 i~l ~ ~ ~ ~ `y ~ .~ G~ O • . ~ U +-+ L ~J ~~~ ~za~~ ~~ ~ 3~ ~ o ~ a~ ~~ c .~ o ~~ ~ ...~ ~ ~ s.. 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minimum value $12,000,000 commencing December 31,1983 until December 31, 2001 October 26 Richfield Shoppes Assessment Agreement and Minimum value $1,902,000 1983 Assessor's Certificate commencing December 31,1984 until last LHN tax increment bond maturity ear 2004 December 13 .Richfield State Agency Assessment Agreement and Minimum value $5,039,831 1983 (Addition of 3 stories to bank Assessor's Certificate commencing upon project completion building, parking lot until last tax increment payment for improvements) (NOTE: See February 15, LHN TIF District (year 2004) 1994 entry for amended Assessment Agreement and Assessor's Certificate resulting from new construction of Woodlake Medical Clinic) December 27 Woodlake Point Assessment Agreement and Minimum value $11,500,000 1984 Condominiums Assessor's Certificate for commencing January 2,1987 until Housing Component A March 31, 2002 or last tax increment payment in LHN TIF District (year 2004 December 27 Market Plaza and Assessment Agreement and Minimum value for shopping center 1984 Market Towers Assessor's Certificate for and housing $10,375,000 (Village Shores) Shopping Center Component commencing January 2,1987 until and Housing Component B March 31, 2002 or last tax increment payment in LHN TIF District ((year 2005); individually, minimum value for shopping center $3,500,000 and minimum value for housing at $6,875,000 July 31 Rainbow Foods Assessment Agreement and Minimum value $3,087,213 1991 Assessor's Certificate commencing January 2,1992 until A ril 1, 2001 • Lyndale Hub Nico{let (L-H-N) Date Pro'ect A reement Terms July 31 U.S. Swim and Fitness Assessmenfi Agreement and Minimum value $1,854,000 1991 Assessor's Certificate commencing January 2,1992 until April 1, 2001 December 21 Richfield State Agency Limited RevenueTax Original principal amount of Note 1993 (Richfield State Agency 1983 Increment Note $226,817; amount of accrued interest improvements* and Woodlake from date of Note $80,415; total Medical Clinic) amount of payments $307,232 to be paid semi-annually on each February 1 and August 1, commencing August 1,1996 until February 1, 2001 February 15 Amendment to Assessment Minimum value $5,039,831 1994 Agreement (Original commencing February 15,1994 until Assessment Agreement and January 2,1995; minimum value Assessor's Certificate dated $6,104,800 commencing January 2, 1983*) 1995 until last tax increment payment for LHN TIF District (year 2001) *See December 13,1983 entry Interstate-Lyndale-Nicollet (1=L-N)' Date Pro'ect .reement Terms December 9 Hampton Inn Assessment Agreement Minimum value $2,060,000 1985 and Assessor's Certificate commencing January 2,1988; minimum value $2,660,000 commencing January 2,1989; minimum value $3,402,000 commencing January 2,1990 until January 2, 2005 or last tax increment payment for ILN TIF District (year 2011 April 29 Shops at Lyndale Limited Revenue Tax Original principal amount of Note 1994 Increment Note (Phase I) $2,196,358; amount of accrued interest from date of Note $2,597,178; total amount of payments $4,793,536 to be paid semi-annually on each February 1 and August 1, commencing August 1, 1996 until Februa 1, 2012 • Interstate-Lyndale-Nicollet (I-L-N) Date Pro'ect A reement Terms April 29 Shops at Lyndale Limited Revenue Tax Original principal amount of Note 1994 Increment Note (Phase II) $1,125,759; amount of accrued interest from date of Note $1,033,409; total amount of payments $2,159,168 to be paid semi-annually on each February 1 and August 1, commencing August 1,1997 until Au ust 1, 2010 March 18 Meridian Crossings Limited Revenue Tax Original principal amount of Note 1996 Increment Note (Phase I) $3,730,472; amount of accrued interest from date of Note $3,884,574; total amount of payments $7,615,046 to be paid semi-annually on each February 1 and August 1, commencing August 1,1999 until Februa 1, 2012 March 18 Meridian Crossings Limited Revenue Tax Original principal amount of Note 1996 Increment Note (Phase II) $8,494,593; amount of accrued interest from date of Note $10,075,145; total amount of payments $18,569,738 to be paid semi-annually on each February 1 and August 1, commencing August 1,1999 until Februa 1, 2012 Interchange (Galyans) Date Pro'ect A reement - Terms December 31 Galyan's Trading Company Limited Revenue Tax Original principal amount of Note 1996 (The Limited, Inc.) Increment Note $3,323,309; amount of accrued interest from date of Note $6,839,413; total amount of payments $10,162,722 to be paid semi-annually on each February 1 and August 1, commencing August 1,1999 until Februa 1, 2019 • Cedar Avenue Business Area (CABA) Date Project Agreement Terms Note: The CABA tax increment district expired December 31,1996. No further tax increment to be received. Final obli ation of tax increment to be aid December, 1997. March 9 Copy Duplicating Products, Assessment Agreement Minimum value $5,343,000 1988 Inc. (CDP) and Assessor's Certificate commencing attime of construction .completion (12/18/89) and until last increment payment for CABA TIF .District (year 1996) March 9 Reimbursement Agreement Amount of reimbursement (principal 1 ggg and interest) $850,000 commencing annually from receipt of first tax increment (1990) until last increment in December, 1996 Richfield Rediscovered (RR) Date Project A reement Terms May 22 6313 Morgan Ave. Assessment Agreement Minimum value $90,000 commencing 1992 (Glenn Wisser) and Assessor's Certificate** January 1,1993 through payment of real estate taxes due and payable in 2017 January 6 6625 Stevens Ave. Assessment Agreement Minimum value $110,000 commencing. 1995 (Sussel Corp.) and Assessor's Certificate* January 1,1996 through payment of real estate taxes due and payable in 2021 Gramercy. Date Pr 'ect A reement Terms December 21 Gramercy Park Cooperative Limited Revenue Tax Original principal amount of Note, as 1998 at Lake Shore Drive Increment Note amended on 12/21/98, $2,230,174; amount of accrued interest from date of Note $4,029,807; total amount of payments $6,259,981 to be paid semi- annually oneach February 1 and August 1, commencing August 1, 2001 until Februa 1, 2026 Urban Village Date Pro'ect A reement Terms November 16 Richfield State Agency, Inc. Limited Revenue. Tax Original principal amount of Notes 1998 Increment Note $8,834,587; amount of accrued interest from date of Notes $13,479,669; total amount of payments $22,317,256 to be paid semi-annually on each February 1 and August 1, commencing August 1, 2002 until Februa 1, 2027 *Notes: • Payments on Limited RevenueTax Increment Notes made only if Developer pays property taxes. • Assessment Agreements are required for certain Richfield Rediscovered properties when additional performance . security is required of builders in order to guarantee minimum building value. C: 6 L PMENT A TH RITY HOUSING AND REDEVE O U O HRA Letter No. 25 Agenda May 17, 1999 Issue Statement: Request from CSM Properties, Inc. to amend the Contract for Private Development for the Interchange West area. Background: The Richfield Housing and Redevelopment Authority (HRA) granted a 90-day extension to CSM Properties, Inc. for the completion of site assembly activities in the Interchange West area on February 16, 1999. CSM has been reporting their progress on site assembly in a weekly status report. There has been a great deal of progress in negotiating the purchase of residential property; evidenced by the fact that CSM has signed purchase offers with 53 of the 68 residential property owners. CSM reports in the attached letter (Exhibit A), however, that due to the complexity of the negotiations with commercial property owners they have been unable to progress at the same pace for the purchase of commercial properties. In an attempt to keep the residential portion of the development moving forward and in order to adhere to the schedule which they have established with homeowners, CSM is requesting that staff prepare an amendment to the contract to allow the project to be completed in two phases. The first phase being the residential portion of the project and the second being the commercial portion. If this request is accepted, staff would prepare such. an amendment for the June 21 HRA meeting. Recommended Motion: Direct staff to prepare an amendment to the contract to provide for the commencement of condemnation on the existing residential property separate from and ahead of condemnation of the existing commercial property and to submit the amendment to the HRA for consideration at their June 21, 1999 meeting. Basis of Recommendation: 1. CSM has made significant progress in negotiating the purchase of residential properties. 2. Due to the complexity of negotiations for the purchase of commercial properties, CSM has not finished negotiations for the majority of those properties. 3. In order to keep the residential portion of the development moving forward and to adhere to the schedule which they have established with homeowners, CSM suggests that the project be completed in two phases. Alternative Recommendation: 1. Deny the request to direct staff to prepare the amendment and terminate the Contract for Private Development with CSM for noncompliance. • 2. Require that both phases of the project progress simultaneously and grant CSM an extension for the completion of site assembly activities. Discussion/Decision Mode: Any such amendment would not affect the establishment of a tax increment finance district for Interchange West. Murray Kornberg, from CSM Properties, Inc., will be present to provide an update of ,their site assembly activities. ctfully sub, 'tted, n L. Devic Acting Executive Director SLD:cak • Exhibit A --.~~ Celebrating 20 Yeeus,-of Serving You ~~ CSM Corporation -~~ 2575 University Arenue West, Sulte 150 • St. Pahl, MN 55114-1024 (651) 646-1717 • FAX (65t) 646-2404 ~_~ May 7, 1999 1V1r. yohn Stark City of Richfield 6700 Portland Avenue Richfield, MN 55423 Re: Interchange West Dear John: • As you knov~~ we have been continuing our efforts to conclude our negotiations on the acquisition of residential and commercial property in the Interchange West Project Area. As of the writing of this letter, we have 53 signed residential purchase agreements, and agreement on price and terms with 4 other homeowners, whose contracts have either not yet been fully redrafted, or are being reviewed by legal counsel. One homeowner requested mediation, which was completed, and we are attempting to resolve one outstanding issue that will allow us to sign that agreement. We are continuing our efforts to sign the remaining nine property owners, and are confident that we will be able to complete purchase agreements with all nine within the next several weeks. We continue tv make progress in our negotiations with commercial property owners. Because of the more complicated nature of those acquisitions, the time to complete negotiations and document those negotiations in a commercial purchase contract is substantially longer than is the case for residential property acquisition. We have reached agreement on price and the basic terms with 6 commercial property owners and are in the process of completing those purchase agreements, and are continuing our negotiations with the remaining commercial property owners. In reviewing our Contract for Redevelopment, we have found that the contract does not contemplate the situation in which we now find ourselves; acquisition of residential property proceeding much faster than the acquisition of commercial property. Also, because of the inherent differences in the process for developing the new residential components as opposed to the new commercial components, it is conceivable that the development of the residenial components could commence earlier (and be completed earlier) than the eomumercial components. Therefore, we request the IAA, to authorize staff to prepare an amendment to the contract to provide for the commencement of condemnation on the existing residential property separate from and ahead of condenmation of the existing commercial property. We continue to remain hopeful that we will not require condemnation on any property in the l~ project area, but such an amendment would recognize the differences in timing between the two types of acquisition and development activities. In the future if we were to request condemnation, such an amendment could also facilitate an earlier commencement to portions of the project if required. I look forward to discussing our request, and the status of our acquisition activity with l`llt~ at the hearing on May 17, 1999. Sincerely yours, • HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 24 Agenda May 17,.1999 Issue Statement: Consideration of a resolution regarding approval of a Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area; and establishment of the Interchange West and Lyndale Gateway Tax Increment Financing District and Tax Increment Financing Plan. Background: The resolution being considered would establish the Interchange West and Lyndale Gateway TIF District and TIF Plan. A description and brief history of the projects included in the TIF District and Plan is as follows: Interchange West CSM Properties, Inc. was selected by the Richfield Housing and Redevelopment Authority (HRA) in 1997 to conduct a redevelopment feasibility study of the Interchange West area. During the course of the study, an extensive neighborhood participation effort was undertaken to seek the opinions of homeowners as to whether or not they should be included in the redevelopment. Surveys were conducted and the final results showed that 70 percent of the homeowners would prefer to have their homes purchased if the commercial area was redeveloped. Based on those results, CSM created a redevelopment concept which includes the area bounded by Penn and Knox Avenues and by 76th and 78th Streets. The HRA entered into a Contract for Private Redevelopment with CSM in October 1998 for the Interchange West area. CSM presented their concept plan at the February 16, 1999 HRA meeting. The primary elements of this concept plan included a 350-room hotel, 375,000 sq. ft. of office space in two connected buildings, a restaurant site, an upscale car dealership, 175 to 250 townhome units and a 100-unit apartment building. The estimated market value for the proposed Interchange West development is approximately $130 million. This represents an increase of $108 million over the current assessed market value. The gross annual increment has been projected at over $6 million. Appendix D of the Tax Increment Plan provides additional, detailed cash flow information. Lyndale Gateway The Lyndale Gateway is bordered by the alley east of Garfield Avenue and Aldrich Avenue between 76th and 77th Streets. This area. was first identified for redevelopment in the Interstate-Lyndale-Nicollet (ILN) Redevelopment Plan which was completed in 1985. Several components of that plan, most notably the Shops at Lyndale development, have been completed. In 1996 the Hoisington-Koegler Group completed a new plan for South Lyndale Avenue. The plan, which was conducted with a high degree of community participation, recommended a complete redevelopment of Lyndale Avenue between 76th and 77th Streets. Since 1996, there have been several concepts for redeveloping South Lyndale Avenue. In 1998, the concept proposed by CSM Properties, Inc. was selected by the HRA and a Contract for Private Redevelopment was adopted in January 1999. Subsequently, a concept plan for the redevelopment was submitted to the HRA on April 19. This concept plan included a drug store and an additional 44,000 sq. ft. of retail and office space on the west side of Lyndale Avenue. On the east side of Lyndale, CSM has proposed a 151-unit senior complex adjoining 37,000 sq. ft. of office space. The development on both sides of the street contains a mixture of surface and underground parking. Additionally, the Lyndale Gateway Tax Increment Financing Plan allows for townhome development on the east side. of Garfield Avenue between 76th and 77th Streets. While this area is not currently designated in the concept plan, its inclusion in the TIF plan is to allow for the development to occur if the majority of homeowners in that area demonstrate a preference to sell their homes. The estimated market value for the development of Lyndale Gateway is $25 million. This represents an increase of nearly $21 million over the current assessed market value. The gross annual increment has been projected at $707,600. Appendix D of the Tax Increment Plan provides additional detailed cash flow information. A rovision of both the Interchan a West and L ndale Gatewa Contracts for Private p g Y Y Redevelopment is an agreement on "the form of the Tax Increment Plan, which, following agreement as to form, shall have been considered and adopted by the City." Additionally, the contract requires the identification of "the level, the nature and the form of public assistance which is necessary in order to facilitate the development contemplated in the Concept Plan." Both of these conditions of the contract are addressed by the resolution which is being considered. Essentially, the form of public assistance is the tax increment to be generated on the site and the use of public assistance will be for reimbursement of site assembly costs. Four parcels which are included in the proposed Interchange West and Lyndale Gateway TIF District are currently a part of the Interstate-Lyndale-Nicollet (ILN) TIF District. These parcels are located at 7601-7633 Lyndale Avenue (east side of the street). If the Lyndale Gateway TIF District and Plan are established, these parcels will be "decertified" from the ILN TIF district. In addition to the cash flows detailed in Appendix D, it is recommended that the executive summary be reviewed: Other Modifications to the Richfield Redevelopment Project Area There are several additional modifications to the Richfield Redevelopment Project Area which are not related to the Interchange West or Lyndale Gateway areas. The purpose • of these modifications is to expand the boundary of the project area so that it corresponds to the redevelopment planning areas within the City. Specifically, these areas are the Richfield Lake Area plan (REAP) and the Airport Mitigative Area. The additional modifications are included to recognize prior redevelopment opportunities that were available to the HRA. The following opportunities came in the form of early property acquisitions from willing sellers for substandard property. These acquisitions include the former Hat Trick Hockey property, the former FINA gas station at 66th Street and Elliot Avenue, and a residential property located at_7608 Pillsbury Avenue. Seven single-family residential properties located at 6913 - 6937 Penn Avenue were also purchased by the City as part of a stormwater mitigation program. These properties will be conveyed to the HRA for redevelopment ofmarket-rate townhomes on residual land after the stormwater retention pond has been implemented by the City. There may also be the opportunity to redevelop parcels including, and adjacent to, the City's garage, 7700 Pillsbury Avenue. The purpose of this redevelopment would be to either expand the City Garage at .its current location or to relocate the Garage and redevelop the site. In addition to the property currently owned by the City, this would include three single family homes and a commercial property. These,properties are included as a modification to the Richfield .Redevelopment Project Area at this time to • negate the necessity of an additional project area modification in the future. Recommended Motion: Adopt the attached resolution which: • approves a modification to the Richfield Redevelopment Project Area Redevelopment Plan; • establishes the Interchange West and Lyndale Gateway Tax Increment Financing District; • approves the Interchange West and Lyndale Gateway Tax Increment Financing Plan; and • requests the City Council to hold a public hearing and approve the modified Redevelopment Plan and new Tax Increment Financing Plans. Basis of Recommendation: 1. Both the Interchange West and Lyndale Gateway areas have been identified for redevelopment. 2. The HRA entered into a Contract for Private Redevelopment with CSM for the redevelopment of the Interchange West area on October 19, 1998 and for the redevelopment of Lyndale Gateway on January 19, 1999. 3. The approval of the plan documents is consistent with the requirements of both of the Contracts for Private Development. 4. The Planning Commission is scheduled to make a finding on the consistency of the Tax Increment Financing Plans with the Richfield Comprehensive Plan on May 25, 1999. 5. The redevelopment and tax increment plans meet the requirements of state law and established procedures within Richfield. Alternative Recommendation: 1. Do not approve the resolution to adopt the modification of the Richfield Redevelopment Project Area and the establishment of the Interchange West and Lyndale Gateway TIF District and Plan. 2. Amend the resolution to eliminate those portions of the Interchange West and Lyndale Gateway TIF District which are related to either to the Interchange West or Lyndale Gateway projects. 3. Delay approval of the modification to the Richfield Redevelopment Project Area or the establishment of the new TIF District and Plan. 4. Seek alternatives to the proposed project. Discussion/Decision Mode: The City Council's public hearing is scheduled for June 14, 1999. Sid Inman of Ehlers & Associates, Inc. will be present at the HRA meeting and will be available to discuss the attached plan documents. Additional information regarding Interchange West is included in Exhibit A and additional .information regarding Lyndale Gateway is included in Exhibit B. Respectfully submitted, Steven L. Devi Acting Executive Director SLD:cak • • HRA RESOLUTION NO. RESOLUTION MODIFYING THE RICHFIELD REVELOPMENT PROJECT AREA AND ADOPTING THE MODIFICATION TO THE REDEVELOPMENT PLAN RELATING THERETO; AND ESTABLISHING THE INTERCHANGE WEST AND LYNDALE GATEWAY TAX INCREMENT FINANCING DISTRICT THEREIN AND ADOPTING THE RELATED TAX INCREMENT FINANCING PLAN WHEREAS, it has been proposed that the Housing and Redevelopment Authority (the "HRA") in and for the City of Richfield (the "City") adopt the Modification to the Redevelopment Plans for the Richfield Redevelopment Project Area and establish the Interchange West and. Lyndale Gateway Tax Increment Financing District and adopt the Tax Increment Financing Plan related thereto,: (collectively, the "Plans"), all pursuant to and in conformity with existing law, including Minnesota Statutes, Sections 469.001 through 469.047., and Sections 469.174 to 469.179, inclusive, as amended, all as reflected in the Plans and presented for the HRA's consideration; and WHEREAS, the HRA has investigated the facts relating to the Plans and has caused the Plans to be prepared; and .WHEREAS, the proposed developments described in the Plans, in the opinion of the HRA, would not reasonably be expected to occur solely through private investment • within the reasonably 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 Plans, including but not limited to, notification of Hennepin County and School District No. 280 having taxing jurisdiction over the property to be included in the Interchange West and Lyndale Gateway Tax Increment Financing District,. notice of a proposed redevelopment district to the local county commissioner, a request for review of and written comment on the Plans by the City Planning Commission, and a request that the Council schedule a public hearing on the Plans upon published notice as required by law. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota. 1. The HRA hereby finds that the Interchange West and Lyndale Gateway Tax Increment Financing District 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 Plans will advance the HRA's and City's objectives of encouraging redevelopment within the Richfield Redevelopment Project Area. 2. Conditioned upon the approval thereof by the City Council following its public hearing thereon, the Plans, as presented to the HRA on this date, are hereby approved, established and adopted and shall be placed on file in the office of the City Clerk.. 3. Upon approval of the Plans by the City Council, .the staff, the HRA's advisors and legal counsel are authorized and directed to proceed with the implementation of the Plans and for this purpose to negotiate, draft, prepare and present to the HRA for its consideration all further plans, resolutions, documents and contracts necessary for this purpose. Approval of the Plans does not constitute approval of any project of a Development Agreement with any developer. 4. Upon approval of the Plans by the City Council, the HRA's Executive Director is authorized to forward a copy of the Plans to the Minnesota Department of Revenue pursuant to Minnesota Statutes 469.175, subdivision 2. 5. The City Clerk is authorized and directed to forward a copy of the Plans to the Hennepin County Auditor and request that the Auditor certify the original tax capacity of the Interchange West and. Lyndale Gateway Tax Increment Financing District as described in the Plans, all in accordance with Minnesota Statutes 469.177. • Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 17th day of May, 1999. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary i Exhibit A Additional Information for the Consideration of the Interchange West TIF District & Plan Public Notice and O ortunit for Partici ation Since July 1997, there have been 221etters sent out to each property owner, household and business in the Interchange West area. An informational hotline has also been operational since last summer and has been updated regularly. The purpose of these communications has been to inform affected parties of upcoming meetings; the results of meetings, changes to the schedule; opportunities for participation and provide an update of the project. CSM's real estate consultant has also sent seven project updates to residential property owners since October 1998. There were three neighborhood meetings to discuss the redevelopment concept and the ability to "vote" for a number of redevelopment options. A survey was also conducted to identify neighborhood concerns and desires. There have also been 11 public meetings relating to CSM's development of the Interchange West area. • Acquisition of Property CSM issued purchase offers to all 68 residential property owners on February 15, 1999. Since that time, approximately 50 homeowners have accepted purchase offers; this represents 74 percent of the residential properties. In March, mediation services were offered, free of charge, to all residential property owners. One household utilized mediation services, and another three were identified as "hardship cases" by CSM, thereby receiving special consideration. All commercial property owners have received purchase offers. Several have accepted their offer while others have not had sufficient time to negotiate. CSM will continue working with commercial property owners. Housing Diversity The Concept Plan for Interchange West includes a minimum of 270 units of housing of varying styles, sizes and costs. Included in the plan is a 100-unit apartment complex. This complex will house a mixture of one and two bedroom units and will have provisions for housing families living below median income levels. • CSM is also proposing at least 170 units of housing for sale: This too will vary in terms of design, size and cost. Many of the units will be multi-story townhomes, while others will be single story "flats" located above. It is intended that these units will vary in price from $130,000 to $180,000. The TIF Plan specifies that there will be a component of affordable housing in these units. Traffic The engineering firm of SEH has conducted a traffic analysis of the Interchange West area based on the development of the concept plan. The SEH study provides several transportation elements that will lessen the impact of the increased traffic flow on existing City streets. According to the traffic study, the level of service at key intersections may actually improve over existing conditions if-the recommendations are followed. Many of the recommendations of the SEH study are reflected in the current concept plan. The remaining. issues will be addressed by staff, the developer and the traffic consultants prior to a rezoning of the property. Pedestrian, Bicycle and Transit Use A portion of the Interchange West area is located in the Twin Cities' Transit Zone, meaning that it is located within a quarter mile of the regional transit network. The transit network is designated as such due to the availability on non-automobile transportation alternatives present The development itself is designed with sidewalks throughout and roadways of an ample width for bicycle travel: Comprehensive Plan The Richfield Comprehensive Plan designates this area as Regional Commercial/Office, Neighborhood Commercial and High Density Residential. The Planning Commission is scheduled to make a finding on the consistency of the Tax Increment Financing Plan with the Richfield Comprehensive Plan on May 25, 1999. Environmental Assessment Worksheet (EAW) The developer is currently in the process of completing an environmental assessment worksheet. The rezoning necessary for the development cannot be enacted before this EAW is complete and has been reviewed by the public and by local and regional policy-makers. Recreational/Community Facilities Included in the development is a large water feature that is intended to serve a dual purpose as both a community oriented park setting and as stormwater retention. The pond will contain natural vegetation and will be encircled with pedestrian trails. • • Cost of Services to New Development While the development will contain more units of housing and square footage of commercial space, those areas will be designed to modern specifications. Public Safety staff have reviewed the plans several times and have ensured that 1) the site is designed using "crime prevention through environmental design" techniques; 2) streets are designed properly for emergency vehicles; 3) sprinkler systems will be added to the building where appropriate; and 4) building materials are used that will minimize fire hazards. These modern standards equate to fewer service calls per unit. Assessed Market Value & Increment Generated b Develo ment The current assessor's estimated market value for the properties in the district is $22 million. The market value of the project is estimated as $130 million; representing an increase of $108 million. The gross annual increment has been projected at $6.2 million. The history of the estimated market value for the Interchange West area prior to redevelopment is as follows: ,~ 19'-~~ 1996 . 1997 1998 1999: $18,390,800 $18,612,600 $19,492,200 $20,313,100 $21,608,300 • Tax Ca acit Ca tured in Richfield as Com ared to Other Similar Communities The percentage of total tax capacity within the City of Richfield which was captured as increment was 12.26 percent for taxes payable in 1998 (data for 1999 is not yet available for comparison). The following graph compares Richfield's percentage of tax capacity which is captured as increment with other similar communities: Captured Tax Capacity in Other Similar Communities 1 e.oo% 15.46% 16.00% ~ 7.os°ro 14.00% I 12.26% 12.13% 12.33% 1 z.oo% 9.76% 10.25% 9.65% 9.44% 1 0.00% 8.0 2 % .,a. 6.00% -- -~ 6.00% - _. - .. ;.-., .. _ .__ 4.00% - - _:_t ,. 2.00% ,<. ,.. _.. _. ~-. .:. _. 0.00% ~ __ '-z. ,:. _ o ys e Q F~c~oc Gyre` ~ ~~ Z`°'r`y o~~` ~a\e~ oQ~ce Q-r~e\a ~o~ya~e \\e ~` a ~C`~ aJ\ G The percent of captured tax capacity is one way to measure redevelopment activity. Older aggressive communities generally have a higher captured percentage. Reasons Wh Richfield Redevelo s • To Keep Residential Neighborhoods Vital • To Retain and Attract Residents • To Maintain a Stable and Growing Population • To attract Investment • To Compete with Developing Suburbs Exhibit B Additional Information. for the Consideration of the Lyndale Gateway TIF District & Plan Public Notice and O ortunit for Partici ation Since November 1998 there have been seven letters sent out to each property owner, household and business in the Lyndale Gateway area. The purpose of these communications has been to inform affected parties of upcoming meetings; the results of meetings; changes to the schedule; opportunities for participation; and provide an update of the project. There have also been four public meetings relating to CSM's development of the Lyndale Gateway area. Acquisition of Property CSM intends to issue purchase offers to all property owners in the Lyndale Gateway prior to June 21, 1999. During the negotiation period, mediation services will be made available at no cost to property owners. Housing Diversity The 151 units of assisted living senior housing meets a housing need in Richfield which is currently unsatisfied. Seventy-eight of the units will be two bedroom and seventy-three will be one bedroom. The facility will meet the needs of many seniors who fall below specified income levels; up to 40 percent of the units will be offered at a reduced rent. Pedestrian, Bicycle and Transit Use The Design Guidelines contained in the1996 Lyndale Gateway Plan state that development in this area should: make public transit an essential part of the solution; establish a character which is pedestrian in scale; and place buildings at the street frontage so that the area is more focused to bicycles and pedestrians rather than the automobile. This development would accomplish these guidelines in many ways, primarily by including transit stops as an integral part of the plan; offering pedestrian plazas; and setting the parking behind the buildings. Comprehensive Plan The Richfield Comprehensive Plan currently designates this area as a Plan Study Area but is in the process of being updated to reflect the findings of the Lyndale Gateway Redevelopment Plan. The Planning Commission is scheduled to make a finding on the consistency of the Tax Increment Financing Plan with the Richfield Comprehensive Plan on May 25, 1999. Cost of Services to New Development While the development will contain more units of housing and square footage of commercial space, those areas will be designed to modern specifications. Public Safety staff have reviewed the plans several times and have ensured that: the site is designed to using "crime prevention through environmental design" techniques; that streets are designed properly for emergency vehicles; building will be sprinklered where appropriate; and building materials are used which will minimize fire hazards. Additionally, the senior apartment complex will have on-site medical personnel. These modern standards equate to fewer service calls per unit. Assessed Market Value & Increment Generated b Develo ment The current assessor's market value for the properties in the district is $4.4 million. The market value of the project is estimated at nearly $25 million, representing an increase of $21 million. The gross annual increment has been projected at $707,600. The history of the estimated market value for the Interchange West area prior to redevelopment is as follows: -- ~ 99~ ---~ 1996 -~ ia97 1998 ~ t999 :$3,973,000 ~ $4,012,000 ~ $4,122,000 $4,298,00 $4,424,000 Tax Ca acit Ca tured in Richfield as Com ared to Other Similar Communities The percentage of total tax capacity within the City of Richfield .which was captured as increment was 12.26 percent for taxes payable in 1998 (data for 1999 is not yet available for comparison).. The following graph compares Richfield's percentage of tax capacity that is captured as increment with other similar communities: Captured Tax Capacity in Other Similar Communities ,s.oo% 17.os°i° 1 5.46 16.00% ~a.ao% 13.11 % - 12.26% 12.13% 12.33% ~ 2.00% - 0 ~o.oow 9.76% 10.25 /0 9.65% 9.44% r _ - 8.02% _ - s.oo% - - 'iii - ~:': ~~:~TT°~ - - a.oo% - 2.00% - o.oo% - - ~oo eC~` Qa~ .0r~e '~ a~e~ `icy he~a ate S~~e a a° ~ J Q ~e ~e ctiQ ~ ~~~ ~c o\JF ~o Q- ~~`cti ~~r `oo~\c ~~ ~~~ ~`~~e G \aec ~o ~`~ o~~`~ ~ goy ~a` G The percent of captured tax capacity is one way to measure redevelopment activity. Older, aggressive communities generally have a higher captured percentage. Reasons Wh Richfield Redevelo s • To Keep Residential Neighborhoods Vital • To Retain and Attract Residents • To Maintain a Stable and Growing Population • To attract Investment • To Compete with Developing Suburbs EXHIBIT C Ehlers and Associates Tax Increment Financing District Overview City of Richfield- The Interchange West and Lyndale Gateway Tax Increment Financing District Proposed action: Establishment ofthe Interchange West and Lyndale Gateway Tax Increment Financing District and the adoption of a plan. Redevelopment Plan: Modify the Redevelopment Program for the Richfield Redevelopment Project Area to include the projects proposed within the Tax Increment District. Type of TIF District: A "Scattered Site" Redevelopment District Parcel Number: See attached parcel lists Location: See the attached maps Proposed development: The Interchange West project is created to facilitate redevelopment of existing buildings in the City ofRichfield. The anticipated use is a 350 room motel, approximately 375,0000 square foot office building, a 50,000 to 70,000 square feet of retail, 100 unit apartment and up to 250 town homes. The Lyndale Gateway project is created to facilitate 50,000 square feet of retail space, 151 unit senior housing complex and the potential for up to 30 town homes Estimated annual tax increment: Interchange West: $6,221,847 Lyndale Gateway: $707,601 Proposed uses: See the attached budget Form of financing: The project will be financed with apay-as-you-go note. Maximum duration: The duration of the Tax Increment Financing District will be 25 .years from the date of receipt of the first increment. The date of receipt of the first tax increment will be approximately 2002. Thus, it is estimated that the Tax Increment Financing District, including any modifications of the Plan for subsequent phases or other changes, would terminate after 2026, or when the Plan is satisfied. If increment is received in 2001 due to inflation, the District will terminate in 2025 Administrative fee: Up to 10% of annual increment, if costs are justified. Fiscal Disparities: The City ofRichfield will choose to calculate fiscal disparities by clause b. TIF District Overview • LGA/I-IACA penalty: The City elects to make the annual local contribution to the project to exempt itself from the LGA-RAGA penalty. Contribution for an redevelopment district is 5% ofannual tax increment. The contribution can be made annually or in larger contribution throughoutthe life ofthe district. 3 Year Activity Rule At least one ofthe following activities must take place in the District within (469.176 Subd. la) 3 years from the date of certification: ^ bonds have been issued ^ the authority has acquired property within the district ^ the authority has constructed or caused to be constructed public improvements within the district The estimated date whereby this activity must take place is June, 2002. 4 Year Activity Rule If after four years from the date of certification of the District one of the (~ 469.176 Subd 6) following activities must have been commenced on each parcel in the District: ^ demolition ^ rehabilitation ^ renovation ^ other site preparation (not including utility services such as sewer and water) If the activity has not been started by the approximately June, 2003, no additional tax increment may be taken from that parcel until the commencement of a qualifying activity. 5 Year Rule Within 5 years of certification revenues derived from tax increments must (~ 469.1763 Subd 3) be expended or obligated to be expended. Tax increments are considered to have been expended on an activity within the District if one of the following occurs: ^ the revenues are actually paid to a third party with respect to the activity ^ bonds, the proceeds of which must be used to finance the activity, are issued and sold to a third party, the revenues are spent to repay the bonds, and the proceeds of the bonds either are reasonably expected to be spent before the end of the later of (i) the five year period, or (ii) a reasonable temporary period within the meaning of the use of that term under §. 148(c)(1) of the Internal Revenue Code, or are deposited in a reasonably required reserve or replacement fund ^ binding contracts with a third party are entered into for performance of the activity and the revenues are spent under the contractual obligation ^ costs with respect to the activity are paid and the revenues are spent to reimburse a pay for payment of the costs, including interest on unreimbursed costs. Any obligations in the Tax Increment District made after approximately June, 2004, will not be eligible for repayment from tax increments. The previous summary contains an overview of the basic elements of the proposed Tax Increment Financing Plan for the Interchange West and Lyndale Gateway Tax Increment Financing District. More detailed information on each of these topics can be found in the complete TIF Plan. Page 2 TIF District Overview The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan for the Interchange West Tax Increment Financing District as required pursuant to M.S., Section 469.175, Subd. 3 are as follows: 1. Finding that the Interchange West portion of the Interchange West and Lyndale Gateway Tax Increment Financing District is a redevelopment district as defrned in M.S., Section 469.174, Subd. 10(a)(1). Interchange West portion consists of 98 parcels, with plans to redevelop the area for housing and commercial purposes. At least 70 percent of the area in the parcels in the Interchange West portion of the Tax Increment Financing District are occupied by buildings, streets, utilities, or other improvements and more than 50 percent of the buildings in the Interchange West portion of the Tax Increment Financing District, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance (See Appendix F). 2. Finding that the proposed development, in the opinion of the City Council, would not reasonably be expected to occur solely through private investment within the reasonably foreseeable future and that the increased market value of the site that could reasonably be expected to occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the Interchange West and Lyndale Gateway Tax Increment Financing District permitted by the Plan. The proposed development, in the opinion of the City, would not reasonably be expected to occur solely throughprivate investment within the reasonably foreseeable future: This finding is supported by the fact that the redevelopment proposed in this plan meets the City's objectives for redevelopment. Due to the high cost of redevelopment on the parcels currently occupied by substandard buildings, the limited amount ofcommercial/industrial property for expansion adjacent to the existing project, the incompatible land uses at close proximity, and the cost of financing the. proposed improvements, this project is feasible only through assistance, in part, from tax increment financing. The developer was asked for and provided a letter and a proforma as justification that the developer would not have gone forward withouttax incrementassistance (see attachment in Appendix F). The increased market value of the site that could reasonable be expected to occur without the use of tax increment financing would be less than the increase in market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the TIF District permitted by the Plan: The City supported this finding on the grounds that the cost of site and public improvements and utilities add to the total redevelopment cost. Historically, site and public improvements costs in this area have made redevelopment infeasible without tax increment assistance. Therefore, the City reasonably determines that no other redevelopment of any kind is anticipated on this site without substantially similar assistance being provided to the development. Accordingly, the increased market value anticipated without tax increment assistance is $0. A comparative analysis of estimated market values both with and without establishment of the Interchange West and Lyndale Gateway Tax Increment Financing District and the use of tax increments has been performed as described above. If all development which is proposed to be assisted with tax increment were to occur in the Interchange West project of the Interchange West and • Page 3 TIF District Overview Lyndale Gateway Tax Increment Financing District, the total increase in market value would be up to $129,303,942. The present value of tax increments from the Interchange West and Lyndale Gateway Tax Increment Financing District is estimated to be $28,175,217. It is the Council's finding that no development with a market value of greater than $101,128,725 would occur without tax increment assistance in this district within 25 years. This finding is based upon evidence from general past experience with the high cost of acquisition, site improvements, public improvements and redevelopment in the general area of the Interchange West and Lyndale Gateway Tax Increment Financing District (see Cashflow in Appendix D). 3. Finding that the Tax Increment Financing Plan for the Interchange West project of the Interchange West and Lyndale Gateway Tax Increment Financing District conforms to the general plan for the development or redevelopment of the municipality as a whole. The Plan was reviewed by the Planning Commission on May 25, 1999. The Planning Commission found that the Plan conforms to the general development plan of the City. 4. Finding that the Tax Increment Financing Plan for the Interchange West project of the Interchange West and Lyndale Gateway Tax Increment Financing District will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of the Richfield Redevelopment Project Area by private enterprise. The project to be assisted by the Interchange West project in the Interchange West and Lyndale Gateway Tax Increment Financing District will result in increased employment and housing opportunities in the: City and the State of Minnesota, the replacement of substandard properties, increased tax base of the State and add a high quality development to the City. • Page 4 TIF District Overview The reasons and facts supporting the findings for the adoption ofthe Tax Increment Financing Plan for the Interchange West and Lyndale Gateway Tax Increment Financing District as required pursuant to M.S., Section 469.175, Subd. 3 are as follows: Finding that the Lyndale Gateway project in the Interchange West and Lyndale Gateway Tax Increment Financing District is a redevelopment district as defined in M.S., Section 469.174, Subd. 10(a) (1). The Lyndale Gateway portion of the Interchange West and Lyndale Gateway Tax Increment Financing District consists of 37 parcels, with plans to redevelop the area for housing and commercial purposes. At least 70 percent of the area in the parcels in the Lyndale Gateway project are occupied by buildings, streets, utilities, or other improvements and more than 50 percent of the buildings in the Lyndale Gateway project, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance (See Appendix F). 2. Finding that the proposed development, in the opinion of the City Council, would not reasonably be expected to occur solely throughprivate investment within the reasonablyforeseeable future and that the increased market value of the site that could reasonably be expectedto occur without the use of tax increment financing would be less than the increase in the market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the Interchange West and Lyndale Gateway Tax Increment Financing District permitted by the Plan. The proposed development, in the opinion of the City, would not reasonably be expected to occur solely throughprivate investment within the reasonablyforeseeable future: This finding is supported by the fact that the redevelopment proposed in this plan meets the City's objectives for redevelopment. Due to the high cost of redevelopment on the parcels currently occupied by substandard buildings, the limited amount ofcommercial/industrial property for expansion adjacent to the existing project, the incompatible land uses at close proximity, and the cost of financing the proposed improvements, this project is feasible only through assistance, in part, from tax increment financing. The developer was asked for and provided a letter and a proforma as justification that the developer would not have gone forward withouttax increment assistance (see attachment in Appendix F). The increased market value of the site that could reasonable be expected to occur without the use of tax increment f nancing would be less than the increase in market value estimated to result from the proposed development after subtracting the present value of the projected tax increments for the maximum duration of the TIF District permitted by the Plan: The City supported this finding on the grounds that the cost of site and public improvements and utilities add to the total redevelopment cost. Historically, site and public improvements costs in this area have made redevelopment infeasible without tax increment assistance. This site has been marketed for at least 14 years without success. Therefore, the City reasonably determines that no other redevelopment of any kind is anticipated on this site without substantially similar assistance being provided to the development. Accordingly, the increased market value anticipated without tax increment assistance is $0. A comparative analysis of estimated market values both with and without establishment of the Interchange West and Lyndale Gateway Tax Increment Financing District and the use of tax increments has been performed as described above. If all development which is proposed to be Page 5 TIF District Overview assisted with tax increment were to occur in the Lyndale Gateway project in the Interchange West and Lyndale Gateway Tax Increment Financing District, the total increase in market value would be up to $24,646,406. The present value of tax increments from the Lyndale Gateway project in the Interchange West and Lyndale Gateway Tax Increment Financing District is estimated to be $4,339,493. It is the Council's finding that no development with a market value of greater than $20,306,913 would occur without tax increment assistance in this district within 25 years. This finding is based upon evidence from general past experience with the high cost of acquisition, site improvements, public improvements and redevelopment in the general area of the Interchange West and Lyndale Gateway Tax Increment Financing District (see Cashflow in Appendix D). 3. Finding that the Tax Increment Financing Plan for the Lyndale Gateway project of the Interchange West and Lyndale Gateway Tax Increment Financing District conforms to the general plan for the development or redevelopment of the municipality as a whole. The Plan was reviewed by the Planning Commission on May 25, 1999. The Planning Commission found that the Plan conforms to the general development plan of the City. 4. Finding that the Tax Increment Financing Plan for the Lyndale Gateway project of the Interchange West and Lyndale Gateway Tax Increment Financing District will afford maximum opportunity, consistent with the sound needs of the City as a whole, for the development or redevelopment of the Richfield Redevelopment Project Area by private enterprise. The project to be assisted by the Interchange West and Lyndale Gateway Tax Increment Financing District will result in increased employment and housing opportunities in the City and the State of Minnesota, the replacement of substandard properties, increased tax base of the State and add a high quality development to the City. r~ Page 6 TIF District Overview BUDGET FOR THE INTERCHANGE WEST AND LYNDALE GATEWAY TAX INCREMENT FINANCING DISTRICT Uses of Funds Interchange Lyndale Land Acquisition, Site Improvements Public Improvements, Public-Utilities And Other Public Improvements $50,000,000 $9,000,000 Interest 47,902,000 7,953,300 Administrative Costs (up to 10%) 10,878,000 1,883,700 TOTAL $108,780,000 $18,837,000 The City will be using some ofthe tax increment designated for land acquisition to provide down payment assistance to a variety of prospective home buyers. Page 7 TIF District Overview PARCEL LIST OF THE RICHFIELD REDEVELOPMENT PROJECT AREA AND THE INTERCHANGE WEST AND LYNDALE GATEWAY TAX INCREMENT FINANCING DISTRICT r Page 8 • Interchange West • Address Address PID 7601 Penn Avenue 33-028-24-33-0037 7609 Penn Avenue 33-028-24-33-0036 7615 Penn Avenue 33-028-24-33-0035 7621 Penn Avenue 33-028-24-33-0034 7627 Penn Avenue 33-028-24-33-0033 7633 Penn Avenue 33-028-24-33-0032 7639 Penn Avenue 33-028-24-33-0031 7649 Penn Avenue 33-028-24-33-0012 7600 Oliver Avenue 33-028-24-33-0021 7604 Oliver Avenue 33-028-24-33-0022 7610 Oliver Avenue 33-028-24-33-0023 7614 Oliver Avenue 33-028-24-33-0024 7620 Oliver Avenue 33-028-24-33-0025 7624 Oliver Avenue 33-028-24-33-0026 7628 Oliver Avenue 33-028-24-33-0027 7634 Oliver Avenue 33-028-24-33-0028 7638 Oliver Avenue 33-028-24-33-0029 7644 Oliver Avenue 33-028-24-33-0030 7601 Oliver Avenue 33-028-24-33-0064 7609 Oliver Avenue 33-028-24-33-0063 7615 Oliver Avenue 33-028-24-33-0089 7621 Oliver Avenue 33-028-24-33-0088 7627 Oliver Avenue 33-028-24-33-0087 7633 Oliver Avenue 33-028-24-33-0062 7639 Oliver Avenue 33-028-24-33-0061 7645 Oliver Avenue 33-028-24-33-0060 7600 Newton Avenue 33-028-24-33-0052 7608 Newton Avenue 33-028-24-33-0053 7614 Newton Avenue 33-028-24-33-0054 7620 Newton Avenue 33-028-24-33-0055 7626. .Newton Avenue 33-028-24-33-0056 7632 Newton Avenue 33-028-24-33-0057 7638 Newton Avenue 33-028-24-33-0058 7644 Newton Avenue 33-028-24-33-0059 7601 Newton Avenue 33-028-24-33-0078 7605 Newton Avenue 33-028-24-33-0079 7611 Newton Avenue 33-028-24-33-0080 7617 Newton Avenue 33-028-24-33-0081 7623 Newton Avenue 33-028-24-33-0082 7629 Newton Avenue 33-028-24-33-0083 7633 Newton Avenue 33-028-24-33-0084 7639/41 Newton Avenue 33-028-24-33-0085 7643/45 Newton Avenue 33-028-24-33-0086 • ~~ • 7600 Morgan Avenue 33-028-24-33-0038 7608 Morgan Avenue 33-028-24-33-0039 7620 Morgan Avenue 33-028-24-33-0041 7624 Morgan Avenue 33-028-24-33-0042 7628 Morgan Avenue 33-028-24-33-0043 7634 Morgan Avenue 33-028-24-33-0044 7638/40 Morgan Avenue 33-028-24-33-0045 7642/44 Morgan Avenue 33-028-24-33-0046 7601 Morgan Avenue 33-028-24-33-0090 7609 Morgan Avenue 33-028-24-33-0091 7615 Morgan Avenue 33-028-24-33-0047 7621 Morgan Avenue 33-028-24-33-0048 7625 Morgan Avenue 33-028-24-33-0049 7629 Morgan Avenue 33-028-24-33-0050 7639/41 Morgan Avenue 33-028-24-33-0051 7645/47 Morgan Avenue 33-028-24-33-0004 1915 76th Street 33-028-24-33-0001 7608/10 Logan Avenue 33-028-24-33-0002 7614/16 Logan Avenue 33-028-24-33-0015 7620/22 Logan Avenue 33-028-24-33-0016 7626/28 Logan Avenue 33-028-24-33-0017 7636/38 Logan Avenue 33-028-24-33-0019 7644/46 Logan Avenue 33-028-24-33-0020 7601 LogarrAvenue 33-028-24-34-0006 2015/25 77th Streeet 33-028-24-33-0008 2101/09/15/21 77th Streeet 33-028-24-33-0010 7615 Logan Avenue 33-028-24-34-0005 7629/35 Logan Avenue 33-028-24-34-0014 7639/45 Logan Avenue 33-028-24-34-0015 7700 Logan Avenue 33-028-24-33-0005 7701 Logan Avenue 33-028-24-34-0007 7708 Logan Avenue 33-028-24-33-0006 7600 Knox Avenue 33-028-24-34-0002 7608 Knox Avenue 33-028-24-34-0003 7626 Knox Avenue 33-028-24-34-0009 7700 Knox Avenue 33-028-24-34-0010 7701 Penn Avenue 33-028-24-33-0013 7745 Penn Avenue 33-028-24-33-0014 7701 Newton Avenue 33-028-24-33-0009 2100 78th Street W 33-028-24-33-0011 2026 78th Street W 33-028-24-33-0067 2024 78th Street W 33-028-24-33-0066&65 2022 78th Street W 33-028-24-33-0068 2020 78th Street W 33-028-24-33-0069 2016 78th Street W 33-028-24-33-0070 2000 78th Street W 33-028-24-33-0007 1920 78th Street W 33-028-24-33-0093 C7 1900 78th Street W 33-028-24-33-0013 7701 Morgan Avenue 33-028-24-33-0094 7705 Morgan Avenue 33-028-24-33-0095 7713 Morgan Avenue 33-028-24-33-0077 7725 Morgan Avenue 33-028-24-33-0072 :~ Lyndale Gateway • Address PID 7600 Lyndale 33-028-24-44-0036 7608 Lyndale 33-028-24-44-0037 7614-16-18 Lyndale 33-028-24-44-0038 7620-26 Lyndale 33-028-24-44-0039 7628 Lyndale 33-028-24-44-0041 7630 Lyndale 33-028-24-44-0042 7632 Lyndale 33-028-24-44-0040 7634-36 Lyndale 33-028-24-44-0043 7638-40 Lyndale 33-028-24-44-0044 7642-42a Lyndale 33-028-24-44-0045 7644-44-1/2 Lyndale 33-028-24-44-0046 7601 Aldrich 33-028-24-44-0056 7609 Aldrich 33-028-24-44-0055 7615 Aldrich 33-028-24-44-0054 7621 Aldrich 33-028-24-44-0053 7627 Aldrich 33-028-24-44-0052 7633 Aldrich 33-028-24-44-0051 7639 Aldrich 33-028-24-44-0050 7601 Lyndale 34-028-24-33-0078 7609-11 Lyndale 34-028-24-33-0077 7613-27 Lyndale 34-028-24-33-0084 7629-33 Lyndale 34-028-24-33-0074 7645 Lyndale 34-028-24-33-0073 7600 Garfield 34-028-24-33-0065 7608 Garfield 34-028-24-33-0066 7614 Garfield 34-028-24-33-0067 7620 Garfield 34-028-24-33-0068 7626 Garfield 34-028-24-33-0069 7632 Gafield 34-028-24-33-0070 7638 Garfield 34-028-24-33-0071 7639 Garfield 34-028-24-33-0058 7633 Garfield 34-028-24-33-0059 7627 Garfield 34-028-24-33-0060 7621 Garfield 34-028-24-33-0061 7615 Garfield 34-028-24-33-0062 7609 Garfield 34-028-24-33-0063 7601 Garfield 34-028-24-33-0064 • TIF 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I - I Foreword ............ ................................... .................1-I Subsection B. Statement of Public Purpose ...........:...................... .. I-1 Subsection F. Boundaries of the Richfield Redevelopment Project Area .............. I -1 Subsection G. Parcels for Acquisition .......................................... 1-1 Subsection J. Development Activities in the Richfield Project Area ................. 1-2 APPENDIX A -BOUNDARY MAPS OF THE RICHFIELD REDEVELOPMENT PROJECT AREA ..................................................................... A-1 r SECTION I MODIFICATION TO THE REDEVELOPMENT PLAN FOR THE RICHFIELD RED~T~ELOPMENT PROJECT AREA Foreword The following text represents a Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area. This .modification represents a continuation of the goals and objectives set forth in the Redevelopment Plan for the Richfield Redevelopment Project Area. Generally, the substantive changes include expanding the boundaries of the Richfield Redevelopment Project Area; clarifying parcels to be acquired by the Housing and Redevelopment Authority and the City of Richfield; and modifying the Redevelopment Plan for the Richfield Redevelopment Project Area to include the establishment of the Interchange West and Lyndale Gateway. Tax Increment Financing District. For further information, a review of the Redevelopment Plan for the Richfield Redevelopment Project Area, adopted June 14, 1993, is recommended. It is available in the Community Development Department at the City of Richfield. Other relevant information is contained in the Tax Increment Financing Plans for the Tax Increment Financing Districts located within the Richfield Redevelopment Project Area. Subsection B. Statement of Public Purpose See also the State of Public purpose found in Section. B of the Redevelopment Plan for the. Richfield Redevelopment Project Area, dated June 14,1993. Subsection F. Boundaries of the Richfield Redevelopment Project Area The boundary for the Richfield Redevelopment Project Area is being expanded to confrom with current redevelopment plan areas and to include the area in the Interchange West and Lyndale Gateway Tax IncrementFinancing District. See Appendix A ofthis Modification to the Redevelopment Program for the Richfield Redevelopment Project Area and the District. Subsection G. Parcels for Acquisition The Housing and Redevelopment Authority may acquire the parcels listed in the Tax IncrementFinancing Plan for the Interchange West and Lyndale Gateway Tax Increment Financing District. However, it is anticipated that the developers will be responsible for acquisition related to the Interchange West and Lyndale Gateway Tax Increment Financing District. City of Richfield Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area In addition, the following parcels have been designated for acquisition: • • Parcel number 26-028-23-32-0033 26-028-23-31-0046 34-028-23-34-0067 34-028-24-34-0070 34-028-34-34-0049 34-028-34-34-0068 34-028-34-34-0052 28-028-24-33-0069 28-028-24-33-0068 28-028-24-33-0067 28-028-24-33-0066 28-028-24-33-0065 28-028-24-33-0064 28-028-24-33-0063 Use Housing Retail space Housing Mortuary Housing Housing City Garage Housing and storm water retention Housing and storm water retention Housing and storm water retention Housing and storm water retention Housing and storm water retention Housing and-storm water retention Housing and storm water retention Subsection J. Development Activities in the Richfield Project Area The Redevelopment Plan for the Richfield Redevelopment Project Area is hereby modified to include redevelopment and development activities to facilitate the construction of the following projects: a. b. c. d. e. f. Motel Conference Office buildings Retail Facilities Apartments Town homes Senior housing • City of Richfield Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area 1-2 APPENDIX A • BOUNDARY MAPS OF THE MODIFIED RICHFIELD REDEVELOPMENT PROJECT AREA City of Richfield Modification to the Redevelopment Plan for the Richfield Redevelopment Project Area A-1