09-15-97 agenda• CITY OF RICHFIELD
REGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING
RICHFIELD CITY HALL
COUNCIL CHAMBERS
MONDAY, SEPTEMBER 15, 1997
7:00 P.M.
AGENDA
CALL TO ORDER
APPROVAL OF MINUTES OF REGULAR HRA MEETING OF AUGUST 18, 1997
1. OPPORTUNITY FOR CITIZENS TO ADDRESS THE HRA ON ITEMS NOT ON
THE AGENDA
2. CONSIDERATION OF RESOLUTION AUTHORIZING ISSUANCE OF
COMPLETION CERTIFICATES FOR RICHFIELD REDISCOVERED
PROPERTIES TO STEVEN MARLIN GRANT HOME, INC. FOR 7424 FIFTH
AND 7421 EMERSON AVENUES; SHADE TREE CONSTRUCTION FOR 6205
i MORGAN AVENUE; AND ROCKPORT HOMES FOR 7625 EMERSON AVENUE
HRA LETTER NO. 54
3. .CONSIDERATION OF AUTHORIZING RELEASE OF $105,000 CASH
PERFORMANCE SECURITY, MERIDIAN CROSSINGS
HRA LETTER NO. 55
4. CONSIDERATION OF REQUEST FROM RICHFIELD FLORAL AND NURSERY
FOR REDUCTION IN SALE PRICE OF 817 EAST 66TH STREET AND WAIVER
OF CERTAIN DEVELOPMENT REQUIREMENTS.
HRA LETTER NO. 56
5. EXECUTIVE DIRECTOR REPORT
6. 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 861-9702.
• HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 56
Agenda September 15, 1997
Issue Statement:
Consider a request from Richfield Floral and Nursery for a reduction in the sale price of
817 East 66th Street as well as the waiver of certain development requirements.
Background:
At its March 17, 1997 meeting, the HRA selected Richfield Floral_and Nursery over the
Minnesota Valley School of Music as the developer-of the former FINA_gas station
property at 817 East 66th Street. Richfield Floral and Nursery's plans included a new
4,000 sq. ft. store and outdoor sales area as well as a new facade for their existing
building, a new sign to replace the existing one and various other site improvements.
Since receiving HRA approval they have also received bids for the proposed work.
Their project has come in at a much higher cost than originally anticipated. One of the
main contributing factors to the cost of the project is the strength of the economy.
Because most building contractors have more work than they can handle, they are
able to be selective and to name their price. Richfield Floral and Nursery is, therefore,
looking for ways to reduce the cost of the project. According to part owner Pat Harris,
they have scaled the building back as much as they possibly can. In an effort to find
i further cost savings, staff met with Richfield Floral and Nursery along with a mediator
to discuss specific concerns and possible areas of savings. Based on that session
staff has agreed on the following:
• The new facade for the existing building will not be required at this time. (However,
staff would still like to see it done in the future if possible.)
• Anew sign will not be required.
• The existing parking lot need not be completely reconstructed as shown on the
approved plans. Instead, the only thing required is the closing of the two curb cuts
to 66th Street and the installation of a catch basin and storm sewer pipe. (With the
curb cut to 66th Street closed, the parking lot would flood without the catch basin.)
Richfield Floral and Nursery has also requested that the other site improvements be
waived, but staff does not support these requests. Based on a contractor's estimate
provided by Richfield Floral and Nursery, the total cost of these particular
improvements is estimated by staff to be between $20,000 and $25,000. They include
the following:
• No blacktop on the parking lot behind the new building. (All parking and driving
areas are required by City code to be hard surfaced. Staff believes that this
requirement should not be waived.)
•
. No storm sewer in the new parking, lots. (All new development and redevelopment
is required under the Storm Water Management Plan to provide on-site storm water
collection.)
• Maintain the existing curb cuts to 66th Street. (The approved plan shows closing
all access to 66th Street.) Closing the curb cuts is being requested in the interest
of safety and traffic management and also to increase the amount of available on-
site parking.)
Finally, Richfield Floral and Nursery has asked for a reduction in cost of the land.
While a minimum amount has not yet been identified, it is staff's understanding that
Richfield Floral and Nursery-maybe asking for a write down-of land to: zero.-The HRA
purchased the property for $117,000 and spent an additional $10,000 to clear the site.
An experienced commercial real estate appraiser familiar with Richfield, appraised the
property at its sale price, is $65,200.
Richfield Floral and Nursery is aware that staff cannot authorize a reduction in the land
price. Staff has suggested, however, that a deferral of the land cost may be a
possibility. Under such a scenario Richfield Floral and Nursery would pay an agreed
upon percentage of the land cost up front and then be given a several year grace
period during which no payment would be required. At the end of that period they
would begin making payments on a note. The details of such an arrangement
including the interest rate would need to be negotiated. This would ease their initial
burden but it would also ensure that the HRA received payment for the land.
Additional direction from the HRA to staff in defining the terms of such a method of
purchase would be appropriate.
Recommended Motion:
Accept the modifications which staff. supports and also authorize staff to .negotiate the
details of an agreement with Richfield Floral and Nursery where the total cost of the
land {$65,200) could be paid back to the HRA over time.
Basis of Recommendation:
1. The plan modifications to which staff has agreed would still provide a quality
development.
2. The granting of the additional modifications requested by Richfield Floral and
Nursery would not be appropriate given current codes and policies.
3. At $65,200 the HRA has already provided a substantial write down.
Alternative Recommendation:
1. Accept the modification which staff supports and also authorize staff to enter into a
purchase agreement with Richfield Floral and Nursery for the sale of 817 East 66th
Street for an amount less than the appraised value of $65,200. That amount to be
determined by the HRA.
2. Direct staff to identify alternative developer(s).
Discussion/Decision Mode:
In selecting Richfield Floral and Nursery to develop this site, the HRA recognizes the
value in having the property under one ownership and having a unified, connected
commercial development. Staff also recognizes the value of this and has, therefore,
tried to work with Richfield Floral & Nursery and to accommodate to the extent possible
all of their concerns. However, there are certain minimum requirements which are
placed on all developers which staff believes must be adhered to.
- _.
It is staff's understanding that. the project will probably not:.get under way this year.
Richfield Floral and Nursery will resubmit the project for bids over the winter in hopes
of getting better prices for construction in the spring of 1998. As a result, there is time
to pursue an agreement which is acceptable to both the HRA and Richfield Floral and
Nursery.
Respectfully submitted,
James rosser
Executive Director
JDP:cak
U
• HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 55
Agenda September 15, 1997
Issue Statement:
Release of a $105,000 performance security, Meridian Crossings.
Background:
The HRA is currently holding two forms of performance security for Meridian Crossings;
a $495,293 Letter of Credit-and $105,000 cash. TOLD is .requesting the return of the
$105,000 cash. They have asserted that the-$495;000-is-more than-adequate-security
to cover the possibility of liens against Phase I I property and the construction of the
driveway to the CSM site through Phase I of Meridian Crossings. Attached is the
request from TOLD. A representative of TOLD will be in attendance. at the September
15 HRA meeting.
Recommended Motion:
Adopt a motion authorizing the release of the $105,000 cash performance security.
Basis of Recommendation: - -
1. Performance security is designed to protect the interest of the HRA.
• 2. The September 2 letter from TOLD indicates that the remaining $495,293 Letter of
Credit is sufficient to secure the HRA interests.
Alternative Recommendation:
1. Delay consideration of the release of the security deposit.
2. Deny the release of the security.
Discussion/Decision Mode:
TOLD has made the request and a timely response would be appropriate.
Respectfully submitted,
Jam D. Prosser
Executive Director
JDP:cak
•
_,__~_
_. I
~~
~,yELQp1N~NT COMPAPIY
September 2,199?
VU-f,~CS1MlLE r r,~~-4~Ya
Ms: Corrine'1'fwmson
Kennedy & Graven
200 South Sixth Svtct
470 Pillsbury Center
Minneapolis, MN 55402
ire: Ixtter of Credit - IVleridian Crossings i.L.C
Dear Conine:
'!'he l.ettet of Credit was iticr^~«sed to $60Q.040.Ott uo'''Cdiately prior to the land closing on Phase
claing requirements but nee~+ed to
r
f
h
e-
t
e p
I titSCe Meridian Crossings i.LC t~.ad not satisfird al! o
It was aia~ays undetSCOOd that, upon satisfaction o the pre-closing trite^a,
tion
e
.
nce cortstntc
comm
the Getter of Credit would be reduced w$495,000.(1(1.
d
•t•n~ te1~5,QOp.t~ !S ttinre than adLquatr security to guard against Fhase II Liens an
Adds ~ y,
Lienable work occurring on Phase II is
h PE~ase I
*ht+cut
i
CSM
.
g
te
s
L-onstnrctior- of the dri~L to the
rading aria mitigation work. Nn other a~ubconuacwrs have or wilt sspply labor er materials
utilit
t
y, g
>e
to Phase IL The mitigation work is under a Meridian construction contract but eventually is to
ainst Phase I until Phase II is substantially correnle`.ed_
i
d a
l
b
g
e
e
ev
covered. by special as~essmentc, w
The cost of mitigation is ~216.00Q.00. Tht utility and grading work nn Phase I:l iS not a >zparatc
contract amc~uni howetier, thr total ~~ontrect amount for Phase I and II is 5354, 129.00. The balarue
G0 frx all Phase I and Phase II grading and utilit~~ work is $97,I29.~J0 pltu
2 29
3~
.
,
remaining out of $
a retainage af:$25.700.OU for a total owing of $I22,824.Ot1 on both Phase i and Phase II. The entire
paving amount of the coritraLt is $44.800.00, none of which has t+ecti F3id.
Thus. addeng the mitigation, site and utility work and paving the total owed is $3?9,679.00, aga+n
A title company would require us to deposit l25% of total
h
iI
ase
:
this is on bath Phase I and P
licnable ~nourits, or $474,b74.OQ. Thus, the $495,440.04 should be more than sufficient to secura
the liens and the construction of the drive.
The I~2A should remembFx dint rwt only is the full credit of ?uleridiaa f.I.C behind the constntction
etscna{ indemnities of the compa:;y principals against all
~3
b:
i
h
p
nc
as o
a
contracts. the title company
lieriS.
Please let me know if anythinb else is necessary io re!rasr the S10S,004.fI4 held by the HRA.
Sincerely, •
~
mas hT. By r
Th
Gzneraf Counsel
TMB:djn~
L/L 3~tfd 0LE6GEEZi9'QI N3Ati21~ 8 1CQ3NN3}i°1~I02I3 S6'60 L6-E0-d35
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 54
Agenda September 15, 199.7
Issue Statement:
Authorization to issue completion certificates to Steven Marlin Grant Homes, Inc. for 7424
Fifth and 7421 Emerson Avenues; Shade Tree Construction for 6205 Morgan Avenue; and
Rockport Homes for 7625 Emerson Avenue.
Background:
The HRA authorized development of the above referenced properties. The development
agreements provide for the issuance of a certificate of completion when construction is
completed. (A sample certificate is attached,) __ _ , _ _
All homes have been completed except for landscaping at 6205 Morgan Avenue. An escrow
has been retained to cover this item. The builders have requested the release of the letters
of credit and the completion certificates upon completion and closing. Staff is anticipating
this request and wants to respond in a timely manner upon verification of completion.
Recommended Motion:
Authorize the Chair and Executive Director to execute completion certificates in accordance
to the attached resolution.
Basis of Recommendation: -
1. Construction has been completed and certificates of occupancy have been issued by
the City's Inspection Division.
2. The builders have performed in accordance with construction agreements and will seek
the issuance of completion certificates and the release of performance security in the
following amounts:
Builder
~I
Steven Marlin Grant Homes
Steven Marlin Grant Homes
Shade Tree Construction
Rockport Homes, Inc.
Pro e
7424 Fifth Avenue
7421 Emerson Avenue
6205 Morgan Avenue
7625. Emerson Avenue
Performance Security
$30,000
$30,000
$27, 000
$25,600
Alternative Recommendation:
Do not issue certificates of completion at this time.
Discussion/Decision Mode:
This matter will be presented at the September 15 HRA meeting.
Respectfully submitted,
James D. Prosser
Executive Director
JDP:cak
HRA RESOLUTION NO.
•
THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE
CITY OF RICHFIELD
RESOLUTION AUTHORIZING THE ISSUANCE OF COMPLETION CERTIFICATES FOR
RICHFIELD REDISCOVERED PROPERTIES AT 7424 FIFTH AVENUE, 7421 EMERSON
AVENUE, 6205 MORGAN AVENUE AND 7625 EMERSON AVENUE
WHEREAS, the Richfield Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota (HRA) entered into contracts with Steven .Marlin Grant Homes, Inc.,
Shade Tree Construction and Rockport Homes, Inc: for the-construction ofsingle-family
homes; and
WHEREAS, the new home locations are as follows: 7424 Fifth Avenue, 7421
Emerson Avenue, 6205 Morgan Avenue and .7625 Emerson Avenue; and
WHEREAS, performance security in the following amounts can be released to the
respective builders:
7424 Fifth Avenue - $30,000
7421 Emerson Avenue - $30,000
6205 Morgan Avenue - $27,000
7625 Emerson Avenue - $25,600
Steven Marlin Grant Homes
Steven Marlin Grant Homes
Shade Tree Construction
Rockport Homes, Inc.
NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment
Authority in and for the City of Richfield,
1. Completion certificates can be issued for 7424 Fifth Avenue, 7421 Emerson Avenue,
6205 Morgan Avenue and 7625 Emerson Avenue.
2. The performance security can be released for all properties when the completion
certificates are issued.
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota this 15th day of September, 1997.
Thomas E. Harms, Chair
ATTEST:
Michael Sandahl, Secretary
CERTIFICATE OF COMPLETION
The undersigned hereby certifies that has fully and completely complied with
its obligations under Article IV of that document entitled "Contract for Private Development",
between the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota
and dated ,filed
as Document No. with respect to construction of the Improvements at
,legally described as - -- in .accordance with the
approved construction plans .and is -released and forever discharged--from its ;obligations to
construct under such above-referenced Article.
Dated:
•
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD
By
By
Its Chairperson
Its Executive Director
STATE OF MINNESOTA
SS
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of
19 , by
and the Chairperson and Executive Director of the
Housing and Redevelopment Authority in and for the City of Richfield, a public body corporate
and politic under the laws of the State of Minnesota on behalf of the public body corporate and
politic.
Notary Public
This instrument was drafted by:
The Housing and Redevelopment Authority
in and for the City of Richfield
67090 Portland Avenue South
Richfield, MN 55423