07-21-97 agendaCITY OF RICHFIELD
REGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING
RICHFIELD CITY HALL
COUNCIL CHAMBERS
MONDAY, JULY 21, 1997
7:00 P.M.
AGENDA
CALL TO ORDER
APPROVAL OF MINUTES OF REGULAR HRA MEETING OF JUNE 16, 1997
1. OPPORTUNITY FOR CITIZENS TO ADDRESS THE HRA ON ITEMS NOT ON
THE AGENDA
2. PUBLIC HEARING AND CONSIDERATION OF RESOLUTION AUTHORIZING
SALE OF 6637 WASHBURN AVENUE TO .STEVEN MARLIN GRANT HOMES,
INC. AND 6415-14TH AVENUE TO AFFORDABLE SUBURBAN HOUSING, INC.
FOR RICHFIELD REDISCOVERED SINGLE FAMILY HOME DEVELOPMENT
HRA LETTER N0.40
3. CONSIDERATION OF RESOLUTION AUTHORIZING EXECUTION OF
CONTRACT WITH HENNEPIN TECHNICAL COLLEGE TO INITIATE 1997-98
NEW HOME PROGRAM PROJECT AT 7520 PORTLAND AVENUE
HRA LETTER NO. 41
4. CONSIDERATION OF RESOLUTION AUTHORIZING SECOND REDUCTION
TO LETTER OF CREDIT FOR SHOPS AT LYNDALE, PHASE II
HRA LETTER NO. 42
5. CONSIDERATION OF RESOLUTION SETTING AMOUNT OF REDUCTION IN
LETTERS OF CREDIT FOR MERIDIAN CROSSINGS
HRA LETTER NO. 43
6. PRESENTATION OF ANNUAL STATUS REPORT ON TAX INCREMENT
DISTRICTS
HRA LETTER N0.44
i 7. CONSIDERATION OF PRIORITIZING DEVELOPMENT OPPORTUNITIES
UTILIZING PROCEEDS OF BONDS OF 1996
HRA LETTER NO. 45
8. CONSIDERATION OF VARIOUS REDEVELOPMENT PROPOSALS FOR 7600
BLOCK OF LYNDALE AVENUE AND ADJACENT RESIDENTIAL HALF BLOCKS
HRA LETTER NO. 46
9. EXECUTIVE DIRECTOR REPORT
10. 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 REbEVELOPMENT AUTHORITY
HRA Letter No. 46
Agenda July 21, 1997
Issue Statement:
Consideration of various redevelopment proposals for the 7600 block of Lyndale
Avenue and adjacent residential half blocks.
Background:
For several months staff has been working with two groups on separate redevelopment
proposals for the 7600. block of Lyndale Avenue as well as the adjacent residential half
blocks of Aldrich and Garfield Avenues. In May the Laurent Parks Development Group
presented its plan to the HRA, and in June the Local Partnership Group presented its
plan along with a Preliminary Land Assembly Agreement. The HRA did not approve
either concept. The HRA did direct staff to continue working with these groups to
further refine their plans. Since presenting to the HRA both groups have made
refinements in an effort to make their plans more economically viable and to reduce the
gap between project costs and financial sources.
Plan Revisions and New Plans:
In the case of the Laurent Parks' plan, the number of apartment units has been
increased from 150 to 256 and the per unit value of the units has been increased. In
• addition, they are no longer including the 1/4 block at the northeast corner of 76th
Street and Lyndale Avenue in their plan. This results in the gap before sources (land
proceeds) being reduced from approximately $4.3 million to approximately $470,000.
Under the revised plan there would be two, four-story buildings on either side of
Lyndale Avenue. Each would have three floors of apartments above ground level retail.
The eight townhomes would be located along Garfield Avenue; behind the larger
building. Should this proposal ultimately be selected, the developer should be
requested to verify the market and the demand for this number of apartment units in
this location.
The Local Partners' plan has undergone a more substantial change in response to an
opportunity which recently presented itself. That opportunity involves the DataSource
Hagen Company (formerly Hagen Computing Solutions which was relocated from 77th'/Z
Street to 77th Street.) and their desire to consolidate their two facilities: one in Edina
and the other on 77th Street. Under the new plan the entire block between Lyndale
and Garfield Avenues would be occupied by a 78,000 sq. ft. three-story building. The
first floor would contain 20,000 sq. ft. of retail space, DataSource Hagen would occupy
40,000 sq. ft. and the remaining 18,000 sq. ft. of office would be leased to other
tenants. Because of the size of the building the remainder of the block would be
devoted to parking and there would also be additional under structure parking. The
other new element of this plan is the possible addition of townhome units in place of the
existing single family homes along the east side of Garfield Avenue. Under the new
plan the gap before sources (land proceeds) has been reduced from $2.9 million to
• $500,000. In the event that the new plan could not be implemented, it would be the
intent of the local group to pursue their original plan.
As part of their proposal, the Local Partnership Group has prepared a Preliminary
Development and Land Assembly Agreement. That Agreement lays out the terms
under which the HRA would lend the group money to begin property acquisition. The
total amount of money to be lent would be agreed to through negotiation and would
become part of the Agreement. The Agreement would also include, .but not be limited
to the following:
• During the terms of the Agreement, (legal counsel suggests six months) the HRA
and redeveloper would negotiate the terms of the Redevelopment Contract.
• During the terms of the Agreement, the HRA would not negotiate with or enter into
an agreement with any third party for the provision of financial assistance for
redevelopment project in this area.
• The Agreement would require timely performance.
• The HRA would, ultimately, utilize condemnation if good faith negotiations were
unsuccessful. However, condemnation would only occur under the terms of a
redevelopment contract.
On July 1, 1997, another proposal was presented to staff by Jack Torvick of Torvick
Chiropractic. Mr. Torvick is a tenant in the 7600 block of Lyndale Avenue. A
preliminary sketch plan was presented, showing two, two-story commercial buildings
situated on either side of Lyndale Avenue. That plan also showed Lyndale Avenue
reconstructed with an "s" curve intended to slow traffic. Such reconstruction and
realignment would need to be reviewed by the City's Public Works Department. The
realignment could also result in additional property acquisition outside of the immediate
redevelopment area. A formal concept plan will be submitted at the July 21 meeting.
Therefore, the plan that is presented to the HRA on July 21 may differ from previous
discussions with staff.
Please refer to Attachment A for a side by side financial comparison of the various
proposals and Attachment B for a similar comparison based on non-financial criteria.
Recommended Motion:
Provide staff direction regarding a desired process and timeline for HRA selection of a
redeveloper.
Basis of Recommendation:
1. The area has been identified for redevelopment.
2. The redevelopment proposals. submitted to date are in substantial conformance
with the Lyndale Gateway Redevelopment Plan and Strategy dated July 8, 1996.
3. It is appropriate for the HRA to direct staff as to what additional information or
analysis is necessary for the HRA to make its decision.
Alternative Recommendation:
1. Select one of the three developers and direct staff to work exclusively with that
developer to implement their redevelopment plan.
Should the HRA select the Local Partnership Group, staff should be directed to
negotiate the previously mentioned Preliminary Development and Land Assembly
Agreement and bring that Agreement to the HRA for its review and approval at
the August 18, 1997 meeting.
2. Terminate redevelopment activities with these groups and seek other
redevelopment plans.
Discussion/Decision Mode:
The details of the Torvick plan were not available at this writing. It is anticipated that
Mr. Torvick will present his proposal at the July 21 HRA meeting and that a revised
version of Attachment A will be available as well. Representatives of the Local
Partnership Group and Laurent Parks Development will also be in attendance and will
be prepared to present their respective plans should the HRA desire.
. The present commercial land within this redevelopment area is in the ILN TIF district
but the residential land is not. Implementation of any of these plans requires the
decertification of the current commercial land .and the creation of a new TIF district.
Technically this should not be an issue but it is something that will impact the timeline
and must be factored into the development process.
DataSource Hagen has a lease at their. Edina location which runs through March 1998..
They may be-able to extend the lease through September 1998 but that is not certain.
If this development option were pursued, and assuming no lease extension,
construction would need to begin by October or November 1997.
Respectf ly submitted,
Jam .Prosser
Execu ive Director
JDP:cak
•
LYNDALE AVENUE PROPOSAL COMPARISON ATTACHMENT A.
FEATURES/COMPONENTS LOCAL PAR TNERS LAURENT-PARKS TORVICK
ORIGINAL PLAN NEW PLAN REVISED PLAN PLAN
COM./RETAIL SQ FT
OFFICE SQ FT
TOWNHOME UNITS
APARTMENT UNITS 47,800
28,000
60
0 38,000
82,000
64
0 84,600
0
8
256
TOTAL OFFICE & RETAIL SQ FT 75,800 120,000 84,600
FINANCIAL/TIF DATA LOCAL PAR TNERS LAURENT-PARKS TORVICK
ORIGINAL PLAN NEW PLAN REVISED PLAN PLAN
CURRENT MARKET VALUE
PROPOSED MARKET VALUE
SITE ASSEMBLY COST
SEMI-ANNUAL TAX INCREMENT
(PRESENT VALUE OVER 25 YRS) $3,464,000
$12,817,589
$5,555,770
$2,619,153 $3,985,000
$22,850,455
$6,338,870
$5,833,346 $3,464,000
$20,780,225
$5,555,770
$5,085,853
P BEFORE SOURCES $2,936,617 $505,524 $469,917
INITIAL SOURCES TO FILL GAP LOCAL PAR TNERS LAURENT-PARKS TORVICK
ORIGINAL PLAN NEW PLAN REVISED PLAN PLAN
LAND PROCEEDS: $1,229,580 $1,469,380 $497,850
-TOWNHOMES AT: $10,000/UNIT
-APARTMENT SITE
-COM/RETAIL/OFFICE SITES AT: $600,000
$0
$629,580 $640,000
$0
$829,380 $0
$0
$497,850
$4/ft LOCAL GROUP, $3/ft LAURENT
$ /ft TORVICK
GAP AFTER INITIAL SOURCES $1,707,037 ($963,856) ($27,933)
OTHER SOURCES TO FILL GAP LOCAL PA RTNERS LAURENT-PARKS TORVICK
ORIGINAL PLAN NEW PLAN REVISED PLAN PLAN
ADDITIONAL HRA FUNDING (IF ANY
IS BEING REQUESTED)
$1,000,000
$0
$0
GAP AFTER OTHER SOURCES $707,037 ($963,856) ($27,933)
~TE: The local partners "new" plan is in response to an office building opporturnty wnicn nas recency presentea nsen.
The "original" plan would be pursued should this opportunity not materialize, therefore both plans are included here.
7/15/97 LYNS05.XLS Page 1
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"The O'Briens
9629 .Wyoming Circle
Bloomin on;, MN 55438
(612944-6294
:July 1 &, 1997 ,
Mr. Jim Prosser
City Manager , "
City of Richfield
b700;Portland Ave `' ;,
.Richfield, MN 55423
Dear Mr. Prosser:
This letter is to inform you,and the HRA hat unfortunately I will not be-able to attend
the meeting scheduled by the HRA for July 21, :.1997: A prior commitment will
necessitate that I be out of town-.that day., Howvever, I.wanted~to re-affirm my
commitment to our partnership for the Mainstreet Shops on Lyridale and our desire to
woxk with the; city. in redeveloping the area.
Our:partnership is anxious: to begin the.. redevelopment of the area `and hopeful that the
HRA will approve our plans""and agree to proceed". `Qur Partnership which includes Mr.
Gary Tushie, Mr. Fred Ryan, and Mr. Steve Sawitzke and. myself have been engage in
this process for many months and`feel with the property ownership which we have,-the
experience that Gary Tushie has with the city that our: proposal is in the best interest of
the :city's long rang planning.
Mr. Prosser I would appreciate it if you would forward a copy of this letter to be placed
in our file to the HRA for their meeting on Monday.
.:Sincerely
~ef~
C
Patrick 0 Brien
cc: Mr-.:Bruce-~almborg
Mr. John llin
Mr. Gary Tushie
•
Mr.,~Robert Deike
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 45
Agenda July 21, 1997
C
•
Issue Statement:
Prioritizing of development opportunities utilizing proceeds of the Bonds of 1996.
Background:
Last year, staff prepared and presented to the HRA a list of Development Investment
Opportunities (see attachment). Also, last year there was a bond sale which netted
$4.9 million. The bond sale was designed to keep certain tax increment funds available
to the community as long as possible since the legislature was poised to make them no
longer accessible. By virtue of the bond sale and legislative action, the Development
Fund will no longer exist after this year. At the present time there are no additional
large sums of money available for Development Fund type activities (except for
Richfield Rediscovered's new construction which will be able to continue under an
independent financing process and will be proposed to the HRA this fall). Because of
all the potential projects being proposed, it would be appropriate to discuss uses for the
bond sale proceeds.
Utilizing the Development Investment Opportunities list and also accounting for events
which have taken place since that list was completed, staff has compiled a priority list
for consideration by the HRA.
INVESTMENT OPPORTUNITIES
Funds already committed/expended due to arevious HRA actions:
1. Meridian Crossings $ 500,000
2. Purchase of Jensen property Cedar Avenue $ 325,000
3. Purchase of Hat Trick Hockey property $ 210,000
4. Bonds of 1996 reserve which may be needed
due to property tax rate/class changes $1,000,000
Subtotal $2,035,000
Other investment oooortunities:
5. Draft revised 1997 HRA budget
.REAP planning & staff time $ 132,525
.Interchange West planning
staff time $ 33,050
.Hat Trick Hockey purchase
(accounted for above)
.Jensen property purchase
(accounted for above)
.Other "~ $ 19,205
Subtotal $ 184,780
6. Draft proposed 1998 HRA budget
.REAP planning & staff time $116,000
.Interchange West planning & $ 79,200
staff time
.Development opportunities $ 82,193
.Other $ 287
Subtotal $ 277,680
7. South Lyndale Avenue Project
A grant to help close the financing gap
on 1 or 2 of the 3 redevelopment proposals
discussed in a separate HRA letter.
Subtotal $1,000,000
8. Existing City garage sites
.Lampert Lumber purchase $750,000
.Pillsbury Avenue site remnant $335,000
south of 77th Street
.Pillsbury Avenue site north $776,000
of 77th Street
.Soil correction ($761,000)
Subtotal $1,100,000
HRA would purchase these sites from the City for redevelopment. The proceeds would
be used to help finance the new City maintenance facility. However, the final purchase
would likely be less than the $1.9 million indicated due to potential soil contamination
issues, demolition and financial feasibility of reuse, thus the estimate of $1.1 million.
9. Current VFW site
10. Current American Legion site
$1,300,000
$1,200,000
The HRA could purchase these two sites for redevelopment. Housing Services, Inc.
has proposed to construct approximately 150 units of co-op housing for people over 62
years of age on the Legion site. The HRA would sell the Legion site to Housing
Services, Inc. However, it is likely that several months would pass between the time of
purchase by the HRA and sale to Housing Services, Inc. Currently there is not a
pending proposal for the VFW site.
Subtotal $5,062,460
TOTAL $7,097,460
Sources $4,900,000
Difference ($2,197,460
With regard to the priority list at the present. time virtually all of these expenditures are
contemplated to be made during the coming 12 to 18 months. While the HRA would
realize land proceeds from sales to developers in some cases the proceeds would be
less than "dollar for dollar" and the return may be from tax increment payments spread
over several years. Therefore, it is suggested the HRA proceed with planning on a
"cash basis."
Mr. Lou Stocco of Housing Services, Inc. has been requested to review his senior
housing concept with the HRA at the July 21 meeting. He would like to proceed with
the co-op housing concept at the American Legion site or work with staff to identify an
alternative location. Mr. Stocco is concerned about the market opportunity window in
Richfield and desires to initiate construction soon.
Recommended Motion:
Discuss the prioritization of the investment opportunities and consider directing staff to
initiate negotiations on the appropriate property.
Basis of Recommendation:
1. The HRA indicated a desire to evaluate investment opportunities for the Bonds of
1996.
2. The projects listed are all significant and have been discussed in a variety of
forums during the last year.
3. Insufficient dollars appear to be available and staff needs direction as to priorities.
Alternative Recommendation:
1. Work with Ehlers and Associates/Publicorp, Inc. to determine if there are any
internal financing methods which could be utilized to fund more projects and
report back to the HRA.
2. Direct staff to include other projects not listed.
Discussion/Decision Mode:
Given the timing of the projects listed, beginning the priority setting process at this time.
would be beneficial.
Respec Ily submitted,
Ja .Prosser
Executive Director
JDP:cak
•
SUMMARY OF INVESTMENT OPPORTUNITIES
Funds already committed/expended due~to previous HRA actions:
1. Meridian Crossings $ 500,000
2. Purchase of Jensen property Cedar Avenue $ 325,000
3. Purchase of Hat Trick Hockey property $ 210,000
4. Bonds of 1996 reserve which may be needed
due to property tax rate/class changes $1,000,000
Other investment oaaortunities:
5. Draft revised 1997 HRA budget $ 184,780
6. Draft proposed 1998 HRA budget $ 277,680
7. South Lyndale Avenue Project $1,000,000
8. Existing City garage sites $1,100,000
9. Current VFW site $1,300,000
10. Current American Legion site $1,200,000
TOTAL $7,097,460
•
•
• MULTIFAMILY .TRANSFORMATION
• POST OFFICE/BRIDGEMAN'S
• KNOX TO LOGAN AVENUE AND 76TH TO 77TH STREETS
• EAST 66TH STREET CORRIDOR UPGRADE
• PILLSBURY AVENUE TO WENTWORTH AVENUE AND 77TH TO 78TH
STREETS
• 4TH AVENUE TO 5TH AVENUE AND 77TH TO 78TH STREETS
• MINI STORAGE AT 200 WEST 78TH STREET
• PENN AVENUE, 68TH TO 69TH STREETS
• SINGLE FAMILY TRANSFORMATION
• 14TH AVENUE TO BLOOMINGTON AVENUE AND 77TH TO 78TH
STREETS
6/26/96
[H:CdAmin:Housing:96Develj
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 44
Agenda July 21, 1997
Issue Statement:
Presentation of. annual status report on tax increment districts.
Background:
The attached report entitled "Richfield HRA Tax Increment District Status Update, June,
1997" was prepared by the HRA's development consultant, Sid Inman of Ehlers and
Associates, Inc. The first half of the report provides a summary on the status of each
tax increment district while the second .half provides financial cashflows. Values reflect
conservative estimates and do not include inflationary increases or interest earnings.
Also reflected in the cashflows are recent legislative reductions in the tax class rates for
commercial property. The reduction in the tax class rates will effectively lower the tax
capacity on which tax increment is calculated by approximately 13%. However, the
base or frozen value will-.also decrease by a similar factor.
A negative balance beginning in the year 2011 is shown on the-last cashflow on page 4,
entitled "Richfield Redevelopment Project Area" . Despite this negative balance, the
health of the overall districts is protected due to market value increases, inflation, and
- investment earnings that do occur but are not shown on the cashflows. Also influencing
the status is the fact that tax class rate changes to commercial property were not
applied against base values in the cashflows. Hennepin County will automatically make
these adjustments for taxes payable 1998 and provide staff with this information early
next year. New cashflows will be prepared when the information is available.
Sid Inman of Ehlers and Associates, Inc. will be present at the meeting to review this
report in further detail and respond to any questions or concerns that you may have.
Recommended Motion:
Discuss and accept the 1997 annual tax increment report prepared by Ehlers &
Associates, Inc.
Basis of Recommendation:
The HRA requested annual reporting on these projects.
Alternative Recommendation:
Delay presentation of the report.
Discussion/Decision Mode:
Updated cashflows will be prepared early next year to include the new tax class rates.
Resp I submitted,
Jam .Prosser
Execu ive Director
JDP:cak
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ASSESSMENT AGREEMENTS AND ASSESSOR'S CERTIFICATES
AND
. LIMITED REVENUE TAX INCREMENT NOTES
~r~a:::>:>:>::>::>::>::::::::::>::::>:>::::>:::>><:>»>>>>>>
:. R. v~lo .tn~nt..P ~ ~
[Iet.L::1~ N ... ed~
:..::::::::::::::::::::::::: .. e...................................................... ................:::::::::::::::::::::::::::::::::::::::.:::::::::::::::::::.::::::::::::::::::::::::::.
:::::::::~.::::.:::::. ~ ::::::::.::::::::.::::::.P::::::::..::.....1................................................................................ .
:::::.::.::.::.:::.:. ::.::::.::::.::::.:.::::::::::::.::.::::::::::::::::: Y..:::::::::::...::::::::.: :::
... ::::.:;::::::.::.;:.>:.;::.:<.;::.::<.::.::.:::.::::.:;:
March 18 Lyndale Garden Center Assessment Agreement Minimum value $1,690,700
1981 and Assessor's Certificate commencing December 15,1981 until
last tax increment payment for LHN
TIF District (year 2001}
October 12 Lake Shore Drive Assessment Agreement Minimum value $10,000,000
1981 Condominiums and Assessor's Certificate commencing December 31,1982;
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
(year 2002)
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
improvement) N( OTE: See February 15, LHN TIF District (year 2001)
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
2001)
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
~Ilage Shores) Shopping Center. Component commencing January 2, 4987 until
and Housing Component B March 31, 2002 or lasttax increment
payment in LHN TIF District ((year
2001); individually, minimum value for
shopping center $3,500,000 and
minimum-value for housing at
$6,875,000
Page 1
July 31 Rainbow Foods Assessment Agreement and Minimum value $3,087,213
1991 Assessor's Certificate commencing January 2,1992 until
April 1, 2001
July 31
1991 U.S. Swim and Fitness Assessment Agreement and
Assessor's Certificate Minimum value $1,854,000
commencing January 2,1.992 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
1994 Agreement (Original
Assessment Agreement and
Assessor's Certificate dated
1983*)
*See December 13,1983 entry
Minimum value $5,039,831
commencing February 15,1994 until
January 2,1995; minimum value
$6,104,800 commencing January 2,
1995 until last tax increment payment
for LHN TIF District (year 2001)
Page 2
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 The Shops of Lyndale Limited Revenue Tax Original principal amount of Note
1994 Increment Note (Phase I) $2,196,358; amount of accrued
interestfrom 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
February 1, 2012
April 29 Limited Revenue Tax Original principal amount of Note
1994 Increment Note (Phase II) $1,125,759; amount of accrued
interestfrom 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
August 1, 2010
March 18 Meridian Crossings Limited Revenue Tax Original principal amount of Note
1996 Increment Note (Phase I) $7,644,695; amount of accrued
.interest from date of Note $8,427,387;
total amount of payments $16,072,082
to be paid semi-annually on each
February 1 and August 1,
commencing August 1,1998 until
February 1, 2012
Page 3
March 18 Meridian Crossings Limited Revenue Tax
1996 Increment Note (Phase II )
Original principal amount of Note
$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 February 1, 2012
Page 4
December 31 Galyan's Trading Company Limited Revenue Tax
1996. (The Limited, Inc.) Increment Note
Original principal amount of 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
February 1, 2019
Page 5
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 at time 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
1988 and interest) $850,000 commencing
annually from receipt of first tax
increment (1990) until last increment
in December, 1996
•
•
Page 6
May 22 6313 Morgan Ave. Assessment Agreement Minimum value $90,000 commencing
1992 (Glenn Wisser) and Assessor's Cer'6ficate** 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 Cerbficate* January 1,1996 through payment of
real estate taxes due and payable in
2021
*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.
Prepared By:
City of Richfield
~ommunity Development Department
Revised July 14,1997
Page 7
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 43
Agenda July 21, 1997
Issue Statement:
Consideration of a request by Meridian Properties Real Estate Development LLC
(TOLD Development Company) to reduce the amounts of the Letters of Credit for
Meridian Crossings.
Background:
On February 18, 1997, the HRA approved a Right of Entry Agreement with the
Developer to allow the Developer to enter Phase I and II of the Cloverleaf site in order
to perform certain site work in advance of the closing on the Phase I property. The
Developer presented the HRA with an irrevocable Letter of Credit in the original amount
of $495,293 to serve as security for performance and payment security for site work
activities and certain. HRA costs related to early construction start as well as for City
costs related to building plan reviews and permits.
On April 21, 1997, the HRA approved a Third Amendment to the Contract for Private
Development which allowed the Developer to close on the Phase I land sale and
commence construction in light of soil contamination detected earlier in the month. At
that time, the original Letter of Credit was amended to extend the:expiration date from
June 19, 1997 to July 31, 1997. Also, a new irrevocable Letter of Credit in the amount
of $105,000 was placed with the HRA as security for resolving soil issues. Both Letters
of Credit expire July 31, 1997.
Late in the week, the Developer requested a reduction in the Letters of Credit to
$150,000. This amount is based upon closing on the Phase I land sale and site work
completed under the Right of Entry Agreement. At this time, the HRA's legal counsel
and staff are reviewing the request. A proposal will be made at the July 21 HRA
meeting with regard to the revised total amount of the Letters of Credit. Also, a
resolution will be presented for review and consideration at that time.
Recommended Motion:
It is recommended that the HRA:
1. Discuss the request for reductions in the Letters of Credit by Meridian Properties
Real Estate Development LLC (TOLD Development Company) based upon the
information that will be provided by legal counsel and staff at the HRA meeting; and
2. Approve a resolution setting the amount of the reduction in the Letters of Credit.
U
Basis of Recommendation:
1. TOLD Development has completed certain activities enumerated in the Right of
Entry Agreement, dated February 18, 1997, and Third Amendment to the Contract
for Private Development, dated April 21, 1997, which would warrant a reduction in
the Letters of Credit currently on file with the HRA.
2. Legal counsel and staff is currently reviewing TOLD's request to determine the
appropriate amount of security still necessary to remain with the HRA.
3. Any amendment to the existing Letters of Credit will continue to adequately protect
the interests of the HRA for outstanding site and closing issues.
Alternative Recommendation:
Delay action on the reduction of the Letters of Credit.
Discussion/Decision Mode:-
Meridian Properties Real Estate Development LLC (TOLD Development Company) is
communicating with legal counsel and staff to determine an appropriate course of
action in a timely manner.
Respectfully submitted,
Jams .Prosser
Executive Director
JDP:cak
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 42
Agenda July 21, 1997
Issue Statement:
Approval of a request by CSM Corporation for a second reduction to the Letter of Credit
for Shops at Lyndale, Phase II.
Background:
The HRA currently has on file a $1,550,000 Letter of Credit from .CSM Corporation for
performance security for site assembly cost payments. Also encumbered under this
Letter of Credit was a list of outstanding site work for Phase I and II whose completion
date was. indicated as June 30, 1997 per a Letter of Undertaking dated December 16,
1996. On March 17, 1997 and in accordance with CSM's request, the HRA approved a
reduction to the original $2.0 million Letter of Credit by $450,000 for certain payments
made by CSM for site assembly costs. The new Letter of Credit was deemed
appropriate for protecting the HRA on the unfinished improvements referenced in the
Letter of Undertaking.
At this time, CSM is again requesting a reduction in the Letter of Credit by $180,000.
The reduction would result in an amendment to the existing Letter of Credit for a new
total of $1,370,000. This reduction is approximately the amount of site assembly costs
involved in the condemnation action for which CSM made recent payment on.
Also,. the date has passed for completion of the outstanding site improvements under
the Letter of Undertaking, dated December 16, 1996. Of these items, the following have
not yet been completed: (1) locate and regrade manholes at Emerson Avenue; (2)
construct a masonry trash enclosure for the in-line shops in Phase II; and (3) construct
pedestrian walkway between the two phases (see attached "punch list"). CSM has
represented that they continue to work towards completion of these items. Per the
Letter of Undertaking, the HRA and City could enter the CSM property for the purpose
of completing the unfinished work and draw down on the Letter of Credit for the cost of
this work. However, it is proposed that an extension be allowed for completion of the
work.
Recommended Motion:
It is recommended that the HRA adopt a motion which:
1. Approves the attached resolution authorizing a $180,000 reduction in the Letter of
Credit for Shops at Lyndale, Phase I1; and
2. Extends the deadline for CSM to complete the remaining site work outlined in the
Letter of Undertaking, dated December 16, 1996, within a 60 day period and not
later than September 19, 1997.
. Basis of Recommendation:
1. CSM has requested a reduction in the amount of the Letter of Credit based on a
recent performance payments made for site assembly costs.
2. Staff has reviewed the request and is of the opinion that CSM's request to reduce
the Letter of Credit by $180,000 is reasonable.
3. The amendment to the existing Letter of Credit by $180,000 will continue to
adequately protect the interests of the HRA for outstanding site assembly costs.
4. Staff has reviewed the outstanding site work related to Phase I and II of the Shops
at Lyndale pursuant to a Letter of Undertaking dated December 16, 1996 and has
been assured by CSM that progress is being made toward completing outstanding
site work although the June 30, 1997 deadline has passed.
5. Staff is proposing that CSM be allowed an extension of 60 more days, or until
September 19, 1997, to adequately complete the outstanding site work.
6. The Letter of Credit in its proposed amended amount would continue to protect the
HRA for the few items remaining as outstanding site work.
Alternative Recommendation:
1. Approve the reduction in the Letter of Credit by $180,000 only contingent upon the
completion of the outstanding site work under the proposed extension.
2. Approve the reduction in the Letter of Credit by $180,000 contingent upon an
alternative time frame for outstanding site work to be completed.
3. Approve the reduction in the Letter of Credit by $180,000 and direct staff to enter
the CSM property and complete all outstanding work as provided for in the Letter of
Undertaking, dated December 16, 1996.
Discussion/Decision Mode:
HRA support will keep the process moving forward.
Respectfully submitted,
Jame .Prosser
Executive Director
JDP:cak
•
HRA RESOLUTION NO.
RESOLUTION AUTHORIZING A $180,000 REDUCTION
IN IRREVOCABLE STANDBY LETTER OF CREDIT
ORIGINALLY DATED NOVEMBER 15, 1996 AND
AMENDED APRIL 4, 1997, FOR THE ACCOUNT
OF CSM INVESTORS, INC.
SHOPS AT LYNDALE, PHASE II
WHEREAS, the Housing and Redevelopment Authority entered into an
Agreement with CSM Corporation (Developer), a Minnesota business corporation,
dated April 11, 1994, pursuant to and in furtherance of the ILN Redevelopment Project
heretofore adopted by the City and the Richfield Housing and Redevelopment
Authority; and
WHEREAS, the Agreement obligated the Developer to construct certain
improvements to property identified in that Agreement; and
WHEREAS, Section 4.7 of the Agreement required the HRA to furnish the
Developer with a Certificate of Completion upon completion of the Phase II construction
in accordance with Concept Plans; and
WHEREAS, the Developer provided the HRA with an Irrevocable Standby Letter
of Credit in the amount of $2.0 million, dated. November 15, 1996, as performance
security for certain -site assembly costs for Phase I I, Shops at Lyndale, and a Letter of
Undertaking, dated December 16, 1996, for outstanding site work for Phase I and II,
Shops at Lyndale; and
WHEREAS, on March 17, 1997, the HRA approved a reduction to the $2.0
million Irrevocable Standby Letter of Credit, dated November 15, 1996, by $450,000
and the Developer provided the HRA with Amendment Number 1 to the Irrevocable
Standby Letter of Credit, dated April 4, 1997, in the new total amount of $1,550,000 as
performance security for certain site improvements and site assembly costs for the
Shops at Lyndale, Phase II; and
WHEREAS, the HRA has billed the Developer for certain site assembly costs
and the Developer is current; and
WHEREAS, Developer has requested that the Irrevocable Standby Letter of
Credit, originally dated November 15, 1996 and amended on April 4, 1997, be further
reduced by $180,000; and
WHEREAS, staff has found that the request for another reduction in the
Irrevocable Standby Letter of Credit, originally dated November 15, 1996 and amended
on April 4, 1997 is reasonable; and
WHEREAS, the Letter of Undertaking, dated December 16, 1996, for certain
outstanding site improvements expired on June 30, 1997; and
WHEREAS, the staff has found that the Developer is making progress towards
the completion of all outstanding site work under said Letter of Undertaking and
recommends an extension of an additional 60 days, or no later than September 19,
1997, for unfinished work.
NOW, THEREFORE, BE IT RESOLVED by the Housing and .Redevelopment
Authority that the Executive Director and HRA Chair are directed to take all steps
necessary to facilitate a reduction in the Irrevocable Standby Letter of Credit, originally
dated November 15, 1996 and amended on April 4, 1997, by $180,000 and to obtain
from the Developer at the appropriate time Amendment Number 2 to the said Letter of
Credit for a new total of $1,370,000; and direct staff to oversee and facilitate the
completion of the outstanding site work under the Letter of Undertaking, dated
December 16, 1996, within the extended 60 day time period, not later than September
19, 1997.
Adopted by the Housing and Redevelopment Authority. in and for the City of
Richfield, Minnesota this 21st day of July, 1997.
•
Thomas E. Harms, Chair
ATTEST:
Michael Sandahl, Secretary
•
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HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 41
Agenda July 21, 1997
Issue Statement:
Authorization to execute a contract with Hennepin Technical College (HTC) to initiate a
1997-98 New Home Program project at 7520 Portland Avenue.
Background:
The HRA has purchased the property at 7520 Portland Avenue from HUD. The
structure on the property was substandard in size and function and was severely
neglected. It had also been the source of several calls to Public Safety and
Environmental Health. Demolition is in the process.
HTC has requested that the HRA participate in a new construction project for the 1997-
- 98 school year. The 7520 Portland Avenue site is a good location. Like the project
recently completed by HTC and the HRA at 6432-15th Avenue, a home with three
bedrooms and space for a future fourth bedroom is envisioned. Performance standards
established in 1995 between the two organizations ensure that the home will be
framed, roofed and sided by the end of fall quarter, December 1997. Interior wall
framing, general carpentry, electrical, plumbing and heating will be completed during
winter quarter ending March 1998. Concrete steps and walk, exterior brick facing,
landscaping -and interior finishes will be completed by June 1998. The home will then
be marketed and sold next summer. This schedule worked well at both 7216 First and
6432-15th Avenues. The project at 7520 Portland Avenue, to be stick-built on site, is
the only HTC project commitment for the 1997-98 school year. Subcontractors to HTC
provide the electrical, plumbing, heating and painting portions of the project.
Staff, in cooperation with HTC architectural drafting faculty, has developed a project
plan for this .lot which meets all setback requirements, complements the neighborhood
and incorporates interior features desirable in today's market. A copy of the plans is
attached. The new house will have approximately 1,750 square feet of finished living
area. Features include: a living room, dining room, kitchen, three finished bedrooms,
1-3/4 bathrooms, a deck and room for a future fourth bedroom and recreation room. As
in the most recently completed home, this home will have an air-to-air exchanger, which
is becoming common in new construction to help prevent moisture build up in tightly
constructed homes. Air conditioning will also be installed due to the site's location on a
busy corridor. The 75-foot wide lot allows ample room for a driveway and off-street
parking. A two car detached garage will also be constructed by HTC. The rest of the
7500 block of Portland consists of single family homes.
The amount of the HTC contract for this project should approximate $88,000. A final
cost is subject to lumber bids being finalized. This cost is consistent with previous
projects given design and- square footage variabilities, the addition of the exchanger
and air conditioning and increased lumber prices.
The estimated project costs and funding sources follow:
ACTIVITY AMOUNT FUNDING SOURCE
Acquisition: $31,500 CDBG Funds
Demolition: $ 3,700 CDBG Funds
HTC Contract: $88,000 Proceeds of Sale
Landscaping: $ 4,000 Proceeds of Sale
Legal (at sale): $ 500 Proceeds of Sale
Closing Costs: $ 2,500 Proceeds of Sale
TOTAL COST: $130,200
The contract document was revised, reviewed,. and found acceptable by legal counsel
last year, due the inclusion of all state technical colleges into the Minnesota State
College and Universities system.
Although the completed value of the home has not yet been determined by
independent appraisal, staff estimates that the home will be sold with a second
mortgage to a moderate income, first-time buying family for approximately $95,000.
Recommended Motion:
It is recommended that the HRA adopt the resolution authorizing the execution of the
HTC contract in the amount of $88,000 for the 1997-98 new construction project at
7520 Portland Avenue.
Basis of Recommendation:
1. -Plans have been developed for 7520 Portland Avenue that will meet site
requirements and program needs of the HRA.
2. The contract provisions are similar to previous contracts with HTC; a summary of
the contract provisions is attached.
3. Administrative changes with HTC have continued to be successful and the most
recent project at 6432-15th Avenue was completed on schedule.
4. HTC has demonstrated a unique ability to provide a desirable product at a more
modest cost than other builders on sites that are challenging to market.
Alternative Recommendation:
Do not authorize execution of the HTC contract.
Discussion/Decision Mode:
Site work begins in July 1997 with full construction starting in August to coincide with
the start of the school year.
Respectfully submitted,
James .Prosser
Executive Director
JDP:cak
•
HRA RESOLUTION NO.
RESOLUTION AUTHORIZING EXECUTION OF A CONTRACT WITH
HENNEPIN TECHNICAL COLLEGE (HTC) FOR DEVELOPMENT
OF 7520 PORTLAND AVENUE
WHEREAS, on June 20, 1997, the HRA purchased the property at 7520
Portland Avenue, legally described as:
The East 165.8 feet of South 75 feet of North 342.8 feet of East 1/2 of Southeast
1/4 of Northeast 1/4 of Southeast 1/4 except road of Section 34 Township 028
Range 24; and
WHEREAS, a project has been proposed as a cooperative effort between the
HRA and HTC; and
WHEREAS, the property at 7520 Portland Avenue would be developed with a
new single family home and two car garage; and
WHEREAS, the cost for constructing a new home and garage in accordance
with the plans and specifications is expected to cost $88,000, subject to finalizing the
cost of lumber; and
WHEREAS, following completion of construction the property will be sold to a
modest income, first time buying family.
NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment
Authority in and for the City of Richfield, Minnesota that the HRA Chairperson and
Executive Director are authorized to enter into a Construction Agreement with HTC for
an amount not to exceed $88,000 with an adjustment permitted should lumber costs be
higher than expected for the construction of a new home and garage at 7520 Portland
Avenue.
Adopted by the Housing and Redevelopment Authority in and. for the City of
Richfield, Minnesota this 21st day of July, 1997.
Thomas E. Harms, Chair
ATTEST:
r:
Michael Sandahl, Secretary
•
July 21, 1997/HRA
7520 Portland Attachment
SUMMARY OF
CONTRACT REQUIREMENTS FOR HTC PROJECT AT
7520 PORTLAND. AVENUE
• The construction of a new home and two car garage at 7520 Portland Avenue.
• The professional installation of heating, electrical and plumbing systems.
• Completion by July 1998.
• Supervision of labor and insurance coverage to be the responsibility of HTC.
• HTC is responsible for aone-year warranty for defects caused by faulty
workmanship or defective materials; atwo-year warranty on installation of plumbing,
electrical, heating and cooling system; and aten-year warranty on structural defects,
per Minnesota Statute.
• Performance standards have been established specifying HTC's responsibilities
concerning timely completion of the home and routine site maintenance during the
construction period:
• By end of December, excavate, place footings and foundation, frame, install
windows and doors, side and roof.
• By end of March, interior wall framing, insulation, gypsum, cabinets and the
majority of plumbing, heating and electrical should be installed.
By end of June, concrete steps, sidewalk, brick work, deck and driveway will
be completed.
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HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 40
Agenda July 21, 1997
Issue Statement:
Public hearing and authorization to sell 6637 Washburn Avenue to Steven Marlin Grant
Homes, Inc. and 6415-14th Avenue to Affordable Suburban Housing, Inc. for Richfield
Rediscovered single family home development.
Background:
The HRA purchased three adjacent lots on Washburn Avenue for the Richfield
Rediscovered Program. This lot is the south-most lot of the three. The site is vacant
and ready for construction by Steven Marlin Grant Homes, Inc. The property will be a
single level home with two bedrooms on the main level for an emphasis on single level
living. A third bedroom will be in the basement. The property will have an estimated
value upon completion of $130,000.
The property at 6415-14th Avenue was purchased under the Richfield Rediscovered
Program. Affordable Suburban Housing, Inc. proposes to build a two story home on the
site for an already .identified first time buying family. The property would be valued at
approximately $131,000. The HRA would provide a second mortgage in the amount of
$26.,000 (the price of the land) to provide a more affordable opportunity to the buyers.
Affordable Suburban Housing, Inc. completed a similar development at 6844-14th
Avenue two years ago.
Recommended Motion:
Following a public hearing, adopt the resolution authorizing the sale of 6637 Washburn
Avenue to Steven Marlin Grant Homes, Inc. and 6415-14th Avenue to Affordable
Suburban Housing, Inc.
Basis of Recommendation:
1. The builders have evidenced experience, capability and financial security.
2. The HRA acquired the properties 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 the sale of the properties was published in the Sun
Current for a July 21, 1997 hearing.
Alternative Recommendation:
Do not proceed with the development agreements with Steven Marlin Grant Homes,
Inc. nor Affordable Suburban Housing, Inc.
Decision/Decision Mode:
Closings would occur in August, with construction starting soon afterwards.
Respectf ly submitted;
Jams .Prosser
Exec ive Director
JDP:cak
• HRA RESOLUTION NO.
RESOLUTION AUTHORIZING THE SALE OF REAL PROPERTY
LOCATED AT 6637 WASHBURN AVENUE TO STEVEN MARLIN GRANT HOMES,
INC. AND 6415-14TH AVENUE TO AFFORDABLE SUBURBAN HOUSING, INC.
IN ACCORDANCE WITH DEVELOPMENT AGREEMENTS
WHEREAS, the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota (HRA) desires to develop certain real property pursuant to and in
furtherance of the Richfield Rediscovered Program adopted by the HRA said real
property being described as follows:
Address Legal Description
6637 Washburn Avenue Lot 17, Block 7,
Tingdale Bros.' Lincoln Hills Addition
6415-14 Avenue Lot 21, Block 3
Nokomis Gardens Rearrangement of Blocks
1, 2, 3,4, and 5, Girard Parkview addition
WHEREAS, the HRA is authorized to sell real property within its area of
operation after public hearing; and
WHEREAS, purchasers of the described properties have been identified and
development agreements negotiated as follows:
Performance
Address Sale Price Security Builder
6637 Washburn Avenue $30,000 $30,000 Steven Marlin Grant Homes, Inc.
6415-14th Avenue $26,000 $26,000 Affordable Suburban Housing,
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 6637 Washburn Avenue is authorized to be
sold for $30,000 to Steven Marlin Grant Homes, Inc. and 6415-14th Avenue is
authorized to be sold for $26,000 to Affordable Suburban Housing, Inc. in
accordance with development agreements with the HRA.
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2. The Chairperson and Executive Director are authorized to execute Contracts for
Private Development and other agreements as required to effectuate the sales to
Steven Marlin Grant Homes, Inc. and Affordable Suburban Housing, Inc.
Adopted by the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota this 21st day of July, 1997.
Thomas E. Harms, Chair
ATTEST:
Michael Sandahl, Secretary
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