02-13-95 agendaCITY OF RIGHFLELD
SPECIAL HOUSING AND REDEVELOPMENT AUTHORITY MEETING
MONDAY, FEBRUARY 13, 1995
6:30 P.M.
COUNCIL CHAMBERS
AGENDA
CALL TO ORDER
I. CONSIDERATION OF RESOLUTION RELATING TO ACCEPTANCE OF LETTER
OF CREDIT AND RELEASING MORTGAGE INTEREST HELD BY HRA; CSM,
PHASEI
HRA LETTER NO. 8
LI. CONSIDERATION OF STIPULATION OF SETTLEMENT REGARDING
PREVIOUSLY OWNED CITY PROPERTY NEAR EMERSON AVENUE AND NEW
77TH STREET; CSM, PHASE
HRA LETTER NO. 9
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. 9
Agenda February 13, 1995
Issue Statement:
Consideration of the approval of a Stipulation of Settlement regarding previously owned
City property, CSM, Phase i.
Background:
Attached is a Stipulation of Settlement which includes a map.. The map identifies land
near Emerson Avenue adjacent to the new 77th Street on the south. Some of this land
was old 77th Street which was vacated and some was residual property purchased for
the new 77th Street (previously known as 7645 Emerson Avenue).
As the stipulation indicates, the HRA acquired title to this property subject to utility
easements in favor of the City. The purpose of this taking was to make the land
available to CSM for their Phase I development. (It was not needed for right of way
purposes.)
Recommended Motion:
It is recommended that the HRA adopt a motion approving the attached stipulation and
direct staff to present it to the City Council along with the HRA's request for approval.
Basis of Recommendation:
1. This land was residual in nature with no other practical use.
2. Mr. Brad Bjorklund of BCL Appraisals; Inc. set the value of this property at $6,800
subject to easements in favor of the City.
3. The HRA would pay $6,800 to the City for this property and receive $6,800 from
CSM. .
Alternative Recommendation:
1. Refuse to approve the stipulation.
2. Delay consideration of this matter.
Discussion/Decision Mode:
CSM will be closing on their permanent financing for Phase I prior to the end of
February and this stipulation needs approval prior to that closing.
Respec Ily submitted,
Jame .Prosser
Exective Director
JDP: cak
SmATE t'~F ~+tINN~SOTA
DISTRICT COURT
Ct~UNTX CF HEi-1'1~EPTN ~ FOURTH JUDICIAL DISTRICT
Housing. and Redevelopment
Authority in and for the City of )
Richfield, a publa.C body } STIPULATION OF
corporate and politic-under the } aETTLEMEAIT
laws of the State of Minnesota, )
Petit~.oner,
yg. ) Court File NO. CD-234
}
City cif Richfield, et al., )
}
Respondents.
THIS STIPULATION IS MADE by and between the Petitioner Housing
and Redevelopment Authority in and for the City of Richfield (the.
"HRDi" } , acting by and through its attorney, ~.nd the respondent City
of Richfield ( "C~.ty„)
Recitals
A. At the time of commencement of this notion, the City was
the owner in fee simple title of the lands identified as Parcels 1
and 2 i.n this condemnat~.on action. The. legal descriptions of
Parcels l and 2 are attached as Exhibit A to this stipulat~.on.
S. By order dated August 3, 3.994, the HRA acquired title to
and pcssessi.on of Parcels 1 and 2,. subject t4 existing utility
easements in favor of the City, as of August 9, 199.4.
C. There is on deposit with the court administrator the sum
of $i.~t3, plus acctued interest thereon, which is the amount of the
quick-takedepost made for Parce3.s ]. and 2 pursuant to Minnesota
.Statutes, section ~~.7.442.
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D. In order to a~to.id further hearings r~r expense, -the City'
and HRA desire to enter into a full and final compromise and
settlement of this matter.
Stipulati.ca
~.. The City and HRA stipulate and. agree that the court-
appainted comm~.ssioners .may .enter a final. a~rard in favor of the.
City, in the amount of $6,800.. for Parcels l and 2.
2. The HRA agrees to pay to the City,-within 3t} days 4i' the
date of this stipulation, tYce sum of $6,800, together w~.th accrued
interest thereon from August 5, i~94•
3. The City agrees that .the IRA may make an e~z a~, rte request
to the court for disburs®ment tv-the ARA of the $1.00 on deposit
with the court, plus accrued interest. thereon,
This stipulation is made as of February ,..1995•-
. ~ HOLMES & CRAVEN, CHARTERED
gy
Robert J. Lindell (63277) ~'
Carrtne A. Heins, (149743)
470 Pillsbury Center
Minneapolis, MN 55402
(612 ) 337--9300
ATTORNEYS FOR PETITIONER
HOUSING AND REDEVELOPMENT
At9TH~RITY IN AND FOR THE
CITX 0~' RICHFIELD
CITY OF RICHFIELD
By
Martin J. Kiruch, Mayor.
By
.Tames D. Prosser, City Manager
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EXHIBIT A
Parcel 1 fP~bstract).
D®scription of Property to be Taken:
The North 30 feet of the East Half of the Southeast Quarter of
Southwest .Quarter of the Southeast Quarter of Section. 33,
~ Township 28, Range 24, Hennepin County, Minnesota
Limitation can.taking:
The taking of-the above-described property is subject to
easements in favor of the City of Richfield for existing public
utilities.
Parcel 2 (Abstx~aot):
Description of Subject Property:
The South 85 feet of the hest ~Ta1f of the East Half of th+~
Northeast Quarter of the Southwest quarter of the Southeast
Quarter of Section 33, Township 28, Range 24, Hennepin County,
Minnesota
and
Lot 8, H'd~tTH~'E1.T ADDITYc~N, Hennepin County, Minn®sc~ta
and
Vacated or unvacated 7?th Street West, as dedicated in the plat
of NpRTHEELT ADDITICN, Hennepin County, Minnesota
Descr~.ption of Part to be Taken:
Than part of-the above--described subject properties being-
describgd as follows:-
Commencing at the southeast corner of the Northeast Quarter
of the Southwest Quarter of the Southeast quarter of said
Section 33; thence South 83 degre®s 41 minutes 41 seconds.
West, assumed bearing, along .the south lf.ne of said
Northeast Quarter of Southwest Quarter of Southeast Quarter
86.58 feet to the point of beginning of the pare®1 to be
described; thence northwresterly x.87.04 feet along a non--
tangential curve concave to the northeast having a radius of
610,33 feet and a central angle of 17 degrees 33 minutes 32
seconds, the chord of said curve bears North 63 degrees 29
minutes 13 seconds West; thence South 3$ d®greas O6 minutes
35 seconds West, not tangent to said curve, 32.47 feet;
thence southerly along a tangential curve concave to the
east having a radius of 120.00 feet to the south 13ne of
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Exhibit ;A
said Northeast Quarter of Southwest Quarter of Sauth~ast
Quarter, thence North $9 degre®s 41 minutes 41 seconds fast
along said south line to the point of beginning.
.Limitation on taki.ng:
The taking of the above described ~rop~rty is subject ~o
easements in favor of tha City of Richfield -for existing pub~.ia
utilities.
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HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 8
Agenda February 13, 1995
Issue Statement:
Consideration of a resolution relating to the acceptance of a Letter of Credit and
releasing of mortgage interests held by the HRA, CSM Phase I.
Background:
The HRA approved a Contract For Private Development with CSM in April, 1994. The
agreement required that CSM would provide security to the HRA for certain costs
enumerated in the agreement in Section 3.2 (d)(3). CSM provided that security through
mortgages. CSM is now negotiating permanent financing for Phase I. To facilitate that.
permanent financing, CSM. has requested-the HRA to release these mortgage interests
(See Exhibit A). Because there are still some outstanding obligations related to Phase
I, CSM is obligated to continue toprovide security for them. They have offered to
provide that security in the form of a Letter of Credit for $750,000. The form of that
proposed Letter of Credit is attached.
Recommended Motion:
Adopt amotion which approves the attached resolution and authorizes the acceptance
of a Letter of Credit and release of mortgages for obligations of CSM to the HRA.
Basis of Recommendation:
1. CSM has expense items related to Phase I for which they are responsible under the
contract.
2. The contract permits substitute forms of .security.
3. A Letter of Credit offers a more effective method for collecting from the security if the
need arises.
4. A downsizing of the security from $2.8 million to $750,000 is appropriate at this time.
Alternative Recommendation:
1. Delay action.
2. Refuse the request.:
Discussion/Decision Mode:
The acceptance of a substitute form of security by a Letter of Credit will facilitate CSM's
closing on the permanent financing for Phase I.
Respect Ily submitted,
Jam .Prosser.
Exe ve Director
JDP:cak
Attachment
RESOLUTION NO.
THE HOUSING AND REDEVELOPMENT AUTHORITY IN
.AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION RELATING TO ACCEPTING LETTER OF CREDIT AND RELEASING
MORTGAGES
WHEREAS, the Housing and Redevelopment Authority in and for the City of
Richfield (the "HRA") did, on or about April 29, 1994, execute and enter into a Contract
for Private Redevelopment .(the "Contract") with CSM Corporation; and
WHEREAS, CSM Corporation subsequently assigned its interest under the
contract to CSM Investors, Inc., a Minnesota corporation (the "CSM"); and
WHEREAS, pursuant to the requirements of section 3.2(d)(3) of the Contract.,
CSM has given- the HRA security interests in the form of mortgages covering the Phase.
property; and
WHEREAS, such mortgages are fully described on the attached Exhibit A; and
WHEREAS, CSM, in connection with securing permanent financing has now
requested that the HRA release its mortgages. in favor of a letter of credit (the "LC") in
the amount of $750,000 and in substantially the form of the attached Exhibit B; and
WHEREAS, the Contract permits the HRA, upon the request of CSM, to accept
other forms of substitute security when, in the HRA's reasonable judgment, such other
forms of security will adequately perfect the HRA's interests under the Contract; and
WHEREAS, the HRA has reviewed CSM's proposed LC, and has included that
LC adequately protects the HRA with respect to the obligations described in Section 3.2
(d)(3) of the Contract.
NOW, THEREFORE, be it resolved by the Housing and Redevelopment
Authority in and for the City of Richfield, Minnesota as follows:
1. That the LC in substantially the form contained in Exhibit B is hereby
approved as alternative security to the mortgage described in Exhibit A.
2. That upon receipt. of a fully executed LC, the Executive Director and
Chairperson are hereby authorized, on behalf of the HRA, to take all actions and do all
things reasonably necessary to release the mortgages described in Exhibit B.
Adopted by the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota this 13th day of February,-1995.
Thomas E. Harms, Chairperson
ATTEST:
Vern Luettinger, Secretary
EXHIBIT A
MORTGAGES
DOCUMENT NO. AMOUNT RECORD DATE
1. 6322375 $1;500,000 August 8, 1994
2. 6322614 400,000 August 8, 1994
3. 6322968 100,000 August 9, 1994
4. 6325228 823,000 August 9, 1994
EXHIBIT
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Beneficiary:
Amoursi Av-aiiai~le:
USD:
U.S. Odlars:
APPi;rar:t: '
~Y Date:
This L4 il7e Origirsal Letter of Creedt.
Ges~ifes'nert:
We hereby issue in your fiav~or ibis irrevacabie Letter ~ Credit tdo. - uP to the amotn7t of
ire U.S. Currenry wh;c.'t is avaitabie stpoa sutsestder Cf ~ Letter. e# Cradrt
to us aes:ompar7ied by your draft drawn at sight an us bearing the pause 'Qtawn crrlder FtrSi krt7elrirurt
Bank Metro. Letter of. Cr~edr2 No. '
We hereby engage with yam, that one draft drawn under and 'sz carr~fiatx7e wilt tree tiaras d the
Letter of Grader wilt. be duly ltor~ore~d by us if presented during regular business l'IOtJtS at 633 Sottl~t Cencord
Street,. South. Si. Paul, MN 5.ra0?5 on a before 2x70 o'docfc p.m. act or before August t. 1995. Tfrs Eerier
of Credt shaft be promptly surrendered to us by yver upon such e~iratia~t_
The request for Pa7~~ under the Letter of Credit sEsaR be fasa! and oondt~sive for aI pvrp~oses
without verification by F1r5# American Bank Metro and shaft not be subject ire sefuLaifon, dertiai, os corstest.
This. documentary credit is svbjeat io the 'Unifoml Customs and Prac#ics fcx Doassaerstary Credits'.
1993. Revisions trriematiorrai Charrf~er of :ommerze Pvbiicaiion No. 504.
F1F;ST AMEAt ~C
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EXHIBIT B
PERFORMANCE
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
INVESTORS- $UILDING
733 MARQUETTE AVENCTE, SUITE 3S0
MINNEAPOLIS, MINNESOTA 55479-0093.
INTERNATIONAL LETTERS OF CREDIT
DATE:
TO___---- ------
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ACCOUNT PARTY:
wE OPEN IRREVOCABLE STANDBY LETTER. OF CREDIT NUMBER $LCNBR IN
THE AMOUNT OF -------------- (----AMOUNT IN WORDS----)
IN FAVOR OF YOURSELVES
EXPIRES -------------- AT OUR COUNTERS
AVAILABLE AGAINST DRAFTS DRAWN AT SIGHT ON NORWEST BANK.
MINNESOTA, NATIONAL ASSOCIATION, MINNEAPOLIS, MINNESOTA SEARING
THE CLAUSE: " DRAG7N UNDER STANDBY LETTER OF CREDIT NUMBER ~LCNBR
OF NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION " ACCOMPANIED BY
THE FOLLOWING DOCUMENTS:
1. BENEFICIARY'S SIGNED .STATEMENT READING: " WE ARE DRAWING
AGAINST STANDBY LETTER OF CREDIT N0. ~LCNBR AS ----------
HAS FAILED TO COMPLY WITH THE TERMS AND CONDITIONS OF
THE CONTRACT DATED ---------- BETWEEN ------------- AND
2. THIS ORIGINAL LETTER. OF CREDIT FOR ENDORSEMENT.
PAYi3'IENT WILL BE MADE AT THE COUNTERS OF NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION.
THIS CREDIT IS SUBJECT TO THE UNIFORP? CUSTOMS AND PRACTICE FOR
DOCUMENTARY CREDITS. (1993 REVISION) INTERNATIONAL CHr',MBER OF
COMMERCE PUBLICATION N0. 500.
NC a~ta5 ~NUL (5-B%-70e%al
m:C":a EXHIBIT. B
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''LESS OTHERWISE STATED, ALL DOCUMENTS ARE TO BE FORWARDED TO
. SY MAIL, OR HAND DELIVERED TO OUR COUNTERS.
DOCUMENTS TO BE DIRECTED TO: NORWEST BANK MINNE80TA, NATIONAL
ASSOCIATION, INVESTORS BUILDING, 733 MARQUETTE AVENUE,
MINNEAPOLIS, MINNESOTA 55479-0093, ATTN: INTERNATIONAL PRODUCT
SERVICES DIVISION., LETTERS OF CREDIT.
WE HEREBY ENGAG£ WITH DRAWERS AND~OR BONA FZD£ HOLDERS THAT
DRAFTS DRAWN AND NEGOTIATED IN STRICT CONFORMITY WITH THE.
TERMS OF THIS CREDIT WILL BE DULY HONORED UPON PRESENTATION.
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION.
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AUTHORIZED SIGNATURE ~,,~. `~t`;~SA ORIZED SIGNATURE
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