01-18-94 agendaCITY OF RICHFIELD.
HOUSING AND REDEVELOPMENT AUTHORITY
TUESDAY, JANUARY 18, 1994
7:00 P.M.
COUNCIL CHAMBERS
AGENDA
CALL TO ORDER
APPROVAL OF MINUTES OF HRA MEETING OF DECEMBER 20, 1993
1. OPPORTUNITY FOR CITIZENS TO ADDRESS THE HRA ON ITEMS NOT ON
THE AGENDA
2. CONSIDERATION OF ELECTION OF OFFICERS FOR 1994
HRA LETTER NO. 1
3. CONSIDERATION OF DESIGNATION OF ACTING EXECUTIVE DIRECTOR FOR
1994
HRA LETTER NO. 2
4. CONSIDERATION OF DESIGNATION OF OFFICIAL NEWSPAPER FOR 1994
HRA LETTER N0. 3
5. CONSIDERATION OF RESOLUTIONS DESIGNATING OFFICIAL
DEPOSITORIES FOR 1994, INCLUDING APPROVAL OF COLLATERAL
HRA LETTER NO. 4
6. CONSIDERATION OF AUTHORIZATION FOR STAFF TO DRAFT AGREEMENT
WITH TOLD DEVELOPMENT COMPANY TO MARKET AND FACILITATE
REDEVELOPMENT OF CLOVERLEAF SITE
HRA LETTER NO. 5
7. CONSIDERATION OF RESOLUTION TO CONFORM LYNDALE/HUB/NICOLLET
COMMERCIAL DEVELOPMENT IMPROVEMENT PROGRAM WITH RSA MEDICAL
OFFICE FACILITY APPROVED DURING LAST QUARTER OF 1993;
MODIFICATION N0. 7
HRA LETTER N0. 6
8. CONSIDERATION OF TRANSFORMATION HOUSING: REVIEW OF 1993
ACTIVITY AND PROGRAM PROPOSAL FOR 1994
HRA LETTER N0. 7
9. PRESENTATION OF CSM STATUS REPORT
10. EXECUTIVE DIRECTOR REPORT
11. 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. 7
January 18, 1994
Issue Statement:
Consideration of Transformation Housing: a review of 1993
activity and a program proposal for 1994.
Background:
The HRA authorized a value added home remodeling program in 1993
called "transformation housing The pilot project at 6500 James
was provided in cooperation with Quam, Sumnicht and Associates
(QSA). The HRA accomplished all of its objectives in the initial
project:
• The foreclosed property was purchased from HUD, but not before
a development agreement and future home buyer were arranged
with QSA.
• A minimum 5120,000 home was provided. The home actually sold
for 5149,500 with many of the amenities found in Richfield
Rediscovered new construction homes.
• A structure, due to its condition, was valued at $50,000 and
was renovated by purchasing at a discount from HUD and passing
approximately half (54,000) of this discount on to QSA after
~, other project costs were covered.
• The home, which had a market value of $74,000 until its
decline and foreclosure, was salvaged and put to a better use.
• HRA staff time was kept to a minimum, an estimated 20 hours.
• A project was completed in a timely manner and QSA had
obtained sufficient financial security (in the form of a
letter of credit) to ensure performance. The HRA promptly
received land/structure proceeds when the property was sold to
the end buyer.
To summarize, the HRA achieved its objectives at little or no
cost.
Staff experience with the program suggests:
1. The 6500 James example was unique. This was a deeply
discounted property available for renovation from HUD. If
the decline in condition and foreclosure had not occurred, a
discount of approximately 525,000 would have been needed to
facilitate transformation.
2. A buyer was readily found, which limited marketing time and
expense. Time and expense are critical issues in major
renovations.
3. QSA was able to overcome buyer and contractor default issues
as they arose.
4. The return on investment by QSA was insufficient for them or
.another remodeler to want to participate .without some program
modifications and additional financial support.
5. A method to transform existing owner .occupied homes has to be
determined. This broadens the program benefit beyond
homebuyers.
To sustain and broaden transformation housing, .the HRA needs to
consider additional financial support. Major remodeling
inherently has greater risks, unforeseen problems, and hard to
estimate and control costs. This. remodeling dilemma is further
explained in the attached "Study of Inherent Loss of Value".
Approximately.5 to 27 .percent of a remodeling projects cost may
not be returned as value added.
In evaluating ways to sustain this program, staff has explored
various types of financial incentives, heard from additional
remodeling contractors that have expressed an interest in
participating, reviewed-some alternative approaches to the
program which were submitted by QSA, and developed a proposal
that should facilitate a greater variety of transformations while
respecting the limited resources of the HRA. A detailed program
summary is provided as an attachment.
Recommended Motion:
Authorize a Transformation '94 program to proceed by supporting
substantial remodeling efforts with a combination of limited
staff support, incentive grants and other financial incentives as
needed for remodeler/homeowner/homebuyer teams.
Basis of Recommendation:
1. "Transformation" is homeowner/homebuyer driven. The HRA and
remodeling contractors are facilitators. The program must
provide sufficient incentives to support
homeowners/homebuyers desire to invest and improve in
Richfield and to do so in a substantial value added way.
2. Experience suggests that homeowners are voluntarily
remodeling up to a contract price of approximately $40,000.
The special mortgage arranged by the HRA with Norwest
supports this initiative and allows up to a 50 percent
increase in value. Remodeling existing homes up to a
$120,000 end value is easily supportable in Richfield by
professional appraisers.
3. To increase the frequency of remodeling greater than this
540,000 value requires additional incentives. These
incentives have to take into account that new construction
,.. is usually more attractive than remodeling, costs frequently
exceed added value, remodelers want a reasonable profit,
- homeowners/homebuyers want to remodel in ways that make
economic sense, and the HRA wants the greatest number of
transformations to occur with the least allocation of
limited resources.
4. The Transformation '94 program summary suggests the HRA take
a shared cost position in major remodeling ventures because
costs typically exceed value added. Incentive grants. deal
with the major program issues: value added is usually less
than actual cost, homeowners may have to temporarily
relocate during major transformations, acquisition followed
by transformation requires greater financial security for
lenders to participate.
5. Unlike Richfield Rediscovered which provides a positive
payback with high a level of security that a home will be
built and completed, the transformation program does not
offer similar security. To improve the HRA's security and
assurance of performance for the contributions made, the
program requires:
s joint grant payments to the homeowner/homebuyer/builder
team at project completion;.
• competitive bidding for homeowners; competitive bidding or
negotiation for home buyers;
• five year continued occupancy to forgive the grant.
-~" The HRA receives greater assurance that the remodeling work
will be completed, that the contract prices are fairly
arrived at, and that remodeling and sale of property does
not create speculative opportunities.
6. Staff has explored various roles the HRA could play
including: acquisition and writedown, interim construction
financing, interest rate reductions on financing, and
designated contractor relationships. Each of these has
consequences which may impair the HRA's transformation
objective given limited resources. Property acquisition
requires large amounts of capital. Writedown requires
interim ownership and limits return on capital. HRA's are
not typically construction lenders. Remodelers typically
use cash on hand, credit lines with experienced lenders and
suppliers and escrow draws to finance remodeling. Interest
rates are already very favorable. Finally, the HRA's
experiences with the Richfield Rediscovered New Construction
program suggests the homeowner/homebuyer prefers to pick
their contractor rather than to have the HRA designate one.
7. The HRA has a possible funding source. Program income from
Richfield Rediscovered New Construction can be committed to
Transformation Housing and not returned to the Development
Fund. Based on Richfield .Rediscovered activity now
underway, approximately $190,000 in land sale program income
is anticipated in 1994.
8. Approximately 10 to 20 incentive grants could be provided
with 5190,000. Approximately two purchase/foreclosure
transformations are possible with the same $190,000.
9. The purchase/transformation process is a more limited method
of program delivery that doesn't help present homeowners.
However, purchase/transformations continue to be an
important method to increase home values and provide more
examples of remodeling alternatives.
10. The incentive grant concept more broadly supports a
transformation initiative with existing owners.
11. Remodeling costs exceed value increases to property by up to
27 percent for typical major improvements. Thus, a 15
percent subsidy to project cost is envisioned to be a
reasonable risk shared by the HRA.
12. A 15 percent of project contribution from the HRA provides
greater lender security, covers a portion of project costs
discovered during remodeling, increases remodeler return,
and provides an incentive to transform.
13. Presently four remodelers have indicated an interest in
participating in transformation housing if the right package
of incentives can be provided (QSA, Parsley, Thompson,
Plekkenpol). Further contractor solicitation would follow
after program approval.
14. Transformation could be appealing to New Ford Town residents
as relocation options are considered.
Alternative Recommendation:
1. Increase HRA support in excess of the proposed amounts and
identify other funding sources.
2. Consider alternative proposals further, such as those
presented by QSA. Three different proposals have been
discussed with QSA since the December 1993 HRA meeting. A
December 15, 1993 proposal suggests up to $25,000 in subsidy
for each project, the HRA assumes the role as the
acquisition and construction financer, a significant
commitment of staff time, detailed administrative processes,
and a high interim capital investment for each remodeling
project. A January 5, 1993 proposal suggested the HRA focus
their assistance on property acquisition loans to benefit
QSA purchases and a monthly retainer of $1,500 while QSA
evaluates candidates for acquisition and initiates projects.
QSA also provided input into the program element the HRA is
reviewing in this letter. The QSA proposals did not address
transformation for owners of existing housing.
3. Discontinue the Transformation Housing Program.
Discussion/Decision Mode:
A waiting list of possible grant recipients .could be started at
the remodeling fair. Additional program marketing is also
envisioned. Land proceeds from Richfield Rediscovered New
Construction should become available in mid to later 1994.
.Respect ully submitted,
Jame Prosser
Exe u 've Director
JDP:cak
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TRANSFORMATION HOUSING
1994 PROGRAM ELEMENT SUMMARY
Transformation Incentive Grants:
- For transformation projects (substantial remodeling), a 15
percent of contract incentive grant (not to exceed $15,000)
would be provided to the builder/homeowner/homebuyer whenever
the total contract price exceeded $50,000.
Contract Price Transformation Incentive Grant
$50,000 $ 7,500
$60,000 $ 9,000
$70,000 $10,500
$80,000 $12,000
$90,000 $1.3,500
$100,000 $15,000
Relocation Supporting Grant:
- For substantial remodeling which requires a homeowner or
homebuyer to not reside in the residence during remodeling, a
maximum 51,500 supporting grant would be provided, paid
directly to the homeowner/homebuyer, at the rate of $500 per
month.
Transformation of Owner Occupied Residences
- The lowest of two competitive bids, submitted by the
homeowner,. is the basis for computing the grant amount.
Transformation of Purchased or Foreclosed Homes
- -The design/build nature of this element requires the grant to
be computed on a total contract price which may be arrived at
by negotiation or competitive bid.
- The cost of property acquisition is the builder/buyer teams
responsibility. A private purchase from a willing seller or a
purchase from the HRA is possible. On a case by case basis,
the HRA may need to evaluate additional financial incentives
with lenders to provide sufficient security for the
builder/buyer team to secure the needed acquisition and
interim construction financing.
- The full 10 percent HUD discount to the HRA for purchasing a
foreclosure would be passed on to the builder/buyer team.
- The builder/buyer team would receive an additional 5 percent
discount as an incentive grant for transforming a foreclosed
home so that the total HUD discount and grant combination
would equal the 15 .percent discount outlined above.
- The homebuyer is encouraged to purchase prior to remodeling.
State law requires the purchase and remodeling to all be
completed in the same year to receive property tax discounts.
Further Consideration:
- The homeowner/homebuyer must remain in the home for five years
to allow the grant .to be forgiven. After the first year the
amount of grant to be repaid would be reduced by 20 percent
until none was owed after the fifth year. A lien would be
filed which would be junior to all other real estate liens of
record.
- Staff time to facilitate incentive .grants would approximate 5
to 10 hours. Staff time to facilitate purchase or foreclosure
transformations should be kept to no more than 20 hours.
- The HRA will publicize the program to homebuyers and sellers;
providing information that will facilitate contacts with
builders .and remodelers.
TRANSFORMATION REQUIREMENTS
The following requirements would apply to all transformation.
projects:
1. Each home shall be a detached single-family dwelling.
2. Three and four bedroom homes are preferred. However, a
minimum of two finished bedrooms and easily finished space for
a third bedroom will be acceptable.
3. Two full bathrooms are preferred, however, a minimum of one
~- full bath and a 1/2 bath roughed in will be acceptable.
4. A two car garage, attached or detached, must be provided on
the site.
5. If exterior work is envisioned, exterior materials should. be
low maintenance. Hardboard siding materials are not
acceptable.
6. All building plans must be prepared in consultation with an
Architectural Designer with a minimum two year technical
degree or an Architect. Plans will be reviewed by staff as a
condition of receiving a grant. House design is a critical
concern. The house building lines, window placement, and
orientation to street, must present a balanced and pleasing
view from all sides. Garage door dominance in design must be
minimized.
7. Site must be fully landscaped and sodded in a professional
manner upon completion.
8. Adjoining properties must not be disturbed by the construction
process.
9. Construction and the finished structure must improve or not
have a detrimental impact on storm water drainage patterns in
the neighborhood.
When a foreclosure transformation project is planned and the HRA
is the interim purchaser, the following requirements would
additionally apply:
1) A development agreement must be agreed upon.
2) The performance security and purchase price amount are equal
and essentially cover the cost of HRA acquisition.
3) The HRA, if acquiring property at a discount, will pass that
discount onto the builder/remodeler.
4) A buyer or owner must be secured by the builder/remodeler in
advance of entering into a development agreement. Remodeling
based on speculation is discouraged.
5) Transformation opportunities will be offered on a first come,
first served basis.
6) Notification of availability of sites is provided to those
that indicate an interest in participating in the program.
SAMPLE TRANSACTION - TRANSFORMATION '94
An owner of a Richfield average $85,000 home wants to
"transform". The homeowner receives two bids, the low bid
approximating $75,000. The contract yields approximately $63,750
in added value. The property valuation upon completion is
5148,750. The homeowner must relocate for two months.
Primary Program Benefits:
- HRA Remodeling Advisor is available to assist project
planning.
- The homeowner/builder receives a 511,250 incentive grant upon
the date of project completion (15 percent of the lowest bid).
- The homeowner receives a total of $1,000 during the relocation
period (2 months x,5500 a month).
Secondary Program Benefits:
- The homeowner presently pays annual homestead property taxes
of $1,250 on an $85,000 home. The property taxes on a
5149,000 valued property approximates $2,900. State law
allows the maximum 525,000 value exclusion due to the extent
of remodeling in this example. Thus, for a ten year period,
the owner is paying taxes as if the property were valued at
$123,750, approximately $2,250 annually. The annual property
tax benefit is $650.
RATIONALE FOR PROGRAM PROCEDURES
- Grant payments are written to the builder/homeowner/homebuyer
team at the end of the project as a way of ensuring the grant
is applied to the transformation project and .that work is
performed completely.
For homeowners contemplating transformation, competitive
bidding allows the market place to determine the contract (and
grant) amount. Competitive bidding is always encouraged.
However, when a homebuyer or builder envisions transformation
prior to occupancy:
- the builder may own the property
- the builder/ buyer may prefer to directly negotiate a
contract price given the scope of work and the
design/builder relationship which is sought. Competitive
bidding would be difficult in these situations, as evidenced
by the HRA approach at 6500 James.
- Financial incentives with lenders maybe required to assist
acquisition and interim construction financing. Transformation
creates an economic dilemma related to acquisition cost. The
depreciation of that cost through the process of
demolition/addition will change values. HRA resources may be
needed to secure the short term period of value decline to
value addition.
- There is a concern that requirements for competitive bidding
and five years of ownership will be detrimental to the program
and are not used in Richfield Rediscovered. Richfield
Rediscovered is a very secure program that generates a
positive cash flow and return to the HRA. Competitive bidding
and"five years of benefit are necessary security given that
transformation housing does not yield a positive cash flow or
any direct financial return to the HRA.
PROJECT CASH FLOW SUMMARY
TRANSFORMATION '94
$360,000 - 1993 Richfield Rediscovered New Construction Funding
from Development Fund.
-170,000 - Net Expenses - New Construction Program (returned
from tax increment over 25 years).
$190,000 Balance (received during 1994 as land sale program
income from new construction activities)
Commit the $190,000 Balance, as received on a first come, first
served basis, to transformation projects. The $190,000 is not
returned to the Development Fund and availability is dependent on
Richfield Rediscovered New Construction activity.
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No.6
Agenda January 18, 1994
Issue Statement•
Adoption of a resolution to conform the Lyndale/Hub/Nicollet
Commercial Development Improvement Program with the RSA medical
office facility approved during the last quarter of 1993;
Modification No. 7.
Background•
During the•last quarter of 1993,-the HRA, Planning Commission and
City Council took a variety of actions which made it possible for
RSA: to undertake the construction of a 22,000 square foot medical
office facility at the corner of 66th Street and Grand Avenue.
It would now be appropriate to take action to approve a
modification to the LHN Commercial Development Improvement
Program. The Planning Commission would also review the
modification and then the City Council would be requested to hold
a public hearing and adopt a resolution finalizing the approval
of the modification.
Recommended Motion:
Adopt a motion which approves the attached resolution which
incorporates the medical facility into the LHN Commercial
Development Improvement Program.
The effectiveness of the HRA approval is contingent upon a
favorable response from the Planning Commission.
.Basis of Recommendation:
The LHN Commercial Development Improvement Program should reflect
the activities undertaken by the HRA.
Alternative Recommendation:
1. Delay action.
2. Refuse to approve the modification
Discussion/Decision Mode:
Approval on January 18 would make it possible to complete the
process with the City Council prior to the end of March.
Res ctfully submitted,
Ja s D. Prosser
Executive Director
JDP:ds
HRA RESOLUTION N0.
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
APPROVING MODIFICATION NO. 7 IN THE
LYNDALE/HUB/NICOLLET COMMERCIAL IMPROVEMENT
PROGRAM: TRANSMITTING THE MODIFIED PLAN TO
THE PLANNING COMMISSION: REQUESTING THE
RICHFIELD CITY COUNCIL TO CONDUCT A PUBLIC
HEARING THEREON: RECOMMENDING APPROVAL OF
THE MODIFIED PLAN
WHEREAS, the Housing and Redevelopment authority in and for
the City of Richfield, Minnesota (the "HRA") did on October 15,
1975, approve a redevelopment plan for an urban renewal project
for the "Lyndale/Hub/Nicollet Commercial Improvement Program";
and
WHEREAS, the City Council of the City of Richfield,
Minnesota (the "City Council") did on November 24, 1975, approve
the Plan; and
WHEREAS, the Plan has subsequently been amended on six
occasions; and
WHEREAS, the Plan previously designated certain properties
for acquisition by the HRA; and
WHEREAS, it has been determined that the acquisition of
certain additional property described in Attachment A is
necessary to implement the Plan and to carry out the purposes of
the Plan; and
WHEREAS, the Minnesota statutes require that the Planning
Commission find that the proposed land purchase is consistent
with the Richfield Comprehensive Plan; and
WHEREAS, the monies for the purchase of this property are
available in the LHN tax increment fund.
NOW, THEREFORE, BE IT RESOLVED by the Housing and
Redevelopment Authority in and for the City of Richfield,
Minnesota as follows:
1. Subject to a favorable finding by the Richfield Planning
Commission regarding the Plan's consistency with the
Richfield Comprehensive Plan, the Plan is hereby modified by
adding thereto as property designated for acquisition the
land described in Attachment A.
2. The HRA requests that the modified Plan be referred to the
Planning Commission for consideration of its consistency with
the Richfield Comprehensive Plan.
3. The Executive Director of the HRA is hereby authorized and
directed to transmit copies of the madified Plan to the
school board of Independent School District No. 280 and the
Board of Commissioners of Hennepin County for review and
comment and to notify said public bodies of the public
hearing to be held on the Plan by the City Council.
4. The HRA requests the City Council to hold a public hearing on
the modified Plan as required by Minnesota Statutes, 469.028
and Minnesota Statutes, .469.175, subd. 3 as soon hereafter as
is practicable and the HRA requests the City Council to
approve the modified Plan following such hearing.
Adopted by the Housing and Redevelopment Authority in and
for the City of Richfield, Minnesota this 18th day of January,
1994.
ATTEST:
Thomas E. Harms, Chair
Vern Luettinger, Secretary
EXHIBIT A
LEGAL DESCRIPTION
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HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No.5
Agenda January 1$, 1994
Issue Statement•
Authorization for staff to draft an agreement with TOLD
Development Company to market and facilitate redevelopment of the
Cloverleaf site.
Background:
The HRA purchased this 13 acre property in 1992 from the
Resolution Trust Corporation. The purchase provided the HRA with
the opportunity to prevent inappropriate development on the site
and to seek appropriate development at the opportune time.
Attached is a proposal from TOLD. TOLD is proposing to enter
into an .agreement to market and facilitate development of the
site. They would formulate and implement a marketing program to
identify an appropriate development(s). They propose an initial
term of 18 months with a potential extension for an additional 12
month period. If the marketing efforts are successful, they
would become the developer.
The elements of the marketing program include site signage, use
of aerial photographs in a promotional brochure, mailings to a
targeted corporate market, and releasing information about the
site and its potential through media articles. On a monthly
basis, reports of potential user contacts would be provided.
Staff is prepared to draft an agreement consistent with
instructions from the HRA. It would be appropriate to consider,
for example, if the HRA wishes to take into account a potential
relocation site for the Emerson Avenue Congregational Church as
was previously suggested by ILN redevelopers.
Recommended Motion:
Authorize staff to draft an agreement for subsequent presentation
to the HRA which would establish the parameters for a marketing
and development program to be implemented by the TOLD Development
Company.
Basis of Recommendation:
1. An agreement could be drafted to protect and achieve the
objectives of the HRA.
2. Staff has had first hand knowledge of TOLD for several years.
As the attached material indicates they are a successful and
reputable developer.
3. A relationship with TOLD would put the HRA and the Cloverleaf
site in an aggressive marketing position.
_ 4. The HRA would incur no expenses during the marketing program
operated by TOLD.
Alternative Recommendation:
1. Reject the .TOLD proposal..
2. See other potential marketing/development proposals.
Discussion/Decision Mode:
TOLD believes there is a "window of opportunity and would like
to take advantage of as much of that time as possible.
Respectfuk'S.~i submitted,
Jame. Prosser
Exec ive Director
JDP:ds
_ TOLD
DEVELOPMENT COMPANY
December 16, 1993
Mr. James D. Prosser
City Manager
City of Richfield
6700 Portland Avenue
Richfield, MN 55423
Dear Jim:
The purpose of this letter is to express our interest in developing a long term relationship with
the City of Richfield. This proposed relationship would allow TOLD Development Company
to assume a proactive position in its efforts to identify and secure large corporate office users
for the approximate 12.92 acres of land located at the northeast corner of I-494 and 35W.
We are of the firm conviction that opportunities to develop freestanding headquarter office
facilities will present themselves during a "window" of time. This window exists from the
present and spans the next 30 months. We believe this windpvv is an opportunity to develop
office facilities which is superior to any window of opportunity for this type of product that we
have seen in the last five to six years. Continuing to allow this particular property to exist in
a "passive" mode, without a concentrated marketing effort by an experienced developer such as
TOLD Development Company will definitely not capitalize on this window of opportunity.
The last three years (a time which has seen the demise of many development companies and a
time when relatively little development activity has taken place), have been the best three years
in our company's history in terms of new development activity. During this period we have
constructed almost twenty new facilities which include multi-story office buildings,
office/warehouse facilities, and a multitude of retail projects throughout the Midwest. At
present, we have eight projects which will commence construction within the next 150 days and
one four story office building which is now in the planning/lease negotiation stages. We believe
the City of Richfield needs an experienced development company such as TOLD who can
assume complete responsibility for the development of the subject property, as if we owned the
property ourselves. We are proposing to function, in the proposed relationship with the City of
Richfield, as if we were your "in-house" development agency, down the hall, so to speak. We
are prepared to assume the cost of mounting a full scale marketing effort over the next 30 month
time period.
MINNEAPOLIS • MILWAUKEE • CHICAGO
WEDGWOOD COMMERCE CENTRE • 6900 Wedgwood Road, Suite 100, Maple Grove, MN 55311 • (612) 420-9000 Fax (612) 420-7574
Mr. James D. Prosser
December 16, 1993
Page -2-
We envision that we will interview and retain (under separate agreement with TOLD) the
services of an outside brokerage firm who will work in concert with TOLD insofaz as
orchestrating a specific marketing plan for the project including, but not limited to, the
following:
PROMINENT SIGNAGE
A professional sign program will be designed and installed to communicate the
availability of the property, for development, to the traffic on I-494 and 35W. This
intersection represents what must certainly be the heaviest trafficed intersection in the
entire State of Minnesota. The most important single element of an effective signage
program is the ease with which interested parties can establish contact, via telephone,
with individuals who aze knowledgeable and can provide specific information about the
property.
AERIAL PHOTOGRAPHY
A series of aerial photographs will be shot in order to select the photograph (or
photographs) which communicate the most favorable elements about the property, i.e.,
proximity to I-494 and 35W, access from the east, ease of access to both I-494 and 35W,
surrounding azea on a three to five mile radius, etc. These photographs will be utilized
in our marketing packages which will be sent out to targeted individuals and to those
making general inquiry about the project.
PROJECT BROCHURE
A professionally designed project brochure is an absolute must if communication about
the availability and quality of this project is to be effective. We believe this brochure
should incorporate the previously described aerial photograph as well as Twin Cities an~
Richfield map references, hypothetical site plan or plans (depicting the potentiality of
future development) and specific information relative to traffic, visibility, ease of access,
etc.
A brochure of this nature is embellished by our name, reputation and credibility, all of
which facilitates users in their determination of pursuing this property as opposed to other
Mr. James D. Prosser
December 16, 1993
Page -3-
available land which may be offered by an owner who has no development experience
or a broker merely interested in earning a commission on a land sale.
TARGETED MARKETING
Through our liaison with the selected brokerage firm, we will design a specific mailing
program to targeted heads of firms, as we initiate what will become a "flow of
information about the availability of the subject property, on a continuous basis
throughout ,the previously described window of opportunity. Typically, these mailings
do not reach the decision making individual at the time of the decision making process.
Rather, they become a reference to the property again, on a continuous basis, so that
when the decision to relocate is completed, the subject property is thg property which is
both remembered and inquired about.
RESPONSE TEAM
If there is any one, singular reason which our meteoric success as a company can be
attributed to, it is the speed and efficacy by which we respond to a potential user once
the bona fide need has been identified and qualified. It is our way of providing the
ultimate level of service in our industry. Our response time and the quality of it have
been acknowledged repeatedly as what sets us apart from our competition. We have
purposely not "grown" our company so that a lengthy decision making process (endemic
to larger bureaucratic development companies), diminishes our ability to respond quickly
and adjust frequently, so as to maintain absolute flexibility in response to the needs of
the user we are dealing with.
PRESENTATION MATERIALS
Another hallmark of our success, which has been acknowledged by many, is the quality
of materials we utilize when making a proposal to an identified "qualified user". These
typically include bound proposals with reductions of site plans, floor plans, architectural
renderings, construction specifications and narrative descriptions. We try to make it as
easy as possible for the decision maker to recognize our commitment to quality from the
beginning of our relationship and to feel comfortable with our commitment to his/her
particular and specific need.
Mr. James D. Prosser
December 16, 1993
Page -4-
PUBLIC RELATIONS
We have never subscribed to the concept of institutional advertising, per se. We have
found it extremely propitious to maintain cordial relationships with leading publications
throughout the Twin Cities azea and the greater Midwest. We feel people reading
magazines, trade publications, newspapers, etc., generally do not really read institutional
advertising. However, we have determined that they do in fact read articles, articles
about projects, leases, transactions, etc. Thus, will capitalize on our relationships with
these publications to structure the timely release of information about the project, our
relationship with the City of Richfield and the potential development of headquarter
office facilities on the subject property. Historically, we have taken the best of these
articles and have had reprints produced (samples enclosed) which have then become the
basis for subsequent mailings, and on, and on.
It is difficult to succinctly encapsulate all of the components which will produce the desired
results, in a few typewritten pages. Suffice it to say, we have found what works, as evidenced
by our successful results over the years, and we are committed to the application of this formula
insofar as the development of the subject property is concerned.
We aze proposing a Development Agreement with the City of Richfield which will have an
initial term of 18 months, and which can be extended by an additional 12 month period,
assuming the City of Richfield is satisfied with our efforts and/or results. Please bear in mind
that the greatest expenditure of time and effort will be required at the beginning of the
aforementioned window of opportunity, with the least appreciable or tangible results being
produced at the beginning at of that period of time. The "peak" time frame of the window of
opportunity may still be a year away however, massive amounts of spade work can be managed
and accomplished so as to maximize our ability to respond to the evolving marketplace over the
next 12 to 18 months.
We will field and qualify all telephone inquiries about the property which may result from our
signage program, marketing program, mailing campaign, telephone campaign, press releases,
or which may come to the City directly (and which would be referred to us for appropriate
follow-up).
Mr. James D. Prosser
December 16, 1993
Page -5-
We will provide the City of Richfield with a written summary of .our activity on a monthly basis
including, but not limited to the following information:
Prospective Tenant Name
Size of Requirement
Timing of Need
Follow-up Action
Etc.
We would also propose a face to face meeting with officials representing the City of Richfield
on a quarterly basis in order to review our progress, results and future strategies.
We will be responsible for any and all out of pocket expenses associated with the marketing plan
described above. The City of Richfield will incur no direct expense for any of these efforts.
We estimate that these expenses will range from $5,000 to $10,000. This will address out of
pocket expenses without consideration for the investment of time we will commit to making
these mazketing efforts successful.
Jim, I am certain that there aze many details which have not been addressed in this proposal
inasmuch as there are so many details involved with a project of this magnitude. Thus, I would
appreciate the opportunity to review this proposal and address any and all details which may be
appropriate to your consideration of TOLD Development Company, at your eazliest convenience.
We aze excited about the opportunity of working with the City of Richfield and firmly believe
that we are the right people to get the job done.
Sin rely,
Ralph ~. Robinson
Chairman
ROR/jm
Enclosure
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No.4
Agenda January 18, 1994
Issue Statement:
Resolutions designating official depositories for the HRA of
Richfield for 1994, including the approval of collateral.
Background:
In accordance with Minnesota Statutes Section 475.66 and 118.005,
the HRA of Richfield must annually establish financial
institutions which have pledged the necessary collateral over and
above the amount of federal insurance, as public depositories.
The Firstar Bank is pledging collateral in the amount of
51,000,000. This collateral pledge means that the HRA's deposits
up to this amount are secured with the depository. In addition
to this collateral pledge, HRA funds are protected by the Federal
Deposit Insurance Corporation in the amount of $100,000, making
the total protection afforded by this depository for HRA funds
equal to 51,100,000. A resolution naming the Firstar Bank as the
1994 official depository. for the Richfield Housing and
Redevelopment Authority is attached. to this letter.
In 1993, Firstar Bank has a community reinvestment rating of
"satisfactory." Within Richfield, Firstar Bank has supported
remodeling programs and made various cash donations in support of
City and HRA programs.
A resolution must be provided annually, designating certain
savings and loan associations and banks as official depositories
for investment of certain HRA funds. With approval of these
official depositories, the HRA will be able to invest funds in
these institutions, not exceeding the federal insurance of
5100,000. All designated depositories have received a community
reinvestment rating of "satisfactory" or better in 1993.
Finally, a resolution is also attached which designates certain
financial institutions as depositories for the investment of HRA
Funds for 1994. These institutions, such as investment brokerage
firms offer government securities in the manner required by law.
These financial institutions include Richfield Bank and Trust
Co., FBS Investment Services Inc., Dain Bosworth, Prudential
Securities, Piper, Jaffray & Hopwood, Shearson Lehman Brothers,
Smith Barney, and Federated Investors.
Recommended Motion:
It is recommended that the HRA adopt the attached resolutions
designating official depositories, with the understanding that
the HRA could not invest in any of the depositories beyond the
level of insurance coverage of the pledged collateral.
Basis of Recommendation:
1. It is recommended that the HRA adopt the attached resolutions
designating official depositories, with the understanding
that the HRA could not invest in any of the depositories
beyond the level of insurance coverage of the pledged
collateral.
2. The HRA has worked with the institutions recommended in the
past and has found to have a good working relationship with
these institutions.
Alternative Recommendation:
The HRA could solicit other financial institutions for official
depositories, but past relationships with the depositories
recommended have proven satisfactory for the HRA.
Discussion/Decision Mode:
Action of the HRA is desirable at
meeting so that the HRA may invest
financial institutions for the yea
the January 18, 1994, HRA
funds in the approved
r 1994 immediately.
Respect lly submitted,
James. Prosser
Execu ve Director
JDP:cak
HRA RE90II~~ 1VC).
A RFSOl~TPIDri DESIQ~lTIl~1G (~R`l~'Qi SAVaiGS AAID
LOAN AS90GIATIONS AtID BAHICS AS DEF06ITOEtIFS
F~OEt THE Il~VFSRl~NP OF TH6 IIDIISING AMID RIDEVELAPT'~NP
ALTt'HORITY FtI~ID6 IId 1994
S~ pursuant to Minnesota Statutes, Section 475.66 ar~d 118.005
municipal furyds may be deposited in any Savings and Loan Association which has
its deposits insured by the Federal Savings and Loan Insurarx~e Oorporation,
and
~S, the amotuit of said deposits may nDt e~ooeed -the Federal Savings
and Loan Insurance Corporation insurance covering. such depasits which
insuraayee amotuit is presently $100,000, and
fr~~iFAS, the deposit of Ho0.asing and Redev~elopt~nt Authar'ity funds in
Savixygs and Loan Associations and Banks would provide greater flexibility in
the Housing and Redevelopment Authar'ity~s investment program and maximi~
interest iryoo[ne the-neon.
NpW, E, BE IT RESOLVID by the Housing and Redevelopnent
Authority of Richfield as follows:
1. It is hereby found and determined 'that it is in the
best interests of the proper management of Hausiryg and
Redevelopn~.nt Authority funds that certain Savings and
Loan Associations and Banks be designated as additional
.depositories for Hausiryg and RedevplopnPnt Authority
furyds for 1994.
2. The following Savings arxi Loan Associations and Bans
are hereby designated as additional depositories for
Housing and RedevelopR~ent Authority funds:
NoYwest Hank Mtrmesota, NA
6445 Nioollet Avezw~e South
Richfield, Misu~esota 55423
Richfield Bank & Trust C,anpanY
6625 Lyndale Avpxwe South
Richfield, Minnesota 55423
Twin City Federal Banking and Savings
3330 West 66th Street
Edina, Minnesota 55435
3. It is further foutxi and determined that the purpose of
such depositooy designation is to facilitate the proper
and advantageous itYVestment of Housing and Redevelapne~zt
Authority funds and that such designation is not exclu-
sive nor does it preclude the deposit of any Haasiryg and
Rede~reloFxtient Authority funds in other officially desig-
Hated depositories of the Housing ar~d Redevelo~nent
Authority.
4. The F~ecutive Director and Finatx~e Managex are hereby
authorized to deposit. Housing and E~edeveloPnent Authority
funds in any or all of the depositories herein designated up
to the amamt of $100,000, or such other ant as may be
subsequently permitted by law, such deposits to be in the form
of demand acaa~uzts for Public Unit Savings Certificates
~~~ }~, the Housing and Redevplc~tient Authority of
Richfield, payable to the Haasiryg and Redevelopment
Authority of Ricdifield on the signatures of the F~ecutive
Director or' F; *~~ Nj3na~-r'.
Pas.9ed by the Ha~sing and Redevelopment Authority of Richfield this
17th day of January, 1994.
Thanas E. Harms, (~airperson
ATTEST:
Vern Luettirx3ex, Secx'etarY
HRA RE90I~TPI~i N0.
A RF90IiTPI~i DESItZ~Il~ITIldG CTIt'1T1IId FIIL IlVSTITUrII~S
AS DE~OSIZ~OltIFS Fit THE IIVVESl~TP OF HOt15II~1G ArID
AiTrHOl2ITY ~' gI[~rFrn FirIDS IN 1994
, the Housing and Redevelopment Authority of Richfield has Haney
which is available for investment, and
In~~tFAS, different financial institutions offer different rates of
return on its, and
~S, the Housing and Rede~relopnent Authar'ity of Richfield shall
purchase U. S. Treasury Bills, U. S. Treasury Notes and other such goverrmexit
secxarities in the manner required by law from the institution offering the
highest 'rate to the City prnvidir~g greater flexibility in the investment
program and .max; m; ze irTtereSt ir]co[ne 'ttlereorl.
NSW, ZiE, BE IT RE90LVED by the Housing and Redevelopment
Authority of Richfield, Miru~esota, as follows:
1. It is hereby found and determined that it is in the best interests
of the proper mar~gement of Housiryg and Redevelopment Authority
funds that certain f;*~m;al institutions be designated as add-
tional depositories far Housing and Redevelopment Authority funds
for 1994.
2. The followiryg finaT,rmial institutions designated as depositories
far Housing and Redevelopment Authority funds:
Richfield Bank & Trust Caripany
FBS Investment Service, Iryc.
Dain Bosworth, 7r~c.
Fnu'iential -Securities
Piper, Jaffray & Ho~xaood
Shearson Leh[nan Brothers
Federated Irn~estors, Trust for ShoEr~t-Tern U.S. Gwt. Securities
Smith Barney
3. The Treasurer aryl Finarx5e Ntanag~er are hereby authorized to deposit
Housing and RedevplgxnPxit Authority funds in arty or all of the
depositories herein designated. Such deposits may be made and
withdrawn friar time to time by the Treasurer oar Finarr~e Manager as
his/her best judgment and the interests of the Housiryg and
Redevelop<mexit Authority dictates.
4. 'I"he investment of funds arxi the r~eportiryg thereof ~x~~ant to this.
resolution shall be oonduabed in aooardanoe with established
policies T~'4i3'''~~xJ the investment of these funds.
passed by the Fiaasing ar~d Redevelzt Authority of Richfield this 17th
day of Jarniary, 1994.
That~as E. Harms, Chairpersaz
ATPEST:
Vern Luettiryger, Secretary
E~tA RE90IIlPION N0.
RE90l~TPION DESI(~fTIIdG THE F'~Sl'AR B~IIC A DEP06IZ+OIZY
OF FZ1~ID6 OF TF~ F~.?SING A1~ID AiITY ~
RIQ~'III~D FC~t THE YFAI2 1994 ATID APPRpVING QOLLATERAL
BE IT RE.'90LVID by the Housing arr3 Redevelopnexit Authority of Richfield as
follows:
That, in aaaorclaryoe -with law, the Firstar Bank be, and hereby is
designated a depository of the furxis of the Housing and Redevplo~xnent
Authority, and subject to the following terms and oa~ditions:
The said depository shall nit be required to give bonds or other
..securities for such deposits prw3.ded that the total spun tt~ex~eof shall not at
any tame e~~oeed in any depositary the s~sn far which its deposits are insured
tu~dex the Acts of Congress of the United States relating to insurance of bank
deposits: but not in case such deposits in any such depositary shall at any
time exceed such insured sum, said depositary shall immediately furnish borx~.s
or othex secxarity for such excess according to law, approRred by the Housing
and Redevplofxrent Authority of Richfield.
That said depository shall pay on demand all deposits there: and shall
pay all time deposits, at or after the end of the period for which the same
shall be deposited, on demand.
BE IT FUR'ti~t ItF50LVEa, that there shall be maintained a general account
in which shall be deposited all monies. Chec3cs on this account shall be
signed by the following officers or their facsimile signatures.
Thomas E. Harms, Chain
James D. Prosser, F~ecutive Director'
HE IT F~ii~t RESOLVID, that there shall be a daily intPx~st savings
account. All withdra~ral.s from said aooamt will be far transfers to the
gex~exal checking ac:eauzt.
HE IT FUR'lf~t RE50LVID, that the collateral in the amo~mt of $1,000,000
deposited for safekeeping at the FiYStar Bank, Milwaukee, Wiscor~,sin is hereby
aPP
Passed by the Housing and F~edevelopnent Authority of Richfield this 17th
day of January, 1994.
Thomas E. HarnLS, (tai _*~~on
ATTEST:
Vern Lu2ttu~er, ~ SeQ~etary
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 3
Agenda January 18, 1994
Issue Statement:
Designation of Official Newspaper for 1994.
Background•
The Richfield Sun-Current, published by Minnesota Sun
Publications, has been the City's and HRA's official newspaper
for several years.
Attached is a copy of a letter from Minnesota Sun Publications
requesting that they be designated the official newspaper for the
City of Richfield for 1994.
1 Column width
1993 $0.72 per line - first insertion ($7.92 per inch)
$0.42 per line - subsequent insertions (54.62 per inch)
1994 $0..79 per line - first insertion ($8.69 per inch)
$0.44 per line - subsequent insertions ($4.84 per inch)
2 Column width
1993 $1.44 per line - first insertion ($15.84 per inch)
$0.84 per line - subsequent insertions ($9.24 per inch)
1994 $1.54 per line - first insertion ($16.94 per inch)
$0.89 per line - subsequent insertions ($9.79 per inch)
Recommended Motion:
Designate the Richfield Sun-Current as the official newspaper of
the Richfield HRA for the year 1994.
Basis for Recommendation:
1. The paper is delivered to each residence in the City, thereby
providing City-wide coverage of legal notices to residents.
2. The paper has served well as the official newspaper for
several years.
3. The paper has expressed a desire to continue to provide this
service.
4. The newspaper is in close proximity to City offices if it is
necessary to hand deliver legal notices before publication
deadlines.
Alternative Recommendation:
1. Not make a designation and request the City Clerk's office to
check into using another publication, such as the Minneapolis
Star & Tribune. However, this would be much more costly.
Discussion/Decision Mode:
This item has been placed on the January 18, 1994 HRA agenda so
that a designation can be made for 1994.
Respectfu ly submitted,
James. Prosser
Execu ive Director
JDP:cak
MINNESOTA
~.
~~~
PUBLICATIONS
Sun•Curren"t Sun•Post Sun•Saitor
December 29, 1993
Mr. Tom Ferber.
City of Richfield
6700 Portland Avenue South
Richfield, MN 55423 .
Dear Mr. Ferber:.
Please consider the Sun-Current as the city of Richfield's official newspaper .for the year 1994 at your
January organizational meeting.
The rate structure for legals effective. January.l, 1994 will be:
i column width: $0.79 per line -first insertion {$8.b9 per inch}
$0.44 per line. - subsequent insertions ($4.84 per inch}
2 column width:. $1.54 per line -first insertion ($16.94 per inch)
. $0,89 per line -subsequent insertions {$9.79 per inch}
Notarized affidavits on each of your. publications will be provided.
Minnesota Sun Publications will accept legal notices on. diskettes. Your IBM or compatible personal
computer makes it easy .for -you to submit legal notices. produced with WordPerfect, ~Wordstar or MS
Word word-processing programs. Files saved. xn ASCII. are also acceptable. As this represents ~as cost-
effective and efficient method far us to produce the. copy for publication, wewill offer a 15% rate
discount on all notices submitted on diskettes. We recommend that other municipal departments
coordinate their legal notice publishing needs with the -city clerk's office as well.
All legal ads should be sent to our Bloomington office by Thursday noon preceding our Wednesday
publications. In.order to expedite our service to you, please direct your legals to the attention of
Meridel Hedblom, Minnesota Sun Publications, 7831 East Bush Lake Road, Bloomington, MN 5.5439.
For your convenience our fax number is :896-4754.
Thank you for considering the Sun-Current as your official newspaper for the ensuing year. We are
honored and pleased to serve you and .look forward to a mutually beneficial working relationship with
the city of Richfield..
Si cerely, ~ .
Q~ , ~ ~ .
Donald W. Thurlow
':Publisher
Bloomington OH1ce: ?831 bast Bush Lake Road • Bloomington, MN 55439 Phs (6123 896-4700
__~_ .. _. i.~..
~,
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 2
Agenda January 18, 1994
Issue Statement:
Designation of Acting Executive Director.
Background•
On January~l0, 1994, the City Council appointed the Director of
Administrative Services to serve as the Acting City Manager in
the absence of the City Manager.
Since the City Manager also serves as the Executive Director of
the HRA, it is recommended that the Administrative Services
Director, Steven Devich, be designated by the HRA as the Acting
Executive Director of the HRA to serve in that capacity during
the absence of the Executive Director.
Recommended Motion:
The HRA designate Steven L. Devich, Administrative Services
Director, as the Acting Executive Director of the HRA.
Basis for Recommendation:
1. A designation of an Acting Executive Director is a normal
business action of the HRA similar to the designation of
depositories and the official newspaper.
2. The Administrative Services Director has been designated as
the Acting Executive Director in the past.
3. The Administrative Services Director serves as the Acting
City Manager, filling other similar responsibilities for the
City Manager in the Manager's absence.
Alternative Recommendation:
1. Make no designation of Acting Executive Director.
2. Make the designation of Acting Executive Director to another
individual or position.
Discussion/Decision Mode:
Designation of the Acting Executive Director is a matter that
would normally be considered at the first business meeting of
each year.
Respe ly submitted,
James Prosser
Executive Director
JDP:ds
i /
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 1
Agenda January 18, 1994
Issue Statement:
Election of officers for the Housing and Redevelopment Authority.
Background•
The bylaws•of the Richfield Housing and Redevelopment Authority provide
that .the HRA hold an annual meeting in January of each year. The
bylaws .further provide that the Chair, Vice Chair and Secretary of the
HRA be elected at this meeting.
Officers for the years 1990-1993 are as follows:
1990
Thomas Harms, Chair
Vern Luettinger, Vice Chair
Joan Helmberger, Secretary
1991
Thomas Harms, Chair
Vern Luettinger, Vice Chair
Joan Helmberger, Secretary
1992 1993
Thomas Harms, Chair Thomas Harms, Chair
Ivan Ludeman, Vice Chair Joan Helmberger, Vice Chair
Joan Helmberger, Secretary Larry Wozniczka, Secretary (1/93-10/93)
Vern Luettinger, Secretary (11/93-12/93 )
Recommended Motion:
Elect officers for the year 1994.
Basis for Recommendation:
1. The bylaws of the HRA require that such an election be held at the
annual meeting in January of each year.
Alternative Recommendation:
1. Do not hold the election. However, this would be in contradiction
to the HRA bylaws.
Discussion/Decision Mode:
This item has been scheduled for the January 18, 1994 HRA meeting in
accordance with the HRA bylaws.
Resp t ly submitted,
Jam s D. Prosser
Exe ive Director
JDP:ds