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10-17-94 agendaCITY OF RICHFIELD MONDAY, OCTOBER 17, 1994 SPECIAL CITY COUNCIL/HOUSING AND REDEVELOPMENT AUTHORITY/ PLANNING COMMISSION STUDY SESSION CITY HALL 5:00 P.M. CALL TO ORDER I. BUS TOUR OF APARTMENT BUILDINGS BY RICHFIELD APARTMENT MANAGERS ASSOCIATION ADJOURNMENT REGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING COUNCIL CHAMBERS 7:00 P.M. AGENDA CALL TO ORDER APPROVAL OF MINUTES OF HRA MEETING OF SEPTEMBER 19, 1994 1. OPPORTUNITY FOR CITIZENS TO ADDRESS THE HRA ON ITEMS NOT ON THE AGENDA 2. CONSIDERATION OF RESOLUTION TO REDEVELOP CAR WASH SITE AT 66TH STREET AND BLOOMINGTON AVENUE HRA LETTER NO. 68 3. CONSIDERATION OF RESOLUTION RELATING TO ISSUANCE OF CERTIFICATE OF COMPLETION TO TWIN CITIES HABITAT FOR HUMANITY FOR COMPLETION OF .RICHFIELD REDISCOVERED PROPERTY AT 6236 PLEASANT AVENUE HRA LETTER NO. 69 4. CONSIDERATION OF RESOLUTION AUTHORIZING PURCHASE OF 7424 FIFTH AVENUE TO INITIATE TRANSFORMATION HOME PROGRAM CONCEPT HRA LETTER NO. 70 5. PUBLIC HEARING AND CONSIDERATION OF RESOLUTION AUTHORIZING SALE OF RICHFIELD REDISCOVERED PROPERTY AT 7525 GIRARD AND 6404-15TH AVENUES TO MARLIN GRANT HOMES, INC. AND 6404 HUMBOLDT AVENUE TO ROCKPORT HOMES, INC., IN ACCORDANCE WITH DEVELOPMENT AGREEMENT HRA LETTER NO. 71 6. CONSIDERATION OF LEASING A PORTION OF CLOVERLEAF SITE FOR OUTDOOR ADVERTISING SIGN HRA LETTER NO. 72 7. EXECUTIVE DIRECTOR REPORT 8. 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. 72 October 17, 1994 Issue Statement: Lease a portion of Cloverleaf site for an outdoor advertising structure (sign). Backgrounds Naegele Outdoor Advertising Company has a unipole mounted double face "V'" sign within the Phase I site area. It was on property formerly owned by Mr. Maki. The HRA/CSM have a relocation obligation for this sign. Recommended Motion: Adopt a motion which approves the attached lease and authorizes the Chair and Executive Director to sign it subject to City Council approvals (.related to sign locations) as required by City. Code. Basis of Recommendation: 1. The estimated relocation benefit due Naegele would be 522,500. 2. By leasing a portion of the Cloverleaf site to Naegele the relocation payment may be avoided in part or totally. • If the lease is cancelled because a contract exists between the HRA and a developer for the .site no payment is due from the HRA. • If the lease is cancelled in the second year by the HRA the fee is $21,000. • If the lease is cancelled in the third year by the HRA the fee is 515,000. 3. Income in the amount of $24,000 per year would be received by the HRA (rent to November and December 1994 would be $3,000). 4. The sign to be located on the Cloverleaf site will be the same type and size of sign as is currently located within Phase I. (see attached map for location.) 5. The lease expires October 31, 1997. This is the same date by which Naegele was required to remove the sign from the Maki property because of the sign phase out program of the City Council. 6. The lease was prepared with assistance from legal counsel and includes several other conditions to properly protect the HRA. Alternative Recommendation: 1. Refuse to lease the property. 2. Modify the lease. Discussion/Decision Mode: The sign is within the construction zone of Phase I and must be moved soon. Respectfully submitted, Jame .Prosser Exec t e Director JDP:cak COMMERCIAL LEASE THIS LEASE is made the day of , 1994 by and between THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA, Landlord, and NAEGELE OUTDOOR ADVERTISING COMPANY, INC., Tenant. WITNESSETH In consideration of payment of the rent hereinafter specified to be paid by Tenant, and the covenants and agreements herein contained, Landlord hereby leases to Tenant that certain property (herein called the Premises) in the County of Hennepin, State of Minnesota, which is located in the northwest corner of the intersection of Emerson Avenue and 78th Street, Richfield, Minnesota. Type of Property: Vacant Land Legal Description: That land shown outlined in red on the attached EXHIBIT, which EXHIBIT is hereby incorporated as part of this lease . including improvements, if any, for the term of 35.5 months commencing on November 15, 1994 and ending on October 31, 1997, with the right of termination in both Landlord and Tenant as hereinafter set forth. IT IS AGREED: 1. RENT . Tenant shall pay to Landlord as rent for the Premises the sum of $24, 000, in monthly payments of $2, 000 in advance on the first day of each month during the term of this lease. Rent payments are to be mailed or delivered to Landlord's office as follows Richfield HRA 6700 Portland Avenue Richfield, MN 55423 Make checks payable to: Richfield HR.A 2 . PREPAID RENT . Tenant has paid to Landlord the sum of $3, 000 as rent for November and December, 1994. 3. USE OF PREMISES . Tenant will use the Premises for the following purpose only: Maintenance of one outdoor advertising structure, a unipole mounted double face "V" , 14' x 48' , set in concrete . It is the sole responsibility of Tenant to comply with all laws, regulations or ordinances imposed by any jurisdiction governing the use of the Premises. Failure to comply will not relieve Tenant of the obligation to pay rent . 4. MAINTENANCE AND REPAIRS. Tenant shall keep the Premises in good condition at Tenant's own expense and shall not call on Landlord to make any improvements or repairs . 5 . UTILITY CHARGES. Tenant shall pay when due all utility charges and any other charges or expenses connected with Tenant's use of the Premises . CAH76837 RC125-68 6 . NOTICES . All notices herein provided to be given, or which may be given, by either party to the other, shall be deemed to have been fully given when served personally on Landlord or Tenant or when made in writing and deposited in the United States mail and addressed as follows To Tenant: Director of Real Estate Naegele Outdoor Advertising Company, Inc. 1700 West 78th Street Richfield, MN 55423 To Landord: Address listed at paragraph 1 above The address to which notices are mailed may be changed by written notice by either party to the other as herein provided. 7. CANCELLATION. This lease shall be subject to cancellation by Tenant at any time during the term of this lease. Landlord may cancel this lease at any time (i) if Landlord has entered into a contract with a third party for development of the Premises or (ii) pursuant to paragraph 17 of this lease. In all other cases, Landlord may cancel this lease at any time after November 15, 1995. The party cancelling the lease must give the other party notice in writing at least sixty days prior to the date when the cancellation shall become effective. The cancellation notice shall be accompanied by the cancellation fee, if any, required by paragraph 8 of this iaase. In the event of cancellation, any unearned rent paid by Tenant shall be returned. 8. CANCELLATION FEE. Tenant shall not be required to pay a cancellation fee. Landlord shall not be required to pay a cancellation fee if Landlord has entered into a contract with a third party for development of the Premises or if Landlord cancels the lease pursuant to paragraph 17 of this lease . In all other cases, however, Landlord shall pay a cancellation fee, the amount of which shall be determined according to the following schedule: Lease year in which cancelled Cancellation Fee Cancellation during second year of lease $ 21, 000 Cancellation during third year of lease $15,000 9. INDEMNIFICATION AND RELEASE. Tenant shall defend, indemnify, save harmless and release Landlord and Landlord's employees from and against all claims, demands and causes of action for injury to or death of persons or loss of or damage to property (including Tenant and Tenant's property) occurring on the Premises or connected with Tenant's use and occupancy of the Premises, regardless of whether such injury, death, loss or damage is caused in part by the negligence of Landlord or is deemed to be the responsibility of Landlord because of its failure to supervise, inspect or control the operations of Tenant or otherwise discover or prevent actions or operations of Tenant giving rise to liability to any person. 10. LIABILITY INSURANCE. Tenant shall maintain during the full term of this lease a policy of public liability insurance with the following minimum limits of liability Bodily injury and property damage combined $1, 000, 000 each occurrence $1, 000, 000 aggregate CAH76837 RC125-66 2 The insurance policy shall include the coverage provided by one of the foll^wing policies, consistent with the risk involved: Comprehensive General Liability; Premises-Operations Liability; Owners', Landlords', and 'Tenants' Liability; Manufacturers' and Contractors' Liability. Prior to execution of this lease by Landlord, the Tenant shall have a Certificate of Insurance sent to Landlord as proof of coverage . The Certificate shall name the Landlord as Additional Insured and shall designate the leased Premises as the location covered by the policy. 11. FIRE INSURANCE. None required. Tenant will make no claim against Landlord arising out of any loss to the Premises. 12. TAXES. Tenant shall pay all taxes, permits, and license fees, if any, arising out of the operation and maintenance or ownership of the advertising structure on the Premises . 13 . LIENS . Tenant shall keep the Premises free and clear of all liens arising out of Tenant's use of the Premises and agrees to protect and indemnify Landlord against all costs, expenses, loss and damage which may in any manner result from the filing or attempted enforcement of any and all such liens . 14 . RIGHT TO ENTER . Tenant shall allow Landlord, Landlord's contractors, agents and assigns to enter upon the Premises for any of the following purposes: to survey the land; to take soil borings; to show the Premises to prospective developers; to install, remove or repair utilities. If any of these operations substantially restrict the Tenant's use of the Premises, rent shall be reduced proportional to the restricted use of the Premises for the period of the restricted use. Landlord or its representatives may enter without notice to Tenant, and for such entry. 15 . ASSIGNMENT AND SUBLETTING . Tenant shall not assign this lease or sublet the Premises, in whole or in part, without the written consent of Land ord. 16. CIVIL RIGHTS ACT. Tenant shall not discriminate on the grounds of race, color, sex or national origin against any person in access to and use of the facilities and services operated or otherwise maintained on the Premises; and the Tenant shall operate and maintain such facilities and services in compliance with Title VI of the Civil Rights Act of 1964, and Title 49, Code of Federal Regulations, Part 21. 17 . REMEDIES . If any rent is due and unpaid or if Tenant defaults in any of the covenants or agreements on the part of the Tenant contained in this lease, Landlord may, at any time after default, cancel this lease, re-enter and take possession of the Premises in the manner provided by law. Tenant will pay Landlord all costs and expenses, including attorneys' fees, in any successful action brought by Landlord to recover any rent due and unpaid hereunder, or for the breach of any of the covenants or agreements contained in this lease, or to recover possession of the Premises . 18. HOLDING OVER. If Tenant holds over after the expiration of the term of this lease with the consent of the Landlord, express or implied, the tenancy shall be deemed to be a tenancy only from month to month, subject otherwise to all of the terms and conditions of this lease so far as applicable . CAH76837 RC125-68 3 19. MOVING OUT . At the expiration or sooner termination of this lease, Tenant shall remove the outdoor advertising structure and leave the Premises in as good condition as when delivered to Tenant (except for ordinary wear and any loss covered by insurance under paragraph 10) . 20. CONDEMNATION. If the whole or any substantial part of the Premises shall be taken or condemned or purchased under threat of condemnation by any governmental authority other than Landlord, then the Term of this Lease shall cease and terminate as of the date when the condemning authority takes possession of the Premises and Tenant shall have no claim against the condemning authority, Landlord or otherwise for any portion of the amount that may be awarded as damages as a result of such taking or condemnation or for the value of any unexpired term of this Lease. 21. SETTLEMENT OF CLAIMS . Tenant acknowledges that by execution of this lease, Tenant and Landlord have reached a complete and final settlement of all claims, whether for just compensation, interest, attorney's fees, relocation benefits, appraisal fees, or otherwise, which Tenant has or could make against Landlord in connection with the Landlord's acquisition by condemnation of the real estate at 7738 Colfax Avenue South, Richfield, Minnesota, pursuant to that certain action filed as Hennepin County District Court File No. CD-2324. Tenant agrees that any breach by Landlord of the terms and conditions of this lease shall not reinstate any claim settled pursuant to this paragraph but that Tenant shall have a cause of action for breach of contract against Landlord . 22. ADDITIONAL AGREEMENTS. None. TENANT NAEGELE OUTDOOR ADVERTISING COMPANY, INC. By: General Manager By: Director-Real Estate LANDLORD THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA By: Chair By: Executive Director CAH76837 RC125-68 4 ~` - - -~ - - . J _ ~ ----_ - ~ ---- ~~W i i b~ ~~ \\ 7fiTH ST. ~~~-_-_ ___~__ _ _ ~ r---_ __r___ - - .~ (-- I ~ ~ ~ ~ ~ I ,' -- ~' _ _ '_ ~ I- ~ -- i ' ' ' Z , -- , -- ' Q 1 ~--- - - - - O LL -- - - ~ - - --- O ~ , (~, ~ ~ ~ --~ --- ~~ - - 1 ~ ' ~ ~ O~ \ -- ~ ~ `-. PROPOSED I (- BILLBOARD LOCATION ~ ~ ' 40'~ ~ ~ \~ I I ~ CSMPYLON ' \. --~ - ~ ' ~~ ~ col - ~ ®'`L - - - - -~-- - - - T~ ~~ -494 ~ 4 HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 71 Agenda October 17, 1994 Issue Statement: Public hearing and authorization of the sale of Richfield Rediscovered property at 7525 Girard and 640.4-15th Avenues to Marlin Grant Homes, Inc., 6404 Humboldt Avenue to Rockport Homes, Inc., and 7344 Bryant and 6821 Logan Avenues to Parsley Builders. Background: In August and September, the HRA authorized the acquisition of these properties under the Richfield Rediscovered Program. Marlin Grant Homes, Inc. of Bloomington has secured purchase agreements from buyers for the lots at ?525 Girard ($137,000 home) and 6404-15th (5115,000 home) Avenues. Rockport Homes, Inc. has secured a purchase agreement from the buyer for the lot at 6404 Humboldt Avenue ($130,000 home). The sale price of the lots and proposed minimum home values are as follows: Property Sale Price Minimum Value 7525 Girard Avenue S 30,000 $ 120,000 6404-15th Avenue S 26,000 S 104,000 6404 Humboldt Avenue $ 30,000 $ 120,000 Parsley Builders is finalizing plans and final costs and has requested that the public hearing for 7344 Bryant and 6821 Logan be continued to the HRA's special meeting, November 1, 1994. The development agreement form remains essentially unchanged from those previously used for Richfield Rediscovered. The agreement requires the builders to: • pay for the site at the stated lot value minus the demolition credit, if any, upon completion of the home; • provide financial security during the construction period with a letter of credit, or similar security, that reflects the value of the lot sale price; and • complete each home and pay for the lot by May 1995. Marlin Grant Homes, Inc. has already completed several Richfield Rediscovered homes. The projects have been promptly developed, and all of the HRA's financial requirements were met. Rockport Homes, Inc. is building with the HRA for the first time. Dennis Mcgraw of Rockport Homes, Inc. displayed a $164,000 four bedroom home as part of the 1994 Parade of Homes. He has agreed to meet all of the HRA's financial requirements. Recommended Motion: Following the public hearing, adopt the attached resolution which authorizes the Chair and Executive Director to execute agreements which sell 7525 Girard and 6404-15th Avenues to Marlin Grant Homes, Inc., and 64Q4 Humboldt Avenue to Rockport Homes, Inc. for the development of new single family homes. It is also requested that the public hearing be continued to November 1 to sell 7344 Bryant and 6821 Logan to Parsley Builders. Basis of Recommendation: 1. A check of references. indicates the builders to be experienced, capable, financially secure builders. 2. The HRA has acquired or is in the process of finalizing the acquisition of all the sites in accordance with purchase agreements. 3. Development agreements have been negotiated and are in conformance with program guidelines. 4. Notice of public hearing was published in the Sun-Current on October 5, 19.94. 5. Previously, the Planning Commission found the sale of the lots for development of new single family homes to be in conformance with the City's Comprehensive Plan. 6. The public hearing for 6821 Logan and 7344 Bryant Avenues will be continued to the November 1, 1994 Special HRA meeting. Because of weather considerations, it benefits the builder to complete the public hearing on November 1 rather than the next scheduled HRA meeting on November 21, 1994. Alternative Recommendation: Do not sell to Marlin Grant Homes, Inc., Rockport Homes, Inc., and Parsley Builders and direct staff to find other buyers. Discussion/Decision Mode: Closings are anticipated to clearance and construction occur in early November with site starting shortly thereafter. Respe ly submitted, James Prosser Executive Director JDP:ds RESOLUTION N0. RESOLUTION AUTHORIZING SALE OF REAL PROPERTY LOCATED AT 7525 GIRARD AND 6404-15TH AVENUES TO MARLIN GRANT HOMES., INC., AND 6404 HUMBOLDT AVENUE TO ROCKPORT HOMES, INC., IN ACCORDANCE WITH A DEVELOPMENT AGREEMENT 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 Redevelopment Project (Project) hereto adopted by the City of Richfield (City) and the HRA, said real property being described as follows:. Property Legal Description 7525 Girard: Lot 18, Block 19, Irwin Shores Addition 6404-15th Ave: Lot 2, Block 3, Nokomis Gardens Rearrangement of Blocks 1, 2, 3, 4, 5 Girard Parkview 6404 Humboldt: Lot 2 and East 10 feet of Lot 19, Fairwood Park First Addition WHEREAS, the HRA is authorized to sell real property within its area of operation after public hearing; and WHEREAS, a developer, Marlin Grant .Homes, Inc. of Bloomington has been identified as the purchaser of the described property at 7525 Girard and 6404-15th Avenues, and Rockport Homes, Inc. has been identified as the purchaser of the described property at 6404 Humboldt Avenue in accordance with a development agreement; and WHEREAS, the public hearing has been held after proper public notice; and WHEREAS, the Planning Commission has made a finding that the disposition of the property for residential purposes is consistent with the Comprehensive Plan. NOW, THEREFORE, BE IT RESOLVED by the Richfield Housing and Redevelopment Authority: 1. A public hearing has been held and 7525 Girard and 6404-15th Avenues are authorized to be sold to Marlin Grant Homes, Inc. 2. 6404 Humboldt Avenue is authorized to be sold to Rockport Homes, Inc. in accordance with a development agreement with the HRA. 3. .The purchase price for 7525 Girard is 530,000. 4. The purchase price for 6404-15th is $26,000. 5. The purchase price for 6404 Humboldt is $30,000. 6. That the Chairperson and Executive Director are authorized to execute the Development Agreements and other agreements as required to effectuate the sale to Marlin Grant Homes, Inc. and Rockport Homes., Inc. Adopted by the Housing and Redevelopment Authority in and for-the City of Richfield Minnesota this 17th day of October 1994. Thomas E. Harms, Chairperson ATTEST: Vern Luettinger, Secretary W Z W a oC a N ti ~~ Z O a W J W F- z O ~- µ- - l ~ '~ i~ ~L. 3 ~- i. 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O ! u J ~__~ T HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 70 October 17, 1994 Issue Statement: Authorization to purchase 7424 Fifth Avenue to initiate a transformation home program concept. Background: In July, the HRA authorized the purchase of 7424 Fifth Avenue to initiate a transformation home program concept. The property would be purchased for $67,000. However, the purchase was made contingent on identifying a transformation contractor. Staff has been working on issues related to design and interim construction financing for a contractor. This property could become a demonstration prta~ect for design and interim construction financing. Firstar Bank is formulating creative contractor financing options. Through Visions Inc. and. the Design. Excellence Committee Paul Brugger, an experienced architectural designer has been made available. He is formulating some design concepts to transform the home and would also work with a builder. once selected. -While these items have not yet been completed, the owner of this property is unwilling to keep the house vacant much longer. He wants to either sell it to the HRA or rent it. A rental could result in a sale by Contract for Deed. This property is a blight - in the neighborhood. The blight should be removed. It is an appropriate property to demonstrate design innovations which could be transferable to other similar type homes in Richfield. If the property is rented, the opportunity would be lost. Recommended Motion: Authorize staff to purchase 7424 Fifth Avenue without contingency for the appraised value of 567,000. Basis of Recommendation: 1. In the remodeling process, owners are first challenged with a plan and design concept. The home at 7424 Fifth would introduce residents to design advisor services such as those available from Paul Brugger. 2. The present owner needs to sell. If the HRA does not .purchase, a contract for deed sale or rental of the property might occur. These are undesirable directions. 3. As a rental property in the past, the tenancy was transient and troublesome for the neighborhood and Public Safety. 4. The HRA assumes a greater risk by purchasing now. However that risk is no greater than the difference between the $67,000 appraisal value and a $15,000 to $17,000 discounted sale to a developer, as originally proposed. 5. The style and condition of the home warrants a remodel response rather than a tear down/build new response. 6. The home, upon completion of remodeling, would provide a property with a value approximately 5120,000 to $130,000. Alternative Recommendation: Do not purchase the property at this time. However,-this prolongs a troublesome use and delays positive improvements for the neighborhood. Discussion~Decision Mode: A November closing would be planned. Respectf ly submitted, Jame Prosser Exec 've Director JDP:cak HRA RESOLUTION N0. RESOLUTION AUTHORIZING PURCHASE OF REAL PROPERTY LOCATED AT 7424 FIFTH AVENUE WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA) desires to purchase certain real property pursuant to and in furtherance of the Richfield Rediscovered Transformation Program heretofore adopted by the HRA, said real property being described as follows: 7424 Fifth: The East 1/2 of the South 59.45 ft of the North 446.15 ft. of the West 1/2 of the Northeast 1/4 of the Northeast 1/4 of the Southeast 1/4, except road; Hennepin County. WHEREAS, the HRA is authorized by Minnesota Statutes Section 469.012 to acquire real property within its area of operation; and WHEREAS, the property. meets program requirements for acquisition; and WHEREAS, the HRA has caused appraisals of the subject property to be made by a qualified independent professional real estate appraiser and has negotiated a purchase price with the owners based on the stated value; and WHEREAS, funds have been provided by the HRA and are available for acquisition; and WHEREAS, the property would be sold to a qualified developer for a value added remodeling project after a public hearing. NOW, THEREFORE, BE IT RESOLVED by the Richfield Housing and Redevelopment Authority: 1. That purchase price is approved at the appraisal value of 567,000. 2. That the Chair and Executive Director are authorized to execute a Purchase Agreement and other documents to effectuate purchase for the amount set forth in this resolution. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 17th day of October, 1994. Thomas E. Harms, Chairperson ATTEST: Vern Luettinger, Secretary HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 68 .October 17, 1994 Issue Statement: Proposal to redevelop the car wash site at 66th Street and Bloomington Avenue:. Background At the September 19 meeting, the HRA heard a concept proposal for the redevelopment of this site for use as a dental clinic. Mr. Jim Winkels, Director of Business Development for Belair Builders Inc. of New Brighton, appeared before the :HRA along with Mr. Charles Ehlers, DDS and Mr. James Koller, DDS. They spoke about constructing a building of approximately 4,000 square feet together with parking and landscaping. Financial assistance was also requested. The range indicated was from 525,000 to S50,OD0. The HRA directed staff to identify more than one option for financing the assistance. They also directed. staff to prepare the appropriate plan documents and developer's agreement for subsequent .presentation to the HRA.. Two financing options have been identified; tax increment or a loan from the development fund. If tax increment was utilized, the amount of assistance needed would be $50,000 on a "pay as you go" basis. There would be no lump sum payment by-the HRA. As the development paid taxes the incremental value of the taxes estimated at approximately $7,000 per year would be paid to the developer (similar. to the CDP and CSM Phase I projects). The alternative form of assistance would be to make a lump sum payment of $61,500 to the developer from the Development Fund. Fifty thousand dollars would be in the form of a loan at 2% interest per annum. The balance of $11,500 dollars would be in the form of a grant. The principal and interest would be paid in annual payments beginning in the eleventh year and finishing in the twentieth year. Interest of 2% per annum would begin accruing in the fifth year. Mr. Sid Inman of Publicorp has indicated that the $61,500 could be withdrawn from the Development Fund without causing any cash flow problems. Attached to the letter is a redevelopment plan. Before any assistance can be provided, the property must be in a redevelopment project. The plan must be approved by the HRA and City Council. The City Council would hold a public hearing prior to considering adoption. If the HRA wished to provide assistance in the form of a lump sum payment, it could approve the redevelopment plan and request the same of the City Council. HRA plan approval would result with the adoption of the attached resolution. If the HRA desires to provide assistance through TIF, staff would formulate a TIF plan and present it along with-the redevelopment plan for approval in November. The redevelopment plan responds to applicable State Statutes. It contains a statement of public purpose, goals and objectives, description of the site and activities to be undertaken by the public. and private interests. It is very similar to other redevelopment plans used for CDP and the dental office. at 70th and Penn Avenue for example. Mr. Winkels will be attending the .October 17 HRA meeting. Recommended Motion: 1. Select the method of financing which in the judgement of the HRA is the most desirable. a. a lump sum payment implemented by adopting the attached resolution, or b. tax increment financing the documents which would be presented in November. 2. Direct the developer to host a neighborhood information meeting as soon as practical but prior to the November 21 HRA meeting. Basis of Recommendation: 1. At the September 19 HRA meeting, the HRA supported the concept of eliminating the existing nuisance use through redevelopment. 2. While the redevelopment of this site with a dental office seems desirable, the residents in the adjoining area need an opportunity to express their thoughts. 3. The site is appropriately zoned.. 4. The assistance being sought is reasonable given the estimated $700,000 development cost. Alternative Recommendation: 1. Provide no financial support to this project. 2. Use tax increment financing to assist the project. Discussion/Decision Mode: A decision regarding financing at the October 17 meeting will make it possible to proceed with the preparation of a developer's agreement for presentation to the HRA hopefully in November Res c lly submitted, James D. Prosser Execu a Director JDP:cak EAST 66TH STREET REDEVELOPMENT PROJECT AREA PLAN A. STATEMENT OF PUBLIC PURPOSE It is found that the public interest requires the replanning, reconstruction, and rehabilitation of neighborhoods; that in order to protect the overall economic stability of the community, particularly its commercial areas, it is necessary to redevelop and remedy conditions of underutilized land, economic obsolescence, and physical blight; that in order to create an economic environment which fosters the growth of a healthy commercial base and facilitates the redevelopment of land, it is necessary to .encourage private enterprise to engage in redevelopment to be constructed in accordance with a comprehensive community plan. The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the "HRA") and the City Council of the City of Richfield (the "Cit~') have determined that public intervention is necessary in the East 66th Street Redevelopment Project Area (the "Project Area') in order to achieve set goals and objectives for proper redevelopment of the area. B. STATUTORY AUTHORITY The statutory authority for the undertaking of a redevelopment project in the Project Area and the redevelopment activities proposed in the redevelopment plan relating thereto is conferred upon the HRA pursuant to and in accordance with the Housing and Redevelopment Authorities Act (the "Act"), Minnesota Statutes, Section 469.001 to 469.047. Specifically, Minnesota Statutes, Section 469.027 establishes the requirements for redevelopment plan preparation by an HRA prior to undertaking property acquisition, relocation, and redevelopment. C. STATEMENT OF GOALS AND OBJECTIVES The HRA determines that it is necessary, desirable, and in the public interest to undertake a redevelopment project in the City pursuant to the provisions of Minnesota Statutes, Chapter 469. The following goals and objectives are intended to serve as a basis for guiding the development and redevelopment of the proposed project area: 1.) To facilitate the acquisition of land or space which is vacant, unused or underused; 2.) To facilitate the redevelopment of land for the construction of a contemporary professional office building; 3.) To achieve a high level of design and landscaping quality in order to enhance the surrounding physical environment; 4.) To facilitate the removal of nuisance uses adjacent to residential uses; 5.) To create effective buffers, screens and transitions between residential and non-residential uses; 6.) To improve the commercial property tax base of the City and other taxing jurisdictions; 7.) To provide increased employment opportunities and improve the income base of the state; and 8.) To provide maximum opportunity, consistent with the needs of the city and other local jurisdictions, for development by private enterprise. D. DESCRIPTION OF THE REDEVELOPMENT PROJECT AREA In order to guide the development and redevelopment in the Project Area, the HRA has created this redevelopment plan. Pursuant to Minnesota Statutes, Sec. 469.002, subd. 12, the proposed project meets the definition of a redevelopment project. More specifically, Minnesota Statutes, Sec. 469.002, subd. l4, states that a"'Redevelopment project' means any work or undertaking: 1) to acquire blighted areas and other real property for the purpose of removing, preventing, or reducing blight, blighting factors, or the causes of blight; 2) to clear any areas acquired and install, construct or reconstruct streets, utilities, and site improvements essential to the preparation of site for uses in accordance with the redevelopment plan; (3) to sell or lease land so acquired for uses in accordance with the redevelopment plan; (4) to prepare a redevelopment plan, and to incur initiation, planning, survey and other administrative costs of a redevelopment project, and to prepare technical and financial plans and arrangements for buildings, structures, and improvements and all other work in connection therewith."' The redevelopment project area boundary is site specific to the project and encompasses all that real property within an area described as follows: The North 250 feet of the West 1/4 of the Northwest 1/4 of the Northeast 1/4 of the Southeast 1/4 of Section 26, Township 28, Range 24, except streets, Hennepin County, Minnesota. 2 E. DEVELOPMENT ACTIVITIES AND AGREEMENTS General The objectives of this Redevelopment Plan will be accomplished pursuant to the authority granted to the HRA by the Act Redevelopment within the Project Area must be financially feasible, marketable, and compatible with long range redevelopment plans of the City and HRA. The following development activities are appropriate for the area in light of current redevelopment opportunities: will be undertaken for the proposed redevelopment project: 1.) Land acquisition; 2.) Site clearance; and 3.) Site improvements. Any and all proposals by the developer will be reviewed by the HRA to determine conformance with the redevelopment plan and applicable municipal ordinances and codes. To facilitate this effort, the following documents may be requested for review and approval: 1.) Site plan; 2.) Construction, mechanical, and electrical system drawings; 3.) Landscaping plan; 4.) Grading and storm drainage plan; 5.) Signage system plan; and 6.) Any other drawings or narrative deemed by the HRA to demonstrate the conformance of the development with the redevelopment plan. Yt is the intention of the HRA that the majority of the redevelopment activities, including but not limited to acquisition, relocation, site clearance, .and improvements be directly undertaken by the developer with assistance when and where appropriate from the HRA. Description of Anticipated Private Development Activities The proposal for redevelopment of the project area calls for the acquisition, site. clearance, and construction of a new commercial, dental office building and related parking. The subject land is owned by a private, third party. Currently and since approximately 1965, the site has been occupied by aself-service car wash business with four stalls. The new commercial dental office building is expected to accommodate a dental clinic for 3 dentists. The dentists have outgrown their current space in an adjacent community and have sought Richfield as an appropriate community to locate to. The 3 commercial office building will approximate 4,000 square feet in size of which 2,400 square feet will be contained on the first floor and 1,600 of finished square feet on the lower level.. The site will also accommodate parking and landscaping. Description of Anticipated Public Development Activities The proposed public development activities in the redevelopment project area would be undertaken by the HRA and City in order to support the private development activities and facilitate redevelopment of the area in a manner suitable to overall development plans. These activities include direct financial assistance to the developers for project costs and indirect assistance to the project for acquring and extinguishing a leasehold interest in the subject property. Redevelopment activities would be contingent upon the mutual agreements set forth in a Contract for Private Redevelopment. F. PUBLIC DEVELOPMENT COST; PROCEEDS; FINANCING The HRA determines that the funding of the necessary activities and improvements in the redevelopment project area shall be accomplished through the use of the revenue in the HRA's Development Fund. Specifically, the developers will obtain a $50,000 loan from the HRA for the dental office project in order to relocate the tenant from the property. This activity will include a leasehold interest buyout. In addition to the loan, the HRA will provide a $11,500 grant to the developer to pay for project costs and other qualifying activities. As the HRA will not acquire any land directly, no capital proceeds from land sale are expected. G. PROPOSED LAND USE The current land use in the redevelopment project area is zoned C-2, General Commercial. The proposed redevelopment project would be consistent with permitted uses in the C-2, General Commercial District H. ACQUISITION, RELOCATION, AND REHABILITATION ACTIVITIES 1. Acquisition As stated previously, the HRA does not intend to acquire any real property for the project However, it is intended that the developers will acquire the following property in order to assemble land for redevelopment, according to the objectives set forth in this plan: PID # 26-028-24-41-0004 4 Legal Description: The north 250 feet of the West 1/4 of the Northwest 1/4 of the Northeast 1/4 of the Southeast 1/4 of Section 26, Township 28, Range 24, except streets, Hennepin County, Minnesota. 2. Relocation The existing; car wash business must be removed from the site for the proposed development. 3. Rehabilitation Program No rehabilitation is currently intended in the Redevelopment Project Area. I. ENVIRONMENTAL CONSIDERATIONS The proposed redevelopment project does not present any permanent environmental problems. All municipal actions, public improvement, and private development shall be carried out in a manner that will enhance, rather than detract, from the natural environment. All necessary environmental permits and clearances will be obtained by the developer. J. REDEVELOPMENT PLAN MODIFICATION Pursuant to Minnesota Statutes, Section 469.029, subdivision 6, a redevelopment plan may be modified at any time provided that the HRA and City Council adopt such modifications upon the notice and after the public hearing required for the original adoption of the redevelopment plan. If the HRA determines the necessity of changes in an approved redevelopment plan or approved modification thereof, which changes do not alter or affect the exterior boundaries, or do not substantially alter or affect the general land uses established in such plan, then such changes shall not constitute a modification of the Redevelopment Plan nor require approval by the governing body of the political subdivision in which the project is located. K. ADMINISTRATION OF REDEVELOPMENT PROJECT The administration of the redevelopment project area will be undertaken by HRA officials. 5 APPENDIX A MAP OF REDEVELOPMENT PROJECT AREA F- 0 Z N ~ q o~ ~ o~ q ~~ DU ~C~ ~ o ^oo ^ a ~ rho i ~I ~ ~ i~ ~3°a ~ Q ap ~~ o' ~ ~ 4 ~_._. s J y _. ~ Q~ c ~ ~~_- ~ ~ o : : - ,f~ ~,.J o O i ~ Cr ~ ° LL 'AMH ^ O D Q ~ -~- ° O 0 q~~g o ~ o a r~ ~~` _~ ~--J oo ~q Q o ~ ~~~ a r ~ a ~ ~, ' P b o 6 i o~l o I °~' D ~ ...... ° -~ :DiO~]p~iC7k] ~7 _~ _. 0 Q ~ [~ ~ ~ D L- - D ~ D° ^ O^ on _ :, ~- I I Id Iplp IQ I ~~ ~ o~~ d-i I d-AI-~- I-° d- ~r~ f I --- ~ ~ I"~-J ~ IQI u~i ' ~ ° ° ~_ a F- ~ -f- n r I / m ~ ~ ~ u~~ ~ I[~ r i _ I I C] ~ L '~ ~ --- ^0~0~ --~ ~ ~ - . . i ~~a o o ~ -- I Q 'I ( c~ o o [3 '3AV H184 Cho G~~ 4 y ~o '3AV H1L4 •3nv H194 '3AV NOtDNIWOOlB '3AV H154 1 I , ...I....I.....I.....I......I. . , I ~ , , , I I I l i i i i I '3AV H194 I 1 I ~ I I I I I I I I ~ ~ i I ~ ~ I 1 I i I i I I I I I I I ~ i l i I I I '3AV HlEI . '3AV H1L4 i " ~ "3AV H14 4 Z V .W~ a w Q H U W O a Z W a O W W 0 W W N H (fl N W ;~.. RESOLUTION N0. THE HOUSING AND REDEVELOPMENT IN AND FOR THE CITY OF RICHFIELD, MINNESOTA RESOLUTION APPROVING MODIFICATION TO RICHFIELD REDEVELOPMENT PROJECT PLAN, CONSISTING OF ADOPTION OF REDEVELOPMENT PLAN FOR THE EAST 66TH STREET REDEVELOPMENT PROJECT AREA; REQUESTING THE RICHFIELD CITY COUNCIL TO CONDUCT A PUBLIC HEARING THEREON; RECOMMENDING APPROVAL. OF THE PLANS BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota as follows: Section 1. Recitals. 1.01. The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the "HRA") is a public body corporate and politic under the laws of the state of Minnesota and authorized by Minnesota Statutes, sections 469.001, through 469.047 (the "HRA Act") to establish projects within the City of Richfield. 1.02. The HRA has identified an area of the city as being in need of development and redevelopment because of the existence of substandard buildings and under utilized property located within such area. 1.03. .The HRA has conducted a study of the physical conditions within. the East 66th Street Redevelopment Project Area (the "Project") and has considered the need for public assistance to encourage development and redevelopment within the area. 1.04. The HRA has caused to be prepared a redevelopment plan for the Project which is contained in a document entitled "Redevelopment Plan for the East 66th Street Redevelopment Project Area" dated October 17, 1994 and on file in the office of the executive director of the HRA. The Redevelopment Plan for the East 66th Street Redevelopment Project Area constitutes a modification to the Richfield Redevelopment Project Plan. Collectively, the documents shall be known hereinafter as the "Plans". 1.05. Notice of the public hearin on the establishment of the Project and will be published as required by law and will be held by the City Council of the "City") on November 14, 1994. g required by the HRA Act the adoption of the Plans a public hearing thereon City of Richfield (the Section 2 . Findincts . 2.01. The HRA finds that the land in the Project would not be made available for development or redevelopment without the financial assistance authorized by the Plans. 2.02. The HRA finds that the Plans will afford maximum opportunity, consistent with the needs of the city as a whole, for the redevelopment of property within the Project by private enterprise. 2.03. Subject to approval by the planning commission, the HRA finds the Plans conform to the general plan for development of the city as a whole. 2.04. The HRA finds that the Project is a redevelopment project within the meaning of section 469.002, subd. 12 of the HRA ACt. Section 3. HRA Approval. 3.03. The HRA approves and hereby adopts the Plans. Section 4. Further ProceedinQS. 4.01. The HRA requests that the Richfield Planning Commission review the Plans and comment thereon regarding their consistency with the City's comprehensive plan. 4.02. The HRA requires that the City hold the public hearing on the Plans as required by section 469.028 of the HRA Act and recommends that the Plans be approved by the city. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield this day of 1994. Thomas E. Harms, Chairperson ATTEST: Vern Luettinger, Secretary HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 69 October 17, 1994 Issue Statements Authorization to issue Certificate of Completion to Twin Cities Habitat for Humanity for completion of the Richfield Rediscovered property at 6236 Pleasant Avenue: Backaround: The HRA authorized development of the property; September 19, 1994. The Contract for Private Development provides for the issuance of a Certificate of Completion when construction is complete. (A sample certificate is attached.) Habitat uses volunteer labor in the construction of their homes. The volunteers working on the Pleasant project are emgloyees of Centex Builders, a professional construction company.. The. site preparation, footings and foundation were planned to be installed October 3 through October 14. The home itself will be built in seven days, beginning October 15 with completion scheduled for October 22, including landscaping and all finishing. Centex Builders worked successfully under a similar schedule two years ago in Minneapolis.- Habitat has requested the Certificate of Completion upon completion and closing. Staff is anticipating this request and wants to respond in a timely manner upon verification of completion. Recommended Motion: Authorize the Chair and Executive Director to execute a Certificate of Completion in accordance with the attached resolution, which includes verification by staff of the completion of development. Basis of Recommendation: 1. Construction is anticipated to be complete by October 22, 1994, including the issuance of a Certificate of Occupancy by the Inspections Division. This is unusual since above ground construction will not begin until October 15, 1994. 2. The builder has performed in previous projects in accordance with construction agreements, and upon verified completion of the project at 6236 Pleasant Avenue, will seek the issuance of a Certificate of Completion and release of performance security in the amount of $20,000. Alternative Recommendation: Do not issue a Certificate of Completion at this time. Discussion/Decision Mode: This matter will be presented at the October 17, 1994 meeting. Respe ly submitted, Jame Prosser Exec ve Director JDP:ds HRA RESOLUTION NO. THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD RESOLUTION RELATING TO THE ISSUANCE OF A COMPLETION CERTIFICATE .FOR THE RICHFIELD REDISCOVERED PROPERTY AT 6236 PLEASANT AVENUE WHEREAS, on September 19, 1994, the Richfield Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA) entered into contracts with The Twin Cities Habitat for Humanity for the construction of single family homes; and WHEREAS, the new home is located at 6236 Pleasant Avenue; and WHEREAS, staff will verify by visual inspection that construction and all development requirements are completed at 6236 Pleasant Avenue; and WHEREAS,- performance security in the amount of $20,000 will be released to Twin Cities Habitat for Humanity, Inc. upon sale to the homeowner in accordance with the development agreement. NOW, THEREFORE, BE IT RESOLVED by the Richfield Housing and Redevelopment Authority in and for the City of Richfield, Minnesota that: 1. Upon verification of completion by staff, a completion certificate shall be issued for 6236 Pleasant Avenue. 2. The performance security can be released when the completion ' certificate is issued and the homeowner has purchased the property. Passed by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 17th day of October, 1994. Thomas E. Harms, Chairperson ATTEST: Vern Luettinger, Secretary EXHIBIT A FORM OF CERTIFICATE OF COMPLETION The undersigned hereby certifies that , has fully and completely complied with its obligations under Article IV of that document entitled "Contract for Private Development", between the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota and dated filed as Document No. with respect to construction of the approved construction plans and is. released and forever discharged from its obligations to construct under such above-referenced Article. DATED: THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD By Its Chairperson By Its Executive Director STATE OF MINNESOTA ) )SS COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of 199 by and the Chairperson and Executive Director of The Housing and Redevelopment Authority in and for the City of Richfield, a public body corporate and politic under the laws of the State of Minnesota on behalf of the public body corporate and politic. Notary Public This instrument was drafted by: Holmes & Graven, Chartered 470 Pillsbury Center Minneapolis, MN 55402