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11-19-90 agendaHousing and Redevelopment Authority 10 HRA Letter No. 36 Agenda November 19, 1990 Issue Statement: Adoption of the?1991 HRA proposed property tax levy and budget. Background: According to the truth and taxation statute, each city and certain taxing jurisdictions such as the HRA must hold truth in taxation hearings and finalize a property tax levy and budget on or before December 20, 1990. At its August meeting, the HRA scheduled a truth in taxation budget hearing for November 19, 1990, with a reconvene date of November 20 if such a reconvene was necessary. Notice of those hearing dates and the tax levy was submitted to Hennepin County prior to September 1, pursuant to state statute and published in accordance with the statute on November 14, 1990. The budget and the HRA tax levy should considered at the public hearing on November 19 (and November 20 if necessary). Final action should be taken at that time to adopt the tax levy and the budget. The actual resolutions to be used for such actions are included as part of the budget document. Recommended Motion: Adopt the resolutions adopting a 1991 HRA budget and proposed property tax levy for 1991. Basis of Recommendation: 1. The truth in taxation law calls for a public hearing as identified in this letter. 2. The HRA adopted the public hearing dates of November 19 and 20 at its August meeting. 3. All notification and publication requirements associated with the budget process have been fulfilled. Alternative Recommendation: None. Discussion/Decision Mode: The HRA must take action on the HRA budget and property tax levy on November 19 and/or November 20. Res a ully submitted, J s D. Prosser Executive Director JDP:ds 0 HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 37 Agenda November 19, 1990 Issue Statement: A public hearing and sale of 7000 Oakland Avenue South. Background : The remodel project at 7000 Oakland Avenue South was authorized by the HRA in September, 1988, as a cooperative project with Vo- Tech. The project is nearing completion and a sale is anticipated in early 1991. A four member income qualified family has been selected as purchasers. They meet the requirements stated in Attachment A. HRA authorization to sell the property is required prior to final processing. The home is being sold for an estimated market value of $99,750. The purchasers are making a down payment of $5,000. They have applied for a conventional mortgage in the amount of $74,750. The difference between the initial purchase price and the estimated market value, $20,000, is provided by the HRA as a second mortgage. Project costs are covered by the down payment and first mortgage. The second mortgage accomplishes the following: 1. Makes the initial purchase affordable. 2. Prevents a speculative purchase in which the buyer might benefit from selling the home quickly. Funds received when the second mortgage is repaid are returned to the New Home Program for financing housing activities of the HRA. The HRA will pay up to four points for mortgage discounting (approximately $2,990) and the cost of title insurance (approximately $200), at closing. After closing, the Vo-Tech contract of $67,558.50 will be paid. These costs have been anticipated in the 1990-91 budget and will be paid by the proceeds of sale. An information manual for new homeowners developed by staff, will be provided and reviewed with the buyer at-closing. The information provides an orientation to the city, housing, and property maintenance requirements and other tips. If during final processing the family is found ineligible by the lender, the purchase agreement is void and earnest money released. At this time however, the lender has qualified the purchasers through the preliminary processing. Prior to sale, the HRA will have an opportunity to inspect the work during an "open house". Recommended Motion: . It is recommended that following the public hearing, the HRA adopt the attached resolution which authorizes the disposition of the HRA owned property at 7000 Oakland Avenue South. Basis of Recommendation: 1. A four member family has been identified as purchasers and meets program requirements. 2. A purchase agreement cannot be processed further by the lender without HRA authorization of sale. 3. A purchase agreement is necessary to obtain a firm financing commitment. 4. A public hearing notice has been published in the Sun-Current which allows the HRA to consider the sale at the November meeting. 5. The Planning Commission has determined that the sale for residential purposes is consistent with the Comprehensive Plan. 6. The home is nearing completion. Alternative Recommendation: 40 Do not adopt the resolution. However, this would cause a delay in the sale of the property, increase HRA holding costs, and be very disturbing for the identified family. Discussion/Decision Mode: Authorization of the sale is required at the November 19th meeting so that the buyers can secure mortgage financing for a February, 1991 closing. Respectfully submitted Jame Five rosser Exec Director 0 • NEW HOME PROGRAM ELIGIBILITY REQUIREMENTS FOR HOME BUYERS ATTACHMENT A - Have a 3-6 member family (a family is defined as persons related by blood, marriage or operation of law) - Be a first time home buyer; (or have not owned in 3 years) - Have the following maximum annual income depending upon family size: Family Size Maximum Income 3 $32,150 4 $35,700 5 $37,950 6 $40,150 This income is 80% of the metropolitan area median income - an accepted CDBG program income level. - Have the ability to make monthly payments on a $74,750 mortgage, pay $5,000 down, and pay buyer required closing costs. - Agree to be subject to a second lien by the HRA for the difference between the initial sales price and the actual value. 0 RESOLUTION NO. THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA RESOLUTION AUTHORIZING SALE OF 'REAL PROPERTY LOCATED AT 7000 Oakland Avenue South WHEREAS, the Housing and Redevelopment Authority (HRA), owns certain real property located at 7000 Oakland Avenue South, legally described as: That part of the N. 109.6 ft., of the NW quarter of the NW quarter of the NW quarter of the NW quarter of Section 35, Township 28, Range 24, lying east of the west 180 ft. of said NW quarter. WHEREAS, the HRA acquired the property so that the South Hennepin Vocational Technical College (Vo-Tech) could construct a new single family home at 7000 Oakland Avenue south, to be sold by the HRA to a moderate income family; and WHEREAS, construction work is nearing completion; and WHEREAS, the Cutshall-Swanson family has been identified as qualified purchasers for 7000 Oakland Avenue South; and WHEREAS, the conditions of sale include a total sales price • of $99,750, a first mortgage of $74,750 payable to the lender, a second lien of $20,000 payable to the HRA, and a $5,000 downpayment; and WHEREAS, the sale of 7000 Oakland Avenue South may be authorized by the HRA following a public hearing which considers the disposition of the property; and WHEREAS, that hearing has been held following proper publication of notice. NOW, THEREFORE BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota that the HRA Chairperson and Executive Director are authorized to execute the purchase agreement and other required documents so that the disposition of HRA owned property at 7000 Oakland Avenue South occurs as presented herein. Passed by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 19th day of November, 1990. Thomas E. Harms, Chair ATTEST: Joan Helmberger, Secretary HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 38 Agenda November 19, 1990 Issue Statement: Authorization to execute contract with South Hennepin Vocational Technical School (Vo-Tech) to initiate a 1991-92 New Home project. Background: Vo-Tech has requested that the HRA participate in a new construction project for the school year 1991-92. The two organizations have participated together in 14 projects since 1977. The projects provide rehabilitation and new construction training opportunities for the Vo-Tech students and affordable housing for the community. This will be the fourth new construction project wherein a structure will be built at the Vo- Tech campus, moved to the site, and placed on a permanent foundation. On September 19, 1990, the HRA authorized st; property at 7528 Colfax Avenue South through Acquisition Program. The Richfield Planning finding that residential use of the property with the Comprehensive Plan. Demolition and anticipated to occur in December 1990. 3ff to acquire the the Voluntary Commission made a was in conformance site clearance is Staff, in cooperation with Vo-Tech architectural drafting faculty, has developed project plans to meet all setback requirements, compliment the design of neighboring homes and incorporate interior features desirable in today's market. The new house will have approximately 1,530 square feet of finished living area. It will feature a split entry design with a living room, dining area, kitchen, four finished bedrooms, two full bathrooms, and a deck area. Space in the lower level is provided for a laundry area and future family room. In addition, the house will feature an attached garage. Typically, only a driveway and space for a future garage is provided. However, the Colfax site, with minimum front footage (531) and no alley access does not easily accommodate the future building of a detached garage. The amount of the Vo-Tech contract for this project is not to exceed $61,507. This cost is consistent with previous projects given design and square footage variabilities. The estimated project costs and funding source follows: Activity Funding Sou rce Acquisition, site: $ 56,000 CDBG Demolition, site: $ 4,000 CDBG Vo-Tech Contract: $ 61,507 Proceeds of Sale Landscaping: $ 4,000 Proceeds of Sale Legal (Sale): $ 600 Proceeds of Sale Closing Costs: $ 2,500 Proceeds of Sale Total Cost $128,607 Private contractors will complete the electrical, plumbing and heating portions of the work. Legal counsel has previously reviewed the contract requirements. A copy of the floor plans and building elevations also accompany this letter. The home will be sold to a first time home buying family of three to six members, having a moderate income (as determined by Section 8 income limits) of between $32,150 and $40,150. Although the completed value of the home has not yet been determined by independent appraisal, staff estimates that the value should approximate $95,000. The initial purchase price would be approximately $75,000. The $20,000 second lien would be used to recover any difference. Proceeds of the sale are used to pay the Vo-Tech contract. A reduced interest rate mortgage would be secured from the Minnesota Housing Finance Agency in the winter of 1992, if available. FHA financing is an acceptable alternative pending mortgage interest rates at the time. Recommended Motion: It is recommended that the HRA adopt the attached resolution authorizing the execution of the Vo-Tech contract in the amount of $61,507, for the 1991-92 new construction project at 7528 Colfax Avenue South. Basis of Recommendation: 1. The site has been acquired by the HRA. 2. Plans have been developed to meet site requirements and program needs of the HRA. 3. The inspection division has had an opportunity to review the plans for the project. 4. Site development is consistent with the Comprehensive Plan. 5. Adjoining neighbors have had an opportunity to review the project with staff. Alternative Recommendation: Do not authorize execution of the Vo-Tech contract. This would delay development which could prohibit Vo-Tech from including the project in their 1991-92 curriculum schedule. Discussion/Decision Mode: The 7528 Colfax Avenue South project was started on campus in September 1990. Contract execution would occur immediately to ensure the HRA's interest in the project. Alternately, the structure would be sold by Vo-Tech to another party. RFee ully submitted, J Prosser Ee Director RESOLUTION NO. • THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA RESOLUTION RELATING TO VO-TECH AGREEMENT FOR 7528 COLFAX AVENUE SOUTH WHEREAS, the Housing and Redevelopment Authority (HRA) acquired the real property at 7528 Colfax Avenue South, legally described as: Lot 8 and 5.3' of Lot 7, Block 22, Irwin Shores WHEREAS, a project has been proposed in cooperation with South Hennepin Vocational Technical Center (Vo-Tech); and WHEREAS, the property at 7528 Colfax Avenue South would be developed with new construction; and WHEREAS, the Agreement price for the new construction project will not exceed $61,507; and WHEREAS, following completion of the new construction work, • the property will be sold to a first time home buying, moderate income family. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota that the HRA Chairperson and Executive Director are authorized to enter into a construction agreement for an amount not to exceed $61,507 for the new construction project at 7528 Colfax Avenue South. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 19th day of November, 1990. Thomas E. Harms, Chairperson ATTEST: Joan Helmberger, Secretary • SUMMARY OF CONTRACT REQUIREMENTS FOR VO-TECH PROJECT AT 7528 COLFAX AVENUE SOUTH The construction of a split-entry structure at 7528 Colfax Avenue South. The installation of heating, electrical and plumbing systems. Interior finishings; floor covering, millwork, painting and staining. Completion by April 1992. Supervision of labor and insurance coverage to be the responsibility of Vo-Tech. Vo-Tech is responsible for a one-year warranty for defects caused by faulty workmanship or defective materials, a two- year warranty on installation of plumbing, electrical, heating and cooling systems and a ten-year warranty on structural defects. A provision specifying the Vo-Tech's responsibilities • concerning timely completion of the exterior facade, and routine site maintenance during the construction period. LJ 0 F O N W W J O V 00 in ti 0 ?? ,ICI ? ? I II: I ,I 01= Q '' C? L J D Z?T I 17.1 ' I DELL. Li I >i LA I 4?- ZL- I ??1+ O I ? ? E . 17PY2 P'? i? L b . J ? Pry MS?R ? 1 71. A=--41 leA\ 7528 COLFAX AVE. SOUTH MAIN LEVEL E? 0 b?p.rc2dig,-- 1 LT. jt?FINistti?? D il [I bt==? ?j 0 Sro?E- UNEX6??4 J JLJ Pxcwet p 7528 COLFAX AVE. SOUTH LOWER LEVEL Housing and Redevelopment Authority HRA Letter No. 39 Agenda November 19, 1990 Issue Statement: Adoption of resolution authorizing the purchase of property under the Expanded New Home Program. Background: In July, 1990, the HRA and City Council approved the Expanded New Home Program Redevelopment and Tax Increment Financing Plans. The two basic objectives of the program are to: 1. Create a voluntary market for substandard poor quality housing; and 2. Provide sites for new homes with features attractive to families. The original program design estimated that 27 sites would be purchased for redevelopment in Phase I. In September and October, the purchase of 14 properties was approved by the HRA. Two qualifying properties have been voluntarily offered to the HRA for purchase in November, 1990 at negotiated purchase prices. The properties and the recommended purchase prices are listed in the attached resolution. • Following acquisition, the properties would be cleared by the HRA in preparation for the construction of new single family homes. The 6813 Logan property is platted as two lots and can be subdivided to provide a total of two new homes. The 6313 Morgan property is a 40' wide lot with a total square footage less than the minimum allowed by ordinance. The seller and staff have prepared a joint variance application for the Hearing Examiner to consider. A finding is anticipated after the November 20, 1990 hearing. Recommended Motion: Adopt the attached resolution which authorizes: 1. The purchase of the property at the prices indicated contingent on variance approval. 2. The Executive Director and HRA Chairperson to execute purchase agreements. Basis of Recommendation: 1. The properties meet program requirements for acquisition. 2. The properties were appraised by Ron Lachenmayer of BCL 10 Appraisals, Inc. . 3. Purchase prices negotiated with sellers are based on the appraisals. 4. The sellers have entered into purchase agreements at the prices indicated in the resolution which total $120,500. Purchase is contingent on a favorable variance finding by the Hearing Examiner. 5. Funding for acquisition has been made available by the HRA and City Council. 6. The owners have voluntarily indicated an interest in selling their.property to the HRA. Alternative Recommendations: 1. Not authorize acquisition. 2. Delay acquisition. Discussion/Decision Mode: Authorization in November, 1990 would facilitate site clearance and new construction in early 1991. is Respe ly submitted, Jam . Prosser Executive Director C RESOLUTION NO. THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA RESOLUTION AUTHORIZING PURCHASE OF REAL PROPERTY LOCATED AT 6813 Logan Ave. So. 6313 Morgan Ave. So. 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 Expanded New Home Program Redevelopment Project (Project) heretofore adopted by the City of Richfield (City) and the HRA, said real properties being described as follows: Lots 11 and 12, Block 5, Tingle Bros. Lincoln Hills Second Addition; and Lot 21, Block 9, Ray's Lynnhurst WHEREAS, the HRA is authorized by Minnesota Statutes Section 469.012 to acquire real property within its area of operation; and • WHEREAS, 6813 Logan meets all program requirements for acquisition and 6313 Morgan meets all program requirements provided a variance to lot width and lot size is granted by the City Hearing Examiner; and WHEREAS, the HRA has caused appraisals of the subject properties to be made by a qualified independent professional real estate appraiser; and WHEREAS, negotiated purchase prices have been determined, with the purchase agreement for 6313 Morgan being contingent on a favorable variance finding; and WHEREAS, funds have been provided by the City Council and HRA and are available for acquisition. NOW, THEREFORE, BE IT RESOLVED by the Richfield Housing and Redevelopment Authority: 1. That purchase prices are approved as follows: 6813 Logan Ave. So. $70,000 6313 Morgan Ave. So. $50,500 2. That the Chairperson and Executive Director are authorized to execute a Purchase Agreement for the amounts set forth in this resolution. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield Minnesota this 19th day of November, 1990. Thomas E. Harms, Chairperson ATTEST: Joan Helmberger, Secretary 0 HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 40 Agenda November 19, 1990 Issue Statement Public hearing and authorization of the sale of two Expanded New Home properties to Marv Anderson Homes, Inc. Backgrounds In September, 1990, the HRA authorized the selection of Marv Anderson Homes, Inc. as the builder for the Expanded New Home Program. Marv Anderson Homes of Bloomington, a division of Pulte Home Corporation, provides 38 years of building experience, a reputation for quality construction and service, and the ability to meet the financial requirements of the program. In September and October, 1990, the HRA authorized the sale of 14 properties to Marv Anderson Homes for redevelopment with new single family homes. Development agreements for three additional properties have been negotiated with Marlin Grant, President of Marv Anderson Homes. These properties are identified in the attached resolution. One of the properties previously approved by the HRA to purchase has a double lot so that three new single family homes are planned. The objective of the development agreement is to achieve the • market rate sale of land and the construction of market rate single family homes that exceed values which presently exist in fully developed neighborhoods. Marv Anderson and the HRA assume reasonable development risks for this creative concept. Development requirements also reflect the market rate theme and have been kept to the minimum needed to meet the HRH's objectives. The development agreement requires: - a minimum market price for three development sites with Marv Anderson paying an average of approximately $26,867 per property. A total of $80,600 has been negotiated. (A further provision provides additional land proceeds to the HRA if homes with higher values than expected are sold to the buyers.) - performance within a timeframe secured by a cash set aside by Marv Anderson of $16,430 per property or, $49,290 total. This amount equals the HRA writedown and demolition costs. The HRA can draw on this escrow account if Anderson fails to perform. three new homes with a total range of values approximating $359,000 to $397,500 replacing substandard homes valued at a total of $120,500. As in September and October, the development agreement will be contingent upon review and approval from Pulte Home Corporation of the agreements executed by Marv Anderson Homes. This is essentially the same development agreement authorized by the HRA in October. A public hearing should be held which authorizes the sale of land to Marv Anderson Homes. The Planning Commission has previously made a finding that the acquisition and disposition of these properties for residential purposes is consistent with the comprehensive plan. The property at 6313 Morgan is a 40' lot with a total lot footage less than allowed by ordinance. Staff is processing a variance request for development. The authorization to sell to Marv Anderson is contingent on a favorable finding by the Hearing Examiner on November 20, 1990. Recommended Motion: Adopt the attached resolution which authorizes the Chairperson and Executive Director to execute agreements which sell acquired Expanded New Home Program sites for development of new single family homes to Marv Anderson Homes, Inc. Basis of Recommendation: 1. Marv Anderson Homes, Inc., is an experienced, quality oriented, capable builder. 2. The HRA has authorized the purchase of properties for • development. 3. A development agreement has been negotiated and executed by Marv Anderson Homes, Inc., to initiate development. 4. Builder and HRA risks have been balanced with the intent of minimizing HRA subsidy and ensuring development performance. 5. Proper notice of public hearing has been published which provides the opportunity for the HRA to consider the sale of the identified properties to Marv Anderson, Inc. Alternative Recommendation: Do not proceed with a development agreement with Marv Anderson Homes, Inc. and terminate or continue the public hearing to sell the identified properties at a later time. Discussion/Decision Mode: Authorization of the sale of properties in November, 1990, would facilitate site clearance and new construction in early 1991. Approval of the agreement by the Pulte Corporation is expected to be received by December 28, 1990. Respectf y submitted, James rve osser Execut ir ector RESOLUTION NO. • THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA RESOLUTION AUTHORIZING THE SALE OF REAL PROPERTY LOCATED AT 6813 Logan Ave. So. 6313 Morgan Ave. So. To Marv Anderson 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 Expanded New Home Program Redevelopment Project (Project) heretofore adopted by the City of Richfield (City) and the HRA, said real properties being described as follows: Lots 11 and 12, Block 5, Tingle Bros. Lincoln Hills Second Addition; and Lot 21, Block 9, Ray's Lynnhurst WHEREAS, the HRA is authorized to sell real property within its area of operation after public hearing; and, WHEREAS, a developer, Marv Anderson Homes, Inc., Bloomington, has been identified as the purchaser of the described property, 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 and the sale of 6313 Morgan is contingent on the granting of a variance by the City Hearing Examiner. NOW, THEREFORE, BE IT RESOLVED by the Richfield Housing and Redevelopment Authority: 1. A public hearing has been held and the following properties are sold to Marv Anderson Homes, Inc., in accordance with a development agreement with the HRA: 6813 Logan Ave. So. a) $28,200 (Lot 11) b) $27,200 (Lot 12) 6313 Morgan Ave. So. $25,200 2. That the Chairperson and Executive Director are authorized to execute the Development Agreement with Marv Anderson, Homes, Inc. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 19th day of November, 1990. Thomas E. Harms, Chairperson ATTEST: Joan Helmberger, Secretary 0 HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 41 Agenda November 19, 1990 Issue Statement: Consideration of a redevelopment concept for Hub West and an implementation plan, LHN Redevelopment Project. Background: The owners •of The Hub, the Bradley Real Estate Investment Trust of Boston (Bradley) together with their local representative Towle Real Estate of Mpls., have prepared a redevelopment concept proposal. The area to be redeveloped adjoins the Bradley property to the west and is occupied by U.S. Swim & Fitness (U.S. Swim), Great Clips, Snyders, Hauser's, Kentucky Fried Chicken, the P & D Investment building at 224 West 66th Street and a Naegele sign. Development Concept Bradley is proposing the following during 1991: - The removal of all existing buildings except U.S. Swim. The U.S. Swim facility would be retained. - The construction of a 50,606 sq. ft. Rainbow grocery store. • - The construction of a 1,500 sq. ft. link between U.S. Swim and the Rainbow facility to be occupied by another retail tenant. - The reconstruction of a Kentucky Fried Chicken facility at a new location on the site. There would be a net gain in building square footage of approximately 12,436. Staff will review the preliminary concept site plan at the November 19 HRA meeting. Staff Review The concept proposal has been presented to and reviewed by staff at the Development Review Advisory Committee. The items of concern which were identified related to circulation; access to the site as well as on-site. Items evaluated included 66th Street median design, curb cut location and number, and automatic traffic signal needs. The conclusions were that no changes are needed in the 66th Street medians and traffic signal location. As final plans are formulated to meet the needs of the new tenants, Bradley will submit those plans as part of a request to amend the existing PUD. At that time the circulation details will be finalized. Project: The total estimated cost of the project is approximately $9 i million. This includes all site assembly costs, construction costs and soft costs. Bradley would provide $5,686,848 (64%) and the HRA would provide $3,262,500 (36%). • The HRA and Bradley would finance the purchase the Levine property. Bradley would be responsible for all site acquisition and relocation costs and activities related to the KFC and the small office building at 220 and 224 West 66th Street with the Naegele sign. Bradley would be responsible for demolition costs on the entire site. These costs total approximately $700,000. The HRA's power of eminent domain would be used if Bradley is unsuccessful in negotiations with either the real estate or lease hold interests. If utilized, Bradley would pay all costs related to the condemnation. Financing: Project costs will be shared by the HRA and Bradley. Bradley, as a real estate investment trust, utilizes its own funds, or line of credit, akin to a participating loan. It would be fully responsible in a similar manner as an equity investment. The HRA revenue would be provided by the LHN tax increment fund. The negotiated purchase price for the Levine property of $3,937,500 was based on an appraisal by Brad Bjorklund of BCL Appraisals and independently reviewed by Don Hennessey, a Certified Review Appraiser. The review appraisal was undertaken strictly as a condemnation appraisal review without knowledge of the lawsuit. Both appraisers are experienced, well respected and knowledgeable in this area. • A site assembly land write down, funded through tax increment, in the amount of $3,262,500 is proposed to make the project feasible. The "but for" analysis would indicate that without this infusion of funds, this project cannot be implemented. As part of the negotiated price, Levine is to be responsible for extinguishing the leasehold interest of Snyder Drug. Bradley would be responsible for U.S. Swim, Great Clips and IGA. The City would handle relocation for Snyder Drug. Mr. Sid Inman of Publicorp Inc. has reviewed the proposal. His review also included an analysis of the ability of the LHN project to support the HRA's portion of the cost. He has determined it is feasible. He will be available at the HRA meeting on November 19 to answer any questions. When conditions are appropriate, bonds could be sold to finance this transaction and reimburse the tax increment fund. By law however, any bonds sold would have to be amortized by 2001. Status: Further actions in this project are contingent on a number of issues including approval by the HRA, City, the Bradley Board, and the Court as it relates to Levine and any continuance of trial to permit finalization of negotiations. To continue the process, it is necessary for the HRA to take the actions recommended. The tentative schedule is to return to a joint S HRA/City Council meeting on December 17 with a developers agreement. Bradley must complete negotiations with their prospective tenants. Recommended Motion: • It is recommended that the HRA take the following action: 1. Approve the redevelopment concept; 2. Adopt the resolution providing for acquisition of the properties within the project area by various means including the use of condemnation by the HRA if Bradley is unable to negotiate the purchase of interests in the real estate. Condemnation would be contingent upon: a. Adoption by the Council of the Plan modification. b. Approval of a developers agreement; 3. Adopt the resolution providing for the acquisition by the HRA of the Levine property and authorizing the execution of a purchase agreement contingent upon: a. Adoption by the Council of the Plan modification b. Approval of a developers agreement; 4. Direct staff to prepare a Developers Agreement for presentation to the HRA and City Council on December 17; 0 5. Request the City Council to schedule a special meeting for December 17, 1990. Basis for Recommendation: Redevelopment of this site is appropriate for several reasons: 1. Currently the two commercial centers are separately owned. It is likely that parking disputes between the two different owners will continue to erupt from time to time. Single ownership permits the redesign of the parking area for efficient and adequate parking for each use. 2. The legal disputes which arise from this situation can be ended. 3. The time available to the HRA for encouraging redevelopment with financial incentives is short. Any new debt issued must be fully amortized by the year 2001 under state law. 4. The proposed redevelopment site is one of the few areas which has not been upgraded as part of the LHN. 5. The community needs surveys have indicated an overwhelming desire for a Rainbow type food store. Alternative Recommendation: ?, Reject the redevelopment proposal. . Discussion/Decision Mode: In order for Bradley to negotiate final tenancy terms, the HRA must indicate its desire to proceed with the project. Further, it is necessary to respond to the current court proceeding which status call is November 20. ReYeD,. ully submitted, Ja Prosser Ex e Director 0 0 0 HRA RESOLUTION NO. RESOLUTION REGARDING THE ACQUISITION OF CERTAIN REAL PROPERTY FOR REDEVELOPMENT WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield ("HRA") has adopted a Tax Increment Plan Modification for the Lyndale- Hub-Nicollet Redevelopment Project Area which Calls: for the acquisition of certain real property within the said project area; and WHEREAS, the planning commission of the City of Richfield will consider such plan modification at its meeting on November 27, 1990; and WHEREAS, the City Council of the City of Richfield will consider such plan modification at a meeting to be called for December 17, 1990; and WHEREAS, the HRA has adopted a resolution authorizing the acquisition of the real property described in the plan modification by various means including the 40 use of eminent domain; and WHEREAS, the Owner of a portion of the lands which are the subject of the plan modification ("Levine Property"), in the expectation that such lands will be subject to acquisition by the HRA through its power of eminent domain has requested that the HRA acquire the property through a negotiated purchase in lieu of eminent domain, and has offered to sell and convey such property for a total purchase price of $3,937,500; and WHEREAS, the HRA has fully reviewed the purchase offer and has, in that connection sought the advice and comment from a certified independent review appraiser. NOW, THEREFORE, be it resolved by the Housing and Redevelopment Authority of the City of Richfield as follows: 0 1. The acquisition of the Levine Property at the purchase price of $3,937,500 is • hereby approved, subject to the following conditions: (a) The HRA's obligation to purchase shall be subject to the approval by the City Council of the modification to the LHN tax increment plan. (b) The HRA's obligation to purchase shall be subject to the HRA's ability to enter into a contract for private development which shall include the subject property. The HRA anticipates that the basic terms of such contract will be considered for approval on or about December 17, 1990, and the Contract should be executed on or about January 1, 1991. 2. The Executive Director and Commission Chairperson are authorized and directed to execute a purchase agreement in substantially the form of the attached Exhibit 1 and deliver the same to the Sellers. Passed by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this day of , 1990. Thomas E. Harms, Chairperson ATTEST: Joan Helmberger, Secretary RC125-044 1* 2 EXHIBIT 1 REAL ESTATE PURCHASE AGREEMENT 0 THIS AGREEMENT is made as of November 19, 1990, between Robert Levine, Marion Levine, Nancy Levine Saliterman, and Richard Simon ("Owners") and the Housing and Redevelopment Authority of the City of Richfield ("BRA"). 1. The Owners offer to sell to the BRA the property legally described as Lot 3, Block 1, Richfield HUB Superblock located at 6520.Pillsbury Avenue South in the City of Richfield. 2. This offer to purchase is irrevocable- and unless previously accepted will remain open until 11:59 p.m. on November 30. Acceptance by the HRA will be effective :upon authorization by the HRA Board to accept this offer. The HRA's acceptance is subject to the following conditions: a. The HRA's obligation to purchase shall be subject to the approval by the City Council of the modification to the LHN tax increment plan. b. The HRA's obligation to purchase shall be subject to the HRA's ability to enter into a contract for private development which shall include the subject property. The HRA anticipates that the basic terms of such . contract will be considered for approval on or about December 17 1990 a d th C , , n e ontract should be executed on or about January 1, 1991. 3. The price for the property is Three Million Nine Hundred and Thirty-Seven Thousand Five Hundred Dollars ($3,937,500), under the following terms: (a) $3,937,500 cash on or before the date of closing; or (b) if as of the date of closing, Owners have not satisfied the leasehold interest of Snyder's Drug Stores, Inc., then the BRA may retain $250,000 of the purchase price until Owners resolve such interest. 4. Not later than 10 days following the acceptance of this purchase agreement by the BRA, Owners will deliver to the BRA all abstracts of title or registered property abstracts, certified to date, involving the property. The BRA shall have 10 days from the date of receipt of such abstracts to make any written objections to the marketability of title. Owners shall have until the date of closing to cure any such objections. 5. At closing, Owners agree to execute and deliver a warranty deed, to be joined in by their spouses, if any, 1 conveying marketable title to the premises subject only to the following exceptions: building and zoning laws, ordinances, • state and federal regulations; restrictions relating to use 'or improvement of the premises without effective forfeiture provision; reservation of any mineral rights by the State of Minnesota; and utility and drainage easements which do not interfere with present improvement. Owners also agree to deliver, at closing, a standard form Sellers' affidavit showing no bankruptcies or judgments, a certificate that Owners are not foreign nationals, and any Certificate of Title in Owners possession. 6. Nothing in this agreement obligates the Owners to assume any responsibility for the leasehold interests, if any, of Penny's Supermarket, Inc. or.Minnesota Swim & Fitness Centers, Inc., or any responsibility for payment, if any, to Snyder's Drug Stores, Inc. for fixtures. The HRA agrees that the leasehold interest of Penco-Challenge (Trade name Great Clips) may continue under the terms and conditions of the lease dated June 1, 1984. 7. Real estate taxes due and pa of closing shall be prorated between calendar year basis to the actual date pay on the date of closing all assessments certified for payment with and payable in the year of the closing. iyable in and for the year Owners and the BRA on a of closing. Owners shall installments of special the real estate taxes due 8. The owners are responsible for satisfying the leasehold interest of Snyder Drug Stores, Inc. Nothing in this agreement obligates the Owners for payment of any expenses, including attorney's fees, associated with any eminent domain action necessary to acquire any leasehold interest, including Snyder's Drug Stores. Owners have the right to select the law firm to handle any such action, but no resolution or settlement of the action will be effective without the BRA's approval. 9. Nothing in this agreement obligates the Owners to pay any relocation benefits to any tenant. 10. Unless otherwise agreed to by the parties, the date of closing will be no later than 30 days after the Owners have cured any objections to title and after the contingencies set forth in paragraph 2 of this Agreement have been satisfied. 11. The Owners warrant that to the best of their knowledge, the information provided in the attached well Disclosure Certificate is accurate and complete. 12. Owners and the BRA each represent and warrant to each other that they have not incurred any obligation or liability, contingent or otherwise, for brokerage or finder's fee or agent's commissions or other like payment to any broker in connection 2 with this Agreement or the transaction contemplated by this Agreement. Owners and the HRA each agree to indemnify, defend, and hold the other harmless against and in respect of any such obligation and liability based in any way upon agreements, arrangements, or understandings made or claimed to have been made by the indemnifying party with any third person. 13. Owners will pay any recording fees required in connection with this Agreement. OWNERS Robert Levine Marion Levine Nancy Levine Saliterman Richard Simon THE HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF RICHFIELD By Its By Its U 3 HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 42 Agenda November 19, 1990 Issue Statement: Approval of Modification No. 6 to the LHN Commercial Improvement Program. Background: Modification No. 6 places all property bounded by vacated Pillsbury Avenue, West 65th Street, the Soo Line railroad right- of-way and West 66th Street in acquisition. It would permit the implementation of the Bradley concept as discussed in the previous agenda item. Purchase by either the HRA or the Bradley Real Estate Investment Trust (Bradley) would then be in conformance with the redevelopment plan. The HRA would purchase the Levine property directly. It contains U. S. Swim and Fitness, Great Clips, Snyders and Hauser's. Bradley would negotiate with the owners of Kentucky Fried Chicken, the P & D Investment building at 224 West 66th Street and the Naegele sign. If negotiations were not successful, the HRA power of condemnation could be utilized. Funding to implement the purchase of the Levine property would be drawn from the LHN tax increment fund. In 1991, when conditions are appropriate, bonds could be sold to finance this transaction and reimburse the tax increment fund. By law, any bonds sold would have to be amortized by 2001. Recommended Motion: Adopt the attached resolution which approves the LHN Plan Modification No. 6 and makes the necessary funding available. The approval is subject to a finding by the Planning Commission that the modification is in conformance with the Comprehensive Plan. The resolution also requests the City Council to schedule a public hearing on the modification and then approve it. Basis of Recommendation: 1. To redevelop this property, Modification No. 6 must be approved. 2. To implement the Bradley proposal requires the processing of this modification. 3. Financing is available from the LHN tax increment fund. Alternative Recommendation: 1. Refuse to modify the Plan. 2. Delay modifying the Plan. 0 Decision/Discussion Mode: Approval of the modification would make it possible for the Planning Commission to consider it on November 27. The City Council would then be requested to hold a special meeting on December 17 and conduct the public hearing. Respect ly submitted, Jame Prosser Exec ive Director JDP:ds 0 0 RESOLUTION NO. THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA, APPROVING MODIFICATION NO. 6 IN THE LYNDALE/HUB/NICOLLET COMMERCIAL IMPROVEMENT PROGRAM: REQUESTING THE RICHFIELD CITY COUNCIL TO CONDUCT A PUBLIC HEARING THEREON: RECOMMENDING APPROVAL OF THE PLANS WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA) did on October 15, 1975, approve a redevelopment plan for an urban renewal project for the "Lyndale/Hub/Nicollet Commercial Improvement Program" (the "Plan"); and WHEREAS, the City Council of Richfield, Minnesota did on November 24, 1975, approve the Plan; and WHEREAS, the Plan has subsequently been amended; and WHEREAS, the Plan 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, Minnesota Statutes require the Planning Commission's finding as to the conformance of the proposed purchase with the Comprehensive Plan; and WHEREAS, the monies for the purchase of this property are available in the LHN tax increment fund; and WHEREAS, the HRA may request the city to assist in financing the public redevelopment costs associated with this modification by issuance of general obligation bonds payable from the tax increments. NOW, THEREFORE, BE IT RESOLVED by the Richfield Housing and Redevelopment Authority that: 1. Subject to a favorable finding by the Richfield Planning Commission the Plan is hereby modified by adding thereto as property designated for acquisition the land described in Attachment A. 0 2. That the executive director of the • and directed to transmit copies of school board of Independent School Board of Commissioners of Hennepin comment and to notify said public hearing to.be held on the Plans by HRA is hereby authorized the modified Plan to the District No. 280 and the County for review and bodies of the public the City. 3. That the HRA requests the Richfield Planning Commission to review the modified Plan and comment regarding the consistency of the Plan with the City's Comprehensive Plan. 4. That the HRA requests the City Council to hold a public hearing on the modified Plans required by Minn. Stat. Section 469.028 and Minn. Stat. Section 469.175 subd 3 as soon hereafter as is practicable and recommends that the modified Plan be approved. 5. That the methods proposed for financing the modification are feasible. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 19th day of November, 1990. Thomas E. Harms, Chairman • ATTEST: Joan Helmberger, Secretary 0 ATTACHMENT A (1 of 2) 01 1-3 C? 0 r l illl .. ?cr[RSOR wa ! ; ? ? ? I i, 1[R)?u?L?1?Rt•M?O w ?? !? i i I I I ?? I II;I ? •1 I ltr1Y000 /OIYp? ? MNOM7 .Yl. - I ? ? ? I I I I \ I I . ? . ' I I III pOLfaL w[. ?r I? r ( 1 I I c 1 I ? ? 1 it l ' N RRUrT arlc. Il} NI I > Iiliil aLORlcr av[ __ ? ?.r .. t o iI.IJI 110 L gill I ) • I I [ uni ...:iii i ? I 'I •I I i t i ? 1 +o`y? I ? I I I I_ IIII I , I, i I? M I NaRRl1T aYL. ITI ..;II i _ ur•u?u?RR?n uuo v[ 1 i 1 I Il_ lIl-?- _I I _ RtaMMT av[. L RRLLROR. wL. WENTMORTr wcl - I ,, I NalLO[lL w[. _ '_ 1111 I . I r.COll[1 aY1. _ 1 (I ? • r ? /I I I I n ?_ ? I ..I`fl. ? it I III I ?: r?.i l l 1 l 1 .. aY[ aTL Y[rf aY[ __ ?? ? I III I I -_ I S.a aYc ° LYNDALE / HUB / NICOLLET COMMERCIAL IMPROVEMENT PROGRAM RICHFIELD, NNV (2 of 2) ATTACHMENT A GENERAL PROPERTY DESCRIPTIONS 224 West 66th Street (PIN No. 27-028-24-24-0009): South 183 feet of East 47 9/10 feet of West 72 9/10 feet of Southeast 1/4 of Northwest 1/4, except road, Section 27, Township 28, Range, 24, Hennepin County, Minnesota. 220 West 66th Street (PIN No. 27-028-24-24-0058): South 150 feet of East 255 feet of that part of Southeast 1/4 of Northwest 1/4 lying West of Richfield Plaza, except road, Section 27, Township 28, Range, 24, Hennepin County, Minnesota. 6520 Pillsbury Avenue South (PIN No. 27-028-24-24-0062): Lot 3, Block 1, Richfield HUB Superblock, Hennepin County, Minnesota. 0 0