06-10-91 agenda
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 13
Agenda June 10, 1991
Issue Statement:
Approval of a negotiated settlement with Snyder's Drug Stores,
Inc., Hub West.
Background:
Under the agreements with the Levine interests and Bradley Real
Estate Trust, the HRA is responsible for settling with Snyder's
for the value of fixtures and the relocation benefit.
Discussions with Snyder's representatives have resulted in the
following proposal for agreement. For fixtures, Snyder's would
be paid $116,000. The relocation benefit would be 599,000. The
total payment would be 5215,000. The allocation between fixtures
and relocation may change, however, the proposed settlement
amount of 5215,000 will not. Snyder's is expected to provide the
HRA with the proposed allocation by the 6/10 meeting. The basis
for the anticipated payments is as follows. There is agreement,
based on our appraisal, for the value of movable fixtures in the
amount of 584,000. The appraised value of the immovable fixtures
is $57,000, which Snyder's contends is due to them based on an
unusual clause in their lease. The City Attorney's review of the
lease would indicate only a salvage value of less than 510,000.
To settle this matter without protracted and costly litigation,
it is suggested that a figure of $32,000 would be appropriate as
a compromise settlement. This results in a fixture payment of
5116,000.
The relocation benefit covers a variety of items. Since a site
is not readily available, payment recognizes that moveable items
could be stored for a period of approximately 12 months. Other
compensable items include the packing, unpacking and moving of
the moveable items, including the prescription computer,
stationery and business card replacement, supervision of the
move, design of new store layout and alarm and telephone
disconnect and re-connects. The only issue related to relocation
is the cost of moving the inventory and equipment. There was a
substantial difference of over $50,000 in the estimates (not
actually bids) for this activity. Snyder's also compared the
estimates to an actual move for Snyder's by Kraus-Anderson this
year. Although the estimates ranged from 533,000 to $85,000, our
relocation consultant termed an agreed upon value of $50,000 to
be reasonable and valid for this type of move.
Recommended Motion:
Adopt a motion approving the recommended settlement with Snyder's
Drug Stores, Inc. for $215,0.00
Basis for Recommendation:
1. The HRA is responsible for paying for the fixtures and the
relocation benefit.
2. The proposed relocation payment is consistent with the
regulations and other site assemblages in the LHN.
3. The compensation for the fixtures is a reasonable compromise
given the nature of the lease.
4. Funding for this payment is available from the LHN project.
Alternative Recommendation:
1. Reject the proposed settlement.
2. Modify the proposed settlement.
3. Delay the proposed settlement.
Discussion/Decision Mode:
Good faith negotiations resulted in this proposal. Settlement
with Snyder's is important to this project proceeding in a timely
manner.
y submitted,
osser
~irector
JDP:dkh
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Direct Dial
(bl2) 397-7031
,Tune l0, 1991
John B. Dean, Esq.
Holmes & Graven
470 Pillsbury Center
Minneapolis, Minnesota 55402
RE: Snyder HUB Stare
Dear John:
Snyder's has authorized' me to accept the city's proposal to pay
$nyder's $215,000 cash in complete settlement of Snyder's
relocation claim on the following terms:
1. The amount will be paid promptly.
2. Snyder's has the right to take any property now in the
premises, whether or not the property woul$.ptlletwiSe bye
owned by the city. However, Snyder's shall not have &!~y
obligation to remove any of the property. We recognize the
possible need of the city to have access to the premises
prior to demolition in order to remove any property which
Snyder's does not desire to keep, and we will cooperate in
this regard.
3, We understand that the city will purchase all of the
landlord's interest in our lease, and that the termination
of our leasehold interest and possessory rights will be
.accomplished through the city and not through the current
landlord.
I understand you will prepare a formal stipulation to incorporate
thfs arrangement.
Very truly yours,
`~ t7~'~ ~` ~-
David R. Busch
DRB/kja/5024e
HOUSING AND REDEVELOPMENT AUTHORITY
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i
Issue Statement:
Adoption of a resolution establishing Approved Appraisals of
Value, Hub West.
HRA Letter No. 12
''1 Agenda June 10, 1991
Background:
Redevelopmenft--°activities regarding Hub West have been ongoing
since Novefi~ber, 1990 under the guidance and direction of the HRA.
In November, the HRA authorized the acquisition by eminent domain
of Hub West property including the office building (224 West 66th
Street), and the Levine property (6520 Pillsbury Avenue). A
petition was filed in District Court seeking title and possession
of the property on July 10, 1991. Apart of the process requires
the HRA to set a fair market value or Approved Appraisal of Value
for each property being condemned. Listed below are the
locations and interests being condemned, and the recommended
Approved Appraisal of Value.
Location Owner Interest Valuation
224 W. 66th Paul Grosz Land & $180,0001
St. Bldg.
6530 Pillsbury Hauser's Residual $25,000
Ave. Foods, lease hold
Inc. value
6520 Pillsbury Snyder's lease hold $77,0002
Ave. value
6520 Pillsbury Snyder's Fixtures $88,0353
Notes:
1 Bankruptcy of the owner necessitates this action.
2 BCL appraisal.
3 C.R. Felton appraisal.
Bradley is responsible for paying all costs related to the
eminent domain proceeding including providing the cash court
deposits for 224 West 66th Street and 6530 Pillsbury Avenue. In
addition, Bradley is paying for the relocation of all tenants
from 224 West 66th Street including the Naegele outdoor
advertising sign. Relocation assistance is already being
provided to the tenants of this building. Relocation benefits
are separate from eminent domain proceedings and are administered
under different regulations and statutes.
The Levine interests are responsible for payment of the lease
hold interest to Snyder's consistent with the purchase agreement
approved by the HRA in November, 1990. Pursuant to the Purchase
Agreement, the HRA is to pay for the Snyder's fixtures.
Recommended Motion:
Adopt the attached resolution which establishes Approved
Appraisals of Value for the interests listed.
Basis of Recommendation:
1. The proposed actions are consistent with the previous actions
taken by the HRA in November, 1991.
2. Action by the HRA on June 10 will help assure achievement
of the goal to begin on-site work in July, 1991.
3. Agreements with Bradley Real Estate and the Levine interests
allocate the costs.
Alternative Recommendation:
1. Delay action on the resolution and motion.
2. Reject the resolution and motion.
Discussion~Decision Mode:
Without support for the recommended actions, the project would be
delayed. A delay at this point could result in the loss of the
project with various parties seeking damages.
Respectfully submitted,
Jame Prosser
Exec ive Director
JDP:cak
HRA RESOLUTION NO.
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION ESTABLISHING APPROVED APPRAISAL OF
VALUE FOR CERTAIN REAL PROPERTY; LYNDALE-HUB-NICOLLET
IMPROVEMENT PROJECT
WHEREAS, the Housing and Redevelopment Authority 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 the City of Richfield,
Minnesota did on November 24, 1975 approve the Plan; and
WHEREAS, the Plan has subsequently been amended .including
Modification No. 6 (Modification) which modification was reviewed
by the Planning Commission and approved by the HRA and City
Council; and
WHEREAS, the Modification identifies certain property for
acquisition by various means including eminent domain to carry
out the purposes of the Plan; and
WHEREAS, the monies for the purchase of property are
available from the Lyndale-Hub-Nicollet Improvement Project,
Bradley Real Estate Trust and the Levine interests; and
WHEREAS, the HRA sought advice and comment from competent
appraisers; and
WHEREAS, the HRA recommends establishing Approved Appraisal
of Value for the following interests:
224 West 66th Street, land and buildings $180,000
6530 Pillsbury Avenue, residual leasehold
interest of J. Brooks Hauser $25,000
6520 Pillsbury Avenue, Snyder's Drug $88,035
Store fixtures
6520 Pillsbury Avenue, Snyder's Drug $ 77,000
Store leasehold interest
NOW, THEREFORE, BE IT RESOLVED by the Richfield Housing and
Redevelopment Authority:
1. The values listed above for each of the interests
are established as the Approved Appraisals of Value.
2. The Chair and Executive Director are authorized and directed
to execute the appropriate documents.
Passed by the Housing and Redevelopment Authority this 10th
day of June, 1991.
Thomas E. Harms, Chair
ATTEST:
Joan Helmberger, Secretary
HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 11
Agenda June 10, 1991
Issue Statement:
Public Hearing and consideration of a resolution approving the
sale of land to Bradley Real Estate Trust (Bradley); and,
approving the contract for private development with Bradley.
Backaround:
A Letter of Intent was approved by the HRA on December 17, 1990
and a public hearing was held on the sale of rovedLthensaple party
to Bradley on January 22, 1991. The HRA app
In accordance with the direction provided by the HRA to pursue
this redevelopment, staff has been formulating and addressing
contract related matters, and, reporting the status of these
items to the HRA at their meetings. The City Council has held
several public hearings on land use related issues.
The contract proposed for approval is consistent with the Letter
of Intent approved in December.
Its major points are as follows:
• The removal of all existing buildings except U.S. Swim and
Fitness by Bradley. This facility will be retained.
• The construction of a Rainbow grocery store.
• The construction of a Kentucky Fried Chicken (KFC)
facility adjacent to the existing facility and the removal
of the existing facility (KFC will not be operational for
approximately three weeks during construction).
• The construction of a Great Clips facility within
the Rainbow building.
• The remodeling of the former Great Clips space for use
by U.S. Swim.
• The provision for parking 1,178 vehicles. This is the
total for Hub East and Hub West. It is 5.4 spaces per
1,000 square feet of building area and results in 96 extra
stalls.
• The HRA will acquire and sell to Bradley four parcels of
property:
- The Levine property (Lot 3, Block 1, Richfield Hub Super
Block, which includes U.S. Swim, Snyder's and IGA.
Approved at a public hearing, January 22, 1991;
A portion of vacated Pleasant Avenue (located immediately
south of west 65th Street and west of U.S. Swim);
- The Grosz property (224 West 66th Street);
- The "gap" property (located immediately adjacent to the
west side of the Hauser's IGA loading facility).
• Closing will take place on Monday, July 1, 1991 unless a
different date is agreed to. Bradley will pay $725,000
for the Levine property and the vacated Pleasant Avenue.
o Bradley will pay the full cost of acquiring the Grosz
property, Hauser leasehold and "gap" property including
attorney fees for condemnation, relocation payments and
relocation consultant time.
• Before closing, Bradley must provide evidence of having
entered into a contract for demolition and that financing
is available for the project.
• Bradley must also present for review and approval recordable
documents providing for reciprocal parking and access rights
over and across Hub West and Hub East. Release or
modification of such documents without prior written approval
of the HRA is prohibited by language in the document. A
separate agreement addresses the 66th/Pillsbury entrance.
The CUP approval by the City Council for the project was
conditioned upon the execution of a contractual agreement
which would require corrective action if the level of service
at the 66th Street and vacated Pillsbury Avenue entry is
reduced to a point that is unacceptable to the City.
e The contract is subject to contingencies on dollar
expenditures for both parties related to Bradley's
expenditures on the Grosz property and the HRA expenditures
for the Levine property and Snyder's. If these to be
determined maximum costs are exceeded, the agreement may (but
is not required to) be nullified. The approval of the
contract is contingent upon agreement on these dollar limits.
• Bradley is provided 12 months to complete construction. An
assessment agreement however, will result in the payment of
taxes beginning in 1993 as though the improvements were
completed by January 2, 1992. The contract execution is
contingent upon Bradley agreeing to a specific dollar
amount on the assessment agreement.
o The tax increment cash flow from the Hub East and Hub West is
sufficient to reimburse the HRA for the writedown. Mr. Sid
Inman of Publicorp will be in attendance at the June 10, 1991
HRA meeting.
~~ Recommended Motion:
1. Hold the public hearing on the sale of three parcels of
property to Bradley.
2. Adopt the resolution approving the contract for private
development and sale of land to Bradley.
Basis of Recommendation:
1. The land sale and contract approval are consistent with
previous HRA action in December, 1990 and January 1991.
2. Sufficient funds are available from the LHN to support this
undertaking without impairing its financial viability.
3. The proposed redevelopment site is one of the few areas in
the LHN which has not been upgraded.
4. The parking disputes will be resolved.
5. Notice of public hearing on the land sale was published
in the Sun-Current on May 22, 1991 and the hearing was
continued from June 3, 1991 to June 10, 1991.
Alternative Recommendations:
1. Reject the two proposed actions.
2. Modify the proposals.
3. Delay the proposals.
Discussion/Decision Mode:
Both parties have been operating in good faith to take timely
action. Delay at this time would jeopardize the entire project.
Respectfu y submitted,
James Prosser
Execu ve Director
JDP:cak
[Redevelopmnt]HRAResol-HubWest
HRA RESOLUTION NO.
THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION RELATING TO THE SALE OF CERTAIN LAND LOCATED WITHIN
THE LYNDALE/HUB/NICOLLET COMMERCIAL IMPROVEMENT
PROJECT AREA AND
APPROVING CONTRACT FOR PRIVATE DEVELOPMENT
WHEREAS, the Housing and Redevelopment Authority in and for
the City of Richfield, Minnesota (HRA) desires to redevelop
certain real property pursuant to and in furtherance of the
~~
"Lyndale/Hub/Nicollet Commercial Improvement Program heretofore
adopted by the City of Richfield (City) and the HRA, said real
property being described as follows:
Parcel Identification
Address: 224 West 66th Street
PIN No.: 27-02$-24-24-0009
Legal Description
The South 183 feet of the East 47.9 feet of the West 72.9
feet of the Southeast Quarter (SE 1/4) of the Northwest Quarter
(NW 1/4), except road, Section 27, Township 28, Range 24.
Parcel Identification
Address: Vacated Pleasant Avenue Right-of-Way, immediately
south of West 65th Street and west of U.S. Swim & Fitness.
Legal Description
All that part of the SE 1/4 of the NW 1/4 of Section 27,
Township 28, Range 24, Hennepin County described as follows:
Beginning at the most northerly northwest corner of Lot 3,
Block 1, Richfield Hub Superblock as platted and of record in the
office of the County Recorder; thence South 00 degrees-20'-18"
West, assumed bearing, along the westerly line of said Lot 3, a
distance of 142.11 feet; thence South 89 degrees 56'-52" West, a
distance of 30..00 feet, to the most westerly line of said Lot 3;
thence North 00 degrees 20'-18" East along the northerly
extension of said most westerly line, a distance of 142.11 feet,
to the westerly extension of the most northerly line of said Lot
3; thence along said westerly extension 30.00 feet to the point
of beginning.
Parcel Identification
Address: Aland area immediately adjacent to the west side
of the loading facility for Hauser's IGA referred to as 6530
Pillsbury Avenue.
Legal Description
That part of the SE 1/4 of the NW 1/4 of Section 27,
Township 28, Range 24, Hennepin County, described as follows:
Commencing at the intersection of the southerly extension of
the westerly line of Lot 3, Block 1, Richfield Hub Superblock, as
platted and of record in the office of the County Recorder and
the southerly line of said SE 1/4 of the NW 1/4; thence North 0
degrees 20'-18" East along said southerly extension a distance of
183.00 feet to the most westerly-southwest corner of said Lot 3;
thence North 89 degrees 59'-52" East along the southerly line of
said Lot 3 a distance of 37.24 feet to the intersection with a
line drawn parallel with and 72.90 feet easterly of as measured
perpendicular to the westerly line of said SE 1/4 of the NW 1/4
said intersection being the actual point of beginning; thence
continue North 89 degrees 59'-52" East a distance of 10.89 feet
to a westerly line of said Lot 3; thence South 0 degrees 25'-38"
West along said westerly line to the north line of the south
150.00 feet of said SE 1/4 of the NW 1/4; thence westerly along
said north line of the south 150.00 feet to said line drawn
parallel with and 72.90 feet easterly of said westerly line of
said SE 1/4 of the NW 1/4; thence northerly along said parallel
line to the point of beginning.
WHEREAS, the HRA is authorized to sell real property within
its area of operation after public hearing; and,
WHEREAS, a developer, Bradley Real Estate Trust, a
Massachusetts business trust, (Bradley) has been identified as
the purchaser of the described property, in accordance with a
Letter of Intent and a proposed Contract for Private Development
to be entered into. between the parties; and,
WHEREAS, the Contract for Private Development has been
formulated and considered by the HRA; and
WHEREAS, the public hearing for the sale of property has
been held after proper public notice; and,
NOW, THEREFORE, BE IT RESOLVED by the Richfield Housing and
Redevelopment Authority as follows:
(1) The Contract for Private Development is conditionally
approved and the Executive Director and Chairperson are directed
to execute and enter into the contract and related documents up
on the Executive Director being satisfied that the following
conditions precedent have been met.
a. The parties have agreed on the dollar amounts to be
contained in Sections 3.7(03) and 3.9 of the Contract
and the Assessment Agreement.
b. Bradley has reviewed and approved the commitment
for title insurance covering the Bradley parcel.
' (2) The described real property is authorized to be sold to
Bradley Real Estate Trust in accordance with the Contract for
Private Development.
Adopted by the Housing and Redevelopment Authority in and
for the City of Richfield., Minnesota this 10th day of June, 1991.
Thomas E. Harms, Chairperson
ATTEST:
Joan Helmberger, Secretary