11-20-89 agenda
CITY OF RICHFIELD, MINNESOTA
Council Letter No. 264
Agenda, November 20, 1989
Issue Statement:
Adoption of a resolution authorizing the execution of an
Agreement with the Robert Larsen Partners, Inc. (Developer).
Background:
The Developer has submitted a proposal for the redevelopment of
an area approximating 30 acres in size in the ILN. The site is
adjacent to and west of Lyndale Avenue and south of 77th Street.
The proposal has been reviewed by staff and disseminated widely
in the community. The response continues to be favorable.
On November 20, 1989, the HRA acted on a resolution which
authorized the execution of an Agreement with the Developer.
That Agreement is attached. For the development proposal to be
implemented, the City Council would have to take action on a wide
range of requests. For that reason, it is appropriate that the
City Council be a party to this preliminary Agreement.
The Agreement recognizes that the developer has formulated a
preliminary proposal. Significant portions of the Agreement
include the following.
1) Section 1 lists the areas in which additional
evaluation of the development proposal is necessary and
includes performance dates.
2) Item l.h. indicates the goal is to negotiate a
Development agreement by April, 1990.
3) In Section 2, the Developer agrees to pay $30,000
to help offset costs related to the continued work on
implementing the concept.
4) Section 3 identifies areas in which the City, HRA and
Developer will cooperate.
5) Item 3.a. states that neither the City nor the HRA will
negotiate with others to redevelop the area for which
the Developer has submitted a proposal. Section 6
further discusses this restriction.
6) Item 3.c. permits the City and HRA to consider any
proposal for improvement made by an owner or tenant.
Section 7 describes a process to be followed when this
situation arises.
7) Item 3.h., i. through iv. identifies the basic
assistance required by the Developer.
• 8) Termination of the Agreement is discussed in Section
8 and 9.
7?'/- /
• Recommendation :
Adopt the attached resolution which approves the Agreement and
authorizes the City Manager and Mayor to execute it.
Basis for Recommendation:
1. The Developer's track record is good.
2. The Agreement contains performance tasks and dates by which
to evaluate progress.
3. For the parties to effectively and efficiently determine
the final feasibility of the concept, this Agreement is
necessary.
4. By this Agreement, neither the HRA nor the City is making
a final irrevocable commitment to the Developer. However,
it is an indication of a desire to proceed in good faith
to negotiate a Developer Agreement and proceed with the
development.
Alternative Recommendations:
1. Delay action on the Agreement.
2. Refuse to approve the Agreement.
3. Alter the content of the Agreement.
Discussion/Decision Mode:
Approval by the City Council on November 20, 1989 would permit
the Developer to proceed in a timely manner with negotiations
related to property purchase, leasing and financing.
Respectfu y submitted,
James fie osser
Execu irector
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RESOLUTION NO.
The City Council of the City of Richfield, Minnesota
Relating To The Approval Of An Agreement
With The Robert Larsen Partners, Inc.
WHEREAS, the City and HRA have established the Interstate-
Lyndale-Nicollet Redevelopment Project Area ("Project Area")
under the authority of Minnesota Statutes, Chapter 469 (the
"Act"), and have established a Redevelopment Tax Increment
Financing District ("TIF District") and adopted a Financing Plan
("TIF Plan") for the TIF District to facilitate the financing of
public development and redevelopment costs in the Project Area;
and
WHEREAS, the City Council deems it to be in the public
interest to facilitate and encourage redevelopment of the Project
Area by a combination of public and private activity within the
Interstate-Lyndale-Nicollet Redevelopment Project Plan and in
accordance with the TIF Plan adopted by the City, on November 12,
1985, and HRA on October 21, 1985, following extensive study and
• preliminary work conducted by the City and HRA and others engaged
by them; and
WHEREAS, the Robert Larsen Partners, Inc. (Developer) has
expressed interest in redeveloping that part of the Project Area
generally bounded by the extension of Girard Avenue South on the
west, Lyndale Avenue South on the east, West 77th Street on the
north, and Interstate 494 on the south (the Redevelopment Area");
and
WHEREAS, Developer has presented to the HRA and City Council
a preliminary proposal for development of the Redevelopment Area;
and
WHEREAS, the evaluation and formulation of the detailed
requirements necessary for the proposed redevelopment
necessitates the expenditure of substantial time and resources in
advance of submission of a redevelopment proposal by Developer,
its evaluation by the City and HRA, and consideration of a
redevelopment agreement between the City, HRA and Developer; and
WHEREAS, an Agreement is an appropriate document in which to
establish the terms and bases upon which the HRA, City and
Developer shall cooperate in determining the feasibility of the
preliminary proposal.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the
City of Richfield, Minnesota as follows:
1. The Agreement identified as Attachment A is herby approved.
2. The Mayor and City Manager are authorized and directed to
execute the Agreement.
Adopted by the City Council of the City of Richfield in and
for the City of Richfield, Minnesota this 20th day of November,
1989.
Steven J. Quam, Mayor
Attest:
Thomas Ferber
City Clerk
0 C89-4-HRALTR-RLP
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AGREEMENT
11/14/89
This Agreement is made as of the day of , 1989, by
and between the City of Richfield, a Minnesota municipal corporation ("City"), the
Housing and Redevelopment Authority in and for the City of Richfield, a public
body corporate and politic ("HRA"), each having an address of 6700 Portland
Avenue South, Richfield, Minnesota, and Robert Larsen Partners, Inc., a Minnesota
corporation , Suite 415, 730
Second Avenue South, Minneapolis, Minnesota 55402 ("Developer").
RECITALS
The City and HRA have established the Interstate-Lyndale-Nicollet
Redevelopment Project Area ("Project Area") under the authority of Minnesota
Statutes, Chapter 469 (the "Act"), and have established a Redevelopment Tax
Increment Financing District ("TIF District") and adopted a Financing Plan ("TIF
Plan") for the TIF District to facilitate the financing of public development and
redevelopment costs in the Project Area.
The City and HRA deem it to be in the public interest to facilitate and
encourage redevelopment of the Project Area by a combination of public and
private activity within the Interstate-Lyndale-Nicollet Redevelopment Project
Plan and in accordance with the TIF Plan adopted by the City, on November 12,
1985, and HRA on October 21, 1985, following extensive study and preliminary
work conducted by the City and HRA and others engaged by them.
Developer has expressed interest in redeveloping that part of the Project
Area generally bounded by the extension of Girard Avenue South on the west,
Lyndale Avenue South on the east, West 77th Street on the north, and Interstate
494 on the south (the "Redevelopment Area") shown on the attached Exhibit A
(Redevelopment Area).
Developer has presented to the staff of the City and HRA a preliminary
proposal for development of the Redevelopment Area. As further indication of
Developer's interest, Developer has undertaken a traffic study and appraisals
necessary for evaluation of the suitability and feasibility of the redevelopment by
the City, HRA and Developer .
Evaluation and formulation of the detailed requirements necessary for the
proposed redevelopment necessitates the expenditure of substantial time and
resources in advance of submission of a redevelopment proposal by Developer, its
evaluation by the City and HRA, and consideration of a redevelopment agreement
between the City, HRA and Developer. Developer is not willing to commit such
substantial time and resources unless Developer has assurance that at the same
time the City and HRA are not and will not be negotiating with others for the
redevelopment of the Redevelopment Area. The City and HRA believe that the
giving of such assurances is reasonable and appropriate to encourage Developer to
evaluate, formulate and present its proposal or proposals, reserving however, their
full governmental discretion to accept or reject such proposal or proposals if and
when made by Developer, upon their determination whether or not such proposal or
proposals are in the public interest.
It is the intention of the City, HRA and Developer that this Agreement shall
set forth the terms and bases upon which the City and HRA shall provide guidance
to the Developer of the features required for a proposal or proposals to be
acceptable to the City and HRA, and for the City, HRA and Developer to
cooperate in determining the feasibility and best means for formulating and
financing the public and private elements necessary for completion of
redevelopment of the Redevelopment Area.
AGREEMENTS
Therefore, in consideration of their mutual undertakings as set forth herein,
the parties covenant and agree as follows:
Section 1. Developer shall continue in the evaluation and preparation of a
proposal or proposals for private redevelopment in the Development Area,
including, among other things the following:
a. The obtaining of a traffic study with respect to the public
streets in and about the Redevelopment Area. Developer shall pay the cost
of such traffic study, subject only to reimbursement as a development cost
or as otherwise hereinafter provided. The traffic study shall be furnished to
the HRA and City.
b. Developer has obtained preliminary appraisals as may be
determined necessary for the purpose of consideration of the feasibility of
the public and private improvements to the Redevelopment Area.
• c. In cooperation with the City and HRA, prepare further
refinements of the plan or plans for public and private improvements in the
Redevelopment Area, including the economic feasibility of such
improvements, preliminary design and construction considerations, and
preliminary financing proposals. Such preparations shall all have been done
not later than February 28, 1990.
d. Conduct, as Developer deems appropriate, presentations to the
owners of property in the Redevelopment Area and adjoining areas with
respect to proposals for the public and private improvements in the
Redevelopment Area. Such presentations shall all have been conducted not
later than December 31, 1989.
e. In good faith and cooperation with the City and HRA, proceed
with such other work as may be necessary or desirable toward the
evaluation, preparation and presentation of a detailed proposal for
development of the Redevelopment Area, including all public and private
improvements anticipated to be made therein and thereabout. It is
anticipated that the ultimate proposal or proposals shall include scheduling
or phasing of the public or private improvements, scheduling and
arrangements for the obtaining of all necessary governmental approvals,
public and/or private acquisition of the property in the Redevelopment
Area, design, construction and financing arrangements, and other matters
involved with the completion of a cooperative public-private redevelopment
project.
f. Developer will present evidence reasonably required by the
City and HRA to properly evaluate the Developer's financial condition,
including the financial condition of its guarantors, willingness of lenders to
finance, experience in development activities of the sort contemplated, and
all such other information as the City and HRA may reasonably conclude as
necessary to determine the ability of Developer to carry out the proposed
development. All such information shall be provided, in confidence, to the
attorneys for the City and the HRA; and shall be.made available to the City
and HRA with the objective of protecting the confidentiality of such
information. The City and HRA agree that, to the extent permitted by law,
they will not publicly disclose such information absent the written consent
of Developer.
g. Developer shall submit to the City and HRA, not later than
January 31, 1990, evidence of preleasing activities, including Developer's
plan for securing tenants within the Redevelopment Area.
h. In cooperation with the City and HRA, the Developer will be
prepared to present to the City and the HRA at their meetings in March,
1990 a list of proposed negotiating principles. Sueh negotiating principles
will, if approved, serve as the basis for negotiation of the Development
Agreement to be presented to the City and HRA at their meetings in April,
1990,
1. Developer shall inform. the HRA staff at least monthly
concerning Developer's progress in all of the matters described in this
Section 1.
Section 2. Developer acknowledges that the City and HRA will be
expending considerable staff and consulting time in evaluating Developer's
proposals and taking other actions necessary to facilitate development.
Consequently, Developer agrees to pay, as consideration for the City and HRA's
undertakings hereunder $30,000. Such payment to be made upon the execution of
this Agreement. No part of such payment shall be refundable to Developer.
Section 3. City and HRA each agree to cooperate with the Developer in
its work toward the preparation of a proposal or proposals of the Redevelopment
Area, including among other things the following:
a. City and HRA each agree that for the term of this Agreement
and until this Agreement is terminated as hereinafter provided, they shall
not solicit or negotiate with any other person or firm for the presentation to
or acceptance by the City and HRA of a redevelopment proposal for the
Redevelopment Area by such other person or firm.
b. City and HRA shall cooperate with the Developer in the
completion of the aforementioned traffic study and preliminary acquisition
appraisals and in the completion by Developer of such other work as may be
required for the preparation of a proposal or proposals for the
Redevelopment Area. - Except as disclosed by Developer in public
presentations or otherwise released by Developer for publication, City and
HRA agree that to the extent they are permitted to do so by state law, they
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will retain in confidence and not cause or permit any other person to
receive, use or publish the traffic study, appraisals, proposals or other work
or materials prepared or presented by Developer or persons engaged by
them.
C. In furtherance of the Redevelopment Plan, the City and HRA
shall not during the term of this Agreement and until such time as this
Agreement is terminated as hereinafter provided, approve or make any
changes or improvements, public or private, in the Redevelopment Area
which are inconsistent with or obstruct the overall redevelopment of the
Redevelopment Area in accordance with the Redevelopment Plan; provided,
however, that nothing in this paragraph or in this Agreement shall be
deemed to preclude the City or HRA from (i) making Improvements within
the Redevelopment Area necessary to preserve the TIF District, (ii)
conserving or maintaining existing public improvements or (iii) considering_
and approving any proper request from the owner or occupier of land within
the Redevelopment Area concerning the use or improvement of such land.
d. The City and HRA will review from time to time the proposal
or proposals of Developer and, if requested, notify Developer of such
features thereof which are expected to be acceptable or unacceptable in a
final proposal or proposals for redevelopment. Any such notification of
expected acceptability shall not, however, prevent the City or HRA from
determining such feature to be unacceptable in the final proposal.
• e. The City and HRA will, to the extent such have been
formulated, provide to Developer the preliminary requirements and plans of
the City and HRA for public improvements, and also the City and HRA
requirements for private improvements in the Redevelopment Area and
their integration with the public improvements. The City and HRA reserve
the right to modify or alter such requirements from time to time.
f. The City and HRA will provide to Developer ';information
possessed by the City or HRA as to the financing of the public
improvements, and of all forms of public financing which the City is willing
to consider utilizing, with respect to acquisition of the property in the
Redevelopment Area, completion of the public improvements, and as
financing to the Developer in the making of private improvements in the
Redevelopment Area.
g. The City and HRA shall in good faith proceed with all
activities which they believe to be appropriate for cooperation review and
evaluation of the proposal or proposals from time to time provided by the
Developer including the matters described in Section 1, paragraphs c and h
above, and for the final preparation and execution by and among the City,
HRA and Developer of a Development Agreement for the Redevelopment
Area.
h. The City and HRA agree that they are willing to consider the
following:
4
i) The use of tax increment to provide land writedown and other
forms of assistance for the development.
The use of tax increment bond proceeds to provide such
assistance.
iii) The exclusion of taxable parcels within the Redevelopment as
contributors to fiscal disparities.
iv) The use of eminent domain to acquire parcels within the
Development Area.
It is understood and agreed, however, that any such expression of
willingness to _consider shall not be deemed to obligate either the HRA or
City to ultimately make the decision under consideration.
i. The HRA and City also agree to undertake, to the extent they
shall deem appropriate, modifications to the tax increment financing plan
for the district, and to inform the Developer of progress in that regard not
later than December 1, 1989.
Section 4. It is understood and agreed that during the term of this
Agreement and until such time as this Agreement may be terminated by the parties
hereto, the City, HRA and Developer each shall in good faith do all such things and
take all such actions as may be appropriate toward the ultimate goal of execution
of a Development Agreement among them with respect to the Redevelopment
• Area. It is understood, however, that nothing in this Agreement shall be deemed to
require any party to approve and execute a Development Agreement if any such
party, in its discretion, determines that it would not be in its best interest to do so.
Section 5. City and HRA in good faith will give full consideration to any
proposal or proposals from Developer for development of the Redevelopment Area.
It is understood that City and HRA, by this Agreement, cannot contract away and
shall not be deemed to have contracted away any of their governmental discretion
with respect to the Development Area, including but not limited to questions of
rezoning, subdivision approval, environmental review, property acquisition,
construction of Public Improvements, incurring of indebtedness, handling or
settling of litigation regarding development rights within the Redevelopment Area,
approval and execution of a Development Agreement or any other matter.
Section 6. During the term of this Agreement, if City and/or HRA
receives a proposal for development of the Redevelopment Area, or of any part
thereof, consistent with the Redevelopment Plan from any person or entity not a
party to this Agreement and not the owner or occupant of land within the
Redevelopment Area ("Third Party Proposal"), City and/or HRA will promptly
notify Developer of receipt of such proposal and its contents. City and HRA agree
that during the term of this Agreement and until termination of this Agreement as
hereinafter provided, City and HRA will not act to approve the Third Party
Proposal. In consideration of the grant by City and HRA of certain exclusive
negotiation rights as set forth herein, Developer agrees to indemnify, defend and
hold City and HRA harmless from and against any claim, expense or damage
resulting solely from the granting by City and HRA of the rights set forth in
Sections 3a and 6 of this Agreement.
Section 7. If during the term of this Agreement the City receives a
request or application from the owner or occupier of land within the
Redevelopment Area involving the use, construction, reconstruction or other
improvement of such land, it shall, promptly notify the Developer of such request
or application and shall proceed to consider such request or application in the
manner and to the extent required by law.
Section 8. The term of this Agreement is 'from the date hereof through
April 30, 1990, and thereafter until such time as any party hereto gives ninety (90)
days written notice of termination to the other parties.
Section 9. In advance of the termination date contained in Section 8 above,
this agreement may be terminated as follows:
a. By any party upon written notice to the other parties hereto
that one or more of the parties to whom notice is given has failed to, in
good faith, proceed with performance of its obligations hereunder; or
b. By the HRA or City giving written notice to Developer that
Developer has failed to timely perform any of the obligations described in
Section 1 of this Agreement.
C. By any party upon the giving written notice to the other
parties that the parties have reached an irresolvable impasse concerning the
nature or extent of the public or private development within the
Redevelopment Area, the terms to be included in the Development
Agreement or the level or nature of financial assistance to be made
available to the Developer.
Termination pursuant to this Section 9 shall be effective on the 90th day
following the date of giving of such notice unless the party claimed to be in default
of its obligation hereunder (or in the event of an impasse, all parties) cures such
default (or impasse) on or before the expiration of such 90-day period and provides
evidence of cure by such time.
If the City or HRA default in their obligations under this Section 9, upon
termination of this Agreement by Developer in the manner set forth above, the
City and HRA agree that the defaulting party shall reimburse Developer the costs
incurred by Developer for the aforementioned traffic study and appraisals, but not
in excess of $15,000 in the aggregate, and such other costs and expenses as are
incurred by the Developer in reliance upon specific authorization from time-to-
time given by the City and HRA of the incurrence of expenses with agreement of
reimbursement by the City and HRA in the event of default. Upon such
reimbursement, all studies, reports and appraisals for which reimbursement is made
shall become the property of the City and HRA and may be used for whatever
purposes they deem appropriate. This Agreement shall also terminate and be of no
further force or effect upon the date that the parties have all executed a
Development Agreement.
Section 10. Any notices required or permitted hereunder to 'be given by
any party to the other parties hereto shall be in writing personally delivered or
• mailed to the other parties at their addresses as set forth hereinabove, or such
6
other address as is given by written notice in accordance herewith, and any notice
shall be effective upon the earlier of being personally delivered, or at the time of
such notice duly addressed being deposited in the United States mail with postage
prepaid, by certified or registered mail, return receipt requested.
Section 11. This Agreement is independent of any other Agreement
between the parties.
Section 12. Any rights or privileges conferred upon the Developer by the
provisions of this Agreement shall not be assignable to any other party, except to a
partnership organized for the purposes hereof by Robert M. Larsen and of which
Robert M. Larsen is a general partner.
IN TESTIMONY WHEREOF, the parties hereto have set their hands as of the
day and year first above written.
CITY OF RICHFIELD
0
•
By
Its City Manager
By
Its Mayor
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE
CITY OF RICHFIELD
By
Its Executive Director
By
Its Commission Chairman
ROBERT LARSEN PARTNERS, INC.
By
Its
By
Its
7
STATE OF MINNESOTA )
) ss.
COUNTY OF )
The foregoing instrument was acknowledge before me this day of
, 1989, by and ,
the City Manager and Mayor of the City of Richfield, Minnesota, a municipal
corporation under the laws of the state of Minnesota, on behalf of the City.
By
Notary Public
r_1
STATE OF MINNESOTA )
ss
COUNTY OF )
The foregoing instrument was acknowledge before me this day of
, 1989, by and ,
the Executive Director and Commission Chairman of the Housing and
Redevelopment Authority in and for the City of Richfield, Minnesota, a public body
politic and corporate, under the laws of the state of Minnesota, on behalf of the
HRA.
Notary Public
STATE OF MINNESOTA )
ss
COUNTY OF )
The foregoing instrument was acknowledge before me this day of
1989, by and ,
the and of Robert Larsen Partners, Inc., a
Minnesota corporation under the laws of the state of Minnesota, on behalf of the
corporation.
Notary Public
•
This instrument drafted by:
Holmes & Graven, Chartered
470 Pillsbury Center
Minneapolis, MN 55402
(612) 337-9300
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