03-07-88 agendaRICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY
HRA Letter No. 14
Agenda March 7, 1988
SPECIAL MEETING
Issue Statement:
Approval of Items Related to the Contract For Private Development
with The Lincoln Companies.
Background:
On February 16th, 1988, the HRA approved the Contract with The
Lincoln Companies. The Transfer Agreement was to be presented to
the HRA for approval at a later date. At the March 7th meeting,
the HRA will be asked to approve the Transfer Agreement. The
Transfer Agreement concept is as follows: The Agreement makes it
possible for The Lincoln Companies to transfer their rights and
obligations to Mr. Jon Malinski. Mr. Malinski is the President
and owner of Copy Duplicating Products, Inc. (CDP). CDP would
lease the property from Malinski. However, if Malinski is unable
to complete construction of the facility, The Lincoln Companies
would assume responsibility for the project.
A second item requiring action is related to subordination of the
right of the HRA to repossess the property. If the responsible
developer is unable to complete the project, the HRA could
terminate their interest and complete construction.
However, the Contract also anticipates that a prospective lender
may request the HRA to subordinate that right and give the
mortgage lender the first right to take possession of the
property and complete construction. Norwest Bank has agreed to
provide the project financing. However, Norwest is requesting
the HRA to approve a subordination agreement which will be
presented to the HRA at the March 7th meeting.
Recommendation:
Adopt the resolution approving the Transfer Agreement and the
Subordination Agreement.
Basis of Recommendation:
1. The Agreements represent reasonable requests which will make
it possible for the CDP development to proceed.
2. John Malinski has provided satisfactory evidence that he is
able to complete the project.
3. The City's interest is adequately protected by Development
Agreement and the Transfer Agreement.
Alternative Recommendation:
1. Not approve the Transfer Agreement
2. Not approve the Subordination Agreement
3. Take no action.
Decision Mode•
Action on March 7 will help make a closing on the sale of
property possible on Wednesday, March 9, 1988.
Respectfully submitted,
Jame Prosser
Exec ive Director
RESOLUTION N0.
The Housing and Redevelopment Authority In and For
The City of Richfield, Minnesota
Resolution Approving Agreements Which Are Part Of The
Contract For Private Redevelopment With The Lincoln Companies
WHEREAS, the City Council of the City of Richfield, Minnesota
(the "City") and the Housing and Redevelopment Authority in and
for the City of Richfield, Minnesota (the "HRA") have created and
established the Cedar Avenue Business Area Redevelopment Project
and Tax Increment Economic Development District (Project Area)
pursuant to the authority granted in Minnesota Statutes, Sections
469.001 to 469.047, inclusive, and 469.174 to 469.179, inclusive
(collectively, the "Act"); and
WHEREAS, the HRA and 'the City have, pursuant to the Act,
adopted a tax increment financing plan (TIF Plan) to finance all
or a portion of the public redevelopment costs of the Project
Area; and
WHEREAS, in order to achieve the objectives of the
Redevelopment Plan and for the TIF District and particularly to
/make land in the Project Area available for redevelopment by
private enterprise for and in accordance with the uses specified
in the Redevelopment Plan, the City and HRA have determined to
provide aid and assistance to finance the public redevelopment
costs of the Project Area; and
WHEREAS, The Lincoln Companies (Developer) has proposed a
development within the Project Area which the City has determined
will promote and carry out the objectives for which redevelopment
in the Project Area has been undertaken, and will assist in
accomplishing the objectives of the TIF Plan, will be in the
vital best interests of the City and the health, safety, morals
and welfare of its residents, and is in accord with the public
purposes and provisions of the applicable state and local laws
and requirements under which redevelopment in the Project Area
has been undertaken and is being assisted; and
WHEREAS, the City and the HRA have by resolution approved a
contract for the private development of land within the Project
Area by the Developer; and
WHEREAS, to effectuate the Contract, it is necessary to
execute a Transfer Agreement and Subordination Agreement
(Agreements) and to make certain technical changes in the
Contract to fully accommodate the Agreements; and
WHEREAS, the HRA has been fully informed of the terms and
provisions of the Agreements and approve of the same.
NOW, THEREFORE, BE IT RESOLVED by the Housing and
Redevelopment Authority in and for the City of Richfield, as
follows:
1. The Executive Director and Chairman are hereby authorized and
directed to execute, on behalf of the HRA the Agreements.
2. The Executive Director and Chairman are hereby authorized to
take all acts and do all things reasonably necessary to carry out
the obligations of the HRA in accordance with such Agreements.
Adopted by the Housing and Redevelopment Authority in and.
for the City of Richfield this 7th day of March, 1988.
Thomas~E.~Harms, Chairman
ATTEST:
Joan Helmberger, Secretary ~~~
COPY DUPLICATING PRODUCTS
Corporate Headquarters
7830 12th Avenue South
Bloomington, MN 55420
612 854-7545
C~.~c~ v~. %2.i..ch~-~e~1d
6600 ~vrct.land Ave.
2~.ch,1°~.e.ld, hIN 55423
Sub~ec.~: Cvm~.vn.t .le.t.~en
Manch 2, .1988
S en ~.1 em en
l h.i~ ~.~ .tv ~.n~.vnm c~vu .tha.t Cvpc~ Dup.1.i..ca.ting ~ nvduc.te hay
net ~a.le~ ~.n ex ce~~ v~ $50, 000, 000 pen ~ can and hay a bvvk
value ~.n exce~~ v~. $20, 000, 000.
i h~.~ .in~vnma~.i..vn .i.~ g~.ven a.t r~vun neque~~ ,ion eva.lua.t.i.vn v~
r~vun cvn~nac.t ,1°vn pn~.va~te nedeve-lvpmen~ fie#ween .the C.~~c~ v~.
2.~ch~.ie.1d and l he L.i..ncv.ln Cvmpan.~e~ .
9 am the ~d-1e vwnen v~ Cvpe~ Dup.l.~cat~.ng % nvduc.t~ and .th.l~
nepne~en#~ appnvx.i_ma.te.lc~ 75% v~ met ne.t wvn~h.
S.ln c ;
~'0% y D i L9 AT Of1Ci S, 9NC .
-- - ~;
'.,
G• `
~v Ma-1~, k.~
e~.i.den~
I~torw~~+t k A~flntta~v~, N.11.
s E~~hit~ ~ ~ ~i'~r~#ttati~ Rr
rV9l:.rr~~ff~, ~}nnasr~ta 5~rd7~
z ~3`t~~ra ~~.~
s~~~~~~~~$~ ~~~
a ,~:.
~ ~a
_ ~Y
_._ ~.~if~ ~ ~~,~ fit? ~~ s~ *~~';- ~ ` _ _.. ~ tee` ~~~ ~~3~~?~~~~~_~ ~~ ~:~~'~ _~
3 ~j
~~ 3, ;~~ ~_:..,.~ a~~~~a '~ii~. :. ~ £~ ~~'~: ~Ti~ '.~~~~.~~~~, ~~?~~~~ sum ~a
~_~
f~
~ ~
- ~
~s~~~~ V~.~~ ~ ~i ~~
,.
v~~~ ~~~~~.a~~t
CL;M~: ,jmn~