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07-16-84 agendaHO-USING AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 34 Agenda July 16, 198 Housing and Redevelopment Authority Commissioners City of Richfield Subject: Opdal Property, Prospective Developers _._ Dear Commissioners: At the HRA meeting in June, there was discussion of the purchase of the Opdal property. Staff was directed to explore the purchase of the property by a :private party which would hopefully result in a more limited financial role for the HRA. This letter reports on meetings which have been held recently with prospective private purchasers. Staff is also seeking further direction. With support from Mr. Galen Schmick of the Trust Department of Richfield Bank and Trust, city staff has met with two interested groups of purchasers of this property: Dr. Irving Her-man and his associate Mr. Scot Cooper of Flag Builders; and, Mr. Jan Susee and his associates Mr. George Ricky, Mr. Wayne Rixman and Mr. Robert Worthington. Dr. Herman has experience in working with both residential and commercial properties. They have constructed and sold new single family housing in New Hope. They also own and manage two small linear commercial centers.One commercial center is in Burnsville, at 138th Street and Nicollet Avenue, known as Colonial Ridge and another in Farmington, is known as Town's Edge on State Highway 3 just west of State Highway 50. The zoning administrator in Burnsville reports that Herman and Cooper are cooperative-and supportive of city efforts to upgrade the commercial properties. That means when the owners have sought permits to undertake improvements the city requested them to make additional improvements and they have complied (lighting, dumpster enclosures, uniform signage, etc.). Dr. Herman has owned the property for several years and its appearance from a maintenance perspective is good. Town's Edge in Farmington was purchased from Midwest Federal Savings and Loan about five years ago. A portion of the center is without tenants. But .there have been recent improvements to the front facade. However, the rear of-the building and the portion of the site adjacent to the rear were unkempt. A small temporary storage shed was in disrepair and there was debris scattered about. .The planner for Farmington indicated that from the city's point of view property taxes and water bills are paid on No 34 -2- time and they have no complaints about the property. It is in better Bondi ion now than when the savings and loan owned it. Dr. Herman and Mr. Cooper will present a concept proposal. for the construction of a new building on the Opdal property. The type and approximate amount of HRA/City participation will also be indicated. Mr. Susee and his associates have a variety of backgrounds, including law, construction, development, and planning. They operate as a group on matters related to real estate and most of them have individual interests in property as well. In 1978, they took over a partially constructed 190-unit apartment.._ _ complex in Brooklyn Park. The units in five separate buildings were completed. The housing inspector in Brooklyn Park has indicated they are responsive landlords with a tenant complaint rate lower than average. A few years ago, they also purchased an uncompleted apartment complex known as the Rosebud at County Road 18 and State Highway 7 and completed it. In the past, they also purchased, renovated anal sold Lakeland Plaza near Stillwater, a small commercial center. One of them has recently purchased Nicollet Village, an apartment project on Nicollet Avenue, north of the "crosstown". Rehabilitation is now underway. Individually they also own apartments at 6441 Queen Avenue and 7127-37 Chicago Avenue. Staff has visually surveyed some of these properties and they appear to be well maintained. The inspection files of the City of Richfield. indicated there have been no unusual problems with any of the Richfield properties. Mr. Susee and associates will present a concept proposal for the rehabilitation of the existing structures and indicate the type of assistance needed from the City/HRA to make the project feasible. Mr. Ahlquist amd Mr. Hedquist will also be at the meeting. They have previously presented a concept for the construction of anew two or three story structure. They will comment upon the status of their proposal and its financing. Based on the conversations of the-.past few weeks and other information it would be appropriate to conclude that there is a market for this property. However, the value placed on it is such that it is not economically feasible for anyone to undertake substantial rehabilitation or removal and new construction without assistance form the HRA/City Council. There may be several alternative types of assistance which could be provided. IDRB's maybe available. Previously, staff reported to the HRA that with the new legislation for tax exempt financing, Richfield would have a limit of $3,556,065 per year for each 1984 and 1985. However, Congress has developed restrictions in addition to the "cap" which indicate that IDRB's alone may not be sufficient. One year's allocation would be consumed by Market Plaza for their commercial space. It appears HRA Letter No 34 -3- now that Market Plaza may use IDRB's and be exempt from the limitation. A final ..determination has not yet been made however. Secondly, it may be possible to use tax increment financing in a method other than for acquisition. This would of course depend upon the tax increment generated by the development and state statutes. Finally,~CDBG funds in the amount of $161,243 have been identified for economic development and may be utilized to assist economic feasibility. The type and amount of assistance would be determined by the specife .needs of the developer, HRA policy and state and federal law regulations. In listening to the concept proposals,-it would be -.- appropraite to consider the following items. The previous experience of the developer and the relationship of that experience to the development proposal. Management experience after construction or rehabilitation is important. Which proposal seems to be in the best long range interest of the City? Both rehabilitation and new construction will be costly. With rehabilitation what would be the likely timing of renovation activities? What type of tenants does the developer envision? It is recommended that the HRA give a preliminary indication of which developer and concept is the most appropriate for staff to work. with. Options: 1. No City involvement - Developer makes repairs (roof .etc.) and improves exterior - present tenant mix to continue; 2. City assist in project. New building. Upgrade tenants. Res ectf y submitted, John G. Cartwr ht Executive Director JGC/eja HOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 33 Agenda of July 16, 1984 Housing and Redevelopment Authority Commissioners City of Richfield Subject: Rae Drive Housing Development and Scattered. Sites Dear Commissioners: On June 18, 1984, the HRA authorized the acquisition of 1016 West 66th Street for $82,500 and directed staff to further evaluate 901-03 Rae Drive and to assemble cost estimates and site location information for scattered sites. This letter discusses recent events concerning the above and also discusses the following items of HRA interest: -an analysis of two site plans for 901-03 Rae Drive/910 West 66th Street accomodating 4 to 6 units of housing. -a "family housing" concept. -amount of CDBG available to acquire various sites being considered for acquisition. Recommendations concerning property acquisition and developer selection follow this discussion. Acquisition - 1016 West 66th Street Since the HRA authorized purchase for $92,500, the property owner, Elmer Nordstrom, has indicated he is unwilling to sell at this price. He has requested the HRA to consider a $94,000 purchase price. His reluctance appears to have resulted because the HRA did not earlier authorize purchase at the offered price of $92,500. As a result, Mr. Nordstrom incurred. approximately $1,500 in expenses he had earlier deferred while the HRA was considering the acquisition. A surveyor was hired to determine dimensions and a legal description for the vacant portion of 1016 West 66th Street. Mr. Nordstrom has considered selling this property seperately and he has indicated he has a $28,000 offer. The probable use of the property would appear to be for a duplex: Some property improvements, including replacing some windows and repainting of the structure also was. undertaken and is now completed. Still more improvements, such as additional window replacement and the addition of a double garage are being planned. However, Mr. Nordstrom agreed that HRA Letter No. 33 -2- these additional improvements and the seperate .sale of the vacant lot are being deferred until after the July 16, HRA meeting. The increase in price appears related to the incurred costs rather than a negotiating ploy. If 1016 West 66th Street is not acquired, scattered site properties could be purchased with the funds. However, 1016 West 66th Street can provide an opportunity for 4 to 6 units rather then only two scattered site units cutting the. cost per unit in at least half. The recent survey work completed by a survey contractor for Mr. Nordstrom anal construction excavations being performed-by Vo- Tech along the adjacent lot line have resulted in a difference in opinion as to where the adjoining boundary line lies. Staff is presently evaluating the problem. Mr. Nordstrom*s survey of of 1016 West 66th (east boundary) and the HRAts survey of 920- 924 West 66th Street (west boundary of the property under construction) ouerlap by approximately one foot. It appears that both surveys are technically correct. The survey of 1016 West 66th Street is based on Torrens title description. The survey of 920-924 West 66th Street is based on recorded plat of record. It appears that the survey based on Torrens title may have the stronger position if differences cannot be resolved. One problem arises in that surrendering the disputed portion of property to Mr. Nordstrom reduces the. turning radius available to enter garages on the 920-924 site. The resolution of this problem will depend upon whether or not the property is .purchased. Acquisition of 1016 West 66th Street will be pursued if HRA Resolution No. 246 which authorized the purchase in June, 1984, is amended. It is recommended that the HRA authorize increasing the acquisition price for 1016 West 66th Street from $92,500 to $94,000. 901-03 Rae Drive The HRA directed staff to further evaluate the condition and potential uses of the rental housing at 901-03 Rae Drive. Since the last regular HRA meeting, staff and an independent housing evaluation/cost estimator/rehabilitation contractor (Messrs Lee and Mike Robinson) have had an opportunity to look at the dwelling. The Robinsons frequently determine housing suitability for FHA financing and have also assisted in the evalution of Richfield housing-for HRA grant and deferred loan. programs. As this letter- was being prepared, their inspection and cost estimates were being completed. Thus, rehabilitation cost estimates which bring the condition of the property up to current minimum FHA standards, will not be ready prior to the HRA meeting. Results can be discussed- at that time. However, initial observations and-some historical background concerning the property follows. The structure, primarily constructed of concrete block with a concrete span type floor on the main level and flat gravel HRA Letter No. 33 -3- built-up roof, was built in 1952. Although it did not start as two units of housing .(and records are unclear), it appears that in the late 1950's or early 1960's a "mother-in-law" type apartment was added in the basement with a connecting interior stairway to the main floor. There is approximately 1,400 square feet of living area on the main level (901), 800 square feet in the basement level (903). It appears from available records that as owners changed, the basement unit would be rented from time to time. After the present owner, Elmer Nordstrom, purchased the property in 1977, the stairway was removed and the two units of housing were more clearly defined as separate rental units. Mr. Nordstrom is not an owner occupant. The condition of both units is fair, the unit on the main floor being the most desireable. The. basement unit closely approximates a "cellar" (fie. more than half of the space is below grade) type of environment except for the walkout entrance. Without modifications to make this lower unit more suitable, it would be more appropriate to consider this structure as 1 to 1 1/2 living units rather than 2 decent, safe, and sanitary units. Staff secured an independent appraisal which places the market value at $86,000. The value for tax purposes is $77,300. Mr. Nordstrom is asking appoximately $95,000 for the property.. The options for 901-03 Rae Drive include: 1. Acqu-firing the property, clearing the structure, and redeveloping the site in combination with 910 West 66th Street. Four to six units of family housing would .replace 2 1/2 existing units. 2. Allowing the structure to remain as one suitable and one marginal rental unit by not acquiring it. There is nothing the. HRA can do to improve the existing environment without acquisition. g10 West 6bth Street would then become the next Vo-Tech renovation project. 3. Acquiring the structure, rehabilitating the existing units beyond minimum standards to a higher standard which would make the units suitable for marketing as ownership type condominiums for families. To assist the HRA's analysis, discussion of family housing, developer perspective on development potential, cost comparison ~ of rehabilitation and new. construction, and a review of Robinsons' inspection results follows. The "norm" for family housing in Richfield is the single family home. However, the most appropriate environment for families is not clearly defined. Appropriateness then is often based on community preferance, needs, and personal perference. Because of limited land availability and the difficulty in HRA Letter No. 33 -~- affording housing today, attached forms. of housing have become attractive affordable alternatives for families. Multi-unit family housing can accomdate household sizes of two to eight members depending on whether there are two or four bedrooms. It is .realistic to expect that in a development of two and three bedroom townhouses a household size of 2 to 4 members will be~the most common. It is physically possible {site considerations) and cost effective (a consideration of acquisition, rehabilitation and new construction costs), to develop four or six units of housing at 901-03 Rae Drive and 910. West 66th Street were 2 1/2 units presently exist. _ Of the three developers (Duraps, Branton, Russell) that attended the last regular HRA meeting (and had indicated interest and support of the HRA project) George Branton has developed a site plan that indicates 6 - 2 bedroom units of hosing could be developed. A copy of the site plan is included with this letter. Each unit could provide. space for a future third. bedroom. Thus, it appears feasible that new construction could be pursued. New construction appears more cost effective than rehabilitation primarily because the funds invested to upgrade the existing units could actually build an additional unit of new housing. The construction cost of each new unit would approximate $50,000. Up to $95,000 in acquisition costs would be incurred with either new construction or rehabilitation. Clearance costs of approximately $3,000 would. leave the site ready for two to three units of new housing. The acquisition followed by an estimated $50,000 in rehabilitation expenses to bring the two units at 901-03 Rae Drive up to marketable standard (but constrained within the existing structure) would still result in only two units of housing. The functional obsolecence of the existing building would remain even after rehabilitation. The specific cost estimates for rehabilitation will be available to the HRA Monday night. In selecting an option, the HRA should consider that although 901-03 Rae Drive (and 1016 West 66th Street) are in a condition that could warrant renovation, the purpose of the acquisition is to improve an area prone to obsolecence, absentee ownership, and deferred maintenance. The redevelopment of 901- 03 Rae Drive, 910 West 66th Street, and 1016 West 66th Street would double or triple the number of affordable housing opportunities at a lower cost per unit than producing only new single family housing on scattered sites or rehabilitating existing units. While the Branton site plan suggest 6 units can exist at 901- 03 Rae Drive and 910 West 66th Street. Staff recommends on a preliminary basis, that, given environmental concerns such as traffic and noise, ~ units of housing is most suitable. If Graham Avenue is vacated for the Market Plaza project additional traffic will pass this site. If 5 to 6 units are most desireable to the HRA there will be a need for amendments to the HRA Letter No. 33 -5- comprehensive plan (the area is designated single family or duplex type residential), .and a need for rezoning to a malt-unit use (4 units can be accomplished by special use. permit, more units requires rezoning). It is recommended that the HRA authorize negotiations for acquiring 910-03 Rae Drive with the intent of producing new construction units on the site in combination with a development at 910 West 66th Street. The acquisition price would be in the $86,000 to $95,000 range. Two tenant households would be eligible for relocation benefits (approximately $5,000 for each household.) Ac~c airing Scattered Sites Following acquisition of 1016 West 66th Street and 901-03 Rae Drive (including anticipated relocation claims for tenants), there will. be approximately $100,000 available in year IX (1983- 84) and year X (1984-85) CDBG funds to acquire additional properties. Staff has prepared a list of sites where property owners have indicated an interest in selling to the HRA. These are .garage homes. or smaller cottage type homes located toward the center of a site. Property data and comments about each site follows. Each of the owners responded to Voluntary Acquisition Program advertising. The programs' guideline section entitled "Property Selection Criteria" is used by staff in evaluating these sites and follows. Property will be inspected, evaluated and recommended for purchase if it meets criteria ~~1, a or b or c or d; and 4~2 or ~~3. 1) .The property is: a. Substandard as to condition, size or usage. b. Obsolete and of faulty design on the block and area in which it is located. c. A deteriorating factor which has caused blight to other adjoining properties. d. Detrimental to the safety or health of abutting properties in block. 2) The parcel could become a marketable lot which could provide a site for new housing or substantially rehabilitated housing. 3) Property which has been voluntarily proposed for purchase by the owner which in the judgement of the HRA would help alleviate the shortage of housing for low and moderate-income families if acquired. The values presented in the site listing are based on Hennepin County Assessors estimated market values (EMV). Garage homes and cottage type structures particularly those suffering HRA Letter No. 33 -6- deterioration and obsolecence are ofter .under valued because there are not many comparable structures and sales to assist in determining value.- Independent appraisals will be secured by staff to help determine values. Acquisition prices may range from 10 to 30 percent higher than the 1984 EMV. As the comment section suggests, these homes suffer from deterioration an_d obsolecence due to age, location on site, size and condition.. Ranking is difficult. It is not appropriate to rank the selection preferance solely on EMV since other factors, such as lot size, housing conditions, and need for paying relocation must also be considered. In addition to the 5 primary sites, there is a list of 74 garage homes and 9 vacant lots attached to this letter as secondary sites to .consider. This list was developed by staff from a list compiled by the Community Development Department Planning staff in August 19.83 as an inventory of gar-age homes and vacant lots. Thus, these sites have not been offered to the HRA, but are a resource of sites to refer to if the primary sites do not remain available. The estimated values of the garage homes range from $32,500 to $75,400. Staff does not recommend the higher value property. However, it is one way of indica-tang to the HRA that not all garage homes are good acquisitions.. Some provide decent, safe, sanitary and affordable housing opportunities for persons that could not of erwise afford housing in single family neighborhoods. The primary and secondary sites listed in this letter are not all inclusive for properties which could qualify for acquisition. Since advertising for sites continues, there may be additional offers that would be appropriate for the HRA to consider in the future. The HRA will be notified if additioal site resources are actually offered and found to be needed to efficiently utilize the CDBG funds. With the approximate $100,000 available, it appears that two acquisitions could occur. Enough funds are available for clearance (approximately $5,000 each .site) and tenant relocation (approximately $5,000) for each site. If 901-03 Rae Drive were not acquired, there would be sufficient funds to acuire two additional scattered sites. It is recommended that staff proceed in determining the purchase price of sites in the order listed in this letter. Once values are determined, the HRA will have the opportunity to consider authorizing the acquisitions. The value information should be available for the August, 1984 meeting. Developer Selection As mentioned at the June HRA meeting, securing quality development proposals for housing requires that an established HRA Letter No. 33 -7- selection process be followed. The following process could occur for housing at Rae Drive/66th Street and on scattered sites: September/October - Draft RFP, Design Guide NovemberlDecember - Solicit developers, receive proposals and evaluate them Janaury/February - HRA evaluates proposals and selects developer _ The RFP (request for proposals) is distributed to developers to respond in writing indicating: -price range of units. •amentiesloptions to be made available -site plan/unit plan drawings -his or her experience in developingJbuilding residential housing -the type of financial resources and amount of financial contribution to be made by the developer Staff evaluates proposals based on the above items as well as conformance to a "design guide". With Rae Drive, the guide should reflect as far as practicable the concerns of neighbors. The guide defines minimum requirements for the housing such as energy efficiency, exterior appearance, and siting require- ments. This helps to ensure quality construction and visually pleasing housing design. The HRA then considers the results of staff evaluation. It is recommended that the HRA authorize the above described process to be carried out. Conclusion This letter discussed the acquisition of 1016 West 66th Street, the development alternatives and acquisition of 901-03 Rae Drive, the acquisition of scattered sites, and the developer selection process. It is recommended that the HRA take the following actions: -Amend HRA Resolution X246, increasing the acquisition price for 1016 West 66th Street from $92,500 to .$94,000; -Authorize. negotiations for acquiring 901-03 Rae Drive as a site, for new construction; -Authorize staff to proceed in determining prices for the scattered single family-housing sites in this order: HRA Letter No. 33 -8- 7521 Dupont, 6820 - 12th Avenue, 7245 .Humboldt, 7508 Colfax, 7520 Bryant. A sufficient number of prices for sites will be obtained to ensure expenditure of CDBG funds in a timely manner; and, -Authorize a developer selection process for the Rae Drive/66th Street and scattered site housing project as set forth in this report (above). Respectfully submitted, John G. rt fight Executive Di ector JGC/eja These properties meet the conditions. mentioned, in order of preference: Site 1984. Assessor EMV Site Dimensions/Size 7521 Dupont $33,400 50'x130' (6,500 sq. ft.) 6820-12th $38,900 7245 Humboldt $48,800 59.5'x130' (7,735 sq. ft.) Comments house vacant, no relocation benefits anticipated, structure approximately 480 sq.ft. on the main level, no basement. Built, 1939. Lot size slightly less than ordinance allows, variance to size prior to construction needed. Can result in one single family dwelling, new construction. -._ homeowner occupied, no relocation benefits anticipated, structure approximately 400 sq. ft. on main level, full basement. Date of dwelling construction unknown. Placed on basement foundation, 1954. Lot size large enough to permit moving a rehabitable structure on to site (Vo-Tech). Can result in one single family dwelling. 100'x93' owner occupied, no reloca- (9,300 sq. ft.) tion benefits anticipated. Structure approximately 980 sq. ft. on two levels. No basement., Lot size large enought to permit moving a rehabitable structure on to site (vo-tech). Vo-tech evaluated the existing structure approximately 2 years ago and found it not suitable for rehabilitation. Can result in one single family dwelling. Site 1984 Assessor EMV Site Dimensions/Size 7508 Colfax $34,100 5D'x130' (6,500 sq. ft.) 7520 Bryant $39,800 50'x130' (6,500 sq. ft) Comments tenant occupied, reloca- Lion benefits anticipated. Structure approximately 400 sq. ft. on main level, crawl space type basement. Built, 1943. Lot size slightly less than ordinance allows, variance to size prior to construction needed. Can result in one single family dwelling, new construction. HRA new ..construction single family rental unit on property directly adjacent. tenant occupied, relocation benefits anticipated, structure approximately 550 sq. ft. on main level. No basement. Built, 1946. Lot size slightly less than ordinance allows, variance to size prior to construction needed. Can result in one single family dwelling,. new construction. ~~ '~~` ~6'.14b i ~ r ~,o i / ~' / i ~'\ i L .- .. r ~~ ^~J 1.~ ; N , . ~. ....~.... 3,~f~G 3yd ., z•.. '-~. ~~ ~~ cs- T ~,: ~ ~ ~M~ry~~ 3 ~~ r -, ~ ~ , . ~~ 1 ~ ja • ~~~_~ .~ 3 ~ 6 V i ~ ~g-~ ttr ~~ S ~. m 0 F- z 0 T Q Z t1.1 a O J W w 0 w W Q `'/ -,~ ~n ~-~ --,... ..f• .. ~~~ s ~ ~~ r ti • ~ _ ~ N .,`4uy~. ., f; ~ .. _ 3 ~ 1~ ~ `~ ~~` tr ° x Z ~ Q~ ~ ~} ~ L. . ~ U ~' c~ ,~ ~ ~~~~ ~... ~ ~ ~ 3 ~ , ~ ,~ ~, . ~ ~ ~ ~ ~. 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H Ul Q W ~ Pa N W 4"I H u-I H O U PROPERTY ADDRESS 6400 VINCENT 6900 VINCENT 6645 LIPTON 6817 RUSSELL 6820 RUSSELL 6933 QUEEN 7321 PENN 6539 OLIVER 6841 NEWTON 6924 NEWTON 6321 MORGAN 6838 MORGAN 6813 LOGAN 6955 KNOX 6414 JAMES 6930 JAMES 6514 IRVINE 6440 HUMBOLDT 7517 HUMBOLDT 6621 GIRARD 7521 GIRARD 7525 GIRARD 7529 FREMONT 7333 EMERSON GARAGE HOUSES PINS ~~' S 2902824130065 2902824430121. 2902824420015 2902824440037 2902824440046 2902824440170 3302824230012 2802824230092 2802824330019 2802824330073 2802824220077 2802824330134 2802824340052 2802824340075 2802824240044 2802824340072 2802824240115 2802824240009 3302824420077 2802824420027 3302824420095 3302824420094 3302824420111 3302824130090 7-10-84 7435 EMERSON 3302824420014 7437 EMERSON. 3302824420013 6315 DUPONT 2$02824110067 7429 DUPONT 3302824410076 7433 COLFAX 3302824410052 7508 COLFAX 3302824410085 7520 COLFAX 3302$24410088 7344 BRYANT 3302824140047 7436 BRYANT - 3302824410048 7520 BRYANT 3302824410110 7528 BRYANT 3302824410112 6313 ALDRICH 2802824110038 7304 ALDRICH 3302824140019 7301 GARFIELD 3402$24230129 6833 GRAND 2702824330070 6801 PLEASANT 2702824340019 7221 NICOLLET 3402824130096 7319 NICOLLET 3402824130013 7615 NICOLLET 3402824430065 7101 1ST 3402824120092 7225 1ST 3402824130058 6600 STEVENS 2702824420070 6612 2ND 2702824420068. 7232 2ND 3402824130121 7316 CLINTON 3402824140086 6620 5TH 2702824410028 6632 5TH 2702824410131 6715 'PORTLAND 2602824320089 6850 PORTLAND 7300 PORTLAND 6825 ELLIOT 6939 12TH 6812 13TH 6935 13TH , 6237 14TH 6844 14TH 6945 14TH 6310 15TH 6404 15TH 6415 15TH.. 6501 15TH 6300. BLOOMINGTON 6421 CEDAR 6436 19TH 6437 19TH 6516 19TH 6521 19TH 6524 19TH 6408 21ST 6421 22ND 2702824400010 3402824140015 2602824340085 2602824430096 2602824430022 2602824430087 2602824120069 2602824430056 2602824430013 2602824120077 2602824130052 2602824130047 2602824130115 2602824120098 2502824230067 2502824230084 2502824230103 2502824230023 2502824230033 2502824230021 2502824230137 2502824240077 VACANT LOTS 2118 W. 69th Street 7015 Penn _ 7021 Penn 7201 Penn 7444 4th Avenue 6601 1st Avenue 6520 Standish 6524 Standish 2200 E. 66th Street 28.028 24 33 0141 33 028 24 22 0003 33 028 24 22 0004 33 028.24 23 0006 34 028 24 41 0059 27 028 24 42 0069 25 -.028 24 24~ 0031 25 028.24 24 0030 25 028 24 24 0023 HOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 32 Agenda July 16, 198 Housing and Redevelopment Authority Commissioners City of Richfield Subject: Actions Relating to the Sale of Redevelopment Bonds for the Market Plaza Project -~- Dear Commissioners: City staff and Evensen-Dodge, Richfield's financial consultant, have made arrangements for the sale of $5,750,000 general obligation redevelopment bonds.. This bond issue will provide permanent financing for certain HRA costs associated with the Market Plaza redevelopment project. The bond sale is scheduled as follows: -Bid Opening: 11:30 a.m. Tuesday, July 31. -Special City Council Meeting: 12 noon, Tuesday, July 31. (At the special city council meeting the council will award the sale of bonds to the successful bidder). Two actions are necessary to proceed with the bond sale: 1. The HRA needs to consider and adopt a resolution determining the need for financing and requesting the city council to authorize the issuance of bonds to finance public redevelopment costs in the L1H/N redevelopment area. 2. The city council needs to consider and adopt a resolution providing for the issuance and sale of the bonds. Staff recommends these actions be undertaken for the reasons outlined below. Market Plaza Project Costs Pursuant to the commitments made by the City and the HRA through the Developer's Agreement executed this spring, certain public costs have been, and will continue to be, incurred in order to facilitate the Market Plaza project. The expected costs are detailed as follows: HRA Letter No. 32 _ -2- Land acquisition, relocation, taxes and special assessment Site improvements and soil correction Demolition Taxes and special assessments Administration and legal expenses Capitalized interest Discount Cost of issuance Total $3,444,000* 268,000 110,000 124,000 375,000 J 1,279,000 110,000 40,000 $5,750,.000 *Because the acquisition costs for the land on the east end of the block will likely exceed $3 million, discussions will be undertaken with Market Plaza Corp. regarding its share of these excess costs. There are some rsignificant changes in the July 2, 1984 tax increment bond issue plan from the preliminary plan submitted to the HRA in May of 1984. First, the writer has set forth below a comparison of the $5.15 million dollar tax increment bond issue as proposed in a communication from Evensen-Dodge on May 24, 1984 with the now recommended $5.75 million dollar tax increment bond issue with the data supplied from Evensen-Dodge on July 2, 1984. 5/24/84 Bond Issue $5,150,000 Project Costs Discount East End $2 ,550,000 West End $ 821,000 Soil & Site Preparation $ 268,000 Demolition $ 110,000 Admin. & Legal $ 248,000 Taxes & Spec. Assess. $ 0 Cost of Issue $ 40,000 Capitalized Interest $1,113,000 7/2/84 $5,750,000 $ 110,000 $3 ,444,000 $ - $ 268,000 $ 110,000 $ 375 , 000 $ 124,000 $ 40,000 $1,279,000 $5,150,000 $5,750,000 HRA Letter No. 32 -3- Listed below are some of the financial assumption changes since the preliminary information was prepared in May and the data now presented to the HRA: 1. The net interest rate has been changed from 9.82 to 10.13; 2. The final maturity date has been changed from the year 2002 to the year 2004, which means we are now proposing a 20-year bond issue rather than an 18- year bond issue; 3. The reinvestment rate on the temporary use of funds has been increased from 6.5~ to 7~5~; -~- - 4. The size of the bond issue has, been increased from $5.15 million to $5.T5 million dollars; 5. The May preliminary financial assumptions included in project costs $821,000 for recovering the city~s cost of acquiring the west end site of the Godfather Block while the current bond issue omits this item because the city is unable to include this item and meet the tax increment financing requirements; 6. $124,000 in taxes and special assessments that will have to be paid by the city when land is acquired at the east end is included for the first time in the public cost; 7. In computing the cash flow analysis for July 2, 1984 Evensen-Dodge has included the increment anticipated from the Richfield State Agency development project and the Richfield Shoppes development project. A more complete report on the Market Plaza tax increment bond issue will be made at the HRA meeting of July 16, 1984. Financial Feasibility For the past several months, city staff has worked with Evensen-Dodge, Inc. on an on-going basis to make certain that the anticipated public financing associated with the Market Plaza project would be financially feasible. We have found that the project is financially feasible, using prudent assumptions concerning interest rates, the construction timetable for the project, and the tax increment to be received from the project. The tax increment capitalized interest and investment earnings will be sufficient to pay for all costs covered by the bond issue. Certain costs associated with the acquisition of the west end of the block (in the amount of $857,130) were financed through an earlier bond issue and will only be reimbursed from this bond issue to the extent that east end acquisition costs are less than presently expected. Evensen-Dodge, Inc. has prepared a Presale Analysis (copy attached) which outlines all aspects of the public. financing and HRA L^tt~N N ~2 -~-~ bond issue in detail, Council Members and HRA should note that a cash-flow analysis was made L/H/N Tax Increment District as a part of this stated on page two of the Presale Analysis, it that the District will remain in a positive ca self-supporting through the life of all bonds. Bond Issue Commissioners for the entire analysis. As is fully expected sh position and be The bond issue will be for $5,750,000 and have a term of 20 years. The net interest cost is presently expected to be 10.13. Recommendation Based on the foregoing information, it is recommended that the HRA and City Council adopt the resolutions relating to the bond sale. Wayne Burggraaff anal Dan Eitheim from Evensen-.Dodge will be present at the July 16th meeting to respond to questions. Re ectfu ubmitted, John G. Cartwr ht Executive Director JCG/eja EXTP.ACT OF MINUTES OF MEETING OF THE HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF RICHFIELD,. HENNEPIN COUNTY, MINNESOTA Pursuant to due call and notice hereof, a regular meeting of the Housing and Redevelopment Authority of the City of Richfield was duly held on Monday, the 16th day of July, 1984, at o'clock p.m. The meeting was called to order by the Chairman. Upon roll call, the following members of the Authority were present: and the following absent: Councilmember introduced the following resolution and moved its adoption. ~ * * * * ~ RESOLUTION N0. ~ * ~ A RESOLUTION DETERMINING THE NEED FOR FINANCING: REQUESTING THE CITY COUNCIL OF THE CITY OF RICHFIELD TO AUTHORIZE THE ISSUANCE OF GENERAL OBLIGATION DEVELOPMENT BONDS TO FINANCE PUBLIC REDEVELOPMENT COSTS IN THE LYNDALE-HUB-NICOLLET REDEVELOPMENT AREA BE. IT, RESOLVED by the Housing and' Redevelopment Authority of the City of Richfield, Minnesota, as follows: Section 1. Findings. 1.01. This Authority has pursuant to Minnesota Statutes, Section 462.411 to 462.716 (Housing Act) duly adopted a Redevelopment Plan (Plan) for a redevelopment project described as the Lyndale-Hub-Nicollet Redevelopment Project (Project Area) and commonly referred to as the LHN Project. The Plan and the Project Area have been duly approved by the City Council of the City of Richfield (City) in accordance with the Housing Act. 1.02. This Authority and the City have entered into a Tax Increment Agreement (Agreement) dated May 9, 1977 in accordance with the Housing Act and Minnesota Statutes, Section 273.71 to 273.78, the Tax Increment Financing Act (the Housing Act and the Tax Increment Financing Act are collectively referred to ads the Act) for the purpose of authorizing the issuance of general obliga- tions of the City,. payable from tax increments in the Project Area, to finance Public Redevelopment Costs within the Project Area. The Agreement authorizes the issuance by the City of its general obligations for such Costs at the request of this Authority. -1.03. The Plan has been duly modified and amended in accordance with the Act to provide for the acquisition and improvement of certain lands in the Project Area for the purpose of facilitating the construction of a multi-family- housing development, a commercial retail facility, and related improvements (Project) and to provide for the financing of other related Public Redevelopment costs of the Project Area. This Authority has authorized the execution of development agreements in connection with the acquisition and disposition of land for the Project. 1.04. This Authority has incurred Public Redevelopment Costs for the Project and other costs for the Project Area,, and it is found and determined that it is necessary for the sound financial management of the LHN Project Area that general obligations of the City be issues to finance all or a portion of such Costs. Section 2. Public Redevelopment Costs .2.01. The Executive Director has submitted to the Authority a list of Public Redevelopment Costs of the Project Area which are. presently estimated to be as follows: Land Acquisition $3,444,000 Site. and Soil Improvement 268,000 . Demolition 110,000 Property Taxes & Special Assessments 124,000 Administrative and Legal 375,000 Costs of Issuance 40,000 Capitalized Interest 1,279,000 TOTAL $5,640,000 Section 3. Issuance of Bonds 3.01. This Authority hereby requests the City to issue and sell its general obligations in an aggregate principal amount not to exceed $5,750,000 to finance-all or a portion of the Public Redevelopment Costs identified in Section 2. 3.02. The Agreement is hereby ratified and confirmed in all respects. 3.03. This Authority renews and reaffirms its statement in HRA Resolu- tion No. 32 of May 9, 1977 concerning its intent to request additional series of bonds in the future to finance the Public Redevelopment Costs in the Project Area and restates its request that all such series of bonds be on a parity with each other such series of bonds so issued, and be equally and ratably secured by the pledge of the Agreement. 3.04. The Executive Director is authorized and directed to transmit a certified copy of the resolution to the City forthwith. Passed by the Housing and Redevelopment Authority of the Cit;a of Richfield, Minnesota this 16th day of July, 1984. Chairman Secretary r. STATE OF MINNESOTA ) COUNTY OF HENNEPIN ) S.S. HOUSING AND RIDE- ) VELOPMENT AUTHORITY ) CITY OF RICHFIELD ) I, the undersigned, being the duly qualified and acting Secretary of the Housing and Redevelopment Authority of the City of Richfield, Minnesota do hereby certify that I have carefully compared the attached and foregoing ex- tracts of minutes of the Housing and Redevelopment Authority of said City held on Monday, July 16, 1984, with the original on file in my office and the same is a full, true and complete transcript therefrom insofar as the same relates to the issuance and sale of $5,750,000 General Obligation Redevelopment Bonds of 1984 of the City.. WITNESS My hand officially as such. Secretary and the seal of the City this day of July, 19$4. Secretary, Housing and Redevelopment Authority of the City of Richfield, Minnesota (SEAL) RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY SPECIAL MEETING JULY 9, 1984 6:45 P.M. Chairman Harms called the .meeting to order at 6:45 P•M• COMMISSTONERS PRESENT: Harms, Helmberger, Ludeman, Luettinger, Hassenstab.- STAFF PRESENT: Executive Director Cartwright, Community Development Director Kraft, Administrative Services Director Rankin. ITEM 1, C NSIDERATION OF THE CITY ATTORNEY'S RECOMMENDATION TO REESTABLISH JUST COMPENSATION FOR THE PURCHASE OF PROPERTY ON THE GODFATHER BLOCK FOR THE MARKET PLAZA PROJECT. Assistant City Attorney, John B. Dean, described the background concerning this matter. He said the quick-take action concerning the Godfather Restaurant property has been in district court proceedings and has also been actively discussed with the attorneys representing the property owner. Mr. Dean said the City Attorney's office is recommending a reduction in the Just Compensation amount set by the HRA in order to limit the Just Compensation only to the value of the property needed to be used immediately for the project. He said it is recommended that the .HRA take action to reestablish the Just Compensation for the property from $1,029,283 to $142,000 for the reduced amount of property. M/Luettnger, S/Hassenstab, that the followingresolution be adopted; that it be s read in the resolution book and that it be made a part o these minutes: RESOLUTION N0. 249 RESOLUTION APPORTIONING JUST COMPENSATION.- GODFATHER RESTAURANT SITE Poll of votes: Ayes -Helmberger, Ludeman, Luettinger, Hassenstab and Harms. Nays - None. Motion carried. This resolution appears as Resolution No. 249 in Resolution Book No. 3. M/Luettinger, S/Ludeman, to adjourn the Special i~eeting of the HRA. All voted aye. Motion carried. The meeting was adjourned at 6:50 P.M. HRA Special Meeting -2- July 9, 1984 Date Approved: oan Helmberger Secretary homas E. Harms Chairman HORSING AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 31 Agenda of July 16, 1984 Housing and Redevelopment Authority Commissioners City of Richfield Subject: Amendment to Vo-Tech Contract between South Hennepin Vocational. Technical Center (Vo-Tech) and Richfield HRA Dear Commissioners: The June 13, 19$4, HRA Memorandum ~~21 discussed the extension of dates within the contract executed by Vo-Tech and the HRA to construct the two-unit townhouse at 920-924 West 6bth Street. This letter requests the HRA to authorize a contract extension to change the completion date from July 1, 1984 to October 1, 1984 and the final payment date from August 31, 1984 to November 30, 1984. On October 13, 1983, the HRA authorized the contract to construct the units at 920, 924 West 6.6th Street for $93,788. The terms of the original contract require: -the project to be completed no later than July 1, 1984. -HRA payment of the contract amount by August 31, 19$4 following confirmation that the work is satisfactorily completed. A number of factors have delayed completion of the project. The severe cold and snowfall created difficulty in completing the initial ground work. The size of the project (new construction versus rehabiliation and two units instead of one) is requiring more time to complete. The Vo-Tech has made the request to extend the completion and payment date due to these conditions through the attached letter. HRA legal counsel has reviewed the contents of the letter and finds it acceptable. It is recommended that the HRA authorize the extension of the completion date from July 1, 1984 to October 1, 1984 and the final payment date from August 31, 1984 to November 30, 1984 by executing the attached letter as drafted by the Vo-Tech. ectfu y fitted, ~~ ~ ~~~ ohn G. rt fight Executive Dire or JCG/eja HENNEPIN TECHNICAL CENTERS SOUTH CAMPUS! 9200 FLYING CLOUD DRIVE, EDEN PRAIRIE. MINNESOTA 55344 / (612) 9a4-2222 r '~ June 8, 1984 7 Housing and Redevelopment Authority City of Richfield 6500 Portland Ave.. ~` Richfield, Minnesota 55423 Dear Sirs: As per our construction agreement section no. 5, it states that a request for an extension must be reviewed b y the Housing Authority prior to July I, 1954. Due to a late signing of the initial contract, and a difficulty in getting the ground work complete because of the severe cold and record snowfall, we will not be able to complete the work by July 1, 1984. Hennepin Technical Center is requesting that the completion time be extended to October 1, 1984, and the final payment shall be made not later than November 30, 1984. HOUSING AND REDEVELOPMENT JOIi~tT INDEPENDENT SCHOOL AUTHORITY IN AND FOR THE DISTRICT N0. 287 (SUBURBAN CITY OF RICHFIELD, MN. HENNEPIN COUNTY AREA VOCA- TIONAL TECHNICAL SCHOOLS) By Its Executive Director Zts Chairman Its Chairman Its Clerk JOIN' INDE?ENOENT SCHCOI OlST?~„T NO 2AT ACCRE017EO 9Y THE NORTH CEw'TnAI A$$OCIAT~ON _ HOUSING AND REDEVELOPMENT AUTHORITY Office of .Executive Director HRA Letter No. 30 Agenda July 16, 1984 Housing and Redevelopment Authority Commissioners City of Richfield Subject: Financing Committments for Market Plaza -~- Shopping Center and Apartment Project Dear Commissioners: Mr. Richard C. Krieg, Vice President of the Derrick Companies, has furnished- the Executive Director for the HRA with a communication dated July 6, 1984, attaching the conditional financial Committment from Prudential-Bache and Balcor/American Express for the Market Plaza shopping center and apartment project. The contract for the sale of land for private development between the HRA and Market Plaza Corporation .provides that one of the conditions precedent to closing is the submission by the developer of financial Committments and construction contracts for the construction of all of the components of the project. The developer's agreement goes on to say that the HRA should make a finding as to their acceptability. The purpose of this agenda item is the receipt of the preliminary financial Committments on the shopping center and apartment components.. The HRA can now take these documents under consideration and at the July 16, 1984 or some future meeting, make a determination as to their acceptability to the HRA. Article I of the contract for the sale of land for private development is entitled "Definitions, Exhibits, Rules of Interpretation." .Section 1.1 gives definition for terms contained in the agreement. Sub-section 6 is entitled "Financial Committment".and the definition for financial Committment is "a written document which sets forth the conditions which, if satisfied by the developer, entitles developer to a loan in a specified amount at specified loan terms." Article II of the same contract is entitled "Representations and Joinder." Section 2.1 which is entitled "Representations by the Developer", provides in subsection 2 that "if, to the extent allowed by law, the city or HRA makes available to the developer tax exempt financing for housing component B and the shopping center component in the exercise of its reasonable discretion, the developer has the capability to obtain necessary capital and mortgage financing Committments necessary for construction of the improvements." HRA Letter No. 30 -2- Section 2.2 entitled '!Representations by HRA and City" provides in subsection 3 that "the HRA and city shall use their best efforts, in the reasonable exercise of their. discretion, to make available tax exempt and tax increment financing for the project." Article III entitled "Sale and Conveyance" provides in Section 3.3 tentitled "Conditions Precedent to Closing, Developer) that "prior to the closing of any conveyance of the property, or portion thereof, developer shall provide the HRA with evidence acceptable to the-HRA of financial committments and construction contracts for the construction of all of the components of the project in accordance with the terms of this agreement. Yf the HRA finds, in the reasonable exercise. of its discretion, that the financing is consistently sufficient with real estate development standards for similar financing arrangements and adequate in amount to provide for the construction of the improvements and that the financial committments obligate the lenders to proceed subject to the provisions of Article VIII and Section 10.2 of this agreement and that any conditions imposed by the financial committments on the HRA or the city are reasonable, the HRA shall notify the developer in writing of its approval:' Subsection 1 provides that the developer shall have until July 20, 1984, to obtain the financial. committments and construction contracts for housing components A and B and the shopping center component of the project. If the developer is unable to obtain the financial committments and construction contracts on or before July 20, 1984, either party shall have the option to terminate the agreement, by notice in writing to the other party, whereupon all parties shall be released from any further obligation or liability." Subsection 3 of Article III Section 3.3 provides "that all other conditions precedent to closing, as set forth in this agreement, have been satisfied or waived by the party entitled to so waive, closing of conveyance of the property shall occur on June 2, 1984 or 90 days after developer has provided the HRA with the financial committments and construction contracts for -all components, whichever occurs later. The HRA shall have the right to waive all or part of the 90 day period upon the giving of 20 days written notice to the developer of such waiver." In the writers discussions with Mr. Krier, the remaining financial committments and construction contracts will not be ready for submission to the HRA on July 16. However, the writer believes they will be submitted to the city by July 20. The HRA now may take these documents under-consideration and when satisfied with the documents may take some action to either approve or disapprove. If the HRA should disapprove the financial committments, the HRA must give their reasons in writing to the developer who then will have 20 .days to answer any objections. HRA Letter No. 34 -3- Therefore, the Executive Director at this time presents to the HRA the financial committments from E. J. Plesko and Associates and the Derrick Companies for the commercial shopping center component and the apartment project component. The HRA should now take these documents under consideration and at the appropriate time make a finding as to whether they are acceptable or are deficient in some way. _ JCG/eja ~-~ -~- ~~ 1650 Shelard Tower • Minneopolis. MN 55426 • 612 /546-2276 The Derrick Companies 6 Juiy 1984 Mr. Sohn Cartwright Executive director hOUSING AND REDEVELORMENT AUTHORITY 6700 Portiand Avenue South Richfield, Minnesota 55423 Re: Market Plaza Joint Venture , Dear John: Attached is the conditional financial commitment from Prudential E3ache and Balcar/American Express. I am submitting -their evidence of financing to satsfiy part of the requirement of the Redeveiopment Contract and as an alternative financing plan. If you should have any questions, please do not}esitate to contact me. Sincerely, Richard C, Krier, AICP Yice President Derrick Companies RCK:cIb Enclosures - Baieor/American Express Real Estate Finance Inc. Baicor Plaza 4849 Gotf Road Skokie, Ulinots 60077 (312)676-6700 June 27, 1984 Mr. E. J. Plesko President - E. J. Plesko & Associates., Inc. 220 Oak Street Grafton, WI 53024 RE: - Market Place Richfield, Minnesota Dear Mr. Plesko• Pursuant to our previous discussions, this shall serve to ~on~irm that BalcorlAmerican Express Real Estate Finance, Inc. would consider financing a ;2,000 ,©00 gap loan to fund the balance of construction costs associated with the ,above referenced pro3ect. Our proposed commitment would be conditioned upon the following being demonstrated satisfactorily to 6alcor: - Total project costs including interest reserve and contingencies not to exceed ;12 million. Within this budget, total construction (hard) costs not to exceed ;10,3b1,500, to be confirmed by Balcor's consulting archi-test. The balance of indirect (soft) costs to be determined based upon underwriting of interest rate movements, lease up and rental income, as well as funds arbitrage and traditional soft cost line items. - Placement of permanent`IRB financing of ;10 million to be underwritten by Prudential Bache's Municipal Bond Department. Said financing to carry a term not less than 5 years and an interest rate not greater than 9% per annum. Total borrowing costs on the IRB including amortization and agency fees shall not exceed lOX per annum. The aforementioned conditions are an essential and integral component to Balcor's commitment to provide this financing. Any modifications in these conditions will terminate our obligation to fund the gap loan. Sincerely, ~' ~ , ~c C L . 6'C G! Lawrence 0. Silberman Assistant Vice President LOS;dc Lending Smart Th~nk~ny to Real Estate rruaentsdra ' - - Secunttes Public finance Department June 27, 1984 E. J. Plesko 6 Associates, Inc. 220 Oak Street Grafton, Wisconsin 53024 Re: City of Richfield, Minnesota Market Piazal Shopping Center and 'Apartment Project ~ _. _. _ Dear Irv: Prudential-Bache Securities is pleased to present you with the following financing proposal for the above project. A,~ you know, the key ingredient in a successful industrial revenue and housing bond financing is the credit support which is necessary to secure a marketable credit rating. Prudential-Bache has developed~a savings and loan collateralized technique,whiC.h will produce the. lowest interest cost for your project and it will also a11aw tike two ~.ssues to be done simultaneously with one offering statement, thus further reducing your cost of issuance expenses. With regard to interest rate, the rate for both the apartment and shopping center project will be set based upon the following terms: 30 Years 3 Years 5 Years SAX 1~X , 9 3/4X S'th - 30th Years $325,000 $604,000 Maturity and amortization Call feature. Put date Bond. rate Annual savings and loan fee Total effective interest rate Bond repricing and remarketing feature Debt Service on $3'~ miilioa Debt Service on $b~ million Should you wish the longer or shorter initial put date the bonds will carry a higher or lower interest rate accordingly. Again, the key factor in such .financings is the credit support. In this project you will mortgage the project with a Savings 8 Loan, and they in term will pledge full single family mortgages to the bond holders in an amount sufficient to secure a AA or .AAA Standard 6 Poor's rating (a 170% or 180X of the bond amount). I have included a prospectus cover which Prudential-Bache underwrote recently for a similar shopping center project. Since we are one of the leading underwriters of collateralized issues, we have developed a stable of Prudential•Bache Securities Inc., 135 South LaSalle Street, Suite 1206, Chicago, IL. 60603 TeI. 3 i 2 630.7083 _ _.. _ ~. Prudential-Bache Secunues Savings ~ Loans who will pledge their old mortgages under the above terms. Over the past two months, we have held discussions with two Savings b Loans concerning this project, and they have expressed their willingness to supply the necessary collateral. A fine point but worth noting is that the time necessary to complete this proposed ,transaction with be shorter than most other tax'exempt IDB and housing issues because of the single.supplier of credit support and the unified offering statement. For example, proces-sing at FNMA or FHA for housing bonds typically takes at least 6 months alone, not counting the usual 60 days for bond documentatifln, underwriting and closing. In addition, we have examined the applicable current and proposed Minnesota'and •federal legislation and IRS regulations and are of the opinion that this project can be correctly structured-to comply with even the most stringent provisions of the "Rostenkowski Tax Bill" HR4170. This is especially true in Minnesota where thg legisla ure had the foresight to pass an allocation formula for iDB issuers. For example, the housing section for your prdjecC'will be exempt from federal and state laws, while the shopping cent'er~must•~.comply with the state allocation .formula and certain leasing restrictions which we have determined will not affect the financial integrity of the project {not leasing space to those tenan s who have over $40,000,000 worth of IDBs outstanding). This last point is significant only if the tenant leases more than 25X of the retail space in the project. Since no proposed tenant will lease more than 25X of the space, and indeed no proposed tenant has over 40,Op0,000 worth of IDBs outstanding, the shopping center issue will comply with this most stringent requirement of HR4170. The enclosed computer runs will give you the financial perimeter of our proposal. Based on a bond issue of $3~ million, the annual debt service would be $325,000 adding back the cost of the Savings b Loan fee. The annual debt service for a bond issue .of $6~ million adding back the cost of the Savings ~ Loan fee would be $604,000. Please feel free .to call me with any questions or comments. Prudential-Bache Securities is anxious to begin the underwriting process, and we are looking forward to being of service. Simply put, we want your business. Sinc/erel~y-, ~~ ~'-~ ,~ ~~~~~t~L.~'•Y~ Gig' • ~/~-~~ Charle ` s W. Freeburg Vice President tag Enclosures t,1i'f Uh h1l:+IFIlcI.U Ml1VfVL':1UIH +Irnl.lri~lvl rnu.lcl.e SEMIANrdUAt. DE6T SERVICE FROM 9/1!!/94 DATE f'RINCIFAL f:ATE iN1f.REST TUTAL 3 / 1) 1 / 95 ,` l b , ZJ/,I, I ICI .1.76., r°il:l , U4 9/C+l/dJ 55,11411,(14 ~,51ti1 ~76,i°°/W.111./ 331,251.1,(,111 3/41/8b 27:,912.54 27.,912.30 9/Ul/66 :15,UC+U.00 9.:1UU 273,912.54 328,912.5u 3101 / 87 271 , L'175. U11 271 , :17.°,1. u4 9/1!1/87 bO,0UU.0U 8..°1110 271,571;,44 331,575.UU 3/41/88 269,4~5.CIU 249,425, 0U 9/111/88 65,Ofl0.tlO 8.501) ~b9,il~~.I:IU ~,4,1)25.UCI 3/01/89 2bb,262.5C1 266,262.50 9/01 /99 7U, QUO. UU B. 51?U 266, -'62.50 3_`•b, 262.:,0 3/01/90 26.:'.,:87.51) 26:,267.50 9/01/90 90,000.0+0 8.500 26~:,2d7.54 343,297.50 3/41/9l 2:19,097.50 .:59,687.50 9/01/91 95,1,11)4, U4 8,51+1+ L59, 697. 511 v44,d67. 511 3/41/92 2~6,~75.~?O ~56,275.U0 9/01 /92 9U, UC10. U0 9.51:10 2.°16, : 75. C1U ~ 46, 275. U0 3/01/93 :52,45A.U4 252,4:.0.00 9/01/93 1UC+, UUU. i-0 9. 51+01 2,2,4,1,1, 111) 15.1.,451+, 114 S/41/94 249,240,!.10 348,204.00 9/01/94'` 110,4010. G0 8.5001 24d,_0101,i.u;- 159,200.04 3/01 /95 : 43, JtJ. u4 00 243, 5:.''~. 9/,1195 120,00+4. OU 8.:1011 243, 525. C+0 A 361,52,•!+U ~/O1/9b 2?8,4:5.04 ~,8,4~5.UU 9/01 /96 130,000.04 8.51)0 2'_•8, 425. U0 368, 425. C.II;r 3/01197 ~ ~~~,90+U,(1U 23:.,904,00. 9/111/97 140,000.00 8.5Un 25,91?I:1,!111 372,9i1ry,U4 3/41/ ;9 226,9:;/),00 226,954. U0 9/01/98 1~O,UOO.UU 9.5011) 226,951).010 376,951+.114 3/01/99 2''U,575,1)u 2U,J75.UC1 2 9/01/99 365,0100.001 8.50+4. __1),;;7~.4U p 3V5, 7:,.c.,4 3/01/ 0 213,562.50 • 21:3,562.54 9101/ O 1BO,11c90.04 8.500 21.3,Jbw.3Q / ?9.v~562.5u 3/OI/ 1 ~05,9t~.`.0 .205;912.~1:- 9/+)1/ 1 195,01UVaUU 9,300 21:15,912.4 41)Ct,91~.v1) , 3/01/ 2 197,625,fj4 197,62°1. U0 9/01 / 2 21 i-, OUO.0+4 H. SC/Cr 197, 625.401 407 , 6~5. Cu:+ 3/01/ 3 169, 7114.001 189,700.04 , 9/UI/ 3 230,401v.0U 8.50+CI 189,704.00 •418,700.00 3/01/ 4 179,925.00 178,925.00 9/01/ 4 24F1,OC+4.00 9..500 179, 925. U4 423,925. U4 3/Oi/ 5 168,512.51 169,512.5u 9/01/ 5 270,000.00 8.500 Ibfi,51.'.5U 4'•9,512.50 3/01/ b 157,U~7.50 157,037.5!1 9/01/ 6 290,000.00 9.'504 157,037.50+ .447,0137.51) 3/41/ 7 144,712.54 144,712.51) 9/01/ 7 315,000.00 B.5U0 144,712.50 459,712.:10 3/01/ 8 131,3~5.U0 131,325.00 9/G1/ 8 340,044.00 8.500 131 ,325.01,1 471,325.0+) 3/01/ 9 116,675.00 116,875.411 9/111/ 9 370,000.00 8.51)4 136,B75.v1) 486,875.04 3/01/14 1U1,15U.illi 11/1,150.01) 9/!11/11+ 41101, (141), Q4 9,500 11l1,1wU,1,1/) 51!1,154.!+4 3/41/11 94,1:10.40 94,154.U0t 9/41 / 1 1 435,001/). UU 8. 501) Ei4, 150, 011) 519, 1501, 0u 3/41/12 b5,G62.:]IJ 6:1,662.:11'! 9/41/!2 475,01+4.00 9.:146 6:1,662.501 540,662.51) 3/01 / 13 4::, 475./)11 45, 475.1)0 9141/13 J1°i,l)C-4. 0u 6.,40 4 5,475,0101 56U, 475.01;1 3/01/14 .^.~,:167,`JI.I 23,,97.54 9!01/14 b55~000.U4 9..,111+ 23,:18/.'.:111 579,587.54 TOTAL 6,5111), 004. GU 11 ,645,4_5,010 18,145,425. U0+ ACCkUED T11kU 9/01/94 4.UU U.OU NET COST 11,64:;,425.00 18,145,425. U0 AVERAGE COUP ON 8. ~+?0- 60NU YEARS 1 37 , ~~45. +?Uu AVERAGE LIFE 21.U7d f'kEPAkED ON June 27, 1964 Prudential-Bache TIME 15:27:401 SecunUes /1NNU/IL 6117 , Si+U. C1C- 602, Ci2~. i,4 603, i 50,1)4 bC+3 , 01;111.1 i4 6012, 515, C11,I bC+b, 575. UO 61,14 , 771, 010 bu_, 550-. UO bU4 , 900-. 00 606, 4010.00 bG7 , 0+51:1. UU bUb, 8:14. U4 605, 9~}4, CIU 603,900.00 bUb,15U.G0 607 , 125.0+0 bilb, 8~5, u0 60`1,::50. U0 bU7 , 4010, UU 602,850.00 bC-7 , 025. UU 604 , 075. ~)0 bf.14, 425.00 6112, b.`,U. 04 641 , 7.°111. C1C1 6{12 , 51+01.00 643 , ~U4. +i4 606,325,00 bUS, 954.010- 602, 175.0+0 CITY OF R1C1iF itl_ll P111VfVt5UIH I'll+nl.cl r a...•~•. --• •••-- SEMIANNUAL DEI+T SEkV.ICE FR017 9/01/84 DATE F'RINCIFAL kATE INTEREST TOTAL 3/01 /85 148, 754• C14 14F3, 751±. C14 9/ut/©J 2:,,uUU.VU . 8.5u1.1 148,/Su.UU 17j,750,1,i1) 3/01/86 147,697.50 147,b87.~0 9101/86 30,(/00.(10 8.5C+O 147,687. O 177,697.50 3/01/87 146,412.5CI 146~4t~.:10 9/1+1/97 ~0,400.1~0 B•3C14 146, 412, 5C/ 176,412.5ir .. 3/O1 /88 14°1, 1 ~7. ~+> 1 4~, 1 ~7. S4 9/01/88 33,U0Cr.IJO 9.54v 145, 1 .7.50 180, 1 X7.50 3/01/89 143,650.40 143,654.00 9/01/89 40,000.00 8•~0U 14~,6.:/4•CI/) 183,650. U0 3/01/90 .141,954.00 141,950.00 9/01/90 40,000.00 8.504 141,9Fi0•U4 181 ,950. U0 3/01 / 91 140 ,::SCI.00 140 , 250.00 9/1)1/91 45,41)0.40 8.501j 144,251).110 185,251/•g0 ' 3/01/92 i~•9,~7.~4 !39,337.:10 9/01/92 ;10,044.00 8.5uu 1r9,3:7•JO 188,337.54 3/01/93 t36,212.~4 136,212.50 9/01/93 55,4/.10.04 8.~0Ct 1 ~b,212.50 191,212.;,0 3/01/94 133,875. up 133,975. U0 9/111/94 55,004.00 8.5u0 133,67 :. U4 169,67:,.00 ~ 3101/93 131,57.54 131.,537.50 9/01/9:, 60,000.00 8.500 311,537. SCI 191,5Y7.50 3101/9.6 129,987.5(1 128,987.5+) 9/01/96 65,01J0.00 8.5(10 128,9E17.50 193,997.50 3/01/97 ~ 1~6,2~5.41) 12b,2~5.U0 9/111 /97 - 75, 1)114.. 44 e• J44 126, 2LJ. 114 : 111 , 223. 114 3/41/98 12~,4Z7.54 123,037.54 9/1 /1/98 80,000.(10 B.:,C10 123.037.30 x13,037.50 • . 311)1/99 119,617.50 119, 637. 5U 9/U1 /99 85,0110.04 8.,;,01} 119,6?7.50 244,bz7.5CI 3/41/ O 116,025.0(1 ,.116,.025.00 9/01/ it 95,000.00 8•~C10 IIb,U25.4Cr 211 ,t1^c`i.44 3/01/ 1 11.1,987.50 ` ` 111'987.50 9101/ 1 i05,1C10.00 8.500 111,987.54 216,987.50 3/Ui/ 2 1u7,S25.0u 1u7,5~5.40 • 9 / u / / 2 1 14 , Oi10, u0 8. ;/I.u:t 107 , 525.1!0 • 217 , 523.00 3101 / S 10''. , 950. 4U ~ 1 C+2 , 850.00 9141/ 3 1211,111)4.1.14 9.,°111W 11)2,951.1,01.1 22.,954.44 3/01/ 4 97,7:.0. G4 97,7:.11.04 9/1)1/ 4 134,0C14.4ti1 8..:;CII;I 97,754.114 .2%,750-•4it 3/01 / ~ 92, _'25. (11,1 92, 225: 4f! 9101 / S 14J, null. t)O 8. SUu y~ , 225.1!u 237, 223.40 3/01/ 6 86,1;162.:.+:1 86,062.54 . 9/41/ b 155,uu0.4U B.:.CIC1 06,462,1) 241,462.50 3/011 7 79, 475. IJC1 79, 475. (ICI 9/C11 / 7 174, 001:). 40 B. 544 79, 473. ui1 249, 475.0G 3/Ol/ 8 72,2:10,00 72,250.00 9 / U 1 / 8 3 85 , Uu4.40 9. 50u 7" 254. u4 257 , 25fi. 00 3/01/ 9 64,~~87.SU b4,~B7.50 9/01/ 9 2U0,000.G4 9.5UG 64,87.54 264,:97.54 3/01/10 X5,697.50 55,997.50 9/Gi/10 220,000. u0 8.5uu 55,987.5u 275,887.51! 3/O1/11 46,::77.:,0 46,537.50 9/01/11 24U,Qi10.40 8.5(1(1 46,57.54 296,537.5(1 3/01/12 ~b,:~7.50 36,3:7.51) 9101/12 260,40(/.00 8.5it0 X6,3:7.54 296,337.0 3/O l / 13 •2:+,87.50 2:,, 297.54 9/41/1Z 29:1.,O4u.04 8.54u 25,a97.5u 210,297.54 3/01/14 11,175.44 13,175.110 9/41!14 310,(140.110 8.54(1 13,175.1)11 323,17:1.40 TOTAL 3,500,400.00 6,318,9+)0.411 9,818,9(10.00 ACCRUED TMF:U 9141 /94 i1. CIU C>• Uv NET COST 6,318,940.01) 9,818,900.00 AVERAGE COUPON 8.540 60ND YEAkS 74,~40.U4fi AVERAGE LIFE 21.244 FREPAFED ON June 27, 1994 Prudential-6ache TIME 15:26: ~4 SrwnUss nr~NUnL .:2, SI:IU. U4 32:1, 37`r. C10 223,825. Ct0 325,273. U0 327,300.00 323,900.00 3~5, 3A1!. fJll 326,675.00 X27 , 42`,.00 322 , 7;,0.00 323 , 075 . CIO 322,473. U0 3::7 , 450.4Ct :26, 075. CIO. 324 , 2 75. CIC1 327,050..40 va8,975.u0 J2J , 1.150. 1,11;1 325, 7u1! • uu 325, 51;10. CIO. 29 , 4:10: c1o 3~7, 12`,.44 328,950,40 329,500.00 X28, 775• Ct4 331 , 7.75.011 332, 075.1)1) 332 , 67 ~. 1)1.1 335, J75• Ul! 336,350. U0 HOUSLNG AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 29 Agenda July 16, 1984 Housing and Redevelopment Authority Commissioners City of Richfield Subject: Project Plans for Market Plaza Development Dear Commissioners: Mr. Richard C. Krier, Vice President for the Derrick Companies, has submitted to the City and the HRA a set of project plans for the Market Plaza Redevelopment Project. This submission of project plans is submitted in accordance with Article IV of the contract for the sale of land for. private development between the City of Richfield and the developers. Article IV, Construction of Improvements, provides in Section 4.6 which is entitled Project Plans, the following: "Within g0 days after execution of this agreement by the developer and at least 30 days prior to the closing date, the developer shall submit detailed schematic project plans for the entire project. The project plans shall provide for the construction of the improvements, and shall be in conformity with this agreement, and all applicable state and local laws and regulations. The HRA shall approve the project plans in writing if, in the reasonable discretion of the HRA (a) the project plans conform to the"terms and conditions of this agreement including Exhibit H; (b) the project plans conform to all applicable federal, state and local law, ordinances, rules and regulations; (c) the project plans are adequate to provide for the construction of the improvements; and (d) the project plans do not provide for expenditures in excess of the funds available to the developer for construction of the improvements." This formal submission of the project plans does not require HRA approval at its meeting of July 16, 1984. Rather, copies of the plans will be presented to each member of the HRA and to various city staff personnel for review and comment first. We can schedule at a future HRA meeting a consideration for formal reply to the developers on our review of the project plans. Mr. Krier informs the writer that he will be present at the July 16, 1984 HRA meeting to review the highlights of the project plans. This presentation will be very similar to the presentation made to the City Council at the City Council meeting of July 9, 1984. HRA Letter No. 29 .2_ The city has twenty (20) days .from July 15th to complete our review and make a finding. as to their acceptability. If the HRA and staff do not act within this twenty (20) day period, the Project Plans are deemed to be approved according to the contract for sale of land between the HRA/City and developers. Therefore, this agenda item is to formally receive from the developer the .project plans. The HRA should now take these plans under consideration along with the city staff and schedule at some future meeting an agenda item to report on our findings after our review of the project plans. JCG/eja