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12-28-81 agenda 4Li'°. -. ~,~r-~ EfOUSING AND REDEVELOP~iF~'~'T AUTHORITY Office of Executive Director HRA Letter No . ~ ` Agenda December 28, 1981 ~~; Housing and Redevelopment - Authority Commissioners '„a~ ~ City of Richfield ;._ =~':•~ `• Dear Co~niss Toners Subject: First Amendment to Contract for Lake Shore Drive Condominiums Last Monday evening, the HRA considered an item on your regular agenda relating to the amendment of the development agreement between the HRA and ~=_-= Knudsen for the Lake Shore Drive Condominium Project. It became clear that ~~~'-~=~~~'~there were issues of concern to the attorneys that had not been resolved prior s*'~ : '~` ' to submittal to the HRA. The attached "first amendment" is the document which has been submitted ,~~ by the attorneys for Knudsen and approved by our attorneys for HRA consideration. In summary, the document preserves the rights of the HRA at the same time as complying with the requirements of the lending institution so that Knudsen Company can finalize its construction financing of $12,500,000. ~:t: ... ~. N.. _"f_. S. r.. ~ •'2i~ ~ %~~..• ., , ~.- ' =, ' , :~ _ .:i. • ,b: ~ .. C The City Attorney will be present at a meeting on Monday, December 28, at 6:45 p.m. to describe the agreement to the HRA. If you have any concerns before that time, please feel free to call Clayt or me. Res~~ectfiilly submitted, h~,,,~ ~) c~C.-..~~z-. - I~arl I~;ollenberger Executive Director cc: Director of Conunuiiit}' Development .~__ ,,r .,~ ~'. ~;4~'~' z i • ,;t: I ' ~° ~~~~,~ . p?~ '~ ~r r:~. BBF:crua 12-21-81 FIRST AMENDMENT TO CONTRACT FOR THE SALE OF LAND FOR PRIVATE DEVELOPMENT THIS AGREEMENT is made as of , 1°81, among KNUTSON CONSTRUCTION COMPANY, a Minnesota corporation ("Borrower"), THE HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF RICHFIELD, MINNESOTA, a Minnesota public body corporate and politic ("HRA") and FIRST NATIONAL BANK OF MINNEAPOLIS, a national banking association ("Lender" RE;C ITALS A. Borrower and the HRA have executed a Contract for the Sale of Land for Private Development (the "Contract"), dated October 12, 1981, relating in part to the premises described on Exhibit A attached hereto and made a part hereof ("Premises"). B. Borrower has applied to Lender for a construction mortgage loan (the "Loan") in the amount of Twelve Million Five Hundred Thousand and No/100 Dollars ($12,500,000.00), to be evidenced by Borrower's Promissory Note and secured by a Mortgage on the Premises. The obligation of the Lender to advance funds under the Loan is subject to the condition precedent (among others) that the lien of the Mortgage be a first lien upon the Premises. C. The HRA agreed in the Contract, Section 7.6, to subordinate its rights under the Contract to the rights of any mortgagee who finances construction upon the Premises. D. It is the mutual desire and intention of the parties hereto, and the purpose of this Agreement, to amend certain provisions of the Contract in order to clarify which obligations of Borrower as Developer under the Contract will be binding upon Lender, its successors and assigns, if Lender becomes the owner of the Premises by reason of a foreclosure or a deed in lieu thereof. NOW THEREFORE, in consideration of the Recitals and of the mutual covenants contained herein and of Cne Dollar ($1.00) and other good and valuable consideration paid by each of the parties hereto to the other, the receipt of which is hereby acknowledged, the parties hereto agree as follows: 1. If, and only if, Lender becomes the owner of the Premises by reason of a foreclosure or a deed in lieu thereof, then Lender, its successors and assigns, shall be obligated only to perform the Developer's obligations under the following sections of the Contract, to the extent that the same have not been performed by Borrower: (a) Section 3.1 through Section 3.20 inclusive; (b) Section 4.4 through Section 4.7 inclusive; (c) Section 5.1; and (d) Section 6.1. -2- In all other respects, the Contract is and shall be subordinate to the Mortgage, and the Mortgage is and shall be prior and superior to the Contract. In such event, the HRA hereby waives performance by Lender, its successors and assigns, of any and all obligations of Borrower under the Contract, except for Borrower's obligations as Developer under the following sections of the Contract, to the extent that the same have not been performed by Borrower: (a) Section 3.1 through Section 3.20 inclusive; (b) Section 4.4 through Section 4.7 inclusive; (c) Section 5.1; and (d) Section 6.1. 2. The HRA agrees to accept performance by Lender as performance by Borrower under the Contract, provided that Lender complies with the following requirements after an Event of Default by Borrower under the Contract: Lender shall either (a) begin to perform Borrower's obligations under the Contract, or (b) begin efforts to acquire possession of the Premises by commencing a court action or a mortgage foreclosure by advertisement, within sixty (60) days of the date Lender receives notice of Borrower's default under the Contract. If Lender decides to acquire possession of the Premises by foreclosure, Lender'shall begin performance of those of -3- Borrower's obligations which are binding upon Lender pursuant to Section 1 hereof by the date which is sixty (60) days after the date when Lender acquires possession of the Premises. The HRA agrees not to exercise any of the remedies available to it as a result of Borrower's default under the Contract unless and until Lender fails to comply with all of the requirements set out in this Section 2. 3. The HRA hereby recognizes and approves of Lender as the holder of a mortgage upon the Premises, and agrees that Lender shall have all of the rights provided in the Contract for the holder of a mortgage authorized or approved by the HRA. 4. The last sentence of Section 7.5 of the Contract is hereby deleted, and the folowing is substituted in lieu thereof: If, within seven (7) days after the mailing of such notice with respect to any monetary default, or within fourteen (14) days after the mailing of such notice with respect to any other default for which notice is required (provided that if additional time is needed to cure such default, such additional time shall be allowed as long as all efforts and diligence are used to cure such default during the additional time) the HRA cures the default, then the holder shall pursue none of its remedies under the financing based upon the said default of the Developer. 5. If the HRA shall deliver any notice or demand to Borrower with respect to the Contract, the HRA shall at the same time forward a copy of such notice or demand to Lender. -4- y ;~ ti 1 • 6. Any notice required or permitted to be given under this Agreement shall be deemed to have been given on the date the same is deposited in the United States mail, certified or registered, postage prepaid, addressed as follows: If to Borrower: Knutson Construction Company 17 Washington Avenue North Minneapolis, Minnesota 55401 Attention: John Curry If to HRA: Executive Director The Housing and Redevelopment Authority of the City of Richfield, Minnesota 6700 Portland Avenue South Richfield, Minnesota 55423 If to Lender: First National Bank of Minneapolis First Bank Place Minneapolis, Minnesota 55480 ATTENTION: Paul Bauer, Real Estate Department Any party may change its address for the purpose of notices by giving written notice to the other parties not less than ten (10) days prior to the effective date of the address change. 7. The HRA hereby recognizes and approves of the development of the Premises as a 178-unit condominium project. 8. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. -5- R ~. KNUTSON CONSTRUCTION COMPANY By Its And Its THE HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF RICHFIELD, MINNESOTA By Its Executive Director And Its Commission Chairman FIRST NATIONAL BANK OF MINNEAPOLIS By Its • IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed as of the day and year first above written. -6- STATE OF MINNESOTA ~ ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of 1981, by ' and , the and respectively, of KNUTSON CONSTRUCTION COMPANY, a Minnesota corporation, on behalf of the corporation. STATE OF MINNESOTA ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 1981, by and the Executive Director and Commission Chairman, respectively, of THE HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF RICHFIELD, MINNESOTA, a Minnesota public body corporate and politic, on its behalf. STATE OF MINNESOTA ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of 1981, by the of FIRST NATIONAL BANK OF MINNEAPOLIS, a national banking association, on behalf of the association. -7- RXHTRTT A Legal Description Lots 5 to 10 inclusive, Block l; Lots 6 to 15 inclusive, Block 3; That part of vacated Graham Avenue and vacated Circle Place lying between the Southerly line of W. 66th Street and a line drawn from the most Easterly corner of said Lot 6, Block 3 to a point on the Southeasterly line of said Lot 10, Block 1 distant 123.34 feet Southwesterly of the Northeasterly corner thereof; That part of vacated Auto Lane lying between the Southerly line of W. 66th Street and the Northeasterly extension of the Southeasterly line of said Lot 15, Block 3; That part of the adjoining vacated South 20 feet of W. 66th Street lying between the extensions across it of the East and West. lines of said Lot 11, Block 3; That part of the vacated South 20 feet of adjoining W. 66th Street lying between the extensions across it of the Easterly and Westerly lines of said Lot 12, Block 3; all in Fairwood Shores, According to the plat thereof on file and of record in the office of the Registrar of Titles, in and for Hennepin County, Minnesota. Permitted Encumbrances i 1. Subject to minerals and mineral rights reserved by the State of Minnesota. (As to Lot 9, Block 3; Lot 14, Block 3; and Lots 12 and 13 and that part of vacated South 20 feet of adjoining West 66th Street, lying between the extensions across it of the Westerly and Easterly lines of said L,ot 12, Block 3) 2. Subject to an easement for highway purposes as shown in Deed Document No. 1442728. (As to Lots 6, 7 and 8, Block 1) 3. Subject to a perpetual easement for street and utility purposes as shown in Deed Document No. 1442734. (As to Lot 5, Block 1) 4. Subject to a perpetual easement for public street purposes as shown in Deed Document No. 1443880. (As to Lot 8, Block 3 and part of vacated Auto Lane) 5. Subject to a perpetual easement for public street, _ sidewalk and landscaping purposes as shown in Deed _ Document No. 1443883. (As to part of vacated 66th Street adjoining Lot. 11, Block 3) 6. Subject to a perpetual easement for public street, sidewalk and landscaping purposes as shown in Deed Document No. 1443884. (As to part of vacated 66th Street adjoining Lot 12, Block 3) 7. Subject to a perpetual easement for drainage purposes as shown in Deed Document No. 1443886. (As to Lot 15, Block 3) 8. Subject to a perpetual easement for public street purposes as shown in Deed Document No. 144388E. (As to part of vacated Auto Lane) 9. Subject to perpetual easements for public street, sidewalk and landscaping purposes to permit improvements to W. 66th Street over and above vacated Graham Avenue, vacated Circle Place and vacated Auto Lane as shown in Order Document No. 1442733. HOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 48 Agenda December 21, 1981 Housing and Redevelopment Authority Commissioners City of Richfield Dear Commissioners: Subject: First Amendment to the Developer's Agreement with Knutson Companies The Knutson Companies is scheduled to close on their construction financing loan with the First National Bank of Minneapolis on Wednesday, December 23. The lender has indicated there is a need to modify certain provisions of the developer's agreement before the loan will be closed. The modifications are intended to clarify the responsibilities of the lender if the lender becomes the owner of the project. The attached agreement is being presented for your review and consideration for adoption. Representatives of the developer and lender will be present at the meeting. Following is a discussion of the major points of the amendment. Introduction `1'he lender is made a party to the developer's agreement and the HRA subordinates its rights to the lender. Section 1 In this section, the lender would not be responsible for the soil correction indemnity. That is, where the developer was required to indemnify and hold the HRA and City harmless if anything happened to the building as a result of improper soil correction activities, the lenders would not have this obligation if they assumed ownership. The developer has a $5,000,000 insurance policy to cover damage claims. and all of the soil correction work has already been completed so this should cause no problems to the HRA. The lender does not wish to be subjected to this section because they were not involved in the project prior to the construction loan closing, when the soil correction work was initiated and completed. The developer will present a letter to the HRA indicating that the soil correction work has been completed. The developer would remain responsible for any damage from improper soil correction. HRA Letter No. 48 Section 2 December 21, 1981 . Section 9.1 of the developer's agreement defines developer defaults. Section 9.2 indicates the remedies available to the HRA if there is a default. The developer is given 30 days to correct a default after receiving notification from the HRA. The lender is simply seeking more time than the 30 days to correct defaults. Section 3 ~1'he HRA is approving of the lender . Section 4 Section 7.5 of the developer's agreement requires notification of the HRA if there is a default in financing. The HRA is permitted to cure any default within 30 days. The lender is proposing a seven and fourteen day time period which would conform with the terms of the mortgage. This should cause no problems. Section 5 and 6 The lender is included as a receiver of official notices. • It is recommended that the HRA approve the First Amendment to the developer's agreement. KN/sh -2- Respectfully submitted, ~t. ~5._ ~~i ALL,.',.-.,~: ~'' ~. Karl Nollenberger Executive Director cc: Community Development Director Housing and Redevelopment Coordinator _ _ - .- r~ is t ~.Zr,~-a i 2 -18 - 81 ~.!~: ` ~ (~~-~ ~- • FIRST AMENDMENT TO CONTRACT FOR THE ~ t, V ~ NT THIS AGREEMENT is made as of , 1°81, among KNUTSON CONSTRUCTION COMPANY, a Minnesota corporation ("Borrower"), THE HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF RICHFIELD, MINIv'ESOTA, a Minnesota public body corporate and politic ("HRA") and FIRST NATIONAL BANK OF MINNEAPOLIS, a national banking association ("Lender"). RECITALS: A. Borrower and the HRA have executed a Contract for the Sale of Land for Private Development (the "Contract"), dated October 12, 1981, relating in part_to • the premises described on Exhibit A attached hereto and made a part hereof ("Premises"). B. Borrower has applied to Lender for a construction mortgage loan (the "Loan") in the amount of Twelve Million Five Hundred Thousand and No/100 Dollars ($12,500,000.00), to be evidenced by Borrower's Promissory Note and secured by a Mortgage on the Premises. The obligation of the Lender to advance funds under the Loan is subject to the condition precedent (among others) that the lien of the Mortgage be a first lien upon the Premises. C. The HRA agreed in the Contract, Section 7.6, to subordinate its rights under the Contract to the rights of any mortgagee who finances construction upon the Premises. D. It is the mutual desire and intention of the parties hereto, and the purpose of this Agreement, to amend certain provisions of the Contract in order to clarify which obligations of Borrower as Developer under the Contract will be binding upon Lender, its successors and assigns, if Lender becomes the owner of the Premises by reason//~~of a foreclosure or a deed in lieu thereof. SNOW THEREFORE, in consideration of the Recitals and of the mutual covenants contained herein and of One Dollar ($1.00) and other good and valuable consideration paid by each of the parties hereto to the other, the • receipt of which is hereby acknowledged, the parties hereto agree as follows: 1. If, and only if, Lender becomes the owner of the Premises by reason of a foreclosure or a deed in lieu thereof, then Lender, its successors and assigns, shall be obligated only to perform the Developer's obligations under the following sections of the Contract, to the extent that the same have not been performed by Borrower: (a) Section 3.1 through Section 3.20 inclusive; ~ . ~- y.~ a,,~ -s~~ e.o~~.-`.., -- (b) Section 4-~ through Section 4.7 inclusive; ~c ~s~~~ ~~ hw ( d ) Section 5.1. Section 6.1. -2- In all other respects, the Contract is and sha_1 be • subordinate to the Mortgage, and the Mortgage is and shall be prior and superior to the Contract. The HRk hereby waives performance by Lender, its successors and assigns, of any and all other obligations of Borrower under the Contract. ~ <r;`-F 2. The HRA agrees to accept performance by ~ ~~ ',~ ~I ,t 9,~,e~ Lender as performance by Borrower under the Contract, ~- ~~ provided that Lender complies with the following obi ; ~F requirements after an Event of Default by Borrower under the Contract: Lender shall either (a) begin to perform Borrower's obligations under the Contract, or {b) begin ~~ • efforts to acquire possession of the Premises by commencing a court action or a mortgage foreclosure by }1~i`~'~~ advertisement, within sixty (60) days of the date Lender '~a~~-S receives notice of Borrower's default under the Contract_~ 5~~~ If Lender decides to acquire possession of the Premises by foreclosure, Lender shall begin performance of those of Borrower's obligations which are binding upon Lender pursuant to Section 1 hereof by the date which is sixty (60) days after the date when Lender acquires possession of the Premises. The HRA agrees not to exercise any of the remedies available to it as a result of Borrower's default under the Contract unless and until Lender fails -3- • to comply with all of the requirements set out in this Section 2. 3. The HRA hereby recognizes and approves of ,c ~`~ Fender a~ the holder of a mortgage upon the Premises, and c~ ,rte agrees that Fender shall have all of the rights provided in the ~°ontract for the holder of a mortgage authorized or approcsed by, the HRA.. 4. The last sentence of Section 7.5 of the •r j ^q~ ~ . I 5 ,f `- ~' • Contract is hereby deleted, and the folowing is substituted in lieu thereof: If, within seven (7) days after the mailing of such notice with respect to any monetary default, or within fourteen (14) days after the mailing of such notice with respect to any other default for which notice is required, the HRA cures the default, then the holder shall pursue none of its remedies under the financing based upon the said default of the Developer. 5. If the HRA shall deliver any notice or demand to Borrower with respect to the Contract, the HRA shall at ~ the same time forward a copy of such notice or demand to "Fender. Ev Any notice required or permitted to be given If to Borrower under this Agreement shall be deemed to have been given on the date the same is deposited in the United States mail, certified or registered, postage prepaid, addressed as follows: Knutson Construction Company 17 Washington Avenue North Minneapolis, Minnesota 55401 -4- ~, ~~' ~~ '~ I y` C ~r ,., • If to HRA: Executive Director The Housing and Redevelopment Authority of the City of Richfield, Minnesota 6700 Portland Avenue South Richfield, Minnesota 55423 If to Lender: First National Bank of Minneapolis First Bank Place `; Minneapolis, Minnesota 55480 ~~ ATTENTION: Paul Bauer, Peal G Estate Department Any party may change its address for the purpose of notices by giving written notice to the other parties not less than ten (IO) days prior to the effective date of the address change. 7. The HRA hereby recognizes and approves of the ~ development of the Premises as a 178-unit condominium project. 8. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed as of the day and year first above written. KNLTSON CONSTRUCTION COMPANY By Its • -5- And • Its THE HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF RICHFIELD, MINNESOTA By Its Executive Director And Its Commission Chairman FIRST NATIONAL BANK OF MINNEAPOLIS By Its • STATE OF MINNESOTA ~ ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of 1981, by and the and respectively, of KNUTSON CONSTRUCTION COMPANY, a Minnesota corporation, on behalf of the corporation. -6- STATE OF MINNESOTA ) • ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day cf 1981, by and the Executive Director and Commission Chairman, respectively, of THE HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF RICHFIELD, MINNESOTA, a Minnesota public body corporate and politic, on its behalf. STATE OF MINNESOTA ) ss. COUNTY OF ) The foregoing instrument was acknowledged before me this day of 1981, by the of FIRST NATIONAL BANK OF MINNEAPOLIS, a national banking association, on behalf of the association. -7- EXHIBIT A • Legal Description Lots 5 to 10 inclusive, Block 1; Lots 6 to 15 inclusive, Block 3; That part of vacated Graham Avenue and vacated Circle Place lying between the Southerly Line of ~v, 66th Street and a line drawn from the most Easterly corner of said Lot 6, Block 3 to a point on the Southeasterly line of said Lot 10, Block 1 distant 123.34 feet Southwesterly of the Northeasterly corner thereof; That part of vacated Auto Lane lying between the Southerly line of W. 66th Street and the Northeasterly extension of the Southeasterly line of said Lot 15, Block 3; That part of the adjoining vacated South 20 feet of W. 66th Street lying between the extensions across it of the East and West lines of said Lot 11, Block 3; That part of the vacated South 20 feet of adjoining W. 66th Street lying between the extensions across it of the Easterly and Westerly lines of said Lot 12, Block 3; all in Fairwood Shores, According to the plat thereof on file and of record in the • office of the Registrar of Titles, in and for Hennepin County, Minnesota. Permitted Encumbrances 1. Subject to minerals and mineral rights reserved by the State of Minnesota. (As to Lot 9, Block 3; Lot 14, Block 3; and Lots 12 and 13 and that part of vacated South 20 feet of adjoining West 66th Street, lying between the extensions across it of the Westerly and Easterly lines of said L.ot 12, Block 3) 2. Subject to an easement for highway purposes as shown in Deed Document No. 1442728. (As to Lots 6, 7 and 8, Block 1) 3. Subject to a perpetual easement for street and utility purposes as shown in Deed Document No. 1442734, (As to Lot 5, Block 1) 4. Subject to a perpetual easement for public street purposes as shown in Deed Document No. 1443880. (As to Lot 8, Block 3 and part of vacated Auto Lane) • • I. 5. Subjec~ to a perpetual easement for public street, sidewalk and landscaping purposes a s shown in Deed Document No. 1443883. (As to part of vacated 66th Street a djoining Lot lI, Block 3) 6. Subject to a perpetual easement for public street, sidewalk and landscaping purposes a s shown in Deed Document No. 1443884. (As to part of vacated 66th Street a djoining Lot 12, Block 3) 7. Subject to a perpetual easement for drainage purposes as shown. in Deed Document No. 14438 86. (As to Lot 15, Block 3) 8. Subject to a perpetual easement for public street purposes as shown in Deed Document No. 1443886. (As to part of vacated Auto Lane) °. Subject to perpetual easements for public street, sidewalk and landscaping purposes t o permit improvem ents to W. 66th Street over and above vacated Graham A venue, vacated Circle Place and vacated Auto Lane as shown in Order Document No. 1442733. • MOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 47 Agenda December 21, 1981 housing and Redevelopment Authority Commissioners City of Richf field Dear Commissioners: Subject: Analysis of Renewal Potential, 76th Street/Lyndale Avenue Area During the past few years, the city has embarked upon various improvements to Lyndale Avenue. These improvements, completed and planned are to occur in three phases: Phase I: 64th Street to Lake Shore Drive (completed in 1981) Phase II: Lake Shore Drive to 74th Street (scheduled for 1982), and Phase III: 74th Street to I-494 (programmed for planning in 1982). • The chase i;~I improvements will impact upon adjacent land uses, and existing on-street parking in the area ,of 76th Street and Lyn- dale Avenue, and possibly the viability of some businesses within this area. The future of the area can be assured only if both the businesses and local units of government, such as the city and the HRA, work together to resolve the issues which may arise. For pur- poses of this report, the 76th Street and Lyndale Avenue area is generally defined as that area bounded on the Nest by I-359, on the south by I-494, on the east to the non-residential uses adjacent to I-494, and on the north to 74th Street. Recent actions taken by the HRA, the City Council anc the Planning CGnun1SS~On i_~dic~.te an interest in the area. In July, 1930, the HRA identified 76th Street and Lyndale Avenue as an area warranting study for possible rehabilitation. Earlier this year, the city council considered priority activities for the city. Activities which ranked high included completion of Lyndale Avenue improvements, expansion of the tax base and encouragment of devel- pr^ent of the Lyons and Erickson properties which are adjacent to I-35W. The planning commission recommended that $492,000 be set aside to complete the improvements on Lyndale Avenue from 74th Street to I-494 in 1983. The city council has approved funding in the 1983-87 Capital Improvement Program for the improvements from 74th Street to I-494 in 1983. Also, $50,000 has been • designated in 1982 for planning purposes and $442,000 in 1983 for construction. (These monies would come from Municipal State Aid Street funds and may only be used for street improvement planning and design work, and construction). Preliminary planning on the HRA Letter No. 47 -2- December 21, 1981 ~'" street improvements for Lyndale Avenue is presently underway. A cursory examination of the area indicates that there are a number of problems and opportunities in the area which may justify rehabilitation activities. Sorne of the problems are listed below: I. PROBLEMS A. Land Use 1. Land Use Conflicts - Commercial/Residential a. Commercial uses abut single family residential uses b. Minimum buffering or screening c. No traffic separation (shared alleys, traffic short-cuts through residential areas) 2. Several parcels of land are utilized below their capacity. Some examples of underutilized land are: a. Lyons parcel (southeast quadrant of 76th Street and I-35W) b. Car wash (near 77 1/2 Street and Dupont Avenue) c. Vacant land (77th Street and Fremont Avenue) • 3. Overutilization of land is also a problem: a. Strip commercial uses along the west side of Lyndale Avenue, very limited parking, no buffering from adjacent residences, shared alley, lack of pedestrian amenities. 4. Fragmented land use or property developed without regard to adjacent development, resulting in: a. inefficient land use, inefficient parking, and pedestrian and traffic conflicts. The area adjacent to Lyndale Avenue north of 76th Street is an example of this problem. B. Transportation/Parking 1. 76th/Lyndale Avenue intersection has a high accident rate (greatest number of accidents in the city, partially because of antiquated signals and no left turn lanes or signals). Both 76th Street and Lyndale Avenue carry very high traffic volumes. 2. There are traffic flow/parking conflicts due to a 'high traffic volume on Lyndale, on-street parking, frequent curb cuts, cars parking on right-of-way and awkward off-street parking layouts. There is also a shared commercial/residential a'~lay. HRA Letter No. 47 -3- December 21, 1981 3. Pedestrian circulation problems exist because de- fined sidewalks and crosswalks are very limited. Cars parking on the right-of-way conflict with pedestrian movement. C. Environmental 1. Lake of Visual Unity a. Signs are many in number and are of varied sizes. Their designs, or lack thereof, fight for attention from the viewer and become ineffective. They present a poor aesthetic appearance. b. Buildings have different, often unrelated, facade treatments and varying setbacks which tend to fragmentize uses. 2. Commercial Definition Lacking a. There is inadequate separation between commercial and residential uses in certain uses. This may have a negative effect on adjacent residential property, and may result in deterioration and disinvestment. 3. Lack of Pedestrian Amenities • a. A lack of amenities, such as sidewalks, street furniture, landscaping, and bus shelters, dis- courage foot traffic between businesses. b. Hazardous walking conditions exist especially where buildings are close to the right-of-way and cars are parking on the right-of-way. II. OPPORTUNITIES A. Municipal State Funds are presently available for street improvements and Lyndale Avenue can be upgraded with these funds. B. Financing renewal, through Tax Increment Financing and Industrial Development Revenue Bonds may be appropriate (see attached discussion of financing for details.) Tax increment financing would be administered under a new law which is different from that used in the L/H/N Redevelopment Project. C. Vacant and underutilized land could be made available to support new development. D. Because of the problems, the business community in the area is willing to discuss and attempt to identify solutions. HRA Letter No. 47 -4- December 21, 1981 The street improvement project scheduled for 1983 provides an opportunity to address the problems of this area. If they are not dealt with, the widening of the street and elimination of on-street parking could be detrimental to viability of the commercial area. Vacant and underutilized land may make public • financing of some aspects of the renewal process more feasible. The problems are difficult and are of such a magnitude that the private sector along cannot adequately address them. It will take the cooperation of both the private and public sectors. Such a partnership will make it possible to deal with the problems in a comprehensive manner. To more fully analyze the feasibility of embarking on a system- matic comprehensive treatment plan, the staff feels that a prelim- inary study should be completed. This would involve the staff meeting with people of the area to more fully assess needs. Eased on this preliminary analysis, the HRA could authorize preparation of a detailed action plan. It is recommended that the HRA authorize the staff to accept proposals to undertake a preliminary study to analyze feasibility of redevelopment activities in this area, to be financed by the funds available in the L/H/N capital fund. Respectfully submitted, • ` / ~, Karl Nollenberger Executive Director cc: Community Development Director Housing and Redeveloprrlent Coordinator FINANCING RENEWAL To successfully treat the problems and take advantage of the opportunities in the area, financing tools are needed. Renewal pf private property may be facilitated, utilizing two "tools" currently being applied in the LHN: tax increment financing . (TIF) and industrial development revenue bonds (IDRB's). TIF TIF laws have been substantially modified since the LHN was established in 1975. A brief summary of the major points under the new tax increment law (Chapter 273.71) follow: - The project area must meet the qualifying conditions under Chapter 462. The criteria is concerned with build- ing conditions and blighting influence. (The LHN was qualified under this criteria). - Within the project, sub areas to be renewed and financed with TIF are known as districts. There are three different types of districts each with their own citeria: • A development district involves the removal of blighted improvements to make it buildable (500 of the buildings must be substandard or 200 of the buildings must be sub- '. standard and 30o must be removed to elimate blighting conditions). Any new use may replace the blight. Tax increment bond amortization is limited to 25 years. A housing district does not have to meet any qualifying conditon test, but the new development must include housing for low and moderate income persons or families. ', Bond amortization is limited to 25 years. An economic development district may be established if it meets one of the following tests: Commerce, industry or manufacturing would be discouraged from moving to other states; or employment opportunities will be increased; or the tax base will be preserved or enhanced. Any type of reuse is acceptable except the bond amortiza- tion is limited to 8 to 10 years. - Properties within a district which are not treated within 5 years of the certification of the project are deleted from the district. ~i - Administration costs are limited to 50 of project costs. ~~ - Without a developer's agreement, no more than 25% of land to be renewed can be purchased in a redevelopment district for housing and economic development districts, the limit is 100. _ the on final frozen) assessed The auditor may increase g ( ildin ermit was hich a bu I value for any project for w g p issued 13 months prior to certification of the district. - There must be a tax increment financing plan which includes: a statement of objectives a development program a finance plan which includes project costs, anticipated bonded indebtedness, duration of the district, revenue sources, base assessed value and captured assessed value - The school district and county must be made aware of the fiscal and economic impacts of the project. - The relationship of the district to fiscal disparities is defined--a contribution must be made either from the district or from the area of the city outside the project. - Pooling of the increments from each district within the same project is limited. (Pooling is a concept whereby a district generating an excess increment is "combined" with a district generating an insufficient increment. Pooling makes the increment deficient dis- trict f.easible,l. Similar districts may be pooled. Dis- similar districts may not be pooled. The above summary indicates that the use of TIF is more restrictive than our experience with the LHN and necessitates careful evaluation and planning prior to any use. IDRB' s The extent to which IDRB's may be appropriately used needs to be evaluated. They are especially appropriate for renewal activities which envision the construction of new commercial/ industrial facilities or the expansion of existing ones. These projects increase the number of employees, the payroll and tax revenues for the community. Such increases are necessary to meet the criteria the city must follow in con- sidering providing this type of financing. Generally rehabili- tation/renovation projects provide less significant increases in these three categories and often do not qualify for IDRB's. • HOUSIT?G AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 45 Agenda December 21, 1931 Housing and Redevelopment Authority Commissioners City of Richfield L7ear Commissioners: Subject: Godfather Block Moratorium Study • On October 20, 1980, the HRA adopted a resolution requesting the city council to consider imposing land use controls c:. the "Godfather Block." The council responded by placing a moratorium on building construction in that area and directing the staff to study what sort of land use controls should be enacted in order to encourage unified development of the block as called for in the L/H/N Redevelopment Plan. The HRA action was based on the desire that development on this block should be integrated. The block is presently a "hodge- podge" of development. I+Iithout an overall development plan, prop- erties could be developed independent of one another without regard to potential development of the whole block. Most of the existing development is approximately 30 years old, although the 6dendy's Restaurant, constructed in 1978-79, represented a new cycle of de- velopment. Ho~~~ever, that development merely repeated the previous pattern of independent disjointed development of each parcel. Such development is an inappropriate and inefficient use of the land be- cause it fails to achieve aind generate the property tax revenues and employment opportunities it is capable of producing. Thus, without proper controls, the goal of large scale integrated develop- ment would be frustrated. The moratorium imposed by the city council will expire in January, 1982, but there is still a need for it. Both state la~~~ and the council ordinance provided for extension of the moratorium if it was deemed necessary. In addition, the council will be re- quested to initiate the rezoning of this property to a planned unit development commercial zone by referring the matter to the planning commission. It is recommended that the HRA adopt the attached resolution, requesting the city council to extend the construction moratorium for one more year. This will enable the appropriate studies to be completed so as to effectively implement the L/H/N Redevelopment Plan. Respectfully submitted, l Karl Nollenberger Executive Director KN/eja RESOLUTION NO. • • RESOLUTION RECOMMENDING EXTENSION OF TRANSITORY ORDINANCE NO. 16.69 WHEREAS, the City Council did on November 24, 1980 adopt Transitory Ordinance No. 16.69,placing a moritorium upon development on certain land within the city; and WHEREAS, prior to the adoption of such ordinance the H RA recommended to the council that the comprehensive plan and zoning controls of the city be amended so as to provide for development on the subject land as a unified and integrated project; and WHEREAS, the city is proceeding with its study and review of the subject site, and is in the process of examining a comprehensive plan which if adopted will lead to the creation and approval of controls which will result in the unified and integrated development in the subject land; and WHEREAS, as a result of expressions of interest by several developers the HRA believes that a market potential currently exists for the development of the subject property as a unified and integrated site; and WHEREAS, Ordinance 16.69 will expire on January 10, 1982 unless the council by resolution extends it; and WHEREAS, the HRA believes that additional time is necessary in order to adopt the comprehensive plan and official zoning controls. NOW THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield as follows: 1. The need to develop the subject land as a unified project continues to exist. 2. The E4:ec~~tive Director is hereby directed to request that the City Council extend Transitory Ordinance 16.69 for an additional 12 month period.by resolution of the council. Passed by the Housing and Redevelopment Authority of Richfield, Minnesota this 21st day of December, 1981. Thomas E. Harms, ATTEST: Michael Freeman, Secretary airman HOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter ~~o. 44 Agenda December 21, 1981 Housing and Redevelopment Authority Commissioners City of Richfield Dear Commissioners: Subject: Authorization to Purchase Property at 721 Graham Avenue In November, 1980, O. J. Janski and Associates made an in- spection and appraisal of the residential property located at 721 Graham Avenue. At that time, they valued the property at $71,000. Vernon Anderson, the then City Assessor, evaluated the property and suggested that it had a value of $72,000. These appraisals were considered by our review appraiser, who recommended that just compensation for the property be set at $71,000. On January 19, 1981, the HRA authorized the staff to negotiate • for acquisition of 721 Graham Avenue at a purchase price of $71,000. The property owner was not pleased with the HRA's purchase offer. In April, the o~aner hired Wiley Real Estate Appraisal and Consult- ing Service to conduct an appraisal which valued the property at $86,000. Our review appraiser indicated that the report justified a purchase payment of $77,000 at that time. For the ensuing eight months, however, the property awner refused to consider any offer to purchase the property for less than $86,000. s Eligibility for relocation benefits is established when an offer is made to purchase property. The HRA's relocation obligations include the adult children living with the property owner being eligible for benefits. Two adults have been relocated, they equally divided a $4,500 residential relocation payment. One of these adults also received a $7,500 business relocation payment for a janitorial serice which was operated from the home. This parcel is the last property on Graham Avenue which is not owned by the HRA, and is the only single family residence remaining in that area. The staff has spent considerable time in discussions with the owner, who is no~~~ agreeable to the following terms: $82,000 for purchase of the property; eligibility for up to $15,000 in reloca- tion benefits (mandated for all homeowners who become homeowners in a replacement dwelling); the right to purchase and remove the residence from the lot for one dollar provided that the move is HRA Letter No. 44 -2- December 21, 1981 completed by February 23, 1982; payment by the HRA of one-half of the cost of storage for the owner's personal property while the house is being moved, not to exceed $880; and payment for the cost of moving personal property, which is a standard benefit. Under this agreement, beginning in January, the owner would pay the HRA $100 per month for rental of the land. If the residence is not moved by February, 1982, it becomes the property of the HRA. As performance security, the HRA would retain $4,000 of the purchase price. Also, the HRA will not pay the owner for the cost of interim housing during the moving process. It is recommended that the HRA adopt the attached resolution, authorizing the purchase of property at 721 Graham Avenue and directing the Chairman and Executive Director to execute the pur- chase agreement as outlined above. Respectfully submitted, i ~` ~ ~., Karl Nollenberger Executive Director • cc: Community Director Housing and Redevelopment Coordinator KN/eja RESOLUTION NO. A RESOLUTION AUTHORIZING THE PURCHASE OF REAL PROPERTY AT 721 GRAHAM AVENUE WHEREAS, the Richfield Housing and Redevelopment Authority (H RA) desires to purchase certain real property pursuant to and in furtherance of the LHN Redevelopment Project heretofore adopted by the City of Richfield (the "City") and the HRA, said real property being described as follows: Lot 5, Block 3 Fairwood Shores Addition; and WHEREAS, the HRA has caused appraisals of the subject property to be made and has carefully considered such appraisals; and WHEREAS, the HRA has authorized the commencement of negotia- tions for the purchase of the real property described above; and WHEREAS, the HRA is authorized by Minnesota Statutes, Section 462.445 to purchase real property; and WHEREAS, funds to provide for the purchase of this property are available in the LHN Capital Fund, and WHEREAS, an agreement contains additional terms and conditions of the transaction; and WHEREAS, fair compensation for the interest of the HRA in the structure is for removal from the property and has also been determined. NOW, THEREFORE, BE IT RESOLVED by the Richfield Housing and Redevelopment Authority:. 1) The Executive Director is directed to execute a purchase agreement for the above property for Eighty-two Thousand and no/100 Dollars ($82,000.00). 2) The Chairman and Executive Director are authorized to execute an Agreement. 3) That the monies for the purchase of this property are to be borrowed from the L/H/N Capital Fund, for a period of three years. 4) That the Chairman and the Executive Director be, and hereby are authorized to execute, as agents of the Richfield Housing and Redevelopment Authority, an agreement (entitled "Loan Agreement") a copy of which is hereby given Clerk's File No. and is ordered placed on file. • r ..~ e ~'7 HOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 4~. Agenda I~o~re~5e"r"""fib , 1 981 Housing and Redevelopment Authority Commissioners City of Richfield Dear Commissioners: Subject: Bond Issue The attached schedule indicates a bond issue of $2,450,000 to be issued by the city for financing costs related to the Lake Shore Drive Condominium, Lyndale Garden Center, and the three houses on Graham Avenue behind the Star Auto building. The cost summary is as follows Project Costs $1,876,000 Issuance Costs 26,000 Dealer Discount 48,000 Capitalized Interest 500,000 Bond Issue $2,450,000 The project costs are made up of $1,350,000 for Lake Shore Drive condominium, $274,000 for Lyndale Garden Center, and $254,000 for the three houses on Graham Avenue. The capitalized interest relates almost entirely to the Lake Shore Drive condominium project since the garden center will yield taxes in 1983. The increment is sufficient by 1984 to cover all of these costs and sustain the debt service assuming a 2% inflation rate through the year 2000. It is recommended that the HRA adopt the attached resolution concerning the bond issue. Respectfully submitted, ~ ; Karl Nollenberger Executive Director w cc: Director Administrative Services Director Community Development `~ Housing and Redevelopment Coordinator c N v~b Finance Coordinator ~~' ~ ~'o ~' ~/. ~ N ` ~ ~a f ~ ~ E~TR.~CT OF MINUTES OF MEETING OF THE HOUSING AIJD REDEVELOPi~ENT AUTHORITY OF THE CITY OF RICHFIELD, HENNEPIN COUI~ITY., MIIINESOTA Pursuant to due call and notice hereof, a regular meeting of the Dousing and Redevelopment Authority of the City of ,Richfield was duly held on Monday, the 16th day of November, 1981, 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. * ~ RESOLUTIOTI NO. A P.ESOLUTION DETERi~~IINING THE NEED FOR FINAIICIIIG REQUIRING THE CITY COU~JCIL OF THE CITY OF RICHFIELD TO AUTHORIZE THE ISSUANCE OF GETIERAL OBLIGATIOi1 DEVELOPI~IETIT BOIIDS TO FIi1A%1CE PUBLIC REDEVELOPMENT COSTS IN THE LYidDALE-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 P•Zinnesota Statutes, Section 462.411 to 462.716 (the "Housing Act") duly adopted a Redevelopment Plan (the "Plan") for a redevelopment project described as the Lyndale-Hub-i~Iicollet Redevelopment Project (the "Project Area") and commonly referred to as the LHT~I Project. The Plan and the Project Area have been duly approved by the City Council of the City of Richfield (the "City") in accordance with the Housing Act. 1_,02. This Authority and the City have entered into a Tax Increment Agreement (the "Agreement") dated May 9, 1977 in accordance with the Housing Act and P~Iinnesota Statutes, Section 273.71 to 273.78, the Tax Increment Financing Act (the Housing Act and the Tax Increment Financing Act collec- tively referred to as the "Act") for the purpose of authorizing ,the issuance of general obligations 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 and related improvements (collectively "the 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. 3.02. The E~greement is hereby ratified and confirmed in all respects. 3.03. This Authority renews and reaffirms its statement in HRA Resolution iJo. 32 of i~1ay 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 ~zecutive 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 City of Richfield, P~linnesota this 16th day of November, 1981. Chairman Secretary • -3- aQ[~-"b~°»'!e~`ye,"~F->:-..~s'-,;~rw!ra.m~::~.,-.s~m«.:^rS•axv..^.... ~s-x +r;~.-+..~.+r.- ~*' -orc ~..-~'w~~ ~e.-., a:: .; s.n;.r.,.,~- ~,vr .rr a,.... ,t ~_+~,~.ba; m.^ -.~ s.~+rr.r_..~..r~.-.s, .,.~--s• STATE OF D'iINNESOTA ) COUNTY OF HEidT1EPIN ) SS. HOUSING AND REDS- ) VELGPi~IENT 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 extracts of minutes of the Housing and Redevelopment Authority of said City held on ~~Ionday, November 16, 1981, 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 $2,450,000 General Obligation Redevelopment Bonds of 1981 of the City. jaITNESS My hand officially as such Secretary and the seal of•the City this 16th day of November, 1981. Secretary City of Richfield, Minnesota (SEAL )