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02-02-81 agenda HOUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director HRA Letter No. 8 Agenda February 2, 1981 Housing and Redevelopment Authority Commissioners City of Richfield Dear Commissioners: Subject: Developer's Agreement for Lyndale Fruit and Vegetable Market, Inc. On December 27, 1979, the HRA held a public hearing on the sale of land to Lyndale Fruit and Vegetable Market, Inc. That _ public hearing was continued to January 14, 1980. On January 14, 1980, the HRA approved the disposition of property not yet owned by the HRA and a developer's agreement in reference to the Planned Unit Development of the Lyndale Fruit and Vegetable Mar- ket, Inc. Over the past year, the interest rate market has pre- vented the owners of the Lyndale Fruit and Vegetable Market, Inc. from pursuing the redevelopment which was approved in January, • 1980. However, due to a recent fire, the owners find themselves of having to begin construction immediately if they are to have any structure to operate in the spring of 1981. The proposed redevelopment includes the construction of a new facility on the site which is presently owned by the company. The construction necessitates HRA purchase and resale of the Adams Property located immediately north of the Lyndale Fruit and Vegetable Market. The property is identified as 6329, 6335 and 6340 Aldrich Avenue. The redevelopment in the Lyndale Market area is a key element to accomplishing the L/H/N redevelopment goals of: 1. Implementing the redevelopment project by utilizing the strengths of existing businesses; 2. Strengthening a business area which specializes in home improvement/garden type activities. The Lyndale Fruit and Vegetable Market, Inc. redevelopment proposal and the accomplishment of the above goals form a key strategy for a successful L/H/N redevelopment project. To help assure success of the proposed garden center redevelopment, the developer has: 1. Formulated a redevelopment plan which conforms sub- stantially with the L/H/N redevelopment plan; HRA Letter No. 8 -2- February 2, 1981 r 2. Met with the immediate neighborhood to discuss the plan; 3. Received favorable recommendations from the Richfield Planning Commission; 4. Submitted the plan to the city for PUD approval and received said approval; 5. Received approval from the Army Corp of Engineers, the Department of Natural Resources, Minnehaha Water Shed District, RING and CIC; 6. Received favorable approval from the State of Minn- esota for Industrial Development Revenue financing. The Adams property is identified in the L/H/N redevelopment plan as property to be acquired for this project. The potential use of the tax increment financing for the acquisition of the Adams property necessitates the HRA involvement in this project. - The developer's agreement which has been negotiated would sell the Adams property to Lyndale Fruit and Vegetable Market, Inc. for a price $200,000. If the HRA incurs expenses greater than that amount in the acquisition of the property, the tax increment bond could be sold with the additional tax revenue on the project being more than adequate to finance any conceivable additional cost. The total project envisioned by the developers will exceed • $1,100,000. The city council at their meeting on January 26, 1981 reviewed the Planned Unit Development and gave approval to the developer with certain stipulations. The city council also agreed to allow the developer to begin the footing and foundation work necessary at this time prior to approval of other aspects of the final plan. It is themcommendation of the city staff that the HRA de- clare its intent to sell to Lyndale Fruit and Vegetable Market, Inc. the Adams Property. It is also recommended that the sale of the property be conditioned upon the following: 1. The developer entering into a developer's agreement with the HRA for the redevelopment of the property. The developer's agreement would be similar to the developer's agreement put together for the K-Mart project and would include the following provisions: A. An agreement to purchase the property from the HRA for the amount of $200,000 once the HRA has purchased the property from the present owner. B. Provide a cash deposit to be used by the HRA in the Adams Property purchase. • C. Agree to redevelop all of the property in accordance with the proposed plan and develop- HRA Letter No. 8 _3_ February 2, 1981 ment schedule which is attached to this HRA letter, city ordinances and state laws. D. Agree to sell landscape easements along Lyn- dale Avenue to the City of Richfield for an amount of $55,000 and to reconstruct Aldrich Avenue by moving the cul-de-sac to the north through a special assessment project to be formulated by the city. E. Agree to execute an assessment agreement pro- viding a minimum market value on December 15, 1981 which shall be assessed for the property and improvements which would guarantee the in- crement needed by the city for this project. F. Agreement by the developer to purchase from the city a triangle of property necessary for the development in the amount of $10,000. G. Agree to give firm financial commitment to the HRA of the ability to finance the project no later than March 20, 1981 with the proviso that if this is not done the developer will forfeit the right to be paid for the Lyndale Avenue right of way easement area being sold • to the city. The HRA should declare its support for this proposal by instructing the Executive Director and the HRA Attorney to enter into a developer's agreement with the developer in line with the above stipulations. In addition, the HRA should give approval to an agreement concerning issuance of footing and foundation permits which would allow the developer to go forward with the construction of footings and foundations necessary for the con- struction of the proposed phases of the buildings. Those founda- • tions would not be allowed to be built any higher than the proposed finished grade of the project. That agreement would allow the developer to begin work tomorrow on the footings and foundations for the project. Respectfully submitted, 1V D K rl Nollenberger Executive Director KN/eja cc: City Attorney Director Community Development . Director Administrative Services City Council Housing and Redevelopment Coordinator Exhibit E SCHEDULE OF PHASE CONSTP.UCTI0~7 Improvement Begin End Phase I 2 south sales bldgs. 2f3/81 * 4/1/81 Phase II North sales bldg. 4/2/81 5/31/81 Phase III Greenhouses 6%I_/81 9/1/81 Phase IV Site improvements 2/3/81 * 12/15/81 * or upon the date this Agreement is executed, whichever comes later. • HGUSING AND REDEVELOPMENT AUTHORITY Office of Executive Director Agenda February 2, 1981 HRA Letter No. 7 Housing and Redevelopment Authority Commissioners City of_ Richfield Dear Commissioners: Subject: Lyndale Garden Fruit and Vegetable Market, Inc. Developer's Agreement Dear Commissioners: On January 26, 1981, the HRA met with the city council to hear a presentation for the reconstruction of the Lyndale Gar- den Center. At their meeting on February 2, 1981, the HRA will be presented with a developer's agreement for the project. The agreement will delineate the responsibilities of both the developer and the HRA. The primary role of the HRA will be to provide additional land area to the developer by purchasing the Adams property. During the week of January 19, 1981, an offer based on appraisal data was made to purchase the property and was subsequently rejected. It now appears that purchase of the property through eminent doirain may be necessary. On Febru- ary 17, 1981, the HRA may be requested to authorize the initiation of eminent domain and quick-take proceedings against this property to provide it to the developer by late summer. The developer's agreement will contain provisions for funding the purchase of this acquisition. Additional land area will be provided the developer by the sale of two small triangular parcels owned by the city. They contain approximately 11,250 and 1,842 square feet respectively and are located near Richfield Lake on the southern edge of the Garden Center property, and is land which now supports a growth of trees and grasses. There will be other major subject matters in the developer's agreement. The developer must provide evidence to the HRA of a commitment to finance the development through a tax exempt mort- gage, and a schedule for completion of construction. The devel- oper will also be required to provide a performance security re- lated to construction completion. Flowever, when tax exempt finan- ing is utilized, a separate performance guarantee ?~~t~~leen fi~,~ FIRA and the developer is of less significance because ~.ne lender who provides the mortgage for the project must be reasonably assured that the project will be completed and also requires the developer to maintain insurance on the improvements during HRA Letter ivo. 7 -2- February 2, 181 :?-°~u~ after construction. Because of this concern by the :3:~r1,d~{r ;,,n 3aat~ring the project completed and protected, the charnc.~~~ ~==?li . z:,-:~~`.<<:`e are considera~~-y reduced. c-,:, ,Y ,r4~~y; ~.~,~~r;i~kg , February 2 f 1 981 , the HRA will be p~~ r ? ,~1~?.t.~.r' s ac; re-emen* . The spec i-f ~.c t~es;*~~ ~a ;«. COnf±1t~~>nG i:? i ~ ~?c' T."C''~Tx ~y':+/ed -.:.i.. tr:.;=~:= time. ~; s~ _~t:~t}-11,1- ~,.:~Kb~s t=~~~~~ , -~ ' ~ `' ' i ~~ ~ ~ - Karl Nollenb~~g~r Executive Director KN/eja cc: Community Development Director Housing and Redevelopment Coordinator Administrative Services Director City Council City Attorney .. • CITY OF RICHFIELD, MINNESOTA Office of City Manager Council Letter No. 35 Agenda February 2, 1981 The Honorable ~~iayor and Members of the City Council City of Richfield Council Members: Subject: Lyndale Garden Fruit and Vegetable Market, Inc. Developer`s Agreement - On January 26, 1981, the HRA met with the city council to hear a presentation for the reconstruction of the Lyndale Gar- den Center. At their meeting on February 2, 1981, the HRA will be presented with a developer's agreement for the project. The agreement will delineate the responsibilities of both the developer and the HRA. The primary role of the HRA will be to provide additional land area to the developer by purchasing the Adams property. During the week of January 19, 1981,. an offer based on appraisal data was made to purchase the property and was subsequently rejected. It now appears that purchase of the property through eminent domain may be necessary. On Febru- ary 17, 1981, the HRA may be requested to authorize the initiation of eminent domain and quick-take proceedings against this property to provide it to the developer by late summer. The dev,eloper's agreement will ~~ntain provisions for funding the purchase of this acquisition. Additional land area will be provided the developer by the sale of two small triangular parcels owned by the city. They contain approximately 11,250 and 1,842 square feet respectively and are located near Richfield Lake on the southern edge of the Garden Center property, and is land which now supports a growth of trees and grasses. There will be other major subject matters in the developer's agreement. The developer must provide evidence to the HRA of a commitment to finance the development through a tax exempt mort- gage, and a schedule for completion of construction. The devel- oper will also be required to provide a performance security re- lated to construction completion. however, when tax exempt finan- ing is utilized, a separate performance guarantee between the HRA and the developer is of less significance because the lender who provides the rlortgage for the project must be reasonably assured that the project will be completed and also requires the developer to maintain insurance on the improvernents during ` ~ i Council Letter No. 35 -2- February 2, 1981 and after construction. Because of this concern by the lender in having the project completed and protected, the chances of failure are considerably reduced. On Monday evening, February 2, 1981, the HRA will be pre- sented with a developer's agreement. The specific terms and conditions will be reviewed at that time. respectfully submitted, ~,,~~~f _ Karl Nollenberger City Manager KN/eja cc: Community Development Director Administrative Services Director