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05-14-1984 SpecialCITY OF RICHFIELD SPECIAL MEETINGS CITY COUNCIL HOUSING AND REDEVELOPMENT AUTHORITY MAY 14, 1984 5:30 P.M. Mayor Hamilton called the meeting to order at 5:30 P.M. He announced that concurrent meetings of the Housing and Redevelopment Authority and the City Council were to be held to consider matters related to the redevelopment o_f the Godfather Block .and the L/HJN area. Council Members present: Ludeman, Bunce, Kirsch, Priebe, and Mayor Hamilton. HRA Members present: Hassenstab, Helmberger, Ludeman, Luettinger, and Chairman Harms. 1. Consideration of a Proposal by Market Piaza Corporation to • Enter Into a Developer's Agreement for a Mixed Use Development Project n the L H N Redevelopment Area. City Manager Cartwright introduced this matter and reported that a meeting had been held on May 10, 1984, with city staff and HRA Chairman Tom Harms and the development team proposed for the redevelopment of the Godfather Block. He said this included a new co-developer for the condominium component of the project, Arkell Development Corporation. Subsequent to that meeting, the developers had met with other members of the City staff to review fire prevention and planning considerations for the project. Mr. Cartwright said the development team that is now proposed includes the Arkell Development Corporation of St. Paul; the Health Central System, which would become involved in the marketing and management of condominium units; Krause- Anderson of St. Paul, which would be the construction contractor for the condominium project; Saunders-Thalden and Associates, Inc. of Minneapolis, architects; and the Northland Mortgage Company of Bloomington, which would place financing for the project. Mr. Cartwright stated that Arkell Development Corporation is involved in a residential redevelopment project in the City of St. Anthony, known as The Kensington, which has financing of $9.2 million. He further noted that prior to the Kensington project, Arkell Development Corporation has primarily been involved in condominium conversions. Mr. Cartwright said Mr. Dave Childs, St. Anthony City Manager, reported that while some problems had been encountered for that project {obtaining a large letter of credit, and a delay in getting pre-sales accomplished) he believed the project was moving along well overall. Mr. Cartwright noted that project marketing will be a key concern because it is necessary to get a 50~ pre-sale commitment on the condominiums before financing will be made final. The City Manager further stated that it is the staff recommendation that the City Council and HRA approve the development agreement, which would. include the Arkell Development Corporation as a co-developer. Roger Derrick, representing Market Plaza Corporation, introduced members of the proposed development team. John Arkell, Arkell Development Corporation, addressed the Council and the HRA, and reviewed his experience with other projects, including the Kensington of St. Anthony. Mr. Arkell said the condominium project marketing work would be done by the Health Central System. Gary Tushie, Saunders-Thalden and Associates, presented various drawings of the project, and commented on the impact on views from the Lake Shore Drive Condominiums, and the potential need for a vacation of Graham Avenue. He described the common areas that would be included in the building and the design of the condominium units. He noted that the building as proposed by Arkell is the same distance from the commercial building and apartments as was the building proposed by Knutson Companies. He said the development would include 147 units ranging from 1- bedroom units to 2-bedroom units with a loft, and the building would have a total height of 12 stories plus a roof (loft) area. Discussion followed concerning access to the condominium building. A discussion occurred concerning the sales commitment necessary for the building to proceed. Mr. Arkell said that the pace of sales commitments will depend on how accurate the waiting list for the Lake Shore Drive Condominium building is, and how willing those people might be to buy a unit in the new building. He said the average price of the units is $79,000, but they range from $57,000 to over $100,000. Dick Krier, Market Plaza Corporation, reviewed a project schedule for all components of the project, inclu-ding marketing and construction. He said the schedule is based on a closing on the land to occur in September or October of 1984, with construc- tion of the components beginning about the same time. Tony Navarro, Northland Mortgage Company, said that he thinks that the location and size of the units is good, but interest rates will determine the final decisions to be made on the project. Attorney Clayton LeFevere asked if there were any requirements in previous financing undertaken by Arkell for approval of future debt. Mr. Navarro said that there was not for the Metro Square building, and Mr. Arkell said that several lenders were interested in the Kensington project in St. Anthony. Mr. LeFevere also asked whether Kraus-Anderson would .have a problem beginning on the project as~soon as contruction would be possible. A representative of Kraus-Anderson said that this would not be a problem. 1 Susan Taylor, representing the Health Central organization, noted that they presently handle management of the Lake Shore Drive condominiums. She believes the location and price range of the units are favorable for the project. Ms. Taylor also noted that Health Central uses autonomous boards of residents to "govern" developments, anal the fee's paid by residents are a percentage of the annual budget developed for the condominium association. In response to a question from Council, she said that fees for the Lake Shore Drive condominiums presently range from $125 to $210 per month for operation of the building. In response to a question from Councilman Bunce, Ms. Taylor said that Health Central has had marketing experience in projects in Minnesota. 1- HRA Chairman Harms said he was initially concerned about the Knutson Company dropping out of the project. However, he said, Derrick has responded quickly and the project actually seems better now. He noted that Health Central's involvement in the project is an asset. Mayor Hamilton said that he also believes the project is ready to go, and would recommend approval by the City Council. Councilman Priebe said that he is impressed by the project, and that it needs to proceed. Discussion followed concerning the need to carefully consider-any vac a-t ion of_Graham Avenue in the vicinity of this project. Attorney LeFevere updated concerning the status of land HRA presently owns about 1/3 Strom property will occur on negotiations have not worked property, but a court hearing the City Council and HRA acquisition, and noted that the of the block, and access to the July 15. He noted that out concerning the Heilicher has been scheduled for May 15. A motion for HRA action was made by Ludeman, seconded by Helmberger, to authorize the HRA to enter into a developers agreementi for a mixed-use development project in the L/H/N redevelopment area with the Arkell Development Corporation as a co-developer of the project. Ludeman, Helmberger, Luettinger, and Harms voted aye. Hassenstab voted no. Motion Carried. For the Council, a motion was made by Kirsch, seconded by Ludeman, to approve the City entering into a developers agreement for a mixed-use development project in the L/H/N redevelopment area including the Arkell Development Corporation as a co-developer. All voted aye. Motion carried. The City Council meeting was adjourned at 6:50 p.m. 2. Resolution establishing Just owned by Amos and Daniel Heilicr Street on the "Godfather Block". Compensation for L/H/N propert er, located at 708 W. 66th Attorney Clayton LeFevere presented a report to the HRA on the status of negotiations with the Heilicher brothers, and said that up to date appraisals had been obtained for the property and fixtures. The real estate has been appraised at a value of $875,000 and fixtures have been appraised at $154,383 for a total of $1,029,383. Motion by Ludeman, second by Luettinger that the following resolution be adopted; that it be spread in the resolution book and that it be made a part of these minutes: RESOLUTION N0. 248 RESOLUTION ESTABLISHIIJG JUST COMPENSATION (HEILICHER PROPERTY) Poll of votes: Ayes - Hassenstab, Helmberger, Ludeman, Luettinger and Harms. Nays - None. Carried. This resolution appears as Resolution No. 248 in . Resolution Book No. 3. The special meeting of the Housing and Redevelopment Authority was adjourned at-6:55 p.m. Date Approved: June 18, 1984 ~~ J n Helmberger Secretary Thomas E. Harms Chairman