07-16-1984 ConcurrentCONCURRENT HOUSING AND REDEVELOPMENT AUTHORITY AND CITY COUNCIL
MEETING MINUTES
City of Richfield, Minnesota
July 16, 19$4
COUNCIL MEMBERS PRESENT: Bunce, Kirsch, Ludeman, Priebe, and
Hamilton.
HRA COMMISSIONERS PRESENT: Hassenstab, Helmberger, Luettinger,
Ludeman and Harms.
Mayor Hamilton and Chairman Harms called the meeting to order at
7:05 p.m.
1. CT E O T E S LE R DEVELOPMEN B DS R THE
MARKET PLAZA PROJECT
City Manager Cartwright introduced this item and described the
actions being requested of the HRA and City Council. He said
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 L/H/N redevelopment area. Mr. Cartwright also said the city
council needs to consider and adopt a resolution providing for
the issuance of sale of $5,750,000 of general obligation
redevelopment bonds.
Mr. Cartwright described the breakdown of project costs to be
covered by the bond issue, including: land acquisition,
relocation., taxes and special assessorents; site improvements of
soil correction; demolition, administration and legal expenses;
capitalized interest; discount; and cost of issuance of the
bonds. Mr. Cartwright stated the various assumptions used in
calculating the financial feasibility of the project.
Mr. Ludeman asked about the amounts of tax and special
assessment payments that would be required for the project.
City Attorney LeFevere responded that most of this amount
includes second half taxes-that would be paid as part of the
negotiated settlement for property acquisitions.
Mr. Ludeman said it has been the City~s policy to try to make
each project in the LlHIN self-supporting. Staff responded that
except for certain land costs which had been financed through an
earlier bond issue, this project is self-supporting of the
project costs. Commissioner Helmberger asked about the amount
of the discount included in the project costs to go to the bond
underwriters. City Attorney LeFevere responded concerning the
sale of the bonds and the purpose of the discount.
Commissioner Hassenstab asked about the increase in the expected
acquisition costs for the east end of the Godfather Block. Mr.
LeFevere said relocation costs are expected to increase and that
there is also a somewhat larger than expected cost for the land
Joint HRA & Council Meeting Minutes -2- July 16, 1984
and buildings. He further noted that the administrative and legal expenses
are now based on actual experience and specific estimates for future costs.
In responding to a question from Commissioner Hassenstab, Mr. LeFevere said
approximately $821,000 of acquisition costs associated with the west end of
the block were paid from an earlier bond issue. Commissioner Hassenstab
also asked about the calculation of the amount of capitalized interest and
it was noted that this amount has increased, due to the projected interest
rate for interim debt service on the bonds.
M/Ludeman, S/Helmberger that the following resolution be adopted; that it be
spread in the resolution book and that it be made a part of these minutes:
HRA RESOLUTION N0. 250
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
Poll of votes: Ayes - Hassenstab, Helmberger, Ludeman, Luettinger and Harms.
Motion carried. This resolution appears as Resolution No. 250 in Resolution
Book No. 3
Commissioner Luettinger said he is concerned about the project not being one
hundred percent self-sustaining, due to the amounts paid from the earlier
bond issue. Chairman Harms commented that it would be desirable for the project
to be entirely self-sustaining; however, it is extremely difficult to do so
with a project of this-size, within the L/H/N district.
Mr. Wayne Burggraaff, Evensen-Dodge, Inc., the HRA/City financial consultant,
explained the calculation of capitalized interest for the bond issue. Mr.
Burggraaff also reviewed the pre-sale analysis, which had been prepared by
his firm concerning the cash flow for the L/H/N district during the terms
of the outstanding bond issues. He said the cash flow shows a positive
balance for the L/H/N tax increment district based on the assumptions used
in calculating the tax increment and other sources of revenues, compared to
the remaining debt service requirements.
Council Member Priebe said recent meetings have demonstrated that there are
certain concerns regarding the Market Plaza project, expecially regarding
the financing arrangements and project design. He noted, however, that
both the council and the HRA need to consider the impact of the alternatives.
Priebe said that there is a definite need to proceed with the Market Plaza
project and that he believes that it is likely to prove successful, both
financially and with regard to the overall benefit provided to Richfield.
M/Kirsch, S/Priebe that the following resolution be adopted; that it be spread
in the resolution book and that it be made a part of these minutes:
Joint HRA & Council Meeting Minutes -3- July 16, 1984
RESOLUTION N0. 6905
RESOLUTION PROVIDNiG FOR THE ISSUANCE
AND SALE OF $5,750,000 GENERAL OBLIGATION REDEVELOPMENT
BONDS OF 1984
1
PvI1 of votes: Ayes - Bunce, Kirsch, Ludeman and Priebe. Nays - None. Absent -
Hamilton. Motion carried. This resolution appears as Resolution No. 6905 in
Resolution Book No. 53.
2. ACTION RELATED TO THE PREVIOUSLY APPROVED INDUSTR LPL REVENUE BOND
APPLICATION FOR THE MARKET PLAZA PROJECT
City Attorney Clayton LeFevere reported that the City Council had previously
given preliminary approval to Industrial Revenue Bonds for the Market Plaza
project +ahich was known at that time as New Age Developers. He sait it is
now proposed thaC the preliminary approval of the project be resubmitted to
the Minnesota Department of Energy, Planning and Economic Development. In
the process of preparing the resubmittal, it was determined that a new state
law may apply for consideration of the application, and it is therefore
necessary for the City Council to consider the proposed resolution.
Mr. LeFevere read the proposed resolution and explained its intended action
of stating the City's commitment to encourage employment of the economically
disadvantaged through the project being funded by the I.R.B.'s.
Council Member Bunce asked if it would be likely that the resubmittal would
be approved by the state, and-Mr. LeFevere said it is hoped that it will be
approved.
MlBunce, S/Priebe 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. 6904
RESOLUTION RELATING TO A COP'R~IERCIAL
DEVELOPMENT REVENUE BOND PROJECT
IN THE LYNDALE-HUB-NICOLLET PROJECT AREA
(GODFATHER BLOCK)
K/Bunce, S/Kirsch to adjourn the special meeting.
Notion carried 4.0. Hamilton absent.
The meeting adjourned at 7:35 p.m.
Date Approved: August 20, 1984
/~.
Thomas E. Harms Chairman
J n Helmberger Secretary