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03-21-1994 SpecialCITY OF RICHFIELD, MINNESOTA HOUSING AND REDEVELOPMENT AUTHORITY MEETING March 21, 1994 HRA MEMBERS PRESENT: Thomas Harms; Joan Helmberger; Vern Luettinger; and Russ Susag. HRA MEMBERS ABSENT: Michael Sandahl. STAFF PRESENT: James D. Prosser, Executive Director; Steven Devich, Administrative Services Director/Acting City Clerk; Byron Wallace, Community Development Director; Bruce Palmborg, Housing and Redevelopment Coordinator; Bruce Nordquist, Housing Superv3~sor; and John Dean, City Attorney. The meeting was called to order by Chair Harms at 6:30 p.m. APPROVAL OF MINUTES M/Susag, S/Luettinger to approve the minutes of the HRA meetings of January 18, 1994; February 22, 1994; and the Special. Joint Cites Council and HRA meeting of March 14, 1994. Motion carried 4-0. ITEM #1 OPPORTUNITY FOR CITIZENS TO ADDRESS THE HRA No one wished to address the HRA. ITEM #2 CONSIDERATION OF AUTHORIZATION FOR STAFF TO DRAFT AGREEMENT WITH TOLD DEVELOPMENT COMPANY TO MARKET AND FACILITATE REDEVELOPMENT OF CLOVERLEAF SITE, HRA LETTER N0. 10 Executive Director Prosser introduced this topic and asked Attorney John Dean to review the proposed draft agreement with TOLD Development. HRA Attorney Dean reviewed HRA Letter No. 10 regarding consideration of authorization for staff to draft an agreement with TOLD Development Company to market and facilitate redevelopment of the Cloverleaf site. HRA Meeting Minutes -2- March 21, 1994 Commissioner Luettinger asked how soon another developer could be considered. Mr. Dean stated that this could be done at any time except. if it is another developer on TOLD's active list, at which time the HRA must wait thirty days. yet. Commissioner Susag asked if TOLD had seen this agreement Mr. Dean said no, that the HRA was to see it first. M/Luettinger, S/Susag to authorize staff to draft an agreement with TOLD Development Company to market and facilitate redevelopment of the Cloverleaf site. Motion carried 4-O. Executive Director Prosser stated that agenda items three through seven which pertain to the CSM Project will be reordered for purposes of discussion, beginning with item number Stour. ITEM #4 CONSIDERATION OF ALTERNATIVES FOR PROVIDING FINANCIAL ASSISTANCE TO CSM CORPORATION, SHOPS AT L.YNDALE, HRA LETTER NO. 12 ITEM #7 CONSIDERATION AND REVIEW OF PROPOSED CONTRACT FOR PRIVATE REDEVELOPMENT BETWEEN HOUSING AND REDEVELOPMENT AUTHORITY AND CSM CORPORATION, HRA LETTER NO. 15 ITEM #3 CONSIDERATION AND REVIEW OF RESOLUTION AUTHORIZING CONDEMNATION AND QUICK TAKE OF PHASE I, THE SHOPS AT LYNDALE; ILN REDEVELOPMENT PROJECT, HRA LETTER NO. 11 ITEM #5 CONSIDERATION OF PROPOSED MODIFICATION TO THE ILN REDEVELOPMENT AND TAX INCREMENT PLAN, HRA LETTER NO. 13 ITEM #6 CONSIDERATION OF PRELIMINARY TIME AND EVENTS SCHEDULE FOR PROPOSED CSM PROJECT, HRA LETTER NO. 14 Chair Harms explained the process to be followed in reviewing this proposed project and the calendar of events. Executive Director Prosser stated that these items are before the HRA this evening to preview only. No action is being requested at this time. Action will be requested at a point HRA/City Council meeting on March 28, 1994. . HRA Meeting Minutes -3- ~ March 21, 1994 Commissioner Luettinger asked how the public will be made aware of this project and when it will be considered. Canmissioner Helmberger suggested that business people in the area be given an opportunity to meet with staff regarding this project. . Mr. Prosser responded that these meetings, as well as the Planning Commission meetings, are an opportunity for residents to provide input. The developers also met with the businesses in the area, and staff is available to meet with those who express an interest in this matter. Commissioners suggested that the Star Tribune and WCCO be approached to try to get the notice of the March 28 meeting to the public. Mr. Prosser stated that he would attempt to do so. Gary Touche, an architect representing CSM, presented an overview of the project by reviewing the site plan. He also reviewed the landscape plan. Mr. Touche included a discussion of the existing tree line and the proposed placement (relocation) of the Emerson Avenue Congregational Church. There was discussion regarding the access to the church in the oak grove. Commissioners also had concerns regarding the-. parking area and amount of space required for the lot in the area containing the oak trees. Commissioner Helmberger asked if the parking could be reconfigured to save more~of the trees. Mr. Touche responded that oak trees are very sensitive to activity above their root systems so it would require staying away from the drip line of each tree to save it. Mr. Prosser stated that there will be at least two additional opportunities to address these siting issues, • including the Planning Commission review. Commissioner Luettinger said he would like to see the church placed in the most advantageous spot, even if it means taking some trees. Mr. Touche presented an elevation of the proposed project and described the building materials and facade. HRA Commissioners asked the developer to describe the location and size of the.signage and identification towers and Mr. Touche presented information regarding these items. HRA Meeting Minutes -4- March 21, 1994 Sid Inman, Publicorp, stated that their responsibility was threefold: 1) Initial tax increment analysis; ___ 2) Fiscal disparities calculations; and 3) "Hut for" analysis. Mr. Inman stated that the developers were asked to provide pro-forma data for the project. Publicorp analyzed the data and brought it to a return on investment (R.O.I.) comparison. Mr. Inman reviewed the pro-forma data with the_HRP,, highlighting the following points: • CSM is providing 25$ of the initial cash outlay. • There is a low developers cost or fee, far below the normal 3-5$. • The R.O.I. is 10$ as shown, and 8$ if the fiscal disparity contribution is assumed by the district. • Mr. Inman would be less concerned with closer ongoing monitoring of the project with a more pay-as-you-go type of prod ect . Mr. Prosser explained that in Richfield the fiscal disparity contribution would be about 15$, with 85$ going to the project. He stated that in most other cities, the entire community pays the fiscal disparities contribution instead of the project area. A lump sum payment to the developer could also be paid, $500,000 for Phase I and $100,000 for Phase II. This would be combined with keeping the fiscal disparities contribution from within the district. Chair Harms stated that the impact on the community if fiscal disparities if paid community wide would be about $2.26 on an $85,000 home and $49.36 on a $500,000 commercial property. Chair Harms asked if the $600,000 could be better spent prepaying the district. Mr. Prosser stated that any prepayment of the tax increment' district does not provide commensurate benefits to the taxpayers because of current law. Mr. Inman said that with the up-front cash there is no need to shift the fiscal disparities to the entire community. Commissioners Helmberger and Luettinger favored the up-front payments. Commissioner Luettinger stated that he did not want the fiscal disparities cost paid by the homeowners. Chair Harms said he leaned toward the up-front payment but wanted further analysis to see if another hybrid method was more advantageous to the HRA and City. HRA Meeting Minutes -5- March 21, 1994 Commissioner Luettinger asked what the projected tax base of the project was. Mr. Inman stated that the projected tax base of this project would generate about $1 million in new annual total property taxes. Mr. Prosser asked if there were any additional questions. There were no further questions. Mr. Prosser reviewed the time and events schedule for the proposed project. Attorney John Dean reviewed the proposed agreement for private development between the HRA and CSM Corporation. Mr. Dean reviewed the process for site assembly of Phase I. The process requested by the developer would proceed through condemnation while the developer continues negotiations. The agreement provides that the costs of the condemnation will be kept current by the developer on a monthly basis. It will be done on a quick-take basis, so large up-front money will have to be deposited with the court by the developer. He stated that the agreement provides surety for the HRA by the developer throughout the quick-take process. The agreement also provides site assembly procedures for Phase II with a tie-in, at the HRA's option to the completion of Phase I. Mr. Dean described a series of safeguards built into the agreement for the HRA for not only Phase I but also Phase II. The Phase I security would also provide protection for certain defaults in Phase II. Mr. Dean stated that Article 3 of the agreement describes the financial assistance to be provided. There are two types of financial assistance: 1) Limited revenue notes ($1,869,000 Exb. D) Phase I 2) Direct up-front payments - $500,000 Phase I - $100,000 Phase II. Mr. Dean stated that the pay-as-you-go aspect of this agreement works similar to the manner in which the previous CDP project on Cedar Avenue was structured. Mr. Dean stated that the staff will be back to the HRA in one week for approval of the agreement. If Commissioners have any questions in the next week, they should let himself or Mr. Prosser know. Chair Harms stated that he wanted the final draft agreement to Commissioners as soon as possible. HRA Meeting Minutes -6- March 21, 1994 M/Susag, S/Luettinger to forward these items to the meeting of March 28, 1994 for consideration. Motion carried 4-0. ITEM #8 PUBLIC HEARING AND CONSIDERATION OF. RESOLUTION AUTHORIZING SALE OF 6538 BLOOMINGTON AVENUE (CONTINUED FROM FEBRUARY 22, 1994), HRA LETTER NO. 16 Executive Director Prosser reviewed HRA Letter No. 16 regarding consideration of resolution authorizing sale of 6538 Bloomington Avenue. No one testified at the public hearing. M/Luettinger, S/Helmberger to close the public hearing. Motion carried 4-0. M/Helmberger S/Susag that the following resolution be adopted; that it be spread in the resolution book and that it be made part of these minutes: RESOLUTION NO. 498 RESOLUTION AUTHORIZING SALE OF REAL PROPERTY LOCATED AT 6538 BLOOMINGTON AVENUE Motion carried 4-0. This resolution appears as Resolution No. 498 in HRA Resolution Book No. 4. ITEM #9 PUBLIC HEARING AND CONSIDERATION OF RESOLUTION AUTHORIZING SALE OF 6501 15TH AVENUE (CONTINUED FROM FEBRUARY 22, 1994), HRA LETTER N0. 17 Executive Director Prosser reviewed HRA Letter No. 17 regarding consideration of resolution authorizing sale of 6501 15th Avenue. Commissioner Susag asked how many homes Hennepin County Vo- Tech has completed for the City. Community Development Director Wallace stated there have been about 20. Commissioner Luettinger stated there were probably more. HRA Meeting Minutes -7- March 21, 1994 No one testified at the public hearing. M/Helmberger, S/Susag to close the public hearing. Motion carried 4-0. M/Luettinger S/Susag that the following resolution be adopted: that it be spread in the resolution book and that it be made mart of these minutes: RESOLUTION NO. 499 RESOLUTION AUTHORIZI.NG SALE OF REAL PROPERTY LOCATED AT 6501 15TH AVENUE Motion carried 4-0. This resolution appears as Resolution No. 499 i~n HRA Resolution Book No. 4. ITEM #10 PUBLIC HEARING AND CONSIDERATION OF RESOLUTION AUTHORIZING SALE OF RICHFIELD REDISCOVERED PROPERTY AT 6636 SHERIDAN AVENUE TO MARLIN GRANT HOMES, INC., HRA LETTER NO. 18 Executive Director Prosser reviewed HRA Letter No. 18 regarding consideration of resolution authorizing sale of Richfield Rediscovered Property at 6636 Sheridan Avenue to Marlin Grant Homes, Inc. No one testified at the public hearing. M/Helmberger, S/Susag to close the public hearing. Motion carried 4-0. M/Helmberger S/Susag that the following resolution be adopted; that it be spread in the resolution book and that it be made part of these minutes: RESOLUTION NO. 500 RESOLUTION AUTHORIZING SALE OF REAL PROPERTY LOCATED AT 6636 SHERIDAN AVENUE TO MARLIN GRANT HOMES, INC., IN ACCORDANCE WITI~ A DEVELOPMENT AGREEMENT Motion carried 4-0. This resolution appears as Resolution No. 500 in HRA Resolution Book No. 4. HRA Meeting Minutes -8- March 21, 1994 ITEM #11 CONSIDERATION OF STATUS REPORT ON TAX INCREMENT DISTRICTS, HRA LETTER N0. 19 Executive Director Prosser reviewed HRA Letter No. 19 regarding the status report of tax increment districts. Mr. Sid Inman, Publicorp, presented the status report on the tax increment districts. He stated that the reserves are strong and that the financial position is stronger than originally projected last year. Commissioner Susag asked where the $500,000 and $100,000 for the CSM Project are coming from. Mr. Inman suggested that it come from the over $1 million of unspent bond proceeds in the ILN. Larry Wozniczka, 6744 Wentworth, asked how the LHN district is contributing $500,000 annually when there are annual negative figures projected. Mr. Inman stated that the negative figures are annual projections that do not consider accumulated cash balances. Thus, there are not real negative figures. Chair Harms stated that the report is accepted. ITEM #12 CONSIDERATION OF MARKETING STRATEGY FOR RESIDENTS OF NEW FORD TOWN AND RICH ACRES, HRA LETTER NO. 20 Executive Director Prosser reviewed HRA Letter No. 20 regarding consideration of marketing strategy for residents of New Ford Town and Rich Acres. Mr. Prosser stated that he believes that Schock and Company are marketing Richfield to NFT residents. Mr. Palmborg, Housing and Redevelopment Coordinator, stated that he was informed that residents in NFT felt good about the attention they were getting from City Hall. Mayor Martin Kirsch stated that he went on the recent bus tour and felt that participants were made aware of the many opportunities available in Richfield. 1 HRA Meeting Minutes -9- ~ March 21, 1994 ITEM #13 CONSIDERATION OF RESOLUTION AUTHORIZING ACQUISITION OF 7537 GIRARD AVENUE, HRA LETTER NO. 21 Executive Director Prosser reviewed HRA Letter No. 21 regarding consideration of resolution authorizing acquisition of 7537 Girard Avenue. Commissioner Susag asked if Vo-Tech would consider the unique characteristics of the lot and its location. Housing Supervisor Bruce Nordquist stated that the contract has not been finalized. However, there have been a number of successful narrow-lot homes constructed by Vo-Tech in the past. M/Susag S/Luettinger that the followin~c resolution be adopted; that it be s._pread in the resolution book and that it be made part of these minutes: RESOLUTION NO. 501 RESOLUTION AUTHORIZING THE ACQUISITION OF 7537 GIRARD AVENUE Motion carried 4-0. This resolution appears as Resolution No. 501 in HRA Resolution Book No. 4. ITEM #14 CONSIDERATION OF AUTHORIZING TRANSFORMATION HOUSING INCENTIVE LOAN PROGRAM, HRA LETTER NO. 22 Executive Director Prosser reviewed HRA Letter No. 22 regarding consideration of authorizing transformation housing incentive loan program. Commissioner Luettinger .asked how participants would qualify . for this program. Mr. Prosser explained the qualification criteria. He stated that there are currently no income requirements. Gary Olsen, 7213 First Avenue South asked about the requirements for a double car garage. Housing Supervisor Bruce Nordquist responded that the intent was to be consistent with a higher valued home. The market for homes in a higher price range often requires a two or more car garage. HRA Meeting Minutes -10- March 21, 1994 Chair Harms suggested that the guidelines be approved, but that staff could come back to the HRA for a waiver for projects where some variance from the guidelines is necessary. Commissioner Susag left the HRA meeting at this time. Dave Sumnicht, 6620 Logan Avenue South, spoke regarding the program. He stated that he has heard some good comments in the community regarding this program. Dan Linnihan, 6345 Logan Avenue South, stated that he felt the program was a great idea and good for the community. Larry Wozniczka, 6744 Wentworth Avenue South, asked where the source of funding is coming from and if this would jeopardize the repayment of previous loans to the Utility Funds. Mr. Prosser stated that the new homes were from the Development Fund and would not affect those loans. He said that the funding would come from the sale of lots in the Richfield Rediscovered Program, but that it would be from the homes funded from the Development Fund. These properties would not affect the loans from the Utility Funds. M/Luettinger S/Helmberger to authorize the Transformation Housing Incentive Loan Program. Motion carried 3-0. ITEM #15 CONSIDERATION OF APPROVING EXTENSION OF TEMPORARY EASEMENT ON CLOVERLEAF SITE; 77TH STREET PROJECT, HRA LETTER N0. 23 Executive Director Prosser reviewed HRA Letter No. 23 regarding consideration of approving extension of temporary easement on Cloverleaf site; 77th Street Project. M/Helmberger S/Luettinger to approve the extension of the temporary_ easement on the Cloverleaf site; 77th Street Project. Motion carried 3-0. ITEM #16 EXECUTIVE DIRECTOR REPORT The Executive Director did not give a report. HRA Meeting Minutes -il- March 21, 1994 ITEM #17 CLAIMS AND PAYROLL M/Helmberger, S/Luettinger that the following claims and payroll be approved: FIRSTAR BANK Checks: HRA: 2/22/94 6160-6275; 11441-11463; $557,949.49 12394-12424 Section 8: 2/21/94 0. HRA: 3/21/94 6276-6390; 11464-11475; 5627,083.97 12428-12460 Section 8: 1075 $177,950.00 Motion carried 3-0. 1 ADJOURNMENT The meeting was adjourned by unanimo nsent at 8:38 p.m. 4/18/94 late A~rr~vei• omas Harms Chair Steven L. Dev ch ames D. Prosser Acting City Clerk xec tive Director