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10-21-1996.~ `~ - ~~ ~~' HOUSING AND REDEVELOPMENT AUTHORITY MEETING MINUTES ~ Richfield, Minnesota ~:. Regular Meeting October 21, 1996 The meeting was called to order by Chair Harms at 7:00 p.m. HRA Members Present: Thomas Harms, Joan Helmberger, Vern Luettinger and Michael Sandahl. HRA Members Excused: Russ Susag. Staff Present : James D. Prosser, Executive Director; Steven Devich, Acting City Clerk; Bruce Nordquist, Housing and Redevelopment Manager; and John B. Dean, City Attorney. Ofhers Present: Susan Rosenberg, Council Member; Don Priebe, Council Member; Sid Inman, Ehlers and Associates; and Tim Keane, Mark Damante, Mike Mulrooney and Tim Bloom, representatives for Galyan's. M/Sandahl, S/Helmberger ~~~rove the minutes of the Regular HRA Meetina of September 16 1996 and the Special HRA Meetina of October 7 1996. Motion carried 4-0. No one wished to address the HRA. Executive Director Prosser reviewed HRA Letter No. 68 regarding public hearing and consideration of resolution authorizing sale of Richfield Rediscovered property at 6824 Queen Avenue to Steven Marlin Grant Homes, Inc. in accordance with development agreement. f\fi/Helr~berger, S/Sandahl to close 4he public hearing. Motion carried 4-0. M/Sandahl, S/Helmberger that the following HRA resolution be adopted. that it be spread in the HRA resolution book and that it be made part of these minutes: HRA RESOLUTION NO. 607 RESOLUTION AUTHORIZING THE SALE OF REAL PROPERTY LOCATED AT 6824 QUEEN AVENUE TO STEVEN MARLIN GRANT HOMES INC. IN ACCORDANCE WITH A DEVELOPMENT AGREEMENT Motion carried 4-0. This resolution appears as HRA Resolution No. 607 in HRA Resolution Book No. 5. Executive Director Prosser reviewed HRA Letter No. 69 regarding discussion to consider including garages for all new home program projects with Hennepin Technical College. Mr. Prosser described a program offering a $5,700 deferred loan to cover the cost of a garage. HRA Meeting Minutes -2- October 21, 1996 HRA Meeting Minutes -3- October 21, 1996 Chair Harms asked if the HRA could do a pilot program of doing one or two projects with a garage to see what impact it would have. Commissioner Sandahl said he would be in agreement with the program if it does not negatively affect the program. Bruce Nordquist, Housing and Redevelopment Manager, said that there is no question that a home with a garage could be marketed, however, the home would target a higher income group. Chair Harms asked to proceed with a three home program. Mr. Prosser suggested that the next three homes be marketed on a two track program, with and without the garage and deferred loan/grant. M/Harms, S/Sandahl that the next three homes be marketed on a two track p~gram with and without the garage and deferred loan/orant. Motion carried 4-0. 1 Executive Director Prosser reviewed HRA Letter No. 70 regarding consideration of resolution approving Contract for Private Redevelopment between HRA and The Limited, Inc., Interchange TIF District. Tim Keane, 7900 Xerxes Avenue, local counsel to The Limited, Inc., addressed the HRA describino~ the project and introducing the members of the Limited, Inc. group present at the meeting. Mark Damante, Three Limited Parkway, addressed the HRA regarding the developer's plan and reasons for the proposed project. He stated that the site is one of the most prominent in the area and stated that the Galyan's project seemed a good fit for the site. Mike Mulrooney, Advanced Resources for Development, described the assumptions used by the developer to model the financial data for the project and summarized the need for TIF assistance. Tim Bloom, CB Commercial Real Estate, spoke to the HRA regarding the potential for alternative commercial projects for the Naegele site. Mr. Bloom summarized his observations regarding why development such as office or hospitality industry complexes HRA Meeting Minutes -4- October 21, 1996 would not be feasible for the site. He felt the site was best suited for selected retail projects and that Galyan's was in a position to make the significant investment necessary to make this site work. Chair Harms asked if it was a reasonable assumption to use a $12.75 per square foot cost while not considering the revenue per square foot generated by the project. Mr. Bloom stated that the rent figure used falls within the parameters that the retailer uses to model the financial needs and return for such a project, and thus would seem reasonable. Chair Harms asked what the impact would be of losing some major hotels on the 1- 494 strip because of runway expansion at the Twin Cities International Airport. He suggested that if three hotels are lost, there may be a demand for a large hospitality facility on the Naegele site. Mr. Keane responded that a large portion of the Met Stadium site will be dedicated to hotel expansion. The Naegele site is also generally too far from the airport to be desirable for a major hotel. Sid Inman, Ehlers and Associates, addressed the HRA describing why it is important for the City to redevelop the Naegele site and why tax increment financing (TIF) is needed to redevelop the site. Chair Harms asked the Executive Director to present staffs perspective regarding a potential hospitality development on the site. Executive Director Prosser indicated that staff has talked to the hospitality industry through CSM to investigate such a hotel development on a site adjacent to the Naegele site. Hospitality industry representatives were not interested because of the location. Don Priebe, Council Member, addressed the HRA to explain a letter (Clerk's File No. C-364) which he wrote to HRA Members opposing the TIF assistance for the Galyan's project. He stated that the citizens of Richfield don't get any benefit from the project because of the frozen tax base. Mr. Priebe felt that this was especially true if the HRA uses more tax increment projects in the future. Commissioner Helmberger asked how much of the City's property was in TIF projects. Executive Director Prosser responded that about 12% is in TIF. As a comparison, Edina has a higher amount, Bloomington is less, St. Louis Park is greater and on balance, Richfield is either average or below the metro area communities. Commissioner Sandahl disagreed with Mr. Priebe's analysis of the tax revenue growth of the Naegele property as it currently exists. Mr. Sandahl felt the projects presented by Mr. Priebe overstated the future growth over the next 25 years. HRA Meeting Minutes -5- October 21, 1996 Chair Harms stated that if the HRA was going to put retail on this, the Galyan's project is a very good one. He added that he still has some concern that there is a potential for a hotel project on the site. Commissioner Sandahl stated that he felt that staff has already explored the potential for a hotel very recently on a site adjacent to the Naegele site. He felt that he was in a position tonight to make a decision on this project at this meeting. Chair Harms stated that he would like one more look before signing an agreement, but that he was ready to vote on the concept tonight. Commissioner Luettinger stated a concern for the 25 year TIF. City Attorney John Dean responded that if the project is more profitable than anticipated it is possible for the 25 year term of the TIF to be shortened somewhat. M/Sandahl, S/Harms that final approval of the resolution aporovina the Contract for Private Development between the HRA and The Limited Inc and the economic assistance proposed be continued to October 28 1996. This item was continued to a Special HRA Meeting to be held at 6:30 p.m. on October 28, 1996. Sid Inman, Ehlers and Associates, reviewed HRA Letter No. 71 regarding consideration of the sale of taxable revenue bonds. Mr. Inman stated that no resolution was needed at this time, but that a motion by the HRA to establish a public hearing to consider modification ofthe ILN and LHN Tax Increment Districts was necessary at this time. Larry Wozniczka, 6744 Wentworth Avenue, asked if a separate public hearing to sell bonds would be necessary. Mr. Inman responded that because this is a tax increment bond issue, a separate public hearing isn't necessary. However, the proposed bond issue would be discussed at the public hearing regarding modification of the districts. M/Harms, S/Sandahl to hold a public hearing at the November 25 City Council meeting to consider modification of the ILN and LHN Tax Increment Districts. HRA Meeting Minutes Motion carried 4-0. -6- October Z 1, 1996 Executive Director Prosser reported on the status of the TOLD project, especially entering the last six months of the exclusive 18-month period for this development is approaching. No tenants have been signed to date for the proposed development. Mr. Prosser stated that he informed Mr. Robinson that if the project didn't begin to move forward in terms of lease agreements and other aspects of the project, the HRA may likely seek other project proposals for the Cloverleaf site once the 18 months have expired. HRA Commissioners concurred and asked that the minutes reflect this position. M/Sandahl, S/Luettinger that the following claims and g_ayrolls be a roved: FIRSTAR BANK HRA: 9845-9967; 14060-14083; 15043-15097 ~ $668,848.43 Motion carried 4-0. The meeting was adjourned by unanimous cent at 8:40 p.m. Date Approved: 11/ 18/ 96 I ~l. teven L. Devich Acting City Clerk Thomas E. Harms C it ~c'~~° me D. Prosser Executive Director 1