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03-20-2000i ~~~' ~ HOUSING AND REDEVELOPMENT AUTHORITY MEETING MINUTES ~ Richfield,Minnesota Regular Meeting March 20, 2000 CALL TO ORDER The meeting was called to order by Chair Harms at 7:00 p.m. ROLL CALL HRA Members Present: Thomas Harms; Joan Helmberger; Kristal Stokes; Dan Linnihan; and Michael Sandahl. Staff Present: Samantha Orduno, Executive Director; Steven Devich, Acting City Clerk; Bruce Palmborg, Community Development Director; and John Dean, HRA Attorney. APPROVAL OF MINUTE'S MlSandahl, S/Helmberger to aeprove the minutes of the Regular HRA Meeting of February 22 2000 and Special HRA Meeting of March 6, 2000. Motion carried 5-0. Item#1 OPPORTUNITY FOR CITIZENS TO ADDRESS THE HRA. None. HRA Meeting Minutes -2- March 20, 2000 Item #2 HRA APPROVAL OF AGENDA Chair Harms stated that the agenda be amended by adding Item 5, consideration of resolution authorizing condemnation of property located at 7601 Garfield Avenue. The agenda was approved as amended by unanimous consent. Item #3 CONSIDERATION OF RESOLUTION RECOGNIZING WITHDRAWAL OF CSM INVESTORS, INC. AS DEVELOPER WITHIN INTERCHANGE WEST REDEVELOPMENT AREA. 'S. R. NO. 23 Community Development Director Palmborg reviewed HRA Letter No. 23 regarding consideration of a resolution recognizing the withdrawal of CSM Investors, Inc. as developer within Interchange West Redevelopment area. I~~ _, M/Sandahl, S/Stokes 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 N0.757 RESOLUTION RECOGNIZING WITHDRAWAL OF CSM INVESTORS, INC. AS DEVELOPER WITHIN THE INTERCHANGE WEST REDEVELOPMENT Motion carried 5-0. This HRA Resolution appears as HRA Resolution No. 757 in HRA Resolution Book No, 6. Item #4 CONSIDERATION OF RESOLUTION APPROVING TERMS OF CONTRACT FOR PRIVATE REDEVELOPMENT BETWEEN BEST BUY CO., '.INC. AND RICHFIELD HRA FOR REDEVELOPMENT OF INTERCHANGE WEST AREA. S. R. NO.24 Executive Director Orduno reviewed HRA Letter No. 24 regarding consideration of a resolution approving terms of a contract for private redevelopment between Best Buy Co., Inc. and HRA for redevelopment of Interchange West area. George Lopuch, Senior Vice President, Best Buy, Co. Inc., addressed the HRA and stated that they are looking forward to being a part of this project. Tim Murnane, Vice President of Real Estate Development, Opus Northwest, L.L.C., reviewed two concept site plans. The project, which is to be approximately 1.5 million HRA Meeting Minutes -3- March 20, 2000 square feet, is estimated to start construction in January/February 2001 with occupancy in the summer of 2002. David Menke, Director of Real Estate Development, Opus Northwest, L.L.C., addressed the HRA concerning the neighborhood meetings that will take place to provide a forum for the developer to exchange information with the residents. He stated that the developer is projecting meetings with individual property owners to establish a fair and equitable price for their respective properties by July 2000. John Dean, Attorney for the HRA, reviewed the proposed development agreement between the HRA and Best Buy. Mr. Dean highlighted the primary obligations of both parties as follows: Best Buy Obligations: • Primary responsibility for acquisition of the site and site preparation - pay up front for site acquisition - $44.5 million budget • Primary responsibility for project permits and related costs • Responsible to finance and build a 1.5 million square foot office project • Responsibility of paying taxes and other financial responsibilities outlined in the agreement HRA Obligations: • HRA authority is to assist in the acquisition of properties • Construct offsite project responsibilities - Penn Avenue bridge - Other off-site streets and public utilities • Provide economic assistance in the form of TIF Best Buy Responsibilities at closing: • Provide $148 million of taxable market value in the Tax Assessment Agreement • If tax increment isn't sufficient to cover debt service payments -Best Buy must fund the difference HRA Responsibilities at closing: • Provide $22.8 million -proceeds from bonds • Provide $13.1 million -Tax Increment Note • Provide $7,100,000 -bonds for Penn Avenue bridge Mr. Dean stated that of the total tax increment assistance, 80% is for developer and development related costs and 20% of increment is for the Administrative and Housing Trust Fund. He also stated that this district would be a contributor to fiscal disparities. Finally, Mr. Dean alerted the HRA to a change in the agreement. Section 3.7 on page 13 refers to possible TEA-21 funding. Mr. Dean stated that funding for this cycle has been determined and Richfield did not get funds. Therefore, Section 3.7 is amended by adding: "or any other state or federal funding". HRA Meeting Minutes -4- March 20, 2000 Mr. Dean commented on the other decision steps that may provide additional consideration by public bodies and/or public hearings. • Comprehensive Plan amendments • Subdivision and land use issues • Public Business Subsidy Act related hearings • Developer presentation of detailed plans to HRA and Planning Commission Sid Inman, Ehlers & Associates, addressed the HRA regarding the financial aspects of the agreement. He stated that this project has some unique aspects: • Owner occupied project • Benefit to the developer about 60% instead of typical 90% • Best Buy will pay a market rate price for the lands to be acquired Commissioner Helmberger asked about the TEA-21 funds and if they might be awarded to the City in future years. Mr. Dean responded that it could happen, but may not be timely with respect to this project. Chair Harms asked how many individuals will be available to address property purchases. Mr. Murnane responded that three contacts at Opus will be available. In addition Mr. Brooks who formerly worked with CSM on the acquisition will also be available. Opus is aware of the previous CSM process issues and will be using a mediator to assist in the project. Chair Harms stated that he felt that this project was a good one and emphasized the importance of working with the neighbors. Commissioner Linnihan stated his concern for the residents in this process. M/Sandahl, S/Stokes 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 N0.758 RESOLUTION APPROVING CONTRACT FOR PRIVATE REDEVELOPMENT AMONG THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD AND BEST BUY CO., INC. Motion carried 5-0. This HRA Resolution appears as HRA Resolution No. 758 in HRA Resolution Book No. 6. ~~~ ~J HRA Meeting Minutes -5- March 20, 2000 Item #5 GONSI ?ERATION QF RESOLUTION AUTHORIZING CONDEMNATION OF pROPE'RTY'LOCATED AT 7601 GARFIELQ AVENUE, WITHIN LYNDALE GATEWAY REDEVELOPMENT AREA. S. R. NO. 25 Community Development Director Palmborg reviewed HRA Staff Report No. 25 regarding consideration of a resolution authorizing condemnation of property at 7601 Garfield Avenue, within Lyndale Gateway Redevelopment area. Mr. Palmborg explained that this was a friendly condemnation to correct a technical issue. M/Sandahl, SlHelmberger that the following HRA resolution be adopted, that it be dread in the HRA resolution book and that it be made part of these minutes: HRA RESOLUTION N0.759 RESOLUTION AUTHORIZING EMINENT DOMAIN PROCEEDINGS TO ACQUIRE CERTAIN REAL PROPERTY IN THE LYNDALE GATEWAY REDEVELOPMENT AREA Motion carried 5-0. This HRA Resolution appears as HRA Resolution No. 759 in HRA Resolution Book No. 6. Item #6 EXECUTIVE DIRECTOR REPORT Executive Director Orduno stated that a special issue of Your City is being prepared that will address the issue of Tax Increment Financing. It will be mailed to residents later this week. Commissioner Linnihan stated a need for a written piece describing the overall philosophy of the HRA's housing strategy. He asked that this topic also be considered for a similar future Your City issue. Item #7 CLAIMS AND PAYROLL M/Stokes, S/Helmberger that the following claims and payrolls be approved: FIRSTAR BANK Section 8 Checks: 100122 - 100240 $ 126,311.18 HRA Checks: 24187 - 24204; 24320 - 24380 $ 341,370.07 [] HRA Meeting Minutes Motion carried 5-0. ADJt3UI~NMENT -6- March 20, 2000 The meeting was adjourned by unanimous Date Approved: April 17, 2000 Steven L. evich Acting City Clerk consent at 7:40 p.m. l omas E. Harms Chan- ~• Sam tha r uno \~xecutive Director