04-10-01 Special
CITY COUNCIL AND HOUSING
AND REDEVELOPMENT AUTHORITY
MEETING MINUTES
Richfield, Minnesota
Special Concurrent Meeting of
City Council and HRA
April 10, 2001
CALL TO ORDER
The meeting was called to order by Mayor Kirsch and HRA Chair Harms at 5:30
p.m.
ROLL CALL
Council
Members Present:Martin Kirsch, Mayor; Sue Sandahl; Susan Rosenberg; Gertrude
Ulrich; and John Enger.
HRA Members
Present:Thomas Harms, Joan Helmberger; Dan Linnihan; Kristal Stokes; and
Michael Sandahl.
Staff Present:Samantha Orduno, City Manager/Executive Director; Bruce
Palmborg, Community Development Director; Cheryl Krumholz,
Recording Secretary; and John Dean, HRA Attorney.
Item # ISTATUS REPORT ON CITY BELLA BY DEVELOPER, GRAMERCY
CORPORATION CITY COUNCIL S. R. NO. 97 AND HRA S. R. NO. 34
Mr. Conlan, Gramercy Corporation, addressed the City Council and HRA on the
status of the City Bella development. Mr. Conlan provided a chronology of events and
correspondence with John Sieff, Lyndale Hardware owner, and Ernie Lindstrom, attorney
representing John Sieff, related to the option to purchase agreement for the Lyndale
Special Concurrent Minutes-2-April 10, 2001
Hardware site on the southwest corner of 66th Street and Lyndale Avenue. Mr. Conlan
reviewed the requirements Gramercy must meet as stated in the contract for private
redevelopment. He said he has lived up to the contract with the HRA. He said he will
provide a report to the HRA on May 1, 2001 regarding the financing and land acquisition
status.
Mr. Conlan stated that confidential financial discussions are underway.
Council Member Enger asked what the original agreed upon price was.
Mr. Conlan said $3.5 million.
Chair Harms asked if Ernie Lindstrom had been involved in negotiations.
Mr. Conlan answered yes.
Chair Harms asked Mr. Conlan if there was anything which could derail the project.
Mr. Conlan replied that financing is unresolved and he was not in a position to
discuss project financing at this time other than to say he is working on it daily.
Chair Harms asked when the “But For” analysis will be presented.
Mr. Conlan answered that it has not been completed because the financing is not
yet firm . The analysis will differ depending on who provides the financing and the details
of the terms.
John Sieff, owner of Lyndale Hardware, addressed the City Council and HRA. He
thanked them for supporting his business for 44 years. Mr. Sieff provided a history of the
Lyndale Hardware business. He reviewed his contacts with Mr. Conlan regarding being a
part of the City Bella development. Mr. Sieff said he wants to find a solution to the problem
of purchasing his property. He said he believes City Bella would be good for the City.
Chair Harms asked Mr. Sieff if he understood that the option to purchase is not a
binding purchase agreement.
Mr. Sieff answered yes.
Chair Harms asked Mr. Sieff why he did not take the financial alternative option for
the extension of $20,000 month.
Ernie Lindstrom, attorney representing John Sieff, explained the financial
ramifications related to the extension option.
Commissioner Linnihan asked Mr. Sieff why he liquidated his business before the
development was finalized.
Mr. Sieff explained the reasons for the liquidation.
Special Concurrent Minutes-3-April 10, 2001
Chair Harms said that the HRA is limited in what it can do because the HRA has no
authority to direct Gramercy to enter into a binding agreement at this time.
Council Member Enger asked Chair Harms what the August deadline meant to the
project.
Chair Harms replied that it means all contingencies can be removed and Gramercy
can come back to the HRA stating all requirements have been met; then the project can
move forward. If requirements are not met at that time, the HRA can terminate the
development contract with Gramercy.
Ernie Lindstrom, attorney representing John Sieff, addressed the City Council and
HRA regarding the Gramercy and Lyndale Hardware issue. He reviewed the sequence of
events related to this situation. He also read and discussed sections of the Contract for
Private Redevelopment by and between the HRA and Gramercy dated January 16, 2001.
He said that Mr. Sieff is in a position of selling to someone else at a higher price. Mr.
Lindstrom said Mr. Sieff wants a signed purchase agreement and cannot wait any longer.
He said Mr. Sieff has done everything he could to make this project go; now it is up to the
City.
Chair Harms said that to force a developer to enter a contract to purchase before
financing is confirmed will not happen. He said this matter should be negotiated between
Mr. Conlan and Mr. Sieff. They need to deal with the economic problems.
Chair Harms stated the HRA has a contract with Gramercy that needs to be
honored. It is the HRA’s expectation that Mr. Conlan will meet the contract requirements
and go forward in good faith.
Mr. Conlan said he fully understands the HRA’s expectations and intends to follow
and honor the contract.
Mayor Kirsch said that these economic differences need to be worked out between
Mr. Conlan and Mr. Sieff. He also said he appreciated Mr. Sieff’s support of the City Bella
development.
ADJOURNMENT
The meeting was adjourned by unanimous consent at 6:53 p.m.
Date Approved:
Martin J. Kirsch
Mayor
Cheryl KrumholzSamantha Orduno
Recording SecretaryCity Manager