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032111completeagendaCITY OF RICHFIELD, MINNESOTA MONDAY, MARCH 21, 2011 SPECIAL RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY/CITY COUNCIL/PLANNING COMMISSION WORKSESSION RICHFIELD CITY HALL COUNCIL CHAMBERS 6700 PORTLAND AVENUE 5:45 P.M. AGENDA Call to order Roll call 1. Discussion regarding The Cornerstone Group proposal for Lyndale Garden Center site (HRA Memo No. 8/Council Memo No. 27) Notes: 2. Discussion regarding 301 West 77th Street — vacant Candlewood parcel (HRA Memo No. 9/Council Memo No. 28) Notes: Adjournment REGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING RICHFIELD CITY HALL COUNCIL CHAMBERS 6700 PORTLAND AVENUE 7:00 P.M... AGENDA Call to order Roll call 1. Approval of minutes of Special HRA Meeting of February 22, 2011 2. HRA approval of agenda 3. Presentation of Penn Central Annual Report Staff Report No. 10 Notes: 4. Consideration of request for subordination of HRA First Time Advantage Home Loan at 6400 Portland Avenue Staff Report No. 11 Notes: 5. Consideration of request for subordination of HRA First Time Advantage Home Loan at - 7536 Fremont Avenue Staff Report No. 12 Notes: 6. Consideration of preliminary agreement with Ron Clark Construction and Design Company for exploring feasibility of redevelopment of 3.5 acre area at former site of Richfield Public Works Maintenance Facility and adjacent properties; and right -of -entry agreement for use of 211 76th Street West and 7608 Pillsbury Avenue by Ron Clark Construction and Design Company Staff Report No. 13 Notes: 7. Consideration of amendment to contract with Arteka Companies, LLC for streetscape improvements at 6401- and 6444 Penn Avenue Staff Report No. 14 Notes: 8. HRA Discussion Items 9. Executive Director report • May 16 Regular HRA Meeting 10. Claims and payroll Adjournment Auxiliary aids for individuals with disabilities are available upon request. Requests must be made at least 96 hours in advance to the City Clerk at 612-861-9738. CITY OF RICHFIELD, MINNESOTA Office of City Manager March 17, 2011 Council Memorandum No. 27 HRA Memorandum No. 8 Housing & Redevelopment The Honorable Mayor Authority Commissioners And City of Richfield Members of the City Council Subject: The Cornerstone Group Proposal for the Lyndale Garden Center Site Discussion (Agenda Item No. 1) Council Members and Commissioners: At the March 21, 2011 City Council/Housing and Redevelopment Authority (HRA) and Planning Commission worksession, representatives from The Cornerstone Group will present preliminary concepts for the redevelopment of the former Lyndale Garden Center site for discussion. SLD:cak Email: Department Directors Assistant to the City Manager Copy: Planning Commission CITY OF RICHFIELD, MINNESOTA Office of City Manager March 17, 2011 Council Memorandum No. 28 The Honorable Mayor And Members of the City Council HRA Memorandum No. 9 Housing and Redevelopment Authority Commissioners City of Richfield Subject: 301 West 77th Street - Vacant Candlewood Parcel (Agenda Item No. 2) Dear Commissioners and Council Members: The Richfield Housing and Redevelopment Authority (HRA) has owned 301 West 77th Street, often referred to as the vacant Candlewood parcel, since 1992. The parcel was originally part of a larger tract of land that had been a lumber yard. In 1998 the land was platted into two parcels. The southerly portion was sold to Candlewood Suites for the development of a hotel. The remaining parcel, retained by the HRA, has been vacant since the HRA's acquisition in 1992. In 2005 the City completed a corridor study for the properties that front on 1-494 between Cedar Avenue and I -35W. The study envisioned a land use pattern for the area that is described as an `urban village', with a greater mix of land uses and more pedestrian activity. Zoning in the area was amended to encourage mixed use and pedestrian friendly development. The HRA parcel was amended so that its future land use would be guided for High Density Residential, which requires a minimum density of 24 units per acre. A land use of High Density Residential is primarily located in areas that are convenient to transportation, shopping, and social services. In June 2010 Sherman Associates held a worksession for the HRA, City Council and. Planning Commission to discuss their proposal for the site. Sherman proposed a two phased housing project. The first phase would begin on the vacant Candlewood parcel and would include a four-story 43 unit affordable apartment building. The proposed second phase would be developed on the former south half of the City Garage site and would include a three-story 47 unit affordable apartment building. At this time the only site in discussion is the vacant Candlewood parcel. At the worksession Sherman Associates stated they were applying for funding for the project through the Minnesota Housing Finance Agency (MHFA) Housing Tax Credit Grant program. In 2010 Sherman Associates was not awarded financing through MHFA but was encouraged to apply again for the 2011 funding cycle. Therefore, Sherman Associates is still committed to moving forward and would like to again apply for financing from MHFA for their proposed project. The HRA's Preliminary Agreement with Sherman Associates will end in June 2011, so they would like to enter into a Contract for Private Redevelopment which in part ensures their commitment to the project and Richfield. Recently staff has also been approached by Richfield Bloomington Honda (RB Honda) which is located directly to the west of the vacant Candlewood parcel. They expressed interest in the site for expansion of their business. RB Honda would like to purchase the site for the construction of an 8,000 square foot building that would include a coffee shop and an office/showroom for electric vehicle leasing as well as space for charging and servicing such vehicles. This proposal would require rezoning and a change in the Comprehensive Plan designation for the parcel. Both parties will be providing a brief presentation of their proposal at the combined worksession of the City Council, HRA, and Planning Commission on March 21, 2011. Based on the outcome of that meeting, staff will continue discussions with either or both prospective developers. SLD:cak Email: Department Directors Assistant to the City Manager Copy: Planning Commission richfield: March 2011 Page 1 of 1 City of Richfield Calendar Calendars Net Navigate: 2010 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2012 March 2011 ioalcta�' Tuesda Wednesday Thursday Fri day 28 Feb 1 Mar 2 3 4 6 PM Special Planning 7 PM Human Rights 7 PM Transportation 7 PM Arts Commission Commission Study Commission @ Commission @ Community Center Session Community Center 11:30a Richfield Tourism 7 PM Planning Promotion Board @ Commission Meeting 6601 Lyndale Ave, Suite 106 7 8 9 10 11 6 PM Special 6 PM Richfield- 7 PM Bike Task Force 7-8:30 PM Public open Concurrent City Council Bloomington Watershed @ Maintenance Facility house at Mt. Calvary & Richfield School Board Management Meeting - Lunchroom school gym, 66th Meeting @ Richfield Richfield Council St./16th Ave., to discuss High School Board Chambers preferred layout Room, 7001 Harriet Ave. alternative of north end 7 PM Regular City of Richfield Council Meeting Parkway/17th & Bloomington Avenues 14 15 .16 17 18- 8_5:30 5:30PM Hearing 4:30 PM FOWL Board Examiner in Heredia Meeting @ WLNC Room Friendship City 7 PM Community Commission Meeting Services Commission @ rescheduled to Feb. 24 Community Center 21 22 23 24 25 6 PM Advisory Board of 5:30 PM Special City 7 PM Friendship City SATURDAY, MAR. 26 Health Council Worksession Commission Meeting in 9:30-10:30 AM Heredia Conference Mayor's Hour @ WLNC 5:30 PM Special City 7 PM Regular City Room Council Meeting Council Meeiting (commission interview) in Executive Conference 6:30 PM Charter Room Commission Meeting in Heredia Conference 5:45 PM Special Room Concurrent HRA/City Council/Planning Commisson Worksession 7 PM Regular HRA Meeting 28 30 31. 1 Apr 7 PM Planning Commission Display: Year Month Week Clay Block List Condensed Abs Slide Calendars: Search Add Events: Daily Duration Periodic Administer: This Calendar All meetings held at City Hall (6700 Portland Avenue) unless indicated otherwise Calendars Net free online interactive web calendars http://www.my.calendars.net/richfield 1 3/17/2011 J CALL TO ORDER SPECIAL HOUSING AND REDEVELOPMENT AUTHORITY MEETING MINUTES Richfield, Minnesota February 22, 2011 The meeting was called to order by Chair Sandahl at 5:45 p.m. ROLL CALL HRA Members Sue Sandahl, Chair; Joan Helmberger, Debbie Goettel, Present: and Steven Quam. HRA Members Doris Rubenstein Absent. Staff Present: Steve Devich, Executive Director; John Stark, Community Development Director; Karen Barton, Community Development Manager; and Cheryl Krumholz, Recording Secretary. Item #1 HRA APPROVAL OF AGENDA M/Quam, S/Goettel to approve the agenda. Motion carried 4-0. Item #2 CONSIDERATION OF REQUEST FOR SUBORDINATION OF HRA FIRST TIME ADVANTAGE HOME LOAN AT 6620 VINCENT AVENUE (STAFF REPORT NO. 9) Community Development Manager Barton presented Staff Report No. 9. Eric Patenaude, owner, proposed the HRA consider accepting a cashiers check payable to the HRA in the amount of the First Time Advantage Home Loan but that it not be cashed until the refinancing process is complete. M/Sandahl, S/Goettel to approve the request for subordination of HRA First Time Advantage Home Loan at 6620 Vincent Avenue. Motion carried 4-0. HRA Meeting -2- February 22, 2011 Item #3 CLAIMS AND PAYROLL M/Goettel, S/Quam that the following claims and payrolls be approved: U.S BANk 02/22/2011 Section 8 Checks: 120085-120213 $ 164,143.60 HRA Checks: 31125-31150 $ 105,362.04 TOTAL $ 269,505.64 Motion carried 4-0. ADJOURNMENT The meeting was adjourned by unanimous consent at 6:05 p.m. Date Approved: March 8, 2011 Cheryl Krumholz Recording Secretary Suzanne M. Sandahl Chair Steve Devich Executive Director J AGENDA ITEM#: REPORT #: STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING MARCH 21, 2011 REPORT PREPARED BY: REPORT PRESENTER: DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTIVE DIRECTOR: 3 10 KAREN BARTON, COMMUNITY DEVELOPMENT ASSISTANT DIRECTOR NAME, TITLE JOHN STARK, COMMUNITY DEVELOPMENT DIRECTOR NAME, Tine, ITEM FOR HRA CONSIDERATION: Presentation of Penn Central Annual Report. I. RECOMMENDED ACTION: By Motion: No formal action required; for information only. Presentation of Penn Central Annual Report. II. BACKGROUND In 2008, the City Council adopted the Penn Avenue Revitalization Plan and Design Guidelines, encompassing Penn Avenue between Highway 62 and 67th Street. The Revitalization Plan and Design Guidelines are intended to be used to assist in guiding a more uniform revitalization and redevelopment of the Penn Avenue corridor as private investment occurs. In an effort to keep the public and other stakeholders informed of changes and improvements along the corridor, staff has prepared the Penn Central Annual Report. David Gepner, resident and community organizer, will be presenting that report at tonight's Council meeting. 032111 Penn Central Annual Report III. BASIS OF RECOMMENDATION A. POLICY • The City strives to encourage reinvestment and revitalization in commercial areas. • Section 4.1 of the 2008 Comprehensive Plan identifies as guiding goals and policies the need to develop identifiable nodes, corridors and gateways throughout the community by encouraging a mix of uses that serve a market in and around Richfield in community commercial nodes, encouraging a mix of uses that serve surrounding local neighborhoods in neighborhood commercial nodes, establishing a land use pattern and supporting infrastructure that creates a "walkable" environment, and develop residential standards (scale, density, etc.) for redevelopment areas that creates neighborhood character. • The Comprehensive Plan states that the Penn Corridor is a target area for redevelopment and recognizes the Penn Avenue Revitalization as an influencing planning effort. B. CRITICAL TIMING ISSUES N/A C. FINANCIAL N/A D. LEGAL • N/A IV. ALTERNATIVE RECOMMENDATION(S�) N/A V. ATTACHMENTS • Penn Avenue Revitalization Plan VI. PRINCIPAL PARTIES EXPECTED AT MEETING David Gepner, resident and community organizer. 1 Proposed Master Plan3- 62 t: IN 11V* lam__ Retail Use Surface Parking1, Retail & Office Use 0,11 — Combined Surface & Romp Parking r j 63rd Stwl, Residential Use Kr Retail & Office User' 1 Surface Parking Surface Parking A a Arr Ir Ath Sued 64th street = Hills !v Y Civic, Residential, & "k Vertical Live/Work Use Combined Underground & Surface Parking Q) Horizontal Live/Work Underground Parking & Surface Visitor Parking A .4 dl tr I Sheridan Dj t-0 Park 65u; Siret R 65th - t et Retail Use Surface Parking Retail & Residential Use Combined Underground& Surface Parking tv if 1 V �."SC-L" 66th Street 66th Street N, r tr17 J Civic & Mixed -Use: Retail/Office I Combined Surface& Romp Parking 4 Retail & ffice Use D Surface Parking LEGEND Retail F k office Mixed -Use lip, low F Horizontal Live/Work .1, Vertical Live/Work S_ High Density Residential L:J F-7 Medium Density Residentiary. 06 7* -jk • Low Density Residential19 Residential Use Combined Underground &Surface Parking Civic/Institutional I 4 Location of Perspective V Sketches A, r AGENDA ITEM#: 4 REPORT #: 11 STAFF REPORT moadd HOUSING AND REDEVELOPMENT AUTHORITY MEETING MARCH 21, 2011 REPORT PREPARED BY: REPORT PRESENTER: DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTIVE DIRECTOR: JULIE URBAN, HOUSING SPECIALIST NAME, TIT LG JOHN STARK, COMMUNITY DEVELOPMENT DIRECTOR Q NAME, TI'!'L1: 4 .A..,® ITEM FOR HRA CONSIDERATION: Consideration of a request for a subordination of a Housing and Redevelopment Authority First Time Advantage Loan at 6400 Portland Avenue. I. RECOMMENDED ACTION: By Motion: Approve or deny the request for a subordination of a Housing and Redevelopment Authority First Time Advantage Home Loan at 6400 Portland Avenue. II. BACKGROUND Ngawang Tara has requested a subordination of a $9,900 First Time Advantage loan received on March 14, 2005. At 97 percent, the loan -to -value ratio exceeds the Housing and Redevelopment Authority's (HRA) Subordination and Satisfaction Policy limit of 80 percent. The HRA's First Time Advantage loan is currently in third place behind a primary mortgage of $130,366 (original Loan amount of $146,000) and a home equity line of credit of $27,375. Ms. Tara is proposing to refinance her primary mortgage into a new mortgage of $136,000 lowering her interest rate from 6.25 percent to 4.0 percent and reducing the years remaining on the mortgage from 23 to 15. In addition she will pay off and close the line of credit. 03212011 Tara subordination request appeal.doc Ms. Tara's payment will increase $117 per month. The property appraised at $150,000. III. BASIS OF RECOMMENDATION A. POLICY According to the HRA Subordination and Satisfaction Policy: • "The total debt secured by the property, including the HRA lien and all superior mortgages, shall not exceed 80 percent of the documented market value of the property." A staff -authorized appeal of the Policy can be granted if the loan -to -value ratio does not exceed 85 percent and all other requirements of the Policy are met. o Ms. Tara's request does not meet either of these rules. • "The overall value of superior debt must not be increased by more than 50%." o The superior debt is decreasing because Ms. Tara is closing her line of credit. "Closing costs are reasonable. Generally this shall mean that the sum of all discount points, origination fees, and lender ancillary fees shall not exceed 3 percent of the new first mortgage amount." - o Closing costs are 2.9 percent. The following are the other staff -authorized appeal requirements that are satisfied: o Payment terms are within the financial means of the borrower. o No equity is being removed. o Property taxes are current. o The HRA has not granted any previous subordinations to the loan. B. CRITICAL ISSUES • The combined loan -to -value ratio is 97 percent. • The amount of debt in front of the HRA lien is decreasing from $157,741 to $136,000. • The refinancing will lower the primary loan's interest rate and will reduce the term of the mortgage from 30 years (with 23 years remaining) to 15 years. C. FINANCIAL • The amount of debt in front of the HRA lien is decreased with the refinancing. • There are closing costs associated with the refinance equal 2.9 percent of the mortgage amount. • The closing costs and pre -paid items are being rolled into the new mortgage. Ms. Tara is using cash to pay off the line of credit. • Payment has been received for the subordination request and appeal. D. LEGAL • N/A IV. ALTERNATIVE RECOMMENDATION(S� Deny the subordination request. V. ATTACHMENTS • Letter from homeowner VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Ngawang Tara To Whom It May Concern: The reason that I am requesting the subordination of my HRA loan in the amount of 9900.00 and originated in March of 2005 is because I am refinancing my first mortgage and the value of my property has dropped considerably since I purchased the home in 2003. I currently have a 1St mortgage balance with Wells Fargo in the amount of about 130,000. I also have a 2'd home equity line with Wells Fargo in the amount of about 24,000 and lastly, I have the HRA loan of 9900.00. My plan is to refinance the current 1St mortgage to get a substantially better rate and a lower term (I am going from a 30 year to a 15 year fixed rate loan). I will be paying off and closing the 24,000 home equity line and am asking your permission to subordinate my HRA loan. I am adding my long time boyfriend to my first mortgage and between the two of us, we have more than enough income to support the new payments. If you have any further questions, please do not hesitate to contact me. Thank you very much for your time and consideration. Sincerely, Ngawang Tara M -02 f% �� AGENDA ITEM#: 5 REPORT #: 12 STAFF REPORT =Oda HOUSING AND REDEVELOPMENT AUTHORITY MEETING MARCH 21, 2011 REPORT PREPARED BY: REPORT PRESENTER: DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTIVE DIRECTOR: JULIE URBAN, HOUSING SPECIALIST NAWF, TITLE JOHN STARK, COMMUNITY DEVELOPMENT DIRECTOR NAmE, TITLE ITEM FOR HRA CONSIDERATION: Consideration of a request for a subordination of a Housing and Redevelopment Authority First Time Advantage loan at 7536 Fremont Avenue. RECOMMENDED ACTION: By Motion: Approve or deny the request for a subordination of a Housing and Redevelopment Authority First Time Advantage Home Loan at 7536 Fremont Avenue. II. BACKGROUND Lynnette Williams and Mitchell Absey have requested a subordination of Ms. Williams' $10,690 First Time Advantage loan received on March 6, 2000. At 100 percent, the combined loan -to -value ratio exceeds the Housing and Redevelopment Authority's (HRA) Subordination and Satisfaction Policy limit of 80 percent. In 2006 Ms. Williams completed a cash -out refinance to a negatively amortizing "option Adjustable Rate Mortgage (ARM)" loan. At the time, the home appraised for $240,000 and the first mortgage was for $192,000. The HRA agreed to subordinate to that loan. Beginning this year, Ms. Williams and Mr. Absey will have to start making payments necessary to pay off the loan at Maturity. This will result in a $400 increase in 03212011 Williams subordination request appeal.doc monthly payments. In order to avoid this large payment increase, she is proposing to refinance to a conventional 30 year, fixed-rate (4.5%), Federal Housing Administration (FHA) loan. The property is currently appraised at $173,000 and the loan has negatively amortized to $197,032. Under FHA guidelines, the maximum first mortgage amount will be $161,982. Based on the current appraised value of the home, the homeowner will bring approximately $35,000 to closing in order to pay down the mortgage balance to an approvable level. With this refinance, the monthly mortgage payment will decrease by $149. III. BASIS OF RECOMMENDATION A. POLICY According to the HRA Subordination and Satisfaction Policy: • "The total debt secured by the property, including the HRA lien and all superior mortgages, shall not exceed 80 percent of the documented market value of the property." A staff -authorized appeal of the Policy can be granted if the loan -to -value ratio does not exceed 85 percent and all other requirements of the Policy are met. o The request does not meet either of these rules. • "The overall value of superior debt must not be increased by more than 50%." o The Superior debt is decreasing because the debt ahead of the HRA's lien is decreasing from $197,032 to $161,982. "Closing costs are reasonable. Generally this shall mean that the sum of all discount points, origination fees, and lender ancillary fees shall not exceed 3 percent of the new first mortgage amount." o Closing costs are 2.9 percent. No more than one subordination request has been approved by the HRA in the past five years. o The HRA approved a subordination in 2006. The following are the other staff -authorized appeal requirements that are satisfied: o Payment terms are within the financial means of the borrower. o No equity is being removed. o Property taxes are current. B. CRITICAL ISSUES • The combined loan -to -value ratio is 100 percent. • The amount of debt in front of the HRA lien is decreasing from $197,032 to $164,554. • The current first mortgage is a negatively amortizing ARM. The homeowner is proposing to refinance to a fixed rate, 30 -year FHA mortgage with an interest rate of 4.5 percent. C. FINANCIAL • The homeowner's monthly payments will decrease $149 a month. Without the refinance, the monthly payments will increase $400 a month. • Based on the current appraised value of the home, the homeowner will bring approximately $35,000 to closing in order to pay down the mortgage balance to an approvable level. • The amount of debt in front of the HRA lien is decreased with the refinancing. • There are closing costs associated with the refinance equal to 2.9 percent of the mortgage amount. Payment has been received for the subordination request and appeal. D. LEGAL N/A IV. ALTERNATIVE RECOMMENDATION(S� Deny the subordination request. V. ATTACHMENTS • Letter from homeowner VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Lynnette Williams 24 January 2011 Attn: HRA Board City of Richfield !�_E: Appeal of Subordination Policy ST+.je respectfully submit for your consideration an appeal of your`,subordination guidelines. In 2006, we were approved for a subordination of our existing HFA lien, and completed a cash out refinance. We realized proceeds fromm that that refinance of $35,875. At the time, our home ap-praise for $210,000 and the new lien was for $192,000. The LTV/CLTV of the loan at that time was 80%/84%, however the loan we secured was a negatively amortizing "option ARNP' loan. That new loan allowed negative amortization up to 115% of the original balance, meaning that the LTV/CLTV could have risen to 91%/95%. Our last payoff had a balance due of approximately $197,000 due to this negative amortization. The last "payment change date" on this loan is arriving this year. This will require us to start making the payment necessary to pay the loan off at Maturity. With the LIBOR index currently at an all-time low, we would still see a payment increase of over $400.00. However the rate is variable, and even a return to "normal" LIBOR rates would more than double our current payment. Like many homeowners, we have seen our property values drop dramatically since then. Our home recently appraised for $173,000, which is significantly lower than the $240,000 appraisal in 2006. To avoid this large payment increase; we are trying to complete a refinance on a FHA loan with Summit Mortgage:. Current FHA guidelines allow for a maximum CLTV of 97.75%. Due to our lower property value, we would need to bring approximately $35,000 to closing in order to pay down the balance to an approvable level. That is all that they have available to liquidate at this time and for the foreseeable future. The new loan would be a fully amortizing, fixed rate FHA loan. We now have the $35,000 available, as we: only recently have recovered early losses on the investments we made with proceeds of the 2006 refinance. Despite being outside of your guidelines, subordinating to this proposed loan is beneficial to both parties. It decreases the amount of our existing first mortgage and puts the ISA in a better equity Position. It helps us because we get "a fixed rate mortgage, while simultaneously eliminating the potential for a large payment increase. Essentially we are simply trying to "undo" the 2006 loan by repaying the proceeds received in 2006. 1'har.,.k you for your consideration of our request. Lynette C. Williams AGENDA ITEM#: 6 REPORT #: 13 STAFF REPORT =0090 HOUSING AND REDEVELOPMENT AUTHORITY MEETING MARCH 219 2011 REPORT PREPARED BY: REPORT PRESENTER: DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTIVE DIRECTOR: CHRISTINE COSTELLO, COMMUNITY DEVELOPMENT SPECIALIST NAME, TITLE JOHN STARK, COMMUNITY DEVELOPMENT DIRECTOR T/AAAW ITEM FOR HRA CONSIDERATION: Consideration of a Preliminary Agreement with Ron Clark Construction for exploring the feasibility of the redevelopment of a 3.5 acre parcel occupied by the former Richfield Public Works Maintenance Facility, the vacant Housing and Redevelopment Authority owned mortuary building and other adjacent properties and consideration of a Right -of -Entry Aareement for those properties owned by the Housing and Redevelopment Authority. I. RECOMMENDED ACTION: By Motion: Approve and authorize execution by the Chair and Executive Director: 1. Attached Preliminary Agreement with Ron Clark Construction and Design Company for exploring the feasibility of the redevelopment of a 3.5 acre area at the former site of the Richfield Public Works Maintenance Facility and adjacent properties; and 2. Attached Right -of -Entry Agreement for use of 211 76th Street West and 7608 Pillsbury Avenue by Ron Clark Construction and Design ComDanv. 032111 -Prelim Agreement Ron Clark.doc II. BACKGROUND Ron Clark Construction and Design (Ron Clark) presented a proposal to both the Richfield City Council (May 12, 2009) and the Richfield Housing and Redevelopment Authority (HRA) (January 19, 2010) regarding their proposed plan to develop the former City Garage/HRA Mortuary site. The proposal included the development of 66 for -sale two and three-story townhome units. Before expending additional time and expense on their proposal for the site, Ron Clark expressed a desire to enter into a Preliminary Development Agreement (Agreement) that would give them exclusive development rights to the property. In March 2010 the Richfield HRA granted Ron Clark approval of the Preliminary Agreement and the City Council approved the Right -of -Entry Agreement needed for the Agreement. Both agreements expired in November 2010. Due to concerns about the availability of financing for for -sale housing, Ron Clark has been exploring alternative housing developments such as rental housing. The Minnesota Housing and Finance Agency's (MHFA) Housing Tax Credit program is being contemplated as a funding source. Ron Clark received funding from MHFA for a project they are doing in Savage called Village Commons, which is a 66 -unit, three-story apartment building of workforce housing. The MHFA funding offers a ten year reduction in tax liability to owners and investors for eligible affordable rental housing units produced as a result of new construction, rehabilitation, or acquisition. MHFA is the primary agency that is designated by the Minnesota Legislature to allocate the Housing Tax Credit program. Due to the housing market and with the available funding to developers, Ron Clark has decided to move forward with an application to MHFA for funding the Richfield project as well. The MHFA funding application uses "local financial support" as evaluating criteria. A price reduction or donation would increase the likelihood that the project would get approval. Ron Clark, therefore, has requested a land donation for the HRA parcel. When the Accessible Space Inc., project was not awarded their funding through the Federal Housing and Urban Development Agency (HUD), and subsequently decided not to pursue a project on this site; the Housing TIF District that was created is still in place for a future user. Through the Housing TIF District, the HRA could receive back the value of the property from tax increment. Even with TIF, the new development will also pay new "base" taxes to the City, County and School District, which are not being paid now since it is currently an HRA property, and therefore tax exempt. The purpose of the Preliminary Agreement will demonstrate to MHFA that the "local financial support" for the grant funding has been supported by the HRA. The Preliminary Agreement is contingent upon Ron Clark receiving funding from MHFA. If funding is not received, the HRA will still retain ownership of the parcel. The attached Preliminary Agreement was drafted jointly by HRA staff, legal counsel and representatives of Ron Clark. In summary, this Agreement would prohibit the HRA from soliciting proposals from, or entering into a development agreement with any other party for a period of fifteen months with a six month extension if Ron Clark has made application to MHFA. During this time, the HRA would obtain appraisals for all of the publicly owned land in the project area; the expense of such appraisals would be reimbursed by Ron Clark if they ultimately proceed with the project. As part of the preliminary agreement process, environmental studies such as soil borings and sample monitoring will need to be conducted to ensure that any hazardous substance or contaminants that may be found in the soils or groundwater can be remediated. Therefore, a Right -of -Entry Agreement is needed between Ron Clark and the HRA as well as the City. Ron Clark will go before the City Council at their April 12th meeting for consideration of a Right -of -Entry Agreement for the City property which is the north half of the former Public Works Maintenance Facility (7700 Pillsbury Avenue). III. BASIS OF RECOMMENDATION A. POLICY • The Richfield Comprehensive Plan has been used as a guide for the redevelopment of the former Richfield Public Works Maintenance Facility. • The Comprehensive Plan indicates that this area is guided for Medium -High Density residential use. • Medium High Density Residential is considered a density that would range from 12. to 24 units per acre and no greater than four stories tall. • The City Council will consider a Right -of -Entry Agreement for the City property at its April 12th meeting. B. CRITICAL TIMING ISSUES • This is a unique opportunity to realize the greatest potential for this area for the future of the community. • The term of the Agreement is for fifteen months with a six month extension if Ron Clark has made application to the MHFA for their Housing Tax Credit Grant program. The Agreement restricts the HRA from assisting any other developer with redevelopment of this project site. • The Preliminary Agreement requires the HRA to undertake a Financial Feasibility Study to ensure that Ron Clark and the proposed project are financial feasible. • Should development prove feasible, the Agreement requires Ron Clark to submit site plans and building elevations to the HRA for review and comment. • If the development project is deemed feasible during the term of the Agreement, the HRA and Ron Clark would negotiate a Private Development Contract. • The Right -of Entry Agreement is necessary so that Ron Clark may enter the HRA and City owned property to undertake environmental work prior to the conveyance of the property to Ron Clark. The Right - of -Entry Agreement for the City property is attached for reference. C. FINANCIAL • The Agreement requires Ron Clark to reimburse the HRA for expenses related to consultants. D. LEGAL • HRA legal counsel drafted the Agreement and the Right -of -Entry Agreement in cooperation with staff and Ron Clark. IV. ALTERNATIVE RECOMMENDATION(S� • Approve the Preliminary Agreement and Right -of -Entry Agreement with added provisions or modifications. • Do not approve the Preliminary Agreement and Right -of -Entry Agreement. • Continue the consideration of the Preliminary Agreement and Right -of -Entry Agreement to a later meeting date. V. ATTACHMENTS Preliminary Agreement and Right of Entry Agreement with Ron Clark VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Ron Clark, Founder and Owner of Ron Clark Construction • Mike Roebuck, Vice President of Ron Clark Construction (- k A PRELIMINARY AGREEMENT THIS AGREEMENT is made and entered into this day of , 2011, by and between the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, a Minnesota public body corporate and politic ("HRA") and R.E.C.,Inc.a Minnesota Corporation DBA RON CLARK CONSTRUCTION AND DESIGN, (" CLARK") RECITALS: First: CLARK and the HRA have been engaged in informal discussions regarding the possible development of an area of land within the City of Richfield that is generally shown in the attached Exhibit A (the "Area"). The Area includes property owned by the HRA, the City of Richfield, Richfield Properties, LLC (which is owned by CLARK) and a private party. Ownership is indicated on Exhibit A. Second: CLARK is proposing redevelopment within the Area which will a include residential use (hereinafter the "Project"); Third: Based on initial reviews of the proposal, it appears that the Project is potentially feasible; however, further review and detail are needed; Fourth: The parties wish to cooperate doing the things necessary in analyzing the potential and feasibility of Project and are willing to proceed as described in this Agreement; Fifth: The parties acknowledge that CLARK will expend substantial time and effort, and incur substantial expense in pursuing the Project; Sixth: CLARK is willing to undertake the activities described in this Agreement only with the reasonable assurance from the HRA that it will support and cooperate with CLARK in its efforts. Seventh; The HRA and CLARK have executed this Agreement to document their understanding with respect to the proposed Project AGREEMENT NOW, THEREFORE, in consideration of the premises and mutual obligations of the parties contained herein, each of them does hereby represent, covenant and agree with the other as follows: 1. Statement of Intent. It is the intention of the parties that during the term of this agreement the following 1 activities will take place: (a) Financial Feasibility. Clark will conduct a financial feasibility analysis of the Project, in such detail and nature as CLARK, in its sole judgment determines necessary. The HRA's fiscal consultant will also conduct a financial analysis of CLARK and the Project. The purpose of the HRA's analysis is to determine CLARK's ability to finance the Project as proposed. CLARK will, as a part of the HRA financial study, provide any internally prepared market /development feasibility study for the HRA. The analysis will consider such factors as CLARK's capability to arrange for borrowing, the anticipated level of other assistance available to the Project from the HRA other sources, and CLARK's ability to provide equity to the Project. Information obtained from CLARK in connection with this analysis will be subject to such confidentiality provisions as are permitted by law. It is understood that it will not be possible for CLARK to provide a loan term sheet at this stage in the process due to the fact that CLARK will not have sufficient information (full proforma, TIF agreement, Development Agreement, Plans & Project Documents etc.) for any bank to do a proper evaluation of the project at this time. (b) Plan Review and Refinement. CLARK will present the general development plan, including parking layout and design, to the City for review and comment; and will also undertake any additional studies or refinements to the plan for the Project that are necessary to determine that the plan (i) complies with the City's land use requirements; (ii) provides sufficient detail to permit the reviews described in paragraphs (a) and (b) above. In formulating the general development plan, to the extent determined necessary by the HRA, CLARK and the HRA will jointly cooperate in conducting sufficient neighborhood open houses to provide information and seek input from the neighborhood as such is defined by the HRA. The general development plan will also address the incorporation of any privately owned parcel in the Area into the Project. (c) Contract Negotiation. Either during or on completion of the activities described in (a), and (b,) above, the parties will attempt in good faith to negotiate the terms of a contract for private development (the "Contract") which will provide for the acquisition of the necessary property, the nature and timing of the private improvements to be constructed, the form, amount and conditions of any economic assistance to be provided by the HRA in aid of the Project. The Contract will contain such other and additional terms as either party believes are necessary for the transaction. (d) Right of Eq Ur. In fulfillment of its responsibilities under this Agreement and as further defined in Article 5G, CLARK and the HRA desire to initially conduct environmental testing. on the portions of the Area owned by the City and/or the HRA. Upon receipt of the environmental testing and after appropriate review and investigation Clark will determine and conduct what additional soil testing and survey work would be required. Upon execution of this Agreement, the HRA will also execute and deliver to CLARK a right of entry agreement in substantially the form of the attached Exhibit B. The HRA will cooperate with 4 CLARK in securing a right of entry agreement from the City of Richfield for the purpose of inspecting the portion of the Area owned by the City and conducting testing and other examinations on the portions of the Area currently owned by the City. The proposed form of agreement that would be presented to the City for consideration is contained in Exhibit C. 2. Undertaking by CLARK. During the term of this Agreement, CLARK will undertake all of the activities necessary to accomplish the activities described in paragraph 1 above to be performed by CLARK, including, without limitation, providing project and financial information to the HRA. 3. HRA's Undertakin . and Agreement. The HRA agrees to cooperate with CLARK in CLARK's undertakings, agrees to utilize its best efforts, subject to CLARK's performance, to accomplish the activities described in paragraph 1 above, which also includes an analysis of the nature, area, and financial implications of any tax increment district which might be established. The HRA further agrees that during the term of this Agreement the HRA will not: (i) provide or enter into an agreement for provision of financial assistance to any third party in connection with any proposed development within the Area, (ii) except as may be necessary in connection with the provision of public improvements, condemn or agree to proceed with the condemnation of any property within the Area to assist or facilitate development within such area by any third party, (iii) solicit proposals from any third party regarding any proposed development within the Area, or (iv) sell or encumber any land owned by it located within the Area. 4. Term. The term of this Agreement shall be for a period of 15 months from the date hereof, and is subject to an automatic additional 6 month extension if CLARK has made application for tax credits or other similar treatment, provided, in the event (i) the HRA determines, in good faith, that CLARK is not diligently pursuing the Project; or (ii) CLARK determines, in good faith, that the HRA is not diligently pursuing its obligations hereunder, or (iii) if CLARK determines, in good faith, that the Project is not feasible, such determining party may terminate this Agreement upon thirty days written notice to the other. The HRA may also terminate this Agreement for failure of CLARK to provide additional funds to the Deposit pursuant to paragraph 5 E. below. The parties each waive any claim or cause of action that they may have against the other party based upon the termination of this Agreement by such other party. The parties may, by mutual written agreement extend this Agreement for such further periods as they shall determine to be appropriate from time to time. Such extension will not be deemed as an extension of any Right of Entry Agreement executed by the parties, or by the parties and the City. Any such notice shall be deemed delivered if either actually delivered, or if faxed and mailed to the parties at the following addresses: 3 v—q Ron Clark RON CLARK Construction and Design 7500 West 78th Street Edina, MN 55439 Fax: 952.947.3030 Richfield Housing and Redevelopment Authority 6700 Portland Avenue South Richfield, MN 55422 Attn: Executive Director Fax: 612.861.9749 Miscellaneous. A. This Agreement constitutes the entire agreement between the parties relative to the proposed Project. Unless specifically described herein, no obligation shall be inferred or construed. B. Redevelopment of the Area will be in accordance with further agreements which the parties shall, in good faith attempt to negotiate during the term of this Agreement. C. As expansion of the foregoing, CLARK understands that further and separate action, for which no obligation is created hereunder, will be required before the HRA or CLARK is obligated to take various actions with respect to the Project. Those actions may include, without limitation: a) Modification of Project Area and/or Tax Increment District; b) Zoning and subdivision approvals; c) Acquisition of land within the Area; d) Construction of public improvements to serve the Project; and e) Approval of separate contracts calling for the actual redevelopment of the Area. D. CLARK further understands that many of the actions which the HRA may be called upon to take require the reasonable discretion and in some instances the legislative judgment of the HRA, such actions may be made only following established procedures; and HRA may not, by agreement, agree in advance to any specific decision in such matters. E. With the execution of this Agreement CLARK will deliver a deposit to the HRA in the amount of $5,000 (the "Deposit"). The deposit shall be used to reimburse the HRA for the service of its consultants including appraisers retained pursuant to 0 paragraph 3, incurred from the date of this Agreement and thereafter. If the amount remaining in the Deposit is reduced to below $2,500, CLARK shall, upon five days written notice from the HRA, make an additional deposit in an amount sufficient to return the amount on deposit to $5,000. If such deposit is not made, the HRA may elect to suspend or terminate its performance hereunder. Such election will be effective on the date it is given in writing, or on such later date specified in the election. Any unexpended or unencumbered portion of the Deposit shall be returned to CLARK upon the expiration or termination of this Agreement. F. The environmental examination and testing to be contracted and conducted as follows: If an update to the Phase I is determined needed it will be requested and paid for by CLARK. At such time as the cost of any needed Phase II can be estimated, the parties may agree to proceed with the Phase II; and if they do proceed, payment of the costs will be initially paid by the HRA subject to CLARK reimbursing the HRA at the time the Contract is executed. IN WITNESS WHEREOF, the parties have executed this Agreement effective the date and year first above written. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA By: Its: By: Its: in RON CLARK CONSTRUCTION AND DESIGN, a Minnesota limited liability company Ron Clark Its: Founder and Owner 5 60-S (0—(0 Exhibit A EXHIBIT B RIGHT OF ENTRY AGREEMENT THIS AGREEMENT, made on this day of , 2011 (the "Effective Date"), by and between THE HOUSING AND REDEVELOPMENT AUTHORITY IN FOR THE CITY OF RICHFIELD, a Minnesota public body corporate and politic ("Owner") and R.E.C.,Inc.a Minnesota Corporation DBA RON CLARK CONSTRUCTION AND DESIGN, (" CLARK") I. RECITALS 1.01. Owner is the fee simple owner of the real estate located at the addresses identified and legally described on the attached Attachment A ("HRA Property") 1.02. CLARK is investigating the possibility of purchasing the HRA Property for the purpose of redevelopment. 1.03. CLARK wishes to have its consultants conduct geotechnical testing, and other related studies on the HRA Property in order to identify whether the HRA Property is suitable for the intended uses. CLARK has requested that Owner grant CLARK, its employees, agents and contractors, the right to enter the HRA Property to conduct said testing and studies. 1.04. CLARK also desires to secure the consent of Owner to enter the HRA Property for the purpose of conducting land surveys of the HRA Property. CLARK has requested that Owner grant its consent to the entry of these additional consultants onto the HRA Property to conduct their studies. 1.05. It is understood that in executing this agreement, Owner will not be granting (a) any permanent interest in the HRA Property to CLARK, or (b) exclusive use or possession of the HRA Property to CLARK. 1 6-7 6-s H. AGREEMENT NOW, THEREFORE, in consideration of the premises and their mutual promises, the parties hereto hereby agree as follows: 2.01. Right of EntrX. Effective upon the date hereof, Owner hereby grants to CLARK, its agents, employees, contractors and invitees, and such other consultants as CLARK may elect (collectively, "Consultants") the right to enter upon the HRA Property, for the purpose of carrying out the activities described in sections 1.03 and 1.04 above relative to CLARK's possible purchase of the HRA Property. 2.02. Consideration. In consideration for such right of entry, CLARK agrees to: (a) Notify Owner of the date and time that work by CLARK or its Consultants on the HRA Property will commence under this Agreement which notice shall be at least five (5) business days prior to doing any work on the HRA Property in order to permit Owner's employees or consultants retained by Owner to be present during the time any work is being done by CLARK or its Consultants; (b) Secure all appropriate government approvals and permits for any work that will occur within public streets adjacent to the HRA Property; (c) Provide a copy of all test results and reports prepared by CLARK's employees or Consultants (except appraisal reports) evaluating the conditions present on the HRA Property to Owner as soon as reasonably possible following final completion thereof. (d) Dispose of all solid waste generated during the course of CLARK's sampling activities and other work on the HRA Property in accordance with applicable 2 60 -R federal, state and local laws, rules and regulations. (e) Do the work in the shortest period of time reasonably necessary to complete such activities authorized under this Agreement as CLARK, in its sole discretion, shall elect to undertake; (f) Use the HRA Property only for the purposes described herein and not park or store any equipment on the HRA Property, except during the limited periods of time when the work on the HRA Property which is contemplated by this Agreement is actually in progress; (g) Do no unnecessary damage to the HRA Property and restore the HRA Property to substantially the same condition as the condition in which it was found by CLARK at the time of CLARK's or its Consultants' entry upon the HRA Property pursuant to this Agreement. (h) Hold Owner harmless from and indemnify Owner from any and all claims, damages, judgments or obligations, including the cost of defense of suit, arising out of damage to HRA Property or arising out of injury to anyone incurred or alleged to have been incurred in connection with or as a result of any work done pursuant to this Right of Entry, or as a result of CLARK's or its Consultants' intentional torts or negligence; (i) CLARK shall ensure that its Consultants or their contractors or invitees which enter the HRA Property pursuant to this Agreement shall carry insurance during the time any work is done on the HRA Property in accordance with the following minimum requirements: Workers' Compensation Insurance with limits as provided by statute, with all 3 necessary statutory elections to provide coverage for and/or claims made by any person doing work on the HRA Property pursuant to this Right of Entry; Employer's liability insurance (often included as coverage (b) in the Workers' Compensation policy) with limits of $100,000; Comprehensive Auto (and truck) Liability Insurance with minimum combined single limits of $1 million per occurrence; Comprehensive General Liability Insurance (including coverage for contractual liability, products and completed operations liability, liability arising out of explosion, or underground related incidents) with minimum combined single limits of $1 million per occurrence. In addition, the Comprehensive General Liability policy shall include Owner and CLARK as additional insureds with respect to work done on the HRA Property. (j) Clark will upon completion of all soils testing provide a complete copy of all soils reports to the OWNER. 2.03. Expiration. The right of entry provided under this Agreement will automatically expire 15 months after the Effective Date. 2.04. Governing Law. This Agreement shall be interpreted in accordance with the laws of the state of Minnesota. 2.05. Notices and Demands. All notices, demands or other communications under this Agreement shall be effective only if made in writing and shall be sufficiently given and deemed given when delivered personally, transmitted by facsimile, or mailed by certified mail, return receipt requested, postage prepaid, properly addressed as follows: 2 If to Owner: Richfield HRA Attn: Executive Director 6700 Portland Avenue South Richfield, MN 55423 With a copy to: John B. Dean Kennedy & Graven, Chartered 470 U. S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 If to CLARK: Ron Clark RON CLARK CONSTRUCTION AND DESIGN 7500 West 78th Street Edina, MN 55439 With Copy to: Or to such other persons as the parties may from time to time designate in writing and forward to the other persons entitled to receive notice as provided in this section. 2.06. Amendment. This Agreement may be amended by the parties hereto only by written instrument executed with the same procedures and formality as were followed in the execution of this Agreement. IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed in their names and on their behalves on or as of the above date. 5 Owner: RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY By: Its Chair By: Its Executive Director RON CLARK Construction and Design, a Minnesota By: Its: 2 (- (a 6 -►3 ATTACHMENT A List of HRA Property Addresses and Legal Descriptions 211 West 76th Street Lots 1, 2, 3, Block 4, Soens Addition, except the East 121.99 feet, according to the recorded plat thereof on file or of record in the office of the Registrar of Titles, Hennepin County, Minnesota. 7608 Pillsbury Avenue South The East 121.99 feet of Lot5 2, Block 4, Soens Addition, according to the recorded plat thereof on file or of record in the office of the Registrar of Titles, Hennepin County, Minnesota. (-iq EXHIBIT C CITY RIGHT OF ENTRY AND STANDSTILL AGREEMENT. THIS AGREEMENT, made on this day of , 2011, (the "Effective Date") by and between THE CITY OF RICHFIELD, a Minnesota municipal corporation ("City") and THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, a Minnesota public body corporate and politic ("HRA") and R.E.C.,Inc.a Minnesota Corporation DBA RON CLARK CONSTRUCTION AND DESIGN, (" CLARK") I. RECITALS 1.01. City is the fee simple owner of the real estate located at the addresses and legally described as such on the attached Attachment A ("City Property"). HRA is the owner of real estate located at the address and legally described as such on the attached Attachment A ("HRA Property"). 1.02. HRA is undertaking discussions Clark concerning the possibility of redeveloping all of the property shown on Attachment A. Such redevelopment would necessitate Clark purchasing the City Property and the HRA Property. 1.03. HRA wishes to have its consultants conduct soil borings, dig and sample monitoring wells and conduct other environmental studies on the City Property in order to identify whether there may be hazardous substances, pollutants or contaminants present on the City Property, and to conduct appraisals to determine the fair market value of the City Property. 1.04. Clark also desires to secure the consent of City to enter the City Property for the purpose of conducting land surveys, and geotechnical testing. CLARK has requested that City grant 1 -15 its consent to the entry of these additional consultants onto the City Property to conduct their studies. 1.05. It is understood that in executing this agreement, City will not be granting (a) any permanent interest in the City Property to CLARK or the HRA, or (b) exclusive use or possession of the City Property to CLARK or the HRA. H. AGREEMENT NOW, THEREFORE, in consideration of the premises and their mutual promises, the parties hereto hereby agree as follows: 2.01. Right of Entry. Effective upon the date hereof, City hereby grants: (i) to Clark, its agents, employees, contractors and invitees, and such other consultants as Clark may elect, the right to enter upon the City Property, for the purpose of conducting the activities described in 1.04 above; and (ii) to the HRA, its agents, employees, contractors and invitees and such other consultants as the HRA may elect, the right to enter upon the City Property, for the purpose of conducting the activities described in 1.03 above. 2.02. Consideration. In consideration for such right of entry, as to their separate activities, Clark and the HRA agree to: (a) Notify City of the date and time that work by Clark or the HRA or Consultants on the City Property will commence under this Agreement which notice shall be at least five (5) business days prior to doing any work on the City Property in order to permit City's employees or consultants retained by City to be present during the time any work is being done by CLARK or its Consultants; (b) Secure all appropriate government approvals and permits for any work that will 6—icy occur within public streets adjacent to the City Property; (c) Provide a copy of all test results and reports prepared by Clark's or HRA's employees or Consultants (except appraisal reports) evaluating the conditions present on the City Property to City as soon as reasonably possible following final completion thereof. (d) Dispose of all solid waste generated during the course of Clark's or HRA's sampling activities and other work on the City Property in accordance with applicable federal, state and local laws, rules and regulations. (e) Do the work in the shortest period of time reasonably necessary to complete such activities authorized under this Agreement as Clark or HRA, in their sole discretion, shall elect to undertake; (f) Use the City Property only for the purposes described herein and not park or store any equipment on the City Property, except during the limited periods of time when the work on the City Property which is contemplated by this Agreement is actually in progress; (g) Do no unnecessary damage to the City Property and restore the City Property to substantially the same condition as the condition in which it was found by Clark or HRA at the time of Clark's or HRA's or their Consultants' entry upon the City Property pursuant to this Agreement. As soon after completion of its work on the City Property as allowed by applicable authorities, HRA shall properly abandon and remove any well installed by HRA or its Consultants, in accordance with Minnesota Department of Health regulations; (h) Hold City harmless from and indemnify City from any and all claims, damages, 91 judgments or obligations, including the cost of defense of suit, arising out of damage to City Property or arising out of injury to anyone incurred or alleged to have been incurred in connection with or as a result of any work done pursuant to this Right of Entry, or as a result of Clark's or the HRA or their Consultants' intentional torts or negligence. Notwithstanding the foregoing, unless the City Property is acquired by it, neither Clark nor the HRA shall not be responsible for any submission or application for further investigation or feasibility analysis or the proper methods or cost of removal, treatment or disposal of any pollutants, contaminants or hazardous substances present on the City Property, it being the sole responsibility of City to perform these tasks if required; (i) Clark or HRA shall ensure that its Consultants or their contractors or invitees which enter the City Property pursuant to this Agreement shall carry insurance during the time any work is done on the City Property in accordance with the following minimum requirements: Workers' Compensation Insurance with limits as provided by statute, with all necessary statutory elections to provide coverage for and/or claims made by any person doing work on the City Property pursuant to this Right of Entry; Employer's liability insurance (often included as coverage (b) in the Workers' Compensation policy) with limits of $100,000; Comprehensive Auto (and truck) Liability Insurance with minimum combined single limits of $1 million per occurrence; Comprehensive General Liability Insurance (including coverage for contractual liability, products and completed operations liability, liability arising out !! of explosion, or underground related incidents) with minimum combined single limits of $1 million per occurrence. In addition, the Comprehensive General Liability policy shall include City as additional insured with respect to work done on the City Property. 0) Clark will upon completion of all soils testing provide a complete copy of all soils reports to the City and HRA (k) Protect all monitoring wells with lockable caps and at least three protected posts. 2.03. Expiration. Unless extended by the mutual agreement of the parties, the right of entry provided under this Agreement will automatically expire 15 months after the Effective Date. 2.04 Standstill. Until the expiration of this Agreement, the City agrees that it will not: (i) sell or encumber or engage in discussions involving the sale or encumbrance of the City Property to anyone other than the parties to this Agreement; (ii) solicit proposals from any third party involving the proposed development of the City Property. Nothing herein shall be construed: (i) as obligating the City to subsequently agree to sell the City Property to the HRA or Clark; (ii) as agreeing to any of the terms of any sale; or (iii) as agreeing to any potential use or development of the City Property in the event of sale. 2.05. Governing Law. This Agreement shall be interpreted in accordance with the laws of the state of Minnesota. 2.06. Notices and Demands. All notices, demands or other communications under this Agreement shall be effective only if made in writing and shall be sufficiently given and deemed given when delivered personally, transmitted by facsimile, or mailed by certified mail, return receipt requested, postage prepaid, properly addressed as follows: 5 If to City: City of Richfield Attn: City Manager 6700 Portland Avenue South Richfield, MN 55423 With a copy to: Corrine A. Heine Kennedy & Graven, Chartered 470 U. S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 If to CLARK: Ron Clark RON CLARK Construction and Design 7500 West 78th Street Edina, MN 55439 With Copy to: If to HRA: Richfield HRA Attn: Executive Director 6700 Portland Avenue South Richfield, MN 55423 With a copy to: John B. Dean Kennedy & Graven, Chartered 470 U. S. Bank Plaza 200 South Sixth Street Minneapolis, MN 55402 Or to such other persons as the parties may from time to time designate in writing and forward to the other persons entitled to receive notice as provided in this section. 2.07. Amendment. This Agreement may be amended by the parties hereto only by written instrument executed with the same procedures and formality as were followed in the execution of this Agreement. Co IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed in their names and on their behalves on or as of the above date. City: CITY OF RICHFIELD By: Its Mayor By: Its City Manager RON CLARK Construction and Design, a Minnesota By: Its: Richfield HRA By: Its Chair By: Its Executive Director 7 - ao (0 a1 ATTACHMENT A List of City Property Addresses and Legal Descriptions 7700 Pillsbury Avenue South (north portion only) Lot 3, except the north 75.00 feet thereof, all of Lots 4 and 5, Block 4, R.C. Soens Addition, according to the recorded plat thereof on file or of record in the office of the Registrar of Titles, Hennepin County, Minnesota. C -A-1 Error! Unknown document property name. AGENDA ITEM#: 7 REPORT #: 14 J STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING MARCH 21, 2011 REPORT PREPARED BY: REPORT PRESENTER: DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTIVE DIRECTOR: LOR KAREN BARTON, COMMUNITY DEVELOPMENT ASSISTANT DIRECTOR NAME, TITLE JOHN STARK, COMMUNITY DEVELOPMENT DIRECTOR t7 NAME, TITLE ITEM FOR HRA CONSIDERATION: Consideration of an amendment to the contract with Arteka Companies, LLC for streetscape improvements at 6401 and 6444 Penn Avenue. I. RECOMMENDED ACTION: By Motion: Approval of an amendment to the contract with Arteka Companies, LLC for streetscape improvements at 6401 and 6444 Penn Avenue. IL BACKGROUND On January 18, 2011 the Richfield Housing and Redevelopment Authority (HRA) approved a contract with Arteka Companies, LLC for streetscape improvements at 6401 and 6444 Penn Avenue, the City's liquor store and fire station. Due to concerns raised by the City's Public Works department regarding the likelihood of damage from snow plows to bollards placed in the right-of-way along Penn Avenue as part of the streetscape improvements, staff requested Arteka to amend the bid to incorporate removable bollards. It is anticipated that installing the removable bollards will save future costs associated with the replacement of damaged bollards. 03212011 Penn Ave Streetscape Contract Amendment This change results in an increase in the contract price of $11,065.00. 2011 budgeted funds are available from the Penn Avenue Streetscape Improvement program through the Bonds of 1996. Staff is recommending the HRA approve the contract amendment to incorporate the removable bollards. III. BASIS OF RECOMMENDATION A. POLICY • From the 2008 Richfield Comprehensive Plan: o Establish a land use pattern and supporting infrastructure that creates a "walkable" environment. o Encourage the development of viable and responsive neighborhood commercial services. o Create commercial districts that sustain specific types of development and stabilize the economic base. B. CRITICAL TIMING ISSUES • Project will begin in the spring of 2011 as weather permits. C. FINANCIAL • Funding for the program has been budgeted for fiscal year 2011. • Up to $62,000 of the budgeted funding would be utilized for this program. D. LEGAL • The HRA attorney has reviewed the contract IV. ALTERNATIVE RECOMMENDATION(S) • Do not approve the amendment V. ATTACHMENTS • Contract Amendment VI. PRINCIPAL PARTIES EXPECTED AT MEETING 0 N/A A4Cmpanies° January 31 `t, 2011 TO: City of Richfield Community Development 6700 Portland Avenue Richfield, MN 55423 CONTRACT PROPOSAL Attn: Karen Barton Page: 1 of 1 Pages Job Name: Penn Avenue Streetscape Date of Plans: N/A PROPOSAL. FOR RENI0VF.,AI3LE BOLLARDS AT THE PENN AVENUE STREETSCAPE PROJECT. LANDSCAPE: t Item 1 1 EA Annapolis Removable Bollard 3 EA Concrete (.25 CY Concrete EA) 11 EA Concrete Form Tubes w/ Drainage Hole 2 CY Pea Gravel (Drainage Zone) 11 EA Drain Tube New Bollard Subtotal: S 2.5,200.00 ($ 2,290.91 EA) Original Bollard Price: $14,135.00 ($ 1,285 EA) Proposed Total Add: $ 11,065.00 Landscape Notes: I . Arteka assumes we will receive all landscaped areas within +/- 1/10' of required sub - grade elevation, ready to receive sod or mulch layer. 2. This proposal does not include any additional soils other than appropt•iate baelcfill soils utilized to promote healthy and vigorous growth. 3. This proposal is based on use of Union labor. Arteka utilizes labor from Local 49, operators, Local 15, plumbers and Local 563, laborers. We Propose to furnish material and labor in accordance with above specifications, for the sum of: dollars Payment to be Net 30 Authorized Signature aie as follows: _ 1-1/2% carrying charge on all accounts past 30 dayshio retainers unless specified. Note: This proposal may be with- , - .1_' drawn b us if not accepted within } 1 Kent Harris, Business Developer Acceptance of Proposal — The above prices, specifications, terms and conditions are satisfactory and are hereby accepted. You are authorized to do the work as specified. Payment will be made as outlined above. Signature: Date of Acceptance: 30 days Arteka Companies • 8810 13th Avenue East, Shakopee, Minnesota 55379 • lel: 952.974.7442 • fax: 952.934.2247