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HomeMy WebLinkAbout04-11-2016 EDA PacketLINO LAKES ECONOMIC DEVELOPMENT AUTHORITY MEETING Monday, April 11, 2016 6:15 P.M. City Council Chambers 1. Call to Order and Roll Call 2. Consideration of Minutes of February 8, 2016 3. Action Items A. 49 Club Demolition, Michael Grochala i. Consider Resolution No. 16-01, Designating Building as Structurally Substandard, 49 Club ii. Consider Resolution No. 16-02, Approving Preliminary Development Agreement with DM Land, LLC 4. Adjourn EDA MINUTES February 8, 2016 DRAFT 1 DATE : February 8, 2016 TIME STARTED : 6:20 p.m. TIME ENDED : 6:28 p.m. MEMBERS PRESENT : EDA Members Kusterman, Reinert, Rafferty, Maher, Manthey MEMBERS ABSENT : None OTHERS PRESENT: : Administrator Jeff Karlson; Community Development Director Michael Grochala; City Clerk Julie Bartell The meeting was called to order at 6:20 p.m. by Acting President Kusterman. CONSIDERATION OF THE MINUTES OF DECEMBER 28, 2015 Economic Development Authority (EDA) Member Reinert moved to approve the December 28, 2016 minutes. EDA Member Rafferty seconded the motion. Motion carried on a voice vote; EDA Members Maher and Manthey abstained from voting. CONSIDERATION OF ANNUAL APPOINTMENTS Michael Grochala, Community Development Director, informed the members that each year the EDA is required to hold an annual meeting and make a number of appointments; the list of appointments was before the Authority for consideration. EDA member Reinert moved to appoint EDA Member Kusterman as president, EDA Member Rafferty as vice president and EDA Member Manthey as treasurer. EDA member Maher seconded the motion. Motion carried on a voice vote. EDA member Rafferty moved to approve other appointments as outlined in the staff report. EDA Member Manthey seconded the motion. Motion carried on a voice vote. CONSIDERATION OF ANNUAL REPORT Community Development Director Grochala reviewed the annual report outlining activities of the EDA in 2015. EDA Member Manthey asked about the number of residential permits issued in 2014. Mr. Grochala explained that there were 33 residential permits (new homes) issued in 2014 and the figure (higher) for 2015 is listed in the report. EDA Member Maher moved to accept the 2015 Annual Report as presented. EDA Member Manthey seconded the motion. Motion carried on a voice vote. ADJOURNMENT There being no further business, EDA Member Rafferty moved to adjourn. EDA Member Maher seconded the motion. Motion carried on a voice vote. The meeting was adjourned at 6:28 p.m. LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY AGENDA ITEM 3A STAFF ORIGINATOR: Michael Grochala MEETING DATE: April 11, 2016 TOPIC: i. Consider Resolution No. 16-01, Designating Building as Structurally Substandard, 49 Club ii. Consider Resolution No. 16-02, Approving Preliminary Development Agreement with DM Land, LLC VOTE REQUIRED: 3/5 BACKGROUND The 49 Club, located at the corner of Hodgson Road and County Road J, has been vacant since approximately 2003. The site has become a blighted location with illegal dumping and vandalism taking place on a regular basis. The city has received numerous complaints regarding the property. The site has been the topic, along with the neighboring 17 acre Jensen property, of several development proposals. However, none have advanced past the concept phase due to a number of complicating factors including the need for public improvements, multiple property owners, and council concern over the intensity of prior commercial development proposals. In March of 2015 LHB Corporation was retained to determine the eligibility of the property for TIF purposes and to document the condition of the building. As noted in the report the buildings are structurally substandard to a degree requiring substantial renovation or clearance. Staff has been working with the owner of the property regarding potential demolition of the buildings either as a City project or by the owner. The owner is proposing to remove both the principal structure and accessory garage with their own contractor. Staff is very interested in this project as a means to clean up the site, eliminate the blight and assist redevelopment efforts. The use of Tax Increment Financing (TIF) has previously been discussed to help offset utility, road or land assemblage costs to facility redevelopment of the corner. However, removal of the building has the potential to eliminate one of the financial tools available to assist with redevelopment. In order to establish a TIF District after demolition, the request for certification of the TIF District must be filed with the County within three years of the parcel being occupied by a substandard building. An actual project would need to occur within 4 years of district certification or the site would be dropped from the district and no longer eligible for TIF. To retain our ability to use TIF staff has listed out the steps that the EDA/City would need to follow in order to demolish a building prior to a redevelopment TIF District being established: 1) The EDA Board finds by resolution (adopted before demolition) that the parcel was occupied by a structurally substandard building and that after demolition and clearance the EDA intends to include the parcel within a TIF district; 2) The City Council adopts resolution and makes blight findings regarding the building (based on report); 3) EDA and owner of property enter into a preliminary development agreement (before demolition) regarding demolition of the buildings and redevelopment of the property. The proposed development agreement does not bind the EDA and/or City to use of Tax Increment Financing. Rather the City and Developer (owner) are agreeing cooperate with respect to potential future redevelopment of the Property. The agreement sets for the conditions and for consideration of city redevelopment assistance and responsibilities of each party. The City Council will be considering the blight findings at their April 11, 2016 regular meeting. RECOMMENDATION Staff is recommending approval of Resolution No. 16-01 and Resolution No. 16-02. ATTACHMENTS 1. Resolution No. 16-01 2. LHB Recommendation March 27, 2015 3. Resolution No. 16-02 4. Preliminary Development Agreement 460586v1 LN140-114 LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 16-01 RESOLUTION DESIGNATING BUILDINGS AS STRUCTURALLY SUBSTANDARD WITHIN LINO LAKES REDEVELOPMENT PROJECT BE IT RESOLVED by the Board of Commissioners ("Board") of the Lino Lakes Economic Development Authority ("Authority") as follows: Section 1. Recitals. 1.01. Under Minnesota Statutes, Section 469.174, subd. 10(d), the Authority is authorized to deem parcels as occupied by structurally substandard buildings despite prior demolition or removal of the buildings, subject to certain terms and conditions as described in this resolution. 1.02. The Authority intends to cause demolition of the buildings located on the property described in Exhibit A hereto (the “Designated Property”), and may in the future include the Designated Property in a redevelopment or renewal and renovation tax increment financing district as defined in Minnesota Statutes, Sections 469.174, Subd. 10 or Subd. 10a. Section 2. Buildings Designated Substandard; Other Proceedings. 2.01. The Authority finds that the buildings on the Designated Property as described in Exhibit A are structurally substandard to a degree requiring substantial renovation or clearance, based upon the analysis of such buildings by LHB Architects dated March 27, 2015 and on file in City Hall. 2.02. After the date of approval of this resolution, the buildings on the Designated Property may be demolished or removed by the Authority, or such demolition or removal may be financed by the Authority, or may be undertaken by a developer under a development agreement with the Authority. 2.03. The Authority intends to include the Designated Property in a redevelopment or renewal and renovation tax increment financing district, and to file the request for certification of such district with the Anoka County auditor within three years after the date of demolition of the buildings on the Designated Property. 2.04. Upon filing the request for certification of the new tax increment financing district, the Authority will notify the Anoka County auditor that the original tax capacity of the Designated Property must be adjusted to reflect the greater of (a) the current net tax capacity of the parcel, or (b) the estimated market value of the parcel for the year in which the buildings were demolished or removed, but applying class rates for the current year, all in accordance with Minnesota Statutes, Section 469.174, subd. 10(d). 460586v1 LN140-114 2 2.05. Authority staff and consultants are authorized to take any actions necessary to carry out the intent of this resolution. Adopted by the Board of Commissioners of the Lino Lakes Economic Development Authority this 11th day of April, 2016. The motion for the adoption of the foregoing resolution was introduced by Board Member _______________and was duly seconded by Board Member ________________ and upon vote being taken thereon, the following voted in favor thereof: The following voted against same: William Kusterman, President ATTEST: Jeff Karlson, Executive Director 460586v1 LN140-114 3 EXHIBIT A Description of Designated Property 6007 Hodgson Road, Lino Lakes, Minnesota PID Nos. 31-31-22-43-0007, 31-31-22-43-0006, and 31-31-22-43-0017 March 27, 2015 Michael Grochala Community Development Director City of Lino Lakes 600 Town Center Parkway Lino Lakes, Minnesota 55014 TIF ANALYSIS FINDINGS FOR 6007 HODGSON ROAD, LINO LAKES, MINNESOTA 55014 LHB was hired to inspect the 49 Club building at 6007 Hodgson Road in Lino Lakes, Minnesota, in order to determine if it meets the definition of “Substandard” as defined by Minnesota Statutes, Section 469.174, subdivision 10. The building parcel may potentially be part of a future Redevelopment TIF District, so will need to be compliant with all of the statutes pertaining to a Redevelopment District. The building is located on a three-parcel property at the northwest corner of Ash Street and Hodgson Road (see Diagram 1). Diagram 1 Page: 2 Date: March 27, 2015 CONCLUSION After inspecting and evaluating the building on March 13, 2015 and applying current statutory criteria for a Redevelopment District under Minnesota Statutes, Section 469.174, Subdivision 10, it is our professional opinion that the building qualifies as substandard. The remainder of this letter and attachments describe our process and findings in detail. MINNESOTA STATUTE 469.174, SUBDIVISION 10 REQUIREMENTS The property was inspected in accordance with the following requirements under Minnesota Statutes, Section 469.174, Subdivision 10(c), which states: Interior Inspection “The municipality may not make such determination [that the building is structurally substandard] without an interior inspection of the property...” Exterior Inspection and Other Means “An interior inspection of the property is not required, if the municipality finds that (1) the municipality or authority is unable to gain access to the property after using its best efforts to obtain permission from the party that owns or controls the property; and (2) the evidence otherwise supports a reasonable conclusion that the building is structurally substandard.” Documentation “Written documentation of the findings and reasons why an interior inspection was not conducted must be made and retained under section 469.175, subdivision 3(1).” Qualification Requirements Minnesota Statutes, Section 469.174, Subdivision 10 (a) (1) requires two tests for occupied parcels: 1. Coverage Test …“parcels consisting of 70 percent of the area of the district are occupied by buildings, streets, utilities, or paved or gravel parking lots” The coverage required by the parcel to be considered occupied is defined under Minnesota Statutes, Section 469.174, Subdivision 10(e), which states: “For purposes of this subdivision, a parcel is not occupied by buildings, streets, utilities, paved or gravel parking lots, or other similar structures unless 15 percent of the area of the parcel contains buildings, streets, utilities, paved or gravel parking lots, or other similar structures.” The LHB team reviewed parcels 31-31-22-43-0007, 31-31-22-43-0006 and 31-31-22-43-0017: • Parcel A (31-31-22-43-0007) is approximately 25,358 square feet and is 98 percent covered by buildings, parking lots or other improvements. • Parcel B (31-31-22-43-0006) is approximately 36,305 square feet and is 45 percent covered by buildings, parking lots or other improvements. • Parcel C (31-31-22-43-0017) is approximately 30,381 square feet and is 21 percent covered by buildings, parking lots or other improvements. Page: 3 Date: March 27, 2015 Findings: The parcels are all covered by buildings, parking lots or other improvements, exceeding the 15 percent parcel requirement. 2. Condition of Buildings Test Minnesota Statutes, Section 469.174, Subdivision 10(a) states, “…and more than 50 percent of the buildings, not including outbuildings, are structurally substandard to a degree requiring substantial renovation or clearance;” a. Structurally substandard is defined under Minnesota Statutes, Section 469.174, Subdivision 10(b), which states: “For purposes of this subdivision, ‘structurally substandard’ shall mean containing defects in structural elements or a combination of deficiencies in essential utilities and facilities, light and ventilation, fire protection including adequate egress, layout and condition of interior partitions, or similar factors, which defects or deficiencies are of sufficient total significance to justify substantial renovation or clearance.” i. We do not count energy code deficiencies toward the thresholds required by Minnesota Statutes, Section 469.174, Subdivision 10(b)) defined as “structurally substandard”, due to concerns expressed by the State of Minnesota Court of Appeals in the Walser Auto Sales, Inc. vs. City of Richfield case filed November 13, 2001. Findings: The 49 Club building at 6007 Hodgson Road exceeds the criteria required to be determined a substandard building (see the attached Building Code, Condition Deficiency and Context Analysis Report). b. Buildings are not eligible to be considered structurally substandard unless they meet certain additional criteria, as set forth in Subdivision 10(c) which states: “A building is not structurally substandard if it is in compliance with the building code applicable to new buildings or could be modified to satisfy the building code at a cost of less than 15 percent of the cost of constructing a new structure of the same square footage and type on the site. The municipality may find that a building is not disqualified as structurally substandard under the preceding sentence on the basis of reasonably available evidence, such as the size, type, and age of the building, the average cost of plumbing, electrical, or structural repairs, or other similar reliable evidence.” “Items of evidence that support such a conclusion [that the building is not disqualified] include recent fire or police inspections, on-site property tax appraisals or housing inspections, exterior evidence of deterioration, or other similar reliable evidence.” LHB counts energy code deficiencies toward the 15 percent code threshold required by Minnesota Statutes, Section 469.174, Subdivision 10(c)) for the following reasons: • The Minnesota energy code is one of ten building code areas highlighted by the Minnesota Department of Labor and Industry website where minimum construction standards are required by law. • The index page of the 2007 Minnesota Building Code lists the Minnesota Energy Code as a “Required Enforcement” area compared to an additional list of “Optional Enforcement” chapters. Page: 4 Date: March 27, 2015 • Chapter 11 of the 2015 Minnesota Residential Code incorporates Minnesota Rules, Chapters, 1322 and 1323 Minnesota Energy Code. • The Senior Building Code Representative for the Construction Codes and Licensing Division of the Minnesota Department of Labor and Industry confirmed that the Minnesota Energy Code is being enforced throughout the State of Minnesota. • In a January 2002 report to the Minnesota Legislature, the Management Analysis Division of the Minnesota Department of Administration confirmed that the construction cost of new buildings complying with the Minnesota Energy Code is higher than buildings built prior to the enactment of the code. • Proper TIF analysis requires a comparison between the replacement value of a new building built under current code standards with the repairs that would be necessary to bring the existing building up to current code standards. In order for an equal comparison to be made, all applicable code chapters should be applied to both scenarios. Since current construction estimating software automatically applies the construction cost of complying with the Minnesota Energy Code, energy code deficiencies should also be identified in the existing structures. Findings: The building has code deficiencies exceeding the 15 percent building code deficiency criteria required to be determined substandard (see the attached Building Code, Condition Deficiency and Context Analysis Report). TEAM CREDENTIALS Michael A. Fischer, AIA, LEED AP - Project Principal/TIF Analyst Michael has 28 years of experience as project principal, project manager, project designer and project architect on planning, urban design, educational, commercial and governmental projects. He has become an expert on Tax Increment Finance District analysis assisting over 100 cities with strategic planning for TIF Districts. He is a Senior Vice President at LHB and currently leads the Minneapolis office. Michael completed a two-year Bush Fellowship, studying at MIT and Harvard in 1999, earning Masters degrees in City Planning and Real Estate Development from MIT. He has served on more than 50 committees, boards and community task forces, including a term as a City Council President and as Chair of a Metropolitan Planning Organization. Most recently, he served as Chair of the Edina, Minnesota planning commission. Michael has also managed and designed several award-winning architectural projects, and was one of four architects in the Country to receive the AIA Young Architects Citation in 1997. Philip Waugh – Project Manager/TIF Analyst Philip is a project manager with 13 years of experience in historic preservation, building investigations, material research, and construction methods. He previously worked as a historic preservationist and also served as the preservation specialist at the St. Paul Heritage Preservation Commission. Currently, Philip sits on the Board of Directors for the Preservation Alliance of Minnesota. His current responsibilities include project management of historic preservation projects, performing building condition surveys and analysis, TIF analysis, writing preservation specifications, historic design reviews, writing Historic Preservation Tax Credit applications, preservation planning, and grant writing. Page: 5 Date: March 27, 2015 Phil Fisher – Inspector For 35 years, Phil Fisher worked in the field of Building Operations in Minnesota including White Bear Lake Area Schools. At the University of Minnesota he earned his Bachelor of Science in Industrial Technology. He is a Certified Playground Safety Inspector, Certified Plant Engineer, and is trained in Minnesota Enterprise Real Properties (MERP) Facility Condition Assessment (FCA). His FCA training was recently applied to the Minnesota Department of Natural Resources Facilities Condition Assessment project involving over 2,000 buildings. ATTACHMENTS We have attached a Building Code, Condition Deficiency and Context Analysis Report, Replacement Cost Report, Code Deficiency Report, and thumbnail photo sheets of the building. Please contact me at (612) 752-6920 if you have any questions. LHB INC. MICHAEL A. FISCHER, AIA, LEED AP SENIOR VICE PRESIDENT M:\15Proj\150099\400 Design\406 Reports\Final Report\150099 Lino Lakes 49 Club Letter of Finding 20150327.docx Lino Lakes 49 Club Redevelopment TIF District Letter of Finding Building Code, Condition Deficiency and Context Analysis Report March 26, 2015 Map No. & Address: Map A - 6007 Hodgson Road, Lino Lakes, MN 55014 Inspection Date(s) & Time(s): March 13, 2015 4:00 PM Inspection Type: Interior and Exterior Summary of Deficiencies: It is our professional opinion that this building is Substandard because: - Substantial renovation is required to correct Conditions found. - Building Code deficiencies total more than 15% of replacement cost, NOT including energy code deficiencies. Estimated Replacement Cost: $940,500 Estimated Cost to Correct Building Code Deficiencies: $575,019 Percentage of Replacement Cost for Building Code Deficiencies: 61.14% Defects in Structural Elements 1. A code required wind uplift system is missing on the exterior wall connection to the roof. 2. East and West wall are tied together with a suspect system to prevent movement. Combination of Deficiencies 1. Essential Utilities and Facilities a. Water service to the building has been disconnected. b. Electrical service is disconnected. c. There are no code accessible restrooms. d. There is no code required accessible parking spaces. 2. Light and Ventilation a. Electrical branch wiring has been removed. b. All light fixtures have been removed. c. The exhaust system has been removed. d. The ventilation system has been disconnected. The age and condition of it make it suspect if it would work as designed. 3. Fire Protection/Adequate Egress a. There is not a code compliant fire protection system in the kitchen. b. Stairs do not have code compliant hand rails. c. The exterior steps leading from the kitchen area are missing and required by code. d. The East and West exterior doors do not have code approved thresholds. e. The East glass door does not have the code required 10 inch kick plates. f. Flooring is missing, torn, or damaged preventing code compliant exiting from the building. Lino Lakes 49 Club Redevelopment TIF District Letter of Finding Building Report LHB Project No. 150099 Page 1 of 2 Map A 4. Layout and Condition of Interior Partitions/Materials a. The ceiling in the residence is stained from water intrusion and damaged by vandals. b. Code approved wall surfacing is absent in the kitchen and restaurant areas. c. Wall surfaces in the residence have been damaged by vandals with holes and graffiti. d. All insulation in the kitchen and restaurant has been removed. 5. Exterior Construction a. Roof is in need of code required replacement to prevent water intrusion. b. Code required siding is missing on the North side of the building. c. Soffit and fascia are missing from the North side of the building. d. Exterior siding is damaged and in need of repair and paint to prevent water intrusion. e. Window glass is missing and is allowing water intrusion. f. Door glass on the west side of the building is broken. Description of Code Deficiencies 1. Provide adequate water supply for fire and life safety system. 2. Replace all electrical wiring and electrical panels in order to provide adequate illuminated egress. 3. Install adequate plumbing for restroom accessibility. 4. Replace HVAC system that is non-existent. 5. All exit doors have non-compliant steps down to landing. 6. Thresholds at egress doors exceed allowable 1/2”. 7. Aluminum and glass doors lack required 10” high kick plate. 8. Flooring needs to be securely installed to create a slip resistant pathway to egress. 9. Replace roof to prevent water intrusion. 10. Replace exterior siding to prevent water intrusion. 11. Commercial kitchen exhaust shall have a separate fire suppression system. 12. Stairways shall have handrails on both sides. 13. Exterior walls do not conform to fire restrictive construction. 14. Install required wind up lift connection system to exterior wall and roof. Overview of Deficiencies The original structure was built in 1967 and has several additions, the latest having burned down several years ago. The interior is void of all essential utilities and necessary facilities to be considered a functional place of business. Lino Lakes 49 Club Redevelopment TIF District Letter of Finding Building Report LHB Project No. 150099 Page 2 of 2 Map A Lino Lakes 49 Club Redevelopment TIF District Letter of Finding Replacement Cost Report Map A - 49 Club City of Lino Lakes 6007 Hodgson Road, Lino Lakes, MN 55014 Building Type: Restaurant with Wood Siding / Wood Frame Location:SAINT PAUL, MN Story Count:1 Story Height (L.F.):12 Floor Area (S.F.):5150 Labor Type:OPN Basement Included:No Data Release:Year 2015 Cost Per Square Foot:$182.62 Building Cost:$940,500 % of Total Cost Per S.F. Cost 8.89% $14.76 $76,000.00 A1010 Standard Foundations $3.44 $17,700.00 A1030 Slab on Grade $5.69 $29,300.00 A2010 Basement Excavation $0.57 $2,950.00 A2020 Basement Walls $5.03 $25,900.00 24.80% $41.17 $212,000.00 B1010 Floor Construction $1.17 $6,050.00 B1020 Roof Construction $7.69 $39,600.00 B2010 Exterior Walls $6.85 $35,300.00 B2020 Exterior Windows $10.58 $54,500.00 B2030 Exterior Doors $5.65 $29,100.00 Estimate Name: Costs are derived from a building model with basic components. Scope differences and market conditions can cause costs to vary significantly. A Substructure Strip footing, concrete, reinforced, load 11.1 KLF, soil bearing capacity 6 KSF, 12" deep x 24" wide Spread footings, 3000 PSI concrete, load 25K, soil bearing capacity 3 KSF, 3' - 0" square x 12" deep Slab on grade, 4" thick, non industrial, reinforced Excavate and fill, 4000 SF, 4' deep, sand, gravel, or common earth, on site storage Foundation wall, CIP, 4' wall height, direct chute, .148 CY/LF, 7.2 PLF, 12" thick B Shell Wood column, 8" x 8", 20' x 20' bay, 12' unsupported height, 160 BF/MSF, 160 PSF total allowable load Wood roof, truss, 4/12 slope, 24" O.C., 30' to 43' span Wood siding, 2"x4" studs 16"OC, insulated wall, 1" x 12" sawn cedar, 1" x 4" battens Aluminum flush tube frame, for 1/4"glass,1-3/4"x4", 5'x6' opening, no intermediate horizontals Glazing panel, plate glass, 1/4" thick, tempered Door, aluminum & glass, without transom, full vision, double door, hardware, 6'-0" x 7'-0" opening Door, aluminum & glass, with transom, non-standard, double door, hardware, 6'-0" x 10'-0" opening Lino Lakes 49 Club Redevelopment TIF District Letter of Finding LHB Project No. 150099 Page 1 of 3 Replacement Cost Report Map A % of Total Cost Per S.F. Cost B3010 Roof Coverings $9.07 $46,700.00 B3020 Roof Openings $0.10 $500.00 15.50% $25.73 $132,500.00 C1010 Partitions $4.50 $23,200.00 C1020 Interior Doors $2.17 $11,200.00 C1030 Fittings $0.70 $3,600.00 C3010 Wall Finishes $2.04 $10,500.00 C3020 Floor Finishes $9.05 $46,600.00 C3030 Ceiling Finishes $7.26 $37,400.00 50.82% $84.37 $434,500.00 D2010 Plumbing Fixtures $10.78 $55,500.00 D2020 Domestic Water Distribution $8.31 $42,800.00 D3050 Terminal & Package Units $36.89 $190,000.00 Door, steel 18 gauge, hollow metal, 1 door with frame, no label, 3'-0" x 7'-0" opening Wood roofing, cedar shingles, 16" x 5", 4" min slope, 5" exposure, 1.6 PSF Insulation, rigid, roof deck, fiberglass, 3'x4' or 4'x8' sheets, 15/16" thick, R3.70 Gutters, box, aluminum, .027" thick, 5", enameled finish Downspout, aluminum, rectangular, 2" x 3", embossed mill finish, .020" thick Skylight, plastic domes, insulated curbs, nominal size to 10 SF, double glazing C Interiors Wood partition, 5/8"fire rated gypsum board face, none base,2 x 4,@ 16" OC framing,same opposite face, 0 insul 5/8" gypsum board, taped & finished, painted on metal furring Door, single leaf, wood frame, 3'-0" x 7'-0" x 1-3/8", birch, hollow core Toilet partitions, cubicles, ceiling hung, plastic laminate Painting, interior on plaster and drywall, walls & ceilings, roller work, primer & 2 coats Ceramic tile, thin set, 4-1/4" x 4-1/4" Carpet tile, nylon, fusion bonded, 18" x 18" or 24" x 24", 35 oz Tile, quarry tile, mud set, minimum Tile, quarry tile, mud set, maximum g, , , channel grid, suspended support D Services Water closet, vitreous china, bowl only with flush valve, wall hung Urinal, vitreous china, wall hung Lavatory w/trim, vanity top, PE on CI, 20" x 18" Kitchen sink w/trim, countertop, stainless steel, 44" x 22" triple bowl Service sink w/trim, PE on CI,wall hung w/rim guard, 24" x 20" Shower, stall, baked enamel, terrazzo receptor, 36" square Water cooler, electric, wall hung, dual height, 14.3 GPH Gas fired water heater, commercial, 100< F rise, 500 MBH input, 480 GPH Rooftop, multizone, air conditioner, restaurants, 3,000 SF, 15.00 ton Commercial kitchen exhaust/make-up air system, rooftop, gas, 2000 CFM Lino Lakes 49 Club Redevelopment TIF District Letter of Finding LHB Project No. 150099 Page 2 of 3 Replacement Cost Report Map A % of Total Cost Per S.F. Cost D4010 Sprinklers $8.70 $44,800.00 D4020 Standpipes $2.00 $10,300.00 D5010 Electrical Service/Distribution $4.35 $22,400.00 D5020 Lighting and Branch Wiring $9.48 $48,800.00 D5030 Communications and Security $3.50 $18,000.00 D5090 Other Electrical Systems $0.32 $1,650.00 0% $0.00 $0.00 E1090 Other Equipment $0.00 $0.00 0% $0.00 $0.00 0% $0.00 $0.00 100% $166.03 $855,000.00 10.00% $16.60 $85,500.00 0.00% $0.00 $0.00 0.00% $0.00 $0.00 $182.62 $940,500.00 Wet pipe sprinkler systems, steel, light hazard, 1 floor, 2000 SF Wet pipe sprinkler systems, steel, ordinary hazard, 1 floor, 1000 SF Wet standpipe risers, class III, steel, black, sch 40, 4" diam pipe, 1 floor Overhead service installation, includes breakers, metering, 20' conduit & wire, 3 phase, 4 wire, 120/208 V, 400 A Feeder installation 600 V, including RGS conduit and XHHW wire, 400 A Switchgear installation, incl switchboard, panels & circuit breaker, 120/208 V, 1 phase, 400 A Receptacles incl plate, box, conduit, wire, 10 per 1000 SF, 1.2 watts per SF Miscellaneous power, 1.8 watts Central air conditioning power, 6 watts Fluorescent fixtures recess mounted in ceiling, 1.6 watt per SF, 40 FC, 10 fixtures @32watt per 1000 SF Communication and alarm systems, fire detection, addressable, 12 detectors, includes outlets, boxes, conduit and wire Fire alarm command center, addressable without voice, excl. wire & conduit Generator sets, w/battery, charger, muffler and transfer switch, gas/gasoline operated, 3 phase, 4 wire, 277/480 V, 15 kW E Equipment & Furnishings F Special Construction G Building Sitework SubTotal Contractor Fees (General Conditions,Overhead,Profit) Architectural Fees User Fees Total Building Cost Lino Lakes 49 Club Redevelopment TIF District Letter of Finding LHB Project No. 150099 Page 3 of 3 Replacement Cost Report Map A Lino Lakes 49 Club Redevelopment TIF District Letter of Finding Code Deficiency Cost Report Map A - 6007 Hodgson Road, Lino Lakes, MN 55014 - PID 31-31-22-43-0007 Code Related Cost Items Unit Cost Units Unit Quantity Total Accessibility Items Restrooms Install plumbing fixtures for accessible restrooms 10.78$ SF 5,150 55,517.00$ Structural Elements Wind up lift requirement Install code required wind up lift system between trusses/rafters and exterior wall 1.75$ SF 5,150 9,012.50$ Exiting Thresholds Correct elevation drop from interior to exterior landing 1,000.00$ Ea 4 4,000.00$ Reduce threshold elevation to less than 1/2 inch 250.00$ Ea 4 1,000.00$ Glass Dooors Install code required 10 inch kick plate 150.00$ Ea 4 600.00$ Flooring Install level flooring to allow emergency egress 9.05$ SF 5,150 46,607.50$ Lighting Install branch wiring and lights for egress 9.48$ SF 5,150 48,822.00$ Fire Protection Commercial Kitchen Install code required fire suppression system 3.70$ SF 2,000 7,400.00$ Entire building Install code required fire alarm system 3.50$ SF 5,150 18,025.00$ Interior walls/ceilings Install code required wall and ceiling finishes 9.30$ SF 5,150 47,895.00$ Exterior Construction Wood Siding Repair/replace wood siding to prevent water intrusion 5.00$ SF 5,150 25,750.00$ Lino Lakes 49 Club Redevelopment TIF District Letter of Finding LHB Project No. 150099 Page 1 of 2 Code Deficiency Cost Report Map A Code Related Cost Items Unit Cost Units Unit Quantity Total Roof Construction Replace roof that has failed. Remove old roof 0.90$ SF 5,150 4,635.00$ Replace with new roof 9.07$ SF 5,150 46,710.50$ Mechanical- Electrical Electrical Install new electrical service 4.35$ SF 5,150 22,402.50$ Plumbing Install domestic water distribution system 8.31$ SF 5,150 42,796.50$ Mechanical Install HVAC system 36.89$ SF 5,150 189,983.50$ Provide electrical service to new HVAC 0.75$ SF 5,150 3,862.50$ Total Code Improvements 575,019.50$ Lino Lakes 49 Club Redevelopment TIF District Letter of Finding LHB Project No. 150099 Page 2 of 2 Code Deficiency Cost Report Map A Lino Lakes 49 Club Redevelopment TIF District Letter of Finding Map A, 6007 Hodgson Road - Photos Page 1 of 6 P1020945.JPG P1020946.JPG P1020948.JPG P1020949.JPG P1020950.JPG P1020951.JPG P1020953.JPG P1020955.JPG P1020956.JPG P1020957.JPG P1020958.JPG P1020959.JPG Page 2 of 6 Lino Lakes 49 Club Redevelopment TIF District Letter of Finding LHB Project No. 150099 Photos Map A P1020960.JPG P1020961.JPG P1020962.JPG P1020963.JPG P1020964.JPG P1020966.JPG P1020967.JPG P1020968.JPG P1020969.JPG P1020970.JPG P1020971.JPG P1020972.JPG Page 3 of 6 Lino Lakes 49 Club Redevelopment TIF District Letter of Finding LHB Project No. 150099 Photos Map A P1020973.JPG P1020974.JPG P1020975.JPG P1020976.JPG P1020977.JPG P1020979.JPG P1020980.JPG P1020981.JPG P1020982.JPG P1020983.JPG P1020984.JPG P1020985.JPG Page 4 of 6 Lino Lakes 49 Club Redevelopment TIF District Letter of Finding LHB Project No. 150099 Photos Map A P1020986.JPG P1020987.JPG P1020988.JPG P1020989.JPG P1020990.JPG P1020991.JPG P1020994.JPG P1020995.JPG P1020996.JPG P1020997.JPG P1020998.JPG P1020999.JPG Page 5 of 6 Lino Lakes 49 Club Redevelopment TIF District Letter of Finding LHB Project No. 150099 Photos Map A P1030001.JPG P1030002.JPG P1030003.JPG P1030004.JPG P1030005.JPG P1030006.JPG P1030007.JPG P1030008.JPG P1030009.JPG P1030010.JPG P1030011.JPG P1030012.JPG Page 6 of 6 Lino Lakes 49 Club Redevelopment TIF District Letter of Finding LHB Project No. 150099 Photos Map A P1030013.JPG P1030014.JPG P1030017.JPG P1030018.JPG P1030019.JPG P1030020.JPG P1030021.JPG P1030022.JPG P1030023.JPG P1030024.JPG P1030025.JPG 476794v1 JAE LN140-114 LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION NO. 16-02 RESOLUTION APPROVING A PRELIMINARY DEVELOPMENT AGREEMENT WITH DM LAND, LLC WHEREAS, the Lino Lakes Economic Development Authority (the “Authority”) desires to promote redevelopment of property located in the City of Lino Lakes, Minnesota (the “City”) known as the Old 49 Club Site (the “Property”); and WHEREAS, the Developer owns the Property and intends to demolish the restaurant and garage buildings currently located on the Property; and WHEREAS, pursuant to a report from LHB, dated March 27, 2015, the buildings are in substandard condition; and WHEREAS, the Board of Commissioners of the Authority (the “Board”) has previously found the buildings located on the Property to be structurally substandard within the meaning of Minnesota Statutes, Section 469.174, subdivision 10; and WHEREAS, demolition of the existing buildings will encourage the redevelopment of the Property; and WHEREAS, there has been presented before the Board a form of Preliminary Development Agreement (the “Preliminary Development Agreement”) proposed to be entered into between the Authority and the Developer, which sets forth the Developer’s intentions and the conditions under which the Developer will demolish the existing buildings on the Property and undertake the redevelopment of the Property; and WHEREAS, a preliminary development agreement entered into prior to demolition is required by Minnesota Statutes, Section 469.174, subdivision 10 in order for the Authority to be able to establish a redevelopment tax increment district after the demolition occurs; and WHEREAS, the Authority has reviewed the Preliminary Development Agreement and finds that the execution thereof by the Authority and the performance of the Authority’s obligations thereunder are in the best interest of the City and its residents; NOW, THEREFORE, BE IT RESOLVED BY THE Board of Commissioners of the Lino Lakes Economic Development Authority as follows: 2 476794v1 JAE LN140-114 1. The Preliminary Development Agreement in substantially the form presented to the Board and on file with the Community Development Director of the City is hereby in all respects approved, subject to modifications that do not alter the substance of the transaction and that are approved by the President and Executive Director; provided that execution of such documents by such officials shall be conclusive evidence of approval. 2. The President and Executive Director are hereby authorized to execute the Preliminary Development Agreement on behalf of the Authority and to carry out on behalf of the Authority the Authority’s obligations thereunder. Adopted by the Board of Commissioners of the Lino Lakes Economic Development Authority this 11th day of April, 2016. The motion for the adoption of the foregoing resolution was introduced by Board Member _______________and was duly seconded by Board Member ________________ and upon vote being taken thereon, the following voted in favor thereof: The following voted against same: William Kusterman, President ATTEST: Jeff Karlson, Executive Director 445151v1 JAE WA445-15 PRELIMINARY DEVELOPMENT AGREEMENT THIS PRELIMINARY DEVELOPMENT AGREEMENT (this “Agreement”), dated this ___ day of ____________, 2016, by and between the Lino Lakes Economic Development Authority, a municipal corporation and political subdivision under the laws of the State of Minnesota (the “EDA”) and DM Land, LLC, a Minnesota limited liability company, or its successors or assigns (the “Developer”): WITNESSETH WHEREAS, the EDA desires to promote redevelopment of property known as the 49 Club Site, located in the City of Lino Lakes, and legally described in Exhibit A (the “Property”); and WHEREAS, the Developer owns the Property and intends to demolish the restaurant building and garage currently located on the Property; and WHEREAS, pursuant to a report from LHB, dated March 27, 2015, the buildings are in substandard condition; and WHEREAS, by resolution adopted on the date hereof, the EDA Board has found the buildings located on the Property to be structurally substandard within the meaning of Minnesota Statutes, Section 469.174, subd. 10(b); and WHEREAS, the EDA and the Developer have determined that it is in the best interest of the parties to demolish the existing building and agree to cooperate with respect to potential future redevelopment of the Property, all as further described in this Agreement; NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and obligations set forth herein, the parties agree as follows: 1. During the term of this Agreement, the Developer (or its successors and assigns) shall: (a) At no cost to the EDA, cause the existing buildings on the Property to be demolished and all demolition debris to be removed from the Property as soon as reasonably practicable after the date of this Agreement. The parties agree that Developer will not be required to remove the existing concrete and asphalt slabs on the Property. The parties agree that such demolition shall occur no later than July 31, 2016. (b) Maintain the Property in compliance with City ordinances. The Parties agree that leaving the concrete and asphalt slabs on the Property are in compliance with City ordinances. (c) If the Developer determines not to undertake redevelopment of the Property directly, it will use its best efforts to seek a successor entity that will proceed with such 445151v1 JAE WA445-15 2 redevelopment. (d) Negotiate in good faith with the EDA regarding any proposed redevelopment of the Property, including any possible public financial assistance related thereof, all with the goal of entering into a contract for private redevelopment (the “Contract”). 2. During the term of this Agreement, the EDA agrees to: (a) Review any proposed successor to the Developer, and if the EDA determines to approve that successor, thereafter cooperate with the successor as the Developer under this Agreement. (b) Cooperate with the Developer or its successor in evaluating any redevelopment proposal submitted by the Developer, including whether any public financial assistance is warranted in connection with that effort. (c) Proceed to seek all necessary information with regard to the anticipated public costs associated with any proposed redevelopment. (d) If the EDA determines that tax increment assistance is reasonably necessary in order to induce the proposed redevelopment of the Property, with the Developer’s assistance, begin the process to create a redevelopment, a housing or a renewal and renovation tax increment financing district encompassing the Property, including the preparation of a tax increment financing plan, pursuant to Minnesota Statutes, Sections 469.174 through 469.1799, as amended (collectively, the “TIF Act”); provided that parties agree and understand that the EDA must file a request for certification of such a tax increment financing district within three years after the date of demolition of the building on the Property, unless Section 469.174, subd. 10(d) is hereafter amended to extend that time period. (e) Negotiate in good faith with the Developer or a successor regarding any proposed redevelopment of the Property, including any possible public financial assistance related thereto, all with the goal of entering into a Contract. 3. It is expressly understood that execution and implementation of the Contract shall be subject to: (a) A determination by the EDA in its sole discretion that its undertakings are feasible based on (i) the projected tax increment revenues and any other revenues designated by the EDA; (ii) the purposes and objectives of any tax increment, development, or other plan created or proposed for the purpose of providing financial assistance for the Redevelopment; and (iii) the best interests of the EDA. (b) A determination by the EDA that any EDA financial assistance is reasonably necessary in order to make the Redevelopment financially feasible. 445151v1 JAE WA445-15 3 (c) A determination by the Developer or its successor that the Redevelopment is economically feasible and in the best interests of the Developer or his successor. 4. This Agreement is effective from the date hereof through December 31, 2017. After such date, neither party shall have any obligation hereunder except as expressly set forth to the contrary herein. Notwithstanding anything to the contrary herein, the term of this Agreement may be extended by mutual written agreement of the parties, provided that the EDA’s approval of such extension may be given by the EDA Executive Director. 5. The Developer shall solely be responsible for all costs incurred by the Developer, and the EDA shall be solely responsible for all costs incurred by the EDA, in connection with the negotiation and drafting of this Agreement and the parties obligations hereunder. 6. This Agreement may be terminated upon ten (10) days written notice by either party to the other of any of the following events of default, only if such events of default shall remain uncured during the aforementioned notice period: (a) an essential precondition to the execution of the Contract cannot be met; or (b) if, in the sole discretion of the EDA, an impasse has been reached in the negotiation or implementation of any material term or condition of this Agreement or the Contract; or 7. If any portion of this Agreement is held invalid by a court of competent jurisdiction, such decision shall not affect the validity of any remaining portion of the Agreement. 8. In the event any covenant contained in this Agreement should be breached by one party and subsequently waived by another party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other concurrent, previous or subsequent breach. This Agreement may not be amended nor any of its terms modified except by a writing authorized and executed by all parties hereto. 9. Notice or demand or other communication between or among the parties shall be sufficiently given if sent by mail, postage prepaid, return receipt requested or delivered personally: (a) As to the EDA: Lino Lakes Economic Development Authority Lino Lakes City Hall 600 Town Center Pkwy Lino Lakes, MN 55014-1182 Attn: Community Development Director 445151v1 JAE WA445-15 4 (b) As to the Developer: DM Land, LLC 14814 102nd Street Circle N Stillwater, MN 55082 Attn: Damon K. Lawson and Brutlag, Hartmann, & Trucke, P.A. 3555 Plymouth Blvd. Ste. 117 Plymouth, MN 55447 Attn: Matthew Doherty 10. This Agreement may be executed simultaneously in any number of counterparts, all of which shall constitute one and the same instrument. 11. This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota. 476746v1 JAE LN140-114 S-1 IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the day and year first above written. LINO LAKES ECONOMIC DEVELOPMENT AUTHORITY By ________________________ Its President By ________________________ Its Executive Director DM LAND, LLC Damon K. Lawson Its _____________ 476746v1 JAE LN140-114 A-1 EXHIBIT A DESCRIPTION OF PROPERTY Parcel A Address: 6007 Hodgson Road, Lino Lakes, Minnesota PID: 31-31-22-43-0007 Parcel B Address: 295 Ash Street, Lino Lakes, Minnesota PID: 31-31-22-43-0006 Parcel C Address: [no street address] PID: 31-31-22-43-0017