HomeMy WebLinkAbout09/13/2005 Council Minutes•
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CITY COUNCIL WORK SESSION
DATE
TIME STARTED
TIME ENDED
MEMBERS PRESENT
MEMBERS ABSENT
APPROVED
CITY OF LINO LAKES
MINUTES
SEPTEMBER 13, 2005
: September 13, 2005
. 4:30 p.m.
. 6:20 p.m.
: Councilmember Carlson, Dahl,
Reinert, Stoltz, and Mayor Bergeson
: None
Staff members present: City Administrator, Gordon Heitke; City Engineer, Jim
Studenski; Community Development Director, Mike Grochala; Economic Development
Coordinator, Mary Alice Divine
AMENDMENT TO DEVELOPMENT CONTRACT — LEGACY AT WOODS
EDGE
Community Development Director Grochala advised in October of 2004 the City Council
approved the Contract for Private Development between the Economic Development
Authority (EDA), City and Hartford Development, Inc., for the Legacy at Woods Edge
project. Hartford Development closed on the City owned property and the Tagg property
in December of 2004.
Community Development Director Grochala stated under Section 3.5 of the Contract
referenced above, the EDA agreed to disburse $1,700,000 to the "Development Property
Owners" (an entity related to Hartford Development, Inc.) under certain terms and
conditions. Disbursement was a two-step process: the funds were to be placed with an
escrow agent after (among other things); the City had approved a preliminary plat for the
first townhome development. Then, funds would be disbursed to the Development
Property Owner when the City had issued the first building permit for the town homes,
and the parties executed Assessment Agreement setting minimum market values for the
town homes in an amount sufficient to generate tax increment needed to repay the full
$1,700,000 interfund loan.
Community Development Director Grochala stated since that time, the original
townhome proposal has been withdrawn, and Hartford is working towards City approval
of a mixed-use development as the first phase, including 60 units of workforce rental
housing with associated commercial space and a separate hotel facility. The current
schedule calls for Council consideration of the site plan and final plat for that
development on October 12.
Community Development Director Grochala advised the other key change since the date
of the Contract is that the City has received a Met Council grant in the amount of
$750,000, which will reduce the Interfund Loan of City funds by that amount.
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CITY COUNCIL WORK SESSION SEPTEMBER 13, 2005
APPROVED
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2 Community Development Director Grochala advised Hartford had now requested that the
3 Contract be amended to permit different terms for dispersal of the $1.7 million. The
4 reason for this request is that Hartford purchased the "TIF Parcel" from the Tagg's under
5 a note and mortgage, which Hartford expected to pay with proceeds of the interfund Loan
6 (assuming the conditions described above would be met, given the expected townhome
7 development). When the townhome development did not occur as planned, the Interfund
8 Loan was not disbursed, and the mortgage on the TIF parcel held by the Tagg's is now in
9 default.
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11 Community Development Director Grochala stated the proposed amendment provides an
12 alternative disbursing procedure, summarized as follows:
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14 1. $750,000 from the Met Council grant would be disbursed immediately after
15 approval of the Contract amendment, so long as Development Property Owner
16 secures a "forbearance agreement" from the Tagg's. That is, the Tagg's would
17 agree not to take significant mortgage foreclosure actions before December 31,
18 2005 (except as described as below).
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20 2. If the site plan and final plat is approved by October 15, 2005, the EDA would
21 disburse the balance of $950,000 on that date, so long as Development Property
22 owner has delivered Assessment Agreements that set a minimum market value
23 needed to generate enough Tax Increment to repay the Interfund Loan. This is
24 similar to the original Contract terms, except that the Interfund Loan amount has
25 been reduced from $1.7 million to $950,000 and the requirement for a building
26 permit has been omitted. If this occurs, the Tagg mortgage would be satisfied,
27 and the development would proceed as under the original Contract.
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29 3. If the site plan and final plat are not approved by October 15, the EDA would
30 nevertheless disburse $400,000 of the Interfund Loan on that date. However, this
31 amount would be a forgivable loan, repayable if the site plan and plat approvals
32 do not occur by April 30, 2006. Also, the City would have a third mortgage, and
33 assessment agreements must be in place to cover the full $950,000. The Tagg
34 forbearance agreement would remain in effect through December 31, 2005.
35 However, if the conditions for this partial disbursement are not met (e.g.,
36 Assessment Agreements are not in place), the Tagg forbearance agreement may
37 terminate on October 15 and the Tagg's may proceed with foreclosure.
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39 4. If the partial disbursement is made on October 15, but the site plan and plat are
40 not approved by April 30,2006, the Development will have defaulted on the
41 obligation to commence construction by that date and the EDA will have all the
42 remedies under the Contract (including the option to terminate).
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44 Community Development Director Grochala stated that while the proposed changes
45 represent a departure from the original requirements, staff is confident that the City's
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CITY COUNCIL WORK SESSION SEPTEMBER 13, 2005
APPROVED
1 position is adequately secured. The addition of the $750,000 from Met Council
2 significantly reduces the City's upfront contribution with the remaining $950,000
3 provided from the proceeds of the sale of land to Hartford. Project development is
4 underway and several requirements of the agreement have been addressed including the
5 removal of all the buildings on the Tagg parcel. Mass grading operations have been
6 completed and public improvements will commence within the week. More importantly
7 the proposed changed will keep the project moving forward.
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9 Staff is recommending approval of Resolution No. 05 — 02, Approving First Amendment
10 to Contract for Private Development, Legacy at Woods Edge.
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12 Mr. Steve Bubal, Springsted, Inc., came forward and explained the purpose of the
13 requested amendment to Contract as well as the provisions within the Contract for
14 payment.
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16 This item will appear on the regular Council agenda Tuesday, September 13, 2005, 6:30
17 p.m.
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19 REGULAR AGENDA ITEMS
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21 Item 6B, Consider 2nd Reading of Ordinance No. 07-05, Amending Sign Ordinance to
22 address temporary signage and additional wall signed — It was noted that this item would
23 be tabled to a future City Council meeting.
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25 Item F and Item G, Minutes of August 17, 2005 and August 22, 2005, were removed from
26 the Consent Agenda.
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28 There were no other changes to the regular agenda.
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30 FIVE YEAR FINANCIAL PLAN
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32 City Administrator Heitke advised staff is continuing to update the City's Five Year
33 Financial Plan. When revisions are completed the Plan will be presented to the Council.
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35 SET DATE FOR TRUTH -IN -TAXATION HEARING
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37 The Truth -in -Taxation was scheduled for Monday, December 12, 2005, 6:00 p.m.
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39 The meeting was adjourned at 6:20 p.m.
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41 These minutes were considered, corrected and approved at the regular Council meeting held on
42 October 10, 2005.
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Acting erk
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CITY COUNCIL WORK SESSION SEPTEMBER 13, 2005
APPROVED
• 1 Transcribed by:
2 Kim Points
3 TimeSaver Off Site Secretarial, Inc.
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