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HomeMy WebLinkAboutHRA MINUTES 11301999I 2 CITY OF ST. ANTHONY 03 HOUSING AND REDEVELOPMENT AUTHORITY MEETING MINUTES 4 NOVEMBER 30, 1999 5 I. CALL TO ORDER. 6 The meeting was called to order at 8:24 p.m. 7 II. ROLL CALL. 8 Commissioners present: Ranallo, Cavanaugh, Marks, Faust, and Thuesen 9 Commissioners absent: None 10 Also present: Executive Director Michael Morrison; City Attorney William R. II Soth 12 III. APPROVAL OF NOVEMBER 30,1999 H.R.A. AGENDA. 13 Motion by Marks, second by Cavanaugh, to approve the November 30, 1999 H.R.A. Meeting 14 Agenda with the following changer 15 VII. CONSIDER LETTER OF UNDERSTANDING WITH THE HITCHING POST (2550 16 Highway 88), and CONSIDER REVISED DRAFT OF LETTER OF UNDERSTANDING 17 WITH REPUBLIC INVESTMENT COMPANY. is Motion carried unanimously. 19 IV. APPROVAL OF NOVEMBER 9,1999 H.R.A. MINUTES. 20 Motion by Faust, second by Marks, to approve the November 9, 1999 H.R.A. Minutes as pre - 21 sented. 22 Motion carried unanimously. 23 V. CLAIMS. 24 Motion by Marks, second by Faust, to approve Claims A -B below: 25 A. St. Anthony Shopping Center: 26 1. RLK Kuusisto. Ltd. in the amount of $180.00 for professional planning services 27 for October 1999 regarding St. Anthony Shopping Center. 28 2. Midwest Planning and Design in the amount of $1,177.29 for professional 29 services rendered pursuant to invoice dated November 3, 1999 regarding Letter of 30 Understanding. 31 B. Financial Capacity Plan: 32 1. Sprin sg ted in the amount of $16,192.81 for financial advisory services rendered 4 from June 14, 1999 through September 15, 1999. 34 Motion carried unanimously. Housing and Redevelopment Authority Meeting Minutes November 30, 1999 • Page 2 I VI. CONSIDER LETTER OF UNDERSTANDING WITH THE"HITCHING POST (2550 2 HIGHWAY 88), AND REVISED DRAFT OF LETTER OF UNDERSTANDING WITH 3 REPUBLIC INVESTMENT COMPANY. 4 Executive Director Michael Morrison directed the H.R.A.'s attention to a letter dated November 5 29, 1999 from James A. Furseth regarding The Hitching Post. He reminded the H.R.A. that 6 negotiations have been ongoing with The Hitching Post regarding the City's purchase of land 7 easements. Recently, a price of $110,000 was agreed upon. Pursuant to Mr. Furseth's letter of 8 November 29, 1999, The Hitching Post has requested that the H.R.A. consider its original 9 request of $125,000 due, in part, to the increased cost of renovating the project to the desired 10 standards set by the City. I 1 Morrison reviewed for the H.R.A. that the original concept of the Shopping Center Plan was that 12 the City would forward approximately $700,000 to the Shopping Center Owners in return for 13 public easements, which the gazebo and landscaping improvements would be implemented on 14 that property. In return for the $700,000, the Shopping Center Owners were going to pay for IS those improvements. Until December 31, 1999, Morrison stated that the City has the option of 16 utilizing funds from the Kenzie District TIF account to implement this project. Morrison stated that City Attorney William R. Soth had reviewed the above plan and advised the 41 City last week that funds could not be taken from the TIF account for improvements that would 19 be made next year'in order to keep in compliance with the intent of the law. However, the City 20 can provide funds from the TIF account for the property at a fair value, and then an agreement 2I could be reached with the Shopping Center owners regarding the utilization of those funds for 22 the public improvements. 23 Morrison stated that Staff's recommendation for the City is to proceed with The Hitching Post for 24 the purchase of 24,000 square feet for either the $110,000 or $125,000 figure, and approximately 25 8,500 square feet of Shopping Center property. The Shopping Center property appears to be val- 26 ued at a higher price because of its location close to Highway 88. Morrison stated at that time, 27 Staff would return to the new Council with a plan for improvement based on the agreements 28 reached. 29 City Attorney Soth stated that the law is clear that the funds from the Kenzie District would be 30 required to be spent before the end of the 1999 year. The possibility of placing the funds into es - 31 crow and then disbursing the funds for improvements later was researched, but it was determined 32 that was not a viable option. Mr. Soth reiterated that the funds actually must be spent in 1999 33 and, therefore, the City's option is to simply purchase the land (easements) from both of the 34 Shopping Center and The Hitching Post at this time. Mr. Soth cautioned that the price for the land must be fair and not exceed the land's actual value. 46 He further stated that the plan should be to allocate as much of the funds from the Kenzie District 37 TIF account this year, and then allocate the rest from the Chandler District in the future. Housing and Redevelopment Authority Meeting Minutes November 30, 1999 • Page 3 I Mayor Ranallo stated that Richard Krier, Midwest Planning & Design, LLC, was in attendance 2 and Mr. Krier was invited to address the H.R.A.. 3 Mr. Krier stated that the goal is to achieve the village green area in the Shopping Center with the 4 least risk to the City. He stated that a new Letter of Understanding has been proposed with the 5 Shopping Center owners (Republic Investment), wherein the City would buy a redevelopment 6 easement that would be paid for in 1999. Republic Investment would in tum secure their agree - 7 ment to provide 90% of the easement improvement costs with a Letter of Credit to the City for 8 that 90%. In short, Republic Investment would take 90% of the funds from the purchase of the 9 easement and develop the village green project. 10 In this respect, Mr. Krier directed the H.R.A.'s attention to a revised draft of a Letter of 11 Understanding dated November 30, 1999 between St. Anthony Housing and Redevelopment 12 Authority and Republic Investment Company regarding the St. Anthony Shopping Center. 13 Mr. Krier continued by stating that if this plan was adopted by the end of 1999, the easement and 14 Letter of Credit would be in place, and in early 2000, the detailed design of the project would be 15 implemented. This detail would include soils reports, utilities, and a thorough inspection, which would take out more of the risk of the project from the City's standpoint. Construction could be- gin in spring or early summer. 18 Ranallo expressed his approval with Item No. 14 on the revised draft, which included that 19 Republic Investment Company would return 90% of the easement purchase price should the City 20 decide not to proceed with the village green project as planned. 21 Faust stated that the City has had excellent TIF projects in the past, and he cautioned the H.R.A. 22 about keeping within the spirit and intent of the law regarding the utilization of TIF funds. 23 Faust was concerned about Item No. 3 on the revised draft wherein it stated the cost of the ease - 24 ment would be valued at $12.00 per square foot. He felt the price was excessive and questioned 25 if the City was meeting the intent of the law with regard to the price paid for the easement. 26 Mr. Soth stated that the City would be acquiring the full right to use and occupy the easement 27 area and the fact that the Shopping Center owners would retain the title ownership is not a 28 significant issue. The value of the easement, he stated, must be close to the value of the title of 29 the property. Although he refrained from.commenting on the $12.00 figure per square foot for 30 the easement, Mr. Soth felt the land could retain more value because of its frontage to County 31 Road 88. 32 Mr. Krier stated that he believed $12.00 per square foot to be a reasonable dollar figure and would be keeping within the spirit of the law. Housing and Redevelopment Authority Meeting Minutes November 30, 1999 • Page 4 I Cavanaugh asked if there was proof that the $12.00 per square foot was a reasonable figure. Ir 2 other words, could a paper trail be provided for the H.R.A. to review. Mr. Krier stated that the 3 property could be appraised, but that process would take approximately six weeks. 4 Mr. Krier clarified Item No. 3 on the revised draft by stating that the purchase of 8,500 square 5 feet from the Shopping Center owners (Republic Investment) x $12.00 per square foot is the 6 dollar figure for the purchase of the easement. From that figure, 90% would be utilized by 7 Republic Investment for redevelopment of the village green area. 8 Cavanaugh inquired about the cost of maintenance of the village green area. Mr. Krier clarified 9 that the City would be responsible for maintaining the area. 10 Mr. Soth questioned Item No. 6 on the revised draft, which stated that the City would attempt to 11 obtain an easement from the adjacent apartments and The Hitching Post to extend the village 12 green to Kenzie Terrace. Mr. Soth wished to clarify for the H.R.A. that it is unlikely that 13 Housing and Urban Development (HUD) would approve the sale. 14 Cavanaugh clarified that if the City decided not to proceed with this project, then the TIF funds from the Kenzie District would be used to pay down bonds, and the project would have to con - 10 tinue with utilizing the TIF funds from Chandler. 17 Faust reiterated his concern about the bottom line number regarding the total purchase price of 18 the Shopping Center easement. 19 Mr. Krier stated that the bottom line is that the City is attempting to utilize an opportunity to ac - 20 quire the land, and if it is determined that the project is not viable, then the City would receive 21 back 90% of the investment. 22 Faust stated that he would appreciate receiving a bottom line figure that the easement would cost. 23 Mr. Krier stated that the cost would be approximately $135,000, because there would be addi- 24 tional costs of putting together the project. 25 The second cost, Mr. Krier stated, would be the improvements on the land, which have been es - 26 timated at approximately $1,200,000. Mr. Krier felt that the figure of $1.2 million was excessive 27 and that the project could be completed satisfactorily for approximately $700,000 to $800,000. 28 Morrison offered insight by stating that the City has the option to keep the momentum going on 29 the project, and use some of the TIF funds from the Kenzie District, and then in January or February use some of the funds in the Chandler TIF account for improvements. Or, the other op- tion, Morrison stated, is to slow the project down, lose the opportunity to utilize funds from the 32 Kenzie TIF account, and return to the project in the Year 2000 and arrange financing. Housing and Redevelopment Authority Meeting Minutes November 30, 1999 • Page 5 I Thuesen questioned if the City would be bound to the figure of $12.00 per square foot if it agreed 2 to the revised draft. 3 Mr. Krier explained that of the $12.00 per square foot, 90% of that amount would be invested 4 into improvements for the village green, or returned to the City if the project was abandoned. 5 Marks expressed his belief that it was important to keep the energy going strong on this project. 6 He stated he understands that there have been obstacles that make the project awkward and those 7 obstacles tend to push the H.R.A. to make a decision in an uncomfortable fashion. However, 8 Marks felt that the H.R.A. should proceed with the momentum on the project. 9 Thuesen agreed with Marks and confirmed that the H.R.A. is on a fast track with this project. 10 Nonetheless, the project has slowed down because the City would only be using a portion of the I I Kenzie TIF funds, and then in the Year 2000 would be reviewing the larger costs. By approving 12 the revised Letter of Understanding, Thuesen said, the City is staying on track with the project. 13 The important fact, he stated, is Item No. 14 on the Letter of Understanding which would allow 14 the City to abandon the project. Thuesen felt that the H.R.A.. should remain cautious with 15 reference to the project, but should continue to proceed. 4kCavanaugh stated he felt it would be irresponsible of the H.R.A. to approve a project that is not 17 specifically set forth on paper. 18 Faust agreed and stated he is personally not satisfied with the amount of detail that has been pro - 19 vided that would allow the H.R.A. to approve certain aspects of the project. Faust wished to 20 state that he fully supported the concept of the project; however, he would like for City.Attomey 21 Soth to review the agreement and have more detail provided as well. He stated that the issue at 22 hand is the H.R.A. needs to provide due diligence to the citizens of the City. 23 Marks asked Mr. Krier about the possibility of returning to the H.R.A. at the December 16, 1999 24 meeting with all documentation, particularly a financial plan, so that all concerns would be satis- 25 fied. 26 Ranallo confirmed that the City needed to give the City Staff, City Attorneys, and developers a 27 clear sense of what the City is expecting. Ranallo reminded the H.R.A. that at the previous 28 meeting, he had asked if the City Attorney had reviewed the proposals. 29 City Attorney Soth made a recommendation that instead of executing the Letter of Understand - 30 ing, that the City direct Staff to proceed with the preparation of a Developers Agreement 31 incorporating the terms suggested. In essence, the City would not be agreeing to any terms at this point, and would be able to review a Developers Agreement at the next meeting on December 16, 1999. Housing and Redevelopment Authority Meeting Minutes November 30, 1999 • Page 6 1 Ranallo stated that Mr. Krier should put together all of the figures and documentation. Momson 2 suggested an open dialogue with the Shopping Center owners about the City's concern. 3 Thuesen said some Commissioners are more comfortable with project than others, but that it 4 would be a reasonable idea to take a few steps back. Thuesen stressed the importance, however, 5 of all the Commissioners getting on the same page and have a strong understanding of the project 6 and the position in which it places the City. He stated that the H.R.A. would do the best job pos- 7 sible in working with the process and ensuring that the project could work satisfactorily for all 8 parties. 9 Ranallo suggested the possibility of having a worksession on Tuesday, December 7, 1999 to re - 10 view figures and discuss options and possibilities. Accordingly, on December 16, 1999 at the I I H.R.A. meeting, the project could be finalized if terms and conditions are acceptable to all 12 parties. 13 Faust stated he would be comfortable with the Letter of Understanding if a bottom line figure had 14 been stated. Ranallo confirmed that December 7, 1999 at 7:00 p.m. would be an extra worksession to consider and review possibilities for the Shopping Center project. 17 Mr. Krier stated that he would be able to provide documentation to Executive Director Michael 18 Morrison on Monday, December 6, 1999. 19 Marks asked if The Hitching Post Letter of Understanding should be addressed further at this 20 meeting. 21 Mr. Krier stated that a possibility for the H.R.A. would be to review both Letters of Understand - 22 ing at the worksession on December 7, and then finalize the documents at the meeting on 23 December 16, 1999. City Attorney Soth stated that he would be available to attend the workses- 24 Sion on December 7, 1999. 25 Marks confirmed that the H.R.A. could not be reviewing or considering the Letter of Under - 26 standing with The Hitching Post any further at this meeting. 27 Mr. Krier directed the Commissioners' attention to a proposed outline of a Developers Agree - 28 ment and continued by reviewing each Article and Section included in the proposal. 29 Faust asked if the Developers Agreement would be solely for the purchase of the land. He clari- fied that at the last H.R.A. meeting, he had spoken about preserving the community's interest by 46 incorporating into the documents an assessment agreement. He strongly suggested that such an 32 agreement be considered and developed. Housing and Redevelopment Authority Meeting Minutes November 30, 1999 • Page 7 I Momson confirmed with Mr. Krier that the City is only committing to bid improvements and to 2 go through the process. Mr. Krier responded affirmatively, but reminded the Commissioners that 3 the H.R.A. still has an option to abandon the project. The key to the change in the project is Item 4 No. 14 of the revised Letter of Understanding. 5 Ranallo thanked Mr. Krier and City Attorney Soth for their attendance and input to the meeting 6 VII. OTHER BUSINESS. 7 None. s VIII. ADJOURNMENT. 9 Motion by Marks, second by Thuesen, to adjourn the meeting at 9:25 p.m. 10 11 Respectfully submitted, 0 Sue Selseth 13 TimeSaver Off Site Secretarial, Inc. 0 Motion carried unanimously.