HomeMy WebLinkAboutHRA MINUTES 08041988` C= = O F S T_ ANTHONY
SPEC = AL HOU S = N G AND RED EVE LOPMENT
AUTHOR 2 TY MEET = N G M= NUTS S
AU GU S T 4 1 9 8 8
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2 The meeting was called to order by Chair Sundland at 5:00 P.M.
3 Present for roll call: Sundland, Vice Chair Enrooth, and
4 Commissioners Makowske and Ranallo.
5 Absent: Secretary/Treasurer Marks.
6 Also present: David Childs, Executive Director
7 Bill Soth, H.R.A. Attorney
8 Greg Bronk and Paul Brewer, Lang -Nelson
9 Gary Holmes and David Carland, CSM Corp.
10 The purpose of the meeting as advertised was to approve the redevelop -
11 ment contract as negotiated with Lang -Nelson Companies for the third
12 phase of the Kenzie Terrace Redevelopment Project.
13 Paul Brewer, Lang -Nelson Company, reported that it had been one year
4 almost to the day when he had given a presentation to the H.R.A. to do
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,15 the project and the Council had chosen Gaughan Companies. When Gaughan
16 Companies failed to do the project, Lang -Nelson and the City began
17 discussions about having them finish the project. Lang -Nelson has
18 worked hard to put a package together and was present that night with:
19 (1) plans, (2) a $20,000 non -contingent option check, (3) signed
20 redevelopment agreement, (4) a $360,000 Letter of Credit with a 30 day
21 financing contingency, and (5) personal guarantees from Lang and Nelson.
22 Mr. Brewer described the project which contained slightly bigger units
23 with the same number of units, resulting in larger buildings. They
24 propose 3 buildings of 48, 55 and 96 units instead of 2 buildings of
25 100+ units each, as proposed by Gaughan Companies. The buildings will
26 be 3 story, with underground parking, hip -type roofs and mostly brick
27 exteriors. They plan to model the building after a project they have
28 just completed in Coon Rapids.
29 Lang -Nelson hopes to have bonds sold in 30-45 days. The City would then
30 acquire the land and construction would start as soon as the land is
31 acquired. There would be an 18-22 month construction period. Norwest
32 Bank would provide the Letter of Credit to enhance the bonds.
33 The H.R.A. thanked Mr. Brewer for his proposal and stated that a year
34 ago, when they chose Gaughan Companies over Lang -Nelson, the Council
35 had an extremely difficult time making that decision since both
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1 companies had excellent proposals. In the end, it almost came down to
•2 a flip of a coin. The fact that Lang -Nelson had wanted to phase the
3 development at that time may have been the deciding factor for choosing
4 the Gaughan Company. The H.R.A. was impressed with this new proposal
5 and thankful for the persistence of Lang -Nelson in working on this
6 project.
7 H.R.A. Attorney Bill Soth reminded those present that the agreement
8 calls for closing on the bonds before the City begins land acquisition.
9 Paul Brewer agreed that this was the case.
10 Also in the audience was Gary Holmes, of CSM Corporation, who asked to
11 be heard. He stated that for the past several weeks they had been
12 working hard to put a proposal together for this project and were
13 present that evening to offer to:
14 *sign a redevelopment agreement;
15 *provide a non -contingent Letter of Credit to guarantee the
16 project.
17 He stated that his track record includes developing over 4,000 units in
18 the last 2-1/2 years and managing over 11,000 units in 17 states. He
19 stated that the most difficult part of a project is the financing and
20 he stated that he had the financing in hand and was ready to do the
21 project.
22 Staff and the Attorney reported that they had been attempting to find
3 developers for the project ever since the Gaughan Companies had failed
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24 to perform. Meetings with CSM had taken place but there had been no
25 response from CSM until the previous week - and financial information
26 had not been received until the previous day. Since there had not been
27 time to review their proposal adequately in one day, the staff reported
28 that although CSM seemed to be a reputable company and their proposal
29 seemed attractive, they, as staff, were not prepared to give any
30 recommendation, either positive or negative, regarding the hastily
31 submitted CSM proposal. Although the CSM representative stated that
32 they would agree to all the terms of the redevelopment agreement, there
33 were a number of issues in that agreement which still needed to be
34 negotiated before signing, so actual approval by the H.R.A. would take
35 additional time.
36 The H.R.A. expressed wonder where all these developers had been several
37 years ago. They thanked Mr. Holmes and Mr. Carland for their proposal.
38 They expressed regret that a project was not available for both
39 developers.
40 Motion by Makowske, seconded by Enrooth to approve execution of the
41 Redevelopment Contract with Lang -Nelson by the H.R.A. officers, approval
42 of the acceptance of the non-refundable check and personal guarantees
43 and the $360,000 Letter of Credit.
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Motion carried unanimously.
6 1 The meeting adjourned at 6:15 P.M.
2 Respectfully submitted,
3 David M. Childs
4 Executive Director
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