HomeMy WebLinkAboutHRA MINUTES 062819880
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C 2 TY OF S T . ANTHONY
HOU S = N G AND REDEVELOPMENT
AUTHOR I TY M 2 NUT E S
JUNE 28, 1-988
1 The meeting was called to order by Chair Sundland at 9:32 P.M.
2 Present for roll call: Sundland, Vice Chair Enrooth, Secretary/
3 Treasurer Marks, and Commissioners Makowske
4 and Ranallo.
5 Also present: David Childs, Executive Director
6 William Soth, H.R.A. Attorney
7 Vern Hoium and Ursula Sheehy of Evergreen Development
8 MARCH 8. 1988 H.R.A. ![INOTBS
9 Motion by Marks, seconded by Ranallo to approve as presented.
10 Notion carried unanimously.
11 Q�AINS
12 Before acting on the three billings from Dorsey & Whitney, Mr. Soth
13 explained the reference in the April billings to correspondence his
14 firm had with the attorney for a Kansas City Savings Association
15 related to the H.R.A. being named as a defendant in a lawsuit
16 involving the first phase of the Kenzie Terrace Redevelopment
17 Project. Mr. Childs told Commissioner Makowske he understood that a
18 closing for the refinancing of the project had been scheduled for the
19 previous Friday, which, if it took place, would eliminate the need
20 for the lawsuit and any chance of the City being involved. Even if
21 that had not happened, Mr. Soth added that he believed he would be
22 able to remove the H.R.A. from the litigation.
23 H.R.A. ACt3_o
24 Motion by Marks, seconded by Ranallo to approve payments of
25 $2,119.95; $1,748.63; and $302.25 to the Dorsey & Whitney law firm
26 for legal services to the H.R.A. during February, March, and April,
27 1988.
28
• 30 H.R.A. members had been provided with copies of the June 28th letter
31 from Richard Krier, President of Development Advisory Services, who
32 serves as H.R.A. consultant, in which Mr. Krier gave his recommenda-
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1 tions related to the proposed Evergreen Townhouse redevelopment
2 project.
3 Mr. Childs indicated Mr. Krier was recommending that the H.R.A.:
4 *should pass a motion recognizing the development as a "for
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5 sale" townhouse development to which the H.R.A. will provide tax
6 increment assistance for the extensive soil correction needed before
7 the project can proceed;
8 *should direct staff to negotiate a redeveloper's agreement
9 with Evergreen Development Corporation with the characteristics Mr.
10 Krier had stipulated in his recommendation;
11 *should authorize the preparation of a Tax Increment Plan which
12 would later be forwarded to Ramsey County and the school district
13 for their review;
14 *should schedule a public hearing on the project after which
15 the Tax Increment District can be certified by resolution.
16 The Executive Director anticipated the preliminary plan would be
•17 ready by July 8th for consideration at the July 12th H.R.A. meeting
18 in such a form as could be sent to the county and school district.
19 Mr. Hoium explained that with prime rate around 9% for the construc-
20 tion loan the banks have been indicating they would be charging
21 prime plus 2% plus up to 2 additional points which would bring the
22 rate right at the 13% shown in their proposal.
23 Mr. Childs indicated he would be proposing that the security be
24 handled the same way as the City had handled the Chandler Place
25 project where instead of the redeveloper having to put up a
26 $350,000.00 Letter of Credit, Evergreen would carry the debt
27 themselves but with tax increments pledged to pay off their lenders
28 in the amount of the soils corrections. This would eliminate the
29 need for the City to sell bonds or to incur any up front risk.
30 The Manager said the way the security had been handled for Chandler
31 Place, the City had incurred no debt and the lender will receive
32 their bond reserve within a very short time. Because of this, the
33 tax increment project had been developed at lower costs than would
34 have been incurred the other way. He perceived Evergreen's to be
35 the same kind of project for which some innovative way of financing
36 can be found. He added that this might be a way .of balancing out
37 the risks both the City and the redeveloper have to take with a
38 project like this one.
. 39 Councilmember Ranallo asked Mr. Childs to prepare to report showing
40 just when the City would be paying off the Chandler and Kenzington
41 projects in the hopes that some day the City would probably be
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1 able to lower the mill rate a little due to the revenues coming in
2 from those projects.
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4 The redeveloper indicated Evergreen had received three "solid"
5 proposals for financing so he didn't anticipate any problems with
6 financing the project. He also said thee was strong interest in the
7 project and they were not worried about sales at all.
9 Motion by Ranallo, seconded by Marks to:
10 1. Designate Evergreen Development Corporation as the redeveloper
11 for the Evergreen Townhouse Redevelopment Project which is
12 recognized as a "for -sale" townhouse development to which the
13 H.R.A. will provide assistance in terms of soil correction.
14 2. Direct the H.R.A. staff (Executive Director, Attorney, and
15 Planning Consultant) to negotiate a Redevelopers Agreement
16 with Evergreen.
17 3. Authorize Development Advisory Services to prepare a Tax Incre-
18 ment Plan.
19 notion carried unanimously.
20 Mr. Childs indicated he hoped the redeveloper would be working on
21 the preliminary plat for the subdivision of the property and the
22 street vacation during the time the consultant is preparing the tax
23 increment documents so "everything can jell at the same time" so the
24 redevelopers would be able to get into the ground this fall. He
25 asked Mr. Hoium to call him at the office the following day so he
26 could tell him what kind of temporary signage the City Ordinance
27 allowed the project.
28 ADDITIONAL CLAIMS
29 A brief discussion of the two bills which Mr. Krier had submitted for
30 consulting services on the Kenzie Terrace Redevelopment Project and
31 the Evergreen Townhouse Redevelopment Project since January as well
32 as efforts being made by the architect on the Kenzie Terrace Phase I
33 project to get paid for his services on the Kenzington preceded the
34 following:
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• 36 Motion by Enrooth, seconded by Marks to approve payment of $3,239.10
37 to Development Advisory Services for consulting services on the
38 Kenzie Terrace Redevelopment Project from January through May, 1988,
39 as well as $699.91 to the same firm for services related to the
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1 Evergreen Townhouse Redevelopment Project from January through March,
2 1988.
3
4 H.R.A. Okays Rennie Terrace Median IIoarad
5 Mr. Childs indicated he was seeking Council authorization to spend
6 between $5,000.00 and $10,000.00 to landscape the median area at the
7 intersection of Silver Lake Road, St. Anthony Boulevard, and Kenzie
8 Terrace, which is between Trillium Park and the City's liquor
9 operation with the help of the Village Gardenettes. He said he
10 thought some of the approximately $80,000.00 available in dollars
11 for the economic development district rather than City or Beautifica-
12 tion Funds money could be used for the project. The Executive
13 Director indicated decorative brick walkways would be provided for
14 pedestrians crossing the street in that area and flowers and other
15 landscaping would be planted in the areas where they don't walk.
16 There was agreement that the condition of the medians warranted these
17 expenditures and the H.R.A. agreed to look later at using some of
18 the redevelopment funds to replace overhead with underground utility
• 19 lines on Coolidge south of Kenzie behind the shopping center.
20 H.R.A. Action
21 Motion by Ranallo, seconded by Marks to authorize staff to prepare a
22 median plan for the intersection of Silver Lake Road, St. Anthony
23 Boulevard, and Kenzie Terrace, as proposed by the Executive Director.
24 Motion carried unanimously.
25 Mr. Childs and Mr. Soth gave an overview of what was happening in
26 relation to finding a redeveloper for Phase III of the Kenzie
27 Terrace Redevelopment Project. They indicated:
28 *they had been meeting with numerous companies who seem to
29 have an interest in the project, including CSM and E. J. Plesko
30 Company out of Milwaukee, who were willing to give the City
31 $40,000.00 to look at the project, but want their money back if they
32 didn't redevelop it;
33 *staff had repeated what they had told all other developers
34 with the same proposal, that the City wanted more commitment than
35 that;
36 *a lot of time is being spent with Lang/Nelson trying to
37 negotiate the acquisition of the triangular parking area next to the
• 38 Town and Country Store the redevelopers perceive they need to do the
39 project with larger unit size;
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1 *the latter have asked for a special meeting with the H.R.A.
2 July 6th, where they would be willing to commit $20,000.00 in non -
3 refundable cash for a 60 day option on the project; and would sign a
4 Redevelopers Agreement and put up a Letter of Credit with the only
5 condition relating to financing;
6 *staff had come back suggesting a $40,000.00 with perhaps
7 $20,000 for the first 30 days and another $20,000.00 if they need
8 more time.
9 *they were in agreement that the developers were very sincere
10 in their desire to do the project;
11 *there was a possibility that if their deal with Norwest went
12 through, they would be able to finance the project through conven-
13 tional mortgages and might not use the Housing Revenue Bonds at all;
14 *because of the time restrictions on the bonds, the H.R.A. is
15 almost forced to go with and stay with one developer at this point;
16 *Gaughan Company doesn't appear to be a viable candidate
17 anymore;
is 18 *the July 6th meeting with Lang/Nelson would be for the purpose
19 of showing the H.R.A. the project they were proposing at this time;
20 delivering a signed Redevelopment Agreement and a Letter of Credit
21 and putting up non-refundable commitment money the amount of which
22 staff is still negotiating.
23 Mr. Childs presented the "worst case scenario" where at the end of
24 the 60 days Lang/Nelson would tell the H.R.A. they can't sell the
25 H.R.A. bonds and their whole project goes away. The H.R.A. would
26 then keep all the $450,000.00 in the bank now, none of which Arkell
27 could claim if that happened. This amount of money would be enough
28 for the H.R.A. to provide some other subsidy for a different kind of
29 project and developer.
30 Even in the face of possible Arkell bankruptcy, the general consensus
31 was that the H.R.A. should not pay the developer anything at this
32 time.
33 When Commissioner Ranallo repeated all the discouraging things he was
34 hearing about the problems with developing rental property, Mr. Soth
35 told him the one thing he perceived was different about this project
36 was the fact that all the developers staff had talked to were in
37 agreement that the site St. Anthony had to offer was "choice" because
38 of its location, making it more probable than other projects they
39 knew of.
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1 Motion by Enrooth, seconded by Sundland to schedule a special H.R.A.
2 meeting with Lang/Nelson at 4:00 P.M., Wednesday, July 6th.
3
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4 Motion by Marks, seconded by Makowske to authorize staff to have an
5 appraisal made of the triangular area of about 18,000 square feet in
6 the Town and Country parking lot for possible acquisition for the
7 third phase of the Kenzie Terrace Redevelopment Project.
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10 Motion by Enrooth, seconded by Marks to adjourn the meeting at 10:21
11 P.M.
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13 Respectfully submitted,
• 14 Helen Crowe
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