HomeMy WebLinkAboutHRA MINUTES 11241987•
C7= TY O F S T. ANTHONY
HOU S I N G AND F2 E D EVE L O PMENT
AUTHOR = TY M = NUT E S
NOV EMB E R 2 4, 1 9 8 7
1 The meeting was called to order at 5:40 P.M. by Chair Sundland.
Present for roll call: Sundland, Vice Chair Enrooth, Secretary/
Treasurer Marks, and Commissioners Ranallo
and Makowske.
5 Also present: David Childs, Executive Director
6 William Soth, H.R.A. Attorney
7 Richard Krier, Development Advisory Services,
8 H.R.A. Planning Consultant
9 NOVEMBER 10, 1987 H.R.A. MINUTES
10 Motion by Ranallo, seconded by Marks, to approve as presented.
11 Motion carried unanimously.
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Mr. Krier reported on discussions with Mr. Alan Hamel, Gaughan
Company President, regarding the problems his firm faced on October
19th when they received a dramatic raise in both the rated and
unrated interest rates for the Revenue Housing Bonds and bank charges
for backing their Letter of Credit. Mr. Krier indicated the problem,
as he saw it, was that the City now had a redeveloper who had the
capability for putting up his own Letter of Credit or getting financ-
ing if any one could, but for business reasons, he decided to delay
executing the redevelopment Agreement with the H.R.A. until he had
first secured either an acceptable FHA conditional commitment or
letter of credit backing like that being negotiated with the Des
Moines Midland Bank, as reported in Mr. Hamel's November 23rd letter
to the H.R.A., distributed before the meeting.
Mr. Krier indicated he had to assume further financial help from the
City to move the project along was not an issue with the Gaughan
Companies, but rather, had to agree with Mr. Soth's assessment that
the redevelopers had the financial strength to do the project by
themselves but the interest rates had gone so high the numbers no
longer worked for them to make a profit on the project. The Attorney
then suggested the City should try to get Arkell completely out of
the picture by offering a settlement which, because of his present
situation, he might be tempted to take.
1 Mr. Soth pointed out that $23,000,000 had always been more than was
2 needed when compared to the $8,500,000 in project costs, so the
• 3 $11,500,000, which remain in revenue bonds after December 1st, should
4 certainly be adequate to get the project done.
5 He was instructed to tell the Gaughan Companies the H.R.A. wanted to
6 schedule meetings with them every two weeks, starting with a meeting
7 after the Council's December 8th meeting, so they could keep track
8 of their financing progress and was requesting the lines of communica-
9 tion be kept open between meetings. The planner indicated the only
10 reason the redeveloper was not present for that meeting was because he
11 had requested they not come. He said he really believed both
12 Gaughan and Piper Jaffray, who were placing the bonds, were working
13 hard on the deal, but having the redeveloper report back every two
14 weeks might apply pressure on Piper to get the financing package put
15 together as soon as possible.
16 It was agreed that further contact with the other developer who had
17 proposed to do the project would not be completely foreclosed in the
18 meantime because the H.R.A. wanted the Gaughan Companies to understand
19 the City intends to get the project done one way or another since
20 they have not signed the agreement as scheduled.
21 It was further agreed that the Mayor and Mr. Childs would broach Mr.
22 Arkell regarding a settlement. Mr. Arkell would be advised that the
23 H.R.A. needs the extra $300,000 now that the drop in prime rate had
24 created a problem with getting another redeveloper and the landowner
4V5 was threatening to sue the City for that failure.
26 The H.R.A. meeting was adjourned at 6:35 P.M. with the Council meeting
27 opening at 7:30 P.M., as scheduled.
28 Respectfully submitted,
29 Helen Crowe, Secretary
30 :cjk
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