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HomeMy WebLinkAboutHRA MINUTES 08251987C= TY O F S T_ ANTHONY • HO U S = N G AND REDEVELOPMENT AUTHOR 2 TY M= N U T E S AU G U S T 25, 1-987 1 The meeting was called to order by Chairman Sundland at 6:30 P.M. 2 Present: Sundland, Vice Chair Enrooth (6:37 P.M.), Secretary/ 3 Treasurer Marks, and Commissioners Ranallo and Makow- 4 ske (6:35 P.M.) 5 Also present: David Childs, Executive Director 6 William Soth, H.R.A. Attorney 7 Richard Krier of Development Advisory Services, 8 Consultant 9 Paul Brewer, President of LaNel Financial Group, 10 Inc. 11 Gregory Bronk, Analyst, Lang -Nelson Associates, 12 Inc. 13 Mr. Childs reported that he, and Messrs. Soth and Krier, as the 14 selection team appointed by the H.R.A., had selected Lang -Nelson 15 and Gaughan as final contenders to do Phase III of the Kenzie 16 Terrace Redevelopment Project. •17 Mr. Brewer reiterated the historical background of Lang -Nelson as 18 given in booklet form to the H.R.A. He said as important as the 19 bricks and mortar are, he perceived "who we are, what is our 20 ability to finish projects, financial strength, ability to manage 21 properties and our long range plans". The LaNel executive said he 22 perceived the H.R.A. would especially be interested to know whether 23 Lang -Nelson would add value to the quality of life in St. Anthony 24 and whether they would still be here as a member of the community 25 and a presence on the street ten years from now. 26 Copies of Mr. Brewer's August 17th response to a request from Mr. 27 Krier for further clarification of some points in Lang -Nelson's 28 proposal related to the exterior treatment of the proposed build - 29 ings, completion of project to assure TIF bonds could be amortized, 30 taxes the firm expected to pay St. Anthony, and whether the 31 buildings would be sprinklered had been distributed along with a 32 listing of the firm's properties and an organizational chart. 33 The developers had a prototype of the type of buildings the H.R.A. 34 could expect them to build, although Mr. Brewer indicated the final 35 architectural details would not be developed until Lang -Nelson has 36 made its final marketing, environmental, and financial analysis 37 after the H.R.A. decision that evening. • 38 Mr. Brewer made the following points about his firm and the project 39 they proposed to build in St. Anthony: -1- 1 Management 2 Lang -Nelson doesn't manage property for other people but owns, 3 or has built, and manages good quality properties ranging 4 from two to 400 units on 26 different sites in the metropoli- 5 tan area including 3,000 plus apartments; two office build - 6 ings, and an office warehouse; 7 has good management training which had resulted in very suc- 8 cessful occupancy rates with a little over 97% of the 3,000 9 units they occupy and manage filled up; 10 there are only 7 vacancies in the new Burnsville 400 unit 11 project and only from 5 to 10 units empty in the 252 unit 12 senior Anthony James project in New Hope. 13 14 showed the prototype of that development, saying the same 15 type of 3 story building with heated underground parking was 16 envisioned for the St. Anthony property where a transition 17 would be necessary between commercial, residential, and the 18 highway; 19 indicated the 252 unit Broadway Village had been constructed 20 in front of a "junky looking" shopping center which Lang - 21 Nelson had remodeled and landscaped to have uniform store •22 frontages and signage. 23 Security 24 Fully secured building with televised entrance where person in 25 charge can see who is coming in before opening the door; • 26 apartment occupants can also see guest on own television. 27 Social/Recreational Areas 28 Health club (showed pictures of Anthony James facilities) 29 exercise area; 30 said residents actually like to walk the long halls better; 31 32 whirlpool area with deck where occupants can go outside in 33 nice weather; 34 two locker rooms with saunas in them; 35 community room does get a lot of play - open at all times, has 36 kitchen in it and serves as a gathering place for the seniors 37 who like to get together. 9 • 1 Siting 2 Would wrap the buildings around the exterior and create a 3 focal point in the middle with an entryway off Kenzie Terrace 4 to accept this project rather than the Walker Senior project; 5 019 keep snow off in this climate; 20 6 would do a lot with landscaping around the retention pond. 7 Parking 22 these are very important. 8 Said would provide 206 parking stalls in underground garages; 9 177 on the surface plus another 27 ancillary spaces to meet 10 ordinance requirements. 11 Buildings 12 Three 3 story, with a total of 201 units; 13 Building A, 96 units; Building B, 51 units; and Building C, 54 14 units; 15 all three would have brick exteriors with wood as an accent 16 principally around balconies to avoid "institutional look" to 17 the buildings; 18 hip roofs would look more residential and would be easier to 019 keep snow off in this climate; 20 balconies would be pulled out from the buildings and lots of 21 angles would be provided because from a marketing standpoint 22 these are very important. 23 Phasing 24 Said would clear site as soon s City acquires it. Said under - 25 stood that would be sometime after September 15th; 26 would start construction as soon as possible in the spring 27 by April 1st, but sooner if weather, demolition and site 28 preparation permitted; 29 would construct Building A, the larger building with 96 units 30 of market rent first, but at same time would start Building C 31 which would be rented for 55 and over; 32 leasing would start around the middle of December, 1988, but 33 wouldn't anticipate buildings would be filled up until June or 34 July, 1989; 35 Building B would be started in the spring of 1989. Lang - 36 Nelson plans it for 55 and over but wants the option of •37 3 •1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 •19 20 building it market rate if market for seniors is soft for Building C; said would guarantee in the Redevelopers Agreement that all three buildings would be constructed as scheduled to prevent problems with bond financing; reiterated that Lang -Nelson would prefer to have 201 senior rentals in this project but have concerns that the market of that type of rental might not be that deep in St. Anthony; found with the Anthony James project, that seniors take a long time making up their minds to move, preferring to wait until spring to sell their current homes. The absorption time needed for seniors is almost double that for market rate as a result. Building Extras There would be laundries in each unit; an interior trash system would call for no dumpsters outside and dumpsters for larger items only in the garage area. The Lang -Nelson representatives H.R.A. questions: Financial made the following responses to 21 When Mr. Soth said the City would want to close on the land 22 with them at the same time they acquired the land, Mr. Bronk 23 said he had always been pessimistic about a September closing, 24 perceiving that would leave them with a negative arbitrage on 25 the money; 26 said the longer the closing went out to the end of 1987, the 27 better the financial picture would be for them; 28 said they would be willing to take all the land at one time 29 but couldn't guarantee they wouldn't split the bond issue 30 since the bonding houses have indicated a $10,000,000 31 issue might be too big to handle at one time and if the issue 32 is phased over 60 or 90 days, they might be able to get a 33 better interest rate than if the entire issue is forced 34 at once; 35 36 reported Jerry Gilligan had told them half the bond issue 37 would have to be taken down in 1987 but they would have until 38 next year to do the remainder; and 39 however, he indicated, he understood that the $360,000 Letter �40 of Credit would have to be put up at the time the Redevelopers 4 • 1 2 Agreement is signed and would not be contingent upon getting 3 the bonds placed; 4 Mr. Bronk said he had gotten a very positive feed back on the 5 bonds but it was hard to get a commitment before they owned 6 the land; 7 reiterated that it was his understanding that the Letter of 8 Credit would assure completion of the project, but Frank Lang 9 and Gene Nelson would individually guaranty the performance 10 of the development contract, i.e., complete the buildings to 11 provide tax base to pay down the TIF. 12 Mr. Bronk provided the financing on other projects Lang -Nelson had 13 constructed as follows: 14 Said woods Park in Burnsville had been done with Industrial 15 Bonds and closed in 1983; bond issue was for $25,000,000 for 6 16 buildings with 400 staged units; started with two buildings 17 and gradually rented them up; completed the last building in 18 January, 1986. 19 Anthony James was done with Industrial Revenue bonds with tax 20 increment financing through the City of New Hope; $3,350,000 21 in non -rated revenue bonds were sold and the city provided •22 some up front TIF money to acquire the land and do some of the 23 improvements as well as some interest write-down money; the 24 project was all arranged by Frank Lang and a whole group of 25 partners. 26 Construction on the 110 unit project they are planning to 27 close in Coon Rapids would start in October; the firm has, 28 conventional financing on that. 29 Dorsey & Whitney have acted as bond counsel for both the 30 Burnsville and New Hope projects. 31 Phasing 32 Preliminary planning indicates they would want to construct 33 Buildings C and A first to screen the property from Lowry and 34 Kenzie and create an interior court which would be a good mar - 35 keting point for seniors; 36 gearing everything to making Building B senior rental because 37 they stay longer and pay better; 38 when asked what it would take to modify their phasing schedule 39 to do all three buildings at once, Mr. Brewer said he per - 40 ceived doing 150 units next spring represented a big chunk at •41 that time and they wouldn't have any product to lease until J •1 late 1988 or early 1989, which would not be a reasonable sea - 2 son to start construction on a third building; 3 4 looking at Building B for early in 1989; 5 pointed to the 73 unit Anthony James project as a case where 6 they had burned the previous building down in June, 1986, and 7 although that had been a very wet fall, had a Certificate of 8 Occupancy on the project by December 1st; 9 reported the partnership had acted as the prime contractor on 10 that job and used Franklin Construction to oversee the bidding 11 process. The prime contractor had made all the contacts with 12 the various subs and trades on that job; 13 said it was most likely they would be doing the same on the 14 Coon Rapids project where they planned to put the contract 15 out for bid, try to get a fixed price, bonded contract and, 16 depending on how the figures came in, would either go with 17 the fixed price or would have the partnership again act as 18 contractor under a construction management agreement; 19 indicated that had worked very successfully on the last two 20 projects Lang -Nelson had done; 21 said they had been very happy with Franklin and had exper- •22 ienced some substantial cost savings by following that 23 process. n LI 24 Occuoancv Market in St. Anthon 25 Mr. Brewer said.he thought that Maxfield Research's market 26 study figures about demand for senior rental might be a little 27 "heavy"; 28 29 said Lang -Nelson thinks 100 units of 55 and over would be 30 closer to what the market will bear; 31 indicated it might be hard when dealing with a lot of older 32 buildings and much lower already existing in St. Anthony 33 rents to draw a comparison with new construction rents and 34 market demand; 35 perceived that type of market study couldn't really tell 36 what the market for new property would actually be; 37 pointed out that the study had to take into account the fact 38 that a lot of seniors would be selling their homes and it 39 would be hard to predict how many would actually be ready to 40 move into a new type of housing; 2 •1 reported his company's experience in New Hope had been that it 2 took twice as long as expected to absorb those seniors; 3 the company would be facing the same problem in Coon Rapids 4 where it will be interesting to watch how many single family 5 homeowners can be persuaded to move into apartments; 6 said he doubted whether they would be able to get someone 7 who's currently living in a St. Anthony apartment to move to 8 the new apartments because the jumps in rents would probably 9 be too high; (expected the amenities and location as well as 10 the availability of transit would be tempting but perceived 11 most people over 55 have already set their budgets and it 12 would probably be difficult to get them to move up). 13 Mr. Brewer concluded by telling the H.R.A. Lang -Nelson wanted to do 14 the City's project very much because it thinks it would be very 15 successful. He said they like the community and wanted to become 16 part of it. The developer also assured the H.R.A. members that 17 once his company had made a decision to go ahead with the develop - 18 ment, they would finish it. 19 MEETING RECESSED 20 The Housing and Redevelopment Authority meeting was recessed at 21 7:20 P.M. for the City Council's interview of an applicant to fill •22 the vacancy on the Eastside Hennepin County Human Services Commit - 23 tee and the Council meeting which followed at 7:30 P.M. 24 The H.R.A. meeting was reconvened at 9:00 P.M. with Alan Hamel of 25 the Gaughan Company present to discuss his company's proposal to do 26 Phase III. 27 All H.R.A. members, as well as Messrs. Childs, Soth, and Krier were 28 again in attendance for that presentation, which followed the 29 approval of the August 25th H.R.A. minutes and claims listed in the 30 agenda for that meeting. 31 AUGUST 25, 1987 H.R.A. MINUTES 32 Motion by Makowske, seconded by Enrooth to approve the above with 33 the following change: 34 Page 2, line 38: Substitute "his" for "he" at beginning of 35 sentence. 36 Motion carried unanimously. 37 CLAIMS • 7 •1 Motion by Marks, seconded by Enrooth to approve payment of 2 $3,757.16 to Development Advisory Services for July, 1987 consult - 3 ing services. 4 Motion carried unanimously. 5 MEETING RECESSED FOR COUNCIL APPOINTMENT OF PEGGY SWONGER 6 Motion by Ranallo, seconded by Marks to recess the meeting at 9:03 7 P.M. to reconvene the Council meeting for the above purpose. 8 Motion carried unanimously. 9 PRESIDENT OF GAUGHAN COMPANY GIVES HIS REDEVELOPMENT PROPOSAL FOR 10 PHASE III 11 Mr. Hamel said P. J. Gaughan had wanted to be there himself that 12 evening but had scheduled an out-of-town trip prior to the notific- 13 ation of this meeting and would not be returning until later that 14 evening. 15 The redeveloper said the following about the project they propose 16 to develop: 17 Buildings •18 Mr. Hamel indicated Gaughan planned to erect two, 2 story 19 buildings with 100 units each and pretty much identical to 20 each other; 21 said by putting all housing in two buildings would be able to 22 preserve quite a bit of green area for a 6.9 acre development 23 project. 24 Exteriors 25 Would be predominately brick with rough hewn cedar around bal- 26 cony area in keeping with the City's guidelines. 27 Siting 28 Under Krier's and Childs' direction, the mature adult (55 and 29 over) oriented building would be constructed on the Lowry Ave - 30 nue side to be more compatible with the residential Minneapo- 31 lis neighborhood; 32 the Kenzie Terrace building would be oriented to empty 33 nesters, working couples, single professionals, etc.; 34 35 if a couple with a child applied, they could be housed in a 36 two bedroom unit, but Gaughan doesn't usually market to famil- •37 ies except in townhouse projects. 8 • 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 •19 20 21 O 23 24 25 26 27 28 29 30 31 32 33 34 35 36 • Density Units Mr. Hamel said density would be high for typical suburban development but only moderate when considered as a redevelop ment project; denisty is a little higher than the total LaBelle Park project in Columbia Heights, but lower than the 60 unit building in that project. Mr. Hamel indicated 50 one bedroom and 50 two bedrooms in each building; design would be very similar to LaBelle Park condominiums from which the plans for this project would be taken; in all cases would have two dining areas, a formal dining room and space in the kitchen area to have a small kitchen table; Mr. Hamel said, although there might have to be some modifica- tions to the one bedroom units, the picture he showed basic- ally indicated the unit types he expected to be provided in the St. Anthony buildings; pointed out that jogs in the buildings would add interest to the units and said typically, units with different shapes are more in demand. Amenities said his firm tries to provide walk-in closets in all units but it might not be possible for some one bedroom units; each building would have a community area providing social and recreational activities; right now not considering a whirlpool area because they have found a large area like that turns out to be a maintenance problem for its location and the rooms above it; might have a Jacuzi tub situation in the senior building; specific floor plans would come in the next planning step, but have provided Jacuzi rooms in other senior projects which worked out fine; told Councilmember Makowske didn't have specific plans yet for the social space but his firm recognized the need for social/ recreational activities in senior projects; 7 •1 Mr. Hamel assured the Councilmember there would be ceramic 2 tile in the bathrooms. 3 Air Conditioning 4 Not certain about specifics, but thought individual units like 5 those in the LaBelle condominiums would be provided. Showed 6 colored photos of rooms with units in them. 7 Sprinklers 8 Mr. Hamel did not know what St. Anthony codes called for but 9 indicated Gaughan would not be adverse to looking at a fire 10 sprinkled system in the development agreement. 11 Occupancy 12 Gaughan believes they can fill 100 units of senior housing 13 over a reasonable marketing period; 14 pointed out that Gaughan had finished a 72 unit congregate 15 senior project in Coon Rapids in February and that building 16 is now about 92% occupied; 17 said Coon Rapids has a lower senior population than St. 18 Anthony and rents were comparable to what would be asked for •19 the City project, so they are not terribly concerned about 20 having problems with renting those units; 21 Mr. Hamel said his firm had used the Maxfield report and their 22 own touch with this area; 23 pointed out that neither the LaBelle or University Heights 24 projects had been restricted by age and both had attracted a 25 good number of St. Anthony seniors; 26 said LaBelle Park is now almost exclusively a 55 and over 27 project; 28 perceived when a particular price bracket is reached, a dev- 29 elopment would not be attracting kids just out of high 30 school; and 31 the project would rather be marketed to those who have been 32 successful and have built up equities in their homes or good 33 paying jobs; 34 Mr. Hamel said he thought Gaughan had already demonstrated 35 through the LaBelle and University Heights projects that the 36 northeast area is a close knit community from which people 37 don't want to move too far; • 10 •1 said you could draw a circle around a five mile radius and 2 find almost all who bought into either of those projects had 3 come from Northeast Minneapolis, St. Anthony, New Brighton, 4 Fridley, or Columbia Heights and not many from Richfield or 5 Edina; 6 Mr. Hamel showed photos of similar buildings and said one of 7 these was 196 unit project of market rate housing in Coon 8 Rapids which was a tax increment development with over 60% 9 occupancy of what could be considered "mature adults"; 10 said a lot of his firm's housing units are developing an 11 older clientele and in the last four or five years the climate 12 had dramatically changed in that direction. 13 Construction Costs 14 final unit cost of about $44,500 permit with land, etc. 15 Rents 16 Would average $535 for one bedroom; $635 for two bedroom; 17 Mr. Hamel acknowledged that was higher than what's currently 18 charged in St. Anthony with high $300's for one bedroom units •19 and about $450 for two bedroom; 20 pointed out that there are no similar rentals in St. Anthony 21 and said believed if marketed properly and extensively, rents 22 of that level would be both feasible and achievable. 23 Timetable 24 Mr. Hamel said he understood from Mr. Childs that the land 25 would probably not be available this fall but would start 26 construction as soon as it was available; 27 would like to start and go to the market for financing as soon 28 as possible because not sure what long term interest rates 29 might do; 30 existing pro forma is based on 8-1/2$ per a ten year issuance 31 and, if interest rates go up, rentals would have to be raised 32 to the point where viability of the project might be put in 33 question; 34 there might be a gap of two months between the start of the 35 two buildings construction; 36 Mr. Hamel told Councilmember Ranallo it might be possible by 37 having firewall separation to continue carpentry and thus • 38 phase the occupancy of the building; 11 •1 should be able to have occupancy within seven months of start - 2 ing a building. 3 Financing 4 Mr. Hamel said looking at unparking $8,500,000 of the bonds 5 the Village sold for the project which, with reserve funding 6 would approach $9,000,000; 7 said Gaughan has extensive experience in doing tax increment 8 projects and gave Coon Rapids and Cambridge projects as 9 examples; 10 Mr. Hamel pointed out that his own background experience had 11 been in city and urban planning; 12 said he had served as Community Development Director of Coon 13 Rapids and had been with Gaughan for ten years; 14 said Pat Gaughan would personally sign the Redevelopment 15 Agreement as the guarantor of the development; 16 understood the $360,000 Letter of Credit would be irrevocable 17 and non-refundable; 18 Soth indicated the City was hoping it could buy rather than *9 condemn the project property and would prefer to close with 20 the developer at the same time as the closing for the land so 21 the City could use the developer's $700,000 for that purpose; 22 Mr. Hamel said he assumed Gaughan would like to get into the 23 financing just as soon as possible and would be ready to 24 close on the land when it was available; 25 Mr. Hamel said he would envision all that happening at once 26 because it would be tough to get the underwriter to resell 27 the bond issue not knowing when the land is going to be 28 delivered; 29 reiterated that the arrangement would be "fine for us at the 30 earliest possible date." 31 Security 32 Mr. Hamel indicated all Gaughan buildings are security -type. 33 Said a security call system would be at the main entrance. 34 Only residents could enter other entrances and would need a 35 key to unlock the door; 36 there would be 24 hours a day security provided; •37 12 • 1 would have to create a security system with television in the 2 garage area to keep,someone from sneaking in when a car enters 3 that area; 23 Minneapolis, Gaughan has a vacancy rate of under 1% in terms 4 recognized security was a main concern of mature adults and 5 would do as much as possible to prevent anyone from breaking 6 in; 29 lections and would be responsible for the day to day manage - 7 same system would be provided to create a secure environment 8 for residents of both buildings; 9 lighting around the buildings would also provide a feeling of 10 security. 11 Building Management 12 Mr. Hamel indicated larger part of Gaughan business and staff - 13 ing is devoted to management of 1,400 units they own or 14 manage; 15 this type of activity is one the firm wants to remain with 16 because it provides year in and year out revenues and stable 17 incomes where construction normally goes in fits and starts; 18 staffing (other than bringing in specialties like under - 19 writers, bond issuers and bankers and training the rest of the •20 development team) is pretty much in-house with their own 21 people; 22 pointed out that, other than the new development in Downtown 23 Minneapolis, Gaughan has a vacancy rate of under 1% in terms 24 of keeping the buildings filled which should be an indication 25 that they do a good management job; 26 told Councilmember Ranallo each building would have its own 27 resident manager and 3 caretakers who would work under that 28 person. The resident manager would take care of rent col - 29 lections and would be responsible for the day to day manage - 30 ment activities within the building; 31 the resident manager in the senior building would provide some 32 different types of programming and activity direction which 33 might not be necessary for the other building; 34 management persons of higher calibre would be sought for the 35 senior building and they would necessarily be paid more to 36 match those higher activities; 37 the resident managers would take applications from the pro - 38 spective residents but the credit and reference checks would 39 be done in the main office where a computer terminal is dir- �40 ectly connected to a Credit Scan system; 13 • 1 Who Would Do Construction? 2 Mr. Hamel said Gaughan has own construction superintendents, 3 estimators and support staff as well as general labor, but not 4 own crews, which is subbed out; 5 has full and part time staff of about 190 people of whom 35 6 full time do nothing but construction and management. 7 Councilmember Makowske asked Mr. Hamel how he felt about this 8 project. He responded by saying he considered it to be a good 9 project for Gaughan because their major activity is in the 10 northern suburbs where they do well and this project should fit in 11 well with other developments in their portfolio for the region. 12 The Gaughan executive indicated his firm had been too involved in 13 the Columbia Heights project in 1980 to seriously consider this 14 project at that time; added that, after reading the 1980 feasibil- 15 ity study, wouldn't have wanted to do the 495 units of condominiums 16 for the project at that time, but Pat Gaughan now feels he can fill 17 100 units of senior housing and 100 units of non -senior rental over 18 a reasonable marketing period. 19 Mr. Hamel pointed to the LaBelle Park 248 unit condominium project 20 close by in Columbia Heights as an example of a type of project 21 which he thought would be very similar to the Kenzie Terrace •22 project and one which had been very successful. 23 H.R.A. MAKES TOUGH CHOICE BETWEEN TWO EXCELLENT PROPOSALS 24 After Mr. Hamel had gone, Mr. Krier told the H.R.A. members he had 25 met at least three times with all the developers who had submitted 26 proposals for the project and at each meeting had requested they 27 update their proposals to meet H.R.A. requirements for brick 28 exteriors. He also said all developers had been alerted to the 29 part they would have to play in working with the neighbors adjacent 30 to the project. 31 He distributed the responses he had gotten from Sherman-Boosalis 32 and said the Walker -Stuart - Kraus -Anderson group proposal had been 33 for two, 4 story, 80 unit residential buildings which would be 70% 34 wood and fully sprinkled. He said they had offered to pay nothing 35 for the land and estimated would be paying $215,000 a year in 36 taxes. They would provide a $360,000 Letter of Credit but each 37 company would be responsible for their own project; Walker for the 38 senior; Stuart for the market rate; and K -A for the commercial; 39 and, if one failed, all would not necessarily have to fail. 40 Comments from H.R.A. and staff: • 14 •1 Ranallo said it was hard for him to make a choice between Lang - 2 Nelson and. Gaughan; 3 was told selection team would be happy with either; 4 indicated he liked Gaughan's two building approach better 5 than Lang -Nelson's three building proposal and liked 6 having the seniors located closest to the Northeast 7 Minneapolis neighbors. 8 Sundland said he saw an advantage to having Gaughan come in and do 9 both buildings at the same time; 10 noted that Pat Gaughan had worked extensively with cities 11 in the north and northeast areas so pretty well knew what 12 H.R.A.'s were expecting; 13 said Gaughan also seemed to understand precisely what the 14 H.R.A. required when it came to the $700,000 payment and 15 and had agreed to personally sign the Letter of Credit. 16 Krier pointed out that the "qualifier" in the Gaughan proposal 17 might be that they wanted to go to market rate occupancy 18 temporarily if they can't rent one whole building to 19 seniors. 20 Marks responded by saying he perceived that might be a better •21 strategy for the City because the H.R.A. certainly 22 wouldn't want to have a building standing empty. 23 Childs pointed out that Lang -Nelson representative had indicated 24 he didn't want any misunderstanding about their not 25 guaranteeing Building B would be senior occupied if they 26 had a problem renting the other senior building. 27 Soth said he perceived several points in favor of Gaughan: the 28 firm has constructed between 1,600 and 1,700 units where 29 Lang -Nelson has constructed only 473. Both firms have 30 owned and managed about the same number of units. Gau- 31 ghan has its own construction management staff and would 32 have no phasing. However, the Attorney perceived Lang - 33 Nelson was an awfully good firm, too. 34 Marks agreed there was so much similarity in the companies and 35 said he thought what it finally came down to was who the 36 H.R.A. would be the most comfortable with in the long 37 run. 38 Childs said he believed after sitting down with P. J. Gaughan, 39 that he sincerely wanted to do at least 100 units of 40 senior and would do everything he could to get at least 41 one building of seniors. He said he perceived that • 15 • 1 Mr. Gaughan was committed to do that, and believed he 2 could do it; 3 pointed out that the other developer was saying they 4 know they can do 50 senior units but aren't sure about 5 the third building; 6 added that Gaughan plan was exactly what the H.R.A. had 7 asked for. 8 Makowske said she also liked the fact that Gaughan had been res - 9 ponsive to the City's request in that regard. 10 Krier commented that when the H.R.A. compares the two proposals 11 they would see both provided the quality of buildings 12 and both companies certainly had the capability of doing 13 the project; 14 however, he saw one advantage for Gaughan was the fact 15 they had their own construction company which should be 16 an advantage in getting the project finished on time; 17 said another advantage with their proposal is the fact 18 that there would be no phasing and Gaughan had promised 19 to start faster. • 20 Ranallo said he thought the H.R.A. should go with the Gaughan 21 Company. 22 Marks agreed. 23 Makowske said it had been little things like providing ceramic in 24 the bathroom where the other company had said linoleum 25 which had convinced her Gaughan should be chosen because 26 she perceived that's the sort of thing which would sell 27 the buildings to renters. 28 Kr 29 Ga eement Be Negot 30 Sundland perceived Gaughan might have skirted the issue about the 31 senior functions in their proposal. 32 Enrooth said he wasn't sure Mr. Hamel had been in a position to 33 know about that at this time because they had ended up 34 with the same architect as Lang -Nelson and hadn't been 35 with a new architect long enough to have final design 36 details like that. 37 Makowske said she had sensed she hadn't gotten a specific "yes" 38 when it came to the community room which she considers 39 a very important part of a senior building. 16 •1, Childs said he thought the only difference had been that Lang - 2 Nelson had an example of a community room with them, and 3 if they perceived that had gone over well with the H.R.A. 4 would have said "that's what we're going to do." 5 Krier indicated he thought Mr. Hamel had "hedged" on that 6 point, but perceived both developers had been sophisti- 7 cated enough that they wouldn't have hesitated to tell 8 the H.R.A. right out if they thought any of their ideas 9 were too difficult to do; 10 he said any suggestions the H.R.A. had could better be 11 negotiated before the Redevelopment Agreement was signed 12 than after, and since Gaughan knew they would need to 13 have specifics related to brick, wood, and design attra- 14 ctions when they talked to the Minneapolis neighbors, 15 they would probably have colored sketches of improvements 16 like the exteriors, community rooms, etc. right at the 17 start anyway. 18 Makowske said she would like to see some type of different design 19 for the buildings like arched windows, to give the build - 20 ing a "more classy look."; 21 was told the specifics of building design would be the •22 next step in the development planning. 23 Soth said the first thing the H.R.A. wanted to do would be 24 to get the Redevelopment Agreement signed, which should 25 not be too difficult since Gaughan had already agreed to 26 do most of what the H.R.A. wanted. 27 Childs pointed out that in relation to the changes in the 28 P.U.D., the Planning Commission and Council would have 29 to consider at public hearings, there would be no need 30 for height variances. He foresaw no need for setback or 31 parking variances in the proposal. This left only total 32 density versus the Ordinance requirements to be con - 33 sidered; 34 however, he pointed out that the H.R.A. would, of course, 35 want to lock in the site plan and would probably want to 36 formally direct the developer to work with the City on 37 the problems with the neighbors. 38 H.R.A. Action 39 Motion by Marks, seconded by Ranallo to authorize staff to first 40 negotiate a Redevelopers Agreement with the Gaughan Company to 41 construct the final phases of the Kenzie Terrace Redevelopment 42 Project and, if for some reason such an agreement can't be worked • 17 •1 out with them, to authorize the team composed of Childs, Krier, and 2 Soth to attempt to get an agreement with Lang -Nelson. 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Motion carried unanimous After the motion had been passed, Mr. Soth indicated he guessed it would now be OK for him to tell the H.R.A. that the selection team had come to the same decision regarding the Gaughan Company because even though they had perceived both developers had "really terrific projects", for some reason Gaughan seemed to have the edge with them, too. He said he had also learned brother worked for Dorsey & difficult if Gaughan weren't attorneys. ADJOURNMENT during the recess that Alan Hamel's Whitney which might have been using Barna Guzy et al for their Motion by Marks, seconded by Sundland to adjourn the H.R.A. meeting at 10:15 P.M. •18 Respectfully submitted, 19 Helen Crowe, Secretary 20 :cjk 21 22 23 24 25 26 27 28 29 30 31 Motion carried unanimously.