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032706 EDA - Official File Copy - CITY OF NEW HOPE EDA MEETING City Hall, 4401 Xylon Avenue North March 27, 2006 EDA Meeting will commence upon adjournment of the City Council Meeting President Martin Opem Sr. Commissioner Mary Gwin-Lenth Commissioner Andy Hoffe Commissioner Karen Nolte Commissioner Steve Sommer 1. Call to order 2. Roll call 3. Approval of regular n1eeting minutes of January 9, 2006 4. Resolution authorizing the extension of the interim agreement with PariPassu/Trio Development for the redevelopment of the Bass Lake Road Apartments site (8400 and 8420 Bass Lake Road and 8401, 8411, and 842158th Avenue) (improvement project no. 795) 5. Adjournment CITY OF NEW HOPE 4401 XYLON i-\ VENUE NORTH NEW HOPE, MINNESOTA 55428 EDA Minutes January 9, 2006 Regular Meeting City Hall CALL TO ORDER President Opeffi called the meeting of the Economic Development Authority to order at 9:06 p.m. ROLL CALL Present: Martin Opeffi Sr., President Mary Gwin-Lenth, Commissioner Andy Hoffe, Commissioner Karen Nolte, Commissioner Steve Sommer, Commissioner Staff Present: Dan Donahue, City Manager Shari French, Director of Parks & Recreation Kim Green, Community Development Assistant Curtis Jacobsen, Community Development Specialist Guy Jolmson, Director of Public Works Valerie Leone, City Clerk Kirk McDonald, Director of Community Development Steve Sondrall, City Attorney Vince VanderTop, Assistant City Engineer APPROVE MINUTES Motion was made by Commissioner Nolte, seconded by President Opern, to approve the Regular Meeting Minutes of November 28, 2005. All present voted in favor. Motion carried. IMP. PROJECT 795 President Opern introduced for discussiol1 Item 4, Resolution authorizing an Item 4 interim agreement with PariPassu/Trio Development for the Bass Lake Road Apartments redevelopment project (8400 and 8420 Bass Lake Road and 8401, 8411, and 842158th Avenue) (improvement project no. 795). Mr. Kirk McDonald, director of community development, stated the interim agreement was previously presented to the city council at its work session of December 19, 2005, at which time the Council supported and tentatively approved the cost sharing agreement but requested more specific information about the cost of Krass Monroe's services. He reported that Krass Momoe has re-evaluated their original estimate of $10,000 to $20,000 and revised it to an estimate of $15,000. He outlined the 50/50 cost sharing arrangement and noted the soil boring cost has increased from $3,200 to $3,500 as the developer had determined that a boring of a greater depth was needed on tl1e northern portion of the site. Other costs include phase I environmental assessment for $1,700, structural/TIP blight analysis for $9,000, boundary and topographical survey and golf course topo survey $5,000. The city and the developer will each pay its o\vn consulting fees with the exception of the 50/50 cost sharing EDA Meeting January 9,2006 Page 1 arrangements for the financial consultant (Krass NIonroe). Mr. McDonald reported that the soil borings, environmental assessment, structural analysis and site survey were in process. Mr. McDonald stated the interim agreement contains four main parts: Part 1 describes the interim nature of the agreement; Part 2 identifies the undertakings of the redeveloper and associated completion dates; Part 3 describes the undertakings of the city; and Part 4 describes the redeveloper deposit and cost sharing approach. It was tentatively agreed betvveen the city and the redeveloper that the preliminary costs would be shared 50/50. He stated if additional costs are identified, staff will present the costs to the Council for approval. Mr. McDonald reported that planning for the Bass Lake Road improvements is underway, and the EDA previously authorized a preliminary site survey to help define the site size and shape. He stated the city engineer will soon be seeking authorization to conduct a feasibility report for Bass Lake Road improvements. Mr. McDonald reported that the developer is in attendance and is prepared to pay the $5,500 fee deposit if the EDA approves the agreement. President Opem directed staff to determine the sewer and water main capacity improvements at the time of the survey. At Commissioner Sommer's request, staff ,vas directed to add "not to exceed" to the financial consultant's $15,000 cost estimate. Commissioner Sommer also asked the minutes to reflect the fact that the city formed a partnership with the developer, but if t11e project does not materialize the city will own the site results of the services performed. Mr. McDonald concurred and commented that this issue is covered in section 5 of the interim agreement. Mr. McDonald indicated PariPassu has invited the EDA on a tour of condo buildings on either January 28 or February 4. The intent is to obtain feedback from the EDA regarding such items as building materials and interior/exterior finishes before the developer completes an elevation plan for the Bass Lake Road Apartments redevelopment project. The EDA selected January 28 at 9:00 a.m. for the tour. Mr. Jonathan Lockart of PariPassu was recognized. He explained it may take up to an hour pef site so the EDA should expect to spend five to six hours on the tour. He also assured the EDA that PariPassu is mindful of the financial consultant costs previously cited. EDA RESOLUTION Commissioner Gwin-Le11th introduced the following resolution and moved 06-01 its adoption: JlRESOLUTION AUTHORIZING AN INTERIM Item 4 AGREEMENT WITH P ARIP ASSU/TRIO DEVELOPMENT FOR THE BASS LAKE ROAD APARTMENTS REDEVELOPMENT PROJECT (8400 AND 8420 BASS LAKE ROAD AND 8401, 8411, AND 8421 58TH A VENUE) (IMPROVEMENT PROJECT NO. 795)." The motion for the adoption of the EDA Meeting January 9, 2006 Page 2 foregoing resolution was seconded by President Opem, and upon vote being taken thereon, the follo'\'viI1g voted in favor thereof: Open1, G\vin-Lenth, Hoffe, Sommer, Nolte; and the following voted against the same:; Abstained: None; Absent: None; whereupon the resolution was declared duly passed and adopted, signed by t11e president which was attested to by the executive director. NORTHWESTERN President Opem introduced for discussion Item 5, Discussion of Northvvestern CASKET COMPANY Casket Company's request for financial assistance from the city. Item 5 Mr. Kirk McDonald, director of community development, indicated Northwestern Casket Company is ill the process of relocating from Minneapolis to New Hope and is requesting financial assistance towards the relocation expenses. He explained that past practice has been that all requests for assistance are presented to the Council or EDA for consideration. The Council and EDA have provided assistance to businesses in the past on a case- by-case basis if the use meets city policies. The company is seeking $125,000 for moving expenses and equipping their tenant space at 4300 Quebec Avenue North. Mr. McDonald explained that staff researched assistance options, but the state does not provide assistance unless there is an increase in the total number of jobs (the company has 28 employees which will remain unchanged). He further explained that New Hope's business subsidy policy's objective is to attract and enhance commercial and industrial development hereby increasing or retaining employment opportunities for New Hope residents and developing the job base and tax base of the city. Mr. McDonald stated staff is pleased to see a new business in New Hope but does not believe the request meets the business subsidy policy. The EDA vvelcomed the business to Nevv Hope but unanimously concluded that the business does not meet the business subsidy criteria. Commissioner Nolte commented that the company should experience a savings in insurance premiums by relocating from Minneapolis to New Hope. ADJOURNMENT Motion was made by Commissioner Gwin-Lenth, seconded by Commissioner Nolte, to adjourn the meeting. All present voted in favor. Motion carried. The New Hope EDA adjourned at 9:30 p.m. Respectfully submitted, ~~ Valerie Leone City Clerk EDA Meeting January 9, 2006 Page 3 EDA !i~"'::'~':~:'~..t"' /' ..su. ' ":':':~.~~,.",..-.-""........,.. ..-." """""1 .~, ............. =; d.. .,X~-r:/:;., " ...:z:-. . "."' :-.:.::;...' ,~",,~ "./.N: .Jr.'~~.':":'~...-- ~ /^"0.-:,N~' . "., :.:.--:-:-: "..-.z:::;" -i-. ~,. 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Request for Action Originating Department Approved for Agenda Agenda Section Community Development March 27, 2006 EDA Item No. 4 By: Kirk McDonald, CD Director By: Kim Green, CD Assistant Resolution authorizing the extension of the mterim agreement between the Economic Development Authority in and for the city of New Hope and PariPassu/Trio Development for the redevelopment of the Bass Lake Road Apartments site (8400 and 8420 Bass Lake Road and 8401, 8411, and 842158th Avenue) (improvement project no. 795) Requested Action Staff requests that the Economic Development Authority (EDA) approve a resolution authorizing an extension of the term of the interim agreement vvith the preferred redeveloper for the Bass Lake Road Aparhnents site, PariPassurrrio Development, from March 28, 2006, to April 30, 2006. All other conditions in the interim agreement remam unchanged, including how preliminary redevelopment costs and responsibilities are to be shared between the EDA and the redeveloper. Policy/Past Practice Priority goal l1umber two emphasizes the maintenance and redevelopment of commercial and residential properties. To assist with this goal, the city can select a preferred redeveloper and participates in a development agreement for the redevelopment of a site in the city. Background On November 28, 2005, the EDA approved a resolution for a 120-day exclusive negotiation period with PariPassufTrio Development for the redevelopment of the Bass Lake Road Apartments site. PariPassufTrio was one of three development teams that participated in a redeveloper selection process, which began in the sprmg of 2005. Following a month of discussions, the EDA and the redeveloper entered into an interim agreement, effective January 9/ 2006, which identifies how the preliminary redevelopment costs and res 011sibilities are shared betvveen the ci and the redevelo er durin the neaotiation eriod. jf Motion by 7Idi-l:L Second by ) To: &'1, {)eJ-02 I: \ RF A \ PLANNING \ Livable Communities \ Bass Lake Road Apts \ Q & R- Resolution approving extension of interium agreement with PariPassTrio for BLR project.doc ~~..':t}~~~~"":"-"'~~""","d<<~~~;;:;;;C-~_.,io'''~'~~''''*;;;~...~y"",,%..~;~."~.7';~,-,,~~~~~0i.:_ Request for ACtiOl1, Page 2 of 3 Nlarc11 27; 2006 The goal of the negotiation period is to determine financial feasibly, prepare a term sheet, and develop a preliminary concept plan. On February 27, 2006, staff updated the Council on the steps that have been taken to better understand the site, the estimated redevelopment costs, and the proposed condominium building. The steps taken to date include: 1. PariPassu obtained additional soil borings from Braun Intertec, which demonstrated the need for the building to be constructed on about 400 pilings. 2. PariPassu obtained a Phase 1 environmental analysis of the site. The environmental consultant Braun Intertec, did not discover any indication of potential contamination issues on site; and did not recommend a phase II analysis. 3. The city obtained a TIP analysis inspection. The inspector from LHB determined that the Bass Lake Road Aparhnents qualify as blighted and a TIP district can therefore be created for the site. 4. The city engineer conducted a boundary survey of the Bass Lake Road Aparhnents and the western portion of the city's golf course. 5. The city engineer examined the realignment of Yukon and Xylon avenues and provided preliminary sketches to show how the roadvvay improvements might impact the redevelopment site and adjacent properties. 6. PariPassu took the City Council and city staff on a bus toUT of five projects similar to the proposed condominiums at Village on the Green to get an idea for the type of structure the City Council would prefer for the site. 7. At the redeveloper's request, city staff, the city attorney, and the redeveloper met with the property owner's attorney to discuss the potential negotiated acquisition of the apartments. 8. Weis Builders created a preliminary budget estimate proposal for the condominium building based on SummerCrest of Edinburgh in Brooklyn Park, the first project viewed by the City Conncll during the bus tour. 9. The city submitted a grant application to Hennepin County's Transit Oriented Development grant program requesting $375,000 to increase the water main capacity serving the redevelopment site. Staff, consultants, and the redeveloper have continued to work through the details that will allow the City Council/EDA to assess the financial feasibility of the project. Krass Monroe, the city's financial consultant, has prepared a very preliminary term sheet the addresses the major points of negotiation between the city and the redeveloper. Staff would like to review the financial details of the project and discuss the prelirrUnary term sheet Witl1 the Council at a special work session, which has been scheduled on Thursday, March 30, 2006, at 6:30 p.m. Following the work session, staff hopes to work with PariPassufTrio to revise the term sheet. If the negotiations move forward as planned, a term sheet will be presented to the Council for adoption at the April 24 Council meeting. To accommodate this timeline, staff and the redeveloper request that the Connell authorize an extension of the term of the interim agreement from March 28, 2006, to April 30, 2006. Funding The extension of the interim agreement does not require additional funds. The city's share of the prelirrUnary redevelopment costs, as outlined in the interim agreement approved by the EDA on January 9, 2006, remain unchanged. Request for Actia11, Page 3 of 3 ~'/larc11 27, 2006 Recommendations/N ext Steps Staff recommends approval of the attached resolution authorizing the extension of the term of the interim agreement with PariPassu/Trio Development from March 28, 2006, to April 30, 2006. If negotiations move forward as anticipated, the following steps will occur: 10. Thursday, March 30, 6:30 p.m. Special City CouncillEDA work session to discuss financial details of project and review preliminary term sheet. PariPassu/Trio Development and Krass Momoe to attend. 11. March 31 through April 14. Staff, consultants, and redeveloper to continue negotiations. Term sheet revised/updated. 12. Term sheet presented to EDA at April 24 EDA meeting. 13. April 30. Extended interim agreement expires. Attachments 1. Resolution 2. First Amendment to Interim Agreement 3. Copy of original interim agreement, effective January 9, 2006 ECONONUCDEVELOPMENTAUTHORITY IN Al~D FOR THE CITY OF NEW HOPE COUNTY OF HENNEPIN STATE OF MINNESOTA RESOLUTION NO. A RESOLUTION AUTHORIZING AN EXTENSION OF THE INTERIM AGREEMENT BETWEEN THE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE AND PARIPASSU/TRIO DEVELOPMENT FOR THE REDEVELOPMENT OF THE BASS LAKE ROAD APARTMENTS SITE BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope (the "Authority") as follows: Section 1. Recitals. 1.01 The Bass Lake Road Apartment site (the "Site") consists of approximately 3.6 acres of land with five tax parcels at 8400 and 8420 Bass Lake Road and 8401, 8411 and 8421 - 58th Avenue. The Site currently consists offive 12-unit rental apartment buildi11gs. 1.02 The City plans to redevelop the Site into for-sale multi-family housing. 1.03 Following a request for proposals by the City and consideration of the proposals received, PariPassulTrio Development (the "Redeveloper") was chosen as the City's tentative Developer/Builder for the Site. 1.04 On November 28, 2006, the Authority authorized a 120-day exclusive negotiation period with the Redeveloper to refine the site plan and examine the economic feasibility of redeveloping the Site. 1.05 Pursuant to that resolution, the AuthoritY and the Redeveloper entered into an futerim Agreement effective as of January 9, 2006 and expiring March 28, 2006, setting forth responsibilities and deadlines for each of the parties. 1.06 The Redeveloper has requested that the Interim Agreement be extended for an additional month so that it may continue to work with the City on project feasibility. Section 2. Findin2s. 2.01 The Authority hereby finds that the redevelopment of the Site and extension of the Interim Agreement promotes the objectives outlined in its Restated Redevelopment Plan for Redevelopment Project No.1 established pursuant to Minnesota Statutes, Section 469.001 et seq. Section 3. Authorizations. 3.01 The Authority hereby approves execution and delivery of a First Amendment to Interim Agreement extending the term of the Interim Agreement from March 28, 2006 to April 30, 2006. 3.02 The President and Executive Director are hereby authorized to execute and deliver the First Amendment in substantially the form presented to the Authority, with such additions and modifications as those Officers may deem desirable or necessary as evidenced by their execution thereof. Adopted by the Authority this 27th day of March, 2006. Martin Opem Sr., President ATTEST: Daniel J. Donahue, Executive Director G:\WPDATA\N\NEW HOPE\19\DOC\RESOL (EDA) EXTENDING INTERIM AGREE.DOC FIRST AMENDMENT TO INTERIM AGREEMENT THIS AGREEMENT (the "First Amendment") is entered into effective the _ day of March, 2006 by and between the Economic Development Authority in and for the City of New Hope, Minnesota, a Minnesota public body corporate and politic (the "Authority") and PariPassu Development Corp., a Minnesota corporation (the "the Redeveloper"). WHEREAS, the Authority and the Redeveloper entered into an Interim Agreement dated effective January 9,2006 (the "Agreement"); WHEREAS, the City and the Redeveloper desire to amend the Agreement to further the purposes set forth herein. NOW, THEREFORE, in consideration of the premises and the mutual obligations of the parties hereto, the parties hereby agree as follows: The term of the Agreement is extended to April 30, 2006, and the date of April 30, 2006 shall be substituted for the date of March 28, 2006 everyvvhere that the latter date appears in the Agreement. IN WITl\TESS WHEREOF, the parties have caused this Agreement to be duly executed in each of their names as of the date first above wntten. ECONOMIC DEVELOPMENT AUTHORlTY IN AND FOR THE CITY OF NEW HOPE, MINNESOTA By: President By: Executive Director P ARIP ASSU DEVELOPMENT CORP. By: Its: G:\WPDATA\N\NEW HOPE\19\DOC\FIRST AMENDMENT TO INTERIM AGREE V1.DOC 2 (-f Y1 :r.. ~ .1/crjDb - INTERI1\1 AGREEMENT This INTERIM AGREEJvIENT entered into effective the 9th day of January, 2006 by and between the Economic Development Authority in and for the City of New Hope, Minnesota, a Minnesota public body corporate and politic (the "Authority") and PariPassu Development Corp., a Minnesota corporation (the ~'the Redeveloper"). WHEREAS, following Boisclair Corporation's withdrawal of its proposal in January 2005, in March 2005 the Authority distributed requests for proposals and.hosted a developers' roundtable regarding redevelopment of the Bass Lake Road apartments site (the "Project"); WHEREAS, several candidates submitted responses and, over the summer, the candidates met with City and Authority staff and discussed plans for the Project at the July 18, 2005 City Council meeting; WHEREAS, several development teams submitted proposals to the City, which were pr,eseIited to City Council on September 19 and October 10, 2005; WHEREAS, at its meeting on November 28, 2005, the Authority authorized a four- month exclusive negotiation period with the Redeveloper to conduct environmental and other due diligence, determine Proj ect feasibility and develop a preliminary concept plan; NOW, THEREFORE, in consideration of the premises and mutual obligations of the parties contained herein, each of them does hereby agree as follows: 1. Interim Nature of Agreement. The Authority and the Redeveloper agree that this Agreement is intended to be preliminary in nature. Before the Authority and the Redeveloper can make a decision on whether to proceed with the Project, it will be necessary to assemble and consider information relating to the economics, site assembly, phasing, environmental remediation and other aspects of the Project. The purpose of this Agreement is to allow the - Redeveloper an opportunity to assemble such information, to prepare a preliminary concept plan and to negotiate with.the Authority concerning the approval of a term sheet (the "Term Sheet") with a view to eventual exeqution of a contract for private redevelopment (the "Redevelopment Agreement") which will set forth the rights and responsibilities of the Authority and the Redeveloper with respect to the Proj ect. 2. Undertakings of the Redeveloper. (a) By January 31,2006 the Redeveloper will: ~ Conduct a Phase I environmental assessment of the site. .. Complete any soil borings and other environmental assessment y needed to estimate the cost of required environmental remediation and soil corrections necessary to complete the Proj ect. (b) From the date hereoftbrough March 28, 2006 the Redevelop~r will: . In consultation with the Authority, the City and City residents, develop a preliminary concept plan. . Work with the Authority's redevelopment consultants to analyze preliminary economic feasibility. fit Present monthly progress reports to City Council. . Negotiate the Term Sheet with the Authority. 3. Undertakings of the Authority. (a) The Authority agrees to cooperate with the Redeveloper in the Redeveloper's undertakings, and agrees that during the term of this Agreement the Authority will not negoti,~.te with any third party in connection with redevelopment of the site. (b) The Authority will take the following actions: -.. By January 31, 2006, determine at least on a preliminary basis whether the blight test for a redevelopment district is likely to be met. . By March 28, 2006, determine the Authority's and the City's willingness to allow a density that maximizes the financial feasibility of the Project that is consistent with market conditions. . Through March 28, 2006, negotiate the Term Sheet with the Redeveloper. . On an ongoing basis, explore grant opportunities and other funding sources. 4. Redeveloper Deposit: Cost Sharing. (a) During the term of this Agreement, the Authority shall pay the fees and costs of its planning consultants, Northwest Associated Consultants; its engineering consultants, Bonestroo Rosene Anderlik & Associates; and the City attorney, Jensen & Sondrall, P .A. The Redeveloper shall pay the fees and costs of its consultants. I (b) The Authority and Redeveloper agree to split the following costs equally: (i) Fees incurred after December 9, 2005. by the Authority's redevelopment counsel, Krass Momoe, P .A., for financial and proj ect feasibility analysis, review of blight analysis, review of site qualification for inclusion in a tax increment district and drafting and negotiation of a term sheet, and (ii) Preliminary redevelopment expenses including environmental analysis, soil borings, blight analysis, boundary survey and other expenses that the parties agree shall be subj ect to cost sharing. The projected budget for these costs is as follows: Description Proj ected Amount / Phase I environmental assessment ............................ $ 1,700 ." '1 b · 3,500 ~ 01 onngs ............................................................... B ligb. t an.al ysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .~. . . . . . . . . . . . . . . . . . . . 9,000 Boundary and topa survey and golf course top 0 survey............................................................. 5,000 Fees of Krass Monroe, P.A. ................ not to exceed 15,000 (c) Upon execution of this Agreement, the Redeveloper shall pay a non- refundable fee of $500.00 to the Authority. The Redeveloper shall also make an initial deposit of $5,000.00 to be applied by the Authority toward the Redeveloper's share of costs incurred by the Authority which are subject to this Paragraph 4. The Redeveloper shall replenish this deposit when the balance falls below $1,000.00 upon r~quest by the Authority. The Authority will reimburse the Redeveloper for its share of costs incurred by the Redeveloper which are subject to this Paragraph 4. (d) Before either party incurs expenses of the type set forth in subparagraph (b ) (ii) above, such party shall provide to the other a copy of the contract with the service provider (or, in the absence of a contract, a statement of the scope and'terms of the engagement) and a statement of the projected fees involved. Both parties must approve expenses prior to their being incurred. (e) In accordance with City policy, following approval of the Term Sheet by the Authority, the Redeveloper will pay all normal and customary City and Authority costs associated with the plan review and approval process. 5. City and Authority Use of Work Product. The Redeveloper shall make available at no cost to the City and the Authority for their unrestricted use all available non-proprietary work product, including market analyses, soil and engineering reports, geotechnical reports, infrastructure construction budgets and other documentation produced specifically for the site. ,., ~l IN WIT1'Ir:ESS WHEREOF, the parties have caused this Agreement to be duly executed in each of their names as ofllie date first above written. .-'" G:\WPDAT A \N\~W HOPE\19\DOC\I1\7ER-Th.1 AGREE V3.DOC ECON01v1IC DEVELOPIv1ENT AUTHORITY IN' A-ND FOR THE CITY OF 1\TEW HOPE, MrnNESOT A (Li1cL1 fj~~L ~ -- By: p hi ~~v ~/- res ent By: .:~ Authority Signature Page - Interim Agreement 4 .. . . . . . P ARIP ASSU DEVELOP1vIENT CORP. By: ~A~ 4c7~,- Ity/ P .,.e./ /VC ,. P..A <- ~ Redeveloper Signature Page - Interiln Agreenlent ......