042406 EDA
- Official File Copy
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CITY OF NEW HOPE
EDA MEETING
City Hall, 4401 Xylon Avenue North
April 24, 2006
EDA Meeting will commence upon
adjournment of the City Council Meeting
President Martin Opem Sr.
Commissioner Mary Gwin-Lenth
Commissioner Andy Roffe
Commissioner Karen Nolte
Commissioner Steve Sommer
1. Call to order
2. Roll call
3. Approval of regular meeting minutes of March 27, 2006
4. Resolution authorizing the second extension of the interim agreement ,vith
PariPassu/Trio Development for the redevelopment of the Bass Lake Road
Apartments site (8400 and 8420 Bass Lake Road and 8401, 8411, and 8421 58th
Avenue) (improvement project no. 795)
j. Adjournment
CITY OF NEW HOPE
4401 XYLON A VENUE NORTH
NEW HOPE, :MINNESOTA 55428
EDA Minutes March 27, 2006
Regular Meeting Ci ty Hall
CALL TO ORDER President Opern called the meeting of the Economic Development Authority
to order at 8:55 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
Carlos Espinosa, Community Development Intern
Shari French, Director of Parks & Recreation
Kim Green, Community Development Assistant
Curtis Jacobsen, Community Development Specialist
Guy Johnson, Director of Public Works
Clarrisa Klug, Assistant City Attorney
Valerie Leone, City Clerk
Kirk McDonald, Director of Community Development
Vince VanderTop, Assistant City Engineer
APPROVE MINUTES Motion ,vas made by Commissioner Hoffe, seconded by Commissioner G,-vin-
Lenth to approve the Regular Meeting Minutes of January 9, 2006. All
present voted in favor. Motion carried.
IMP. PROJECT 795 President Opern introduced for discussion Item 4, Resolution authorizing the
Item 4 extension of the i11terim agreement with PariPassu/Trio Developn1ent for the
redevelopment of the Bass Lake Road Apartments site (8400 and 8420 Bass
Lake Road and 8401, 8411, and 8421 58th Avenue) (improvement project no.
795).
President Opem commented that adoption of the resolution will extend the
term of the interim agreeme11t by one montl1 (from MarcI1 28, 2006, to April
30, 2006). He noted the action is necessary to accommodate the special work
session scheduled on March 30 at V\Thich time the developer will present the
financial details of the project and discuss the preliminary term sheet with city
represen ta ti ves.
EDA RESOLUTION Commissioner Nolte introduced the follovving resolution and moved its
06-02 adoption: "RESOLUTION AUTHORIZING THE EXTENSION OF THE
Item 4 INTERIM AGREEMENT WITH P ARIP ASSU/TRIO DEVELOPMENT FOR
EDA Meetu1g
Page 1 March 27, 2006
THE REDEVELOPMENT OF THE BASS LAKE ROAD AP ARTMENTS
SITE (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 foregoing resolution was seconded by Commissioner Gwin-
Lenth, and upon vote being taken thereon, the following voted in favor
thereof: Opem, Gwin-Lenth, Hoffe, Nolte, Sommer; and the following voted
against the same: None; Abstained: None; Absent: None; whereupon the
resolution was declared duly passed and adopted, signed by the president
which was attested to by the executive director.
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 8:57 p.m.
Respectfully submitted,
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Valerie Leone
City Clerk
EDA Meeting
Page 2 March 27, 2006
EDA
Request for Action
Originating Department Approved for Agenda Agenda Section
Community Development April 24, 2006 EDA
Item No.
By: Kirk McDonald, CD Director 4
Kim Green, CD Assistant
Resolution authorizing the second 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 (8400 and 8420 Bass Lake Road and 8401, 8411, and 842158th Avenue)
(improvement project no. 795)
Requested Action
Staff requests the Economic Development Authority (EDA) approve a resolution authorizing the seco11d
extension of the term of the interim agreement with the preferred redeveloper for the Bass Lake Road
Apartments site, PariPassufTrio Development. On March 27, 2006, the EDA authorized the extension of the
agreement from March 28, 2006, to April 30, 2006. If the EDA desires to continue negotiations with
PariPassu/Trio Development, staff requests the EDA authorize a second extension of the agreement to June
30, 2006. All other conditiolls in the interim agreement remain unchanged, including how preliminary
redevelopment costs and responsibilities are to be shared between the EDA and the redeveloper.
Policy/Past Practice
Priority goal number two emphasizes the maintenance and redevelopment of commercial and residential
properties. To assist with this goal, the city can select a preferred redeveloper and participate in a
redevelopment agreement for the redevelopment of a site ill the city.
Background
On November 28, 2005, the EDA approved a resolution for a 120-day exclusive negotiation period with
PariPassu/Trio Developmellt for the redevelopment of the Bass Lake Road Apartments site. PariPassu/Trio
was one of three develo ment teams that artici ated in a redevelo er selection roce,S5, which bee-an in the
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Motion by Second by dwill'~'
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To: ~ 07 II 06-03
I: \ RF A \ PLANNING \ Livable Communities \ Bass Lake Road Apts \ Q & R- April 24 2006 Resolution approving extension of interiurn
agreement \vith PariPassTrio for BLR project.doc
Request for Action, Page 2 of 3
April 24, 2006
spring 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
responsibilities are shared between the city and the redeveloper during the negotiation period.
On March 27, 2006, the EDA authorized the extension of the interim agreement from March 30 to April 30,
2006, to provide additional time to review project details with the redeveloper. On Thursday, March 30, the
Council held a special work session to discuss the project with PariPassufTrio Development, staff, and the
city's financial consultant. The Council expressed general support for the upscale condominium project. Jim
Casserly from :Krass Monroe, the city's financial consultant, reviewed the financial information with the
Council and indicated the current analysis shows a difference of $876,493 between the sources and uses
preliminarily identified, after the use of tax increment financing (TIP). The Council requested the redeveloper
consider options for modifying its proposal to allow for a reduced financial contribution from the city, while
maintaIDing a high-quality housing product.
Staff, consultants, and the redeveloper continue to work through the details that will allow the City
Council/EDA and the redeveloper to prepare a term s11eet that meets the needs of both the city and the
redeveloper. Staff met with the redeveloper on April 13 to review the direction provided at the work session
and discuss possible options for modifications to the project proposal. Staff and the development team from
PariPassu{Trio met again on April 19 to outline possible approaches to improving the pro-forma for the
project. Staff will present the outcome of that meeting with the Council/EDA at tonight's EDA meeting. If the
EDA wishes to continue negotiations with PariPassufTrio development, staff requests that the EDA authorize
a second extension for the agreement to June 30, 2006. All other conditions in the interim agreement remain
unchanged, including how preliminary redevelopment costs and responsibilities are to be shared between tl1e
EDA and the redeveloper.
As the EDA is avvare, there are several important infrastructure projects associated with this potential
redevelopment, including the $1.4 milli011 federal grant for the aligI1IDent of Yukon a11d Xylon avenues and
the potential grant from Hennepin County for the water main improvements. In addition, the Connty has
dedicated funding to assist with the local match for the roadway improvement project. Staff recommends that
tl1e city continue to work with the redeveloper to negotiate agreeable terms, keeping in mind the many city-
wide benefits and opportunities what would be created by the proposed project.
Funding
The extension of the interim agreement does not require additional funds. The city's share of the preliminary
redevelopment costs, as outlined in the interim agreement approved by the EDA on January 9, 2006, remain
Ul1changed. However, if negotiations continue, at a future meeting staff might be requesting the EDA
authorize additional expenses for the services of Krass Monroe.
Recommendations
Staff recommends approval of the attached resolution authorizing a second extension of the term of tile
ll1terim agreement with PariPassu/Trio Development from April 30, 2006, to June 30, 2006. If negotiations
proceed, staff will provide an update to the Council at the May 8 Council meeting and hopes to present a term
sheet to the Council for approval at the first meeting in June.
Request for Action, Page 3 of 3
April 24, 2006
Attachments
1. Resolution
2. Second Amendment to Interim Agreement
3. First Amendment to Interim Agreement
4. Copy of original interim agreement, effective January 9, 2006
ECONOMUCDEVELOPMENTAUTHORITY
IN AND FOR THE CITY OF NEW HOPE
COUNTY OF HENNEPIN
STATE OF MUNNESOTA
RESOLUTION NO.
A RESOLUTION AUTHORIZING A SECOND EXTENSION OF THE
INTERIM AGREEMENT BETWEEN THE ECONOMUC DEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF NEW HOPE AND
P ARIP ASSU/TRIO DEVELOPMENT FOR THE REDEVELOPlVIENT 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 follo\vs:
Section 1. Recitals.
1.01 The Bass Lake Road Apartmellt site (the "Site") consists of approximately 3.6 acres
of land with five tax parcels at 8400 alld 8420 Bass Lake Road alld 8401, 8411 and 8421 - 58t11
A vellue. The Site cU11-ently consists of five 12-Ul1it rental apartmellt buildings.
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, PariPassu/Trio Development (the "Redeveloper") was chosen as the City's tentative
DeveloperlBuilder 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 Interim
Agreement effective as of January 9, 2006 and expiring March 28, 2006, setting forth responsibilities
and deadlines for each of the parties.
1.06 As requested by tIle Redeveloper, the Interim Agreement was extended for an
additional month (until April 30, 2006) so tI1at it could continue to work~ with the City on project
feasibility.
1.07 The Redeveloper requests a second extension to the term of the Interim Agreement 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 Second Amendment to
Interim Agreement extending the term of the Interim Agreement from April 30, 2006 to June 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 24th day of April, 2006.
Mariin Opem Sr., President
ATTEST:
Daniel J. Donahue, Executive Director
G:\COMMDEV\KIM\BASS LAKE ROAD APARTMENTS 2005\PREFERRED DEVELOPER\RESOL (EDA) EXTENDING INTERIM AGREE FOR SECOND
TIME.DOC
SECOND AMEND1v1ENT
TO
IN"TERIM AGREE1v1ENT
THIS AGREE1v1ENT (the "Second Amendment") is entered into effective the 24th day of
April, 2006 by and between the Economic Development Authority in and for the City of New
Hope, Minnesota, a Milll1esota public body corporate and politic (the "Authority") and PariPassu
Development Corp., a Mi1U1esota corporation (the "the Redeveloper").
WHEREAS, the Authority and the Redeveloper entered into an Interim Agreement dated
effective January 9,2006 (the "Agreement");
WHEREAS, the Authority and the Redeveloper authorized the First Amendment to the
agreement dated effective March 27, 2006 (the "First Amendment");
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 June 30, 2006, and the date of June 30, 2006
shall be substituted for the date of March 28, 2006 or April 30, 2006 everywhere that the latter
two dates appears in the Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreemellt to be duly executed in
eacll of their names as of the date flIst above written.
ECONOMIC DEVELOPMENT AUTHORITY
IN" AND FOR THE CITY OF NEW HOPE, MINNESOTA
By:
President
By:
Executive Director
P ARIP ASSU DEVELOPMENT CORP.
By:
Its:
G:\CorrunDev\Kim\Bass Lake Road Apartments 2005\Preferred Developer\Second Amendment to Interim Agree vI.doc
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lliTERIM AGREEMENT
This ll\TTERll\1 AGREElvIENT 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
lvIinnesota public body corporate and politic (the "Authority") and PariPassu Development
COrpa, a Minnesota corporation (the "the Redeveloper").
WHEREAS, following Boisclair Corporation's vvithdrawal 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 \vere
pr~sented 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 Project 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 Acreement. 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 w"hether to proceed with the Project, it will be necessary to assemble and
consider information relating to the economics, site assembly, phasing, en"vironmental
remediation and other aspects of the Proj ect. 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 vvith 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 boiings and other environmental assessment
needed to estimate the cost of required en"vironmental remediation
and soil corrections necessary to complete the Proj eet.
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(b) From the date hereof through March 28, 2006 the Redeveloper will:
. In consultation with the Authority, the City and City residents,
develop a preliminary concept plan.
e Wark with the Authority's redevelopment consultants to anal)'Ze
preliminary economic feasibility.
G Present monthly progress reports to City Council.
. Negotiate the Term Sheet with the Authority.
3. Undertakings of the Authoritv.
(a) The Authority agrees to cooperate witb. the Redeveloper in the
Redeveloper's undertakings, and agrees that during the term oftbis Agreement the Authority will
not negotiate with any third party in connection with redevelopment ofllie 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.
e 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 fuLlding
sources.
4. Redeveloper Deposit: Cost Sharing.
(a) During the term of this ...t\.greem ent, the Authority shall pay the fees and
costs of its planning consultants, Northw~est 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.
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(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 Monroe, 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) Preliminal)' rede'velopment 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 Projected Amount
/ $ 1,700
Phase I environmental assessment ............................
~ "I b · -
~ 01 onngs ............."........."..................................".... 3,500
B Ii gh t an.al ysis . . . . . . . . . . . " . . . · · · · · · · · · · · · · · . · · · · · · · · · -. · · · · · · " · · · · · · · · . . · · 9,000
Boundary and tapa survey and golf course
tapa 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 oilier a copy of the contract Mth 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 Mth 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 Wark Product. The Redeveloper shall make available
at no cost to the City and the Authority for their uirrestricted 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.
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IN WITl\r:ESS WHEREOF, the parties have caused this Agreement to be dilly executed in
each of their names as of the date first above vvritten.
G:\ WPDA T A \l--,f\.NEW HOPE\19\DOC'ill't"TERIM: AGREE V3.DOC
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ECONOMIC DEVELOP11ENl AUTHORITY
IN fL"ND FOR THE CITY OF NEW HOPE, MTh1NESOTA
By: ;:71t~Jit~qQk~
res ent
By:
Authority Signature Page - Interim Agreement
4
P ARIP ASSU DEVELOPIvIENT CORP.
By:
Its:
Redeveloper Signature Page ~ Interim Agreelnent
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FIRST A.."MENDMENT
TO
WTERlM AGREEMENT
TIDS AGREEMENT (the "First Amendment") is entered into effective the :2 7 day of
March, 2006 by and between the Economic Development Authority in and for the City of New
Hope, Minnesota, a 11innesota public body corporate and politic (the "Authority") and PariPassu
Development Corp., a Minnesota corporation (the "the Redeveloper").
VVHEREAS, the Authority and the Redeveloper entered into an Interim Agreement dated
effective January 9,2006 (the "Agreement");
VVHEREAS, 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 Apri~ 30, 2006, and the date of April 30, 2006
shall be substituted for the date of March 28, 2006 everyvvrhere that the latter date appears in the
Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be dilly executed in
each of their names as of the date first above vvritten.
ECONO:MIC DEVELOPMENT AUTHORITY
W AND FOR THE CITY OF NEW HOPE, :MmNESOTA
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By: //!c~vGl~
iBTesident U
By:
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P ARIP ASSU DEVELOPMENT CORP.
By: ;;;:;::&. Z;;L
Its~ ~;;:t~ Irvt:- ,/''';;~.2 r/2/e:7t...
G:\WPDATA\N\NEW HOPE\19\DOC\F1RST AMENDMENT TO INTERIM AGREE V1.DOC
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