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031119 EDA Meeting Packet EDA MEETING City Hall, 4401 Xylon Avenue North Monday, March 11, 2019 President Kathi Hemken Commissioner John Elder Commissioner Cedrick Frazier Commissioner Andy Hoffe Commissioner Jonathan London 1. Call to order – EDA Meeting of March 11, 2019 2. Roll call 3. Approval of Minutes:  December 10, 2018 4. Resolution approving the sale of the scattered site lot located at 3856 Maryland Avenue North (improvement project no. 1024) 5. Adjournment EDA Meeting Page 1 December 10, 2018 City of New Hope 4401 Xylon Avenue North New Hope, Minnesota 55428 EDA Minutes December 10, 2018 Regular Meeting City Hall CALL TO ORDER President Hemken called the meeting of the Economic Development Authority to order at 9:06 p.m. ROLL CALL Present: Kathi Hemken, President John Elder, Commissioner Cedrick Frazier, Commissioner Andy Hoffe, Commissioner Jonathan London, Commissioner Staff Present: Kirk McDonald, City Manager Aaron Chirpich, Community Development Specialist Tim Fournier, Police Chief Rich Johnson, Director of HR/Admin. Services Valerie Leone, City Clerk Chris Long, City Engineer Susan Rader, Director of Parks and Recreation Jeff Sargent, Director of Community Development Steve Sondrall, City Attorney Bernie Weber, Director of Public Works Stacy Woods, Assistant City Attorney APPROVAL OF MINUTES Item 3 Motion was made by Commissioner Hoffe, seconded by Commissioner Frazier, to approve the minutes of November 13, 2018. All present voted in favor. Motion carried. EDA LEVY Item 4 President Hemken introduced for discussion EDA Item 4, Resolution authorizing the final levy of a special benefit levy pursuant to Minnesota Statutes, Section 469.033, subdivision 6 and approval of a final budget for fiscal year 2019. Mr. Kirk McDonald, city manager, stated the EDA is asked to approve a $300,000 levy for 2019. He noted the levy is $100,000 greater than last year to provide for increased funding of the scattered site housing program. RESOLUTION 2018-23 Item 4 Commissioner Elder introduced the following resolution and moved its adoption “RESOLUTION AUTHORIZING THE FINAL LEVY OF A SPECIAL BENEFIT LEVY PURSUANT TO MINNESOTA STATUTES, SECTION 469.033, SUBDIVISION 6 AND APPROVAL OF A FINAL BUDGET FOR FISCAL YEAR 2019.” The motion for the adoption of the foregoing resolution was seconded by Commissioner Hoffe, and upon vote being taken thereon, the following voted in favor thereof: Hemken, Elder, Frazier, Hoffe, London; 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. EDA Meeting Page 2 December 10, 2018 IMPROVEMENT PROJECT NO. 1020 Item 5 President Hemken introduced for discussion EDA Item 5, Resolution approving Purchase Agreement for the acquisition of 3924 Utah Avenue North (improvement project no. 1020). Mr. Aaron Chirpich, community development specialist, requested the EDA’s approval of a purchase agreement for $190,100 for the acquisition of 3924 Utah Avenue North. He stated the two-story home was constructed in 1961 and is in need of maintenance. He recommended the home be considered for a rehabilitation project and possibly as a “demonstration” project to showcase to other residents. He noted there are several similar house designs in the neighborhood. Mr. Chirpich reviewed the scope of the work for the base bid and items to be considered as alternates. He reviewed the proposed budget and stated with a $300,000 sales price the loss/value gap may be $20,000. He stated EDA funds will be used for the project. Commissioner London advocated for a re-investment of properties and setting the sales prices for the remodeled home as high a s possible. He commented that he believes the land values set by Hennepin County are too low. RESOLUTION 2018-24 Item 5 Commissioner London introduced the following resolution and moved its adoption “RESOLUTION APPROVING PURCHASE AGREEMENT FOR THE ACQUISITION OF 3924 UTAH AVENUE NORTH (IMPROVEMENT PROJECT NO. 1020).” The motion for the adoption of the foregoing resolution was seconded by Commissioner Elder, and upon vote being taken thereon, the following voted in favor thereof: Hemken, Elder, Frazier, Hoffe, London; 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 Frazier, seconded by Commissioner Elder, to adjourn the meeting. All present voted in favor. Motion carried. The New Hope EDA adjourned at 9:20 p.m. Respectfully submitted, Valerie Leone, City Clerk I:\RFA\COMM DEV\2019\EDA\3-11-19\RFA - Sale of Lot at 3856 Maryland 3-11-19.docx Request for Action March 11, 2019 Approved by: Kirk McDonald, City Manager Originating Department: Community Development By: Aaron Chirpich, CD Specialist Agenda Title Resolution approving the sale of the scattered site lot located at 3856 Maryland Avenue North (improvement project no. 1024). Requested Action This is a public hearing, and after receiving public comments, staff is requesting that the Economic Development Authority (EDA) approve the attached resolution approving the sale of the EDA-owned property located at 3856 Maryland Avenue North. Policy/Past Practice Proposals for the redevelopment of EDA-owned scattered site lots are reviewed by the EDA prior to executing a contract with the preferred buyer/builder. Background Staff sent Request for Proposals (RFPs) to more than 20 builders marketing the lot located at 3856 Maryland Avenue. The non-negotiable minimum lot sales price was set at $58,000, and builders were offered the chance to submit a higher offer to make their proposal more competitive. The minimum lot sales price for this lot is lower in comparison to other lots recently sold by the EDA, as the price was adjusted downward to account for the required soil corrections at this location. These soil corrections, and the subsequent lower price, were discussed in detail at the January 22, 2019 Work Session meeting. For more information regarding soil corrections, please refer to the previously distributed packet for that Work Session. The EDA received proposals for the development of 3856 Maryland Avenue from the following two builders:  Novak-Fleck, Inc.  Donnay Homes Staff reviewed the proposals with the city manager. Upon review, staff found it difficult to distinguish a superior proposal. Therefore, staff would like to review the characteristics and attributes of both proposals with the EDA and select a preferred builder following deliberations at the public hearing. The primary attributes for both proposals are listed below. Donnay Homes Overview  Two-story home design  Above-average curb appeal  High-end trim package for the cabinets, flooring, doors, and fixtures  Granite kitchen counter tops  Five bedrooms  Main-floor fireplace  Tray ceilings in master bedroom  Master suite with walk-in closet Agenda Section EDA Item Number 4 Request for Action, Page 2  Master bath is equipped with separate tile shower and soaker tub  Three-car garage  Two full baths, one ¾ bath, and one ½ bath (4 total)  3,201 finished square feet including a finished basement  Typical exterior finishes, vinyl siding with cultured stone accents  10’ X 10’ Concrete patio in rear of home  Land offer = $60,000  Anticipated sales price = $395,000 Novak-Fleck Overview  Two-story home design  Above-average curb appeal  High-level trim package for cabinets, flooring, doors, and fixtures  Granite kitchen counter tops  Main-floor fireplace  Four bedrooms  Three-car garage  One full bath, two ¾ baths, and one ½ bath (4 total)  Master suite with walk-in closet  Full tile master shower  2,805 finished square feet including a finished basement  Typical exterior finishes, vinyl siding with cultured stone accents  Land offer = $63,000  The home is pre-sold to a prospective buyer  Anticipated sales price = $394,000 Experience with Builders Novak-Fleck is a moderate-sized home builder based out of Brooklyn Park, and the EDA has sold five lots to them over the past five years. The lots purchased by the builder have been located at 6059 West Broadway Avenue, 5431 Virginia Avenue, 9115 62nd Avenue, 9121 62nd Avenue, and 4511 Boone Avenue. Overall, staff has been impressed by the quality of work completed by Novak-Fleck, and the builder has always delivered what they propose. The plan submitted by Novak-Fleck is the same plan that was built at 4511 Boone Avenue. The EDA has not sold a scattered site lot to Donnay Homes. However, the builder is a well-known locally- owned company that has experience building high-end custom homes throughout the region. Donnay is currently most active in the cities of Shakopee, Edina, Shorewood, Plymouth, and Burnsville. The builder reported the construction and sale of 27 custom homes in 2018. Development Agreement and Next Steps Staff has worked with the city attorney to draft a purchase and redevelopment agreement for the sale of the lot. The agreement ensures that the provisions set forth in t he RFP will be met. Once the agreement is fully executed, staff anticipates that the closing of the lot sale will take place by the end of April. Construction of the home will begin once weather permits. Request for Action, Page 3 Recommendation Staff recommends that the EDA review the submitted proposals and select a preferred builder for the lot located at 3856 Maryland Avenue North. Approval of the attached resolution will allow staff to move forward with executing a purchase and redevelopment agreement with the selected builder. Attachments  Resolution  Public Hearing Notice  Proposals  RFP for Lot Sale  Minutes from the January 22, 2019 Work Session meeting CITY OF NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY EDA RESOLUTION NO. 19-___ RESOLUTION APPROVING SALE OF THE SCATTERED SITE LOT LOCATED AT 3856 MARYLAND AVENUE NORTH (IMPROVEMENT PROJECT NO. 1024) BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope (“EDA”) as follows: WHEREAS, the EDA purchased that certain vacant parcel of real property located at 3856 Maryland Avenue North, New Hope, MN, and legally described as Lot 9, Block 4, Gwynnco Second Addition, Hennepin County, MN (the “Property”) on September 5, 2018, with the intention of selling the Property for the construction of a new single family home; and WHEREAS, in response to a Request for Proposal (“RFP”) sent by New Hope City staff to various builders, the EDA received an offer from ____________________, Inc. a Minnesota corporation (“”) regarding the sale and redevelopment of the Property; and WHEREAS, the EDA arrived at an agreement with _____________________, to sell the Property for the purchase price of $__________________ upon all of the terms set forth in the RFP; and WHEREAS, it is in the best interest of the EDA to sell the Property to __________________ for the sum of $______________________, in order for __________________________ to redevelop and build a new single family home on the Property in accordance with the City’s scattered site housing program and policy; and WHEREAS, the City staff is hereby seeking approval from the EDA to execute a purchase and redevelopment agreement with __________________________, for the sale of the Property. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: 1. That the above recitals are incorporated herein by reference. 2. That the sale of the Property by the EDA to _____________________, for the purchase price of $_________________________, with other terms and conditions to be set forth in a purchase and redevelopment agreement to be drafted by the City Attorney, is approved subject to the review and approval by the City Attorney of the final language and exhibits to the purchase and redevelopment agreement relating to the closing on the sale of the Property, it being in the best interest of the EDA to sell the Property for redevelopment and construction of a single-family home in accordance with the City’s scattered site housing program and policy. 3. The EDA shall use due diligence for selling the Property to ________________, for the construction of a single-family home, so as to return the Property to the tax rolls for the benefit of all taxing jurisdictions. 4. The President, Executive Director and New Hope City staff are authorized and directed to sign all appropriate documents, and to take whatever additional actions are necessary or desirable, to complete the sale of the Property in accordance with the Purchase and Redevelopment Agreement. Dated the 11th day of March, 2019. ____________________________________ Kathi Hemken, President Attest: _____________________________ Kirk McDonald, Executive Director P:\Attorney\SAS\1 Client Files\2 City of New Hope\99-11427 Purchase 3856 Maryland Ave N from Crystal\Resolution Approving Sale of 3856 Maryland Avenue North.docx PD F c r e a t e d w i t h p d f F a c t o r y P r o t r i a l v e r s i o n ww w . p d f f a c t o r y . c o m PD F c r e a t e d w i t h p d f F a c t o r y P r o t r i a l v e r s i o n ww w . p d f f a c t o r y . c o m PD F c r e a t e d w i t h p d f F a c t o r y P r o t r i a l v e r s i o n ww w . p d f f a c t o r y . c o m PD F c r e a t e d w i t h p d f F a c t o r y P r o t r i a l v e r s i o n ww w . p d f f a c t o r y . c o m