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EDA 12/08/03OFFICIAL FILE COPY CITY OF NEW HOPE EDA MEETING City Hall, 4401 Xylon Avenue North December 8, 2003 President W. Peter Enck Commissioner Sharon Cassen Commissioner Don Collier Commissioner Mary Gwin-Lenth Commissioner Steve Sommer 2. 3. 4. Call to order Roll call Approval of regular meeting minutes of November 24, 2003 Resolution modifying the restated redevelopment plan and tax increment financing plans for redevelopment project no. 1 and tax increment financing districts nos. 80-2, 81-1,82-1, 85-1, 85-2, 86-1 and 02-1; creating tax increment financing district no. 03-1 (special law) and adopting a tax increment financing plan relating thereto (improvement project no. 724) Resolution approving the metropolitan council's memorandum of understanding to establish and administer a waiting list and grievance procedure for MHOP units in the Bass Lake Apartments project (7610 Bass Lake Road) (improvement project no. 707) Resolution authorizing and calling for a closed meeting of the New Hope Economic Development Authority 7. Adjournment CITY OF NEW HOPE 4401 XYLON AVENUE NORTH NEW HOPE, MINNESOTA 55428 EDA Minutes Regular Meeting November 24, 2003 City Hall CALL TO ORDER ROLL CALL APPROVE MINUTES PUBLIC HEARING IMP. PROJECT 665 Item 4 President Enck called the meeting of the Economic Development Authority to order at 8:02 p.m. Present: W. Peter Enck, President Mary Gwin-Lenth, Commissioner Steve Sommer, Commissioner Absent: Sharon Cassen, Commissioner Don Collier, Commissioner Motion was made by Commissioner Sommer, seconded by Commissioner Gwin- Lenth, to approve the Regular Meeting Minutes of November 10, 2003. All present voted in favor. Motion carried. President Enck introduced for discussion Item 4, Public Heating - Resolution approving purchase agreements with JCS Development Inc. and Frey Development Inc. for sale of 7500-7528 42na Avenue North property (improvement project no. 665). Mr. Kirk McDonald, Director of Community Development, expressed his pleasure regarding the planned commercial redevelopment of the 42nd and Quebec Avenue property. He attributed the success of the redevelopment and soil contamination clean-up to staff member, Ken Doresky, who was responsible for securing two recent grants. Mr. McDonald acknowledged the presence of Douglas Bergstrom, environmental consultant of Diversified Environmental, Inc., who is available to answer questions from the EDA. Mr. Ken Doresky, Community Development Specialist, stated items 4, 5, and 6 all relate to the 7500-7528 42nd Avenue North property. He indicated the proposed purchase price is $380,000 (Culver's Restaurant); and $130,000 (office condominiums); for a total of $510,000. In addition to the purchase price, the developers have agreed to contribute $47,100 for regional storm water improvements based on the estimate prepared by the City Engineer. The storm water fee is separate from the purchase price and will .be included in the development agreement. Also, the city's not paying any realtor fee in conjunction with the sale of the property. On June 23, the Council approved Ordinance 03-13, an ordinance establishing a park dedication requirement and/or cash payment in lieu of land dedication. At the time the ordinance was adopted, staff recommended and the Council agreed that the newly created fee would not be applicable to developments currently in process, including this project and Woodbridge Senior Cooperative, Plymouth Heights Pet Hospital and St. Joseph Catholic Church. New Hope EDA Page 1 November 24, 2003 CLOSE HEARING Item 4 EDA RESOLUTION 03-10 Item 4 The following three items are being presented for EDA consideration at tonight's meeting: I. Purchase Agreements: Purchase agreements have been submitted from both Culver's Restaurant and Frey Development (Office Condomimums). The City Attorney will prepare a development agreement for the site for consideration at a later date. Finally, the city will close on the property after planning and zoning approvals (expected during the winter). 2. Restrictive Covenant: The Covenant, prepared by the City Attorney and approved by the Minnesota Pollution Control Agency (MPCA), restricts use of the property and imposes maintenance and reporting requirements. Any buyer would be required to adhere to the Restrictive Covenant. The MPCA continues to exercise control over this property. Therefore, the MPCA is requiring the City to record a Declaration of Covenants against this property prior to its sale for redevelopment purposes. 3. Environmental Monitoring Proposal: Diversified Environmental, the city's environmental consultant, has submitted a proposal to oversee the final environmental responsibilities prior to project completion. Many activities are required by the MPCA and are outlined within the Restrictive Covenant to ensure proper redevelopment of the site. Diversified Environmental has been assisting the city with this site since the contamination was originally discovered in 1984. Mr. Doresky indicated the closing will occur following planning and zoning approvals. He illustrated revised site plans and renderings of Culver's and the office condominiums. He reported that construction will start in the spring. Mr. Doresky explained the on-site monitoring that will be conducted by the Minnesota Pollution Control Agency (MPCA). The MPCA also requires preparation of a contingency plan for continued monitoring during construction and the disposal of any contaminated materials removed during construction. There will be certain restrictions for the site that are documented within the Declaration of Covenants. He also noted the requirement for a subsurface vapor collection system for permanent structures at the property. Commissioner Gwin-Lenth questioned whether extra care is required for installation of such items as fencing and plantings. Mr. Doresky reported that the site plan must be approved by the MPCA. Any modifications (or tree replacements) may require re-approval. Motion was made by Commissioner Gwin-Lenth, seconded by Commissioner Sommer, to close the public hearing. All present voted in favor. Motion carried. Commissioner Sommer introduced the following resolution and moved its adoption "RESOLUTION APPROVING PURCHASE AGREEMENTS WITH JCS DEVELOPMENT INC. AND FREY DEVELOPMENT INC. FOR SALE OF 7500-7528 42~D AVENUE NORTH PROPERTY (IMPROVEMENT PROJECT NO. 665)". 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: Enck, Gwin-Lenth, Sommer; and the following voted against the same: None; Abstained: None; Absent: Cassen, Collier; whereupon the resolution was declared duly passed and adopted~ signed by the president which was attested to by the executive director. New Hope EDA Page 2 November 24, 2003 IMP. PRO~rECT 665 Item 5 EDA RESOLUTION 03-11 Item 5 IMP. PROJECT 665 Item 6 EDA RESOLUTION 03-12 Item 6 IMP. PROJECT 756 Item 7 New Hope EDA Page 3 President Enck introduced for discussion Item 5, Resolution approving declaration of covenants for 7500-7528 42~a Avenue North (improvement project no. 665). Commissioner Sommer introduced the following resolution and moved its adoption "RESOLUTION APPROVING DECLARATION OF COVENANTS FOR 7500-7528 42Nv AVENUE NORTH (IMPROVEMENT PROJECT NO. 665)." The motion for the adoption of the foregoing resolution was seconded by Commissioner Gwm-Lenth, and upon vote being taken thereon, the following voted in favor thereof: Enck, Gwin-Lenth, Sommer; and the following voted against the same: None; Abstained: None; Absent: Cassen, Collier; whereupon the resolution was declared duly passed and adopted, signed by the president which was attested to by the executive director. President Enck introduced for discussion Item 6, Resolution approving environmental monitoring proposal for 7500-7528 42"d Avenue North property (improvement project no. 665). Commissioner Sommer introduced the following resolution and moved its adoption "RESOLUTION APPROVING ENVIRONMENTAL MONITORING PROPOSAL FOR 7500-7528 42N° AVENUE NORTH PROPERTY (IMPROVEMENT PROJECT NO. 665)." 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: Enck, Gwin-Lenth, Sommer; and the following voted against the same: None; Abstained: None; Absent: Cassen, Collier; whereupon the resolution was declared duly passed and adopted, signed by the president which was attested to by the executive director. President Enck introduced for discussion Item 7, Resolution approving purchase agreement and relocation benefits for 7601 Bass Lake Road (improvement project no. 756). Mr. Ken Doresky, Community Development Specialist, reported the purchase agreement is based on the property's appraised value of $220,000 and the relocation benefits are estimated at $22,520. He stated Krass Monroe, the city's financial consultant, as well as the city attorney, recommend that the EDA (rather than the City Council) consider acquisitions of this type. Mr. Doresky stated as directed by the council at its meeting of November 3, 2003, staff will coordinate with Evergreen Land Services for payment of relocation benefits to all remaining sellers in the East Winnetka Livable Communities Area. The city's purchase offer will consist of the appraised value and a relocation payment determined by the city's relocation consultant. The relocation estimate of $22,520 for the 7601 Bass Lake Road properly will be adjusted when the property owner moves and completes the purchase of another property. Commissioner Gwin-Lenth questioned the computation of relocation benefits. Mr. Steve Sondrall, City Attorney, explained that the relocation benefits differ between commercial and residential properties. For residential properties, the city must pay actual relocation expenses (moving expenses and closing expenses). He reported a differential payment may be required if the acquired property is worth more than comparable properties. President Enck asked Mr. Doresky to report on the letters that the city mailed to remaining property owners in the area that are not city-owned properties. November 24, 2003 EDA RESOLUTION 03-13 Item 7 ADJOURNMENT Mr. Doresky stated letters were sent today requesting that property owners consider an offer by the city based on an appraised value and relocation benefits. The appraisals should be completed by the end of December. Commissioner Sommer introduced the following resolution and moved its adoption "RESOLUTION APPROVING PURCHASE AGREEMENT AND RELOCATION BENEFITS FOR 7601 BASS LAKE ROAD (IMPROVEMENT PROJECT NO. 756)." 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: Enck, Gwm-Lenth, Sommer; and the following voted against the same: None; Abstained: None; Absent: Cassen, Collier; whereupon the resolution was declared duly passed and adopted, signed by the president which was attested to by the executive director. Motion was made by Commissioner Sommer, seconded by Commissioner Gwin- Lenth, to adjourn the meeting. All present voted in favor. Motion carried. The New Hope EDA adjourned at 8:29 p.m. Respectfully submitted, Valerie Leone City Clerk New Hope EDA Page 4 November24,2003 EDA REQUEST FOR ACTION Originating Department Approved for Agenda Agenda Section Community Development /" 12-8-03 EDA J Item No. By: Kirk McDonald, Director of By: Community Development ,' ,. 4 A RESOLUTION MODIFYING THE RESTATED REDEVELOPMENT PLAN AND TAX INCREMENT FINANCING PLANS FOR REDEVELOPMENT PROJECT NO. 1 AND TAX INCREMENT FINANCING DISTRICTS NOS. 80-2, 81-1, 82-1, 85-1, 85-2, 86-1 AND 02-1; CREATING TAX INCREMENT FINANCING DISTRICT NO. 03-1 (SPECIAL LAW) AND ADOPTING A TAX INCREMENT FINANCING PLAN RELATING THERETO. (IMPROVEMENT PROJECT NO. 724) REQUESTED ACTION Staff and consultants are recommending that the New Hope Economic Development Authority approve the attached Resolution Modifying the Restated Redevelopment Plan and Tax Increment Financing Plans for Redevelopment Project No. 1 and Tax Increment Financing Districts Nos. 80-2, 81-1, 82-1, 85-1, 85-2, 86-1 and 02-1; Creating Tax Increment Financing District No. 03-1 (Special Law) and Adopting a Tax Increment Financing Plan Relating Thereto. The resolution was prepared by Krass Monroe, the city's redevelopment financial consultant, and Jim Casserly will be in attendance at the meeting to answer any questions on this matter. This is the step that will create the East Winnetka Tax Increment Financing District. The EDA needs to approve this resolution making recommendations to the City Council prior to the City Council public hearing. As the EDA is aware, a final development agreement and plan have not yet been presented for approval and it is anticipated that those documents will be presented at the January 12, 2004, City Council and ED,~ meetings. POLICY/PAST PRACTICE The EDA and City Council have created tax increment financing districts in the past to facilitate redevelopment projects. BACKGROUND Extensive background information is provided on this matter under the City Council public hearing request and it is not the intention to duplicate all of that information in this request for action. Staff is recommending that the EDA approve the resolution and then conduct the public hearing at the City Council level. The resolution states, in part, that: · It has been proposed that the EDA approve and adopt the proposed modifications to the Restated Redevelopment Plan for Redevelopment Project No. 1 clarifying the available sources of revenue and reflecting increased project costs and increased bonding authority within the project area. MOTION BY ~f-~-. ~(~/~ SECOND BY ! kRFA\PLANNING\Livable Communifies\O-Public Hearing.doc Request for Action Page 2 12-8-03 It has been further proposed that the EDA approve and adopt the proposed modifications to the Tax Increment Financing Plans (the "Existing TIF Plans") for Tax Increment Financing Districts Nos. 80-2, 81-1, 82-1, 85-1, 85-2, 86-1 and 02-1 (the "Existing TIF Districts") clarifying the available sources of revenue and reflecting increased project costs and increased bonding authority within the project area. It has been further proposed that the EDA approve the creation of proposed Tax Increment Financing District No. 03-1 (Special Law) the ("Proposed TIF District") within the project area and approve and adopt the proposed Tax Increment Financing Plan (the "Proposed TIF Plan") relating thereto. The EDA has caused to be prepared and has investigated the facts with respect thereto a modified plan for the project area and modified existing TIF plans for the existing TIF districts clarifying the available sources of revenue and reflecting increased project costs and increased bonding authority within the project area, and a proposed TIF plan for the proposed TIF district defining more precisely the property to be included, the public costs to be incurred and other matters relating thereto. The EDA has performed all actions required by law to be performed prior to the approval and adoption of the modifications to the plan and existing TIF plans and the approval and adoption of the proposed TIF plan. The EDA hereby determines that it is necessary and in the best interests of the city and the EDA at this time to approve and adopt the modifications to the plan and existing TIF plans, to create the proposed TIF district and to approve and adopt the proposed TIF plan relating thereto. The resolution states the following findings: · The EDA hereby finds that the assistance to be provided through the adoption and implementation of the modified plan, modified existing TIF plans and proposed TIF plan is necessary to assure the development and redevelopment of the project area. · The EDA hereby finds that the plans conform to the general plan for the development and redevelopment of the city as a whole. The EDA hereby finds that the plans afford maximum opportunity consistent with the sound needs of the city as a whole for the development and redevelopment of the project area by private enterprise and it is contemplated that the development and redevelopment thereof will be carried out pursuant to redevelopment contracts with private developers. The resolution states the following approvals and adoptions: · The modifications to the plan clarifying the available sources of revenue and reflecting increased project costs and increased bonding authority within the project area are hereby approved and adopted by the commissioners of the EDA and are forwarded to the New Hope City Council for public hearing, review and approval. The modifications to the existing TIF plans clarifying the available sources of revenue and reflecting increased project costs and increased bonding authority within the project area are hereby approved and adopted by the commissioners of the EDA and are forwarded to the New Hope City Council for public hearing, review and approval. The creation of the proposed TIF district within the project area and the adoption of the proposed TIF plan relating thereto are hereby approved and adopted by the commissioners of the EDA and are forwarded to the New Hope City Council for public hearing, review and approval. Request for Action Page 3 12-8-03 Lastly, the resolution states that: · Upon approval and adoption of the plans, the EDA shall cause said plans to be filed with the Minnesota Department of Revenue. Staff recommends approval of the resolution and forwarding the matter to the City Council for consideration at the public hearing. A'I-I'ACHMENTS · Resolution · Article III, Cash Flow Analysis, Map, But For Analysis, Sources and Uses Statement · 12/2/03 Krass Monroe Correspondence NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY COUNTY OF HENNEPIN STATE OF MINNESOTA RESOLUTION NO. A RESOLUTION MODIFYING THE RESTATED REDEVELOPMENT PLAN AND TAX INCREMENT FINANCING PLANS FOR REDEVELOPMENT PROJECT NO. 1 AND TAX INCREMENT FINANCING DISTRICTS NOS. 80-2, 81-1, 82-1, 85-1, 85- 2, 86-1 AND 02-1; CREATING TAX INCREMENT FINANCING DISTRICT NO. 03-1 (SPECIAL LAW) AND ADOPTING A TAX INCREMENT FINANCING PLAN RELATING THERETO. BE IT RESOLVED by the Board of Commissioners (the "Commissioners") of the New Hope Economic Development Authority (the "EDA"), as follows: Section 1. Recitals. 1.01. It has been proposed that the EDA approve and adopt the proposed modifications to the Restated Redevelopment Plan (the "Plan") for Redevelopment Project No. I (the "Project Area") clarifying the available sources of revenue and reflecting increased project costs and increased bonding authority within the Project Area, pursuant to and in accordance with Minnesota Statutes, Sections 469.001 to 469.047, 469.124 to 469.134 and 469.090 to 469.108, inclusive, as amended and supplemented from time to time. 1.02. It has been further proposed that the EDA approve and adopt the proposed modifications to the Tax Increment Financing Plans (the "Existing TIF Plans") for Tax Increment Financing Districts Nos. 80-2, 81-1, 82-1, 85-1, 85-2, 86-1 and 02-1 (the "Existing TIF Districts") clarifying the available sources of revenue and reflecting increased project costs and increased bonding authority within the Project Area, pursuant to and in accordance with Minnesota Statutes, Sections 469.174 to 469.1799 and 469.090 to 469.108, inclusive, as amended and supplemented from time to time. 1.03. It has been further proposed that the EDA approve the creation of proposed Tax Increment Financing District No. 03-1 (Special Law) (the "Proposed TIF District") within the Project Area and approve and adopt the proposed Tax Increment Financing Plan (the "Proposed TIF Plan") relating thereto pursuant to and in accordance with Minnesota Statutes, Sections 469.174 to 469.1799 and 469.090 to 469.108, and Laws of Minnesota 2003, Chapter 21, Article 10, Section 10, inclusive, as amended and supplemented from time to time. 1.04. The EDA has caused to be prepared and has investigated the facts with respect thereto a modified Plan for the Project Area and modified Existing TIF Plans for the Existing TIF Districts clarifying the available sources of revenue and reflecting increased project costs and increased bonding authority within the Project Area, and a Proposed TIF Plan for the Proposed TIF District defining more precisely the property to be included, the public costs to be incurred and other matters relating thereto. 1.05. The EDA has performed all actions required by law to be performed prior to the approval and adoption of the modifications to the Plan and Existing TIF Plans and the approval and adoption of the Proposed TIF Plan. 1.06. The EDA hereby determines that it is necessary and in the best interests of the City and the EDA at this time to approve and adopt the modifications to the Plan and Existing TIF Plans, to create the Proposed TIF District and to approve and adopt the Proposed TIF Plan relating thereto. Section 2. Findinqs. 2.01. The EDA hereby finds that the assistance to be provided through the adoption and implementation of the modified Plan, modified Existing TIF Plans and Proposed TIF Plan (collectively the "Plans") is necessary to assure the development and redevelopment of the Project Area. 2.02. The EDA hereby finds that the Plans conform to the general plan for the development and redevelopment of the City as a whole. 2.03. The EDA hereby finds that the Plans afford maximum opportunity consistent with the sound needs of the City as a whole for the development and redevelopment of the Project Area by private enterprise and it is contemplated that the development and redevelopment thereof will be carried out pursuant to redevelopment contracts with private developers. Section 3. Approvals and Adoptions. 3.01. The modifications to the Plan clarifying the available sources of revenue and reflecting increased project costs and increased bonding authority within the Project Area are hereby approved and adopted by the Commissioners of the EDA and are forwarded to the New Hope City Council for public hearing, review and approval. 3.02. The modifications to the Existing TIF Plans clarifying the available sources of revenue and reflecting increased project costs and increased bonding authority within the Project Area are hereby approved and adopted by the Commissioners of the EDA and are forwarded to the New Hope City Council for public hearing, review and approval. 2 3.03. The creation of the Proposed TIF District within the Project Area and the adoption of the Proposed TIF Plan relating thereto are hereby approved and adopted by the Commissioners of the EDA and are forwarded to the New Hope City Council for public hearing, review and approval. Section 4. Filing of Plans. 4.01. Upon approval and adoption of the Plans, the EDA shall cause said Plans to be filed with the Minnesota Department of Revenue. Adopted by the Commissioners of the EDA this day of ,2003. YES: NO: ABSENT: ATTEST: President Executive Director CERTIFICATION I, , Executive Director of the New Hope Economic Development Authority, County of Hennepin, State of Minnesota, do hereby certify that the foregoing is a true and correct copy of Resolution No. adopted by the EDA on the day of 2003. ' G:\WPDATA'~qEW HOPE'~9\TIF',EDA RESOLUTION. DOC Executive Director ARTICLE III TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT FINANCING DISTRICT NO. 03-1 (SPECIAL LAW) (RYLAND PROJECT) Section 3.1 Statement of Objectives. See Article I, Section 1.4, Statement of Objectives. Section 3.2 Restated Redevelopment Plan. See Article I, Sections 1.1 through 1.11. Section 3.3 Parcels to be Included. The boundaries of Tax Increment Financing District No. 03-1 (Special Law) (the "TIF District") are described in Exhibit III-A and illustrated on Exhibit III-B. Section 3.4 Parcels in Acquisition. The EDA Authority may write down or acquire and reconvey real property, or interests therein, within this TIF District or elsewhere within the Project Area at the time or times as the EDA Authority may determine to be necessary or desirable to assist or implement development or redevelopment within the Project Area or the TIF Distdct as further described in Article 1, Section 1.11. Section 3.5 Development Activity for which Contracts have been Siqned. As of the date of adoption of the TIF Plan, the EDA Authority contemplates entering into a signed contract with The Ryland Group, Inc., a Minnesota corporation, for the activities discussed below. Section 3.6 Specific Development Expected to Occur. At this time it is anticipated that the construction of approximately 184 units of housing will be completed in two phases. Phase I, to be constructed in 2004, is proposed to include 43 carriage homes and 19 condominiums and Phase II, to be constructed in 2005, is proposed to include 85 carriage homes and 37 condominiums. Upon completion of both phases of construction, it is expected that the City's tax base will increase by approximately $31.8 million. Section 3.7 Prior Planned Improvements. The EDA Authority shall, after due and diligent search, accompany its request to the County Auditor for the certification of or its notice of enlargement of the TIF District with a listing of all properties within the TIF District for which building permits have been issued during the eighteen (18) months immediately preceding approval of the TIF Plan by the EDA Authority. 3-1 The County Auditor shall increase the original tax capacity of the TIF District by the tax capacity of each improvement for which a building permit was issued. If said listing does not accompany the aforementioned request or notice, the absence of such listing shall indicate to the County Auditor that no building permits were issued in the eighteen (18) months prior to the EDA Authority's approval of the TIF Plan. Section 3.8 Fiscal Disparities. The City hereby elects the method of tax increment computation set forth in Minnesota Statutes, Section 469.177, Subdivision 3, clause (a) if and when commercial/industrial development occurs within the TIF District. Section 3.9 Estimated Proiect Costs. The estimated costs associated with this portion of Redevelopment Project No. 1 (the "Project Area") are listed on Exhibit I-A. Section 3.10 Estimated Amount of Indebtedness. It is anticipated that approximately $10,750,000 of indebtedness may be incurred with respect to this portion of the Project Area. Section 3.11 Soumes of Revenue. The anticipated revenue sources to finance the costs associated with the Project Area are outlined in Article 1, Section 1.5 Section 3.12 Estimated Oriqinal and Captured Tax Capacity. The tax capacity of all taxable property in the TIF District, as most recently certified by the Commissioner of Revenue of the State of Minnesota on January 2, 2003, is estimated to be $38,749. The estimated captured tax capacity of the TIF District upon completion of the proposed improvements on January 2, 2006, is estimated to be $318,051. The EDA Authority intends to utilize 100% of the captured tax capacity, for the duration of the TIF District, for purposes of determining tax increment revenues. Section 3.13 Tax Capacity Rate. The pay 2003 tax capacity rate is 1.37362, Section 3.14 Tax Increment. Annual initial tax increment has been calculated at approximately $436,881 assuming a static tax capacity rate and a valuation increase of five zero percent (5.0%) compounded annually. A financial analysis is provided on Exhibit III-C. Revenue has also been projected for the duration of the TIF District and is shown on Exhibit I-A. 3-2 Section 3.15 Type of TIF District. The TIF District is, pursuant to Minnesota Statutes, Section 469.174, Subdivision 10, a redevelopment district. Section 3.16 Duration of TIF District. The duration of the TIF District is eXpected to twenty-five (25) years from receipt of the first tax increment. The date of receipt of the first tax increment is estimated to be July, 2006. Thus, it is estimated that the TIF District, including any modifications for subsequent phases or other changes, would terminate in the year 2031. Section 3.17 Estimated Impact on Taxinq Jurisdictions. The estimated impact on other taxing jurisdictions assumes construction would have occurred without the creation of the TIF District. If the construction is a result of tax increment financing, the impact is $0 to other entities. Notwithstanding the fact that the fiscal impact on the other taxing jurisdictions is $0, due to the fact that the financing would not have occurred without the assistance of the ED^ Authority, Exhibit III-E reflects the estimated impact of the TIF District if the "but for" test were not met. Section 3.18 Modification of the TIF District and/or TIF Plan. As of December 8, 2003, no modifications to the TIF District or the TIF Plan have been made. G:\WPDATA~I~NEW HOPEX~9\TIF~TIF PLAN. DOC 3-3 EXHIBIT III-A PARCELS TO BE INCLUDED IN TAX INCREMENT FINANCING DISTRICT NO. 03-1 (SPECIAL LAW) PIN PIN PIN PIN PIN PIN PIN PIN PIN PIN PIN PIN 05-118-21-33-0002 PIN 05-118-21-33-0003 PIN 05-118-21-33-0004 PIN 05-118-21-33-0005 PIN 05-118-21-33-0006 PIN 05-118-21-33-0007 PIN 05-118-21-33-0008 PIN 05-118-21-33-0009 PIN 05-118-21-33-0010 PIN 05-118-21-33-0011 PIN 05-118-21-33-0012 PIN 05-118-21-33-0013 PIN 05-118-21-33-0014 PIN 05-118-21-33-0015 PIN 05-118-21-33-0016 PIN 05-118-21-33-0017 PIN 05-118-21-33-0018 PIN 05-118-21-33-0019 PIN 05-118-21-33-0020 PIN 05-118-21-33-0021 PIN 05-118-21-33-0022 PIN 05-118-21-33-0023 PIN 05-118-21-33-0024 PIN 05-118-21-33-0025 PIN PIN 08-118-21-22-0001 including adjacent streets and rights-of-way 05-118-21-33-0026 05-118-21-33-0027 05-118-21-33-0028 05-118-21-33-0029 05-118-21-33-0081 05-118-21-33-0082 05-118-21-33-0083 05-118-21-33-0085 05-118-21-33-0087 05-118-21-33-0088 05-118-21-33-0089 05-118-21-33-0091 G:\WPDATA\N\NEW HOPE\09\TIF\TIF PLAN EXHIBIT.DOC i~ItlBIT III-B BOUNDARY HAP /- ' '-.. ..' i--: :. · ~ i i '"- L ~ { -'? .-* 761o ~. ~. ~ ~,,,,.~ --' ........ .ii: : -- : ....... ._!: ....... ........ :. ~ lllil~'llllll[ 56TH AVE ~.._l[/~_lll ' ; ,, i, ......~ i ....... -. :-- i.: f}~ ?$15 : F-- ..... ::_~!_~ :: ...., , . ..,. t , ,l: : .,I -- i ~ I ~ ~ ~ :' ~ : ; ' ::' ; ' · .... ~. 7S21 ~ ~ 7601 .o. ,~~ ..... ~----~ ~ ~._m[~: -'-' ..... '! I .... .....~?, .... -1 : ....... · : -. : : : ........... . , .------~-,i-~-.-.---t ........ ' Z~,-.,----, ,__,,. · ,:o i~4:: ! ' : : ' ': ' '' 5400 i 5401 ~ .... ~1:) .--- .... ~ ..... ,-3 ~--~-~. ..... , .... ---__i .... '; 5401; , 5400 ,, 5401 ;-,..: 5400: ~,01. · 5400 I ................ "' ..... ' .... ' .......... i" ..... .... 2; .... '' ' ' ' '" · . ., . , ____ .... __. i:-~-~ Pa.T,'~;~ ~-~T-~' . . ' . ~ ~ -. ,,,,..~v , ;)~/ ~, . .-_--- _ .~ i . ~ : ' ti. Id; ---- : 5331 - : 40 : , w,v . ~ · '~,,,,l' 'i ; : ' . .- · ~:-- ~ : ,:1:~ ......... . · "--~ ; o : i~lO? ' ;. 5312: 5319; ri,'.-' ~; ~.~17 ; : ~318 ,.--._. %'. J~ .,--.....__ . ...... : ,* ~ : ! ..-.~...-....., · '-,.... '~, $ *"~.. *' .~ - - - · . i ~ .....o *';~, *~ : -~' , ~r,~.~ / ~xl.~: , 5324 .. 53~3 ~ i .5312 : - . .-. ~ ; '.. ,: - ....; : { · , ; : --i III-B-I EXHIBIT III-C CASH FLOW ANALYSIS CITY OF NEW HOPE East Winnetka - Ryland ASSUMPTIONS Area of Parcel 112/2002 Market V~_!,_,e (Pay 2003) Original Market Values (Acres) (Sq. Feet Land Building Total I Total Propenies 15.86 690,895 $1,649,929 $ 2,225,000 $ 3,874,929 Totals 15.86 690,895 $1,649,929 $ 2~.25,000 $ 3,874,929 $ 2.39 3er sq. It. Original Tax Capacity % of new ETC Class Rate * 38,749 Commerclai /Retail 0.0% 0 @ 2.00% = 0 Rental - Moderate 0.0% 0 @ 1.25%' = 0 Rental J 0.0% 0 @ 1.25°~ = 0 Owner Occupied 100.0% 3,874,929 @ 1.004 .= 38,749 I 100.0% 3,874,929 · Final rates for Pay 2004 Phase I YEAF Estimated Market Value 61 units 11,893,333 Estii~,ated Tax Capacity 2005 0 sq. lt. 118,933 E.s~,i,aied Taxes I 2006 163,369 EsG-~a~ecl Tax Increment 110,142 67.4% iof total Phase 2 (c~bined) Estimated Mad(et Value 184 units 35,680,000 Estimated Tax Capacity 2006 0 sq. It. 356,800 Estimated Taxes I 2007 490,108 Estimated Tax Increment 436,881 89.1% of t_n_ ~! taxes Phase 3 Es~rhated Market Value 184 units 35,680,000 9.2 times incr. in MV Es~;,~a~ed Tax Capacity 2007 0 sq. ft. 356,800 Es~;,~a;.ed Taxes I 2008 490,108 Estimated Tax Increment 436,881 89.1% of total taxes Coverage 11.6 units per acre Local Tax Rate - Pay 2003 1.37362 ,* 1.4% State Tax Rate. Pay 2003 0.54447 (CJI only) Eft Tax Rate ICombined Tax Rate - CJI Property Only 1.91809 I I i ** used for tax increment calculations Admin Fees 10.00% Inflation (after 2 yrs of full value in each tract) 5-00% ~ 'Pre~ent Value Rate 6/1/2003 5.00% Prepared by Krass Monroe, P.A_ III-C-[ East Winnetka Ryland 03e.xls EXHIBIT IIl-C CASH FLOW ANALYSIS CITY OF NEW HOPE East Winnetka - Ryland ASSUMPTIONS PHASE 1 'Total Estimated Manet Value I 11,893,333 Commercial / Retail 0 Tech Flex 0 sq. ft. @ 70 /sq. ft. = 0 Office I warehouse 0 sq. fL ~ 70 /sq. ft. = 0 IOffice J 0 sq. fL @ 90 Isq. ft. = 0 Retail - service 0 sq. ft. @ 90 /sq. ft. = 0 Restaurant / entertainment 0 sq. fL @ 90 /sq. ft. = 0 Ot~er I 0 sq. ft. ~ 90 /sq. ft. = 0 Rentalt 0 Moderate Income 0.0%1 0 units ~ 80,000 /unit = 0 Market Rate 0.0% 0 units @ 90,000 /unit = 0 Owner Occup/ed 11,893,333 A Carriage Homes-BLR 33.3% 43 units @ 200,000 /unit = 8,533,333 B Twin Homes 33.3% 0 units @ 225,000 /unit = 0 C Condos-Winnetka 33.3% 19 units ~ 180,000 /unit = 3,360,000 D Single Family Homes 33.3% 0 units @ 400,000 /unit = 0 I 61 units : 0 sq. ft. Total E~U,,ated Tax Capacity 118,933 Commercial / Retail 0 Tech Flex 2.00% 0 Office / warehouse 2.00% 0 IOffce I 2.00% 0 IRetail' service 2.00o/ 0 Restaurant / entertainment 2.00% 0 Other 2.00% 0 Rental 0 Moderate Income 1.25% 0 Market Rate 1.25% 0 Owner Occupied 118,933 A Carriage Homes-BLR 85,333 <= 500,000 1.00% 85,333 · 500,000 1.25% 0 B Twin Homes <= 500,0OO 1.00%~ 0 I · 500,000 1.25% 0 C Condos-Winnetka 33,600 I <= 500,000 1.00% 33,600 [ > 500,000 1.25% 0 ~D Single Family Homes <= 500,000 1.00% 0 . · 500,000 1.25% 0 Total Estimated Taxes 163.369 Commercial / Retail 0 Tech Flex 0 sq. fL @ 0.00 /sq. ft. = 0 Office / warehouse 0 sq. fL ~ 0.00 /sq. ft. = 0 : 0 0.00 /sq. fL = 0 service 0-- ~0:0O- ~ = o , ~Restaurant / entertainment 0 sq. fL @ 0.00 /sq. ft. = 0 i. Rental -- ~ ...... I 0 Moderate Income 0 units @ 0 /unit = 0 Market Rate 0 units @ 0 /unit = 0 ! Owner Occupied j 163,369 A Carriage Homes-BLR 43 units @ 2,747 /unit = 11 7,216 B ITwin Homes 0 units @ 0 /unit = 0 C Condos-Winnetka 19 units {~ 2,473 /unit = 46,154 D Single Family Homes 0 units ~ 0 /unit = 0 ~-~stmclion -- 2--'~ 100.~--~-00--'-~- ........ Full Valuation 2005 ........ Prepared by Krass Monroe, P.A. EXHIBIT III-C CASH FLOW ANALYSIS CITY OF NEW HOPE East Winnetka - Ryland ASSUMPTIONS PHASES 1 & 2 Total E~[;,,,ated Mall(et Value 1 35,680,000 Co,~,,,,=~c/al / Retail 0 Tech Flex 0 sq. ft. @ 70 /sq. ft. = 0 Office / warehouse 0 sq. ft. @ 70 /sq. ft. = 0 Oflice I 0 sq. ft. ~ 90 Isq. fL = 0 Retail - service 0 sq. ft. @ 90 /sq. ft. = 0 Restaurant / entertainment 0 sq. ft. @ 90 /sq. ft. = 0 Other I 0 sq. ft. @ 90 /sq. fL = 0 RentalI 0 IModerate Income 0.0% 0 units ~ 80,000 /unit = 0 IMarket Rate 0.0% 0 units @ 90,000 /unit = 0 Owner Occupied 35,680,000 A Ca,age Homes-BLR 100.0% 128 units @ 200,000 /unit = 25,600,000 Bi Twin Homes 100.0% 0 units @ 225,000 /unit = 0 C Condos-Winnetka 100.0% 56 units @ 180,000 /unit = 10,080,000 D Single Family Homes 100.0% 0 units @ 400,000 /unit = 0 I 184 units I 0 sq. fL Total F.~;,~i~d Tax Capacity 356,800 Commercial / Reta# 0 Tech Flex 2.00% 0 OfT-me / warehouse 2.00% 0 Off. ce J 2.00% 0 Retail- service 2.00% O Restaurant / entertainment 2.00% 0 'Rental 0 I Moderate Income i.25% 0 Market Rate 1.25% 0 Owner Occupied 356,800 A Carriage Homes-BLR 256,000 > 500,000 1.25% 0 , Bi Twin Homes 0 ' I <= 500,000 1.00% 0 · 500,000 1.25% 0 C Condos-Winnetka~ 100,800 I <-- 5oo.000 1.00% lOO,800 I · 500,000 1.25% 0 D Singlo Family Homos 0 ! I <= 500,000 1.00°~ 0 I · 500,000 1.25% 0 Total E~;F, ia[ed Taxes 490,108 Commercial / Reta# 0 !Tech Flex 0 sq. ft. @ 0.00 /sq. ft. = 0 O-'~;~ I warehouse 0 sq. ft. @ 0.00 /sq. ft. = 0 omcel o sq. fL @ o.oo /sq. fL = o ;Retail - service 0 sq. fL @ 0.00 /sq. ft. = 0 Restaurant / entrainment 0 sq. ft. @ 0.00 /sq. fL = 0 OtherI 0 sq. ft. ~ 0.00 Rental Isq. fL = 0 IModerate Income 0 units @ 0 /unit = 0 lMa~'~et Rate 0 units @ 0 /unit = 0 Owner _c)~'~__ _~pied 490,108 A Cai¥'mge Homes-BLR 128 units ~ 2,747 /unit = 351,647 B Twin Homes 0 units ~ 0 /unit = 0 56 units ~ 2,473 /unit = 138,461 C Condos-Winnetka D iSingle Family Homes 0 units @ 0 /unit = 0 construction 2005 100.00%; Full Valuation 2006 Prepared by Krass Monroe, P.A. 111-C-3 East Winnetka Ryland 03e.xis 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 EXHIBIT III-C CASH FLOW ANALYSIS <. ANNUAL ~.> < SEMI- ANNUAL -- > (a) (b) (c) (d) (e) (f) (g) (h) (i) 0) Odginal Estimated Captured Estimated Less: Available Cumulative <.. Present Value > Tax Tax Tax Tax Admin Tax Avail. Tax Semi Annual Cumulative Date Capacity Capacity Capacity Increment Fees Increment Increment Balance Balance (see assumptions) (c) - (b) (d) x (e) x (e) - (f) Total of (g) P.V. of (g) Total of (i) 6.0% Inflation (prev. year) 1.37362 10.00% 5.00% 06101103 06101103 38,749 38,749 0 0 0 0 0 0 12/01/03 38,749 38.749 0 0 0 0 0 0 06101/04 38,749 38.749 0 0 0 0 0 0 0 12/01/04 38,749 38,749 0 0 0 0 0 0 0 06/01/05 38,749 118,933 0 0 0 0 0 0 0 12/01/05 38,749 118.933 0 0 0 0 0 0 0 06/01/06 38,749 356,800 80,184 55.071 5,507 49,564 49,564 42.739 42.739 12/01/06 38,749 356,800 80,164 55,071 5,507 49,564 99,128 41,697 84.435 06/01/07 38,749 356,800 318,051 218,440 21,844 196,596 295,725 161,356 245,791 12/01/07 38,749 356,800 318,051 218,440 21,844 196,596 492,321 157,420 403,212 06/01/08 38,749 356,800 318.051 218,440 21,844 196,596 688,917 153,581 556,792 12/01/08 38,749 356,800 318,051 218,440 21,844 196,596 885,514 149,835 706.627 06/01/09 38,749 374,640 318,051 218,440 21,844 196,596 1,082,110 146.180 852,808 12/01/09 38,749 374,640 318,051 218,440 21,844 196.596 1,278,708 142,615 995,423 06/01/10 38,749 393,372 335,891 230,693 23,069 207,624 1,486,330 146,941 1,142,364 12/01/10 38,749 393,372 335,891 230,693 23,069 207,624 1,693,954 143,357 1,285,721 06/01111 38,749 413,041 354,623 243,558 24,356 219,203 1,913,157 147,660 1,433,381 12/01/11 38,749 413,041 354,623 243,558 24,356 219,203 2,132,359 144,059 1,577,440 06/01/12 38,749 433,693 374,291 257,087 25,707 231,360 2,363,719 148,340 1,725,780 12/01/12 38,749 433,693 374,291 257,067 25,707 231,360 2,595,080 144,722 1,870,503 06/01/13 38,749 455,377 394,943 271,251 27,125 244,126 2,839,206 148,983 2,019,485 12/01/13 38,749 455,377 304,943 271,251 27,125 244,126 3,083,332 145,349 2,164,835 06/01,"14 38,749 478,146 416,628 286,144 28,614 257,530 3,340,861 149,590 2,314,425 12/01/14 38,749 478,146 416,628 286,144 28,614 257,530 3,598,391 145,941 2,460,366 06/01/15 38,749 502,053 439,397 301,782 30,178 271,604 3,869,995 150,163 2,610,529 12/01/15 38,749 502,053 439,397 301,782 30,178 271,604 4,141,599 146,501 2,757,030 06/01/16 38,749 527,156 463,304 318,202 31,820 286,382 4,427,981 150,704 2,907,734 12/01/16 38,749 527,156 463,304 318,202 31,820 286,382 4,714,363 147,028 3,054,762 06/01/17 38,749 553,514 488,407 335,443 33,544 301,898 5,016,261 151,214 3,205,976 12/01/17 38,749 553,514 488,407 335,443 33,544 301,898 5,318,159 147,526 3,353,502 06/01/18 38,749 581,190 514,765 353,645 35,355 318,191 5,636,350 151,695 3,505,198 12/01/18 38,749 581,190 514,765 353,545 35,355 318,191 5,954,541 147,995 3,653,193 06/01/19 38,749 610,249 642,440 372,553 37,255 335,298 6,289,839 152,148 3,805,341 12/01/19 38,749 610,249 642,440 372,553 37,255 335,298 6,625,137 148,437 3,953,779 06/01/20 38,749 640,762 571,500 392,512 39,251 353,261 6,978,398 152,575 4,106,354 12/01/20 38,749 640,762 571,500 392,512 39,251 353,261 7,331,659 148,854 4,255,208 06/01/21 38,749 672,800 602,012 413,468 41,347 372,121 7,703,780 152,977 4,408,164 12/01/21 38,749 672,800 602,012 413,468 41,347 372,121 8,075,901 149,246 4,557,430 06/01/22 38,749 706,440 634,050 435,472 43,547 391,925 8,467,826 153,354 4,710,784 12/01/22 38,749 706,440 634,050 435,472 43,547 391,925 8,859,751 149,614 4,860,398 06/01/23 38,749 741,762 '667,690 458,576 45,858 412,719 9,272,470 153,709 .5,014,107 12/01/23 38,749 741,762 667,690 458,576 45,858 412,719 9,585,188 149,960 5,164,067 06/01124 38,749 778,850 703,012 482,836 48,284 434,552 10,119,741 154,042 5,318,110 12/01/24 38,749 778,850 703,012 482,836 48,284 434,552 10,554,293 150,285 5,468,395 06/01/25 38,749 817,792 740,100 508,308 50,831 457,477 11,011,770 154,355 5,622,749 12/01/25 38,749 817,792 740,100 508,308 50,831 457,477 11,469,248 150,590 5,773,339 06/01/26 38,749 868,682 779,043 535,054 53,505 481,549 11,950,797 154,647 5,927,987 12/01/26 38,749 858,682 779,043 535,054 53,505 481.549 12.432,346 150.876 6.078.862 06/01127 38.749 901,616 819,932 563.138 56,314 506,824 12,939,170 154,921 6,233,784 12101/27 38,749 901,616 819.932 563,138 56,314 506,824 13,445,994 151,143 6,384,927 06/01/28 38,749 946,697 862,867 592,625 59,263 533,363 13,979,357 155,178 6,540,104 12/01/28 38,749 946,697 862,867 592,625 59,263 533,363 14,512,720 151,393 6,691,497 06/01/29 38,749 994,031 907,947 623,587 62,359 561,229 15.073,948 155,417 6,846,914 12/01/29 38.749 994,031 907,947 623,587 62.359 561,229 15.635.177 151,626 6,998,541 06101/30 38,749 1,043,733 955,282 656,097 65,610 590.488 16.225.664 155.640 7.154,181 12/01/30 38.749 1,043,733 955.282 656,097 65.610 590,488 16,816,152 151.844 7,306.025 06/01/31 38,749 1,095,920 1,004,984 690,233 69,023 621,210 17,437,362 155.648 7.461,873 12/01/31 38,749 1,095,920 1,004,964 690,233 69,023 621,210 18,058,571 152,047 7.613,920 20,085,079 2,006,508 18,058.571 18,058.571 7,613,920 7,613,920 Prepared by Krass Monroe, P.A. ['['I'-C-/~ East Winnetka Rytand 03e.xls EXHIBIT III-D "BUT FOR" ANALYSIS The City of New Hope and the EDA Authority have been studying redevelopment opportunities in the Bass Lake Road/Winnetka Avenue area for many years and the parcels identified for inclusion in the tax increment financing district are identified in the City's Comprehensive Plan for redevelopment. This entire area is a well-documented redevelopment area and the City has received a Livable Communities Grant from the Metropolitan Council to study four different sites or areas within the overall Bass Lake Road/Winnetka study area. One of the areas that has been studied extensively is the area referred to as the Winnetka Avenue East area which is the area being included in the tax increment financing district. For a number of years, the City/EDA Authority have acquired approximately one- half of the 34 parcels needed for the housing project being contemplated. The cost of acquiring the parcels, demolishing the structures, soil correction, mass grading of the site and utility relocation are approximately $8.0 to $8.5 million. The Ryland Group, Inc. (the "Redeveloper") responded to a City/EDA Authodty's request for proposals for the Winnetka Avenue East area. The Redeveloper contemplates constructing between 165 and 185 housing units with market values ranging between $180,000 to $225,000 per unit depending on the type of unit. However, the market value of the land to the Redeveloper ranges from $12,500 per unit to $19,500 per unit or $2.2 million to $3.4 million, assuming 175 units. The higher price per unit assumes a completely finished lot suitable for building. The lower pdce per unit assumes that the Redeveloper installs all of the public improvements including streets, boulevards, sidewalks, fencing, lighting, berms and all utilities. The EDA Authority has opted to have the Redeveloper provide all site improvements and accordingly has agreed to sell the property at $12,500 per unit. Since the costs of acquiring a site and making it available for redevelopment are approximately $8.0 million and the value of the site to the Redeveloper who needs to develop the site into finished lots is approximately $2.2 million, there is a gap of approximately $5.5 million. The City hopes to fill part of this gap with grants from the Metropolitan Council. The balance of the gap requires the use of tax increment financing. But for the use of tax increment financing, this redevelopment project could not proceed. G:~WPDATA~I~NEW HOPE~09~TIF~TIF PLAN EXHIBIT.DOC iII-D-1 EXHIBIT III - E ESTIMATED IMPACT OF TAX INCREMENT FINANCING DISTRICT NO. 03-1 (Special Law) IMPACT ON TAX BASE ORIGINAL ESTIMATED CAPTURED DISTRICT TAX TAX TAX TAX AS % ENTITY BASE CAPACITY CAPACITY CAPACITY OF TOTAL City of New Hope 13,477,113 38,749 356,800 318,051 2.360% County of Hennepin 975,218,292 38,749 356,800 318,051 0.033% lSD # 281 68,916,707 38,749 356,800 318,051 0.462% IMPACT ON TAX RATE TAX % OF TAX TAX RATE ENTITY RATE TOTAL INCREMENT INCREASE City of New Hope 0.49819 36.27% 158,450 1.204% County of Hennepin 0.50607 36.84% 160,956 0.017% lSD # 281 0.29179 21.24% 92,804 0.135% Other 0.07757 5.65% 24,671 1.37362 100.00% 436,881 * Assumes construction would have occurred without the creation of a Tax Increment Financing District. If construction is a result of Tax Increment Financing, the impact is $0. III - E - 1 Source of Funds TIF No. 03-1 (Special Law) Cumulative Modified Bud.qet Tax Increment Revenue Investment Earnings Bond Proceeds Loan Proceeds Special Assessments Sales/Lease Proceeds Loan/Advance Repayments Grants Other Transfers In Total Source of Funds Use of Funds $ 21,000,000 2,100,000 10,750,000 2,500,000 1,150,000 $ 37,500,000 Land/building acquisition Site Improvements/preparation costs Installation of public utilities Public Parking facilities Streets and sidewalks Public park facilities Social, recreational or conference facilities Interest reduction payments Bond principal payments Bond interest payments Loan principal payments Loan/note interest payments Administrative costs Other Transfers out Total Use of Funds $ 8,000,000 600,000 10,750,000 6,450,000 6,450,000 2,100,000 3,150,000 $ 37,500,000 0 TIF budget - 03-1 .xls I - A - 1 10/6/2003 KRASS MONROE, ATTORNEYS AT Mary E. Molzahn Email ma~. m@~krasxmonroe, com Yotce Mail (952) 885-4382 P.A. LAW MEMORANDUM Date: Re: To: City of New Hope Attn: Kirk McDonald, Community Development Director From: Mary E. Molzahn, Sr. Development Analyst December 2, 2003 Ryland TIF District Our File No. 10048-9 Enclosed please find resolutions for consideration by the EDA and Council respectively at their December 8th meetings and a copy of the TIF Plan for proposed TIF District No. 03-1 (Special Law). After the EDA and Council have taken action on these resolutions, we will need three certified copies of each executed resolution. If there is anything further you need before the December 8th meetings, please give a call. G:\WPDATA\N'~IEW HOPE~9\COR\MCDONALD MEM I DOC 8000 NORMAN CENTER DRIVE · SUITE 1000 · BLOOMINGTON, MINNESOTA 55437 TELEPHONE 952J885-5999 · FACSIMILE 952/885-5969 www. krass~nonroe.com EDA REQUEST FOR ACTION Originating Department Approved for Agenda Agenda Section Community Development ;-' 12-8-03 EDA ),, J ~,'~ Item No. By: Ken Doresky, Community ~ /~' Development Specialist B¥:~ RESOLUTION APPROVING THE METROPOLITAN COUNCIL'S MEMORANDUM OF UNDERSTANDING TO ESTABLISH AND ADMINISTER A WAITING LIST AND GRIEVANCE PROCEDURE FOR MHOP UNITS IN THE BASS LAKE APARTMENTS PROJECT (7610 BASS LAKE ROAD) (IMPROVEMENT PROJECT NO. 707) ACTION REQUESTED Staff recommends EDA approval of a resolution prepared by the City Attorney approving the attached Met. Council Memorandum of Understanding required to establish and administer a waiting list and grievance procedure for the Minneapolis Housing Opportunity Program (MHOP) units within the recently renovated Bass Lake Apartments project located at 7610 Bass Lake Road owned by Project for Pride in Living (PPL). There are four (4) MHOP units in the building. Significant funding was allocated to the project from the Minneapolis Public Housing Authority (MPHA) in exchange for the creation of these units. The Met. Council has agreed to assume the responsibility and cost of administering the waiting list and grievance procedure process for these units at no cost to the City. Per the City Attorney, "The only obligation the EDA will have in connection with this matter is an agreement to share costs with the Metropolitan Council in the event a claim is made against the Metropolitan Council related to its administration of the waiting list or grievance procedure for one (1) New Hope incentive unit." No claims have been initiated in connection with a similar agreement in place since 1998 for the PPL owned Bass Lake Court Townhome project located at 7300-7394 Bass Lake Road. POLICY/PAST PRACTICE City goal #2 is to pursue the maintenance and redevelopment of commercial and residential properties within the City. The City Council has been addressing the residential portion of this goal through the City's many housing activities, including partnering with different agencies and organizations on housing projects. In the past, the City has been requested to approve agreements in multi-partner redevelopment projects. In 1998, the EDA approved a similar memorandum of understanding for the PPL owned Bass Lake Court Townhome project. BACKGROUND Staff is requesting Council and EDA approval of the attached Met. Council Memorandum of Understanding to establish and administer a waiting list and grievance procedure for the Minneapolis Housing Opportunity Program (MHOP/ units within the recently renovated Bass Lake Apartments project located at 7610 Bass Lake ?o: / I:\RFA\PLANNING\Housin~\7610 BLR\Q-MHOP EOA.doc Request for Action Page 2 12-8-03 , Road. This project is being handled in the same manner as the previous PPL redevelopment project, the Bass Lake Court Townhomes. Please see the following comments provided by the City Attorney regarding the requested action: "As you know, this development involves the renovation of the eleven unit apartment complex at 7610 Bass Lake Road. Our funding agreements with the MPHA and PPL require the establishment of four MHOP units in this apartment complex. One of the MHOP units will be designated as an incentive unit, the occupancy of which can be determined by the EDA. Since we already use the waiting list and grievance procedures established by the Metropolitan Council in our Section 8 housing program, there is no reason not to use the Metropolitan Council procedures to administer this process within this Project as well. Also, it is basically the same agreement being used at the Bass Lake Townhome Project and therefore, it makes sense to use it in this Project. As indicated in paragraph 7 on page 3 of the Agreement, the Metropolitan Council will be assuming responsibility for this process at no cost to the City. The only obligation the EDA will have in connection with this matter is an agreement to share costs with the Metropolitan Council in the event a claim is made against the Metropolitan Council related to its administration of the waiting list or grievance procedure for the New Hope incentive unit. As a result, I would recommend the adoption of the enclosed resolution by the EDA allowing the Metropolitan Council to administer the waiting list and grievance procedure for the MHOP units within the Bass Lake Apartment Project pursuant to the terms and conditions of the attached Memorandum of Understanding." On May 12, 2003, the EDA approved three routine agreements (Housing Development Agreement, Regulatory and Operating Agreement and Property Management Agreement) between the MPHA, New Hope EDA and PPL for the subject project. The agreements were required by HUD and the MPHA to permit funding of the project. The Housing Development Agreement confirmed the City's development agreement with PPL. The Regulatory and Operating Agreement required PPL to develop and operate four (4) MHOP units for the term of the Annual Contributions Contract. The EDA also agreed to allow PPL to transfer their interest in the development to Bass Lake Apartments, LLC. This was a new entity in which PPL has the controlling interest. As a result, there was a Property Management Agreement between those entities. The EDA only approved the agreement and was not required to sign the agreement. On December 9, 2002, the EDA approved the Initial Agreement and Cooperation Agreement between the MPHA and the EDA for the subject project. The Initial Agreement indicated that the EDA was willing to participate with the MPHA and PPL in the proposal process to HUD for funding of the MHOP units and required the EDA to enter into a Housing Development Agreement with the MPHA and PPL that, among other things, established design specifications for the units, confirmed amenities in and around the development and required PPL to execute a Regulatory and Operating Agreement and provide Declaration of Restrictive Covenants relating to the operation of the units. The Cooperation Agreement indicated that the City, in its capacity as the taxing authority, will not assess real estate taxes against the four MHOP units within the development for the entire 40-Year exemption period. In lieu of real estate taxes, the Owner will pay the EDA a PILOT. This amount will be calculated as 5% of the "Shelter Rent" as that term is defined in the Agreement. Shelter Rent is approximately 30% of the income of the occupants of the four MHOP units. As a result, the rental payment will be quite Iow. The EDA will be required to pay the PILOT to the County for distribution to the various taxing bodies as if it were the actual real estate tax payment. On May 13, 2002, the EDA approved a redevelopment and loan agreement with PPL for partial funding and participating in 7610 Bass Lake Road Redevelopment Project. The project will include complete rehabilitation of the building's exterior and interior, as well as, several site improvements, including: · Exterior: The building exterior will be completely renovated, including painting, the repair or replacement of the soffits, fascia, gutters and downspouts, brick and mortar repair, and the repair or · Request for Action Page 3 12-8-03 replacement of the windows and exterior doors and roof. Interior: The interior work will include updating the existing units in their present configuration. New cabinets, counters and appliances will be provided in the kitchens. The plumbing and electrical will be updated. The boiler will be replaced. The walls will be repaired and painted and new carpet will be installed throughout. Site Improvements: The landscaping will be improved, a playground added, the drive expanded and resurfaced, the walkways repaired, and garages added for each unit. On February 25, 2002, the City Council approved a resolution prepared by the City Attorney authorizing the acquisition of 7610 Bass Lake Road by eminent domain. Project for Pride in Living, Inc. and the owners had executed a purchase agreement on the property and the owners requested a "friendly condemnation" resolution to insure they will be able to utilize the full rights of Section 1033 of the Internal Revenue Code. Those rights relate to an extended time limit of reinvestment for tax purposes. PPL purchased the property through a direct transaction, therefore it was not necessary for the City to commence a condemnation proceeding pursuant to that resolution. On October 2, 2001 staff presented this rehabilitation proposal to the Livable Communities Task Force. Staff prepared an information packet for the Task Force, gave a short presentation on the project and requested that the Task Force review the proposal and provide written input on the project at the following meeting. The overwhelming input and direction from the Task Force was to proceed with the project. On June 27, 2001, the EDA requested that staff investigate additional financing options for the project. Staff presented those options at the September 17, 2001 Council work session. At the work session, the majority of the Council voted to approve the rehabilitation project contingent on decreasing the City's contribution to $218,000 with the addition of a fourth MHOP unit and obtaining Livable Community Task Force input on the project. Also, the Council elected to contribute $5,000 for playground equipment on the site. PPL ensured the Council that an additional $5,000 could be raised to match the City's contribution for playground equipment. The playground equipment has been installed. Rehabilitation activities have been completed. Staff recommends approval of this resolution. FUNDING The total cost of this project is approximately $1.32 million. The financing is a combination of a traditional bank mortgage, investments from the City of New Hope and Hennepin County HOME and AHIF funds. Four affordable units will be paid for by the Metropolitan Housing Opportunities Program (MHOP), which was created to increase the supply of rental housing outside of the central cities. The City's portion of funding for the project is as follows: Total loan: $223,000 (30 year 0% interest deferred loan with a balloon payment due June 1,2032). Sources: o $ 78,000 CDBG, and; o $145,000 EDA. A'I-rACHMENTS · Resolution · Memorandum of Understanding · City Attorney Correspondence, 12-2-03 · Location Map EDA RESOLUTION NO. 03- RESOLUTION APPROVING THE METROPOLITAN COUNCIL'S MEMORANDUM OF UNDERSTANDING TO ESTABLISH AND ADMINISTER A WAITING LIST AND GRIEVANCE PROCEDURE FOR MHOP UNITS IN THE BASS LAKE APARTMENTS PROJECT (7610 Bass Lake Road) BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: WHEREAS, the Minneapolis Public Housing Authority (.,XMPHA@), the Economic Development Authority in and for the City of New Hope (g. EDA@) and the City of New Hope (City) entered into an Initial Agreement dated December 18, 2002, under which the MPHA, the EDA and the City agreed to cooperate in the location of four (4) MHOP Units in an eleven unit multifamily housing project at 7610 Bass Lake Road known as Bass Lake Apartments (the .zfl3evelopment@) located within the City, and defined the relationships of MPHA and the EDA with respect to the planning, construction, ownership and operation of the MHOP Units; and WHEREAS, pursuant to the Initial Agreement, the MPHA, the EDA and the City agreed the Incentive Units will be filled pursuant to the EDA's waiting list procedures and further agreed the EDA could request the Metropolitan Council to administer the waiting list for the Incentive Units within the Development; and WHEREAS, the EDA and the City do hereby request the Metropolitan Council to administer the waiting list for the Incentive Units, and the EDA and the City do hereby request the Metropolitan Council to administer grievance procedures for all MHOP units located in the Development; and WHEREAS, the Metropolitan Council has agreed it will administer a waiting list for the Incentive Units and administer a grievance procedure for all MHOP units located in the development in accordance with the terms and conditions of the Memorandum of Understanding attached to this Resolution as Exhibit A; and WHEREAS, the New Hope EDA hereby determines that the Metropolitan Council's agreement to assume the responsibility for the administration of the waiting list and grievance procedures is in the best of the City of New Hope. -1- NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope, Minnesota, as follows: That the President and Executive Director of the EDA are hereby authorized and directed to sign and enter into the attached Memorandum of Understanding with the Metropolitan Council for administration of the Incentive Units waiting list and grievance procedure for all MHOP Units within the Bass Lake Townhome development. That the City Manager/Executive Director is authorized and directed to take all steps necessary to implement the terms of the attached Memorandum of Understanding. Adopted by the City Council this 8th day of December, 2003. W. Peter Enck, President Attest: Daniel J. Donahue, Executive Director P:L~.ttomcy\Cnh Resolution~\CN'H99.11166-004-EDA Reso Approv Metro Council Memo.doc -2- MEMORANDUM OF UNDERSTANDING ADMINISTRATION OF WAITING LIST AND GRIEVANCE PROCEDURES FOR CERTAIN PUBLIC HOUSING UNITS CITY OF NEW HOPE - BASS LAKE APARTMENTS THIS MEMORANDUM OF UNDERSTANDING is made and entered into by and between the Economic Development Authority in and for the City of New Hope (the "EDA"), the Minneapolis Public Housing Authority in and for the City of Minneapolis (the "MPHA") and the Metropolitan Council (the "Council"). WHEREAS, the federal consent decree entered in settlement of Hollman v. Martinez, Civil No. 4-92-712 (U.S. Dist. Ct. D. Minn. 4th Div.) ("Hollman Consent Decree") provides for the funding and development of certain public housing units within the City of Minneapolis and metropolitan-area suburban locations; and WHEREAS, Paragraph 37 of the Hollman Consent Decree, as amended by stipulation and court order in May 1998, provides that a portion of the public housing development units made available under the Hollman Consent Decree ("Incentive Units") may be offered to suburban jurisdictions as an incentive to accept Minneapolis Public Housing Authority ("MPHA") replacement units in those suburban jurisdictions; and WHEREAS, the MPHA established the Metropolitan Housing Opportunity Program ("MHOP") pursuant to which the MPHA cooperates with suburban counties and municipalities in the construction and operation of qualified public housing units (the "MHOP Units"); and WHEREAS, the MPHA and the EDA entered into an Initial Agreement dated December 18, 2002 (the "Initial Agreement"), under which the MPHA and the EDA agreed to cooperate in the location of four (4) MHOP Units in an eleven-unit multifamily housing project known as Bass Lake Apartments (the "Development") located within the City of New Hope, and defined the relationship of the MPHA and the EDA with respect to the planning, construction, ownership and operation of the MHOP Units; and WHEREAS, pursuant to the Initial Agreement, the MPHA and the EDA agreed the EDA would maintain the waiting lists for persons and families applying for housing in the MHOP Units using applicable federal, MHOP and local priorities, and that the one Incentive Unit will be filled pursuant to the EDA's waiting list procedures; and WItEREAS, the EDA is administering grievance procedures for the MHOP Units; and WHEREAS, the EDA and the MPHA requested the Council to administer the waiting list for the Incentive Units and requested the Council to administer grievance procedures for all MHOP Units located in the Development; and Page 1 of 4 Pages WHEREAS, Minnesota Statutes section 473.195 authorizes the Council to exercise certain functions, rights, powers, duties, privileges, immunities and limitations as are provided for housing and redevelopment authorities created for municipalities; and WHEREAS, the Council administers a federal Section 8 housing assistance program and a public housing program in certain jurisdictions located within the seven-county metropolitan area surrounding Minneapolis and Saint Paul; and WHEREAS, to help implement the Hollman Consent Decree and encourage the development of affordable housing opportunities throughout the seven-county metropolitan area, the Council is willing to administer a waiting list for the Incentive Units in the Development and administer grievance procedures for all the MHOP Units in the Development subject to the terms and conditions of this agreement. NOW THEREFORE, in consideration of the mutual agreements and covenants contained in this agreement, the EDA, the MPHA and the Council agree as follows: MHOP and Incentive Units 1. This agreement relates to the four (4) MHOP Units within the eleven- (11) unit Development located at 7610 Base Lake Road in New Hope, Minnesota 55428. 2. The four MHOP Units consist of three (3) MPHA replacement housing units for Minneapolis residents and one (1) Incentive Unit, all of which are made available under the Hollman Consent Decree. The four MHOP Units are not physically identified and "float" throughout the Development depending upon vacancies and availability. Waiting List Administration 3. The MPHA is responsible for maintaining and administering the waiting list for the three MPHA MHOP replacement housing units according to the MPHA's own waiting list policies. 4. The waiting list for the one Incentive Unit will be administered by the Council according to the waiting list policies identified in Exhibit A of this agreement, which is attached to and incorporated into this agreement. The waiting list policies identified in Exhibit A shall conform to and be administered consistent with the requirements of the Hollman Consent Decree, applicable provisions of 24 C.F.R. Parts 5, 8, 913, 960 and 966, and applicable Fair Housing and Equal Oppommity laws and regulations. As provided in Exhibit A, names of applicant families on the waiting list shall be provided to the Owner to fill vacancies of Incentive Units according to the following priorities: (a) applicant families currently on the Council's Section 8 waiting list who are identified as currently residing in the City; (b) applicant families residing in any community who are currently on the Council's Section 8 waiting list; and (c) applicant families on a public housing waiting list specific to the City. The Council will advertise for applications for a public housing waiting list specifically for the City if it becomes reasonably Page 2 of 4 Pages evident priorities (a) and (b) will not provide a sufficient number of applicant families to fill Incentive Unit vacancies in a timely manner. 5. The owner of the Development ("Owner") is responsible for managing all the units at the Development, including all MHOP Units. The Owner is responsible for selecting applicant families and for carrying out such other administrative functions as (but not limited to) applicant interviews and screening, verification, determination of suitability for admission, unit assignment, execution of leases, terminations and evictions. When the Council is informed of a vacant Incentive Unit by the Owner, the Council will provide the Owner names of families from the waiting list administered by the Council according to the waiting list policies identified in Exhibit A of this agreement. The Council is not responsible for selecting applicant families for unit occupancy, applicant interviews and screening, verifications, determinations of suitability for admission, unit assignments, execution of leases, termination, evictions or other administrative functions that are the responsibility of the Development Owner. Grievance Procedures 6. The Council will administer grievance procedures for all four MHOP Units located in the Development according to the grievance procedures identified in Exhibit A of this agreement. The grievance procedures in Exhibit A shall conform to and be administered consistent with the requirements of applicable U.S. Department of Housing and Urban Development regulations. Administrative and Other Expenses and Costs 7. Except as provided in Paragraph 8 of this agreement, the Council will administer its waiting list and the grievance procedures at its own cost and will not charge the City or the EDA any administrative fees for administering its waiting list and the grievance procedures. The Council reserves the right to request administrative fees or cost reimbursement from the MPHA and the EDA if the Council determines it no longer can assume the expenses and costs associated with its administration of its waiting list and the grievance procedures. Any future agreements to charge administrative fees or seek cost reimbursement shall be made by written amendment to this agreement pursuant to Paragraph 10. 8. In consideration for the Council's agreement to administer its waiting list and grievance procedures at no cost, the MPHA and the EDA agree to share equally with the Council any costs or expenses, including attorneys fees and adverse awards, the Council may incur as a result of any claims, actions or litigation against the Council related to its administration of its waiting list and grievance procedures for the MHOP Units which are the subject of this agreement. At their own expense, the MPHA and the EDA may retain their own attorneys to monitor any proceedings or litigation against the Council relating to the Council's administration of its waiting list and grievance procedures. 9. Except as provided in Paragraph 8, the MPHA, the EDA and the Council shall remain responsible for their own actions and omissions regarding the MHOP Units which are the subject of this agreement. Nothing in this agreement shall constitute a waiver by the MPHA, the EDA or Page 3 of 4 Pages the Council of any immunities or limits on liability conferred on the MPHA, the EDA or the Council by Minnesota Statutes Chapter 466 or other applicable state or federal law. Amendments and Termination 10. This agreement and any of its provisions may be changed or modified by mutual agreement of the parties. Such changes, modifications and amendments shall be effective only on the execution of written amendment(s) signed by the authorized representatives of the MPHA, the EDA and the Council. Changes to the waiting list policies and grievance procedures contained in Exhibit A shall be made by written amendments of this agreement. 11. This agreement shall continue so long as the MHOP Units remain public housing units or until this agreement is terminated by the parties, whichever occurs earlier. Any party may terminate this agreement for any reason upon ninety (90) calendar days written notice to the other parties. IN WITNESS WHEREOF, the MPHA, the EDA and the Council have caused this agreement to be executed by their duly authorized representatives. This agreement is effective on the date when this agreement is finally executed by all parties. MINNEAPOLIS PUBLIC HOUSING AUTHORITY IN AND FOR THE CITY OF MINNEAPOLIS ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF NEW HOPE By: Comell L. Moore, Chair By: W. Peter Enck, President Date: Date: By: Cora McCorvey, Executive Director Date: By: Daniel J. Donahue, Executive Director Date: METROPOLITAN COUNCIL By: Thomas H. Weaver Regional Administrator Date: MHOPNH2 12/0~ Page 4 of 4 Pages DOUGLAS J. DEBNER2 GOROON L. JENSENI GLEN A. NORTON STEVEN A. SONDRALL STACY A. WOODS OF COUNSEL LO~NS Q. BRYNESTAD 'Real Property Law Specialist Certified By The Minnesota State Bar Association 2^dmitted in Iowa JENSEN & SONDRALL, P.A. Attorneys At Law 8525 EDINBROOK CROSSING, STE. 201 BROOKLYN PARK, MINNESOTA 55443-1968 TELEPHONE (763) 424-8811 · TELEFAX (763) 493-5193 e-mail law~jensen-sondrall.com December 2, 2003 Ken Doresky Community Development Specialist City of New Hope 4401 Xylon Avenue North New Hope, MN 55428 SENT BY FACSIMILE TO: (763) 531-5136; AND SENT BY E-MAIL TO: kdore sicy @ci. new-hope, mn. us; AND SENT BY U.S. MAIL Re: Waiting List and Grievance Procedure Agreement for Bass Apartment Project/MHOP Units Our File No. 99.11166 Dear Ken: Lake Please find enclosed for consideration at the December 8, 2003 EDA meeting, a proposed EDA Resolution Approving the Metropolitan Council's Memorandum of Understanding to Establish and Administer a Waiting List and Grievance Procedure for MHOP Units in the Bass Lake Apartments Project. As you know, this development involves the renovation of the eleven unit apartment complex at 7610 Bass Lake Road. Our funding agreements with the Minneapolis Public Housing Authority and PPL require the establishment of four MHOP units in this apartment complex. One of the MHOP units will be designated as an incentive unit, the occupancy of which can be determined by the EDA. Since we already use the waiting list and grievance procedures established by the Metropolitan Council in our Section 8 housing program, there is no reason not to use the Metropolitan Council procedures to administer this process within this Project as well. Also, it is basically the same agreement being used at the Bass Lake Townhome Project and therefore, it makes sense to use it in this Project. As indicated in paragraph 7 on page 3 of the Agreement, the Metropolitan Council will be assuming responsibility for this process at no cost to the City. The only obligation the EDA will have in connection with this matter is an agreement to share costs with the Metropolitan Council in the event a claim is made against the Metropolitan Council related to its administration of the waiting list or grievance procedure for the New Hope incentive unit. As a result, I would recommend the adoption of the enclosed resolution by the EDA allowing the Metropolitan Council to administer the waiting list and grievance procedure for the MHOP units within December 2, 2003 Page 2 the Bass Lake Apartment Project pursuant to the terms and attached Memorandum of Understanding. Please contact me questions or comments about the Resolution or the Agreement. Very truly yours, Steven A. Sondrall, City Attorney, City of New Hope JENSEN & SONDRALL, P.A. saz@jensen-sondrall.com After Hours Extension//147 Enclosures CC; Kirk McDonald Valerie Leone conditions of the if you have any P:\Atlom~yXSAS~Leuz~CNH99.11166-1]02*Domsioy Lit.doc ~.~ ~ ~ ;~ i :~ ............. ~ ~ .......................... ~ ........................... ......... i ~. 5700 5704 ~ ~' ~ ; ~ ~ ~ ~ . ~ '. ,o,'".'... .... ....... '-.: ............ ~-i;:~ ; 5540: '' ~' ~ ~ 5537 ............ ~ .............. ;;;[~ ...... {-"S;;~-'] ~"'~-"~ ........ ;; ......................... :, ............... 7.4o ! ~ ~ ~ ~" ~-~'T-," 5431 5427 5421 5417 5411 54o7; 5401 ............... 55os ~ 55TH AVE N , 5437 ~ ," ~ ......... ~ ................... 5422 :: ~ ~ ........ ~ ~20 ~ ''~ ............. ~17 }~ i~ 5420 ~ i ~.~ 5420 ~19 ~ ............. ~ .................. ~ ......... -~ ......... ~ .................... ~ z; ............ ~ ~ ~ ~ ~ ~ ~ :. I'".,.. ...... ~ ............. ~ . ~ ~ ~ ........ ~ ...... ~ ......... ~ ........... r ......... ~ ? ......... ~ ....... ~ s~ 5~49"'..,.'"" '" ~:. ............ ~ .... ~ ........ ;~ ......................... ~ ....... ~ ...... ; ........ ~ --; ~]9 ~ 5324 ~ ~ ..... .......................................... ~ ~ : ' EDA REQUEST FOR ACTION Originating Department Approved for Agenda Agenda Section Community Development ~~ 12-9-03 EDA /~/~[ Item No. By: Kirk McDonald By: ./' ~',~ -'" 6 RESOLUTION AUTHORIZING AND CALLING FOR A CLOSED MEETING OF THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY REQUESTED ACTION Staff is requesting that the City Council approve the enclosed resolution prepared by the city attorney entitled Resolution Authorizing and Calling for a Closed Meeting of the New Hope Economic Development Authority. POLICY/PAST PRACTICE The City Council and Economic Development Authority have conducted closed meetings in the past regarding litigation matters, as allowed by state law. BACKGROUND Per the city attorney's correspondence, "The purpose of the meeting is to discuss the appeal of the Commissioners Award in the Ahrens Trucking condemnation matter. Attached to this letter is the Award. Also attached are letters from the attorneys' for Ahrens Trucking and the Navarre Corporation. I agreed I would submit these letters to the EDA before its consideration of this appeal." A'I-rACHMENTS · Resolution · 12/3/03 City Attorney Correspondence · Award of Commissioners · Other Attorney's Correspondence g s closed mtg EDA RESOLUTION NO. 03- RESOLUTION AUTHORIZING AND CALLING FOR A CLOSED MEETING OF THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY WHEREAS, Minn. Stat. {}471.705, Subd. l(d) authorizes and permits the New Hope EDA to hold a closed meeting to discuss City issues and information protected by the attorney-client privilege, and WHEREAS, the New Hope EDA has commenced or has been made a party to a lawsuit or been threatened with litigation which has presently activated its right under the referenced statute to hold a closed meeting, and WHEREAS, specifically the EDA is a party to a lawsuit commenced pursuant to Minn. Stat. Chap. 117 identified as Hennepin County District Court File No. CD 2699 for the purpose of acquiring real property located at 7600 49th Avenue North for economic redevelopment purposes, and WHEREAS, on October 30, 2003 the Award of Commissioners was filed in this action and a closed meeting of the New Hope EDA is necessary to consider the acceptance or appeal of the Award of Commissioners and to consider various legal strategies for the continued prosecution or defense of District Court File No. CD 2699. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: 1. That a closed meeting of the New Hope EDA shall be held on December 8, 2003 immediately following the adjournment of the regular meeting of the New Hope City Council, or adjournment of the regular meeting of the New Hope EDA in the event said public bodies have a regularly scheduled meeting on said day, at the New Hope City Council Chambers. 2. That the purpose of the meeting shall be the discussion of an appeal of the Award of Commissioners, settlement alternatives and prosecution/defense strategies in connection With litigation of Hennepin County District Court File No. CD 2699. 3. That said meeting shall not be open to the public. 4. That the New Hope City Clerk is hereby directed to tape record the closed meeting and preserve the tape recording for a period of two years from the date of the meeting. -1- 5. That the New Hope City Clerk shall prepare a written roll of the members and all other persons present at the closed meeting and make said roll available for public inspection upon adjournment of the closed meeting. Adopted by the Economic Development Authority in and for the City of New Hope this 8th day of December, 2003. W. Peter Enck, President Attest: Daniel J. Donahue, Executive Director P:XAttorney\Cnh Resolutions\CNH99.53073-003-EDA Reso Authorizing Closed Mtg.doc DOUGLAS J. DEBNER1 GORDON L. JENSEN~ GLEN A. NORTON STEVEN A. SONDRALL STACY A. WOODS OF COUNSEL LORENS Q. BRYNESTAD IReal Property Law Specialist Certified By The Minnesota State Bar Association :Admitted in Iowa JENSEN & SONDRALL, P.A. Attorneys At Law 8525 EDINBROOK CROSSING, STE. 201 BROOKLYN PARK, MINNESOTA 55443-1968 TELEPHONE (763) 424-8811 $ TELEFAX (763) 493-5193 e-mail iaw~jensen-sondrall.com December 3, 2003 Mr. Kirk McDonald City of New Hope 4401 Xylon Avenue North New Hope, MN 55428 RE: Resolution Calling For Closed Meeting Of New Hope EDA/Ahrens Condemnation Court File No. CD 2699 Our File. 99.53073 Dear Kirk: Enclosed is a Resolution Authorizing and Calling for a Closed Meeting of the the New Hope Economic Development Authority for consideration at the December 8, 2003 EDA meeting. The Resolution should be passed at the regular meeting of the New Hope EDA. After the regular meeting is adjourned then the special closed meeting of the EDA should be convened. The purpose of the meeting is to discuss the appeal of the Commissioners Award in the Ahrens Trucking condemnation matter. Attached to this letter is the Award. Also attached are letters from the attorneys' for Ahrens Trucking and the Navarre Corporation. I agreed I would submit these letters to the EDA before their consideration of this appeal. Since this is a closed meeting I am not submitting a resolution. A motion is all that is necessary subsequent to our discussion at the meeting as to whether an appeal should be from the Commissioners' Award. Please contact me if you have any questions or comments with respect to the enclosed resolution or the procedure for calling for the closed meeting. Very truly yours, Steven A. Sondrall Attorney for New Hope EDA cc: Valerie Leone P:~Attorney~SAS~Letters\CNH99.53073_028.1tr to McDonald closed mtg.ltr.doc STATE OF MINNESOTA COUNTY OF HENNEP~ DISTRICT COURT FOURTH JUDICIAL DISTRICT Case Type: Condemnation Court File No, CD 2699 The Economic Development Authority in and for the City of New Hope, Minnesota, a Minnesota municipal corporation, P~tioner, Vo Ahrens Entrrprises, LLC, a Minnesota limited liability company, Ahrens Thinking, Inc., a Minnesola corporation, Ahr~ns Trucking, ~nc., a Minnesota corporation D/B/A Ru,sscll Delivery, Wells Fargo B~nk Minnesota, N.A,, Qwest Communications Corporation, a Delaware corporation, Qwest Corporation, a Colorado corporation, Xcel Energy Inc., a Minnesota corporation, Centerpoint F. llergy Minncgasco, a divisioll of Cellterpoint F21ergy l~sources Corp., a Delaware corporation, City of New Hope, a Mirmesota municipal corporation, and County of Hennepin, a Minnesota municipal corporation, NOTICE OF FIIdNG OF AWARD OF COMMISSIONERS TO: PLEASE TA~ NOTICE that on the 30~ day of October, Commissioll~s srmched hereto was filed in the above-entitled action. award is $603,000. Ahrem Enterprises, LLC, is also required to pay taxes, assessments, street maintenance and any other charges due and payable in 2002 and prior years including p_ennltieS, if ally. RESPONDENTS ABOVE-NAMED, AND THEIR ATI'ORNEYS OF RI~CORD: 2003, the Award of The amount of thc 12/03/2003 08:46 FAX 753 493 $193 JENSEN & $ONDRALL, ?.~. ~ GNh-C~ ~ooo Dar. cd: December 1, 2003. JENSEN & $ONDRALL, P.A. Stcven A. $ond~all,//103391 Attorney for Petitioner 8525 Edin~k Crossing, Suite 201 Brooklyn Park, MN 55443 (763) 424-8811 P:~mom~AS~l~s~,m~n~CNii~,~O'~O~.Nod~ ~ Nil~ of Av~9.do~ 2 ~2/03/200~ · ~ 0~:46 FAX 763 493 S193 STATE OF MINNESOTA COUNTY OF KENNF_.PIN JENSEN & 50NDRALL, ?.~. DISTRICT COURT FOURTH JIJDICIA~ DISTRICT Case Type: Condemnation Com't File No. CD 2699 The Economic Dc'velopmcnt Authority in and for ~he Ci~ of New Hope, Minnesota, Mi-r~¢sota municipal corporation, P~titioncr, AWARD OF COM1HISSIO1NERS IN THE MA~ OF THE CONDEMNATION' OF CF~TAIN REAL ESTATE IN THE CO ..UIITrY OF HENNEPIN, STATE OF MINNF. SOTA, FOR. ECONOMIC DE%rRT.OPMENT PURPOSF, S Th~ tlnde~glled'Commissio~m's, appoillted by the above-named Corot, having quailed according to law, met m directed by thc Ordcr of tho Court appointing th~n as Commissioners, given notice in writing ofth~ limo and place o£their meetings, h~ard thc allcgations and proofs of all persons in~ed in touching the matters committed to thcm,'hcard tcsrimony publicly ~2/03/2003 0~:46 FA,~ 76~ 493 5193 dENSEN ~ SONDIi, AI,A.,, P.~. - CNa-C~ ~uuo tmdcr oath from those persons wishing to be heard in connection with said taking, and in their prescnc¢, viewed thc lands herei,~e~r described, completed such hearings as wcr~ requested by parties appeanng with respect to sam lands, now hcrcb¥ ,~t,e the following award of damages, which in their judgment will re,sult to thc owners'of the premises descn'bed in thc Petition (7600 - 49~ Avenuo North, New Hop~, Mi-~ota), and to any party having an inte. re~t therein by mason of the taking of said psrcel by ttm P~itioner. Said aw-m'd is m~le as follows: TO: Allrens Euterpris~, LLC: All Other Respondents Named Herein: TOTAL DAMAGES: The aforesaid award ofdsmsges is made subject to the following: The ownmz' obligation to pay the tax~s, special assessmemts, street maintenance and other azmual charges due =~d payable in the year of 2002 and prior years, with penalties, if any. · ~ We further r~ort that each of thc undersigned Commissioners viewed the parccl and that all .the undersigned participated in heating all testimony of the/n~ partie~ which was off~.xi for condderalion and pattiaipaled in as~g,* d~m;n;,~g, assessing and awarding damages for tho taking of the parcel. Appraisal fe~ of$500.00 ar~ also ~ward~ to Dated: October.-'2°, 2003 12/0~/200~ 0~:46 FA~ 76~ 49~ $19~ JENSE~ ~ SONDRALL, P.A. o CNh-C~ ~0u~ DAN'IZ'L N. ROS~ ALAN' R. · ~'~'_'Lu~[ $, Rt-~S~N (19,~-1999) ROSEN & ROSEN LI, C 150 SOU'tH ~-a- ~1 51'X~'ETr ~ Lf_ffI~. 5250 blIN~'EA. POI 1.:,. MI'qN'~O'I~ 55~02 I'I2.EPI-IO.NE (612) 692-2,TM PAX (612) e92-2~--. November25, 2003 VIA FACSIMILE # (763) 493-5193 & U.S. MAIl, Mr. Stevcn A. Sondrall 8525 Edinbrook Crossing Suite 201 Brooklyn Park, MN 55443 Re: EDA v. Ahrens Enterprises, LLC, et al. Court File No. CD 2699 Our File No. 9649 Dear Mr. Sondrall: This follows your advising me by telephone that you did not know when, if ever, the EDA would be considering or voting on the matter of appeal from the commissioners' award in the above-referenced matter. Please be advised that if the EDA does not vote to appeal, we wilt move. the Court to dismiss thc appeal as not having been properly authorized by the condemning authority. Furthermore, unless there is serious deliberation'of the issue by the EDA, we will assert that the EDA unlawfully delegated the authority to make the appeal decision to Navarre. There is a substantial body of law on the permissibility of the delegation of governmental authority to private entities and I respectfully assert that the law does not support the delegation of the power to decide whether or not to appeal in an ,~ninent domain case. I have previously asked (a) to appear before the EDA ax the time of the consideration of this issue at open meeting; and (b) to be advised of when that consideration will take place. I reiterate those demands now and further demand that the ma~er of ~vhether or not to appeal actually be addressed by the EDA board and voted upon in open meeting. Very truly yours, Daniel N. Rosen Brett & LaDorma Ahrens Donald & Sharon Ahre~ Thomas Boyck Esq. 12./03/2003 08:47 FAX 76,3 493 5193 JF_.a'qSF.~ & SONDRALL, P.A. .* CNh-Ch ~uiu WINTHROP~ WEINSTINE November 19, 2003 Thom~ It. Boyd (~z~) ~o~.~ tboyd~winthrop.com VIA FACSIMILE 763-493-5193 UNITED STATES MAIL Stcvcn A. Sondrall, Esq. Jenson & Sondrall, P.A. Edinburgh Executive Office Plaza 8525 Edinbrook Crossing, Suite 201 Brooklyn Park, lVIN 55z~3-1968 Re: The Economic Development Authority in and for the City of New Hope v. Ab_tens Enterprises, LLC, ct al. Court File No.: CD 2699 Dear Steve: I am writing m confirm the telephone message I left for you earlier today on behalf of Navarre Corporation advising you that the City should promptly file and serve a notice of appeal of the Award of Commissioners in the above-referenced matter. It is my understanding that, as City Attorney, you will follow up on r, ak'ing all of the axlallgcnlents to file and serve the notice of appeal and take any other steps necessary to perfect that appeal. While I am not aware of the filing date of the Award, it is my understanding that it was dated October 20, 2003. Accordingly, we would ask that you give this matter your prompt attention so as to ensure thc timely filing and service of the notice of appeal. Please feel free to contact me ffyou have any questions. Very lzuly yom, WINTttROP & WBINSTINE, P.A. Thomas H. Boyd TI'IB:e~m 2076112vi cc: Ryan Umess, Esq. (via facsimile 763-533-2156/U.S. Mail) c ...... ~=ru~ , ~,~. ~,,k I,;~,1, q,..~ 1 Ml~n,-.~,~llc MN KKr1')-1,~)9 I Mi~x"~Rl~Jfif!~.&$O0 I f".'~:i6121604-(~ROt! I ww~:~inthrup, cum I ,I JaP-I, ,,iaAa/ Atcpctarten