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091007 EDA ~ CITY OF NEW HOPE EDA MEETING City Hall, 4401 Xylon Avenue North September 10, 2007 EDA Meeting will commence upon adjournment of the City Council Meeting President Martin Opem Sr. Commissioner Andy Boffe Commissioner Karen Nolte Commissioner Steve Sommer Commissioner Daniel Stauner 1. Call to order 2. Roll call 3. Approval of regular meeting minutes of May 14,2007 4. Resolution authorizing signatures for Certificate of Completion and Release of Forfeiture related to the Linden Park Condominiums, a project by PPL (Project for Pride in Living) at 5445 Boone Avenue North (improvement project no. 776) ::l. Adjournment EDA Minutes Regular Meeting CALL TO ORDER ROLL CALL APPROVE MINUTES IMP. PROJECT 795 Item 4 EDA Meeting Page 1 CITY OF NEW HOPE 4401 XYLON AVENUE NORTH NEW HOPE, MINNESOTA 55428 May 14, 2007 City Hall President Opem called the meeting of the Economic Development Authority to order at 9:16 p.m. Present: Martin Opem Sr., President Andy Hoffe, Commissioner Karen Nolte, Commissioner Steve Sommer, Commissioner Daniel Stauner, Commissioner Staff Present: Dan Donahue, City Manager Kim Berggren, Community Development Assistant Valerie Leone, City Clerk Kirk McDo~ald, Director of Community Development Steve Sondrall, City Attorney Vince VanderTop, Assistant City Engineer Motion was made by Commissioner Nolte, seconded by Commissioner Sommer, to approve the Regular Meeting Minutes of February 12, 2007. All present voted in favor. Motion carried. President Opem introduced for discussion Item 4, Resolution authorizing an interim agreement with Insignia Development for the Bass Lake Road Apartments redevelopment project (8400 and 8420 Bass Lake Road and 8401, 8411, and 842158th Avenue) (improvement project no. 795). Mr. Kirk McDonald, director of community development, asked the Council to approve two items related to this item: 1) a resolution authorizing an interim agreement with Insignia Development; and 2) a motion to amend the purchase offer for the Bass Lake Road Apartments (per the Council's direction to the city attorney at the May 7 work session). He explained the project involves the redevelopment of the Bass Lake Road Apartments site. He noted Insignia Development participated in the 2005 RFQ process and remains interested in the project. He stated Don Uram, President of Insignia, is available for questions. Mr. McDonald reviewed the responsibilities of the developer: payment of a $500 non-refundable fee; complete market study by December 1, 2007; submit concept plan and $5,000 refundable deposit in spring of 2008; and continue to meet deadlines through summer/early fall. He noted the agreement end date is October I, 2008. May 14, 2007 RESOLUTION 07-01 Item 4 EDA Meeting Page 2 Mr. McDonald also reviewed the city's responsibilities: provide previously prepared documents on the site/project to developer; attempt to acquire site; cooperate with developer and negotiate in good faith; and pay for the city's associated costs including planning, engineering, and legal costs. Next, Mr. McDonald reviewed the city's counteroffer for the purchase of the Bass Lake Apartments site. He stated the purchase offer remains at $2.145 million; there is no end date on the offer; the city will provide $50,000 in escrow payable at closing; and the city will complete a due diligence inspection. Mr. Don Uram, President of Insignia Development, was recognized. He expressed his appreciation to work with the city on the redevelopment project. He stated his intention of providing a market study to show what can be supported by the site. He stated he anticipates the approval process, including pre-sales, to occur during 2008 and construction to take place through 2009. Commissioner Stauner strongly urged the developer to consider a mixed use development such as retail for the site. He stated he believes the site could support some type of retail. He also noted a restaurant could be greatly supported by the housing d,!2velopment as well as golf course patrons. Commissioner Stauner thanked Mr. Uram for his perseverance with the proposed project. Mr. Uram stated the mixed use concept "vill be part of the market study. He also pointed out that the timelines included in the interim agreement can always be moved forward if the development progresses in a more timely fashion. Commissioner Sommer pointed out the city could have pursued the purchase of the property and landbanked it for the future. He stated the city is fortunate to have a qualified developer such as Insignia interested in the project, and he supported continuing the relationship with Insignia Development. The EDA expressed their support for moving forward with the proposed redevelopment project. Commissioner Stauner introduced the follo'wing resolution and moved its adoption: "RESOLUTION AUTHORIZING AN INTERIM AGREEMENT WITH INSIGNIA DEVELOPMENT FOR THE BASS LAKE ROAD APARTMENTS REDEVELOPMENT PROJECT (8400 AND 8420 BASS LAKE ROAD AND 8401, 8411, AND 842158TH AVENUE) (IMPROVEMENT PROJECT NO. 795)." 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: Opem, Hoffe, Nolte, Sommer, Stauner; 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. May 14, 2007 MOTION Item 4 IMP. PROJECT 697 Item 5 MOTION Item 5 ADJOURNMENT EDA Meeting Page 3 Motion was made by Commissioner Nolte, seconded by Commissioner Stauner, to approve a counteroffer for the purchase of Bass Lake Road Apartments as discussed at the May 7, 2007, work session. All present voted in favor. Motion carried. President Opem introduced for discussion Item 5, Motion authorizing expenditure of $15,000 for legal fees related to a cost recovery claim against Unocal/Chevron (improvement project no. 697). Motion ,'vas made by Commissioner Sommer, seconded by Commission Stauner, authorizing expenditure of $15,000 for legal fees related to a cost recovery claim against Unocal/Chevron (improvement project no. 697). All present voted in favor. Motion carried. Motion was made by Commissioner Nolte, seconded by Commission Hoffe, to adjourn the meeting. All present voted in favor. Motion carried. The New Hope EDA adjourned at9:30 p.m. Respectfully submitted, ~~ Valerie Leone City Clerk May 14, 2007 EDA Request for Action Originating Department Approved for Agenda Agenda Section Community Development September 10, 2007 EDA Item No. By: Kirk McDonald, Acting CM Curtis Jacobsen, CD S ecialist By: 4 Resolution authorizing signatures for Certificate of Completion and Release of Forfeiture related to the Linden Park Condominiums a project by PPL (Project for Pride in Living) at 5445 Boone Avenue North (im rovement roject 776) Requested Action The EDA is requested to approve the resolution authorizing signatures on the Certificate of Completion and Release of Forfeiture related to the Linden Park Condominiums at 5445 Boone Avenue North a project by PPL (Project for Pride in Living). Policy/Past Practice It is the past practice of the city/EDA to authorize signatures on the Certificate of Completion and Release of Forfeiture when the Developer has completed the :tvlinimum Improvements and has been issued a Certificate of Occupancy for any individual residential wut in that building. 11us Certificate of Completion and Release of Forfeiture is similar to the one approved by the Cow1cil for Emerald Pointe Apartments on June 25, 2007. Background 111e EDA entered into a Contract for Private Redevelopment with PPL on October 25, 2004, for a two phase project for the redevelopment of the site at 5501/5445 Boone Avenue North. The project phases consisted of a 35 unit apartment building and a 41 unit condominium building both with w1derground parking. The aparhnent phase of the project was completed in late 2005 and PPL began construction on the condominium portion of the project in late 2006. The Contract for Private Redevelopment specifies when the Certificate of Completion is to be issued, as outlined below: Section 4.4. Certificate of Completion.. To: fLI~ II ;au 0 /)~ tJtL Second by Motion by I: \ RF A \ PLAl'\JNING\ PLANNlNG \ Plannino- \ Q & R - PPL Cert of Corn letion 9-10-07.doc Request for Action September 10, 2007 Page 2 (a) Promptly after completion of the lYfurimum Improvements for each building in accordfulce with the provisions of this Agreement relating to the obligations of the Redeveloper to construct such improvements (including the date for completion thereof)) the Authority will ~sh the Redeveloper with a Certificate of Completion for such Building in substantially the form attached as Schedule D. The Certificate of Completion shall be a conc1usiv.e determination and conclusive evidence ofllie satisfaction and termination of the agreements and covenants in this Agreement and in the Redevelopment Property Deed with respect to the obligations of the Redeveloper and its successors a:n.d assigns) to construct the lv.linim.um Improvements for each building and the date for the completion thereof. (b) If the Authority believes the Redeveloper has failed to complete the N1inimum Improvements as to any building for \vhich a Certificate of Completion is requested by the Redeveloper, the Authority shall, within thirty (30) days after such wntten request by the Redeveloper, pro....ide the Redeveloper with a 'iiutten statement; indicating in adequate detail in \vhat respects the Authority believes the Redeveloper has failed to complete the Ivlinimum Improvements in accordance with the provisions of this Agreement, and what measures or acts will be necessary, in the opinion of the Authority, for the Redeveloper to take or perform in order to obtain a Certificate of Completion. ( c) The construction of the I\1irrimum Improvements for each building shall be deemed to be completed in accordance ....vith the Redeveloper's obligations hereunder when the City has issued a certificate of occupancy for any individual residential unit of that Building. The PPL staff and their closing company have requested tlus release be processed at this time so that they may proceed \vith closings on the individual wuts later this month. As previously discussed by the Cow1cil and PPL resh'ictions on non-o"Yvners are in place through the Contract for Private Redevelopment and state law. Ninety-five percent of the 41 units are required to be initially sold to owner occupants, per Section 2.2 (n) of the Contract and Mllmesota Statutes 469.174 Subd. 11 and 469.1761 Subd. 2. 111ere are also other provisions witl1in the Local Housing Incentive Account funding from the Metropolitan Cow1cil that restricts 20 w1its permanently tlnough the use of long term deed restrictions to buyers at 80 percent of area median ll1come. Considerll1g these legal restrictions only two of the 41 units could be sold directly to investors under the provisions of the law under wluch the tax ll1crement housll1g district assisting the project was created. Recommendation Staff recommends tl1e Council approve the resolution authorizll1g signatures on the Certificate of Completion and Release of Forfeiture. In a related item, PPL has provided a $5,000.00 cash deposit for the hard surface play area at the apartments and agreed to enlarge the area installed to 20 X 20. Attachment(s) III Resolution III Certificate of Completion III Request from PPL III Copy Certificate of Occupancy III Statute excerpts III Contract for Private Redevelopment excerpts City of New Hope Resolution No. 2007- Resolution authorizing signatures for Certificate of Completion and Release of Forfeiture related to the Linden Park Condominiums a project by PPL (Project for Pride in Living) at 5445 Boone Avenue North (improvement project no. 776) WHEREAS, the EDA has received a request from Project for Pride in Living (PPL) for the city to provide the Certificate of Completion and Release of Forfeiture as identified in their Contract for Private Redevelopment, and; WHEREAS, the Contract for Private Redevelopment states that the Economic Development Authority will promptly furnish the Redeveloper a Certificate of Completion after completion of the projects Minimum Improvements, and; WHEREAS, the Minimum Improvements are deemed to be completed when the city has issued a certificate of occupancy for any individual w1it of that building, and; WHEREAS, a certificate of occup,mcy for tl1e condomiIuum building at 5445 Boone Avenue Nortl1 was issued on Friday, August 31, 2007. NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority of the city of New Hope, HennepiI1 County, Mllmesota: 1. 111at the President and Executive Director are hereby authorized and directed to sign tl1e Certificate of Completion and Release of Forfeiture for tl1e Linden Park CondomiIuums, located at 5445 Boone Avenue North. 2. 111e City Clerk shall provide PPL with a signed copy of t1us resolution and the signed Certificate of Completion. Adopted by t11e Economic Development Authority of the city of New Hope, HennepiI1 COW1ty, MiImesota, this 10th day of September 2007. President Attest: Executive Director Exhibit 1 CERTIFICATE OF COMPLETION AND RELEASE OF FORFEITURE WHEREAS, the Economic Development Authority in and for the City of New Hope, a body corporate and politic under the laws of Minnesota (the "Grantor"), by a Deed recorded in the Office of the County Recorder or the Registrar of Titles in and for the County of Hennepin and State of Minnesota, as Deed Document Number , has conveyed to Project for Pride in Living, Inc., a Minnesota nonprofit corporation (the "Grantee"), the following described land in County of Hennepin and State of Minnesota, to-wit: Lot 2, Block 1, Science and Industry Center 3rd Addition WHEREAS, said Deed contained certain cov(1uants and restrictions, the'breach of which by Grantee, its successors and assigns, would result in a forfeiture and right of re-entry by Grantor, its successors and assigns, said covenants and restrictions being set forth in said Deed; and WHEREAS, said Grantee has performed said covenants and conditions insofar as it is able in a manner deemed sufficient by the Grantor to permit the execution and recording of this certification; NOW, THEREFORE, this is to certify that all building construction and other physical improvements specified to be done and made by the Grantee have been completed and the above covenants and conditions in said Deed have been performed by the Grantee therein and that the provisions for forfeiture of title and right to re-entry for breach of condition subsequent by the Grantor therein is hereby released absolutely and forever insofar as it applies to the land described herein, and the County Recorder or the Registrar of Titles in and for the County of Hennepin and State of Minnesota is hereby authorized to accept for recording and to record this instrument, and the filing of this instrument will be a conclusive determination of the satisfactory termination of the covenants and conditions of the contract referred to in said Deed, the breach of which would result in a forfeiture and right of re-entry. 3 Date: ,2004 ECONOMIC DEVELOPMENT AUTHORlTY IN AND FOR THE CITY OF NEW HOPE By Its President By Its Executive Director STATEOFMJNNESOTA ) )ss COUNTY OF HEN1\TEPIN ) On this _ day of , 2004 before me, a notary public within and for Hennepin County, personally appeared and , to me personally known who by me duly sworn, did say that they are the President and Executive Director, respectively, of the Economic Development Authority in and for the City of New Hope, a public body corporate and politic under the laws of Minnesota, and acknowledged the foregoing instnunent on behalf of said Authority. Notary Public 4 Page 1 of 1 Jacobsen Curtis From: Sent: To: Chris Dettling [chris.dettling@ppl-inc.org] Tuesday, July 31, 2007 2:55 PM Jacobsen Curtis Cc: Mary Novak; Rick Blackmon Subject: Linden Park Condominiums: CERTIFICATE OF COMPLETION AND RELEASE OF FORFEITURE Follow Up Flag: Follow up Flag Status: Red Attachments: Redev Property Deed.doc Curtis: The attached deed for 5501/5445 Boone Avenue includes an attachment entitled ""CERTIFICA TE OF COMPLETION AND RELEASE OF FORFEITURE" which needs to be executed by the EDA before we will be able to close on the sales of the condos to end buyers. We would like to have one release for the entire building recorded instead of 41 individual unit releases. We anticipate having a Certificate of Occupancy issued on or about September 24th, 2007. Will a CofO suffice for the EDA to sign? Will it require EDA and or City Council Action? When would be the best time to get signatures (Sept 24th or Oct 8th Council meeting)? I will wait to set a schedule for closings until we can get a plan together. Please advise. Thanks, Chris P.S. I left a check for $5K at the front desk earlier today for the hard surface play area guarantee. Chris Dettling Senior Project Manager Housing & Development PPL (Project for Pride in Living) 1035 E. Franklin Ave. Minneapolis, rvlN 55404 chris. dettlimr((V.pp 1- ll1C. or2: 612-455-5219 - direct 612-455-5101 - fax W\vvV. pp 1- mc. or 2: PPL's Mission: 'To work with lower-income individuals and famifies to achieve greater self-sufficiency through housing, employment training, and support services." - Proud to be serving the community for 35 years. - 9/4/2007 469.174 Subd. 11. Housing district. "Housing district" means a type of tax increment financing district which consists of a project, or a portion of a project, intended for occupancy, in part, by persons or families of low and moderate income, as defined in chapter 462A, Title II of tl1e National Housing Act of 1934, the National Housing Act of 1959, the United States Housing Act of 1937, as amended, Title V of the Housing Act of 1949, as amended, any otl1er similar present or future federal, state, or municipal legislation, or the regulations promulgated w1der any of tl10se acts, and that satisfies tl1e requirements of section 469.1761. Housing project means a project, or a portion of a project, that meets all of the qualifications of a housing district under tl1is subdivision, whether or not actually established as a housing district. 469.1761 INCOME REQUIREMENTS; HOUSING PROJECTS. Subdivision 1. Requirement imposed. (a) In order for a tax increment financing district to qualify as a housing district: (1) the income limitations provided in tlus section must be satisfied; and (2) no more tl1al1 20 percent of the square footage of buildings tl1at receive assistance from tax increments may consist of corrunercial, retail, or other nonresidential uses. (b) 111e requirements imposed by tlus section apply to property receiving assistal1ce fll1al1ced with tax ll1crements, including ll1terest reduction, lal1d h-ansfers at less them the autl10rity's cost of acquisition, utility service or cOlmections, roads, parkll1g facilities, or otl1er subsidies. The provisions of tlus section do not apply to districts located ll1 a targeted area as defined ll1 section 462C.02. subdivision 9, clause (e). Subd. 2. Owner occupied housing. For o"Yvner occupied residential property, 95 percent of tl1e housing units must be initially purchased and occupied by ll1dividuals whose family ll1come is less thal1 or equal to the ll1come requirements for qualified mortgage bond projects under section 143(f) of the Internal Revenue Code. Subd. 3. Rental property. For residential rental property, the property must satisfy the income requirements for a qualified residential rental project as defined in section 142( d) of the Internal Revenue Code. The requirements of this subdivision apply for the duration of the tax increment financing district. Subd. 4. Noncompliance; enforcement. Failure to comply with the requirements of this section is subject to section 469.1771. Section 4.4. Certificate ofComnletion., (a) Promptly after completion of the Minimum Improvements for each building in accordance with the provisions of this Agreement relating to the obligations of the Redeveloper to construct such improvements (including the date for completion thereof), the Authority will ~sh the Redeveloper with a Certificate of Completion for such Building in substantially the form attached as Schedule D. The Certificate of Completion shall be a conclusive determination and conclusive evidence of the satisfaction and termination of the agreements and covenants in this Agreement and in the Redevelopment Property Deed with respect to the obligations of the Redeveloper and its successors and assigns, to construct the Minimum Improvements for each building and the date for the completion thereof. (b) If the Authority believes the Redeveloper has failed to complete the Minimum Improvements as to any building for which a Certificate of Completion is requested by the Redeveloper, the Authority shall, within thirty (30) days after such written request by the Redeveloper, provide the Redeveloper with a written statement, indicating in adequate detail in what respects the Authority believes the Redeveloper has failed to complete the Minimum Improvements in accordance with the provisions of . this Agreement, and what measures or acts will be necessary, in the opinion of the Authority, for the Redeveloper to take or perform in order to obtain a Certificate of Completion. ( c) The construction of the Minimum Improvements for each building shall be deemed to be completed in accordance with the Redeveloper's obligations hereunder when the City has issued a certificate of occupancy for any individual residential unit of that Building.