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062308 EDA ~ CITY OF NEW HOPE EDA MEETING City Hall, 4401 Xylon Avenue North June 23, 2008 EDA Meeting will commence upon adjournment of the City Council Meeting President Martin Opem Sr. Commissioner John Elder Commissioner Andv Hoffe "' Commissioner Karen Nolte Commissioner Daniel Stauner 1. Call to order 2. Roll call 3. Approval of regular meeting minutes of May 27,2008 4. Resolution approving an amended and restated interim agreement between Ryan Companies, Inc. and the Ne\v Hope Economic Development Authority for the potential redevelopment of city center (improvement project no. 842) :J. Adjournment EDA Minutes Regular Meeting CALL TO ORDER ROLL CALL APPROVE MINUTES IMP. PROJECT 844 Item 4 IMP. Item 5 836 EDA Meeting Page 1 CITY OF NEW HOPE 4401 XYLON AVENUE NORTH NEW HOPE, :MINNESOTA 55428 May 27, 2008 City Hall President Opem called the meeting of the Economic Development Authority to order at 8:50 p.m. Present: Martin Opem Sr., President John Elder, Commissioner Andy Hoffe, Commissioner Karen Nolte, Commissioner Daniel Stauner, Commissioner Staff Present: Kirk McDonald, City Manager Curtis Jacobsen, Director of Community Development Valerie Leone, City Clerk Steve Sondrall, City Attorney Motion was made by Commissioner Nolte, seconded by President Opem, to approve the Regular Meeting Minutes of April 28, 2008. Voting in favor: Opem, Hoffe, Nolte, Stauner; Voting against: None; Abstained: Elder; Absent: None. Motion carried. President Opem introduced for discussion Item 4, Resolution approving BCD Holdings, LLC/Holiday StationStore loan documents for the redevelopment of 7180 42nd A venue North (improvement project no. 844). President Opem reviewed the terms of the 560,000 loan includes an interest rate of three percent over ten years and the payment for the first 18 months will be deferred. The EDA expressed concerns regarding the mortgage subordination agreement which requires the city to subordinate its lien to future liens against the property. Council Member StaUller recommended the document be revised to specify the debt the city's loan would subordinate. Mr. Steve Sondrall, city attorney, pointed out that he has requested the follo-wing information from Chuck Durand: title evidence that BCD Holdings is the fee owner of the mortgaged property, documentation that BCD Holdings has at least $60,000 of equity in the property, and that Chuck Durand personally guarantees the loan. The EDA directed the city attornev to revise the loan documents for consideration at the EDA meeting June 9f 2008. President Opem introduced for discussion Item :Jf demolition contract for the Bass Lake Road Resolution avvarding Apartment complex :May 27, 2008 EDA RESOLUTION 08-08 Item 5 ADJOURNMENT EDA Meeting Page 2 (improvement project no. 836). Mr. Kirk McDonald, city manager, stated the low bid for demolition of the Bass Lake Road Apartments complex was submitted by Sauter & Sons for $98,100 plus an $8,000 per building burn deduct. He reported on the favorable bid as the estimate was $150,000 ($30,000 per building). Mr. Curtis Jacobsen, community development director, reported that he checked the contractor's references and other cities were complimentary or Sauter & Sons' performance. Commissioner Nolte introduced the following resolution and moved its adoption: "RESOLUTION AWARDING DEMOLITION CONTRACT FOR THE BASS LAKE ROAD APARTMENT COMPLEX (IMPROVEMENT PROJECT NO. 836)." The motion for the adoption of the foregoing resolution \vas seconded by Commissioner Elder, and upon vote being taken thereon, the following voted in favor thereof: Opem, Elder, Hoffe, Nolte, Stauner; and the rollowing voted against the same: None; Abstained: None; Absent: None; whereupon the resolution was declared duly passed and adopted, signed by the president which \vas attested to by the executive director. Motion was made by Commissioner Nolte, seconded by Commissioner StaUller, to adjourn the meeting. All present voted in favor. Motion carried. TIle New Hope EDA adjourned at 9:09 p.m. Respectfully submitted, ~~ Valerie Leone, City Clerk May 27, 2008 EDA Request for Action Originating Department Approved for Agenda Agenda Section Community Development June 23, 2008 EDA Item No. By: Curtis Jacobsen, Director of CD By: Kirk McDonald, City Manager 4 Resolution approving an amended and restated interim agreement between Ryan Companies, Ine., and the Ne\v Hope Economic Development Authority for the potential redevelopment of City Center (improvement ro'ect no. 842) Requested Action Staff, Ryan Companies and Krass Monroe request to provide an update on the City Center project and request approval of the attached amended and restated interim agreement between Ryan Companies, Inc., and the Hew Hope Economic Development Authority for the potential redevelopment of City Center. Policy/Past Practice It is a past practice of staff to coordinate updates to the Authority for projects on an ongoing basis. Additionally, it is also a past practice to amend and restate agreements from time to time to more accurately reflect the progress and details of the project. Background TI1e COUl1cil met in a special work session on May 29 for an informal update on the progress being made to comply with the timeline in the interim agreement. C01mcil consensus \^las that they favored an extension to the interim agreement to continue looking at the feasibility of the City Center redevelopment. Funding FUl1ding for the financial consultant during the interim analysis steps are shared 50/50 vvith the developer with the city share being paid with EDA funds. TI1e developer is responsible for all costs they incur for their consultants. Attachment(s) ED Resolution ED Redlined version of amended and restated interim agreement @ Amended and restated interim agreement Second by l'vlotion bv To: A \PLANNING\PLANNING\ Cit; Center amended ao-reement 6-23-0S.doc City of Nevv Hope EDA Resolution 2008-_ Resolution approving an amended and restated interim agreement between Ryan Companies, Inc., and the New Hope Economic Development Authority for the potential redevelopment of City Center (improvement project no. 842) WHEREAS, Ryan Companies US, Inc., and city staff have been working on completing the steps identified in the interim agreement entered into on January 28, 2008, regarding the possible redevelopment of City Center; and WHEREAS, on May 29, 2008, staff and Ryan Companies made a presentation to the City Council during a work session; and WHEREAS, during the May meeting the consensus of the COUl1Cil was to authorized staff to negotiate an amended interim agreement with Ryan Companies; and WHEREAS, Ryan Companies and staff have reached tentative agreement on the details of said amended and restated interim agreement. NOW, THEREFORE, BE IT RESOLVED, by the Economic Development Authority in and for the city of New Hope, Mumesota as follows: 1. TI1at said agreement is adopted in its scope and tunelu1es. 2. The President and the Executive Director of the Economic Development Authority U1 and for the city of New Hope are hereby authorized and directed to enter U1tO said agreement. Adopted by the Economic Development Authority of the city of New Hope, Helmepu1 County, Minnesota, this 23rd day of JUl1e 2008. President Attest: Executive Director 6-_-08 AIVIENDED AND RESTATED INTERIM AGREEMENT This AMENDED AND RESTATED INTERIM AGREEMENl entered into effective the ~?_lA A~ y. _ ()X~l_~~ ~2 _ _~Q9_~ 2 _ _~X _ !l:l!_q _ E~~~~_~~ _ !h~_ _J?:_~~~_()~! ~_ P~_-Y~~()J?~~!l!_ A l}_t_~~~!Y. _ !~_ _ ~!l~ _ f~~ _ ~~~_ _, _' - - - { Deleted: 28th City of New Hope, Minnesota, a Minnesota public body corporate and politic (the "Authority") - --i Deleted: January and Ryan Companies US, Inc., a Minnesota corporation (the "Redeveloper"). WHEREAS, the City Center site (the "Site") consists of approximately 51.7 acres of land, mainly surrounding the intersection of 'Winnetka and 42nd Avenues with 31 acres in the northwest quadrant, 4.4 acres in the northeast quadrant, 15 plus acres in the southeast quadrant, one half acre on the southwest quadrant and an additional 1.1 acres in the northwest quadrant of 42nd and Xylon Avenues; and WHEREAS, the Authority desires for the Site to be redeveloped primarily as a commercial site with a smaller segment of mixed use or multi-family residential development; and WHEREAS, the Redeveloper is proposing a redevelopment (the "Project") for the Site and has requested that the Authority negotiate exclusively with the Redeveloper while the Project is being studied. WHEREAS, the Redeveloper has initially suggested a first phase ("Phase 1") that includes approximately 32.36 acres located in the northwest, northeast and southeast quadrants of 'Winnetka and 42nd A venues; and WHEREAS, the Authority is willing to negotiate exclusively with the Redeveloper until August 11,.2009,pr()vid~dthat deadlines f()rcertain milestones describ~d belo\~are m~t. NOW, THEREFORE, in consideration of the premises and mutual obligations of the parties contained herein, each of them does hereby agree as follows: l. Interim Nature of Agreement. The Authority and the Redeveloper agree that this Agreement is intended to be preliminary in nature. Before the Autholity and the Redeveloper can make a decision on whether to proceed with the Project, it will be necessary to assemble and consider inf01111ation relating to the economics, site assembly, phasing, environmental remediation and other aspects of the Project. The purpose of this Agreement is to allow the Redeveloper an opportunity to assemble such inf01111ation, to prepare a preliminary concept plan and to negotiate with the Authority conceming the approval of a tenTI sheet (the "Tem1 Sheet") with a view to eventual execution of a contract for plivate redevelopment (the "Redevelopment Agreement") which will set forth the lights and responsibilities of the Authority and the Redeveloper with respect to the Project. 2. Agreements of the Authoritv. (a) The Authority agrees to cooperate with the Redeveloper in the Redeveloper's undertakings and agrees that during the term of this Agreement the Authority will not negotiate with any third party in connection with redevelopment ofthe Site. (b) The Authority will negotiate with the Redeveloper in good faith, including examining options for acquisition, relocation, public improvements, demolition, infrastructure improvements, and the creation of a tax increment financing ("TIT") district or districts for the Project area. (c) The Authority will provide to the Redeveloper all of the following which the Authority has in its possession and which relate to the Site: market analyses, blight reports, surveys, soil, engineering, and geotechnical reports, previous concept plans and estimates of environmental remediation and soils correction costs. 3. Undertakings of the Parties. (a) By February 15, 2008, the Authority and its redevelopment counsel will determine, on a preliminary basis, whether the parcels in Phase 1 qualify for inclusion in a new redevelopment TIT district and will share their findings with the Redeveloper. (b) On an ongoing basis, the Redeveloper will review such findings and the reports and other materials provided by the Authority on an as-needed basis. The Redeveloper and Authority will identify additional issues and concems. (c) By March 24, 2008, the Redeveloper will, in consultation with the Authority and the City, develop a preliminary concept plan. The Redeveloper will provide infOIIDation requested by the Authority's redevelopment counsel in order to perfOIID a TIT revenue analysis, including the projected product types, taxable value and completion dates of the new or renovated buildings to be constructed in Phase 1. (d) By April 21, 2008, the AuthOlity's redevelopment counsel will complete its ini tial analysis of projected TIT revenues from Phase.,J/~__(111e__s_oLltIle,lSI__a!1d__ / Deleted: s 1l0nheaSl ouaclrams) and and the Redeveloper and the Authority will jointly determine \vhether either or both of Phases lA and 1B are financially feasible, given the amount of TIF or other Autholity assistance potentially available to the Project. Coullcil for the work session referenced in subDaragnmh (h) below. (e) On 28, 2008, the Redeveloper and City staff \vill present the preliminary concept plan and their findings as to financial feasibility to the Board of the Authority. 2 parcels in the southeast quadrant for inclusion in a redevelopment tax increment district and will review the impact of relocatinl2 the school district's facilities ,vi thin the City (with such propel1v then becoming tax-exempt) and its impact on rhe City's cash now. (g) Bv Julv 3 1. 2008. the City Council will hold another work session 10 assess the+ narties' progress in im111ementing the undertakings contained in this Agreement. (h) After Julv 31. 2008. City Council mav request rhat the Redeveloper host communirv (men house with the assistance of City staff to present the preliminary concept plan for Phase 1 and solicit feedback from City residents. Before the open house. neither the Authorirv nor the Redeveloper will make any community presentation relating to the Project. (j') The AuthOlitv will approve and certify a redevelopment tax increment distlict for+.. the p3rcels in the southeasr quadrant bv December 31. 2008 if the apPTOPliate findings can be made. The Authoritv and RedeveloDer will iointly desi2:nate the first Veal' in which t3X increment ,vill be collected. The City ,vill attemPt to work \vith Hennepin Countv in establishin2: the market value of the schoo! distlict Darcels. The Authoritv will also aDprove a hazardous substance subdistrict within the district if eligible costs exist and for such period of time and for such parcels as pel1llitted bv statute. (i) Before termin3tion of this Al<'TeeJ1lent. the Rede\ elopel \\"]11 have entered lntO+- bindin!2: contraciLlal arral12:ements to relocate the school district's facilities to another location either inside or outside the Citv. (Ll The Redeveloper will continue to work with the City to refine its redeveloDmem+ plans for all P3rts of Ph3ses I A and I B. and the City and RedeveloDer will continue to work together to refine the TIF revenue an3lvses for Phases lA and 18 in al1 effort to make all DartS of those Phases tinanciallv feasible. Droiect feasibilit\:,. 10. at a minimum. the soutbeast Quadrant. ResDonsibilitv for Costs and Redeveloper Deposit. (a) During the teml of this Agreement, the AuthOlity or the City shall be responsible for fees and costs of its planning and engineering consultants and the City Attomey (except as set forth in subparagraph (b)(3) below). o .) Deleted: <#>lfthe Authority so elects following the presentation on April 28, then hBy June 14 2008, the Redeveloper shall host a conununit), open house with the assistance of City stan to present the preliminary concept plan for Phase 1 and solicit feedback from City residents. Before the open house. neither the Authority nor the Redeveloper will make any conununity presentation relating to the Project.llJ 'T <#>The parties \\111 then determine a timetable for negotiation and execution of a Contract for Private Redevelopment for I. Formatted: Bullets and Formatted: Bullets and Formatted: Buliets and Forma"ed: Bullets and Formatted: Bullets and FOimaL~ed: Builets and (b) The Redeveloper shall be responsible for: (1) fees and costs of its counsel and consultants, (2) the cost of any additional market studies, environmental analyses, soil borings, or surveys performed by the Redeveloper, and (3) one-half (1/2) of the fees incuned after the date of this Agreement by the Authority's redevelopment counsel relating to TIF district qualification and creation, financial feasibility analysis of the Project and drafting and negotiation of the Redevelopment Agreement and related documents. (c) J).~. ~~~.~Y.~! ~P.~~.J~ ~? J!?~ ~.~.~. ~~J?~?i!. ~t?l~, 9.Q.Q: 9g.!~ .~.~. ~J!Rl~~~ .~)'. !~~. 6-.l! !~~~~... ' ,., to reimburse costs and fees incuned by the Authority for which the Redeveloper '. is responsible under Paragraph 4(b)(3). The Redeveloper shall replenish this deposit when the balance falls below S I ,000.00 upon request by the Authority. (d) In accordance \vith City policy, the Redeveloper will pay all normal and customary City fees associated with the plan review and approval process. "J1 Deleted: Upon execution of this ;-.~~~-=-~~~~"~-"-~..._..._-_..._. 'i Deleted: shall make 5. Tent1 of Agreement. This Agreement shall be binding upon the parties until August 11, ..2009). !-!!1.l~?~. !~.r:n!i~~,t.~~__ ?~().1]~~.ty. .~J:1.e..h'.l!!h().Ij.tyJ()T__~J:1~. ~~d,e.Y:~!~P.e.!')J~.iJ.l!T~ .!(). .!i.l!l.e.ly.. . .,' Deleted: 2008 comply with any of the deadlines set forth in Paragraph 3 or by mutual agreement of the parties. 6. Citv and Authoritv Use of Work Product. If the Redeveloper decides not to proceed with redevelopment ofthe Site, the Redeveloper shall make available at no cost to the City and the Authority for their unrestricted use all available non-proprietary work product, including market analyses, soil and engineering reports, geotechnical reports, construction budgets and other documentation produced specifically for the Site. IN W1TNESS \\TIIEREOF, the parties have caused this Agreement to be duly executed in each of their names as of the date first above wlitten. ECONOMIC DEVELOPMENT AUTHORITY IN ANTI FOR THE CITY OF NEW HOPE, rvIINNcSOTA By: President By: Executive Director RYAN COMPANIES US, INC. By: Its: "! ~eleted: ~ --:. KJvl: 4811-3029-4530, v. I 5 June _,2008 Al"WENDED AND RESTATED INTERIM AGREEMENT This AMENDED AND RESTATED INTERIM AGREEMENT entered into effective the 23rd day of June, 2008, by and between the Economic Development Authority in and for the City of New Hope, Minnesota, a Minnesota public body corporate and politic (the "Authority") and Ryan Companies US, Inc., a Minnesota corporation (the "Redeveloper"). WHEREAS, the City Center site (the "Site") consists of approximately 51.7 acres of land, mainly surrounding the intersection of Willl1etka and 42nd Avenues with 31 acres in the northwest quadrant, 4.4 acres in the northeast quadrant, 15 plus acres in the southeast quadrant, one half acre on the southwest quadrant and an additional 1.1 acres in the northwest quadrant of 42nd and Xylon Avenues; and \VHEREAS, the AuthOlity desires for the Site to be redeveloped primarily as a conll11ercial site with a smaller segment of mixed use or multi-family residential development; and \VHEREAS, the Redeveloper is proposing a redevelopment (the "Project") for the Site and has requested that the Authority negotiate exclusively with the Redeveloper while the Project is being studied. WHEREAS, the Redeveloper has initially suggested a first phase ("Phase I") that includes approximately 32.36 acres located in the nOlihwest, nOliheast and southeast quadrants of \Virll1etka and 42nd Avenues; and \\THEREAS, the Authority is \villing to negotiate exclusively with the Redeveloper until :1 2009, pro\iided tllat deadli11es for celiail1111ilestollesdescribed belo\v are l11et. NO\V, THEREFORE, in consideration of the premises and mutual obligations of the pariies contained herein, each of them does hereby agree as follows: 1. Intelim Nature of Agreement. The Autholity and the Redeveloper agree that this Agreement is intended to be preliminary in nature. Before the Authority and the Redeveloper can make a decision on whether to proceed with the Proj ect, it \vill be necessary to assemble and consider infonnation relating to the economics, site assembly, phasing, environmental remediation and other aspects of the Proj ect. The purpose of this Agreement is to allow the Redeveloper an oppOliunity to assemble such infomlation, to prepare a preliminary concept plan and to negotiate \vith the Authority conceming the approval of a teml sheet (the "Teml Sheet") with a view to eventual execution of a contract for private redevelopment (the "Redevelopment Agreement") which will set forth the rights and responsibilities of the Authority and the Redeveloper with respect to the Proj ect. 2. Agreements of the Authoritv. (a) The Authority agrees to cooperate with the Redeveloper in the Redeveloper's undertakings and agrees that during the tenn of this Agreement the Authority will not negotiate v'lith any third party in connection with redevelopment of the Site. (b) The Authority will negotiate with the Redeveloper in good faith, including examining options for acquisition, relocation, public improvements, demolition, infrastructure improvements, and the creation of a tax increment financing ("TIF") district or districts for the Project area. (c) The Authority will provide to the Redeveloper all of the following which the Authority has in its possession and which relate to the Site: market analyses, blight repOlis, surveys, soil, engineering, and geotechnical reports, previous concept plans and estimates of environmental remediation and soils correction costs. 3. Undeliakings of the Pmiies. (a) By February 15, 2008, the Authority and its redevelopment counsel will determine, on a preliminary basis, whether the parcels in Phase 1 qualify for inclusion in a new redevelopment TIF district and will share their findings with the Redeveloper. (b) On an ongoing basis, the Redeveloper will review such findings and the reports and other materials provided by the AuthOlity on an as-needed basis. The Redeveloper and Authority will identify additional issues and concems. (c) By 2008, the Redeveloper will, in consultation with the AuthOlity and the City, develop a preliminary concept plan. The Redeveloper will provide info1111ation requested by the Authority's redevelopment counsel in order to perf 01111 a TIF revenue analysis, including the projected product types, taxable value and completion dates of the new or renovated buildings to be constructed in Phase 1. (d) By 2008, the AuthOlity's redevelopment counsel will complete its initial analysis of projected TIt revenues fi..om Phase lA (the southeast and northeast quadrants) and Phase IB (Winnetka Center) and the Redeveloper and the AuthOlity will jointly dete1111ine whether either or both of Phases 1A and IE are financially feasible, given the amount of TIF or other AuthOlity assistance potentially available to the Project. An updated analysis will be provided to the Council for the vvork session referenced in subparagraph (h) below. 2 ( e) On April 28, 2008, the Redeveloper and City staff will present the preliminary concept plan and their findings as to financial feasibility to the Board of the Authority. (f) By July 31,2008, the Authority \vill complete its analysis of the suitability of the parcels in the southeast quadrant for inclusion in a redevelopment tax increment district and will review the impact of relocating the school district's facilities within the City (with such property then becoming tax-exempt) and its impact on the City's cash flow. (g) By July 31, 2008, the City Council will hold another work session to assess the parties' progress in implementing the undeliakings contained in this Agreement. (h) After July 31, 2008, City Council may request that the Redeveloper host a community open house with the assistance of City staff to present the preliminary concept plan for Phase 1 and solicit feedback from City residents. Before the open house, neither the Authority nor the Redeveloper \vill make any conmmnity presentation relating to the Project. (i) The Authority will approve and ceriify a redevelopment tax increment district for the parcels in the southeast quadrant by December 31, 2008 if the appropriate findings can be made. The Authority and Redeveloper will jointly designate the first year in which tax increment will be collected. The City will attempt to work with Hennepin County in establishing the market value of the school district parcels. The Authority will also approve a hazardous substance subdistrict within the district if eligible costs exist and for such period of time and for such parcels as pemlitted by statute. U) Before tel111ination of this Agreement, the Redeveloper will have entered into binding contractual arrangements to relocate the school district's facilities to another location either inside or outside the City. (k) The Redeveloper will continue to viork with the City to refine its redevelopment plans for all parts of Phases lA and 1B, and the City and Redeveloper will continue to work together to refine the TIP revenue analyses for Phases IA and ill in an effOli to make all paris of those Phases financially feasible. (1) The City arld Authority will pursue state and regional grant funding to assist in project feasibility. (m) If all of the proceeding steps have occurred to the City's and Redeveloper's satisfaction, the City and Redeveloper shall enter into a Contract for Private Redevelopment by the tenllination of this Agreement, which contract shall relate to, at a minimum, the southeast quadrant. 4. Responsibilitv for Costs and Redeveloper DeDosit. .., ,j (a) During the term of this Agreement, the Authority or the City shall be responsible for fees and costs of its planning and engineering consultants and the City Attorney (except as set forth in subparagraph (b )(3 ) below). (b) The Redeveloper shall be responsible for: (1) fees and costs of its counsel and consultants, (2) the cost of any additional market studies, environmental analyses, soil borings, or surveys performed by the Redeveloper, and (3) one-half (112) of the fees incurred after the date of this Agreement by the Authority's redevelopment counsel relating to TIP district qualification and creation, financial feasibility analysis of the Project and drafting and negotiation of the Redevelopment Agreement and related documents. (c) The Redeveloper has made a deposit of $15,000.00 to be applied by the Authority to reimburse costs and fees incurred by the Authority for which the Redeveloper is responsible under Paragraph 4(b )(3). The Redeveloper shall replenish this deposit when the balance falls below $1,000.00 upon request by the Authority. (d) In accordance with City policy, the Redeveloper will pay all normal and customary City fees associated with the plan revie\v and approval process. ). Tern1 of Agreement. This Agreement shall be binding upon the parties until August 11, 2009, unless tem1inated sooner by the Authority for the Redeveloper's failure to timely comply with any of the deadlines set f01ih in Paragraph 3 or by mutual agreement of the parties. 6. Citv and Authority Use of Work Product. If the Redeveloper decides 110t to proceed \'lith redevelopment of the Site, the Redeveloper shall make available at no cost to the City and the Authority for their unrestricted use all available non-proplietary work product, including market analyses, soil and engineering reports, geotechnical rep01is, construction budgets and other documentation produced specifically for the Site. 4 IN VVITI\TESS VVHEREOF, the parties have caused this Agreement to be duly executed in each oftheir names as of the date fIrst above \vritten. ECONOMIC DEVELOPMENT AUTHORlTY IN Al\TD FOR THE CITY OF NEW HOPE, Mll\Tl\TESOT A By: President By: Executive Director RYA.l~ COMP A.NIES US, INe. By: Its: KJv!: 4811-3029-4530, v. 1 5