020909 EDA
~
1. Call to order
2. Roll call
CITY OF NEW HOPE
EDA MEETING
City Hall, 4401 Xylon Avenue North
February 9,2009
EDA Meeting will commence upon
adjournment of the City Council Meeting
President Kathi Hemken
Commissioner John Elder
Commissioner Andy Hoffe
Commissioner Eric Lammle
Commissioner Daniel Stauner
3. Approval of regular meeting minutes of December 8, 2008
4. Resolution terminating the Interim Agreement with Insignia Development for
non-performance (improvement project no. 795)
5. Adjournment
EDA Minutes
Regular Meeting
CALL TO ORDER
ROLL CALL
APPROVE MINUTES
IMP PROJECT 842
Item 4
EDA Meeting
Page 1
CITY OF NEW HOPE
4401 XYLON AVENUE NORTH
NEW HOPE, MINNESOTA 5542S
December S, 200S
City Hall
President Opem called the meeting of the Economic Development Authority
to order at 7:30 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
Jerry Beck, Communications Coordinator
Shari French, Director of Parks & Recreation
Curtis Jacobsen, Director of Community Development
Rich Johnson, Human Resources Manager
Valerie Leone, City Clerk
Julie Linnihan, Finance Manager
Kyle Mestad, Web Site Intern
Steve Sondrall, City Attorney
Motion was made by Commissioner Nolte, seconded by Commissioner
Stauner, to approve the Regular Meeting Minutes of October 13, 2008. All
present voted in favor. Motion carried.
President Opem introduced for discussion Item 4, Resolutions regarding
proposed Tax Increment Financing District No. OS-1 and Hazardous
Substance Subdistrict No. OS-1 A (improvement project no. S42).
Commissioner Stauner inquired whether a decline of property values
(including commercial properties) could impact the tax increment financing
district's payback schedule.
Mr. Curtis Jacobsen, director of community development, indicated an
analysis of that nature has not yet been conducted but will be completed in
the future. He noted the school district property is a tax exempt property
which is only reviewed by the assessor every six years.
Commissioner Hoffe referred to Exhibit VI-E "Estimated Impact of Tax
Increment Financing District No. OS-I" that shows an estimated tax capacity
of $322,000. He inquired whether this exhibit is the data utilized in the
preliminary calculations.
Mr. Jim Casserly, Krass Monroe, was recognized. He stated the values utilized
December S, 200S
EDA RESOLUTION
08-13
Item 4
EDA RESOLUTION
08-14
Item 4
EDA RESOLUTION
08-15
Item 4
EDA Meeting
Page 2
in the plan are for payable 2009. Mr. Casserly also confirmed that the only
property proposed for TIF District OS-1 is the southeast corner of Winnetka
and 42nd avenues. Discussion ensued regarding property values for the other
parcels in the redevelopment area. Mr. Casserly indicated the Council was
previously provided financial information for both the northwest and
northeast corners, and he would make it available again if so desired.
President Opem reminded the EDA and audience that the project is in the
preliminary stage and currently shows a financial gap. He stated the
developer will continue to refine the numbers, and if it is determined that the
project is not financially feasible, the city can decertify the TIF District at a
later date.
Commissioner Elder introduced the following resolution and moved its
adoption: "RESOLUTION RELATING TO THE DECERTIFICATION OF
PARCELS FROM TAX INCREMENT FINANCING DISTRICT NO. 85-2)."
The motion for the adoption of the foregoing resolution was seconded by
Commissioner Nolte, and upon vote being taken thereon, the following voted
in favor thereof: Opem, Elder, Hoffe, Nolte, 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.
Commissioner Nolte introduced the following resolution and moved its
adoption: "RESOLUTION MODIFYING THE RESTATED
REDEVELOPMENT PLAN AND TAX INCREMENT FINANCING PLANS
FOR REDEVELOPMENT PROJECT NO. 1 AND TAX INCREMENT
FINANCING DISTRICTS NOS. 82-1, 85-1, 85-2, 86-1, 02-1, 03-1 (SPECIAL
LAW) AND 04-1 (SPECIAL LAW) AND 04-2; CREATING TAX
INCREMENT FINANCING DISTRICT NO. 08-1, AND ADOPTING A TAX
INCREMENT FINANCING PLAN RELATING THERETO)." The motion for
the adoption of the foregoing resolution was seconded by President Opem,
and upon vote being taken thereon, the following voted in favor thereof:
Opem, Elder, Hoffe, Nolte, 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.
Commissioner Nolte introduced the following resolution and moved its
adoption: "RESOLUTION MODIFYING THE RESTATED
REDEVELOPMENT PLAN AND TAX INCREMENT FINANCING PLANS
FOR REDEVELOPMENT PROJECT NO. 1 AND TAX INCREMENT
FINANCING DISTRICTS NOS. 82-1, 85-1, 85-2, 86-1, 02-1, 03-1 (SPECIAL
LAW) AND 04-1 (SPECIAL LAW) AND 04-2; CREATING HAZARDOUS
SUBSTANCE SUBDISTRICT NO. OS-lA, AND ADOPTING A TAX
INCREMENT FINANCING PLAN RELATING THERETO)." The motion for
the adoption of the foregoing resolution was seconded by Commissioner
Elder, and upon vote being taken thereon, the following voted in favor
thereof: Opem, Elder, Hoffe, Nolte, 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
December S, 200S
ADJOURNMENT
EDA Meeting
Page 3
attested to by the executive director.
Motion was made by Commissioner Nolte, seconded by Commissioner Elder,
to adjourn the meeting. All present voted in favor. Motion carried. The New
Hope EDA adjourned at 7:40 p.m.
Respectfully submitted,
~~
Valerie Leone, City Clerk
December S, 200S
EDA
Request for Action
Originating Department Approved for Agenda
Agenda Section
Community Development February 9,2009
EDA
Item No.
4
By: Curtis Jacobsen, Director of CD By: Kirk McDonald, City Manager
Resolution terminating the Interim Agreement with Insignia Development for non-performance
(im rovement roject no. 795)
Requested Action
Staff requests that the EDA approve the resolution terminating the Interim Agreement with Insignia
Development for non-performance under the terms of the agreement.
Policy/Past Practice
It is a past practice of the EDA to take action as is determined to be in the best interest of the city of New Hope
and the interests of the EDA.
Background
The EDA entered into an Interim Agreement with Insignia Development for the potential redevelopment of
the Bass Lake Road Apartment site on May 14, 2007. The Interim Agreement was amended on January 28,
2008. Per the amended Interim Agreement the developer was to have submitted a completed market study for
the redevelopment site. Staff contacted the developer on August 13, 2008 to remind them of their obligations
under the Interim agreement. On December 18, 2008 staff contacted the developer by letter and reminded
them of their obligations and that the EDA would consider termination of the agreement unless the EDA
received appropriate assurances and a proposed date for submission of the market study by February 2,2009.
Staff has not received any responses from the developer in the last five months.
Staff recommends the EDA approve a resolution terminating the Interim Agreement with Insignia
Development for the former Bass Lake Road apartment site. When the economy improves, staff will consult
with the EDA and solicit development proposals for the site.
Staff would request to discuss with the EDA potential short term uses for the property this summer. Some
have suaaested that the site would be a ood lace for community aardens, miniature aolf, domed drivina
~
/
Motion by
r....L. '4 'y
.(.) 7t:<-{...{..'j/V!../ v
Second by
To:
lZcr...f-1
/
t"1) 17
'/} {)9 -oj
I: \RFA \ PLAl'lNlt'\jG \ PLA.Nl\.TING\ Terminate Interim Agreement 2-9-2009.doc
Request for Action
February 9, 2009
Page 2
range or just green space. Staff has some concerns about introducing any activities to the property this
summer, since the grass is newly established and at this point it is unknown how well it will come back this
season. Any heavy use of the site will be detrimental to the grasses establishment. Council feedback would be
appreciated.
Attachment(s)
. Resolution
· Letter to Insignia 12-18-08
. Interim Agreement 1st Amendment
. Interim Agreement
Economic Development Authority
in and for the City of New Hope
EDA Resolution No. 2009-_
Resolution terminating the Interim Agreement with
Insignia Development for the Bass Lake Road Apartment site
(improvement project no. 795)
WHEREAS, the Economic Development Authority entered into an Interim
Agreement with Insignia Development for the redevelopment of the
Bass Lake Road Apartment site, and
WHEREAS, the Interim Agreement was amended one time extending the
timelines for the redevelopment of the site by one year, and
WHEREAS, Insignia Development has been unable to meet the terms of the
Interim Agreement due to the difficult housing market, and
WHEREAS, the amended Interim Agreement authorized either or both parties to
withdraw from the agreement upon forty-five days notice to the other
party, and
WHEREAS, on December 18, 2008, staff notified the developer of the EDA's intent
to terminate the agreement.
NOW, THEREFORE BE IT RESOLVED, by the Board of Directors of the Economic
Development Authority, of and for the City of New Hope, to
terminate the Interim Agreement between Insignia Development and
the Economic Development Authority as of this date.
Adopted by the Economic Development Authority of the city of New Hope, Hennepin COlmty,
lIIinnesota, this 9th day of February 2009.
President
Attest:
Executive Director
December 18, 2008
Mr. Jeff Schoenwetter
Insignia Development
5252 West 74th St., Suite 5
Edina, MN 55439
Re: Interim Agreement with New Hope EDA
Dear Mr. Schoenwetter:
Insignia Development has missed its first deliverable under the Interim Agreement
between the New Hope EDA and Insignia Development. This deliverable was for the
provision of a market study for the site at 8400 Bass Lake Road. Unless the city receives
appropriate assurances and a projected date for the submission of the market study for
this property within the next thirty days it will consider the agreement terminated as of
February 2,2009.
Under the current conditions, which are extremely difficult in the condominium market,
we would certainly understand if you do not wish to proceed at this time.
I may be reached at 763-531-5119 or bye-mail at cjacobsen@ci.new-hope.rnn.us if you
wish to discuss this further.
Sincerely,
Curtis Jacobsen
Director of Community Development
Attachments: Interim Agreement
First Amendment to Interim Agreement
CC: File
INTERIM AGREEMENT
This INTERIM AGREEMENT entered into effective the 14th day of May, 2007, 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 Insignia Development LLC, a
Minnesota limited liability company (the "Redeveloper").
WHEREAS, the Bass Lake Road Apartments site (the "Site") consists of approximately 3.6
acres of land with five 12-unit rental apartment buildings at 8400 and 8420 Bass Lake Road and
8401, 8411 and 8421 - 58th Avenue; and
WHEREAS, the Redeveloper might determine to expand the redevelopment site to include
the four single-family lots at 8400,8404,8408, and 8412 58th Avenue North; and
WHEREAS, the Authority desires for the Site to be redeveloped as owner-occupied market-
rate housing or mixed-use 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 Authority is willing to negotiate exclusively with the Redeveloper until
October 1, 2008, provided that deadlines for certain milestones described below are met.
NOW, THEREFORE, in consideration of the premises and mutual obligations of the parties
contained herein, each of them does hereby agree as follows:
1. Interim Nature of Agreement. The Authority and the Redeveloper agree that this
Agreement is intended to be preliminary in nature. Before the Authority and the Redeveloper can
make a decision on whether to proceed with the Project, it will be necessary to assemble and
consider information 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 information, to prepare a preliminary concept plan and to negotiate
with the Authority concerning the approval of a term sheet (the "Term Sheet") with a view to
eventual 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 Project.
2. Undertakings of the Authority.
(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 of the Site.
(b) The Authority will negotiate with the Redeveloper in good faith the terms of the
Redevelopment Agreement, which includes examining options for acquisition,
tenant relocation, demolition, infrastructure improvements, and the creation of a tax
increment financing district for the Site.
(c) The Authority will provide to the Redeveloper all market analyses, blight reports,
surveys and soil, engineering, and geotechnical reports that have been done for the
Site, as well as previous concept plans and estimates of any environmental
remediation and soils correction costs prepared by previous redeveloper candidates
for the Site.
(d) The Authority will begin negotiations with the current property owner ill an
attempt to acquire the Site.
3. Undertakings of the Redeveloper.
(a) By December 1, 2007, the Redeveloper will review the reports and other materials
from the Authority referenced above and will complete a market study for the
project site.
(b) By April 1, 2008, the Redeveloper will, in consultation with the Authority, the City
and City residents, develop a preliminary concept plan. If the Redeveloper proposes
to redevelop an area larger than the Site, the Redeveloper must indicate its ability to
acquire the additional parcels voluntarily as evidenced by executed options or
purchase agreements.
(c) By June 1, 2008, the Redeveloper will also complete any additional environmental
assessment the Redeveloper deems necessary to estimate the cost of any
environmental remediation and soil corrections in order to construct the Project or
will notify the Authority that no further testing will be required.
(d) By August 1, 2008, the Redeveloper shall submit a construction pro forma, finished
housing unit values and such other financial information as the Authority or its
redevelopment consultants may request in order to assess the economic feasibility
of the Project, the amount of Authority assistance to be provided to the project, and
the price to be paid by the Redeveloper to the Authority for the Site.
(e) By September 1, 2008, the Redeveloper shall:
" Host a community open house in conjunction with city staff to present project
plans and solicit feedback from the neighborhood; and
" Obtain Authority approval of a Term Sheet.
(f) By October 1, 2008, the Redeveloper will have negotiated and obtained Authority
approval of a Redevelopment Agreement.
2
(g) During the term of this Agreement, the Redeveloper shall also:
· Present progress reports to the Authority or to City Council, if requested; and
· If the Redeveloper determines that the Site is not economically feasible to
redevelop, the Redeveloper shall deliver to the Authority for its unrestricted
use at no cost to the Authority all work product, market analysis, architectural
and engineering reports, construction budget, research materials, and other
documentation produced for the Site.
4. Responsibility for Costs and Redeveloper Deposit.
(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 subparagraphs (b)(3) and (4) 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,
(3) if the Redeveloper proposes to redevelop an area larger than the Site,
the additional costs of property acquisition, resident relocation,
demolition, blight analysis, surveys, and environmental testing for
the additional parcel(s), as well as the cost of any required re-
engineering of the infrastructure improvements described in
subparagraph (a)(3) above (such costs may be eligible for
reimbursement with tax increment, however), and
(4) fees incurred after the date of Authority approval of this Agreement
by the Authority's redevelopment counsel, Krass Momoe, P.A., for
financial and feasibility analysis of the Redeveloper's project,
drafting and negotiation of the Term Sheet and Redevelopment
Agreement, and, with respect to any additional parcels to be
acquired by the Redeveloper, review of blight analysis and review of
qualification of such parcels for inclusion in the tax increment
district.
(c) Upon execution of this Agreement, the Redeveloper shall pay a non-refundable fee
of $500.00 to the Authority. Upon the Redeveloper's submittal of the concept plan,
the Redeveloper shall also make a deposit of $5,000.00 to be applied by the
Authority to reimburse costs and fees incurred by the Authority for which the
..,
.:l
Redeveloper is responsible under this Paragraph 5. 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 review and approval process.
Q. Term of Agreement. This Agreement for exclusive negotiations shall be binding
upon the parties until October 1, 2008, unless terminated sooner by the Authority for the
Redeveloper's failure to timely comply with any of the deadlines set forth in Paragraph 3 or by
mutual agreement of the parties.
6. City and Authority Use of Work Product. If the Redeveloper decides not to proceed
with 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-proprietary work product, including market
analyses, soil and engineering reports, geotechnical reports, infrastructure construction budgets,
and other documentation produced specifically for the Site.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed in
each of their names as of the date first above written.
ECONOMIC DEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF NEW HOPE, MINNESOTA
By:
President
By:
Executive Director
INSIGNIA DEVELOPMENT LLC
By:
Its:
4
FIRST AMENDMENT
INTERIM AGREEMENT
This the First Amendment to the Interim Agreement 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 Insignia
Development LLC, a Minnesota limited liability company (the "Developer") entered
into this 28th day of January, 2008.
WHEREAS, the Authority and the Developer have entered into an Interim
Agreement whereby they have agreed to negotiate exclusively with each other for a
period of time toward the potential redevelopment of the Bass Lake Road Apartment
site; and
WHEREAS, due to a downturn in the housing market the Developer has asked
that the Authority for a one year extension on all timelines in the Interim agreement; and
WHEREAS, the Authority can see the benefits to both parties by extending the
timeline that currently exists; and
WHEREAS, the Authority desires to have a release clause included along with
and extension of the basic agreement timeline.
NOW, THEREFORE, in consideration of the premises and mutual obligations of
the parties contained herein, each of them does hereby agree as follows:
1. Extended Timeline. The Authority and the Developer agree to extend the
timeline in the original Interim Agreement by one year for all items innumerate within
the agreement.
2. Release of Obligations. The Authority and the Developer agree that should an
opportunity become apparent for either or both parties prior to the first revised
submission date making it necessary to seek a release from their obligations within this
agreement they will meet the following minimum requirements.
(a) The Authority shall provide the Developer with 45 days advance
notice regarding its termination of this agreement.
(b) The Developer shall provide the Authority 45 days advance notice
prior to tendering its withdrawal from this agreement.
First Amendment
Interim Agreement
January 28,2008
Page 2
IN WITNESS WHEREOF, the parties have caused this Amendment to the
Interim Agreement to be duly executed in each of their names as of the date first above
written.
ECONOMIC DEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF NEW HOPE, MINNESOTA
By:
President
By:
Executive Director
INSIGNIA DEVELOPMENT, LLC
By:
Its: