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081009 EDA ~ CITY OF NEW HOPE EDA MEETING City Hall, 4401 Xylon Avenue North August 10, 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 1. Call to order 2. Roll call 3. Approval of regular meeting minutes of February 9, 2009 4. 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) 5. Adjournment EDA Minutes Regular Meeting CALL TO ORDER ROLL CALL APPROVE MINUTES IMP PROJECT 795 Item 4 EDA RESOLUTION 09-01 EDA Meeting Page 1 CITY OF NEW HOPE 4401 XYLON AVENUE NORTH NEW HOPE, MINNESOTA 55428 February 9,2099 City Hall President Hemken called the meeting of the Economic Development Authority to order at 7:55 p.m. Present: Kathi Hemken., President John Elder, Commissioner Andy Hoffe, Commissioner Daniel Stauner, Commissioner Absent: Eric Lammle, 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 Stauner, seconded by Commissioner Hoffe, to approve the ReguIar Meeting Minutes of December 8, 2008. Voting in favor. Elder, Hoffe, Stauner; Voting against: None; Abstained: Hemken; Absent: Lammle. Motion carried. President Hemken introduced for discussion Item 4, Resolution terminating the Interim Agreement with Insignia Development for non-performance (improvement project no. 795). Mr. Curtis Jacobsen, director of community development, stated due to the difficult housing market Insignia is unable to fulfill the obligations of the agreement and staff recommends terminating the agreement. He stated the company was notified by written and oral communication of the city's intent to terminate the agreement. He stated when the housing market condition improves the city can consider undertaking another Request for Proposal process. Mr. Steve Sondrall, city attorney, concurred with staff's recommendation. Commissioner Stauner asked that the resolution be modified slightly to clearly state the reason for termination. The EDA was agreeable to inclusion of the following language as the third Whereas in the resolution: failure to deliver the market study required by the interim agreement that was due on or before December 1, 2008. Commissioner Stauner introduced the following resolution and moved its adoption: "RESOLUTION TERMINATING THE INTERIM AGREEMENT February 9, 2009 Item 4 WITH INSIGNIA DEVELOPMENT FOR NON-PERFORMANCE (IMPROVEMENT PROJECT NO. 795)," The motion for the adoption of the foregoing resolution was seconded by Commissioner Elder, and upon vote being taken thereon, the following voted in favor thereof: Hemken, Elder, Hoffe, Stauner; and the following voted against the same: None; Abstained: None; Absent: Lammle; whereupon the resolution was declared duly passed and adopted. signed by the president which was attested to by the executive director. Discussion ensued regarding possible short-term use of the vacant property at 8400 Bass Lake Road during the summer months. Mr. Jacobsen shared some suggestions such as community gardens, miniature golf, domed driving range, or to leave as green space. He expressed staff's concern regarding introducing activities to the property this summer as heavy use could disturb the recently grass seeded area. Commissioner Stauner mentioned the close proximity of Meadow Lake and noted the run off from fertilizer used for gardening purposes would enter the lake which would be problematic. Mr. Jacobsen noted the city has alternate sites that could serve as community gardens. The EDA supported leaving the area as green space at the present time. Director Jacobsen noted the golf course staff will mow the site this summer. Commission Stauner mentioned an article that Brooklyn Center lobbied the legislature to pass a special law to set up a TIF district to rehab existing houses. He wondered whether New Hope has communicated with our legislators on such a bill as it could be useful due to foreclosures and property maintenance issues in the city. Commissioner Stauner also mentioned foreclosures are oftentimes avoidable if owners could refinance at a lower interest rate. He suggested exploring a program to provide EDA money for low interest loans (Le. to cover closing costs) as a foreclosure prevention measure program in New Hope. He acknowledged that certain criteria would need to be met in order to qualify. Mr. Jacobsen shared that there have been 85 foreclosures in the city over the last year, and the private sector purchased about 80% of the foreclosed properties and put them back on the market which shows that New Hope continues to be a desired housing area. Mr. Jacobsen indicated he will research the legislation mentioned by Commissioner Stauner. Rental housing issues were discussed. Commissioner Elder noted the city is not against rental properties or renters but must ensure that properties are adequately maintained. President Hemken indicated at the February 7 legislative breakfast the group home topic was discussed including the notification process. Mr. McDonald stated the city usually receives notification from Hennepin County when new group homes enter the city, but staff is interested in legislation that would EDA Meeting Page 2 February 9, 2009 ADJOURNMENT EDA Meeting Page 3 include a minimum distance requirement between group home properties. Motion was made by Commissioner Elder, seconded by Commissioner Stauner, to adjourn the meeting. All present voted in favor. Motion carried. The New Hope EDA adjourned at 8:12 p.m. Respectfully submitted, ~~ Valerie Leone, City Clerk February 9, 2009 EDA Request for Action Originating Department Approved for Agenda Agenda Section Community Development August la, 2009 EDA Item No. By: Curtis Jacobsen, Director of CD By: Kirk McDonald, City Mana er 4 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 roject no. 842) Requested Action Staff and Ryan Companies request approval of the attached amended and restated interim agreement between Ryan Companies, Inc., and the New 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. t\dditionally, it is also a past practice to amend and restate agreements from time to time to more accurately leflect the progress and details of the project. Backaround ~.~ o " (j{/I.L-- The Council met in a work session on 13 for an informal update on the progress being made to comply with the timeline in the interim agreement. Council consensus was that they favored a one year extension to the interim agreement to continue looking at the feasibility of the City Center redevelopment. Funding Funding for the financial consultant during the interim analysis steps are shared 50/50 with the developer with the city share being paid with EDA funds. The developer is responsible for all costs they incur for their consultants. Attachment(s) @ Resolution @ Amended and restated interim aareement . Motion by rj. '~fdjj& Second by To: I: \ RFA \ PLAl"JNING \ PLANI\.TING \ City Center amended agreement 8-10-09.doc City of New Hope EDA Resolution 2009-_ 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 :rZu't WHEREAS, on Jttly13, 2009, staff and Ryan Companies made a presentation to the City Council during a work session; and WHEREAS, during the July meeting the consensus of the Council 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 with all major timelines extended by one year. NOW, THEREFORE, BE IT RESOLVED, by the Economic Development Authority in and for the city of New Hope, Minnesota as follows: 1. That said agreement is adopted in its scope and timelines and having an expiration date of August 10, 2010. 2. The President and the Executive Director of the Economic Development Authority in and for the city of New Hope are hereby authorized and directed to enter into said agreement. Adopted by the Economic Development Authority of the city of New Hope, Hennepin County, Minnesota, this 10th day of August 2009. President Attest: Executive Director August 10, 2009 AMENDED AND RESTATED INTERIM AGREEMENT This AMENDED AND RESTATED INTERIM AGREEMENT entered into effective the 10th day of August, 2009, 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 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/l) for the Site and has requested that the Authority negotiate exclusively with the Redeveloper wIllie the Project is being studied. WHEREAS, the Redeveloper has initially suggested a first phase ("Phase 1/1) that includes approximately 32.36 acres located in the northwest, northeast and southeast quadrants of Winnetka and 42nd Avenues; and WHEREAS, the Authority is willing to continue to negotiate exclusively with the Redeveloper until ArtJ.'?usf 10, 2010, provided that deadlines for certain milestones described below are met. r-<:-h 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. Agreements 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, including examining options for acquisition, relocation, public improvements, demolition, infrastructure improvements, and the creation of a tax increment financing ("TIP") 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 ill district and will share their findings with the Redeveloper. COMPLETED. (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 information requested by the Authority's redevelopment counsel in order to perform a ill revenue analysis, including the projected product types, taxable value and completion dates of the new or renovated buildings to be constructed in Phase 1. COMPLETED, 2 (d) By April 21, 200S, the Authority's redevelopment counsel will complete its initial analysis of projected TIP revenues from Phase 1A (the southeast and northeast quadrants) and Phase 1B (Winnetka Center) and the Redeveloper and the Authority will jointly determine whether either or both of Phases 1A and 1B are financially feasible, given the amount of TIP or other Authority assistance potentially available to the Project. An updated analysis will be provided to the Council for the work session referenced in subparagraph (h) below. COMPLETED, (e) On April 2S, 200S, the Redeveloper and City staff will present the preliminary concept plan and their findings as to financial feasibility to the Board of the Authority. COMPLETED, (f) By July 31, 2008, the Authority will 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. COMPLETED, (g) By July 31, 2008, the City Council will hold another work session to assess the parties' progress in implementing the undertakings contained in this Agreement. COMPLETED, (h) The Authority will approve and certify 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 is willing to consider a hazardous substance subdistrict within the district if eligible costs exist and for such period of time and for such parcels as permitted by statute. COMPLETED. (i) -'Th.eJS,~developer and tl1e Independent School District 281 will submit the -appropriate application for zoning approval of the Hoesterman site as a -felocaLion site by October 15, 2009, The Authority and Redeveloper agree that the review of ~ planning application may take more than 120 days and [1N'1 mutually agree to extend the review as necessary. (j) After January 15, 2010, City Council may request that the Redeveloper host a community open house with the assistance of City staff to present the concept plan for Phase 1Aand solicit feedback from City residents. Before the open house, neither the Authority nor the Redeveloper will make any community presentation relating to the Project. 3 (k) Before termination 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. (1) The Redeveloper "'lill continue to work with the City to refine its redevelopment plans for Phase lA, and the City and Redeveloper will continue to work together to refine the TIP revenue analyses for Phases 1A and 1B in an effort to make all parts of those Phases financially feasible. (m) The City and Authority will pursue state and regional grant funding to assist in project feasibility. (n) 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 termination of this Agreement, which contract shall relate to, at a minimum, the southeast quadrant. 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 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, traffic studies, storm water studies, environmental analyses, soil borings, or surveys performed by the Redeveloper, and (3) one-half (1/2) 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) 111e 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 review and approval process. 4 Feb- 5. Term of Agreement. This Agreement shall be binding upon the parties until August 10, 2010, 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, 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 RYAN COMPANIES US, INC. By: Its: 5