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Ed102802 CITY OF NEW HOPE 4401 XYLON AVENUE NORTH NEW HOPE, MINNESOTA 55428 Approved EDA Minutes October 28, 2002 Regular Meeting City Hall CALL TO ORDER President Enck called the meeting of the Economic Development Authority to order at 7:40 p.m. ROLL CALL Present: W. Peter Enck, President Sharon Cassen, Commissioner Don Collier, Commissioner Mary Gwin-Lenth, Commissioner Absent: Pat LaVine Norby, Commissioner APPROVE MINUTES Motion was made by Commissioner Collier, seconded by Commissioner Gwin- to approve the Regular Meeting Minutes of September 23, 2002 Lenth, . Voting in favor: Enck, Cassen, Collier, Gwin-Lenth; Voting Against: None; Absent: Norby; Abstained: None. Motion carried. IMP. PROJECT 728 President Enck introduced for discussion Item 4, Update on Navarre Project and Item 4 Discuss Revised Terms of Agreement (Improvement Project No. 728). Mr. Kirk McDonald, Director of Community Development, reported that at the September 9 Council and EDA Meetings, several agreements regarding the Navarre expansion and Ahrens Trucking relocation projects were approved. The initial plan th was to relocate Ahrens Trucking to 9200 49 Avenue North and allow Navarre th Corporation to acquire 7600 49 Avenue, the property vacated by Ahrens Trucking, for expansion. Since that time bids came in very high on the Ahrens Trucking project. This was reported to the Council at a recent work session at which time the general direction to staff was to work with the financial consultant to continue to coordinate with Navarre Corporation to determine if it is possible for that portion of the project to proceed, and hopefully to find a way to still relocate Ahrens Trucking somewhere else in the City. He noted the city's policy and past practice has been to provide financial assistance in a variety of ways to companies for major expansions to promote economic development and retain businesses in the city and for job creation and expansion. Navarre Corporation's expansion project is expected to generate 100 new jobs. Mr. McDonald acknowledged the presence of Jim Casserly from Krass Monroe who will review the revised terms of agreement with Navarre Corporation. He commented that tonight's presentation is for general discussion. Staff would like further direction by the EDA but is not seeking any decisions at tonight's meeting. Mr. McDonald stated based upon the direction given by the EDA, staff anticipates coming back to the EDA in a few weeks with resolutions to proceed with necessary documents. Mr. Jim Casserly, Krass Monroe, was recognized. He reported that under the revised approach, the city property previously authorized to be conveyed to Navarre Corporation will not be conveyed to Navarre. He stated under the revised terms, Navarre will not be constructing a new truck facility. He reiterated that the bid for construction of a new trucking facility for Ahrens Trucking was substantially more than could be afforded. The goal is to continue to try to acquire the Ahrens Trucking New Hope EDA property and Navarre has continued to communicate with Ahrens. In the event that Page 1 October 28, 2002 the property cannot be acquired it will be necessary to re-address the EDA to seek direction on how to proceed. construction of a new trucking facility for Ahrens Trucking was substantially more than could be afforded. The goal is to continue to try to acquire the Ahrens Trucking property and Navarre has continued to communicate with Ahrens. In the event that the property cannot be acquired it will be necessary to re-address the EDA to seek direction on how to proceed. Mr. Casserly explained that if the EDA concludes that they should acquire the Ahrens Trucking property through the use of a public action through eminent domain then Navarre Corporation would be required to advance any funds necessary to bring that proceeding. The assistance that the EDA would be providing would be traditional assistance: site assembly, land costs, and utility relocation. The assistance would not be upfront but would be in the form of a reimbursement. The EDA would authorize the issuance of a tax increment revenue note to the redeveloper who would have to demonstrate that they incurred and advanced those costs. Then they would be reimbursed from the new improvements over a period of time. If a $450,000 revenue note is provided, it is estimated that the redeveloper would receive 90% of the increment through the first half tax payments of year 2011. Mr. Robert Glasgow, representative of Navarre Corporation, was recognized. He stated Navarre Corporation would like to proceed with the development in New Hope, and have negotiated in good faith with the city on the present proposal. Mr. Glasgow commented that they have tried diligently to negotiate with Ahrens; however, unfortunately both time and costs have been disadvantages. Mr. Brett Ahrens, co-owner of Ahrens Trucking, was recognized. He provided a brief history of the company. He expressed their desire to stay in their present location since Navarre Corporation is no longer willing to construct a new facility for the trucking business. President Enck acknowledged his recent visit with Brett's father who indicated he would be researching alternate sites. Mr. Brett Ahrens pointed out the difficulty of finding a site with their present amenities: outside trailer parking, indoor access for trucks, a dock, and floor drains. Commissioner Cassen asked Mr. Casserly to report on the city's cost differences between the original and the revised proposal. Mr. Casserly stated the new proposal is a clearer transaction in that it involves property acquisition (hopefully on a voluntary basis), the redeveloper makes the improvements, and upon completion the city delivers a revenue note and pledges the increment. th He pointed out that the EDA retains the 9200 49 Avenue property that has a value, but it could also be viewed as a negative since it will remain vacant with no tax advantages. Commissioner Gwin-Lenth expressed disappointment that the original proposal did not work. She inquired whether Ahrens Trucking would benefit by closer proximity to a major highway. Mr. Ahrens explained the trucking operations of their five trucks. He noted that New Hope is centrally located within the 7-county metro area. Mr. Ahrens th acknowledged the 9200 49 Avenue North would have been a good site. He emphasized that Ahrens Trucking has substantially less truck traffic than Navarre Corporation. New Hope EDA Page 2 October 28, 2002 It was noted that Commissioner Collier is refraining from participating in the discussion, as he is a member of an investment club that owns Navarre stock. President Enck summarized the EDA's two options: participate in the expansion of Navarre that would necessitate some involvement for the removal of Ahrens Trucking from their present location. The other option is to do nothing, which prohibits the Navarre Corporation expansion and requires Navarre to relocate. President Enck expressed sympathy to Ahrens Trucking, but acknowledged that City Councils and EDAs must look at the long-term best interests for the City. He recommended that staff be encouraged to work with the various representatives to proceed with the acquisition of the Ahrens Trucking property and to assist Navarre Corporation with their expansion project. Commissioners Cassen and Gwin-Lenth concurred with President Enck's recommendation. The EDA also recommended that staff continue to assist Ahrens Trucking to find a relocation site. Mr. Steve Sondrall, City Attorney, clarified that the City would be obligated to pay relocation costs for Ahrens Trucking but those expenses would be reimbursed by Navarre Corporation. ADJOURNMENT Motion was made by Commissioner Cassen, seconded by Commissioner Gwin- to adjourn the meeting Lenth, . All present voted in favor. Motion carried. The New Hope EDA adjourned at 8:04 p.m. Respectfully submitted, Valerie Leone City Clerk New Hope EDA Page 3 October 28, 2002