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Ed051099.doc CITY OF NEW HOPE 4401 XYLON AVENUE NORTH NEW HOPE, MINNESOTA 55428 Approved EDA Minutes May 10, 1999 Regular Meeting City Hall CALL TO ORDERPresident Enck called the meeting of the Economic Development Authority to order at 8:31 p.m. ROLL CALLPresent: Enck, Cassen, Collier, Norby, Thompson Staff Present: Sondrall, Hanson, Donahue, Leone, Vander Top, McDonald, Henry, Lomaistro, Johnson APPROVE MINUTES Motion was made by Commissioner Thompson, seconded by Commissioner Collier, to approve the Regular Meeting Minutes of April 12, 1999, and April 26, 1999; and Closed Session Meeting Minutes of April 26, 1999. All present voted in favor. Motion carried. ND 7500 42 AVE. N. President Enck introduced for discussion Item 4, Resolution Authorizing nd IMP. PROJECT 474 Appraisals and Commencement of Negotiations to Acquire 7500 42 Avenue Item 4 North (Improvement Project No. 474). Mr. Kirk McDonald, Director of Community Development, stated that since the early 1990s, the City has taken a number of actions to acquire the three industrial nd properties located at the northeast corner of 42 and Quebec Avenues for redevelopment purposes. The City acquired and demolished the Electronic nd Industries building at 7516 42 Avenue in 1993, and the City acquired and nd demolished the Foremost building at 7528 42 Avenue between 1993 and 1995. nd One property remains to be acquired at 7500 42 Avenue. Over the years, the City has had a number of conversations with the property owner, Terry Jensen, regarding the potential acquisition of the property by the City and the City has had three appraisals completed on the property in 1992, 1996, and 1997. Ardel Engineering is a tenant in the building located on the site. In August 1997, the EDA approved a resolution authorizing the commencement of eminent domain nd proceedings to acquire the property at 7500 42 Avenue North, but the action has not been implemented. The environmental cleanup and future redevelopment of the three industrial sites nd located at the northeast corner of Quebec Avenue and 42 Avenue is identified as a goal of the Comprehensive Plan. Mr. McDonald stated the owner of the property has recently been in contact with the City again to inquire about the City’s interest in acquiring the property. Ardel Engineering’s lease will terminate on May 31 and an agreement was not reached between the owner and tenant to renew the lease. Ardel Engineering is in the process of vacating the building and is relocating to Science Industry Park in the City. The property owner is in the process of marketing the property. Due to the fact that the building is being vacated, the City would have no responsibility for relocation costs. New Hope EDA May 10, 1999 Page 1 Now is an opportune time to recommence discussion with the property owner nd regarding the EDA’s purchase of 7500 42 Avenue. The opportunity presents itself due to the pending vacation of the property by the current tenant, Ardel Engineering, by June 1. He stated the enclosed resolution authorizes the EDA to obtain an updated appraisal of the property and commence negotiations with the property owner for acquisition of the property as of June 1, when the property officially becomes vacant and unoccupied. This will allow the City to avoid payment of tenant relocation expenses, which has been the policy for acquisition of all properties initiated by an owner’s request to sell to the City or EDA under the scattered site acquisition policy. The owner has recently obtained his own appraisal of the property indicating a market value of $545,000. Once the City has its appraisal on the property updated, the EDA will need to determine the dollar amount it is willing to authorize as a ceiling for acquisition. The owner has also indicated that he wants to be reimbursed for lost rent during the month of June in the event he agrees to keep the property vacant, so there should be some discussion concerning the amount of a non- refundable payment to the property owner in consideration for his agreement to keep the property vacant during the negotiation period. Mr. McDonald also noted that since the dealings in 1997, the attorney for the property owner has become a partner of the City Attorney, and the City Attorney requested that the EDA be made aware of this fact. The EDA expressed support for the acquisition. In response to questions concerning possible soil contamination, City Attorney Sondrall noted there does not appear to be soil contamination on the Ardel property. Mr. Donahue, City Manager, interjected that the property will be examined prior to any purchase. Mr. Sondrall discussed the two paragraphs in the proposed resolution which have blanks (#4 and #5). He stated the first blank will be completed to authorize the Executive Director to commence negotiations for a fair negotiated amount but at a price not to exceed the amount of the appraisal. He commented that paragraph #5 concerning a non-refundable fee would be deleted from the resolution. EDA Commissioner Norby introduced the following resolution and moved its adoption: RESOLUTION 99-07 “RESOLUTION AUTHORIZING APPRAISALS AND COMMENCEMENT ND OF NEGOTIATIONS TO ACQUIRE 7500 42 AVENUE NORTH (IMPROVEMENT PROJECT NO. 474) ”. The motion for the adoption of the foregoing resolution was seconded by Commissioner Collier, and upon vote being taken thereon, the following voted in favor thereof: Enck, Cassen, Collier, Norby, Thompson; 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 8113 BASS LAKE RD President Enck introduced for discussion Item 5, Discussion Regarding Request for Item 5 Financial Assistance for Potential Rehabilitation Project at 8113 Bass Lake Road. Mr. McDonald, Director of Community Development, provided background of the fourplex property at 8113 Bass Lake Road. He stated the property formerly owned by David Espeland is now under new ownership. The building was constructed in New Hope EDA May 10, 1999 1958 and has a market value of $136,000 (land $26,000/building $110,000). The Page 2 building has a brick exterior, but is in need of substantial repairs, including roof and window replacement, rain gutters, exterior doors, drain tile, a boiler and general interior upgrading. The parking area needs resurfacing, additional landscaping is needed and no garages are available on the site. The owner has fourplex property at 8113 Bass Lake Road. He stated the property formerly owned by David Espeland is now under new ownership. The building was constructed in 1958 and has a market value of $136,000 (land $26,000/building $110,000). The building has a brick exterior, but is in need of substantial repairs, including roof and window replacement, rain gutters, exterior doors, drain tile, a boiler and general interior upgrading. The parking area needs resurfacing, additional landscaping is needed and no garages are available on the site. The owner has estimated the project cost at $15,000, however, staff estimate it will be at least twice that amount. There is a twin fourplex building located adjacent to this building (8109 Bass Lake Road) that is under separate ownership. Both properties are located on the south side of Bass Lake Road, just west of Lyndale Garden Center, and have a shared access off of Bass Lake Road. Mr. McDonald explained that these properties have been designated in the Comprehensive Plan for either redevelopment or substantial rehabilitation. Staff is pleased that the new owner wants to cooperate with the City on potential improvements to the property. Staff is requesting direction from the EDA as to whether or not it is interested in pursuing a rehabilitation project at this site in cooperation with the new owner. If the EDA determines to proceed, staff would like authorization to meet with the property owner to determine the necessary improvements, and approach the owner of the adjacent building to inquire of their participation in the project. President Enck questioned the financial investment and whether redevelopment should be explored rather than rehabilitation of the property. Mr. McDonald reiterated that the Comprehensive Plan Update calls for rehab or redevelopment of this area. Mr. McDonald suggested obtaining a financial analysis similar to the one recently prepared for Regent Apartments. Councilmember Cassen pointed out that the City has received numerous complaints regarding this property in the past. The EDA was receptive to exploration of all options, and directed staff to contact the property owner to discuss redevelopment or rehabilitation options. ADJOURNMENT to Motion was made by Commissioner Collier, seconded by Commissioner Cassen, adjourn the meeting . All present voted in favor. Motion carried. The New Hope EDA adjourned at 8:42 p.m. Respectfully submitted, Valerie Leone City Clerk New Hope EDA May 10, 1999 Page 3