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.
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7500 42 AVE. N. President Enck introduced for discussion Item 4, Resolution Authorizing
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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
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properties located at the northeast corner of 42 and Quebec Avenues for
redevelopment purposes. The City acquired and demolished the Electronic
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Industries building at 7516 42 Avenue in 1993, and the City acquired and
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demolished the Foremost building at 7528 42 Avenue between 1993 and 1995.
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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
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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
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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
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Now is an opportune time to recommence discussion with the property owner
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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
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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,
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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
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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
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