Ed112398
CITY OF NEW HOPE
4401 XYLON AVENUE NORTH
NEW HOPE, MINNESOTA 55428
Approved EDA Minutes November 23, 1998
Meeting #9 City Hall
CALL TO ORDERPresident Enck called the meeting of the Economic Development Authority to order
at 7:56 p.m.
ROLL CALLPresent: Enck, Cassen, Collier, Otten
Absent: Norby
Staff Present: Sondrall, Hanson, Donahue, Leone, McDonald, Henry, Johnson
APPROVE MINUTESMotion was made by Commissioner Otten, seconded by Commissioner Collier, to
approve the EDA minutes of November 9, 1998. All present voted in favor. Motion
carried.
IMP. PROJECT 493 President Enck introduced for discussion Item 4, Motion Directing Staff to Prepare
Item 4 a Redevelopment Contract for Senior Outreach Services, Inc. for the development
of an Adult Daycare Facility on a Portion of Lot 2, Block 1, Science Industry
rd
Center 3 Addition (Improvement Project No. 493).
Mr. Kirk McDonald, Director of Community Development, explained that at the
th
August 8 EDA Meeting, the EDA approved a resolution declaring its willingness
to convey a portion of the property at 5501 Boone Avenue North to Senior Outreach
Services, Inc. for an adult daycare facility. The entire purchase price would be in a
deferred loan subject to 100 percent forgiveness in the event all of the conditions of
a redevelopment contract were satisfied. He stated Senior Outreach Services has
secured the necessary funding for the project and has developed concept site plans
for the development of the south half of the parcel. They are in the process of
developing more complete plans and initiating the necessary applications for the
planning/zoning approval process.
He also shared that North Ridge Care Center has held preliminary discussions with
staff regarding the development of a temporary parking lot on the north side of the
parcel for employee parking. He stated the temporary nature of the parking lot
would facilitate additional development on the north portion of the property in the
future.
Mr. Donahue, City Manager, stated North Ridge may present a proposal for the
parking lot and if so the City may benefit by having the two parking lots next to
one another.
Discussion ensued regarding the need for North Ridge to locate land for permanent
parking lot use as parking along Boone poses a traffic hazard.
Commissioner Collier stated his opposition to the City’s donation of the land to
Senior Outreach Services, and indicated such a transaction would be setting a
precedent. He pointed out that the City’s investment in the property is $376,764.
MOTION Motion was made by Commissioner Otten, seconded by Commissioner Cassen,
Item 4 directing staff to prepare a redevelopment contract
. Voting in favor: Enck,
New Hope EDA November 23, 1998
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Cassen, Otten; Voting Against: Collier; Absent: Norby; Motion carried.
IMP. PROJECT 614 President Enck introduced for discussion Item 5, Resolution Approving Addendum
PPL to Bass Lake Court Townhome Project Redevelopment Contract (Improvement
Item 5 Project No. 614).
Mr. Kirk McDonald acknowledged the presence of PPL representatives who are
available to answer questions and provide an update of the project.
He stated PPL has recently closed on four of the properties and the financing
commitments are on schedule.
Mr. McDonald stated the addendum addresses three issues:
1. PPL has assigned its interest in the project to PPL - Bass Lake Court Limited
Partnership. PPL remains as the general partner of this limited partnership.
Article 6 of the Redevelopment Contract permits PPL to make this assignment
of interest and the City was aware a limited partnership would be formed by
PPL to carry forward with this project. This is why the contingency for the
assignment was originally included in the Redevelopment Contract. Due to the
assignment of interest, the Addendum is necessary.
2. The Addendum will re-characterize the funds the EDA has committed to the
project as a grant instead of a loan. The current characterization of these funds
as a loan rather than a grant adversely affects the ability of PPL to maximize
its financing through the sale of low income housing tax credits.
3. Lastly, the Addendum eliminates the restriction on PPL’s use of $500,000 of
the $1,400,000 in proceeds the EDA has committed to the project in tax
increment financing funds. The original Redevelopment Contract indicates the
EDA will commit funds in excess of $900,000 to a maximum of $1,400,000 if
land acquisition costs through a condemnation proceeding results in the need
to expend these funds. PPL recently met with the City Manager, City Attorney
and Community Development Director to request that this restriction be lifted
due to increased project costs. The major reasons for the project cost increases
include:
??
Significantly more site work related to resolving drainage concerns and
the construction of a storm water pond on School District property.
??
Increased scope of work for rehabilitation of existing four-plexes.
??
Booming construction market, which has raised prices and decreased
interest in small rehabilitation projects.
Mr. McDonald stated the City Manager and staff are supportive of the request and
believe that PPL has tried to contain the project costs to the best of their ability. The
enclosed Addendum would remove the restriction and simply commit $1,400,000
of funds for any appropriate project purpose.
Mr. Steve Cramer, Executive Director of Project for Pride in Living, Inc., was
recognized. He emphasized that in order for the project to proceed on schedule the
financing for the funding gap must be obtained. He stated they have significantly
reduced the soft costs, and the only option would be to put the project on hold,
reconfigure and scale back the project. He pointed out that the market place is not
responding well for smaller scale rehab work. The cost of the improvements related
to the school district property also impacted the original estimate.
The EDA expressed concern regarding the increased project costs and conveyed its
preference to avoid any delay in the project construction.
New Hope EDA November 23, 1998
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The question was raised concerning the $500,000 and how the funds would be
disbursed if any were remaining after completion of the project.
Mr. Cramer reported that PPL must demonstrate that all the funds for the project
costs are in place. If the project requires additional funds he assured the EDA that
PPL will assume financial responsibility. He suggested that the City be involved
through authorization of the “draws”. He indicated it is doubtful that there will be
any remaining funds, but if that becomes the case, each party would feel entitled to
a portion.
Mr. Steve Sondrall, City Attorney, stated the City must ensure that the tax
increment funds are appropriately used. He also pointed out that initially the City
desired to provide funding at the completion of the project rather than at the onset
as a measure of guaranteeing completion. He noted the City is now participating
more as a partner in the project. Due to the limited sources of available funding,
Mr. Cramer is seeking financial assistance.
Mr. Cramer assured the EDA that MHFA’s oversight process will guarantee to the
public agencies that the project reaches completion. He pointed out that PPL’s
reputation will be at stake.
The EDA reiterated its support for the project and advised Mr. Cramer that it
would like to recapture funds if any of the $500,000 remains after completion of the
project.
RESOLUTION Commissioner Collier introduced the following resolution and moved its adoption:
EDA 98-12 “RESOLUTION APPROVING ADDENDUM TO BASS LAKE COURT
Item 5 TOWNHOME PROJECT REDEVELOPMENT CONTRACT
(IMPROVEMENT PROJECT NO. 614)”.
The motion for the adoption of the
foregoing resolution was seconded by Commissioner Cassen, and upon vote being
taken thereon, the following voted in favor thereof; Enck, Cassen, Collier, Otten;
and the following voted against the same: None; Abstained: None; Absent: Norby;
whereupon the resolution was declared duly passed and adopted, signed by the
president which was attested to by the executive director.
ADJOURNMENT Motion was made by Commissioner Collier, seconded by Commissioner Otten, to
adjourn the meeting. All present voted in favor. The New Hope EDA adjourned at
8:44 p.m.
Respectfully submitted,
Valerie Leone
City Clerk
New Hope EDA November 23, 1998
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