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012604 EDA CITY OF NEW HOPE 4401 XYLON AVENUE NORTH NEW HOPE, MINNESOTA 55428 EDA Minutes January 26, 2004 Regular Meeting City Hall CALL TO ORDER President Enck called the meeting of the Economic Development Authority to order at 7:43 p.m. ROLL CALL Present: W. Peter Enck, President Sharon Cassen, Commissioner Don Collier, Commissioner Mary Gwin-Lenth, Commissioner Steve Sommer, Commissioner APPROVE MINUTES Motion was made by Commissioner Collier, seconded by Commissioner Gwin- to approve the Regular Meeting Minutes of January 12, 2004, Lenth, with a correction to the last paragraph on page 1. All present voted in favor. Motion carried. IMP. PROJECT 751 President Enck introduced for discussion Item 4, Resolution authorizing execution Item 4 and delivery of a contract for private redevelopment by and between the New Hope Economic Development Authority and the Ryland Group, Inc. (improvement project no. 751). Mr. Kirk McDonald, Director of Community Development, stated the resolution approves the development agreement with Ryland Group, Inc. for the East Winnetka redevelopment site in the Livable Communities study area. He noted the highlights of the agreement were previously reviewed at the January 20 Council work session. This agreement will facilitate the construction of 171 to 179 new market rate townhomes and condominium units in the East Winnetka Livable Communities area and address life cycle housing goals outlined in the Comprehensive Plan. Once the development agreement is approved, the next step would be authorizing acquisition of the remaining properties so that they can be delivered to the developer, per the agreement. Jim Casserly from Krass Monroe is in attendance to review the details with the EDA Mr. McDonald stated the Council has been discussing the details of this development for over a year with Ryland Homes and the development agreement finalizes all details on the contract portion of the development. The developer will initiate the planning process in February and present plans to the Planning Commission and City Council the first part of March. It is anticipated that there will be some changes to the plan as it proceeds through the planning review and public comment process. Construction of model homes will take place in April. The City Council selected Ryland Homes as the preferred developer for this site at the conclusion of the Livable Communities study, due in part to the quality of the construction of its homes. Mr. Jim Casserly, Krass Monroe, was recognized. He indicated the only unresolved issue relates to how Ryland Group structures its purchase agreements and the number of days they would like for due diligence. He explained the city’s process of selling debt to enable funds for property acquisitions. The city is committed to the acquisitions and may structure its debt on repayment of the principal in a different New Hope EDA manner depending on the scheduled payment of tax increment financing. Mr. Page 1 January 26, 2004 Casserly reported that the bond sale will occur on March 22. The developer is willing to change its date from April 15 to March 31. He noted the city would prefer March 15 and will continue to try and resolve the timing issues with Ryland. acquisitions and may structure its debt on repayment of the principal in a different manner depending on the scheduled payment of tax increment financing. Mr. Casserly reported that the bond sale will occur on March 22. The developer is willing to change its date from April 15 to March 31. He noted the city would prefer March 15 and will continue to try and resolve the timing issues with Ryland. President Enck pointed out omissions/corrections needed within the contract. The EDA discussed interest rates and the payment schedule for property taxes and special assessments. Discussion reverted back to the contract. Mr. McDonald recommended the EDA approve the contract subject to minor adjustments. Mr. Casserly assured the EDA that none of the issues discussed tonight would negate the agreement. EDA RESOLUTION Commissioner Collier introduced the following resolution and moved its adoption 04-02 “RESOLUTION AUTHORIZING EXECUTION AND DELIVERY OF A Item 4 CONTRACT FOR PRIVATE REDEVELOPMENT BY AND BETWEEN THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY AND THE RYLAND GROUP, INC. (IMPROVEMENT PROJECT NO. 751).” The motion for the adoption of the foregoing resolution was seconded by Commissioner Gwin-Lenth, and upon vote being taken thereon, the following voted in favor thereof: Enck, Cassen, Collier, Gwin-Lenth, Sommer; 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. IMP. PROJECT 724 President Enck introduced for discussion Item 5, Resolution authorizing the Item 5 acquisition of certain property within the city of New Hope for the purpose of redevelopment (improvement project 724). Mr. Kirk McDonald, Director of Community Development, explained that the resolution was prepared by the city attorney authorizing the acquisition of 14 properties in the east Winnetka redevelopment area. The resolution includes condemnation for all 14 properties currently not owned by the city. Mr. McDonald explained that over the past 8 years the City has been acquiring property in the subject area in anticipation of future redevelopment. The first property that the city acquired in the area was 7621 Bass Lake Road in 1995. In 1998, the Council passed a resolution approving the city of New Hope Comprehensive Plan Update. The Comprehensive Plan targeted several areas in the city for redevelopment. Recommendations for the subject area include the acquisition and redevelopment of sites located along the south side of Bass Lake Road, in the Bass Lake Road extension area and along the east side of Winnetka Avenue North between 5340 Winnetka Ave. and Bass Lake Road. In 2000, the city received a Metropolitan Council Livable Communities Grant to study redevelopment opportunities in the roughly quarter-mile area encircling the intersection of Winnetka Ave. N. and Bass Lake Road. In 2001 and 2002, the Livable Communities Task Force studied redevelopment opportunities within the designated area. In 2002, the Council accepted the task force study. In February 2003, the Council selected developers for each study area site based on proposals, except the west Winnetka site. Staff continues to coordinate with developers in the Livable Communities Area. New Hope EDA Page 2 January 26, 2004 As directed by the Council at the November 3, 2003, Work Session, staff has been coordinating with the remaining owners in the subject area to complete the acquisition of property. Also, staff has coordinated with Evergreen Land Services, the city’s relocation consultant for payment of relocation benefits to all remaining sellers. At the January 20 Council Work Session, staff presented a detailed review of acquisition status in the subject area. Even though the resolution includes all remaining properties that the city has not yet closed on to insure delivery of the property to the developer on a timely basis, purchase agreements and/or negotiation is underway on a number of the remaining properties. Mr. McDonald emphasized that eminent domain will only be necessary for properties where purchase agreements are not negotiated. At this point, staff is negotiating purchase agreements with most of the property owners. Commissioner Cassen questioned the status of 5519 Sumter Avenue North. Mr. McDonald stated the city recently sent a letter to the property owner to try to reach a mutual agreement. Mr. Bob Sable, 5242 Quebec Avenue North, questioned the legality of acquiring private property through eminent domain. He also advised that the task force was supportive of single family homes as part of the plan. It was noted that the city can acquire residential property as well as commercial property through eminent domain proceedings. President Enck commented that although the townhouses are not single-family homes, they will be individually owned. EDA RESOLUTION Commissioner Collier introduced the following resolution and moved its adoption 04-03 “RESOLUTION AUTHORIZING THE ACQUISITION OF CERTAIN Item 5 PROPERTY WITHIN THE CITY OF NEW HOPE FOR THE PURPOSE OF REDEVELOPMENT (IMPROVEMENT PROJECT 724).” 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, Gwin-Lenth, Sommer; 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. IMP. PROJECT 760 President Enck introduced for discussion Item 6, Resolution approving purchase Item 6 agreement and relocation benefits 5400 Winnetka Avenue North (improvement project 760). Mr. Ken Doresky, Community Development Specialist, stated the city’s purchase offer will now consist of the appraised value and a relocation payment determined by the city’s relocation consultant. The relocation cost estimate is $56,250 for this property, but will be adjusted when the property owner moves and completes the purchase of another property (actual closing costs will be used proportionate to the purchase price of the subject property). He reported that Steve Carlson from Evergreen Land Services, is in attendance at the meeting to answer any questions related to relocation payments. Ms. Carol Cline, 5400 Winnetka Avenue North, addressed the council. She expressed her displeasure of being forced out of her home, but stated she understands the city’s reason for the redevelopment. New Hope EDA Page 3 January 26, 2004 President Enck empathized with Ms. Cline and commented that even leaving one’s home on a voluntary basis can be difficult. EDA RESOLUTION Commissioner Sommer introduced the following resolution and moved its adoption 04-04 “RESOLUTION APPROVING PURCHASE AGREEMENT AND Item 6 RELOCATION BENEFITS 5400 WINNETKA AVENUE NORTH (IMPROVEMENT PROJECT 760).” The motion for the adoption of the foregoing resolution was seconded by Commissioner Gwin-Lenth, and upon vote being taken thereon, the following voted in favor thereof: Enck, Cassen, Collier, Gwin-Lenth, Sommer; 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. IMP. PROJECT 755 President Enck introduced for discussion Item 7, Resolution approving purchase Item 7 agreement and relocation benefits 5440 Winnetka Avenue North (improvement project 755). Mr. Steve Carlson, Evergreen Land Services, explained the aspects of mortgage differentials and how the city would have to buy down rates if a homeowner had to enter into a mortgage at a higher rate than their existing mortgage rate. EDA RESOLUTION Commissioner Collier introduced the following resolution and moved its adoption 04-05 “RESOLUTION APPROVING PURCHASE AGREEMENT AND Item 7 RELOCATION BENEFITS 5440 WINNETKA AVENUE NORTH (IMPROVEMENT PROJECT 755).” The motion for the adoption of the foregoing resolution was seconded by Commissioner Gwin-Lenth, and upon vote being taken thereon, the following voted in favor thereof: Enck, Cassen, Collier, Gwin-Lenth, Sommer; 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. IMP. PROJECT 723 President Enck introduced for discussion Item 8, Discussion regarding 7615 Bass Item 8 Lake Road (New Hope Alano), purchase price, relocation benefits, and request to nd purchase city-owned property at 7601-41 62 Avenue North (improvement project 723). Mr. Kirk McDonald, Community Development Director, stated over the past year, staff has met with the New Hope Alano Group to discuss the potential acquisition of their property and relocation options. Staff last met with Alano on December 22, 2003. Staff requests EDA discussion and direction regarding the 7615 Bass Lake Road (New Hope Alano) purchase price/appraised value, relocation benefits and nd request to purchase city-owned property at 7601-41 62 Avenue North. He stated New Hope Alano Group is willing to accept the $465,000 appraised value and the estimated relocation benefits of $35,000. Mr. McDonald reported that Alano’s main concern is relocation. They would like to relocate as close as possible to their current location. Over the past several months, staff has met with Alano and presented many relocation options. Staff strongly recommended that they coordinate with the developer of the proposed office nd condominium units at 42 and Quebec Avenue North. Alano has seriously considered this option, but feel that city assistance in addition to the purchase price and relocation estimate would be required. Alano is requesting that the city consider nd selling them the city-owned property at 7601-7641 62 Avenue North to construct a new facility. New Hope EDA Page 4 January 26, 2004 Staff is seeking Council direction on Alano’s request for financial assistance to nd relocate to the office condominium development at 42 and Quebec Avenues North nd and their request to purchase the city-owned property at 7601-7641 62 Avenue North. nd The EDA expressed concern regarding the sale of the property on 62 Avenue as it may restrict a future project at that site. The importance of not deviating from the 1998 comprehensive plan was also pointed out. The EDA discussed the 42nd/Quebec Avenue site as a possibility for the New Hope Alano. Parking needs for Alano as well as for nearby restaurants were discussed. Mr. Fred Boyes, representing New Hope Alano, was recognized. He stated he has been involved with New Hope Alano for 28 years. He mentioned they recently remodeled and would not voluntarily have chosen to relocate. He acknowledged the city’s redevelopment efforts, and stated he has been pleased with the assistance provided by the city. He noted they have considered 15 properties so far. The EDA recommended that Alano submit a detailed request for potential nd assistance needed to relocate in a new facility at 42 and Quebec. MOTION Motion was made by Commissioner Sommer, seconded by Commission Gwin- IMP. PROJECT 723 authorizing staff to proceed with the purchase of 7615 Bass Lake Road, Lenth, Item 8 and requested more information from the Alano Group regarding a potential nd relocation to the 42/Quebec site. All present voted in favor. Motion carried. IMP. PROJECT 733 President Enck introduced for discussion Item 9, Resolution authorizing approval of Item 9 a term sheet between the New Hope Economic Development Authority and Armory Development II, LLC for the redevelopment of the former Frank’s Nursery Property, 5620 Winnetka Avenue North (improvement project no. 733). Mr. Kirk McDonald, Director of Community Development, stated the city has been discussing a potential redevelopment with Armory Development at the 5620 Winnetka Avenue site for over a year. A tax increment financing analysis has been completed and staff/consultants have been negotiating with the developer over the past month on proposed terms of agreement with the city to assist with financing. If the EDA is supportive of the project and the city assistance, staff recommends approval of the term sheet. The next steps would include initiating the creation of a TIF district, approval of a development agreement and starting the planning approval process for the townhome development. th President Enck noted he had viewed a similar townhome development at 77 and Lyndale and was concerned with the limited parking (one-stall garages). He noted the EDA has not yet seen definitive plans from Armory Development. Mr. Jim Casserly, Krass Monroe, explained that the entire site can be controlled by one contract. He stated it is a very straight forward proposal with up front assistance of $400,000 and the balance in the form of a revenue note. He stated 35% of increment generated by the new value will be pledged to repayment of the revenue note. He stated this project will generate a positive amount of increment, and because of the new legislation the city is able to use the proceeds for other redevelopment projects. Mr. Doug Hoskin, Armory Development II, LLC, was recognized. He stated of the 44 units, 14 will have single garages and 30 will accommodate two vehicles. He explained that all garages are only one-car wide but some will be deep enough to accommodate two vehicles. He noted there will be a small area for visitor parking, New Hope EDA and visitors or extra vehicles can be parked in the driveway spaces. Page 5 January 26, 2004 accommodate two vehicles. He noted there will be a small area for visitor parking, and visitors or extra vehicles can be parked in the driveway spaces. Discussion ensued regarding unit prices, storm water issues, density, and green space. Mr. McDonald reminded the EDA that the issue before them tonight is approval of the term sheet. He reported that a site plan will be provided at a later date. President Enck opened the floor for comments. Karen Nolte, 8232 Northwood Parkway, was recognized. She inquired regarding the square footage of the units. Mr. Hoskin reported that the units will range from 1150 square feet to 1940 square feet. EDA RESOLUTION Commissioner Sommer introduced the following resolution and moved its adoption 04-06 “RESOLUTION AUTHORIZING APPROVAL OF A TERM SHEET Item 9 BETWEEN THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY AND ARMORY DEVELOPMENT II, LLC FOR THE REDEVELOPMENT OF THE FORMER FRANK’S NURSERY PROPERTY, 5620 WINNETKA AVENUE NORTH (IMPROVEMENT PROJECT NO. 733).” The motion for the adoption of the foregoing resolution was seconded by Commissioner Gwin- Lenth, and upon vote being taken thereon, the following voted in favor thereof: Enck, Cassen, Collier, Gwin-Lenth, Sommer; 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. IMP. PROJECT 754 President Enck introduced for discussion Item 10, Update on potential Item 10 redevelopment by Bear Creek Capital and CVS Pharmacy (improvement project no. 754). Mr. Kirk McDonald, Director of Community Development, stated the city has been coordinating with Bear Creek Capital/CVS Pharmacy over the past eight months regarding a potential redevelopment at the southwest quadrant of Bass Lake Road and Winnetka Avenue. The redevelopment would be in two phases, with the first phase involving the construction of a CVS Pharmacy store and ancillary retail development. The first phase would include the acquisition by CVS of three parcels in the area: a residential property at 5539/5549 Winnetka and a commercial property at 7901 Bass Lake Road. Appraisals of all three parcels were completed in October 2003, and at the October 27 EDA meeting, the EDA authorized staff to meet with the developers and the property owners to facilitate the potential property acquisition. Mr. McDonald reported that a successful meeting, facilitated by the city, was recently conducted between the property owners of 5539/5549 Winnetka and the developer and correspondence has been exchanged outlining the terms of a purchase contract. Regarding the 7901 Bass Lake Road, Mr. McDonald stated Sinclair Corporation has not been willing to meet with representatives of the city or the developer up to this point. The attorney representing Sinclair requested additional information on the project, which the city provided, and they are in the process of having their own appraisal completed. Sinclair has indicated that they would meet with the developer and city once the appraisal is done. More recently, there has been some direct negotiation between the developer and Sinclair. City staff has indicated it would much prefer that the developer acquire the property voluntarily on a willing seller basis. New Hope EDA Page 6 January 26, 2004 basis. Mr. McDonald stated CVS has indicated that this is its first choice for development in the New Hope area. Also, CVS has begun to actively market its development to other commercial users and are close to reaching an agreement with a casual dining establishment as part of the ancillary development. Once the property acquisition process is better defined, a more detailed site planning process will begin, which will include a review of the area storm water analysis and discussions with adjacent property owners, including District 281. It is the intention of CVS to start construction this spring if the property can be acquired and other approvals received. Mr. McDonald commented that if the redevelopment would proceed, the city would want to examine the potential of creating a new tax increment financing district to capture the increased value of the redevelopment for use on other redevelopment projects in the Livable Communities area. The EDA thanked Mr. McDonald for the update. ADJOURNMENT Motion was made by Commissioner Collier, seconded by Commissioner Sommer, to adjourn the meeting . All present voted in favor. Motion carried. The New Hope EDA adjourned at 9:15 p.m. Respectfully submitted, Valerie Leone City Clerk New Hope EDA Page 7 January 26, 2004