1992 EDAApproved EDA Minutes
Meeting #1
CITY OF NEW HOPE
4401Xylon Avenue North
Hennepin County, Minnesota 55428
January 13, 1992
CALL TO ORDER
ROLL CALL
APPROVE NINUTES
CITY-OWNED
PROPERTY AT
7305 42ND AVE. N.
Item 4
President Erickson called the meeting of the Economic
Development Authority to order at 7:26 p.m.
Present: Erickson, L'Herault, Otten, Enck, Williamson
Motion was made by Commissioner Enck, seconded by
Commissioner L'Herault, to approve the EDA minutes of
December 23, 1991. ~ All present voted in favor. Motion
carried.
President Erickson introduced for discussion Item 4,
Discussion Regarding City-Owned Property at 7305 42nd
Avenue North.
Mr. Donahue reported that the City has received an "offer
to negotiate" from Valvoline Rapid Oil, Inc. for the
property at 7305 42nd Avenue North. He stated the
property is located adjacent to All Star Sports. He
stated staff is requesting direction from the EDA.
President Erickson suggested sending a formal letter to
All Star Sports explaining the situation at this
particular time and encouraging them to respond if they
are planning on doing something to the property so that
the City may respond to the current offer from Rapid Oil.
Commissioner L'Herault conveyed the need for a new
appraisal on the property. He also felt All Star Sports
should be made aware that the City is seriously
considering Rapid Oil Inc.'s offer.
Commissioner Enck commented that he believes "informal"
discussions with All Star Sports should be sufficient
incentive for the owner to act on the property if he has
any interest in the property.
Commissioner Enck agreed with President Erickson's
suggestion to formally correspond to All Star Sports. He
stated the dialogue should also be opened with the
petitioner for the purchase to determine whether he is
interested in purchasing the property for an amount near
the last appraisal. He stated Rapid Oil may be wanting to
purchase it for an amount totally unacceptable to the EDA
New Hope EDA
Page 1
January 13, 1992
and therefore it would not be necessary expend monies in
obtaining a new appraisal.
The EDA briefly discussed the project timetable. Mr.
Donahue stated it could probably be developed sometime
this summer. He commented on the easement across the
property which may complicate the issue.
President Erickson stated he felt it should be left up to
staff as to when an appraisal should be obtained. He
noted it will probably become necessary at some point in
time.
Mr. Donahue stated he will inquire of Rapid Oil's proposed
offer. He asked the EDA whether it would be necessary to
come back for authorization of an appraisal if staff feels
the offer is not in line.
President Erickson noted that the comprehensive plan
adopted for 42nd Avenue may have to be amended if this
type of business-is allowed.
Commissioner Williamson asked for a brief overview of the
proposal submitted by Rapid Oil, Inc.
Mr. Donahue stated Valvoline Rapid Oil Change, Inc. would
like to build a Rapid Oil Change facility which primarily
handles oil changes, lube changes, cooling systems, brake
fluids, and other items of that nature. He stated there
would be no gasoline or mechanical work involved; it would
strictly be the "Rapid Oil Change" operation. He stated
the facility would be similar to the one on Hwy. 81 and
Bass Lake Road located in Crystal.
Commissioner Williamson felt it will be difficult to
negotiate a fair purchase price utilizing a four-year old
appraisal.
Commissioner Otten asked whether further studies should be
undertaken as to the options for uses on that piece of
propertY.
Mr. Donahue stated a full-scale marketing study could be
obtained, but he felt it would be counterproductive given
the studies which have been done to date. He stated the
original comprehensive plan identified commercial use as
a first choice as opposed to an automobile-oriented use.
He stated there has not been much interest in the past
several years. He noted the property is small in size {a
1/2 acre).
President Erickson informed the EDA that he has suggested
New Hope EDA
Page 2
January 13, 1992
to Colour Lab that he work with the owner of All Star
Sports and consider the possibility of having All Star
Sports build an addition on their building and allow
Colour Lab to lease from All Star Sports. He noted Colour
Lab will eventually being moving out of the Autohaus
building. He stated he believes that would be an ideal
situation.
Mr. Donahue stated he has discussed that option and it was
felt to be unworkable.
Mr. Donahue stated he will write a letter to All Star
Sports indicating that Valvoline Rapid Oil Change, Inc.
has contacted the City and is interested in acquiring the
vacant city-owned parcel at 7305 42nd Avenue North. He
indicated that he will ask All Star Sports whether they
still have intentions to expand their building onto the
adjacent vacant property; and if not, the EDA is willing
to give serious consideration to the proposal by Valvoline
Rapid Oil. He will convey that the EDA wishes to see the
property developed within the next year.
Mr. Donahue stated staff will begin discussions with Rapid
Oil to inquire regarding their offer. He indicated he
will wait for Rapid Oil's offer to determine the necessity
of a new appraisal.
Commissioner Enck noted if the proposal is out of line he
feels an appraisal will not be necessary as the EDA can
take that to mean Rapid Oil is only trying to get what
appears to have been a distressed piece of property for a
low price. He commented that if the offer is close to
what the EDA would be willing to sell the property for,
then an appraisal would be beneficial to determine the
current market value. He indicated the EDA could provide
authorization at this time for staff to obtain the
appraisal based on whether Rapid Oil makes a reasonable
offer.
President Erickson commented that the land is not a
distressed piece of property.
Commissioner Enck noted that Rapid Oil may believe the
property is distressed and that the City is anxious to
sell it. He stated it would not be cost effective to pay
for an appraisal now and then have to do so again in a
year or two when another offer may arise.
President Erickson directed staff to begin an aggressive
marketing program in the spring for property on the north
side of 42nd Avenue to see if there is any interest.
New Hope EDA
Page 3
January 13, 1992
ADJOURNMENT
Mr. Donahue reported that he has met with PRISM since
their request to the EDA regarding the vacant city-owned
property {north side of 42nd Avenue). He indicated they
are continuing their efforts and their latest approach was
to contact a number of non-profit organizations to explore
the construction of a joint facility. He commented that
if they did build at that site it is the City Attorney's
opinion that they would probably be required to pay
property tax.
Mayor Erickson noted that PRISM has requested that the
City donate very valuable property.
Mr. Donahue stated the City paid half a million dollars
for the mentioned parcels.
Mayor Erickson stated he could not support asking the
taxpayers to donate half a million dollars to PRISM unless
a worthwhile program could be developed which would
benefit the entire City.
Commissioner Enck suggested that marketing also be
conducted for the Ardell property.
Motion made by Commissioner L'Herault, seconded by
Commissioner Otten, to adjourn the EDA meeting as there
was no further business to come before the Council. All
present voted in favor. The New Hope EDA adjourned at
7:37 p.m.
Respectfully submitted,
Valerie Leone
City Clerk
New Hope EDA
Page 4
January 13, 1992
Approved EDA Minutes
Meeting #1
CITY OF NEW HOPE
4401Xylon Avenue North
Hennepin County, Minnesota 55428
January 13, 1992
CALL TO ORDER
ROLL CALL
APPROVE MINUTES
CITY-OWNED
PROPERTY AT
7305 42ND AVE. N.
Item 4
President E~ickson called the meeting of the Economic
Development Authority to order at 7:26 p.m.
Present: Erickson, L'Herault, Otten, Enck, Williamson
Motion was made by Commissioner Enck, seconded by
Commissioner L'Herault, to approve the EDA minutes of
December 23, 1991. All present voted in favor. Motion
carried.
President Erickson introduced for discussion Item 4,
Discussion Regarding City-Owned Property at 7305 42nd
Avenue North.
Mr. Donahue reported that the City has received an "offer
to negotiate" from Valvoline Rapid Oil, Inc. for the
property at 7305 42nd Avenue North. He stated the
property is located adjacent to All Star Sports. He
stated staff is requesting direction from the EDA.
President Erickson suggested sending a formal letter to
All Star Sports explaining the situation at this
particular time and encouraging them to respond if they
are planni-ng on doing something to the property so that
the City may respond to the current offer from Rapid Oil.
Commissioner L'Herault conveyed the need for a new
appraisal on the property. He also felt All Star Sports
should be made aware that the City is seriously
considering Rapid Oil Inc.'s offer.
Commissioner Enck commented that he believes "informal"
discussions with All Star Sports should be sufficient
incentive for the owner to act on the property if he has
any interest in the property.
Commissioner Enck agreed with President Erickson's
suggestion to formally correspond to All Star Sports. He
stated the dialogue should also be opened with the
petitioner for the purchase to determine whether he is
interested in purchasing the property for an amount near
the last appraisal. He stated Rapid Oil may be wanting to
purchase it for an amount totally unacceptable to the EDA
New Hope EDA
Page 1
January 13, 1992
and therefore it would not be necessary expend monies in
obtaining a new appraisal.
The EDA briefly discussed the project timetable. Mr.
Donahue stated it could probably be developed sometime
this summer. He commented on the easement across the
property which may complicate the issue.
President Erickson stated he felt it should be left up to
staff as to when an appraisal should be obtained. He
noted it will probably become necessary at some point in
time.
Mr. Donahue stated he will inquire of Rapid Oil's proposed
offer. He asked the EDA whether it would be necessary to
come back for authorization of an appraisal if staff feels
the offer is not in line.
President Erickson noted that the comprehensive plan
adopted for 42nd Avenue may have to be amended if this
type of business is allowed.
Commissioner Williamson asked for a brief overview of the
proposal submitted by Rapid Oil, Inc.
Mr. Donahue stated Valvoline Rapid Oil Change, Inc. would
like to build a Rapid Oil Change facility which primarily
handles oil changes, lube changes, cooling systems, brake
fluids, and other items of that nature. He stated there
would be no gasoline or mechanical work involved; it would
strictly be the "Rapid Oil Change" operation. He stated
the facility would be similar to the one on Hwy. 81 and
Bass Lake Road located in Crystal.
Commissioner Williamson felt it will be difficult to
negotiate a fair purchase price utilizing a four-year old
appraisal.
Commissioner Otten asked whether further studies should be
undertaken as to the options for uses on that piece of
property.
Mr. Donahue stated a full-scale marketing study could be
obtained, but he felt it would be counterproductive given
the studies which have been done to date. He stated the
original comprehensive plan identified commercial use as
a first choice as opposed to an automobile-oriented use.
He stated there has not been much interest in the past
several years. He noted the property is small in size {a
1/2 acre).
President Erickson informed the EDA that he has suggested
New Hope EDA
Page 2
January 13, 1992
to Colour Lab that he work with the owner of All Star
Sports and consider the possibility of having All Star
Sports build an addition on their building and allow
Colour Lab to lease from All Star Sports. He noted Colour
Lab will eventually being moving out of the Autohaus
building. He stated he believes that would be an ideal
situation.
Mr. Donahue stated he has discussed that option and it was
felt to be unworkable.
Mr. Donahue stated he will write a letter to All Star
Sports indicating that Valvoline Rapid Oil Change, Inc.
has contacted the City and is interested in acquiring the
vacant city-owned parcel at 7305 42nd Avenue North. He
indicated that he will ask All Star Sports whether they
still have intentions.to expand their building onto the
adjacent vacant property; and if not, the EDA is willing
to give serious consideration to the proposal.byValvoline
Rapid Oil. He will convey that the EDA wishes to see the
property developed within the next year.
Mr. Donahue stated staff will begin discussions with Rapid
Oil to inquire regarding their offer. He indicated he
will wait for Rapid Oil's offer to determine the necessity
of a new appraisal.
Commissioner Enck noted if the proposal is out of line he
feels an appraisal will not be necessary as the EDA can
take that to mean Rapid Oil is only trying to get what
appears to have been a distressed piece of property for a
low price. He commented that if the offer is close to
what the EDA would be willing to sell the property for,
then an appraisal would be beneficial to determine the
current market value. He indicated the EDA could provide
authorization at this time for staff to obtain the
appraisal based on whether Rapid Oil makes a reasonable
offer.
President Erickson commented that the land is not a
distressed piece of property.
Commissioner Enck noted that Rapid Oil may believe the
property is distressed and that the City is anxious to
sell it. He stated it would not be cost effective to pay
for an appraisal now and then have to do so again in a
year or two when another offer may arise.
President Erickson directed staff to begin an aggressive
marketing program in the spring for property on the north
side of 42nd Avenue to see if there is any interest.
New Hope EDA
Page 3
January 13, 1992
ADJOURNMENT
Mr. Donahue reported that he has met with PRISM since
their request to the EDA regarding the vacant city-owned
property {north side of 42nd Avenue}. He indicated they
are continuing their efforts and their latest approach was
to contact a number of non-profit organizations to explore
the construction of a joint facility. He commented that
if they did build at that site it is the City Attorney's
opinion that they would probably be required to pay
property tax.
Mayor Erickson noted that PRISM has requested that the
City donate very valuable property.
Mr. Donahue stated the City paid half a million dollars
for the mentioned parcels.
Mayor Erickson stated he could not support asking the
taxpayers to donate half a million dollars to PRISM unless
a worthwhile program could be developed which would
benefit the entire City.
Commissioner Enck suggested that marketing also be
conducted for the Ardell property.
Motion made by Commissioner L'Herault, seconded by
Commissioner Otten, to adjourn the EDA meeting as there
was no further business to come before the Council. All
present voted in favor. The New Hope EDA adjourned at
7:37 p.m.
Respectfully submitted,
Valerie Leone
City Clerk
New Hope EDA
Page 4
January 13, 1992
Approved EDA Minutes
Meeting #2
CITY OF NEW HOPE
4401Xylon Avenue North
Hennepin County, Minnesota 55428
February 10, 1992
CALL TO ORDER
ROLL CALL
APPROVE MINUTES
FOREMOST PROPERTY
(PROJECT #474)
Item 4
President Erickson called the meeting of the Economic
Development Authority to order at 9:25 p.m.
Present: Erickson, L'Herault, Otten, Enck, Williamson
Motion was made by Commissioner Otten, seconded by
Commissioner Enck, to approve the EDA minutes of January
13, 1992. All present voted in favor. Motion carried.
President Erickson introduced for discussion Item 4,
Discussion Regarding Acquisition of Foremost, Inc.
Property, 7528 42nd Avenue North, Improvement Project No.
474.
Mr. Donahue stated the EDA asked a number of questions at
the December 16, 1991, meeting. He indicated staff has
since responded to the questions and has shared the
information with Mr. Allan Fredendall. Mr. Donahue added
that Mr. Fredendall would like to address the EDA to
answer their questions especially relative to the
viability and strength of his business as well as his
future plans since there seems to be some concern as to
whether he would remain in business or whether the EDA is
relieving a failing business. Mr. Donahue stated Mr.
Fredendall would like to assure the EDA that he has a
strong organization and intends to remain in business.
Mayor Erickson noted the substantial amount of information
and the number of questions which need to be reviewed. He
recommended scheduling a work session to discuss this item
only. Councilmembers Enck and Otten conveyed that they
agreed with President's Erickson's recommendation for a
work session.
Mr. Allan Fredendall, owner of Foremost, Inc., was
recognized. He provided a brief history of the Foremost
Company and stated he has been a self-employed businessman
for 25 years and has employed as many as 50 people at the
present location. He noted he is actually one of the few
businesses actually making items and selling items in the
United States. He stated they use raw sheet steel to
finished goods for consumer products. Mr. Fredendall
explained that he has long-term employees with very
New Hope EDA
Page I
February 10, 1992
technical-oriented skilled. Some of the products
manufactured include items used in people's every day
lives. They are a supplier to IBM, Honeywell, Thermal
King and some of the products made include medical
products such as baby monitors for sudden infant crib
death. They have a complete quality control program which
checks outside sourcing for plating and certifications of
all materials.
Mr. Fredendall pointed out that he wishes to remain in New
Hope and to be a very viable business. Due to the
economic downturn of the past 19 months they have
considered many alternatives to lower overhead and curb
costs and there are a certain amount of things that they
have done. Nonetheless the economy has hurt them as it
has many other companies. He assured the EDA that they
will be around when things turn and will be a better
company for it. He expressed the desire to work with Kirk
McDonald to locate space within New Hope as he finds New
Hope to be a wonderful community.
President Erickson questioned the number of employees at
Foremost.
Mr. Fredendall replied that they currently have 24
employees.
President Erickson asked whether Mr. Fredendall has
contacted Brad Hoyt who could provide information
regarding industrial properties within the City.
Mr. Fredendall stated he felt it would be premature to
speak with developers or realtors until he receives
direction from the City. He commented that it is the most
unsettling time in his life and expressed concern for his
employees.
He noted the business deals with precise metal stamping
and small quantity production runs; therefore, it is
necessary to retain capable and trained employees.
President Erickson commented that the EDA has a strong
motivation to keep Foremost within the City of New Hope,
as it is a good neighbor and well as good employer. He
commented that he hopes a mutual arrangement can be found.
The EDA will review the information at a work session and
will respond to Mr. Fredendall as soon as possible.
Commissioner Enck called attention to the original
discussions with Mr. Fredendall at which time he indicated
his intentions to build or own a building within New Hope.
Commissioner Enck commented that now the discussions
New Hope EDA
Page 2
February 10, 1992
WORK SESSION
OTHER BUSINESS
include leasing a building. He asked Mr. Fredendall to
elaborate on his plans for renting or purchasing a
building.
Mr. Fredendall responded that he does not have anything
concrete from the EDA and therefore is unable to make firm
plans yet. He conveyed that he would have to confer with
his attorney and tax person to find out what would be
best. He indicated that currently he and his wife own the
building and they lease it to the corporation and he would
favor that situation if it is advantageous but he does not
know whether it is economically possible in these times.
Commissioner Enck commented that the original request was
from Mr. Fredendall rather than something the City took
the initiate in; however, he does not believe the City is
adverse to it. He noted both parties have to look at the
economics of the situation including the sources of
funding and the improved properties. He stated it is in
the best interest of the City to keep employment and keep
technical people here in New Hope.
President Erickson advised Mr. Fredendall that every
attempt will be made by the City to act on the matter as
quickly as possible so as to put Foremost employees' minds
at ease.
Mr. Fredendall explained that his employees have technical
backgrounds but even in this difficult job market they can
find jobs, and he has tried to convey this message to
them.
The EDA scheduled a work session for Monday, March 2nd, at
6 p.m. to discuss this matter.
Mr. Donahue informed the EDA that he has recently received
a request from Process Displays for the City to consider
a refinancing of their original industrial revenue bond
from 1980. He informed the Council that he believes the
refinancing would be handled in a similar manner to the
original issue. Mr. Donahue recommended an increase in
the non-refundable handling fee from $500 to $1,000 plus
a fee based upon $100 per $100,000 face value of the bond;
therefore, a million dollar bond issue would be $1,000
fee.
Commissioner Enck commented that the fees should
substantially cover all expenses including the City's
staff time and legal fees.
Mr. Donahue informed him that the proposed fees are to
cover staff time only; all legal fees and bond counsel are
New Hope EDA
Page 3
February 10, 1992
ADJOURNMENT
in addition to the established fees. He also stated a
certain amount has to be factored in to cover unrecover-
able staff time; he noted because the City's name is on
the bond, if something goes wrong with the bond issue
several years later, extensive staff time could be spent
dealing with institutions to resolve the problems.
President Erickson informed Mr. Donahue to research the
matter, draft a proposal, and make a recommendation to the
City Council.
Motion was made by Commissioner Enck, seconded by
Commissioner L'Herault, to adjourn the EDA meeting as
there was no further business to come before the Council.
All present voted in favor. The New Hope EDA adjourned at
9:42 p.m.
Respectful ly submitted,
Valerie Leone
City C1 erk
New Hope EDA
Page 4
February 10, 1992
EDA
Worksession #1
CITY OF NEW HOPE
4401 XYLON AVENUE NORTH
HENNEPIN COUNTY, MINNESOTA 55428
March 2, 1992
City Hall, 6:00 p.m.
C~T.T. TO ORDER
ROT.T.
APPROVAL OF
MINUTES
DISCUSSION
REOARDING
ACQUISITION OF
FOREMOST, INC.
PROPERTY, ?528
42ND AVENUE
NORTH, IMPROVE-
MENT PROJECT
474
The New Hope EDA met in special work session pursuant to due
call and notice thereof; President Erickson called the meeting
to order at 6:40 p.m.
Present: Erickson, L'Herault, Otten, Enck, Williamson. Staff
present: Dan Donahue and Kirk McDonald. Also present: Steve
Sondrall, City Attorney.
Motion by Commissioner Williamson, seconded by Commissioner
Otten, to approve the February 10, 1992 EDA minutes as written.
Voting in favor: Ail.
City Attorney Steve Sondrall initiated discussion of this issue
by stating one of the thoughts staff had was the creation of a
hazardous substance sub-district which would be a sub-district
within the tax increment financing district in the redevelopment
plan. The question was if the County would change the net tax
capacity or the frozen tax base of the properties that are
subject to the contamination. If the City did buy the property
and demolished the buildings and had new redevelopment, could
the City experience any increment from that redevelopment and
could it be used within that district. Bond and TIF Consultant
Jerry Gilligan told the City that the City could create this
district and use tax increment money on those properties to
remediate and remove the contamination.
The EDA discussed Foremost's financial condition at length.
City Manager Donahue stated that Hennepin County evaluated the
property for tax purposes down to $235,000 which drops the value
of the property substantially. Commissioner Enck expressed
reservations about getting into this issue as he sees no value
to the City for the acquisition of this property. Chairman
Erickson concurred.
Commissioner Enck stated that if the City buys the property,
then the City is responsible for clean-up costs and if it is
condemned the City is responsible for relocation costs plus all
the fees, legal and other incurred expenses.
New Hope EDA Worksession
Page i
March 2, 1992
MOTION
OTHER
BUSINESS
MOTION
ADJOURNMENT
Motion by Commissioner Enck, seconded by Commissioner L'Herault,
recommending to staff that they discontinue discussions
concerning Foremost and not to proceed with the acquisition of
the Foremost property at this time. Voting in favor= Ail.
City Attorney Sondrall stated that the City had received the
appraisals on the Electronic Industries property (7516 42nd
Avenue North) which indicated there is a value of $18,000 on the
property. The City has been holding off on the hazardous
building complaint and action if the City wanted to acquire it.
The City Attorney stated that Electronic Industries should now
be forced to either bring their building up to code or raze the
building. City Attorney Sondrall asked the EDA if they were
still interested in acquiring the Electronic Industries
property. Commissioner Enck stated if the property was priced
reasonably and if the City would not be responsible for a large
amount of clean-up, he would like to see that property
purchased. Commissioner Otten stated that he would like to see
Electronic Industries commit to selling to the City for
redevelopment purposes. Commissioner Enck stated that he would
like to see the matter proceed as follows: proceed with the
demands that the building is removed or rehabilitated and see
what kind of a response the City receives and have someone
working with the PCA to monitor the property.
Motion by Commissioner Otten, seconded by Commissioner Enck, to
have staff proceed with the condemnation of the Electronic
Industries building under the hazardous building complaint and
report back to the EDA if Electronics Industries wish to
negotiate the sale of their property to the City. Voting in
favor: All.
Motion by Commissioner L'Herault, seconded by Commissioner Enck,
to adjourn the EDA meeting. Voting in favor - Ail. The EDA
meeting adjourned at 7:00 p.m.
Respectfully submitted,
City Clerk
New Hope EDA Worksession
Page 2
March 2, 19/~'~
Approved EDA Minutes
Meeting #3
CITY OF NEW HOPE
4401Xylon Avenue North
Hennepin County, Minnesota 55428
March 23, 1992
CALL TO ORDER
ROLL CALL
APPROVE MINUTES
COHMUNITY
REVITALIZATION
CORPORATION
Item 4
EDA RES. 92-01
Item 4
AUTOHAUS
(PROaECT #467)
Item 5
President Pro tem Enck called the meeting of the Economic
Development Authority to order at 9:45 p.m.
Present: Enck, L'Herault, Otten, Williamson
Absent: Erickson
Motion was made by Commissioner Otten, seconded by
Commissioner Williamson, to approve the EDA work session
minutes of March 2, 1992. All present voted in favor.
Motion carried.
President Pro tem Enck introduced for discussion Item 4,
Resolution Appointing Directors to the Bard of the New
Hope Community Revitalization Corporation.
The resolution will confirm the Board of Directors for the
New Hope Community Revitalization Corporation for the 1992
year. The Revitalization Corporation is only needed for
tax-exempt projects much like the handicapped housing
projects where a non-profit board is appointed in order to
facilitate the project. The Revitalization Corporation
consists of the Citizen Advisory Commissioners.
Commissioner Williamson introduced the following
resolution and moved its adoption: "RESOLUTION APPOINTING
DIRECTORS TO THE BOARD OF THE NEW HOPE COMMUNITY
REVITALIZATION CORPORATION". The motion for the adoption
of the foregoing resolution was seconded by Commissioner
Otten, and upon vote being taken thereon; the following
voted in favor thereof: Enck, L'Herault, Otten,
Williamson; and the following voted against the same:
None; Absent: Erickson; whereupon the resolution was
declared duly passed and adopted, signed by the president
which was attested to by the executive director.
Mayor Pro tem Enck introduced for discussion Item 5,
Consideration of Request for Extension on Development
Contract Improvements, Autohaus, Inc., 7709 42nd Avenue
North (#467).
Mr. Donahue explained that on April 4, 1991, Autohaus
entered into a development contract with the City
regarding specific improvements to be made to the Autohaus
New Hope EDA
Page I
March 23, 1992
New Hope EDA
Page 2
property such as the installation of concrete curb,
landscaping improvements, paving and lighting
improvements, construction of storm water drainage
improvements, and the demolition/removal of the Animal
Hospital building. He informed the EDA that Mr. Tom
Boettcher from Autohaus has requested a one-year extension
to accomplish the fore-mentioned items.
President Pro tem Enck inquired of the exact outstanding
improvements, a time schedule for the work plan, and an
explanation as to why the items have not yet been
accomplished.
Mr. Tom Boettcher was recognized and indicated that
Autohaus has done as much as possible to complete the
improvements, although delays and economic times have
caused an extension of one year to be necessary.
He reported that Autohaus has demolished the old Animal
Hospital building and improved the 42nd Avenue appearance.
He stated the debris which was part of the bus garage fill
has been removed as well as trees and brush and the back
area has been reshaped. He also noted a silt fence was
installed near the ponding area. Delays in the city doing
a practice fire and an early snow cover have also
contributed to the need for an extension.
Mr. Boettcher affirmed that Autohaus fully intends to
finish the contract improvements in a timely manner
considering the capability to pay as the improvements are
made. Autohaus has construction money set aside for the
area's improvement but due to economic times some
improvements will need to be rebid and some Autohaus will
do itself. The next stage is to pave the front area where
the Animal Hospital building was, and address enhancing
the view from 42nd Avenue.
Mr. Boettcher made mention of higher bids than those which
were originally received when the loan was established.
He also stated their former accounting firm had adjusted
their financial statements over $220,000 in a two year
period. He stated he would not have purchased the
property had he known the correct financial figures. He
also stated Colour Lab would like to relocate and
terminate his lease for the front of the building.
President Pro tem Enck questioned why a permit was not
obtained for demolition of the old animal hospital
building.
Mr. Boettcher responded that the permit was an oversight
as Autohaus personnel believed the contractor was
March 23, 1992
MOTION
Item 5
obtaining the permit and visa versa. He stated he is not
aware of any damage done to the ponding area. He noted
there was much debris removed from the ponding area such
as refrigerators with freon, trash, cans, etc.
President Pro tem Enck stated ponding is very necessary
and should be of major concern. He noted if ponds were
filled, storm water would have no where to go.
Commissioner Otten suggested a meeting between Autohaus
and staff to establish a work plan and new time schedule.
Mr. Boettcher indicated he would be willing to meet with
staff; however, he will not begin any projects until the
economy improves and the action against the accounting
firm is determined. He stated due to many factors it
would be difficult to establish an exact time schedule for
completion. He stated different options are being
considered for the curbing and paving and possibly
developing the front half of the property and leaving the
rear lot vacant.
Mr. Donahue stated a formal business arrangement has been
entered and Autohaus is obligated to make certain
improvements.
Mr. Steve Sondrall, City Attorney, stated a $26,000
certificate of deposit is being held by the City as
security for completion of public improvements. Mr.
Sondrall advised that the City has a right to draw upon
the certificate if the work is not performed. He also
stated Mr. Boettcher would be in breach of the contract
and would-be subject to mortgage foreclosure if he does
not fulfill the obligations. He noted a lapse in time
does not make the contract unenforceable.
President Pro tem Enck asked Mr. Boettcher if he
understands the requirements of the development contract
as explained by the City Attorney.
Mr. Boettcher replied that he does understand his
responsibilities and advised that he is currently
obtaining bids for the sewer and paving work. He noted
that he would like to resubmit a new plan for upgrading
the front of the building.
Motion was made by Councilmember Otten, seconded by
Councilmember L'Herault, tabling the extension request on
development contract improvements for Autohaus until April
13th and directing Autohaus to meet with staff to develop
a plan of action and time schedule for improvements. All
present voted in favor. Motion carried.
New Hope EDA
Page 3
March 23, 1992
NEg HOPE TERRACE
PROPERTY
item 6
New Hope EDA
Page 4
President Pro tem Enck introduced for discussion Item 6,
Discussion Regarding Market Value of New Hope Terrace
Property.
Mr. Donahue explained that the New Hope Terrace Apartment
building on 36th near the railroad tracks was built with
tax increment funds. He stated the building was recently
sold to LaNel.
He stated currently there is a developer's agreement that
includes an assessment agreement with a 2% escalator. The
assessment agreement has established a market value of 6.2
million dollars for payable 1992. He stated LaNel, the
new owners, recently purchased the property for 5 million.
He stated LaNel has approached the City about amending the
developer's agreement whereby the market value could be
lowered and thus the taxes paid could be lowered. The
original development used housing bonds where it was
required to set aside 20% {or 30 units) to persons who
qualified under income guidelines. With the new purchase
of the building, the old bonds were paid off and thus
there is no longer a requirement to provide for the 20%
set aside. Mr. Donahue informed the EDA that persons
receiving notification of this discontinuation will press
the City Council for action to reinstate part of the low
and moderate income housing.
He indicated that he has spoken with Ember Reichgott and
Ann Rest regarding the situation and they are very
interested.
Mr. Donahue reiterated that LaNel would like the market
value lowered. At the current time the Hennepin County
Assessor has provided an unofficial valuation of 5.5
million for the property, and does not feel the market
value would be set at 5 million dollars.
He indicated that he believes the only way the City could
provide relief would be to use excess tax increments
towards the lost low and moderate income units. At the
present time, state law forbids the use of excess
increment or any increment to go into direct housing
subsidy. However, there is a tax increment amendment bill
before the Legislature which would allow tax increments to
be used directly for housing subsidy.
President Pro tem Enck stated he is uncomfortable
eliminating 1.2 million of tax capacity to one particular
property owner since it would set a precedent. He noted
the tax loss not only affects the city but also includes
the school district, county, watersheds, etc. He felt
this would impose a burden upon others in the taxing
March 23, 1992
ADJOURNMENT
district since the current value is built into the tax
capacity for generating revenues.
commissioner Williamson stated that many apartment
buildings within the City are deteriorating and may need
help in the future. She commented that if a developer
purchases these apartments at a distressed value and is
willing to make some sort of a deal with the City, it may
be in the City's best interests to do so. She expressed
concern for low and moderate income persons not having
decent places to reside.
President Pro tem Enck agreed that in the future that may
the case; however, in this case there is a binding
contract.
Commissioner Otten indicated he would prefer to retain the
original development contract.
Commissioner L'Herault inquired of the number of units
which would be made available if the value is dropped to
5.5 million.
Mr. Donahue stated many scenarios are being discussed. He
stated if the bill passes regarding use of excess tax
increment funds, the developer would be willing to
designate 10 units. In the event that the State does not
approve the pending legislation, LaNel would phase out the
10 units over a two year period.
Mr. Donahue suggesteddeferring action until a decision is
made regarding the tax increment bill.
Commissioner Williamson indicated the sale of the property
has been taking place for over a year and will be no
surprise to most of the apartment dwellers. She indicated
there had been rumors of losing the low income housing if
the apartments changed ownership.
Motion was made by Commissioner Williamson, seconded by
Commissioner L'Herault, to adjourn the EDA meeting as
there was no further business to come before the Council.
All present voted in favor. The New Hope EDA adjourned at
10:21 p.m.
Respectful ly submitted,
Valerie Leone
City Clerk
New Hope EDA
Page 5
March 23, 1992
Approved EDA Minutes
Meeting #4
CITY OF NEW HOPE
4401Xylon Avenue North
Hennepin County, Minnesota 55428
April 13, 1992
CALL TO ORDER
ROLL CALL
APPROVE MINUTES
42ND/NEVADA SOIL
CLEANUP (#462)
Item 4
MOTION
President Pro tem Enck called the meeting of the Economic
Development Authority to order at 8:31 p.m.
Present: Enck, L'Herault, Otten, Williamson
Absent: Erickson
Motion was made by Commissioner Otten, seconded by
Commissioner Williamson, to approve the EDA minutes of
March 23, 1992. All present voted in favor. Motion
carried.
President Pro tem Enck introduced for discussion Item 4,
Approving Revised Corrective Action Design Workplan for
42nd/Nevada Avenue Soil Contamination Cleanup and
Authorizing Advertisement for Bids to Excavate and Treat
Impacted Soils - Project No. 462.
Mr. Kirk McDonald, Management Assistant/Community
Development Coordinator, explained that the action being
requestedis for the EDA to approve the revised Corrective
Action Design Workplan for 42nd/Nevada Avenue soil
contamination cleanup, prepared on behalf of the City by
Northern Environmental and recently approved by the
Minnesota .Pollution Control Agency, and to authorize
advertisement for bids for the soil excavation/treatment
of impacted soils portion of the project.
He reviewed events leading up to this point. He stated
the PCA had requested additional information to define the
magnitude and extend of petroleum contamination before
they would allow the soils to be excavated or accept the
workplan. Therefore, in July of 1991, the Council
authorized Northern Environmental to conduct additional
activities which included the drilling of five additional
soil exploration borings on and off the site, three of
which were completed as monitoring wells. The results of
the investigation indicated that the contamination has
been contained on-site.
Mr. McDonald stated Petro Fund will pay for 90% and CDBG
funds will pay the remaining 10% of the costs.
Motion was made by Commissioner Otten, seconded by
New Hope EDA
Page i
April 13, 1992
BID/SOIL CLEANUP
Item 5
)OTION
NEW HOPE TERRACE
APARTNENTS
Item 6
New Hope EDA
Page 2
Commissioner L'Herault, approving revised corrective
action design workplan for 42nd/Nevada Avenue soil
contamination cleanup and authorizing advertisement for
bids to excavate and treat impacted soils. All present
voted in favor. Motion carried.
President Pro tem Enck introduced for discussion Item 5,
Approval of Bid Submitted by Bergerson-Caswell, Inc. for
Groundwater Quality Monitoring Well Abandonment and
Construction for 42nd/Nevada Avenue Soil Cleanup (Project
#462), in the amount of $2,296.
Mr. McDonald stated the bid is for abandoning a well and
constructing a new well. The MPCA is requesting that a
monitoring well at the location of the soils to be
excavated be abandoned prior to excavation and that an
additional groundwater monitoring well be constructed near
Park Ridge Way Apartments after the excavation of
contaminated soils.
Motion was made by Commissioner L'Herault, seconded by
Commissioner Otten, approving bid submitted by Bergerson-
Caswell, Inc. for groundwater quality monitoring well
abandonment and construction for 42nd/Nevada Avenue soil
cleanup (Project #462), in the amount, of $2,296. All
present voted in favor. Motion carried.
President Pro Tem Enck introduced for discussion Item 6,
Discussion Regarding Request by LaNel Financial Group,
Inc. to Amend Assessment Agreement for New Hope Terrace
Apartments.
Mr. Donahue explained that LaNel is the new owner of New
Hope Terrace Apartments on 36th Avenue west of the
railroad tracks. He indicated that LaNel has approached
the City regarding changing the assessment agreement which
was originally made in 1986-87 between the City and the
developers of the property which guaranteed a certain
minimum market value of the apartment project in order to
pay off housing bonds.
Mr. Donahue stated the life of the bonds will run through
2004 and the City does not need to change the assessment
agreement if it does not desire to do so.
He reviewed scenarios discussed with LaNel which may
advantageous to the City. One of the options is to retain
10 of the original 30 low and moderate income apartments
for the life of the bond issue (until year 2004) if the
City would amend the assessment agreement. The amendment
would include allowing the market value to be set by the
assessor free of any artificial limits such as a 2%
April 13, 1992
increase. He noted a minimum market value should be
established to ensure a certain tax flow until the bonds
are paid off.
Mr. Donahue illustrated tax projections based on the
current assessment agreement. He stated the owners would
be required to pay $269,000 in taxes next year. If the
agreement was amended, based on $5.5 million, $233,000
would be generated in taxes, or a tax savings to the
apartment owners of $36,000. The City's analysis would
show that if the owners provided 10 units of apartments at
$200 per month or $24,000/year, LaNel would have a net tax
savings of $12,000.
He also reviewed the projections for year 2003. The cost
of providing the 10 units would be $29,000 and the owner
would have a tax savings of approximately $15,000.
Mr. Donahue stated 2/3 of the savings would be for the
public good and 1/3 to the apartments owner.
He informed the EDA that Paul Brewer from LaNel Financial
Group is present to answer or clarify questions.
Commissioner Williamson questioned the current market
value. Mr. Donahue stated the payable 1993 market value
is $6.4 million (which would generate $269,000 in taxes).
Mr. Donahue stated at the current time there is an excess
of $500,000 in reserves which would meet two years of bond
payments. Under the current agreement it is projected to
be $1.5 million. When the bonds are paid off, the money
is to be redistributed to the taxing jurisdictions or 7%
to the City (17% less 10%).
He stated if the EDA agrees to the change, the excess
increment will not continue to build, but rather the funds
will subsidize the housing. The approximate cost would be
between $120,000 to $150,000.
President Pro tem Enck commented that this happens to be
one project which the City planned well.
Mr. Donahue noted that he is aware of no other city which
has undertaken changes to assessment agreements to benefit
low and moderate income housing.
Mr. Brewer, LaNel, was recognized and stated New Hope
Terrace Apartments was purchased for $5.5 million dollars
which was substantially less than the value stated on the
assessment agreement. He noted when the property was
purchased real estate taxes were considered. He stated it
New Hope EDA
Page 3
April 13, 1992
New Hope EDA
Page 4
is their goal to get taxes in line with the value. He
stated he recognized the property had 30 units designated
as low income rentals which the previous owner rented for
less than the market rental rate. He stated the units
were primarily rented by low-income elderly persons. Mr.
Brewer continUed stating that in this area LaNel currently
has over 1,000 units of multi-family housing, two of which
are Anthony James and Broadway Village Apartments which
are mostly elderly. Because of this, LaNel did not want
to lose the current tenants at New Hope Terrace even
though they were subsidized, yet at the same time the
property could not be economically operated with 30 low-
income units.
Mr. Brewer reviewed his proposal regarding reduction of
the market value. He stated it would not jeopardize the
tax increment financing which exists on the property as
there is sufficient reserves.
He emphasized the assessment agreement amendment would not
only benefit LaNel as a property owner operating on an
economic basis but would also meet and retain some of the
City's low-income housing needs.
Commissioner L'Herault questioned whether the negotiated
purchase price was a reflection of the tax situation.
Mr. Brewer stated that was not the controlling factor as
a number of buyers were competing for the property. He
noted the elimination of the low income units makes up
part of the difference. However, it would be nice to
retain the current low-income tenants since they have
proven to be good tenants.
Commissioner L'Herault again questioned if the tax burden
was reflected in the purchase price.
Mr. Brewer replied that he could not say that it had a
direct impact although it may have indirectly entered into
the offer. He stated the purchase price was determined
based upon the projected revenues generated from the
property.
President Pro tem Enck stated the change in valuation
would amount to $450,000 over a lO-year period. He
pointed out that the City has an obligation to the taxing
districts by maintaining the agreement. He remarked that
a benefit would be given to one (property owner and
recipients of low-income housing) at the expense of
another (taxing districts such as the schools).
He expressed displeasure with the City being perceived as
April 13, 1992
the cause behind the elimination of the low-income housing
units.
He pointed out that the agreement was in place when the
property was purchased and the apartment complex was
purchased at a discounted price.
Mr. Donahue asked the EDA for direction as to whether or
not to proceed. He reiterated President Pro tem Enck's
comment regarding the benefit to one at the expense of
another.
Ms. Colleen Barstein was recognized and stated she resides
at the New Hope Terrace Apartment. She has been living
with her mother in a 2-bedroom subsidized apartment for
four years. She indicated she was shocked to learn of the
$250 increase in rent with the elimination of the
subsidized rent. Ms. Barstein stated she would like to
continue living in New Hope and urged the EDA to reach a
compromise for the continuation of the subsidized program.
She indicated without the subsidized housing, people will
be forced to move out or pay the $700 rent. It will be
difficult to find another place to live especially since
many of the affected persons are elderly. She noted they
view'the apartments as their home.
She commented that the merchants at Winnetka Commons
Shopping Center may be affected by the tenants relocating.
President Pro tem Enck expressed empathy and stated it is
a difficult dilemma. He inquired of the occupancy rate.
He noted even if there was a change in the agreement, 2 of
the 3 tenants would be adversely impacted since there
would be only 10 rather than 30 subsidized units.
Mr. Brewer stated the apartments are 95% occupied and the
market in New Hope is good.
Commissioner Otten inquired of alternate subsidized
housing within the City.
Mr. Donahue reported that the options are limited.
Section 8 is the predominant program; however, the waiting
list is about 5 years. He stated Metro Housing was
contacted regarding emergency housing in the form of
vouchers but the hardship would not qualify under its
"emergency" program. He mentioned senior apartment
complexes within the City: Anthony James, Chardon Courts,
St. Therese, and North Ridge Apartments.
Commissioner Williamson questioned how the program was
New Hope EDA
Page 5
April 13, 1992
subsidized or how the apartment owners were reimbursed.
Mr. Brewer explained that there was no reimbursement; the
owners were required to provide 20% of the units at a
reduced rate that met the federal guidelines.
Mr. Sondrall, City Attorney, reported that an annual
certification was submitted to the City and the County.
Commissioner Williamson stated it is a serious issue and
she hopes Mr. Brewer can find a way to continue the
program. She stated it is difficult to find subsidized
housing as clean and well operated as New Hope Terrace
Apartments.
She asked how many units of the subsidized units are
currently occupied.
Mr. Brewer replied that there are 16 or 17 apartments.
Ms. Williamson questioned whether Mr. Brewer is confident
that he could maintain a 95% occupancy at the full-market
rate.
Mr. Brewer replied that he believes they can. He noted
that New Hope has an overall vacancy of 3% and the market
is very tight. He noted last year Anthony James
Apartments had 1/10 of 1% vacancy. He stated the normal
turnover on an apartment project is 50-60% of its units
whereas in a senior complex, turnover of 15-20% is high.
Commissioner Otten inquired whether Hennepin County will
be assessing the property.
Mr. Donahue stated the assessment agreement sets the
market value and the escalator is an automatic 2% until
the life of the contract.
Commissioner Otten noted it is a private venture and it
appears there is little the City can do regarding the
market value set by the contract. He conveyed he does not
feel the City should be lowering the taxes at this time.
Commissioner Williamson indicated philosophically she
agrees with Commissioner Otten; however because the City
originally put stipulations on the property at the time of
construction, she feels the City has a responsibility to
the residents to maintain the subsidized housing end of
the agreement.
Commissioner L'Herault stated it was a package and one has
to use caution when identifying only part of the
New Hope EDA
Page 6
April 13, 1992
AUTOHAUS - #467
Item 7
MOTION
OTHER BUSINESS
Prism
agreement.
Commissioner L'Herault asked whether it can be approached
another way without impacting the taxing districts.
President Pro tem Enck stated the lower market value will
enable the bonds to be paid off; however, there will be
less money going into the pool and little surplus to be
redistributed at the end of the contract. He noted he
does not feel the City should be changing contracts andhe
has not seen anything sufficient enough to warrant a
change to the contract.
Mr. Donahue commented that in the year 2004, the City
would gain $250,000 with the contract as is. If the
contract is changed as proposed, the City would gain
$100,000. Therefore, the housing subsidy program could be
viewed as costing the City $150,000.
Mr. Donahue inquired whether the EDA desires staff to
discuss the matter with the County and/or School District
for their input.
Commissioner Williamson indicated that she would like
President Erickson's input regarding the proposal.
President Pro tem Enck commented that it is appropriate to
have all members actively participate in the decision. He
directed staff to bring the item back on the April 27th
agenda for discussion.
President Pro tem Enck introduced for discussion Item 7,
Request for Extension on Development Contract Improvements
- Autohaus (#467).
Mr. Donahue stated staff has met with Autohaus and is
recommending to table further consideration on this item
until the May 11th meeting.
Motion was made by Commissioner Otten, seconded by
L'Herault, to table until May 11, 1992, the request by
Autohaus for an extension on their development contract
improvements. All present voted in favor. Motion
carried.
Mr. Donahue informed the EDA that PRISM continues to be
interested in obtaining the City-owned property on
42nd/Nevada Avenue for a new facility. He stated they
have retained an architect and have developed conceptual
drawings which they wish to present to the EDA. The
drawings are in the Mayor's office for the EDA to review.
He informed the EDA that PRISM would like to meet
New Hope EDA
Page 7
April 13, 1992
AD~OURNHENT
individually with the EDA Commissioners. Mr. Donahue
noted if the conceptual plan is agreed upon, PRISM plans
to raise $500,000. He stated the Building Official has
met and discussed all of the standards necessary for that
property.
President Pro tem Enck questioned the value of the
property and noted that PRISM is still asking the City to
donate the property.
Mr. Donahue indicated the property is valued at $200,000
to $250,000. He stated it was purchased with CDBG money
so it must be used for a qualifying use or if it is sold
at a commercial rate, the money must be put back into the
pool for redistribution. He indicated part of the money
could be used for other qualifying programs.
Commissioner Williamson inquired whether the property
would be taxable.
Mr. Donahue stated he believes it would be a taxable
agency; however, that is not definite. He will be
discussing it with the County Assessor.
He reiterated that the drawing is in the Mayor's office
and asked the EDA to review it.
Motion was made by Commissioner L'Herault, seconded by
Commissioner Williamson, to adjourn the EDA meeting as
there was no further business to come before the Council.
All present voted in favor. The New Hope EDA adjourned at
9:35 p.m.
Respectful ly submitted,
Valerie Leone
City Clerk
New Hope £DA
Page 8
April 13, 1992
Approved EDA Minutes
Meeting #5
CITY OF NEW HOPE
4401Xylon Avenue North
Hennepin County, Minnesota 55428
April 27, 1992
CALL TO ORDER
ROLL CALL
APPROVE MINUTES
-42ND/NEVADA SOIL
CLEANUP (#462)
Item 4
EDA RES. g2-02
Item 4
WINNETKA WEST
PROJECT (#466)
Item 5
President Erickson called the meeting of the Economic
Development Authority to order at 10:31 p.m.
Present: Erickson, L'Herault, Otten, Enck, Williamson
Motion was made by Commissioner Otten, seconded by
Commissioner Enck, to approve the EDA minutes of April 13,
1992. Voting in favor: L'Herault, Otten, Enck,
Williamson; Abstained: Erickson. Motion carried.
President Erickson introduced for discussion Item 4,
Resolution Awarding Contract to Kevitt Excavating, Inc.
for Excavation and Treatment of Gasoline Impacted Soils at
42nd/Nevada Avenues, Project No. 462.
Bids were opened on April 21st for the excavation,
treatment and/or disposal of "source area" gasoline
impacted soils at 42nd Nevada avenues. Five bids were
received and the low bid was submitted by Kevitt
Excavating, Inc. in the amount of $57,016. Northern
Environmental, the city's consultant for this project,
recommends awarding the bid to the low bidder. The soils
will be excavated and disposed of by land application at
an MPCA approved site. The work is expected to take place
the second week in May.
Commissioner Otten introduced the following resolution and
moved its adoption: "RESOLUTION AWARDING CONTRACT TO
KEVITT EXCAVATING, INC. FOR EXCAVATION AND TREATMENT OF
GASOLINE IMPACTED SOILS AT 42ND/NEVADA AVENUES, PROJECT
NO. 462 - $57,016". The motion for the adoption of the
foregoing resolution was seconded by Commissioner Enck,
and upon vote being taken thereon; the following voted in
favor thereof: Erickson, Enck, L'Herault, Otten,
Williamson; and the following voted against the same:
None; Absent: None; whereupon the resolution was declared
dUllY passed and adopted, signed by the president which was
attested to by the executive director.
President Erickson introduced for discussion Item 5,
Motion Authorizing Executive Director to Sign Certificate
of Completion for the Winnetka West Barrier-Free Housing
Project (#466).
New Hope EDA
Page i
April 27, 1992
MOTION
Item 5
NEH HOPE TERRACE
APARTMENTS
Item 6
New Hope EDA
Page 2
A condition of the Development Agreement is that the EDA
will furnish a certificate of completion certifying that
all obligations of the developer have been completed in
the construction of the project.
Motion was made by Commissioner Enck, seconded by
Commissioner Williamson, to authorize the Executive
Director to Sign Certificate of Completion for the
Winnetka West Barrier-Free Housing Project {#466). All
present voted in favor. Motion carried.
President Erickson introduced for discussion Item 6,
Discussion Regarding Request by LaNel Financial Group,
Inc. to Amend Assessment Agreement for New Hope Terrace
Apartments.
The EDA resumed discussions previously held on March 23,
1992, and April 13, 1992.
Mr. Donahue explained that LaNel Financial Group is
requesting that the City amend its assessment policy
regarding the New Hope Terrace project. The assessment
policy was developed at the time of the original
construction in 1986 which had a minimum market value and
required a 2% escalation of that market value every year.
In 1993, that market value will be at $6.4 million. They
are requesting an amendment to the assessment agreement
that would allow the county assessor to set the market
value for 1993 and that would be the minimum amount or
floor that the market value could not go under for the
life of the bond issue through the year 2004.
If the City agrees to the amendment, LaNel will retain ten
of the thirty units for low to moderate income housing.
LaNel is projecting that the average subsidy will be $230
per month. For ten units this would amount to
approximately $28,000 per year.
President Erickson interjected that the City needs to
ensure that the "floor" is beneficial to the City of New
Hope in that it would never be so low that the bonds could
not be paid.
Mr. Donahue stated that if the EDA wishes to pursue this
change, he would discuss the specifics with Hennepin
County.
He noted he personally would like the EDA to grant the
request to LaNel as it would save ten of the subsidized
units. However, on the down side, the City's risk is
increased since the bonds are not yet paid off. He
April 27, 1992
pointed out that certain things can happen which may be
out of the City's control {i.e. if the new owners file
bankruptcy} and there may not be adequate reserves to pay
the bonds.
Mr. Sondrall, City Attorney, noted that taxes will have a
priority even in a bankruptcy case. The value of the
property may decline during a bankruptcy case since the
building may be allowed to deteriorate.
President Erickson responded favorably to the amendment to
the assessment policy since 1} it would allow ten out of
the thirty renters to remain until the year 2003; 2) there
will be cash flow to maintain and upkeep the premises; and
3) the new owners are stable and experienced in rental
management-.
Mr. Paul Brewer, President of LaNel Financial Group, Inc.,
was recognized. He reiterated their proposal to retain
ten units in exchange for readjustment to the property's
market value.
He reviewed planned improvements to the property including
patio maintenance, caulking of siding, exterior
staining/painting, landscaping, insulation to the pipes in
the underground garage to reduce heat loss, wallpaper
border and lighting in hallway, carpet replacement, and a
new identification sign.
He presented a chart showing the net cash flow with a
reduction of taxes to 5 million and also based on 5.5
million.
Mr. Greg Bronk of LaNel addressed the EDA. The current
taxes are $268,000 based on a $6,267,000 value. If the
value is reduced to $5,000,000, the taxes would be reduced
to $203,207 or $65,000 reduction. The cost of the ten low
income units would average $27,600 annually. Therefore,
the net reduction of taxes would be $37,800.
He next reviewed taxes based on a $5,500,000 value. The
taxes would be $223,000 or a $45,000 reduction. After the
ten unit subsidy, the net reduction of taxes would be
$17,500. He stated the additional cash flow created by
reduced taxes will be used to partially fund the fore-
mentioned improvements.
Commissioner Otten questioned whether there is any legal
precedent. He remarked of the circumstances where a
private contract is being altered to provide a trade-off
between taxes and low-income housing.
New Hope EDA
Page 3
April 27, 1992
New Hope EDA
Page 4
Mr. Sondrall replied that he does not believe there is a
legal precedent. The EDA is considering re-negotiating
the assessment agreement. He stated it will not affect
other agreements currently in effect.
Mr. Donahue stated he has learned of assessment agreement
modifications made by other cities; namely St. Anthony and
Bloomington. However, he was not aware of any specific
instances where the changes were made for a direct housing
subsidy.
Mr. Sondrall stated there is a legitimate public purpose
if the EDA desires to amend the agreement. The EDA must
protect the City in meeting the financial obligation of
the bonds as well as to ensure quality housing for low to
moderate income persons.
Commissioner Williamson questioned whether there would be
any surplus if the market value was lowered.
Mr. Donahue stated the surplus will be less than if the
agreement is not amended. Certain provisions could be
made in the agreement to act as safety nets.
Commissioner Enck commented that he does not believe New
Hope has the prerogative to use the bonds as requested.
The amendment would have an adverse affect on all New Hope
tax payers, school district, and the county. He noted
LaNel purchased the property as a distressed sale buying
a 5.5 to 6.0 million dollar structure for 5 million
dollars and the corporate profits could be utilized to
subsidize the low to moderate income units.
President Erickson pointed out that the other taxing
districts will not receive any tax dollars until the bonds
are paid off. As soon as a complex starts creating a
negative cash flow, maintenance and upkeep decreases which
in turn draws a different clientele. The new owners have
no legal obligations to retain any low to moderate income
units; however, LaNel is willing to compromise in exchange
for lower taxes. If the City does not assist, there will
be no low to moderate income units in the building. The
petitioners are good owners as proven by Anthony James and
Broadway Village Apartments operations in the City.
Commissioner L'Herault conveyed that he agrees with
Commissioner Enck in that the owners were aware of the
assessment agreement when they made the purchase. He
expressed empathy that tenants may be evicted since they
cannot afford the full rent. He continued by stating on
the other hand LaNel would be saving $65,000 for retaining
only ten people in the apartment building.
April 27, 1992
MOTION
Item 6
President Erickson asked Mr. Donahue to explain the actual
cost to the City.
Mr. Donahue stated the City would give up a certain tax
flow that goes into the tax increment issue. He stated
there is a $532,000 fund balance and anything in excess of
the principal and interest goes into the reserve balance
which is saved over time. In the year 2003, when the
final interest and principal payments are made, the County
divides the money by the taxing jurisdictions. He
projected that the current assessment agreement would bear
the City $250,000. He stated if the proposal is accepted
and the value is set around $5 million, the City's share
would be lowered to $100,000.~
President Erickson suggested tabling the item until the
County could establish the market value and the City
Attorney could prepare a draft agreement.
Commissioner Williamson questioned whether the EDA could
determine the market value rather than the County.
Mr. Donahue stated if the value does not appear to be a
safe enough amount, an escalator could be built into the
contract in order to minimize the City's risk.
Commissioner Otten stated he is pleased that LaNel has
purchased the property but feels the EDA should not be
making amendments to the assessment agreement at the
taxpayers' expense.
Commissioner Williamson reported on the difficulty~she
experienced reaching her decision on the matter.
She commended LaNel for wanting to negotiate a possible
solution to the housing problem. She encouraged them to
solve the problem and maintain the 10-30 units on their
own. She pointed out that as an elected official the
situation has to be viewed as to how it impacts the city
as a whole, and she does not feel she can support it.
Commissioner Otten stated he wants to see the new owners
make a success of the operation. He noted his concern
with the compromise being based on the low to moderate
income housing issue. He remarked that the current
assessment agreement does not appear to jeopardize the
financial standing of the new owners or prevent them from
running a successful operation.
Motion was made by Commissioner Enck, seconded by
Commissioner L'Herault, to make no amendments to the
assessment agreement for New Hope Terrace Apartments.
New Hope EDA
Page 5
April 27, 1992
AD~OURNHENT
Voting in favor: Williamson, L'Herault, Otten, Enck;
Voting Against: Erickson. Motion carried.
Motion was made by Commissioner L'Herault, seconded by
Commissioner Otten, to adjourn the EDA meeting as there
was no further business to come before the Council. All
present voted in favor. The New Hope EDA adjourned at
11:20 p.m.
Respectful ly submitted,
Valerie Leone
City Clerk
New Hope EDA
Page 6
April 27, 1992
Approved EDA Minutes
Meeting #6
CITY OF NEW HOPE
4401Xylon Avenue North
Hennepin County, Minnesota 55428
May 11, 1992
CALL TO ORDER
ROLL CALL
APPROVE MINUTES
AUTOHAUS
PROJECT #467
Item 4
MOTION
Item 4
CITY-OWNED
PROPERTY AT 7305
42ND AVE N (#492)
Item 5
President Erickson called the meeting of the Economic
Development Authority to order at 9:30 p.m.
Present: Erickson, L'Herault, Otten, Enck, Williamson
Motion was made by Commissioner Enck, seconded by
Commissioner Otten, to approve the EDA minutes of April
27, 1992. All present voted in favor. Motion carried.
President Erickson introduced for discussion Item 4,
Consideration of Request for Extension on Development
Contract Improvements, Autohaus, Inc., 7709 42nd Avenue
North.
Mr. Dan Donahue, City Manager, explained that staff has
met with Autohaus to review the development contract.
Certain matters remain to be worked out but a plan in
principle has been established. He noted a formal plan is
being prepared and should be ready to present to the EDA
at the next meeting.
Motion was made by Commissioner Enck, seconded by
Commissioner Otten, to table until May 26, 1992, the
request by Autohaus for an extension on their development
contract improvements. All present voted in favor.
Motion carried.
President Erickson introduced for discussion Item 5,
Discussion Regarding City-Owned Property at Southwest
Corner of 42nd/Nevada Avenues.
Mr. Donahue explained that a purchase offer has been
received from Rapid Oil for the property. At the January
13, 1992, meeting, the EDA directed staff to contact All
Star Sports to inquire whether they were still interested
in a future expansion on the property. Mr. Donahue
informed the EDA that Mr. Jerry Norman, owner of All Star
Sports, and Mr. Robert Baldwin, realtor for Valvoline
Rapid Oil, were both in attendance.
The EDA questioned Mr. Norman regarding any interest in
the parcel for future expansion of his business.
New Hope EDA
Page 1
May 11, 1992
AD~OURNHENT
New Hope EDA
Page 2
Mr. Norman stated he is interested and does have
preliminary plans; however, no specific time table has
been established. He noted he would be willing to move
ahead immediately.
Commissioner Enck commented that the City has communicated
with Mr. Norman several times and a decision has to be
made regarding the property. He pointed out that he would
be hard pressed to reject the offer by Rapid Oil if All
Star Sports is not willing to make a formal purchase
offer.
Mr. Norman advised that he would be prepared to make a
formal proposal in two weeks. He commented that he was
unaware that it was a pressing issue.
President Erickson recommended allowing 30 days for Mr.
Normal to prepare a proposal. He stressed the need for
the EDA to reply to Valvoline regarding their proposal for
the property.
Commissioner L'Herault expressed reservations regarding
legal issues involved in selling the property and whether
the purchase price is the determining factor when
selecting a buyer.
Mr. Donahue explained that the property was purchased with
economic development dollars and no particular funds
require reimbursement. He called attention to the fact
that as property owners the EDA is free to sell the
property to whatever buyer it feels is in the best
interest of the city as well as the best public good. He
emphasized the most important factor to consider during
the sale is the comprehensive plan and the EDA's
development intentions, rather than only considering the
purchase price.
Mr. Robert Baldwin, Baldwin Realty, was recognized. He
expressed his dissatisfaction with the EDA's delay in
making a decision regarding the proposal made by Valvoline
Rapid Oil Change approximately six months ago.
President Erickson reported that the EDA will attempt to
make a decision in 30 days.
Commissioner Otten encouraged Mr. Norman to keep staff
apprised regarding a purchase offer. Also, he was asked
to notify staff if he elects not to pursue purchasing the
property. It was noted that Mr. Norman may be able to
respond prior to the 30-day deadline.
Motion was made by Commissioner Williamson, seconded by
May 11, 1992
Commissioner L'Herault, to adjourn the EDA meeting as
there was no further business to come before the Council.
All present voted in favor. The New Hope EDA adjourned at
9:45 p.m.
Respectfully submitted,
Valerie Leone
City Clerk
New Hope EDA
Page 3
May 11, 1992
Approved EDA Minutes
Meeting #7
CITY OF NEW HOPE
4401Xylon Avenue North
Hennepin County, Minnesota 55428
May 26, 1992
CALL TO ORDER
ROLL CALL
APPROVE llINUTES
AUTOHAUS
PRO~ECT #467
Item 4
President Erickson called the meeting of the Economic
Development Authority to order at 8:46 p.m.
Present: Erickson, L'Herault, Otten, Enck
Absent: Williamson
Motion was made by Commissioner Enck, seconded by
Commissioner Otten, to approve the EDA minutes of May 11,
1992. All present voted in favor. Motion carried.
President Erickson introduced for discussion Item 4,
Resolution Approving Addendum to City of New Hope
Development Contract with Autohaus of Minneapolis, Inc.
(#467).
Mr. Dan Donahue, City Manager, explained certain items
outlined in the development contract with Autohaus were to
be completed by April 4, 1992. Autohaus has requested an
extension and is proposing to complete all site and
building improvements north of the south line of the
building by October 31, 1992, and to complete the
improvements on the rear portion of the property by
October 31, 1994.
Mr. Donahue stated Autohaus has indicated economic
conditions have caused the delay for the improvements. He
also noted Universal Color Lab has a 3-year lease
remaining and some design amenities will be difficult to
occur with the lessee on the property. Mr. Donahue
suggested letting the lease agreement run its course and
structure final approvals based upon the absence of Color
Lab.
Mr. Kirk McDonald, Management Assistant/Community
Development Coordinator, indicated the curbing from the
most southerly wall of the building northward to the
property line will be completed by October 31, 1992. The
remainder of the curbing will be installed by October 31,
1994. He noted that Autohaus had indicated they did not
desire to complete the striping, repaving, and final
curbing at the rear of the building until after the storm
sewer is installed.
Improvements to the building are also proposed which were
not covered in the development contract, i.e. building
painting, installation of canopies, etc.
New Hope EDA
Page 1
May 26, 1992
Commissioner L'Herault inquired of the consequences if
Autohaus does not fulfill the conditions by deadlines.
Mr. Steve Sondrall, City Attorney, stated the City holds
a bond for $26,000 which covers only the public
improvements relating to the storm sewer and drainage in
the rear of the lot. He stated if Autohaus fails to meet
the development contract improvements they would be in
breach of their mortgage and the City has the right to
foreclose on their mortgage.
Commissioner L'Herault expressed doubts regarding whether
the new deadlines will be met unless the EDA conveys its
intentions to take action if Autohaus does not meet the
specified conditions.
President Erickson commented that he believes Autohaus is
just as anxious as the City is to make the site
improvements.
Commissioner L'Herault asked when the canopies would be
installed.
Mr. Tom Oestrich, representing Autohaus, stated the
canopies as well as new signage are in the process of
being made but will not be placed until after Color Lab
vacates the property.
He emphasized that Autohaus is trying to obtain one
company to handle all the improvements (landscaping,
sprinklers, paving, striping, concrete, and curbing).
A lengthy discussion ensued regarding the substitution of
concrete and bituminous for the bomanite paving.
Commissioner Enck asked of the difference between the
materials (appearance, longevity, and cost). He recalled
that Mr. Boettcher has previously stressed the aesthetics
of bomanite.
Mr. Mark Hanson, City Engineer, explained that bomanite is
actually concrete with a color added to it. Then it is
stamped to create a brick effect. He stated it is a
sophisticated construction and is more expensive than
bituminous or concrete.
Commissioner Enck questioned bomanite's resistance to oil
and fuel spills.
Mr. Hanson stated oil and gas probably have the same
affect on bomanite as it would to concrete or asphalt.
Concrete may be more resistant than asphalt but concrete
would hold up better than asphalt.
President Erickson pointed out that oil leakage on
concrete would be more noticeable than it would on an
New Hope EDA
Page 2
May 26, 1992
asphalt surface.
Commissioner Enck stated originally the area was to tie in
with the overall scheme of the 42nd Avenue improvements,
and the change would allow it to be another ordinary
parking lot. He indicated he would prefer holding
Autohaus to the original agreement by requiring the
bomanite surface but allowing an extension rather than
allowing a downgrade.
Mr. Oestrich reported that bomanite is $30,000 higher than
blacktop and in order to meet the improvement deadline
they are planning on paving with a heavy-duty blacktop
fabric. He noted in the future, after Color Lab vacates,
they may replace the blacktop with bomanite.
Commissioner Enck pointed out that "sometime n the future"
is not a commitment.
President Erickson commented that the presence of Color
Lab makes the development difficult.
Mr. Oestrich indicated that Color Lab is trying to
relocate.
Commissioner L'Herault reported when Autohaus entered the
original agreement, it was known that Color Lab may extend
the lease and yet the bomanite surface was one of the
specified improvements.
Mr. Hanson interjected that if the EDA is concerned
regarding the bomanite being relinquished, perhaps a
trade-off requiring greater green area and shrubbery could
be reached to offset the blacktop. He suggested a review
of the site plan.
Mr. Donahue informed the EDA that a decision does not have
to be made tonight and that the item may be tabled.
Mr. Sondrall pointed out that agreement must also be
reached regarding the seeding completion date to provide
for erosion control. He reported that summer seeding
should be completed by June 15th.
Mr. Oestrich confirmed that they would have no problem
meeting the June 15th date for seeding.
Commissioner Enck discussed the southern portion of the
work proposed to be completed by October of 1994. He
recommended placing a deadline of October of 1993 so that
Autohaus does not wait until October of 1994 then request
another extension.
Mr. Oestrich indicated they are trying to be realistic
with the deadlines so that further extensions are not
necessary.
New Hope EDA
Page 3
May 26, 1992
MOTION
NEg HOPE TERRACE
Item 5
ADgOURNMENT
President Erickson conveyed that he personally would agree
to additional shrubs in substitution of bomanite.
Commissioner Enck pointed out that additional shrubs will
require sacrificing vehicle parking space. He stressed
that the whole scheme was to make it an attractive
facility and vast parking area was allowed in trade for
some amenities. He stated he would agree to the blacktop
versus the bomanite if Autohaus will commit to a definite
time frame. He suggested extending the bomanite
requirement no later than 6 months after expiration of
Color Lab's lease.
Staff was directed to meet with Autohaus to discuss the
parking lot surface and to discuss the likelihood of
completion of the rear property by October 1994 deadline.
Motion was made by Commissioner Otten, seconded by
Commissioner L'Herault, to table until June 8, 1992, the
request by Autohaus for an extension on their development
contract improvements. All present voted in favor.
Motion carried.
Mayor Erickson announced that Item 5, Consideration of
Amendment to Agreement Between City of New Hope and New
Hope Terrace, has been removed from the agenda for future
consideration.
Mr. Donahue commented that this item is unrelated to the
recent request by New Hope Terrace to amend the assessment
agreement.
Motion was made by Commissioner L'Herault, seconded by
Commissioner Otten, to adjourn the EOA meeting as there
was no further business to come before the Council. All
present voted in favor. The New Hope EDA adjourned at
9:15 p.m.
Respectfully submitted,
Valerie Leone
City Clerk
New Hope EDA
Page 4
May 26, 1992
Approved EDA Minutes
Meeting #8
CITY OF NEW HOPE
4401Xylon Avenue North
Hennepin County, Minnesota 55428
June 8, 1992
CALL TO ORDER
ROLL CALL
APPROVE MINUTES
AUTOHAUS
PROJECT #467
Item 4
President Erickson called the meeting of the Economic
Development Authority to order at 9:06 p.m.
Present: Erickson, L'Herault, Otten, Enck, Williamson
Motion was made by Commissioner Otten, seconded by
Commissioner L'Herault, to approve the EDA minutes of May
26, 1992. Voting in favor: Erickson, L'Herault, Otten,
Enck; Abstaining: Williamson. Motion carried.
President Erickson introduced for discussion Item 4,
Consideration of Addendum to City of New Hope Development
Contract with Autohaus of Minneapolis, Inc.
Mr. Dan Donahue, City Manager, explained that revisions
requested by the EDA on May 26th have been made to the
addendum. The revisions include the requirement of
installation of the bomanite within six months after
Universal Color Lab leaves the site, all original
improvements in the rear of the building must be made no
later than 1993 and if Autohaus cannot meet that deadline,
they must request another extension, and seeding to
control erosion must be done by June 15, 1992.
President Erickson asked whether Autohaus is in agreement
with the Addendum.
Mr. Oestrich informed the EDA that Autohaus would like to
install bituminous and concrete rather than the bomanite
paving. He added that bomanite does not strengthen the
surface yet it is $30,000 more expensive than bituminous.
He noted the grade of bituminous will be the equivalent of
cement. He expressed opposition with being required to
replace a bituminous surface which would only be a few
years old.
Commissioner Enck reminded Mr. Oestrich that the bomanite
paving was a commitment previously made by Autohaus and
the EDA wants to hold Autohaus to that commitment. He
stated if an equivalent paving material is used, Autohaus
has the capability to request approval at a later date
regarding the alternate surface.-He commented that at
this time (prior to actually viewing a completed parking
New Hope EDA
Page 1
June 8, 1992
MOTION
Item 4
CITY-OWNED
PROPERTY (#492)
Item 5
lot) the EDA is unwilling to agree to anything less than
the original agreement.
President Erickson explained that the EDA wishes to work
with Autohaus and is not unreasonable; however, the EDA
must insist upon certain requirements in the formal
agreement.
Motion was made by Commissioner Enck, and seconded by
Commissioner Williamson, to approve the addendum to City
of New Hope Development Contract with Autohaus of
Minneapolis, Inc'. All present voted in favor. Motion
carried.
President Erickson introduced for discussion Item 5,
Discussion Regarding City-Owned Property at Southwest
Corner of 42nd/Nevada Avenues (#492).
Mr. Donahue informed the EDA that several months ago a
purchase offer was made by Valvoline Inc. to install a
Rapid Oil facility on the city-owned property.
He noted the City's development plan attempts to minimize
petroleum businesses and a Rapid Oil facility does not
particularly fit this plan.
All Star Sports was contacted regarding whether they would
be interested in expanding their adjacent business onto
the vacant parcel. This would complement their existing
site and at the same time help meet the City's objectives
for developing that area.
Mr. Donahue stated All Star Sports has preliminary plans
for expansion of the existing All Star Sports building.
Mr. Ed Sorgatz, Olson Company, was recognized and
explained that he was contacted by Jerry Norman regarding
ideas as to how they could add on to their building as
well as an estimate of costs. He stated the objectives
they tried to accomplish included upgrading the look of
the existing building (colors, etc.), to coordinate the
new building with the existing building so that it appears
as one, and to make the new part accessible to the
original building. He explained that the building is
considered a "high ranch" since at the time the building
was originally constructed, a basement was intended,
however due to a high water table the basement was never
made. He presented drawings showing a central access
corridor which would serve both the new and existing
building. Ramps would be used to make the existing
building accessible.
New Hope EDA
Page 2
June 8, 1992
CLOSED MEETING
Item 6
EDA RES. 92-03
Item 6
Mr. Sorgatz explained that brick would be used for the
exterior to match the existing brick. The building would
be upgraded with patterns and colors through the use of
standing-seam metal. Landscaping and shrubs would make
the current high window system less noticeable.
Mr. Sorgatz advised that the Normans believe that the
project is possible through a cooperative effort with the
City.
President Erickson complimented Mr. Sorgatz on the
attractive layout. He commented that the City's
motivation with 42nd Avenue redevelopment is to upgrade
the Avenue, and he was pleased by the plans for additional
landscaping. He stated the City is more than willing to
help get the property developed, and he encouraged Mr.
Norman to meet with the City Manager regarding expansion
figures. He explained that the EDAwill have to review it
at a later date before making any commitments.
Commissioner Enck questioned whether Mr. Norman intends to
lease space in the proposed addition.
Mr. Norman replied that it is one possibility.
Commissioner Enck inquired of Mr. Norman's intentions to
make an offer to the EDA regarding the purchase of the
property.
Mr. Sorgatz felt a couple weeks would be adequate time for
him to present costs to Mr. Norman.
Mr. Donahue reported that he would like to have a formal
offer available for presentation to the EDA on July 27,
1992.
President Erickson introduced for discussion Item 6,
Resolution Authorizing and Calling for a Closed Meeting of
the New Hope Economic Development Authority.
Mr. Donahue explained that the resolution authorizes the
EDA to hold a closed meeting following adjournment of the
regular meetings. Discussion is concerning the pending
lawsuit involving the Paro's Pub condemnation {42nd Avenue
Redevelopment Project #431). He stated the City purchased
some right-of-way property and settlement regarding the
value of the property is still unresolved.
Commissioner Otten introduced the following resolution and
moved its adoption: "RESOLUTION AUTHORIZING AND CALLING
FOR A CLOSED MEETING OF THE NEW HOPE ECONOMIC DEVELOPMENT
AUTHORITY". The motion for the adoption of the foregoing
New Hope EDA
Page 3
June 8, 1992
ADgOURNMENT
resolution was seconded by Commissioner Enck, and upon
vote being taken thereon; the following voted in favor
thereof: Erickson, Enck, L'Herault, Otten, Williamson; and
the following voted against the same: None; Absent: None;
whereupon the resolution was declared duly passed and
adopted, signed by the president which was attested to by
the executive director.
Motion was made by Commissioner Enck, seconded by
Commissioner Otten, to adjourn the EDA meeting as there
was no further business to come before the Council. All
present voted in favor. The New Hope EDA adjourned at
9:25 p.m.
Respectfully submitted,
Valerie Leone
City Clerk
New Hope EDA
Page 4
June 8, 1992
Approved EDA Minutes
Executive Session
CITY OF NEW HOPE
4401Xylon Avenue North
Hennepin County, Minnesota 55428
June 8, 1992
CALL TO ORDER
ROLL CALL
PARO'$ PUB
#431
ADJOURNMENT
The New Hope EDA met in executive session pursuant to due
call and notice thereof; President Erickson called the
meeting to order at 9:56 p.m.
Present: Erickson, Enck, Otten, L'Herault, Williamson
Also Present: Dan Donahue, Steve Sondrall, Mark Hanson,
Kirk McDonald, Valerie Leone.
President Erickson introduced discussion regarding the
pending lawsuit involving the Paro's Pub condemnation
(42nd Avenue Redevelopment Project #431).
The EDA directed the City Attorney to offer no more than
$22,500, bringing the total payment on this case to
$90,500, or the amount of the commissioner's award. If
the property owner does not accept the offer, the City
Attorney was directed to initiate court proceedings.
As there was no further business to come before the
Council, the New Hope EDA adjourned its Executive Session
at 10:03 p.m.
Respectful ly submitted,
Valerie Leone
City Clerk
New Hope City Council
Executive Session
June 8, 1992
Approved EDA Minutes
Meeting #9
CITY OF NEW HOPE
4401 XYLON AVENUE NORTH
HENNEPIN COUNTY, MINNESOTA 55428
June 22, 1992
CALL TO ORDER
ROLL CALL
APPROVE MINUTES
CITY-OWNED
PROPERTY AT 7305
42ND AVE N (~492)
Item 4
ACQUISITION OF
5501 BOONE AVE NO
Item 5
PROJECT #493
New Hope EDA
Page 1
President Erickson called the meeting of the Economic
Development Authority to order at 9:00 p.m.
Present: Erickson, Enck, L'Herault, Otten, Williamson
Motion was made by Commissioner Enck,
Commissioner L'Herault, to approve the
(Regular and Executive Session) of June 8,
present voted in favor. Motion carried.
seconded by
EDA minutes
1992. Ail
President Erickson introduced for discussion Item
Discussion Regarding City-Owned Property at 7305 42nd
Avenue North - Ail Star Sports/Valvoline Rapid Oil Change
(#492).
Mr. Donahue reported to the EDA that the City is
discussing the purchase and development of the City-owned
property next to Ail Star Sports. Jerry Norman of Ail
Star Sports is working with Olson Concrete to put a
development together. There is the potential for a tenant
for that building if it is built. Mr. Donahue requested
time to explore the possibile development. Mr. Donahue
said that Ail Star Sports will be asking for some City
assistance, principally tax increment financing dollars.
Mr. Donahue stated he informed Mr. Norman that the City
would have to justify any public dollars or tax increment
dollars going into the project and the City would have to
analyze and recommend to Council what might be workable or
feasible.
City Council directed staff to inform Ail Star Sports to
bring a firm proposal back to the July 27 Council Meeting
and Council will make a decision on the issue at that time
President Erickson introduced for discussion Item 5,
"RESOLUTION AUTHORIZING ACQUISITION OF 5501 BOONE AVENUE
NORTH BY EMINENT DOMAIN PROCEEDINGS (#493).
Mr. Donahue explained that 5501 Boone Avenue North is the
vacant property between the City garages and North Ridge.
June 22, 1992
EDA RES. 92-04
Item 5
ADJOURNMENT
The City is putting together a planned project for this
property. Mr. Donahue said part of that development
requires this property and the City has been in
negotiation with the owner for some time and the owner is
not willing to accept what the City considers a fair and
viable offer. Mr. Donahue said if the City wishes to go
forward with the project, he is recommending that eminent
domain proceedings begin and decide within the next 90
days if the project is to proceed and if it is a quick
take or conventional type of eminent domain. Mr. Donahue
said if it is quick take and the project comes together,
construction could probably start in the fall.
President Erickson explained that on July 1, North Ridge
staff, staff from the City of New Hope, and the Director
of North Memorial will be meeting to discuss the
possibility of constructing a hospice building and an
adult daycare building on the property in question.
President Erickson stated that this property is a very
major part of the construction of these two facilities.
President Erickson introduced the following resolution and
moved its adoption: "RESOLUTION AUTHORIZING ACQUISITION
OF 5501 BOONE AVENUE NORTH BY EMINENT DOMAIN PROCEEDINGS
(#493)". The motion for the adoption of the foregoing
resolution was seconded by Commissioner Enck, and upon
vote being taken thereof; the following voted in favor
thereof; Erickson, Enck, L'Herault, Otten, Williamson; and
the following voted against the same None; Absent; None;
whereupon the resolution was declared duly passed and
adopted, signed by the presiden~ which was attested to by
the executive director.
Motion was made by Commissioner Williamson, seconded by
Commissioner Enck, to adjourn the meeting. Ail present
voted in favor. The New Hope EDA adjourned at 9:10 p.m.
Respectfully sub~?itted,
Valerie Leone
City Clerk
New Hope EDA
Page 2
June 22, 1992
Approved EDA Minutes
Meeting #10
CITY OF NEW HOPE
4401 XYLON AVENUE NORTH
HENNEPIN COUNTY, MINNESOTA 55428
July 27, 1992
CALL TO ORDER
ROLL CALL
APPROVE HINUTES
82-1 PLAN
(#493)
Item 4
EDA RES. 92-05
Item 4
CITY-OWNED
PROPERTY (#492)
Item 5
New Hope EDA
Page i
President Erickson called the meeting of the Economic
Development Authority to order at 8:11 p.m.
Present: Erickson, Enck, L'Herault, Otten, Williamson
Motion was made by Commissioner L'Herault, seconded by
Commissioner Enck, to approve the EDA minutes of June 22,
1992. All present voted in favor. Motion carried.
President Erickson introduced for discussion Item 4,
Resolution Approving 1992 Amendment to Redevelopment Plan
82-1 and Tax Increment Financing Plan 82-1 and Requesting
Approval of City Council (#493).
Commissioner Enck verbalized his endorsement of the Adult
Day Care project.
Commissioner Enck introduced the following resolution and
moved its adoption: "RESOLUTION APPROVING 1992 AMENDNENT
TO REDEVELOPNENT PLAN 82-1 AND TAX INCREMENT FINANCING
PLAN 82-1 AND REQUESTING APPROVAL OF CITY COUNCIL". The
motion for the adoption of the foregoing resolution was
seconded by Commissioner Williamson, and upon vote being
taken thereof; the following voted in favor thereof;
Erickson, Enck, L'Herault, Otten, Williamson; and the
following voted against the same None; Absent; None;
whereupon the resolution was declared dul.¥ passed and
adopted, signed by the president which was attested to by
the executive director.
(At 8:15 p.m. the City Council meeting resumed; at 9:04
p.m. the EDA was called back to order).
Mayor Erickson introduced for discussion Item 5,
Discussion Regarding City-Owned Property at 7305 42nd
Avenue North - All Star Sports/Valvoline Rapid Oil Change
(#492).
Mr. Donahue reported that city staff has been discussing
the development of the city-owned property at Nevada and
July 27, 1992
42nd Avenue for a long period of time. The City has
received two proposals for development: one from the
adjacent property owner, All Star Sports; and one from
Valvoline Rapid Oil. Staff has analyzed the proposals and
determined that All Star Sports proposal will require
substantial city. assistance whereas the Valvoline Rapid
Oil proposal will require no city assistance.
Mr. Donahue informed the EDA that when making its decision
regarding the proposals it should keep in mind the
existing policy which favors non-automotive related use of
the property.
Mr. Donahue stated All Star Sports offered $50,000 for the
property and requested approximately $100,000 of tax
increment financing assistance. They are proposing to
construct a one-story addition to their present building;
however, they do not have a tenant for the expansion and
may not be willing to proceed at this time even if the
City provided funding.
He further stated that Valvoline has offered $75,000 for
the property and is requesting no financial assistance
from the City.
President Erickson inquired whether it would be an
appropriate courtesy to provide a counter proposal to All
Star Sports.
Commissioner L'Herault felt a counter offer is not
necessary as the property has been under discussion for
several months. He noted when Valvoline first approached
the EDA, representatives explained the type of proposed
building and it appeared to be agreeable to the EDA. He
recommended proceeding with the Valvoline proposal.
Commissioner Enck felt the EDA should be in a position to
make a decision tonight and give direction to staff. He
agreed with Commissioner L'Herault that the Valvoline
Rapid Oil proposal is the better proposal. He noted a
Rapid Oil business will be an attractive structure and it
is not the same as a gas station service center.
President Erickson recommended supporting the project
contingent' upon approval of plans which outline
landscaping and street access drawings.
Commissioner Enck questioned whether Valvoline Rapid Oil
will be requesting any variances.
Mr. Donahue recalled no variances being requested during
New Hope EDA
Page 2
July 27, 1992
NOTION
OTHER BUSINESS
AD~OURNHENT
the initial discussions by Valvoline. He noted a joint
parking area or driveway access with All Star Sports may
become an issue.
Motion was made by Commissioner Enck, seconded by
Commissioner Wi!liamson, to accept the proposal by
Valvoline Rapid Oil subject to approval of final plans.
All present voted in favor. Motion carried.
Mr. Donahue reported a neighborhood problem at 36th and
Hillsboro between the Professional Building and Highway
169. He stated there are two properties which each have
a fence constructed resulting in a natural walk-way. He
proposed utilizing up to $4,000 of tax increment dollars
to demolish the two fences and construct one fence which
will eliminate the walk-way and juvenile problems.
The EDA directed Mr. Donahue to report back with bids.
Motion was made by Commissioner Enck, seconded by
Commissioner Otten, to adjourn the meeting. All present
voted in favor. The New Hope EDA adjourned at 9:20 p.m.
Respectfully submitted,
Valerie Leone
City Clerk
New Hope EDA
Page 3
July 27, 1992
Approved EDA Minutes
Meeting #11
CITY OF NEW HOPE
4401XYLON AVENUE NORTH
HENNEPIN COUNTY, MINNESOTA 55428
September 28, 1992
CALL TO ORDER
ROLL CALL
APPROVE
MINUTES
SUBORDINATION
AGREEMENT
Item 4
EDA RES. 92-06
Item 4
ADJOURNMENT
President Erickson called the meeting of the Economic
Development Authority to order at 8:31 p.m.
Present: Erickson, Enck, L'Herault, Otten, Williamson
Motion was made by Commissioner Enck, seconded by
Commissioner L'Herault, to approve the EDA minutes of July
27, 1992. All present voted in favor. Motion carried.
President Erickson introduced for discussion Item 4,
Resolution Directing Execution of Subordina-tion Agreement
Regarding EDA Second Mortgage on Property Located at 4021
Oregon Avenue North.
Mr. Donahue explained that the City sold this city-owned
home to Steven and Diane Heinsch in June of 1990. The
property owners are refinancing the property, and as
second mortgage holders, it is necessary for the EDA to
execute the Subordination Agreement.
The owners are taking advantage of the favorable interest
rates by refinancing and staff recommends approval.
Commissioner Williamson introduced the following
resolution and moved its adoption: "RESOLUTION DIRECTING
EXECUTION OF SUBORDINATION AGREEMENT REGARDING EDA SECOND
MORTGAGE ON PROPERTY LOCATED AT402! OREGON AVENUE NORTH".
The motion for the adoption of the foregoing resolution
was seconded by Commissioner Enck, and upon vote being
taken thereof; the following voted in favor thereof;
Erickson, Enck, L'Herault, Otten, Williamson; and the
following voted in against the same; None; Absent; None;
whereupon the resolution was declared duly passed and
adopted, signed by the president which was attested to by
the executive director.
Motion was made by
Commissioner L'Herault,
present voted in favor.
8:35 p.m.
Commissioner Otten, seconded by
to adjourn the meeting. All
The New Hope EDA adjourned at
Respectful ly submitted,
Valerie Leone
City Clerk
New Hope EDA
Page 1
September 28, 1992
Approved EDA Minutes
Meeting #12
CITY OF NEW HOPE
4401XYLON AVENUE NORTH
HENNEPIN COUNTY, MINNESOTA 55428
October 26, 1992
CALL TO ORDER
ROLL CALL
APPROVE MINUTES
EDA RESOLUTION
92-07
Item 4
EDA RESOLUTION
92-07
OTHER BUSINESS
Bus Shelter
New Hope EDA
Page 1
President Erickson called the meeting of the Economic
Development Authority to order at 8:03 p.m.
Present:
Absent:
Erickson, L'Herault, Otten, Williamson
Enck
Motion was made by Commissioner Otten, seconded by
Commissioner Williamson, to approve the EDA minutes of
September 28, 1992. All present voted in favor. Motion
carried.
President Erickson introduced for discussion Item 4,
Resolution Authorizing Commencement of Eminent Domain
Proceedings to Acquire Property at 7516 42nd Avenue North,
New Hope, Minnesota (#474).
Mr. Donahue reported that acquisition of the property by
eminent domain is necessary to ensure the City's
protection again~responsibility for soil and ground water
contamination cleanup costs.
Commissioner L'Herault introduced the following resolution
and moved its adoption: "RESOLUTION AUTHORIZING
COHMENCENENT OF EMINENT DOMAIN PROCEEDINGS TO ACQUIRE
PROPERTY AT 7516 42ND AVENUE NORTH, NEW HOPE, MINNESOTA
(#474)". The motion for the adoption of the foregoing
resolution was seconded by Commissioner Williamson, and
upon vote being taken thereof; the following voted in
favor thereof: Erickson, L'Herault, Otten, Williamson;
and the following voted against the same: None; Abstained:
None; Absent: Enck; whereupon the resolution was declared
duly passed and adopted, signed by the president which was
attested to by the city clerk.
Councilmember Williamson inquired whether staff has
received a response from Mr. Swanberg as a result of Shari
French's correspondence to him regarding the wind break.
Mr. Donahue stated the Citizen Advisory Commission
recommended that the City take no action to build bus
October 26, 1992
Mayor's Breakfast
AD~OURNHENT
shelters as it would set a precedent. He stated the
School District was contacted regarding the bus route,
etc. and the School Board would not recommend undertaking
the building of shelters. The Citizen Advisory Commission
recommended planting trees to provide some relief. He
noted if bus shelters were built maintenance would become
an issue.
Councilmember Williamson questioned whether the homeowner
could be responsible for maintenance.
Mr. Donahue stated if it was placed on private property
that would be possible. He stated design issues would be
of concern as well the anchoring method. He stated if the
Council desires to pursue a shelter, the Building Official
would be asked to provide input.
Councilmember L'Herault recalled Mr. Swanberg offering to
build an attractive and durable shelter.
Councilmember Williamson indicated she felt it is not an
unreasonable request and suggested that staff contact Mr.
Swanberg to further discuss it.
Councilmember Otten announced the first Mayor's Breakfast
taking place on Friday, October 30th, and invited
interested persons to obtain tickets through City Hall.
Motion was made by Commissioner Williamson, seconded by
Commissioner L'Herault, to adjourn the meeting as there
was no further business to come before the EDA. All voted
in favor. The New Hope Economic Development Authority
adjourned at 8:10 p.m.
Respectful ly submitted,
Valerie Leone
City Clerk
New Hope EDA
Page 2
October 26, 1992
CITY OF NEW HOPE
4401Xylon Avenue North
Hennepin County, Minnesota 55428
Approved City Council Minutes
Executive Session
December 28, 1992
CALL TO ORDER
ROLL CALL
CHAMPION AUTO
IMP. PROJECT #444
MOTION
ADJOURNMENT
The New Hope City Council met in executive session
pursuant to due call and notice thereof; Mayor Erickson
called the meeting to order at 8:25 p.m.
Present: Erickson, Enck, Otten, L'Herault
Absent: Williamson
Also Present: Dan Donahue, Steve Sondrall, Kirk McDonald,
Terri Wehling, and Valerie Leone.
Mayor Erickson introduced discussion regarding the
Litigation/Settlement Strategy on Champion Auto Special
Assessment Appeal (#444).
Mr. Steve Sondrall, City Attorney, explained the status of
the special assessment appeal.
Mr. Donahue presented his recommendation for settlement.
Motion was made by Councilmember Enck, seconded by
Councilmember L'Herault, authorizing settlement in
accordance with the City Manager's recommendation. All
present voted in favor. Motion carried.
As there was no further business to come before the
Council, the New Hope City Council adjourned its Executive
Session at 8:35 p.m.
Respectful ly submitted,
Val erie Leone
City Clerk
Approved EDA Minutes
Neeting #13
CITY OF NEW HOPE
4401XYLON AVENUE NORTH
HENNEPIN COUNTY, MINNESOTA 55428
December 28, 1992
CALL TO ORDER
ROLL CALL
APPROVE NINUTES
EDA RESOLUTION
Item 4
EDA RESOLUTION
#92-08
New Hope EDA
Page I
President Erickson called the meeting of the Economic
Development Authority to order at 7:06 p.m.
Present: Erickson, L'Herault, Enck, Otten
Absent: Williamson
Motion was made by Commissioner Enck, seconded by
Commissioner L'Herault, to approve the EDA minutes of
October 26. Voting in favor: Erickson, L'Herault, Otten;
Abstained: Enck; Absent: Williamson. Motion carried.
President Erickson introduced for discussion Item 4,
Resolution Authorizing Commencement of Eminent Domain
Proceedings to Acquire Partial Property at 5425 Boone
Avenue North (Project #493).
Mr. Donahue explained that this action authorizes the EDA
to commence eminent domain proceedings to acquire 75 feet
of property owned by Lee Brothers. The property is
necessary to proceed with the adult day care development
proposal by North Ridge and Senior Outreach Services.
Mr. Donahue noted there are tax consequences through
eminent domain which is an issue that Lee Brothers have
been instructed to discuss with their tax advisors. He
stated negotiations for a purchase price can still take
place even after the EDA initiates eminent domain
proceedings.
Councilmember Otten questioned the request for 75 feet
rather than the initial 100 feet of property.
Mr. Donahue stated after analyzing the project and effects
to Lee Brothers it was felt that 75 feet was reasonable
because it still gives the project the necessary property
as well as allows Lee Brothers the potential to develop
their site and to have a more marketable property. ~
Commissioner Enck introduced the following resolution and
moved its adoption: "RESOLUTION AUTHORIZING COMMENCENENT
December 28, 1992
AD~IOURNMEKr
OF ENZNENT DOMAIN PROCEEDZNGS TO ACQUZRE PARTIAL PROPERTY
AT 5425 BOONE AVENUE NORTH, NEW HOPE, MINNESOTA (#493)'.
The motion for the adoption of the foregoing resolution
was seconded by Commissioner L'Herault, and upon vote
being taken thereof; the following voted in favor thereof:
Erickson, Enck, L'Herault, Otten; and the following voted
against the same: None; Abstained: None; Absent:
Williamson; whereupon the resolution was declared duly
passed and adopted, signed by the president which was
attested to by the city clerk.
Motion was made by Commissioner Otten, seconded by
Commissioner L'Herault, to adjourn the meeting as there
was no further business to come before the EDA. All voted
in favor. The New Hope Economic Development Authority
adjourned at 7:10 p.m.
Respectful 1 y submitted,
Valerie Leone
City Clerk
New Hope EDA
Page 2
December 28, 1992