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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