1991 EDAApproved EDA Minutes
Meeting #1
CITY OF NEW HOPE
4401Xylon Avenue North
Hennepin County, Minnesota 55428
February 11, 1991
CALL TO ORDER
ROLL CALL
APPROVE MINUTES
OECEMBER 27, 1990
FINAL SITE PLAN
AUTOHAUS
Item 4
President Erickson called the meeting of the Economic
Development Authority to order at 8:00 p.m.
Present: Erickson, L'Herault, Otten, Enck, Williamson
Motion by Commissioner Otten, seconded by Commissioner
Enck to approve the EDA minutes of December 27, 1990.
Voting in favor: Otten, Erickson, Enck, Williamson;
Abstained: L'Herault; Absent: None. Motion Carried.
President Erickson introduced for discussion Item 4,
Resolution Approving Final Site Plan for Autohaus Addition
and Authorizing Autohaus Loan as Consistent with the
Development Objectives of the 42nd Avenue Tax Increment
Financing District (Project 467).
Mr. Donahue stated the Autohaus Development contract and
site plan were previously tentatively approved subject to
specific changes being made to the site plan. A revised
site plan has been submitted to the City which
incorporates all the necessary changes required from
previous approvals. It should be noted that the original
site plan showed a "showroom and display area" in the
front section of the building. Staff had requested that
the site plan be revised to show that Universal Colour Lab
is presently located there and that the area may be used
in the future for showroom and display. Other changes
involved increased landscaping, decreased sales area and
front display area, and elimination of several parking
stalls.
The City Attorney has revised the Development Contract to
show the private improvements the City expects to see made
in consideration of the loan agreement. Achange has also
been made to show that the storm water drainage
improvements are public improvements which will become
property of the City after their completion.
A public hearing will be scheduled for the next Council
meeting to authorize the sale of the animal hospital
property to AutohaUs.
New Hope EDA
Page 1
February 11, 1991
New Hope EDA
Page 2
Commissioner Enck pointed out that the Agreement to Raze
incorrectly shows Autohaus of Minnesota rather than
Autohaus of Minneapolis and asked that it be corrected.
Mr. McDonald stated the major changes made to the plan
include the reduction of a 15-foot display area in front
of the building; the sales area was reduced to provide a
snow storage area at back of the property; inaccessible
parking spaces were eliminated; Universal Colour Lab is
shown on the plan; and landscaping revisions.
Mr. McDonald further stated that the Planning Commission
requested additional landscaping at the westerly area
between the school district and Autohaus. He explained
that the request was for elimination of the Junipers and
replacement with taller trees such as conifers or spruce
for more effective screening. He noted that the plan
shows arborvitaes will be planted. The EDA indicated
approval of the arborvitaes plantings.
Commissioner Enck inquired regarding the parking location
for Universal Colour Lab employees. Mr. Tom Oestreich,
representing Autohaus, responded that they will continue
to park in the front of the building as in the past. He
noted the parking area is specified on their lease
agreement.
Commissioner Williamson inquired of the length of the
lease agreement with Universal Colour Lab. Mr. Oestreich
stated he believes they are close to making final
arrangements to relocate. He stated Universal Colour Lab
has six months remaining on the lease. There is a 5-year
option on the lease; however, at their last meeting,
Universal Colour Lab did not elect to exercise the option.
Commissioner Enck commented that what is requested for
approval by the EDA is not the same as what is displayed
in the site plan because Universal Colour Lab is still
located in the building.
Mr. Donahue stated language could be incorporated into the
developer's agreement to address that aspect.
Mr. Sondrall explained that the notation on the site plan
serves that purpose by indicating the existing location of
Universal Colour Lab. Essentially, what is being approved
is the potential forAutohaus to expand its development to
what is shown on t~e Site Plan. What the EDA should be
aware of is that there is an option that Universal Colour
February 11, 1991
New Hope EDA
Page 3
Lab could remain in that building for 5-1/2 years. The
site plan is a representation of what Autohaus would be
allowed. Any other changes would be contrary to the
development contract and the plan.
Commissioner Enck pointed out that the notation only
refers to the area inside the structure, but does not
address where Universal Colour Lab employees will park.
Mr. Sondrall stated the site plan could be modified to
show how Universal Colour Lab will fit into this plan
relative to the existing situation.
Commissioner Williamson stated she does not feel it poses
a problem. She noted the actual dimensions will not be
changed and within six months the area currently being
used as a parking lot will become the display area.
Commissioner L'Herault stated the financial data for the
loan was based upon front display area and how it related
to potential sales. He inquired how much of an impact
there would be if Universal Colour Lab decided to remain
for another five years causing Autohaus unable to display
vehicles in that area.
Mr. Oestreich commented that since Autohaus has rented the
property from Dr. Herman and has been able to display cars
in that location, their "off-street" sales volume has
increased from one percent to seven or eight percent and
with the elimination of the animal hospital building they
anticipate even higher sales. He commented that an
increase to seven to eight percent is a conservative
assumption.
Mr. Donahue reiterated that language can be contained in
the developer's agreement which points out that display
area in front of the Universal Colour Lab will not be
allowed while the property is leased by Universal Colour
Lab. Mr. Sondrall concurred and stated the development
contract and site plan can be tailored as needed. He
commented that he felt it was necessary to include the
notation on the site plan.
Mr. Oestreich indicated Autohaus would agree to language
indicating the front area will not be used for display
area while Universal Colour Lab is a tenant.
Mr. Sondrall commented that the site plan should actually
show where the tenant parking is located so that it is
clear and is in conformance with the development contract.
February 11, 1991
Commissioner Enck pointed out that the parking area must
adhere to the City Code's parking requirements relating to
any structure.
Mr. Sondrall stated he is unaware how it may affect the
zoning code relative to parking but he knows Autohaus has
81 parking spaces and he is assuming it is in conformance
with code. He indicated staff will review the situation
and commented that if a number of those spaces are
allocated to Universal Colour Lab, it may change the mix.
However, by reducing the size of the existing building for
Autohaus the number of needed spaces based on gross
footage would also be reduced.
The EDA discussed parking areas for vehicle display,
customer parking, and employee parking.
Mr. Sondrall stated the closing is tentatively scheduled
for February 26.
Commissioner Otten inquired whether Mr. Oestreich feels
that in two weeks Universal Colour Lab would be in a
position to give a definite decision regarding its
relocation. He commented that if that decision is eminent,
perhaps it would be best to table the item for two weeks.
Commissioner Enck stated he is concerned that there is no
restriction in the development plan regarding different
tenants and if Universal Colour Lab moves out, Autohaus
could choose to rent the building to a different tenant.
Mr. Sondrall clarified that the development contract
specifically states that the front of the building will be
used either with Universal Colour Lab as a leasee or as
display area for Autohaus.
Mr. Tom Oestreich emphasized that Autohaus is anxious for
Universal Color Lab to relocate and would not consider a
different tenant.
Mr. Sondrall asked Mr. Oestreich if he would guarantee
that there would be no other tenant than Universal Color
Lab. Mr. Oestreich responded, "Absolutely".
President Erickson stated the amendment to the development
contract should specify that there will be no outside
parking of cars in front of Universal Color Lab until
Universal Color Lab has actually left the premises.
New Hope EDA
Page 4
February 11, 1991
EDA RES. #g1-1
Item 4
ADJOURNMENT
Commissioner Enck noted that his position remains the same
and that he is not in favor of supporting the loan request
based upon the possible adverse impacts. Commissioner
L'Herault indicated he is in agreement with Commissioner
Enck.
Commissioner Otten introduced the following resolution and
moved its adoption: "RESOLUTION APPROVING REVISED SITE
PLAN AND AUTHORIZING AUTOHAUS LOAN AS CONSISTENT WITH THE
DEVELOPMENT OBJECTIVES OF THE 42ND AVENUE TAX INCREMENT
FINANCING DISTRICT". The motion for the adoption of the
foregoing resolution was seconded by Commissioner
Williamson, and upon vote being taken thereon; the
following voted in favor thereof: Erickson, Williamson,
Otten; and the following voted against the same: Enck,
L'Herault; Absent: None; whereupon the resolution was
declared duly passed and adopted, signed by the president
which was attested to by the city clerk.
Mr. Sondrall requested clarification of the motion.
President Erickson explained that the EDA has adopted the
resolution subject to amendment to the site plan and
development contract.
Motion 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
8:30 p.m.
Sincerely,
Val erie Leone
City Clerk
New Hope EDA
Page 5
February 11, 1991
Approved EDA Minutes
Meeting #2
CITY.OF NEW HOPE
4401Xylon Avenue North
Hennepin County, Minnesota 55428
February 25, 1991
CALL'TO ORDER
ROLL CALL
APPROVE MINUTES
FEBRUARY 11, 1991
SALE OF PROPERTY
7675 42ND AVE. N.
Item 4
MOTION
EDA RES. #91-2
Item 4
President Erickson called the meeting of the Economic
Development Authority to order at 8:45 p.m.
Present: Erickson, L'Herault, Otten, Enck, Williamson
Motion by Commissioner Williamson, seconded by
Commissioner Otten to approve the EDA minutes of February
11, 1991. All present voted in favor.
President Erickson introduced for discussion Item 4,
Resolution Authorizing Sale of Property at 7675 42nd
Avenue to Autohaus of Minneapolis, Inc. (Project #467).
Mr. Donahue stated this public hearing is scheduled
regarding the sale of the Herman property to Autohaus.
The property would be acquired by direct purchase, the
existing structure would be razed, and the property would
be incorporated with the Autohaus property in conjunction
with expansion plans. Autohaus has agreed to purchase the
property from he EDA in the amount of $140,000.
The Council inquired of the closing date. City Attorney,
Steve Sondrall, stated he does not believe a closing date
has been scheduled.
Mr. Tom Oestreich, representing Autohaus was recognized
and stated there was an issue regarding possible soil
contamination. Soil tests were taken and the test results
came back favorable. The closing date is set for Tuesday,
March 5, 1991.
Motion was made by Commissioner Enck, seconded by
Commissioner Williamson, to close the public hearing on
consideration of the sale of the property at 7675 42nd
Avenue North to Autohaus. All present voted in favor.
Motion carried.
Commissioner Enck introduced the following resolution and
moved its adoption: "RESOLUTION AUTHORIZING SALE OF
PROPERTY AT 7675 42ND AVENUE NORTH TO AUTOHAUS OF
MINNEAPOLIS, INC." The motion for the adoption of the
New Hope EDA
Page 1
February 25, 1991
ADJOURNMENT
foregoing resolution was seconded by Commissioner Otten,
and upon vote being taken thereon; the following voted in
favor thereof: L'Herault, Otten, Erickson, Enck,
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 made by Commissioner Otten, 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
8:50 p.m.
Sincerely,
Valerie Leone
City Clerk
New Hope EDA
Page 2
February 25, 1991
Approved EDA Minutes
Meeting #3
CITY OF NEW HOPE
4401Xylon Avenue North
Hennepin County, Minnesota 55428
April 8, 1991
CALL TO ORDER
ROLL CALL
APPROVE HINUTES
FEBRUARY 25, 1991
FOREMOST, INC.
Item 4
President Erickson called the meeting of the Economic
Development Authority to order at 8:50 p.m.
Present: Erickson, Otten, Williamson
Absent: L'Herault, Enck
Motion was made by Commissioner Otten, seconded by
Commissioner Williamson to approve the EDA minutes of
February 25, 1991. All present voted in favor.
President Erickson introduced for discussion Item 4,
Consideration of Request by Foremost, Inc., for Economic
Development Grant Program/Economic Recovery Fund
Application.
Mr. Donahue stated Foremost, Inc., 7825 42nd Avenue North,
is interested in relocating and expanding their sheet
metal fabrication business. They have encountered
problems marketing their property due to the groundwater
contamination problems generated by Electronic Industries
and have requested economic development assistance from
the City. Foremost has made three specific requests, one
of which involves an Economic Development Grant
Application through the Economic Recovery Fund.
President Erickson stated the negotiations should be based
upon what the value of the building is on the regular
market with the existing problems. He recommended having
an appraisal conducted indicating the value of the
property if there was no contamination and what it is
worth with the contamination.
Mr. Donahue noted~that Foremost, Inc. has filed a suit
against Electronic Industries for loss of property value.
He stated through the state's Economic Grant Program the
City may receive between $250,000 to $500,000 to
administer in the form of a grant or a loan to Foremost
for relocation. He stated the City is not committing to
anything at this time.
President Erickson stated applying for the grant appears
to be the first step and he is in favor of it.
New Hope EDA
Page I
April 8, 1991
MOTION
ADJOURNMENT
Motion was made by Commissioner Williamson, seconded by
Commissioner Otten, directing staff to proceed with the
grant application. All present voted in favor. Motion
carried.
Motion made by President Erickson, 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
8:55 p.m.
Sincerely, /-
Valerie Leone
City Clerk
New Hope EDA
Page 2
April 8, 1991
CITY OF NEW HOPE
4401Xylon Avenue North
Hennepin County, Minnesota 55428
Approved EDA Minutes
Meeting #4
April 22, 1991
CALL TO ORDER
ROLL CALL
APPROVE MINUTES
FOREMOST, 'INC.
Item 4
President Pro tem Enck called the meeting of the Economic
Development Authority to order at 7:55 p.m.
Present: Enck, L'Herault, Otten, Williamson
Absent: Erickson
It was the consensus of the EDA to defer approval of the
April 8, 1991, minutes until the next EDA Meeting.
President Pro tem Enck introduced for discussion Item 4,
Consideration of Request by Foremost, Inc., for City to
Share Cost of Drilling Test Wells to Determine Status of
Contamination on Property (Improvement Project 474).
Mr. Donahue stated the City has been discussing with
Foremost, Inc. a possible economic development project for
properties on 42nd and Quebec. He stated Foremost would
like to request assistance in the cost of drilling test
wells for soil samples to determine if there is
contamination on their property. Mr. Donahue stated this
information is essential before the property could be
acquired and marketed by the City and is one of the items
identified in the Planning Consultant's report that must
be investigated if the City is interested in exploring
redevelopment.
President Pro rem Enck inquired whether the EDA would
recover its expenditures. Mr. Donahue stated the majority
of the tax increment monies would be recovered through two
sources--I) if Foremost is successful on their lawsuit
against Electronic Industries because of loss of value due
to the contamination, and 2) if the City receives the
grant from the State Economic Development Grant Program.
Mr. Donahue informed the EDA of the risks involved with
the project. He stated the City would have a financial
risk of $15,000 (2/3 of $22,000) for the testing work.
Mr. Donahue stated the application for the grant will be
shared equally between Foremost and the City.
Next, Mr. Donahue discussed the appraisal of the Foremost
New Hope EDA
Page i
April 22, 1991
property and recommended that the EDA not share in the
expense for the appraisal of the Foremost property.
Commissioner Otten inquired of thecost for the appraisal.
Mr. Steve Sondrall, City Attorney, stated the appraisal
will be approximately $3,000.
Mr. William Skolnick, Attorney representing Mr. Allen
Fredendall and Foremost, Inc., was recognized. Mr.
Skolnick introduced Mr. Allen Fredendall, owner of
Foremost, Inc. at 7825 42nd Avenue North. He explained
that Foremost employs between 35-40 people and desires to
relocate and expand their sheet metal fabrication business
within the City of New Hope.
Mr. Skolnick clarified that the appraisal fee is $3,000
for the initial part of the appraisal and the total cost
estimate is $7,000. He commented that after negotiations
with the City regarding the appraisal, it was decided that
Foremost would bear the entire cost for the appraisal.
Mr. Skolnick stated the estimate obtained by Delta
Environmental Consultants for the soil testing is $22,314.
He requested that the City pay 2/3 of the cost and
reported that Foremost would agree to reimburse the City
for this assistance out of the proceeds of the lawsuit
and/or any grant funds that would be forthcoming. He also
indicated that Foremost will share half the cost of the
grant application.
He explained that financial institutions are not willing
to refinance the property because of possible soil
contamination.
Mr. Skolnick pointed out that Foremost desires to relocate
within the City and the City is interested in redeveloping
the property on 42nd and Quebec. In order to accomplish
this, certain questions must be addressed: a) whether
there is contamination on the property, b) if there is
contamination, to what extent; andc) the associated costs
for clean-up.
Mr. Skolnick stated he had just recently obtained
information regarding the insurance policy of Electronic
Industries. President Pro tem Enck requested a copy of
the policies. Mr. Skolnickstated he would furnish copies
to Mr. Sondrall if it does not violate confidentiality of
Electronic Industries.
Commissioner Otten inquired of the associated costs for
the appraisal. Mr. Skolnick stated Foremost has elected
to retain Peter Patchin as an appraiser due to his
New Hope EDA
Page 2
April 22, 1991
MOTION
experience in valuation of real property when located next
to or on a contamination problem. He explained that the
appraisal will definitely cost $3,000 and could be as high
as $7,000 depending on when a settlement is reached and if
a final report is necessary.
Commission Otten asked whether the proposed expansion will
affect the number of employees at Foremost. Mr.
Fredendall stated he is optimistic that when the economy
picks up, so will his business. He explained that their
present building is 24,700 sq. feet in size and is not
adequate during peak business. He stated they previously
leased space from 5101Hillsboro for 11 months.
Commissioner Otten questioned when and if Foremost will
decide to relocate. Mr. Fredendall explained that he
decided long ago to relocate but has been unable to do so
since lending institutions will not make loans because of
soil problems and potentially large clean-up costs.
The EDA and Mr. Skolnick discussed the pending lawsuit
against Electronic Industries. Mr. Skolnick stated in
addition to seeking damages for diminution of property,
Foremost will be seeking reimbursement for costs of soil
testing conducted west of Electronic Industries.
He stated the Minnesota Pollution Control Agency will
require Electronic Industries to clean up the property
regardless of whether Foremost wins its lawsuit or not.
In summary, Mr. Skolnick stated the City and Foremost have
a common goal--the City would like to redevelop the area
and Foremost would like to relocate within New Hope.
Mr. Sondrall inquired whether Peter Patchin has given any
indication as to an approximate amount of diminution of
value in the Foremost property. Mr. Skolnick replied that
he has not but in his own mind he feels it will be 30 to
40 percent.
Mr. Skolnick stated Foremost is proceeding with the grant
application and relocation and is not relying on proceeds
from the lawsuit to get into a new site. Mr. Fredendall
stated his only personal security is the business.
Motion was made by Commissioner L'Herault, seconded by
Commissioner Otten, to provide financial assistance of 2/3
of the costs not to exceed $15,000 for drilling test wells
(utilizing tax increment monies) and to pay 1/2 the cost
for the grant application. All present voted in favor.
Motion carried.
New Hope EDA
Page 3
April 22, 1991
ADgOURNHENT
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
8:25 p.m.
Respectfully submitted,
Valerie Leone
City Clerk
New Hope EDA
Page 4
April 22, 1991
Approved EDA Minutes
Meeting #5
CITY OF NEW HOPE
4401Xylon Avenue North
Hennepin County, Minnesota 55428
May 28, 1991
CALL TO ORDER
ROLL CALL
APPROVE MINUTES
GETHSEMANE
CEMETERY PROPERTY
Item 4
New Hope EDA
Page I
President Erickson called the meeting of the Economic
Development Authority to order at 7:50 p.m.
Present: Erickson, L'Herault, Otten, Enck, Williamson
Motion was made by Commissioner Williamson, seconded by
Commissioner Otten, to approve the EDA minutes of April 8,
1991. Voting in favor: L'Herault, Otten, Erickson,
Williamson; Voting against; None; Abstaining: Enck.
Motion carried.
Motion was made by Councilmember Enck, seconded by
Commissioner Williamson, to approve the EDA minutes of
April 22, 1991. All present voted in favor. Motion
carried.
President Erickson introduced for discussion Item 4,
Consideration of Proposal to Prepare Planning Document/
Market Study Regarding Development of a Portion of
Gethsemane Cemetery Property.
Mr. Donahue explained that officials representing
Gethsemane Cemetery have made application for a
conditional use permit to allow a temporary office
structure on the site for the purpose of the sale of
spaces in a proposed mausoleum to be built at the
cemetery. The CUP request is in the Planning Commission
process at this time. In preliminary discussions with
cemetery officials regarding long-range planning for the
entire site, officials indicated to staff that they may
give consideration to selling off a portion of the
property on the westerly portion of the site for
development. The funds would assist them in building the
mausoleum. Staff developed several concept plans for
several different sizes of developments and presented them
to cemetery officials for review.
At this time, staff would like the opportunity to have a
professional planning document and market study prepared
on the 18-20 acres of property to identify the market
conditions that may influence the development of a portion
of Gethsemane Cemetery. Such a study would identify
development cost estimates for single family, townhome and
May 28, 1991
MOTION
ADJOURNMENT
multiple-family market opportunities. The development of
a portion of this property would not only coincide with
the City's long-range goals of providing a greater
diversity in housing, but would also maximize property
values by utilizing vacant property. The estimated cost
for the study is $2,250 according to the City's Planning
Consultant. It would be funded by the HRA Redevelopment
fund.
Commissioner Enck expressed the need for quality control
if it is determined that multiple-family housing is the
best use for the land.
Commissioner Williamson commented that it is difficult for
a single-income family to afford a single family house and
there is a need for housing in the $60-80,000 price range
such as a townhomes and condos. President Erickson
commented that in many instances "owned" housing is
maintained better than "rental" units.
Motion was made by Commissioner L'Herault, seconded by
Commissioner Otten, authorizing the market study on
development of a portion of Gethsemane Cemetery. All
present voted in favor. Motion carried.
Motion 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 8:00 p.m.
Respectful ly Submi.tted,
Valerie Leone
City Clerk
New Hope EDA
Page 2
May 28, 1991
Approved EDA Minutes
Meeting #6
CITY OF NEW HOPE
4401Xylon Avenue North
Hennepin County, Minnesota 55428
June 24, 1991
CALL TO ORDER
ROLL CALL
APPROVE MINUTES
FOREHOST, INC.
Item 4
President Erickson called the meeting of the Economic
Development Authority to order at 9:05 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 May 28,
1991. All present voted in favor. Motion carried.
President Erickson introduced for discussion Item 4,
Discussion of Request by Foremost, Incorporated for
Economic Development Grant Program/Economic Recovery Fund
Application {#474).
Mr. Donahue stated City staff recently met with
representatives of the Minnesota Department of Trade and
Economic Development to discuss an Economic Recovery Fund
Application to assist Foremost in the relocation/expansion
of its business. Estimated costs for land, building and
equipment at the new site total $815,800. These costs do
not include the acquisition of the present Foremost site,
which Mr. Fredendall feels has a value of $720,000. While
the grant application could be structured to assist with
the acquisition and development of the new site, the grant
funds cannot be utilized by the City for the purchase of
the existing site. While the acquisition price of the
Foremost property might be reduced significantly if
Foremost is successful in their suit against Electronic
Industries and awarded damages, some source of revenue for
the acquisition of the property {whether it be $400,000 or
$720,000) must be found if the grant application is to
proceed.
A cash flow projection for Tax Increment District #8,
which includes the loan to Autohaus, shows that the
district is projected to have a cash balance of $3,500,000
at the end of the district's life in 2004. The cash
balance at the end of 1990 was $454,000. While there is
presently not enough cash in the district to purchase the
property, the excess cost could be financed internally and
paid back to the district. What has to be decided is
whether the EDA desires to purchase the Foremost property
and draw down the balance of the cash flow so that the
New Hope EDA
Page I
June 24, 1991
grant can proceed.
A second alternative that staff has discussed with
Foremost, in the event that the City does not purchase the
Foremost property, is that perhaps the City should shift
its focus towards the acquisition of the Electronic
Industries site. This would be less costly and the
purpose here would be to rid 42nd Avenue and Foremost of
the building/property from where the contamination was
generated. The building would be demolished and the land
possibly added to the present Foremost site to provide
room for expansion and/or to make the Foremost site more
marketable.
In either case, a preliminary decision needs to be made
regarding the acquisition of the Foremost site because
this will determine if the grant application proceeds or
not. Without the acquisition of the property, Foremost
does not have the equity that is needed to invest in the
grant for the relocation.
Mr. Donahue stated the preliminary testings of the soils
under and around the Foremost building show that there is
no soil contamination but there is ground water
contamination.
He noted that Mr. Fredendall is asking $720,000 for the
property, although it may have a market value closer to
$420,000. The EDA could assist him by purchasing the
Foremost property, however, by doing so, it would deplete
the tax increment funds.
Mr. Donahue recommended pursuing the Electronic Industries
site. He stated the City is currently trying to get the
building up to code and as a last resort may have it
removed. He stated an option would be for the EDA to
acquire Electronic Industries property, clear the
building, clean up the soil problems then divide the
properties between the two neighboring properties,
Foremost Inc. and Ardel Industries. He stated the
remaining properties would be brought into code
conformance and the City would need to structure some type
of agreement that if and when they ever sell the building,
the City may recoup its investment. He commented that
this would be less costly and would make both neighboring
properties more attractive for sale.
The EDA questioned the results of the wells. Mr. Donahue
stated the wells are having a positive impact as the
ground water contamination levels have significantly
decreased.
New Hope EDA
Page 2
June 24, 1991
Commissioner Enck expressed concern that the extent of
contamination is unknown as well as the cost for remedial
action. He commented the EDA must address these issues.
Also, the source of funding must be explained--appears to
be Petro dollars. The cost/benefit ratio for the whole
district must be determined.
Mr. Enck spoke against the option of purchasing the
Electronic Industries site since the City would then
become the generator of the soil contamination problem.
He also stated he did not believe that splitting the
property between the neighboring property owners would
accomplish anything since the buildings do not meet
standards.
He stated the EDA must find the real value of the Foremost
property. He stated if the EDA assisted in any way, he
would recommend demolishing the whole area to carry on
with the intent of the redevelopment to dress up the 42nd
Avenue and put some viable properties there. He stated
the EDA could take over the properties, clean them up, and
do remedial excavations. This would end up costing the
EDA 10% of the total costs. He stated that cost could be
carried over against Electronic Industries. He stated if
Foremost can proceed on their own with some assistance
from the EDA (purchasing property at market value), then
the EDA would be complying with the intent of the 42nd
Avenue Redevelopment Project which is to improve the
neighborhood.
President Erickson agreed with Commissioner Enck's
recommendations.
Mr. Donahue informed the EDA that most of the tax
increment monies would be depleted.
President Erickson noted that Foremost is anxious to reach
an agreement since they are really cramped at their
present building. He stated they are in a bind since they
cannot get a loan from the bank to expand the building due
to the soil contamination. However, the EDA should not
pay an additional $300,000 than what the property is
worth.
President Erickson felt an appraisal is necessary and
Foremost should share the cost. Mr. Donahue stated
Foremost is currently having an appraisal conducted and is
paying the entire cost.
The EDA discussed the necessity of retaining an appraiser
to determine the property's market value.
New Hope EDA
Page 3
June 24, 1991
Commissioner Enck expressed concern that the extent of
contamination is unknown as well as the cost for remedial
action. He commented the EDA must address these issues.
Also, the source of funding must be explained--appears to
be Petro dollars. The cost/benefit ratio for the whole
district must be determined.
Mr. Enck spoke against the option of purchasing the
Electronic Industries site since the City would then
become the generator of the soil contamination problem.
He also stated he did not believe that splitting the
property between the neighboring property owners would
accomplish anything since the buildings do not meet
standards.
He stated the EDA must find the real value of the Foremost
property. He stated if the EDA assisted in any way, he
would recommend demolishing the whole area to carry on
with the intent of the redevelopment to dress up the 42nd
Avenue and put some viable properties there. He stated
the EDA could take over the properties, clean them up, and
do remedial excavations. This would end up costing the
EDA 10% of the total costs. He stated that cost could be
carried over against Electronic Industries. He stated if
Foremost can proceed on their own with some assistance
from the EDA {purchasing property at market value), then
the EDA would be complying with the intent of the 42nd
Avenue Redevelopment Project which is to improve the
neighborhood.
President Erickson agreed with Commissioner Enck's
recommendations.
Mr. Donahue informed the EDA that most of the tax
increment monies would be depleted.
President Erickson noted that Foremost is anxious to reach
an agreement since they are really cramped at their
present building. He stated they are in a bind since they
cannot get a loan from the bank to expand the building due
to the soil contamination. However, the EDA should not
pay an additional $300,000 than what the property is
worth.
President Erickson felt an appraisal is necessary and
Foremost should share the cost. Mr. Donahue stated
Foremost is currently having an appraisal conducted and is
paying the entire cost.
The EDA discussed the necessity of retaining an appraiser
to determine the property's market value.
New Hope EDA
Page 3
June 24, 1991
Approved EDA Minutes
Meeting #7
CITY OF NEW HOPE
4401Xylon Avenue North
Hennepin County, Minnesota 55428
July 22, 1991
CALL TO ORDER
ROLL CALL
APPROVE MINUTES
FOREHOST, INC.
Item 4
MOTION
ADJOURNMENT
President Erickson called the meeting of the Economic
Development Authority to order at 9:05 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 June
24, 1991. All present voted in favor. Motion carried.
President Erickson introduced for discussion Item 4,
Request Authorization to Obtain Appraisal on Foremost,
Inc. Property at 7528 42nd Avenue North (Improvement
Project No. 474).
Mr. Donahue stated in order to proceed with the
acquisition of the Foremost property and before a grant
application can be submitted, specific costs must be
identified. An appraisal is necessary so the City can
structure an offer to purchase the property at fair market
value. Staff is recommending that the appraisal be
conducted by Brad Bjorklund, BCL Appraisal, Inc. for
$5,000. He stated the appraisal will be funded out of
42nd Avenue tax increment monies.
Motion was made by Commissioner Otten, seconded by
Commissioner Enck, authorizing the apprmisml on Foremost,
Inc. Property at 7528 42nd Avenue North {Improvement
Project No. 474).
Motion made by Commissioner Enck, seconded byCommissioner
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 9:10 p.m.
Respectful ly Submitted,
Valerie Leone
City C1 erk
New Hope EDA
Page I
July 22, 1991
Approved EDA Minutes
Meeting #8
CITY OF NEW HOPE
4401Xylon Avenue North
Hennepin County, Minnesota 55428
October 14, 1991
CALL TO ORDER
ROLL CALL
APPROVE MINUTES
CUSTOM HOLD
PROPERTY
5430 INTERNATIONAL
PARKWAY
Item 5
President Erickson called the meeting of the Economic
Development Authority to order at 9:20 p.m.
Present: Erickson, L'Herault, Otten, Enck, Williamson
Motion was made by Commissioner L'Herault, seconded by
Commissioner Otten, to approve the EDA minutes of July 22,
1991. All present voted in favor. Motion carried.
President Erickson indicated that Item 5 will precede Item
4 since Mr. Duane Trieber (Custom Mold & Design, Inc.) is
in attendance.
President Erickson introduced for discussion Item 5,
Discussion Regarding Purchase of Outlot A, Custom Mold
Addition, 5430 International Parkway.
Mr. Donahue explained that Custom Mold and Design, Inc. is
proposing to expand their existing facility to the north
and is acquiring and platting the property at 5430
International parkway to accommodate the expansion
{Planning Cases 91-28 and 91-30). The New Hope Public
Works Garage is located directly north of this site and
Public Works currently utilizes the northern portion of
the vacant property. Custom Mold is acquiring the two
acre site and proposing to plat it so that 1.12 acres
would be combined with their existing property and .88
acres would be platted as an outlot, with an understanding
that the City may have an interest in purchasing the
property to expand the public works site. Mr. Donahue
stated the City has informally discussed the acquisition
of the property from Custom Mold.
Mr. Duane Trieber, owner of Custom Mold, acquired the two
acres of property at 5430 International Parkway for
$179,000 or $89,500 per acre. The outlot contains .88
acres and the asking price is approximately $78,760 (.88
x $89,500).
Mr. Donahue stated the City has no land for temporary
storage of items such as rock, sand, dirt, etc. He stated
arrangements will also have to be made soon for a salt
storage building.
New Hope EDA
Page i
October 14, 1991
FOREMOST, INC.
7528 42ND AVE. N.
#474
Item 4
New Hope EDA
Page 2
He stated besides the purchase price Mr. Trieber would
like two other items addressed: 1) a plan for the site;
and 2) excess fill material.
Mr. Donahue explained that another factor to be taken into
consideration is the potential development at 5501 Boone
Avenue North {North Ridge development}. The property is
low on the south and it is possible that excess soils from
the Custom Mold property may be deposited on this site and
if so, the purchase price may be lower. Mr. Donahue
stated Chuck Thompson of North Ridge may be coming before
the EDA in the near future. He indicated the City may
want to consider becoming part of the North Ridge project
and utilize the south portion for vehicular parking or
some other use.
The EDA authorized the City Manager to proceed to
negotiate with purchasing the land from Custom Mold. Mr.
Donahue stated any proposal made would be contingent upon
approval by the EDA.
Mr. Trieber stated if the City does not need the dirt, he
would contract to have the dirt hauled away. However, if
the City wanted it he could relocate the dirt.
He expressed concern with the height of the potential salt
dome and requested review of a concept plan.
President Erickson commented that the City would have to
go through the Planning Commission process and would work
closely with Custom Mold to ensure that all concerns are
addressed.
Mayor Erickson introduced for discussion Item 4,
Discussion Regarding Acquisition/Relocation of Foremost,
Inc., 7528 42nd Avenue North.
Mr. Donahue stated the appraisal of the Foremost, Inc.
property has been completed and staff is continuing
discussions with Foremost regarding the possible
acquisition of the property and the relocation of the
business within New Hope.
Mr. Donahue updated the EDA and indicated in the past, the
City has reviewed the Foremost deal as two projects in
one: 1) the redevelopment of the Foremost property; and 2)
the relocation of the Foremost facility within New Hope.
He stated staff recommends establishing the redevelopment
of 42nd Avenue as the City's first priority. He commented
that whether Mr. Fredendall of Foremost relocates in New
October 14, 1991
ADJOURNMENT
Hope or not, should be considered secondary. He stated
staff hopes that the business will remain in New Hope;
however, that should be a separate issue.
Mr. Donahue stated staff is in the process of obtaining an
analysis between Foremost's appraisal and the City's
appraisal of the property. Mr. Donahue stated a review
appraisal would cost between $1,000 to $1,500. He stated
he would use this information to determine what the City
would be required to do under condemnation opposed to what
the City might be willing to offer for the property.
The EDA agreed with Mr. Donahue's recommendations in that
it would be advantageous to separate the issues.
Motion made by Commissioner Otten, 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
9:45 p.m.
Respectful ly submitted,
Val erie Leone
City Clerk
New Hope EDA
Page 3
October 14, 1991
Approved EDA Minutes
Meeting #g
CITY OF NEW HOPE
4401Xylon Avenue North
Hennepin County, Minnesota 55428
November 12, 1991
CALL TO ORDER
ROLL CALL
APPROVE HINUTES
CUSTOH HOLD
PROPERTY
5430 INTERNATIONAL
PARKWAY
Item 5
President Erickson called the meeting of the Economic
Development Authority to order at 8:20 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 October
14, 1991. All present voted in favor. Motion carried.
President £rickson introduced for discussion Item 4,
Discussion Regarding Purchase of Outlot A, Custom Mold
Addition, 5430 International Parkway (Improvement Project
No. 488).
Mr. Donahue explained that staff met with Custom Mold and
Design, Inc. to discuss the property and the final plat.
The actual approval of the final plat is contingent upon
whether the City wishes to acquire the Outlot A from that
plat.
Mr. Donahue explained that the reason for the purchase of
Outlot A is to expand the Public Works property. The City
has been utilizing Outlot A for several years to store
various materials. Permission for its use was granted by
the owner; however, the City did not have to pay anything.
The purchase of the property would provide sufficient land
to store materials (sand, rock, gravel, etc). He also
explained that the State is mandating that salt and sand
used during winter months be stored under cover to avoid
migration into storm water.
Mr. Donahue continued noting that soil borings dating back
to 1979 indicate the property is buildable land. He
stated that if a salt dome is built, staff will recommend
that it be built in the existing yard rather than outlot
A due to a better access.
Commissioner Enck inquired how salt and sand would be
mixed if staff desired to change the percentage of each.
Mr. Hanson, City Engineer, stated Public Works typically
mixes a quantity of 1100-1400 ton of salt/sand twice per
year rather than mixing different percentages. He stated
New Hope EDA
Page 1
November 12, 1991
EDA RES. 91-3
Item 4
ADJOURNHENT
he would anticipate that Public Works would load the dome
in the fall before the winter starts and if needbe a
second time during the winter. He explained that the
sand/salt would be mixed in the yard then put in the dome
through a conveyor in the same manner as filling a silo.
Mr. Donahue noted that funds from the existing reserves in
the Central Garage Fund would be used rather than funds in
the General Fund.
Mr. Sondrall stated the petitioner was concerned regarding
construction of a berm which would be partially
constructed on the City's property once the property was
acquired. He explained that the purchase agreement would
provide for provisions for that berm to be constructed
Partly on the petitioner's property and partly on the
City's property and each party would then bear their own
cost for sodding/seeding the berm. Second, at the request
of the petitioner, a height restriction on storage of
material will be made a condition of the deed.
The EDA discussed the property purchase price of $78,760
(.88 acre x $89,500) for Outlot A.
Commissioner L'Herault introduced the following resolution
and moved its adoption: "RESOLUTION AUTHORIZING PURCHASE
OF OUTLOT A, CUSTOM MOLD ADDITION". 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, L'Herault,
Otten, Enck, 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 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
8:30 p.m.
Respectful ly submitted,
City Clerk
New Hope EDA
Page 2
November 12, 1991
Approved EDA Minutes
Meeting #10
CITY OF NEW HOPE
4401Xylon Avenue North
Hennepin County, Minnesota 55428
November 25, 1991
CALL TO ORDER
ROLL CALL
APPROVE HINUTES
7305 42ND AVENUE
NORTH PROPERTY
Item 4
President Erickson called the meeting of the Economic
Development Authority to order at 9:51 p.m.
Present: Erickson, L'Herault, Otten, Enck
Absent: Williamson
Motion was made by Commissioner L'Herault, seconded by
Commissioner Enck, to approve the EDA minutes of November
12, 1991. All present voted in favor. Motion carried.
President Erickson introduced for discussion Item 4,
Discussion with Rapid Oil Inc. Regarding City-Owned
Property at 7305 42nd Avenue North.
Mr. Donahue, City Manager, explained that Valvoline
Company would like to make a presentation to the EDA
regarding the city-owned property at 42nd and Winnetka.
He stated the proposal is for a Rapid Oil Change facility
on the site next to All Star Sports. He indicated the EDA
does not have to take any action tonight on the matter.
He pointed out that the EDA may accept or reject the
proposal and is under no obligation.
Commissioner Enck inquired whether All Star Sports has
expressed an interest in the property.
President Erickson stated he did speak with Mr. Norman on
Friday and he is very interested in expanding his building
and would like to discuss it with the City.
Mr. Mark Segal, Valvoline Rapid Oil Change, Inc. Real
Estate Field Representative, was recognized. He stated
they are willing to pay a fair market value for the
property. Mr. Segal showed a prototype building of Rapid
· Oil Change.
He stated Rapid Oil Change would change the property which
is currently non-taxable into taxable functioning
property.
President Erickson explained that he would favor utilizing
the property for an addition to the All Star Sports
facility rather than a automobile service station. He
New Hope EDA
Page 1
November 25, 1991
pointed out that the plan for 42nd Avenue Redevelopment
was to minimize commercial uses of property where
petroleum products are dispensed and the Rapid Oil Change
is closely related to this type of use.
Mr. Segal inquired whether the purchase price would
influence the EDA's decision.
President Erickson stated at this time the EDA cannot
react to All Star Sports because they have not made a
formal proposal.
Mr. Segal emphasized that Rapid Oil Change businesses are
good corporate neighbors, and he asked how long the EDA is
willing to wait for a formalized proposal from All Star
Sports.
President Erickson noted that he would like to see
something concrete this winter so construction can begin
next summer.
Commissioner Enck pointed out that President Erickson has
provided his feelings regarding the site; however, the
other EDA members may not agree. He explained that he
would like to consider a proposal and purchase offer;
however, Mr. Segal has not provided that tonight. He
stated he would like to see the market value and traffic
generation, etc.
Commissioner L'Herault agreed that more information is
necessary. He commented that he feels a Rapid Oil Change
is considerably different than a gas station operation.
Mr. Donahue pointed out three items: first, the EDA is the
property owner and can act like a property owner; second,
the EDA has a development plan for 42nd Avenue which would
have to be modified to accept this proposal; and third, a
purchase offer should be presented at the same time as the
proposal.
Mr. Segal stated his primary purpose tonight was to
introduce Rapid Oil Change and obtain an inclination from
the EDA as to their feelings for the property. He
indicated he would be happy to return with a proposal and
purchase offer.
Mr. Sondrall, City Attorney, informed the EDA that a
public hearing would be required before city-owned
property could be sold. Therefore, the EDA should bear in
mind the notification requirements.
Commissioner Enck recommended that Mr. Segal provide a
New Hope EDA
Page 2
November 25, 1991
ELECTRONIC
INDUSTRIES
Item 5
~OTION
Item 5
NORTHNEST YMCA
Item 6
rendering of the structure and indicate the structure's
value when he presents the proposal.
Mr. Segal replied that he would not be able to give the
EDA a site plan unless the project was authorized due to
the expense. He reported that he could provide an old set
of plans and a rendering. He stated a 1300 square foot
two-bay building is proposed for the site.
President Erickson introduced for discussion Item 5,
Discussion on Request for Authorization to Obtain
Appraisal on Electronic Industries Property at 7516 42nd
Avenue North.
Mr. Sondrall indicated the City has formally served an
order under the Hazardous Building Act which would require
action on the part of the property owner. The action
would be either to respond formally much like an answer in
a civil lawsuit or do nothing which would cause the City
to make a motion in court to have the building razed.
He explained that nothing will happen on the property for
30 days.
The property owner has contacted the City and indicated
that they would be willing to sell the property at a
reasonable price, in light of the order. They do not
desire to make extensive repairs to the building, only to
have the property taken by the City.
Mr. Sondrall stated an appraisal is necessary so the EDA
can determine the property's market value.
He pointed out that if the property is not sold to the
EDA, the City will proceed with its action in district
court for requiring improvements to the property or the
demolition of the property.
Mr. Donahue indicated the approximate cost of the
appraisal is $3,500.
Motion was made by Commissioner Enck, seconded by
Commissioner L'Herault, to authorize the appraisal for
$3,500. All present voted in favor. Motion carried.
President Erickson introduced for discussion Item 6,
Discussion with Northwest YMCA on Their Vacant Parcel.
Mr. Duane Ostlund, representing YMCA, was recognized and
stated the assessment for Quebec Avenue Extension for the
YMCA amounted to $76,000. He stated on behalf of the YMCA
Chuck Holmes sent a letter to Mayor Erickson regarding a
New Hope EDA
Page 3
November 25, 1991
proposal indicating that the YMCA would deed over to the
City of New Hope the holding pond and the high ground
south of the YMCA as its payment for the project
assessment.
He stated several years ago the YMCA allowed the City to
construct a holding pond on its property and the Y was not
compensated but cooperated with the City. He explained
that the YMCA not only is a health enhancement facility
but it does a tremendous job working with the youth and
family of the community. The $76,000 assessment will
severely hamper their ability to continue the programs at
the same level.
Mr. Ostlund asked the EDA to seriously consider the
proposal. He pointed out that timing is crucial as the
assessment deadline is November 30th in order to avoid
interest.
President Erickson stressed the need to separate the
issues. He stated if the City is interested in purchasing
the property, that should be issue number one and the
assessment is number two. He encouraged the YMCA to make
arrangements for paying the assessment or putting it on
the tax rolls. He stated if the City purchases the
property, the YMCA could do whatever it wishes with the
money.
President Erickson stated the EDA will consider the
proposal but is not prepared to make a decision tonight.
Mr. Donahue stated it should be made clear that the issues
are separate and the YMCA has a deadline to meet in terms
of filing their appeal if they desire to go that route.
Mr. Sondrall stated the appeal notice is based on the
YMCA's ability to appeal their assessment not just pay it.
If they decide the assessment was inappropriately levied
against their property, they would have 30 days from the
day of the adoption of the assessment to challenge the
amount. A possible acquisition of the property would in
no way extend the appeal period or waive any challenge
that the City might make in the event they want to appeal
it later. The assessment was adopted on October 28, 1991;
therefore, the YMCA has until November 28th to make an
appeal.
Commissioner Enck questioned the size of the property.
Mr. Donahue stated it is .96 acres. He stated staff is
exploring the possibility with Crystal for a joint
salt/sand dome or a fuel facility. The property alone is
New Hope EDA
Page 4
November 25, 1991
AD~OURNRENT
probably too small; however, it may be feasible if it were
combined with the large piece of vacant property owned by
the school district south of the bus barn. He .commented
it may also serve the school district's fuel needs.
Motion made by Commissioner L'Herault, seconded by
Commissioner Enck, 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.
Respectfully submitted,
Valerie Leone
City Clerk
New Hope EDA
Page 5
November 25, 1991
Approved EDA Minutes
Meeting #11
CITY OF NEW HOPE
4401Xylon Avenue North
Hennepin County, Minnesota 55428
December 9, 1991
CALL TO ORDER
ROLL CALL
APPROVE MINUTES
FOREMOST PROPERTY
Item 4
President Erickson called the meeting of the Economic
Development Authority to order at 8:55 p.m.
Present: Erickson, L'Herault, Otten, Williamson
Absent: Enck
Motion was made by Commissioner L'Herault, seconded by
Commissioner Otten, to approve the EDA minutes of November
25, 1991. 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 staff would like to discuss the
acquisition of the Foremost, Inc. property at 7528 42nd
Avenue North with the EDA. He stated last June the EDA
gave the City Manager strong direction to pursue the
acquisition of the properties {Foremost, Electronic
Industries, and Ardel) based upon the previously accepted
plan for the development of the properties east of Quebec
on 42nd Avenue {42nd Avenue Redevelopment Plan). The EDA
has pursued a plan where it wishes to look at commercial
development of the properties given the problems
associated with the area including the substantial
pollution allegedly caused by Electronic Industries which
is the property located near Foremost.
He indicated during the past six months City staff has
been working with Mr. Fredendall, owner of Foremost, and
his attorney to negotiate an agreement whereby the City
could acquire the property. He stated the proposal is
comparable to costs the City could expect to pay in a
contested condemnation action. Mr. Donahue referred to
the City Attorney's December 3rd letter which outlined the
City's proposal on the acquisition of the property:
1) A purchase price not to exceed $585,000 {figured
arrived at based on payment of outstanding mortgage
equaling $484,962; payment of unpaid real estate taxes
for years 1990 and 1991 of $64,792; payment of unpaid
special assessments not certified to tax rolls of
$14,692; payment of relocation expenses of $20,000)
New Hope EDA
Page 1
December 9, 1991
New Hope EDA
Page 2
2) After acquisition of the property the City would
continue to allow Foremost to operate at the property
without payment of rent for a period not to exceed 24
months. Foremost would pay all operational costs
associated with their use of the property including,
but not limited to, real estate taxes, utility charges
and insurance. Also, they would receive a gO-day
notice provision to vacate the property.
3) Upon their vacation of the property, they would be
allowed to remove all personal property, machinery and
equipment including any item which would be considered
a movable fixture. In other words, they would have
all salvage rights to the building given the fact that
we intend to demolish the building for redevelopment.
4) Foremost would agree to execute an agreement providing
the EDA with an equal share of the judgement collected
on their lawsuit against Electronic Industries after
payment of attorney's fees and not to exceed $50,000.
In other words, there will be the possibility that the
City would receive a $50,000 reimbursement in the
event that Foremost was very successful in their
lawsuit against Electronic Industries.
Mr. Donahue stated a lawsuit has been initiated based upon
the loss of property value. Foremost is claiming there is
a stigma attached to their property in that there is a
loss of market value due to their proximity to Electronic
Industries which allegedly caused substantial pollution to
their property.
He stated the City's appraisal also referred to the
pollution stigma: "the site is stricken with stigma of
pollution because of its proximity to polluted Electronic
Industries". He explained that the Foremost property has
ground water contamination but does not have any soil
contamination. He pointed out that there is protection
under state and federal laws whereby the purchaser of
property does not assume any problems or liabilities.
Mr. Donahue asked the City Attorney to further explain how
the proposed price was reached. He noted the possibility
of $50,000 reimbursement if Foremost is successful in
their lawsuit.
President Erickson stated staff was directed to consider
this and it would relate to the plan to upgrade 42nd
Avenue. However, there are so many influences on the
proposal that he would strongly recommend holding a work
session to discuss the different issues.
Mr. Sondrall stated one qualification he would like to
make is that the $585,000 figure that is quoted in the
December 9, 1991
letter does not necessarily represent what a court or a
jury or another appraiser might consider to be the market
value of the property. He stated the figures that the
City Manager read were basically utilized to understand
what the property owner at Foremost is facing in regard to
expenses, liabilities, and problems in marketing the
property. It does not represent a "market value" that the
property is worth.
He continued by explaining that if the EDA wishes to
pursue the acquisition of the property, he would recommend
a friendly condemnation action because of the protection
from contamination liability found in chapter 117. The
necessary action if the EDA is desirous of pursuing this
option, would be to pass a resolution authorizing the
condemnation and authorizing a direct purchase of the
property under chapter 117.
Commissioner Otten inquired how unpaid real estate taxes
are normally handled in condemnation actions.
Mr. Sondrall indicated they would be subtracted from the
determination of value that was ultimately arrived at in
the condemnation action.
Mr. Donahue discussed the project time table and commented
that there are some considerations for completing the
matter by January 1, 1992.
Mr. Donahue also noted that the $585,000 would not come
from City funds but would be paid through the
redevelopment district that has been created along 42nd
Avenue. He stated there are excess revenues in TIF
District No. 8.
Mr. Bill Skolnick, Attorney representing Mr. & Mrs.
Fredendall (owners of Foremost), was recognized. He
stated there is a time issue for the matter to get
resolved. He reported their appraisal is at $660,000
unimpaired. Mr. Skolnick stated a contested condemnation
action could exceed $660,000.
He stated Foremost is proceeding with the litigation and
he has obtained a report by their environmental
consultants which clearly demonstrates that Electronic
Industries polluted the Foremost property.
Mr. Skolnick concluded by conveying that he would gladly
furnish any documents requested by the EDA.
Commissioner Otten noted the $585,000 equates to
approximately $27 per square foot.
New Hope EDA
Page 3
December 9, 1991
WORK SESSZON
ADJOURNMENT
Mr. Sondrall stated the $585,000 price takes into
consideration the relocation costs as well as the market
value of the property {land and building).
Mr. Sondrall stressed the importance of starting a
condemnation action since that is necessary in order to
obtain the benefit covered under chapter 117 relating to
acquiring contaminated property and not being responsible
for clean-up costs. He stated if the EDA does not pursue
under Chapter 117 then it may have to deal with
contamination clean-up costs.
He stated the matter was approached with the number one
concern being the acquisition of the property for future
development in accordance with the guidelines for ¢2nd
Avenue. He noted that while the negotiated price may be
on the high side, it may be a good deal if the property
owner's case is accepted rather than the City's side.
President Erickson stated this is a cooperative effort
between the City and Foremost. He believes the purchase
will be advantageous to both parties.
Mr. Skolnick clarified an item contained in number two in
the proposal which refers to a 90 day notice provision
given by the City. He pointed out that it should be
reversed whereby Foremost may give the City a 90-day
notice. He stated if Foremost finds an alternate site
before expiration of the 24 months, it has the right to
vacate.
Commissioner Otten stated he would like to obtain options
for the two combined properties and agreed that a work
session would be beneficial.
The EDA scheduled a work session for Monday, December 16,
1991, at 6 p.m. to continue discussions regarding the
Foremost 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
9:30 p.m.
Respectfully submitted,
Valerie Leone
City Clerk
New Hope EDA
Page 4
December g, 1991
Approved EDA Minutes
Meeting #12
CITY OF NEW HOPE
4401Xylon Avenue North
Hennepin County, Minnesota 55428
December 23, 1991
CALL TO ORDER
ROLL CALL
APPROVE NINUTES
ARDELL ENGINEERING
PROPERTY
Item 4
HOTION
ADJOURNMENT
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 L'Herault, seconded by
Commissioner Williamson, to approve the EDA minutes of
December 9, 1991. Voting in favor: Otten, Williamson,
L'Herault; Abstaining: Enck; Absent: Erickson. Motion
carried.
President Pro Tem Enck introduced for discussion Item 4,
Discussion on Request for Authorization to Obtain
Appraisal on Ardell Engineering and Manufacturing Property
at 7500 42nd Avenue North (Project No. 474).
Mr. Donahue indicated at the work session last week,
Council directed staff to initiate an appraisal on the
property on 7500 42nd Avenue. The motion tonight would
formalize that directive and would authorize the City's
appraiser, Brad Bjorklund to undertake the work for a cost
of $1,200 to $1,800.
President Pro Tem Enck questioned whether the appraisal
will be a formula in which it may be adjusted up or down
depending on changes in property values in case nothing is
done within a year or two.
Mr. Donahue stated he believes it could be updated rather
than repeating the whole process.
Mr. Sondrall stated the appraiser would probably update
the comparables to determine market value.
Motion was made by Commissioner Otten, seconded by
Commissioner L'Herault, to authorize the appraisal on
Ardell Engineering and Hanufacturing Property at 7500 42nd
Avenue North. All present voted in favor. Motion
carried.
Motion made by Commissioner Otten, seconded by
Commissioner L'Herault, to adjourn the EDA meeting as
New Hope EDA
Page I
December 23, 1991
there was no further business to come before the Council.
All present voted in favor. The New Hope EDA adjourned at
8:35 p.m.
Respectfully submitted,
Valerie Leone
City Clerk
New Hope EDA
Page 2
December 23, 1991