EDA 08/12/02OFFICIAL FILE COPY
CITY OF NEW HOPE
EDA MEETING
City Hall, 4401 Xylon Avenue North
August 12, 2002
President W. Peter Enck
Commissioner Sharon Cassen
Commissioner Don Collier
Commissioner Mary Gwin-Lenth
Commissioner Pat LaVine Norby
2.
3.
4.
o
Call to Order
Roll Call
Approval of Regular Meeting Minutes of July 22, 2002
Discussion Regarding Creation of Tax Increment Financing District and City Assistance
for Navarre Corporation Expansion and Ahrens Trucking Relocation; Discuss Terms of
Agreement and Direct Staff to Proceed with Preparation of Development Agreement
(Improvement Project No. 727)
Adjournment
CITY OF NEW HOPE
4401 XYLON AVENUE NORTH
NEW HOPE, MINNESOTA 55428
Approved EDA Minutes
Regular Meeting
July 22, 2002
City Hall
CALL TO ORDER
ROLL CALL
APPROVE MINUTES
CITY CENTER AREA
Item 4
New Hope EDA
Page 1
President Enck called the meeting of the Economic Development Authority to order
at 9:01 p.m.
Present:
W. Peter Enck, President
Don Collier, Commissioner
Mary Gwin-Lenth, Commissioner
Sharon Cassen, Commissioner
Pat LaVine Norby, Commissioner
Motion was made by Commissioner Norby, seconded by Commissioner Collier, to
approve the Regular Meeting Minutes of May 13, 2002. All present voted in
favor. Motion carried.
President Enck intxoduced for discussion Item 4, Resolution Approving Letter of
Intent to Work Collaboratively with Brookstone, Inc. on Potential Redevelopment of
City Center Area and Authorizing Executive Director to Execute Agreement.
Mr. Kirk McDonald, Director of Community Development, stated city staff and
several members of the City Council have met with several developers over the past
year in an effort to generate interest in and to pursue the potential redevelopment of
the City Center area. The developer that has met with staff on the most frequent and
consistent basis over the past six months has been Richard Martens from
Brookstone, Inc., the developer of the Golden Valley Town Square project. Staff is
recommending that the Economic Development Authority now take steps to
formalize this working partnership by approving a resolution and Letter of Intent.
Mr. McDonald noted that although staff recently received word from the Met
Council that the City Center Opportumties Grant was not funded, staff anticipates
that the EDA will want to move forward with forming a task force and undertake the
planning study and possibly reduce the cost of study and/or utilize EDA funds to
cover the costs of the study.
He stated the Letter of Intent from Brookstone, Inc. requires no payment from the
City to the developer and simply states that the two parties agree to work together
over the next 12 months to develop plans, in conjunction with a task force, for the
potential redevelopment of the City Center area. He reviewed the key points of the
agreement:
The project area includes the northwest and southeast comers of 42"d and
Winnetka. The southeast parcel will be taken out of the letter of intent if another
developer moves ahead.
The New Hope Economic Development Authority hereby grants Brookstone,
Inc. an exclusive right to negotiate with the City for the redevelopment of all or
a portion of the City Center area for a period of 12 months, based upon moving
forward collaboratively on the agreed upon timeline and w_ork program.
July 22, 2002
RESOLUTION 02-04
Item 4
ADJOURNMENT
· It is understood that if the parties are reasonably satisfied at the end of one year
that the Letter of Intent may be extended or a formal agreement entered into, if
appropriate.
· The specific goal for redevelopment will be a broadly based mixed use project,
including a variety of housing types and mixed use commercial, and to establish
an inviting pedestrian friendly, village environment that has a strong gathering
place attraction.
· Both parties agree that they will work together in a collaborative manner, but
have distinct responsibilities within the joint venture effort.
· It is understood and agreed that the City will take financial responsibility to
initiate the items included in the workplan.
· It is understood that Brookstone will be responsible for providing input on
planning and financial matters, will have no direct financial responsibility and
will be paid no fees for their effort.
Richard Martens, Brookstone, Inc., was recognized.
He spoke regarding the location attributes and noted the complexity of
redevelopment endeavors. He emphasized the need to make it a pedestrian friendly
area.
Commissioner Gwin-Lenth complimented Mr. Martens on the Golden Valley
project.
For the record President Enck reported that he contacted Mr. Marten through a
friend, but he has no fmancial relationship with the fm-n of Brookstone, Inc. and
there is no conflict of interest.
President Enck requested staff to amend the resolution to include the language
regarding the southeast parcel (school district site).
There were no further questions from the EDA or audience.
Commissioner Collier introduced the following resolution and moved its adoption
"RESOLUTION APPROVING LETTER OF INTENT TO WORK
COLLABORATIVELY WITH BROOKSTONE, INC. ON POTENTIAL
REDEVELOPMENT OF CITY CENTER AREA AND AUTHORIZING
EXECUTIVE DIRECTOR TO EXECUTE AGREEMENT". The motion for the
adoption of the foregoing resolution was seconded by Commissioner Gwin-Lenth,
and upon vote being taken thereon, the following voted in favor thereofi Enck,
Cassen, Colher, Gwin-Lenth, Norby, and the following voted against the same:
None; Abstained: None; Absent: None; whereupon the resolution was declared duly
passed and adopted, signed by the president which was attested to by the executive
director.
Motion was made by Commissioner Collier, seconded by Commissioner Gwin-
Lenth, to adjourn the meeting. All present voted in favor. Motion camed. The
New Hope EDA adjourned at 9:15 p.m.
Respectfully submitted,
Valerie Leone
City Clerk
New Hope EDA
Page 2
July 22, 2002
EDA
REQUEST FOR ACTION
Originating Depa~ment Approved for Agenda Agenda Section
Community Development '~"~ 8-12-02 EDA
Item No.
By: Kirk McDonald By: 4
DISCUSSION REGARDING CREATIO/OF TAX INCREMENT FINANCING DISTRICT AND CITY
ASSISTANCE FOR NAVARRE CORPORATION EXPANSION AND AHRENS TRUCKING RELOCATION
DISCUSS TERMS OF AGREEMENT AND DIRECT STAFF TO PROCEED WITH PREPARATION OF
DEVELOPMENT AGREEMENT (T~ROVEMF. NT PROJF~CT NO. 727)
REQUESTED ACTION
Staff requests that the Economic Development Authority have a discussion regarding the creation of a Tax
Increment Financing District and city assistance for the Navarre Corporation expansion and Ahrens Trucking
relocation, discuss the Terms of Agreement, and direct staff to proceed with the preparation of a Development
~ Agreement. Jim Casserly from Krass Monroe, P.A., the city's financial development consultant, will be in
attendance to discuss these issues with the EDA.
POLICY/PAST PRACTICF
In the past, the EDA has created new Tax Increment Financing Districts and provided city financial assistance
for the relocation, retention and expansion of businesses in the City.
BACKGROUND
At the June 10, 2002, New Hope EDA meeting, staff presented a request from Navarre Corporation to relocate
Ahrens Trucking from its current location to the city-owned property at 9200 49~h Avenue to facilitate a large
expansion at the Navarre site. The EDA directed staff to coordinate with all parties to determine if the plan was
financially feasible. Navarre requested city financial assistance in the form of a land write-down gap funding
assistance for the Ahrens project and utility relocation at the Navarre site. The EDA saw this initially as a "win-
win" for all parties, as Ahrens Trucking would be relocated and retained in the City, Navarre Corporation would
undertake a major expansion, and the city property would be developed and regional storm water
improvements.
Over the past two months, staff has been coordinating with Krass Monroe and Navarre Corporation on details
regarding how this project might work and Krass Monroe has prepared the attached documents outlining the
scope and financial parameters of the project. If the EDA is agreeable to the terms of the agreement, staff
,~/,./~,( (cont.)
MOTION BY //~~ SECOND BY 7-~/~r)
To: - '
~'0' / -,
Page 2 8-12-02
Request for Action
recommends that the EDA direct staff to continue to coordinate with all parties on the preparation of a
Development Agreement.
ATTACHMENTS · 8/5 Krass Monroe Memo
· Term Sheet
· Previous Correspondence
· Site Map
KRASS MONROE, P.A.
ATTORNEYS AT LAW
Greg D. Johnson, CPA
Email.'gre~Jo'assmonroe. com
Voice Mail (952) 885-5994
James R~ Casserly, Esq.
Emai! jamesc~krassmonroe, com
Voice Mail (952) 885-1296
MEMORANDUM
City of New Hope
Attn: Kirk McDonald, Comm. Dev. Dir.
Daniel Donahue, City Manager.
Daryl Sulander, Finance Director
From: Greg D. Johnson, CPA
James R. Casserly, Esq.
Date: August 5, 2002
Re:
Navarre Expansion/Ahrens Trucking Relocation
Our File No. 10048-8
INTRODUCTION
We have prepared a financial and legal analysis for moving Ahrens Trucking to a new
site, Navarre constructing a 100,000+ sq. ft. building adjacent to its existing facility and
the construction and relocation of vadous public improvements. The financial and legal
issues addressed in this memo include the following:
Can the City assist in the expansion of Navarre thus allowing an important
corporate member of the community to retain its business in the City.
How can the City assist Ahrens Trucking to relocate from its current site to
a site currently owned by the City.
How can the City pay for public improvements in the Navarre expansion
area (relocation of utilities) and in the City-owned site (development of
stormwater retention area).
How can the City minimize its risks while accomplishing its stated goals.
SUITE 1100 SOUTHPOINT OFFICE CENTER * 1650 WEST 82ND STREET * BLOOMINGTON, MINNESOTA 55431-1447
TELEPHONE 952/885-5999 · FACSIMILE 952/885-5969
www.krassmonroe.com
FINANCIAL ANALYSIS
At a meeting on July 3, Bob Glasgow, a consultant for Navarre, identified the costs
related to moving Ahrens into a new building on current City owned property. Bob's
recommendation is to provide Ahrens with the land for $1.00 and limit their outstanding
debt so that their monthly debt service is no more that $600 higher than the current level
of $1,187 per month. Ahren's current bank debt service is:
Orig. Bal. Int. Rate Orig. Term Monthly Pmt Cur. Bal.
Bank Loan 100,000 7.5% 120 months 1,187 80,000 (est.)
The total cost of the new Ahrens building is $677,239. Navarre has committed to
covering $340,000 in exchange for the current Ahrens property leaving a balance of
$337,239 needed for project costs. In addition, Ahrens currently has $80,000 of bank
debt outstanding. The remaining project costs and bank debt total $417,239 but there is
only $1,787 per month available to pay this balance. Our analysis on the attached page
1 shows that monthly payments of $1,787 for 20 years at 7.5% would support a principal
of $221,824.
Since the projected debt of $417,239 is greater than the supportable debt of $221,824,
there is gap of $195,415. Ahrens appears unwilling to accept any higher level of debt
service. Navarre is paying $340,000 to acquire 43,570 sq. ft. from Ahrens ($7.80/sq. ff.)
and will not pay any additional amounts. If the City is willing to cover this almost
$200,000 gap, then the project will proceed.
The City can provide the assistance if it creates a tax increment district(s) to generate
the necessary funds.
The three parcels to be used for the new Navarre building and the one parcel for the
new Ahrens building would not qualify for a 25-year redevelopment TIF district, but it
appears a 9-year economic development TIF district could be established. Our
projections, on the attached pages 2 & 3, show that approximately $141,000 in tax
increment could be generated annually from the new buildings. Total tax increment
generated is about $1,100,000 (see column (e) on page 3) and after deducting 10% for
admin, and program costs, there remains $1,010,029 (see column (h) on page 3). This
$1,010,029 can be allocated for the payment of project expenses. If Navarre pays
approximately $445,000 of project expenses, it would then receive a tax increment
revenue note for that amount which requires using 70% or $707,021 of the available tax
increment (see column (c) on page 4 and the tax increment revenue note amortization
schedule on page 5).
After payment of the revenue note, there remains approximately $300,000 for the EDA's
project expenses (see column (f) on page 4). In 2002 dollars, the amount is worth
$223,984 assuming a 5% present value or interest rate (see column (g) on page 4).
· Page 2
LEGAL ISSUES
To generate the necessary funds to accomplish the City's goals, the following actions
are necessary:
The City/EDA must establish a non-contiguous economic development TIF
district. Both projects must qualify in a non-contiguous district and our
initial review suggests that both projects will satisfy the required criteria.
The customary public headngs and notices are required.
If the City owns the site, then the City should convey to the EDA that
portion of the site it owns which it does not need for stormwater drainage.
The EDA should enter into a development contract with Navarre which
includes the following terms:
The EDA will transfer property to Navarre that is needed for the
Ahrens relocation (thus allowing for the Navarre expansion). This
transfer requires a public headng and notice.
Bo
Navarre will contract directly with Ahrens which will allow Ahrens to
timely relocate to the new site.
The EDA will assist Navarre with $200,000 of Navarre's acquisition
costs and approximately $245,000 of utility relocation costs by
delivering to Navarre a tax increment revenue note payable from
the increased value of the projects (the EDA's net cost is slightly
more because of the value of the land it is transferring). The
revenue note will not be delivered unless the expansion occurs and
the City land can revert to the EDA if Ahrens does not actually
expand.
The EDA can facilitate the necessary public improvements on both sites.
It can get appropriate security from Navarre dudng the relocation of the
utilities and pdor to the time Navarre actually commences construction
(these provisions would be part of the redevelopment contract). The EDA
can raise funds for the projects by either selling debt or, if the City's fund
balances are sufficient, by borrowing from the City; and, in either case, the
EDA would repay the debt by pledging tax increment (an interfund loan.
which is specifically authorized by the Tax Increment Act).
· Page 3
CONCLUSION
With the creation of a single TIF distdct and the construction of the buildings, the
City/EDA are able to provide a reasonable amount of assistance for Navarre to
purchase the Ahrens land and relocate Ahrens to a parcel currently owned by the City.
The EDA does not have to have a direct contractual relationship with Ahrens; however, it
must facilitate the appropriate result for Ahrens. With the financial plan described in the
memo, the EDA should also have the resources necessary to construct the public
improvements. We think the approach outlined meets the goals of the City/EDA and the
impacted companies and further provides for a proper allocation of risk. We look
forward to a further review of this project with the City.
G:\WPDATA~'~NEW HOPE~08\CORRVvlCDONALD-OONAHUE-SULANDER 2.DOC
· Page 4
CITY OF NEW HOPE - Navarre
Ahren's Trucking
Debt Service
Current Debt
I Bank Loan
. IOriginal Loan $ 100,000 .
t Interest Rate 7.50%
i Term 120 months
Payment 1,187 per month
TOTAL CURRENT MONTHLY DEBT SERVICE ' 1,187 Iper month
New Debt + Restructured Bank Loan
Construction & Soil Correction 596,423 bid
Soft Costs 64,298
Contingency 2.5% 16,518
City Land Payment 0 City Assistance
To[al Cost for New Building 677,239
Payment by Navarre (340,000)
City Assistance (195,415) City Assistance
i ,
, Remaining amount to finance 141,824
Ahrens current bank debt balance 80,000
Total Debt to finance 221,824
Interest Rate 7.50%
i Term l 240 months
~TOTAL NEWMONTHLYDEBTSERVlCE I 1,787 per month
Navarre - Ahrens debt 2.xls Prepared by Krass Monroe, P.A. 8/5/2002
CITY OF NEW HOPE
Navarre Expansion & Ahrens New Site
ASSUMPTIONS
Original Market Values
Navarre
I Navarre Parking lot 08-118-21-24-0005
2 Ahrens Trucking 08-118-21-23-0006
30utlot 08-118-21-23-0008
Ahrens
1 9200 49th Ave N. 07-118-21-23-0022
Totals
Original Tax Capacity
<= 150,000 1.50%
> 150,000 2.00%
Estimated Market Value
Navarre warehouse 100,000
Ahrens Building 4,800
Estimated Tax Capacity
Navarre warehouse
Ahrens Building
<= 150,000 1.50%
> 150,000 2.00%
sq. ft. @ $
sq. ft. @ $
Estimated Taxes
Navarre warehouse 100,000 sq. ft. @ $
Ahrens Building 4,800 sq. ft. @ $
Estimated Tax Increment -Annual
Area of Parcel 112/2001 Market Value (Pay 2002)
(Acres) (Sq. Feet) Land Building Total
7550 49th Ave. 0.98 42,675 108,000 108,000
7600 49th Ave. 1.00 43,570 109,000 42,000 151,000
3.73 162,280 186,000 186,000
"% of Site
66.7% 1.90 82,724 82,724 82,724
7.60 331,249 $ 485,724 $ 42,000 $ 527,724
4,891
50.00 persq, ft. = 5,000,000
60.00 persq, ft.= 288,000
99,250
5,010
1.47 per sq. ft. of Land
2.10 per sq. ft. = 200,262
2.11 per sq. ft. = 10,109
5,288,000
104,260
140,881
210,371
67.0% of total taxes paid
Local Tax Rate - Pay 2002 estimate
State Tax Rate - Pay 2002 estimate 0.60000
Combined Tax Rate - C/I Property Only 2.01775
used for tax increment calculations
Admin Fees
State Auditor Fee
Inflation (after 2 yrs of full value)
PV Rate - Rev. Note 12/1/2002
PV Rate - City 12/1/2002
1.41775 *
(C/I only)
10.00%
0.425%
0.00%
7.00%
5.00%
Navarre - Ahrens TI Combined 2.xls Prepared by Krass Monroe, P.A. 8/5/2002
CITY OF NEW HOPE
Navarre Expansion & Ahrens New Site
CASH FLOW AND PRESENT VALUE ANALYSIS
1
2
3
4
5
6
7
8
9
(a)
Date
06/01/02
.12101/02
06/01/03
12101/03
06/01/04
12/01/04
06/01/05
12/01/05
06/01/06
12/01/06
06/01/07
12/01/07
06/01/08
12/01/08
06/01/09
12/01/09
06/01/10
12/01/10
06/01/11
12/01/11
06/01/12
12/01/12
< ANNUAL ............. > <,
(b) (c) (d) (e) (f)
Original Estimated Captured Est. T.I. Less:
Tax Tax Tax (d) x Admin
Capacity Capacity Capacity 1.41775 Fees
(see assumptions) (c) - (b) St. Aud. Fee (e) x
0.0% Inflation (prey. 0.425% 10.00%
4,891
4,891
4,891
4,891
4,891
4,891
4,891
4,891
4,891
4,891
4,891
4,891
4,891
4,891
4,891
4,891
4,891
4,891
4,891
4,891
4,891
4,891
4,891
4,891
4,891
4,891
104,260
104,260
104,260
104,260
104,260
104 260
104 260
104,260
104 260
104 260
104,260
104,260
104,260
104,260
104,260
104,260
104,260
104,260
0
0
0
0
99,369
99,369
99,369
99,369
99,369
99,369
99,369
99,369
99,369
99,369
99,369
99,369
99,369
99,369
99,369
99,369
SEMI - ANNUAL
(g)
Available
Tax
Increment
(e)- (f)
(h)
Cumulative
Avail. Tax
Increment
Total of (g)
70,141
70,141
70,141
70,141
70,141
70,141
70,141
70,141
70,141
70,141
70 141
70 141
70 141
70,141
70 141
70 141
0 0
0 0
0 0
0 0
0 0
0 0
7,014
7,014
7,014
7,014
7,014
7,014
7,014
7,014
7,014
7,014
7,014
7,014
7,014
7,014
7,014
7,014
0
0
0
0
0
0
63,127
63.127
63 127
63 127
63 127
63 127
63 127
63.127
63.127
63 127
63 127
63 127
63 127
63 127
63.127
63.127
0
0
0
0
0
0
63,127
126,254
189,381
252,507
315,634
378,761
441,888
505,015
568,142
631,268
694,395
757,522
820,649
883,776
946,903
1,010,029
1,122,255 112,225 1,010,029 1,010,029
Navarre - Ahrens TI Combined 2.xls Prepared by Krass Monroe, P.A. 8/5/2002
CITY OF NEW HOPE
Navarre Expansion & Ahrens New Site
PRESENT VALUE ANALYSIS FOR CITY AND REVENUE NOTE
(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)
Available for P.V. IRate 'P. V. Rate Total Total
Available Revenue Semiannual Cumulative Available for 8emiannual Cumulative Semiannual Cumulative
Date Tax Increment Note Balance Balance Authority Balance Balance Balance Balance
(from Cash (b) x P.V. of (c) Total of (d) (b)- (c) P.V. of (f) Total of (g) (d) + (g) (e) + (h)
Flow Analysis) 70,00% 7.00% 30.00% 5.00%
06/01/02 0 0 0 0 0 0 0 0 0
1~01/02 0 0 0 0 0 0 0 0 0
06/01/03 0 0 0 0 0 0 0 0 0
12/01/03 0 0 0 0 0 0 0 0 0
06/01/04 0 0 0 0 0 0 0 0 0
12/01/04 0 0 0 0 0 0 0 0 0
06/01/05 63,127 44,189 37,206 37,206 18,938 16,738 16,738 53,944 53,944
12/01/05 63,127 44,189 35,948 73,153 18,938 16,330 33,069 52,278 106,222
06/01/06 63,127 44,189 34,732 107,885 18,938 15,932 49,001 50,664 156,886
12/01/06 63,127 44,189 33,557 141,443 18,938 15,543 64,544 49,101 205,987
06/01/07 63,127 44,189 32,423 173,866 18,938 15,164 79,708 47,587 253,574
12/01/07 63,127 44,189 31,326 205,192 18,938 14,794 94,503 46,121 299,694
06/01/08 63,127 44,189 30,267 235,459 18,938 14,434 108,936 44,700 344,395
12/01/08 63,127 44,189 29,243 264,702 18,938 14,081 123,018 43,325 387,720
06/01/09 63,127 44,189 28,264 292,957 18,938 13,738 136,756 41,993 429,712
12/01/09 63,127 44,189 27,299 320,256 18,938 13,403 150,159 40,702 470,414
06/01/10 63,127 44,189 26,376 346,631 18,938 13,076 163,235 39,452 509,866
12/01/10 63,127 44,189 25,484 372,115 18,938 12,757 175,992 38,241 548,107
06/01/11 63,127 44,189 24,622 396,738 18,938 12,446 188,438 37,068 585,175
12/01/11 63,127 44,189 23,790 420,527 18,938 12,142 200,580 35,932 621,107
06/01/12 63,127 44,189 22,985 443,512 18,938 11,846 212,427 34,831 655,939
12/01/12 63,127 44,189 22,208 465,720 18,938 11,557 223,984 33,765 689,704
1,010,029 707,021 465,720 465,720 303,009 223,984 223,984 689,704 689,704
Utility Relocation Costs 244,750 0 0
Ahrens' Trucking 200,000
Total Revenue Note 444,750
Navarre - Ahrens TI Combined 2.xls Prepared by Krass Monroe, P.A. 8/5/2002
CITY OF NEW HOPE
Navarre Expansion & Ahrens New Site
TAX INCREMENT REVENUE NOTE
Principal Amount
Interest Rate
Number of Payments
Payment Amount
Interest Start Date
Term of Note
465,720
7.00%
16 semi-annual payments
Available Tax Increment
12/01/02
10.0 years
2
3
4
5
7
8
9
10
Date
12/01/02
06/01/03
12/01/03
06/01/04
12/01/04
06/01/05
12/01/05
06/01/06
12/01/06
06/01/07
12/01/07
06/01/08
12/01/08
06/01/09
12/01/09
06/01/10
12/01/10
06/01/11
12/01/11
06/01/12
12/01/12
Capitalized
Interest
Payment Interest Principal
Balance
465,720
16,300 0 0 482,020
16,871 0 0 498,891
17,461 0 0 516,352
18,072 0 0 534,424
0 44,189 18,705 25,484 508,940
0 44,189 17,813 26,376 482,565
0 44,189 16,890 27,299 455,265
0 44,189 15,934 28,254 427,011
0 44,189 14,945 29,243 397,768
0 44,189 13,922 30,267 367,501
0 44,189 12,863 31,326 336,174
0 44,189 11,766 32,423 303,752
0 44,189 10,631 33,557 270,194
0 44,189 9,457 34,732 235,462
0 44,189 8,241 35,948 199,515
0 44,189 6,983 37,206 162,309
0 44,189 5,681 38,508 123,801
0 44,189 4,333 39,856 83,945
0 44,189 2,938 41,251 42,694
0 44,189 1,494 42,694 0
707,021
0
172,596 534,424
68,704
Navarre - Ahrens TI Combined 2.xls Prepared by Krass Monroe, P.A. 8/5/2002
08/09/02 FRI 12:49 FAX 952 885 5969 KRASS ~ONRO~
TERM SHEET
Navarre
(August 9, 2002)
Redeveloper:
Navarre Corporation, a Minnesota corporation
City:
City of New Hope, Minnesota
EDA:
New Hope Economic Development Authority
Redevelopment Property:
The Redeveloper's Property, adjacent Ahrens Trucking Property
and City Property on which Ahrens Trucking is being relocated, all
as described below.
Redeveloper's Property:
The approximately 4.7 acres shown on the attached Site Plan and
currently owned by the Redeveloper.
City Property:
The approximately 3.0 acres shown on the attached Site Plan and
currently owned by the City of New Hope. The new Ahrens
Trucking development will occur on the front 2/3rd of the property
facing 49o` Ave. N. The back 1/3Td of the property will be used for
a regional storm water pond. The City will provide Navarre with
the required amount of City Property needed for the Ahrens
relocation.
Ahrens Trucking Property: The approximately 1.0 acres shown on the attached Site Plan and
currently owned by Ahrens Trucking.
Minimum Improvements:
The Redeveloper shall construct or cause to be constructed the
following minimum improvements to the Redevelopment Property:
II:
A warehouse of approximately 100,000 square feet
on the Redeveloper's property and Ahrens Trucking
Property
An approximately 4,800 square foot building for
Ahrens Trucking on the City Property
08/09/02 FRI 12:49 FAX 952 885 5969 1/I~55 ~O~ROk ~.
Timing:
Navarre Warehouse:
Begin on or about January 1, 2003
Complete on or about September 1, 2003
Ahrens Trucking Building:
Begin on or about September 15, 2002
Complete on or about January 1, 2003
Redevelopment Costs:
The Redeveloper shall pay for all environmental remediation, site
preparation including soil correction, public improvements,
demolition, relocation, plat and plat amendment (except for the
City Property), survey (except for the City Property), PUD and
other development costs. This includes the utility relocation costs
needed for construction of the Navarre warehouse. In the event
environmental remediation is required, the City will diligently
pursue any eligible programs for reimbursement of such costs.
Also included are the costs for the Ahrens Trucking building as
shown on the construction proforma attached. Environmental
issues on the City Property will require further discussion.
Revenue Note:
To defray the Redevelopment Costs the EDA will issue a Revenue
Note to the Redeveloper in the amount of $200,000 plus the cost of
relocating the utilities on the Redevelopment Property in an
amount not to exceed $250,000 for a total principal amount of the
Revenue Note not to exceed $450,000. The Revenue Note shall be
paid from tax increment generated by the Minimum Improvements
on the Redevelopment Property.
Security:
As security for the construction of the Navarre warehouse, Navarre
shall provide the EDA with a note in the amount of $250,000, or
equivalent security acceptable to the EDA, secured by a mortgage
on that portion of the Redevelopment Property which includes the
Redeveloper's Property and the Ahrens' Trucking Property. After
construction has been commenced on the Navarre warehouse, the
EDA shall provide a Satisfaction of the Mortgage and return the
Note.
Business Subsidy Act:
The Redeveloper shall set wage and job goals in connection with
the Business Subsidy Act, if applicable. If such goals are not
required by the Act, the Redeveloper agrees to co~-aply with any of
2
08/09/02 FRI 12:50 FAX 952 885 5969 KRASS MONROE
the Act's reporting requirements that may nonetheless be
applicable to the project
This Term Sheet outlines the terms under which the parties are willing to enter into a Contract
for Private Redevelopment, but does not constitute an offer or acceptance on either party's part.
All fights and obligations with respect to the Redevelopment Property shall only be as provided
for in a Contract for Private Rcdevelopment approved by the City Council.
Attachment
G:\WPDATAh'~NEW }IOP~0g\DOC\TERM SHEET 8-9-02 CLEAN.DOC
3
0~/06/02 Tbk 14:42 PAX 952 885 5969 KRASS MONROE
./
H.L~ON
,09'09a ]nN:a^v
,U
OO5
,SITE DATA
Total Site Area = 243,770 $.F. o~' 5.6 acres
Total Buildi~:j Area = lOO,O00 S.F.
Tolal Green Area = 6'1,350 S.F, or 25%
Parking
Required = 158 slalls
Provided = 158 stalls
WC;L
AS$OCIAIES, INC.
CD
08/06/02 TUE 14:43 FA~ 952 885 5969 KRASS ~IONROE
Anrens Relocal~on 9200 49ih Ave N.
C70 Prelimina~ Bids 7/2/112 1.9 acre
iProject Summary i I I I I I / ! / ,
Project Detail i :Unils U cosI ~xV, nded Cos~ ps[ Correc~or~
__ FoundaUon -~
....... ......... $ 47 3~5 Exmna*'W~ ........... ~65:~- I~- ......
-- st~l*oolings-&foL~ndali°n t----*~'-310 $ 45J30 $ ~-~,-9-~ .............. FoundntionWall 69.63 1'
dock foundalJon & r~i*~-n~-v~fl'~l~i 6-6 '-$ le 00 $ 1,188 --' -- ~{ ........... 120,00 50~
excavalion and backfill ................ '' '~8(~T 1.20 $ 6,336 ----- F-~r- ..... 168.00 70#
~ s/abDngrade&pads ........... 5280 $ 7.00 ~ .... ~ -- 523.07 ..........
! stzuctural sMb ad(~ . '.:. ~4~0-0 $ .... ~::'~ s 36,~60 ......... LOad iin-~ / pi"-~ 60.00
stairs Deplh 65.90
Exte~'~* ................. $ ......................... ¥0~1 Footage 566.66
L.u[icre~ block & insulalion 20 6200 $ 9.00 "$ 55,800 ...............
exleno.r u_~p~.rade fronl --
overhead aoors
I 5 S 2,000 $ IOTO-~-
persnnne~ doors ........ 2 $ Z00 $ 1.400 ......
glazing
4~00 $ 2.10 $ 10.0~0
~ insub~uon 4800 -~ ...... i.~4'~)- $ ~,720
! m~s~'aou~ 4~00 $ o.so $ 2.eso ...............................
! sheetrock walls 360 $ 3.00 $ 1.0~0 .................................
cacpet & ba~e 244 $ t.75 I $ 427 ....................................
elevator ~, ....... *
slairs ....................
i Mechanical ~ $ -
fire ~'olection
.......... .... 11 LS i $ 2,500 .............
~oo~ s oso i s 2,400
-m-'!~!ng Total S
260
__ Cfly C~sts - I $ (87,4_22_~ ........
;s~od ...... 35,4~0 $ 0 RO $ 28.3B4 Cfl)~ Costs :-I-I ..... "~ ...........
trees & shru~s (~ea) 30 $ 200.oo- -~---' 6.--0-0~ ....................
excavate Beo fabr/c /'ill, com-~?cl ~-'---'~=~ --. Nel Value $ (87,422). $ ~[1.051
Profil and Ovemead i i 4.,% $ 20,493 I ]$ -%816 i ia.brans R~,.": ...... ? .......... i
.... Total Corlltr. & ~oil ¢orrecUon i ................... ) ............... I .........
..... Se#£~llMee(f~R .......... ~ ..... 2,000 $ 8,000 I Sublolali T 577,239
Acqui$ilion Fag .................. 10.0%'~
I...-- Project Managemenl 3.0%i ...... ~:~ la, sas Flxecl Cun'em Debt Pa]/off~'-$'-' ~'~)i00¥ -$-(:1~'
Misc. EKoer~ ..................... 100.0% i ,S 3,000 ~ $ 3,OOO .......................
....... ' ...... {ncr. DebS.Land S .
;Interim Financing cj,0% 9 $ 2,013 -- N~va/e'-(~c~i~:)-~ '$--'(340,00n
!Pemlanenl Loan-f~ .................. 3.0% S 150,00D; $ ---~,~-:
iSoff Cotls Tolal
rolal Debt Req'd S 467,239 $ (65.c
N~3~Y
Jme 3, 2002
Mr. Kirk McDonald
Director ofCommtmity Dev~lopmc~n
Cily of New Hope
5501 Xyion Avenue No.
New Hope, Mn. 55428-4898
Re: Navarre Expansion
Dear Mr. McDonald:
I am writing this letter to you on beha/f of Navarre, Inc.. The purpose of this letter is to acknowledge Navarre's
respom~ility and commitmerg to improve the t~mpomry parking situation. Secondly, to reasonably request your
assistance in making it possible to expand their presence in New Hope.
Background:
It is Navarre's sincere desire to expand in the city of New Hope on a consol/r~t~,~:l site adjacem to the Navarre
headquanem Fortuml~ly, we have been able to assemble most office adjacent site necessary to make this happen. It
is however limited by various utility easemeras. In order for us to proceed, we need to comml the Ahren's site (See
attached site plan). We have been pursuing an acquisifiou of the site at above market mtes for ff~e past 3.½ years.
However the owner/occupant (Ahren) is unwilling to sell unless we are able to meet the/r business cr/ter/a. They have
been reasouably cooperative but firm in their sumce. We need to meet their requirements to proceed, they are:
· location, location, location (convenient to Hwy 169 & Nevada Ave)
· replacemem of facility (2x cm~t size)
· use / ou~ide storage ofiruck trailers
° no new debt or ~ debt servic, e incurred by Ahrens
Timing is important to us. If Navarre can not expand adjacent, they must consider other alternatives that may
include an eventual relocation of the entire business operation.
The c~sts / restrictions of dealing with th~ utility ea.seme~ on the Navarre expansion site are additionally
burdensome.
impending site development.
June 3, 2002
1. TheCityis owner ofa 2'85 acre parcel l°cated at 9200 49~' Ave' N'' We request the city to sell this parcel per the
attached concept plan. Navarre will pay the city $1.00 for U~e site. Costs to stabilize the soil and support ~he
building will be paid for by Navarre. An easement will be cr~_~,~l in the rear l~rtion for New Hopes ~ional
watershed cor~rol project.
The CRy will relocate the sanitary & storm sewer lines on the development site to a munally agreeable locatior~
To meet Ahrens criteria for no new / increased debt, we request financial assistance in strucuafng this debt.
~ener~ Timecable:
Task
1. ~eliminaty agr~aem of concept between City & Navarre
2. Developmem & Sales Agreemems between a) City & Navarre
and b) Navarre & ~:
3. prepare concept drawings & verify cost~
4. Application submissions for Staffr~view
5. Planning Conun~ion
6. City Council
7. Replat 9200 49a Ave
8. Ahrens Constm~on
9. Relocate Utilities on Navarre Site
10. Navarre ~on
May, 2002
June
June
ju~
August
August
August
August- December, Aim'i{
August- ~
November- August, 2003
Navarre will commit to the following..
1. Enter into a ~on with Ahrens to exchange their existing property upon completion of replacement facilities
.at 9200 49~ Ave. N. at an above ~ price.
2. Build Ahrens a replacement facilityat 9200 49~ Ave' N'
3. Build a 70,000 sq. fl. + facility to open in August, 2003 including parking facilities.
Information you may find helpful in evaluating this proposal includes:
· Navarre anticipates its New Hope employment will increase by 80 people upon completion of the facility and
will increase to 100 people over lime.
· The preliminary estimate of consuucfion cost for the Ahrens replacement facility, exclusive of land cost and
~ soil correction is approximately $530,000.
· The prelimnmy estimate of construction cost for the Navarre facility is, exclusive of Ahrens site acquisition and
relocation of utilities is in the rang~ of $3 million.
I appredate the oppommity to present this letter of request to you on behaffofNavarre, Inc.. ff you have questions or
would like to discuss these developments further, I can be reached at 612-339-5680.
Sincerely,
9200 49th Ave- Proposed relocntion site for Ahtvns
7600 49th Ave - Ahtem current location / Navarre ext~msion plan
Cc: Mr John Turner, Sr. V. P., Navarre, Inc.
Page 2
June 4, 2002
Mr. Kirk McDonald
Director of Community Development
City of New Hope
5501 Xylon Avenue North
New Hope, MN 55428-4898
Re:
Navarre Expansion and
Ahrens Relocation
WCL
ASSOCIATES INC.
Architecture
Interiors
Dear Kirk:
Please find attached our preliminary submittal for the Navarre Corporation to be
heard at the June 10r~ City Council meeting.
Project Narrative
The scope of the proposed work is to relocate Ahrens Trucking from its present
location at 7600 49"` Avenue North to a new, city owned property at 9200 49"'
Avenue North. Navarre Corporation will demolish the existing Ahrens facilities and
construct a new 100,000 s.f. building to expand existing operations and parking.
1. 9200 49"' Avenue North Sitn
This city owned site will be the new home of Ahrens Trucking and a Regional
pond for the watershed district. The pond is expected to cover about 1/3 of
the entire site.
The new building is 4,800 s.f. in area for Phase I and is designed for an
additional 6,000 s.f. in the future. Uses include offices, storage and an area
to transfer goods from truck to truck for shipping.
B~uildinq Architecture and Matedal,~.
The building will be a I story colored concrete block or bdck with anodized
aluminum window frames and clear glass. The roof will be fiat and will
complement the existing commercial and office buildings located to the east
and west of the site.
Site Development
Special care has been taken to minimize the visual impact of the building
from the street and the neighbors. Berms and street trees are proposed
along 49t~ Avenue North. Evergreen trees are proposed along the west and
east property lines to screen the trailer storage area form the street and the
neighboring commercial properties.
2. 7600 49~ Avenue North Site
After building demolition and relocation of existing sanitary and storm sewer
lines, a new 100,000 s.f. building will be erected for Navarre Corporation.
New ponds located in city drainage easements will also be constructed at
the rear of the existing Navarre building and to the west of the new building.
The new building will provide additional office, repackaging and warehouse
space.
Buildin.q Architecture and Materials
The building will be 2 stodes in height with a fiat roof. The materials and
shape of the new building will mimic the existing facility. Materials include
precast concrete panels, painted, green window frames and green metal wall
panels at the curved front comers.
Site Development
The site will provide 158 new parking stalls and approximately 25% green
area.
If I can be of any further assistance, do not hesitate to contact me.
Very truly you~,
Gary E. De~n, ale, AIA
WCL Asso~ates, Inc.
Attachment
(G:~002~48_navarre~01 _navarre~_0604km.wlxl)
16:07 F~ 952 885 5969
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EXHIBIT XX-B
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Illilll'JJl IlJlllJ Jfl Jill IIII
i.,,
DRAFT
2 SUBJECT AREAS
COMPRISE TAX
INCREMENT FINANCING
DISTRICT NO. 02-1
II-B-1