112816 EDA
CITY OF NEW HOPE
4401 Xylon Avenue North
New Hope, Minnesota 55428
EDA Minutes November 28, 2016
Regular Meeting City Hall
CALL TO ORDER President Hemken called the meeting of the Economic Development Authority
to order at 7:46 p.m.
ROLL CALL Present: Kathi Hemken, President
John Elder, Commissioner
Andy Hoffe, Commissioner
Jonathan London, Commissioner
Absent: Eric Lammle, Commissioner
Staff Present: Kirk McDonald, City Manager
Tim Fournier, Police Chief
Vicki Holthaus, AEM
Chris Long, City Engineer
Jeff Sargent, Director of Community Development
Steve Sondrall, City Attorney
D. E. Walker-Crawford, Admin Specialist
Stacy Woods, Assistant City Attorney
APPROVAL OF Motion was made by Commissioner Hoffe, seconded by Commissioner Elder,
MINUTES to approve the minutes of September 12, 2016. All present voted in favor.
Item 3
Motion carried.
IMP. PROJECT 964 President Hemken introduced for discussion EDA Item 4, Resolution
Item 4
authorizing the execution of a purchase and development agreement with
Alatus New Hope, LLC (project no. 964).
Jeff Sargent, director of community development, thanked the EDA
commissioners for their patience in anticipation of this being brought to the
agenda. He indicated there has been a great deal of communication ensuring
the city and Alatus are both satisfied with the terms and conditions. Mr. Sargent
said that the city’s redevelopment attorney, Bob Deike, and his team wrote the
resolution and development agreement, and Alatus had opportunity to review
it and provide input to come to the current agreement.
Mr. Sargent introduced Stacie Kvilvang of Ehlers, to review the agreement. Ms.
Kvilvang reminded Council that the last time they discussed this was at the
September 19, 2016, EDA meeting where updated terms were agreed upon to
bring forward. Ms. Kvilvang stated the two biggest of those were a TIF note
increase of approximately $1.9 million dollars due to poor soil condition
remediation, construction of a lift station on behalf of the city and burying of
power lines and that Alatus would pay for the land up front. She then reviewed
the major components of the development agreement as outlined in the Ehlers
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Memo provided in the agenda packet. Ms. Kvilvang shared additionally that
Atalus hopes to close well before the February 28th date, due to site planning
issues they may not be required to use the joint trash enclosure, the cost of the
lift station will be approximately $660,000, and the full cost of during lines will
be approximately $440,000.
Commissioner London asked Ms. Kvilvang to explain to the residents of New
Hope how the $6.5 million TIF note benefits the developer. Ms. Kvilvang stated
that if it were not for the TIF note the project would not be built. She shared
that approximately $4 million of that amount is going to improvements specific
to the site and the remaining assistance is going to lower the costs of
construction due to the fact that the rents you can charge are not enough to
cover the project costs to ensure that the project has a reasonable rate of return
to attract equity to get the deal done. She further clarified that only
approximately 30% of the $6.5 million in forgone tax revenues would have
come to the city. Commissioner London reviewed the comp sheets and felt
additional sites should have been included. He inquired of the reason for the
23-year schedule. Ms. Kvilvang stated the term of the note is based on the sizing
needed to get the financing in place for the construction of the development
within a reasonable market return, those other properties are able to charge
higher rents and value propositions coming in along with grant sources that
New Hope does not have. She also stated that New Hope is gaining a luxury
rental product and putting land that has been sitting tax exempt into good use
for the community. Commissioner London says he sees a high subsidy and long
term note. He feels this development needs to be all-star given the amount of
subsidy.
Commissioner Elder asked Ms. Kvilvang what the current income on the
property is. Ms. Kvilvang responded zero. Commissioner Elder asked for what
period has it been zero. Mr. McDonald said that it has been 8 years.
Commissioner Elder asked if there were other development offerings to
consider and Ms. Kvilvang indicated no, that from the RFP sent out this was
the one selected by the EDA to move forward with. Commissioner Elder shared
that he was a member of the council that took a tour of other Alatus properties
and he has full confidence that they will build an all-star property and that the
money put towards this project will not be wasted.
Mark Stenglein, director of government relations for Alatus, was invited by
Mayor Hemken to speak. He spoke of Bob Lux’s reputation. Alatus feels that
the city will get nothing but the best and this will be jewel of the community.
RESOLUTION 2016-21 Commissioner Elder introduced the following resolution and moved its
Item 4 adoption “RESOLUTION AUTHORIZING THE EXECUTION OF A
PURCHASE AND DEVELOPMENT AGREEMENT WITH ALATUS NEW
HOPE, LLC (PROJECT NO. 964)”. The motion for the adoption of the
foregoing resolution was seconded by Commissioner Hoffe and upon the vote
being taken thereon, the following voted in favor thereof: Hemken, Elder,
Hoffe, London; and the following voted against the same: None; Abstained:
None; Absent: Lammle; whereupon the resolution was declared duly passed
and adopted, signed by the president which was attested to by the executive
director.
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Mayor Hemken shared that she had spoken with Commissioner Lammle and
he was in full support of the project. She also thanked Ms. Kvilvang and Mr.
Stenglein for their participation.
ADJOURNMENT Motion was made by Commissioner London, seconded by Commissioner
Elder, to adjourn the meeting. All present voted in favor. Motion carried. The
New Hope EDA adjourned at 8:05 p.m.
Respectfully submitted,
D. E. Walker-Crawford, Admin. Specialist
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