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121399 EDA Official File Copy CITY OF NEW HOPE EDA MEETING City Hall, 4401 Xylon Avenue North December 13, 1999 President W. Peter Enck Commissioner Sharon Cassen Commissioner Don Collier Commissioner Pat LaVine Norby Commissioner Mark Thompson 1. Call to Order 2. Roll Call 3. Approval of Regular Meeting Minutes of November 8, 1999 4. Discussion Regarding Proposed Development for City-owned Property at 9200 49~h Avenue and Authorization for Staff to Negotiate on Potential Sale of Property (Improvement Project No. 597) 5. Resolution Consenting to and Approving Sale of Partnership Interest in North Ridge Properties of New Hope Limited Partnership 6. Adjournment CITY OF NEW HOPE 4401 XYLON AVENUE NORTH NEW HOPE, MINNESOTA 55428 Approved EDA Minutes November 8, 1999 Regular Meeting City Hall CALL TO ORDER President Enck called the meeting of the Economic Development Authority to order at 8:42 p.m. ROLL CALL Present: W. Peter Enck, President Pat LaVine Norby, Commissioner Sharon Cassen, Commissioner Don Collier, Commissioner Mark Thompson, Commissioner APPROVE MINUTES Motion was made by Commissioner Thompson, seconded by Commissioner Collier, to approve the Regular Meeting Minutes of October 25, 1999. All present voted in favor. Motion carried. 52~°/PENNSYLVANIA President Enck introduced for discussion Item 4, Discussion Regarding Proposal CITY-OWNED by Eagle Crest Northwest, Inc. to Develop City-Owned Property Near 52"4 PROPERTY Avenue and Pennsylvania Avenues). Item 4 Mr. Kirk McDonald, Director of Community Development, explained that a preliminary proposal has been submitted by Eagle Crest Northwest, Inc. regarding a 30-unit townhome development at the city-owned property near 52"d and Pennsylvania Avenues. He stated the vacant parcel is seven acres in size and is located south of 52nd and Pennsylvania Avenues and north of the 49th Avenue railroad tracks. The site is zoned single-family and is identified in the Comprehensive Plan as a potential low density residential development site. He noted the majority of the Council was not interested in developing the property when a different proposal was presented in 1998. Mr. Steve Sondrall, City Attorney, disclosed that Mr. Gleason of Eagle Crest Northwest is a client of his lawfirm. Mr. Bill Gleason, Eagle Crest Northwest, Inc., was recognized. He stated the townhomes would be one level and designed for persons in the 55 + age group. The units could easily be upgraded for handicapped residents. The units would sell in the $125,000-$150,000 price range. President Enck polled the EDA members regarding interest in selling the city- owned property. Commissioner Collier indicated the vacant land is the last open green space in the City. He spoke in favor of retaining the property at this time. He suggested that attention be given to other options such as a potential development at the Hosterman school site. Commissioner Cassen expressed a willingness to explore development of the New Hope EDA November 8, 1999 Page 1 vacant city-owned parcel. President Enck commented that if the City sells the property, it would never be able to recapture open recreational space. President Enck also pointed out that Mr. Gleason's proposal would require a zoning district change. Commissioner Norby commented that due to the property's close proximity to the railroad tracks, noise from trains and train whistles might pose a problem. Commissioner Thompson indicated he is not prepared to make a decision at tonight's meeting, and suggested further review at a future work session. MOTION Motion was made by Commissioner Thompson, seconded by Commissioner Item 4 Cassen, to postpone a decision regarding the sale of the property to a future EDA Meeting but no later than January 24, 2000. Voting in favor: Thompson, Cassen; Against: Norby, Enck, Collier. Motion failed. President Enck thanked Mr. Gleason for his interest in the city-owned property but explained that at this time it appears the EDA does not desire to sell the property. IMP. PROJECT 666 President Enck introduced for discussion Item 5, Resolution Approving City of Item 5 New Hope 2000-2002 Official Resident Guide/Business Directory Contract (Improvement Project No. 666). Ms. Sue Henry, Community Development Specialist, explained that based on advertising sales of $22,000, the base fee to the City is $9,000 for publication of 12,000 directories. The EDA questioned whether a publication quantity of 12,000 copies is excessive. Ms. Henry stated 20,000 copies were printed in 1998. She reported that 8,500 directories of the 12,000 inventory will be mailed directly to residents and businesses. The remaining copies will be available for distribution upon request and will be furnished to new residents. EDA RESOLUTION Commissioner Cassen introduced the following resolution and moved its adoption: 99-12 "RESOLUTION APPROVING CITY OF NEW HOPE 2000-2002 OFFICIAL Item 5 RESIDENT GUIDE/BUSINESS DIRECTORY CONTRACT (IMPROVE- MENT PROJECT NO. 666)". The motion for the adoption of the foregoing resolution was seconded by Commissioner Norby, and upon vote being taken thereon, the following voted in favor thereof: Enck, Cassen, Collier, Norby, Thompson; 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. ADJOURNMENT Motion was made by Commissioner Norby, seconded by Commissioner Collier, to adjourn the meeting. All present voted in favor. Motion carried. The New Hope EDA adjourned at 9:00 p.m. Respectfully submitted, Valerie Leone City Clerk New Hope EDA November 8, 1999 Page 2  EDA IIIII I RF UE T FOR ACTION Originating Department Approved for Agenda Agenda Section Community Development EDA Kirk McDonald ~I 12-13-99 Item No. B~nd Phil KernB~.//. ~ DISCUssION REGARDING PROPOSED DEV~ELoPMENT FOR CITY-0WNED PROPERTY AT 9200 49TM AVENUE AND AUTHORIZATION FOR STAFF TO NEGOTIATE ON POTENTIAL SALE OF PROPERTY (IMPROVEMENT PROJECT #597). ACTION REQUESTED Staff requests to discuss with the EDA a potential development on the City-owned property at 9200 49t' Avenue and authorization to negotiate the potential sale of property. PAST PRACTICE In the past, staff has presented all matters relating to the future development of this parcel to the EDA. The EDA has taken the approach to review all proposals and authorize staff to negotiate on select proposals. BACKGROUND In June 1997, the City of New Hope purchased this vacant 2.8 acre industrial site from Clarence Brandell. The City acquired the property because a portion of the property is identified in the New Hope Surface Water Management Plan as a future potential site for a water quality pond to help improve the water quality of the large wetland north of, and adjacent to, the site. The City acquired the property to have control over the future development of the site and is interested in a potential joint-cooperative development (similar to Conductive Containers, Inc. on Quebec Avenue), where a development could occur in conjunction with the installation of a water quality pond. The 1997 appraisal on the property indicated a value of $282,000, but the appraisal was discounted due to the poor soils on site. The City purchased the property for the adjusted appraised value of $195,000 and the City Engineer has estimated that the City would need to utilize approximately one acre of the site for ponding improvements, leaving two acres available for development. In November, City staff was approached by ID Services, a New Hope based manufacturing company currently located at 3410 Winnetka Avenue. ID Services has been located in New Hope since it began providing engraving services for businesses and advertisers in 1971. The company has expanded its services into Canada and Europe since 1986 and continues to maintain its headquarters here in New Hope. The current location of the building at 3410 Winnetka has been maximized in terms of use, and the company is looking for a new location to build a larger operation. ID Services is proposing to build a 31,400 square loot building on the City-owned property at 9200 49th Avenue. The building will be used primarily for (cont'd.) MOTION BY ~~~Y"~ ~ SECOND BY/~ ~ , u ' ' Request for Action Page 2 12-13-99 manufacturing and warehousing its products and as office space for its operation. They have hired Olson General Contractors, Inc., a local contractor, to development a preliminary concept plan for the site, which has been submitted to the City and is included in the attachments. The EDA last discussed development at this site in January following a proposal from Contract Hardware to build a 26,000 square foot warehouse/manufacturing building on site. At that time, the EDA was considering the sale of the property "as is" to Contract Hardware without making the necessary soil improvements. The negotiations for an agreed upon sale price did not result in terms that were acceptable to both the City and Contract Hardware, and the proposal was withdrawn. At that time, the EDA instructed staff to continue working on correcting the soils on site for future development and making the necessary ponding improvements. Staff has worked with the City Engineer to identify the area needed for the construction of a water quality pond and the steps needed to correct the soils on site. The City Engineer has identified that the soils in the area of the water quality pond are good condition and can be used to replace the poor soils in the developable area. Taking this into consideration, staff determined that it would be more cost-effective for the City to correct the soils at the same time as it excavates for the water quality pond. Staff has been working with Timberland Properties to the west for the past nine months to obtain a necessary easement for the construction of the water quality pond and has not been successful. At this time, staff has instructed the City Engineer to devise an alternate plan for the water quality pond making the easement with Timberland Properties not necessary. Collins Electrical, located at 4990 Highway 169, has indicated an interest in participating with the City on a ponding project so that they can pursue additional development on their property. In October, the City Engineer submitted a grant application to the MetroEnvironmental Partnership Program of the Metropolitan Council to pay for the costs of the water quality pond construction, with the City paying for soil correction costs. The City will be notified in late December or early January whether or not the project will receive funding. If the project is selected, staff expects the ponding and soil improvements can begin in the spring of 2000. This schedule works well with ID Services, as they would like to begin construction during the summer of 2000. After the soil and ponding improvements have been completed, the entire lot will be sold to ID Services with the City retaining a ponding easement over approximately one acre of the northern portion of the property. The remaining 1.85 acres will be available for ID Services to develop. The 1997 appraisal indicates that with corrected soils the property has a market value of $282,000, or $2.30 per square foot. Subtracting the one acre used for the ponding improvements, the value of the developable portion of the property is calculated to be approximately $185,000. Staff is pleased to work with a company that has been based in New Hope for over 25 years on the potential development of this property. ID Services has 65 employees, with hourly pay averaging $13.10 per employee. It is estimated that this expansion will allow for the addition of 20-30 new employees over the next five years. In terms of rewards for the City, the business will add approximately $35,000 - $40,000 to the tax rol~s per year, of which $8,000 - $10,000 will be directed to the City of New Hope. The development will also retain existing jobs in the City of New Hope and provide the infrastructure for the additional employment opportunities in the next five years. ID Services will be maximizing the site with a use that does not include heavy traffic or all-night operations. Staff recommends approval of a motion authorizing staff to negotiate with ID Services on the purchase and development of this property. Representatives from ID Services will be present at the meeting. ATTACHMENTS · 12/6/99 Correspondence from ID Services · Preliminary Site Plan and Front Elevation · Site ponding diagrams submitted by the City Engineer · 1/6/99 City Engineer's memo on the costs of soil and ponding improvements · 1999 MetroEnvironmental Partnership Grant Application Date: December 6, 1999 To: Economic Development Authority of the City of New Hope From: Christine and Elert Johnson Re: Background information on Identification Services, Inc.. Identification Services, Inc. was started in the basement of Chris Johnson's New Hope home in 1971. It was known as CM Johnson Engraving. The primary clients were computer manufacturers and uniform shops. In 1976 the company had grown too large for the basement and it was time to move. Chris looked for an appropriate location close to her home in .New Hope. The 3410 Winnetka Building was just the place. Ten years later in 1986, Chris decided to buy the 3410 Winnetka Building with her husband. Chris has a strong dedication to the community, including volunteering for the Twin West Chamber of Commerce and District 281 Schools. She has raised all three of her children here. They are all now involved in the business. Chris continues to maintain controlling interest in Identification Services, Inc. In the past 10 years, the company has grown five fold. We have expanded into the advertising specialty market, serving companies in the United States, Canada and Europe. The company plans on continuing to expand in this market as well as entering into the medical membrane switch market. In an effort to continue to grow and service our customers, we are looking for a larger building. We have really enjoyed being in the City of New Hope and want to continue to grow our company here. We anticipate rapid growth over the next five years, approximately doubling our current size. We estimate adding 15-20 people within the next 3 years and another 5-10 people in the following 2 years. These positions are higher end manufacturing jobs. Our average pay is $13.10 per hour and 75% of our work force is full time. We offer a full range of benefits, including health, dental, life and disability insurance, vacation and personal time, 401k plan and flex time. Most of our positions involve intense use of computers and manufacturing equipment. We train employees in all facets of our business, including computer training, accounting, screen-printing, engraving and fabrication. div of Identification Services. Inc E-mail info~idline.com 3410 Winnetka Avenue North Phone (800)779-5612 (612)544-7326 Minneapolis. MN 55427-2094 Fax (800)779-0450 (612)542-1819 asi/59080 · ppa/ l 10766 ID Line Wise Line asi/47850 · ppa/l 11778 We continue to be involved in the community and are involved in a special work program with Cooper High School for disadvantaged kids. We are very excited about the success rate we have had with these kids. The land at 49th and Erickson is ideal for our expansion site. We are looking forward to working together with the City of New Hope to construct a building, which will make an excellent addition to the city. Thank you for your time and consideration. div of Identification Services, Inc E-mail info~idline.com 3410 Winnetka Avenue North Phone (800)779-5612 (612)544-7326 Minneapolis. MN 55427-2094 Fax (800)779-0450 (612)542-1819 asi/59080 · ppa/110766 ID Line Wise Line asi/47850 · ppa/ l l1778 Qf:~LIMIN~R~ ~T~ ~I.~N . · 1999 MetroEnvironment Partnership Grant Application Legal Name of Project Sponsor: City of New Hope Designated Project Representative: Kirk McDonald, Community Development Director Mailing Address, E-Mail Address, & Telephone Number of Project Sponsor City of New Hope, 4401 Xylon Ave. No, New Hope~ MN 55428 (612) 531-5100 (phone)~ (612) 531-5136 (fax)~ kmcdonald@ci.new-hope, mn.us Project Title: New Hope Coordinated Water Quality Project at Brandel Ponds Total Project Cost: $233,400 Grant Request Amount: $ 90,000 Project Summary including information on water resource benefiting (Include a short description of the project, goals, objectives, budget and project timeline.) Proiect Description The City of New Hope is proposing this project to improve the water quality in the New Hope Athletic Fields Wetland, Plymouth and Bass Creeks, Shingle Creek and ultimately, the Mississippi River. The City proposes to create a new multicell water quality pond to treat runoff from New Hope and the City of Plymouth before it enters the Athletic Field Wetlands (DNR Protected Wetland 569W). At the same time, the City will work with commercial and residential landowners in the tributary area to improve land management practices and reduce nutrient runoff to the ponds and downstream waterbodies. The City and watershed area tributary to the ponds are fully developed. The property to be acquired for the Brandel ponds is the only area remaining to create ponds that will provide significant water quality improvement in this area. The City is also adding sediment traps in three other areas around the wetland to remove pollutants that enter from drainage areas to the east and west. The City has worked with a variety of partners to develop this project. The Brandel Ponds project is a priority project identified in the City's Surface Water Management Plan (1996) and has been approved by the Shingle Creek Watershed Management Commission. The wetland complex in the Athletic Fields has been identified as a High-Priority Wetland in the New Hope Wetland Inventory and Management Plan (1998), which also recommended the implementation of the proposed ponds to protect the quality of these wetlands. The City has worked with Tom Hovey, DNR Area Hydrologist, in designing the proposed pond. Independent School District 28 I, whose Cooper High School drains to the site, has committed to use of non-phosphorus based fertilizers on all grass areas, and the removal of all fertilizer deposited on hard surfaces as a part of the project. The proposed project includes excavation of approximately 18,000 cubic yards of earth to create the multicell pond and a berm to direct storm water to the pond system. (See attached plan.) The disturbed areas will be planted with wetland plantings, native prairie seed, and native trees and shrubs. The project will remove approximately 8 pounds of phosphorus per year to benefit downstream water bodies. In addition to these signficant benefits, the City will use this project to expand the pilot water quality education efforts it began last year with city residents. Mayor Peter Enck (also the chair of the Bassett Creek Watershed Commission) initiated a program to educate residents in the drainage area to Northwood and Meadow Lakes about water quality issues and actions that residents could take to improve the quality of local water bodies. The efforts included door-to-door distribution of informational materials, an evening workshop for neighborhood residents (also rebroadcast on the local cable access channel), a volunteer planting of a native plants to create a shoreline buffer on Meadow Lake, and interpretive signs for park users. The success of these efforts has encouraged the City to propose similar strategies to educate · commercial and residential property owners in the area around the Brandel ponds, to maximize the benefits to be realized from the proposed project. The City will use a pre-and post-project survey to determine the effectiveness of the education efforts. Pro. iect Goals I. Reduce nonpoint source pollutants (phosphorus) entering the DNR Protected Wetland in the Athletic Fields and downstream water bodies by 8 lbs / year. 2. Create water quality ponds planted with native wetland materials that compliment the adjacent High Quality wetlands and provide additional habitat benefits. 3. Implement a neighborhood water quality education program that helps to reduce nutrients and sediments in runoff to the ponds, to maximize the benefits of the pond project. Ob|ectives and Timeline Late 1999 - Early 2,000 Resolve easement negotiations with adjacent landowners Complete project design Apply for DNR permit for the project Spring-Summer, 2,000 Construct ponds Complete plantings Implement neighborhood education program Project Budeet Property acquisition $ 65,000 (100% complete) Easement Acquisition 10,000 Pond Construction 133,100 Plantings 6,000 Engineering 24,300 (40% complete) Education program 5,000 $243,400 The city is requesting $90,000 from the MetroEnvironment Partnership Grant Program to support the costs of project construction and the education program. The City will match this amount with $153,400 for property acquisition, and to support remaining construction and engineering costs. (Match percent is approximately 63%). The City has presently spent approximately 50% of its match amount. The grant will support the efforts of the City of New Hope to improve water quality. __ 3dOH M.a,N .40 ,U JO OISCHAAG~ TO ~M r~'M[NT (q4x) sir) STCI~sLrr~ MEMOR.,~L~I TO: Kirk McDonald/Steve Sondrall FRO~I: Mark Hanson SUBJECT: 9200 49~ Avenue ('Brandell Property) BRA File No. 34-.98.820 DATE: Sanuary 6, 1999 On .~anuary 4, 1999. we met to review' the potential development for the above property.. As previously stated in our December 22, 1995 memo, New Hope's Surface Water Management plan provided for a resional pond to satisfy water quality requirements over the entire property, at 9200 49'*' Avenue. However, in the interest of providing some development on this property, its been proposed that if ponding for water qualit~ requirements can be incorporated in a portion of the existing wetland east of Eniland Graphics (9100 49"' Avenue) and mitigation for the wetland encroachment can be satisfied over the northerly 1/3 of 9200 49" Avenue, then the southerly 2/3 of 9200 49u' Avenue can be preserved for development. The contour dra,,,,ings dated 1955 for the area including 9200 49u' Avenue and the soil borings taken by the City. ,.,,'hen the Property. was acquired by the City suggest that the northerly 1/.3 of 9200 49~h Avenue ha~ better soil than thc southerly ZG. Therefore. as discussed at our meeting. if the City. were to undertake a public impwvement project to construct the regional water quality and the required mitigation over 9200 49~ Avenue, the better soil on the northerly. 1/3 of the property could be used to correct the poorer soil over the south~iy 2/3. 2335 ~Vest Highway 36 · St. Paul, MN 55113 · 612-636-4600 · Fax: 612-636-1311 The estimated cost to construct the water quality pond and provide the required mitigation over the northerly. 1/3 of 9200 49~ Avenue including soil correction is summarized below: Water Quali~,,,Pond/Mifigation (northerly I/3 9200 49tb Avenue) 2~300 CY Water Quality Pond Excavation ~ $7.00/cy $16,000 14,000 CY Mitigation Excavation ~ $7.00/cy- 95,000 150 LF Extend Storm Sewer Pipe in 49m Avenue (~ $100/lf 15,000 2 AC Restoration/Erosion Control ~ $2,000/ae 4,000 Subtotal $133,100 $0iJ Correction (southerly 2/3 91[00 49th Avenue) 12,000 CY Common Excavation (~ $4.00/cy $48,000 1,900 CY Granular borrow (~1 $6.00/cy 11,400 Subtotal S59,400 The above estimate assumes common excavation for soil correction includes only excavation ($4.00/cy) while the estimate for mitigation excavation assumes excavation and removal off site ($7.00/cy). In summary, the above cost estimates assumes the additional cost for'soil correction over the southerly 2/3 of 9200 49t~ Avenue is approximately $60,000 as opposed to $147,500 estimated by the developer. Presently, we are preparing a DNR Permit application to construct the water quality pond in the existing wetland and provide the proposed mitigation. We expect the DNR Permit review will take 30-60 days. However, its not certain whether the DNR will approve the Permit. RF~UI~T FOR ACTION Originating Depa, tment Approved for Agenda Agenda Section Community Development EDA Kirk McDonald )"-~)12-13-99 Item No. B~nd Phil Kern By:./'/ 5 / RESOLUTION CONSENTING TO AND APPROVING SALE OF PARTNERSHIP INTEREST IN NORTHRiDGE PROPERTIES OF NEW HOPE LIMITED PARTNERSHIP. ACTION REQUESTED Staff requests that the EDA approve the enclosed resolution consenting to and approving sale of ~artnership interest in Northridge properties of New Hope Limited Partnership. PAST PRACTICE All adjustments or changes in development agreements are subject to the approval of the Economic Development Authority. BACKGROUND In 1984, the New Hope Housing and Redevelopment Authority entered into a redevelopment agreement with Northridge Properties of New Hope Limited Partnership. The agreement required the HRA to acquire land for Northridge Properties for the construction and development of the Chardon Court Apartments. The HRA's financial contribution to the project consisted of $975,000 in TIF and $880,200 in interest rate reduction payments to the Partnership payable from tax increment funds generated by the development. The agreement provides that the HRA shall have a lien against the development in the minimum amount of $614,200 payable upon transfer or sale of the legal or equitable interests in the property. The City has been approached by Attorney Judith Gartner, representing the Northridge Properties of New Hope Limited Partnership, to request approval of the transfer of interests ;from Charles Thompson (Charlie) to the Partnership. When the agreement was originally signed !in 1984, the Partnership consisted of Charles P. Thompson, Charles T. Thompson, and Donald E. Forseth. In 1987, Donald E. Forseth and Charles P. Thompson's partnership interests were transferred or sold to Dr. James Pattee and M. Melinda Pattee. However, the HRA did not ~provide any written consent or approval for the change in partnership control at the time of this transfer of interests. (cont'd) il ' Request for Action Page 2 12-13-99 Ms. Gartner is now informing the City that Charles T. Thompson is requesting to transfer his interests in the Partnership to M. Melinda Pattee. The Partnership is requesting that the HRA by and through the EDA approve and consent to the transfer and control of the Partnership interest to Dr. James Pattee and M. Melinda Pattee without triggering the maturity of the HRA lien. In summary, this resolution will provide written authorization for the 1987 transfer of interests from Chades P. Thompson and Donald E. Forseth to Dr. James Pattee and M. Melinda Pattee. The resolution would also approve the current transfer of interests from Charles T. Thompson to the M. Melinda Pattee. The EDA would be acknowledging that the transfers of interests do not trigger the maturity of the HRA lien. Staff recommends the consent and approval of the transfer of interests within the Northridge Properties of New Hope Limited Partnership. ATTACHMENTS · Resolution · 12/8/99 Correspondence from the City Attorney · 11/22/99 Correspondence from Ms. Judith Gartner, Attorney EDA RESOLUTION NO. 99- RESOLUTION CONSENTING TO AND APPROVING SALE OF PARTNERSHIP INTEREST IN NORTHRIDGE PROPERTIES OF NEW HOPE LIMITED PARTNERSHIP BE IT RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: WHEREAS, the Housing and Redevelopment Authority in and for the City of New Hope (hereinafter "HRA") entered into a redevelopment agreement entitled the 1984 Redevelopment Agreement Between Northridge Properties of New Hope Limited Partnership, a Minnesota Limited Partners, Housing and Redevelopment Authority in and for the City of New Hope, Minnesota, City of New Hope, Minnesota, and Charles P. and Mary Jane Thompson, husband and wife dated January 30, 1985 (hereinafter "Agreement"); and WHEREAS, the Agreement provides, among other things, that the HRA will acquire land for Northridge Properties of New Hope Limited Partnership (hereinafter "Partnership") for construction and development by the Partnership of housing facilities for occupancy by the elderly and persons of moderate income. The HRA's financial contribution to the project per the Agreement is $975,000.00 from the sale of Tax Increment Bonds, series 1985 and $880,200.00 in interest rate reduction payments to the Partnership payable from tax increment generated by the development in Tax Increment District 82-1 as amended and adopted by the City Council on October 25, 1982 and the 1984 Amendment as adopted and approved by the City Council on October 24, 1984; and WHEREAS, the Agreement further provides that the HRA shall have a lien against the development and property in a minimum amount of $614,200.00 payable upon a transfer or sale of the legal or equitable interests in the property by the Partnership as defined and set out in the Agreement; and WHEREAS, the Partnership is currently made up of the following individuals and/or family trusts controlled by said individuals: Dr. James Pattee Charles T. Thompson M. Melinda Pattee; and WHEREAS, the Agreement originally indicated the Partnership consisted of: -1- Charles P. Thompson Charles T. Thompson Donald E. Forseth; and WHEREAS, the HRA did not provide any prior written consent or approval for the change in partnership control when Donald E. Forseth and Charles P. Thompson's partnership interests were transferred or sold and when Dr. James Pattee and M. Melinda Pattee acquired their interests in the Partnership; and WHEREAS, Charles T. ThOmpson is now desirous of divesting himself of his interest in the Partnership by a sale of his interest to M. Melinda Pattee; and WHEREAS, the partners of the Partnership request the HRA by and through the Economic Development Authority in and for the City of New Hope (hereinafter "EDA") to approve and consent to the transfer and control of the Partnership interest to the following entities and/or individuals without a triggering of the maturity of the HRA lien: Dr. James Pattee M. Melinda Pattee Anderson/Pattee Family Limited Partnership I, a Minnesota Limited Partnership, and WHEREAS, the EDA has the authority to approve and consent to this transfer of control due to its assumption of responsibility of all HRA projects, rights and obligations per EDA Resolution 89-3 adopted April 10, 1989 accepting project control, authority and operation of all HRA projects including all tax increment financing districts and redevelopment agreements entered into by the HRA to implement the goals and objectives of said districts and agreements. NOW, THEREFORE, BE IT RESOLVED: 1. The Economic Development Authority in and for the City of New Hope hereby ratifies and approves the current partnership interests of Dr. James Pattee, Charles T. Thompson and M. Melinda Pattee. The EDA agrees a change to this ownership group of the Partnership has not triggered payment of the HRA lien described in the 1984 Redevelopment Agreement dated January 30, 1985. Also, any ownership transfer by said partners to any family limited partnerships will not trigger payment of the lien as long as the current partners referenced above remain in control of the Partnership. 2. The EDA consents to and approves the transfer by Charles T. Thompson to M. Melinda Pattee of all of Thompson's interest in the Partnership. Further, that said transfer will also not trigger the payment of the HRA lien. -2- 3. The EDA consents to and approves control of the Partnership by Dr. James Pattee, M. Melinda Pattee and the Anderson/Pattee Family Limited Partnership I. That for purposes of the 1984 Redevelopment Agreement, control by the referenced individual and entities shall be deemed as the Redeveloper (or Developer) as defined by Section 1.041 of the Agreement. 4. That any furore transfer or sale by the control group referenced in 3 above shall be governed by the Agreement, and this Resolution shall not alter the provisions of the Agreement in any way except as specifically indicated in this Resolution. Dated the day of , 199 W. Peter Enck, President Attest: Daniel J. Donahue, Executive Director P:\Attori~ey\Cnh Remlutiott~kEDA Reso Consnt to Sale of Ptshp.wpd -3- JENSEN SWANSON & SONDRALL, P.A. Attorneys At ~2~ E DINBROOK CROSSING, STE. 201 BROOKLYN PARK, MINNESOTA ~5443-1999 TELEPHONE (612) 424-8811 · TELEFAX (612) 493-5193 E-MAIL jss~jsspa.com GORDON L. JENSEN* WILLIAM G. SWANSON IULIE A. THILL Kirk McDonald Community Development Director o~ COUSS~L City of New Hope LOREN$ Q. BRYNESTAD 4401 Xylon Avenue North New Hope, MN 55428 Re: Resolution Consenting to and Approving Sale of Partnership Interest in Northridge Properties of New Hope Limited Partnership Our File No.: 99.1000 Dear Kirk: Please find enclosed for consideration at the December 13, 1999 EDA meeting a proposed Resolution Consenting to and Approving Sale of Partnership Interest in Northridge Properties of New Hope Limited Partnership. This action is prompted by the request made by Attorney Judith Gartner in her November 22, 1999 letter to the City Manager. Ms. Gartner represents the Partnership in this transaction. Basically, the Resolution does two things. One, it ratifies and approves past action by the Partnership when Donald Forseth divested himself of interest in the Partnership with said interest being acquired by Dr. James Pattee and M. Melinda Pattee. As pointed out in the enclosed Resolution, the current control group of the Partnership includes Dr. James Pattee, Charles T. Thompson and M. Melinda Pattee. Attorney Gartner also informs me that two family trusts controlled by Charles T. Thompson and M. Melinda Pattee also have an interest in the Partnership. The enclosed Resolution approves this partnership group. Secondly, the proposed Resolution approves a transfer of all of Charles T. Thompson's interests in the Partnership to M. Melinda Pattee. The approval of the partnership group by the EDA is important to the Partnership to ensure that the EDA has no present intention to demand payment of the security lien originally given to the HRA by the Redevelopment Agreement in the minimum amount of $614,200.00. This lien becomes payable to the EDA when there is any change in either the legal or equitable ownership of Chardon Courts. Arguably under the Agreement, when the Pattees' acquired their ownership interest in the Partnership an equitable ownership change in Chardon Courts occurred triggering repayment of the lien. The enclosed Resolution ratifies and approves the Pattees as acceptable owners of the partnership interest without triggering the lien payment. The Resolution also approves the sale of Charles T. Thompson's entire interest in the Partnership to M. Melinda Pattee. That sale will also not trigger payment of the HRA lien. *Real Property Law Spc~cialist Certified By The Minnesota State Bm' Association 'i'Qualified ADR Neutral December 8, 1999 Page 2 The EDA should know that the present ownership group was constructively approved in 1996 when the Parmership refinanced the housing revenue bonds used to originally develop the property. It is my understanding the current unpaid principal amount on the bonds is approximately $5 Million. These bonds are scheduled to be repaid in full in 2026. The HRA lien is subordinate only to this bond refinancing with Norwest Bank of Minnesota acting as trustee for the bond issue. It is my further understanding that the property's valuation is somewhere in the $7 Million to $9 Million range. In other words, there is probably $3 Million to $4 Million of equity in Chardon Courts after repayment of the unpaid principal balance on the bonds. Our HRA lien is fully protected by this equity. Therefore, it is my opinion this Resolution approving the current ownership group and authorizing a transfer of interest from Charles T. Thompson to M. Melinda Pattee will not negatively impact protection of the HRA lien against the property. The HRA lien will ultimately be paid when Chardon Courts and/or the land it is situated on is sold by the current ownership group to a new third party entity as was the case when Masonic Homes purchased Northridge. If you have any further questions or comments regarding the Resolution or content of this letter, please don't hesitate to contact me. Very truly yours, Steven A. Sondrall JENSEN SWANSON & SONDRALL, P.A. Enclosure cc: Dan Donahue Valerie Leone Judith Garmer, Esq. CNH lO00-Ol-Kirk Ltr.wpd O owcn & 8AMUP. L D. ORBOVICH SUSAN M. ~ Of C~ ~o~s L. ~OR~ ~stofic ~m Building - Sui~ 417 ~8 St. Pemr S~eet St. Paul, Mi~e~m 55102-1187 Telep~: (5~1) 22~074 F~: (551) 22~697 November 22, 1999 Daniel I. Donahue, City Manager City of New Hope 4401 Xylon Avenue North New Hope, MN 55428-4898 RE: Northridge Properties of New Hope Limited Partnership. Dear Dan: Recently I spoke by telephone.with Steve Sondrall, expressing my interest in discussing with the appropriate individuals at the City of New Hope a proposed transfer of partner interests in the above-referenced limited partnership. As you know, the Limited Partnership owns the senior apartment complex known as Chardon Court. At the present time, the partner interests are controlled by Dr. lames Pattee, Charles T. Thompson (Charlie), and M. Melinda Pattee A portion of those interests are owned, for estate planning purposes, by family limited partnerships. Charlie Thompson has had discussions with ]Vfmdy Pattee and her husband, Ron Anderson, in which Charlie has offered to divest himself of his general partner and limited partner interests in the Limited Partnership. lVfindy Pattee and Ron Anderson have e.~ressed en intere~ it,. acquiring those interests from Charlie and have engaged our firm to assist with the proposed transaction. If the proposed transaction occurs, Mindy and Ron would expect to transfer a portion, if not all, of the interest they acquire from Charlie into a family limited liability company. W.e are dis&ussing this proposed transaction with you at this time because of the existence of a Redevelopment Agreement entered into as of;lanuary 30, 1985, by the Limited Parmership, the New Hope HRA, and Charles P. Thompson and Mary ;/ane Thompson. As I review the document with its exhibits and amendments, I conclude that the proposed transfer should not trigger any immediate payment to the City of New Hope. If you were to conclude differently, we would want to understand the basis for that conclusion, and discuss the possibility of some transfer structure that would not have that punitive effect. Daniel $. Donahue November 22, 1999 Page 2 Ron Anderson and Mindy Pattee are particularly interested in being able to have an ownership interest in the Limited Partnership through their limited liability company, as it Would place that entity in a strategically advantageous position for the future development of the remaining unimproved property owned by the Limited Partnership adjacent to the existing Chardon building. Steve Sondrall has told me he believes you have the applicable documents in your files. I am sending him, by his copy of this letter, all applicable pages to those agreements of which I am aware. When you have had the opportunity to review this matter, we look forward to discussing it with you, and answering any of your questions. We will gladly come to New Hope for a meeting at your convenience. Very truly yours, JRG/Ise cc: ~/Kirk McDonald Steve SondraH Ron Anderson Tom Dougherty F:~CLIENTS~A~I'EE~LS E0 I09.WI~D