081098 EDA Official File Copy
CITY OF NEW HOPE
EDA AGENDA
EDA Regular Meeting #5 August 10, 1998
Agenda #5
President W. Peter Enck
Commissioner Sharon Cassen
Commissioner Don Collier
Commissioner Pat La Vine Norby
Commissioner Gerald Otten
1. Call to Order
2. Roll Call
3. Approval of Minutes of July 27, 1998
4. Discussion Regarding Potential Multi-Family Rehabilitation Project at New
Hope Garden Apartments, 5600-5650 Zealand Avenue North and 8511
Bass Lake Road
5. Resolution Declaring Preliminary Intent to Convey Property to Senior
Outreach Services, Inc. for Adult Day Care Facility (Improvement Project
No. 493)
6. Adjournment
CITY OF NEW HOPE
4401 XYLON AVENUE NORTH
NEW HOPE, MINNESOTA 55428
Approved EDA Minutes July 27, 1998
Meeting #4 (Meeting held at School District Adm. Building)
CALL TO ORDER President Enck called the meeting of the Economic Development Authority to order
at 7:13 p.m.
ROLL CALL Present: Enck, Cassen, Collier, Otten, Norby (arrived at 8:25 pm)
Staff Present: Sondrall, Hanson, Donahue, Leone, McDonald, Henry, Kern
APPROVE MINLrI'ES Motion was made by Commissioner Otten, seconded by Commissioner Cassen, to
approve the EDA minutes of June 22, 1998, with a correction clarifying Collier's
absence. Voting in favor: Enck, Cassen, Otten; Abstained: Collier; Absent: Norby.
Motion carried.
REDEVELOPMENT President Enck introduced for discussion Item 4, Resolution Approving 1998
PLAN AMENDMENT Amendment to Master Modification to Redevelopment Plans and Tax Increment
Item 4 Financing Plans and Requesting the Approval of the City Council.
President Enck noted that the EDA must take action on Item 4 before reconvening as
the City Council and voting on Item 7.2.
Mr. Dan Donahue, City Manager, stated the plan amendment would expand the
district area to include the PPL housing redevelopment project and the Cooper High
School Property. He stated the City has previously authorized the use of tax
increment revenues to fund a portion of the costs for the PPL housing project but has
not committed to any project or funding for recreational facilities at Cooper High
School. Approval of the amendment expanding the district area does not authorize the
expenditure of funds.
Mr. Donahue reported that Hennepin County was the only taxing jurisdiction which
provided comment regarding the tax increment hearing. He summarized that the
County did not have any objections to inclusion of the Project for Pride in Living
development, but commented that the use of tax increment for construction of a
school gymnasium does not fall within Heunepin County guidelines for acceptable
use of TIF.
Commissioner Cassen questioned why similar funding was approved for the
gymnasium at Armstrong High School. Mr. Donahue stated the County admitted that
it was an oversight on their part.
Commissioner Collier recommended separating the properties for the vote on the
plan amendment.
Mr. Donahue clarified that no formal action has been taken on the Cooper project.'
Further he stated there would be no change to the TIF district but only an expansion
of the development area where funds could be expended in the future.
Substantial discussion ensued regarding costs, commitments and the use of tax
increment.
New Hope EDA July 27, 1998
Page 1
MOTION Motion was made by Commissioner Collier, seconded by Commissioner Cassen,
H.C. LETTER acknowledging receipt of the July 24 Hennepin County memorandum and
Item 4 entering it into the record. All present voted in favor. Motion carried.
RESOLUTION . Commissioner Collier moved approval of the following resolution expanding the
EDA 98-06 plan to include the Project for Pride in Living property:
Item 4
"RESOLUTION APPROVING 1998 AMENDMENT TO' MASTER
MODIFICATION TO REDEVELOPMENT PLANS AND TAX INCREMENT
FINANCING PLANS AND REQUESTING THE APPROVAL OF THE CITY
COUNCIL".
The motion for the adoption of the foregoing resolution was seconded by
Commissioner Cassen, and upon vote being taken thereon, the following voted in
favor thereof; Euck, Cassen, Collier, Otten; and the following voted against the
same: None; Abstained: None; Absent: Norby; whereupon the resolution was
declared duly passed and adopted, signed by the president which was attested to by
the executive director.
MOTION Motion was made by Commissioner Otten, seconded by Commissioner Cassen, to
approve amendment to the plan by including the Cooper High School property.
Voting in favor: Euck, Otten; Against: Collier, Cassen; Absent: Norby. Motion
failed.
SUSPF. blSION AND The EDA Meeting was suspended at 7:32 p.m. to reconvene the City Council
RECONVENING OF Meeting. The EDA Meeting reconvened at 9:03 p.m. (Commissioner Norby arrived
MEETING at the Council Meeting at 8:25 p.m.)
REGENT President Euck introduced for discussion Item 5, Discussion Regarding Potential
APARTMENTS Multi-Family Rehabilitation Project at Regent Apartments, 7136 60~ Avenue, 6017
Item 5 Louisiana Avenue, and 7124 Lombardy Lane (Project 645).
Mr. Kirk McDonald, Director of Community Development, explained that the
owners of Regent Apartments have inquired regarding financial assistance for
rehabilitation of the three-building complex. Mr. McDonald inquired whether the
EDA would be interested in providing fmaucial assistance similar to the New Hope
Apartment project approved in 1994. He stated the owners are requesting a loan and
consideration of a grant for a portion of the project
The EDA directed staff to communicate with the owners that the EDA would
consider a loan opportunity but would not be willing to consider any form of a grant.
9200 49TM AVE. N. President Enek introduced for discussion Item 6, Discussion regarding Development
IMP. PROJECT 597 Options for City-Owned Property at 9200 49~ Avenue North (Improvement Project
Item 6 No. 597).
Mr. McDonald provided history of the property and that Upper Midwest is no longer
interested in the site. Mr. McDonald requested direction from the EDA on how it
wishes to proceed with the site and offered the following options: l) no action; 2)
reconsider previous proposals; 3) hire a commercial real estate person to market the
property; or 4) have staff develop a Request for Proposal outlining the types of
development the City would prefer and seek request for proposals from interested
persons.
The EDA directed staff to pursue option 4 by developing guidelines for the use of the
property.
New Hope EDA July 27, 1998
Page 2
Commissioner Cassen inquired of the property's fair market value. Mr. McDonald
stated the City paid the appraised value of $195,000.
7300 BASS LAKE RD President Enck introduced for discussion Item 7, Resolution Approving Initial
IMP. PROJECT 614 Agreement Between the Minneapolis Public Homing Authority and the New Hope
Item 7 Economic Development Authority for the PPL/Bass Lake Townhomes Project at
7300-7332 Bass Lake Road (Improvement Project No. 614).
Mr. Donahue, City Manager, reported on design changes (2rstory rather than 3-story
units and inclusion of a road between the two buildings) recommended by the
Minneapolis Public Housing Authority. He stated the representatives are still
devising the parking lot plans.
Mr. McDonald, Director of Community Development, reported approval of this
initial agreement is necessary in order for PPL to keep the project financing on
schedule. He stated the main responsibility for the EDA under the Initial Agreement
will be maintenance of an applicant waiting list and administration of grievance
procedures for the MHOP units. These lists and procedures are being developed by
the Metropolitan Council. The EDA's responsibility for these issues can be satisfied
by delegation to the Met Council and will be outlined in a future agreement between
the EDA and the Met Council.
RESOLUTION Commissioner Norby introduced the following resolution and moved its adoption:
EDA 98-07 "RESOLUTION APPROVING INITIAL AGREEMENT BETWEEN THE
Item 7 MINNEAPOLIS PUBLIC HOUSING AUTHORITY AND TIlE NEW HOPE
ECONOMIC DEVELOPMENT AUTHORITY FOR TltE PPL/BASS LAKE
TOWNHOMES PROJECT AT 7300-7332 BASS LAKE ROAD
(IMPROVEMENT PROJECT NO. 614)". The motion for the adoption of the
foregoing resolution was seconded by Commissioner Collier, and upon vote being
taken thereon, the following voted in favor thereof; Enck, Cassen, Collier, Norby,
Otten; 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 Collier, seconded by Commissioner Otten, to
adjourn the meeting. All present voted in favor. The New Hope EDA adjourned at
9:24 p.m.
Respectfully submitted,
Valerie Leone
City Clerk
New Hope EDA July 27, 1998
Page 3
(,,i REQUEST FOR ACTION
Originating Department Approved for Agenda Agenda Section
EDA
Community Development ~ .. .
8-1o-9.,
BYKirk McDonald I~. / / 4
- ?
DISCUSSION REGARDING POTENTIAL MULTI~AMILY REHABILITATION PROJECT AT NEW HOPE
GARDEN APARTMENTS, 5600-5650 ZEALANJTAVENUE NORTH AND 8511 BASS LAKE ROAD
Another multi-family dwelling owner has approached the City and is interested in the EDA Apartment
Loan Program. Charles Miller, Miller Management Co., Inc., is part of a partnership that' owns the New
Hope Garden Apartments. This is a group of seven buildings (11 units each), along with 77 single
garages, located on Zealand Avenue near Bass Lake Road. The specific addresses are:
5600 Zealand Avenue North 5649 Zealand Avenue North
5601 Zealand Avenue North 5650 Zealand Avenue North
5624 Zealand Avenue North 8511 Bass Lake Road
5625 Zealand Avenue North
The property was built between 1962 - 68 and Miller Management has owned the property since 1974.
The owners want to make two major improvements to the buildings:
1. Installation of new windows throughout the complex (480 windows). The existing windows are the
original windows, are single pane glass with no energy efficiency, and let in wind and water.
Estimated cost to replace the windows is $222,500 (the owners have already obtained quotes and
signed a contract).
2. Installation of new maintenance free siding on the eaves, overhangs and garage walls. The owners
state that the siding and overhang are a constant peeling paint problem. Estimated cost for the
cladding is $48,220.
The total estimated cost of the project would be $270,720, with the owners proposing to finance one-half
of the project and requesting a no interest loan for the other one-half of the project ($135,360).
(cont'd.)
MOTION BY ~ SECOND BY ~
Request for Action Page 2 8-10-98
The request is slightly different than the request considered at the July EDA meeting, as follows:
Only two major improvements are being requested; not a full-scale rehabilitation of the property
involving a variety of items.
· The applicant understands this to be a 50~50 loan program; no grant is being requested.
· The property is paid for, so there would be no detailed financial analysis that would be necessary.
One of the buildings or an assignment of rents could be used as the financial guarantee.
Per the City Attorney's letter, the policy adopted in the res.olution states that public funds will not be
substituted for private funds that could reasonably be raised in the private market. Staff feels that this
would be a good project, but it is doubtful that public funds are essential for the project to move forward.
Miller Management has done a good job of maintaining their properties in the City.
Staff requests that the EDA give direction to staff as to whether this is a project you wish to pursue or
not.
MILLER MANAGEMENT CO., INC.
3947 Excelsior Boulevard
Minneapolis, MN 55416
612/925-1510
Fax 612/925-9443
July 31, 1998
Mr. Kirk McDonald
City of New Hope
4401 Xylon Ave. North
New Hope, MN 55428
Re: Apartment Loan Program Request
Dear Kirk:
Thank you for meeting with me today to explain your Apartment Loan Program.
We would like to participate in your Apartment Loan Program for our New Hope
Garden ^partments. This complex has 7 eleven-unit buildings along with 77
single garages. The property was built in 1962-1968 and we have owned it since
1974.
The improvements we want to make consist of new windows and covering the
eaves, overhangs and garage walls with new maintenance free siding. The old
windows are original and let wind and water in and are not energy efficient. The
siding and overhangs are a constant peeling paint problem.
We anticipate these improvements to cost about $222,500 for the 479 windows
and about $48,220 for the cladding. We understand that % of this cost would be
our responsibility and the other ½ could come from your interest free loan
program.
We hope to hear from you soon concerning your interest in doing the loan
program with us.
Sincerely,
Charles S. Miller, CPM
~/~/9~ i0: 22. $StS, ATTORf~-YS "> 53i5i~ ~0. 715 P002
JENSEN SWANSON & SONDRALL, P.A.
Attorn~s At
8~25 Eu]~aOO~ Caos~a~, S~. 201
BROOELY~ PA~, M. INA~$O~A
T~PHONg (612) ~-8811 s TE~AX (61~)
~P. MA~ August 6, 1998
C. ~
Daniel J. Donahue
City of New Hope Manager
4401 Xylon Avenue North
New Hope, MN 55428
RE: Proposed Rahab of New Hape Gardens Apartments
Our File No. 99.11211
Dear Dan:
The City was recenl~ly approached by the owners of New Hope Gardens
Apartments regarding financial assistance for the rehabilitation of their
seven building apartment complex located at Zealand Avenue and Bass
Lake Road. Each of the seven buildings holds 11 apartment units. The
EDA would be the actual lender, and did provide financial assistance on a
similar project to New Hope Apartments in 1994, in the form of a no-
interest loan.
The City's apartment loan program focuses on the rehabilitation of the
basic needs of apartments, to combat aging and obsolescence. The
rehabilitation is aimed at maintaining the existing housing stock, not at
upgrading the units so as to attract more affluent tenants. The prior
project, involving a different apartment complex with different owners,
included the replacement of the roofs, doors, windows, carpeting,
interior and exterior lighting, decks, plumbing, and ceramic tile, and
replacement or repair of the security system. The current proposal for
New Hope Gardens involves similar improvements, namely the
replacement of windows suffering from air and water leakage and energy
inefficiency, as well as new siding for the garages and new soffits end
fascia for the garages and apartment buildings.
~)8YB6Y98 10:22 iFS&S,ATTORNEYS -) 53151~G NO.?15 P~)~5
Daniel J. Donahue
August §, 1998
Page 2
Consistent with existing policy, the cost of the rehabilitation should be divided
equally between the City end the apartment owners. The City should pay for half
of the cost, and the owners pay the rest of the project cost themselves. The City
financial assistance can take the form of a no-interest loan, as with the prior
project. The loan can be repaid by monthly payments of one percent of the initial
loan amount, leading to repayment in 100 months, Or eight years and four months.
The loan note should contain a provision requiring the property owners to limit rent
increases to inflation only for the next two years. As with all projects of this type,
the City should require a promissory note, a second mortgage, and other
documentation from the building owners. The New Hope Gardens representatives
stated that the entire complex is unencumbered by a mortgage, and proposed
giving the City a mortgage on one of the buildings as security for a loan. With a
projected City loan of $135,000, the City will be adequately secured by a
mortgage on one apartment building having an estimated market value in excess of
$300,000.
You should also be aware that the EDA Resolution Approving Multi-Family Housing
Policies includes language to the effect that public money would not be substituted
for private funding, if such funding was available. See No. 11, EDA Resolution No.
93-13. In this case, there is sufficient equity in the buildings to qualify for private
financing. If the EDA wants to proceed with this project, it may wish to consider
amending its policy regarding the availability of private financing.
Please call if you have any questions.
Sincerely,
Martin P. Malecha
Assistant City Attorney
cc: Kirk McDonald, Director of Community Development
Susan Henry, Community Development Specialist
Doug Sandstad, Building Official
Steven A. Sondrall, City Attorney
EDA RESOLUTION NO. 93-[3
RESOLUTIOI~ APPROVING MULTI-FAMILY
HOUSING POLICIES
(PROJECT #510)
WHEREAS, tht City of Ntw Hope contains over 3,839 units of rental multiple unit housing; and
WHEREAS, many of those units have been constructed during the period from 1960 to 1979; and
WHEREAS, many of those units hive begun to show signs of aging and obsolescence; and
WHEREAS, mlny privets owners Ire hiving difficulty obtaining privets clpitai necessary to rehabilitate and
proplrly maintain their units; and
WHEREAS, rainy of thlse rental housing projects hive been subjtcted to the rial estate recession that has
involved most of the United Stetes la wall Ii the metropolitan area; and
WHEREAS, thai housing stock, if maintained, can providt I decent, alfa, ind delirebll source of affordable
housing for the currtnt end future residentl of Ntw Hope; and
WHEREAS, the City of New Hope Economic Development Authority (EDA} hl~ a deairl to provide aspsistancs
where that assistance il clserh/nestled end warranted; encl
WHEREAS. the purpose of thee assistance would be to: stem physical proporty deearioreeion, improve public '
slfeey, improve values, enhance naighborhoocl cohesivanm, end mist in the provision of modern
rental amlnities; and
WHEFIEAS, the City of New Hope must target itl limited resources, reflecting the reality that it can provide
Qnly limited funding, compared to the funding that might potlntlaily be required to renovate s
significant percentage of the 3,839 muiti-flmih/rental unitl in the City; and
WHEREAS, the gold of the EDA'I involvement would bi to ~ public policy naedl in the housing and human
servtcel aria, rather thin to resolve project financial probleml end issues that privets owners and
lenderl may hive, end
WHEFIEAS, the EDA reeogNzes that financial lesteelnce tO reel esteee projects involve Iome risk.
NOW THEREFORE BI= IT RESOLVED rites the folk)wing poliG-y Ihall be used by the EDA to evaiuete potential
future requestl for eesMtenco by rental unit ownarl:
1. The minimum amount of publk: funding required Ihall be provided in each case.
· 2. ~ prkxity will be given to belie needl (iud1 es roof rlq)llcement, wiring, heating,
tie.) es oppoled to provilion of ImMdIMI (aUdi es wesharl end dryarl in each unit, new
office IfKI lobby furniture, etc.) '
3. No funding wiN be provided which, directly or ind~ectly, il uled for fsel by the owner or
related plrtiM (including conilnJCtion management fees, devalopar fees, uat of
-. 'contingency fundl', fee shMtng, etc.)
4. At least two bona fide bidl, from non-raleeld plrlMI, will be required for elch item that is
I part of In overall program of rchlbilitetion funded plrttdly M' compleeMy with City funds.
Normally, 'in houle' contracting end/or related party contrlcting will be prohibited.
5. No fundl will be provided to bring defeuittd mortgagee current.
"// 6. No funds will be provided to bring taxis current.
/
7. Public funds will be used to leverage private funding wherever Possible. Normally a 50/50
matching of funds for eligible activities would be required.
8. Wherever possible, loans shall be used as the preferred financing vehicle, rather than grants
or equity investments.
9. In the cleo in which a project has substantial private financial stress, appropriate
participation by the lender and the equity owner will be e requirement for City investment.
The private investment may take the form of additional ecluity, debt forgivenese, interest
rate red~mtion, Ioefl term extension, payment deferrals, management fee reduction, reduced
cesh flow distribution, etc.
In no case will tax funds be used to mdve finencisl problems that would otherWise be
solved privately in the absence of public participation.
10, Public funds will only be provided in thole instances in which the public funds are essential
to the rehabilitation of the 13reject, Public funds will not be provided when the primary
result of that ~ovision would be to merely raise the Ixofitability of · building.
1 1. Public funds will not be substituted for private fund~ that could reasonably be raised in the
private market. For example, if a private loan could be obtained, and/or if Iow income tax
credits wo~d bo available, EDA funds will not be used to disl31ece these other i~tamial
12, Each financial assistance ~grlement will contain an ~celerated repeyment i~ovisiofl in the
event of IXoperty sale, or other significant changes in circumat~cee.
1 3. Fufldl will not be Ixovldod this will dow tho owr~ to dil01lCo moderate income residents
md ettruct higher income tonems. Nothing in this alinement shell be construed to
GwlchJde the attrlctJ~ of delirlbll tlfllntl to I ~ and the dilolocement of
14. Fufld8 wo~Jld not bi Orovlded fat projects that would ~ in lower property tax peyments,
16. EPA RelwddgtmJa~ f~]fld8 shell not be Orovtded far use in such · wey that Relocation
16. NO fuading wil be cmulder~l far 8eqxovtl vvMMut 8 Ixlot oNectJve fiflonclel ermlysis of the
orojec~ and m indooefldem r~amMfld~Jo~ 08 to ~ amount and tylM of PrOl~Sed
Adopted.by the EiXIflOllli~ ~ At/thoHty in Iftcl for the City of New Hol)I ~ 13th cloy of September,
1 g~3.
Atteel:tOenlel J. Oofbhue, E~meutive Olrectcx
7 City of New Hope
Apartment Loan Program
EDA Resolution NO. 93-13
Purpose
In September of 1993, the New Hope Economic Development Authority established a
loan program directed at maintaining multi-family rental housing. The program appeals
to the City's over 3,839 multiple rental units and focuses on three fundamental areas.
First, it assists owners in obtaining necessary capital for property rehabilitation and
upkeep. Secondly, it provides safe and descent housing opportunities at affordable
pdces for residents now and into the future. Lastly, by targeting public resources in
areas of greatest need the program reverses property deterioration; thereby improving
overall property values and enhancing public safety within the community.
Policy Guidelines
1. In view of limited public financial resources, the program provides minimal
assistance to the greatest number of projects, with foremost attention to those
properties in the greatest need. Basic need improvements such as: roof
replacement, widng and heating or other mechanical repairs carry a higher funding
priority.
2. Loans shall remain the preferred financing vehicle as opposed to grants or equity
investments. A 50~50 matching of funds is a normal requirement for eligible
projects.
3. No funding is provided which, directly or indirectly, is used for fees by the owner or
related parties (including construction management fees, developer fees, use of
~contingency funds," fee shadng, etc.)
4. At least two bona fide bids, from non-related parties, are required for each item that
is a part of an overall program of rehabilitation.
5. No funds are provided to address defaulted mortgages or to bdng taxes current.
6. In cases involving substantial financial stress, appropdata participation by the
lender and equity owner is required for City investment. Participation may take the
following forms: debt forgNeness, additional equity investment, interest rate
reduction, loan term extension, payment deferrals, management fee reduction,
reduced cash flow distribution, or other good faith efforts on behalf of the leader
and property owner.
7. Public funds will only be provided in those instances in which they are essential to
rehabilitation of the project. Public funds will not be provided when the pdmary
result of that provision would be to merely raise the profitability of a building.
8. Public funds will not substitute for private funding that may reasonably be raised in
the private market.
9. Each financial assistance agreement will contain an accelerated repayment
provision in the event'of property sale, or other significant changes in
circumstances.
10. Funds will not be provided to allow the owner to displace moderate income
residents and attract higher income tenants. EDA rehabilitation funds may not but
utilized in such a way that relocation statues and payments are triggered.
11. Funds will not be provided for projects that would result in lower property tax
payments, unless such projects meet other City objectives.
12. No funding will be considered for approval without pdor objective financial analysis
of the project, along with an independent recommendation as to the amount and
type of proposed funding.
Additional Information
For additional information or clarification on this program contact the following*
individuals:
Kirk McDonald
Director of Community Development
City of New Hope
(612) 531-5119
Susan Henry
Community Development Specialist
City of New Hope
(6t2) 531-5137
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RE~IIEST FOR ACTION
Originating Depa~Lulent Approved for Agenda Agenda Section
EDA
Community Development
8 10~98 ~J Item ~o.
By: Kirk McDonald By:.///'//// 5
RESOLUTION DECLARING PRELIMINAR/Y( INTENT TO CONVEY PROPERTY TO SENIOR
OUTREACH SERVICES, INC. FOR ADULT DAY CARE FACILITY ( IHPR0VEHENT PROJECT NO. 493)
The enclosed resolution prepared by the City Attorney sets forth the EDA's willingness to convey the
property at 5501 Boone Avenue North to CareBreak for an adult daycare facility on a deferred loan/grant
redevelopment contract. The entire purchase price would be in a deferred loan subject to 100 percent
forgiveness in the event all of the conditions of a Redevelopment Contract were satisfied. The conditions
would include:
1. A thirty (30) year contract term.
2. A reversionary clause which would automatically convey the property back to the EDA in the event
the property was not developed and operated as an adult daycare facility on or before November
2000.
3. A second lien or mortgage in the amount of the EDA's $376,764 purchase price for the property. This
lien or mortgage would be forgiven in the event all conditions of the Redevelopment Contract were
met.
4. CareBreak would make an annual payment to the EDA in an amount equal to the portion of real
estate taxes the City would receive if the property was fully taxable for real estate purposes.
5. CareBreak would be required to immediately prepare and submit development plans for site and
building plan review acceptable to the City.
6.. That CareBreak enters into a Redevelopment Contract which incorporates the foregoing conditions
and restrictions and any other conditions or restrictions required by the City.
With this resolution, CareBreak should be able to commence negotiation proceedings with its financing
institution, allowing it to prepare a financial plan for the successful completion of the project. This is
simply the initial step in the process to a final cooperation agreement with CareBreak to construct this
facility.
A Redevelopment Contract will be brought back to the EDA for consideration in the future.
Staff recommends approval of the resolution.
MOTION BY ~ SECOND BY
RFA..O01
08,d~6,'98 ll:12 IS~S,ATTOR~iEYS -> 5315136 NO.?19 P004
NEW HOPE EDA
RESOL~ON NO. 98-
RESOLUTION DECLARING PRELIMINARY
INTENT TO CONVEY PROPERTY TO
SENIOR OUTREACH SERVICES, INC.
FOR ADULT DAY CARE FACILITY
WHEREAS, the Economic Development Authority ia and for the City of New Hope (hereafter
FDA) is the fee owner of the property legally described as follows:
Lot 2, Block 1, Science Industry Center 3rd Addition;
WHEREAS, the described property was partially paid for and acquired with Commnnlry
Development Block C-ra~t funds (CDBG funds) pursuant to a l_and Disposition
Agreement with Hennepin County; and
WHEREAS, the Land Disposition Agreement requires the EDA to commit the property to
development and use as an adult daycare facility and/or senior center public
facility with a three-year period from the date ~he CDBG reimbursement was
received by the EDA from Hennep~ County; and
WI~.~, the EDA is desirous of conveying the property in fee subjec~ to certain
restrictions and covenants to Seoior Outreach Services, Inc., a Minnesota non-
profit corporation, for development and use as an adult daycare facility; and
WHEREAS, Senior Outreach Service. s, Inc. has represented to the EDA that it is a $01(C)(3)
corporation desirous of obtaining the referenced property to coustruct and operate
an adult daycare facility in complhmc, e with the Land Disposition Agreement
between the EDA and County.
NOW, TI:I~REFORE, BE IT RESOLVED by the Economic Development Authority in and
for the City of New Hope as follows:
1. The FDA hereby declares its intent to convey Lot 2, Block 1, Science Industry Center
3rd Addition to Senior Outreach Service~, Inc. subject to the following conditions:
a. Senior Outreach Services, Inc. will immediately prepare and submit to the City
and EDA a proposed preliminary plan regarding the type of facility it intends to
construct on the property. The EDA's conveyance of said property will be
subject to the City's approval of a site and building plan for the property.
Further, the EDA will convey to Senior Outreach Services, Inc. only that portion
of the property necessary to successfully complete the approved site and building
plan.
b, Any conveyance of fl~ property by the EDA ~o Sen/or Outreach Services, Inc.
shall be subject w revcrsionary clause transferring title back to the EDA in
event Senior Outreach Services, Inc. fails to develop and use the property as an
adult daycare facility. The reverter shall be effective automatically upon the
expiration of thc three-yeaz implcmental/on period referred to in thc I_and
Disposition Agreement between the ]/DA and Heo.aepin County.
c. The conveyance shall also be subject to a lien or second mortgage given to the
EDA to secure the FDA's $376,764.00 purchase price for the property. The
EDA shall agree to forgive this lien and/or mortgage if Senior Outreach Services,
Inc. continues to usc the property for an adult daycare center for a period of
thirty (30) yeazs from thc date of the ]~DA's conveyance of thc property. The
lien or mortgage amount shaU be increased by accrued interest pursuant to a
schedule for reduction o~ forgiveness of the debt over the thirty (30) year
operation period. The schedule for debt forgiveness shall be mutually agreed
upon by the parties at a later date.
d. That Scnlor Outreach Services, Inc. will make an annual payment w the FDA in
lieu of real estate taxes in the event th~ property is exempt from real estate taxes
for any reason. This amount shall be equal to that portion of taxes thc City
would have received in the event thc properly was subject to real estate taxes as
a r~on-exempt property.
e. That Senior Outreach Services, Inc. will enmr into a Redevelopment Contract
with thc 1:.DA which shall incorporate all terms and restrictions relating to the
FDA's conveyance of this property.
f. The terms, restrictions ao.d covenants contained herein arc not intended to be an
exhaustive list of those conditions that may be included in the Redevelopment
Contract referenced above.
g. This resolution is intended by the £DA to ccrromunicatc its intent to convey the
property to Senior Outreach Services, Inc. for construction and operation of an
adult daycare facility. The conveyance is meant to be financed as a deferred loan
subject to forgiveness in full or in part pursuant to Senior Outreach Services, ][nc.
compliap, ce with the development, construction and operation rcquiremet~ts yet to
be fully defined and set forth in thc Redevelopment Contract.
h, The New Hope City Manager/EDA N. xecuttve Director and his staff is hereby
authorized and directed to contirme working with Senior Outreach Services, Inc.
to implement the development and construction of an adult daycarc facility on the
subject property.
Adopted by thc New Hope Economic Development Authority, Henuepin County, Minnesota, this
~ day of ,1998.
W. Peter Enck, President
Attest:
Daniel I. Donahue, F..xecufive Director
11:12 ~S&S,ATTORNEYS ~ 53151~ NO.?19 P002
SWANSO T & SONDRALL,
Affords At
~2~ ~~ Cao~x~, S~. 201
c. ~ ~t Aunt 6, 1~8
0r Coxn~ Mr. Kirk McDonald
co~s q, ~rSmTA~ New Hope Community
Development Director
City of New Hope
4401 Xylon Avenue North
New Hope, Minn~ota 55428
Re: EDA Resolution Der. lartng Intent to Convey Property at 5S01 Boone
Our File No. 99.11198
Dear Kirk:
Pl~se fred euclos~l a propomed F2DA l~aolutiou D~laring Prel~ Int~ut to Coilvey
Prol~rty to Senior Outre~Jm Services, I~. for Adult Daycare Facility for cousidu~ation
at tim August 10, 19~8 muffing.
Basically, fl~ cu¢los~l l~solutioil s~s fo~h the EDA's willingn~-ss to cmmvey the
prol~rty at 5501 Boou~ Av~mlu~ North (commntlly known as the Doyle prop~y) to
S~u~ior Outr~mch .~ervices, Ir~. or Ca~ebr~ak for au {giult daycate fa~-ility oil a deferred
loan/grant r~devel~ coutra~t. Iu other words, tl~ ultimate ag~me.~ we sign with
Carcbrcak would not ~ ~ to front any purch~e price for th~ prol~rty. The
entire purcha~ price would l~ in ~ deferred loau subjec~ to 100% forgiveness in the
~veut all of th~ ~ of a Red~v~op~ Contract wer~ satisfied.
The Redeveloplxum~ Contr~t would contain the followirig coigiitious; however,
conditions ar~ not intund~ to b~ exll~us£ive mntl eau be added to or subtra~ud from
the City Council or EDA d~siruS:
1. A thirty (30) yea~ contract term.
2. A umv~io~ ¢lanse which would autolUatically coIlv~y the prol~rty ba~k to the
EDA in th~ eveui the propert~ wa~ nut d~veloped aud ol~rated as au adul£
daycare facility Oil or before November, 2000.
$. A mecond li~ or mortgag~ in the amounI of the F_.DA's $376,764.00 purchnse
price for the property. This li~ or mortgage would be forgiv~u in the ~eni all
conditions of th~ Rtgk:velo~ Contract were m~t; however, if the property
-m--, ~mv~,~,~,~ was sokl o£ otherw}~ coilveyed ox the prolmrty's us~ was disc. ontinutgi ~-m an
Mmum m Bar aflUlt claycar~ ~111~, Lite llell or mortgage W01lld becOme a~Ltve.
11:12 ~TS~S,ATTORNEYS -~ 5~15136 NO.?lB P~3
August 6, 1998
Page 2
4. la the event the property is exempt from real estate taxes, Carebreak would make a~ annual
payment to the I//DA in an amount equal to the portion of real estate taxes the City would receive
ii the property was fully taxable for real estate purposea,
5. Carebreik would be required to immediately prepare and submit development plans for site and
building plan review acceptable to the City.
6. That C. arebre, ak enters into a Redevelopment Contract which incorporates the foregoing conditions
and restrictions and any other conditions or restrictions required by the City.
This Resolution should provide Senior Outreach Services, Inc, with the necessary indication by the EDA
that the EDA intends to work with aha convey this property to Carebreak for the purposes of
LrnplemenIing a successful adult daycare facility at the property. With this Resolution Carebreak should
be able to commence negotiation proceedings with its financing institution, allowing it to prepare a
financial plan for the successful completion of the project, Obviously, this is sir~. ly the initial step in
the process to a final cooperation agreement with Carebreak to construct this facility. I am sure
numerous ~,dditioo~l rounds of discu~ions and negotiations will be necessary before we reach a t3r~l
Redevelopment Contract, closing and conveyance on the property to Carebreak.
Please contact me if you have any further questions or comments regarding the enclosed Resolution,
Very truly you. rs,
Steven A. $ondmll
SA$:sr
Daniel ]. Donahue
Val~ri~ L~one