121498 EDA Official File Copy
CITY OF NEW HOPE
EDA AGENDA
EDA Regular Meeting #10 December 14, 1998
Agenda #10
President W. Peter Enck
Commissioner Sharon Cassen
Commissioner Don Collier
Commissioner Pat La Vine Norb¥
Commissioner Gerald Otten
1. Call to Order
2. Roll Call
3. Approval of Minutes of November 23, 1998
4. Resolution Authorizing Deed to Project for Pride in Living, Inc. for Property
at 7300 Bass Lake Road
5. Adjournment
CITY OF NEW HOPE
4401 XYLON AVENUE NORTH
NEW HOPE, MINNESOTA 55428
Approved EDA Minutes November 23, 1998
Meeting #9 City Hall
CALL TO ORDER President Enck called the meeting of the Economic Development Authority to
order at 7:56 p.m.
ROLL CALL Present: Enck, Cassen, Collier, Otten
Absent: Norby
Staff Present: Sondrall, Hanson, Donahue, Leone, McDonald, Henry, Johnson
APPROVE MINUTES Motion was made by Commissioner Otten, seconded by Commissioner Collier, to
approve the EDA minutes of November 9, 1998. All present voted in favor.
Motion carried.
IMP. PROJECT 493 President Enck introduced for discussion Item 4, Motion Directing Staff to Prepare
Item 4 a Redevelopment Contract for Senior Outreach Services, Inc. for the development
of an Adult Daycare Facility on a Portion of Lot 2, Block 1, Science Industry
Center 3rd Addition (Improvement Project No. 493).
Mr. Kirk McDonald, Director of Community Development, explained that at the
August 8~ EDA Meeting, the EDA approved a resolution declaring its willingness
to convey a portion of the property at 5501 Boone Avenue North to Senior
Outreach Services, Inc. for an adult daycare facility. The entire purchase price
would be in a deferred loan subject to t00 percent forgiveness in the event all of
the conditions of a redevelopment contract were satisfied. He stated Senior
Outreach Services has secured the necessary funding for the project and has
developed concept site plans for the development of the south half of the parcel.
They are in the process of developing more complete plans and initiating the
necessary applications for the planning/zoning approval process.
He also shared that North Ridge Care Center has held preliminary discmsions with
staff regarding the development of a temporary parking lot on the north side of the
parcel for employee parking. He stated the temporary nature of the parking lot
would facilitate additional development on the north portion of the property in the
future.
Mr. Donahue, City Manager, stated North Ridge may present a proposal for the
parking lot and if so the City may benefit by having the two parking lots next to
one another.
Discussion ensued regarding the need for North Ridge to locate land for permanent
parking lot use as parking along Boone poses a traffic hazard.
Commissioner Collier stated his opposition to the City's donation of the land to
Senior Outreach Services, and indicated such a transaction would be setting a
precedent. He pointed out that the City's investment in the property is $376,764.
MOTION Motion was made by Commissioner Otten, seconded by Commissioner Cassen,
Item 4 directing staff to prepare a redevelopment contract. Voting in favor: Enck,
Cassen, Otten; Voting Against: Collier; Absent: Norby; Motion carried.
New Hope EDA November 23, 1998
Page 1
IMP. PROJECT 614 president Enck introduced for discussion Item 5, Resolution Approving Addendum
PPL to Bass Lake Court Townhome Project Redevelopment Contract (Improvement
Item 5 Project No. 614).
Mr. Kirk McDonald acknowledged the presence of PPL representatives who are
available to answer questions and provide an update of the project.
He stated PPL has recemly closed on four of the properties and the financing
commitments are on schedule.
Mr. McDonald s~ated the addendum addresses three issUeS:
1. PPL has assigned its interest in the project to PPL - Bass Lake Court Limited
Partnership: P. PL" remains as the general partner of this limited partnership.
Article 6 of the Redevelopment Contract permits PPL to make this assignment
of interest and the City was aware a limited parmership would be formed by
PPL to carry forward with this project. This is why the contingency for the
assignment was originally included in the Redevelopment Contract. Due to the
assignment of interest, the Addendum is necessary.
2. The Addendum will re-characterize the funds the EDA has committed to the
project as a grant instead of a loan. The current characterization of these funds
as a loan rather than a grant adversely affects the ability of PPL to maximize
its financing through the sale of low income housing tax credits.
3. Lastly, the Addendum eliminates the restriction on PPL's use of $500,000 Of
the $1,400,000 in proceeds the EDA has committed to the project in tax
increment financing funds. The original Redevelopment Contract indicates the
EDA will commit funds in excess of $900,000 to a maximum of $1,400,000 if
land acquisition costs through a condemnation proceeding results in the need to
expend these funds. PPL recently met with the City Manager, City Attorney
and Community Development DirectOr to request that this restriction be lifted
due to increased project costs. The major reasons for the project cost increases
include:
· Significantly more site work related to resolving drainage concerns and
the construction of a storm water pond on School District property.
· Increased scope of work for rehabilitation of existing four-plexes.
Booming constructi°n market, which has raised prices and decreased
interest in small rehabilitation projects.
Mr. McDonald stated the City Manager and staff are supportive of the request and
believe that PPL has tried to contain the project costs to the best of their ability.
The enclosed Addendum would remove the restriction and simply commit
$1,400,000 of funds for any appropriate project purpose.
Mr. Steve Cramer, Executive Director of Project for Pride in Living, Inc., was
recognized. He emphasized that in order for the project to proceed on schedule the
financing for the funding gap must be obtained. He stated they have significantly
reduced the soft costs, and the only option would be to put the project on hold,
reconfignre and scale back the project. He pointed out that the market place is not
responding well for smaller scale rehab work. The cost of the improvements
related to the school district property also impacted the original estimate.
The EDA expressed concern regarding the increased project costs and conveyed its
preference to avoid any delay in the project construction.
The question was raised concerning the $500,000 and how the fimds would be
New Hope EDA November'23, 1998
Page 2
disbursed if any were remaining after completion of the project.
Mr. Cramer reported that PPL must demonstrate that all the funds for the project
costs are in place. If the project requires additional funds he assured the EDA that
PPL will assume f'mancial responsibility. He suggested that the City be involved
through authorization of the "draws". He indicated it is doubtful that there will be
any remaining funds, but if that becomes the case, each party would feel entitled to
a portion.
Mr. Steve Sondrall, City Attorney, stated the City must ensure that the tax
increment funds are appropriately used. He also pointed out that initially the City
desired to provide funding at the completion of the project rather than at the onset
as a measure of guaranteeing completion. He noted the City is now participating
more as a partner in the project. Due to the limited sources of available funding,
Mr. Cramer is seeking financial assistance.
Mr. Cramer assured the EDA that MHFA's oversight process will guarantee to the
public agencies that the project reaches completion. He pointed out that PPL's
reputation will be at stake.
The EDA reiterated its support for the project and advised Mr. Cramer that it
would like to recapture funds if any of the $500,000 remains after completion of
the project.
RESOLUTION Commissioner Collier introduced the following resolution and moved its adoption:
EDA 98-12 "RESOLUTION APPROVING ADDENDUM TO BASS LAKE COURT
Item 5 TOWNHOME PROJECT REDEVELOPMENT CONTRACT
(IMPROVEMENT PROJECT NO. 614)". 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; Enck, 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.
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 8:44 p.m.
Respectfully submitted,
Valerie Leone
City Clerk
New Hope EDA November 23, 1998
Page 3
II
"
ae -zs? 'oa AenO
Originating Department Approved for ~enda EOA~enda SeCUon
Community Development
2.~ ~o/ Item No.
1
~irk McDonald
RESOLUTION AUTHORIZING DEED TO PROJ T FOR PRIDE IN LIVING, INC. FOR PROPER~ AT
7300 BASS ~KE ROAD
Per the City Attorney, the title to the Spur gas station prope~y at 7300 Bass Lake Road passed -to the
City by "quick take" on September 28, 1998. The EDA now needs to o~cially transfer the title to 7300
Bass Lake Road to PPL to satis~ the terms of the Development Contra~ and ~o that PPL can complete
the pla~ing of PPL Addition.
PPL staded construction on the entire site the week of December 7. Because the EDA still owned the
Spur station site at that time, an Early Ent~ Agreement was necessa~ for any const~ion activity on
the EDA-owned potion of the site. The City Manager administratively approved the attached Early Ent~
Agreement, which contained necessa~ protection~ for the EDA, so that const~ction could proceed. The
Early Ent~ Agreement needs to be formally approved by the EDA.
The enclosed resolution authorizes the transfer of title, to 7300 Bass Lake Road and also approves and
ratifies the Early Ent~ Agreement.
Staff recommends approval of the resolution.
M~ON~ ~ SECO~ ~~
EDA RESOLUTION NO. 98-
RESOLUTION AUTHORIZING DEED
TO PROJECT FOR PRIDE IN LIVING, INC.
FOR PROPERTY AT
7300 BASS LAKE ROAD
BE IT RESOLVED by the Economic Development Authority in and for the City of New
Hope, Minnesota as follows:
WHEREAS, the Economic Development Authority in and for the City of New Hope,
Minnesota (the EDA) by Resolution Nos. 98-03 and 98-04 authorized the acquisition by eminent
domain of certain real estate known as 7300 Bass Lake Road, PID No.' 05-118-21-31 0008, legally
described as
The South 80 feet of the West 166.76 feet of the East 196.76 feet of the West 1/2 of Lot
32, Auditor's Subdivision No. 226, Hennepin County, Minnesota, except road,
(the Property), and
WHEREAS, in order to ensure completion and occupancy of 34 affordable housing units
to be constructed or renovated by Project for Pride in Living, Inc. (PPL) at the Property by March
1, 1999, the Property was acquired by the EDA using the "Quick-Take" procedures of Minn. Stat.
§ 117.042, and
WHEREASes, in the Development Contract relating to the proposed PPL Addition, the (the
City of New Hope through the)EDA contractually agreed to provide rifle to the Property to PPL,
and
WHEREAS, the EDA now has title to and possession of the Property, having obtained title
and possession on the "Quick-Take" date of November XX, 1998, and
WHEREAS, to take advantage of the mild weather, PPL asked the EDA for permission
to enter onto the Property to begin construction and renovation, and signed that certain Early
Entry Agreement attached hereto as Exhibit A, and
WHEREAS, it is in the best interests of the EDA and the people of the City of New Hope
to approve the Early Entry Agreement and to transfer title to the Property to PPL.
NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in
and for the City of New Hope as follows:
1. That the above recitals are incorporated herein by reference.
2. That the President and Executive Director are authorized and directed to sign a
Deed and any other necessary documents to transfer title to the Property to Project for Pride in
Living, Inc.
3. That the Early Entry Agreement attached hereto as Exhibit A is approved and
ratified, that any acts by the EDA or City of New Hope staff to implement the Early Entry
Agreement are approved and ratified, and the President and Executive Director are authorized and
directed to sign said Early Entry Agreement.
Adopted by the Economic Development Authority in and for the City of New Hope this
14th day of December, 1998.
W. Peter Enck, President
Attest:
Daniel J. Donahue, Executive Director
EDA l~so for Deed to 7300 Bass Lk Rd. wpd (283\CNI-I-RESO)
2
CITY OF NEW HOPE
PPL ADDITION
EARLY ENTRY AGREEMENT
THIS AGREEMENT, made and entered into on the __ day of December, 1998, by
and between the City of New Hope, a Minnesota municipal corporation (hereinafter the City),the
Economic Development Authority in and for the City of New Hope, a Minnesota municipal
corporation (hereinafter the EDA), and Project Pride for Living, Inc., a Minnesota non-profit.
corporation (hereinafter the Developer), WITNESSETH:
WHEREAS, the City has approved the plat of certain land to be known as PPL Addition
(hereinafter the Addition or the Pla0, and
WHEREAS, the Plat involves certain land known as 7300 Bass Lake Road, legally
described as:
The South 80 feet of the West 166.76 feet of the East 196.76 feet of the West 1/2
of Lot 32, Auditor's Subdivision No. 226, Hennepin County, Minnesota except
road. (PID No. 05-118-21-31 0008),
(hereinafter the Station Property), and
WHEREAS, the EDA has acquired the Station Property by exercise of the EDA's eminent
domain powers, utilizing the "Quick-Take" procedures of Minnesota Statutes Chapter 117, and
WHEREAS, the EDA now has the legal fight to possession of the Station Property, and
WHEREAS, the Developer wishes to begin removal of the existing improvements and
construction of new improvements on the Station Property prior to the date the EDA officially
transfers title of the Station Property to the Developer.
NOW, THEREFORE, the City, the EDA, and Developer agree as follows:
1. The above recitals are incorporated herein by reference.
2. The EDA and the City grant to the Developer permission to enter upon the Station
Property, to remove existing improvements located there, and to begin construction of new
improvements in accordance with the plans and specifications approved by the City as part of
Planning Case No. 97-32.
1
EXHIBIT A
3. Developer agrees to comply with all terms and conditions of that certain City of
New Hope Development Contract between the City and Developer dated ,1998.
4. The Developer agrees to provide the City and the EDA with such evidence that the
City and the EDA may require of General Liability, Automobile, Workers Compensation, and any
other insurance for the Developer and all contractors and agents of the Developer, in amounts and
coverages as specified by the City and the EDA, and listing the City and EDA as insureds, with
30 days written notice to the City and the EDA of cancellation.
5. The Developer shall obtain any required building permits from the City prior to
commencing any activity on the Station Property.
6. The Developer shall keep the Station Property free and clear of all mechanics
materialmen's and other liens; shall keep the Property free from levy, execution or attachment
and shall immediately pay whether or not then due all indebtedness which may be secured by lien
or charge on the Property and upon request shall exhibit to Mortgagee satisfactory evidence of
such payment and discharge.
7. The DevelOper agrees to indemnify and hold harmless the City and the EDA and
their respective agents, employees, and representatives against any and all claims, demands,
losses, damages and expenses (including attorney fees) arising out of or resulting from the
Developer's or the Developer's contractors, agents, or employees negligent or intentional acts,
or any violation of any safety law, regulation or code, involved with or related to the presence on
the Station Property of the Developer or the Developer's contractors, agents, or employees.
8. The Developer agrees to reimburse the City for all costs incurred by the City in the
enforcement of this Agreement, or any portion thereof, including court costs and reasonable
engineering and attorney's fees.
9. If any portion, section, subsection, sentence, clause, paragraph or phrase of this
Agreement is for any reason held to be invalid, such decision shall not affect the validity of the
remaining portion of this Contract.
IN WITNESS WHEREOF, we have hereunto set our hands and seals.
City of New Hope
Its Mayor
2
¸By
Its City Manager
Economic Development Authority in and for
the City of New Hope
By
Its President
By
Its Executive Director
Project Pride for Living, Inc.
By
By
Its
JENSEN SWANSON & SONDRALL, P.A.
Attorneys ~It/Law
8525 EDINBROOK CROSSING, STE. 201
BROOKLYN PARK~ MINNESOTA 55443-1999
TELEPHONE (612) 424-8811 · TEL£FAX (612) 493-5193
GORDON L. JENSEN*
WILLIAM G. SWANSON December 10, 1998
STEVEN A. SONDRALL
MARTIN P. MALECHA
C. ALDEN PEARSON'['
Daniel J. Donahue
o~ COUNSEL New Hope EDA
LORENS Q. BRYNESTAD
4401 Xylon Avenue North
New Hope, MN 55428
RE: EDA Deed for 7300 Bass Lake Road
Our File No, 99,53046
Dear Dan:
Title to the property at 7300 Bass Lake Road passed to the EDA as of
September 28, 1998, the "Quick-Take" date. Project for Pride in Living,
Inc. has started construction on the site, in order to take advantage of the
continuing mild weather, doing so under an Early Entry Agreement which
contained necessary protections for the EDA. That Agreement needs to be
approved. The EDA also needs to officially transfer title to 7300 Bass Lake
Road to PPL, to satisfy the terms of the Development Contract. The title
transfer will also allow PPL to complete the platting of PPL Addition. The
enclosed Resolution authorizes the transfer of title to 7300 Bass Lake Road
from the EDA to PPL, and also approves and ratifies the Early Entry
Agreement.
If the EDA approves, the enclosed Resolution can be passed at an EDA
meeting on December 14, 1998. Note that any delays in passing the
enclosed Resolution will likely cauSe PPL to miss filing the plat by the end
of 1998.
Please call if you have any questions.
Sincerely,
Martin P. Malecha
· ~-,~s~i~ Assistant City Attorney
Certified By The
Minnesota State Bar
Association
~'Quslified ADR Neutral
Enclosures
cc: Kirk McDonald, Director of Community Development (w/enc)
Valerie Leone, City Clerk (w/enc)
Susan Henry, Community Development Specialist (w/enc)
Steven A, Sondrall, City Attorney