101104 EDA ---- Official
CITY OF NEW HOPE
EDA MEETING
City Hall, 4401 Xylon Avenue NOrth
October 11, 2004
File
Copy
President Don Collier
Commissioner Doug Andersen
Commissioner Sharon Cassen
Commissioner Mary Gwin-Lenth
Commissioner Steve Sommer
2.
3.
4.
Call to order
Roll call
Approval of regular meeting minutes of September 27, 2004
Discussion and update regarding development proposal for the city-owned property
located at 7819 Angeline Drive (improvement project no. 603)
Adjournment
CITY OF NEW HOPE
4401 XYLON AVENUE NORTH
NEW HOPE, MINNESOTA 55428
EDA Minutes
Regular Meeting
September 27, 2004
City Hall
CALL TO ORDER
ROLL CALL
APPROVE MINUTES
IMP. PROJECT 773
Item 4
EDA Meeting
Page 1
President Collier called the meeting of the Economic Development
Authority to order at 8:17 p.m.
Present:
Don Collier, President
Doug Andersen, Commissioner
Sharon Cassen, Commissioner
Mary Gwin-Lenth, Commissioner
Steve Sommer, Commissioner
Motion Was made by Commissioner Sommer, seconded by Commissioner
Andersen, to approve the Regular Meeting Minutes of September 13, 2004.
All present voted in favor. Motion carried.
President Collier introduced for discussion Item 4, Resolution regarding
execution and delivery of a contract for private redevelopment by and
between the New Hope Economic Development Authority and the Ryland
Group, Inc. (Winnetka Green Phase III) (improvement project no. 773).
Mr. Kirk McDonald, director of community development, stated staff is
requesting that the EDA approve a resolution affirming support of the
Winnetka Green Phase III expansion and authorizing staff to proceed with
appraisals and relocation estimates and to continue to work on the studies
necessary to determine eligibility of the eight Phase III parcels for inclusion
in the tax increment district. He stated a representative of Krass Monroe, the
city's financial consultant, and a representative from Ryland Homes is
present if the council has questions.
Mr. McDonald stated the proposed expansion of this development has been
under discussion since June of 2004. There was a term sheet approved by
the city council in July. Staff updated the EDA on the proposal on August. 9,
a neighborhood meeting was held August 25, and a special council meeting
was held on September 23 devoted specifically to discuss the proposed
expansion.
He stated staff is requesting the EDA to make a determination of whether
the project will proceed or not. Mr. McDonald reviewed contents of the
resolution:
Section 1.02: The EDA is considering the addition of a proposed
Phase III to Winnetka Green which would be constructed on the
following parcels: 5509 Sumter, 5510 Sumter, 5501 Sumter, 7708 55%
7700 55% 7624 55% 7616 55th, and 7608 55th Avenue North.
September 27, 2004
EDA Meeting
Page 2
Section 1.03: It has been proposed that the EDA enter into a contract
for private redevelopment with Ryland Group relating to the Phase
III parcels.
Section 2: Assuming that the findings can be made that this area
would qualify as a TIF District, the city would approve the contract
with Ryland Homes if the terms are in the same form as approved
on July 26.
Section 3: Authorizes city staff to obtain appraisals for the eight
properties in phase III, authorizes city staff to engage Evergreen
Land Services to obtain relocation estimates for the eight properties,
and authorizes city staff to continue to work with Short Elliott
Hendrickson to complete the building eligibility reports.
Mr. McDonald explained that in compliance with the term sheet approved
on July 26, 2004, Ryland Homes deposited $25,000 with the city to cover
initial expenses related to the Phase III expansion. The costs associated with
the appraisals, relocation estimates; and TIF eligibility would be funded
with that money.
Mr. McDonald stated staff is seeking direction from the EDA on whether to
proceed or not with phase III.
President Collier pointed out that the resolution as presented is written in
the affirmative. He asked the city attorney to clarify the outcome if no
motion is made on the item.
Mr. Steve Sondrall, city attorney, advised that there would be no
authorization to proceed if the resolution supporting Phase III does not pass
by a majority vote. He also stated if the EDA fails to introduce the
resolution, in essence, the phase III development is not approved.
President Collier entertained a motion on the resolution. No motion was
introduced by the EDA; therefore, the development of Phase III was
determined as denied.
Members of the EDA presented explanations for their position on the
proposed Phase III development. It was emphasized that the Winnetka
Green development will be a successful housing development in its current
configuration. The EDA thanked those involved with Phase III discussions
for their input including Ryland Homes, the neighborhood, and members of
the Livable Communities Task Force.
The EDA directed staff to facilitate discussions between Ryland Homes and
the property owners interested in purchasing Outlot A. Staff was also asked
to work with the property owner adjacent to the park regarding the sanitary
sewer issue. A suggestion was made to utilize the scattered site housing
program to assist property owners of the former phase III area that may be
experiencing water problems and may be interested in relocation.
September 27, 2004
IMP. PROJECT 603
Item 5
EDA Meeting
Page 3
President Collier introduced for discussion Item 5, Discussion and update
regarding development proposal for the EDA owned property located at
7819 Angeline Drive (improvement project no. 603).
Mr. Shawn Siders, community development specialist, stated staff requests
EDA discussion and direction regarding the proposed development of the
EDA owned parcel located at 7819 Angeline Drive. The property is vacant
and has never been developed. The city recently received an inquiry for a
private market sale of the property for the development of a single-family
home.
The EDA acquired the tax-forfeited parcel for approximately $7,053 which
included the sales price of $5,000, $223.70 for incidental expenses as well as
special assessment fees in the amount of $1,830.
The lot was appraised in 2002 for $46,000. At that time SLP Investments, Inc.
was interested in the property as well as the lot at 7813 Angeline Drive. The
sale did not occur as an agreement could not be reached for the 7813
Angeline Drive property.
On September 21, 2004, Kingsman, LLC submitted a development proposal
for the purchase and development of a single family home on the property
located at 7819 Angeline Drive. City staff has reviewed the proposal and it is
in substantial compliance with the city's Zoning Ordinance. The developer
has indicated that a purchaser has been identified and they would like to
move into the home on or around December 1, 2004. The proposed single-
family unit will have three bedrooms and two bathrooms with 1,225 square
feet of finished space. The main level would be 970 square feet. There will
be a two-car garage constructed to the front of the home.
Mr. Siders illustrated photographs of the proposed home. He noted the
developer has constructed numerous homes on sites with environmental
and other site constraints. The developer has offered to purchase the lot for
$35,000. The applicant calculated the offer of $35,000 for the lot based on the
proposed site improvements and what the potential purchaser could afford.
Mr. Siders stated the $35,000 offer is significantly greater than the original
purchase price of $7,053.70, however, it is $11,000 less than the value
determined by the appraisal. Because there were no soil borings conducted,
city staff cannot reasonably determine what costs may be associated with
corrective soils measures that may need to be completed.
Mr. Siders stated the city has not been actively marketing this property.
Information regarding the availability of this vacant parcel has been
provided upon developer inquiries.
It was noted that the property is currently vacant and tax exempt. The.
property would generate between $2,500-3,000 in annual property taxes if a
house valued at $180,000 - 200,000 is constructed at the site.
Mr. Donahue, city manager, mentioned the property was previously
unbuildable due to railroad restrictions that have since been removed. He
September 27, 2004
ADJOURNMENT
also noted that the property has a reduced value due to its close proximity
to the railroad tracks.
Commissioner Sommer expressed support for the sale of the lot for $35,000.
He commented that the $35,000 price may be a fair price considering the
necessity of soil correction costs.
The EDA expressed support for the sale of the lot. Discussion ensued
regarding the $35,000 offer. Commissioner Cassen pointed out that the lot
value of $46,000 has likely increased since the 2002 appraisal. The EDA did
not believe it would be prudent to incur additional costs for an updated
appraisal or a soil correction analysis.
Staff was directed to consult the developer regarding the proposed soil
boring costs and to utilize the $46,000 appraisal as a basis for negotiation on
the lot price.
Motion was made by Commissioner Gwin-Lenth, seconded by
Commissioner Sommer, to adjourn the meeting. All present voted in favor.
Motion carried. The New Hope EDA adjourned at 8:50 p.m.
Respectfully submitted,
Valerie Leone
City Clerk
EDA Meeting
Page 4
September 27, 2004
EDA
j. . REQUEST FOR ACTION
Originating Department Approved for Agenda Agenda Section
Community Development ~ / 10-11-04 EDA
Item No.
By: Kirk McDonald, Director of CD By:
Shawn Siders, CD Specialist
DISCUSSION AND UPDATE REGARDING DEVELOPMENT PROPOSAL FOR THE CITY OWNED
PROPERTY LOCATED AT 7819 ANGELINE DRIVE (IMPROVEMENT PROJECT FILE NO. 603).
REQUESTED ACTION
Staff requests EDA discussion and direction regarding the proposed development of the city owned parcel
located at 7819 Angeline Drive. The property is vacant and has never been developed. At its meeting of
September 27, 2004, city staff provided an overview of the proposed development of a single family, market
rate, owner occupied housing unit on that parcel. As directed, city staff has met with the proposed developer
to discuss a revised purchase price and Seek further direction with respect to whether or not the original offer
of $35,000 is acceptable.
POLICY/PAST PRACTICE
City goal #2 is to emphasize the maintenance and redevelopment of commercial and residential properties
within the city. The council has been addressing the residential portion of this goal through the city's many
housing activities. In the past, the city has sold property based u. pon appraised values and acceptable
development proposals.
BACKGROUND
On September 27, 2004, city staff provided the EDA with an overview of a development proposal submitted by
Kingsman, LLC. At that time, staff indicated that Kingsman, LLC made an offer to purchase the lot from the i
EDA for $35,000 and develop a market rate, owner occupied, single family home. Staff advised the EDA that
soils corrections may be necessary and because no soil boring tests have been conducted, it is impossible to
speculate what remediative actions may be necessary. Staff indicated that the EDA had purchased the
property for $7,053 through a tax forfeiture sale. An appraisal that the EDA ordered in 2002 indicated that the
property has a market value of $46,000. The EDA determined not have the appraisal updated. At the
conclusion of that discussiOn, the EDA directed staff to enter into negotiations with Kingsman, LLC regarding
the proposed purchase price. The EDA indicated its overall support of the project, however, the consensus
indicated that the purchase price should be ~reater.
MOTION BY ~"/'/,g/L-' SECOND BY
I: \ RFA \ PLANNING \ Housing\ 7819 \ Q-7819 EDA Update 10-11-04.doc
Request for Action Page 2 October 11, 2004
City staff met with Mr. Peter Long, President, Kingman, LLC regarding the proposed purchase price. After
meeting with staff, it was determined that there will be approximately $11,000 in site preparation work,
basement waterproofing as directed by the Building Official, extension of the driveway for additional on-site
parking due to the proximity of the home near a busy intersection and a brick wainscote treat~'nent. The
breakdown in additional development expenses is as follows:
$5,000 to strip the topsoil, grade and compact the new soil brought to the property in order to elevate
the site. It is expected that the fill dirt will be provided and hauled to the site, free of charge from other
developments currently under construction in the city.
· $2,000 to conduct two (2) soil boring tests
$2,000 additional cost to waterproof the basement, if the water table is too high (water table will be
determined by the soil boring tests)
$2,000 for extending the driveway and the brick facade treatment
Mr. Long has indicated that the potential purchaser is in a position to cover the additional expense related to
the site preparation work as directed by the City Engineer and Building Official. Mr. Long also indicated that
because of the additional site preparation costs, which were not anticipated in the original proposal his client
is not in a position to increase the purchase price offer. Therefore, Mr. Long has submitted a revised offer to
cover all expenses related to the site preparation work, and pay the EDA $35,000 for the land acquisition. This
is the same purchase price that was discussed by the EDA at its meeting of September 27, 2004.
Overall, the proposed development is in conformance with the City's Zoning Code. The developer was
provided direction by the City's Planning Consultant, City Engineer and Building Official to ensure the
proposed single-family house conforms to all applicable city building codes.
In response to the City Engineer's request, the developer has agreed to provide the city with an additional ten-
foot wide by forty-seven foot long (470 sq. ft.) drainage and utility easement to the rear (south end) of the
property. This would allow for the future extension of the existing culvert which currently terminates on the
east side of the property. This easement would be conveyed to the city during the closing, if approved by the
EDA.
REOUESTED ACTION
City staff requests further direction with respect to the proposed purchase price. As previously stated,
Kingsman, LLC will assume all responsibility with respect to conducting soil boring tests as well as take all
corrective soil measures that may or may not be necessary. The developer will also be responsible for all site
preparation work to elevate the site. City staff will work with the developer to find acceptable fill dirt that can
be delivered to the site, free of charge. It is anticipated that other developments in the city have excess fill dirt
and can distribute some of it to this site for its eventual elevation.
NEXT STEPS
If the EDA determines that the proposed purchase price is acceptable, the following is the proposed timeline to
transfer the property to Kingsman, LLC:
OctOber 25, 2004 - Resolution approving a purchase agreement with Kingsman, LLC
Request for Action
Page 3 October 11, 2004
November 8, 2004 - Public Hearing regarding the transfer of the property to Kingsman, LLC
Resolution authorizing the property transfer to Kingsman, LLC
FUNDING
EDA funds would be used to pay for all costs necessary to transfer the property and would be repaid upon
closing.
Currently, the property is vacant and tax exempt. The applicant has indicated that the value of the house will
be approximately $180,000 - $200,000. It is anticipated that this property would generate approximately $2,500
- $3,000 in annual tax revenue.
ATTACHMENTS · Site Sketch Plan
· Letter from Developer - October 7, 2004
/
!
'//
%.
N
15.00
$ 27'00'40'
/
/
\%
,/
I
!
;
I
I
.I
I I
I
/
Page 1 of 1
Siders Shawn
From: peterlong@comcast.net
Sent: Thursday, October 07, 2004 3:46 PM
To: Siders Shawn
SubJect: 7819 Angeline Drive
Shawn,
Based on our meeting today October 7th, 2004 we went further in depth about what is the best way to
add value to this property and neighborhood. Here is the summary of an estimate of costs that are
associated in addition to the purchase price of the lot.
$2000 for two soil borings.
$5000 strip, grade, compact new soil brought on to property per Vincent Vander Top's
recommendation. This price is assuming that the city will work with Kingsman in order to secure fill
hauled to the site at no charge.
$2000 additional cost for waterproofing if the water table is high.
$2000 for extending driveway and putting brick on the front.
By adding these additional costs to the existing plan my client is not willing to pay more than the initial
offer of $35,000 for the price of the lot.
thank you,
Peter Long
612-382-9454
10/7/2004