020893 EDA OFFICIAL FILE COPY ---
CITY OF NEW HOPE
EDAAGENDA
EDA Regular #eeting #2 February 8, 1993
Agenda #2
President Edwanf J. Erfckson
Commissioner W. Peter Enck
Commissioner GeraTd Otten
Commissioner Terrf WehTfng
Commissioner Marky Williamson
1. Call to Order
2. Roll Call
3. Approval of Minutes of January 25, 1993
4. Resolution Calling for a Closed Meeting of the New Hope Economic
Development Authority, Authorized by M.S. §471.705 to Discuss
Litigation/Settlement Strategy on Foremost Property Located at 7528
42nd Avenue North (#474)
5. Adjournment
CITY OF NEW HOPE
4401XYLON AVENUE NORTH
HENNEPIN COUNTY, MINNESOTA 55428
Approved EDA Minutes January 25, 1993
Meeting #1
CALL TO ORDER President Erickson called the meeting of the Economic
Development Authority to order at 8:47 p.m.
ROLL CALL Present: Erickson, Enck, Otten, Wehling, Williamson
APPROVE NINUTES Motion was made by Commissioner Enck, seconded by
Commissioner Williamson, to approve the EDA minutes of
December 28, 1992. Voting in favor: Erickson, Enck,
Williamson, Otten; Abstained: Wehling. Motion carried.
BY-LAW CHANGES President Erickson introduced for discussion Item 4,
NEW HOPE COMNUNITY Discussion of By-Law Changes of the New Hope Community
REVITALIZATION Revitalization Corporation.
CORPORATION
Item 4 Mr. Dan Donahue explained that Hennepin County has been
allocated funds from the federal HOME housing program. A
portion of these funds has been reserved for housing to be
developed, sponsored or owned by Community Housing
Development Organizations (CHDOs).
Tonight's discussion is to consider changing the existing
New Hope Community Revitalization Corporation into a CHDO
for the purpose of application for federal HOME funds.
The Articles of Incorporation for the Revitalization
Corporation have been revised to meet the requirements of
the CHDO, with the major change being the composition of
the board. Currently, membership of the Community
Revitalization Corporation consists of Citizen Advisory
Commissioners appointed by the City Council. He stated
the by-law changes would amend the board membership to
consist of three sectors: the public official sector, the
low/moderate income sector, and the private sector (with
only 1/3 of the Board appointed by the City Council}.
President Erickson expressed opposition to revising the
Community Revitalization Corporation into a CHDO as he
felt the City would lose control.
It was the consensus of the EDA to consider this issue
during a future work session.
New Hope EDA January 25, 1993
Page i
AD~IOURN~IENT Motion was made by Commissioner Enck, seconded by
Commissioner Williamson, to adjourn the meeting. All
present voted in favor. The New Hope EDA adjourned at
9:05 p.m.
Respectful 1 y submitted,
Valerie Leone
City Clerk
New Hope EDA January 25, lgg3
Page 2
EDA
REQUEST FOR ACTION
originating Department Approved for Agenda Agenda Section
City Manager EDA
2-8-93
Kirk McDonald Item No.
By: Management Assistant By: 4
RESOLUTION CALLING FOR A CLOSED MEETING OF THE NEW HOPE ECONOMIC
DEVELOPMENT AUTHORITY, AUTHORIZED BY M.S.§471.705, TO DISCUSS
LITIGATION/SETrLEMENT STRATEGY ON FOREMOST PROPERTY LOCATED AT 7528
42ND AVENUE NORTH (//474)
Adoption of this resolution will allow the EDA to hold a closed meeting following adjournment
of the regular meeting.
Staff recommends adoption.
~o~o~ ~ //Jc~z,~a~,~-- ~co~ ~ ~~
Review: Administration: Finance:
I RFA-O01 ~B
FEB-- 4--9~ THU 14 : 12 CORR I CK ~ SONDRALL P . 04
RESOLUTION NO. 93-
RESOLUTION CALLING FOR A CLOSED MEETING
OF THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY
AUTHORIZED BY MINN. STAT. §471.705 TO
DISCUSS LITIGATION/SETTLEMENT STRATEGY ON
FOREMOST PROPERTY LOCATED AT
7528 42ND AVENUE NORTH
WHEREAS, Minn. Stet. §471.705, Subd. l(d) authorizes and
permits the New Hope EcOnomic Development Authority to hold a
closed meeting to discuss City issues and information protected by
the attorney-client privilege, and
WHEREASj the City of New Hope has commenced or has been made
a party to a lawsutt or been threatened with litigation which has
presently activated its right under the referenced statute to hold
a closed meeting, and
WHEREAS, specifically the City has been threatened with
litigation a31eging the City negligently failed to exercise its
police powers to protect the Foremost property from sot1 and
ground
water contamination generated by the use of a neighboring property
causing damage to the Foremost property in the form of
significantly diminished property values, and
WHEREAS, a closed meeting of the New Hope E~onomtc Development
Authority is necessary to consider the acceptance or rejection of
a settlement offer/proposal and to consider yartous legal
strategies for the continued prosecution or de?erisa of said action.
NOWj THEREFORE, BE IT RESOLVED by the Economic Development
Authority of the City of New Hope as follows:
1. That a closed meeting of the New HOpe Economic
Development Authority shall be held on February 8, 1993
immediately fo33owlng the adjournment of the regu3ar
meeting of the New Hope City Council, or adjournment of
the regular meetings of the New Hope EDA or HRA in the
event said public bodtes have a regularly scheduled
meeting on said day, at the New Hope City Council
Chambers.
2. That the purpose of the meeting shall be the discussion
of settlement alternatives end prosecution/defense
strategies in connection with the above described
threatened litigation.
F E ]~-- 4-- 9 ~ t h U 1 4 : 1 ~ C 0 R R I C K ~ S 0 h I] R ~ L L P . 05
)
3, That sald meettng shall not be open to the pubiic,
4. That the New Hope City Clerk ts her'eby directed to tape
record the closed meeting and preserve the tape recording
for ~ period of two years from the date of the meeting.
5. That the New Hope City Clerk shall prepare a written roll
of the membere and all other persona present at the
closed meeting and make said roll available for public
inspection upon adjournment of the closed meeting.
Adopted by the New Hope Economic Development Authority this
day of February~ 1993,
Edw, J, Erickson, President
Attest:
Daniel J, Donahue~
Executive Director
FEB-- 4--93 THU 14 : i i CORR I CK & $ONDRA&L P . 82 ~
CO~CK & ,~NDRALL
w~ ~, ~ ~lnbur~ ~ecu
· T~.~. ~.~t~ ~,~ 8525 ~br~k C~lng
February 4, 1993
Ur, Daniel J. Donahue
City Manager
City of New Hope
4401 Xylon Avenue Nort~
New Hope~ MN 55428
RE: Acquisition of Foremost Property/7528 42nd Avenue North
Our Fi~e No: 99.11090
Dear Dan:
In follow up to our meeting with Allen Fredenda]l and his attorney,
Grant Uerritt, regarding the ~osslb]e acquisition of the Foremost
property on February 3rd, 1993~ please ftn~ enclosed a Resolution
Cs]lin9 for s C~osed Meeting ~owin9 us to discuss this property
in an executive session. On several occasions I have been informed
by severs1 sttorneys purporting to represent Mr. Fredend=l~,
including Mr, Merritt, that a lawsuit m~y be commenced against the
City for its negligent failure to ~rotect Mr. Fredende]]'s Droperty
from actual contamination and a "stigma" of contamination resulting
~rom the use of t~e a~jacent Electronic Industries property by its
¢urrent owner=. As a result,
hold an executive session to discuss possible strategy to ward off
this kind of ]itigstion which strategy would inolude the posst51e
acquisition of the pro,arty.
[ am also enclosing the following documents in background to the
issue. It appears to me we are not covering any new ground from
wha~ we have discussed previous]y~ The only change that
a possible willingness of Mr. Fredendell to reduce the purchase
price. The do¢uments are as
1. A November 25th, 1992 letter from the MPCA.
2. An April 1, 1992 memo to the E~ectroni~ Industries file.
3. A March 2nd, 1992 letter from Jerry Gt]]ig=n regarding
the creation of e hazsrdous substance $ubdistrict.
FEB-- 4-- 9.~, T H U i 4 : i 2 O O R lB I OK & S O N D R A L L P 8 ~
Mr. D~nlel ,i. Donahue
February 4, 1993
Page 2
4. My February 6th, 1992 and December 3rd, 1991 letters
regarding the property,
5. A newspaper article re~ardlng the acquisition of polluted
properties.
6. A summary of monetary benefits in connection with
relocation expenses under eminent domain proceedings.
The referenced documents basica31y cover al1 of the issues we have
previously discussed concerning the acquisition of this property.
Please contact me if you have any questions.
Very truly yours,
Steven A. $ondr~ll
slt2
Enclosures
cc: Kirk McDonald
Valerte Leone
Minnesota Pollution Control Agency
RECEIVED
.~v,~,~ :~s, &~9:2 DEC 1 &169~
~epa~a~ ~y ~lCa ~v~re~nCal Co~ulc~a, ~ce~ ~uly ~s,
~ced ~ 3X, 1992.
4. ~ro~ ~ro~d w&cer ~4 ~oil ~epc~e c~ucc~ a~_ the
~,eca~ On ~ly 29, X992, ~0= a ~no ~cCL~' ~=e~cA~
c~cl~ad Chat, b~ed on ~e~4 ~e~o~cl, the releue o~ VolaCil4
Site (C~e "X~enci~ied ~aleaee~) iS a~C li~ific~ in ~CanC
~gmi'Cude, ~d c~ ~e~e Am no C~ea~ to ~ he&lm~ o~ the
S~20 tJ./aveaa Rd,.: .gL Pm..d. MM ~1~98: (61~ 2~,-t.qOO; R~ Office: gt.d~, grak'.dnf ,, Oat.f'oa LAW. Mati.hd · Ro.~o~e
Page 2
~gni~uda cf the :d~ifiad Release. ,
locace~ &~ ?~2~ 42~ Avenue No~th, in Mew ~Ope ~aaeca, a~ ncc cc
~leaae be advised ~hac the Comp~ (SleccroniO Z~ust~iaa,
Zaco~o~aced) ~a ~lige~ to re~u~fa ~ ~ C~soione= ~o~
~ you ~ ~y ~esc~o~ ~ the contents o~ ~ia leCce~, please
f
'i
I~VD' HEY~b~ff'
ECEIAED
FEB-- 4--93 THU 14 : i 5 CORRI CK
MEMO
TO: ELECTRONIC INDUSTRIES FILE NO. 99.53004
RE: STATUS OF REMEDIATION AT EI SITE
FROM: SAS
DATE: 04/01/92
As a result of threatened litigation by Foremost against the City
of New Hope, I contacted Scott Carlstrom of the Minnesota Pollution
Control Agency, telephone number 297-8476, regarding the
remediation status of the Electronic Industries site and some
interpretation of the Delta Environmental Site Investigation
Report.
~emediation effort~ at Electronic Industries site - recommended
ailo~bie limits 'Or RAL are 30 parts per billi~h.' This is the
drinking water standard. Currently at the EI Lite the
contamination is 3300 parts per billion at the ~oint of
contamination. This would be at the remediation well on the site.
In constrast, at City monitoring well no. 7, the level of
'contamination is 640 Darts per billion, at City monitoring well no.
I it's 47 parts per billion, at City monitoring well no. 4 l~'s 800
parts per billion, and at monitoring well no. 8 which is upgradient
of the contamination site, there is no contamination.
I also asked Scott about Gran~Merit~ concern that VO¢'s which have
been allowed to escape' --~n the air could be causing a health
problem. Scott informed me tha~ the level o~ VOC's escaping ~n the
air through the ventilation process meets air quality ~ontrol
standards of the MPCA. As a result, no health hazard currently
exists,
The M~CA is al~o ~ushing for a vapor extraction system which will
expedite the remediation process. Simply, it is a process by which
air is pumped through the soil providing for extraction of the
VOC's from the soil. VOC stands for volatile organic compound.
Contamination at Foremost site. I also spoke with Scott about the
Delta Environmental Report. 'He referred m~ to section 3.4 of the
report dealing with water chemistry. The RAL for 1.2 PGE is 70
micrograms per liter. Therefore, the 120 micrograms per liter
found at the Foremost site is over the limit. Also, the RAL for
vinyl chloride is .1 microgram per liter. Therefore, the 8.$
micrograms per liter at the site is also over the RAL. The
trichloroethene is below the RA5 which is 30. The 2.1 reading is,
in fact, is well below that limit. Therefore only vinyl chloride
and dichloroether~are over the limits at the Foremost sate.
4--~ THU 14 : ! 5 COR~ ~ CK & $ON~LL P . 09
Scott summarized this information by saying that the contaminatiOn
at the Foremost site is not serious and that the MPCA is not very
excited about that contamination. Basically, Scott felt that the
no action letter that could be pursued through the property
transfer section of the MPCA would be the best way for Foremost to
handle the problem there. Jerry Stanke is the individual to call
at Property Transfer to get information concerning obtaining a no
action letter. Stanke's number is 297-1459.
Also, Scott disagreed with the conclusion reached by Delta that the
contamination at the Foremost well is due to the RI property. He
finds it highly unlikely that said contamination could move
upgradient as suggested by Delta. Also, he informs me that he has
relayed that information EI.
Basically, he thinks the situation at the Foremost Electronic
Industries site is not that serious and that the problem that he
sees is banker paranoia.
FEB-- 4-- 9 ~ T H U I 4 : I 6 C 0 R R I I:: K :~ S 0 N D R A L L P - ! 0
?
'~'l~) ,u~ ,J.-o blll~l IgA POI. IS. M I la N l", .~0'rA 55,1~0~ ' l,S! )J~ ,,,..
.... (OkPJ 0,1~O- ~CI<>O .' ~
,.q~-1-4V' O~' i~§- 4-~l
March 2, 1992
Mr. Steven $ondrall
C0rrick & $ondrall
Edinbm'gh Executive Office Plaza
Strife 203
85Z5 Edb~.brook Crossing
Brooklyn Park, lv/dnne~ota 55443
Re: Hazardous $ubstattce Subdistrict
Dear oeteve:
For purposes of having sometl~ing for tonight's City Council work
~ssim~, el~closed are brief responses to yo~ February 19th letter on creating a
haz~dous substance sub~~ ~ ~e 4~d Avenue TIF Dis~ict. I will prepare a
more det~l~d response tot ~e Gi~ ~d you later tMs week.
1, ~.uM~igation of. Propec~ as H~dousSuiz~.[~Std~ia[rlct. The
property appears [o qua~y for tndmion hi a lmzardous subslance subcli~lrict. A
"development response action pl~" must be approved by tl~e MI'CA [.,l ior Io
cerli.flclition o~ the subdlskict by fire Hmmeph~ County A mit tot. Tiffs pl;~n is a
proposal for remov~ actions ~d remediatlon ac~ons, 2hough the statute is not
particularly clear oil fl~ tssue~ it appe~s Otat the subdlstrict can be created be.tore
MI'CA approval of ~e response pl~ it it is responsibly expected ii,at the plat will
b~ approved by fl~e ~GA. From o~ conversations I understand M.l.'(Sk has bell
involved with the demt-up plus ~or tim Elactro~c h~dusiries site so gwre may
already bc~ ~L/ch a pl~t ~ place,
JeC~(,)II
469.174, subdivision 7(b), provides fllat upon certification to the CO ti f t t,}.' Auditor that
or retl~edlation actions o~ ~ ~it~ or ~te EDA oiha~ist} provides fu~tcl~ to fh~ance
FEB-- 4--95 THU I 4 : i 7 CORR I CK & SONDRALL P . i i
l?ago -2-
Mr. Steve: ,qondrall
March 2~ 1~92
tile developmmLt response plan, the original tax capadty of tim property itt the
subdistrict will be reduced to it~ ~en ~ent t~ capadty less the estimated costs
the removal or remedJaflon a~ons spelled in fl~e development response plan;
provided Ihat it can not ~ less fl~ ~ro. You should note that iL i~ ctlt't0flt tax
capaOty of tho paxcel~ fl~at is usedt trot fl~e pr~t origln~ tax capacity of the parcels
for p~po~es of the '1'~ ~strict.
3. ~mitation o~ Use.~f ~cremejxt. 'l'lxe adcliOox~
resulting from fl~e reduct/on of ~e orig~al t~ capacity may o~fly bo used to pay or
reimburse costs of (i) the removM or remediatlon actions; (ii) testing,
comp;~c.l/~m or otl~er costs ~d (t~) related administrative and legal o~sts.
subd.ls~ict cm~ continue for fl~e lessor et (i) a period for 25 yem'$ front the date of
r~{:eipt of the fkst increment ~tat was greater flt~l the Incvenmnt received from th~
parcel pl'/{}r to certification of fl~e ~ub~s~tct or (ii) the perim:l necessary fi u' tile EDA
to recover the co,ts of fire remov~ or rmediation actions pttrsua~t to tim
plan.
4. ~!~ to CrRat~. To =cate tl~e sub~sh'ict It will bo necessary to
prep~e alt amend~Tent to fire ~ PI~ ~d have Gte City hold a public hear~g
tl~ereon after 30 days no~ce to the Co~ty and Scl~ool Dish'ict nnd 10 day~ published
notice. Thc City Coun~ ~td EDA will n~d to m~e certaiiT findh~g, relating to
need for ~ea~.ion of the sub~s~ict ~d fl~at &e proposed developmex~t will ZlOt
occur without its creation. T~$ ~mndment c~t be incorporated with the egret
am(mdnletxts which the EDA Is pre~ntly considering to the 'l'Ht Plan.
Should you need ~yfl~g furtl~er for tor~glxt's meeti.ng or have any
questions, please give me a call.
Yetis
JPG :cmn
FE~-- 4--93 THU 14 = 50 CORR I CK ~ SONDRALL P . O5
Febr'u~4ry 6, 199~
Mr. I~irk HcDoneld
C tt;y of New Hope
4401 Xylon Avenue
New Hope, ~N 55428
Our File No. 99.1~0g0
Oe~r ~'lrk~
This leLter ts tn follow up Lo your danuciry 6, Igg2 ~mo. Tibia
What 'is [l~e Ct[y's oblige[Ion ~or relocation
suffered bY Forc~'{~(~[ and Ardel t f Chat r re~peccive
proper[les a~'~ r. aken by
Can t. he Cl[y rem~ire t, ha[ relocattvn cost.~ be waived as
What ta [he C'l~y's financial e;,,posui'e for soil and
affected by the marmer tn Nhtch we acquire the ~r'oper'ty~
i.e. L~y condemnation or dt~act pu{chase?
[,lect. r'ol'lic 1. nduat~ ie;, eith,,~ Mir~,ctly ,~
5. ] f' we buy theism r,r Ol:~et' t:. i~ f ~,,,~ domol ~ L ton
FEB-- 4--~ THU 14 : 50 CORR I CK & SON~RALL P . 0~
Mr. Kirk McDonald
February 6, 1992
Page 2
~l~LL.~r~._.l. What ia the City's obligation for relocation
costa suffered by Foremost end Ardel if their respective properties
are taken by condemnation?
~!jn~~%. §117.52 requires that the condemning authority shall
provide assistance~ services, payments and benefits provided under
the (hereafter Act) to
displaced businesses in a condemnation action as a ~os: of
acquisition,
The Ac% provides for two alternative methods of payment at
property ownarSs discretion:
a, Payment of actual relocation expenses, or
b. m $20,000 payment in lieu of ac%ual relooatton expenses.
Actual relocation expenses can exceed $20~000 if they are
documented properly. They include such ~hinga aa [raneportatton
coats, packing and unpacking, dtsc:onnec:ton and reinstating costs,
colts for reconnectton to utilities and modifications ~o personal
property or replacemer)~ site for reconnectton to utilities, storage
cos%s~ relocation Jneurance~ costs for new required permits or
licenses, required and necessary professional services, relettertng
o~ stgns and replacement of stationary, actual direct loss of
tangible personal ~roperty caused by the move, This ia not an
exhaustive
A displaced business may also be entitled to a $10,OOO
reestablishment fee in additton to actual moving expenses. A
reestablishment expense t$ a cost to modt.fy ~he replacement
location ~o accept :he displaced business. Thts would include such
things as butldtmlg repairs, consteuctton or installation of new
$1gnage, provisions for utilities from the right-of-way,
replacement of carps%lng or new painting~ professional servtces in
connection with 3easlng or buying r'eplacement site. Again, thta
list is not exhaustive.
There~or"e, it appears clear tlqat relocation Goats may be qutLe
expensive, [t would be impossible for me to accurately esttmate
the relocation expenses involved, It may be necessary to hire a
consultant that could review the businesses involved so that
accurate estimate could be provided. However, it, would not be
unreasonable to believe tha~ r'e~ocation expenses for Foremost and
Ardel combine~ could be aa much as $100,ooo,oo. No relocation
COSTS would be required for the Electron'(c Zndumtr'tes ~ite
the property ia vacant.
FEB-- 4--9~ thU 1 4 : S 1 CO~ I C~ ~
Mr. Kirk McDonald
February 8, 1992
Page 3
~j~£g~_~. Cea the City require that relocation costa be
waived ~s a condition of a "friendty' condemnation?
The answer to [hts question ts no, ~j~q_~_~.~. §117,S21(3) does
not allow a waiver of relocation assistance, Aa a result, say
watver obtatned through a "friendly" condemnation would not be
enforceable. The City would Ilave to rely on the good faith of the
property owner ~o forego hte relocation Costs because a waiver of
same tn not legally binding due to ~he Sta.~ute referenced herein.
~25L~B_l;d~q_~, Nhat ie the City's ftnanoial exposure ~or soil
and ground water contamination c]ean up coetm and is our exposure
affected by the manner in which we acquire the property, i.e. by
condemn&tlon Or direr purchase?
If the C~ty acquires ~he property through condemnation H_~t~D~~.
~11~B.O3(5) w~11 oompletely relieve the City for any clean up costs
due to $ot1 or ground wete~ contamination on the site, However,
th~a exemption ~a onlv applicable ~f the Ctt~ acquires the property
through an eminent domain action,
If the property ~s acqutred by d~re~t ~urchase without the use of
an eminent domain ac%ton we could be exposed to clean up costs ~f
the ~r~mary responsible ~ar~y could not pav or could not be found,
Zn th~s case, ~he reapons~ble ps~y E1.ectron~c ~ndu~trte6 ~a
currently re~d~t~ng the problem, We would only be reassemble
Under ~n,.S~.at, ~115B,04(4), our 1lability for clean up costs
woula be 1tatted [o $400,000.00. As a result, tt would be prudent
to taft,ate a condemnation for DurDoaes of acquiring t~tle ~o
insure avoidance of all l~abiltty for contamination clean u~ costa.
However, Jf we did not use condemnation to acquire the property we
could avoid our obligation for relocation assistance s{nce ~l~
.~.~,~. Sll?.S2 would not be applicable. Thts does assume we would
not be using federal money for acquisition purposes.
~[~.~_~. Should we ~ ~nvolved in Forager's law~utt
against Electr'onio Ind[~strJes, either directly or 'indirectly?
Th~a is a po31cy question more than a 3ega'l question, Hy s'imp]e
answer is no, ~ find litt, le if any public purpo6e served by
involving ourselves ~n the Foremost 3aweut~ against Electronic
Industries, ~n my opinion it projec~ an improper public
appearance, The City should have no s%~ke in ~he outcome of a
lawsuit by two prtvabe propor[y owners.
FEB-- 4--9~ THU I 4 : 5~ cORR I CK & $ONDRA~ P . 08
Mr. Kirk McDonald
P~ge 4
.q..g..~.~.t~_i,/,~_n__.[~, Zf we buy theee properties fur deltloltt, ion and
redevelopment, s will we be setting a de[rt~r~ml pr'eceden[ for l~nd
valuee bhat could be used against ~J~ Jn other condemnati(~ lawsuits
such as ~he Paro'e Pub action?
Our appraiser, Brad Bjorklu~)d, advises that no precedent for high
'l~nd values will be set in i;hie transaction. As m result, the
purchase of thie property for demolition of existing butldtng~ for
fur, ute redevelopmen~,wiil no% provide damaging evidance of high
land values ~hmt could be ir)~r'oduced by property owners In o~her
condemnation actt. ons much as the Pmro'e Pub case.
However, I cmu%lon %he Council tha~ pr'ejudtcial and inadmissible
evidence do.em find t~a way fnto cour~ proceedi~ga by error and
mistake. There ts no absolute guarantee that thJm tranmmc~4on w~ll
no~ result tn higher than normal land values paid by the Otty a~
some fu~ur'e date.
~.QD:C]~.~J_~6. in(tim~ing condemnation ~o acquire ~i~le 4e ~he
bes~ w~y to insulate ouPselves from 1(ability for oon~tna~ton
clean up cos~e. However, i~ does expose the City for po~en~(ally
cos~ly relocation expenses.
If we believe Electronic ~ndustrtea will con~{nue ~o assume
res~onaJbtl(ty for cle~r~ up, purchasing the pr'oper~y directly from
the owners without %he use of condemns%ton will relieve ua of
payment for reloca%ion expenae~. Z~ doe~, however, eubjeec~ us. ~o
clean u~ ¢oete tf Electronic Zndus~rie~ be¢~ solvent. Also, we
wt 11 s~lll be exposed t.o clean up costa under ~ny federal
regul a% i OhS.
Please oon~aob ~ if you have ~t)y further question,s.
Very truly yours,
Steven A, $ondrall
stt, 4
cc: D~(~iel J. Donahue
FEE:-- 4 -- 9.~, T H U 1 4 : 4 E: C 0 R R T C:K & S 0 I'-III R R L L P = 02
~ecember 3, 199~
Hr', D~n'lel J. Donahue
City Manager ~/ ~
Ct ty o~ New Hope
4401 Xylofl Avet~ue North
New Hope, MN 55428
RE:For"emos~ Proper~y Acquiai~ton~
Our F~le ~o: ~9,~0~0
Dear Dan:
regarding the acquisition of t. he~r pro~rty located at the corner
of 42nd Avenue North aha Quebec Avenue North,
occurred on Nove~er 27~h,
1. A purchase prtCe no~ ~o e~ceed $585,000.OO ([hie figure
~rtoage eqt~al~ng $404,~6~,00; pay~nt of unpald real estate Laxos
for yeere 1990 and Iggl of $e4,792.00~ pmymen~ of unpaid epectal
asaee~nts not certified to tax rolls of t14,852,00; pay~nt
rel~atton expenses of t2OtO00.O0).
· 2. After scQutettto~ of ~he property we would continue
a11ow Porel~.s% ~o operate e~ the proper'~y wl~13ou~ paymen~
for a period mot ~o exceed twm"~ty-fou~ months. Foremoat wou3d pay
a11 oper'a~lonal oos[s aeaocta[ed with their use o.t the property
including, but no[ limited t.o, real estate taxes, utiltt, y cl~ar'ge~
and ~nsurance, Also, Lhey would receive a 90 day ~o'[tc.e pr'ovt,sior~
to vacate the propert, y,
3. Upon t',t~e 1 r v~catto.n of the ~r'opert. y, [hey would be
F E ]~ -- 4 -- 9 ~ T H U I 4 : 49 E: El R I~ I C I<: ~ :~; Ei N ~i I;~ f::::i L L P - ~ ~
Mr'. Daniel J, Donahue
December 3, 1991
Page 2
including any item which would be considered a movable ftxtur'e, In
other words, they would have all salvage rights to the building
given the fact that we intend to demolish the building for
redevelopment.
4. Foremost would agree to execute an aGreemen~ providing
the EDA with an eq[Jal share of the judgment collected on their
lawsutt against Electronic Industries after paymenb of attorney's
fees and not to exceed $50,000.00. [n other word$~ [here w111 be
~he possibility that the City would receive a $$0,000.00
reimbursement 'in the event that Foremos~ was very successful in
their lawsuit agatnst Electronic [ndustries,
Naturally, [he acquisition would be effectuated as par~ of an
eminent domain action. The ne$otlated a~reemen~ is relatively
comparable ~o the costs we could expect in & contested condemnation
action. ^~eumtng Foremost could deltver an uncontaminated
p~operty, our appraisal establishes ~he property value
$475,000.00. A contaminated or impaired property value pek our
appraisal is $453,000.00. Actually, ! think Electronic Industries
is dotnGa fairly good Job of oleanup and it would be prudent to
analyze a negotiated settlement ba~ed on an uncontaminated
pr'operCy. Therefore, for ~he purposes of thta comparison ! have
assumed that a condemns%ton commission would accept the 9475,000.00
value. Further, I think it would not be unrealistic to believe
%hat Foremos~ would be entitled to $38,000,00 in moving and
establishment expenses, Finally, I think attorney's fees,
appraisal fees and court costs associated with the acquisition of
this property may be ~n the range of $30~000.00. Aea result, the
~otal cost to the City fna contested condemnation action would be
somewhere between $S40,000 to
If Foremost Is successful in their lawsuit age~nst Electronic
Industries, the City's ~tnal cost based on our negotiated
settlement might be as low as $535,000.00. Of course, this assumes
the risk that Che~p litigation will be successful. In speaktng
with %he attorney for Foremost, they are very confident about the
ltttg~bto~ and have no intention of accepting a "low ball" offe~
simply to obtain a settlement. They are basically proceeding on an
all or nothing bas~s. Since I am not privy to the nuances of ~he
lawsuit, ~t would be inappropriate for me [o give an opinion
reGar'd~n9 the probability of a successful ve~dict~ howeve~ ! think
we can be optimistic about a successful outcome In light of the
vigor and zealousness that Foremost's attorney has shown with
FEI)--
~r. Daniel J. Donahue
December 3~ 1991
Page 3
regard t.o the lawsuit. In that regard, I certainly feel that
Electronic Industries will definitely have their hands full in
defending this case. 8asides, any time you do ~o into court you
have a 50750 chance and this case appears as if it is going to
COU r t.
Please contact, me if you have any further questions,
Very truly yours,
Steyen A. 8ondrall
alt3
cc: Kirk McDonald, Management Aast.
~ Peopi~ waiaM in liae dm-iag peak id~ais mla6v~iy n~w. th~ways-lfw~'tenet~,hesat~ationpoint tO ~t.~avid~~ir -
;--~yon~~~ .~di~on~~~~' ~ it ~uld ~ diffi~k m ~tiate ~~~r~'i~a~
~. , Fd ~ ~ mom ~d ~a~:' ~ bu~g~m~~y~~, itin~c ~n~. We mlyon~idpla~
' ~ ~ a ~-~ E ~ ~ R~. w~ w~ bis ~r, ~. ~d ~ ~Y --7~ M.~ ._
~. ~mnt~ Of~-~ x' [ ][ [ [ .[[ [
~~t.~.~ ~.~h~~ ~, ~eSt. ~ul ~Au~fi~ ~t ' ~ ~ ~t ~ cl~ing ~li~ pmk.
~-~vifi~. ~d I ~m w~GIS~HON AIDS "It (~ ~I~M~)~d~ ~le ~ is ~. cl~up ~s~ ~c a
r~naibility ~ ~e stale Gmv~ s~.
~f~ ~, it~ ~m ~t to S~d ~ ~c ~ au~od~'s plan to towhen~6~who~d~itup7
;~:' ~ ch~a sim fora n~- ~rk ~ ~cc~ of he ~ys. '~at ~ simply ~ ~-
Airena Golf C~ttr opened in II ~ to mmh ~]lutM ~mm~. '~nd~mi~y mn ~lop~ ~t~~~ ll~ ·
~,~~a~t~~le ~nd wi~ a l~f~! ~le. Not bl~wi~ltu~i~mf~= ~t~big~ap~l~in~.hutour
~ ~ golf ~ ~, ~ d~o~, ~ma, I~d~, ~ ~n 1~ "~ ~y ~, it ~idn~ ~ ~ it for a~ ~ ~ hd~ c~ up ~y ~aib~
n~B~. H~C ~e~ pi~es of lee~lation buy;' says ~ry ~e, manager of the * Gi~g~n~a~i~rof~-
~ ~ ~g C~n~. ~ o~- ~~lier~is~r ~1 ~t~r MCD~sN~~I~~Io~ detonation ~r ~ ~1~, which h~
:~ ~e. ~a~t~ ~ ~m ~while for cit~ and o~ ~nt ~. '~l's ~ ~e~ a~ .~ had ~ual right to condemn l~d_
/-
~a ~t.a golf~i~nt ~. d~lo~ -- or ~p ~m ~e~l~. ofl~d to ~ ~n ~ of. %c ~ I~i~a- ~e ails& ~c ~lads will ~ es~mi-
~ ~lf ~ ~d. offs. ~ ~e ~ I~slafion ~ ~ng b~ng tion ~ ~ly amp ~ ~e right di~t~a, blebr~upc~of~llu~ ~nd.
Tre~. ~ Bme~d Ai~ ~ ~ o~sa~M~lisC~u~ Citi~ a~ ~ls li~ ~ (o ~t land ~kon land isjust sining ~m, ~ ~ ~e ux mils7
'~ ~, ~lo~nt Agtn~ (MC~) a~ ~ c~ ~e ~ ml~ ~ c~fin& jo~:' G~ ~. '~is ~ help ~t it back
I ~ ~~i~ ~em~k- h~ so~ I~bk d~i~ witK ~llu~ ~. aa a~n~ ~ to ~in ~em~tion ~l~d$. he ~.
~ ~ ~ m o~tf 1o ~d 1~:' O~ ~. *~ ~1~ ~ to fi~ p~in~ in ~er lo h~ thc tight ~ t~t. *~ ]~islation ~ ~lming
m. He d~n't ~ h~ ~ out ifland ~'~ ~in~ng a~t a~uifingis ~d. "J~g~~on~in~ ~ in ~e ~la~7 G~ ~ "Not
~d~ fi~.~t~ ~llu~,~d~thold ~mble~ ~ ~y:' Gm~ ~. '~nd ~ o~en only d~ it ~lp citi~, but ~lps g~
~M~ ~ect~ifit~:' ~,~ing~t~up~eirlaM.~ing polluted land in the state cleaned up7
~ ~ a ba~in~ ~ ~e ~t d~fi~ t~ a ~r ~ omar ~ ~p~ br d~ ~e ~ue d~. ~i~ly if~ f~nd
: ~ ~tf ~ ~ T~ CM~ of ~ub~fing~m~i~ which in t~ ~ ~ of cl~ing up ~llu~ I~ w~n Tv
~ym~it~n~r c~j~ ~g a ~ pfi~ in co.rotation in
s
FEB--
SUMMABy 0F.~ONETA~Y BENEFITS
Business concerns who move on or after April 2, 1989, ma.~ be
ltgtble for either:
a) Payments to cover the following within certain limitations:
l) Actual reasonable moving and related expenses,
Actual direct loss of personal property liquidated because
of the move,
Actual reasonable expenses incurred in searching for a
replacement site, and
4) Reestablishment expenses.
oj
b) A fixed payment, except for payment to a nonprofit
organization, shall equal the average annual net earnings of
the business, but not less than $1,000.00 nor more than
$20,000,00. The displaced business is eligible for the payment
if the Agency determines that the business cannot be relocated
without a substantial loss of its existing patronage, and it is
not part of a commercial enterprise having more than three
other entities which are not being acquired by the Agency, and
which are under the same ownership and engaged in the same or
similar business activities, and the business is not operated
at a displacement dwelltng solely for the purpose of renting
such dwelling to others.
-1-