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022293 EDA .... OFFICIAL FILE COPY CITY OF NEW HOPE EDAAGENDA EDA Regular Meeting ~3 February 22, 1993 Agenda #3 President Edward J. Erickson Commissioner W. Peter Enck Commissioner Gerald Otten Commissioner Terri Wehling Commissioner Narky Williamson 1. Call to Order 2. Roll Call 3. Approval of Minutes of February 8, 1993 4. Resolution Finding Need to Acquire Title and Possession of Property by "Quick-Take" Approving the Appraisal of Damages Resulting From the Taking, and Ratifying and Authorizing All Steps Taken by Staff to Acquire the Property at 5501 Boone Avenue North and 5425 Boone Avenue North (Improvement Project No. 493) 5. Discussion Regarding Assessment Agreement of New Hope Terrace Apartments (Emerald Pointe Apartments) 6. 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) 7. Adjournment CITY OF NEW HOPE 4401XYLON AVENUE NORTH HENNEPIN COUNTY, MINNESOTA 55428 Approved EDA Minutes February 8, 1993 Meeting #2 CALL TO OROER President Erickson called the meeting of the Economic Oevelopment Authority to order at 9:]5 p.m. ROLL CALL Present: Erickson, Enck, Otten, Wehling, Williamson APPROVE MINUTES Motion was made by Commissioner Williamson, seconded by Commissioner Otten, to approve the EOA minutes of January 25, 1993. All present voted in favor. Motion carried. FOREMOST PROPERTY President Erickson introduced for discussion Item 4, Item4 Resolution Calltng for a Closed Meeting of the New Hope Economic Oevelopment Authority, Authorized by M.S. 471.705 to 0iscuss Litigation/Settlement Strategy on Foremost Property Located at 7528 42nd Avenue North (#474). EDA RES. 93-01 Commissioner Williamson introduced the following Ite~ 4 resolution and moved its adoption: "RESOLUTION CALLING FOR A CLOSED MEETING OF THE NLql HOPE ECONOMIC OEVELOP#ENT AUTHORITY, AUTHORIZED BY #.S. 471.705 TO OISCUSS LITIGATIOM/SETTLEMENT STRATEGY ON FOREMOST PROPERTY LOCATED AT 7528 42NOAVENUE NORTH (#474)". The motion for the adoption of the foregoing resolution was seconded by Commissioner Enck, and upon vote being takenthereon; the following voted in favor thereof: Erickson, Enck, Otten, Williamson, Wehling; and the following voted against the same: None; Absent: None; whereupon the resolution was declared duly oassed and adopted, signed by the president which was attested to by the executive director. AIMOURNMENT Motion was made by Commissioner Enck, seconded by Commissioner Otten, to adjourn the meeting. All present voted in favor. The New Hope EDA adjourned at 9:I8 p.m. Respectfully submitted, Valerie Leone City Clerk New Hope EDA February 8, 1993 Page 1 CITY OF NEW HOPE 4401XYLON AVENUE NORTH HENNEPIN COUNTY, MINNESOTA 55428 Approved EDA Minutes February 8, 1993 Executive Session CALL TO ORDER The New Hope Economic Development Authority met in executive session pursuant to due call and notice thereof; President Erickson called the meeting to order at 9:21 p.m. ROLL CALL Present: Erickson, Enck, Otten, Wehling, Williamson Also Present: Steve Sondrall, Mark Hanson, Dan Donahue, Kirk McDonald, Valerie Leone FORE)lOST PROPERTY The EDA discussed acquisition of the Foremost property in 7528 42nd Ave. N. connection with a possible settlement to a threatened ~474 lawsuit. It was decided that the EDA would not make an affirmative offer but would respond to any offers made by the property owner to sell the property. The EDA directed staff to inform the property owners of this decision. AD~IOURNMENT Motion was made by Commissioner Enck, seconded by Commissioner Williamson, to adjourn the meeting. All present voted in favor. The New Hope EDA adjourned its Executive Session at 9:32 p.m. Respectful 1 y s ubmi tted, Valerie Leone City Clerk New Hope EDA February 8, 1993 Page I ~ EDA Originating Department Approved for Agenda Agenda Section City Manager EDA 2-22-93 Item No. Kirk McDonald By: ~2/ · 4 By: Management Assistant RESOLUTION FINDING NEED TO ACQUIRE TITLE 'AND POSSESSION OF PROPERTY BY "QUICK-TAKE" APPROVING THE APPRAISAL OF DAMAGES RF_.~ULTING FROM THE TAKING, AND RATIFYING AND AUTHORIZING ALL STEPS TAKEN BY STAFF TO ACQUIRE THE PROPERTY AT 5501 BOONE AVENUE NORTH AND 5425 BOONE AVENUE NORTH 0MPROVEMlgN-T PROJECT NO. 493) The attached resolution finding a need to use "quick-take" procedures and establishing the approved appraisal amounts for the property involved in the North Ridge condemnation is the next step in acquiring the property needed for the Senior Outreach Services Adult Day Care project. The purpose of the resolution is to approve the appraisal of damages resulting from the condemnation. The appraisal of damages resulting from the proposed taking has been determined as follows: 5501 Boone Avenue North $141,400.00 5425 Boone Avenue North $ 56,000.00 The resolution also authorizes staff to proceed to acquire the subject property by "quick-take" and to take all reasonable steps necessary and required to accomplish this objective. Staff recommends approval of the resolution. l~view: Administra~ton: Finance: FEB-- 18--93 THU 1~ ~ 08 CORR I CK & SONDRALL P. 8~ EDA RESOLUTZON NO. 93- RESOLUTION FINDING NEED TO ACQUIRE TITLE AND POSSESSION OF PROPERTY BY 'QUICK-TAKE" APPROVING THE APPRAISAL OF DAMAGES RESULTING FROM THE TAKING, AND RATIFYING AND AUTHORIZING ALL STEPS TAKEN BY STAFF TO ACQUIRE THE PROPERTY AT 5501 BOONE AVENUE NORTH AND 5425 BOONE AVENUE NORTH BE IT RESOLVED by the Economic Development Authority of the City of New Hope, Minnesota, as follows: WHEREAS, the E=onomic Deve3opment Authority (hereinafter the EDA) has initiated an eminent domain proceeding identified as District Court File No. CD - 2290 to acquire certain property needed to carry out the 9oa3s and objectives of Tax Increment Financing Plan 82-1, Redevelopment Project 82-1, and Redevelopment Plan 82-1, which property is legally described in Exhibit A attached hereto, and WHER_.~, the EDA adopted Resolutions No. 92-04 and 92-08 at its June 22, 1992 and December 28, 1992 meetings, respectively, and that said Resolutions authorized the subject property be acquired by the "Quick-Take" procedure pursuant to Minn._Stet. §117.042, and WHEREAS, the EDA now finds it necessary to take title and possession to the subject property prior to the fins1 determination of damages from the taking and filing of an award by the court appointed Commissioners pursuant to the "Quick-Take" procedure, and ~, the EOA bases its finding to acquire the subject property by the "Quick-Take" procedure on the fact that it is in the best interest of the City of New Hope and its people to complete development of the subject property during this year's construction season, and WHEREAS, an appraisal of damages resulting from the proposed taking has been prepared for the two affected parcels of property by an independent certified fee appraiser, and the damages resulting from the taking as determined by said appraiser are as follows: Parcel 1 - $141,400.00 Parcel 2 - $56,000.00 and FE~-- 18--9~ THU 12 : 09 CORR I CK & SONDRALL P. 04 WHEREAS~ said determination of damages is hereby adopted by the EDA as its approved appraisal of value as required by ~ Stat .... §117.042. NOW, THEREFORE, BE [T RESOLVED by the Economic Development Authority in and for the City of New Hope as follows: 1, That acqufsftion of title and possession to the subject property legally descrfbed in Exhibit A attached hereto by the °'Quick-Take" procedures permitted per W~.nn. St_at. §117.042 is necessary end in the best interests of the City of New Hope and ~ts people. 2. That the appraisal of damages ~n the amounts for each parcel referenced here~n is hereby approved and declared by the EDA as its official determination of damages resulting from the taking. 3. That the EDA staff is hereby authorized to proceed forthwith to acquire the subject property by "Ou{ck-Take" per M~nn .... $~st. §117.042 and to take a11 reasonable steps necesssary amd required to acoomp]ish this objective. Dated: February 22, 19~3. Edw. J. Erickson, President Attest= Dan~el J, Donahue, Executfve Director f EIb-- I $--95 t H U 12 : 10 CO R R I CK ~ SON ]~ R ALL P . 05 ~ Tract 1 (5501 8cone Avenue North, New Hope) Re91stered Property, Certificate of Title No. 559078 Legal Description of Property to be acquired in fee simple absolute by this eminent domain action: That part of Lot 2, Block 2, lying North of the North line of the South 639.88 feet of said Lot 2, Block 2, as measured along the East and West lines thereof, except the North 150 feet thereof~ science Industry Center, according to the plat thereof on file or of record in the Office of the Registrar of Titles tn and for Hennepin County, Minnesota. Subject to utility easements shown on plat; Subject to an overhead easement in favor of Northern States Power Company as set forth in Document No. 1098475, Files of Registrar of Titles; Subject to the storm sewer easement as set forth in the Notice of Subsequent Adverse Claim, Document No. 2058134, Files of the Registrar of Titles. Names of part,es interested in the above-described land and nature of their interest: ~ Interest Melvin d. Doyle Fee Owner Elsa M. Ooyle Statutory Spouse's Interest Knutson Construction Company, Record Fee Owner a Minnesota corporation County of Hennepin Real Estate Taxes Northern States Power Company ) Minnegasco ) Posslble utility U.S. WEST Communications~ Inc. ) easements Exhibit A-1 Tract 2 (5425 Boone Avenue North, New Hope) RegiStered Property, Certificate of Title No. 392244 Legal Description of Property to be acquired in fee simple absolute by this eminent domain action: The North 75 feet of the following described property; The North 300 feet of the South 639.88 feet (as measured along the East and West lines thereof) of Lot 2, Block 2, Science Industry Center, according to the plat thereof on file or of record in the Office of the Registrar of Titles in and for Hennepin County, Minnesota, Subject to utility easements as shown on plat, Names of parties interested in the above-described land sad nature of their interest: Name I~te. rest Char3es W. Lee, Jr, Undivided 1/3 Fee Audrey d. Lee Statutory Spouse's Interest Robert E. Lee Undivided 1/3 Fee David G. Lee Undivided 1/3 Fee County of Hennep~n Real Estate Taxes Northern States Power Company ) Minnegasco ) Possible utility U.S. WEST Communications, Inc,) easements Exhibit A-2 FE~-- 18--9~ THU 12 : 08 CORR I OK & SON~RALL P. 02 ~i February 18, 1993 Daniel d, Oonahue City Manager City of New Hope 4401Xylon Avenue North New Hope, MN 55428 RE: Northridge Adult Day Care Condemnation Our File No, 99.53010 Dear Dan: Enclosed please find a proposed Resolution finding a need to use "Quick-Take" procedures and establishing the approved appraisal amounts for the property involved in the Northridge condemnation. This Resolution should be considered at an EDA meeting on February 22nd, ~f possible. The purpose of the Resolution ts to approve the appra~sa~ of damages resulting from the condemnation. These damage amounts will then need to be deposited into Court in approximately three months, which will be just prior to the EDA actually taking possession of the property through the Quick-Take procedures of the condemnation action. Be sure to call if you have any questions. Sincerely, Martin P. Yalecha Assr, New Hope City Attorney s3t Enclosure cc: Steven A, $ondra11, Esq. Kirk McDonald (By Fax) Valerie Leone (w/en¢) APPRAISAL OF c.5§01 ~one Avenue North N~w Ho~, ~ City of New Hope c/o Kirk F~/)onald 4401 Xylon Avenue North New Hope, Minnesota 55428 AS OF Jar~ary7, 1993 ~he purpose of the appraisal is to estimate the market value of the property in fee simple. Market value, accordirg to The Appraisal Institute and major regulators is the most probable price which a proDerty should bring in a competitive ar~ market all fair the seller each acting pru~__ently and knowl__~ck3_~e~bly, and assuming the price is not affected by ur~ue stimulus. Implicit in this definition is the consunm%ation of a sale as of a specified date and the passing of title from seller to buyer under condi~ whereby; the buyer and seller are typically motivated; both parties are well informed or well advised, and acting in what they consider their own best interests; a reasonable time is allowed for exposure in the open market; payment is made in terms of cash in U.S. dollars or in terms of financial arrangements c~le thereto; the price represents the normal consideration for tb~ property sold unaffected by special or creative sales concessions associated with the sale. financing or by anyone '. Our File Number 93036 C~IPTCATI~ I oertify to have personally inspect~ the subject property on Jamm~y 7, 1993, after offering the owner, F~_lvi~ Doyle the op~o~~ to accompany me and that to the best of my knowledge and belief tb~ statsments contained in subject to the "Certification, Assum~ions and Conditions" herein set forth. Code of Ethics and Standards of Professional Practice of the Appraisal Employment in and ~tion for making this appraisal are in no way oontin~ent upon the value reported. I certify to have no interest, either present or contemplated, in the subject property. It is my opir~ion that as of Jar~vy 7, 1993, tb~ market value of the subject property assuming subsoils are not contaminated is: (~E ~ ~ (~E ~ F(~/R ~/NE~ED DO~ (141,400) Brad BjOrklund, MAI, SRA MN License No. 4000377 3 Location ~he subject property is located at about 5501 Boone Avenue North, New Hope, Size ~he lar~ size is reported by the city officials to be 496.15 feet by 300 feet equals 848,845 square feet, 3.42 acres, subject to sL~vey. A perimeter drainage ar~ utility easement, apparently about five feet wide occupies the west and north property line areas. No other easements accruing T~e prc~ contains about 496 feet of frontage on the westerly side of Boone Avenue. Boone Avenue is a two lane bituminous paved roadway with concrete curb~, gutters and sidewalks. It appears to be in good condition and carries moderate north/south traffic by the subject. _Too~m:~aph¥ and Soils ~e site appears to range about five feet in elevation fz-~ a low point in the east and northeast central portion of the pro~, about equal to street grade to higher ~ru~und at the west property line. It is apparent that surface filling h~ occurred in the westerly and southwesterly portions of the land. Some aquatics grasses, primarily cattails are observed in the lowest elevations of the subject. T~y and Soils COnt'd It is specifically assumed for the purpose of this appraisal that the subsoils upon the subject property are uncontaminated. Soil borings show soft, probably peaty subsoils, to a depth of typically 17 feet. Deeper in the southwest, shallc~_r in the northeast. Piling and/or spread footings will be r~uded before a building could be c~nstructed. A Boring Location Map in the Accessibility and Identity The site currently has no oArbcut on Boone Avenue but it is assumed two curbcuts could be placed upon the large frontage. That access, when the site is developed, is considered to be average. ~he property's identity is core,al,red to be average. It is generally associated with tb~ large Science In~ Industrial Park. That industrial park area was begun in about 1960 and developed over the next ten years or more. It b~-~ no special or strong identity of its own. ~he City's Zonirg Map is reproduced in the Addenda. It shows the subject to be in an area zoned I-l, Limited Industrial. Hi~hest and Best Use Highest and best use is defined as the reasonably probable and legal use of vacant land or an improved pr~, which is physically possible, appropriately supported, financially feasible, and that results in the highest The land is of sufficient size for construction with a variety of buildings in any of several locations on the parcel. Subsoils are assumed to be uncon~ted but are known to be soft so that piling or spread footings would be required before normal building construction oould oocur. Industrial property surrounds the subject on three sides. Industrial occupancy and 5 ~he valuation of a typical paroel of real estate is derived principally through three basic a~proaches to value: The Replacement Cost App~ch From the indication of these analyses and the weight accorded each, an opinion of value is reached based upon expert judgment within the outline of the apioz~';.~..~l process. More specifically, the approaches to value are described as follc~s: ReDlacement Cost Approach ~ approach re~ves that a current estimate of the cost of replacing the improvers be made, frcm which must be deducted accrued depreciation in te_~ms of physical deterioration, fxmcti~ obsolescence, and econ~nic obeolescenoe, if any, and to which is added the estimat~ value of the land, as if vacant. Market Data Approach The Market Data Approach or Comparative Approach is based upon the principle of substitution, that is, when a property is placed on the market, its value tends to be set at the cost of acquiring an equally desirable substi~ property, asmming no c~tly delay in making the substitution, since no two properties are ever truly identical, adjustments to the cc~le are necessary for differences in location, quality, oondition, size,, market appeal, and other miters. These consi_~erations are a function of tb~ appraiser's experience and judgment. ~ Appr~ch ~he ~ Approach irwolves an ar~lysis of the prop~ in terms of its ability to provide a net annual income in dollars over a given economic life. Tb~ estimated net annual income is then capitalized at a rate co~J~Arate with the relative certainty of its continuance and the risk involved in ownership of the property, by utilization of the formula; Net ~, divided by Capitalization Rate, equals Value. 8 A rmm~er of properties similar to the subject prcpezty which were recently sold, have k~en checked and relat~d_ to the subject property as to location, dat~ of sale, size, to~y, financir~, and other mtters influenoing market value. A sampling of the market data follows. The analysis indicates that the land, (~x~i~ as if vacant, would be ~ke~hle at about $141,400 as indicated below: IAND ONLY 148,845 scp,~re feet of land area @ $.95 = $141,403 Discussion of C~le Sales Five lar~ sales are described on following pages. C~le land sales are plotted on the City Map in tb~ Addenda. The following paragra~ describe adjustments applied to each cc~parable for differences observed in location, date, size, topo9%~phy/soils, financing and other matters. The adjustments applied for location are basically subjective in nature and depend upon the relative quantifiable differences c~_rved f~-om one traffic volume streets with convenient acoess tend to sell at higher prices, For ~he date sale, a 5% depreciation rate per y~ is estimated for 1990 and for 1991 when the ~ was strongly recessionary. For the years 1989, 1992 and 1993, no depreciation or appreciation changes are estimated to be approgriate for /ndustrial land like the subject. Size adjustments are required to the oomparables because they are either significantly larger or significantly smaller than the subject. For each d~ublir~ or halving of a subjects size, a 5% change in value is estimated, all other things being equal. This seems to reflect the ~henomanon that smaller size parcels sell at higher prioes per schlage foot of land area, all other ~ being equal. A greater number of buyers bid up the price on smaller size par~ls. iiiii ..... F ..................... i{ll~ml~ ............ i '['~m~lll'l iiii 'llll ................... I1 I{ I mi D{~,-~!on of ~__w~b!e ?~d ._~les Cont'd ~1 of ~ ~1~ ~ ~ ~ve ~ ~ 1~ ~i~ ~i~ z~. ~le {4 ~ a I-2 ~ ~i~ z~ ~ a ~ 5% ~j~t ~ ~ f~ ~t ~ z~. ~y ~j~ ~ a ~jor ~i~ti~ ~ ~ ~ysis of ~ ~j~ ~ ~ ~ ~ ~~t of 2/3 1~. ~i~ ~ of ~ ~j~ ~ ~ ~ ~r~s ~ ~ ~ ~-~la~Ble ~ ~ly ~t ~i~ ~ ~ 1~ ~ ~~ ~ ~t si~fi~tly ~1~ by ~r ~i~ ~~s. ~ l~e ~~ ~ion of ~ si~ ~ a ~1~ ~ ~i~ ~~ ~d ~ 1~ ~~t~ ~ 65% of si~ is ~ ~ ~ve ~r ~ils (~t ~ fill) ~ a de~ of ~i~ly 17 f~t. ~~ pl~ ~ ~ ~t ~ ~~ devel~t on ~e si~ ~ si~fi~ ~il ~~i~ ~ ~ ~ wi~ ~ ~r ~i~ ~ils ~ ~ ~vic~ of ~ ~1~ ~ for ~e ~~. ~e ~~ ~ a~ ~ ~ 3 f~t of ~s ~tion ~ ~pla~t ~e~ wi~ ~e ~lati~ of a mt. ~~ ~ ~ ~~~ on ~e ~j~ wight ~1 ~ti~ or p~ ~ ~ 17 f~t dept. ~1~ ~~ion a~ ~ ~pil~ ~ ~ f~t~. ~ ~ of ~il ~~i~ ~ ~ ~ ~ive ~ ~i~ ~id for ~i~ 1~ d~. ~ ~s ~, ~ ~ of ~ 1~ ly~ ~i~ 1~ ~ ~ ~ ~ w~ ~~1~ ~ l~ti~ ~~ f~ ~e 1980{s ~ ~ ~ly 1990's. A f~ ~y ~ ~t pri~ for si~fi~y 1~ 1~, or 1~ a~ly aff~ ~ ~r ~i~ ~il, ~1 at pri~ ~ 1~ ~ ~t $.50 ~ ~,are f~t ~ ~ ~ ~ ~ ~ ~ $1.50 ~ ~ f~t d~ ~n ~ l~tion fa~ ~ ~e .~t of 1~ 1~ aff~ ~ ~vi~ si~. ~ g~ ~, it ~ ~~ ~ ~t~ f~ ~e ~ys~ of ~le ~ ~t ~ ~~i~ 1~ ~ls ~ve ~e ~~t of 10% 1~ 1~ or 1~ ~t ~ si~ ~~i~, ~d~ or is ~ s~p or ~i~~ ~ si~o~. Ia~ 1~ ~ ~j~ ~t ~ si~fi~t or n~ly ~1 of i~ ~~ ~io~ ~i~ by 1~ or ~ 1~ a~ ~ ~11 at ~ Discussion of C~le Land Sales Cont'd half of the rate of normal land. Comparable Sale #1, to a lesser deqree, C~le #2 and C~le #3 are essentially normal topographical land areas with little to up to 10% of the land adversely affected. Adjustments to ~ comparables are therefore at a .5 to .45 rats. C=m~x-~ble Sale #4 _b~d~_ approx/mately 30% iow land that was mostly corrected but still presented a stigma to development. Its sales price is adjusted down only 30%. ~le Sale #5 is also in New Hope, is a recent sale and has an estima~ 50% to 60% low lyir~ land or nearly tb~ same amount as the subject but slightly less. It is the best comparable in regard to being like the characteristics. A discussion with the buyer revealed that the price was low Ail of the c~rables sold on a cash or cash equivalent basis re~ing no fir~r~ing adju~ta~nts. Only one other adjustment was required and that was for (km%~arable #2 which was sold as excess land by the seller to an adjacent buyer. As ex=ess land, the price was discounted and an upward adjustment of 10% is reflected for this ~he average adjusted value frc~ tb~ five oomparable sales is $.98 per s~a~e foot for the subject property. Ccmparable #5 is the best and it supports a slightly lower rate. Therefore, the final value estimate is rounded to $.95 per square foot. # ~ocation T~me Size Zonin~ T~o/Fin/Other $/SF Adj Rate i 1.05 1.00 0.95 1.00 0.50/1.00/ $2.06 $1.03 2 1.05 1.00 0.90 1.00 0.45/1.00/1.10 $1.83 $0.86 3 1.10 1.00 1.05 1.00 0. 50/1. 00/-- $1.81 $1.05 4 1.10 0.90 1.05 0.95 0.70/1.00/-- $1.64 $1.13 1.10 1.00 0.95 1.00 0.90/1.00/ $0.96 $0.82 Subj Average 1-93 148,845 I-1 65% low CE X = $0.98 I 17 IAll three of the standardized approaches to value were cons~ in the ~ not applied to the analysis of vacant land. I ~e Market Data Approach best considers the actions of typical buyers and sellers of properties of the subject type. Good c~m]ity oc~le land sales were found. ~hey were readily adjusted for observed diff~ and only the ~y (subsoil) adjustments were in some cases significant. A separate analysis was ccmple~ of sales prices of lc~ quality industrial land with poor subsoils. That analysis ~ppo~ these large adjustments. Tb~ market value conclusion is stxDngly suppo~ at $.95 per square foot. <:./ ,.:/,,,~ ',~",l ~1 _. ~- ....... ~,, '~ZZ~ ~,*,~ -- r o~'L~"* - ~ {~ 2": ."' I' ', (~ (~) ,',o:,,~ NORTH ~'"' RIDGE ~ (~ r{R ~ CARE 2ND ADD. ~ p~ <~ (~ CENTER i "~ c~ <~ ADDIT! ON .'?' / ~E~T~ '~ s .':~ ~. ' .......... ~CREAGE t S.W. I/4 I S=E. ~ H-- ",~ ~ IIIIHI I I IIII ......... APPRAISAL Of Industrial Real Estate 5425 Boone Avenue North City of New Hope c/o Kirk McDonald 4401 Xylo~ Avenue North New Hope, Mirunesota 55428 ASOF January 21, 1993 ~ OF A_-~l~'r-q~ ~he purpose of the appr~(~l is to est(mate the market value of the property in fee sim~le b~fore ~ after a partial taking. Market val~e, azcordin~ to The ~ Institut~ and major regulators is the most probable prioe ~ a property should brin~ in a competitive and o~en market under all conditions rec~)(~ite to a fair sale, the buyer and seller each actin~ prudently and kncwl~3~ably, and assumin~ the price is not affected by undue stimulus. Implicit in this definition is the consu~m~ation of a sale as of a specified date and th~ passir~ of motivated; both parties are well informed or well advised, and actir~ in what they consider their own be~t interests; a reasonable, time is allowed for exposure in the open market; payment is made terms of cash U.S. dollars or in terms of financial arrangements cc~le thereto; the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyon~ associated with the sale. Our File Numk~r 93037 I oertify to have personally inspected the subject property on January 21, 1993, with the owners, Bob a~d O~/ck Lee, present. To 'the best of my knowledge and belief, the statements contained in this report and upon which the o~inions are based, are true and correct subject to the "Certification, Assumptions ar~ ~tions" herein set forth. In addition, this report conforms with and is subject to requ~m~ents of the-Code of Ethics and Stam~ds of Professional Practice of the Appraisal Institute. Employment in and compensation for making this appraisal are in no way contingent upon tb~ value reported. I certify to have no interest, either present or contemplated, in the subject property. It is my opir~on that as of January 21, 1993, the market value of the Before the~ $347,500 After ~ ~ $291.500 D~u~ages $ 56,000 Brad Bjorklund, MAI, SRA MN License No. 4000377 I~cation subject property is locat~__ at 5425 Boor~ Avenue North, New Hope, Size Municipal records indicate the subject is 300' X 300' = 90,000 square feet of lar~ area, subject to survey. Easements Nortbmrn States Power electrical transmission lines easements my occupy portions of the south and west property line areas. No other utility, access, or other easements were reported or were observed. Streets The property contains 300 feet of frontage on tb~ westerly side of Boone Avenue North. Boone is a two lane bituminous paved roadway with concrete curbs, gutters and sidewalks. It appears to be in good condition and carries moderate north/south traffic by the subject. Utilities ~he subject property is reported to be served by all public utilities includLug sanitary sewer, storm sewer, water, natural gas, electricity and ~Tooo~raph¥ and Soil~ The site appears to be generally level and to rise 5 to 8 feet in elevation frc~ the low point at the east property line to a high point at the west property line where a small hill or rise is located. It is apparent fr~n four borir~s taken when the building was built in about 1965 at its outside warehouse corners and two borings taken recently near the north property line that subsoil conditions are not good throughout the subject property, but worse in the north property line. Borings taken there and on land further to Soil~ Cont'd the north indicat~ poor ~ml ity soils down to a depth of about 17 feet. The four borings at the existing building location show less lower quality subsoils and a water table 5 feet below the surfaoe. The existing buildin~ was b~!t on spread footings in the south portion of the site. The building ~ no ~:lv~ deterioration f-~-~, settlement indicating that with modest corrections, the subsoils are not that bad in the south portion of tb~ site. Subsoils are specifically assumed to not be contaminated. No contamination Accessibility and Identity. The site currently has a curbcut to Boone Avenue near the center portion of the east property line. That access is considered to be average. The property's identity is considered to be average. It is generally associated with the large Science Industry Industrial Park. That industrial park was bec3~ in about 1960 and developed in the next ten years or more. It has no special or strorg identity of its own. The City Zonin~ Map is reproduced in the Addenda. It shows the subject to be in a~ area zor~d I-1, T.{~ie__~__ Industrial. Highest and best use is defined as the reasonably probable and legal use of ~acant land or an improved property, which is ~hysically possible, appropriately supported, financially feasible, and that results in the highest value o The land is of sufficient size for construction with a variety of buildings in any of several locations on the parcel with perhaps a location at the south end of the site best acc~,u~dating poor subsoils known to be located on the north portion of the property. Lndustrial property surrounds the subject on three sides although a vacant lot lies to the north. Industrial occupancy and ~ohest and Best Use Cont'd development is reasonably healthy but not overly strong in the current economy. Developin~ the site with an industrial build/rig represents the if vacant and represents the highest and best use of property as improved. n~R(:~IPTIC~ OF ~ The south portion of the land is improved with a freestar~ing masonry industrial building and a limited amount of on-site paved parking and landscapir~. The north portion of the property is unimproved and in a natural gro~h of ~. Size 42.5' X 23' = 978 100.5' X 102.5' -- 10,301 11,279 sq. ft. gross building area Age The b, ilding is reported to have been constructed in 1965 and occupied in October of t_hat year. Foundation A concrete block foundation and poured concrete footing system is observed frc~ buildir~ plar~. Framing appears to be primarily concrete blocks with steel posts and beams. Framing appears to be in average to good condition. ~e ~aluation of a typical parcel of real estate is derived principally through three basic approaches to value: The Replacement COst Approach A-om the indication of tb~e analyses and the weight accorded each, an opinion of walue is reac~_~ based upon expert judgment within the outline of the appraisal process. More specifically, the approaches to value are described as follows: Replacement Cost AmPr0ad~ ~ approach recreates that a current e~timate of the cost of replacir~ the improvers be made, frc~ which must be deducted accrued depreciation in terms of ~hysical deterioration, functional obsolescence, and economic ob~ol~, if any, and to which is added the estimated value of the land, as if vacant. The Market Data Approach or (km~k%rative Approach is based upon the principle of substitution, that is, when a property is placed on the market, its value tends to be set acquiring an ec~!ally at the of desirable substitute property, assuming no costly delay in making the substitution. Since no two properties are ever truly identical, adjustments to the ~able are necessary for differences in location, quality, condition, size, market appeal, and other matters. These considerations are a function of the appraiser's experience and judgment. Income Approach The IP~cm%e Approach involves an analysis of the property in terms of its ability to provide'a net anD~] income in dollars over a given economic life. Tne estimated net annual income is then capitalized at a r~te commerce=ate with the relative certainty of its contiDuance and the risk involved in of the by utilization of the formula; Net owners~p property, Income, divided by Capitalization Rate, ec~als Value. Marshall ValuatioD Service Sectica% 14, Page 15 Type - Average Class C Manufacturin~ industrial bldg. Would be less but for excess utility & bldg. ew~__nsion capabilities. Basic U~it C~ $24.95 per square foot _Square Foot Refb~m~nts Cold Climate Heat & Office A/C $ 1.13 Total $26.08 Heiqht and Size Refinements Wall Height (15.5' Avg) 1.031 Floor Ar~imeter (11,279/452) .997 Tempo_ ral &. Locational Multipliers Current Cost Multiplier ~t~ USA, Class C, Section 14 .99 Local Minneapolis Multiplier 1.14 Application $26.08 X 1.031 X .997 X .99 X 1.14 = $30.26 per s~are foot Direct ~ctic~ Oost SAY $341,300 ~%e ]:~il~ oo~tai~s 11,279 sq%k3re feet arid direct (:or~_~1~on cost is calculated as follows: 11,279 sq. ft. @ $30.26 = $341,303 Site & .Other Improvemen~ SAY $ 59,900 10,760 sq. ft. bituminous paving @ $1.16 = $12,482 Sodding, site lighting & miscellaneous = $ 3,600 I~ cxar~ $43,800 Total $59,882 Indirect Co~c~ion Oost~ SAY $ 12,000 Interest ar~taxesonlandduringconstructionand develo~mentperiod, financing, andmisc, expenses at approximately 3% of directconstructioncostand site improvements. (3.0% of $401,200 = $12,036) Total Direct andL-~~c~ionCosts $413,200 Estimated Accrued Depreciation Physical 45% for general ageing, wear and tear Functi~ Nil Economic 5% for recessi~~ Total 50% 20-22 year effective age of a 40 year total economic life ($206.600) DeDreciated~ostEstimate $206,600 , Land Valuation (F~.Market Data Approach) $144,000 Total ValueInd/cated $350,600 12 A number of properties similar to the subject property which were recently sold, have been checked and related to tb~ subject property as to location, ~_~_~r~_ ~tion, size, age, ~ producir~ capability, financing, and other matters influencing market value. A sampling of the market data follows. The ar~lysis indicates that the land, considered as if vacant, would be marke~ble at about $144,000, and the total property (land and buildings) %~ld be market, hie at about $345,700, as ir~licated belch: LAND ONLY 90,000 square f~t of land area at $1.60 = $144,000 LAND AND ~JILDING 11,279 square feet of gross building area at $30.65 = $345,701 Discussion of Cc~le Iand Sales Five lar~ sales are described on following pages. Comparable land sales are plotted on the City Map in the ~nda. The following paragraphs describe adjustments applied to each c~le for differences observed in location, date, size, topography/soils, financing and other matters. ~he adjustments applied for location are basically subjective in nature and ~epend upon the relative quantifiable differences observed frc~ one cc~le's location to another where better located ccm~les on high traffic volume streets with convenient access tend to sell at higher prices, For the date sale, a 5% depreciation rate per year is estimated for 1990 and for 1991 whe~ the ecor~m%~ was strongly recessionary. For the years 1989, 1992 a~d 1993, ~o depreciation or appreciation changes are estimated to be appropriate for izzlustrial land like the subject. Size adjustments are rec~,~red to the ccmparables because they are either significantly larger or significantly smaller than the subject. For each doubling or halving of a comparables size, a 5% change in value is estimate, all other things being equal. This seems to reflect the ph~n that Discussion of (kam~arable T and Sales Cont'd smaller size paruels sell at higher prices per square foot of land area, all other things bein~ equal. A greater number of buyers bid up the price on smaller size parcels. Ail of the ccmparables but one have the same low density industncial zoning. C~parable #4 has a I-2 higher density zoning and a modest 5% adju~H~nt is re~,~ed for that better zoning. Topography adju~U~_nts are a major consideration in the analysis of the subject property which is the equivalent of 1/3 low or say 30%. Peri~_ral ar~-~ of the subject where no soil borings were taken and non-buil~hle areas normally set aside in open land and setbacks are not significantly influenced by poor quality subsoils. The large central portion of the site where a b~il~ ar~ on-site parking would be located representing about 30% of site is known to have poor subsoils to a depth of about 17 feet. Building plans were examined that show development on the site and the use of spread footings soil correction costs to cope with the poor quality subsoils in the vicinity of the building. ~ kind of subsoil correction cost tends to drive the price paid for industrial land down. Comparable Sale #1, to a lesser degree, C~le #2 and Comparable #3 are essentially normal topogra~cal land area~s with little to up to 10% of the land adversely affected. A~justments to these co,parables are therefore at a .80 to .75 rate. C~le Sale #4 had approximately 30% low land that was mostly corrected but still presented a stigma to development. No adjustment is made. Comparable Sale #5 is also in New Hope, is a recent sale and has an eStimated 50% to 60% low lying land or nearly twice the amount as the subject. A 50% upward adjustment is made. A d/scussion with the buyer revealed that the price was low primarily because of subsoil characteristics. Ail of the ccm~leS sold on a cash or c~-~h equivalent basis requiring no financing adjustments. Only one other adjustment was required and that w~s for Comparable #2 which was sold as not r~ed excess land by the seller to an adjacent buyer. As excess land below the 1 acre minimum lot size, the price was discounted and an upward adjustment of 10% is reflected for this 14 Discussion of O~,,,~le ~nd Sales Co_n~'d The average adjusted value fYum the five cc~parable sales is $1.61 per square foot for the subject property. The final value estimate is rounded to $1.60 per square foot. ~ Ti~ s. ize zo~u~ Tooo/Fin/Oth~ ~ auj Ra~ 1.05 1.00 1.00 1.00 0.80/1.00/---- $2.06 $1.73 1.05 1.00 0.95 1.00 0.75/1.00/1.10 $1.83 $1.51 1.1o 1.oo 1.1o 1.oo o.8o/1.oo/---- $1.81 $1.75 1.10 0.90 1.05 0.95 1.00/1.00/----- $1.64 $1.62 1.10 1.00 1.00 1.00 1.50/1.00/-- $0.96 $1.44 Subj Average 1-93 90,000 I-1 30% low CE ~ = $1.61 3O 1. Cost Approach $350,600 2. Market ]3ata A~3roach $345,700 3. ~ ~~ N~ ~li~ ~li~ ~ ~ ~ la~ of ~ ~, ~ ~ ~pi~izati~ ~ for ~1 ~ ~i~ faciliti~ 1~ ~e ~j~. ~ ~la~ ~ ~~ ~~y ~id~ ~ ~la~t ~ of ~]~ ~ si~ ~~, ~ ~t a~pria~ ~t of o1~, ~ ~ ~ ~y ~y ~n ~ ~ ~~ ~ V~ ~ it ~o~ giv~ ~y a f~ ~~ of ~ p~'s ~t ~ue. ~ ~t ~ ~~ ~t ~id~ ~ a~i~ of ~i~ ~ ~ ~1~ of p~~ of ~ ~j~ ~. ~ ~i~ 1~ ~ ~1~ ~ ~ f~. ~j~ ~ ~ly ~ for ~~ ~ff~ ~ ~ ~l~i~ is ~ly ~~. ~ f~ ~ ~~, ~ ~~ ~ pla~ ~ ~ f~s of ~t ~ ~~ wi~ ~~ ~~ p~id~ by ~e ~ ~~. Value ~s~-~te $347,500 ~he property retains its same location and locational attr~ after the takir~. Its size, however, is rech/oed fr~m 300' X 300' to 225 frontage on Boone Averse by the same 300 foot depth. The total remaining land area is now 67,500 square feet. The land has the same utility service, topography and soils, accessibility ar~ identity, zoning and industri~ buildir~ highest ar~ l:~s~rm OF ~ (Aft-r ~ Taking) The subject land is still improved with the same improvements that it had before the taking. The acquired land was improved with a natural growth of grmsses and a few small natural growth trees at the far rear. All of the ~ site a~d b~il~ i~prov~ts are unaffect~. t_ Direct(kx~tru~onC~st SAY $341,300 ~heh/ild/r~~ 11,279 sc~e feet a~ddirect cu~struc~ioncostiscalculatedas follows: 11,279 sq. ft. @ $30.26 = $341,303 Site & Other ImDrov~ents SAY $ 59,900 10,760 sq. ft. bi~ pavir~ @ $1.16 = $12,482 Sodding, site lighting &miscellaneous = $ 3,600 Rail~ - $43,800 Total $59,882 Indirect Construction Costs SAY $ 12,000 development period, financing, and misc. expenses at approximately 3% of direct construction cost and site improvements. (3.0% of $401,200 = $12,036) Total Direct andIndirectConstruction(k~ts* $413,200 Estimated~Depreciation Physical 45% for general ageing, wear andtear. Functional 5% for ex c ess bldg. expansion costs & less land toexpand into. Eooncmic 5~ for recessionaryeconcmy. Total 55% 22-23 year effective age of a 40 year total economic life ($227,300) Depreciated CostEstimate $185,900 Land Valuation (Frc~MarketDataApproach) $108,000 To~ Val~eIr~ted $293,900 * Same as before the taking 33 A number of properties similar to tb~ subject proper~f which were recently sold, have been chec~_ and related to the subject property as to location, coalition, size, age, ~ producing capability, financing, ar~ other matters influencing market value. A sampling of the market data follows. The analysis ir~iicates that the land, considered as if vacant, would be marketable at about $108,000, and the total property (land and buildings) would be market~ble at about $289,900, as indicated below: LAND ONLY 67,500 sc~m~ feet of land area at $1.60 = $108,000 IAND AND KIILDING 11,279 square feet of gross buildin~ area at $25.70 = $289,870 Discussion of ~(~.~able Fand Sales The same five cc~le sales considered before the taking are considered after the taking. The same adjustments are applied to the comparable sales. No different factors are required including those for size. To~ same land value rate of $1.60 per square foot is supported. 34 Discussion of C~~e Buildir~ Sales Cont'd ~he same five comparable bu/lding sales consiae~ed before the tak/ng are consid~_red after the taking. The only factors that change are the land to Jalild/ng ratio~. Before the taking, most of the ccm~oarables had a land to bma')lS'h~g' ratio of abo~t 5 to 1 a~d the subject had an 8 to 1 land to building ratio. After the taking, the subject's ratio changes to 6 to I which is only slightly different than 4 of the 5 ccm~les. Therefore, the land size adjustments where the subject used to have nearly an extra lot are c~ed down typically 20% to better reflect to the current land to building ratio which is nearly identical to most of the c~mparables. The followir~ Building Sales Adjustment Grid is produced and it shows the same adjustments as those applied before the taking except in the Lar~ Size column. ~he average adjusted value of the five oamparable sales after the taking is $25.72 per sqL~are foot. Th(-~ is rotJr~ed to $25.70 for the final value ~usion. # Location .Date Bldg/~ Size Aqe&Condition Fin/Othe~r $/sf Adj .Value 1 0.95 0.90 1.00/1.05 0.90 1.00 $31.26 $25.26 2 1.00 0.95 1.00/1.00 0.90 1.00 $27.78 $23.75 3 1.00 0.95 1.00/1.00 1.00 0.95 $28.62 $25.83 4 1.10 0.90 1.05/1.00 0.75 1.00 $33.44 $26.07 5 1.00 0.90 1.05/1.20 1.35 1.00 $18.09 $27.69 Avg. 1-93 11,279/67,500 1965, 9% off. CE ~ = $25.72 Avg.+crane 1. Rspla~OostApproach $293,900 2. Ma~ketDataApproach $289,900 3. Inc:c~eApproach Ncfc~lied All three of the standardized approaches to value were considered in the market value analysis of the subject property. The Income Approach was not applied due to the lack of me~ningf%~ inccm~, expense and capitalization rate data for small owner occupied facilities like the subject. ~he P~placement Cost Approach ad~quately considers the replacement cost of k~ld/r~ and site improvements, d____~k~s that appropriate amount of depreciation and adds the well supported land value. Since the building is older, buyers do not quickly rely upon the Cost Approach to Value and it therefore gives only a f~r imiication of the property's market value. The Market Data Approach best considers the actions of typical buyers and sellers of properties of the subject type. Good quality land and build/ng sales are found. Adjustments are readily made for observed differences and the value In the final value estimate, most emphasis is placed upon the fittings of the Fir~l Value Es~-~m~te $291,500 Allocation Market Value Before theTakir~ $347,500 ~k~rket Value AftertheTaking $291,500 Damages $ 56,000 Value ofthePartTaken 75' X 300' = 22,500 sq. ft. @ $1.60 = $ 36,000 Sev~ Damages $ 20,000 Severance Damages result f~-c~ slight additional building depreciationduetothe inability toexpand ina fashion as large asbefore the takingand inefficiency of excess utility systems installed in the buildin~. ~,~. ~...~ ' :'.'o~ I ~ .... 2?0 INDu~ I~tO our - RESEA~ CE. NTER~RD ", ~ PC ,. 'R~ ~'"' RIDGE ' CARE ~ND ~DD. CENTER (~ (~ ADDITION ~'?' I S.W. I/4 '1 .... S.E. I/4 n-~':__ .l n.~..- ,,~.~ ~., ~ ................... ~UA ~ REQUEST FOR ACTION Originating Depart.merit Approved for Agenda Agenda Section City Manager 2-22-93 E?A Item No. By: Dan Oonahue By: i 5 DISCUSSION REGARDING ASSESSMENT AGREENENT OF NEt/HOPE TEREACE APARTMENTS (EMEEALD POINTE APARTMENTS) Lang-Nelson Associates is asking the City to reconsider a change in the assessment agreement between the City and New Hope Terrace Apartments (now Emerald Pointe Apartments). The Assessment Agreement was set in 1986 and calls for 2% increase on market value every year to pay off the tax increment bonds. The current market value for payable 1993 is 6.3 million. Without the assessment agreement the Hennepin County Assessor states that the 1993 market value would be 5 million. The EDA previously discussed this matter at meetings held March 23, 1992, April 13, 1992, April 27, 1992, May 26, 1992, and June 22, 1992. Minutes from these meetings have been provided for your information. TO: _ ._~ ~ Review: Adrrdrdstration: Finance: RFA-O01 ~ LANG-NELSON ASSOCIATES INCORPORATED PROFESSIONAL PROPERTY MANAGEMENT February 11, 1993 Mayor Edward Erickson City of New Hope 4401Xylon Avenue North New Hope, MN 55427 RE: EMERALD POINTE APARTMENTS Dear Mayor Erickson; In April of last year, we appeared before the City Council as the new owners of New Hope Terrace Apartments (now Emerald Pointe Apartments), to request an Amendment to the Assessment Agreement~ covering real estate taxes on that property. As you are aware, the original Assessment Agreement created an artificial value, which escalates by the terms of the Agreement, 2% per annum, placing the current market value for tax purposes at $6,367,200.00, which number in 1993 will become $6,494,544.~0. This value is greatly in excess of the Fair Market Value of $5,000,000.00, which the County Assessor has recently informed the City he would use, if he was not restricted by the Assessment Agreement and which coincidentally, is the amount of our purchase price. Ithink it is fair to say that we are all proud of Emerald Pointe, which is a very positive and fine rental housing community in the City of New Hope. Unfortunately, this artificially high real estate tax expense does and will adversely affect Emerald Pointe, the apartment community, the residents, certainly the Partnership, and hence the City. By amendin~he Assessment Agreement to the Fair Market Value, (which the--COunty Assessor has established), is a true win/win, not only for the Emerald Pointe Partnership, but the City as well. In reviewing the tax increment financing numbers, a reduction in value to $5,000,0~.~0 would still allow for the bonds to be paid off well ahead of schedule and still maintain a level of sufficient debt service reserve, as bargained. The City ends up with a fine apartment community, as bargained, well managed and maintained and full of New Hope residents, for which the City can be very proud. 4601 Excelsior Boulevard, Suite 650, Minneapolis, Minnesota 55416 920-0400 February 11, 1993 Page Two Resolving the real estate tax issue now is critical to the Partnership. The mortgage cannot be fully funded, until the real estate tax issue is brought in line, as stipulated by the mortgage agreement. These circumstances have all come together causing us to act now. We are asking for this matter to be put on the Council Meeting Agenda for February 23, 1993. I am sure there may be questions concerning this matter· I would b~'~O~e than happy to discuss them with you by phone, or in person /~rior %0 that meeting, if You wish. / ~ordial~y, /~~ President v ~ FWL/djD President Pro tem Enck introduced for discussion Item 6, Discussion Regarding Market Value of New Hope Terrace Property. Mr. Donahue explained that the New Hope Terrace Apartment building on 36th near the railroad tracks was built with tax increment funds. He stated the building was recently sold to LaNel. He stated currently there is a developer's agreement that includes an assessment agreement with a 2% escalator. The assessment agreement has established a market value of 6.2 million dollars for payable 1992. He stated LaNel, the new owners, recently purchased the property for 5 million. He stated LaNel has approachedthe City about amending the developer's agreement whereby the market value could be lowered and thus the taxes paid could be lowered. The original development used housing bonds where it was required to set aside 20% (or 30 units) to persons who qualified under income guidelines. With the new purchase of the building, the old bonds were paid off and thus there is no longer a requirement to provide for the 20% set aside. Mr. Donahue informed the EDA that persons receiving notification of this discontinuation will press the City Council for action to reinstate part of the low and moderate income housing. He indicated that he has spoken with Ember Reichgott and Ann Rest regarding the situation and they are very interested. Mr. Donahue reiterated that LaNel would like the market value lowered. At the current time the Hennepin County Assessor has provided an unofficial valuation of 5.5 million for the property, and does not feel the market value would be set at 5 million dollars. He indicated that he believes the only way the City could provide relief would be to use excess tax increments towards the lost low and moderate income units. At the present time, state law forbids the use of excess increment or any increment to go into direct housing subsidy. However, there is a tax increment amendment bill before the Legislature which would allow tax increments to be used directly for housing subsidy. President Pro tem Enck stated he is uncomfortable eliminating 1.2 m(llion of tax capacity to one particular property owner since it would set a precedent. He noted the tax loss not only affects the city but also includes the school district, county, watersheds, etc. He felt this would impose a burden upon others in the taxing New Hope EDA March 23, 1992 Page 4 district sinceth~ current value is built into the tax capacity for generating revenues. Commissioner Williamson stated that many apartment buildings within the City are deteriorating and may need help in the future. She commented that if a developer purchases these apartments at a distressed value and is willing to make some sort of a deal with the City, it may be in the City's best interests to do so. She expressed concern for low and moderate income persons not having decent places to reside. President Pro tem Enck agreed that in the future that may the case~ however, in this case there is a binding contract. Commissioner Otten indicated he would prefer to retain the original development contract. Commissioner L'Herault inquired of the number of units which would be made available if the value is dropped to 5.$ million. Mr. Donahue stated many scenarios are being discussed. He stated if the bill passes regarding use of excess tax increment funds, the developer would be willing to designate 10 units. In the event that the State does not approve the pending legislation, LaNel would phase out the 10 units over a two year period. Mr. Donahue suggested deferring action until a decision is made regarding the tax increment bill. Commissioner Williamson indicated the sale of the property has been taking place for over a year and will be no surprise to most of the apartment dwellers. She indicated there had been rumors of losing the low income housing if the apartments changed ownership. ADJOURN#ENT Motion was made by Commissioner Williamson, seconded by Commissioner L'Herault, to adjourn the EDA meeting as there was no further business to come before the Council. All present voted in favor. The New Hope EDA adjourned at 10:21 p.m. Respectfully submitted, Valerie Leone City Clerk New Hope EDA March 23, 1992 Page 5 Commissioner L'Herault, approving revised corrective action destgn workplan for 42nd/Nevada Avenue sotl contamination cleanup and authorizing advertisement for bids to excavate and treat impacted soils. All present voted in favor. Motion carried. BID/SOIL CLEANUP President Pro tem Enck introduced for discussion Item 5, Item $ Approval of Bid Submitted by Bergerson-Caswell, Inc. for Groundwater Quality Monitoring Well Abandonment and Construction for 42nd/Nevada Avenue Soil Cleanup (Project #462), in the amount of $2,295. Mr. McDonald stated the bid is for abandoning a well and constructing a new well. The MPCA is requesting that a monitoring well at the location of the soils to be excavated be abandoned prior to excavation and that an additional groundwater monitoring well be constructed near Park Ridge Way Apartments after the excavation of contaminated soils. MOTION Motion was made by Commissioner L'Herault, seconded by Commissioner Otten, approving bid submitted by Bergerson- Caswell, Inc. for groundwater quality monitoring well abandonment and construction for 42nd/Nevada Avenue soil cleanup (Project ~462), in the amount of $2,296. All present voted in favor. Motion carried. President Pro Tem Enck introduced for discussion Item 6, Discussion Regarding Request by LaNel Financial Group, Inc. to Amend Assessment Agreement for New Hope Terrace Apartments. Mr. Donahue explained that LaNel is the new owner of New Hope Terrace Apartments on 36th Avenue west of the railroad tracks. He indicated that LaNel has approached the City regarding changing the assessment agreement which was originally made in lg86-87 between the City and the developers of the property which guaranteed a certain minimum market value of the apartment project in order to pay off housing bonds. Mr. Donahue stated the life of the bonds will run through 2004 and the City does not need to change the assessment agreement if it does not desire to do so. He reviewed scenarios discussed with LaNel which may advantageous to the City. One of the options is to retain 10 of the original 30 low and moderate income apartments for the life of the bond issue (until year 2004) if the City would amend the assessment agreement. The amendment would include allowing the market value to be set by the assessor free of any artificial limits such as a 2% New Hope EDA April 13, 1992 Page 2 increase. He nOted a minimum, market value should be established to ensure a certain tax flow until the bonds are paid off. Mr. Donahue illustrated tax projections based on the current assessment agreement. He stated the owners would be required to pay $269,000 in taxes next year. If the agreement was amended, based on $5.5 million, $233,000 would be generated in taxes, or a tax savings to the apartment owners of $36,000. The City's analysis would show that if the owners provided 10 units of apartments at $200 per month or $2¢,O00/year, LaNel would have a net tax savings of $12,000. He also reviewed the projections for'year 2003. The cost of providing the 10 units would be $29,000 and the owner would have a tax savings of approximately $15,000. Mr. Donahue stated 2/3 of the savings would be for the public good and 1/3 to the apartments owner. He informed the EDA that Paul Brewer from LaNel Financial Group is present to answer or clarify questions. Commissioner Williamson questioned the current market value. Mr. Donahue stated the payable 1993 market value is $6.4 million (which would generate $269,000 in taxes). Mr. Donahue stated at the current time there is an excess of $500,000 in reserves which would meet two years of bond payments. Under the current agreement it is projected to be $1.5 million. When the bonds are paid off, the money is to be redistributed to the taxing jurisdictions or 7% to the City (17% less 10%). He stated if the EDA agrees to the change, the excess increment will not continue to build, but rather the funds will subsidize the housing. The approximate cost would be between $120,000 to $150,000. President Pro tem Enck commented that this happens to be one project which the City planned well. Mr. Donahue noted that he is awareof no other city which has undertaken changes to assessment agreements to benefit low and moderate income housing. Mr. Brewer, LaNel, was recognized and stated New Hope Terrace Apartments was purchased for $5.5 million dollars which was substantially less than the value stated on the assessment agreement. He noted when the property was purchased real estate taxes were considered. He stated it New Hope EDA April 13, 1992 Page 3 is their goal to get taxes in line with the value. He stated he recognized the property had 30 units designated as low income rentals which the previous owner rented for less than the market rental rate. He stated the units were primarily rented by low-income elderly persons. Mr. Brewer continued stating that in this area LaNel currently has over 1,000 units of multi-family housing, two of which are Anthony James and Broadway Village Apartments which are mostly elderly. Because of this, LaNel did not want to lose the current tenants at New Hope Terrace even though they were subsidized, yet at the same time the property could not be economically operated with 30 low- income units. Mr. Brewer reviewed his proposal regarding reduction of the market value. He stated it would not jeopardize the tax increment financing which exists on the property as there is sufficient reserves. He emphasized the assessment agreement amendment would not only benefit LaNel as a property owner operating on an economic basis but would also meet and retain some of the City's low-income housing needs. Commissioner L'Herault questioned whether the negotiated purchase price was a reflection of the tax situation. Mr. Brewer stated that was not the controlling factor as a number of buyers were competing for the property. He noted the elimination of the low income units makes up part of the difference. However, it would be nice to retain the current low-income tenants since they have proven to be good tenants. Commissioner L'Herault again questioned if the tax burden was reflected in the purchase price. Mr. Brewer replied that he could not say that it had a direct impact although it may have indirectly entered into the offer. He stated the purchase price was determined based upon the projected revenues generated from the property. President Pro tem Enck stated the change in valuation would amount to $450,000 over a lO-year period. He pointed out that the City has an obligation to the taxing districts by maintaining the agreement. He remarked that a benefit would be given to one {property owner and recipients of low-income housing) at the expense of another (taxing districts such as the schools). He expressed displeasure with the City being perceived as New Hope EDA April 13, 1992 Page 4 the cause behind the eliminationof the low-income housing units. He pointed out that the agreement was in place when the property was purchased and the apartment complex was purchased at a discounted price. Mr. Donahue asked the EDA for direction as to whether or not to proceed. He reiterated President Pro tem Enck's comment regarding the benefit to one at the expense of another. Ms. Colleen Barstein was recognized and stated she resides at the New Hope Terrace Apartment. She has been living with her mother in a 2-bedroom subsidized apartment for four years. She indicated she was shocked to learn of the $250 increase in rent with the elimination of the subsidized rent. Ms. Barstein stated she would like to continue living in New Hope and urged the EDA to reach a compromise for the continuation of the subsidized program. She indicated without the subsidized housing, people will be forced to move out or pay the $700 rent. It will be difficult to find another place to live especially since many of the affected persons are elderly. She noted they view the apartments as their home. She commented that the merchants at Winnetka Commons Shopping Center may be affected by the tenants relocating. President Pro rem Enck expressed empathy and stated it is a difficult dilemma. He inquired of the occupancy rate. He noted even if there was a change in the agreement, 2 of the 3 tenants would be adversely impacted since there would be only 10 rather than 30 subsidized units. Mr. Brewer stated the apartments are g5% occupied and the market in New Hope is good. Commissioner Otten inquired of alternate subsidized housing within the City. Mr. Oonahue reported that the options are limited. Section 8 is the predominant program; however, the waiting list is about 5 years. He stated Metro Housing was contacted regarding emergency housing in the form of vouchers but the hardship would not qualify under its "emergency" program. He mentioned senior apartment complexes within the City: Anthony James, Chardon Courts, St. Therese, and North Ridge Apartments. Commissioner Williamson questioned how the program was New Hope EDA April 13, 1992 Page 5 subsidized or how the apartment owners were reimbursed. Mr. Brewer explained that there was no reimbursement; the owners were required to provide 20% of the units at a reduced rate that met the federal guidelines. Mr. Sondrall, City Attorney, reported that an annual certification was submitted to the City and the County. Commissioner Williamson stated it is a serious issue and she hopes Mr. Brewer can find a way to continue the program. She stated it is difficult to find subsidized housing as clean and well operated as New Hope Terrace Apartments. She asked how many units of the subsidized units are currently occupied. Mr. Brewer replied that there are 16 or 17 apartments. Ms. Williamson questioned whether Mr. Brewer is confident that he could maintain a 95% occupancy at the full-market rate. Mr. Brewer replied that he believes they can. He noted that New Hope has an overall vacancy of 3% and the market is very tight. He noted last year Anthony James Apartments had 1/10 of 1% vacancy. He stated the normal turnover on an apartment project is 50-60% of its units whereas in a senior complex, turnover of 15-20% is high. Commissioner Otten inquired whether Hennepin County will be assessing the property. Mr. Donahue stated the assessment agreement sets the market value and the escalator is an automatic 2% until the life of the contract. Commissioner Otten noted it is a private venture and it appears there is little the City can do regarding the market value set by the contract. He conveyed he does not feel the City should be lowering the taxes at this time. Commissioner Williamson indicated philosophically she agrees with Commissioner Otten; however because the City originally put stipulations on the property at the time of construction, she feels the City has a responsibility to the residents to maintain the subsidized housing end of the agreement. Commissioner L'Herault stated it was a package and one has to use caution when identifying only part of the New Hope EDA April 13, 1992 Page 6 agreement. Commissioner L'Herault asked whether it can be approached another way without impacting the taxing districts. President Pro rem Enck stated the lower market value will enable the bonds to be paid off; however, there will be less money going into the pool and little surplus to be redistributed at the end of the contract. He noted he does not feel the City should be changing contracts and he has not seen anything sufficient enough to warrant a change to the contract. Mr. Oonahue commented that in the year 2004, the City would gain $250,000 with the contract as is. If the contract is changed as proposed, the City would gain $100,000. Therefore, the housing subsidy program could be viewed as costing the City $150,000. Mr. Oonahue inquired whether the EDA desires staff to discuss the matter with the County and/or School District for their input. Commissioner Williamson indicated that she would like President Erickson's input regarding the proposal. President Pro tem Enck commented that it is appropriate to have all members actively participate in the decision. He directed staff to bring the item back on the April 27th agenda for discussion. AUTOHAUS - #467 President Pro tem Enck introduced for discussion Item 7, Item 7 Request for Extension on Development Contract Improvements - Autohaus (#467). Mr. Donahue stated staff has met with Autohaus and is recommending to table further consideration on this item until the May 11th meeting. MOTION Motion was made by Commissioner Otten, seconded by L'Herault, to table until Nay 11, 1992, the request by Autohaus for an extension on their development contract improvements. All present voted in favor. Motion carried. OTHER BUSINESS Mr. Oonahue informed the EOA that PRISM continues to be Prism interested in obtaining the City-owned property on 42nd/Nevada Avenue for a new facility. He stated they have retained an architect and have developed conceptual drawings which they wish to present to the EDA. The drawings are in the Mayor's office for the EDA to review. He informed the EDA that PRISM would like to meet New Hope EDA April 13, lg92 Page 7 A condition of the Development Agreement is that the EDA will furnish a certificate of completion certifying that all obligations of the developer have been completed in the construction of the project. NOTION Motion was made by Commissioner Enck, seconded by Item 5 Commissioner Williamson, to authorize the Executive Director to Sign Certificate of Completion for the Winnetka West Barrier-Free Housing Project {#466). All present voted in favor. Motion carried. President Erickson introduced for discussion Item 6, Discussion Regarding Request by LaNel Financial Group, Inc. to Amend Assessment Agreement for New Hope Terrace Apartments. The EDA resumed discussions previously held on March 23, 1992, and April 13, 1992.- Mr. Donahue explained that LaNel Financial Group is requesting that the City amend its assessment policy regarding the New Hope Terrace project. The assessment policy was developed at the time of the original construction in 1986 which had a minimum market value and required a 2% escalation of that market value every year. In 1993, that market value will be at $6.4 million. They are requesting an amendment to the assessment agreement that would allow the county assessor to set the market value for 1993 and that would be the minimum amount or floor that the market value could not go under for the life of the bond issue through the year 2004. If the City agrees to the amendment, LaNel will retain ten of the thirty units for low to moderate income housing. LaNel is projecting that the average subsidy will be $230 per month. For ten units this would amount to approximately $28,000 per year. President Erickson interjected that the City needs to ensure that the "floor" is beneficial to the City of New Hope in that it would never be so low that the bonds could not be paid. Mr. Donahue stated that if the EDA wishes to pursue this change, he would discuss the specifics with Hennepin County. He noted he personally would like the EDA to grant the request to LaNel as it would save ten of the subsidized units. However, on the down side, the City's risk is increased since the bonds are not yet paid off. He New Hope EDA April 27, 1992 Page 2 pointed out that certain things can happen which may be out of the City's control {i.e. if the new owners file bankruptcy) and there may not be adequate reserves to pay the bonds. Mr. Sondrall, City Attorney, noted that taxes will have a priority even in a bankruptcy case. The value of the property may decline during a bankruptcy case since the building may be allowed to deteriorate. President Erickson responded favorably to the amendment to the assessment policy since 1) it would allow ten out of the thirty renters to remain until the year 2003; 2) there will be cash flow to maintain and upkeep the premises; and 3) the new owners are stable and experienced in rental management. Mr. Paul Brewer, President of LaNel Financial Group, Inc., was recognized. He reiterated their proposal to retain ten units in exchange for readjustment to the property's market value. He reviewed planned improvements to the property including patio maintenance, caulking of siding, exterior staining/painting, landscaping, insulation to the pipes in the underground garage to reduce heat loss, wallpaper border and lighting in hallway, carpet replacement, and a new identification sign. He presented a chart showing the net cash flow with a reduction of taxes to 5 million and also based on 5.5 million. Mr. Greg Bronk of LaNel addressed the EDA. The current taxes are $268,000 based on a $6,267,000 value. If the value is reduced to $5,000,000, the taxes would be reduced to $203,207 or $65,000 reduction. The cost of the ten low income units would average $27,600 annually. Therefore, the net reduction of taxes would be $37,800. He next reviewed taxes based on a $5,500,000 value. The taxes would be $223,000 or a $45,000 reduction. After the ten unit subsidy, the net reduction of taxes would be $17,500. He stated the additional cash flow created by reduced taxes will be used to partially fund the-fore- mentioned improvements. Commissioner Otten questioned whether there is any legal precedent. He remarked of the circumstances where a private contract is being altered to provide a trade-off between taxes and low-income housing. New Hope EDA April 27, 1992 Page 3 Mr. Sondrall replied that he does not believe there is a legal precedent. The EDA is considering re-negotiating the assessment agreement. He stated it will not affect other agreements currently in effect. Mr. Donahue stated he has learned of assessment agreement modifications made by other cities; namely St. Anthony and Bloomington. However, he was not aware of any specific instances where the changes were made for a direct housing subsidy. Mr. Sondrall stated there is a legitimate public purpose if the EDA desires to amend the agreement. The EDA must protect the City in meeting the financial obligation of the bonds as well as to ensure quality housing for low to moderate income persons. Commissioner Williamson questionedwhether there would be any surplus if the market value was lowered. Mr. Donahue stated the surplus will be less than if the agreement is not amended. Certain provisions could be made in the agreement to act as safety nets. Commissioner Enck commented that he does not believe New Hope has the prerogative to use the bonds as requested. The amendment would have an adverse affect on all New Hope tax payers, school district, and the county. He noted LaNel purchased the property as a distressed sale buying a 5.5 to 6.0 million dollar structure for 5 million dollars and the corporate profits could be utilized to subsidize the low to moderate income units. President Erickson pointed out that the other taxing districts will not receive any tax dollars until the bonds are paid off. As soon as a complex starts creating a negative cash flow, maintenance and upkeep decreases which in turn draws a different clientele. The new owners have no legal obligations to retain any low to moderate income units; however, LaNel is willing to compromise in exchange for lower taxes. If the City does not assist, there will be no low to moderate income units in the building. The petitioners are good owners as proven by Anthony James and Broadway Village Apartments operations in the City. Commissioner L'Herault conveyed that he agrees with Commissioner Enck in that the owners were aware of the assessment agreement when they made the purchase. He expressed empathy that tenants may be evicted since they cannot afford the fUll rent. He continued by stating on the other hand LaNel would be saving $65,000 for retaining only ten people in the apartment building. New Hope EDA April 27, 1992 Page 4 President Erickson askedMr. Donahue to explain the actual cost to the City. Mr. Donahue stated the City would give up a certain tax flow that goes into the tax increment issue. He stated there is a $532,000 fund balance and anything in excess of the principal and interest goes into the reserve balance which is saved over time. In the year 2003, when the final interest and principal payments are made, the County divides the money by the taxing jurisdictions. He projected that the current assessment agreement would bear the City $250,000. He stated if the proposal is accepted and the value is set around $5 million, the City's share would be lowered to $100,000. President Erickson suggested tabling the item until the County could establish the market value and the City Attorney could prepare a draft agreement. Commissioner Williamson questioned whether the EDA could determine the market value rather than the County. Mr. Donahue stated if the value does not appear to be a safe enough amount, an escalator could be built into the contract in order to minimize the City's risk. Commissioner Otten stated he is pleased that LaNel has purchased the property but feels the EDA should not be making amendments to the assessment agreement at the taxpayers' expense. Commissioner Williamson reported on the difficulty 'she experienced reaching her decision on the matter. She commended LaNel for wanting to negotiate a possible solution to the housing problem. She encouraged them to solve the problem and maintain the 10-30 units on their own. She pointed out that as an elected official the situation has to be viewed as to how it impacts the city as a whole, and she does not feel she can support it. Commissioner Otten stated he wants to see the new owners make a success of the operation. He noted his concern with the compromise being based on the low to moderate income housing issue. He remarked that the current assessment agreement does not appear to jeopardize the financial standing of the new owners or prevent them from running a successful operation. NOTION Motion was made by Commissioner Enck, seconded by Item 6 Commissioner L'Herault, to make no amendments to the assessment agreement for New Hope Terrace Apartments. New Hope EDA April 27, 1992 Page 5 Voting in favor: Williamson, L'Herault, Otten, Enck; Voting Against: Erickson. Motion carried. ADJOURNMENT Motion was made by Commissioner L'Herault, seconded by Commissioner Otten, to adjourn the EDA meeting as there was no further business to come before the Council. All present voted in favor. The New Hope EDA adjourned at 11:20 p.m. Respectfully submitted, o Valerie Leone City Clerk New Hope EDA April 27, 1992 Page 6 President Erickson conveyed that he personally would agree to additional shrubs in substitution of bomanite. Commissioner Enck pointed out that additional shrubs will require sacrificing vehicle parking space. He stressed that the whole scheme .was to make it an attractive facility and vast parking area was allowed in trade for some amenities. He stated he would agree to the blacktop versus the bomanite if Autohaus will commit to a definite time frame. He suggested extending the bomanite requirement no later than 6 months after expiration of Color Lab's lease. Staff was directed to meet with Autohaus to discuss the parking lot surface and to discuss the likelihood of completion of the rear property by October 1994 deadline. MOTION Motion was made by Commissioner Otten, seconded by Commissioner L'Herault, to table until June 8, 1992, the request by Autohaus for an extensiOn on their development contract improvements. All present voted in favor. Motion carried. Mayor Erickson announced that Item 5, Consideration of Amendment to Agreement Between City of New Hope and New Hope Terrace, has been removed from the agenda for future consideration. Mr. Donahue commented that this item is unrelated to the recent request by New Hope Terrace to amend the assessment agreement. ADJOURNMENT Motion was made by Commissioner L'Herault, seconded by Commissioner Otten, to adjourn the EDA meeting as there was no further business to come before the Council. All present voted in favor. The New Hope EDA adjourned at 9:15 p.m. Respectfully submitted, Valerie Leone City Clerk New Hope EDA May 26, 1992 Page 4 Council approve the matter. It was determined that the winners' names should be published in the City Newsletter that is delivered to residents. MOTION Motion was made by Councilmember Enck, seconded by Item 6.4 Councilmember L'Herault to publicize the recycling winners names in the City Newsletter. Ail present voted in favor. Motion carried. COMPUTER Mayor Erickson introduced for discussion Item 6.10, EQUIPMENT Authorization to Purchase Computer Equipment to Connect Item 6.10 City Hall to Logis Wide Area Network and to Implement Local Area Network Within City Hall - Estimated Cost $28,000. Councilmember Otten inquired as to how this matter impacts the budget and what is expected in the next year or two as far as computer costs are concerned. City Manager Donahue replied that City Hall computers would be hooked into a network. Staff is recommending that the basics be established now so that in the future additions can be made. This recommendation also will buy some of the equipment that is needed. It will not replace all of the older PC's but that will not be a major expense in the future as prices are coming down on computers each year. LOGIS will also maintain the system so we don't have to have on-board people to maintain the system, run the system or answer questions regarding the system. MOTION Motion was made by Councilmember Otten, seconded by Item 6.10 Councilmember Enck, to authorize purchase of computer equipment to connect City Hall to Logis Wide Area Network and to implement Local Area Network within City Hall. Ail present voted in favor. Motion carried. WEED C~TING Mayor Erickson called for discussion Item 6.11, Acceptance Item 6.11 of bid from Wrobleski's Lawn Service for Weed Cutting on Private and Public Lands and Authorization to Purchase Service on an As Needed Basis. Councilmember Otten asked if contracting on the basis of jobs as opposed to performing it on an hourly basis has been reviewed and whether that be a more viable way to handle this. Mr. Donahue stated that Dick Desplinter recommended that this be done on bid with the stipulation that no more than two hours be spent on any one property. This fee is assessed back to the property owner so is not a cost item for the City. MOTION Motion by Councilmember Otten, seconded by Councilmember Item 6.11 Enck to accept bid from Wrobleski's Lawn Service for Weed Cutting on Private and Public Lands and Authorization to Purchase Service on an As Needed Basis. Ail voted in favor. Motion carried. The Council discussed the New Hope Terrace Apartment complex and their informal request for anamendment to the agreement with the City. It was noted that since the project is now built, certain parts of the agreement can be amended and the construction language removed. The Council directed the City Manager to inform New Hope New Hope City Council June 22, 1992 Page 9 Terrace Apartments to present their proposal at the July 27, 1992, Council Meeting. Announcements Mr. Donahue reminded the Council of the Fire Consolidation meeting on Tuesday, June 23. Deputy City Clerk Motion was made by Councilmember Enck, seconded by Appointment Councilmember L'Herault, to appoint Jayne Ferr~ as Deputy City Clerk on a temporar~ basis in order to execute Paddock Laboratories bond documents. Ail present voted in favor. Motion carried. ADJO~I~NMENT Motion was made by Councilmember Otten, seconded by Councilmember Williamson, to adjourn the meeting as there was no further business to come before the Council. Ail present voted in favor. The New Hope City Council adjourned at 8=50 p.m. Respectfully submitted, Valerie Leone City Clerk New Hope City Council June 22, 1992 Page 10 ~~~i REQUEST FOR ACTION Originating Department Approved for Agenda Agenda Section City Manager EDA ,"~ 2-22-93 By: Management Assistant By: (~ / 6 f RESOLUTION CALLING FOR A CLOSED MEETING OF THE NEW HOPE ECONOMIC DEVELOPMENT AUTHORITY, ,~UTHORIZED 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. r ! · Review: Admlmstra~on: Finance: RFA-O01 ~ FEB-- 4--9~ THU 14 : 12 CORR I CK ~ $OH~RALL P . 04 ) RESOLUTION NO. 93- RESOLUTION CALLING FOR A CLOSED MEETING OF THE NEW HOPE ECONOMIO DEVELOPMENT AUTHORITY AUTHORIZED BY MINN. STAT. §471.705 TO DISCUSS LITIGATION/SETTLEMENT STRATEGY ON FOREMOST PROPERTY LOCATED AT 7528 42ND AVENUE NORTH ~d_F~, Ninn. stat. §471.705, Subd. l(d) authorizes and permits the New Hope Economic Development Authority to hold m closed meeting to discuss City issues and information protected by the attorney-client privilege, and WHEREAS, the City of New Hope has commenced or has been made a party to a lawsutt or been threatened with litigation whtch has presently activated its right under the referenced statute to hold a closed meettng, and WHEREAS, specifically the City has been threatened with litigation alleging the City nealtgently failed to exercise its poltce powers to protect the Foremost property from soil 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 W R_.~, a closed meeting of the New Hope E~onomto Development Authority is necessary to consider the acceptance or rejection of a settlement offer/proposal and to consider various legal strategies for the continued prosecution or defense of said action. NOW, THEREFORE, SE IT RESOLVED by the Economic Development Authority of the City of New Hope as follows: 1. That a closed meeting of the NeW MOpe Economic Development Authority sh&11 be held on February ZZ, 1993 immediately following the adjournment of the regular 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 satd day, at the New HOpe City Council Chambers. 2. That the purpose of the meeting shall be the discussion of settlement alternatives and prosecution/defense strategies in connection with the above described threatened litigation. That satd meettng shall not be open to the public. 4. That the New Hope City Clerk is hereby directed to tape record the closed meeting and preserve the tape recording for & ~eriod of two years from the date of the meeting. 5. That the New Hope City Clerk shal~ prepare a written roll of the membere and all other persona present at the closed meeting and make seid roll available for public inspection upon adjournment of the closed meeting. Adopted by the New Hope Economi'c Development Authority this . day of February, 19~3. Edw, J, Erickson, President Attest: Daniel J, Donahue, Executive Director REQUEST FOR ACTION Originating Department Approved for Agenda Agenda Section City Manager EDA Kirk McDonald ~ 2-22-93 Item No. By: Management Assistant By:Y/ Closed Mtg. Material / DISCUSSION REGARDING FOREMOST, INC. PROPERTY, LOCATED AT 7528 42ND AVENUE NORTH Staff desires to discuss the Foremost, Inc. property with the EDA. Previous material on this issue is enclosed for your information. MOTION BY SECOND BY TO: Review: Administration: Finance: RFA-O01 ~ FE~-- 4--95 THU 1 ~ : 1 1 CORR I CK ~ SOH~RALL ~. 02 COR CK & ~ ~;A 8525 ~b~k February 4, 1993 Mr. Dante1 d. Donahuo City Manager City of Now Ho~o 4401 Xy]on Avenue Nort~ New Hope, MN 55428 RE: Acquisition of Foremost Pro~erty/7528 42nd Avenue North Our File No: 99.11090 Dear Dan: In fo]Iow u~ to ou~ moating with Alien Fredonda]l and his attorney, Grant Merrttt, regarding tho Oos$tb~e $cqutattton of the Foremost pro~ert~ on February 3rd, 1993~ please find enclosed a Resolution Calling fo~ a C3osed Moo~in9 allowing us to discuss this property in afl executive session. On several occasions I have been informed by sovera3 attorneys ~ur~orting to represent Mr. Fredenda3~, including Mr. Merritt, that a lawsuit may bo co~enced against the Cit~ for its negligent from actual contamination and a "stigma" of ¢ont~ination resulting from the uso of t~e a~acent E]ectro~tc ~ndustries ~ro~ertv by its ~urront owners. As hold an executive ~oooton to discuss possible strategy to ward off this kind of litigation which strategy would i~olude the possible acquisition of the aro~erty. [ am also enclosing the following documents in background to the issue. Zt appears to me we are not covering any new ground from wha: we have discussed previously~ The only Gh~ngo that I see a posstblo wtllingneos of Mr. Fredondall to reduce tho purchase price. The documonto are as follows; 1. A November 25t~, 1992 ]attar from the MPCA. 2. An Aprtl 1~ lg92 memo to the Electronic Industries ftle. 3. A March 2nd, 19g~ letter from daffy Gt~l~gan regarding the creation of a hazardous substance subdtstrict. FEB-- 4--95 THU I 4 : 12 coRR I CK ~ $ONDRALL P . 0~ Mr. Oaniel J. Donahue February 4, 1993 Page 2 ¢, My February 6th, 1992 and December 3rd, 1991 letters regarding the property. 5. A newspaper article reaard~ng the acquisition of polluted properties. 6. A summary of monetary benefits tn connection with relocation expenses under eminent doma{n proceedings. The referenced documents basically cover all of the issues we have prev{ous]y d~scussed concern~n9 the ~¢qu~a~tion of this property. Please contact me if you have any questions.. Very tru]y yours, Steven A. Sondrall slt~ Enclosures cc: Kirk McOon&ld Valer~e Leone F E ]~ -- 4 -- 9 ~ T H U I 4 "- I ........ ~__ C 0 R R. I C K ~__ $ 0 N b R A~ L. .,, Minnesota Pollution Control Agency Celabr~tin~ our ~th anniv~rtaty ina ~o ~0~ annlvef~a~ ot ~4 Clean W&tl~r'A¢ RECEIVED ~ril 8, X99~. .~ca~ ~ ~ 29, 29~2, for a 'hQ acCL~m ~e~c~ ~e. ~ds (~Co) identified ~ leal ~ gr~d ~Ce= a= ~ge 2 C~ieii~ae~ ~1~ cooe~de~ iaeu~ne & da~e~na~i~ in acco~an~e t~e ~ ~ ~Ieg~Ci~G ~ Oc~e~ 27,. 1~2,- CO C~a GQ ~lea~e be advised c~a~ C~ie dece~ci~ applie~ co cae pro~mr~y release c~=eacened release Qr o~her c~i~&~ &~ C~ ti2e. In , ~y ~.Gn ~er an~ lay of c~e i~a~e o~ (~). Z~ ycu ~ ~n~ ~es~Lo~ ~ o~ ~ie letter, 91ease : QOa~a~~X~ &~ (eX~)~e COnCen~l i~Evo' HEathEr' ECEIAED ~EB-- 4--95 THU 14 : I MEMO TO: ELECTRONIC INDUSTRIES FILE NO. 99.5300~ RE: STATUS OF REMEDIATION AT BI SITE FROM: SAS DATE: 04/0~/92 ., As a result of threatened litigation by Foremost against the City of New Hope, I contacted Scot~ 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 efforts at Electronic Industries site_- recommended allowable limits or RAL are 30 Parts per billion. This is the drinking water standard. Currently at the El site the contamination is 3300 parts per billion at the point 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 parts per billion, at City monitoring well no. 1 it's 47 pa=ts per billion, at City monitoring well no. 4 i~s ~00 parts per billion, and at monitoring well no. 8 which is upgradien= of the contamination site, there is no contamination. I also asked Sco~t about G~an~ Meri~ concern that VO~s which have been allowed t~ escape in ~he air could be causing a health problem. Sco~t ~nformed me that the level of VOC's escapin~ in the air through the ventilation process meets air quality control standards of the MPCA. As a result, no health hazard currently exists. The MPCA is also ~ushing for a vapor extraction system which will expedite the remediation process. Simply, it is a process by which air is pumped through ~he soil providing for extraction of the vet's from the soil. VOC stands for volatile organic compound. Contamination at Foremost site. I also spoke with Scott about the ~i~wEn%i~onmental Report.' 'He referred me to section 3.4 of the report dealing with water chemistry. The ~AL for 1.2 DCE is ?0 micrograms per liter. Therefore, the 120 micrograms per liter found at the Foremos~ site is over the limit. Also, the ~AL for vinyl chloride is .1 microgram per liter. Therefore, the 8.5 micrograms per liter at the site is also over the RAL. The trichloroethene is below the ~AL which is 30. The 2.1 reading is, in fac~, is well below tha~ limit. Therefore onl~ vinyl chloride and dichloroether~are over the limits a= the Foremost sire. FEB-- 4--95 TWU 1 ~ ~ 1 § CO~ I OK ~ $OND~ALL ~- 09 Scot= summarized this information by saying that the contamination a= ~he Foremos~ site is not serious and that the MPCA is not very excited about that contamination. Basically, Scott felt ~hat the no ac=ion letter that could be pursued through the property transfer section of ~he MPCA would be ~he 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'~ number is 297-1459. Also, Scott disagreed with the conclusion reached by Delta that the contamination a~ the Foremos~ well is due to the RI property. He finds it highly unlikely that said contamination could move upgradlent as suggested by Delta. Also, he informs me that he has relayed that informa=ion SI. Basically, he thinks the situation at the Foremost Electronic Industries site is not =Hat serious and ~ha~ the problem that he sees is banker paranoia. Mr. Steven $ondrall C°rrick & $ondrall EcllnbLu'gh Executive Office Plaza Suite 203 85Z5 Eclinb*'ook Crossing Brooklyn l'ark, ~nne~ta 55~3 Ro~ Haz~dous Subst~ce Sub~s~ict Dear ~eLeve: For purpo~s of having sometltlng for tonighrs City Coum'il work session, enclosed are brief :responses to yo~ February 19th letter o, creating a haz~dous subst~ce sub~~ ~ ~ 4~d Avenue TIF Disaict. I wgl prepare a more defiled respo~e ~or ~e Ci~ ~d you later t~ week. I. QU.~icagon of.~opetW as H~dOg~.Su~.~~iairict. The properly appears to ~a~y for ind~lon hi a hazardous s,bslanc~ subcU~irict. A "development response aciion pl~" must be approved by the MI'CA [.,l.ior to certiricution of the su~lct by ~e He~mep~ County Auclitc)r. lifts plan is tt proposal for r~mov~ a~ons ~d remediatlon ac~ons. Though tho statute is not particularly dear on ~ tssue~ it appe~s ~mt the subdlsttict can be crei~ted belore MI'CA approval at g~a res~ pl~ ff it is respomibly expected II,at tho pj~t w~I be approved by g~s ~C~ ~rom o~ conversations I undorstm~d MI"CA has be~t lnvolvad with the de.t-up pl~s {or ~m Electroidc h~dusiries site so tlu..re may already bo SLtCh a plat ~ p~ce. 2. ~.~~f~g~al T~. C~p~. Mhmesota Stattttes, ~ecO~)tt 469.174, subdivision 7(b)~ provides ~xat upon certification to th~ Cou,ty Auditor that fl~e EDA ha~ ~l~t~red htto a r~divelopment a~reement wilh respect to t~-~ remov~ or remediation actions on ~e stt~ or Om EDA otha~isa provides fund~ to fh~ance I:' E B -- 4 -- 9 ~ T I--I U i 4 I~,') 92 ,q2 t8:.15 FAX Page -2- Mr. Slew: .qo,tdrall March 2, 1992 tile developmu~t response plan, the orig~aJ tax capadty of ~l~e property i~ the subdistrict will be reduced to its then current tax capacity less the esUmat~d costs of the removal or remed.latton act/ohs specified i~ the development reSl,~mse plan; provided Ihat it cart not be less than zero. You Should nolo lltat il i.~ cuz'tm~! tax capacity of the parcels t2xat is used, r~ot tl~e present origin~ tax cal~acity of the t~arcels for puxpo~s of tlxe T/.F District. 3. Limilat/on on~ U's~ of/.ncr~me_tx_{_. 'I'1'~ aclcli, tio~xaJ resulting from the reduction of the orig~al tax capacity may o~rly bo. used to pay or reimburse costs of (i) the removal or remediation acUons~ (ii) testing, .~ii compaclh~x or oilier costs m~d (ii/) related admirdstraUve at~d legal c~sts. subdistrict crux continu~ for th~ lessor ot (i) a period for 25 yea.rs from the date of re, ceip~: of the first i~xcrement that was greaIer tlt~ the ln¢'reme~I recoived from the parcel prior to certification ol~ the ~ubdlstxtct or (ii) t.he l~eriod l~ecessary t'~,r tllo EDA to recover tho. costs of the removal or re. mediation acU[on~ pursua~xt lo ll~: respo~xse plan. 4. Sl.._.o.~e~ata. To create the subdistrict It will be necessmy to prepare a~x amendment to the ~ Plan and have the City hold a public he,'ui.ng thereon after 30 days notice to th~ Cou.nty and Scl~ool Diab'ict mid 10 days pt~blished not/ce. The City Council told I/DA will need to ma.ke certain tind. tngs reh~ting to the neec[ for creallon of the ~ubdlstrict and that the proposed developmev. I wi. Il not occur without it~ creation. Th/~ amendment cas~ be in¢orporaled with the outer am(:ltdn~ot~ts whld~ tim I/DA is pre~ntly considering to the Tilt Plan. Should you ne~d axtythhlg furtl~er for tordght's meeti.~g or have any questions, plea.,',~ give me a call. Yot~r$ rebr. uary 6, 1992 ct[y of NeN Hope 4401 Xylon Avenue Nort;h Ne~ HoDe~ ~t4 55428 ~r File No. 99.~I090 letter .111 ane~e? &he following ques[Jone posed by your memo: ~hat is Ihs Ctty'~ oblig~tl~ 2. Can the Ct[y require tha~ relocatlun coet. e be ~ofved affected by the man~ter in which we acquire the ~roperty, i.e. by conde~a[ton or direct pu(chase? tied. troy, lc tn,Juet~ icc, ei~.h,.,t ~irL~ctly 5, If we buy these r',r oper r, i~o~ t ed~ve Ic;p~nl.., w i 't I ~ r.e ~;,,:.L t. lng FE~-- 4--9~ THU 14 : 50 CORR I CK ~ ~ON~RALL P . 0~ Nr. Kirk NcDon&td .. February O, 1992 Page 2 ~u~.~P~i. What te the City's obttgatton for relocation costa suffered by Foremost and Ardel tf their respective properties are taken by condemnation? ~L~J3~. j117.52 requires ~ha~ the condemning authority shall provide ~eststance, services, payments end benefi%s provided under displaced bus~neesee acquisition. The Ac% provides p~oper[y owne~*s a. Pay~n[ b. s $20,000 paymen~ in lieu ~ actual relooabJon expenses. Actual relocation expense6 cen exceed $20,000 if %hey are documented properly. They tnclude such ~htngs aa branepor[atton coe~e, packtng and unpacking, d~sconnec~ton and reinstating costs, coe~s fo~ reconnec[1on ~o utilities and ~dJftca~on~ [o personal proper~y or replAcemen~ 8t~e for reconnec~on ~o utilities, storage costa, relocation insurance, cosbe for new required permits or licenses, requJ~ed and necessary professional eerv~cee, releb[erJng o~ signs and replace~n~ bangJbte personal proper~y caused by bhe ~ve. Thte te no~ an exhaustive 11e~. A d~eplaced bus,nee, may also be en~[led ~o a $10,000 reee[ablteh~n[ fee in addt[lon ~o ec~ual ~vtng expenses. A rees[abllsh~n[ expense tea cos~ [o ~dtfy [~e replace~n~ location [o accepb ~he displaced business. Thte would ~nclude such LhJnga as builatng repairs, construction or tns%ellab~on of new replace~nb of carpeting or new painting, profesalonai servtces tn connection with leasing or buy~n~ replace~n[ site. Again, ~hta ltsb t~ not exhaustive. expensive, It would be impossible fo~ me ~o accurately es~tma[e the relocation expenses ~nvo3ved. I~ may be necessary [o hire a consu3~ant ~ha[ accurate es%ima[e could be Orovtded, However, ~t would not be unreasonable [o be3~eve that r'e3oca[ion expenses for Foremost and Ardel combined cou3d be costs wouid be required for the Electron'ic Industries site since ~he property ~a vacant. FE~-- 4--9~ THU 1 4 : 5 ~ cORR I CK ~ SON~RALL Hr. Ktrk NcDonald Page 3 ~_e~A~_Q~..~. Can the City require that relocation costs be waived as a condition of a '~riendl¥' condemn&tics? The answer ~o this question i~ no, I~,I~. §117,521(3) does not allow a waiver of relocation assistance, A= a result, watver ob~atned ~hrough a "friendly" condemnation would not be en¢orceab]e. The City would bays to rely on ~he good faith of the property owner %o forego hts relocation costa because a waiver same tn no~ leg&lly btndtng due %o the ~a%u~e referenced heretn. and ground water contmtnatton cle~ up costa and te our ex~eure affect~ by the ~ner tn which ~ acquire the pro. cry, i.e. by c~~a~lon or Strut purchase? If the City acquires ~he property through condemnation ~tl~B.03(6) will o~pletelx relieve the City for any cle~ up costs due ~o act3 o~ ground wa~e~ contamtna~ton on ~he el~e. However, ~hta exertion t~ onlx applicable ~f ~he City acquires ~he proper~y ~hrough ~n ~nen= d~ain If ~he pr~er~y te acquired by dtreo= purchase wf~hou~ ~he uae an amines= d~a~n acSton we oould be exposed ~o clean up costa ~he p~t~ry reaponaiOle p~r~y could no~ p~y or could no~ be found, In this case, ~he rea~nstble p&r~y E1ectron~c Industries currently P~dta~Jng the problem, We would only be ree~neible for ~leen up coats if Electronic Industries beca~ tn~olven~, Under ~~, 111~B,04(4), our liaOtljty for clean up would ~ limited to t400,000.00. Aea result, it wo~ld ~ insure svotd~nce of ~11 liability for contamination clean up However, if we did no~ use conde~a~lon ~o acquire ~he proper~y we could avoid our oOltga~l~ for ~eloca~lon assistance since ~.%. 1117.~2 would no~ be applicable. Thte does aasu~ we would ~l~~_~. Should ~e ~ Involved in Forems~'s again~b Elec~r~ia Industries, either directly or indirectly? ThJi ~1 a ~ollcy question more ~han a legal question. Ny eim~le answer ia no, ~ find 1~1e tf any ~u~llc purpoce served by involving oureelve~ tn the Foremos~ laweul~ ageing% Electronic Zndus~riee. ~n my 'opinion i~ projec~ an improper' publtc a~earence. The Ci[y ~hould have no ~[ake ~n ~he outcome of lewsut[ by [wu prtva~e OPo~er[y owners. Kirk McDonald February ~, I ~B~!Ltg~._A. If we buy these properties For de~31tt~on and such as the Pete's Pub action? Our appraiser, Brad Bjorklut~d, advises that no precedent for high 'land values will be set in this transaction. As a r'esult, the purchase of this property fo~ demolition Of existing buildings for fur, ute redevelopment.will not provide damag..~ng evtdence of h~gh land values that could be ~ntroduced by property owners ~n other condemnation actions such as the Pete's Pub case. However, Z caution ~he Council that pre~ud~clal and inadmissible evidence d~e fln~ tis way Into court p~oceedi~ga by error and m~stake. There te no a~eolute guarantee that this transaction w~11 not reault ~n ht~he~ thmn normal la~d value~ pa%d by the O~t~ ~% ~.~.~J.~. Initiating condemnation to acquire title ts ~he best way to insulate ourselves from liability for ~ont~inat~on clean up costs. However, 1~ does expose the City for potentially ~ostly relocation expenses, responsibility for clean up, purchasing the property directly from the owners without the use o~ condemnation will relieve ua of clean up costa tf Electronic Industries bec~e solvent. Aleo, we will still be exposed ~o clean ue coats under any ~ederal regulations. Please oontact ~ If you have arty further questions. Very truly y~ro, Steven A. Sondr.ll cc: Dante1 J. Oonahue December 3, l!)~)t City of New ltope ~_~ 4401 Xylon Ave~e North RE: Foremost Property Acquisition ~}1~' Our File ~: 99.1t090 l~ Dear Dan: Thee let[er w~11 conf~rm our discussions w~h Fore. s:, regarding the acquisition of their pro.rix located at U~e corner of 42n~ Aven~ North an~ ~e~c Avenue North. occurred on Nov~er 27th~ l~t, 8a~tcally~ we dte~usee~ the followtna: 1. A purchase price not to exceed $S85,000.00 (iht. figure wee arrived a~ baae~ on the following: pay~nt of for yeare 1990 and t991 of ~e4,792.00; pay~nt of unpaid ~pec~al rel~aCton expenaet De 2, Al[er acqutat[ton of the property we wr~uld continue to allow Forel~st [o o~era[e aC Che property wt:l~out paymen~ of re, r~L For a pertod ~o~ to e~ceed ~wen~y-four ~tha. Pore~a~ wou~d pay all operational coe[a as=octa[e~ with their use of Lhe property Including, but no[ 1fatted t.o, r'eal aerate :axes, u:Jlit, y and tns,Jrsnce. Also, Lhay would receive s 90 day I~o~tce pr'ovi,stc>r~ [o vacate the ~roperLy. 3. Upon their vacation of Lt,e Dropert. y, Lhey allowed [o re~ve atl per'sons1 ~ro~,erLy, machinery I: E El -- 4 -- 9 ~ T H U I 4 = 4 ~ C 0 ~ R I C K ~- $ 0 I-.I D I~ I:DI L L P . 0 ~ Hr. Dante1 J, Oonahue December 3, 1991 Page 2 including any item which would be considered a movable fixture. In other words, they would have all salvaee rights to the building given the fa~t that we intend to aemollah %he building for redevelopment. 4. Foremost would agree to execute an agreement providing the EDA with an equal share of the judgment collected on their lawsutt against Electronto Industries after payment of attorney's fees end not to exceed $50,000.00. [n other words, there wtll be the possibility tha: the City would receive a reimbursement in the event that Foremost was very successful their lawsuit against Electronic Industries. Naturally, the acquisition would be effectuated as part of an eminent domain action. The negotiated agreement is relatively comparable to ~he costs we could expect in a contested condemnation action. Aseumtng Foremost could deltver an uncontaminated pro,er:y, our appraisal establishes the property value $475~000.00, A con:amine:ed or impaired property value per our appraisal ia $433,000.00. Actually, ! think Elam:tonic is doing a ~atrly good Job of ~leanup end it would be prudent analyze a negotiated settlement baaed on an uncontaminated property. Therefore, for the purposes of this comparison ! have ~ssumed that a condemnation commission would accept the $475,000.00 value. Further, ! think ~t would no~ be unre&ltet~: to believe tha~ Foremost would be entitled to $3&,000.00 in moving end establtaheent expenses, Ftnally, ! thtnk attorney's fees, appraisal fees and court costs seeooteted with the acquisition of thls property may be in the range of $30,000.00. As a result, th® total cost to the City in a contested condemnation action would be somewhere between $S40,000 to $$50,000. Zf Foremost ~e successful in thetr lawsuJ~ agatha: Electronic Zndustriea, the CJty'e final cos~ based on our negotiated settlement might be aa low as $535,000.00. Of course, this assumes the rtsk that their litigation will be successful. !n speaktng wi%h %he attorney for ~oremost, %hey are very conftden~ abou~ litigation and have no intention of accepting a 'low ball" offer simply to obtain · se~lement. They are basically proceeding on an al1 or nothing basis. Since ! am not privy to the nuances of the lawsu~%, t~ would be inappropriate for me to give an opinion regarding :he probability Of a successful verdict, however !:htnk we can be optimistic about · ~ucceseful outcome in light of the vigor and zealousness that Foremost's attorney has shown with ~ E B -- 4 -- 9 ~, T H U 1 4 : 4 9 C 0 R R I C K 8:, $ 0 N I~ R A k_ L ~ . ~-.3 4 Hr, Dan~el J. Donahue December 3, 199! Page 3 Elec[ronlc Industries will define[ely have their hands full tn defending thta case. 8ealdea, any time you do go tn~o court you have a 50/50 chance and ~hlm ca;e appears as if tt ~$ gotng to Please con~act me if you have any further ques~lon~. Very truly yourm, SteYen A. Sondrall slt3 cc: Kirk NcDona3d, Hanagemen~ Ams[. tluco ways- if w~'se not a, the mturaLion point to 15 pcuccnt, arc avid. The nd~r~ take dscix "~fion~~~~, ~g~m~ ~y w~~. :7.~y~~~ rd ~,~ ...... ~ ~a~:' ~ _ itin~c~.~y~d~a~ ~~~~ ~__ ~~_~ ........ n~ -~., ~ e~ a s~ ~r a ~ ~rk ~ ~ ~ of ~ ~ys. ~al ~ sim~ ~ ~ Ai~aa Golf C~lcr opcmd in ~ ~y mm to ~ ~a~ ~~. "A~m~y m~p~ ~t~~~~ lt~ ' n~ ~. H~C ~ve~ p~s of ~s~ion buy:' sa~ ~rry ~e. manager of the · Gi~ g~mt a~i~ ~r of c~- . m~ ~d~ S~ ~ ~~ ~ ~ ~y pil~ ~r: ~ M~ sim~ to ~ ~. ~ U~cr ~ ~sl~m, agc~i~ such ~ ~ ,~v~ ~, ~~st~(M~)~c~ ~e ~ ml~~6ngj~:' G~. ~~a~ fim~.ht~ ~l~.~'t~~k ~ ~ ~y: ~ ~. '~nd e~ ohcn ~y ~ it ~lp citi~, bat k~s gd m~ ~~ ~c~pifb~:' su~.~t~up~la~,~ polluted land in the sram cleancd up:' ~~km~:'~."~ ~ ~ ~ a~ · ~ ~ ~- ~~llit. ~~ld~ ~~ a bH~ ~ ~t d~l~a~r ~r~ ~ dt~*e~.~idly ~e~ 4--95 THU iU,MM6~Y OF HONETARY BENEFITS Business concerns who move on or after April 2, ]gSg, ~ be eltgtDle for elther: a) Payments to cover the following wtthln certain limitations: 1) Actual reasonable moving and related expenses, Actual direct loss oF personal property liquidated because of the move, 3) Actual reasonaDle expenses tncurred In searching for a repTacement stte, and 4) Reestablishment expenses, b) A ftxed payment, except for payment to a nonprofit organization, the bus$ness, but not ]ess than $1,000.00 nor more than $20,000,00. The dlsp~ace~ ~ustneSs ls e]igl~le for the payment tf the Agency determines that the bu$1ness cannot ~e re]ocated~ ~$thout not part of a con~nercta~ enterprise havlng more than three. ot~er entttte$ ~hlc~ are not betng acqutred by the Agency, and ~hlch a~e unde~ the same oune~shlp and engaged tn the same or similar ~u$$nes$ activities, and the business ts not operated at a displacement dwel]lng so]ely for the purpose of renting such duelling to others. -7-