052891 EDA~ ..... OFFICIAL FILE COPY
Agenda #5
CTTY OF NEw HOPE
EDA AGENDA
EDA Regular Meeting #5
May 28, 1991
City Hall
President Edward J. Erickson
Commissioner W. Peter Enck
Commissioner Gary L'Herault
Commissioner Gerald Otten
Commissioner Marky Williamson
2.
3.
4.
Call to Order
Roll Call
Approval of Minutes of April 8, 1991 and April 22, 1991
Consideration of Proposal to Prepare Planning Document/Market Study
Regarding Development of a Portion of Gethsemane Cemetery Property
Other Business
Adjournment
Approved EDA Minutes
Meeting #3
CITY OF NEW HOPE
4401Xylon Avenue North
Hennepin County, Minnesota 55428
April 8, 1991
CALL TO ORDER
ROLL CALL
APPROVE MINUTES
FEBRUARY 25, 1991
FOREMOST, INC.
Item 4
President Erickson called the meeting of the Economic
Development Authority to order at 8:50 p.m.
Present: Erickson, Otten, Williamson
Absent: L'Herault, Enck
Motion was made by Commissioner Otten, seconded by
Commissioner Williamson to approve the EDA minutes of
February 25, 1991. All present voted in favor.
President Erickson introduced for discussion Item 4,
Consideration of Request by Foremost, Inc., for Economic
Development Grant Program/Economic Recovery Fund
Application.
Mr. Donahue stated Foremost, Inc., 7825 42nd Avenue North,
is interested in relocating and expanding their sheet
metal fabrication business. They have encountered
problems marketing their property due to the groundwater
contamination problems generated by Electronic Industries
and have requested economic development assistance from
the City. Foremost has made three specific requests, one
of which involves an Economic Development Grant
Application through the Economic Recovery Fund.
President Erickson stated the negotiations should be based
upon what the value of the building is on the regular
market with the existing problems. He recommended having
an appraisal conducted indicating the value of the
property if there was no contamination and what it is
worth with the contamination.
Mr. Donahue noted that Foremost, Inc. has filed a suit
against Electronic Industries for loss of property value.
He stated through the state's Economic Grant Program the
City may receive between $250,000 to $500,000 to
administer in the form of a grant or a loan to Foremost
for relocation. He stated the City is not committing to
anything at this time.
President Erickson stated applying for the grant appears
to be the first step and he is in favor of it.
New Hope EDA
Page 1
April 8, 1991
MOTION
ADgOURNMENT
Motion was made by Commissioner Williamson, seconded by
Commissioner Otten, directing staff to proceed with the
grant application. All present voted in favor. Motion
carried.
Motion made by President Erickson, seconded by
Commissioner Williamson 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
8:55 p.m.
Respectful ly ~
Valerie Leone
City Clerk
New Hope EDA
Page 2
April 8, 1991
CITY OF NEW HOPE
4401Xylon Avenue North
Hennepin County, Minnesota 55428
Approved EDA Minutes
Meeting #4
April 22, 1991
CALL TO ORDER
ROLL CALL
APPROVE MINUTES
FOREMOST, INC.
Item 4
President Pro tem Enck called the meeting ofthe Economic
Development Authority to order at 7:55 p.m.
Present: Enck, L'Herault, Otten, Williamson
Absent: Erickson
It was the consensus of the EDA to defer approval of the
April 8, 1991, minutes until the next EDA Meeting.
President Pro tem Enck introduced for discussion Item 4,
Consideration of Request by Foremost, Inc., for City to
Share Cost of Drilling Test Wells to Determine Status of
Contamination on Property (Improvement Project 474).
Mr. Donahue stated the City has been discussing with
Foremost, Inc. a possible economic development project for
properties on 42nd and Quebec. He stated Foremost would
like to request assistance in the cost of drilling test
wells for soil samples to determine if there is
contamination on their property. Mr. Donahue stated this
information is essential before the property could be
acquired and marketed by the City and is one of the items
identified in the Planning Consultant's report that must
be investigated if the City is interested in exploring
redevelopment.
President Pro tem Enck inquired whether the EDA would
recover its expenditures. Mr. Donahue stated the majority
of the tax increment monies would be recovered through two
sources--I) if Foremost is successful on their lawsuit
against Electronic Industries because of loss of value due
to the contamination, and 2) if the City receives the
grant from the State Economic Development Grant Program.
Mr. Donahue informed the EDA of the risks involved with
the project. He stated the City would have a financial
risk of $15,000 (2/3 of $22,000) for the testing work.
Mr. Donahue stated the application for the grant will be
shared equally between Foremost and the City.
Next, Mr. Donahue discussed the appraisal of the Foremost
New Hope EDA
Page I
April 22, 1991
property and recommended that the EDA not share in the
expense for the appraisal of the Foremost property.
Commissioner Otten inquired of the cost for the appraisal.
Mr. Steve Sondrall, City Attorney, stated the appraisal
will be approximately $3,000.
Mr. William Skolnick, Attorney representing Mr. Allen
Fredendall and Foremost, Inc., was recognized. Mr.
Skolnick introduced Mr. Allen Fredendall, owner of
Foremost, Inc. at 7825 42nd Avenue North. He explained
that Foremost employs between 35-40 people and desires to
relocate and expand their sheet metal fabrication business
within the City of New Hope.
Mr. Skolnick clarified that the appraisal fee is $3,000
for the initial part of the appraisal and the total cost
estimate is $7,000. He commented that. after negotiations
with the City regarding the appraisal, it was decided that
Foremost would bear the entire cost for the appraisal.
Mr. Skolnick stated the estimate obtained by Delta
Environmental Consultants for the soil testing is $22,314.
He requested that the City pay 2/3 of the cost and
reported that Foremost would agree to reimburse the City
for this assistance out of the proceeds of the lawsuit
and/or any grant funds that would be forthcoming. He also
indicated that Foremost will share half the cost of the
grant application.
He explained that financial institutions are not willing
to refinance the property because of possible soil
contamination.
Mr. Skolnick pointed out that Foremost desires to relocate
within the City and the City is interested in redeveloping
the property on 42nd and Quebec. In order to accomplish
this, certain questions must be addressed: a) whether
there is contamination on the property, b) if there is
contamination, to what extent; and c) the associated costs
for clean-up.
Mr. Skolnick stated he had just recently obtained
information regarding the insurance policy of Electronic
Industries. President Pro tem Enck requested a copy of
the policies. Mr. Skolnick stated he would furnish copies
to Mr. Sondrall if it does not violate confidentiality of
Electronic Industries.
Commissioner Otten inquired of the associated costs for
the appraisal. Mr. Skolnick stated Foremost has elected
to retain Peter Patchin as an appraiser due to his
New Hope EDA
Page 2
April 22, 1991
MOTION
experience in valuation of real property when located next
to or on a contamination problem. He explained that the
appraisal will definitely cost $3,000 and could be as high
as $7,000 depending on when a settlement is reached and if
a final report is necessary.
Commission Otten asked whether the proposed expansion will
affect the number of employees at Foremost. Mr.
Fredendall stated he is optimistic that when the economy
picks up, so will his business. He explained that their
present building is 24,700 sq. feet in size and is not
adequate during peak business. He stated they previously
leased space from 5101Hillsboro for 11 months.
Commissioner Otten questioned when and if Foremost will
decide to relocate. Mr. Fredendall explained that he
decided long ago to relocate but has been unable to do so
since lending institutions will not make loans because of
soil problems and potentially large clean-up costs.
The EDA and Mr. Skolnick discussed the pending lawsuit
against Electronic Industries. Mr. Skolnick stated in
addition to seeking damages for diminution of property,
Foremost will be seeking reimbursement for costs of soil
testing conducted west of Electronic Industries.
He stated the Minnesota Pollution Control Agency will
require Electronic Industries to clean up the property
regardless of whether Foremost wins its lawsuit or not.
In summary, Mr. Skolnick stated the City and Foremost have
a common goal--the City would like to redevelop the area
and Foremost would like to relocate within New Hope.
Mr. Sondrall inquired whether Peter Patchin has given any
indication as to an approximate amount of diminution of
value in the Foremost property. Mr. Skolnickreplied that
he has not but in his own mind he feels it will be 30 to
40 percent.
Mr. Skolnick stated Foremost is proceeding with the grant
application and relocation and is not relying on proceeds
from the lawsuit to get into a new site. Mr. Fredendall
stated his only personal security is the business.
Motion was made by' Commissioner L'Herault, seconded by
Commissioner Otten, to provide financial assistance of 2/3
of the costs not to exceed $15,000 for drilling test wells
{utilizing tax increment monies) and to pay 1/2 the cost
for the grant application. All present voted in favor.
Motion carried.
New Hope EDA
Page 3
April 22, 1991
AD~OURNHENT
Motion 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
8:25 p.m.
Respectfully submitted,
Valerie Leone
City Clerk
New Hope EDA
Page 4
April 22, 1991
EDA
REQUF_ T FOR ACTION
Orig~attng Department Approved ~rAgenda AgendaSe~ion
City Manager 5-28-91 EDA
Item No.
By: Kirk McDonald 4
Management Assistant By:
/
CONSIDERATION OF PROPOSAL TO PREPARE PLANNING DOCUMENT/MARKET STUDY
REGARDING DEVELOPMENT OF A PORTION OF GETHSEMANE CEMETERY PROPERTY
Officials representing ~ethsemane uemetery have made application ~or
a conditional use permit to allow a temporary office structure on the
site for the purpose of the sale of spaces in a proposed mausoleum to
be built at the cemetery. The CUP request is in the Planning
Commission process at this time. In preliminary discussions with
cemetery officials regarding long-range planning for the entire site,
officials indicated to staff that they may give consideration to
selling off a portion of the property on the westerly portion of the
site for development. Staff developed several concept plans for
several different sizes of developments and presented them to cemetery
officials for review.
With Gethsemane Cemetery representing by far the largest parcel of
undeveloped land in the City, staff would like the opportunity to have
a professional planning document and market study prepared to identify
the market conditions that may influence the development of a portion
of Gethsemane Cemetery. Such a study would identify development cost
estimates for single family, townhome and multiple-family market
opportunities. The development of a portion of this property would
not only coincide with the City's long-range goals of providing a
greater diversity in housing, but would also maximize property values
by putting vacant property to use.
The City's Planning Consultant has prepared the attached outline and
cost estimate to prepare a study on the development of a portion of
Gethsemane Cemetery. The estimated cost for the study is $2,250 and
would be funded by the HRA Redevelopment fund.
Staff requests to discuss this proposal with the EDA.
MORON BY SECOND BY ~
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MEMORANDUM
TO:
FROM:
DATB:
REt
Kirk McDonald
Alan Brixius
17 May 1991
New Hope - Gethsemane Cemetery Study
131.00 - 91.04
Based on our discussion on 15 May, we have formulated a work
program to identify the market conditions ~hat may influence the
development of a portion of Gethsemane Cemetery.
WORK PROGRAM
Development Costs. Based on the concepts
Sandstad, development costs will be calculated
development expenses.
O
Raw Land Value
Street improvement Costs
Utility Improvements
Administration/Inspection
prepared by Doug
to show estimated
Single Family Markets. The study
family housing market opportunities.
O
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will identify the single
Check MLS listing for price ranges and median for New Hope
homes.
Check MLS listing for home turnover rates.
Interview local real estate sales people regarding their
impressions of the New Hope housing market.
Review the Pulfka subdivision to outline a model for
comparing new construction sales and development.
4601 Excelsior Blvd..Suite 410.Minneapolis, MN 55416.(612) 925-9420. Fax 925-2721
MAY-- i -~--9 I F F~ I 1 i ' 09 F~ . 0 ~
Development.
Townhome
housing opportunities.
The study will identify the townhome
o
Interview local real estate sales people
impression of the New Hope townhome market.
Identify and interview townhome developers.
Identify area townhome developments for
regarding their
competitive amenities.
Socio-economic ~valuation
opportunities.
to outline
description of
empty-nester market
Multiple Family Markets. The study
family housing'market Opportunities.
Inventory competitive facilities.
a. Location
b. Number of Units/Amenities
c. Rent Range
d. Vacancy Rates
Interview property managers for
multiple family housing market.
Contact multiple family housing
interest exists in the property.
will identify the multiple
their impression of the
developers to determ£ne if
Conclusions. The study conclusions will
following i~ems:
attempt to define the
Developmen~ cost estimates
development concepts.
for various elements of the
Single Family Market Opportunities.
a. Lot Value
b. Mome Value~
c. Selling Schedule
Townhome Market Opportunities.
a. Home Values
b. Amenity Package
c. Selling Schedule
d, Market Target Groups
Multiple Family Market Opportunities
a. Density
b. Amenity Package
c. Rent Ranges
d. Existing Vacancy Rates
MAY-- 17--91 FR I i i : 10 P . 04
Cost of Project Schedule. Based on the work outline, we would
estimate that the project would cost a~proximately $2,250.00 and
could be completed within three weeks after authorization,
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