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2000-05-09MOUND HRA MEETING - MAY 9~ 2000 HRA MINUTES - REGULAR MEETING - MAY 9, 2000 The Housing and Redevelopment Authority of the City of Mound, I-Iennepin County, Minnesota, met in a regular session on Tuesday, May 9, 2000, at 7:00 p.m., in the Council Chambers at 5341 Maywood Road, in said City. Those present: Chairperson Pat Meisel; HRA Board Members: Andrea Ahrens, Bob Brown, Mark Hanus and Leah Weycker. Also in attendance were City Manager Kandis Hanson, City Clerk Fran Clark, City Attorney John Dean, Mound Visions Coordinator Bruce Chamberlain, James D. Prosser of Ehlers & Associates, Inc., Bill Beard from Mainstreet, Inc., City Engineer John Cameron and Secretary Sue McCulloch and Diana Mestad. Others present: Jorj Ayaz, Kristen & John Beise, Jane Carlsen, Martin Cowder, Ken Custer, Lori Ham, Duane Leisinger, Dorothy Netka, Bill Netka, Peter Meyer, Linda Skorseth, Ani Tasciyan. Consent Agenda: All items listed under this Consent Agenda are considered to be routine by the Housing and Redevelopment Authority. There will be no separate discussion of these items unless a Councilmember or citizen so request, in which event the item will be removed from the Consent Agenda and considered in normal sequence. Chairperson Meisel called the meeting to order at 7:08 p.m. TAX INCREMENT FINANCING. 1.0 APPROVE MINUTES OF APRIL 25, 2000. MOTION by Hanus, seconded by Ahrens, to approve the minutes of April 25, 2000. The vote was unanimously in favor. Motion carried. 5-0. 1.1 DISCUSSION: MAXWELL PROPERTY, VACANT LAND NEXT TO SUPER AMERICA. Bruce Chamberlain stated the Maxwell property is the property adjacent to Super America. He stated there were a couple of reasons why the acquisition was not being pursued. Mr. Maxwell and Mr. Chamberlain have had conversations recently that have been documented in a recent e-mail. Mr. Maxwell is willing to negotiate the price of the property, but he is quite firm on between the $350,000-$400,000 range. The City previously offered $250,000. Mound Visions Coordinator stated Mr. Maxwell would like a closing date and a resolution regarding the cleanup on the site with a possible no association letter attached. The bottom line is that Mr. Maxwell is looking for a higher number the City will pay for this property. Mound Visions Coordinator stated the City was willing to offer $500,000, but that got reduced because of the geotechnical and environmental issues on the property. HRA Board Member Ahrens asked if Mr. Maxwell was asking for additional items. Mound Visions Coordinator stated he is asking for cash at the closing and a few other terms in the agreement that are not substantial. MOUND HRA MINUTES - MAY 9, 2000 I-IRA Board Member Brown asked if $300,000 would be an appropriate number to offer Mr. Maxwell for, the property. Mound Visions Coordinator stated Mr. Maxwell sounded firm that he wanted to start in the range of $350,000. Mound Visions Coordinator stated this property will need to be discussed again in the future and, for the overall development of the downtown property site, this piece of property is important and the City will need to face having to purchase it again at some point if this acquisition does not work out. Mound Visions Coordinator stated the park-and-ride facility for the new redevelopment of downtown would be accessed from this site, so this piece of property does pay an important part in the development process. HRA Board Member Hanus asked if anyone else wanted to purchase this property for any purpose, they too would be faced with the same cost regarding cleanup and soil problems. With that thought in mind, HRA Board Member Hanus is concerned the numbers being presented are not sensible. Mound Visions Coordinator stated there are costs associated with upgraded structural and environmental issues to be dealt with by the property owner. Mound Visions Coordinator mentioned Mr. Maxwell stated this problem, in his eyes, is no different than what Super America faced next door when it was built. HRA Board Member Hanus stated he would assume there were less problems up the hill than what is being dealt with here. Chairperson Meisel was concerned with the possible soil corrections that may be needed, but with information recently received in tonight's packets, the conditions do not seem as traumatic. HRA Board Member Ahrens asked if there is an appraisal on this property. Mound Visions Coordinator stated there is a year-old appraisal on the property at $477,000 assuming normal soil conditions. HRA Board Member Brown stated he discussed this situation with an educated friend in this area regarding property and the problems within the property and he thought it could cost up to $500,000 with the clean-up. The City Attorney explained that the City of Mound was concerned about the property because it needed the environmental clearances before anything could be done further on the property. The City Attorney further stated the real problem with the site was not so much the contamination, but unstable soils. The City Engineer agreed. Mound Visions Coordinator suggested the HRA hire a structural engineer to give them a clear picture of what s/he might see with the studies that have been done to date and give a II ,Il J, & I ,14, B-,~i , B MOUND HRA MINUTES - MAY 9, 2000 opinion of what the tangible liabilities actually are with this acquisition. He was not able to state what this type of service would cost the HRA. The City Attorney further added the amount of corrective soils work with would vary depending on what is built on the site. HRA Board Member Hanus stated it is possible that this site could house nothing more than the farmers market or a parking lot. He asked the City Attorney if this would change the factors. The City Attorney stated this would entail less corrective work but some would still need to the done. Chairperson Meisel asked if it would be possible reimbursement through the Super Fund. James Prosser, Ehlers & Associates, Inc. stated the City needs to find out what the purpose of the acquisition really is for the HRA. He indicated that the City could keep the control of this property even if it does not buy it, because if other possible buyers came in and wanted to develop it, the City still has to approved the development. Chairperson Meisel stated she does not appreciate having to start at $350,000 for this property knowing all the corrections involved. HRA Board Member Hanus agreed. HRA Board Member Ahrens asked if condemnation was used to obtain the property are the soil conditions and contamination considered in determining the price. The City Attorney stated this probably would be taken into account if there is back-up to prove it. HRA Board Member Weycker felt this piece of property is needed for the downtown redevelopment and does not want to see the City lose it. The City Attorney suggested coming back at another meeting with quotes to provide that information and then have the HRA make the decision whether to proceed with more soil analysis, contamination investigation or structural and engineering work. HRA Board Member Hanus mentioned the HRA has already paid $17,000 investigating this property. He does not want to see the HRA lose this property because of the TIF factor. Mound Visions Coordinator stated a challenge to keep in mind is that in order to gain full access based on current roadway plans; the City needs this specific piece of property. MOTION by Brown, seconded by Weycker, to direct staff to obtain structural and cleanup quotes from an engineering firm, as well as a concept plan for this property from the appropriate individuals. The vote was unanimously in favor. Motion carried. 5-0. MOUND HRA MINUTES - MAY 9, 2000 1.2 POST OFFICE RELOCATION UPDATE. James Prosser, Ehlers & Associates, stated he been working with the real estate broker on the post office and is continuing follow the progress of this project through the acquisition stage. At this point, the Phase II stage cannot be paid for by the post office until they have true control of the site. The Phase II is necessary at this point and would be in the range of $4,000-$6,000. The City Attorney asked if this is reimbursable. Mr. Prosser stated he would expect this to be reimbursable, but is not sure and could not guarantee it, but he would try to get that part into the agreement. Mr. Prosser did say it would be TIF reimbursable. MOTION by Weycker, seconded by Ahrens, to complete Phase H of the post office relocation project. The vote was unanimously in favor. Motion carried. 5-0. Mr. Prosser further stated an offer has been made to the owner of the United Properties parcel and we are waiting for a counter. There is still title work and surveying to be done, and once that information is prepared, there will be a determination of whether to file eminent domain. Filing eminent domain does not mean it will truly happen. 1.3 BEARD GROUP UPDATE. Mr. Prosser stated the Beard Group Preliminary Development Agreement expires on May 15, 2000, and the Bear Group would like to have it extended. Mr. Prosser explained the purpose for the extension is to allow time for the developer to gather information sufficiently to determine whether it is financially suitable for them to enter into the Final Development Agreement. Mr. Prosser stated this is clearly a most complicated redevelopment project because of issues regarding land ownership, change of roadway and other public improvements. He further explained most of these issues are nearing resolution. Mr. Prosser stated there would be an additional 55 days to work out more specific information which would allow a firmer estimate of the cost of the project. Mayor Meisel stepped down as Chairperson and HRA Board Member Hanus became Chairperson. Bill Beard and Paul Gambst of Mainstreet, Inc. Mr. Beard stated in simple terms, there should be two things that come out of the project after the Preliminary Development Agreement. The first is a concept plan and the second is a development budget. He stated this has been the most complicated project they have worked on. To date, the concept plan presented back in November could not be built today because of high-pressure sewer lines under parts of the property, along with storm water ponding issues. If there are major changes that need to be made, they may need to do a new plan, but if not they hope to keep moving forward. Acting Chairperson Hanus asked when would the City receive final survey documents and storm water calculations because this is when the 55 day extension would start. The City MOUND HRA MINUTES - MAY 9, 2000 Engineer stated the survey documents are still waiting for title information regarding easements for lift stations and watermalns. The Title Company has had this information since November, but it is really complicated because of the railroad property. He was not sure when this would be received. The City Engineer found out today he was supposed to be working on the storm water calculations. A timeframe for this concern may be two weeks, but he does need to get together with the Minnehaha Creek Watershed District regarding the regional ponding needed in connection with the relocation of County Road 15. Mr. Beard stated they are going to do the same thing here to take whatever information they have received to make assumptions so when the final documentation comes in, this can be adjusted quickly. They want this project to move forward as quickly as possible. MOTION by Brown, seconded by Ahrens, to approve the Extension Agreement prepared by Mainstreet, Inc. The vote was unanimously in favor. Motion carried. 4-0, Chairperson Meisel was not in attendance and did not vote. 1.4 1.5 BUSINESS SUBSIDIES CRITERIA - PUBLIC HEARING MOTION by Meisel, seconded by Hanus, to set the Business Subsidies Criteria public hearing for May 23, 2000. The vote was unanimously in favor. Motion carried. 5-0. BUSINESS SUBSIDY GRANTED TO RAY MAR PROPERTIES - PUBLIC HEARING. MOTION by Meisel, seconded by Ahrens, to set the public hearing for May 23, 2000, to grant to Ray Mar Properties a Business Subsidy from the HRA. The vote was unanimously in favor. Motion carried. 5-0. ADJOURNMENT. MOTION by Brown, seconded by Weycker, to adjourn the meeting at 7:59 p.m. The vote was unanimously in favor. Motion carried. 5-0. Kandis Hanson, City Manager Attest: City Clerk