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2000-06-27HRA MINUTES - REGULAR MEETING - JUNE 27, 2000 The Housing and Redevelopment Authority of the City of Mound, Hennepin County, Minnesota, met on Tuesday, June 27, 2000, at 7:00 p.m., in the Council Chambers at 5341 Maywood Road, in said City. Those present: Acting Chairperson Mark Hanus; HRA Board Members: Andrea Ahrens, Bob Brown, and Leah Weycker. Absent and excused: Chairperson Meisel. Also in attendance were HRA Director Pinky Charon, City Manager Kandis Hanson, City Attorney John Dean, City Engineer John Cameron, Mound Visions Coordinator Bruce Chamberlain, and Recording Secretary Diana Mestad. Others present: Jo Longpre, 2631 Granger Lane; Ken Custer, 5533 Shoreline; Steven Coddon, 3615 Lyric Ave, Orono; Don Richard, Barr Engineering; Lorrie Ham, The Laker; Martin Miller, 6058 Lynwood Blvd; Milton Hentges, 6400 County Road 5; Peter Meyer, Mound; Tony Clapp, 2180 Cardinal; John Volgstrom, 4329 N. Woodgate Lane; John Volgstrom, 2350 Driftwood Lane; Tom and Dene Fabick, 2017 Arbor Lane; Bill and Dorothy Netka, 2360 Commerce; Joel Krumm, Mound. Consent/lgenda: All items listed under this Consent Agenda are considered to be routine b.v the Housing and Redevelopment Authority. There will be no separate discussion of these items unless a HRA Board Member or citizen so request, in which event the item will be removed from the Consent Agenda attd considered itt normal sequence. Acting Chairperson Hanus called the meeting to order at 7:00 p.m. *1.0 INDIAN KNOLL MANOR CONSENT AGENDA 1.1 A. MONTHLY BILLS B. MINUTES - MAY 23, 2000 Brown, Weycker, unanimously. ACCOUNTING ITEMS A. ACCOUNTANT REPORTS B. BANK ACCOUNTS The HRA Director stated that the bank account information was included in the packet for review. No action was required on this. Mound HRA Minutes, June 27, 2000 1.2 lIRA ACTION ITEMS A. RESOLUTION #00-14, BUDGET FOR Y/E 9/30/01 The HRA Director stated that the budget was for the year end 9/30/01 and there was not much change from last year. She further stated that additional capital improvement money is expected after the first of the year. MOTION by Brown, seconded by Weycker to accept the resolution as submitted. RESOLUTION #00-14: RESOLUTION APPROVING OPERATING BUDGET FOR Y/E 9/30/01. The vote was unanimously in favor. Motion carried 4-0. 1.3 INFORMATION ITEMS A. SECRETARY COMMENDATON FROM HUD B. LETTER FROM HAROLD LUCAS The I-[RA Director stated that the HRA had received a commendation from the U.S. Department of Housing and Urban Development recognizing the HRA as a successful performer. The HRA Director stated that she expected this trend to continue. In addition, Harold Lucas, Assistant Secretary of the U.S. Department of Housing and Urban Development has sent the HRA a congratulatory letter. The HRA Director stated that a new caretaker has been hired and is doing a great job. Marybeth was introduced to the HRA. 1.4 TENANT REPRESENTATIVE REPORT The tenant representative was absent. 1.5 MISCELLANEOUS The next Indian Knoll Manor meeting is July 25, 2000. TAX INCREMENT FINANCING. 1.6 APPROVE MINUTES OF JUNE 13~ 2000. MOTION by Hanus, seconded by Brown, to approve the Minutes of June 13, 2000. The vote was unanimously in favor. Motion carried. 4-0. 2 Mound I-IRA Minutes, June 27, 2000 1.7 MAXWELL STRUCTURAL AND ENVIRONMENTAL STUDIES COST ESTIMATES. Bruce Chamberlain, Mound Visions Coordinator spoke on this issue. He referred to the memo in the meeting packet regarding the structural integrity of the site and the pollution that has been discovered. He stated that he wanted to discuss the exploration and quotes. The possibilities to consider were: 1. Structural mitigation due to poor soils needed for a proposed hotel building; 2. Soil stabilization to support a parking lot; 3. Soil investigation/remediation needed through the Petroleum Fund and Voluntary Investigation and Clean-up Program (VIC). The Mound Visions Coordinator stated that the cost for reviewing the first two items would be $2,000 to $3,000 each. The cost for the consulting fees on item 3 is about $15,000 to review and install monitoring wells. This cost is in addition to the cost of clean up. All costs for item 3 are reimbursable through the Petroleum Fund. Because volatile organic compounds have been found, the VIC program is necessary. The Mound Visions Coordinator suggested reviewing the neighboring Lost Lake property at the same time. The costs are in the $25,000 to $50,000 range depending on the level of pollution found on the site. The Mound Visions Coordinator suggested doing items 1 and 2 in order to get a handle on the building costs for the site. After those costs have been determined, the City could decide on whether to look into grant programs for site cleanup. Acting Chairperson Hanus asked what the point of spending money on this site was unless the City knew this would go forward. He questioned the idea of spending money on a parcel of land the City does not control. The Mound Visions Coordinator stated that this is a property that the City will want to link with other properties in the future. Acting Chairperson Hanus asked about doing the clean up on one parcel and not both. The Mound Visions Coordinator stated that the VIC program should be done on all of the parcels so that the area can be developed. HRA Board Member Weycker asked about the option of talking with the current property owner before pushing this through. Acting Chairperson Hanus stated that the City already knows where the property owner stands. The City Attorney stated that the price of the property has been discussed for a long time and the problem at the moment is the preliminary cost for structural use. He stated that the desire at this point is to determine if this cost was realistic. Mound HRA Minutes, June 27, 2000 Acting Chairperson Hanus asked if doing just item 1 was feasible. The Mound Visions Coordinator suggested that both items 1 and 2 be addressed, as the parking lot is also a problem. The City Attorney stated that the parking lot may be as big of an issue as a building or possibly even worse. HRA Board Member Ahrens stated that the original numbers were astronomical and wanted to know if the Mound Visions Coordinator was now saying they were too high. The Mound Visions Coordinator stated that the numbers were put together quickly with very and that the City Engineer wanted to be safe and so offered a high range. The plan now was to have a structural engineer explore the actual costs involved. HRA Board Member Weycker stated that she was concerned that the property owner would not sell and wondered if someone could be talking to him during the process. The City Attorney stated that the property owner was in the $400,00 range and the City was looking at about $250,000 and so he was not sure what the conversation should be. HRA Board Member Weycker stated that she wanted to let the property owner know that the City is looking at the options because she is afraid that he will sell the property while the investigation is in progress. The City Attorneys stated that it would not hurt to ask about any immediate prospects for a new buyer. HRA Board Member Ahrens stated that this might be a chance the City has to take in order to move forward. The Mound Visions Coordination stated that he liked HRA Board Member Weycker's ideas and that he is in contact with Mr. Maxwell. MOTION by Brown, seconded by Weycker to move forward with items 1 and 2 in the Mound Visions Coordinator's plan including a recommendation to stay in touch with the property owner during the process. Motion carried 4-0. 1.8 HOTEL DISTRICT DEVELOPMENT RECOMMENDATION. The Mound Visions Coordinator stated that the City had originally entered into a preliminary agreement with Country Inns who decided that they were not interested in Mound. That meant the City was now looking at the possibility of an American or Super 8 motel chain. The City decided that was not the type of facility they were interested in and the agreement was dropped. Recently Rick and Sue Bloomquist have expressed an interest in developing a hotel. Staff feels that the Bloomquist's can put this project together. Staff does have a concern that the hotel is a very critical component in the overall redevelopment and feels it is too early to enter into an agreement because Mound needs more development elsewhere in order to get the level of a Mound HRA Minutes, June 27, 2000 facilit3, that the City wants. Staff recommends holding on this agreement and re-evahat'mg this in six months or so. HRA Board Member Brown disagreed with waiting because a hotel chain would be a basic building whereas he felt there was an opportunity with the Bloomquists to have a hotel that blends with the Visions plan and that the Bloomquists have an interest in the community. The Mound Visions Coordinator agreed with this point, but also stated that Mr. Bloomquist has mentioned bringing in a national franchise for his hotel proposal which again would bring a concern as to whether it was too soon to qualify for the type of hotel the City was looking for. He stated that a better result might be obtained in six months. The Mound Visions Coordinator stated that the hope is to keep the Bloomquists interested until some other projects in Mound are underway. HRA Board Member Brown stated that this might give the Bloomquists false hope. The Mound Visions Coordinator stated that this was a concern, but that alternatively, the Bloomquists would be asked to invest in market research and design resulting in the same type of facility that has already been turned down. HRA Board Member Weycker stated that because the property is still uncertain, it is too early to make a commitment, but that she would like to see the Bloomquists stay interested. The City Attorney stated that this was a difficult decision and that Staff was impressed by the Bloomquists, but the issue is the current marketplace. He wanted to clarify that the Bloomquists were not the issue, but rather the timing of the decision was a concern. Mr. Bloomquist addressed the Board stating that he and his wife have been talking to structural people and that as of yet, they have no idea of what the market research will show. He stated that he is currently not a hotel person, but that he will get what the City needs. Mr. Bloomquist further stated that he wishes to be kept in the loop, but is not interested in a bidding war. HRA Board Member Brown asked if there was an opportunity to give the Bloomquists a first right of refusal such as in the Dodd case. The City Attorney stated that this was a different situation from the Dodds, as they owned their land. He was concerned that a right of first refusal might create false hopes and might also have an artificial impact on inflating the value of the property that the City is trying to purchase. The City Attorney stated that he had the sense that HRA will keep the Bloomquists in the loop. MOTION by Ahrens, seconded by Weycker, to accept Staff's recommendation not to enter into an agreement but to continue to keep the Bloomquists informed and to re-evaluate this in six months. Ayes: 3 Nay: 1 (Brown) Motion carried. 3-1. Mound HRA Minutes, June 27, 2000 1.9 ABBITIONAL MATTERg REGkRBING Rk¥ MkR PROPERTIE§ DEVELOPMENT. The City Attorney stated that more information has come in. The title company is requiring the City to provide an indemnity with respect to the property. The City acquired the railroad property in fee simple and stated the purpose was a municipal parking lot. Because the City is now selling this property for another purpose, the title company wants indemnity. The City Attorney feels there is nothing to this issue and that it is not a problem to recommend that the City do this. Additionally, there is a disbursement agreement in the contract that provided that net proceeds of about $70,000 would be parceled out in increments of 25%. The SPA did not approve this. Because they need to collateralize their loan, the SPA asked that the whole amount be deposited with them at closing to pay for construction billings as they come in. This is not subject to discussion. Because the SPA will be disbursing the money to cover validated construction costs, the City is still in the same position and he recommends the I-IRA agree with this. A third issue is the easement area across the land laying north of the portion of property conveyed to the Dodds. This is an access easement and also a walkway easement 6 feet wide. Agreement was not successfully put together and the Dodds are still interested in a 6-foot easement. The City Attorney has added this to the agreement. As part of the same scenario, there was discussion of building up to the property line on the north, which requires that the Dodd building be slightly redesigned to cover the snow load. An agreement was in mind to reimburse the Dodds to cover additional cost up to $10,000. It has now been concluded that the cost is $7,900. The cost of this will be offset by the cost of the geo technical work ($3,050), and 1/2 the cost of the planning of the entire property ($2,500). The City Attorney recommends that the amount of $2,500 be paid by the City rather than the HRA. He is recommending an agreement on behalf of the City and the Dodds to settle up when costs are known, probably in July. This will allow the City to gain better utility of the property to the north. Finally, is the issue of drainage and utility easements. The City Engineer and the Mound Visions Coordinator have opened up the possibility that when a sanitary sewer force main is relocated, if alternative route is provided, the City will not have to pay any money. The City Attorney has drafted a dumpster agreement with the Dodds whereby the City will construct and move the dumpster during the construction of this sewer arrangement. The City is suggesting a wooden type of structure. Acting Chairperson Hanus confirmed that none of the information above was in contained in the meeting packet. The City Attorney said that only the dumpster agreement was included. I-IRA Board Member Weycker asked whether the Dodds were asking to keep the 6-foot easements and how that would be possible with the abutting building. The City Attorney said that the walkway would remain and the new building will be built around the walkway; perhaps with an enclosed walkway with a 2nd floor tie in; i.e., a mall type passage. Mound I-IRA Minutes, June 27, 2000 MOTION by Ahrens, second by Brown to approve the changes. Motion carried 4-0. ADJOURNMENT: MOTION by Ahrens, seconded by Brown to adjourn the meeting at 7:50 p.m. The vote was unanimously in favor. Motion carried. 4-0. Kandis Hanson, City Manager Attest: Acting Chairperson Hanus