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2000-04-25I~ ,l& i i I ,BI,, ,I,, ~I i ,I, M[NETES - SPEC L MEETING - .APRIL 2,5, 2666 The Housing and Redevelopment Authority of the City of Mound, Hennepin County, Minnesota, met in a special session on Tuesday, April 25, 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. and Secretary Sue McCulloch. Others present: Kim Anderson, Alan Blackwell, Donny Bonnicksen, Jane & Walter Carlson, Suzanne Claywell, Steve Coddon, Ken & Sally Custer, Eric Funderburk, Tom Gray, Lorrie Ham, John Hubler, Pamela Janisch, Jackie & Peter Meyer, Dorothy & Bill Netka, Angie & Dan Patterson, Frank Weiland. 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 7:10 p.m. TAX INCREMENT FINANCING. 1.0 APPROVE MINUTES OF APRIL 11, 2000. MOTION by Weycker, seconded by Brown, to approve the minutes of April 11, 2000. The vote was unanimously in favor. Motion carried. 5-0. 1.1 BUS TOUR FOR CITY COUNCIL MEMBERS Chairperson Meisel stated the Mound Visions Coordinator, Bruce Chamberlain, presented a memorandum to the HRA recommending the members consider a bus tour on a Saturday morning to look over housing projects and related projects performed by Metro Plains Development. This would be helpful for the HRA become more educated and give them a stronger background on projects that are similar to those being proposed for the City of Mound. He asked the HRA if they would be willing to consider such a tour. Bruce Chamberlain stated Metro Plains would be presenting its plans on May 8, 2000, so there would be some urgency to have this tour before that date. City Manager suggested inviting the Planning Commission on this tour as well. After discussion the HRA decided to invite the Planning Commission and the EDC (F_conomic Development Commission to accompany them on this tour. The tour will take place on Tuesday, May 2, 2000, at 4:00 P.M. Staff will notify the Commissions and arranged for the bus. Il ,11 I I I I1, I,,,L I ,1, MOUND HRA MINUTES - APRIL 25, 2000 I-IRA Board Member I-Ianus asked about developments and questions that may arise, ltruce Chamberlain stated the City Planner, Loren Gordon, would be present possibly at the site to give statistics. He suggested this would be a very valuable experience because of the discussions that would be generated by the information received at the sites. HRA Board Member Brown asked if the tour would be going to Cannon Falls. Mound Visions Coordinator stated they would not because of the distance involved, although, he did suggest they could find similar developments regarding housing type and range of design closer to the Metro area. Chairperson Meisel polled the HRA with the May 2, 2000, date. HRA Board Members Brown and Weycker would be able to attend. HRA Board Members Hanus and Ahrens would make every effort to accommodate this appointment. Chairperson Meisel would be in attendance. HRA Board Member Brown agreed to videotape their tour for those who could not attend. Bruce Chamberlain will also provide written statistics as part of the documentation for this tour as well. 1.2 POST OFFICE RELOCATION UPDATE. JimProsser of Ehlers & Associates presented an update. He stated the post office relocation is proceeding. He stated the post office was presented with a number of sites and they have narrowed it down to the Willette and United Properties site. He stated at this point they need to come to some terms with both owners. He stated the HRA is required to provide compensation at the real market value for the property. With that in mind, Mr. Prosser recommends the HRA proceed with eminent domain proceedings. He stated the HRA might not need this to complete this process, but it is something that should be in the works if negotiations with the owners fails. Mr. Prosser stated in some cases condemnation will give the property owner some tax advantages. Mr. Prosser is fairly confident the post office is on track, barring any unforeseen circumstances. HRA Board Member Hanus asked if for some reason this location did not work for the post office, would this property still be of value to the City and could it still qualify for TIF. Mr. Prosser stated the property would still qualify and it would still be a marketable piece of property for the City. Mound Visions Coordinator, Bruce Chamberlain, presented an e-mail sent to him on behalf of the post office (which he made copies for all HRA members) stating the post office is on a fast-track and they would appreciate the HRA's assistance in further expediting this matter. He stated the two things that they would like from the HRA are the Phase One MOUND HRA MINUTES - APRIL 25, 2000 Environmental Report and the Boundary Survey. Mound Vision Coordinator asked the I4RA if they would like to assist with this process. HRA Board Member Hanus asked what financial commitment this would require. Mound Visions Coordinator stated the Phase One Report would cost about $1,500 and the Boundary Survey would cost approximately $1,500. These figures seemed appropriate to the HRA Board. 1.3 LETTER FROM JIM PROSSER REGARDING AUTHORIZATION TO PROCEED WITH EMINENT DOMAIN ACTION ON PROPERTIES INVOLVED WITH POST OFFICE RELOCATION. The City Attorney addressed the issue of eminent domain, condemnation. HRA Board Member Weycker asked if Mr. Willette was aware of the HRA's position? Mr. Prosser stated he would make sure Mr. Willette is up to date before he is actually bound by any agreement. Chairperson Meisel stated she spoke with Mr. Willette and he would prefer to keep his property or work out some sort of land swap so he could build his laundrymat. Basically, he does not want the money. He would prefer to keep his property. HRA Board Member Hanus stated he would be willing to listen to Mr. Willette's ideas, although, the HRA may be put in a very complicated position allowing more time than the HRA can sacrifice for the downtown project. HRA Board Member Brown asked if the Williams store location would be a possible exchange for Mr. Willette. Mr. Prosser discussed the concept of bartering with Mr. Willette and concluded this type of scenario becomes very complex. He further stated if the HRA would try to become a so- called broker, this would put additional obligations on the HRA that they cannot meet. Mr. Prosser is sympathetic with Mr. Willette. Mr. Prosser suggested giving to Mr. Willette the list of the other post office sites that were considered and lettting him deal with his own real estate broker on an of those parcels. HRA Board Member Hanus stated the bartering concept would extend the development process and wipe out any thoughts of speeding up the post office project. Chairperson Meisel questioned the quick-take process as well as how long this would be tied up in the court system. The City Attorney stated this process of a quick-take is effective within 90 days from the date it begins. He stated the title to the property would pass to the HRA. Although, he 3 MOUND HRA MINUTES - APRIL 25, 2000 stated the value of the property would be determined at a later date by the court. In the meantime, the property could be built upon and occupied. Chairperson Meisel is concerned about the expense of the legal expenses. She stated the transaction might not be a friendly one, causing even more legal fees. She suggested maybe the swapping of the land would be more desirable. HRA Board Member Brown suggested the site near Jubilee that the post office did not consider as another site that might work for Mr. Willette. It was suggested Mr. Willette take the proceeds from the sale of his property and buy the property that he is interested in, rather than having the HRA swap land. Chairperson Meisel stated the HRA's main concern with the downtown project at this time is to keep things moving along at an acceptable pace. The City Attorney stated the HRA could discontinue the condemnation process at any point if a negotiated price is reached on the property with the owners and that would stop the excessive amount of legal fees that could occur. He stated to remember that both parties would be paying legal fees and not just the HRA. HRA Board Member Weycker suggested we confront Mr. Willette and state the HRA needs to keep moving on the project, but it does not mean the condemnation process would not end at some point. She further stated the land swap exchange would take more time than the HRA could allow. Chairperson Meisel mentioned Mr. Willette is in favor of the redevelopment of Mound and looks forward to the process. HRA Board Member Ahrens sated she in not in favor of the condemnation, but she is in favor of the project. She reminded all members that the post office location is holding up the complete project, so holding up the project anymore, would not be appropriate at this time. MOTION by Ahrens, seconded by Hanus, to accept the Resolution authorizing eminent domain proceedings if deemed appropriate. RESOLUTION//00-8 RESOLUTION AUTHORIZING EMINENT DOMAIN PROCEEDINGS TO ACQUIRE CERTAIN REAL PROPERTY. The vote was unanimously in favor. Motion carried. 5-0. MOUND HRA MINUTES - APRIL 25, 2000 1.4 LETTER FROM JIM PROSSER REGARDING CONSIDERATION OF CONTRACT FOR PRIVATE DEVEIJOPM-ENT - MOUND FA1M'ILY HARDWARE. Mr. Prosser stated the HRA has previously approved the downtown Mound development. He stated in the spring of last year, the Dodds brought a plan for redevelopment to the HRA's attention. He stated since that time the HRA has been working with the Dodds in order to prepare a plan and agreement for redevelopment. He stated the agreement is now ready for signing and thus allowing the process to move along. Mr. Prosser stated the agreement would be making the HRA commit to providing assistance to the Dodds subject to certain conditions. He stated this is not the final action regarding the agreement but merely some action to start the process. Chamberlain explained the land swap with the Dodds property and the City of Mound property located by the Coast to Coast. He also explained ownership before and after the swap. Mound Visions Coordinator stated the new store would be constructed by County Road 110, consisting of about 16,000 square feet. He stated there would be some right-of- way for Hennepin County for expansion of the street. He mentioned there would be temporary parking and it would guarantee permanent parking when the entire block is redeveloped. Chamberlain further presented a drawing of the proposed Mound Hardware. He noted it will be one story building with a traditional storefront. He stated there would be columns at the regular locations. He stated the overall width of the building would be 95 feet. The building would contain retractable awnings and lights located on the columns. The building would give the appearance of being a two-story structure. He noted the building would be made from wood materials and would maintain the grand hotel character. HRA Board Member Ahrens suggested removing the panes in the windows and replacing them with display windows. Chamberlain stated that change had already been discussed. HRA Board Member Brown informed the HRA the Planning Commission was concerned this building would be only a one-story building, although, he does agree with the look being proposed of the building because it give a a two-story appearance. The City Attorney reviewed the development agreement terms. He stated the Dodds and their attorney, as well as himself, have reviewed the agreement. He stated what has been presented in the packets tonight is a final draft and it is acceptable to the Dodds. He stated it is fairly complex. The contract addresses the land swap, the construction and improvements, as well as the economic assistance that would be provided to the developer by the HRA for this project. The City Attorney stated the building itself would have a minimum market value of $750,000. The land itself would have a $98,000 price to it. The total amount for the 5 MOUND HRA MINUTES - APRIL 25, 2000 property would be va/ued at $848,000. The City Attorney stated this amount would start on January 1, 2001, and would remain through the tax increment time period. He stated the assessment section in the agreement notes this information. The City Attorney then detailed the economic assistance. He stated there would be a loan in the amount of $250,000. He stated the loan would payable in increments, and the final being paid when the building is 25 percent completed which would be determined by the Building Official. He further stated the loan would be repaid by the developer over a period of 25 years. This obligation would be secured by a note. The payments would consist of about $23,000 per year, plus 6.5 percent interest. The property would be secured by a contractual obligation to sue to collect if there is a failure to pay taxes. The City Attorney further stated shared parking would be terminated if failure to make the payments on the note existed as well. He mentioned once the building is underway, the building would be occupied and taxes would be paid, thus allowing the City to get their money back through tax increment. He ended stating the agreement has been reviewed by all necessary people. The City Attorney stated there are two conditions to the agreement being finalized. One condition is the preliminary plans for the building need to be approved and, secondly, a but- for analysis would need to be completed. HRA Board Member Hanus mentioned the but-for analysis is done on all TIF project and it is not a new concept being proposed to the HRA. HRA Board Member Brown stated he assured the Planning Commission last night that they will be seeing all items that need to come before them on the downtown redevelopment. The City Attorney stated the two main concerns for the Planning Commission would be the hardcover variance and the major subdivision. HRA Board Member Ahrens appreciated HRA Board Member Brown's attempt to make the Planning Commission aware that they will not be excluded from the process. HRA Board Member Hanus questioned the parking agreement regarding its exclusive rights, but the City Attorney stated the agreement pertains to nonexclusive rights. HRA Board Member Hanus asked about shared parking on odd hours of the days and would like this clarified. The City Attorney stated the agreement specifically states there are 20 spaces of parking and it does not limit to business hours, although, the City Attorney will readdress this concern and report back on his findings. The City Attorney suggested the lot repairs provision could be reworded to suggest improvements as well. MOTION by Ahrens, seconded by Weycker, to approve the Contract for Private Redevelopment, subject to the preliminary plat approval, the but-for analysis, and language changes to the shared parking and/or lot repairs sections of the Contract. The vote was unanimously in favor. Motion carried. 5-0. MOUND HRA MINUTES - APRIL 25, 2000 kBIO~, MOTION by Brown, seconded by Ahrens, to adjourn the meeting at 8:05 p.m. The vote was unanlmously in favor. Motion carried. 5-0. Kandis Hanson, City Manager Attest: Chairperson Meisel 7