Loading...
HomeMy WebLinkAboutEDA MIN 09-16-03ECONOMIC DEVELOPMENT AUTHORITY (EDA) REGULAR MEETING MINUTES SEPTEMBER 16, 2003 CALL TO ORDER/ROLL CALL President, Murzyn called the meeting to order at 7:06 p.m. Present; Don Murzyn Jr., Patricia Jindra, Julienne Wyckoff, Bobby Williams and Bruce Nawrocki, Tammera Ericson, and Bruce Kelzenberg PLEDGE OF ALLEGIANCE CONSENT AGENDA Approval of Minutes Move to adopt the minutes of the August 20, 2003, regular meeting as presented in writing. Nawrocki stated in the future when he makes a supportive argument, he would like to see it in the minutes. Financial Report and Payment of Bills Move to approve Resolution 2003-14, Resolution of the Columbia Heights Economic Development Authority (EDA) approving the financial statements for August, 2003 and approving payment of bills for August, 2003. MOTION by Williams, second by Wyckoff, to adopt the consent agenda items as listed. All ayes. Motion Carried. Nawrocki stated the check record pages aren't in the Financial Report. Streetar stated he would check into it. ITEMS FOR CONSIDERATION 40th & University ', Schumacher stated the EDA selected Haugland Company as the exclusive developer for the 40~h & University redevelopment site. Haugland has $50, O00for the land in theirproforma. Staff had Ehlers do an analysis which states construction costs, the vacancy of 5% and development fees are within industry standards, the construction proposed by Haugland is of high quality, and the lease rate of $14. 50~square foot is within the Columbia Heights market but is a little on the high side. Haugland would like to get a determination from the board if they are willing to except the purchase price of $50, O00 for the land so an agreement can be drawn up and the project started. Paul Reinke, Senior Director of Development for Haugland Company stated his job was to establish the need and type of development that will work on the project site. Originally he proposed a 75, 000 sq. ft. retail building or a restaurant like Culvers that would work on the site. However, after contacting Culvers and other restaurants they indicated no interest in the site. Therefore, he recommended a service retail market for the site. Nawrocki asked if the $14.50/sq.ft. is gross or minimum rent plus cam. Reinke stated it would be Economic Development Authority Meeting Minutes September 16, 2003 Page 2 of 6 more like $20. O0/sq.ft. with the operating expenses. Nawrocki stated he didn't feel that coffee shops would pay $20. O0/sq.ft. and felt the sale price of the land is too low. Murzyn asked ifa fast food restaurant would give the City more for the land. Reinke stated it would, but after researching they found there isn't a market for anymore fast food restaurants in the City. Wyckoff stated the City needs coffee shops and dry cleaners in Columbia Heights, which would also be an incentive for the residents of the new housing units in the Industrial Park project area. Dunn Brothers and Quizno's would compliment the corner. Fehst stated with the new housing in the Industrial Area, there will be a need for some retail. Williams stated the sale price of the land was too low and asked how much money does the City have invested in this project. Schumacher stated there will be a little over $500,000 in CDBG dollars, which purchased two single-family homes, gas station and the MG$ building. Reinke stated he contacted Welsh, United and a couple other developers to market the property for him and they said no as the area is too small. Kelzenberg did not feel that people would want to turn off of University to get a cup of coffee or sandwich. Streetar stated there is the option of equity sharing when Haugland is ready to sell. Reinke stated he hasn't explored this option but could certainly consider it. Murzyn directed staff to explore this option with Haugland. Ericson stated we want to be one step ahead of the other developments in the area. Nawrocki asked if Haugland Company is developers or owners. Reinke stated they are developers that manage properties, sometimes keep the property and even share it with other entities. Motion by Ericson, second by Wyckoff, to direct staff to move ahead in negotiating a Development Agreement with Haugland Company, based on the sale price of $50,000 for the land. Upon Vote: Jindra-aye, Nawrocki- nay, Ericson- aye, Williams- nay, Wyckoff- aye, Kelzenberg- aye, Murzyn- aye. Motion Carried. Resolution 2003-15~ Modifying the CBD Revitalization Plan and Establishing a TIF District for Kmart/Central Streetar stated the Tax Increment Financing Plan is for the establishment of the Kmart/Central Avenue District. The Plan describes the purpose and the amount of tax increment assistance that will be necessary for the development. Mark Ruff of Ehlers and Associates and Steve Bubul of Kennedy and Graven have reviewed the document and provided the summary in the packet. The next step in the process would be to hold a Public Hearing at the City Council Meeting on Economic Development Authority Meeting Minutes September 16, 2003 Page 3 of 6 September 22, 2003. Motion by Ericson, second by Williams, to waive the reading of Resolution 2003-15, there being an ample amount of copies available to the public. All ayes. Motion Carried. Motion by Ericson, second by Williams, to Adopt Resolution 2003-15, a Resolution Adopting a Modification to the Downtown Central Business District (CBD) Revitalization Plan for the CBD Redevelopment Project and establishing the Kmart/Central Avenue Tax Increment Financing District therein and Adopting Tax Increment Financing Plan; and furthermore, to authorize the President and Executive Director to enter into an agreement for the same. All ayes. Motion Carried. Resolution 2003-16~ Contract for Private Redevelopment with New Heights Development~ LLC Streetar stated the Contract for Private Redevelopment with New Heights Development, LLC is for the property that Mr. Nedegaard will own at the old Kmart site on Central Avenue. The redevelopment property is broken up into three sections: 1) housing,'2) commercial and 3)future commercial property. In the housing section Nedegaard has agreed to build 244 units of for-sale housing ranging in price from $175, 000 to $330,000 in a period of four years. Nedegaard is requesting up to $700,000 Tax Increment Financing assistance for the demolition of Kmart and other site related costs. Nedegaard will be required to buiM up to 10,000 square feet of commercial space. At that time, if the EDA feels that Tax Increment Financing is warranted, you can negotiate that with Mr. Nedegaard. If the EDA feels that it isn't warranted, Mr. Nedegaard is still obligated to build the 10, 000 square feet of commercial space and complete that part by July 1, 2006. Nedegaard will not get any money until the entire project is finished. They will have up to 12 months from the time the development agreement is executed to put together a redevelopment plan acceptable for the EDA, if he doesn't the City will be able to use any developer of their choice. Nawrocki stated the $700,000 will be higher with the interest. The beginning we talked about $500,000 of TIF to tear down the building, with no discussion of interest and $300, O00 for the sewer costs. Streetar stated we should keep in mind that the roads, sewer and water will be totally paid for by Nedegaard. Ruff stated in the beginning Nedegaard came to the City asking for $500,000 upfront for the housing development, with no talk of interest. The City said no, they would like to see some commercial commitment to that area and didn't want to see him make too much money. Nedegaard stated he would need $700,000 instead of the original $500,000 to complete the City's commercial commitment. The City would be sitting in a very safe position by entering into this contract with Nedegaard and if the City decides to use TIF funds, it wouM be paid back over a period of 4-5 years. Nawrocki asked what criteria we are using to determine what Nedegaard is making on the project and does the contract call for an audit. Streetar stated it is stated in the contract there will be an audit performed. Fehst stated there is always a chance of things going wrong and that Economic Development Authority Meeting Minutes September 16, 2003 Page 4 of 6 is why we have Mark Ruff working on this with us to make sure things are handled properly and we should keep in mind that it is very usually that Nedegaard agreed to receive no TIF funding until the entire project is completed. Resident, Mr. Herringer asked if Nedegaard has to build everything by 2006, what happens to the real estate taxes in the years between. Ruff stated the City would hold the tax dollars until Nedegaard is finished with the development in 2006. Nawrocki felt this should be a City Council agreement not EDA. Ruff explained that tonight they are voting on two items; to set up a maximum amount of $100, O00 in TIF district funding and an agreement with the developer. Then the City Council will hold a public hearing on September 22na and take action on the TIF District per state law. Motion by Ericson, second by Williams, to waive the reading of Resolution 2003-16, there being an ample amount of copies available to the public. All ayes. Motion Carried. Motion by Ericson, second by Williams, to Adopt Resolution 2003-16, a Resolution Approving a Contract for Private Redevelopment between the Columbia Heights Economic Development Authority and New Heights Development, LLC; and furthermore, to authorize the President and Executive Director to enter into an agreement to the same. All ayes. Motion Carried. 39th & Central Redevelopment Streetar stated on August 22~ the City received a letter from Gene Mady and Doug Foss, the owners and operators of Mady 's requesting the City remove their property from any redevelopment plan. The Mayor responded with a letter indicating the redevelopment of 39tn and Central, including their property remains a high priority for the City. Staff recommends the 39th and Central area, including their building, remain a high priority. It is likely the EDA may have to acquire this and other properties through eminent domain. Staff asked the board if they are willing to exercise the power of eminent domain, if necessary, to acquire the properties for redevelopment. ~' Murzyn stated the general consensus of the board is that they are willing to go forth with eminent domain to acquire the redevelopment sites, but only after all efforts to negotiate have been exhausted. NEI Proposal Streetar stated on June Ist Dunwoody College of Technology merged with NEI College of Technology. Dunwoody's intent is to sell the NEI building by December of 2003, and has been working with a real estate broker to redevelop the entire property. Staff has contacted a number of developers, but with no interest. On September 8th, representatives from NEI presented staff a possible redevelopment concept with two primary components. Component one consists of a City Hall and Library to be located on the first floor with 60 units of moderately priced senior rental units on the second, third and fourth floors. The second option for this component would result in senior housing without a City Hall or Library. The Economic Development Authority Meeting Minutes September 16, 2003 Page 5 of 6 Anoka County HRA would own and manage the senior rental housing and the City would own its facilities on the first floor. This is the same kind of concept is near completion in the City of Waconia. County Commissioner Kordiak expressed an interest in exploring a joint Hbrary option at this site. Component two would include 20 units of market rate, single-story, for sale, side-by-side townhomes. Either of these concepts may require the City's assistance in the demolition of the existing building. Streetar requested the board direct staff to explore the concept and report to the board at the October EDA meeting. Motion by Williams, second by Wyckoff, to direct staff to move forward exploring the concepts and report at the October meeting. Upon Vote: Jindra- nay, Nawrocki- nay, Ericson- aye, Kelzenberg- aye, Williams- aye, Wyckoff- aye, Murzyn- aye. Motion Carried. ADMINISTRATIVE REPORTS 4833 University Avenue Schumacher stated at last months EDA meeting, staff was directed to propose a mid-point purchase price of $70, 000 to Collins Autobody for 4833 University Avenue property with Collins being responsible for the demolition of the home. Collins has agreed to the purchase price. They are working with the SBA on financing and would like to have a 24 month window for construction to start instead of the original 12 months. Staff recommends moving forward with the purchase agreement. Murzyn directed staff to move forward with the purchase agreement. Industrial Park Redevelopment Plan Schumacher stated the soil and water testing has been completed with 85 samples taken, three 'locations showing significant contamination, which monitoring wells are being installed at the sites based on MPCA Standards for a long-term, analysis. The contaminated properties were the old foundry building, Grief Brothers, and Region Truck Equipment. Information from the tests will be available in approximately two weeks in the Response Action Plan. Funding from DEED for the corrections will be applied for next month. The City Council approved a grant application with the Metropolitan Council for a one-time predevelopment grant. The study will address needs of sewer, water, surface water management, traffiC, road improvements, and an estimated cost of all improvements needed prior to redevelopment of the sites. Nawrocki asked if samples were taken at the Electric Steel Castings building. Schumacher said yes and the results of the soil tests will be in the report. ADJOURNMENT Motion by Williams, second by Jindra to adjourned the meeting at 9:54 p.m. Respectfully submitted, Economic Development Authority Meeting Minutes September 16, 2003 Page 6 of6~.~ ~ Cheryl Bal~ken ' Community Development Secretary HSEDAminutes2003\9-16-2003 Iii II II II