HomeMy WebLinkAbout20190805_EDA_minutesECONOMIC DEVELOPMENT AUTHORITY (EDA) MINUTES OF THE MEETING OF
AUGUST 5, 2019
The meeting was called to order at 6:00 pm by President Szurek.
Members Present: Murzyn, Schmitt,
Buesgens, Novitsky, Williams, Herringer, and Szurek.
Staff Present: Kelli Bourgeois (City Manager), Aaron Chirpich (Community Development Director), and Shelley Hanson (Secretary).
Representatives from Ehlers and Alatus were also present.
PLEDGE OF ALLEGIANCE- RECITED
CONSENT AGENDA
1. Approve the minutes from the Executive Session of May 28, 2019 and
from the regular meeting of July 22, 2019.
Motion by Buesgens, seconded by Murzyn, to approve the consent agenda as presented. All ayes. MOTION PASSED.
BUSINESS ITEMS
1. Façade Improvement
Grant Funding Recommendations
Chirpich said the following report provides a brief summary of each application, the proposed improvements, and the review committee’s suggestions for
funding. Pictures and further context was presented at the EDA meeting.
Castle Distributing/Big Stop Mart
Big Stop Mart is a small grocery store located at 334 40th Ave NE on the corner
of 40th and University, next to Sarna’s. Big Stop Mart has requested new awnings and a door with a window for the side of the building. The awnings would cover the front window facing
40th and the front door facing Sarna’s parking lot. The side door which is being replaced is located further back on the side of the building, facing Sarna’s Parking lot. The awnings
have an estimated cost of $2,125 and the door would cost $1,160. Therefore the application would require a reimbursement of $1,642. It is the recommendation of the review committee to
fund the awnings in full, but to not fund the side door replacement. The side door is not eminently visible from 40th Avenue, and would not meet the goals laid out in the Façade Improvement
Program Guidelines. The cost of the committees suggested action would be a total reimbursement of $1,062. Members agreed with the committee’s recommendation, however, they wanted staff
to make sure they are in compliance with sign ordinance requirements before any payments are made.
El Tequila
El Tequila is a small restaurant located within the strip mall on the
North East corner of 40th and Central (4005 Central Ave NE). El tequila has requested new windows for the front of the structure. Currently the windows are made up of multiple smaller
panes. El Tequila’s improvement would replace these panes with fewer larger ones which would mirror the type of windows found on the rest of the strip mall. The overall cost of the project
is $12,630 which would require a possible reimbursement of $5,000. It is the recommendation of the review committee to fund the window replacement in full.
EDA Minutes
Page 2
Aug 5,
2019
Embroidery and More
Embroidery and more is located at 808 40th Ave NE right next to the old Columbia Heights Library. Embroidery and More is requesting to sandblast and apply stucco
to the exterior of the building. The overall cost of the project is $12,645 with a city reimbursement of $5,000. It is the suggestion of the review committee to fund this project in
full. The Façade Improvement Grant Program allows for the painting and stuccoing of exterior facades and this project would greatly improve the look of the building and the area.
Hairatage
Hairatage
is located at 530 40th Ave NE on the corner of Summit St NE and 40th Ave. Hairatage is looking to re-stucco the building, add an awning, and add concrete planters to the front of the
building. The Proposed Awning would be a bubble awning that covers the entrance to the building along 40th. The proposed project would cost a total of $9,368 with the awning costing
$1,440, the Planters costing $2,678, and the stucco costing $5,250. The overall reimbursement would total $4,684. The review committee recommends funding this project in full. All of
the proposed improvements would add to the revitalization of the properties on 40th.
Heights Chiropractic
Heights Chiropractic is located at 4111 Central Ave NE # 105 in the strip
mall just north of 41st Ave. Heights Chiropractic is looking to update their signage running along the front of their business. The proposed sign change would cost $3,835 with a reimbursement
of $1,917. The review committee suggests not funding this application. It is the role of the Façade Improvement Program to improve existing facades on central and 40th. While the proposed
signage looks good it is the same color and close to the same design as the previous sign, therefore not making any substantial improvement to the area. Members agreed with this recommendation.
Hei
ghts Theatre
Heights theatre is located at 3951 Central Ave NE. The proposed project is to fix damaged masonry along the front of the building. Overall the project is estimated to cost
$14,430 with a reimbursement of $5,000. All of the improvements are located along the front of the building facing Central Ave. It is the recommendation of the committee to fund the
project in whole. This project fits with the original goals of the Façade Improvement Grant Program.
Millers
Miller’s is located right across the street from city hall at 547 40th Ave
NE. Miller’s is looking to install 3 Awnings, 2 awnings on the front of the building facing 40th and one on the side of the building facing Washington. These awnings would match the
businesses current color scheme and would have printed words on them. The project cost is estimated at $3,555 with a reimbursement of $1,777. It is the suggestion of the committee to
fund this project in full. Even though the side awning is not along 40th Ave the side door is easily visible when traveling East-West along 40th.
ORB, LLC
ORB is a small discount shop
located at 509 40th Ave NE two stores down from Romans Café. ORB is looking to install new windows at a project cost of about $25,850. The reimbursement would meet the max amount of
$5,000. The Review committee suggests funding this project in full, this type of project is exactly what the Grant was produced to assist with. Murzyn asked whether we should consider
adding a clause to future applications that requires the applicant not to sell the building for a designated
EDA Minutes
Page 3
Aug 5, 2019
period of time. He is concerned that
owners may take advantage of “free money” to increase the value of the property in order to sell it for more money. Buesgens and Novitsky didn’t necessarily feel that should be a factor
since our goal is to improve the aesthetics of the commercial property along Central and 40th Avenues and the fact that they are willing to also expend money to make improvements achieves
that goal. Staff will check closer at the application to verify ownership status of this property before entering into an agreement with them.
Sportsman’s Barbers
Sportsman’s is located
on the Southeast corner of 40th and Central (914 40th Ave NE). Sportsman’s is looking to add a small awning over their front entrance facing 40th Ave. This small project has a cost of
$938 with the cities reimbursement at $469. The committee suggests funding this project in full.
The Exchange
The Exchange is located at 4639 Central Ave NE in the strip mall just south
of 47th and Central. The Exchange is looking to replace the current apron/sign with a regular sign along the front of the building. The new sign would cost around $7,855 with a reimbursement
of $3,942. It is the suggestion of the committee to not fund this project. The committee believes that the sign proposed does not enhance or improve the façade of the building. Additionally,
the property is currently not in compliance with the cities sign code.
CAMERAS:
The Façade Improvement Committee also met to discuss the installation of security cameras in conjunction
with the Façade applications. The police department would like to add cameras to; Heights Theatre, El Tequila, Your Exchange, Castle Distributing/Big Stop Mart, and a separate property
that only applied for cameras Dr. Wilken Dentistry located at 700 40th Ave. Staff from Community Development and Public Safety will meet with the individual owners of the selected properties
to determine the feasibility of installing cameras at each location. Staff will then secure quotes for the camera installation work. The final scope of work related to the security cameras
will be limited by the budget outlined below.
SUMMARY:
The Façade improvement grant program has $58,777 to spend on improvements in 2019. The chart below provides a summary of
the proposed grant funding schedule and total costs. With the committee’s proposal, $27,992 would be spent on Façade Improvements, while $30,785 would be set aside for the installation
of cameras. Last year the Façade Improvement Grant Program spent just over $15,000 on façade improvements for 5 businesses along Central Avenue. The grant also spent about $25,000 on
the installation of cameras at 4 different businesses.
EDA Minutes
Page 4
Aug 5, 2019
Business
Requested Reimbursement
Recommended Reimbursement
Castle Distributing/Big
Stop Mart
$1,642
$1,062
El Tequila
$5,000
$5,000
Embroidery and More
$5,000
$5,000
Hairatage
$4,684
$4,684
Heights Chiropractic
$1,917
$0
Heights Theatre
$5,000
$5,000
M
illers
$1,777
$1,777
ORB, LLC
$5,000
$5,000
Sportsman’s Barbers
$469
$469
The Exchange
$3,942
$0
Total:
$34,431
$27,992
Staff recommends that the EDA give
guidance on which applications they would like to fund. Approval of resolution 2019-12 will allow staff to enter into agreements with the selected businesses. Following approval by
the EDA, staff will execute individual grant agreement contracts with each applicant.
Questions/Comments by members:
Buesgens asked if there was a fine for businesses that do not
follow the sign ordinance requirements. Chirpich said a warning letter is usually sent and a citation can be issued to those who do not comply. This hasn’t necessarily been a top priority
for staff to monitor. Bourgeois stated that during the targeted enforcement that is taking place along Central Avenue, businesses should be given notices if they are breaking the sign
ordinance as part of the overall inspection that is being done by staff from various departments.
Schmitt said the Planning Commission and staff have talked for years about the need
to update the sign ordinance. She suggested it may be a good time to make it more current and clearer to understand.
Motion by Herringer, seconded by Williams, to waive the reading
of Resolution 2019-12, there being ample copies available to the public. All ayes. MOTION PASSED.
Motion by Herringer, seconded by Williams, to adopt Resolution 2019-12, Resolution
Approving the form and substance of the Façade Improvement Grant agreement, and approving authority staff and officials to take all actions necessary to enter the authority into Facade
Improvement Grant agreements with various grant recipients, subject to staff verifying compliance with the sign code for Big Stop and to verify ORB LLC is the owner of 509 40th Avenue.
All ayes. MOTION PASSED.
A copy of the agreement is included here that each Business will enter into.
EDA Minutes
Page 5
Aug 5, 2019
RESOLUTION NO. 2019-12
A RESOLUTION OF THE
ECONOMIC DEVELOPMENT AUTHORITY OF COLUMBIA HEIGHTS, MINNESOTA, APPROVING THE FORM AND SUBSTANCE OF THE FAÇADE IMPROVEMENT GRANT AGREEMENT, AND APPROVING AUTHORITY STAFF AND OFFICIALS
TO TAKE ALL ACTIONS NECESSARY TO ENTER THE AUTHORITY INTO FAÇADE IMPROVEMENT GRANT AGREEMENTS WITH VARIOUS GRANT RECIPIENTS.
BE IT RESOLVED BY the Board of Commissioners ("Board") of
the Columbia Heights Economic Development Authority (the "Authority") as follows:
WHEREAS, the City of Columbia Heights (the “City”) and the Authority have collaborated to create a
certain Façade Improvement Grant Program (the “Program”); and
WHEREAS, pursuant to guidelines established for the Program, the Authority is to award and administer a series of grants
to eligible commercial property owners and/or tenants for the purposes of revitalizing existing store fronts, increasing business vitality and economic performance, and decreasing criminal
activity along Central Avenue Northeast, 40th Ave NE, and 38th Ave NE, pursuant to a Façade Improvement Grant Agreement with various property owners and/or tenants (the “Grant Agreement”);
and
WHEREAS, pursuant to the Program, the City is to coordinate a surveillance camera monitoring program by placing surveillance cameras on some of the storefronts that are part of
the Program for the purposes of improving public safety in and around the Central Business District; and
WHEREAS, the Authority has reviewed copies of the proposed form of the Grant
Agreement.
NOW, THEREFORE BE IT RESOLVED that the Authority hereby approves the form and substance of the Grant Agreement, and approves the Authority entering into the Grant Agreement
with various grant recipients, as recommended by the Community Development Department of the City, in accordance with the Program guidelines.
BE IT FURTHER RESOLVED, that Marlaine
Szurek, as the President of the Authority, is hereby authorized, empowered and directed for and on behalf of the Authority to enter into the various Grant Agreements.
BE IT FURTHER
RESOLVED, that Marlaine Szurek, as the President of the Authority, is hereby authorized and directed to execute and take such action as he/she deems necessary and appropriate to carry
out the purpose of the foregoing resolutions.
BE IT FURTHER RESOLVED, that these actions shall be effective as of August 5, 2019
ORDER OF ECONOMIC DEVELOPMENT AUTHORITY
Passed this
5th day of August, 2019
Offered by:
Herringer
Seconded by:
Williams
Roll Call:
All ayes
Marlaine Szurek, President
Attest:
Shelley
Hanson, Secretary
EDA Minutes
Page 6
Aug. 5, 2019
FAÇADE IMPROVEMENT GRANT AGREEMENT
THIS FAÇADE IMPROVEMENT GRANT AGREEMENT (“Agreement”), dated this _____ day of ______________,
2019 (the “Effective Date”), is entered into by and between [PROPERTY OWNER] a Minnesota [ENTITY TYPE] (the “Grantee”), and the Columbia Heights Economic Development Authority (the “EDA”).
RECITALS
WHEREAS, Grantee is [the owner of] [a tenant at] certain Property located at __________________ in the City of Columbia Heights (the “City”), Anoka County, Minnesota, and legally described
in Exhibit A hereto (the “Property”);
WHEREAS, the EDA, in cooperation with the City and its police department, has instituted a Façade Improvement Grant Program (the “Program”) for
the purpose of revitalizing existing store fronts, increasing business vitality and economic performance, and decreasing criminal activity;
WHEREAS, as part of the Program, the EDA
has proposed to make grants of money in the maximum amount of $5,000.00 per parcel of real property, to property owners, tenants, or nonprofit organizations, in order to revitalize,
rehabilitate, and restore exterior store fronts within the Central Business District in the City (the “CBD”), increase business vitality and economic performance in the CBD, and in certain
instances, to provide monitored surveillance within the CBD; and
WHEREAS, Grantee desires to participate in the Program, on the terms and conditions set forth below.
NOW, THEREFORE,
in consideration of the premises and of the agreements hereinafter contained, the parties agree as follows:
Property Improvements: Grantee agrees to complete the improvements at the
Property that are identified on Exhibit B attached hereto (the “Improvements”), subject to the following terms and conditions:
If requested by the EDA, Grantee shall provide plans
and specifications to the EDA, detailing the Improvements to be constructed (the “Plans”). If Grantee wishes to revise the Plans, Grantee must submit the revised Plans to the EDA at
the address provided herein. The EDA shall give written notice of its approval or disapproval of the revisions to the Plans, and if the EDA does not give such written approval or disapproval
within ten (10) business days after receipt of Grantee’s revised Plans, the EDA shall be deemed to have approved the revisions to the Plans.
The Improvement shall be constructed consistently
with the Plans, as the same may be revised pursuant to Section 1(a) herein. The cost to complete construction of the Improvements shall be defined as the “Improvement Costs.” The Improvements
shall be completed in a first-class manner, consistent with the Plans, if any, and in compliance with all applicable laws, rules, and regulations. Grantee shall obtain all required
permits and approvals from the City and any other governing authority with jurisdiction over the Property related to the construction of the Improvements. The out-of-pocket costs for
such permitting and approvals shall be the responsibility of Grantee, provided the same shall be included in the definition of “Improvement Costs,” and subject to the provisions of Section
2 of this Agreement.
Grantee agrees to commence the Improvements within sixty (60) days following the Effective Date, and to complete the Improvements within six (6) months following
the issuance of all necessary building permits, but in no event later than eight (8) months following the Effective Date.
EDA Minutes
Page 7
Aug 5, 2019
Payment of Grant Funds:
Grantee shall be responsible for making initial payment to all contractors involved in the construction of the Improvements. Upon final completion of the Improvements, Grantee shall
make a written request to the EDA for reimbursement of one-half (1/2) of the actual Improvement Costs incurred by Grantee, but in no event shall the reimbursement exceed Five Thousand
Dollars ($5,000.00). The written request shall include:
Proof of final inspection of the Improvements by the City building inspector;
Before and after photographs of the Property,
reflecting the Improvements made (as well as follow-up transmission of electronic files of such photographs), and reflecting that the Improvements were completed consistently with any
approved Plans;
A copy of the final invoice(s) received from the contractor(s) who completed the Improvements; and
Proof of payment of invoice(s) that comprised the Improvement Costs.
Following
Grantee’s written request for reimbursement, Grantee shall cooperate with the EDA in delivering to the EDA such follow-up information as is reasonably requested by the EDA in order to
review the Improvements and Improvement Costs reimbursement request. Within twenty-one (21) days following receipt of Grantee’s written request for reimbursement of Improvement Costs,
the EDA shall: (i) make payment of the reimbursement, (ii) send Grantee written explanation of such other items of information as are needed by the EDA to evaluate the reimbursement
request, or (iii) send Grantee written explanation of the EDA’s reasons for denial of repayment of any of Grantee’s requested reimbursement.
Liability for Improvements: Neither the
City nor the EDA shall in any event be liable to the Grantee, nor to any of its agents, employees, guests or invitees at the Property for, and the Grantee shall indemnify, save, defend,
and hold harmless the City and the EDA from, any claims or causes of action, including attorney’s fees incurred by the City or the EDA, arising from defect or claimed defect of any of
the Improvements, or arising from any action of the City or the EDA under this Agreement. This section shall survive the termination or expiration of this Agreement.
Written Notice:
Wherever any notice is required or permitted hereunder, such notice shall be in writing. Any notice or document required or permitted to be delivered hereunder shall be deemed to be
delivered when actually received by the designated addressee or regardless of whether actually received or not, when deposited in the United States Mail, postage prepaid, certified mail,
return receipt requested, addressed to the parties hereto at their respective addresses, as set forth below, or at such other address as they may subsequently specify by written notice.
If to the EDA:
Columbia Heights EDA
Community Development Department
590 40th Avenue N.E.
Columbia Heights, MN 55421
If to Grantee:
____________________
Attn: ________________
_______________
_____
____________________
EDA Minutes
Page 8
Aug 5, 2019
Captions; Choice of Law; Etc. The paragraph headings or captions appearing in this Agreement are for convenience
only, are not a part of this Agreement, and are not to be considered in interpreting this Agreement. This Agreement constitutes the complete agreement between the parties and supersedes
any prior oral or written agreements between the parties regarding the subject matter contained herein. There are no verbal agreements that change this Agreement. This Agreement binds
and benefits the parties hereto and their successors and assigns. This Agreement has been made under the laws of the State of Minnesota, and such laws will control its interpretation.
IN WITNESS WHEREOF, Grantee and the EDA have signed this Agreement as of the day and year first above written.
GRANTEE: [_________________________]
a [_______________________]
By:____________________________
Name: _________________________
Its:____________________________
Date:__________________________
EDA: COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
By:
Name: _________________________
Its:____________________________
Date:__________________________
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
EXHIBIT B
PROPERTY IMPROVEMENTS
SUBJECT TO 50% REIMBURSEMENT
EDA Minutes
Page 9
Aug 5, 2019
2. Preliminary Development Agreement with Alatus LLC
Chirpich reminded members that on July 22, 2019 the EDA approved
the acquisition of the vacant six-story office building located at 3989 Central Avenue NE, and the closing for the purchase occurred on July 31. The EDA has acquired 3989 Central Avenue
to facilitate redevelopment of the property along with the adjacent city owned parking ramp. Since May of 2019, the EDA has been working with Alatus LLC as the preferred development
partner for the project. The current Alatus concept plans for the site include the following base elements:
200-270 Luxury Apartments
Underground parking
20,000 square foot City Hall
space
3,000+ square feet of retail/restaurant space
Amenity deck with pool and complete workout facility
Sixth-floor sky lounge
At the July 22 EDA meeting, Alatus presented the Board
with visual concept plans for the property and expressed their desire to secure a formal interest in the property in the form of a preliminary development agreement. The Alatus proposal
was well received, and the Board directed staff to pursue a contractual agreement with Alatus as the next step in continuing negotiations. Since that meeting, staff has worked with the
EDA’s redevelopment council and Alatus to create a preliminary development agreement that is ready for approval. A full copy of the agreement is attached to this report. The primary
components of the agreement are as follows:
Alatus is designated as the sole developer for the property during the term of the agreement.
The agreement termination date is May 31, 2020.
The
concept plans and core elements of the project are established.
The EDA agrees to explore the use of tax increment financing to support the project.
Alatus will reimburse the EDA for
predevelopment planning costs, and an $11,000 escrow will be deposited upon execution of the agreement.
SUMMARY:
Chirpich stated that ultimately, it is the goal of staff to work as quickly
as possible towards a final purchase and redevelopment agreement that will allow for the sale of the property to Alatus. Due to the complex nature of this project, that goal will take
several months to realize. The objective of the preliminary development agreement is to formalize a working relationship and negotiation framework with the selected developer. The agreement
assures Alatus and the EDA that both parties are committed to working through the due diligence process to achieve a mutually beneficial outcome.
Staff recommends that the EDA Board
approve the predevelopment agreement with Alatus LLC. Chirpich stated that Stacie Kvilvang from Ehlers and Bob Lux from Alatus were present to answer member’s questions. He went on
to say that the City Council will have a more detailed discussion at the work session following this meeting regarding the possibility of locating City Hall on the first floor of the
proposed Alatus Development.
EDA Minutes
Page 10
Aug 5, 2019
Questions/comments from members:
Herringer asked if there would be a non-refundable earnest payment made. Kvilvang
stated that typically an earnest payment is non-refundable and that will be made at the next step when a purchase agreement is entered into. Herringer stated he loves the plan but is
concerned about the possibility of the deal falling apart. He noted that it is costing the City money to continue paying the taxes on the site until someone else actually purchases it.
Kvilvang stated that Alatus is committed to this project and will be expending $200,000-$300,000 within the next 45 days for design work, seeking their financing, and making TIF applications.
Lux told members he wants to do this as quickly as possible.
He acknowledged there is risk involved for both parties, but the vision for the property matches up for Alatus and the
City.
Williams asked Lux why he didn’t purchase the property from the former owner directly. Lux said he tried to negotiate with the seller to purchase the property, but the talks
failed. He explained that when the “Opportunity Zone” designation was bestowed on the property the former owner thought it was worth more. He also included the value of the ramp site,
even though he didn’t have control of it at the time. Lux told members that the seller wanted at least one million more than what the City purchased the property for which would have
made the development undoable. He said the City had some leverage because they actually retained ownership of the ramp parcel.
Herringer asked if it was realistic to transfer the
property to Alatus in 45 days. Chirpich said Alatus will be expending funds within the next 45 days to move forward with the plan, but he expects the process to close on the sale to
take approximately 6 months. Lux stated there are four components that need to happen first-
1. Entitlements (Site Plan, variance approval, and other Planning processes)
2. The antennas
need to be taken off so the demo can take place.
3. TIF and other financing needs to be determined.
4. A decision needs to be made whether City Hall will be included in the final design.
Members
questioned if there would be a problem getting the antennas off within that timeframe. Chirpich said negotiations were going well and that the company has a strong desire to relocate
them as soon as possible. They would like to put up a monopole antenna on the lot behind the Library and have agreed to be off the building by the Spring of 2020. They need to do some
soil tests on the new potential location so a Right of Entry agreement will be entered into soon so the testing can commence.
Herringer acknowledged it will be faster to get things
in place with Alatus rather than having to deal with a new developer. Buesgens stated she is not concerned with owning the building for the short term. She is confident that even
if this deal would fall apart for some reason, some other developer would also be interested in the parcel.
Motion by Buesgens, seconded by Novitsky, to waive the reading of Resolution
2019-13, there being ample copies available to the public. All ayes. MOTION PASSED.
Motion by Buesgens, seconded by Novitsky, to adopt Resolution 2019-13, Resolution approving preliminary
development agreement between the Columbia Heights Economic Development Authority and Alatus LLC. All ayes. MOTION PASSED.
EDA Minutes
Page 11
Aug 5, 2019
COLUMBIA HEIGHTS ECONOMIC
DEVELOPMENT AUTHORITY
RESOLUTION NO. 2019-13
APPROVING PRELIMINARY DEVELOPMENT AGREEMENT
BETWEEN THE COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY AND ALATUS LLC
BE IT RESOLVED
by the Board of Commissioners of the Columbia Heights Economic Development Authority (“Authority”) as follows:
1. Background.
1.01. Alatus LLC (the “Developer”) desires to acquire
certain property (the “Property”) owned by the Authority and by the City of Columbia Heights (the “City”), which Property has been the subject of certain preliminary negotiations with
the Authority for purposes of constructing a multi-use development on the Property (the “Development”).
1.02. The Authority and the Developer have determined to enter into a preliminary
development agreement (the “PDA”), providing for negotiation of a definitive purchase and development contract that will address (among other things) terms under which the Developer
will acquire the Property from the Authority and construct the Development on the Property, and the Authority may provide certain financial assistance if warranted to make development
by the Developer financially feasible.
1.03. The Board has reviewed the PDA, and has determined that it is in the best interests of the Authority to approve and execute the PDA.
2. Approval
of PDA.
2.01. The Authority approves the PDA, and authorizes and directs the President and Executive Director to execute same in substantially the form on file, subject to modifications
that do not alter the substance of the transaction and are approved by the President and Executive Director, provided that execution of the PDA by such officials will be conclusive evidence
of their approval.
2.02. Authority officials and consultants are authorized to take any other actions necessary to carry out the Authority’s obligations under the PDA, and to bring
a proposed definitive purchase and development contract before the Authority.
Approved this 5th day of August, 2019, by the Board of Commissioners of the Columbia Heights Economic
Development Authority.
_________________________________________
President
ATTEST:
_________________________________
Secretary
This is the Agreement being entered into.
EDA
Minutes
Page 12
Aug 5, 2019
PRELIMINARY DEVELOPMENT AGREEMENT
(NE Business Center Project)
THIS AGREEMENT, dated this ___ day of August, 2019, by and between the Columbia Heights
Economic Development Authority, a body politic and corporate under the laws of Minnesota (the “Authority”) and Alatus LLC, a Minnesota limited liability company, or permitted successors
or assigns (the “Developer”):
WITNESSETH:
WHEREAS, the Authority desires to promote redevelopment of certain Authority-owned property within the City of Columbia Heights (the “City”),
which property is legally described in Exhibit A attached hereto (the “Authority Property”), as well as certain other property owned by the City and legally described in Exhibit A attached
hereto (the “City Property”, and together with the Authority Property, the “Property”); and
WHEREAS, the Developer desires to acquire the Property for purposes of constructing a mixed-use
(multi-family residential and commercial) development on the Property (the “Development”), and has submitted a proposal outlining its general development terms and goals, a portion of
which is attached hereto as Exhibit B; and
WHEREAS, the Authority has determined that it is in the Authority’s best interest that the Developer be designated sole developer of the Property
during the term of this Agreement; and
WHEREAS, the Developer has requested the Authority to explore the use of tax increment financing under Minnesota Statutes, Sections 469.174 to
469.1794, as amended (the “Tax Increment Act”) or other public financial assistance to offset a portion of the public costs of the Development; and
WHEREAS, the Authority and the Developer
are willing and desirous to undertake the Development if (i) a satisfactory agreement can be reached regarding the Authority’s commitment for public assistance necessary for the Development;
(ii) satisfactory mortgage and equity financing, or adequate cash resources for the Development can be secured by the Developer; and (iii) the economic feasibility and soundness of the
Development and other necessary preconditions have been determined to the satisfaction of the parties; and (iv) the parties reach a satisfactory resolution of zoning, land use, site
design, and engineering issues; and
WHEREAS, the Authority is willing to evaluate the Development and work toward all necessary agreements with the Developer if the Developer agrees
to reimburse the Authority for its costs relating to the Development even if the Development is abandoned or necessary agreements are not reached under the terms of this Agreement.
NOW,
THEREFORE, in consideration of the foregoing and of the mutual covenants and obligations set forth herein, the parties agree as follows:
1. During the term of this agreement, the Authority
agrees to negotiate solely with the Developer relative to the acquisition and development of the Property by the Developer, in an attempt to formulate a definitive purchase and development
contract (“Contract”) based on the following:
(a) the Developer’s proposal (when submitted) together with any changes or modifications required by the Authority;
(b) such documentation
regarding economic feasibility of the Project as the Authority may wish to undertake during the term of this Agreement; and
EDA Minutes
Page 13
Aug 5, 2019
(c) other terms and conditions
of this Agreement.
2. It is the intention of the parties that this Agreement: (a) documents the present understanding and commitments of the parties; and (b) will lead to negotiation
and execution of a mutually satisfactory Contract for the Development prior to the termination date of this Agreement. The Contract (together with any other agreements entered into
between the parties hereto contemporaneously therewith) when executed, will supersede all obligations of the parties hereunder.
3. During the term of this Agreement, the Developer
shall:
(a) Submit a proposal to the Authority, which proposal must show the location, size, and nature of the proposed Development, including sample floor layouts, renderings, elevations,
and other graphic or written explanations of the Development. The proposal shall be accompanied by a preliminary schedule for the starting and completion of all phases of the Development.
(b) Submi
t an overall cost estimate for the design and construction of the Development.
(c) Submit a final time schedule for all phases of the Development.
(d) Undertake and obtain such other
preliminary economic feasibility studies, income and expense projections, and such other economic information as the Developer may desire to further confirm the economic feasibility
and soundness of the Development.
(e) Submit to the Authority the Developer’s financing plan showing that the proposed Development is financially feasible.
Furnish satisfactory, financial
data to the Authority evidencing the Developer’s ability to undertake the Development.
4. During the term of this Agreement, the Authority agrees to:
(a) Commence the process necessary
to undertake such public assistance as is necessary pursuant to the terms of the proposal.
(b) Proceed to seek all necessary information with regard to the anticipated public costs
associated with the Development.
(c) Estimate the Authority’s level and method of financial participation, if any, in the Development and develop a financial plan for the Authority’s
participation.
(d) Grant to the Developer, its agents, employees, officers, and contractors (the “Authorized Parties”) a right of entry on the Property for the purpose of performing
all due diligence work and inspections deemed necessary by the Developer to fulfill its obligations under this Agreement (the “Permitted Activities”). The Authorized Parties shall have
access to the Property seven (7) days a week between the hours of 7:00 a.m. and 7:00 p.m. Developer hereby agrees to be responsible for any and all costs related to the Permitted Activities
conducted on the Property, and to restore the Property to its original condition upon completion of the Permitted Activities. Developer agrees to indemnify, save harmless, and defend
the City, the Authority, and their officers and employees, from and against any and all claims, actions, damages, liability and expense in connection with personal injury and/or damage
to
the Property arising from or out of any occurrence in, upon or at the Property caused by the act or omission of the Authorized Parties in conducting the Permitted Activities on
the Property, except (a) to the extent caused by the negligence, gross negligence, willful misrepresentation or any willful or wanton
EDA Minutes
Page 14
Aug 5, 2019
misconduct by
the City or Authority, their officers, employees, agents or contractors; and (b) to the extent caused by a “Pre-Existing Condition” as defined in this paragraph 4. “Pre-Existing Condition”
shall mean any condition caused by the existence of hazardous substances or materials in, on, or under the Property, including without limitation hazardous substances released or discharged
into the drainage systems, soils, groundwater, waters or atmosphere, which condition existed as of the date of this Agreement and became known or was otherwise disclosed or discovered
by reason of the Authorized Parties’ entry onto the Property.
5. It is expressly understood that execution and implementation of the Contract shall be subject to:
(a) A determination
by the Authority in its sole discretion that its undertakings are feasible based on (i) the projected tax increment revenues and any other revenues designated by the Authority; (ii) the
purposes and objectives of any tax increment, development, or other plan created or proposed for the purpose of providing financial assistance for the Development; and (iii) the best
interests of the Authority.
(b) A determination by the Developer that the Development is feasible and in the best interests of the Developer.
6. This Agreement is effective from the
date hereof through May 31, 2020. After such date, neither party shall have any obligation hereunder except as expressly set forth to the contrary herein.
7. The Developer shall
be solely responsible for all costs incurred by the Developer. In addition, the Developer shall reimburse the Authority for the following costs:
(a) Upon execution of this Agreement,
the Developer has deposited with the Authority funds in the amount of $11,000, receipt of which the Authority hereby acknowledges. The Authority may apply such deposit to pay any “Authority
Costs,” which means: reasonable and necessary out-of pocket-costs incurred by the Authority from and after May 20, 2019, in each case based on actual time spent in connection with rendering
assistance and advice to the Authority as evidenced by itemized bills and invoices for (i) the Authority’s financial advisor in connection with the Authority’s financial participation
in redevelopment of the Property , (ii) the Authority’s legal counsel in connection with negotiation and drafting of this Agreement and any related agreements or documents, and any legal
services related to the Authority’s or City’s participation in redevelopment of the Property; (iii) any appraiser retained by the Authority in connection with conveyance of any portion
of the Property by the Authority to the Developer or in connection with determination of the level of public assistance; and (iv) consultants retained by the Authority for planning,
environmental review, and traffic engineering for development of the Property. At Developer’s request, but no more often than monthly, the Authority will provide Developer with a written
report on current and anticipated expenditures for Authority Costs, including invoices or other comparable evidence.
(b) If at any time during the term of this Agreement the Authority
determines that the amounts deposited by Developer are insufficient to pay Authority Costs, the Authority may notify the Developer in writing as to any additional amount required to
be deposited. The Developer must deposit such additional funds within 20 days after receipt of the Authority’s notice.
(c) Upon termination of this Agreement in accordance with its
terms, the Authority will return to the Developer the balance of any funds deposited under this section that are on hand as of the date of receipt of the notice of termination, less
$1,000 representing a nonrefundable application fee, and less any Authority Costs incurred through the date of receipt of the notice of termination. For the purposes of this paragraph,
Authority Costs are considered to be incurred if they have been paid, relate to services performed, or are payable under a contract entered into, on or before the date of receipt of
the notice of termination.
EDA Minutes
Page 15
Aug 5, 2019
This Section 7 shall survive termination of this Agreement and shall be binding on the Developer regardless of the enforceability
of any other provision of this Agreement.
8. This Agreement may be terminated upon 5 days written notice by the Authority to the Developer if:
(a) an essential precondition to the execution
of a contract cannot be met; or
(b) if, in the sole discretion of the Authority, an impasse has been reached in the negotiation or implementation of any material term or condition of
this Agreement or the Contract; or
(c) The Authority determines that its Administrative Costs will exceed the amount initially deposited for such purpose under Section 7(b), and the
Developer does not deliver additional security to the Authority pursuant to Section 7(b) of this Agreement.
If the Authority terminates the Agreement under this Section 8, the Developer
shall remain liable to the Authority under Section 7(b) of this Agreement for Administrative Costs incurred by the Authority through the effective date of termination.
9. The Developer
is designated as sole developer of the Property during the term of this Agreement. The Authority makes no representations or warranties as to control, access or ownership of any portion
of the Property, but agrees that during the term of this Agreement the Authority will not enter into agreements with any other party to facilitate redevelopment of the Property.
10. In
the event that the Developer, its heirs, successors or assigns, fail to comply with any of the provisions of this Agreement, the Authority may proceed to enforce this Agreement by appropriate
legal or equitable proceedings, or other similar proceedings, and the Developer, its heirs, successors or assigns, agree to pay all costs of such enforcement, including reasonable attorneys’
fees.
11. If any portion of this Agreement is held invalid by a court of competent jurisdiction, such decision shall not affect the validity of any remaining portion of the Agreement.
12. In
the event any covenant contained in this Agreement should be breached by one party and subsequently waived by another party, such waiver shall be limited to the particular breach so
waived and shall not be deemed to waive any other concurrent, previous or subsequent breach. This Agreement may not be amended nor any of its terms modified except by a writing authorized
and executed by all parties hereto.
13. Notice or demand or other communication between or among the parties shall be sufficiently given if sent by mail, postage prepaid, return receipt
requested or delivered personally:
(a) As to the Authority:
Columbia Heights Economic Development Authority
590 40th Avenue NE
Columbia Heights, MN 55421
Attn: Community Development
Director
(b) As to the Developer:
Alatus LLC
800 Nicollet Mall, Suite 2850
Minneapolis, MN 55402
Attn: Director of Development
EDA Minutes
Page 16
Aug 5, 2019
14. This Agreement may
be executed simultaneously in any number of counterparts, all of which shall constitute one and the same instrument.
15. This Agreement shall be governed by and construed in accordance
with the laws of the state of Minnesota. Any disputes, controversies, or claims arising out of this Agreement shall be heard in the state or federal courts of Minnesota, and all parties
to this Agreement waive any objection to the jurisdiction of these courts, whether based on convenience or otherwise.
16. The Developer hereby agrees to protect, defend and hold the
Authority and its officers, elected and appointed officials, employees, administrators, commissioners, agents, and representatives harmless from and indemnified against any and all loss,
cost, fines, charges, damage and expenses, including, without limitation, reasonable attorneys fees, consultant and expert witness fees, and travel associated therewith, due to claims
or demands of any kind whatsoever arising out of (i) the development, marketing, sale or leasing of all or any part of the Property, including, without limitation, any claims for any
lien imposed by law for services, labor or materials furnished to or for the benefit of the Property, or (ii) any claim by the state of Minnesota or the Minnesota Pollution Control Agency
or any other person pertaining to the violation of any permits, orders, decrees or demands made by said persons or with regard to the presence of any pollutant, contaminant or hazardous
waste on the Property; and (iii) or by reason of the execution of this Agreement or the performance of this Agreement. The Developer, and the Developer’s successors or assigns, agree
to protect, defend and save the Authority, and its officers, agents, and employees, harmless from all such claims, demands, damages, and causes of action and the costs, disbursements,
and expenses of defending the same, including but not limited to, attorneys fees, consulting engineering services, and other technical, administrative or professional assistance. This
indemnity shall be continuing and shall survive the performance, termination or cancellation of this Agreement. Nothing in this Agreement shall be construed as a limitation of or waiver
by the Authority of any immunities, defenses, or other limitations on liability to which the Authority is entitled by law, including but not limited to the maximum monetary limits on
liability established by Minnesota Statutes, Chapter 466.
17. The Developer, for itself, its attorneys, agents, employees, former employees, insurers, heirs, administrators, representatives,
successors, and assigns, hereby releases and forever discharges the Authority, and its attorneys, agents, representatives, employees, former employees, insurers, heirs, executors and
assigns of and from any and all past, present or future claims, demands, obligations, actions or causes of action, at law or in equity, whether arising by statute, common law or otherwise,
and for all claims for damages, of whatever kind or nature, and for all claims for attorneys’ fees, and costs and expenses, including but not limited to all claims of any kind arising
out of the negotiation, execution, or performance of this Agreement between the parties.
IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name
and behalf and its seal to be duly affixed hereto and the Developer has caused this Agreement to be duly executed as of the day and year first above written.
ALATUS LLC
By
Chris
Osmundson
Its Director of Development
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
By By__________________________________
Marlaine Szurek Kelli Bourgeois
Its President
Its Executive Director
EDA Minutes
Page 17
Aug 5, 2019
EXHIBIT A
Description of Property
AUTHORITY PROPERTY:
PARCEL 1 (Abstract and Torrens Property):
Lot 32, Block 6, Reservoir
Hills, Anoka County, Minnesota.
Lots 25 through 28, Block 1, Walton's Rearrangement of Lots 33 and 34, Block 6, Reservoir Hills, Anoka County, Minnesota.
The vacated alley adjacent
to Lots 25 through 28, Block 1, Walton's Rearrangement of Lots 33 and 34, Block 6, Reservoir Hills, Anoka County, Minnesota.
Those parts of Lots 28 through 31, Block 6, Reservoir Hills;
Lots 23. and 24, Block 1, Walton's Rearrangement of Lots 33 and 34, Block 6, Reservoir Hills; and of the vacated alley adjacent to Lot 24, Block 1, Walton's Rearrangement of Lots 33
and 34, Block 6, Reservoir Hills; lying southwesterly and westerly of the following described line: Beginning at a point on the south line of Block 1, Walton's Rearrangement, said point
being 18.00 feet West of the southeast corner of Lot 23, of said Block 1, Walton's Rearrangement; thence Northerly on a line 18.00 feet West of and parallel with the east line of Lot
23 a distance of 87.00 feet; thence on a straight line to a point on the north line of Lot 30 of said Block 6, Reservoir Hills, said point being 47.23 feet Easterly of the northwest
comer of said Lot 30 and there terminating.
The following portion of the above description being registered land:
That part of Lot Twenty-three (23), Block (1), Walton's Rearrangement
of Lots Thirty-three (33) and Thirty-four (34), Block Six (6), Reservoir Hills, lying southwesterly and westerly of the following described line: Beginning at a point on the South line
of said Block 1, Walton's Rearrangement, said point being 18.00 feet West of the southeast comer of Lot 23 of said Block 1, Walton's Rearrangement: thence Northerly on a line 18.00 feet
West of and parallel with said east line of Lot 23, a distance of 87.00 feet; thence on a straight line to a point on the north line of Lot 30 of said Block 6, Reservoir Hills, said
point being 47.23 feet Easterly of the northwest comer of said Lot 30 and there terminating.
PARCEL 2 (Abstract Property):
Those parts of Lots 27 through 31, Block 6, Reservoir Hills
and those parts of Lots 23 and 24, Block 1, Walton's Rearrangement of Lots 33 and 34, Block 6, Reservoir Hills and of the vacated alley abutting Block 1, "Walton's Rearrangement of Lots
33 and 34, Block 6, Reservoir Hills", as dedicated in said plat, lying within the following described tract: Commencing at a point on the south line of said Block 1, Walton's Rearrangement
distant 18.00 feet west of the southeast corner of Lot 23, said Block 1, Walton's Rearrangement; thence northerly on a line 18.00 feet west of and parallel with the east line of said
Lot 23, a distance of 87.00 feet, to the actual point of beginning of the tract to be described; thence continuing northerly on the extension of said line to the north line of Block
6, Reservoir Hills; thence westerly along said north line of Block 6, to a point being 47.23 feet easterly of the northwest corner of Lot 30, Block 6, Reservoir Hills; thence southeasterly,
to the point of beginning;
Excepting therefrom Tract A, Registered Land Survey No. 250, Anoka County, Minnesota.
PARCEL 3 (Torrens Property):
Tract A, Registered Land Survey No. 250,
Anoka County, Minnesota.
EDA Minutes
Page 18
Aug 5, 2019
CITY PROPERTY:
Lots 24, 25, and 26, Block 6, Reservoir Hills.
Lots 20, 21, and 22, Block 1, Walton’s Rearrangement of Lots
33 and 34, Block 6, Reservoir Hills, and all of the vacated alley adjacent to said Lots 20, 21, and 22.
Those parts of Lot 7, Block 6, Reservoir Hills and of Lot 23, Block 1, Walton’s
Rearrangement of Lots 33 and 34, Block 6, Reservoir Hills and of that part of the vacated alley abutting Block 1, “Walton's Rearrangement of Lots 33 and 34, Block 6, Reservoir Hills”,
as dedicated in said plat, which lies westerly of the northerly extension of the east line of Lot 23, said Block 1, lying easterly of the following described line:
Beginning at a point
on the south line of said Block 1, Walton’s Rearrangement, said point being 18.00 feet west from the Southeast corner of Lot 23 of said Block l,Walton's Rearrangement; thence northerly
on a line 18.00 feet west of and parallel with the east line of said Lot 23, to the north line of said Block 6, Reservoir Hills.
Reserving and subject to easement to the City of Columbia
Heights for roadway purposes over the north 4.00 feet of the west 232.00 feet of said Block 6, Reservoir Hills.
PID: 36-30-24-32-0262, 950 40th Avenue NE
Lot 19, Block l, Walton's
Rearrangement of Lots 33 and 34, Block 6, Reservoir Hills, according to the map or plat thereof on file or of record in the office of the Registrar of Deeds in and for Anoka County,
Minnesota.
PID: 36-30-24-32-0078, 961 Gould Avenue NE
EDA Minutes
Page 19
Aug 5, 2019
EXHIBIT B
Developer’s Proposal
/
/
EDA Minutes
Page 20
Aug 5, 2019
The
next meeting is scheduled for Tuesday, September 3, 2019-due to the Labor Day Holiday.
Motion by Buesgens, seconded by Murzyn, to adjourn the meeting at 7:00 pm.
All ayes.
Respectfully
submitted,
Shelley Hanson
Secretary