HomeMy WebLinkAbout2015/08/17 - ADMIN - Agenda Packets - City Council - RegularAGENDA
AUGUST 17, 2015
6:30 p.m. SPECIAL STUDY SESSION – Community Room
Discussion Item
1. 45 min. Redevelopment of Former Bally’s Site by Oppidan Investment Company
7:20 p.m. ECONOMIC DEVELOPMENT AUTHORITY -- Council Chambers
1. Call to Order
2. Roll Call
3. Approval of Minutes
3a. Economic Development Authority Meeting Minutes August 3, 2015
4. Approval of Agenda
5. Reports -- None
6. Old Business – None
7. New Business
7a. Establishment of The Shoreham Tax Increment Financing District
Recommended Action:
• Motion to Adopt EDA Resolution approving the establishment of The Shoreham
Tax Increment Financing District within Redevelopment Project No. 1 (a
redevelopment district).
• Motion to Adopt EDA Resolution authorizing an Interfund Loan for advance of
certain costs in connection with the administration of The Shoreham TIF District.
7b. Redevelopment Contract with Shoreham Apartments, LLC
Recommended Action: Motion to Adopt EDA Resolution approving the
Redevelopment Contract between the EDA and Shoreham Apartments, LLC (Bader
Development) related to the proposed Shoreham project at the SW corner of CSAH 25
and France Ave.
8. Communications -- None
9. Adjournment
7:30 p.m. CITY COUNCIL MEETING – Council Chambers
1. Call to Order
1a. Pledge of Allegiance
1b. Roll Call
2. Presentations
2a. Recognition of Clark Kube’s Years of Service
2b. Retirement Recognition Resolution for Office Assistant Nancy Conery
2c. Community Garden Harvest Festival Day Proclamation
2d. Southwest Twin Cities Beyond The Yellow Ribbon Coalition Update
Meeting of August 17, 2015
City Council Agenda
Auxiliary aids for individuals with disabilities are available upon request. To make arrangements, please call
the Administration Department at 952/924-2525 (TDD 952/924-2518) at least 96 hours in advance of meeting.
3. Approval of Minutes
3a. Study Session Meeting Minutes July 27, 2015
3b. City Council Meeting Minutes August 3, 2015
4. Approval of Agenda and Items on Consent Calendar
NOTE: The Consent Calendar lists those items of business which are considered to be routine and/or which
need no discussion. Consent items are acted upon by one motion. If discussion is desired by either a
Councilmember or a member of the audience, that item may be moved to an appropriate section of the regular
agenda for discussion. The items for the Consent Calendar are listed on the last page of the Agenda.
Recommended Action: Motion to approve the Agenda as presented and items listed on the Consent Calendar; and to waive
reading of all resolutions and ordinances. (Alternatively: Motion to add or remove items from the agenda,
or move items from Consent Calendar to regular agenda for discussion.)
5. Boards and Commissions – None
6. Public Hearings
6a. Central Florida Restaurants, Inc. dba T.G.I. Fridays - On-Sale Intoxicating and On-Sale
Sunday Liquor License
Recommended Action: Mayor to open public hearing, take public testimony, and close
public hearing. Motion to approve application from Central Florida Restaurants, Inc. dba
T.G.I. Fridays for an On-Sale Intoxicating and On-Sale Sunday Liquor License for the
premises located at 5875 Wayzata Blvd. with a license term through March 1, 2016.
6b. MLCV STLP, LLC dba DoubleTree Minneapolis Park Place - On-Sale Intoxicating and
On-Sale Sunday Liquor License
Recommended Action: Mayor to open public hearing, take public testimony, and close
public hearing. Motion to approve application from MLCV STLP, LLC dba DoubleTree
Minneapolis Park Place for an On-Sale Intoxicating and On-Sale Sunday Liquor License
for the premises located at 1500 Park Place Blvd. with a license term through March 1,
2016.
6c. Public Hearing and Establishment of The Shoreham Tax Increment Financing District
Recommended Action: Mayor to open public hearing, take public testimony, and close
public hearing. Motion to Adopt Resolution approving the establishment of The
Shoreham Tax Increment Financing District within Redevelopment Project No. 1 (a
redevelopment district).
7. Requests, Petitions, and Communications from the Public -- None
8. Resolutions, Ordinances, Motions and Discussion Items
8a. Ordinance Amending St. Louis Park City Code Chapter 3 – Alcoholic Beverages
Recommended Action: Motion to approve the first reading of an ordinance amending
St. Louis Park City Code Chapter 3 relating to alcoholic beverages and to schedule the
second reading of the ordinance on September 8, 2015.
9. Communications -- None
Meeting of August 17, 2015
City Council Agenda
CONSENT CALENDAR
4a. Adopt Resolution electing to continue the current coverage with the changes from the
LMCIT’s.
4b. Authorize staff to purchase up to $820,000 in office partitions, workstations, and
furnishing with State contract pricing from Hendrickson PSG.
4c. Approve the Blue Cross Blue Shield of Minnesota Active Living for All Master
Agreement relating to the Health in the Park initiative.
4d. Adopt Resolution authorizing execution of the Hennepin County Grant Agreement for
the City’s residential curbside recycling and organics program.
4e. Adopt Resolution authorizing the special assessment for the repair of the sewer service
line at 2960 Zarthan Avenue South, St. Louis Park, MN P.I.D. 09-117-21-34-0188.
4f. Adopt Resolution to recognize Office Assistant Nancy Conery for her 37 years of
service to the City of St. Louis Park.
4g. Adopt Resolution calling for a public hearing on September 21, 2015 regarding the
issuance of private activity revenue bonds for Shoreham Apartments, LLC.
St. Louis Park Economic Development Authority and regular City Council meetings are carried live on Civic TV cable channel
17 and replays are frequent; check www.parktv.org for the schedule. The meetings are also streamed live on the internet at
www.parktv.org, and saved for Video on Demand replays. The agenda is posted on Fridays on the official city bulletin board in
the lobby of City Hall and on the text display on Civic TV cable channel 17. The agenda and full packet are available by noon
on Friday on the city’s website.
Meeting: Special Study Session
Meeting Date: August 17, 2015
Discussion Item: 1
EXECUTIVE SUMMARY
TITLE: Redevelopment of Former Bally’s Site by Oppidan Investment Company
RECOMMENDED ACTION: Staff wishes to review changes Oppidan has made to the
development plans since the June 8th Study Session, and to ascertain whether the City
Council/EDA supports the revised development plans. If the Council/EDA supports the plans,
then Oppidan will move forward with the PUD approval process and its request for TIF
assistance.
POLICY CONSIDERATION: Does the City Council/EDA support Oppidan’s revised
redevelopment plans for the “Bally block” and is it willing to consider entering into a
redevelopment contract to reimburse the Developer for qualified costs incurred in connection
with the construction of 4900 Excelsior with tax increment generated by the project to make it
financially feasible?
SUMMARY: Oppidan Investment Company (“Developer”) proposes to acquire the former Bally
Total Fitness property, raze the building and parking structure and replace them with a mixed-
use (residential and retail) development called 4900 Excelsior. The proposed building plan has been
revised since the City Council’s June 8, 2015 meeting to respond to comments and concerns
made by the City Council. The proposed building would be five to six stories tall with step backs
along the north and south sides. It would consist of 28,228 square feet of ground floor retail
space and 176 apartment units. It would also feature 18 affordable units, a public art mural, two
levels of structured underground parking as well as on-street parking. As part of the project, Oppidan
proposes to purchase the vacant EDA property immediately to the east (located at 4760 Excelsior
Blvd). In order to make the project financially feasible, Oppidan has applied for Tax Increment
Financing (TIF) assistance. As a reminder, should the EDA direct staff to pursue the project further,
the EDA is not obligating itself to providing the proposed assistance at this time. The planned
unit development approval for this project will require five affirmative votes (2/3 majority).
FINANCIAL OR BUDGET CONSIDERATION: The cost to construct the proposed 4900
Excelsior project is approximately $47.2 million. Upon completion it is estimated that the
project’s total taxable market value would exceed $38 million. The proposed mixed-use project
is not financially feasible due to more than $7.1 million of extraordinary costs associated with
redeveloping the site. In order for the project to proceed, it is proposed that the EDA consider
reimbursing the Developer for qualified costs up to approximately $2.6 million in pay-as-you-go
tax increment generated by the project for a term of approximately 6.5 years. All the above
estimates are subject to review of an updated proforma that reflects the project revisions
described later in this report. Based on the latest plan revisions and project proforma, it is likely
the requested amount of TIF assistance may also need to be revised.
VISION CONSIDERATION: St. Louis Park is committed to providing a well-maintained and
diverse housing stock.
SUPPORTING DOCUMENTS: Discussion
Revised Building Renderings
Prepared by: Greg Hunt, Economic Development Coordinator
Sean Walther, Planning & Zoning Supervisor
Reviewed by: Kevin Locke, Community Development Director
Approved by: Tom Harmening, City Manager
Special Study Session Meeting of August 17, 2015 (Item No. 1) Page 2
Title: Redevelopment of Former Bally’s Site by Oppidan Investment Company
DISCUSSION
BACKGROUND: The Bally Total Fitness facility (located at 4900 Excelsior Blvd.) closed in
2012 as a result of the acquisition of its parent company by LA Fitness. Recently, Oppidan
Investment Company secured an option to purchase the 1.2 acre Bally property and has applied
for planning approvals and TIF assistance for the redevelopment of the entire block. The block is
bound by Excelsior Blvd, Quentin Ave S, Princeton Ave S, and Park Commons Dr.
The land assemblage necessary for the proposed redevelopment will require the acquisition of
the property located at 4760 Excelsior Blvd immediately east of the Bally building. This vacant
0.4 acre property is a remnant owned by the EDA. It acquired the property in 1996 as part of the
land assemblage of the future Excelsior & Grand project. The EDA retained ownership of the
property in hopes that a mixed-use redevelopment proposal encompassing the entire block would
eventually emerge.
PRESENT CONSIDERATIONS: The Bally Total Fitness building has been vacant and
unoccupied since 2012. The EDA property next door (4760 Excelsior Blvd) has been vacant and
unoccupied since 2001. The EDA maintains the property and annually incurs expenses related to
irrigation, lawn maintenance, stormwater utility, and Special Service District charges. Both
properties are highly visible on the north side of Excelsior Blvd between the Park Nicollet Clinic
Campus on the west and Excelsior & Grand on the east. This 1.6-acre site has been eyed for
redevelopment since the mid-1990s.
Special Study Session Meeting of August 17, 2015 (Item No. 1) Page 3
Title: Redevelopment of Former Bally’s Site by Oppidan Investment Company
Plan Revisions: While this project has had many iterations, the descriptions below focus on the
changes since the June 8th Study Session, unless otherwise noted.
Dwelling Units: Oppidan reduced the project to 176 dwelling units. That is 13 fewer than when
the Planning Commission reviewed the project and three fewer than the City Council saw on
June 8, 2015. Three units on the sixth level were removed along the Excelsior Blvd frontage, as
shown below.
Building Height: There building will be six stories on the south elevation along Excelsior
Boulevard, similar to the proposal that the Planning Commission reviewed on April 15, 2015.
The roof of the building is 77 feet above the finished grade along Excelsior Blvd, excluding the
trellis features at the corners which rise higher. However, the central portion of the building will
step back approximately 30 feet on the sixth level now that three units have been removed.
Three images of this change follow. Oppidan will provide enhanced graphics for the presentation
on Monday. The drawings attached at the end of the report have not been updated to reflect the
changes shown in the following depictions.
Special Study Session Meeting of August 17, 2015 (Item No. 1) Page 4
Title: Redevelopment of Former Bally’s Site by Oppidan Investment Company
Perspective from
Excelsior & Quentin
Perspective from
Excelsior & Princeton
3D Elevation
along Excelsior
Special Study Session Meeting of August 17, 2015 (Item No. 1) Page 5
Title: Redevelopment of Former Bally’s Site by Oppidan Investment Company
On the north side along Park Commons Drive, the top floor still steps back 25 to 35 feet, which
effectively reduces the height of the building visible from the street level. This has minimized the
shadows cast upon the Wolfe Lake Condominium building across the street. The building height
would be approximately 57 to 65 feet tall on this north side; excluding the trellis elements (see
attached drawings).
Exterior Building Materials Changes: The revised drawings indicate a red brick will be used,
instead of the gray previously proposed. They have also changed the building materials used at
the sidewalk level along Park Commons Drive, Princeton Avenue, and Quentin Avenue. Glass
has been added in several locations as well.
Excelsior Boulevard (South) Building Elevation Changes:
In addition to the three units removed on the sixth floor, several other improvements have been
made to the plan. Additional resident entry/exit doorways have been added along the sidewalk.
There will be a total of three entrances to the residential, two from the exit stairways and one to
the lobby. There will also be an entry to the grocery store on Excelsior Boulevard. All the entries
include canopies above the doors to highlight these entries. A vertical set of windows has been
added at the westerly resident entry which adds visual interest and provide natural light to the
stairwells.
Also, Oppidan enhanced the streetscape along Excelsior Boulevard, the plantings along the
boulevard have been enhanced and potted plants, benches, and tables and chairs are proposed
along the building foundation.
Park Commons Boulevard (North) Building Elevation Changes
On the north side of the building, Oppidan added cast stone on the parking levels which will be
more durable and add texture and interest. Brick banding was added at the building corners,
which also adds visual interest and detailing. A band of transom windows were added to first
level parking. Two entries were added with staircases up to the first level. One will be a
resident only entry, the other is a grocery store entry that goes into the first level parking. Glass
was also added in two locations where decorative screening was previously shown. Decorative
screening is still shown on the middle section of the building on the first level commercial
parking.
Quentin Avenue (West) Building Elevation Changes
A doorway to the commercial (first level) parking was added. The stucco previously proposed at
sidewalk level was changed to cast stone. Also, a horizontal stucco sign band was added along
this elevation.
Princeton Avenue (East) Building Elevation Changes
A few of the details have changed along this elevation. There is an entry to the residential lobby.
The metal staircases has changed to aluminum picket railings, some recessed brick banding
details were added, a sign band is now depicted over the garage entry, and again the stucco along
the sidewalk level has been changed to cast stone.
CURRENT PROPOSAL: Oppidan proposes to raze the former fitness facility and adjoining
parking ramp and replace them with a mixed-use development called 4900 Excelsior. As noted
previously, the recently revised plans (attached) depict a building with six stories at a height of
77 feet along Excelsior Blvd and step backs along Park Commons Drive and a portion of
Excelsior Boulevard. The step backs on the building’s north side reduced the shadow coverage
Special Study Session Meeting of August 17, 2015 (Item No. 1) Page 6
Title: Redevelopment of Former Bally’s Site by Oppidan Investment Company
on the adjacent buildings. The proposed project includes commercial and multi-family residential
components. The commercial component consists of 28,228 square feet of ground floor retail
space that is expected to be leased to Fresh Thyme Farmers Market which hopes to include a
small, off-sale liquor store. The residential component consists of 176 apartment units (of which
18 units or 10% would be designated for households earning 60% of Area Median Income). Also
included would be a public art mural, two levels of structured underground parking as well as
on-street-level parking for a total of 340 parking stalls.
The project’s proposed residential unit mix is as follows:
UNIT TYPE 1ST 2ND 3RD 4TH 5TH 6TH TOTAL ACTUAL %
STUDIO 0 1 1 1 0 0 3 2%
ALCOVE 0 10 9 9 5 0 33 19%
1 BR 0 17 20 20 17 2 76 43%
1 BR + DEN 0 3 3 3 2 0 11 6%
2 BR 6 6 9 9 8 6 44 25%
2 BR + DEN 0 2 2 2 2 1 9 5%
TOTAL 6 39 44 44 34 9 176 100%
The land assemblage necessary for the proposed redevelopment will require the acquisition of
4760 Excelsior Blvd from the EDA. The property was appraised at $600,000 as a Stand-Alone
site and $780,000 as Assembled with the adjoining property for a mixed–use development. It is
the EDA’s practice to sell property at market rate. Oppidan has offered to purchase the property
for $780,000. Acquisition terms would be specified in a Purchase and Redevelopment Contract.
Oppidan envisions commencing the project this year and taking a little over a year to construct.
The Developer estimates the new mixed–use building would be open for occupancy by Spring of
2017.
Land Use, Zoning, and Other Requirements
The Comprehensive Plan designates the site for Mixed-Use and the current zoning map
contemplates mixed-use and high-density residential development on the site. The proposed
PUD would create a new zoning district and zoning regulations for uses and dimensional
standards that are unique to this site and the proposed site and building plans.
The intent of the Mixed Use land use designation and the City’s Livable Communities design
principles is to create compact, pedestrian-scale, mixed-use buildings, typically with retail,
service or other commercial uses on the ground floor and residential or office uses on upper
floors. Mixed-use is intended to accommodate mixed-income housing, a mix of housing types on
the same block, and higher density development. The Comprehensive Plan calls for an increase
in the availability of neighborhood housing choices and a broader range of housing types. The
proposed development would provide higher density apartment housing, including affordable
units, in a building that complements the nearby Excelsior & Grand development.
The southern portion of the site is zoned Mixed-Use and the northern portion is High Density
Multiple Family Residential. The proposed grocery store footprint straddles this zoning
boundary. For this reason, the commercial use currently shown as multiple-family residential
requires a 2/3 majority of the City Council to approve (five of seven council members).
Special Study Session Meeting of August 17, 2015 (Item No. 1) Page 7
Title: Redevelopment of Former Bally’s Site by Oppidan Investment Company
Staff finds that this site is suitable for the proposed mixed-use development and multiple-family
housing and meets or addresses many of the Livable Communities Principles and the Wolfe Park
Neighborhood Improvement Opportunities listed in the City’s Comprehensive Plan as well as
meets many of the objectives for the Park Commons redevelopment area. The project will
follow the City’s Green Building Policy and it is located in a neighborhood that received LEED-
ND certification from the U.S. Green Building Council. It will also comply with requirements
incorporated in the City’s recently adopted Inclusionary Housing Policy. To that end, Oppidan
will designate 18 (or 10%) of the residential units as affordable to households earning 60% of the
area median income. This makes for a mixed-income development and expands housing choices
for the community. The site has convenient access to good bus service, Wolfe Park, and other
services and businesses along Excelsior Blvd, and is within biking distance of the SWLRT
regional trail and future LRT Beltline and Wooddale stations.
The proposed development is a mixed-use building that promotes efficient use of the land,
existing infrastructure, and existing roadway system. The plan places the majority of the parking
under the building screened from view and utilizes adjacent on-street parking.
The plan for 4900 Excelsior provides private designed outdoor recreation area rooftop amenities
on the second floor for its residents. The building design includes active uses at the pedestrian-
level along Excelsior Blvd, including storefront windows, entrances, high quality building
materials, and other measures to enhance the character at the pedestrian level along Excelsior
Blvd. Portions of the upper stories are set back to minimize the visual impact of the building at
the pedestrian-level.
Overview of the Project’s Sources and Uses
The total development cost (TDC) to construct 4900 Excelsior is projected at $47.2 million. The
project’s anticipated sources and uses are listed in the tables below along with their respective
percentage of the total development cost.
SOURCES AMOUNT ($) % of TDC
Private Financing 34,700,000 74.0
Developer Equity 9,890,000 20.5
Tax Increment Financing 2,600,000 5.5
TOTAL Sources 47,190,000 100%
USES AMOUNT ($) % of TDC
Land Acquisition 4,480,000 9.5
Construction Costs 36,515,000 77.4
Architectural/Engineering 1,450,000 3.1
Marketing/Leasing Costs 549,000 1.1
Carrying & Soft Costs 3,026,000 6.4
Developer Fee 1,170,000 2.5
TOTAL Project Costs 47,190,000 100%
As indicated above, the proposed purchase price for the subject properties is $4,480,000; that is
$3,700,000 for the Bally property and $780,000 for the EDA property respectively. The
combined land acquisition price equals approximately $25,028 per unit. According to both
Ehlers and the City Assessor, this per unit cost is higher than the typical range of $10,000 to
Special Study Session Meeting of August 17, 2015 (Item No. 1) Page 8
Title: Redevelopment of Former Bally’s Site by Oppidan Investment Company
$15,000 per unit but this is due to the fact that there is an existing building and parking structure
on the site. The EDA’s property was appraised at $600,000 as a Stand-Alone site and $780,000
As Assembled with the adjoining property for a mixed–use development. It is the EDA’s
practice to sell property at market rate; therefore Oppidan’s proposed purchase price for 4760
Excelsior Blvd reflects the appraised As Assembled price. The other above project costs were
found to be reasonable and within industry standards for the proposed type of redevelopment.
The inclusion of 18 affordable units in the project results in a reduction of rental income for the
Developer. The reduction is due to a difference between market rents and lower affordable rents.
The difference between the market units and the affordable units is approximately $94,000
annually or $2.4 million (excluding inflation) over the required 25 years. Despite this income
loss, the Developer is able to maintain the project’s viability via density, upper market rate rents
and accepting a slightly lower rate of return.
Developer’s Request for Public Financing Assistance
In its application, Oppidan requested $4 million in tax increment finance assistance to offset a
portion of the $7.1 million of extraordinary costs* associated with redeveloping the subject site.
Tax increment financing uses the increased future property taxes generated by a new
development to finance certain qualified development costs incurred in connection with that
project for a limited period of time. The extraordinary site redevelopment costs related to
Oppidan’s proposed project include building demolition, site preparation, shoring and structured
underground parking. The proposed project’s anticipated extraordinary costs are included in the
$36.5 million of Construction Costs above and are detailed below.
Extraordinary Cost Estimates AMOUNT ($)
Investigation & RAP Development 30,000
Asbestos Abatement and Other Environmental Work 210,000
Building Demolition 240,000
Installation of Shoring 340,000
Stormwater Retention System 250,000
Site work Design 500,000
Construction of Structured Parking 5,550,000
TOTAL Extraordinary Costs $7,120,000
*Extraordinary costs are expenses encountered over and above those which a developer would typically expect to
incur in a suburban development (e.g. asbestos removal, building demolition, contaminated soil removal and
disposal, storage tank removal and disposal, shoring, utility replacement, specialized stormwater management,
structured parking, etc.)
Pro Forma Analysis
Oppidan’s preliminary sources and uses statements, cash flow projections, and investor rate of
return (ROR) related to the proposed redevelopment were reviewed by Staff and Ehlers. If no tax
increment were provided, the project’s average expected cash-on-cash (COC) return on equity
would be approximately 4.16% to investors. Given that real estate developments are speculative
and involve significant risk for investors, it is unlikely that such a rate of return would be
sufficient to attract the necessary equity capital needed to start the project thereby making it
financially infeasible. According to Ehlers, the industry standard for COC returns for similar
projects is ten (10) percent in order to raise equity and achieve financing.
Special Study Session Meeting of August 17, 2015 (Item No. 1) Page 9
Title: Redevelopment of Former Bally’s Site by Oppidan Investment Company
In order for the project pro forma to attain the average cash-on-cash (COC) return of
approximately ten (10) percent it is estimated that $2,600,000 in tax increment assistance would
be necessary. That level of assistance would overcome enough of the extraordinary site costs
described above such that it allows the project to achieve a rate of return sufficient to attract the
necessary equity capital to enable the project to move forward. With or without the inclusion of
affordable housing units, the proposed project is not financially viable without tax increment
assistance. Statutorily, the proposed tax increment assistance could only be applied toward the
project’s extraordinary expenses. Staff has requested an updated project proforma from Oppidan
reflecting the revised building plans. These latest revisions will likely increase the project’s total
cost which may result in a revised request for TIF assistance.
It is important to note that when evaluating these types of developments, it is challenging to
accurately estimate a project’s precise rate of return upon project stabilization. The objective is
to assemble, within certain parameters, a proforma that provides a comfort level to all those
investing in the project. Consistent with other recent redevelopment projects with which the
EDA has been involved, a "look back" provision would be incorporated into the redevelopment
contract with Oppidan. Per the contract, the Redeveloper would be required to submit a final
proforma detailing the actual financial performance of the project. The look back provision
establishes a cap on the return that the Developer earns on a cash-on-cash basis, once the project
reaches stabilized income. The cap is essentially an industry standard for similar projects. The
look back provision ensures that if the project cash flows at a higher rate than currently
estimated, the EDA shares economically in the success of the project by reducing the amount of
TIF assistance provided.
Providing tax increment financing assistance to the proposed redevelopment makes it possible to
construct a high quality project consistent with the Comprehensive Plan, bring the subject
properties to optimal market value and create new employment opportunities as well as provide
the community with additional affordable housing units. The proposed amount of TIF assistance
is consistent with other developments the EDA has assisted. As a reminder, the tax increment
would be generated by the project itself and would only be provided once construction had been
completed and the Developer supplies statements verifying that it had incurred the specified
qualified costs. The EDA would be obligated to provide assistance to the project only to the
extent that the project generates sufficient tax increment to make the bi-annual payments.
TIF Note
If the City Council/EDA desires to move the proposed 4900 Excelsior project forward, Staff and
Ehlers is recommending providing Oppidan a pay-as-you -go TIF N ote in the amount of
approximately $2,600,000 to enable the redevelopment to reach financial viability and attain the
above return. It will take a little over a year to construct the proposed project. Based upon that
schedule, the first increment would likely be paid in 2018. Given current estimates of market
value, it is projected that the project’s TIF Note would be paid off in approximately 6.5 to 7
years (on a net present value basis). The proposed project would be financed on a "pay-as-you-
go" basis, which is the desired financing method under the City's TIF Policy. The Note would
bear interest at 4.5%, which is the Developer’s proposed bank financing rate for the project. The
size of the TIF Note is based upon no inflationary value in the project (as with all projects). This
is more conservative estimating and thus it is anticipated that the pay-as-you -go note will be
retired earlier than the estimated 6.5 to 7 years . As with most of the City’s redevelopment
contracts, the Developer will be required to execute a Minimum Assessment Agreement for the
value utilized for projecting the amount of TIF assistance available.
Special Study Session Meeting of August 17, 2015 (Item No. 1) Page 10
Title: Redevelopment of Former Bally’s Site by Oppidan Investment Company
TIF District
The subject site is within the City’s Redevelopment Project Area which is the portion of the city
where the EDA may establish TIF districts. The Bally block lies within the current Park
Commons TIF District. The period for amending the TIF Plan budget for this district to include
Oppidan’s proposed project has expired. Thus, if tax increment assistance were provided to the
proposed project, the subject properties would need to be removed from the existing TIF district
and a new Redevelopment TIF District would need to be established.
In order to determine if the subject site qualified as a Redevelopment District under Minnesota
Statutes, Section 469.174, Subdivision 10, consulting firm LHB was retained to conduct a TIF
district feasibility analysis. After inspecting and evaluating the subject properties and applying
current statutory criteria, LHB concluded in its report that the proposed TIF district qualifies as a
Redevelopment District based on the following findings:
• The proposed TIF District has a coverage calculation of 74.6 percent which exceeds the 70
percent requirement.
• 100 percent of the buildings are structurally substandard which exceeds the 50 percent
requirement.
• The substandard buildings are reasonably distributed throughout the geographic area of the
proposed TIF District.
The proposed TIF district would include two parcels: 4900 Excelsior Blvd and 4760 Excelsior
Blvd. Such a TIF district would allow up to 26 years of tax increment.
Property Value and Taxes
The current total market value of the proposed Bally redevelopment site is approximately $2.7
million. The estimated market value of the property upon the proposed project’s completion (for
TIF estimation purposes) exceeds $38.7 million. Most of the new value would be captured as tax
increment and used to make payments on the TIF Note until it is retired and the TIF district is
terminated. It is estimated that 4900 Excelsior would generate over $856,500 in total property
taxes annually. The City, County and School District would continue to receive the property
taxes collected on the subject site’s base value. The project is estimated to generate a total of
$582,000 in new tax increment annually. Once the TIF Note is retired, the additional property
taxes generated by the project would accrue to the local taxing jurisdictions. Upon termination of
the TIF Note, it is estimated that the City’s portion of the project’s total property taxes would
exceed $240,000 annually.
It should be noted that the value of the project could be much higher than the estimated $38.7
million once it is assessed for tax purposes. This was a conservative value utilized only for
estimating the amount of TIF the project would generate. Should the value of the project at the
time of completion be higher than the estimated amount, the principal amount of the TIF Note
would be paid back sooner than the projected 6.5 to 7 years and local taxing jurisdictions would
receive the benefit of having the full value for tax purposes sooner than anticipated.
Conformance and Analysis under the City’s TIF Policy
Oppidan’s proposed mixed-use project meets the following Minimum Qualifications as outlined
in the City’s TIF Policy:
• Promotes neighborhood stabilization and revitalization by the removal of blight and
the upgrading of existing housing stock.
Special Study Session Meeting of August 17, 2015 (Item No. 1) Page 11
Title: Redevelopment of Former Bally’s Site by Oppidan Investment Company
• Provides a balanced and sustainable housing stock to meet diverse needs both today
and in the future.
• The project is consistent with the City’s Comprehensive Plan and Zoning Ordinances.
• The Developer has demonstrated that the proposed project is not financially feasible
“but-for” the use of tax increment financing.
• The Developer has a proven track record of successful real estate development
performance and has demonstrated the capability to fully complete the project as
proposed.
The proposed project meets the following “Desired Qualifications” as outlined in the TIF Policy:
• Creates a substantially higher ratio of property taxes paid before and after
redevelopment and provides a significant increase in taxable market value.
• Facilitates new construction on a site which would not be redeveloped without such
assistance.
• Redevelops underutilized property.
• Creates a high quality building (e.g. sound architectural design, quality construction
and materials)
• Creates new employment opportunities.
In addition to the above, the proposed project would have the following additional benefits:
• Removes a vacant, structurally obsolete building that is increasingly becoming a
blighting nuisance within the neighborhood.
• Intensifies the subject site and makes optimal use of the property with an attractive
mixed-use development that is walkable and human-scale.
• Results in the sale of a long-held vacant EDA property.
• Complements, integrates with, and strengthens the surrounding multi-family
neighborhoods.
• Helps stabilize the retail businesses along Excelsior Blvd by increasing the potential
customer base.
• Further increases and diversifies the housing options available in the St. Louis Park
market.
• Incorporates affordable housing.
• Incorporates Green Building design and features.
• Lies within a Priority Redevelopment Study Area as identified in the City’s
Comprehensive Plan.
• Incorporates Livable Communities and Transit Oriented Design principles.
• Located along an existing transit route and between two future SWLRT station areas.
Grading under Project Report Card
Oppidan’s TIF application for proposed redevelopment was graded according to the Project
Report Card provided within the City’s TIF Policy. The application was graded as follows:
• Promotes housing for large families.
The residential units in the development will cater to the demands of the market
which is for smaller units. No 3 bedroom or larger units are proposed to be included
in the project’s unit mix. Since 0% of the units could accommodate large families a
grade of “F” was provided.
Special Study Session Meeting of August 17, 2015 (Item No. 1) Page 12
Title: Redevelopment of Former Bally’s Site by Oppidan Investment Company
• Provides economic integration of rental or ownership projects.
Of the proposed 176 apartment units, 18 (or 10%) would be designated as affordable;
therefore a grade of “C” was provided.
• Ratio of soft costs to Total Project Costs.
Soft costs of the total project were estimated at approximately $6.2 million or 13% of
total project costs. Since this is less than 15% of the total development costs as
indicated on the scale, a grade of “A” was provided.
• Ratio of private to public (TIF) financing.
$47 million in private development costs to $2.6 million in TIF resulted in a $18.15
private / $1 public ratio which garnered an “A” on the scale.
• The value of the site before and after redevelopment
The total market value of the subject redevelopment site is currently less than $2.76
million. The projected market value upon redevelopment exceeds: $38.7 million.
This is a ratio of $1:$14 which garnered an “A” on the scale.
• New Job Creation in City:
The total number of new FTE jobs expected to be created in the city as a result of the
proposed project is estimated at 85. This level of job creation garnered an “A” on the
scale.
The proposed project received bonus points for: assembling all the properties required for the
redevelopment, redeveloping blighted/contaminated property, being part of a mixed-use
development, adding value to the neighborhood, incorporating livable communities and LEED
principles, will likely stimulate further investment in the surrounding neighborhood, being
located in one of the City’s Redevelopment Study Areas, and having a positive community
impact.
Upon calculation of all applicable factors and bonus points, 4900 Excelsior received a final
grade of “B-” according to the Project Report Card within the TIF Policy.
Conformance with the City’s Business Subsidy Policy
Any TIF assistance provided Oppidan’s proposed redevelopment would be exempt from state
business subsidy requirements as it relates to housing, pollution control/abatement, and
redevelopment (Section 116J.993, Subdivision 3). Therefore, no public subsidy hearing would
be required; however, the EDA would still be subject a modified reporting requirements.
Summary
Oppidan’s proposed redevelopment meets the City’s objectives for the provision of Tax
Increment Financing as specified in the City’s TIF Policy. As noted above, the project meets
nearly all the Minimum and Desired Qualifications for providing TIF assistance and received a
final grade of “B-” according to the Project Report Card within the TIF Policy. Furthermore, it
has been demonstrated that the proposed project is not financially viable but for the provision of
tax increment financing. Given these findings, Staff supports reimbursing Oppidan for qualified
costs up to $2,600,000 in pay-as-you-go tax increment generated by 4900 Excelsior so as to
allow the redevelopment to proceed.
Special Study Session Meeting of August 17, 2015 (Item No. 1) Page 13
Title: Redevelopment of Former Bally’s Site by Oppidan Investment Company
TRAFFIC SUMMARY: A Traffic Impact study was completed for the mixed use development
as originally proposed (183 units and a grocery store). Since this study, the development
proposal has been modified. The number of apartments has been reduced to 176 apartment units.
The following traffic information reflects the original proposal.
The study analyzed the 2016 build conditions. The findings:
• The proposed development is expected to generate 3,622 trips over the course of and
average weekday, including 174 during the am peak hour and 336 during the pm peak
hour.
• The forecast traffic from the proposed development will have little impact on the
operations of the adjacent streets or the study intersections. All study intersections will
operate acceptably through the 2016 build scenarios.
Level of Service (LOS) discussion
2015 2016 No- Build 2016 build
Intersection AM
Peak
Hour
PM
Peak
Hour
AM
Peak
Hour
PM
Peak
Hour
AM
Peak
Hour
PM
Peak
Hour
Excelsior Blvd/ Quentin Ave C (c) C (d) C (c) C (d) C (c) C (e)
Excelsior Blvd/ Princeton Ave A (b) A (b) A (b) A (b) A (b) A (b)
Park Commons Dr/ Princeton Ave A (a) A (a) A (a) A (a) A (a) A (a)
Park Commons Dr/Quentin Ave A (b) A (a) A (a) A (b) A (a) A (b)
Quentin Ave/ Site Access NA NA NA NA A (b) A(b)
Park Commons Drive/ Site Access NA NA NA NA A (a) A (a)
Princeton Ave/ Site Access NA NA NA NA A (a) A (a)
The first letter is the level of Service for the intersection. The second letter (in parentheses) is the Level of Service
for the worst operating movement.
As the table shows there is very little change between the existing LOS, no-build LOS and the
build LOS. The added traffic from the development will not impact the operation of the study
intersections. The only change in the LOS to note is the westbound left turns at the Excelsior
Blvd/ Quentin Ave intersection. This movement moves to the LOS E range in the 2016 PM peak
hour build scenario. The vehicle queue length for this movement is less than four vehicles. In
this case the lower level of service is due to the length of the signal cycle and limited green time
for that movement as opposed to a capacity issue. The proposed development traffic does not
increase the westbound movement; rather, the reduction in LOS is due to the increased overall
demand at the intersection. Staff is reviewing the potential for installing flashing yellow arrows
at this intersection to improve the LOS for this movement, which would also require Hennepin
County review and approval.
There are three accesses to the site. The grocery store parking lot has two accesses, with one on
Princeton and one on Quentin Ave. The apartment’s access is to Park Commons Drive. This
layout provides good access for all uses.
Daily Traffic Volumes: Existing average daily traffic volumes were obtained from the most
recent MN DOT volume maps. These volumes were then forecast for the 2016 No- build and
build scenarios.
Special Study Session Meeting of August 17, 2015 (Item No. 1) Page 14
Title: Redevelopment of Former Bally’s Site by Oppidan Investment Company
Road
Segment
Segment
Location
Capacity Existing 2015 Site
volume
2016
Excelsior
Blvd
West of
Quentin
Ave
27,200 to
32,000
20,500 21,550 1,550 23,100
Quentin
Ave
North of
Excelsior
Blvd
8,500 to
10,000
2,100 2,250 2,350 4,600
Quentin
Ave
South of
Excelsior
8,500 to
10,000
1,850 2,000 450 2,450
The proposed site is expected to add approximately 200 to 1,150 vehicles per day to Park
Commons Drive, depending upon the exact location. The proposed site is expected to add
approximately 650 to 750 vehicles per day to Princeton Avenue depending upon the exact
location. These additional daily volumes are within the capacity of these roads.
NEXT STEPS: As with all such TIF applications it is at the EDA’s discretion as to whether it
wishes to provide financial assistance at the proposed level. If the EDA supports providing tax
increment to Oppidan’s proposed redevelopment project as proposed, Staff would begin
negotiating business terms for the provision of the assistance. Such terms would be brought back
to the EDA for its review at a subsequent study session and would be incorporated into a
Redevelopment Contract requiring formal approval. Staff would also begin the process of
formally establishing the proposed TIF district; the vehicle through which the assistance would
be provided. The first step of which would be to call for a public hearing date. This could be
scheduled in September/October.
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Meeting: Economic Development Authority
Meeting Date: August 17, 2015
Minutes: 3a
UNOFFICIAL MINUTES
ECONOMIC DEVELOPMENT AUTHORITY
ST. LOUIS PARK, MINNESOTA
AUGUST 3, 2015
1. Call to Order
President Mavity called the meeting to order at 7:25 p.m.
Commissioners present: President Anne Mavity, Tim Brausen, Gregg Lindberg, Susan Sanger,
and Jake Spano.
Commissioners absent: Steve Hallfin and Jeff Jacobs.
Staff present: Executive Director (Mr. Harmening) and Recording Secretary (Ms. Hughes).
2. Roll Call
3. Approval of Minutes
3a. Economic Development Authority Meeting Minutes July 20, 2015
Commissioner Brausen requested that the first sentence of the second paragraph on page
2 be revised to read “Councilmember Commissioner Brausen stated he would support the
application along with this project and disagreed with Councilmember Commissioner
Sanger’s characterization of the units as low income units and stated that approximately
60% of the housing stock in St. Louis Park is affordable and the PLACE development
comports with the City’s current community character.”
President Mavity requested that the third paragraph on page 2 be revised to reflect
“Commissioner” and not “Councilmember.”
The minutes were approved as amended.
4. Approval of Agenda
The agenda was approved as presented.
5. Reports
5a. Approval of EDA Disbursements
It was moved by Commissioner Lindberg, seconded by Commissioner Brausen, to accept
for filing EDA Disbursements for the period June 27, 2015, through July 24, 2015.
The motion passed 5-0 (Commissioners Hallfin and Jacobs absent).
6. Old Business - None
Economic Development Authority Meeting of August 17, 2015 (Item No. 3a) Page 2
Title: Economic Development Authority Meeting Minutes of August 3, 2015
7. New Business - None
8. Communications - None
9. Adjournment
President Mavity adjourned the meeting at 7:27 p.m.
______________________________________ ______________________________________
Secretary President
Meeting: Economic Development Authority
Meeting Date: August 17, 2015
Action Agenda Item: 7a
EXECUTIVE SUMMARY
TITLE: Establishment of The Shoreham Tax Increment Financing District
RECOMMENDED ACTION:
• Motion to Adopt EDA Resolution approving the establishment of The Shoreham Tax
Increment Financing District within Redevelopment Project No. 1 (a redevelopment district).
• Motion to Adopt EDA Resolution authorizing an Interfund Loan for advance of certain costs
in connection with the administration of The Shoreham TIF District.
POLICY CONSIDERATION: Does the EDA support the establishment of The Shoreham Tax
Increment Financing District to facilitate the construction of a mixed use redevelopment at the
SW corner of CSAH 25 and France Ave? Does the EDA support authorizing an Interfund Loan
for advance of certain costs in connection with the administration of The Shoreham TIF District?
SUMMARY: Bader Development’s application for Tax Increment Financing (TIF) assistance
in connection with its proposed Shoreham redevelopment at the SW corner of CSAH 25 and
France Ave was reviewed at the June 1st Study Session where it received consensus support.
Constructing The Shoreham project is not financially feasible without TIF assistance. At its June
15th meeting, the City Council set a public hearing date of August 17th for consideration of the
proposed Shoreham Redevelopment TIF District. It is now time to take the final step in the TIF
process which is to formally authorize the creation of the TIF district. Such authorization
enables the EDA to designate tax increment generated from the completed Shoreham
development as partial reimbursement to Bader Development for certain qualified costs incurred
in connection with the construction of the project so as to make it financially feasible.
Establishment of TIF districts also requires a public hearing and the approval of the City
Council. Thus, during its meeting Monday evening the City Council will hold a public hearing
on this topic, after which it will be asked to approve the establishment of The Shoreham TIF
District.
FINANCIAL OR BUDGET CONSIDERATION: Authorizing the establishment of The
Shoreham TIF District does not, in itself, commit the EDA to any specific level of financial
assistance for the proposed project. Procedurally, it simply creates the funding vehicle to
reimburse the Redeveloper for a portion of its qualified project costs. The terms and amount of
TIF assistance are specified within the staff report pertaining to the Redevelopment Contract
with The Shoreham Apartments, LLC which is also scheduled for consideration August 17th.
VISION CONSIDERATION: St. Louis Park is committed to providing a well-maintained and
diverse housing stock.
SUPPORTING DOCUMENTS: Discussion
Resolutions
Shoreham TIF District Overview
Shoreham TIF Plan
Prepared by: Greg Hunt, Economic Development Coordinator
Reviewed by: Michele Schnitker, Housing Supervisor
Kevin Locke, Community Development Director
Approved by: Tom Harmening, EDA Executive Director and City Manager
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a) Page 2
Title: Establishment of The Shoreham Tax Increment Financing District
DISCUSSION
BACKGROUND: Bader Development (“Redeveloper”) has option agreements to acquire five
properties at the SW corner of CSAH 25 and France Ave. These include two commercial
properties located at 3907 & 3915 Highway 7, (the ASAP building and Battlefield Store
respectively), two single-family homes located at 3031 Glenhurst Ave. and 3914 31st St. and a
townhome duplex located at 3918 31st St. The land assemblage creates a 2.23-acre
redevelopment site.
The Redeveloper proposes to raze the current commercial buildings and residences, remove the
contaminated fill material and soils impacting the site, and construct a mixed-use development
called The Shoreham. The proposed multi-story building would consist of 148 residential units
(of which 20% would be designated for households earning 50% of area median income) and
20,000 square feet of office space (split between Bader Development/Steven Scott Management
and a medical office tenant). Also included would be structured underground and surface
parking.
Request for Tax Increment Assistance
Bader Development submitted an application to the EDA for tax increment finance assistance to
offset a portion of the $7.8 million of extraordinary costs associated with redeveloping the
subject site.
Bader Development’s preliminary sources and uses statements, cash flow projections, and
investor rate of return (ROR) related to The Shoreham project were reviewed by Staff and Ehlers
(the EDA’s financial consultant). The estimates were found to be reasonable and within industry
standards for this type of redevelopment. It was also concluded, given the extraordinary costs
noted above, that without public financial assistance the project would not generate enough of a
return on investment to attract the necessary equity capital to achieve financing (see staff report
on Redevelopment Contract with Shoreham Apartments).
Upon analysis by Staff and Ehlers, and discussion with Bader Development, it was initially
determined that between $1,700,000 and $3,050,000 in tax increment assistance would be
necessary (depending if any grants were awarded) to allow the project to achieve a standard
return. The EDA/City Council reviewed Bader Development’s TIF Application at the June 1st
Special Study Session. Following discussion there was consensus support to favorably consider
reimbursing the Redeveloper for qualified costs incurred in connection with the construction of
the project up to $3,050,000 in tax increment generated by the project minus any grant awards
The EDA has subsequently been informed that the project has been awarded four grants from
DEED, the Metropolitan Council and Hennepin County which total $1,849,075. Given these
grant awards and further review of the Redeveloper’s most recent financial proforma, the amount
of tax increment necessary to make the project financially feasible has been reduced to $1.2
million. Reimbursing the Redeveloper for certain extraordinary costs makes it possible to
construct a high quality project consistent with Livable Communities design principles and other
objectives listed in the City’s Comprehensive Plan. The proposed amount of assistance is
consistent with other similar mixed-use developments the EDA has facilitated in the past.
Upon project completion, verification of qualified costs, and issuance of the TIF Note, tax
increment generated from the increased value of the property would be disbursed to Bader
Development on a "pay-as-you-go" basis. This means the Redeveloper must first incur the
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a) Page 3
Title: Establishment of The Shoreham Tax Increment Financing District
construction costs with its own funds. The increased property taxes generated from the
completed project and paid by the Redeveloper (called “tax increment”) is then used to
reimburse the Redeveloper for the above extraordinary costs it incurred during construction of the
project. This is the preferred financing method under the City's TIF Policy. The Shoreham project
met the requirements of a Redevelopment TIF District (25 year TIF District). Under this type of
TIF district, the proposed project would generate the proposed $1.2 million in tax increment in
approximately 4 years.
TIF District Approvals
As noted above, the EDA/City Council reviewed Bader Development’s TIF Application for the
proposed Shoreham project at the June 1st Special Study Session. Following discussion there
was consensus support for favorably considering the project and the Redeveloper’s request for
financial assistance. As a result, Staff was directed to call for a public hearing on the proposed
TIF District and to begin drafting a formal redevelopment contract with Bader Development.
At its June 15th meeting, the City Council set a public hearing date of August 17th for
consideration of the proposed The Shoreham Redevelopment TIF District.
The Planning Commission reviewed The Shoreham Tax Increment Financing Plan on July 15th, as
required by the TIF Act, and determined it was in conformance with the City’s Comprehensive Plan.
A report on the potential business terms that would serve as the basis for a redevelopment
contract with Bader Development was submitted at the July 27th Study Session.
Synopsis of the Proposed TIF District
The subject site is located within the boundaries of the City’s Redevelopment Project Area which
is the portion of the city where the EDA may statutorily establish TIF districts. Inclusion of the
proposed project within a designated Redevelopment Project Area allows the EDA/City Council
to establish a TIF district so as to enable the EDA to provide the proposed financial assistance to
The Shoreham project. As shown in the attached TIF District maps, the proposed Shoreham TIF
District consists of five parcels: 3907 Highway 7, 3915 Highway 7, 3031 Glenhurst Ave. 3914
31st St. and 3918 31st St. Together, these parcels equal approximately 2.2 acres.
Attached is an Overview which summarizes the basic elements of the proposed TIF District.
Details of the proposed TIF District may be found in the attached The Shoreham TIF District
Plan. Both the Overview and TIF Plan were prepared by the EDA’s TIF consultant, Ehlers. In a
general sense, TIF plans may be viewed as enabling legislation. They establish the proposed TIF
district’s classification, geographic boundaries, maximum duration, maximum budget authority
for tax increment revenues and expenditures, fiscal disparities election as well as estimated
impact on various taxing jurisdictions along with findings which statutorily qualify the district.
The specific mutual obligations between the EDA and the Developer as well as the precise terms
of the financial assistance are contained in the separate Contract for Private Redevelopment
between the parties (also to be considered August 17th). Both the TIF Plan and the
Redevelopment Contract need to be approved in order for economic development or
redevelopment projects involving tax increment to proceed.
Duration of the Proposed TIF District
Under the TIF Act, the duration of redevelopment districts is up to 25 years after receipt of the
first increment by the City (a total of 26 years of tax increment). The date of receipt by the City
of the first tax increment is expected to be 2017. Thus, the full term of the district is estimated to
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a) Page 4
Title: Establishment of The Shoreham Tax Increment Financing District
terminate in 2043. The EDA and City have the right to decertify the District prior to the legally
required date. As previously indicated, the City’s expressed obligations to the Developer will
likely be satisfied in approximately 4 years. Once those obligations are satisfied, the City may
terminate the district.
TIF District Budget
It should be noted that the financing uses and project costs reflected within the Uses of Funds
(Section 2-10) of the attached TIF Plan is a not-to-exceed budget and not the actual expected
project budget.
Fiscal Disparities Election within the Proposed TIF District
The proposed development will contain commercial property therefore the proposed TIF District
is subject to the fiscal disparities calculation. Consistent with the city’s TIF Policy and past
practice, The Shoreham TIF District will contribute to fiscal disparities (as opposed to the tax
base of the City making the contribution).
Qualifications of the Proposed TIF District
In order to determine if the subject site qualified as a Redevelopment District under Minnesota
Statutes, Section 469.174, Subdivision 10, consulting firm LHB was retained to conduct a TIF
district feasibility analysis. After inspecting and evaluating the subject properties and applying
current statutory criteria, LHB concluded in its report (Report of Inspection Procedures and
Results for Determining Qualifications Of A Tax Increment Financing District As A
Redevelopment District: [Encore} Redevelopment District, St. Louis Park, MN dated May 19,
2015) that the proposed project site qualifies as a Redevelopment District based on the following
findings:
• The proposed TIF District has a coverage calculation of 100 percent which is above the
70 percent requirement.
• 60 percent of the buildings are structurally substandard which is above the 50 percent
requirement.
• The substandard buildings are reasonably distributed.
Thus the proposed TIF District met both the “Coverage Test” and the “Condition of Buildings
Test” and thereby qualified under Minnesota Statutes Section 479.174, Subdivision 10 as a
redevelopment TIF district.
Other findings for the qualification of the proposed TIF District are contained in Appendix G of
the attached TIF Plan.
NEXT STEPS: The Redevelopment Contract with The Shoreham Apartments, LLC which
specifies the terms and amount of TIF assistance is also scheduled for EDA consideration August
17th.
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a) Page 5
Title: Establishment of The Shoreham Tax Increment Financing District
ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY
CITY OF ST. LOUIS PARK
HENNEPIN COUNTY
STATE OF MINNESOTA
RESOLUTION NO. 15-____
RESOLUTION ADOPTING A MODIFICATION TO THE REDEVELOPMENT PLAN
FOR REDEVELOPMENT PROJECT NO. 1, ESTABLISHING THE SHOREHAM TAX
INCREMENT FINANCING DISTRICT THEREIN AND ADOPTING A TAX
INCREMENT FINANCING PLAN THEREFOR.
WHEREAS, it has been proposed by the Board of Commissioners (the "Board") of the
St. Louis Park Economic Development Authority (the "EDA") and the City of St. Louis Park
(the "City") that the EDA adopt a Modification to the Redevelopment Plan (the "Redevelopment
Plan Modification") for Redevelopment Project No. 1 (the "Project") and establish the Shoreham
Tax Increment Financing District (the "District") and adopt a Tax Increment Financing Plan (the
"TIF Plan") therefor (the Redevelopment Plan Modification and the TIF Plan are referred to
collectively herein as the "Plans"), all pursuant to and in conformity with applicable law,
including Minnesota Statutes, Sections 469.090 to 469.1082, and Sections 469.174 to 469.1794,
inclusive, as amended (the "Act"), all as reflected in the Plans and presented for the Board's
consideration; and
WHEREAS, the EDA has investigated the facts relating to the Plans and has caused the
Plans to be prepared; and
WHEREAS, the EDA has performed all actions required by law to be performed prior to
the adoption of the Plans. The EDA has also requested that the City Planning Commission
provide for review of and written comment on the Plans and that the Council schedule a public
hearing on the Plans upon published notice as required by law.
NOW, THEREFORE, BE IT RESOLVED by the Board as follows:
1. The EDA hereby finds that the Shoreham Tax Increment Financing District is in the
public interest and is a "redevelopment district" under Section 469.174, Subd. 10 of the Act, and
finds that the adoption of the proposed Plans conform in all respects to the requirements of the
Act and will help fulfill a need to develop an area of the State of Minnesota which is already
built up, and that the adoption of the proposed Plans will help in the preservation and
enhancement of the tax base of the City and the State and promote the construction of high
quality housing and commercial space, thereby serving a public purpose.
2. The EDA further finds that the Plans will afford maximum opportunity, consistent
with the sound needs for the City as a whole, for the development or redevelopment of the
Project by private enterprise, in that the intent is to provide only that public assistance necessary
to make the private developments financially feasible.
3. The boundaries of the Project are not being expanded.
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a) Page 6
Title: Establishment of The Shoreham Tax Increment Financing District
4. The reasons and facts supporting the findings in this resolution are described in the
Plans.
5. The EDA elects to calculate fiscal disparities for the District in accordance with
Section 469.177, Subd. 3, clause b of the Act, which means the fiscal disparities contribution will
be taken from inside the District.
6. Conditioned upon the approval thereof by the City Council following its public
hearing thereon, the Plans, as presented to the EDA on this date, are hereby approved,
established and adopted and shall be placed on file in the office of the Economic Development
Coordinator of the City.
7. Upon approval of the Plans by the City Council, the staff, the EDA's advisors and
legal counsel are authorized and directed to proceed with the implementation of the Plans and for
this purpose to negotiate, draft, prepare and present to this Board for its consideration any further
plans, resolutions, documents and contracts necessary for this purpose. Approval of the Plans
does not constitute approval of any project or a Development Agreement with any developer.
8. Upon approval of the Plans by the City Council, the Economic Development
Coordinator of the City is authorized and directed to forward a copy of the Plans to the
Minnesota Department of Revenue and the Office of the State Auditor pursuant to Section
469.175, Subd. 4a of the Act.
9. The Economic Development Coordinator of the City is authorized and directed to
forward a copy of the Plans to the Hennepin County Auditor and request that the Auditor certify
the original tax capacity of the District as described in the Plans, all in accordance with Section
469.177 of the Act.
Reviewed for Administration: Adopted by the Economic Development
Authority August 17, 2015
Executive Director President
Attest
Secretary
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a) Page 7
Title: Establishment of The Shoreham Tax Increment Financing District
ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY
CITY OF ST. LOUIS PARK
HENNEPIN COUNTY
STATE OF MINNESOTA
RESOLUTION NO. 15-____
RESOLUTION AUTHORIZING AN INTERFUND LOAN FOR ADVANCE
OF CERTAIN COSTS IN CONNECTION WITH THE SHOREHAM TAX
INCREMENT FINANCING DISTRICT
BE IT RESOLVED by the Board of Commissioners (the "Board") of the St. Louis Park
Economic Authority (the "EDA") of the City of St. Louis Park, Minnesota (the “City”), as
follows:
WHEREAS, the City Council of the City intends to establish the Shoreham Tax
Increment Financing District (the "TIF District") within Redevelopment Project No. 1 (the
"Project"), and will adopt a Tax Increment Financing Plan (the "TIF Plan") for the purpose of
financing certain improvements within the Project, pursuant to Minnesota Statutes, Sections
469.174 to 469.1794, as amended (the “Act”); and
WHEREAS, the EDA has determined to use tax increments from the TIF District to pay
for certain costs identified in the TIF Plan, which may include land/building acquisition, site
improvements/preparation, utilities, other qualifying improvements, interest and administrative
costs (collectively, the "Qualified Costs"), which costs may be financed on a temporary basis
from EDA funds legally available for such purposes; and
WHEREAS, under Section 469.178, Subd. 7 of the Act, the EDA is authorized to
advance or loan money from the EDA's general fund or any other fund from which such
advances may be legally authorized, in order to finance the Qualified Costs; and
WHEREAS, the EDA intends to reimburse itself for the Qualified Costs from tax
increments derived from the TIF District in accordance with the terms of this resolution (which
terms are referred to collectively as the "Interfund Loan").
NOW THEREFORE BE IT RESOLVED by the Board as follows:
1. The EDA hereby authorizes the advance of up to $50,000 from any legally
authorized EDA fund or so much thereof as may be paid as Qualified Costs. The EDA shall
reimburse itself for such advances together with interest at the rate of 4%, which rate applies for
the duration of the Interfund Loan, and does not exceed the greater of (a) the rate specified under
Minnesota Statutes, Section 270C.40 or (b) the rate specified under Minnesota Statutes, Section
549.09.
2. Principal and interest ("Payments") on the Interfund Loan shall be paid semi-
annually on each August 1 and February 1 (each a "Payment Date"), commencing on the first
Payment Date on which the EDA has Available Tax Increment (defined below), or on any other
dates determined by the Executive Director of the EDA, through the date of last receipt of tax
increment from the TIF District.
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a) Page 8
Title: Establishment of The Shoreham Tax Increment Financing District
3. Payments on this Interfund Loan are payable solely from "Available Tax Increment,"
which shall mean, on each Payment Date, tax increment generated in the preceding six (6)
months with respect to the property within the TIF District and remitted to the EDA by Hennepin
County, all in accordance with the Act. Payments on this Interfund Loan are subordinated to any
outstanding or future bonds, notes or contracts secured in whole or in part with Available Tax
Increment, and are on parity with any other outstanding or future interfund loans secured in
whole or in part with Available Tax Increment.
4. The principal sum and all accrued interest payable under this Interfund Loan are pre-
payable in whole or in part at any time by the EDA without premium or penalty. No partial
prepayment shall affect the amount or timing of any other regular payment otherwise required to
be made under this Interfund Loan.
5. This Interfund Loan is evidence of an internal borrowing by the EDA in accordance
with Section 469.178, Subd. 7 of the Act, and is a limited obligation payable solely from
Available Tax Increment pledged to the payment hereof under this resolution. This Interfund
Loan and the interest hereon shall not be deemed to constitute a general obligation of the State of
Minnesota or any political subdivision thereof, including, without limitation, the EDA. Neither
the State of Minnesota, nor any political subdivision thereof shall be obligated to pay the
principal of or interest on this Interfund Loan or other costs incident hereto except out of
Available Tax Increment, and neither the full faith and credit nor the taxing power of the State of
Minnesota or any political subdivision thereof is pledged to the payment of the principal of or
interest on this Interfund Loan or other costs incident hereto. The EDA shall have no obligation
to pay any principal amount of the Interfund Loan or accrued interest thereon, which may remain
unpaid after the final Payment Date.
6. The EDA may amend the terms of this Interfund Loan at any time by resolution of
the Board, including a determination to forgive the outstanding principal amount and accrued
interest to the extent permissible under law.
Reviewed for Administration: Adopted by the Economic Development
Authority August 17, 2015
Executive Director President
Attest
Secretary
Tax Increment Financing District Overview
City of St. Louis Park
The Shoreham Tax Increment Financing District
The following summary contains an overview of the basic elements of the Tax Increment Financing Plan
for the Shoreham Tax Increment Financing District. More detailed information on each of these topics can
be found in the complete Tax Increment Financing Plan.
Proposed action: Establishment of the Shoreham Tax Increment Financing District (District)
and the adoption of a Tax Increment Financing Plan (TIF Plan).
Modification to the Redevelopment Plan for Redevelopment Project No. 1
includes the establishment of the Shoreham Tax Increment Financing
District, which represents a continuation of the goals and objectives set
forth in the Redevelopment Plan for Redevelopment Project No. 1.
Type of TIF District: A redevelopment district
Parcel Numbers: 06-028-24-11-0014 06-028-24-11-0015
06-028-24-11-0016 06-028-24-11-0056
06-028-24-11-0007
Proposed
Development:
The District is being created to facilitate the redevelopment of the parcels into
approximately 150 apartments and 20,000 square feet of commercial/office
space in the City. Please see Appendix A of the TIF Plan for a more detailed
project description.
Maximum duration: The duration of the District will be 25 years from the date of receipt of the
first increment (26 years of increment). The City elects to receive the first tax
increment in 2017. It is estimated that the District, including any
modifications of the TIF Plan for subsequent phases or other changes, would
terminate after December 31, 2042, or when the TIF Plan is satisfied.
Estimated annual tax
increment:
Up to $492,982
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 9
Page 2
Authorized uses:
The TIF Plan contains a budget that authorizes the maximum amount that
may be expended:
Land/Building Acquisition .................................................. $2,000,000
Site Improvements/Preparation ........................................... $2,000,000
Public Utilities .................................................................... $2,000,000
Other Qualifying Improvements ......................................... $2,150,030
Administrative Costs (up to 10%) .......................................... $614,658
PROJECT COSTS TOTAL ................................................ $8,764,688
Interest ................................................................................ $4,757,788
PROJECT COSTS TOTAL ........................................... $13,522,476
See Subsection 2-10, on page 2-6 of the TIF Plan for the full budget
authorization.
Form of financing: The project is proposed to be financed by a $1.2 million pay-as-you-go note.
Administrative fee: Up to 10% of annual increment, if costs are justified.
Interfund Loan
Requirement:
If the City wants to pay for administrative expenditures from a tax increment
fund, it is recommended that a resolution authorizing a loan from another
fund be passed PRIOR to the issuance of the check.
4 Year Activity Rule
(§ 469.176 Subd. 6)
After four years from the date of certification of the District one of the
following activities must have been commenced on each parcel in the District:
• Demolition
• Rehabilitation
• Renovation
• Other site preparation (not including utility services such as sewer and
water)
If the activity has not been started by approximately August 2019, no
additional tax increment may be taken from that parcel until the
commencement of a qualifying activity.
5 Year Rule
(§ 469.1763 Subd. 3)
Within 5 years of certification revenues derived from tax increments must be
expended or obligated to be expended.
Any obligations in the District made after approximately August 2020, will
not be eligible for repayment from tax increments.
The reasons and facts supporting the findings for the adoption of the TIF Plan for the District, as required
pursuant to M.S., Section 469.175, Subd. 3, are included in Exhibit A of the City resolution.
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 10
´
The Shoreham TIF District
Legend
Parcels
Encore TIF District
Redevelopment Area
June 16, 2015
Prepared by the St. Louis Park Community Development Department
3,500 0 3,5001,750 Feet
Subject
Area
TIF District
TIF
District
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 11
Page 3
MAP OF REDEVELOPMENT PROJECT NO. 1 AND
THE SHOREHAM TAX INCREMENT FINANCING DISTRICT
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 12
As of August 12, 2015
Draft for Public Hearing
Modification to the Redevelopment Plan
for Redevelopment Project No. 1
and the
Tax Increment Financing Plan
for the establishment of
the Shoreham Tax Increment Financing District
(a redevelopment district)
within
Redevelopment Project No. 1
St. Louis Park Economic Development Authority
City of St. Louis Park
Hennepin County
State of Minnesota
Public Hearing: August 17, 2015
Adopted:
Prepared by: EHLERS & ASSOCIATES, INC.
3060 Centre Pointe Drive, Roseville, Minnesota 55113-1105
651-697-8500 fax: 651-697-8555 www.ehlers-inc.com
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 13
Table of Contents
(for reference purposes only)
Section 1 - Modification to the Redevelopment Plan
for Redevelopment Project No. 1 .......................................... 1-1
Foreword ............................................................. 1-1
Section 2 - Tax Increment Financing Plan
for the The ShorehamTax Increment Financing District .......................... 2-1
Subsection 2-1. Foreword............................................... 2-1
Subsection 2-2. Statutory Authority........................................ 2-1
Subsection 2-3. Statement of Objectives ................................... 2-1
Subsection 2-4. Redevelopment Plan Overview .............................. 2-1
Subsection 2-5. Description of Property in the District and Property To Be Acquired . 2-2
Subsection 2-6. Classification of the District................................. 2-2
Subsection 2-7. Duration and First Year of Tax Increment of the District ........... 2-4
Subsection 2-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity
Value/Increment and Notification of Prior Planned Improvements ................ 2-4
Subsection 2-9. Sources of Revenue/Bonds to be Issued ...................... 2-5
Subsection 2-10. Uses of Funds ........................................... 2-6
Subsection 2-11. Fiscal Disparities Election.................................. 2-6
Subsection 2-12. Business Subsidies....................................... 2-7
Subsection 2-13. County Road Costs ....................................... 2-8
Subsection 2-14. Estimated Impact on Other Taxing Jurisdictions................. 2-8
Subsection 2-15. Supporting Documentation ................................ 2-10
Subsection 2-16. Definition of Tax Increment Revenues ....................... 2-10
Subsection 2-17. Modifications to the District................................ 2-10
Subsection 2-18. Administrative Expenses .................................. 2-11
Subsection 2-19. Limitation of Increment ................................... 2-12
Subsection 2-20. Use of Tax Increment .................................... 2-13
Subsection 2-21. Excess Increments ...................................... 2-13
Subsection 2-22. Requirements for Agreements with the Developer .............. 2-13
Subsection 2-23. Assessment Agreements ................................. 2-14
Subsection 2-24. Administration of the District ............................... 2-14
Subsection 2-25. Annual Disclosure Requirements ........................... 2-14
Subsection 2-26. Reasonable Expectations ................................. 2-14
Subsection 2-27. Other Limitations on the Use of Tax Increment................. 2-15
Subsection 2-28. Summary.............................................. 2-15
Appendix A
Project Description ...................................................... A-1
Appendix B
Map of Redevelopment Project No. 1 and the District ........................... B-1
Appendix C
Description of Property to be Included in the District ............................ C-1
Appendix D
Estimated Cash Flow for the District ........................................ D-1
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 14
Appendix E
Minnesota Business Assistance Form ....................................... E-1
Appendix F
Redevelopment Qualifications for the District .................................. F-1
Appendix G
Findings Including But/For Qualifications..................................... G-1
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 15
St. Louis Park Economic Development Authority
Modification to the Redevelopment Plan for Redevelopment Project No. 1 1-1
Section 1 - Modification to the Redevelopment Plan
for Redevelopment Project No. 1
Foreword
The following text represents a Modification to the Redevelopment Plan for Redevelopment Project No. 1.
This modification represents a continuation of the goals and objectives set forth in the Redevelopment Plan
for Redevelopment Project No. 1. Generally, the substantive changes include the establishment of the
Shoreham Tax Increment Financing District.
For further information, a review of the Redevelopment Plan for Redevelopment Project No. 1 is
recommended. It is available from the Economic Development Coordinator at the City of St. Louis Park.
Other relevant information is contained in the Tax Increment Financing Plans for the Tax Increment
Financing Districts located within Redevelopment Project No. 1.
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 16
St. Louis Park Economic Development Authority
Tax Increment Financing Plan for the Shoreham Tax Increment Financing District 2-1
Section 2 - Tax Increment Financing Plan
for the Shoreham Tax Increment Financing District
Subsection 2-1. Foreword
The St. Louis Park Economic Development Authority (the "EDA"), the City of St. Louis Park (the "City"),
staff and consultants have prepared the following information to expedite the establishment of the Shoreham
Tax Increment Financing District (the "District"), a redevelopment tax increment financing district, located
in Redevelopment Project No. 1.
Subsection 2-2. Statutory Authority
Within the City, there exist areas where public involvement is necessary to cause development or
redevelopment to occur. To this end, the EDA and City have certain statutory powers pursuant to Minnesota
Statutes ("M.S."), Sections 469.090 to 469.1082, inclusive, as amended, and M.S., Sections 469.174 to
469.1794, inclusive, as amended (the "Tax Increment Financing Act" or "TIF Act"), to assist in financing
public costs related to this project.
This section contains the Tax Increment Financing Plan (the "TIF Plan") for the District. Other relevant
information is contained in the Modification to the Redevelopment Plan for Redevelopment Project No. 1.
Subsection 2-3. Statement of Objectives
The District currently consists of five parcels of land and adjacent and internal rights-of-way. The District
is being created to facilitate the redevelopment of the parcels into approximately 150 apartments and 20,000
square feet of commercial/office space in the City. Please see Appendix A for further District information.
The EDA expects to enter into an agreement with Shoreham Apartments LLC (Bader Development) and
development is likely to begin in fall 2015. This TIF Plan is expected to achieve many of the objectives
outlined in the Redevelopment Plan for Redevelopment Project No. 1.
The activities contemplated in the Modification to the Redevelopment Plan and the TIF Plan do not preclude
the undertaking of other qualified development or redevelopment activities. These activities are anticipated
to occur over the life of Redevelopment Project No. 1 and the District.
Subsection 2-4. Redevelopment Plan Overview
1. Property to be Acquired - Selected property located within the District may be acquired by
the EDA or City and is further described in this TIF Plan.
2. Relocation - Relocation services, to the extent required by law, are available pursuant to
M.S., Chapter 117 and other relevant state and federal laws.
3. Upon approval of a developer's plan relating to the project and completion of the necessary
legal requirements, the EDA or City may sell to a developer selected properties that it may
acquire within the District or may lease land or facilities to a developer.
4. The EDA or City may perform or provide for some or all necessary acquisition, construction,
relocation, demolition, and required utilities and public street work within the District.
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 17
St. Louis Park Economic Development Authority
Tax Increment Financing Plan for the Shoreham Tax Increment Financing District 2-2
Subsection 2-5. Description of Property in the District and Property To Be Acquired
The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the
parcels listed in Appendix C of this TIF Plan. Please also see the map in Appendix B for further information
on the location of the District.
The EDA or City may acquire any parcel within the District including interior and adjacent street rights of
way. Any properties identified for acquisition will be acquired by the EDA or City only in order to
accomplish one or more of the following: storm sewer improvements; provide land for needed public streets,
utilities and facilities; carry out land acquisition, site improvements, clearance and/or development to
accomplish the uses and objectives set forth in this plan. The EDA or City may acquire property by gift,
dedication, condemnation or direct purchase from willing sellers in order to achieve the objectives of this TIF
Plan. Such acquisitions will be undertaken only when there is assurance of funding to finance the acquisition
and related costs.
Subsection 2-6. Classification of the District
The EDA and City, in determining the need to create a tax increment financing district in accordance with
M.S., Sections 469.174 to 469.1794, as amended, inclusive, find that the District, to be established, is a
redevelopment district pursuant to M.S., Section 469.174, Subd. 10(a)(1) as defined below:
(a) "Redevelopment district" means a type of tax increment financing district consisting of a project,
or portions of a project, within which the authority finds by resolution that one or more of the
following conditions, reasonably distributed throughout the district, exists:
(1) parcels consisting of 70 percent of the area in the district are occupied by buildings, streets,
utilities, paved or gravel parking lots or other similar structures and more than 50 percent
of the buildings, not including outbuildings, are structurally substandard to a degree
requiring substantial renovation or clearance;
(2) The property consists of vacant, unused, underused, inappropriately used, or infrequently
used rail yards, rail storage facilities or excessive or vacated railroad rights-of-way;
(3) tank facilities, or property whose immediately previous use was for tank facilities, as defined
in Section 115C, Subd. 15, if the tank facility:
(i) have or had a capacity of more than one million gallons;
(ii) are located adjacent to rail facilities; or
(iii) have been removed, or are unused, underused, inappropriately used or infrequently
used; or
(4) a qualifying disaster area, as defined in Subd. 10b.
(b) For purposes of this subdivision, "structurally substandard" shall mean containing defects in
structural elements or a combination of deficiencies in essential utilities and facilities, light and
ventilation, fire protection including adequate egress, layout and condition of interior partitions,
or similar factors, which defects or deficiencies are of sufficient total significance to justify
substantial renovation or clearance.
(c) A building is not structurally substandard if it is in compliance with the building code applicable
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 18
St. Louis Park Economic Development Authority
Tax Increment Financing Plan for the Shoreham Tax Increment Financing District 2-3
to new buildings or could be modified to satisfy the building code at a cost of less than 15
percent of the cost of constructing a new structure of the same square footage and type on the
site. The municipality may find that a building is not disqualified as structurally substandard
under the preceding sentence on the basis of reasonably available evidence, such as the size,
type, and age of the building, the average cost of plumbing, electrical, or structural repairs or
other similar reliable evidence. The municipality may not make such a determination without
an interior inspection of the property, but need not have an independent, expert appraisal
prepared of the cost of repair and rehabilitation of the building. An interior inspection of the
property is not required, if the municipality finds that (1) the municipality or authority is unable
to gain access to the property after using its best efforts to obtain permission from the party that
owns or controls the property; and (2) the evidence otherwise supports a reasonable conclusion
that the building is structurally substandard.
(d) A parcel is deemed to be occupied by a structurally substandard building for purposes of the
finding under paragraph (a) or by the improvement described in paragraph (e) if all of the
following conditions are met:
(1) the parcel was occupied by a substandard building or met the requirements of paragraph
(e), as the case may be, within three years of the filing of the request for certification of the
parcel as part of the district with the county auditor;
(2) the substandard building or the improvements described in paragraph (e) were demolished
or removed by the authority or the demolition or removal was financed by the authority or
was done by a developer under a development agreement with the authority;
(3) the authority found by resolution before the demolition or removal that the parcel was
occupied by a structurally substandard building or met the requirement of paragraph (e) and
that after demolition and clearance the authority intended to include the parcel within a
district; and
(4) upon filing the request for certification of the tax capacity of the parcel as part of a district,
the authority notifies the county auditor that the original tax capacity of the parcel must be
adjusted as provided by § 469.177, subdivision 1, paragraph (f).
(e) For purposes of this subdivision, a parcel is not occupied by buildings, streets, utilities, paved
or gravel parking lots or other similar structures unless 15 percent of the area of the parcel
contains buildings, streets, utilities, paved or gravel parking lots or other similar structures.
(f) For districts consisting of two or more noncontiguous areas, each area must qualify as a
redevelopment district under paragraph (a) to be included in the district, and the entire area of
the district must satisfy paragraph (a).
In meeting the statutory criteria the EDA and City rely on the following facts and findings:
• The District is a redevelopment district consisting of five parcels.
• An inventory shows that parcels consisting of more than 70 percent of the area in the District are
occupied by buildings, streets, utilities, paved or gravel parking lots or other similar structures.
• An inspection of the buildings located within the District finds that more than 50 percent of the buildings
are structurally substandard as defined in the TIF Act. (See Appendix F).
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 19
St. Louis Park Economic Development Authority
Tax Increment Financing Plan for the Shoreham Tax Increment Financing District 2-4
Pursuant to M.S., Section 469.176, Subd. 7, the District does not contain any parcel or part of a parcel that
qualified under the provisions of M.S., Sections 273.111 or 273.112 or Chapter 473H for taxes payable in
any of the five calendar years before the filing of the request for certification of the District.
Subsection 2-7. Duration and First Year of Tax Increment of the District
Pursuant to M.S., Section 469.175, Subd. 1, and Section 469.176, Subd. 1, the duration and first year of tax
increment of the District must be indicated within the TIF Plan. Pursuant to M.S., Section 469.176, Subd. 1b.,
the duration of the District will be 25 years after receipt of the first increment by the EDA (a total of 26 years
of tax increment). The EDA elects to receive the first tax increment in 2017, which is no later than four years
following the year of approval of the District. Thus, it is estimated that the District, including any
modifications of the TIF Plan for subsequent phases or other changes, will terminate after 2042, or when the
TIF Plan is satisfied. The EDA reserves the right to decertify the District prior to the legally required date.
Subsection 2-8. Original Tax Capacity, Tax Rate and Estimated Captured Net Tax Capacity
Value/Increment and Notification of Prior Planned Improvements
Pursuant to M.S., Section 469.174, Subd. 7 and M.S., Section 469.177, Subd. 1, the Original Net Tax Capacity
(ONTC) as certified for the District will be based on the market values placed on the property by the assessor
in 2015 for taxes payable 2016.
Pursuant to M.S., Section 469.177, Subds. 1 and 2, the County Auditor shall certify in each year (beginning
in the payment year 2017) the amount by which the original value has increased or decreased as a result of:
1. Change in tax exempt status of property;
2. Reduction or enlargement of the geographic boundaries of the district;
3. Change due to adjustments, negotiated or court-ordered abatements;
4. Change in the use of the property and classification;
5. Change in state law governing class rates; or
6. Change in previously issued building permits.
In any year in which the current Net Tax Capacity (NTC) value of the District declines below the ONTC, no
value will be captured and no tax increment will be payable to the EDA or City.
The original local tax rate for the District will be the local tax rate for taxes payable 2016, assuming the
request for certification is made before June 30, 2016. The ONTC and the Original Local Tax Rate for the
District appear in the table below.
Pursuant to M.S., Section 469.174 Subd. 4 and M.S., Section 469.177, Subd. 1, 2, and 4, the estimated
Captured Net Tax Capacity (CTC) of the District, within Redevelopment Project No. 1, upon completion of
the projects within the District, will annually approximate tax increment revenues as shown in the table
below. The EDA and City request 100 percent of the available increase in tax capacity for repayment of its
obligations and current expenditures, beginning in the tax year payable 2017. The Project Tax Capacity (PTC)
listed is an estimate of values when the projects within the District are completed.
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 20
St. Louis Park Economic Development Authority
Tax Increment Financing Plan for the Shoreham Tax Increment Financing District 2-5
Project Estimated Tax Capacity upon Completion (PTC)$449,150
Original Estimated Net Tax Capacity (ONTC)$30,990
Fiscal Disparities Contribution $39,083
Estimated Captured Tax Capacity (CTC)$379,077
Original Local Tax Rate 1.30048 Pay 2015
Estimated Annual Tax Increment (CTC x Local Tax Rate) $492,982
Percent Retained by the EDA 100%
Pursuant to M.S., Section 469.177, Subd. 4, the EDA shall, after a due and diligent search, accompany its
request for certification to the County Auditor or its notice of the District enlargement pursuant to M.S.,
Section 469.175, Subd. 4, with a listing of all properties within the District or area of enlargement for which
building permits have been issued during the eighteen (18) months immediately preceding approval of the
TIF Plan by the municipality pursuant to M.S., Section 469.175, Subd. 3. The County Auditor shall increase
the original net tax capacity of the District by the net tax capacity of improvements for which a building
permit was issued.
The City has reviewed the area to be included in the District and found no parcels for which building
permits have been issued during the 18 months immediately preceding approval of the TIF Plan by the
City.
Subsection 2-9. Sources of Revenue/Bonds to be Issued
The costs outlined in the Uses of Funds will be financed primarily through the annual collection of tax
increments. The EDA or City reserves the right to incur bonds or other indebtedness as a result of the TIF
Plan. As presently proposed, the projects within the District will be financed by a pay-as-you-go note. Any
refunding amounts will be deemed a budgeted cost without a formal TIF Plan Modification. This provision
does not obligate the EDA or City to incur debt. The EDA or City will issue bonds or incur other debt only
upon the determination that such action is in the best interest of the City.
The total estimated tax increment revenues for the District are shown in the table below:
SOURCES OF FUNDS TOTAL
Tax Increment $12,293,160
Interest $1,229,316
TOTAL $13,522,476
The EDA or City may issue bonds (as defined in the TIF Act) secured in whole or in part with tax increments
from the District in a maximum principal amount of $8,764,688. Such bonds may be in the form of pay-as-
you-go notes, revenue bonds or notes, general obligation bonds, or interfund loans. This estimate of total
bonded indebtedness is a cumulative statement of authority under this TIF Plan as of the date of approval.
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 21
St. Louis Park Economic Development Authority
Tax Increment Financing Plan for the Shoreham Tax Increment Financing District 2-6
Subsection 2-10. Uses of Funds
Currently under consideration for the District is a proposal to facilitate the redevelopment of the five existing
parcels into approximately 150 apartments and 20,000 square feet of commercial/office space in the City.
The EDA and City have determined that it will be necessary to provide assistance to the project for certain
costs of Redevelopment Project No. 1, as described. The EDA has studied the feasibility of the development
or redevelopment of property in and around the District. To facilitate the establishment and development or
redevelopment of the District, this TIF Plan authorizes the use of tax increment financing to pay for the cost
of certain eligible expenses. The estimate of public costs and uses of funds associated with the District is
outlined in the following table.
USES OF TAX INCREMENT FUNDS TOTAL
Land/Building Acquisition $2,000,000
Site Improvements/Preparation $2,000,000
Utilities $2,000,000
Other Qualifying Improvements $2,150,030
Administrative Costs (up to 10%)$614,658
PROJECT COST TOTAL $8,764,688
Interest $4,757,788
PROJECT AND INTEREST COSTS TOTAL $13,522,476
The total project cost, including financing costs (interest) listed in the table above does not exceed the total
projected tax increments for the District as shown in Subsection 2-9.
Estimated costs associated with the District are subject to change among categories without a modification
to this TIF Plan. The cost of all activities to be considered for tax increment financing will not exceed,
without formal modification, the budget above pursuant to the applicable statutory requirements. Pursuant
to M.S., Section 469.1763, Subd. 2, no more than 25 percent of the tax increment paid by property within the
District will be spent on activities related to development or redevelopment outside of the District but within
the boundaries of Redevelopment Project No. 1, (including administrative costs, which are considered to be
spent outside of the District) subject to the limitations as described in this TIF Plan.
Subsection 2-11. Fiscal Disparities Election
Pursuant to M.S., Section 469.177, Subd. 3, the EDA may elect one of two methods to calculate fiscal
disparities. If the calculations pursuant to M.S., Section 469.177, Subd. 3, clause b, (within the District) are
followed, the following method of computation shall apply:
(1) The original net tax capacity shall be determined before the application of the fiscal disparity
provisions of Chapter 276A or 473F. The current net tax capacity shall exclude any fiscal
disparity commercial-industrial net tax capacity increase between the original year and the
current year multiplied by the fiscal disparity ratio determined pursuant to M.S., Section
276A.06, subdivision 7 or M.S., Section 473F.08, subdivision 6. Where the original net tax
capacity is equal to or greater than the current net tax capacity, there is no captured tax capacity
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 22
St. Louis Park Economic Development Authority
Tax Increment Financing Plan for the Shoreham Tax Increment Financing District 2-7
and no tax increment determination. Where the original tax capacity is less than the current tax
capacity, the difference between the original net tax capacity and the current net tax capacity
is the captured net tax capacity. This amount less any portion thereof which the authority has
designated, in its tax increment financing plan, to share with the local taxing districts is the
retained captured net tax capacity of the authority.
(2) The county auditor shall exclude the retained captured net tax capacity of the authority from the
net tax capacity of the local taxing districts in determining local taxing district tax rates. The
local tax rates so determined are to be extended against the retained captured net tax capacity
of the authority as well as the net tax capacity of the local taxing districts. The tax generated by
the extension of the less of (A) the local taxing district tax rates or (B) the original local tax rate
to the retained captured net tax capacity of the authority is the tax increment of the authority.
The EDA will choose to calculate fiscal disparities by clause b.
According to M.S., Section 469.177, Subd. 3:
(c) The method of computation of tax increment applied to a district pursuant to paragraph (a) or
(b) shall remain the same for the duration of the district, except that the governing body may
elect to change its election from the method of computation in paragraph (a) to the method in
paragraph (b).
Subsection 2-12. Business Subsidies
Pursuant to M.S., Section 116J.993, Subd. 3, the following forms of financial assistance are not considered
a business subsidy:
(1) A business subsidy of less than $150,000;
(2) Assistance that is generally available to all businesses or to a general class of similar businesses,
such as a line of business, size, location, or similar general criteria;
(3) Public improvements to buildings or lands owned by the state or local government that serve a
public purpose and do not principally benefit a single business or defined group of businesses at
the time the improvements are made;
(4) Redevelopment property polluted by contaminants as defined in M.S., Section 116J.552, Subd. 3;
(5) Assistance provided for the sole purpose of renovating old or decaying building stock or bringing
it up to code and assistance provided for designated historic preservation districts, provided that
the assistance is equal to or less than 50% of the total cost;
(6) Assistance to provide job readiness and training services if the sole purpose of the assistance is to
provide those services;
(7) Assistance for housing;
(8) Assistance for pollution control or abatement, including assistance for a tax increment financing
hazardous substance subdistrict as defined under M.S., Section 469.174, Subd. 23;
(9) Assistance for energy conservation;
(10) Tax reductions resulting from conformity with federal tax law;
(11) Workers' compensation and unemployment compensation;
(12) Benefits derived from regulation;
(13) Indirect benefits derived from assistance to educational institutions;
(14) Funds from bonds allocated under chapter 474A, bonds issued to refund outstanding bonds, and
bonds issued for the benefit of an organization described in section 501 (c) (3) of the Internal
Revenue Code of 1986, as amended through December 31, 1999;
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 23
St. Louis Park Economic Development Authority
Tax Increment Financing Plan for the Shoreham Tax Increment Financing District 2-8
(15) Assistance for a collaboration between a Minnesota higher education institution and a business;
(16) Assistance for a tax increment financing soils condition district as defined under M.S., Section
469.174, Subd. 19;
(17) Redevelopment when the recipient's investment in the purchase of the site and in site preparation
is 70 percent or more of the assessor's current year's estimated market value;
(18) General changes in tax increment financing law and other general tax law changes of a principally
technical nature;
(19) Federal assistance until the assistance has been repaid to, and reinvested by, the state or local
government agency;
(20) Funds from dock and wharf bonds issued by a seaway port authority;
(21) Business loans and loan guarantees of $150,000 or less;
(22) Federal loan funds provided through the United States Department of Commerce, Economic
Development Administration; and
(23) Property tax abatements granted under M.S., Section 469.1813 to property that is subject to
valuation under Minnesota Rules, chapter 8100.
The EDA will comply with M.S., Sections 116J.993 to 116J.995 to the extent the tax increment assistance
under this TIF Plan does not fall under any of the above exemptions.
Subsection 2-13. County Road Costs
Pursuant to M.S., Section 469.175, Subd. 1a, the county board may require the EDA or City to pay for all or
part of the cost of county road improvements if the proposed development to be assisted by tax increment
will, in the judgment of the county, substantially increase the use of county roads requiring construction of
road improvements or other road costs and if the road improvements are not scheduled within the next five
years under a capital improvement plan or within five years under another county plan.
If the county elects to use increments to improve county roads, it must notify the EDA or City within forty-
five days of receipt of this TIF Plan. In the opinion of the EDA and City and consultants, the proposed
development outlined in this TIF Plan may have an impact upon county roads, therefore the TIF Plan was
forwarded to the county 45 days prior to the public hearing. The EDA and City are aware that the county
could claim that tax increment should be used for county roads, even after the public hearing.
Subsection 2-14. Estimated Impact on Other Taxing Jurisdictions
The estimated impact on other taxing jurisdictions assumes that the redevelopment contemplated by the TIF
Plan would occur without the creation of the District. However, the EDA has determined that such
development or redevelopment would not occur "but for" tax increment financing and that, therefore, the
fiscal impact on other taxing jurisdictions is $0. The estimated fiscal impact of the District would be as
follows if the "but for" test was not met:
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 24
St. Louis Park Economic Development Authority
Tax Increment Financing Plan for the Shoreham Tax Increment Financing District 2-9
IMPACT ON TAX BASE
2014/Pay 2015
Total Net
Tax Capacity
Estimated Captured
Tax Capacity (CTC)
Upon Completion
Percent of CTC
to Entity Total
Hennepin County 1,354,654,515 379,077 0.0280%
City of St. Louis Park 51,886,847 379,077 0.7306%
St. Louis Park ISD No. 283 49,130,597 379,077 0.7716%
IMPACT ON TAX RATES
Pay 2015
Extension Rates
Percent
of Total CTC
Potential
Taxes
Hennepin County 0.463980 35.68% 379,077 175,884
City of St. Louis Park 0.494330 38.01% 379,077 187,389
St. Louis Park ISD No. 283 0.226940 17.45% 379,077 86,028
Other 0.115230 8.86%379,077 43,681
Total 1.300480 100.00%492,982
The estimates listed above display the captured tax capacity when all construction is completed. The tax rate
used for calculations is the actual Pay 2015 rate. The total net capacity for the entities listed above are based
on actual Pay 2015 figures. The District will be certified under the actual Pay 2016 rates, which were
unavailable at the time this TIF Plan was prepared.
Pursuant to M.S. Section 469.175 Subd. 2(b):
(1) Estimate of total tax increment. It is estimated that the total amount of tax increment that will be
generated over the life of the District is $12,293,160;
(2) Probable impact of the District on city provided services and ability to issue debt. An impact of the
District on police protection is not expected. With any addition of new residents or businesses, police
calls for service will be increased. New developments add an increase in traffic, and additional
overall demands to the call load. The City does not expect that the proposed development, in and
of itself, will necessitate new capital investment in vehicles or require that the City expand its staff.
The probable impact of the District on fire protection is not expected to be significant. Typically new
buildings generate few calls, if any, and are of superior construction.
The impact of the District on public infrastructure is expected to be minimal.
The probable impact of any District general obligation tax increment bonds on the ability to issue
debt for general fund purposes is expected to be minimal. It is not anticipated that there will be any
general obligation debt issued in relation to this project, therefore there will be no impact on the
City's ability to issue future debt or on the City's debt limit.
(3) Estimated amount of tax increment attributable to school district levies. It is estimated that the
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 25
St. Louis Park Economic Development Authority
Tax Increment Financing Plan for the Shoreham Tax Increment Financing District 2-10
amount of tax increments over the life of the District that would be attributable to school district
levies, assuming the school district's share of the total local tax rate for all taxing jurisdictions
remained the same, is $2,145,156;
(4) Estimated amount of tax increment attributable to county levies. It is estimated that the amount of
tax increments over the life of the District that would be attributable to county levies, assuming the
county's share of the total local tax rate for all taxing jurisdictions remained the same, is $4,386,199;
(5) Additional information requested by the county or school district. The City is not aware of any
standard questions in a county or school district written policy regarding tax increment districts and
impact on county or school district services. The county or school district must request additional
information pursuant to M.S. Section 469.175 Subd. 2(b) within 15 days after receipt of the tax
increment financing plan.
No requests for additional information from the county or school district regarding the proposed
development for the District have been received.
Subsection 2-15. Supporting Documentation
Pursuant to M.S. Section 469.175, Subd. 1 (a), clause 7 the TIF Plan must contain identification and
description of studies and analyses used to make the determination set forth in M.S. Section 469.175, Subd.
3, clause (b)(2) and the findings are required in the resolution approving the District. Following is a list of
reports and studies on file at the City that support the EDA and City's findings:
• A list of applicable studies will be listed here prior to the public hearing.
Subsection 2-16. Definition of Tax Increment Revenues
Pursuant to M.S., Section 469.174, Subd. 25, tax increment revenues derived from a tax increment financing
district include all of the following potential revenue sources:
1. Taxes paid by the captured net tax capacity, but excluding any excess taxes, as computed under M.S.,
Section 469.177;
2. The proceeds from the sale or lease of property, tangible or intangible, to the extent the property was
purchased by the Authority with tax increments;
3. Principal and interest received on loans or other advances made by the Authority with tax increments;
4. Interest or other investment earnings on or from tax increments;
5. Repayments or return of tax increments made to the Authority under agreements for districts for
which the request for certification was made after August 1, 1993; and
6. The market value homestead credit paid to the Authority under M.S., Section 273.1384.
Subsection 2-17. Modifications to the District
In accordance with M.S., Section 469.175, Subd. 4, any:
1. Reduction or enlargement of the geographic area of the District, if the reduction does not meet the
requirements of M.S., Section 469.175, Subd. 4(e);
2. Increase in amount of bonded indebtedness to be incurred;
3. A determination to capitalize interest on debt if that determination was not a part of the original TIF
Plan;
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St. Louis Park Economic Development Authority
Tax Increment Financing Plan for the Shoreham Tax Increment Financing District 2-11
4. Increase in the portion of the captured net tax capacity to be retained by the EDA or City;
5. Increase in the estimate of the cost of the District, including administrative expenses, that will be paid
or financed with tax increment from the District; or
6. Designation of additional property to be acquired by the EDA or City,
shall be approved upon the notice and after the discussion, public hearing and findings required for approval
of the original TIF Plan.
Pursuant to M.S. Section 469.175 Subd. 4(f), the geographic area of the District may be reduced, but shall not
be enlarged after five years following the date of certification of the original net tax capacity by the county
auditor. If a redevelopment district is enlarged, the reasons and supporting facts for the determination that
the addition to the district meets the criteria of M.S., Section 469.174, Subd. 10, must be documented in
writing and retained. The requirements of this paragraph do not apply if (1) the only modification is
elimination of parcel(s) from the District and (2)(A) the current net tax capacity of the parcel(s) eliminated
from the District equals or exceeds the net tax capacity of those parcel(s) in the District's original net tax
capacity or (B) the EDA agrees that, notwithstanding M.S., Section 469.177, Subd. 1, the original net tax
capacity will be reduced by no more than the current net tax capacity of the parcel(s) eliminated from the
District.
The EDA or City must notify the County Auditor of any modification to the District. Modifications to the
District in the form of a budget modification or an expansion of the boundaries will be recorded in the TIF
Plan.
Subsection 2-18. Administrative Expenses
In accordance with M.S., Section 469.174, Subd. 14, administrative expenses means all expenditures of the
EDA or City, other than:
1. Amounts paid for the purchase of land;
2. Amounts paid to contractors or others providing materials and services, including architectural and
engineering services, directly connected with the physical development of the real property in the
District;
3. Relocation benefits paid to or services provided for persons residing or businesses located in the
District; or
4. Amounts used to pay principal or interest on, fund a reserve for, or sell at a discount bonds issued
pursuant to M.S., Section 469.178; or
5. Amounts used to pay other financial obligations to the extent those obligations were used to finance
costs described in clauses (1) to (3).
For districts for which certification was requested after July 31, 2001, no tax increment may be used to pay
any administrative expenses for District costs which exceed ten percent of total estimated tax increment
expenditures authorized by the TIF Plan or the total tax increments, as defined in M.S., Section 469.174, Subd.
25, clause (1), from the District, whichever is less.
Pursuant to M.S., Section 469.176, Subd. 4h, tax increments may be used to pay for the County's actual
administrative expenses incurred in connection with the District and are not subject to the percentage limits
of M.S., Section 469.176, Subd. 3. The county may require payment of those expenses by February 15 of the
year following the year the expenses were incurred.
Pursuant to M.S., Section 469. 177, Subd. 11, the County Treasurer shall deduct an amount (currently .36
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 27
St. Louis Park Economic Development Authority
Tax Increment Financing Plan for the Shoreham Tax Increment Financing District 2-12
percent) of any increment distributed to the EDA or City and the County Treasurer shall pay the amount
deducted to the State Commissioner of Management and Budget for deposit in the state general fund to be
appropriated to the State Auditor for the cost of financial reporting of tax increment financing information
and the cost of examining and auditing authorities' use of tax increment financing. This amount may be
adjusted annually by the Commissioner of Revenue.
Subsection 2-19. Limitation of Increment
The tax increment pledged to the payment of bonds and interest thereon may be discharged and the District
may be terminated if sufficient funds have been irrevocably deposited in the debt service fund or other escrow
account held in trust for all outstanding bonds to provide for the payment of the bonds at maturity or
redemption date.
Pursuant to M.S., Section 469.176, Subd. 6:
if, after four years from the date of certification of the original net tax capacity of the tax
increment financing district pursuant to M.S., Section 469.177, no demolition, rehabilitation
or renovation of property or other site preparation, including qualified improvement of a
street adjacent to a parcel but not installation of utility service including sewer or water
systems, has been commenced on a parcel located within a tax increment financing district
by the authority or by the owner of the parcel in accordance with the tax increment financing
plan, no additional tax increment may be taken from that parcel and the original net tax
capacity of that parcel shall be excluded from the original net tax capacity of the tax
increment financing district. If the authority or the owner of the parcel subsequently
commences demolition, rehabilitation or renovation or other site preparation on that parcel
including qualified improvement of a street adjacent to that parcel, in accordance with the
tax increment financing plan, the authority shall certify to the county auditor that the activity
has commenced and the county auditor shall certify the net tax capacity thereof as most
recently certified by the commissioner of revenue and add it to the original net tax capacity
of the tax increment financing district. The county auditor must enforce the provisions of this
subdivision. The authority must submit to the county auditor evidence that the required
activity has taken place for each parcel in the district. The evidence for a parcel must be
submitted by February 1 of the fifth year following the year in which the parcel was certified
as included in the district. For purposes of this subdivision, qualified improvements of a
street are limited to (1) construction or opening of a new street, (2) relocation of a street,
and (3) substantial reconstruction or rebuilding of an existing street.
The EDA or City or a property owner must improve parcels within the District by approximately August 2019
and report such actions to the County Auditor.
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Title: Establishment of The Shoreham Tax Increment Financing District Page 28
St. Louis Park Economic Development Authority
Tax Increment Financing Plan for the Shoreham Tax Increment Financing District 2-13
Subsection 2-20. Use of Tax Increment
The EDA hereby determines that it will use 100 percent of the captured net tax capacity of taxable property
located in the District for the following purposes:
1. To pay the principal of and interest on bonds issued to finance a project;
2. To finance, or otherwise pay the cost of redevelopment of the Redevelopment Project No. 1 pursuant
to M.S., Sections 469.090 to 469.1082;
3. To pay for project costs as identified in the budget set forth in the TIF Plan;
4. To finance, or otherwise pay for other purposes as provided in M.S., Section 469.176, Subd. 4;
5. To pay principal and interest on any loans, advances or other payments made to or on behalf of the
EDA or City or for the benefit of Redevelopment Project No. 1 by a developer;
6. To finance or otherwise pay premiums and other costs for insurance or other security guaranteeing
the payment when due of principal of and interest on bonds pursuant to the TIF Plan or pursuant to
M.S., Chapter 462C. M.S., Sections 469.152 through 469.165, and/or M.S., Sections 469.178; and
7. To accumulate or maintain a reserve securing the payment when due of the principal and interest on
the tax increment bonds or bonds issued pursuant to M.S., Chapter 462C, M.S., Sections 469.152
through 469.165, and/or M.S., Sections 469.178.
These revenues shall not be used to circumvent any levy limitations applicable to the City nor for other
purposes prohibited by M.S., Section 469.176, Subd. 4.
Tax increments generated in the District will be paid by Hennepin County to the EDA for the Tax Increment
Fund of said District. The EDA will pay to the developer(s) annually an amount not to exceed an amount as
specified in a developer's agreement to reimburse the costs of land acquisition, public improvements,
demolition and relocation, site preparation, and administration. Remaining increment funds will be used for
administrative expenses as described in Subsection 2-18 (up to 10 percent) and for the costs of public
improvement activities outside the District.
Subsection 2-21. Excess Increments
Excess increments, as defined in M.S., Section 469.176, Subd. 2, shall be used only to do one or more of the
following:
1. Prepay any outstanding bonds;
2. Discharge the pledge of tax increment for any outstanding bonds;
3. Pay into an escrow account dedicated to the payment of any outstanding bonds; or
4. Return the excess to the County Auditor for redistribution to the respective taxing jurisdictions in
proportion to their local tax rates.
The EDA must spend or return the excess increments under paragraph (c) within nine months after the end
of the year. In addition, the EDA may, subject to the limitations set forth herein, choose to modify the TIF
Plan in order to finance additional public costs in Redevelopment Project No. 1 or the District.
Subsection 2-22. Requirements for Agreements with the Developer
The EDA will review any proposal for private development to determine its conformance with the
Redevelopment Plan and with applicable municipal ordinances and codes. To facilitate this effort, the
following documents may be requested for review and approval: site plan, construction, mechanical, and
electrical system drawings, landscaping plan, grading and storm drainage plan, signage system plan, and any
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 29
St. Louis Park Economic Development Authority
Tax Increment Financing Plan for the Shoreham Tax Increment Financing District 2-14
other drawings or narrative deemed necessary by the EDA or City to demonstrate the conformity of the
development to City plans and ordinances.
Pursuant to M.S., Section 469.176, Subd. 5, no more than 25 percent, by acreage, of the property to be
acquired in the District as set forth in the TIF Plan shall at any time be owned by the EDA or City as a result
of acquisition with the proceeds of bonds issued pursuant to M.S., Section 469.178 to which tax increments
from property acquired are pledged, unless prior to acquisition in excess of 25 percent of the acreage, the
EDA or City entered into an agreement for the development or redevelopment of the property acquired and
which provides recourse for the EDA or City should the development or redevelopment not be completed.
Subsection 2-23. Assessment Agreements
Pursuant to M.S., Section 469.177, Subd. 8, the EDA or City may enter into a written assessment agreement
in recordable form with the developer of property within the District which establishes a minimum market
value of the land and completed improvements for the duration of the District. The assessment agreement
shall be presented to the County Assessor who shall review the plans and specifications for the improvements
to be constructed, review the market value previously assigned to the land upon which the improvements are
to be constructed and, so long as the minimum market value contained in the assessment agreement appears,
in the judgment of the assessor, to be a reasonable estimate, the County Assessor shall also certify the
minimum market value agreement.
Subsection 2-24. Administration of the District
Administration of the District will be handled by the Economic Development Coordinator.
Subsection 2-25. Annual Disclosure Requirements
Pursuant to M.S., Section 469.175, Subds. 5, 6, and 6b the EDA or City must undertake financial reporting
for all tax increment financing districts to the Office of the State Auditor, County Board and County Auditor
on or before August 1 of each year. M.S., Section 469.175, Subd. 5 also provides that an annual statement
shall be published in a newspaper of general circulation in the City on or before August 15.
If the City fails to make a disclosure or submit a report containing the information required by M.S., Section
469.175 Subd. 5 and Subd. 6, the OSA will direct the County Auditor to withhold the distribution of tax
increment from the District.
Subsection 2-26. Reasonable Expectations
As required by the TIF Act, in establishing the District, the determination has been made that the anticipated
development would not reasonably be expected to occur solely through private investment within the
reasonably foreseeable future and that the increased market value of the site that could reasonably be expected
to occur without the use of tax increment financing would be less than the increase in the market value
estimated to result from the proposed development after subtracting the present value of the projected tax
increments for the maximum duration of the District permitted by the TIF Plan. In making said determination,
reliance has been placed upon written representation made by the developer to such effects and upon EDA
and City staff awareness of the feasibility of developing the project site(s) within the District. A comparative
analysis of estimated market values both with and without establishment of the District and the use of tax
increments has been performed as described above. Such analysis is included with the cashflow in Appendix
D, and indicates that the increase in estimated market value of the proposed development (less the indicated
subtractions) exceeds the estimated market value of the site absent the establishment of the District and the
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 30
St. Louis Park Economic Development Authority
Tax Increment Financing Plan for the Shoreham Tax Increment Financing District 2-15
use of tax increments.
Subsection 2-27. Other Limitations on the Use of Tax Increment
1. General Limitations. All revenue derived from tax increment shall be used in accordance with the TIF
Plan. The revenues shall be used to finance, or otherwise pay the cost of redevelopment of the
Redevelopment Project No. 1 pursuant to M.S., Sections 469.090 to 469.1082. Tax increments may not
be used to circumvent existing levy limit law. No tax increment may be used for the acquisition,
construction, renovation, operation, or maintenance of a building to be used primarily and regularly for
conducting the business of a municipality, county, school district, or any other local unit of government
or the state or federal government. This provision does not prohibit the use of revenues derived from tax
increments for the construction or renovation of a parking structure.
2. Pooling Limitations. At least 75 percent of tax increments from the District must be expended on
activities in the District or to pay bonds, to the extent that the proceeds of the bonds were used to finance
activities within said district or to pay, or secure payment of, debt service on credit enhanced bonds. Not
more than 25 percent of said tax increments may be expended, through a development fund or otherwise,
on activities outside of the District except to pay, or secure payment of, debt service on credit enhanced
bonds. For purposes of applying this restriction, all administrative expenses must be treated as if they
were solely for activities outside of the District.
3. Five Year Limitation on Commitment of Tax Increments. Tax increments derived from the District shall
be deemed to have satisfied the 75 percent test set forth in paragraph (2) above only if the five year rule
set forth in M.S., Section 469.1763, Subd. 3, has been satisfied; and beginning with the sixth year
following certification of the District, 75 percent of said tax increments that remain after expenditures
permitted under said five year rule must be used only to pay previously committed expenditures or credit
enhanced bonds as more fully set forth in M.S., Section 469.1763, Subd. 5.
4. Redevelopment District. At least 90 percent of the revenues derived from tax increment from a
redevelopment district must be used to finance the cost of correcting conditions that allow designation
of redevelopment and renewal and renovation districts under M.S., Section 469.176 Subd. 4j. These costs
include, but are not limited to, acquiring properties containing structurally substandard buildings or
improvements or hazardous substances, pollution, or contaminants, acquiring adjacent parcels necessary
to provide a site of sufficient size to permit development, demolition and rehabilitation of structures,
clearing of the land, the removal of hazardous substances or remediation necessary for development of
the land, and installation of utilities, roads, sidewalks, and parking facilities for the site. The allocated
administrative expenses of the EDA or City, including the cost of preparation of the development action
response plan, may be included in the qualifying costs.
Subsection 2-28. Summary
The St. Louis Park Economic Development Authority is establishing the District to preserve and enhance the
tax base, redevelop substandard areas, and provide employment opportunities in the City. The TIF Plan for
the District was prepared by Ehlers & Associates, Inc., 3060 Centre Pointe Drive, Roseville, Minnesota
55113, telephone (651) 697-8500.
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 31
Appendix A-1
Appendix A
Project Description
The District is being created to facilitate the redevelopment of properties located at the southwest corner of
County Road 25 and France Avenue. Development will consist of approximately 150 residential rental units
and 20,000 square feet of office space. Construction will begin in 2015 with an anticipated completion date
in spring of 2017.
The City’s EDA will be providing tax increment on a pay-as-you-go basis.
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 32
Appendix B-1
Appendix B
Map of Redevelopment Project No. 1 and the District
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 33
´
The Shoreham TIF District
Legend
Parcels
Encore TIF District
Redevelopment Area
June 16, 2015
Prepared by the St. Louis Park Community Development Department
3,500 0 3,5001,750 Feet
Subject
Area
TIF District
TIF
District
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 34
39073915
3031 391839143907
3915 Hwy 7
PID: 0602824110007
3907 Hwy 7
PID: 0602824110056
3031 Glenhurst Ave
PID: 0602824110016
3918 31st St W
PID: 0602824110015
3914 31st St W
PID: 0602824110014
31ST
HIGHW
A
Y
7
MINNETONKA
FRANCESER VICE D
R
H
I
G
H
W
A
Y
7 GLENHURSTHUNTINGTONHIGH
W
A
Y
7
MIN
N
E
T
O
N
K
A
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The Shoreham TIF District
Legend
Parcels
Roads
Surrounding Roads
Encore TIF District
June 16, 2015
Prepared by the St. Louis Park Community Development Department
220 0 220110 FeetTIF District
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 35
Appendix C-1
Appendix C
Description of Property to be Included in the District
The District encompasses all property and adjacent rights-of-way and abutting roadways identified by the
parcels listed below.
Parcel Numbers Address Owner
06-028-24-11-0014 3914 31st St W Wofford
06-028-24-11-0015 3918 31st St W Gambucci
06-028-24-11-0016 3031 Glenhurst Ave Klumpner
06-028-24-11-0056 3907 Highway 7 PP&W
06-028-24-11-0007 3915 Highway 7 Johnsen
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 36
Appendix D-1
Appendix D
Estimated Cash Flow for the District
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 37
The Shoreham - No InflationCity of St. Louis Park150 Apartments & 20,000 Sq/Ft RetailASSUMPTIONS AND RATESDistrictType:RedevelopmentDistrict Name/Number:County District #:Exempt Class Rate (Exempt)0.00%First Year Construction or Inflation on Value2015Commercial Industrial Preferred Class Rate (C/I Pref.)Existing District - Specify No. Years RemainingFirst $150,0001.50%Inflation Rate - Every Year:0.00%Over $150,0002.00%Interest Rate:4.00%Commercial Industrial Class Rate (C/I)2.00%Present Value Date:1-Aug-16Rental Housing Class Rate (Rental)1.25%First Period Ending1-Feb-17Affordable Rental Housing Class Rate (Aff. Rental)Tax Year District was Certified:Pay 2016First $100,000 0.75%Cashflow Assumes First Tax Increment For Development: 2017 Over $100,000 0.25%Years of Tax Increment 26 Non-Homestead Residential (Non-H Res. 1 Unit)Assumes Last Year of Tax Increment2042First $500,0001.00%Fiscal Disparities Election [Outside (A), Inside (B), or NA]Inside(B)Over $500,0001.25%Incremental or Total Fiscal DisparitiesIncrementalHomestead Residental Class Rate (Hmstd. Res.)Fiscal Disparities Contribution Ratio35.0050% Pay 2015First $500,0001.00%Fiscal Disparities Metro-Wide Tax Rate161.6250% Pay 2015Over $500,0001.25%Maximum/Frozen Local Tax Rate: 130.048% Pay 2015Agricultural Non-Homestead1.00%Current Local Tax Rate: (Use lesser of Current or Max.) 130.048% Pay 2015State-wide Tax Rate (Comm./Ind. only used for total taxes) 50.8400% Pay 2015Market Value Tax Rate (Used for total taxes)0.23783% Pay 2015Building Total PercentageTax Year Property CurrentClassAfterLandMarket Market Of Value Used Original OriginalTaxOriginalAfterConversionMap # PIDOwner Address Market Value ValueValue for District Market Value Market Value Class Tax Capacity Conversion Orig. Tax Cap.106‐028‐24‐11‐0007 3915 Hwy 7448,000 137,000 585,000100% 585,000 Pay 2016 C/I Pref.10,950 Rental7,313 206‐028‐24‐11‐0056 3907 Hwy 71,103,000 25,000 1,128,000100% 1,128,000 Pay 2016 C/I Pref.21,810 Rental14,100 306‐028‐24‐11‐0016 3031 Glenhurst Ave98,000 68,100 166,100100% 166,100 Pay 2016 Non-H Res. 1 Unit1,661 Rental2,076 406‐028‐24‐11‐0015 3918 31st St W81,200 351,700 432,900100% 432,900 Pay 2016 Rental5,411 Rental5,411 506‐028‐24‐11‐0014 3914 31st St W73,500 93,700 167,200100% 167,200 Pay 2016 Hmstd. Res.1,672 Rental2,090 1,803,700 675,500 2,479,2002,479,200 41,50430,990Note:1. Base values are for pay 2016 based upon review of County website on 5-20-15Area/ PhaseTax Rates BASE VALUE INFORMATION (Original Tax Capacity)Prepared by Ehlers & Associates, Inc. - Estimates OnlyN:\Minnsota\St. Louis Park\Housing - Economic - Redevelopment\TIF\TIF Districts\The Shoreham\TIF Run 5-20-15Economic Development Authority Meeting of August 17, 2015 (Item No. 7a) Title: Establishment of The Shoreham Tax Increment Financing DistrictPage 38
The Shoreham - No InflationCity of St. Louis Park150 Apartments & 20,000 Sq/Ft RetailEstimated TaxableTotal Taxable PropertyPercentage Percentage Percentage Percentage First YearMarket Value Market Value TotalMarketTaxProject Project Tax Completed Completed Completed Completed Full TaxesArea/Phase New Use Per Sq. Ft./Unit Per Sq. Ft./Unit Sq. Ft./UnitsValueClass Tax CapacityCapacity/Unit 2015201620172018 PayableApt180,000180,000 150 27,000,000 Rental337,5002,250 10%100%100%100%2018Medical Office 325325 10,000 3,250,000 C/I Pref. 64,2506 10%100%100%100%2018Bader Office 237237 10,000 2,370,000C/I47,4005 10%100%100%100%2018TOTAL32,620,000449,150 Subtotal Residential150 27,000,000337,500 Subtotal Commercial/Ind.20,000 5,620,000111,650 Note:1. Market values are based upon estimates from City Assessor on May 21, 2015 .Total Fiscal Local Local Fiscal State-wide MarketTax Disparities Tax PropertyDisparities PropertyValueTotal Taxes PerNew UseCapacityTax CapacityCapacityTaxesTaxesTaxesTaxesTaxes Sq. Ft./UnitApt337,5000337,500 438,9120064,214 503,126 3,354.17Medical Office 64,250 22,491 41,759 54,307 36,351 32,6657,729 131,052 13.11Bader Office 47,400 16,592 30,808 40,065 26,817 24,0985,63796,6179.66TOTAL 449,150 39,083 410,067 533,284 63,168 56,76377,580 730,795Note: 1. Taxes and tax increment will vary signficantly from year to year depending upon values, rates, state law, fiscal disparities and other factors which cannot be predicted.Total Property Taxes730,795Current Market Value - Est.2,479,200less State-wide Taxes(56,763)New Market Value - Est.32,620,000less Fiscal Disp. Adj.(63,168) Difference30,140,800less Market Value Taxes(77,580)Present Value of Tax Increment7,311,283less Base Value Taxes(40,302) Difference22,829,517Annual Gross TIF 492,982Value likely to occur without Tax Increment is less than:22,829,517 WHAT IS EXCLUDED FROM TIF?MARKET VALUE BUT / FOR ANALYSISTAX CALCULATIONSPROJECT INFORMATION (Project Tax Capacity)Prepared by Ehlers & Associates, Inc. - Estimates OnlyN:\Minnsota\St. Louis Park\Housing - Economic - Redevelopment\TIF\TIF Districts\The Shoreham\TIF Run 5-20-15Economic Development Authority Meeting of August 17, 2015 (Item No. 7a) Title: Establishment of The Shoreham Tax Increment Financing DistrictPage 39
The Shoreham - No InflationCity of St. Louis Park150 Apartments & 20,000 Sq/Ft RetailTAX INCREMENT CASH FLOWProject Original Fiscal CapturedLocal Annual Semi-Annual State Admin. Semi-Annual Semi-Annual PERIOD% of TaxTax Disparities TaxTax Gross Tax Gross Tax AuditoratNet Tax Present ENDING Tax PaymentOTC Capacity Capacity Incremental CapacityRate Increment Increment 0.36%5% Increment Value Yrs. Year Date- - - - 02/01/17100% 44,915 (30,990) (3,908) 10,017 130.048% 13,027 6,513 (23) (324) 6,165 5,926 0.5 2017 08/01/17100% 44,915 (30,990) (3,908) 10,017 130.048% 13,027 6,513 (23) (324) 6,165 11,736 1 2017 02/01/18100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 227,290 1.5 2018 08/01/18100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 438,619 2 2018 02/01/19100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 645,803 2.5 2019 08/01/19100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 848,925 3 2019 02/01/20100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 1,048,065 3.5 2020 08/01/20100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 1,243,299 4 2020 02/01/21100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 1,434,706 4.5 2021 08/01/21100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 1,622,359 5 2021 02/01/22100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 1,806,333 5.5 2022 08/01/22100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 1,986,700 6 2022 02/01/23100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 2,163,530 6.5 2023 08/01/23100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 2,336,892 7 2023 02/01/24100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 2,506,856 7.5 2024 08/01/24100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 2,673,487 8 2024 02/01/25100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 2,836,850 8.5 2025 08/01/25100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 2,997,011 9 2025 02/01/26100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 3,154,031 9.5 2026 08/01/26100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 3,307,972 10 2026 02/01/27100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 3,458,894 10.5 2027 08/01/27100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 3,606,858 11 2027 02/01/28100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 3,751,920 11.5 2028 08/01/28100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 3,894,138 12 2028 02/01/29100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 4,033,567 12.5 2029 08/01/29100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 4,170,262 13 2029 02/01/30100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 4,304,277 13.5 2030 08/01/30100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 4,435,665 14 2030 02/01/31100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 4,564,476 14.5 2031 08/01/31100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 4,690,761 15 2031 02/01/32100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 4,814,570 15.5 2032 08/01/32100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 4,935,952 16 2032 02/01/33100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 5,054,953 16.5 2033 08/01/33100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 5,171,622 17 2033 02/01/34100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 5,286,002 17.5 2034 08/01/34100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 5,398,140 18 2034 02/01/35100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 5,508,079 18.5 2035 08/01/35100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 5,615,862 19 2035 02/01/36100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 5,721,532 19.5 2036 08/01/36100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 5,825,130 20 2036 02/01/37100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 5,926,697 20.5 2037 08/01/37100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 6,026,272 21 2037 02/01/38100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 6,123,895 21.5 2038 08/01/38100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 6,219,603 22 2038 02/01/39100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 6,313,435 22.5 2039 08/01/39100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 6,405,427 23 2039 02/01/40100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 6,495,615 23.5 2040 08/01/40100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 6,584,035 24 2040 02/01/41100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 6,670,722 24.5 2041 08/01/41100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 6,755,708 25 2041 02/01/42100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 6,839,028 25.5 2042 08/01/42100% 449,150 (30,990) (39,083) 379,077 130.048% 492,982 246,491 (887) (12,280) 233,323 6,920,714 26 2042 02/01/43 Total12,337,575 (44,415) (614,658) 11,678,502 Present Value From 08/01/2016 Present Value Rate 4.00%7,311,283 (26,321) (364,248) 6,920,714 Prepared by Ehlers & Associates, Inc. - Estimates OnlyN:\Minnsota\St. Louis Park\Housing - Economic - Redevelopment\TIF\TIF Districts\The Shoreham\TIF Run 5-20-15Economic Development Authority Meeting of August 17, 2015 (Item No. 7a) Title: Establishment of The Shoreham Tax Increment Financing DistrictPage 40
Appendix E-1
Appendix E
Minnesota Business Assistance Form
(Minnesota Department of Employment and Economic Development)
A Minnesota Business Assistance Form (MBAF) should be used to report and/or update each calendar year's
activity by April 1 of the following year.
Please see the Minnesota Department of Employment and Economic Development (DEED) website at
http://www.deed.state.mn.us/Community/subsidies/MBAFForm.htm for information and forms.
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 41
Appendix F-1
Appendix F
Redevelopment Qualifications for the District
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 42
Report of Inspection Procedures and Results for
Determining Qualifications of a
Tax Increment Financing District as a Redevelopment District
St. Louis Park Encore Redevelopment TIF District
St. Louis Park, Minnesota
May 19, 2015
Prepared For the
City of St. Louis Park
Prepared by:
LHB, Inc.
701 Washington Avenue North, Suite 200
Minneapolis, Minnesota 55401
LHB Project No. 150264
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 43
St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264 Page 1 of 12 Final Report
TABLE OF CONTENTS
PART 1 – EXECUTIVE SUMMARY ................................................................................ 2
Purpose of Evaluation ................................................................................ 2
Scope of Work ........................................................................................... 3
Conclusion ................................................................................................. 3
PART 2 – MINNESOTA STATUTE 469.174, SUBDIVISION 10 REQUIREMENTS ....... 3
A. Coverage Test ...................................................................................... 4
B. Condition of Buildings Test ................................................................... 4
C. Distribution of Substandard Buildings ................................................... 5
PART 3 – PROCEDURES FOLLOWED ......................................................................... 6
PART 4 – FINDINGS ...................................................................................................... 6
A. Coverage Test ...................................................................................... 6
B. Condition of Building Test ..................................................................... 7
1. Building Inspection .................................................................... 7
2. Replacement Cost ..................................................................... 8
3. Code Deficiencies ..................................................................... 8
4. System Condition Deficiencies .................................................. 9
C. Distribution of Substandard Structures ................................................. 9
PART 5 - TEAM CREDENTIALS .................................................................................. 11
APPENDIX A Property Condition Assessment Summary Sheet
APPENDIX B Building Code, Condition Deficiency and Context Analysis Reports
APPENDIX C Building Replacement Cost Reports
Code Deficiency Cost Reports
Photographs
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 44
St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264 Page 2 of 12 Final Report
PART 1 – EXECUTIVE SUMMARY
PURPOSE OF EVALUATION
LHB was hired by the City of St. Louis Park to inspect and evaluate the properties within a Tax
Increment Financing Redevelopment District (“TIF District”) proposed to be established by the
City. The proposed TIF District is bounded by Service Drive Highway 7, Glenhurst Avenue, 31st
Street West, and France Avenue South (Diagram 1). The purpose of LHB’s work is to determine
whether the proposed TIF District meets the statutory requirements for coverage, and whether five
(5) buildings on five (5) parcels and one (1) right of way parcel, located within the proposed TIF
District, meet the qualifications required for a Redevelopment District.
Diagram 1 – Proposed TIF District
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 45
St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264 Page 3 of 12 Final Report
SCOPE OF WORK
The proposed TIF District consists of five (5) parcels and one (1) right of way parcel with five (5)
buildings. Five (5) buildings were inspected on April 24, 2015. Building Code, Condition
Deficiency and Context Analysis Reports for the buildings that were determined to be substandard
are located in Appendix B.
CONCLUSION
After inspecting and evaluating the properties within the proposed TIF District and applying current
statutory criteria for a Redevelopment District under Minnesota Statutes, Section 469.174, Subdivision 10,
it is our professional opinion that the proposed TIF District qualifies as a Redevelopment District
because:
• The proposed TIF District has a coverage calculation of 100 percent which is above the 70
percent requirement.
• 60 percent of the buildings are structurally substandard which is above the 50 percent
requirement.
• The substandard buildings are reasonably distributed.
The remainder of this report describes our process and findings in detail.
PART 2 – MINNESOTA STATUTE 469.174, SUBDIVISION 10
REQUIREMENTS
The properties were inspected in accordance with the following requirements under Minnesota
Statutes, Section 469.174, Subdivision 10(c), which states:
INTERIOR INSPECTION
“The municipality may not make such determination [that the building is structurally substandard]
without an interior inspection of the property...”
EXTERIOR INSPECTION AND OTHER MEANS
“An interior inspection of the property is not required, if the municipality finds that
(1) the municipality or authority is unable to gain access to the property after using its best
efforts to obtain permission from the party that owns or controls the property; and
(2) the evidence otherwise supports a reasonable conclusion that the building is structurally
substandard.”
DOCUMENTATION
“Written documentation of the findings and reasons why an interior inspection was not conducted
must be made and retained under section 469.175, subdivision 3(1).”
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 46
St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264 Page 4 of 12 Final Report
QUALIFICATION REQUIREMENTS
Minnesota Statutes, Section 469.174, Subdivision 10 (a) (1) requires three tests for occupied parcels:
A. COVERAGE TEST
…“parcels consisting of 70 percent of the area of the district are occupied by buildings,
streets, utilities, or paved or gravel parking lots…”
The coverage required by the parcel to be considered occupied is defined under Minnesota
Statutes, Section 469.174, Subdivision 10(e), which states: “For purposes of this subdivision, a
parcel is not occupied by buildings, streets, utilities, paved or gravel parking lots, or other
similar structures unless 15 percent of the area of the parcel contains buildings, streets,
utilities, paved or gravel parking lots, or other similar structures.”
B. CONDITION OF BUILDINGS TEST
Minnesota Statutes, Section 469.174, Subdivision 10(a) states, “…and more than 50 percent of the
buildings, not including outbuildings, are structurally substandard to a degree requiring
substantial renovation or clearance;”
1. Structurally substandard is defined under Minnesota Statutes, Section 469.174, Subdivision
10(b), which states: “For purposes of this subdivision, ‘structurally substandard’ shall
mean containing defects in structural elements or a combination of deficiencies in
essential utilities and facilities, light and ventilation, fire protection including adequate
egress, layout and condition of interior partitions, or similar factors, which defects or
deficiencies are of sufficient total significance to justify substantial renovation or
clearance.”
a. We do not count energy code deficiencies toward the thresholds required by
Minnesota Statutes, Section 469.174, Subdivision 10(b) defined as “structurally
substandard”, due to concerns expressed by the State of Minnesota Court of Appeals
in the Walser Auto Sales, Inc. vs. City of Richfield case filed November 13, 2001.
2. Buildings are not eligible to be considered structurally substandard unless they meet
certain additional criteria, as set forth in Subdivision 10(c) which states:
“A building is not structurally substandard if it is in compliance with the building code
applicable to new buildings or could be modified to satisfy the building code at a cost of
less than 15 percent of the cost of constructing a new structure of the same square
footage and type on the site. The municipality may find that a building is not disqualified
as structurally substandard under the preceding sentence on the basis of reasonably
available evidence, such as the size, type, and age of the building, the average cost of
plumbing, electrical, or structural repairs, or other similar reliable evidence.”
“Items of evidence that support such a conclusion [that the building is not disqualified]
include recent fire or police inspections, on-site property tax appraisals or housing
inspections, exterior evidence of deterioration, or other similar reliable evidence.”
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 47
St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264 Page 5 of 12 Final Report
LHB counts energy code deficiencies toward the 15 percent code threshold required by
Minnesota Statutes, Section 469.174, Subdivision 10(c)) for the following reasons:
• The Minnesota energy code is one of ten building code areas highlighted by the
Minnesota Department of Labor and Industry website where minimum
construction standards are required by law.
• The index page of the 2007 Minnesota Building Code lists the Minnesota Energy
Code as a “Required Enforcement” area compared to an additional list of
“Optional Enforcement” chapters.
• Chapter 11 of the 2015 Minnesota Residential Code incorporates Minnesota
Rules, Chapters, 1322 and 1323 Minnesota Energy Code.
• The Senior Building Code Representative for the Construction Codes and
Licensing Division of the Minnesota Department of Labor and Industry
confirmed that the Minnesota Energy Code is being enforced throughout the
State of Minnesota.
• In a January 2002 report to the Minnesota Legislature, the Management Analysis
Division of the Minnesota Department of Administration confirmed that the
construction cost of new buildings complying with the Minnesota Energy Code
is higher than buildings built prior to the enactment of the code.
• Proper TIF analysis requires a comparison between the replacement value of a
new building built under current code standards with the repairs that would be
necessary to bring the existing building up to current code standards. In order
for an equal comparison to be made, all applicable code chapters should be
applied to both scenarios. Since current construction estimating software
automatically applies the construction cost of complying with the Minnesota
Energy Code, energy code deficiencies should also be identified in the existing
structures.
C. DISTRIBUTION OF SUBSTANDARD BUILDINGS
Minnesota Statutes, Section 469.174, Subdivision 10, defines a Redevelopment District and
requires one or more of the following conditions, “reasonably distributed throughout the
district.”
(1) “Parcels consisting of 70 percent of the area of the district are occupied by buildings,
streets, utilities, paved or gravel parking lots, or other similar structures and more than
50 percent of the buildings, not including outbuildings, are structurally substandard to a
degree requiring substantial renovation or clearance;
(2) the property consists of vacant, unused, underused, inappropriately used, or infrequently
used rail yards, rail storage facilities, or excessive or vacated railroad rights-of-way;
(3) tank facilities, or property whose immediately previous use was for tank facilities…”
Our interpretation of the distribution requirement is that the substandard buildings must be
reasonably distributed throughout the district as compared to the location of all buildings in
the district. For example, if all of the buildings in a district are located on one half of the
area of the district, with the other half occupied by parking lots (meeting the required 70
percent coverage for the district), we would evaluate the distribution of the substandard
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 48
St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264 Page 6 of 12 Final Report
buildings compared with only the half of the district where the buildings are located. If all of
the buildings in a district are located evenly throughout the entire area of the district, the
substandard buildings must be reasonably distributed throughout the entire area of the
district. We believe this is consistent with the opinion expressed by the State of Minnesota
Court of Appeals in the Walser Auto Sales, Inc. vs. City of Richfield case filed November 13,
2001.
PART 3 – PROCEDURES FOLLOWED
LHB inspected five (5) of the five (5) buildings during the day of April 24, 2015.
PART 4 – FINDINGS
A. COVERAGE TEST
1. The total square foot area of the parcel in the proposed TIF District was obtained from
City records, GIS mapping and site verification.
2. The total square foot area of buildings and site improvements on the parcels in the
proposed TIF District was obtained from City records, GIS mapping and site verification.
3. The percentage of coverage for each parcel in the proposed TIF District was computed
to determine if the 15 percent minimum requirement was met. The total square footage
of parcels meeting the 15 percent requirement was divided into the total square footage of
the entire district to determine if the 70 percent requirement was met.
FINDING:
The proposed TIF District met the coverage test under Minnesota Statutes, Section 469.174, Subdivision
10(e), which resulted in parcels consisting of 100 percent of the area of the proposed TIF District
being occupied by buildings, streets, utilities, paved or gravel parking lots, or other similar structures
(Diagram 2). This exceeds the 70 percent area coverage requirement for the proposed TIF District
under Minnesota Statutes, Section 469.174, Subdivision (a) (1).
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 49
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Diagram 2 – Coverage Diagram
Shaded area depicts a parcel more than 15 percent occupied by buildings, streets, utilities,
paved or gravel parking lots or other similar structures
B. CONDITION OF BUILDING TEST
1. BUILDING INSPECTION
The first step in the evaluation process is the building inspection. After an initial walk-
thru, the inspector makes a judgment whether or not a building “appears” to have enough
defects or deficiencies of sufficient total significance to justify substantial renovation or
clearance. If it does, the inspector documents with notes and photographs code and non-
code deficiencies in the building.
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2. REPLACEMENT COST
The second step in evaluating a building to determine if it is substandard to a degree
requiring substantial renovation or clearance is to determine its replacement cost. This is
the cost of constructing a new structure of the same square footage and type on site.
Replacement costs were researched using R.S. Means Cost Works square foot models for
2015.
A replacement cost was calculated by first establishing building use (office, retail,
residential, etc.), building construction type (wood, concrete, masonry, etc.), and building
size to obtain the appropriate median replacement cost, which factors in the costs of
construction in St. Louis Park, Minnesota.
Replacement cost includes labor, materials, and the contractor’s overhead and profit.
Replacement costs do not include architectural fees, legal fees or other “soft” costs not
directly related to construction activities. Replacement cost for each building is tabulated
in Appendix A.
3. CODE DEFICIENCIES
The next step in evaluating a building is to determine what code deficiencies exist with
respect to such building. Code deficiencies are those conditions for a building which are
not in compliance with current building codes applicable to new buildings in the State of
Minnesota.
Minnesota Statutes, Section 469.174, Subdivision 10(c), specifically provides that a building
cannot be considered structurally substandard if its code deficiencies are not at least 15
percent of the replacement cost of the building. As a result, it was necessary to determine
the extent of code deficiencies for each building in the proposed TIF District.
The evaluation was made by reviewing all available information with respect to such
buildings contained in City Building Inspection records and making interior and exterior
inspections of the buildings. LHB utilizes the current Minnesota State Building Code as
the official code for our evaluations. The Minnesota State Building Code is actually a
series of provisional codes written specifically for Minnesota only requirements, adoption
of several international codes, and amendments to the adopted international codes.
After identifying the code deficiencies in each building, we used R.S. Means Cost Works
2015; Unit and Assembly Costs to determine the cost of correcting the identified
deficiencies. We were then able to compare the correction costs with the replacement
cost of each building to determine if the costs for correcting code deficiencies meet the
required 15 percent threshold.
FINDING:
Three (3) out of five (5) buildings (60 percent) in the proposed TIF District contained
code deficiencies exceeding the 15 percent threshold required by Minnesota Statutes, Section
469.174, Subdivision 10(c). Building Code, Condition Deficiency and Context Analysis
reports for the buildings in the proposed TIF District can be found in Appendix B of this
report.
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4. SYSTEM CONDITION DEFICIENCIES
If a building meets the minimum code deficiency threshold under Minnesota Statutes, Section
469.174, Subdivision 10(c), then in order for such building to be “structurally substandard”
under Minnesota Statutes, Section 469.174, Subdivision 10(b), the building’s defects or
deficiencies should be of sufficient total significance to justify “substantial renovation or
clearance.” Based on this definition, LHB re-evaluated each of the buildings that met the
code deficiency threshold under Minnesota Statutes, Section 469.174, Subdivision 10(c), to
determine if the total deficiencies warranted “substantial renovation or clearance” based
on the criteria we outlined above.
System condition deficiencies are a measurement of defects or substantial deterioration in
site elements, structure, exterior envelope, mechanical and electrical components, fire
protection and emergency systems, interior partitions, ceilings, floors and doors.
The evaluation of system condition deficiencies was made by reviewing all available
information contained in City records, and making interior and exterior inspections of the
buildings. LHB only identified system condition deficiencies that were visible upon our
inspection of the building or contained in City records. We did not consider the amount
of “service life” used up for a particular component unless it was an obvious part of that
component’s deficiencies.
After identifying the system condition deficiencies in each building, we used our
professional judgment to determine if the list of defects or deficiencies is of sufficient
total significance to justify “substantial renovation or clearance.”
FINDING:
In our professional opinion, three(3) out of five (5) buildings (60 percent) in the proposed
TIF District are structurally substandard to a degree requiring substantial renovation or
clearance, because of defects in structural elements or a combination of deficiencies in
essential utilities and facilities, light and ventilation, fire protection including adequate
egress, layout and condition of interior partitions, or similar factors which defects or
deficiencies are of sufficient total significance to justify substantial renovation or
clearance. This exceeds the 50 percent requirement of Subdivision 10a(1).
C. DISTRIBUTION OF SUBSTANDARD STRUCTURES
Much of this report has focused on the condition of individual buildings as they relate to
requirements identified by Minnesota Statutes, Section 469.174, Subdivision 10. It is also
important to look at the distribution of substandard buildings throughout the geographic
area of the proposed TIF District (Diagram 3).
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Title: Establishment of The Shoreham Tax Increment Financing District Page 52
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LHB Project No. 150264 Page 10 of 12 Final Report
FINDING:
The parcels with substandard buildings are reasonably distributed compared to all parcels
that contain buildings.
Diagram 3 – Substandard Buildings
Shaded green area depicts parcels with buildings.
Hatched area depicts parcels with substandard buildings.
Shaded orange area depicts substandard buildings.
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LHB Project No. 150264 Page 11 of 12 Final Report
PART 5 - TEAM CREDENTIALS
Michael A. Fischer, AIA, LEED AP - Project Principal/TIF Analyst
Michael has 28 years of experience as project principal, project manager, project designer and project
architect on planning, urban design, educational, commercial and governmental projects. He has
become an expert on Tax Increment Finance District analysis assisting over 100 cities with strategic
planning for TIF Districts. He is a Senior Vice President at LHB and currently leads the
Minneapolis office.
Michael completed a two-year Bush Fellowship, studying at MIT and Harvard in 1999, earning
Masters degrees in City Planning and Real Estate Development from MIT. He has served on more
than 50 committees, boards and community task forces, including a term as a City Council President
and as Chair of a Metropolitan Planning Organization. Most recently, he served as Chair of the
Edina, Minnesota planning commission. Michael has also managed and designed several award-
winning architectural projects, and was one of four architects in the Country to receive the AIA
Young Architects Citation in 1997.
Philip Waugh – Project Manager/TIF Analyst
Philip is a project manager with 13 years of experience in historic preservation, building
investigations, material research, and construction methods. He previously worked as a historic
preservationist and also served as the preservation specialist at the St. Paul Heritage Preservation
Commission. Currently, Phil sits on the Board of Directors for the Preservation Alliance of
Minnesota. His current responsibilities include project management of historic preservation projects,
performing building condition surveys and analysis, TIF analysis, writing preservation specifications,
historic design reviews, writing Historic Preservation Tax Credit applications, preservation planning,
and grant writing.
Phil Fisher – Inspector
For 35 years, Phil Fisher worked in the field of Building Operations in Minnesota including White
Bear Lake Area Schools. At the University of Minnesota he earned his Bachelor of Science in
Industrial Technology. He is a Certified Playground Safety Inspector, Certified Plant Engineer, and is
trained in Minnesota Enterprise Real Properties (MERP) Facility Condition Assessment (FCA). His
FCA training was recently applied to the Minnesota Department of Natural Resources Facilities
Condition Assessment project involving over 2,000 buildings.
M:\15Proj\150264\400 Design\406 Reports\Final Report\150264 St Louis Park Encore Redevelopment TIF Report.docx
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APPENDICES
APPENDIX A Property Condition Assessment Summary Sheet
APPENDIX B Building Code and Condition Deficiencies Reports
APPENDIX C Building Replacement Cost Reports
Code Deficiency Cost Reports
Photographs
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 55
APPENDIX A
Property Condition Assessment Summary Sheet
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 56
St. Louis Park Encore Redevelopment TIF District - St. Louis Park, MinnesotaProperty Condition Assessment Summary SheetTIF Map No.PID # Property AddressImproved or VacantSurvey Method UsedSite Area(S.F.)Coverage Area of Improvements(S.F.)Coverage Percent of ImprovementsCoverageQuantity(S.F.)No. of BuildingsBuildingReplacementCost15% of Replacement CostBuilding Code DeficienciesNo. of Buildings Exceeding 15% CriteriaNo. of buildings determined substandardA602824110007 3915 Highway 7 Improved Interior/Exterior 21,999 15,211 69.1% 21,999 1 $629,590 $94,439 $125,374 1 1B602824110056 3907 Highway 7 Improved Interior/Exterior52,171 36,527 70.0% 52,171 1 $1,591,112 $238,667 $588,292 1 1C602824110016 3031 Glenhurst Ave Improved Interior/Exterior 9,781 2,709 27.7% 9,781 1 $162,964 $24,445 $36,954 1 1D602824110015 3918 31st St W Improved Interior/Exterior 4,873 4,597 94.3% 4,873 1 $398,894 $59,834 $4,800 0 0E602824110014 3914 31st St W Improved Interior/Exterior 4,873 2,322 47.6% 4,873 1 $128,345 $19,252 $13,250 0 0FR.O.W. N/A Improved Exterior 3,372 3,372 100.0% 3,372 0TOTALS 97,06997,069 5 33100.0% 60.0%M:\15Proj\150264\400 Design\406 Reports\Final Report\[150264 20150420 St Louis Park Encore Redevelopment TIF Summary Spreadsheet.xlsx]Property InfoPercent of buildings determined substandard: 60.0%Total Coverage Percent:Percent of buildings exceeding 15 percent code deficiency threshold: St. Louis Park Encore Redevelopment TIF DistrictLHB Project Number 150264Page 1 of 1Property Condition Assessment Summary SheetEconomic Development Authority Meeting of August 17, 2015 (Item No. 7a) Title: Establishment of The Shoreham Tax Increment Financing DistrictPage 57
APPENDIX B
Building Code, Condition Deficiency and Context Analysis Reports
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 58
St. Louis Park Encore Redevelopment TIF District
Building Code, Condition Deficiency and Context Analysis Report
May 8, 2015
Map No. & Address: Map A - 3915 Highway 7 St. Louis Park, MN 55416
Inspection Date(s) & Time(s): April 24, 2015 2:30 PM
Inspection Type: Interior and Exterior
Summary of Deficiencies: It is our professional opinion that this building is Substandard
because:
- Substantial renovation is required to correct Conditions found.
- Building Code deficiencies total more than 15% of
replacement cost, NOT including energy code deficiencies.
Estimated Replacement Cost: $629,590
Estimated Cost to Correct Building Code Deficiencies: $123,874
Percentage of Replacement Cost for Building Code Deficiencies: 19.7%
Defects in Structural Elements
1. Significant crack in the floor three feet in from the main entrance.
Combination of Deficiencies
1. Essential Utilities and Facilities
a. Accessible parking is needed.
b. Accessible route from parking lot is lacking.
c. Threshold on main entrance is higher than allowed by code.
d. Exit door landings on west side of building are not flush with threshold.
e. Restrooms are non-compliant.
f. Door hardware is non-compliant.
g. Staff sink is non-compliant.
h. There is not an accessible drinking fountain in the building.
2. Light and Ventilation
a. Power exhaust is needed in restrooms.
3. Fire Protection/Adequate Egress
a. There is no fire suppression system.
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LHB Project No. 150264 Page 1 of 2 Map A
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 59
4. Layout and Condition of Interior Partitions/Materials
a. Ceiling in southwest corner is stained from water intrusion.
b. Ceiling in southwest corner is separating from walls.
c. Carpet is bucking preventing unimpeded emergency egress.
d. Interior needs to be painted.
e. Window tinting has failed and needs to be replaced.
f. There is a significant floor crack just inside the main entrance.
5. Exterior Construction
a. Wood trim needs painting to prevent water intrusion.
b. Original roof needs to be replaced due to age and water intrusion.
Description of Code Deficiencies
1. Needs a compliant accessible route to the building.
2. Thresholds at egress doors exceed allowable 1/2 inch.
3. Interior floor elevation needs to be at the same level as the exterior landing.
4. Renovate restrooms for accessibility and proper function.
5. Proper door hardware needs to be installed for accessibility.
6. Sink in staff break room should be made compliant.
7. Building lacks an accessible drinking fountain.
8. Building lacks code compliant ventilation system in restrooms.
9. Install fire suppression system for fire and life safety.
10. Flooring needs to be securely installed to create a slip resistant pathway to egress.
11. Protect exterior wood from decay to prevent water intrusion.
12. Replace roof to prevent water intrusion.
Overview of Deficiencies
This 1969 building was originally built as a bank. In or around 2004 the building was converted into a retail
business. Public records indicate and the owner confirms that no work has been performed on any of the
exterior building components. Water staining on the ceiling is indicative of water intrusion. The restrooms
appear to be original and are not compliant. There is a large floor crack just inside the main entrance
indicative of differential settlement. An interior room shows signs of ceiling/wall separation. The building
lacks a fire suppression system.
St. Louis Park Encore Redevelopment TIF District Building Report
LHB Project No. 150264 Page 2 of 2 Map A
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 60
St. Louis Park Encore Redevelopment TIF District
Building Code, Condition Deficiency and Context Analysis Report
May 1, 2015
Map No. & Address: Map B - 3907 Highway 7 St. Louis Park, MN 55416
Inspection Date(s) & Time(s): April 24, 2015 3:00 PM
Inspection Type: Interior and Exterior
Summary of Deficiencies: It is our professional opinion that this building is Substandard
because:
- Substantial renovation is required to correct Conditions found.
- Building Code deficiencies total more than 15% of
replacement cost, NOT including energy code deficiencies.
Estimated Replacement Cost: $1,591,112
Estimated Cost to Correct Building Code Deficiencies: $588,292
Percentage of Replacement Cost for Building Code Deficiencies: 36.97%
Defects in Structural Elements
1. Corner of lower flat roof is failing.
2. Attached sub grade structure has wooden posts that are bent and broken designed to hold back
earthen material with just plywood sheathing. Plywood is rotted and earthen material is infiltrating
interior space where critical equipment is housed.
Combination of Deficiencies
1. Essential Utilities and Facilities
a. There is a need for accessible parking and an accessible route into building.
b. There is not an accessible route from the entrance to the above grade work area.
c. There is not an accessible route from the entrance to the basement work area.
d. There is not an accessible route to the elevated office area.
e. The five restrooms are non-compliant.
f. Stair rails are non-compliant on three sets of stairs.
2. Light and Ventilation
a. The ventilation system is original and does not comply with current standards.
b. Surface mounted electrical panel is rusting from water running down the wall behind it.
3. Fire Protection/Adequate Egress
a. Exit signs are missing on two exit paths.
b. Flooring is damaged and/or missing.
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LHB Project No. 150264 Page 1 of 2 Map B
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 61
4. Layout and Condition of Interior Partitions/Materials
a. Interior walls are damaged.
b. Ceilings are stained and/or missing from water intrusion.
c. Efflorescence is apparent on below grade walls indicating water intrusion.
d. Below grade walls are stained from the water intrusion.
e. Carpeting is torn and missing preventing unimpeded emergency exiting.
f. Window seals are failing made apparent by water stains on sills.
5. Exterior Construction
a. Roof has failed made apparent by the number of ceiling leaks and water diversion apparatus
hung from the ceiling.
b. Exterior CMU is in need of paint.
c. Wooden parapet on front of building is rotting.
Description of Code Deficiencies
1. Accessible parking spaces shall be provided.
2. Needs a compliant accessible route to the building.
3. At least one accessible route shall connect each accessible story and mezzanine in multi-level
buildings and facilities.
4. Renovate restrooms for accessibility and proper function.
5. Hand rails on stairs need to be made compliant extending beyond bottom stair face.
6. Structural walls shall be capable of resisting horizontal forces.
7. Building lacks code compliant ventilation system.
8. Path of egress shall be marked by visible exit signs.
9. Panelboards must be weatherproof when used in a wet location.
10. Efflorescence on interior of walls indicates leakage through them.
11. Flooring needs to be securely installed to create a slip resistant pathway to egress.
12. Exterior windows shall be flashed and caulked to prevent water intrusion.
13. Replace roof to prevent water intrusion.
Overview of Deficiencies
This circular building was built in 1955 and currently houses a graphics business. According to staff and
public records the roof has not been replaced in over 25 years. It is apparent that the roof has failed given
the amount of water staining and actively running down the interior walls. There is no accessible route from
the street entrance to any of the three building levels. There is a below grade attached room that is collapsing
in upon itself.
St. Louis Park Encore Redevelopment TIF District Building Report
LHB Project No. 150264 Page 2 of 2 Map B
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 62
St. Louis Park Encore Redevelopment TIF District
Building Code, Condition Deficiency and Context Analysis Report
May 8, 2015
Map No. & Address: Map C - 3031 Glenhurst Ave, St. Louis Park, MN 55416
Inspection Date(s) & Time(s): April 24, 2015 2:00 PM
Inspection Type: Interior and Exterior
Summary of Deficiencies: It is our professional opinion that this building is Substandard
because:
- Substantial renovation is required to correct Conditions found.
- Building Code deficiencies total more than 15% of
replacement cost, NOT including energy code deficiencies.
Estimated Replacement Cost: $162,964
Estimated Cost to Correct Building Code Deficiencies: $36,954
Percentage of Replacement Cost for Building Code Deficiencies: 22.68%
Defects in Structural Elements
1. Rafters appear to be buckling as indicated by a warped roof.
2. Stairs leading to the north doors have deteriorated significantly.
3. Foundation is deteriorating.
Combination of Deficiencies
1. Essential Utilities and Facilities
a. Electricity has been turned off to the building.
b. Water has been turned off to the building.
c. Inadequate number of electrical outlets.
d. Install GFCI outlets in bathroom and kitchen.
e. Install arc fault current interrupter (AFCI) outlets at bedrooms, hallways and living rooms.
f. The furnace is non-functional and non-compliant with code.
g. Install code compliant circuit breaker system.
2. Light and Ventilation
a. Ventilation system is non-compliant.
3. Fire Protection/Adequate Egress
a. Install smoke detectors in bedrooms and on ground level and in basement
b. Install carbon monoxide detectors within 10 feet of bedroom.
c. Basement stair is not code compliant for width, riser dimensions, headroom, railings and
landings. Guard rail is missing.
d. Front porch, stair has excessive variation of riser height and a non-compliant threshold.
e. North porch stairs are severely decayed.
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LHB Project No. 150264 Page 1 of 2 Map C
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 63
4. Layout and Condition of Interior Partitions/Materials
a. Interior partitions and ceilings throughout the house show water intrusion.
b. Basement is moist and shows mold growth on the southeast panel wall.
c. Interior basement wall is deteriorating.
d. All interior painted walls need to be repainted.
e. All windows are in need of replacement.
f. All doors need to be refinished or painted.
g. Carpet is worn and in need of replacement.
h. Floor and wall tile in bathroom is in need of re-grouting.
5. Exterior Construction
a. Paint is peeling on all surfaces.
b. Roof is in poor condition and in need of replacement.
c. There are no gutters.
d. Site lacks positive slope away from building on south side. Regrade to drain away from
building.
e. CMU's are deteriorating.
f. North side stairs cannot be used for safe egress as they are deteriorating and separating from
the building.
g. All exterior windows are rotting from water intrusion and should be replaced.
h. The roof and soffit are un-vented.
Description of Code Deficiencies
1. Install code compliant GFCI outlets in bathroom and kitchen.
2. Install code compliant AFCI outlets at bedrooms, hallways and living rooms.
3. Install code compliant circuit breaker system.
4. Building lacks habitable furnace capable of maintaining habitable rooms at 68 degrees F per code.
5. Replace three exterior stairs to create code compliant safe egress.
6. Basement stair is not code compliant for dimension rise, headroom, railings and landing.
7. Install smoke detectors in both bedrooms and in basement per code.
8. Install carbon monoxide detectors within 10 feet of bedrooms per code.
9. Basement is moist. Building lacks working foundation drainage system.
10. Site lacks positive slope away from house. Re-grade south side to drain away from building.
11. Unsecured wiring hanging along basement walls and ceilings needs to be corrected per code.
12. Venting needs to be installed in roof and soffit per code.
13. Roof is leaking and needs to be replaced per code.
Overview of Deficiencies
According to public records this building was built in 1926 and appears to have at least one addition to its
original floor plan. The building has been vacant for several years and both water and electric have been
turned off. The exterior shows significant signs of deterioration from the foundation to the roof. The
interior space is water stained and mold is present. Windows are rotting and the interior foundation walls are
deteriorating.
St. Louis Park Encore Redevelopment TIF District Building Report
LHB Project No. 150264 Page 2 of 2 Map C
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 64
APPENDIX C
Building Replacement Cost Reports
Code Deficiency Cost Reports
Photographs
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 65
St. Louis Park Encore Redevelopment TIF District
Replacement Cost Report
Square Foot Cost Estimate Report Date:4/26/2015
Encore Building A
3915 Highway 7, St. Louis Park, Minnesota
55416
Building Type:
Store, Retail with Face Brick on Concrete
Block / Steel Joists
Location:MINNEAPOLIS, MN
Story Count:1
Story Height (L.F.):14
Floor Area (S.F.):5040
Labor Type:OPN
Basement Included:No
Data Release:Year 2015 Quarter 1
Cost Per Square Foot:$123.95
Building Cost:$629,590.52
% of Total Cost Per S.F. Cost
11.12% 13.40 67,513.41
A1010 Standard Foundations 2.58 12,996.81
2.44 12,314.69
0.14 682.12
A1030 Slab on Grade 5.58 28,113.83
5.58 28,113.83
A2010 Basement Excavation 0.34 1,726.15
0.34 1,726.15
A2020 Basement Walls 4.90 24,676.62
4.9 24,676.62
39.40% 47.47 239,296.45
B1020 Roof Construction 7.25 36,576.69
6.64 33,478.70
0.61 3,097.99
B2010 Exterior Walls 27.12 136,675.90
27.12 136,675.90
B2020 Exterior Windows 4.39 22,107.59
2.34 11,799.42
2.05 10,308.17
Estimate Name:
Costs are derived from a building model with basic components.
Scope differences and market conditions can cause costs to vary significantly.
A Substructure
Strip footing, concrete, reinforced, load 5.1 KLF, soil bearing capacity
3 KSF, 12" deep x 24" wide
Spread footings, 3000 PSI concrete, load 50K, soil bearing capacity
6 KSF, 3' - 0" square x 12" deep
Slab on grade, 4" thick, non industrial, reinforced
Excavate and fill, 10,000 SF, 4' deep, sand gravel, or common earth,
on site storage
Foundation wall, CIP, 4' wall height, direct chute, .148 CY/LF, 7.2
PLF, 12" thick
B Shell
Roof, steel joists, beams, 1.5" 22 ga metal deck, on columns and
bearing wall, 25'x25' bay, 20" deep, 40 PSF superimposed load, 60
PSF total load
Roof, steel joists, beams, 1.5" 22 ga metal deck, on columns and
bearing wall, 25'x25' bay, 20" deep, 40 PSF superimposed load, 60
PSF total load, add for column
Brick wall, composite double wythe, standard face/CMU back-up, 8"
thick, styrofoam core fill
Aluminum flush tube frame, for 1/4"glass,1-3/4"x4", 5'x6' opening, no
intermediate horizontals
Glazing panel, insulating, 1/2" thick, 2 lites 1/8" float glass, clear
St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264 Page 1 of 3
Replacement Cost Report
Map A
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 66
% of Total Cost Per S.F. Cost
B2030 Exterior Doors 0.70 3,559.34
0.46 2,333.34
0.24 1,226.00
B3010 Roof Coverings 7.82 39,416.67
3.27 16,501.72
2.15 10,835.95
1.68 8,449.97
0.72 3,629.03
B3020 Roof Openings 0.19 960.26
0.19 960.26
13.79% 16.63 83,766.89
C1010 Partitions 1.14 5,731.51
1.14 5,731.51
C1020 Interior Doors 2.00 10,081.99
2 10,081.99
C3010 Wall Finishes 3.11 15,649.38
2.8 14,088.90
0.31 1,560.48
C3020 Floor Finishes 2.83 14,275.40
2.83 14,275.40
C3030 Ceiling Finishes 7.55 38,028.61
7.55 38,028.61
35.69% 35.18 181,778.27
D2010 Plumbing Fixtures 3.15 15,878.05
0.86 4,315.77
0.43 2,174.86
0.8 4,038.49
0.68 3,422.36
0.38 1,926.57
D2020 Domestic Water Distribution 0.10 5,034.03
0.1 5,034.03
D2040 Rain Water Drainage 1.60 8,015.45
1.1 5,519.36
0.5 2,496.09
D3050 Terminal & Package Units 7.44 37,483.89
7.44 37,483.89
D4010 Sprinklers 4.30 21,693.22
4.3 21,693.22
D4020 Standpipes 1.00 5,026.63
Door, aluminum & glass, with transom, black finish, hardware, 3'-0" x
10'-0" opening
Door, steel 18 gauge, hollow metal, 1 door with frame, no label, 3'-0"
x 7'-0" opening
Roofing, asphalt flood coat, gravel, base sheet, 3 plies 15# asphalt
felt, mopped
Insulation, rigid, roof deck, composite with 2" EPS, 1" perlite
Roof edges, aluminum, duranodic, .050" thick, 6" face
Gravel stop, aluminum, extruded, 4", mill finish, .050" thick
Roof hatch, with curb, 1" fiberglass insulation, 2'-6" x 3'-0",
galvanized steel, 165 lbs
C Interiors
Metal partition, 5/8"fire rated gypsum board face, 1/4" sound
deadening gypsum board, 2-1/2" @ 24", same opposite face, no
insulation
Door, single leaf, kd steel frame, hollow metal, commercial quality,
flush, 3'-0" x 7'-0" x 1-3/8"
2 coats paint on masonry with block filler
Painting, interior on plaster and drywall, walls & ceilings, roller work,
primer & 2 coats
Vinyl, composition tile, maximum
Acoustic ceilings, 3/4"mineral fiber, 12" x 12" tile, concealed 2" bar &
channel grid, suspended support
D Services
Water closet, vitreous china, tank type, 2 piece close coupled
Urinal, vitreous china, wall hung
Lavatory w/trim, vanity top, PE on CI, 20" x 18"
Service sink w/trim, PE on CI,wall hung w/rim guard, 24" x 20"
Water cooler, electric, wall hung, dual height, 14.3 GPH
Gas fired water heater, residential, 100< F rise, 30 gal tank, 32 GPH
Roof drain, CI, soil,single hub, 4" diam, 10' high
Roof drain, CI, soil,single hub, 4" diam, for each additional foot add
Rooftop, single zone, air conditioner, department stores, 10,000 SF,
29.17 ton
Wet pipe sprinkler systems, steel, ordinary hazard, 1 floor, 10,000
SF
St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264 Page 2 of 3
Replacement Cost Report
Map A
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 67
% of Total Cost Per S.F. Cost
1 5,026.63
D5010 Electrical Service/Distribution 4.63 23,377.68
1.29 6,508.85
0.97 4,911.13
2.37 11,957.70
D5020 Lighting and Branch Wiring 10.94 55,128.83
2.82 14,191.18
0.41 2,048.91
0.83 4,205.79
6.88 34,682.95
D5030 Communications and Security 1.80 9,030.34
0.98 4,917.10
0.82 4,113.24
D5090 Other Electrical Systems 0.22 1,110.15
0.22 1,110.15
0%0 0
E1090 Other Equipment 0 0
0%0 0
0%0 0
100% $112.68 $572,355.02
10.00% $11.27 $57,235.50
0.00% $0.00 $0.00
0.00% $0.00 $0.00
$123.95 $629,590.52
Wet standpipe risers, class III, steel, black, sch 40, 4" diam pipe, 1
floor
Overhead service installation, includes breakers, metering, 20'
conduit & wire, 3 phase, 4 wire, 120/208 V, 400 A
Feeder installation 600 V, including RGS conduit and XHHW wire,
400 A
Switchgear installation, incl switchboard, panels & circuit breaker,
120/208 V, 1 phase, 400 A
Receptacles incl plate, box, conduit, wire, 8 per 1000 SF, .9 watts
per SF
Miscellaneous power, 1.5 watts
Central air conditioning power, 4 watts
Fluorescent fixtures recess mounted in ceiling, 1.6 watt per SF, 40
FC, 10 fixtures @32watt per 1000 SF
Communication and alarm systems, fire detection, addressable, 25
detectors, includes outlets, boxes, conduit and wire,,
conduit
Generator sets, w/battery, charger, muffler and transfer switch,
gas/gasoline operated, 3 phase, 4 wire, 277/480 V, 15 kW
E Equipment & Furnishings
F Special Construction
G Building Sitework
SubTotal
Contractor Fees (General Conditions,Overhead,Profit)
Architectural Fees
User Fees
Total Building Cost
St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264 Page 3 of 3
Replacement Cost Report
Map A
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 68
St. Louis Park Encore Redevelopment TIF District
Code Deficiency Cost Report
Map A - 3915 Highway 7 St. Louis Park , MN 55416 - PID 602824110007
Code Related Cost Items Unit Cost Units Unit
Quantity Total
Accessibility Items
Accessible route
Install appropriate number of accessible parking stalls 250.00$ Ea 2 500.00$
Correct elevation changes from parking to ramp 1,000.00$ Lump 1 1,000.00$
Reduce threshold to less than 1/2 inch 150.00$ Ea 1 150.00$
Raise exterior stoops flush with exit door threshold 1,000.00$ Ea 2 2,000.00$
Remodel restroom for compliance 10,000.00$ Ea 2 20,000.00$
Replace door hardware for compliance 250.00$ Ea 10 2,500.00$
Modify staff break room sink for compliance 2,000.00$ Ea 1 2,000.00$
Install accessible drinking fountain 3,500.00$ Ea 1 3,500.00$
Structural Elements
Exiting
Flooring
Replace flooring 2.83$ SF 5,040 14,263.20$
Fire Protection
Fire suppression
Install sprinkler system 5.30$ SF 5,040 26,712.00$
Exterior Construction
Exterior protection from elements
Paint all exterior wood surfaces 1.25$ SF 5,040 6,300.00$
Roof Construction
Roofing membrane
Remove existing roof and flashing 0.90$ SF 5,040 4,536.00$
Install new roofing material and flashing 7.82$ SF 5,040 39,412.80$
Mechanical- Electrical
Exhaust
Install exhausts in restrooms 500.00$ Ea 2 1,000.00$
Total Code Improvements 123,874.00$
St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264 Page 1 of 1
Code Deficiency Cost Report
Map A
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 69
St. Louis Park Encore Redevelopment TIF District
Map A, 3915 Highway 7 Photos
Page 1 of 4
P1030293.JPG P1030294.JPG P1030295.JPG
P1030296.JPG P1030297.JPG P1030298.JPG
P1030299.JPG P1030300.JPG P1030301.JPG
P1030302.JPG P1030303.JPG P1030304.JPG
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 70
Page 2 of 4St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264
Photos
Map A
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P1030308.JPG P1030309.JPG P1030310.JPG
P1030311.JPG P1030314.JPG P1030315.JPG
P1030316.JPG P1030317.JPG P1030318.JPG
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 71
Page 3 of 4St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264
Photos
Map A
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P1030322.JPG P1030323.JPG P1030324.JPG
P1030325.JPG P1030326.JPG P1030327.JPG
P1030328.JPG P1030329.JPG P1030330.JPG
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 72
Page 4 of 4St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264
Photos
Map A
P1030331.JPG P1030332.JPG
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 73
St. Louis Park Encore Redevelopment TIF District
Replacement Cost Report
Square Foot Cost Estimate Report Date:4/27/2015
Encore Building B "ASAP"
3907 Highway 7, St. Louis Park, Minnesota
55416
Building Type:
Factory, 1 Story with Concrete Block /
Bearing Walls
Location:MINNEAPOLIS, MN
Story Count:1
Story Height (L.F.):20
Floor Area (S.F.):10562
Labor Type:OPN
Basement Included:No
Data Release:Year 2015 Quarter 1
Cost Per Square Foot:$150.65
Building Cost:$1,591,112.49
% of Total Cost Per S.F. Cost
18.49% 25.32 267,429.84
A1010 Standard Foundations 4.54 47,951.48
1.77 18,694.74
2.77 29,256.74
A1030 Slab on Grade 5.58 58,935.96
5.58 58,935.96
A2010 Basement Excavation 4.23 44,677.26
4.23 44,677.26
A2020 Basement Walls 10.97 115,865.14
10.97 115,865.14
36.32% 49.73 525,248.26
B1010 Floor Construction 20.26 213,986.12
6.52 68,864.24
13.74 145,121.88
B1020 Roof Construction 7.93 83,756.66
7.55 79,743.10
0.38 4,013.56
Estimate Name:
Costs are derived from a building model with basic components.
Scope differences and market conditions can cause costs to vary significantly.
A Substructure
Strip footing, concrete, reinforced, load 11.1 KLF, soil bearing
capacity 6 KSF, 12" deep x 24" wide
Spread footings, 3000 PSI concrete, load 100K, soil bearing capacity
6 KSF, 4' - 6" square x 15" deep
Slab on grade, 4" thick, non industrial, reinforced
Excavate and fill, 10,000 SF, 8' deep, sand, gravel, or common
earth, on site storage
Foundation wall, CIP, 12' wall height, pumped, .444 CY/LF, 21.59
PLF, 12" thick
B Shell
Cast-in-place concrete column, 12" square, tied, 200K load, 12' story
height, 142 lbs/LF, 4000PSI
Flat slab, concrete, with drop panels, 6" slab/2.5" panel, 12" column,
15'x15' bay, 75 PSF superimposed load, 153 PSF total load
Roof, steel joists, joist girder, 1.5" 22 ga metal deck, on
columns/bearing wall, 40'x40' bay, 40 PSF superimposed load, 40.5"
deep, 61 PSF total load
Roof, steel joists, joist girder, 1.5" 22 ga metal deck, on
columns/bearing wall, 40'x40' bay, 40 PSF superimposed load, 40.5"
deep, 61 PSF total load, add for column
St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264 Page 1 of 4
Replacement Cost Report
Map B
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 74
% of Total Cost Per S.F. Cost
B2010 Exterior Walls 6.29 66,434.98
6.29 66,434.98
B2020 Exterior Windows 6.07 64,111.34
6.07 64,111.34
B2030 Exterior Doors 1.30 13,730.60
0.2 2,112.40
0.65 6,865.30
0.45 4,752.90
B3010 Roof Coverings 7.39 78,053.18
3.27 34,537.74
2.15 22,708.30
1.21 12,780.02
0.24 2,534.88
0.52 5,492.24
B3020 Roof Openings 0.49 5,175.38
0.18 1,901.16
0.31 3,274.22
6.74%9.23 97,487.26
C1010 Partitions 1.96 20,701.52
1.96 20,701.52
C1020 Interior Doors 2.00 21,124.00
2 21,124.00
C1030 Fittings 1.01 10,667.62
1.01 10,667.62
C3010 Wall Finishes 3.23 34,115.26
2.41 25,454.42
0.82 8,660.84
C3020 Floor Finishes 0.28 2,957.36
0.28 2,957.36
C3030 Ceiling Finishes 0.75 7,921.50
0.75 7,921.50
38.08% 52.16 550,913.92
D2010 Plumbing Fixtures 4.76 50,275.12
1.96 20,701.52
0.14 1,478.68
1.67 17,638.54
0.12 1,267.44
0.18 1,901.16
0.29 3,062.98
0.17 1,795.54
0.23 2,429.26
Concrete block (CMU) wall, lightweight, hollow, 4 x 8 x 16, 85 PCF
Windows, aluminum, sliding, insulated glass, 8' x 4'
Door, aluminum & glass, with transom, narrow stile, double door,
hardware, 6'-0" x 10'-0" opening
Door, steel 18 gauge, hollow metal, 1 door with frame, no label, 3'-0"
x 7'-0" opening
Door, steel 24 gauge, overhead, sectional, electric operator, 10'-0" x
10'-0" opening
Roofing, asphalt flood coat, gravel, base sheet, 3 plies 15# asphalt
felt, mopped
Insulation, rigid, roof deck, composite with 2" EPS, 1" perlite
Roof edges, aluminum, duranodic, .050" thick, 6" face
Flashing, aluminum, no backing sides, .019"
Gravel stop, aluminum, extruded, 4", mill finish, .050" thick
Roof hatch, with curb, 1" fiberglass insulation, 2'-6" x 3'-0",
galvanized steel, 165 lbs
Smoke hatch, unlabeled, galvanized, 2'-6" x 3', not incl hand winch
operator
C Interiors
Partition, concrete block, 6" thick
Door, single leaf, kd steel frame, hollow metal, commercial quality,
flush, 3'-0" x 7'-0" x 1-3/8"
Toilet partitions, cubicles, ceiling hung, stainless steel
2 coats paint on masonry with block filler
Painting, masonry or concrete, latex, brushwork, primer & 2 coats
Vinyl, composition tile, maximum
Acoustic ceilings, 3/4"mineral fiber, 12" x 12" tile, concealed 2" bar &
channel grid, suspended support
D Services
Water closet, vitreous china, bowl only with flush valve, wall hung
Urinal, vitreous china, wall hung
Lavatory w/trim, vanity top, PE on CI, 19" x 16" oval
Kitchen sink w/trim, countertop, stainless steel, 33" x 22" double
bowl
Service sink w/trim, PE on CI,wall hung w/rim guard, 22" x 18"
Shower, stall, baked enamel, terrazzo receptor, 36" square
Shower, stall, fiberglass 1 piece, three walls, 36" square
Water cooler, electric, floor mounted, dual height, 14.3 GPH
St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264 Page 2 of 4
Replacement Cost Report
Map B
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 75
% of Total Cost Per S.F. Cost
D2020 Domestic Water Distribution 1.61 17,004.82
1.61 17,004.82
D2040 Rain Water Drainage 2.55 26,933.10
1.75 18,483.50
0.8 8,449.60
D3010 Energy Supply 9.34 98,649.08
9.34 98,649.08
D3030 Cooling Generating Systems 10.97 115,865.14
10.97 115,865.14
D4010 Sprinklers 3.81 40,241.22
3.81 40,241.22
D4020 Standpipes 0.57 6,020.34
0.45 4,752.90
0.12 1,267.44
D5010 Electrical Service/Distribution 3.19 33,692.78
0.99 10,456.38
0.82 8,660.84
1.38 14,575.56
D5020 Lighting and Branch Wiring 13.79 145,649.98
1.89 19,962.18
0.3 3,168.60
0.64 6,759.68
10.96 115,759.52
D5030 Communications and Security 1.57 16,582.34
1.13 11,935.06
0.44 4,647.28
0.37%0.51 5,386.62
E1030 Vehicular Equipment 0.51 5,386.62
0.51 5,386.62
E1090 Other Equipment 0 0
0%0 0
0%0 0
Gas fired water heater, commercial, 100< F rise, 115 MBH input,
110 GPH
Roof drain, CI, soil,single hub, 5" diam, 10' high
Roof drain, CI, soil,single hub, 5" diam, for each additional foot add
Commercial building heating systems, terminal unit heaters, forced
hot water, 10,000 SF bldg,100,000 CF, total, 2 floors
Packaged chiller, air cooled, with fan coil unit, factories, 40,000 SF,
133.33 ton
Wet pipe sprinkler systems, steel, ordinary hazard, 1 floor, 50,000
SF
Wet standpipe risers, class III, steel, black, sch 40, 6" diam pipe, 1
floor
Wet standpipe risers, class III, steel, black, sch 40, 6" diam pipe,
additional floors
Overhead service installation, includes breakers, metering, 20'
conduit & wire, 3 phase, 4 wire, 120/208 V, 600 A
Feeder installation 600 V, including RGS conduit and XHHW wire,
600 A
Switchgear installation, incl switchboard, panels & circuit breaker,
120/208 V, 600 A
Receptacles incl plate, box, conduit, wire, 2.5 per 1000 SF, .3 watts
per SF
Miscellaneous power, 1 watt
Central air conditioning power, 4 watts
HID fixture, 20' above work plane, 100 FC, type G, 6 fixtures per
1800 SF
Communication and alarm systems, fire detection, addressable, 50
detectors, includes outlets, boxes, conduit and wire
Fire alarm command center, addressable with voice, excl. wire &
conduit
E Equipment & Furnishings
Architectural equipment, dock shelters, truck, scissor arms, deluxe
F Special Construction
G Building Sitework
St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264 Page 3 of 4
Replacement Cost Report
Map B
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 76
% of Total Cost Per S.F. Cost
100% $136.95 $1,446,465.90
10.00% $13.70 $144,646.59
0.00% $0.00 $0.00
0.00% $0.00 $0.00
$150.65 $1,591,112.49
SubTotal
Contractor Fees (General Conditions,Overhead,Profit)
Architectural Fees
User Fees
Total Building Cost
St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264 Page 4 of 4
Replacement Cost Report
Map B
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 77
St. Louis Park Encore Redevelopment TIF District
Code Deficiency Cost Report
Map B - 3907 Highway 7 St. Louis Park , MN 55416 - PID 602824110056
Code Related Cost Items Unit Cost Units Unit
Quantity Total
Accessibility Items
Accessible route to building
Install one more accessible parking space 250.00$ Ea 1 250.00$
Make accessible ramp from parking lot to 1,000.00$ Lump 1 1,000.00$
building compliant
Accessible route within building
Install elevator connecting all levels 150,000.00$ Lump 1 150,000.00$
Restrooms
Renovate restrooms for compliance 4.76$ SF 10,562 50,275.12$
Stairs
Install compliant railings on five stairs 400.00$ Ea 10 4,000.00$
Structural Elements
Exterior walls
Correct deficient wall structure in attached 50,000.00$ Lump 1 50,000.00$
sub level room
Exiting
Exit signs
Install two exit signs for compliance 250.00$ Ea 2 500.00$
Flooring
Replace flooring for egress compliance 2.23$ SF 10,562 23,553.26$
Fire Protection
Exterior Construction
Windows
Caulk exterior windows to prevent water intrusion 2,500.00$ Lump 1 2,500.00$
Roof Construction
Roofing membrane
Remove existing built up roof 0.90$ SF 10,562 9,505.80$
Replace built up roof 7.39$ SF 10,562 78,053.18$
St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264 Page 1 of 2
Code Deficiency Cost Report
Map B
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 78
Code Related Cost Items Unit Cost Units Unit
Quantity Total
Mechanical- Electrical
Ventilation
Replace deficient ventilation system for compliance 20.31$ SF 10,562 214,514.22$
Electrical
Replace electrical disconnect switch for compliance 1,500.00$ Ea 1 1,500.00$
Upgrade electrical service for new HVAC system 0.25$ SF 10,562 2,640.50$
Total Code Improvements 588,292.08$
St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264 Page 2 of 2
Code Deficiency Cost Report
Map B
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 79
St. Louis Park Encore Redevelopment TIF District
Map B, 3907 Highway 7 Photos
Page 1 of 10
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P1030339.JPG P1030340.JPG P1030342.JPG
P1030343.JPG P1030344.JPG P1030345.JPG
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 80
Page 2 of 10St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264
Photos
Map B
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P1030349.JPG P1030352.JPG P1030353.JPG
P1030354.JPG P1030355.JPG P1030356.JPG
P1030357.JPG P1030358.JPG P1030359.JPG
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 81
Page 3 of 10St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264
Photos
Map B
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P1030363.JPG P1030364.JPG P1030365.JPG
P1030366.JPG P1030367.JPG P1030368.JPG
P1030369.JPG P1030370.JPG P1030371.JPG
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 82
Page 4 of 10St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264
Photos
Map B
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P1030375.JPG P1030376.JPG P1030377.JPG
P1030378.JPG P1030379.JPG P1030382.JPG
P1030383.JPG P1030384.JPG P1030385.JPG
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 83
Page 5 of 10St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264
Photos
Map B
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P1030393.JPG P1030394.JPG P1030395.JPG
P1030396.JPG P1030397.JPG P1030398.JPG
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 84
Page 6 of 10St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264
Photos
Map B
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P1030405.JPG P1030406.JPG P1030407.JPG
P1030408.JPG P1030409.JPG P1030410.JPG
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 85
Page 7 of 10St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264
Photos
Map B
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P1030415.JPG P1030416.JPG P1030417.JPG
P1030418.JPG P1030419.JPG P1030420.JPG
P1030421.JPG P1030422.JPG P1030423.JPG
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 86
Page 8 of 10St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264
Photos
Map B
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P1030427.JPG P1030428.JPG P1030429.JPG
P1030430.JPG P1030431.JPG P1030432.JPG
P1030433.JPG P1030434.JPG P1030435.JPG
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 87
Page 9 of 10St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264
Photos
Map B
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P1030439.JPG P1030440.JPG P1030441.JPG
P1030442.JPG P1030443.JPG P1030444.JPG
P1030445.JPG P1030446.JPG P1030447.JPG
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 88
Page 10 of 10St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264
Photos
Map B
P1030448.JPG P1030449.JPG P1030450.JPG
P1030451.JPG P1030452.JPG
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 89
St. Louis Park Encore Redevelopment TIF District
Replacement Cost Report
Square Foot Cost Estimate Report Date:4/27/2015
Encore Building C
3031 Glenhurst Avenue, St. Louis Park,
Minnesota 55416
Building Type:
Economy 1 Story with Wood Veneer -
Wood Frame
Location:MINNEAPOLIS, MN
Story Count:1
Story Height (L.F.):8
Floor Area (S.F.):1417
Labor Type:RES
Basement Included:Yes
Data Release:Year 2015 Quarter 1
Cost Per Square Foot:$115.02
Building Cost:$162,964.52
% of Total Cost Per S.F. Cost
1.28%1.33 1,890.86
1.33 1,890.86
13.44% 14.06 19,914.46
1.73 2,447.67
8.33 11,800.38
4 5,666.41
15.73% 16.44 23,303.03
1.96 2,779.86
0.38 540.6
0.29 414.86
1.67 2,371.51
2.88 4,084.84
6.97 9,873.16
2.29 3,238.20
18.06% 18.88 26,756.66
0.88 1,250.82
7.88 11,172.76
0.61 867.05
1.45 2,057.44
5.53 7,832.08
1.89 2,674.09
0.64 902.42
4.81%5.03 7,124.34
5.03 7,124.34
Estimate Name:
Costs are derived from a building model with basic components.
Scope differences and market conditions can cause costs to vary significantly.
01 Site Work
Footing excavation, building, 26' x 46', 4' deep
02 Foundation
Footing systems, 8" thick by 18" wide footing
Block wall systems, 8" wall, grouted, full height
Floor slab systems, 4" thick slab
03 Framing
Floor framing, wood joists, #2 or better, pine, 2" x 8", 16" OC
Floor framing, bridging, wood 1" x 3", joists 16" OC
Box sills, #2 or better pine, 2" x 8"
Girders, including lally columns, 3 pieces spiked together, 2" x 8"
Exterior wall framing systems, 2" x 4", 16" OC
Truss roof framing systems, 24" OC, 4/12 pitch, 1' overhang, 26'
span
Partition framing systems, 2" x 4", 16" OC
04 Exterior Walls
Painting, 2 coats
Wood siding systems, 1/2" x 8" beveled cedar siding, "A" grade
Non-rigid insul, batts, fbgls, kraft faced, 3-1/2" thick, R13, 15" W
Non-rigid insul, batts, fbgls, kraft faced, 12" thick, R38, 23" wide
Sliding window systems, builder's quality wood window, 3' x 2'
Door systems, solid core birch, flush, 3' x 6'-8"
Storm door, al, combination, storm & screen, anodized, 2'-8" x 6'-8"
05 Roofing
Gable end roofing, asphalt, roof shingles, class A
St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264 Page 1 of 2
Replacement Cost Report
Map C
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 90
% of Total Cost Per S.F. Cost
33.73% 35.28 49,972.03
6.43 9,116.86
2.52 3,565.71
3.13 4,434.81
5.02 7,106.40
6.33 8,972.85
2.3 3,258.34
5.56 7,871.62
0.72 1,014.39
1.94 2,742.32
0.55 777.56
0.78 1,111.17
3.00% 3.14 4,447.87
1.41 2,003.18
1.16 1,642.71
0.57 801.98
7.51% 7.85 11,121.65
3.16 4,471.97
0.72 1,019.22
0.12 165.83
0.82 1,157.91
1.02 1,442.40
0.87 1,237.66
0.56 796.53
0.28 400.56
0.09 131.71
0.09 133.36
0.12 164.5
2.44% 2.55 3,618.66
0.9 1,279.02
1.65 2,339.64
100% $104.56 $148,149.56
10.00% $10.46 $14,814.96
0.00% $0.00 $0.00
0.00% $0.00 $0.00
$115.02 $162,964.52
06 Interiors
Wall system, 1/2" drywall, taped & finished
Wall system, 1/2" drywall, taped & finished
1/2" gypsum wallboard, taped & finished ceilings
Suspended ceiling 2' x 4' grid, film faced fiberglass, 5/8" thick
Lauan, flush door, hollow core, interior
Carpet, Olefin, 15 oz
Carpet, tile, foam backed, needle punch
Padding, sponge rubber cushion, minimum
Underlayment plywood, 1/2" thick
Resilient flooring, asphalt tile on wood subflr, 1/8" thk, group B
Basement stairs, open risers
07 Specialties
Kitchen, economy grade
Sinks, stainless steel, single bowl 16" x 20"
Water heater, electric, 30 gallon
08 Mechanical
Three fixture bathroom with wall hung lavatory
Furnace, gas heating only, 100 MBH, area to 1200 SF
Intermittent pilot, 100 MBH furnace
Supply duct, rectangular, area to 1200 SF, rigid fiberglass
Return duct, sheet metal galvanized, to 1500 SF
Lateral ducts, flexible round 6" insulated, to 1200 SF
Register elbows, to 1500 SF
Floor registers, enameled steel w/damper, to 1500 SF
Return air grille, area to 1500 SF 12" x 12"
Thermostat, manual, 1 set back
Plenum, heating only, 100 MBH
09 Electrical
100 amp electric service
Duplex receptacles using non-metallic sheathed cable
SubTotal
Contractor Fees (General Conditions,Overhead,Profit)
Architectural Fees
User Fees
Total Building Cost
St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264 Page 2 of 2
Replacement Cost Report
Map C
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 91
St. Louis Park Encore Redevelopment TIF District
Code Deficiency Cost Report
Map C - 3031 Glenhurst Ave St. Louis Park , MN 55416 - PID 602824110016
Code Related Cost Items Unit Cost Units Unit
Quantity Total
Accessibility Items
Structural Elements
Foundation
Repair interior and exterior foundation walls 5,000.00$ Lump 1 5,000.00$
Exiting
Exterior steps
Replace non compliant West steps 2,000.00$ Ea 1 2,000.00$
Replace non compliant North steps 2,500.00$ Ea 2 5,000.00$
Interior basement stairs
Demo existing stairs 500.00$ Lump 1 500.00$
Rebuild stair for compliance 300.00$ Ea 10 3,000.00$
Install railings for compliance 700.00$ Lump 1 700.00$
Fire Protection
Alarms
Install smoke detectors at bedrooms, main floor 225.00$ Ea 4 900.00$
and basement
Install CO detectors outside of bedrooms 225.00$ Ea 2 450.00$
Exterior Construction
Regrade earth around house for proper drainage 1.00$ SF 1,000 1,000.00$
Roof Construction
Roof
Remove exiting shingles 0.50$ SF 1,416 708.00$
Reinstall new compliant shingles 5.03$ SF 1,416 7,122.48$
Ventilation
Install code required roof ventilation 100.00$ Ea 4 400.00$
Install code required soffit ventilation 50.00$ Ea 8 400.00$
St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264 Page 1 of 2
Code Deficiency Cost Report
Map C
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 92
Code Related Cost Items Unit Cost Units Unit
Quantity Total
Mechanical- Electrical
Mechanical
Install compliant HVAC system 3,500.00$ Ea 1 3,500.00$
Electrical
Install 100 amp circuit breaker box 0.90$ SF 1,416 1,274.40$
Provide GFCI protected receptacles at sink locations
Kitchen 250.00$ Ea 2 500.00$
Bathroom 250.00$ Ea 1 250.00$
Laundry 250.00$ Ea 1 250.00$
Provide AFCI per code
Living rooms 250.00$ Ea 4 1,000.00$
Bedrooms 250.00$ Ea 4 1,000.00$
Hallways 250.00$ Ea 4 1,000.00$
Secure loose wires per code
Basement 1,000.00$ Lump 1 1,000.00$
Total Code Improvements 36,954.88$
St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264 Page 2 of 2
Code Deficiency Cost Report
Map C
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 93
St. Louis Park Encore Redevelopment TIF District
Map C, 3031 Glenhurst Ave Photos
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Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 94
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St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264
Photos
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Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
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St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264
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Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 96
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St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264
Photos
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Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
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St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264
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Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
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Page 6 of 6St. Louis Park Encore Redevelopment TIF District
LHB Project No. 150264
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Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 99
Appendix G-1
Appendix G
Findings Including But/For Qualifications
The reasons and facts supporting the findings for the adoption of the Tax Increment Financing Plan (“TIF
Plan”) for the Shoreham Tax Increment Financing District (“District”), as required pursuant to Minnesota
Statutes, Section 469.175, Subdivision 3 are as follows:
1. Finding that the District is a redevelopment district as defined in Minnesota Statutes, Section
469.174, Subd. 10.
The District consists of five parcels with plans to redevelop the area for rental housing. At least 70
percent of the area of the parcels in the District is occupied by buildings, streets, utilities, paved or
gravel parking lots or other similar structures and more than 50 percent of the buildings in the
District, not including outbuildings, are structurally substandard to a degree requiring substantial
renovation or clearance.
2. Finding that the proposed development, in the opinion of the City Council, would not reasonably be
expected to occur solely through private investment within the reasonably foreseeable future and
theat the increased market value of the site that could reasonably be expected to occur without the
use of tax increment financing would be less than the increase in the market value estimated to result
from the proposed development after subtracting the present value of the projected tax increments
for the maximum duration of the District permitted by the TIF Plan.
The proposed development, in the opinion of the City, would not reasonably be expected to occur
solely through private investment within the reasonably foreseeable future: This finding is supported
by the fact that the redevelopment proposed in the TIF Plan, which meets the City’s objectives for
redevelopment, requires a significant investment by the developer. Due to the inclusion of affordable
housing units and the high cost of redevelopment on the parcels currently occupied by substandard
buildings and costs associated with their removal, environmental remediation, site improvements and
utility relocation, and the costs of financing the proposed improvements, this project is feasible only
through assistance, in part, from tax increment financing. The developer was asked for and provided
a letter and a proforma as justification that the developer would not have gone forward without tax
increment assistance.
Therefore, the City concludes as follows:
A. The City’s estimate of the amount by which the market value of the entire District wil increase
without the use of tax increment financing is $0.
B. If the proposed development occurs, the total increase in market value will be $32,620,000.
C. The present value of tax increments from the District for the maximum duration of the district
permitted by the TIF Plan is estimated to be $7,311,283.
D. Even if some development other than the proposed development were to occur, the Council finds
that no alternative would occur that would produce a market value increase greater than
$22,829,517 (the amount in clause b less the amount in clause c) without tax increment
assistance.
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 100
Appendix G-2
3. Finding that the TIF Plan for the District conforms to the general plan for the development or
redevelopment of the municipality as a whole.
The Planning Commission reviewed the TIF Plan and found that the TIF Plan conforms to the
general development plan of the City.
4. Finding that the TIF Plan for the District will afford maximum opportunity, consistent with the sound
needs of the City as a whole, for the development or redevelopment of Redevelopment Project No.
1 by private enterprise.
The project to be assisted by the District will result in increased employment in the City and the State
of Minnesota, the renovation and environmental remediation of substandard properties, and increased
tax base of the State, and will add a high quality development to the City. In addition, through the
implementation of the TIF Plan, there will be an increase in the availability of safe and decent life-
cycle housing in the City.
But-For Analysis
Current Market Value 2,479,200
New Market Value - Estimate 32,620,000
Difference 30,140,800
Present Value of Tax Increment 7,311,283
Difference 22,829,517
Value Likely to Occur Without TIF is Less Than: 22,829,517
Economic Development Authority Meeting of August 17, 2015 (Item No. 7a)
Title: Establishment of The Shoreham Tax Increment Financing District Page 101
Meeting: Economic Development Authority
Meeting Date: August 17, 2015
Action Agenda Item: 7b
EXECUTIVE SUMMARY
TITLE: Redevelopment Contract with Shoreham Apartments, LLC
RECOMMENDED ACTION: Motion to Adopt EDA Resolution approving the Redevelopment
Contract between the EDA and Shoreham Apartments, LLC (Bader Development) related to the
proposed Shoreham project at the SW corner of CSAH 25 and France Ave.
POLICY CONSIDERATIONS: Does the EDA approve the proposed Redevelopment Contract
between the EDA and Shoreham Apartments, LLC to facilitate the construction of its proposed
mixed-use redevelopment at the SW corner of CSAH 25 and France Ave.?
SUMMARY: Bader Development has requested Tax Increment Financing assistance to support
its construction of a major mixed-use redevelopment called The Shoreham at the SW corner of
CSAH 25 and France Ave. There are the substantial extraordinary costs related to preparing the
redevelopment site for the proposed project. The Redeveloper’s application for Tax Increment
Financing (TIF) assistance was reviewed at the June 1st Special Study Session where it received
consensus support. The project’s plans also received Final Plat and PUD approvals from the City
Council on June 1st. A list of specific business terms for providing the proposed assistance was
provided at the July 27th Study Session. Those terms served as the basis for the proposed
Redevelopment Contract with Shoreham Apartments, LLC (Bader Development).
FINANCIAL OR BUDGET CONSIDERATION: But for the use of the public financial
assistance the proposed project would not proceed due to more than $7.8 million of extraordinary
costs associated with redeveloping the site. In order for the project to be financially feasible, it is
proposed that the EDA reimburse the Redeveloper for qualified site redevelopment costs up to
$1,200,000 in pay-as-you-go tax increment generated by the project for a term of approximately
4 years. Once the TIF Note is retired, the additional property taxes generated by the project
would accrue to the applicable taxing jurisdictions. The EDA’s financial participation in the
proposed project would leverage approximately $45 million in new investment, retain one
business and attract another as well as create over 50 new jobs and 30 affordable housing units.
Upon completion the project is conservatively estimated to have a total taxable market value of
$32.6 million.
VISION CONSIDERATION: St. Louis Park is committed to providing a well-maintained and
diverse housing stock.
SUPPORTING DOCUMENTS: Discussion
Resolution of Approval
Site & Building Plans
Redevelopment Contract
Prepared by: Greg Hunt, Economic Development Coordinator
Reviewed by: Michele Schnitker, Housing Supervisor
Kevin Locke, Community Development Director
Approved by: Tom Harmening, EDA Executive Director and City Manager
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b) Page 2
Title: Redevelopment Contract with Shoreham Apartments, LLC
DISCUSSION
BACKGROUND: Bader Development (“Redeveloper”) has option agreements to acquire five
properties at the SW corner of CSAH 25 and France Ave. These include two commercial
properties located at 3907 & 3915 Highway 7, (the ASAP building and Battlefield Store
respectively), two single-family homes located at 3031 Glenhurst Ave. and 3914 31st St. and a
townhome duplex located at 3918 31st St. The land assemblage creates a 2.23-acre
redevelopment site.
Proposed Shoreham redevelopment site – SW corner of CSAH 25 and France Ave.
PROPOSED REDEVELOPMENT: The Redeveloper proposes to raze the current commercial
buildings and residences, remove the contaminated fill material and soils impacting the site, and
construct a mixed-use development called The Shoreham. The proposed multi-story building
would consist of 148 residential units (of which 20% would be designated for households
earning 50% of area median income) and 20,000 square feet of office space (split between Bader
Development/Steven Scott Management and a medical office tenant). Also included would be
structured underground and surface parking. The proposed building would front on CSAH 25
and be five stories tall, with the fifth story stepped back from the street. The building would be
three stories tall facing W 31st Street, with the building being built into the hillside.
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b) Page 3
Title: Redevelopment Contract with Shoreham Apartments, LLC
Rendering of proposed building - The Shoreham
Project Schedule
Under the proposed Redevelopment Contract with the EDA, Bader Development is required to
commence construction on The Shoreham by October 31, 2015 and substantially complete it by
May 1, 2017.
Job Retention and Creation
The Redeveloper proposes to relocate its corporate offices (Steven Scott Management and Bader
Development) with its combined 43 FTE employees from The Parkdales and occupy 10,000
square feet in the proposed Shoreham building. That move would coincidently replace the 43
workers formerly employed at ASAP Printing which chose to sell and relocate from the subject
site. In addition, the proposed project is expected to create 10 full-time on-site property
management positions. A medical clinic has agreed to lease the other 10,000 square feet of office
space in The Shoreham and is projected to create 44 new FTE employment positions.
Redeveloper’s Request for Public Financing Assistance
Environmental investigations revealed that soil on the subject site is impacted with petroleum,
lead, pesticides and polynuclear aromatic hydrocarbons (PAHs). Also impacting the soil is
various fill debris including glass, brick, ash, concrete, wood and asphalt which varies in
thickness from 3 feet (south side) to as deep as 15 feet (north side). Groundwater below the site
is also impacted with petroleum compounds.
The northern and western portions of the site were historically marshy areas as evidenced by
layers of peat identified in those areas. During the 1940s and 1950s, these portions were
contaminated due to urban fill material and debris deposited on the site. In addition there is
evidence of underground storage tanks and timber piles treated with creosote on the site.
During redevelopment, the site will be excavated to depths ranging from 10 to 20 feet below
grade to construct one level of underground parking beneath the new building. Therefore, it is
anticipated that significant amounts of impacted fill soil will be excavated and will necessitate
special handling and disposal in accordance with MPCA requirements.
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b) Page 4
Title: Redevelopment Contract with Shoreham Apartments, LLC
To make the most efficient use of the redevelopment site, structured parking is necessary under
almost the entirety of the building’s footprint. The project will include a total of 291 parking
spaces of which 203 spaces will be provided underground for residential units and 88 spaces will
be provided on the surface for non-residential uses.
The total cost of the above extraordinary expenses exceeds $7.8 million as detailed below.
Extraordinary Cost Estimates AMOUNT ($)
Investigation & RAP Development 60,000
Excavation & Disposal of Contaminated Soils 972,160
Asbestos Abatement and Building Removal 317,190
Installation of Shoring 63,750
Installation of Geopiers/piles 511,251
Removal/disposal of UST & Contaminated Fill Material 15,000
Stormwater Utilities 150,000
France Ave road improvements & trail extension 90,000
Bicycle/Pedestrian Amenities & Improvements 499,000
Construction of Structured Parking 5,125,000
TOTAL Extraordinary Costs $7,803,351
To offset a portion of the above costs, Bader Development submitted an application to the EDA
requesting to be reimbursed $4 million in tax increment* generated from the project. At
approximately the same time, Bader and the EDA also applied for contamination cleanup and
TOD grants from DEED, the Metropolitan Council, and Hennepin County. In addition, the
Redeveloper recently submitted an application for up to $40 million in Private Activity Revenue
Bond financing with the City. Details on this submission are contained in a separate staff report.
*Tax increment financing uses the increased future property taxes generated by a new development to finance certain qualified
development costs incurred in connection with the construction of that project for a limited period of time.
Level and Type of Financial Assistance
The latest cost estimate to construct the proposed Shoreham project is $45.1 million. Bader
Development’s updated sources and uses statements, cash flow projections, and investor rate of
return (ROR) related to The Shoreham project were reviewed by Staff and Ehlers (the EDA’s
financial consultant). The estimates were found to be reasonable and within industry standards
for this type of redevelopment. It was also concluded, given the extraordinary costs outlined
above, that if no tax increment were provided, the project’s average expected cash-on-cash
(COC) return on equity would be approximately 5.2% to investors. According to Ehlers, the
industry standard for COC returns for similar projects is ten (10) percent in order to raise equity.
Thus, without financial assistance from the above agencies and the EDA, the project would not
generate enough of a return on investment to attract the necessary equity capital to achieve
financing.
Upon analysis by Staff and Ehlers, and discussion with Bader Development, it was initially
determined that between $1,700,000 and $3,050,000 in tax increment assistance would be
necessary (depending if any grants were awarded) to allow the project to achieve a standard
return. The EDA/City Council reviewed Bader Development’s TIF Application at the June 1st
Special Study Session. During the course of that discussion it was also noted that the
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b) Page 5
Title: Redevelopment Contract with Shoreham Apartments, LLC
Redeveloper would likely be submitting an application for private activity revenue bond
financing from the City. Following discussion there was consensus support to favorably consider
reimbursing the Redeveloper for qualified costs incurred in connection with the construction of
the project up to $3,050,000 in tax increment generated by the project minus any grant awards.
As a result, staff was directed to draft a formal Redevelopment Contract with Bader
Development.
The EDA has subsequently been informed that the project has been awarded four grants from the
above three agencies which total $1,849,075. Given these grant awards and further review of the
Redeveloper’s most recent financial proforma, the amount of tax increment necessary to make
the project financially feasible has been reduced to $1.2 million. Reimbursing the Redeveloper
for certain extraordinary costs in connection with The Shoreham makes it possible to construct a
high quality project consistent with Livable Communities design principles and other objectives
listed in the City’s Comprehensive Plan. The proposed amount of assistance is consistent with
other similar mixed-use developments the EDA has facilitated in the past.
Upon project completion, verification of qualified costs, and issuance of the TIF Note, tax
increment generated from the increased value of the property would be disbursed to Bader
Development on a "pay-as-you-go" basis. This means the Redeveloper must first incur the
construction costs with its own funds. The increased property taxes generated from the
completed project and paid by the Redeveloper (called “tax increment”) is then used to
reimburse the Redeveloper for the above extraordinary costs it incurred during the project’s
construction. This is the preferred financing method under the City's TIF Policy. The Shoreham
project met the requirements of a Redevelopment TIF District (25 year TIF District). Under this
type of TIF district, the proposed project would generate the proposed $1.2 million in tax
increment in approximately 4 years. The Note would bear interest at 3.75%, which is the
Redeveloper’s proposed bank financing rate for the project. The size of the Note is based upon
no inflationary value in the project (as with all projects). This is more conservative estimating
and thus it is possible that the pay-as-you-go note may be retired earlier than the estimated 4
years. As with most of the EDA’s redevelopment contracts, the Redeveloper will be required to
execute a Minimum Assessment Agreement for the value utilized for projecting the amount of
TIF assistance available.
The EDA’s financial participation in the proposed project would leverage over $45 million in
new investment as well as create over 50 new jobs and 30 affordable housing units. The ratio of
private to public investment (grants and TIF) in the project is approximately $15 to $1. As a
percentage of total project cost, the total amount of public investment is approximately 6.8%.
TIF Lookback
As with other projects the EDA has assisted with TIF, the proposed Redevelopment Contract
with Bader contains a “lookback” provision. The EDA will perform a “lookback” calculation on
the earliest of (i) the date when 93% of the apartments are leased; (ii) the date of any transfer in
whole or in part of the apartments; or (iii) three years after the date of issuance of the Certificate
of Completion for the project. The Redeveloper must submit evidence of its actual annualized
cumulative internal rate of return (the “IRR”) from the apartments, calculated as of the
applicable lookback date, along with the estimated annualized cumulative IRR from the
apartments assuming a sale in the tenth year after the date of issuance of the Certificate of
Completion for the apartments. The amount by which the IRR exceeds eighteen percent (18%) is
considered Excess Income. If the EDA determines that there is Excess Income, it will apply fifty
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b) Page 6
Title: Redevelopment Contract with Shoreham Apartments, LLC
percent (50%) of that amount toward prepayment of the outstanding principal amount of the TIF
Note.
Property Value and Taxes
The total combined taxable market value of the five properties Bader Development proposes to
redevelop is under $2.5 million. The total taxable market value of The Shoreham upon
construction completion is estimated at $32.6 million. Thus the proposed project would create
over $30 million in new market value. Most of the new value would be captured as tax
increment and used to make payments on the TIF Note until it is retired and the TIF district is
terminated. The project is estimated to generate a total of $730,795 in annual property taxes of
which approximately $493,000 would be gross tax increment. The City, County and School
District would continue to receive the property taxes collected on the subject site’s current base
value. Once the TIF Note is retired the additional property taxes generated by the project’s
market value would accrue to the benefit of the applicable taxing jurisdictions.
Proposed Redevelopment Contract
The EDA has been in discussion with Bader Development relative to the subject redevelopment
site since last Fall. The Redeveloper’s proposed project plans and request for financial assistance
have been presented and/or discussed at several study sessions over the past year. The project’s
plans received Final Plat and PUD approvals from the City Council on June 1st. A list of specific
business terms for providing the proposed assistance was provided at the July 27th Study
Session. Those terms served as the basis for the proposed Redevelopment Contract with The
Shoreham Apartments, LLC (Bader Development and “Redeveloper”). The Contract for Private
Redevelopment specifies the mutual obligations between the EDA and the Redeveloper as well
as the precise terms of the financial assistance to be provided. The proposed Contract was
prepared by the EDA’s legal counsel, Kennedy & Graven in consultation with staff. The
attached resolution of approval allows for modifications to the Contract that do not alter the
substance of the transaction without bringing the Contract back to the EDA. The following are
key terms of the proposed Contract.
1. Redeveloper agrees to close on the acquisition of the properties (“Closing”) located at the
SW quadrant of the CSAH 25 Frontage Road and France Ave. (specifically 3907 and
3915 Highway 7, 3031 Glenhurst Avenue, and 3914 and 3918 31st Street West in St.
Louis Park (“Redevelopment Property”) within 60 days of obtaining financing for the
project.
2. The parties acknowledge that MPCA has approved a voluntary response action plan
(“VRAP”) providing for remediation of hazardous wastes and contaminants on the
Redevelopment Property. Promptly following the Closing, Redeveloper shall undertake
remediation and any other actions required under the VRAP. Redeveloper expressly agrees
to perform any task or obligation imposed under the VRAP and the Declaration, including
any emergency procedures.
3. The Redeveloper acknowledges that the EDA makes no representations or warranties as to
the condition of the soils on the Redevelopment Property or the fitness of the
Redevelopment Property for construction of the Minimum Improvements (as defined in
paragraph 11) or any other purpose for which the Redeveloper may make use of such
property, and that the assistance provided to the Redeveloper neither implies any
responsibility by the EDA or the City for any contamination of the Redevelopment Property
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b) Page 7
Title: Redevelopment Contract with Shoreham Apartments, LLC
nor imposes any obligation on such parties to participate in any cleanup of the
Redevelopment Property.
4. The Redeveloper further agrees that it will indemnify, defend, and hold harmless the EDA,
the City, and their governing body members, officers, and employees (“Indemnitees”), from
any claims or actions arising out of the presence, if any, of hazardous wastes or pollutants
existing on the Redevelopment Property, unless and to the extent that such hazardous wastes
or pollutants are present as a result of the actions or omissions of the Indemnitees.
5. To finance a portion of the extraordinary costs of environmental remediation on the
Redevelopment Property (the “Grant-Eligible Costs”), the EDA has been awarded grants
from DEED in the amount of $625,075; from the Metropolitan Council in the amount of
$594,000; and from Hennepin County in the amounts of $430,000 and $200,000 (the
“Grants”).
(a) The EDA will reimburse the Redeveloper for Grant-Eligible Costs from and to the
extent of the grant proceeds under such Grants in accordance with the terms of the
applicable grant agreement(s). If Grant-Eligible Costs exceed the amount to be
reimbursed under such grant agreements such excess shall be the sole responsibility of
the Redeveloper (except to the extent reimbursable under the Note).
(b) The Redeveloper agrees to submit to the EDA written reports so as to allow the EDA to
remain in compliance with reporting requirements under state statutes and agency
requirements. The EDA will consult with the Redeveloper regarding the required
information needed to complete the forms.
6. The EDA has determined that, in order to make development of the Minimum
Improvements financially feasible, it is necessary to reimburse Redeveloper for a portion of
the cost of: building demolition, environmental contamination cleanup, site preparation,
stormwater management, road improvements, trail extension, and structured parking related
to the Minimum Improvements (the “Public Redevelopment Costs”). The tax increment
generated from the Shoreham TIF District will be payable to Redeveloper in the form of
one “TIF Note” (described below as the “Note”), which would be structured on the
following basis:
Ø Issue total: Not to exceed $1,200,000
Ø Type: Pay-as-you-go
Ø Term: Until full repayment – approximately 4 years
Ø Interest Rate: 3.75%
Ø Admin Fee: 5%
Ø Fiscal Disparities: Paid from within the district
The EDA shall issue and deliver the TIF Note upon Redeveloper having:
(a) delivered to the EDA written evidence satisfactory to the EDA that
Redeveloper has incurred Public Redevelopment Costs in an amount least
equal to the principal amount of the TIF Note, which evidence must include
copies of the paid invoices or other comparable evidence for costs of
allowable Public Redevelopment Costs;
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b) Page 8
Title: Redevelopment Contract with Shoreham Apartments, LLC
(b) submitted and obtained EDA approval of financing; and
(c) delivered to the EDA an investment letter in a form reasonably satisfactory
to the EDA.
7. The EDA will perform a “lookback” calculation on the earliest of (i) the date when 93% of
the apartments are leased; (ii) the date of any transfer in whole or in part of the
apartments; or (iii) three years after the date of issuance of the Certificate of Completion
for the project. The Redeveloper must submit evidence of its actual annualized
cumulative internal rate of return (the “IRR”) from the apartments, calculated as of the
applicable lookback date, along with the estimated annualized cumulative IRR from the
apartments assuming a sale in the tenth year after the date of issuance of the Certificate of
Completion for the apartments. The amount by which the IRR exceeds eighteen percent
(18%) is considered Excess Income. If the EDA determines that there is Excess Income,
it will apply fifty percent (50%) of that amount toward prepayment of the outstanding
principal amount of the TIF Note.
8. Both parties agree that any assistance provided to the Redeveloper under the Redevelopment
Contract is not expected to constitute a “business subsidy” under Minnesota Statutes
because the assistance is for redevelopment.
9. Redeveloper agrees that it will pay the reasonable costs of consultants and attorneys retained
by the EDA in connection with the preparation of the TIF Plan, the establishment of the TIF
District, the negotiation and preparation of the Redevelopment Contract and other incidental
agreements and documents. Upon termination of the Redevelopment Contract the
Redeveloper remains obligated for costs incurred through the effective date of termination.
10. Before commencing construction of the Minimum Improvements or Redeveloper Public
Improvements, the Redeveloper must submit plans and specifications regarding the
Redeveloper Public Improvements for approval by the City Engineer (“Construction
Plans”), and must submit Construction Plans regarding the Minimum Improvements for
approval by the EDA. Plans related to the soil remediation however do not require
approval by the City or EDA. All work on the Redeveloper Public Improvements and
Minimum Improvements shall be in accordance with the approved Construction Plans
and shall comply with all City requirements regarding such improvements. The parties
agree and understand that the City will accept the Redeveloper Public Improvements in
accordance with City procedures as specified in the Planning and Development Contract
between the City of St. Louis Park and Shoreham Apartments, LLC.
11. Redeveloper agrees to undertake the Minimum Improvements and Redeveloper Public
Improvements as shown in the Official Exhibits to Ordinance 2471-15 (“Approvals”). In
summary, the Redeveloper agrees to remediate the site in compliance with MPCA
requirements, construct the Redeveloper Public Improvements, and construct a building
in accordance with Ordinance 2471-15. Specifically, the Minimum Improvements shall
include a multi-story, mixed-use building consisting of approximately 150 units of multi-
family housing with 20,000 square feet of ground-floor office space along with
associated underground structured parking and surface parking. Redeveloper intends that
the office space shall be initially leased by Bader Development/Steven Scott
Management and another office/retail tenant, currently anticipated to be a medical office
tenant.
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b) Page 9
Title: Redevelopment Contract with Shoreham Apartments, LLC
12. If the Redeveloper desires to make any material change in the Construction Plans after their
approval by the EDA, the Redeveloper shall submit the proposed change to the EDA for its
approval. The term “material” means changes that increase or decrease construction costs
by $500,000 or more.
13. Prior to the demolition of any existing structures, the Redeveloper must complete on-site
historic documentation according to the “Scope and Fee Budget” from Preservation Design
Works, LLC, provided to the City, dated December 1, 2014.
14. Subject to Unavoidable Delays, Redeveloper agrees to commence construction of the
Minimum Improvements by October 31, 2015 and substantially complete them by May 1,
2017. If the Redeveloper anticipates that the above timetable will not be met, Redeveloper
shall provide a written and oral presentation to the City Council of the City at a regular City
Council meeting prior to the Required Commencement Date or Completion Date. The
report must describe the reasons for the expected failure to meet the schedule, evidence of
Redeveloper’s due diligence in working toward construction of the relevant Phase, and a
detailed revised schedule. Failure to timely provide such written and oral report is an Event
of Default.
15. The Redeveloper agrees to comply with the City’s Green Building Policy adopted 2-16-10.
As a condition to issuance of a Certificate of Completion for the Minimum Improvements,
Redeveloper will submit to the EDA a detailed list of the specific energy-
efficient/sustainable features or components implemented in the construction of the
Minimum Improvements.
16. Promptly after completion of the Minimum Improvements, the EDA Representative will
deliver to the Redeveloper a Certificate of Completion. The construction of the Minimum
Improvements will be deemed to be substantially complete upon issuance of a certificate of
occupancy for the Minimum Improvements, and upon determination by the EDA
Representative that all related site improvements on the Redevelopment Property have been
substantially completed in accordance with approved Construction Plans, subject to
landscaping that cannot be completed until seasonal conditions permit.
17. Redeveloper shall install dedicated wired connections from each building’s point of
presence to each internal wiring closet, thence to each living and working unit. Each
living and working unit shall have at least two (2) connections, each capable of
supporting at minimum a one-gigabit connection. The Redeveloper shall wire the
building to include 2 CATV and 2 CAT-6 connections. To provide for future high-speed
broadband service, the Redeveloper shall install one empty 2-inch conduit from within a
new or existing handhold in proximity to its existing telecommunications services
(typically in public Right-of-Way) to a point of presence within each building in
proximity to its existing telecommunications services.
18. In addition to construction of the Minimum Improvements, the Redeveloper shall construct,
at Redeveloper’s sole cost, public sidewalks and boulevards adjacent to all streets abutting
the Redevelopment Property; reconstruct France Avenue from West 30 ½ Street to a
terminus approximately 120 feet north of West 31st Street; and construct a multi-use
recreational trail between West 31st Street and France Avenue, as provided in the Official
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b) Page 10
Title: Redevelopment Contract with Shoreham Apartments, LLC
Exhibits to the City’s Ordinance 2471-15 (the “City Ordinance”). All Redeveloper Public
Improvements shall be constructed in accordance with the City Ordinance.
19. Redeveloper shall undertake all work related to the Redeveloper Public Improvements and
the Minimum Improvements in compliance with all applicable federal and state laws,
including without limitation all applicable state and federal Occupational Safety and Health
Act regulations. Any subcontractors retained by Redeveloper shall be subject to the same
requirements.
20. The Redeveloper agrees to comply with the City’s Inclusionary Housing Policy adopted 6-
1-15 including the following:
A. Redeveloper agrees to reserve 20% of the apartment units in the Minimum
Improvements for households earning 50% of Area Median Income (AMI)
(“affordable dwelling units”) for at least 15 years following building occupancy.
For the next 10 years, Redeveloper agrees to reserve at least 10% of the apartment
units for households earning 60% of AMI or at least 8% of the apartment units for
households earning 50% of AMI.
B. The monthly rental price for affordable dwelling units shall include rent and
utility costs and shall be based on fifty percent (50%) and/or sixty percent (60%)
for the metropolitan area that includes St. Louis Park adjusted for bedroom size
and calculated annually by Minnesota Housing for establishing rent limits for the
Housing Tax Credit Program.
C. The size and design of the affordable dwelling units shall be consistent and
comparable with the market rate units in the rest of the project and is subject to
the approval of the City. The Affordable dwelling units shall be distributed
throughout the building.
D. The affordable dwelling units shall have a number of bedrooms in the approximate
proportion as the market rate units.
E. Redeveloper agrees to prepare an Affordable Housing Plan as defined in the City’s
Inclusionary Housing Policy. The Affordable Housing Plan shall describe how the
Redeveloper complies with each of the applicable requirements of Inclusionary
Housing Policy. Such a Plan shall be prepared and must be approved by the City
prior to or in conjunction with the Redeveloper receiving its Certificate of
Occupancy from the City.
21. Upon execution of the Agreement, the Redeveloper shall, with the EDA, execute an
Assessment Agreement specifying an assessor's minimum Market Value for the
Redevelopment Property and Minimum Improvements. The amount of the minimum
Market Value shall be $27,421,000 as of January 2, 2017, and $32,260,000 as of January 2,
2018 and each January 2 thereafter, notwithstanding the status of construction by such dates.
22. If Redeveloper requires mortgage financing for the development of the Project, the EDA
agrees to subordinate its rights under the Redevelopment Contract to the Holder of any
Mortgage securing construction or permanent financing, in accordance with the terms of a
mutually-approved subordination agreement.
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b) Page 11
Title: Redevelopment Contract with Shoreham Apartments, LLC
23. Redeveloper agrees not to transfer the Redevelopment Contract or the Redevelopment
Property (except to an affiliate) prior to receiving a Certificate of Completion without the
prior written consent of the EDA, except for construction mortgage financing and/or
permanent financing. The EDA's consent shall not be unreasonably withheld, conditioned
or delayed. The EDA agrees to provide its consent or refusal to consent to Redeveloper
in writing within 10 days after a request for such consent from Redeveloper.
24. Redeveloper agrees that the EDA and the City will not be held liable for any loss or
damage to property or any injury to or death of any person occurring at or about or
resulting from any defect in the Redevelopment Property or the Minimum Improvements.
25. The Redeveloper agrees not to discriminate upon the basis of race, color, creed, sex or
national origin in the construction and maintenance of the Minimum Improvements and
Public Improvements as well as lease, rental, use or occupancy of the Redevelopment
Property or any improvements erected thereon.
Business Subsidy
The assistance provided to the Redeveloper under the proposed Contract does not constitute a
“business subsidy” under the Business Subsidy Act (Section 116J.993 to 116J.995) as it is for
redevelopment of property polluted by contaminants.
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b) Page 12
Title: Redevelopment Contract with Shoreham Apartments, LLC
ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY
CITY OF ST. LOUIS PARK
HENNEPIN COUNTY
STATE OF MINNESOTA
RESOLUTION NO. 15-____
RESOLUTION APPROVING A CONTRACT FOR
PRIVATE REDEVELOPMENT AND AWARDING THE SALE OF,
AND PROVIDING THE FORM, TERMS, COVENANTS AND DIRECTIONS FOR THE
ISSUANCE OF ITS TAX INCREMENT REVENUE NOTE, SERIES 20__,
TO SHOREHAM APARTMENTS LLC
BE IT RESOLVED BY the Board of Commissioners (“Board”) of the St. Louis Park
Economic Development Authority, St. Louis Park, Minnesota (the “Authority”) as follows:
Section 1. Authorization; Award of Sale.
1.01. Authorization. The Authority and the City of St. Louis Park have heretofore
approved the establishment of its Shoreham Tax Increment Financing District (the “TIF District”)
within Redevelopment Project No. 1 (“Project”), and have adopted a tax increment financing plan
for the purpose of financing certain improvements within the Project.
Pursuant to Minnesota Statutes, Section 469.178, the Authority is authorized to issue and
sell its bonds for the purpose of financing a portion of the public development costs of the Project.
Such bonds are payable from all or any portion of revenues derived from the TIF District and
pledged to the payment of the bonds. The Authority hereby finds and determines that it is in the best
interests of the Authority that it issue and sell its Tax Increment Revenue Notes, Series 20__ (the
“Note”) for the purpose of financing certain public redevelopment costs and environmental
remediation costs of the Project.
1.02. Approval of Agreement. The Authority and Shoreham Apartments LLC (the
“Owner”) have negotiated a Contract for Private Redevelopment (the “Agreement”) which
provides for the construction of a mixed-use rental housing and office facility and associated
parking, and for the issuance of the Note to the Owner. The Agreement as presented to the Board
is hereby in all respects approved, subject to modifications that do not alter the substance of the
transaction and that are approved by the President and Executive Director, provided that execution
of the Agreement by such officials shall be conclusive evidence of approval.
1.03. Issuance, Sale, and Terms of the Note. (a) The Authority hereby authorizes the
President and Executive Director to issue the Note in accordance with the Agreement. All
capitalized terms in this resolution have the meaning provided in the Agreement unless the context
requires otherwise.
(b) The Note will be issued in the maximum aggregate principal amount of $1,200,000 to
the Owner in consideration of certain eligible costs incurred by the Owner under the Agreement,
will be dated the date of delivery thereof, and will bear interest at the rate of 3.75% from the date of
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b) Page 13
Title: Redevelopment Contract with Shoreham Apartments, LLC
issue per annum to the earlier of maturity or prepayment. The Note will be issued in a single series,
in the principal amount of Public Redevelopment Costs submitted and approved in accordance with
Section 3.5 of the Agreement. The Note is secured by Available Tax Increment, as further
described in the form of the Note herein. The Authority hereby delegates to the Executive Director
the determination of the date on which the Note is to be delivered, in accordance with the
Agreement.
Section 2. Form of Note. The Note will be in substantially the following form, with the
blanks to be properly filled in and the principal amount adjusted as of the date of issue:
(The remainder of this page is intentionally left blank.)
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b) Page 14
Title: Redevelopment Contract with Shoreham Apartments, LLC
UNITED STATE OF AMERICA
STATE OF MINNESOTA
COUNTY OF HENNEPIN
ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY
No. R-1 $_____________
TAX INCREMENT REVENUE NOTE
SERIES 20__
Date
Rate of Original Issue
3.75%
The St. Louis Park Economic Development Authority (“Authority”) for value received,
certifies that it is indebted and hereby promises to pay to Shoreham Apartments LLC or registered
assigns (the "Owner"), the principal sum of $__________ and to pay interest thereon at the rate of
3.75% per annum, solely from the sources and to the extent set forth herein. Capitalized terms shall
have the meanings provided in the Contract for Private Redevelopment between the Authority and
the Owner, dated as of August 17, 2015 (the "Agreement"), unless the context requires otherwise.
1. Payments. Principal and interest ("Payments") shall be paid on August 1, 20__ and
each February 1 and August 1 thereafter to and including February 1, 2024 ("Payment Dates") in the
amounts and from the sources set forth in Section 3 herein. Payments shall be applied first to
accrued interest, and then to unpaid principal. Interest accruing from the date of issue through and
including February 1, 20__ shall be compounded semiannually on February 1 and August 1 of each
year and added to principal.
Payments are payable by mail to the address of the Owner or such other address as the
Owner may designate upon 30 days written notice to the Authority. Payments on this Note are
payable in any coin or currency of the United States of America which, on the Payment Date, is
legal tender for the payment of public and private debts.
2. Interest. Interest at the rate stated herein shall accrue on the unpaid principal,
commencing on the date of original issue. Interest shall be computed on the basis of a year of 360
days and charged for actual days principal is unpaid.
3. Available Tax Increment. (a) Payments on this Note are payable on each Payment
Date solely from and in the amount of Available Tax Increment, which shall mean 95% of the Tax
Increment attributable to the Minimum Improvements and Redevelopment Property that is paid to
the Authority by Hennepin County in the six months preceding each Payment Date on the Note.
(b) The Authority shall have no obligation to pay principal of and interest on this Note on
each Payment Date from any source other than Available Tax Increment and the failure of the
Authority to pay principal or interest on any Payment Date shall not constitute a default hereunder
as long as the Authority pays principal and interest hereon to the extent of Available Tax Increment.
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b) Page 15
Title: Redevelopment Contract with Shoreham Apartments, LLC
The Authority shall have no obligation to pay unpaid balance of principal or accrued interest that
may remain after the final Payment on February 1, 2024.
4. Default. If on any Payment Date there has occurred and is continuing any Event of
Default under the Agreement, the Authority may withhold from payments hereunder under all
Available Tax Increment. If the Event of Default is thereafter cured in accordance with the
Agreement, the Available Tax Increment withheld under this Section shall be deferred and paid,
without interest thereon, within 30 days after the Event of Default is cured. If the Event of Default
is not cured in a timely manner, the Authority may terminate this Note by written notice to the
Owner in accordance with the Agreement.
5. Prepayment. (a) The principal sum and all accrued interest payable under this Note
is prepayable in whole or in part at any time by the Authority without premium or penalty. No
partial prepayment shall affect the amount or timing of any other regular Payment otherwise
required to be made under this Note.
(b) Upon receipt by Redeveloper of the Authority’s written statement of the
Participation Amount as described in Section 3.6 of the Agreement, fifty percent of such
Participation Amount will be deemed to constitute, and will be applied to, prepayment of the
principal amount of this Note. Such deemed prepayment is effective as of the date of delivery of
such statement to the Owner, and will be recorded by the Registrar in its records for the Note. Upon
request of the Owner, the Authority will deliver to the Owner a statement of the outstanding
principal balance of the Note after application of the deemed prepayment under this paragraph.
6. Nature of Obligation. This Note is one of an issue in the total principal amount of
$_________________, issued to aid in financing certain public redevelopment costs and
administrative costs of a Project undertaken by the Authority pursuant to Minnesota Statutes,
Sections 469.001 through 469.047, and is issued pursuant to an authorizing resolution (the
"Resolution") duly adopted by the Authority on August 17, 2015, and pursuant to and in full
conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes,
Sections 469.174 to 469.1794, as amended. This Note is a limited obligation of the Authority which
is payable solely from Available Tax Increment pledged to the payment hereof under the
Resolution. This Note and the interest hereon shall not be deemed to constitute a general obligation
of the State of Minnesota or any political subdivision thereof, including, without limitation, the
Authority. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to
pay the principal of or interest on this Note or other costs incident hereto except out of Available
Tax Increment, and neither the full faith and credit nor the taxing power of the State of Minnesota or
any political subdivision thereof is pledged to the payment of the principal of or interest on this Note
or other costs incident hereto.
7. Registration and Transfer. This Note is issuable only as a fully registered note
without coupons. As provided in the Resolution, and subject to certain limitations set forth therein,
this Note is transferable upon the books of the Authority kept for that purpose at the principal office
of the City Controller, by the Owner hereof in person or by such Owner's attorney duly authorized
in writing, upon surrender of this Note together with a written instrument of transfer satisfactory to
the Authority, duly executed by the Owner. Upon such transfer or exchange and the payment by the
Owner of any tax, fee, or governmental charge required to be paid by the Authority with respect to
such transfer or exchange, there will be issued in the name of the transferee a new Note of the same
aggregate principal amount, bearing interest at the same rate and maturing on the same dates.
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b) Page 16
Title: Redevelopment Contract with Shoreham Apartments, LLC
Except as otherwise provided in Section 3.5(d) of the Agreement, this Note shall not be
transferred to any person or entity, unless the Authority has provided written consent to such
transfer and the Authority has been provided with an opinion of counsel or a certificate of the
transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and
prospectus delivery requirements of federal and applicable state securities laws.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required
by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be
performed in order to make this Note a valid and binding limited obligation of the Authority
according to its terms, have been done, do exist, have happened, and have been performed in due
form, time and manner as so required.
IN WITNESS WHEREOF, the Board of Commissioners of the St. Louis Park Economic
Development Authority have caused this Note to be executed with the manual signatures of its
President and Executive Director, all as of the Date of Original Issue specified above.
ST. LOUIS PARK ECONOMIC
DEVELOPMENT AUTHORITY
Executive Director President
REGISTRATION PROVISIONS
The ownership of the unpaid balance of the within Note is registered in the bond register of
the City Finance Director, in the name of the person last listed below.
Date of Signature of
Registration Registered Owner____ City Controller
Shoreham Apartments LLC
Federal Tax I.D. No. _____________
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b) Page 17
Title: Redevelopment Contract with Shoreham Apartments, LLC
Section 3. Terms, Execution and Delivery.
3.01. Denomination, Payment. The Note shall be issued as a single typewritten note
numbered R-1.
The Note shall be issuable only in fully registered form. Principal of and interest on the
Note shall be payable by check or draft issued by the Registrar described herein.
3.02. Dates; Interest Payment Dates. Principal of and interest on the Note shall be payable
by mail to the owner of record thereof as of the close of business on the fifteenth day of the month
preceding the Payment Date, whether or not such day is a business day.
3.03. Registration. The Authority hereby appoints the City Controller to perform the
functions of registrar, transfer agent and paying agent (the "Registrar"). The effect of registration
and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows:
(a) Register. The Registrar shall keep at its office a bond register in which the Registrar
shall provide for the registration of ownership of the Note and the registration of transfers and
exchanges of the Note.
(b) Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the
registered owner thereof or accompanied by a written instrument of transfer, in form reasonably
satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly
authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the
name of the designated transferee or transferees, a new Note of a like aggregate principal amount
and maturity, as requested by the transferor. Notwithstanding the foregoing, the Note shall not be
transferred to any person other than an affiliate, or other related entity, of the Owner unless the
Authority has been provided with an opinion of counsel or a certificate of the transferor, in a form
satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery
requirements of federal and applicable state securities laws. The Registrar may close the books for
registration of any transfer after the fifteenth day of the month preceding each Payment Date and
until such Payment Date.
(c) Cancellation. The Note surrendered upon any transfer shall be promptly cancelled
by the Registrar and thereafter disposed of as directed by the Authority.
(d) Improper or Unauthorized Transfer. When the Note is presented to the Registrar for
transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on
such Note or separate instrument of transfer is legally authorized. The Registrar shall incur no
liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or
unauthorized.
(e) Persons Deemed Owners. The Authority and the Registrar may treat the person in
whose name the Note is at any time registered in the bond register as the absolute owner of the
Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or on
account of, the principal of and interest on such Note and for all other purposes, and all such
payments so made to any such registered owner or upon the owner's order shall be valid and
effectual to satisfy and discharge the liability of the Authority upon such Note to the extent of the
sum or sums so paid.
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b) Page 18
Title: Redevelopment Contract with Shoreham Apartments, LLC
(f) Taxes, Fees and Charges. For every transfer or exchange of the Note, the Registrar
may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee,
or other governmental charge required to be paid with respect to such transfer or exchange.
(g) Mutilated, Lost, Stolen or Destroyed Note. In case any Note shall become mutilated
or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount, maturity dates
and tenor in exchange and substitution for and upon cancellation of such mutilated Note or in lieu of
and in substitution for such Note lost, stolen, or destroyed, upon the payment of the reasonable
expenses and charges of the Registrar in connection therewith; and, in the case the Note lost, stolen,
or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Note was lost,
stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an
appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the
Authority and the Registrar shall be named as obligees. The Note so surrendered to the Registrar
shall be cancelled by it and evidence of such cancellation shall be given to the Authority. If the
mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption in
accordance with its terms, it shall not be necessary to issue a new Note prior to payment.
3.04. Preparation and Delivery. The Note shall be prepared under the direction of the
Executive Director and shall be executed on behalf of the Authority by the signatures of its
President and Executive Director. In case any officer whose signature shall appear on the Note shall
cease to be such officer before the delivery of the Note, such signature shall nevertheless be valid
and sufficient for all purposes, the same as if such officer had remained in office until delivery.
When the Note has been so executed, it shall be delivered by the Executive Director to the Owner
thereof in accordance with the Agreement.
Section 4. Security Provisions.
4.01. Pledge. The Authority hereby pledges to the payment of the principal of and interest
on the Note all Available Tax Increment as defined in the Note.
Available Tax Increment shall be applied to payment of the principal of and interest on the Note in
accordance with the terms of the form of Note set forth in Section 2 of this resolution.
4.02. Bond Fund. Until the date the Note is no longer outstanding and no principal thereof
or interest thereon (to the extent required to be paid pursuant to this resolution) remains unpaid, the
Authority shall maintain a separate and special “Bond Fund” to be used for no purpose other than
the payment of the principal of and interest on the Note. The Authority irrevocably agrees to
appropriate to the Bond Fund on or before each Payment Date the Available Tax Increment in an
amount equal to the Payment then due, or the actual Available Tax Increment, whichever is less.
Any Available Tax Increment remaining in the Bond Fund shall be transferred to the Authority's
account for the TIF District upon the termination of the Note in accordance with its terms.
4.03. Additional Obligations. The Authority may apply or pledge Available Tax
Increment in excess of the amount needed to make Payments due on each Payment Date, to any
other obligations (including without limitation any interfund loan). Any such pledge or
expenditure is subordinate to the Note, including the requirement to pay any accumulated
deficiency in meeting scheduled Payments on the Note.
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b) Page 19
Title: Redevelopment Contract with Shoreham Apartments, LLC
Section 5. Certification of Proceedings.
5.01. Certification of Proceedings. The officers of the Authority are hereby authorized and
directed to prepare and furnish to the Owner of the Note certified copies of all proceedings and
records of the Authority, and such other affidavits, certificates, and information as may be required
to show the facts relating to the legality and marketability of the Note as the same appear from the
books and records under their custody and control or as otherwise known to them, and all such
certified copies, certificates, and affidavits, including any heretofore furnished, shall be deemed
representations of the Authority as to the facts recited therein.
Section 6. Effective Date. This resolution shall be effective upon approval.
Reviewed for Administration: Adopted by the Economic Development
Authority, August 17, 2015
Executive Director President
Attest
Secretary
SCALE IN FEET
0 6030
Project
Location
Certification
Sheet Title
Summary
Revision History
Sheet No.Revision
Project No.
Date Submittal / RevisionNo. By
Designed:Drawn:
Approved: Book / Page:
Phase: Initial Issued:
Client
BADER
DEVELOPMENT
THE
SHOREHAM
ST. LOUIS PARK,
MINNESOTA
MGB JTA/JMW
EWM
03/02/2015
DJR20165PLAN REVIEW ONLYRegistration No.
I hereby certify that this plan, specification or
report was prepared by me or under my direct
supervision and that I am a duly licensed
professional ENGINEER under the laws of the state
of Minnesota.
If applicable, contact us for a wet signed copy of this
plan which is available upon request at Sambatek's,
Minnetonka, MN office.
Date:41326
Erik W. Miller
03/02/2015
03/02/2015 PRELIMINARY PUD
03/18/2015 PRELIMINARY COMMENTS
04/17/2015 REVISED CITY SUBMITTAL
04/29/2015
PUD APPLICATION COMMENTS
05/12/2015 CITY COMMENTS
May 21, 2015 - 12:32pm - User:593 L:\PROJECTS\DJR20165\dwg\Civil\Preliminary\20165-C3-SITE.dwg
C3.01
SITE PLAN
AREA
TOTAL SITE AREA
SETBACKS
FRONT YARD
REAR YARD
SIDE YARD
ZONING
EXISTING ZONING
PROPOSED ZONING
EXISTING
IMPERVIOUS AREA
PERVIOUS AREA
TOTAL
PROPOSED
IMPERVIOUS AREA
PERVIOUS AREA
TOTAL
A. ALL DIMENSIONS ARE ROUNDED TO THE NEAREST TENTH FOOT.
B. ALL DIMENSIONS SHOWN ARE TO THE FACE OF CURB TO FACE OF CURB UNLESS OTHERWISE NOTED.
BACK OF CURB IS SHOWN GRAPHICALLY ONLY.
C. ALL AREAS ARE ROUNDED TO THE NEAREST SQUARE FOOT.
D. ALL PARKING STALLS TO BE 9' IN WIDTH AND 18' IN LENGTH UNLESS OTHERWISE INDICATED.
E. CONTRACTOR SHALL REFER TO ARCHITECTURAL PLANS FOR EXACT LOCATIONS AND DIMENSIONS OF
EXIT PORCHES, RAMPS, PRECISE BUILDING DIMENSIONS AND EXACT BUILDING UTILITY ENTRANCE
LOCATIONS.
F. SEE ARCHITECTURAL PLANS FOR PYLON SIGN DETAILS
G. SEE ARCHITECTURAL PLANS FOR LIGHT POLE FOUNDATION DETAIL AND FOR EXACT LOCATIONS OF LIGHT
POLE.
H. REFER TO PRELIMINARY PLAT FOR LOT BOUNDARIES, LOT NUMBERS, LOT AREAS, AND LOT DIMENSIONS.
I. ALL GRADIENTS ON SIDEWALKS ALONG THE ADA ROUTE SHALL HAVE A MAXIMUM LONGITUDINAL SLOPE
OF 5% (1:20), EXCEPT AT CURB RAMPS (1:12), AND A MAXIMUM CROSS SLOPE OF 2.08% (1:48). THE
MAXIMUM SLOPE IN ANY DIRECTION ON AN ADA PARKING STALL OR ACCESS ISLE SHALL BE 2.08% (1:48).
THE CONTRACTOR SHALL REVIEW AND VERIFY THE GRADIENT IN THE FIELD ALONG THE ADA ROUTES
PRIOR TO PLACING CONCRETE OR BITUMINOUS. THE CONTRACTOR SHALL NOTIFY THE ENGINEER
IMMEDIATELY IF THERE IS A DISCREPANCY BETWEEN THE GRADIENT IN THE FIELD VERSUS THE DESIGN
GRADIENT.
J. "NO PARKING" SIGNS SHALL BE PLACED ALONG ALL DRIVEWAYS AS REQUIRED BY CITY.
K. STREET NAMES ARE SUBJECT TO APPROVAL BY THE CITY.
L. DRAINAGE AND UTILITY EASEMENTS SHALL BE PROVIDED AS REQUIRED. DRAINAGE AND UTILITY
EASEMENTS WILL BE PROVIDED OVER ALL PUBLIC UTILITIES AND UP TO THE HIGH WATER LEVEL OF ALL
PONDS.
LEGEND
EASEMENT
CURB & GUTTER
BUILDING
RETAINING WALL
SAWCUT LINE
NUMBER OF PARKING
STALLS PER ROW
SIGN
PIPE BOLLARD
STANDARD DUTY
ASPHALT PAVING
HEAVY DUTY
ASPHALT PAVING
CONCRETE PAVING
PROPERTY LIMIT
EXISTINGPROPOSED
KEY NOTE
DEVELOPMENT SUMMARY
DEVELOPMENT NOTES
KEY NOTES
WETLAND LIMITS
TREELINE
A. BUILDING, STOOPS, STAIRS (REF ARCHITECTURAL PLANS FOR DETAILS)
B. B-612 CONCRETE CURB AND GUTTER
C. B-618 6CONCRETE CURB AND GUTTER
D. ZERO CURB SECTION
E. CONCRETE APRON
F. FLAT CURB SECTION
G. SEGMENTAL BLOCK RETAINING WALL
H. ACCESSIBLE RAMP
I. BIKE RACKS (REF ARCHITECTURAL PLANS FOR DETAILS)
J. PLANTER (REF ARCHITECTURAL PLANS FOR DETAILS)
K. PEDESTRIAN CROSSWALK - ZEBRA DESIGN
L. "ONE-WAY DO NOT ENTER" SIGN
M. LIGHT STANDARD (REF ARCHITECTURAL PLANS FOR DETAILS)
N. BRICK PIERS (REF ARCHITECTURAL PLANS FOR DETAILS)
O. FENCE (REF ARCHITECTURAL PLANS FOR DETAILS)
P. MONUMENT SIGN (REF ARCHITECTURAL PLANS FOR DETAILS)
Q. 8' WIDE MULTI-PURPOSE TRAIL
2.23 AC
20 FEET
30 FEET
20 FEET
C-2 & R-4
PUD
63% 1.59 AC
37% 0.95 AC
2.23 AC
77% 1.73 AC
23% 0.50 AC
2.23 AC
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b)
Title: Redevelopment Contract with Shoreham Apartments, LLC Page 20
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b) Title: Redevelopment Contract with Shoreham Apartments, LLCPage 21
464891v2 MNI SA285-105
Draft as of August 12, 2015
CONTRACT
FOR
PRIVATE REDEVELOPMENT
By and Between
ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY
and
SHOREHAM APARTMENTS LLC
Dated as of: __________________, 2015
This document was drafted by:
KENNEDY & GRAVEN, Chartered (MNI)
470 U.S. Bank Plaza
Minneapolis, Minnesota 55402
(612) 337-9300
http://www.kennedy-graven.com
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b)
Title: Redevelopment Contract with Shoreham Apartments, LLC Page 22
464891v2 MNI SA285-105 i
TABLE OF CONTENTS
Page
PREAMBLE ......................................................................................................................................... 1
ARTICLE I
Definitions
Section 1.1. Definitions .................................................................................................................... 2
ARTICLE II
Representations and Warranties
Section 2.1. Representations by the Authority ................................................................................. 6
Section 2.2. Representations and Warranties by the Redeveloper ................................................... 6
ARTICLE III
Property Acquisition; Public Redevelopment Costs
Section 3.1. Status of Redevelopment Property ............................................................................... 8
Section 3.2. Environmental Undertakings ........................................................................................ 8
Section 3.3. Relocation ..................................................................................................................... 8
Section 3.4. Grant Disbursement ...................................................................................................... 9
Section 3.5. Issuance of Note ......................................................................................................... 10
Section 3.6. TIF Lookback ............................................................................................................. 11
Section 3.7. Business Subsidy ........................................................................................................ 12
Section 3.8. Payment of Authority Costs ....................................................................................... 13
ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Construction of Improvements ................................................................................... 14
Section 4.2. Construction Plans ...................................................................................................... 14
Section 4.3. Commencement and Completion of Construction ..................................................... 15
Section 4.4. Certificate of Completion ........................................................................................... 16
Section 4.5. Records ....................................................................................................................... 16
Section 4.6. Connectivity ................................................................................................................ 16
Section 4.7. Redeveloper Public Improvements ............................................................................ 16
Section 4.8. Inclusionary Housing .................................................................................................. 17
ARTICLE V
Insurance
Section 5.1. Insurance ..................................................................................................................... 18
Section 5.2. Subordination .............................................................................................................. 19
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464891v2 MNI SA285-105 ii
ARTICLE VI
Tax Increment; Taxes
Section 6.1. Right to Collect Delinquent Taxes ............................................................................. 20
Section 6.2. Review of Taxes ......................................................................................................... 20
Section 6.3. Assessment Agreement .............................................................................................. 20
ARTICLE VII
Other Financing
Section 7.1. Generally ..................................................................................................................... 21
Section 7.2. Authority’s Option to Cure Default on Mortgage ...................................................... 21
Section 7.3. Modification; Subordination ...................................................................................... 21
ARTICLE VIII
Prohibitions Against Assignment and Transfer; Indemnification
Section 8.1. Representation as to Development ............................................................................. 22
Section 8.2. Prohibition Against Redeveloper’s Transfer of Property and
Assignment of Agreement .......................................................................................... 22
Section 8.3. Release and Indemnification Covenants .................................................................... 23
ARTICLE IX
Events of Default
Section 9.1. Events of Default Defined .......................................................................................... 25
Section 9.2. Remedies on Default .................................................................................................. 25
Section 9.3. No Remedy Exclusive ................................................................................................ 26
Section 9.4. No Additional Waiver Implied by One Waiver ........................................................ 26
Section 9.5. Attorney Fees .............................................................................................................. 26
ARTICLE X
Additional Provisions
Section 10.1. Conflict of Interests; Representatives Not Individually Liable ................................. 27
Section 10.2. Equal Employment Opportunity ................................................................................ 27
Section 10.3. Restrictions on Use ..................................................................................................... 27
Section 10.4. Provisions Not Merged With Deed ............................................................................ 27
Section 10.5. Titles of Articles and Sections .................................................................................... 27
Section 10.6. Notices and Demands ................................................................................................. 27
Section 10.7. Counterparts ................................................................................................................ 28
Section 10.8. Recording .................................................................................................................... 28
Section 10.9. Amendment ................................................................................................................ 28
Section 10.10. Authority Approvals ................................................................................................... 28
TESTIMONIUM ................................................................................................................................ 29
SIGNATURES ................................................................................................................................... 29
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b)
Title: Redevelopment Contract with Shoreham Apartments, LLC Page 24
464891v2 MNI SA285-105 iii
SCHEDULE A Redevelopment Property
SCHEDULE B Form of Draw Request
SCHEDULE C Authorizing Resolution
SCHEDULE D Form of Certificate of Completion
SCHEDULE E Subordination Agreement
SCHEDULE F Pro Forma
SCHEDULE G Assessment Agreement
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b)
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464891v2 MNI SA285-105
CONTRACT FOR PRIVATE REDEVELOPMENT
THIS AGREEMENT, made as of the __ day of ___________, 2015, by and between the St.
Louis Park Economic Development Authority (the “Authority”), a public body corporate and politic
under the laws of Minnesota, and Shoreham Apartments LLC (the “Redeveloper”), a Delaware
limited liability company.
WITNESSETH:
WHEREAS, the Authority was created pursuant to Minnesota Statutes, Sections 469.090 to
469.1081, as amended (the “Act”) and was authorized to transact business and exercise its powers
by a resolution of the City Council of the City of St. Louis Park, Minnesota (the “City”); and
WHEREAS, the Authority has undertaken a program to promote the development and
redevelopment of land which is underutilized within the City, and in this connection created
Redevelopment Project No. 1 (hereinafter referred to as the “Project”) in an area (hereinafter
referred to as the “Project Area”) located in the City pursuant to Minnesota Statutes, Sections
469.001 to 469.047 (the “HRA Act”); and
WHEREAS, pursuant to the Act and the HRA Act, the Authority is authorized to undertake
certain activities to prepare such real property for development and redevelopment by private
enterprise; and
WHEREAS, the Redeveloper intends to acquire certain property (the “Redevelopment
Property”) in the Project Area and to develop on that property a mixed-use facility consisting of
rental housing and commercial space, further described herein (the “Minimum Improvements”); and
WHEREAS, the Authority has established the Shoreham Tax Increment Financing District
(“TIF District”) pursuant to Minnesota Statutes, Sections 469.174 to 469.1794, as amended, made
up of property in the Project Area including the Redevelopment Property; and
WHEREAS, the Authority believes that the development of the Redevelopment Property
pursuant to and in general fulfillment of this Agreement, is in the vital and best interests of the City,
will promote the health, safety, morals, and welfare of its residents, and will be in accord with the
public purposes and provisions of the applicable State and local laws and requirements under which
the Project has been undertaken and is being assisted.
NOW, THEREFORE, in consideration of the premises and the mutual obligations of the
parties hereto, each of them does hereby covenant and agree with the other as follows:
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b)
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464891v2 MNI SA285-105
ARTICLE I
Definitions
Section 1.1. Definitions. In this Agreement, unless a different meaning clearly appears
from the context:
“Act” means Minnesota Statutes Sections 469.090 to 469.1081, as amended.
“Affiliate” means with respect to any entity (a) any corporation, partnership, limited
liability company or other business entity or person controlling, controlled by or under common
control with the entity, and (b) any successor to such party by merger, acquisition, reorganization
or similar transaction involving all or substantially all of the assets of such party (or such
Affiliate). For the purpose hereof the words “controlling”, “controlled by” and “under common
control with” shall mean, with respect to any corporation, partnership, limited liability company
or other business entity, the ownership of fifty percent or more of the voting interests in such
entity or possession, directly or indirectly, of the power to direct or cause the direction of
management policies of such entity, whether through ownership of voting securities or by
contract or otherwise.
“Agreement” means this Agreement, as the same may be from time to time modified,
amended, or supplemented.
“Authority” means the St. Louis Park Economic Development Authority.
“Authority Representative” means the Executive Director of the Authority, or any person
designated by the Executive Director to act as the Authority Representative for the purposes of this
Agreement.
“Authorizing Resolution” means the resolution of the Authority, substantially in the form of
attached Schedule C to be adopted by the Authority to authorize the issuance of the Note.
“Available Tax Increment” has the meaning provided in the Authorizing Resolution.
“Business Day” means any day except a Saturday, Sunday, legal holiday, a day on which
the City is closed for business, or a day on which banking institutions in the City are authorized by
law or executive order to close.
“Business Subsidy Act” means Minnesota Statutes, Sections 116J.993 to 116J.995, as
amended.
“City” means the City of St. Louis Park, Minnesota.
“Certificate of Completion” means the certification provided to the Redeveloper pursuant to
Section 4.4 of this Agreement.
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464891v2 MNI SA285-105
“Construction Plans” means the plans, specifications, drawings and related documents on
the construction work to be performed by the Redeveloper on the Redevelopment Property which
(a) shall be as detailed as the plans, specifications, drawings and related documents which are
submitted to the appropriate building officials of the City, and (b) shall include at least the following
for each building: (1) site plan; (2) foundation plan; (3) underground parking plans; (4) floor plan
for each floor; (5) cross sections of each (length and width); (6) elevations (all sides); (7) landscape
plan; and (8) such other plans or supplements to the foregoing plans as the Authority may
reasonably request to allow it to ascertain the nature and quality of the proposed construction work.
“County” means the County of Hennepin, Minnesota.
“County Grant Agreements” means Contract No. ___________, the Environmental
Response Fund Grant Agreement between the Authority and the County, by and through its
Department of Environmental Services, negotiation of which was approved by County resolution on
____________, 2015; and ___________________.
“DEED” means the Minnesota Department of Employment and Economic Development.
“DEED Grant Agreement” means the Contamination Cleanup Grant Contract, Grant No.
CCGP-15-0004-Z-FY16 (The Shoreham Project) between DEED and the Authority dated as of July
6, 2015.
“Development Pro Forma” means the financial pro forma for the Minimum Improvements
attached hereto as Schedule E.
“Draw Request” has the meaning provided in Section 3.4(d) hereof.
“Event of Default” means an action by the Redeveloper listed in Article IX of this
Agreement.
“Grants” has the meaning provided in Section 3.4(a) hereof.
“Grant-Eligible Costs” has the meaning provided in Section 3.4(a) hereof.
“Holder” means the owner of a Mortgage.
“HRA Act” means Minnesota Statutes, Sections 469.001 to 469.047, as amended.
“Maturity Date” means the date that the Note has been paid in full or terminated in
accordance with its terms, whichever is earlier.
“Met Council” means the Metropolitan Council.
“Met Council Grant Agreement” means the Metropolitan Livable Communities Act Grant
Agreement between the Metropolitan Council and the Authority dated as of ___________, 2015.
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464891v2 MNI SA285-105
“Minimum Improvements” means construction on the Redevelopment Property of a multi-
story mixed use building consisting of approximately 150 market-rate and affordable apartment
units and approximately 20,000 square feet of office space, along with associated surface and
structured underground parking.
“Mortgage” means any mortgage made by the Redeveloper that is secured, in whole or in
part, with the Redevelopment Property and that is a permitted encumbrance pursuant to the
provisions of Article VIII of this Agreement.
“Note” means a Tax Increment Revenue Note, substantially in the form contained in the
Authorizing Resolution, to be delivered by the Authority to the Redeveloper in accordance with
Section 3.5 hereof to reimburse the Redeveloper for Public Redevelopment Costs.
“Parcel” means any parcel of the Redevelopment Property.
“Project” means the Authority's Redevelopment Project No. 1.
“Public Redevelopment Costs” has the meaning provided in Section 3.5(a) hereof.
“Project Area” means the geographic area within the boundaries of the Project.
“Redeveloper” means Shoreham Apartments LLC, a Delaware limited liability company, or
its permitted successors and assigns.
“Redevelopment Plan” means the Redevelopment Plan for the Project.
“Redevelopment Property” means the real property described in Schedule A of this
Agreement, provided that upon filing of a final plat of such property, the platted legal description
will control.
“State” means the state of Minnesota.
“Tax Increment” means that portion of the real property taxes that is paid with respect to the
Redevelopment Property and that is remitted to the Authority as tax increment pursuant to the Tax
Increment Act.
“Tax Increment Act” or “TIF Act” means the Tax Increment Financing Act, Minnesota
Statutes Sections 469.174 to 469.1794, as amended.
“Tax Increment District” or “TIF District” means the Shoreham Tax Increment Financing
District created by the City and the Authority.
“Tax Increment Plan” or “TIF Plan” means the Tax Increment Financing Plan for the TIF
District approved by the City Council on August 17, 2015, and as it may be amended.
.
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b)
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464891v2 MNI SA285-105
“Tax Official” means any County assessor, County auditor, County or State board of
equalization, the commissioner of revenue of the State, or any State or federal district court, the tax
court of the State, or the State Supreme Court.
“Transfer” has the meaning set forth in Section 8.2(a) hereof.
“Unavoidable Delays” means delays beyond the reasonable control of the party seeking to
be excused as a result thereof which are the direct result of strikes, other labor troubles, prolonged
adverse weather or acts of God, fire or other casualty to the Minimum Improvements, litigation
commenced by third parties which, by injunction or other similar judicial action, directly results in
delays, or acts of any federal, state or local governmental unit (other than the Authority or City in
exercising their rights under this Agreement), including without limitation condemnation or threat
of condemnation of any portion of the Redevelopment Property, which directly result in delays.
Unavoidable Delays shall not include delays experienced by the Redeveloper in obtaining permits
or governmental approvals necessary to enable construction of the Minimum Improvements by the
dates such construction is required under Section 4.3 of this Agreement, so long as the Construction
Plans have been approved in accordance with Section 4.2 hereof.
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b)
Title: Redevelopment Contract with Shoreham Apartments, LLC Page 30
6
464891v2 MNI SA285-105
ARTICLE II
Representations and Warranties
Section 2.1. Representations by the Authority. (a) The Authority is an economic
development authority duly organized and existing under the laws of the State. Under the
provisions of the Act and the HRA Act, the Authority has the power to enter into this Agreement
and carry out its obligations hereunder.
(b) The Authority will use its best efforts to facilitate development of the Minimum
Improvements, including but not limited to cooperating with the Redeveloper in obtaining necessary
administrative and land use approvals and construction financing pursuant to Section 7.1 hereof.
(c) The Authority will issue the Note, subject to all the terms and conditions of this
Agreement.
(d) The activities of the Authority are undertaken for the purpose of fostering the
redevelopment of certain real property that is occupied by substandard and obsolete buildings,
which will revitalize this portion of the Project Area, increase tax base, and increase housing
opportunities.
Section 2.2. Representations and Warranties by the Redeveloper. The Redeveloper
represents and warrants that:
(a) The Redeveloper is a limited liability company, duly organized and in good standing
under the laws of the State of Delaware, is not in violation of any provisions of its articles of
organization or bylaws, is duly qualified as a foreign limited liability company and authorized to
transact business within the State, has power to enter into this Agreement and has duly authorized
the execution, delivery, and performance of this Agreement by proper action of its members.
(b) If the conditions precedent to construction occur, the Redeveloper will construct the
Minimum Improvements and Redeveloper Public Improvements in accordance with the terms of
this Agreement, the Redevelopment Plan and all local, state and federal laws and regulations
(including, but not limited to, environmental, zoning, building code and public health laws and
regulations, and all applicable state and federal Occupational Safety and Health Act regulations).
Redeveloper will require that all subcontractors retained by Redeveloper are subject to the
requirements of this paragraph.
(c) The Redeveloper will use reasonable efforts to secure all permits, licenses and
approvals necessary for construction of the Minimum Improvements.
(d) The Redeveloper acknowledges that the Minnesota Pollution Control Agency
(“MPCA”) has approved a voluntary response action plan (“VRAP”) in connection with the
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b)
Title: Redevelopment Contract with Shoreham Apartments, LLC Page 31
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464891v2 MNI SA285-105
Redevelopment Property, and that the Redeveloper is obligated to undertake the remediation
required under the VRAP, as more fully described in Section 3.2 hereof.
(e) The Redeveloper has received no written notice or other written communication
from any local, state or federal official that the activities of the Redeveloper or the Authority in the
Project Area may be or will be in violation of any environmental law or regulation (other than those
notices or communications of which the Authority is aware). Subject to the contents of the
Environmental Reports, the Redeveloper is aware of no facts the existence of which would cause it
to be in violation of or give any person a valid claim under any local, state or federal environmental
law, regulation or review procedure.
(f) Neither the execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby, nor the fulfillment of or compliance with the terms and
conditions of this Agreement is prevented, limited by or conflicts with or results in a breach of, the
terms, conditions or provisions of any corporate restriction or any evidences of indebtedness,
agreement or instrument of whatever nature to which the Redeveloper is now a party or by which it
is bound, or constitutes a default under any of the foregoing.
(g) The proposed development by the Redeveloper hereunder would not occur but for
the tax increment financing assistance being provided by the Authority hereunder.
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b)
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464891v2 MNI SA285-105
ARTICLE III
Property Acquisition; Public Redevelopment Costs
Section 3.1. Status of Redevelopment Property. The Redevelopment Property consists of
the real property described in Schedule A. As of the date of this Agreement the Redeveloper has
entered into purchase agreements to acquire all Parcels of the Redevelopment Property, and shall
close on the acquisition of the Redevelopment Property within 60 days of receiving financing for
the Minimum Improvements and Redeveloper Public Improvements. The Authority has no
obligation to acquire the Redevelopment Property or any Parcel thereof.
Section 3.2. Environmental Undertakings. (a) The parties acknowledge that the MPCA has
approved a voluntary response action plan providing for the remediation of hazardous wastes and
contaminants on the Redevelopment Property (the “VRAP”). Promptly following closing on the
acquisition of the Redevelopment Property, Redeveloper shall undertake the remediation and other
actions required under the VRAP, subject to the reimbursement as further described in this
Agreement. The Redeveloper expressly agrees to perform any task or obligation imposed under the
VRAP, including any emergency procedures.
(b) The Redeveloper acknowledges that the Authority makes no representations or
warranties as to the condition of the soils on the Redevelopment Property or the fitness of the
Redevelopment Property for construction of the Minimum Improvements or any other purpose for
which the Redeveloper may make use of such property, and that the assistance provided to the
Redeveloper under this Agreement neither implies any responsibility by the Authority or the City
for any contamination of the Redevelopment Property nor imposes any obligation on such parties to
participate in any cleanup of the Redevelopment Property.
(c) Without limiting its obligations under Section 8.3 of this Agreement, the
Redeveloper further agrees that it will indemnify, defend, and hold harmless the Authority, the City,
and their governing body members, officers, and employees, from any claims or actions arising out
of the presence, if any, of hazardous wastes or pollutants existing on or in the Redevelopment
Property (including without limitation any asbestos in any existing building), unless and to the
extent that such hazardous wastes or pollutants are present as a result of the actions or omissions of
the indemnitees. Nothing in this section will be construed to limit or affect any limitations on
liability of the City or Authority under State or federal law, including without limitation Minnesota
Statutes Sections 466.04 and 604.02.
Section 3.3. Relocation. (a) As of the date of this Agreement the Redeveloper has entered
into purchase agreements to acquire all Parcels of the Redevelopment Property. The Authority has
no obligation to acquire the Redevelopment Property or any portion thereof, and has no obligation
to pay relocation benefits with regard to any Parcel.
(b) Without limiting the Redeveloper's obligations under Section 8.3 hereof, the
Redeveloper will indemnify, defend, and hold harmless the Authority, the City, and their governing
body members, employees, agents, and contractors from any and all claims for benefits or payments
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b)
Title: Redevelopment Contract with Shoreham Apartments, LLC Page 33
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464891v2 MNI SA285-105
arising out of the relocation or displacement of any person from the Redevelopment Property as a
result of the implementation of this Agreement.
Section 3.4. Grant Disbursement. (a) To finance a portion of the environmental
remediation activities on the Redevelopment Property, including the costs of implementing the
VRAP (the “Grant-Eligible Costs”), the Authority has obtained a grant from DEED in the amount
of $625,075, two grants from the County in the amounts of $430,000 and $200,000, and a grant
from the Met Council in the amount of $594,000.
(b) The Authority will pay or reimburse the Redeveloper for Grant-Eligible Costs from
and to the extent of the grant proceeds from DEED, the Met Council, and the County in accordance
with the terms of the DEED Grant Agreement, the Met Council Grant Agreement, and the County
Grant Agreements, respectively, and the terms of this Section. Notwithstanding anything to the
contrary herein, if Grant-Eligible Costs exceed the amount to be reimbursed under this Section, such
excess shall be the sole responsibility of the Redeveloper (except to the extent such costs are eligible
for reimbursement under the Note).
(c) All disbursements will be made subject to the conditions precedent that on the date
of such disbursement:
(1) The Authority has received a written statement from the Redeveloper’s
authorized representative certifying with respect to each payment: (a) that none of the items
for which the payment is proposed to be made has formed the basis for any payment
previously made under this Section (or before the date of this Agreement); (b) that each item
for which the payment is proposed is a Grant-Eligible Cost, including a statement specifying
which grant is the eligible funding source; and (c) the Redeveloper reasonably anticipates
completion of the Grant-Eligible Costs and the Minimum Improvements in accordance with
the terms of this Agreement.
(2) No Event of Default under this Agreement or event which would constitute
such an Event of Default but for the requirement that notice be given or that a period of
grace or time elapse, shall have occurred and be continuing.
(3) No license or permit necessary for undertaking the Grant-Eligible Costs or
constructing the Minimum Improvements shall have been revoked or the issuance thereof
subjected to challenge before any court or other governmental authority having or asserting
jurisdiction thereover.
(4) Redeveloper has submitted, and the Authority has approved, Construction
Plans for the Minimum Improvements in accordance with Article IV hereof.
(d) Whenever the Redeveloper desires a disbursement to be made hereunder, which
shall be no more often than bi-weekly, the Redeveloper shall submit to the Authority a draw request
in the form attached as Schedule B duly executed on behalf of the Redeveloper accompanied by
paid invoices or other comparable evidence that the cost has been incurred and paid or is payable by
Redeveloper (the “Draw Request”). Each Draw Request shall constitute a representation and
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warranty by the Redeveloper that all representations and warranties set forth in this Agreement are
true and correct as of the date of such draw request.
(e) If the Redeveloper has performed all of its agreements and complied with all
requirements theretofore to be performed or complied with hereunder, including satisfaction of all
applicable conditions precedent contained in this Article III, the Authority shall make a
disbursement to the Redeveloper in the amount of the requested disbursement or such lesser amount
as shall be approved, within twenty Business Days after the date of the Authority’s receipt of the
Draw Request, or, if later, upon receipt of grant proceeds from DEED, the County, or the Met
Council, as the case may be. Each disbursement shall be paid from the grant designated by the
Authority at its discretion, subject to the Authority’s determination that the relevant Grant-Eligible
Cost is payable from the designated source under the DEED Grant Agreement, the County Grant
Agreement and the Met Council Grant Agreement.
(f) The making of the final disbursement by the Authority under this Section shall be
subject to the condition precedent that the Redeveloper shall be in compliance with all conditions
set forth in this Section and further, that the Authority shall have received a lien waiver from each
contractor for all work done and for all materials furnished by it for the Grant-Eligible Costs.
(g) The Authority may, in its sole discretion, without notice to or consent from any other
party, waive any or all conditions for disbursement set forth in this Article. However, the making of
any disbursement prior to fulfillment of any condition therefor shall not be construed as a waiver of
such condition, and the Authority shall have the right to require fulfillment of any and all such
conditions prior to authorizing any subsequent disbursement.
(h) The Redeveloper agrees to submit to the Authority any written reports required in
order for the Authority to remain in compliance with its reporting requirements under the Grant
Agreements. The Authority will inform the Redeveloper of any information Authority requires to
complete the applicable reporting forms.
Section 3.5. Issuance of Note. (a) Generally. The Authority has determined that, in order
to make development of the Minimum Improvements financially feasible, it is necessary to
reimburse Redeveloper for the cost of demolition, site preparation, stormwater management,
environmental remediation (to the extent not reimbursed as a Grant-Eligible Cost), structured
parking, road improvements, and trail extension work (collectively referred to as “Public
Redevelopment Costs”) related to the Redevelopment Property, subject to the terms of this Section.
(b) Terms. To reimburse the Public Redevelopment Costs incurred by Redeveloper, the
Authority shall issue and the Redeveloper shall purchase the Note in the maximum principal
amount of $1,200,000. The Authority shall issue and deliver the Note upon Redeveloper having:
(i) delivered to the Authority written evidence satisfactory to the Authority that
Redeveloper has incurred Public Redevelopment Costs in an amount least equal to the
principal amount of the Note, which evidence must include copies of the paid invoices or
other comparable evidence for costs of allowable Public Redevelopment Costs;
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(ii) submitted and obtained Authority approval of financing in accordance with
Section 7.1; and
(iii) delivered to the Authority an investment letter in a form reasonably
satisfactory to the Authority.
The terms of the Note will be substantially those set forth in the form of the Note shown in
Schedule B, and the Note will be subject to all terms of the Authorizing Resolution, which are
incorporated herein by reference.
(c) Termination of right to Note. In accordance with Section 469.1763, Subdivision 3
of the TIF Act, conditions for delivery of the Note must be met within five years after the date of
certification of the TIF District by the County. If the conditions are not satisfied by such date,
the City has no further obligations under this Section 3.5.
(d) Assignment of Note. The Authority acknowledges that the Redeveloper may assign
the Note to a third party. The Authority consents to such an assignment, conditioned upon receipt
of an investment letter from such third party in a form reasonably acceptable to the Authority.
(e) Qualifications. The Redeveloper understands and acknowledges that the
Authority makes no representations or warranties regarding the amount of Tax Increment, or that
revenues pledged to the Note will be sufficient to pay the principal and interest on the Note. Any
estimates of Tax Increment prepared by the Authority or its financial advisors in connection with
the TIF District or this Agreement are for the benefit of the Authority, and are not intended as
representations on which the Redeveloper may rely. Public Redevelopment Costs exceeding the
principal amount of the Note are the sole responsibility of Redeveloper.
Section 3.6. TIF Lookback.
(a) Generally. The financial assistance to the Redeveloper under this Agreement is based
on certain assumptions regarding likely costs and expenses associated with constructing the
portion of the Minimum Improvements consisting of the apartment units (the “Apartments”).
The Authority and the Redeveloper agree that those assumptions will be reviewed at the times
described in this Section, and that the amount of Tax Increment assistance provided under
Section 3.5 will be adjusted accordingly.
(b) Definitions. For the purposes of this Section, the following terms have the following
definitions:
“Calculation Date” means 60 days after the earliest of (i) the date of Stabilization
for the Apartments; (ii) the date of any Transfer in whole or in part of the Apartments; or
(iii) three years after the date of issuance of the Certificate of Completion for the
Apartments.
“Net Operating Income” means all net rental income from the Apartments
received in the last fiscal year prior to the Calculation Date, subject to the following
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adjustments: (i) if the Apartments have not reached Stabilization as of the Calculation
Date, income will be calculated as the sum of actual rent, parking and miscellaneous
income plus assumed rent, parking and miscellaneous income for the space needed to
reach 93% lease-up at rates equal to the average rent and parking income from actual
leases and miscellaneous income as of the Calculation Date; (ii) from that total will be
deducted actual fees, operating and management expenses as outlined on Schedule E
hereto (if Stabilization has occurred) or estimated fees, operating and management
expenses as if the Apartments were 93% leased (if Stabilization has not occurred).
“Stabilization” means 93% of the Apartments are leased.
(c) Lookback Calculation. On the applicable Calculation Date, the Redeveloper shall
deliver to the Authority reasonable evidence of its actual annualized cumulative internal rate of
return (the “IRR”) from the Apartments, calculated as of the applicable Calculation Date, along
with the estimated annualized cumulative IRR from the Apartments assuming a sale in the tenth
year after the date of issuance of the Certificate of Completion for the Apartments. The IRR
shall be calculated based on equity, revenues and expenses in substantially in the format of the
lookback pro forma attached as Schedule F hereto. The Redeveloper agrees to provide to the
Authority any background documentation reasonably related to the financial data, upon written
request from the Authority or the Authority’s financial consultant. The Authority may, by
written request, require Redeveloper to deliver to the Authority a written certificate of a certified
public accountant regarding total redevelopment costs and revenues, to be provided at
Redeveloper’s expense.
The amount by which the IRR exceeds eighteen percent (18%) shall be referred to as the
“Excess Percentage.” The Excess Percentage, multiplied by Redeveloper’s equity in the
Apartments (as calculated for purposes of determining the IRR), is the “Participation Amount.”
If the Authority determines that there is a Participation Amount, the Authority shall deliver
written notice to the Redeveloper stating the Participation Amount and applying fifty percent
(50%) of the Participation Amount as prepayment of the outstanding principal amount of the
Note in accordance with Section 5(b) of the Note, effective upon delivery of such notice.
Section 3.7. Business Subsidy. The Redeveloper warrants and represents that the
Redeveloper’s investment in the purchase of the Redevelopment Property and in site preparation
equals at least 70% of the County assessor’s finalized market value of the Redevelopment
Property for the 2015 assessment year, calculated as follows:
Aggregate cost of acquisition of Redeveloper Parcels……...…..$4,000,000
Plus Estimated cost of site preparation...................……………$290,000
Less site preparation costs reimbursed by the Authority….. ……($290,000)
Equals net land and site preparation cost...................…………$4,000,000
Assessor's finalized market value
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of Redevelopment Property (2015)...................……………$2,214,208
$4,000,000 (net acquisition and site preparation cost) is 180.66% of $2,214,208
(assessor's finalized fair market value of the Redevelopment Property for 2015).
Accordingly, the parties agree and understand that the financial assistance described in
this Agreement does not constitute a business subsidy within the meaning of the Business
Subsidy Act. The Redeveloper releases and waives any claim against the Authority and its
governing body members, officers, agents, servants and employees thereof arising from
application of the Business Subsidy Act to this Agreement, including without limitation any
claim that the Authority failed to comply with the Business Subsidy Act with respect to this
Agreement.
Section 3.8. Payment of Authority Costs. The Redeveloper agrees that it will pay, within
15 days after written notice from the Authority, the reasonable costs of consultants and attorneys
retained by the Authority in connection with the creation of the TIF District and the negotiation in
preparation of this Agreement and other incidental agreements and documents related to the
development contemplated hereunder. The Authority will provide written reports describing the
costs accrued under this Section upon request from the Redeveloper, but not more often than
intervals of 45 days. Any amount deposited by the Redeveloper upon filling its application for tax
increment financing with the Authority will be credited to the Redeveloper’s obligation under this
Section. Upon termination of this Agreement in accordance with its terms, the Redeveloper remains
obligated under this section for costs incurred through the effective date of termination.
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ARTICLE IV
Construction of Minimum Improvements
Section 4.1. Construction of Improvements. The Redeveloper agrees that it will construct
or cause construction of the Minimum Improvements on the Redevelopment Property in accordance
with the approved Construction Plans and that it will, during any period while the Redeveloper
retains ownership of any portion of the Minimum Improvements, operate and maintain, preserve
and keep the Minimum Improvements or cause the Minimum Improvements to be maintained,
preserved and kept with the appurtenances and every part and parcel thereof, in good repair and
condition.
Section 4.2. Construction Plans. (a) Before commencing construction of the Minimum
Improvements, the Redeveloper shall submit to the Authority Construction Plans for the Minimum
Improvements. The Construction Plans shall provide for the construction of the Minimum
Improvements and shall be in conformity with this Agreement, the Redevelopment Plan and all
applicable State and local laws and regulations. The Authority will approve the Construction Plans
in writing if (i) the Construction Plans conform to all terms and conditions of this Agreement; (ii)
the Construction Plans conform to the goals and objectives of the Redevelopment Plan; (iii) the
Construction Plans conform to all applicable federal, state and local laws, ordinances, rules and
regulations; (iv) the Construction Plans are adequate to provide for construction of the Minimum
Improvements; (v) the Construction Plans do not provide for expenditures in excess of the funds
available to the Redeveloper for construction of the Minimum Improvements; and (vi) no Event of
Default has occurred. No approval by the Authority shall relieve the Redeveloper of the obligation
to comply with the terms of this Agreement, applicable federal, state and local laws, ordinances,
rules and regulations, or to construct the Minimum Improvements in accordance therewith. No
approval by the Authority shall constitute a waiver of an Event of Default. If approval of the
Construction Plans is requested by the Redeveloper in writing at the time of submission, such
Construction Plans shall be deemed approved unless rejected in writing by the Authority, in whole
or in part. Such rejections shall set forth in detail the reasons therefor based upon the criteria set
forth in (i) through (vi) above, and shall be made within 20 days after the date of receipt of final
plans from the Redeveloper. If the Authority rejects any Construction Plans in whole or in part, the
Redeveloper shall submit new or corrected Construction Plans within twenty (20) days after written
notification to the Redeveloper of the rejection. The provisions of this Section relating to approval,
rejection and resubmission of corrected Construction Plans shall continue to apply until the
Construction Plans have been approved by the Authority. The Authority's approval shall not be
unreasonably withheld. Said approval shall constitute a conclusive determination that the
Construction Plans (and the Minimum Improvements, constructed in accordance with said plans)
comply to the Authority's satisfaction with the provisions of this Agreement relating thereto.
The Redeveloper hereby waives any and all claims and causes of action whatsoever
resulting from the review of the Construction Plans by the Authority and/or any changes in the
Construction Plans requested by the Authority. Neither the Authority, nor any employee or official
of the Authority or City shall be responsible in any manner whatsoever for any defect in the
Construction Plans or in any work done pursuant to the Construction Plans, including changes
requested by the Authority.
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(b) If the Redeveloper desires to make any material change in the Construction Plans or
any component thereof after their approval by the Authority, the Redeveloper shall submit the
proposed change to the Authority for its approval. For the purpose of this section, the term
“material” means changes that increase or decrease construction costs by $500,000 or more. If the
Construction Plans, as modified by the proposed change, conform to the requirements of this
Section 4.2 of this Agreement with respect to such previously approved Construction Plans, the
Authority shall approve the proposed change and notify the Redeveloper in writing of its approval.
Such change in the Construction Plans shall, in any event, be deemed approved by the Authority
unless rejected, in whole or in part, by written notice by the Authority to the Redeveloper, setting
forth in detail the reasons therefor. Such rejection shall be made within 10 days after receipt of the
notice of such change. The Authority's approval of any such change in the Construction Plans will
not be unreasonably withheld.
(c) Prior to demolition of any existing structures on the Redevelopment Property, the
Redeveloper must complete onsite historic documentation pursuant to the Scope and Fee Budget
from Preservation Design Works, LLC, dated December 1, 2014 and provided to the City and
Authority.
Section 4.3. Commencement and Completion of Construction. (a) Subject to Unavoidable
Delays, the Redeveloper shall commence construction of the Minimum Improvements by October
31, 2015. Subject to Unavoidable Delays, the Redeveloper shall complete the construction of the
Minimum Improvements by May 1, 2017. All work with respect to the Minimum Improvements to
be constructed or provided by the Redeveloper on the Redevelopment Property shall be in
conformity with the Construction Plans as submitted by the Redeveloper and approved by the
Authority. If the Redeveloper becomes aware that Redeveloper is not likely to meet the required
deadline for commencement and/or completion of construction of the Minimum Improvements, the
Redeveloper agrees to provide a written and oral report to the City Council of the City at a regular
City Council meeting prior to the applicable deadline. The report must describe the reasons for the
expected failure to meet the applicable deadline, evidence of the Redeveloper’s good faith efforts to
construct the Minimum Improvements, and a detailed revised schedule. Failure to timely provide
such written and oral report is an Event of Default.
(b) The Redeveloper agrees for itself, its successors, and assigns, and every successor in
interest to the Redevelopment Property, or any part thereof, that the Redeveloper, and such
successors and assigns, shall promptly begin and diligently prosecute to completion the
development of the Redevelopment Property through the construction of the Minimum
Improvements thereon, and that such construction shall in any event be commenced and completed
within the period specified in this Section 4.3 of this Agreement. After the date of this Agreement
and until the Minimum Improvements have been fully leased, the Redeveloper shall make reports,
in such detail and at such times as may reasonably be requested by the Authority, but no more than
monthly, as to the actual progress of the Redeveloper with respect to such construction and leasing.
(c) The Redeveloper shall comply with the City’s Green Building Policy, adopted by
the City Council on February 16, 2010 and as such policy may be amended as of the date of
issuance of a building permit for the Minimum Improvements. As a condition to issuance of a
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Certificate of Completion for each component of the Minimum Improvements, Redeveloper shall
submit to the Authority a detailed list of the specific energy-efficient and/or sustainable features or
components implemented in the construction of the Minimum Improvements.
Section 4.4. Certificate of Completion. (a) Promptly after completion of the Minimum
Improvements in accordance with those provisions of the Agreement relating solely to the
obligations of the Redeveloper to construct the Minimum Improvements (including the dates for
beginning and completion thereof), the Authority Representative shall deliver to the Redeveloper a
Certificate in substantially the form shown as Schedule D, in recordable form and executed by the
Authority.
(b) If the Authority Representative shall refuse or fail to provide any certification in
accordance with the provisions of this Section 4.4 of this Agreement, the Authority Representative
shall, within thirty (30) days after written request by the Redeveloper, provide the Redeveloper with
a written statement, indicating in adequate detail in what respects the Redeveloper has failed to
complete the Minimum Improvements in accordance with the provisions of the Agreement, or is
otherwise in default, and what measures or acts it will be necessary, in the opinion of the Authority,
for the Redeveloper to take or perform in order for the Authority to issue the Certificate of
Completion.
(c) The construction of the Minimum Improvements shall be deemed to have
commenced upon commencement of environmental remediation activities on the Redevelopment
Property, and shall be deemed to be substantially complete upon issuance of a certificate of
occupancy for the Minimum Improvements, and upon determination by the Authority
Representative that all related site improvements on the Redevelopment Property have been
substantially completed in accordance with approved Construction Plans, subject to landscaping that
cannot be completed until seasonal conditions permit.
Section 4.5. Records. The Authority and the City through any authorized representatives,
shall have the right at all reasonable times after reasonable notice to inspect, examine and copy all
books and records of Redeveloper relating to the Minimum Improvements. Such records shall be
kept and maintained by Redeveloper through the Maturity Date.
Section 4.6. Connectivity. The Redeveloper shall install dedicated wired connections
from the point of presence for the Minimum Improvements to each internal wiring closet within the
Minimum Improvements, and thence to each living and working unit of the Minimum
Improvements (each a “Unit”). Each Unit shall have at least two connections, each capable of
supporting at minimum a one-gigabit internet connection. The Redeveloper shall wire the
Minimum Improvements to include two CATV and 2 CAT-6 connections. To provide for future
high-speed broadband service, the Redeveloper shall install one empty 2-inch conduit from within a
new or existing handhold in proximity to its external existing telecommunications services to a
point of presence within the Minimum Improvements in proximity to its existing
telecommunications services.
Section 4.7. Redeveloper Public Improvements. In addition to construction of the
Minimum Improvements, the Redeveloper shall construct, at Redeveloper’s sole cost, public
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sidewalks and boulevards adjacent to all streets abutting the Redevelopment Property; reconstruct
France Avenue from West 30 ½ Street to a terminus approximately 120 feet north of West 31st
Street; and construct a multi-use recreational trail between West 31st Street and France Avenue, as
provided in the Official Exhibits to the City’s Ordinance 2471-15 (the “City Ordinance”). All
Redeveloper Public Improvements shall be constructed in accordance with the City Ordinance,
which is incorporated herein by reference.
Section 4.8. Inclusionary Housing. The Redeveloper agrees to comply with the City’s
Inclusionary Housing Policy, as adopted June 1, 2015, including without limitation the following:
(a) Redeveloper agrees to reserve 20% of the apartment units in the Minimum
Improvements (the “Affordable Dwelling Units”) for households earning 50% of Area Median
Income (AMI) for at least 15 years following building occupancy. For the next 10 years,
Redeveloper agrees to reserve at least 10% of the apartment units for households earning 60% of
AMI or at least 8% of the apartment units for households earning 50% of AMI.
(b) The monthly rental price for Affordable Dwelling Units shall include rent and
utility costs and shall be based on fifty percent (50%) and/or sixty percent (60%) of AMI for the
metropolitan area that includes St. Louis Park adjusted for bedroom size and calculated annually
by Minnesota Housing in connection with establishing rent limits for the Housing Tax Credit
Program.
(c) The size and design of the Affordable Dwelling Units shall be consistent and
comparable with the market rate units in the Minimum Improvements and is subject to the
approval of the City. The Affordable Dwelling Units shall be distributed throughout the
Minimum Improvements.
(d) The Affordable Dwelling Units shall have a number of bedrooms in the
approximate proportion as the market rate units.
(e) Redeveloper agrees to prepare an affordable housing plan as defined in the City’s
Inclusionary Housing Policy (the “Affordable Housing Plan”). The Affordable Housing Plan shall
describe how the Redeveloper complies with each of the applicable requirements of the
Inclusionary Housing Policy. The Affordable Housing Plan shall be prepared by the Redeveloper
and must be approved by the City prior to or in conjunction with delivery of the Certificate of
Completion for the Minimum Improvements.
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ARTICLE V
Insurance
Section 5.1. Insurance. (a) The Redeveloper will provide and maintain at all times during
the process of constructing the Minimum Improvements an All Risk Broad Form Basis Insurance
Policy and, from time to time during that period, at the request of the Authority, furnish the
Authority with proof of payment of premiums on policies covering the following:
(i) Builder’s risk insurance, written on the so-called “Builder’s Risk --
Completed Value Basis,” in an amount equal to 100% of the principal amount of the Note,
and with coverage available in nonreporting form on the so-called “all risk” form of policy.
The interest of the Authority shall be protected in accordance with a clause in form and
content satisfactory to the Authority;
(ii) Comprehensive general liability insurance (including operations, contingent
liability, operations of subcontractors, completed operations, and contractual liability
insurance) together with an Owner’s Protective Liability Policy with limits against bodily
injury and property damage of not less than $1,000,000 for each occurrence (to accomplish
the above-required limits, an umbrella excess liability policy may be used). The Authority
shall be listed as an additional insured on the policy; and
(iii) Workers’ compensation insurance, with statutory coverage, provided that the
Redeveloper may be self-insured with respect to all or any part of its liability for workers’
compensation.
(b) Upon completion of construction of the Minimum Improvements and prior to the
Maturity Date, the Redeveloper shall maintain, or cause to be maintained, at its cost and expense,
and from time to time at the request of the Authority shall furnish proof of the payment of premiums
on, insurance as follows:
(i) Insurance against loss and/or damage to the Minimum Improvements under
a policy or policies covering such risks as are ordinarily insured against by similar
businesses.
(ii) Comprehensive general public liability insurance, including personal injury
liability (with employee exclusion deleted), against liability for injuries to persons and/or
property, in the minimum amount for each occurrence and for each year of $1,000,000, and
shall be endorsed to show the City and Authority as additional insureds.
(iii) Such other insurance, including workers' compensation insurance respecting
all employees of the Redeveloper, in such amount as is customarily carried by like
organizations engaged in like activities of comparable size and liability exposure; provided
that the Redeveloper may be self-insured with respect to all or any part of its liability for
workers' compensation.
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(c) All insurance required in Article V of this Agreement shall be taken out and
maintained in responsible insurance companies selected by the Redeveloper that are authorized
under the laws of the State to assume the risks covered thereby. Upon request, the Redeveloper will
deposit annually with the Authority policies evidencing all such insurance, or a certificate or
certificates or binders of the respective insurers stating that such insurance is in force and effect.
Unless otherwise provided in this Article V of this Agreement each policy shall contain a provision
that the insurer shall not cancel nor modify it in such a way as to reduce the coverage provided
below the amounts required herein without giving written notice to the Redeveloper and the
Authority at least 30 days before the cancellation or modification becomes effective. In lieu of
separate policies, the Redeveloper may maintain a single policy, blanket or umbrella policies, or a
combination thereof, having the coverage required herein, in which event the Redeveloper shall
deposit with the Authority a certificate or certificates of the respective insurers as to the amount of
coverage in force upon the Minimum Improvements.
(d) The Redeveloper agrees to notify the Authority immediately in the case of damage
exceeding $250,000 in amount to, or destruction of, the Minimum Improvements or any portion
thereof resulting from fire or other casualty. In such event the Redeveloper will forthwith repair,
reconstruct, and restore the Minimum Improvements to substantially the same or an improved
condition or value as it existed prior to the event causing such damage and, to the extent necessary
to accomplish such repair, reconstruction, and restoration, the Redeveloper will apply the net
proceeds of any insurance relating to such damage received by the Redeveloper to the payment or
reimbursement of the costs thereof.
The Redeveloper shall complete the repair, reconstruction and restoration of the Minimum
Improvements, regardless of whether the net proceeds of insurance received by the Redeveloper for
such purposes are sufficient to pay for the same. Any net proceeds remaining after completion of
such repairs, construction, and restoration shall be the property of the Redeveloper.
(e) In lieu of its obligation to reconstruct the Minimum Improvements as set forth in this
Section, the Redeveloper shall have the option of: (i) paying to the Authority an amount that, in the
opinion of the Authority and its fiscal consultant, is sufficient to pay or redeem the outstanding
principal and accrued interest on the Note, or (ii) so long as the Redeveloper is the owner of the
Note, waiving its right to receive subsequent payments under the Note.
(f) The Redeveloper and the Authority agree that all of the insurance provisions set
forth in this Article V shall terminate upon the termination of this Agreement.
Section 5.2. Subordination. Notwithstanding anything to the contrary herein, the rights of
the Authority with respect to the receipt and application of any insurance proceeds shall, in all
respects, be subordinate and subject to the rights of any Holder under a Mortgage allowed pursuant
to Article VII of this Agreement.
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ARTICLE VI
Tax Increment; Taxes
Section 6.1. Right to Collect Delinquent Taxes. The Redeveloper acknowledges that the
Authority is providing substantial aid and assistance in furtherance of the development through
reimbursement of Public Redevelopment Costs. The Redeveloper understands that the Tax
Increments pledged to payment on the Note are derived from real estate taxes on the
Redevelopment Property, which taxes must be promptly and timely paid. To that end, the
Redeveloper agrees for itself, its successors and assigns, that in addition to the obligation pursuant
to statute to pay real estate taxes, it is also obligated by reason of this Agreement to pay before
delinquency all real estate taxes assessed against the Redevelopment Property and the Minimum
Improvements. The Redeveloper acknowledges that this obligation creates a contractual right on
behalf of the Authority to sue the Redeveloper or its successors and assigns to collect delinquent
real estate taxes and any penalty or interest thereon and to pay over the same as a tax payment to the
county auditor. In any such suit, the Authority shall also be entitled to recover its costs, expenses
and reasonable attorney fees.
Section 6.2. Review of Taxes. The Redeveloper agrees that prior to the Maturity Date it
will not cause a reduction in the real property taxes paid in respect of the Redevelopment Property
through: (A) willful destruction of the Redevelopment Property or any part thereof; or (B) willful
refusal to reconstruct damaged or destroyed property pursuant to Section 5.1 of this Agreement,
except as provided in Section 5.1(e). The Redeveloper also agrees that it will not, prior to the
Maturity Date, seek exemption from property tax for the Redevelopment Property or any portion
thereof or transfer or permit the transfer of the Redevelopment Property to any entity that is exempt
from real property taxes and state law (other than any portion thereof dedicated or conveyed to the
City in accordance with platting of the Redevelopment Property), or apply for a deferral of property
tax on the Redevelopment Property pursuant to any law.
Section 6.3. Assessment Agreement. (a) Upon execution of this Agreement, the
Redeveloper shall, with the Authority, execute an Assessment Agreement pursuant to Minnesota
Statutes, Section 469.177, subd. 8, specifying an assessor's minimum Market Value for the
Redevelopment Property and Minimum Improvements constructed thereon. The amount of the
minimum Market Value shall be $27,421,000 as of January 2, 2017, and $32,260,000 as of January
2, 2018 and each January 2 thereafter, notwithstanding the status of construction by such dates.
(b) The Assessment Agreement shall be substantially in the form attached hereto as
Schedule H. Nothing in the Assessment Agreement shall limit the discretion of the assessor to
assign a market value to the property in excess of such assessor's minimum Market Value. The
Assessment Agreement shall remain in force for the period specified in the Assessment Agreement.
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ARTICLE VII
Other Financing
Section 7.1. Generally. Before issuance of the Note, the Redeveloper shall submit to the
Authority or provide access thereto for review by Authority staff, consultants and agents, evidence
reasonably satisfactory to the Authority that Redeveloper has available funds, or commitments to
obtain funds, whether in the nature of mortgage financing, equity, grants, loans, or other sources
sufficient for paying the cost of the developing the Minimum Improvements, provided that any
lender or grantor commitments shall be subject only to such conditions as are normal and customary
in the commercial lending industry.
Section 7.2. Authority's Option to Cure Default on Mortgage. In the event that any portion
of the Redeveloper's funds is provided through mortgage financing, and there occurs a default under
any Mortgage authorized pursuant to Article VII of this Agreement, the Redeveloper shall cause the
Authority to receive copies of any notice of default received by the Redeveloper from the holder of
such Mortgage. Thereafter, the Authority shall have the right, but not the obligation, to cure any
such default on behalf of the Redeveloper within such cure periods as are available to the
Redeveloper under the Mortgage documents.
Section 7.3. Modification; Subordination. The Authority agrees to subordinate its rights
under this Agreement to the Holder of any Mortgage securing construction or permanent financing,
in accordance with the terms of a subordination agreement substantially in the form attached as
Schedule E, or such other form as the Authority approves.
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ARTICLE VIII
Prohibitions Against Assignment and Transfer; Indemnification
Section 8.1. Representation as to Development. The Redeveloper represents and agrees
that its purchase of the Redevelopment Property, and its other undertakings pursuant to the
Agreement, are, and will be used, for the purpose of development of the Redevelopment Property
and not for speculation in land holding.
Section 8.2. Prohibition Against Redeveloper’s Transfer of Property and Assignment of
Agreement. The Redeveloper represents and agrees that prior to issuance of a Certificate of
Completion for all of the Minimum Improvements:
(a) Except only by way of (i) apartment and retail leases in the ordinary course of
operating the Minimum Improvements, and (ii) security for, and only for, the purpose of obtaining
financing necessary to enable the Redeveloper or any successor in interest to the Redevelopment
Property, or any part thereof, to perform its obligations with respect to undertaking the
redevelopment contemplated under this Agreement, and any other purpose authorized by this
Agreement, the Redeveloper has not made or created and will not make or create or suffer to be
made or created any total or partial sale, assignment, conveyance, or lease, or any trust or power, or
transfer in any other mode or form of or with respect to this Agreement or the Redevelopment
Property or any part thereof or any interest therein, or any contract or agreement to do any of the
same, to any person or entity whether or not related in any way to the Redeveloper (collectively, a
“Transfer”), without the prior written approval of the Authority (whose approval will not be
unreasonably withheld, subject to the standards described in paragraph (b) of this Section) unless
the Redeveloper remains liable and bound by this Redevelopment Agreement in which event the
Authority’s approval is not required. Any such Transfer shall be subject to the provisions of this
Agreement. For the purposes of this Agreement, the term Transfer does not include (i) acquisition
of a controlling interest in Redeveloper by another entity or merger of Redeveloper with another
entity; or (ii) any sale, conveyance, or transfer in any form to any Affiliate.
(b) In the event the Redeveloper, upon Transfer of the Redevelopment Property or any
portion thereof either before or after issuance of the final Certificate of Completion, seeks to be
released from its obligations under this Redevelopment Agreement as to the portions of the
Redevelopment Property that is transferred, the Authority shall be entitled to require, except as
otherwise provided in the Agreement, as conditions to any such release that:
(i) Any proposed transferee shall have the qualifications and financial
responsibility, in the reasonable judgment of the Authority, necessary and adequate to fulfill
the obligations undertaken in this Agreement by the Redeveloper as to the portion of the
Redevelopment Property to be transferred.
(ii) Any proposed transferee, by instrument in writing satisfactory to the
Authority and in form recordable in the public land records of Hennepin County, Minnesota,
shall, for itself and its successors and assigns, and expressly for the benefit of the Authority,
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have expressly assumed all of the obligations of the Redeveloper under this Agreement as to
the portion of the Redevelopment Property to be transferred and agreed to be subject to all
the conditions and restrictions to which the Redeveloper is subject as to such portion;
provided, however, that the fact that any transferee of, or any other successor in interest
whatsoever to, the Redevelopment Property, or any part thereof, shall not, for whatever
reason, have assumed such obligations or so agreed, and shall not (unless and only to the
extent otherwise specifically provided in this Agreement or agreed to in writing by the
Authority) deprive the Authority of any rights or remedies or controls with respect to the
Redevelopment Property, the Minimum Improvements or any part thereof or the
construction of the Minimum Improvements; it being the intent of the parties as expressed in
this Agreement that (to the fullest extent permitted at law and in equity and excepting only
in the manner and to the extent specifically provided otherwise in this Agreement) no
transfer of, or change with respect to, ownership in the Redevelopment Property or any part
thereof, or any interest therein, however consummated or occurring, and whether voluntary
or involuntary, shall operate, legally, or practically, to deprive or limit the Authority of or
with respect to any rights or remedies on controls provided in or resulting from this
Agreement with respect to the Redevelopment Property that the Authority would have had,
had there been no such transfer or change. In the absence of specific written agreement by
the Authority to the contrary, no such transfer or approval by the Authority thereof shall be
deemed to relieve the Redeveloper, or any other party bound in any way by this Agreement
or otherwise with respect to the Redevelopment Property, from any of its obligations with
respect thereto.
(iii) Any and all instruments and other legal documents involved in effecting the
transfer of any interest in this Agreement or the Redevelopment Property governed by this
Article VIII, shall be in a form reasonably satisfactory to the Authority.
(iv) At the written request of Redeveloper, the Authority shall execute and
deliver to Redeveloper and the proposed transferee an estoppel certificate containing
commercially customary and reasonable certifications.
In the event the foregoing conditions are satisfied then the Redeveloper shall be released from its
obligation under this Agreement, as to the portion of the Redevelopment Property that is transferred,
assigned, or otherwise conveyed.
Section 8.3. Release and Indemnification Covenants. (a) Except for any willful
misrepresentation or any willful or wanton misconduct or negligence of the Indemnified Parties
as hereinafter defined, and except for any breach by any of the Indemnified Parties of their
obligations under this Agreement, the Redeveloper releases from and covenants and agrees that the
Authority, the City, and the governing body members, officers, agents, servants, and employees
thereof (the “Indemnified Parties”) shall not be liable for and agrees to indemnify and hold harmless
the Indemnified Parties against any loss or damage to property or any injury to or death of any
person occurring at or about or resulting from any defect in the Redevelopment Property or the
Minimum Improvements.
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(b) Except for any willful misrepresentation or any willful or wanton misconduct or
negligence of the Indemnified Parties, the Redeveloper agrees to protect and defend the Indemnified
Parties, now and forever, and further agrees to hold the aforesaid harmless from any claim, demand,
suit, action, or other proceeding whatsoever by any person or entity whatsoever arising or
purportedly arising from this Agreement, or the transactions contemplated hereby or the acquisition,
construction, installation, ownership, maintenance, and operation of the Redevelopment Property.
(c) Except for any willful misrepresentation or any willful or wanton misconduct or
negligence of the Indemnified Parties, the Indemnified Parties shall not be liable for any damage or
injury to the persons or property of the Redeveloper or its officers, agents, servants, or employees or
any other person who may be about the Redevelopment Property or Minimum Improvements.
(d) All covenants, stipulations, promises, agreements and obligations of the Authority
contained herein shall be deemed to be the covenants, stipulations, promises, agreements, and
obligations of such entity and not of any governing body member, officer, agent, servant, or
employee of such entities in the individual capacity thereof.
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ARTICLE IX
Events of Default
Section 9.1. Events of Default Defined. The following shall be “Events of Default” under
this Agreement and the term “Event of Default” shall mean, whenever it is used in this Agreement,
any one or more of the following events, after the non-defaulting party provides thirty (30) days
written notice to the defaulting party of the event, but only if the event has not been cured within
said thirty (30) days or, if the event is by its nature incurable within thirty (30) days, the defaulting
party does not, within such thirty- (30-) day period, provide assurances reasonably satisfactory to
the party providing notice of default that the event will be cured and will be cured as soon as
reasonably possible:
(a) Failure by the Redeveloper or Authority to observe or perform any covenant,
condition, obligation, or agreement on its part to be observed or performed under this Agreement.
(b) If, before issuance of the certificate of completion for all the Minimum
Improvements, the Redeveloper shall
(i) file any petition in bankruptcy or for any reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under the United States
Bankruptcy Act or under any similar federal or State law, which action is not dismissed
within sixty (60) days after filing; or
(ii) make an assignment for benefit of its creditors; or
(iii) admit in writing its inability to pay its debts generally as they become due; or
(iv) be adjudicated a bankrupt or insolvent.
Section 9.2. Remedies on Default. Whenever any Event of Default referred to in Section
9.1 of this Agreement occurs, the non-defaulting party may:
(a) Suspend its performance under this Agreement until it receives assurances that the
defaulting party will cure its default and continue its performance under the Agreement.
(b) Upon a default by the Redeveloper under this Agreement, the Authority may
terminate the Note and this Agreement.
(c) Take whatever action, including legal, equitable, or administrative action, which
may appear necessary or desirable to collect any payments due under this Agreement, or to enforce
performance and observance of any obligation, agreement, or covenant under this Agreement,
provided that nothing contained herein shall give the Authority the right to seek specific
performance by Redeveloper of the construction of the Minimum Improvements.
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Section 9.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to any
party is intended to be exclusive of any other available remedy or remedies, but each and every such
remedy shall be cumulative and shall be in addition to every other remedy given under this
Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to
exercise any right or power accruing upon any default shall impair any such right or power or shall
be construed to be a waiver thereof, but any such right and power may be exercised from time to
time and as often as may be deemed expedient. To entitle the Authority to exercise any remedy
reserved to it, it shall not be necessary to give notice, other than such notice as may be required in
this Article IX.
Section 9.4. No Additional Waiver Implied by One Waiver. In the event any agreement
contained in this Agreement should be breached by either party and thereafter waived by the other
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 hereunder.
Section 9.5. Attorney Fees. Whenever any Event of Default occurs and if the non-
defaulting party employs attorneys or incurs other expenses for the collection of payments due or to
become due or for the enforcement of performance or observance of any obligation or agreement on
the part of the defaulting party under this Agreement, the defaulting party shall, within ten (10) days
of written demand by the non-defaulting party, pay to the non-defaulting party the reasonable fees
of such attorneys and such other expenses so incurred by the non-defaulting party.
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ARTICLE X
Additional Provisions
Section 10.1. Conflict of Interests; Representatives Not Individually Liable. The Authority
and the Redeveloper, to the best of their respective knowledge, represent and agree that no member,
official, or employee of the Authority shall have any personal interest, direct or indirect, in the
Agreement, nor shall any such member, official, or employee participate in any decision relating to
the Agreement that affects his personal interests or the interests of any corporation, partnership, or
association in which he, directly or indirectly, is interested. No member, official, or employee of the
City or Authority shall be personally liable to the Redeveloper, or any successor in interest, in the
event of any default or breach by the Authority or for any amount that may become due to the
Redeveloper or successor or on any obligations under the terms of the Agreement.
Section 10.2. Equal Employment Opportunity. The Redeveloper, for itself and its
successors and assigns, agrees that during the construction of the Minimum Improvements provided
for in the Agreement it will comply with all applicable federal, state, and local equal employment
and non-discrimination laws and regulations.
Section 10.3. Restrictions on Use. The Redeveloper agrees that until the Maturity Date, the
Redeveloper, and such successors and assigns, shall devote the Redevelopment Property to the
operation of the Minimum Improvements as described in Section 4.1 hereof, and shall not
discriminate upon the basis of race, color, creed, sex or national origin in the sale, lease, or rental or
in the use or occupancy of the Redevelopment Property or any improvements erected or to be
erected thereon, or any part thereof. Redeveloper agrees that no portion of the Redevelopment
Property will be used for a sexually-oriented business, a pawnshop, a check-cashing business, a
tattoo business, or a gun business.
Section 10.4. Provisions Not Merged With Deed. None of the provisions of this Agreement
are intended to or shall be merged by reason of any deed transferring any interest in the
Redevelopment Property and any such deed shall not be deemed to affect or impair the provisions
and covenants of this Agreement.
Section 10.5. Titles of Articles and Sections. Any titles of the several parts, Articles, and
Sections of the Agreement are inserted for convenience of reference only and shall be disregarded in
construing or interpreting any of its provisions.
Section 10.6. Notices and Demands. Except as otherwise expressly provided in this
Agreement, a notice, demand, or other communication under the Agreement by either party to the
other shall be sufficiently given or delivered if it is dispatched by registered or certified mail,
postage prepaid, return receipt requested, or delivered personally, to the following addresses (or to
such other addresses as either party may notify the other):
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To Redeveloper: Shoreham Apartments LLC
Attn: Robb Bader
5402 Parkdale Boulevard, Suite 200
St. Louis Park, MN 55416
To Authority: St. Louis Park EDA
Attn: Executive Director
5005 Minnetonka Boulevard
St. Louis Park, Minnesota 55416-2518
Section 10.7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same instrument.
Section 10.8. Recording. The Authority may record this Agreement and any amendments
thereto with the Hennepin County recorder. The Redeveloper shall pay all costs for recording. The
Redeveloper’s obligations under this Agreement are covenants running with the land for the term of
this Agreement, enforceable by the Authority against the Redeveloper, its successor and assigns,
and every successor in interest to the Redevelopment Property, or any part thereof or any interest
therein.
Section 10.9 Amendment. This Agreement may be amended only by written agreement
approved by the Authority and the Redeveloper.
Section 10.10. Authority Approvals. Unless otherwise specified, any approval required by
the Authority under this Agreement may be given by the Authority Representative, except that final
approval of issuance of the Note shall be made by the Authority’s board of commissioners.
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IN WITNESS WHEREOF, the Authority and Redeveloper have caused this Agreement to be duly
executed by their duly authorized representatives as of the date first above written.
ST. LOUIS PARK ECONOMIC DEVELOPMENT
AUTHORITY
By
Its President
By
Its Executive Director
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of _________, 2015
by Anne Mavity and Tom Harmening, the President and Executive Director of the St. Louis Park
Economic Development Authority, on behalf of the Authority.
Notary Public
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SHOREHAM APARTMENTS LLC
By
Robb Bader, Administrative Member
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _____ day of ________, 2015,
by Robb Bader, the Administrative Member of Shoreham Apartments LLC, a Delaware limited
liability company, on behalf of the company.
Notary Public
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SCHEDULE A
REDEVELOPMENT PROPERTY
Lot 1, Block 1, Shoreham Addition, Hennepin County, Minnesota.
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SCHEDULE B
DRAW REQUEST
TO: St. Louis Park Economic Development Authority
5005 Minnetonka Boulevard
St. Louis Park, MN 55416
DISBURSEMENT DIRECTION
The undersigned Authorized Representative of Shoreham Apartments LLC, a Delaware
limited liability company (the “Redeveloper”), hereby authorizes and requests you to disburse
from proceeds of the DEED grant, the County Grant or the Met Council grant, as the case may
be, in accordance with the terms of the Contract for Private Redevelopment by and between the
St. Louis Park Economic Development Authority (“Authority”) and the Redeveloper, dated as of
___________, 2015 (the “Agreement”), the following amount to the following person and for the
following proper Grant-Eligible Costs:
1. Amount:
2. Payee:
3. Purpose:
4. Grant Source (DEED, County or Met Council):
all as defined and provided in the Agreement. The undersigned further certifies to the Authority
that (a) none of the items for which the payment is proposed to be made has formed the basis for
any payment previously made under Section 3.3 of the Agreement (or before the date of the
Agreement); (b) that each item for which the payment is proposed is a Grant-Eligible Cost, eligible
for funding from the grant source(s) identified above; and (c) the Redeveloper reasonably
anticipates completion of the Grant-Eligible Costs and the Minimum Improvements in accordance
with the terms of the Agreement.
Dated: ____________________
______________________________________
Redeveloper’s Authorized Representative
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SCHEDULE C
AUTHORIZING RESOLUTION
ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. ______
RESOLUTION AWARDING THE SALE OF, AND
PROVIDING THE FORM, TERMS, COVENANTS AND
DIRECTIONS FOR THE ISSUANCE OF ITS TAX
INCREMENT REVENUE NOTES TO SHOREHAM
APARTMENTS LLC.
BE IT RESOLVED BY the Board of Commissioners (“Board”) of the St. Louis Park
Economic Development Authority, St. Louis Park, Minnesota (the “Authority”) as follows:
Section 1. Authorization; Award of Sale.
1.01. Authorization. The Authority and the City of St. Louis Park have heretofore
approved the establishment of its Shoreham Tax Increment Financing District (the “TIF District”)
within Redevelopment Project No. 1 (“Project”), and have adopted a tax increment financing plan
for the purpose of financing certain improvements within the Project.
Pursuant to Minnesota Statutes, Section 469.178, the Authority is authorized to issue and
sell its bonds for the purpose of financing a portion of the public development costs of the Project.
Such bonds are payable from all or any portion of revenues derived from the TIF District and
pledged to the payment of the bonds. The Authority hereby finds and determines that it is in the best
interests of the Authority that it issue and sell its Tax Increment Revenue Notes, Series 20__ (the
“Note”) for the purpose of financing certain public redevelopment costs and environmental
remediation costs of the Project.
1.02. Issuance, Sale, and Terms of the Note. (a) The Authority hereby authorizes the
President and Executive Director to issue the Note in accordance with the Contract for Private
Redevelopment dated as of _______________, 2015, between the Authority and Shoreham
Apartments LLC (the “Agreement”), and approved on _____________, 2015 by the Authority.
All capitalized terms in this resolution have the meaning provided in the Agreement unless the
context requires otherwise.
(b) The Note shall be issued in the maximum aggregate principal amount of $1,200,000 to
Shoreham Apartments LLC (the “Owner”) in consideration of certain eligible costs incurred by the
Owner under the Agreement, shall be dated the date of delivery thereof, and shall bear interest at the
rate of 3.75% from the date of issue per annum to the earlier of maturity or prepayment. The Note
will be issued in a single series, in the principal amount of Public Redevelopment Costs submitted
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and approved in accordance with Section 3.5 of the Agreement. The Note is secured by Available
Tax Increment, as further described in the form of the Note herein. The Authority hereby delegates
to the Executive Director the determination of the date on which the Note is to be delivered, in
accordance with the Agreement.
Section 2. Form of Note. The Note shall be in substantially the following form, with
the blanks to be properly filled in and the principal amount adjusted as of the date of issue:
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UNITED STATE OF AMERICA
STATE OF MINNESOTA
COUNTY OF HENNEPIN
ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY
No. R-1 $_____________
TAX INCREMENT REVENUE NOTE
SERIES 20__
Date
Rate of Original Issue
3.75%
The St. Louis Park Economic Development Authority (“Authority”) for value received,
certifies that it is indebted and hereby promises to pay to Shoreham Apartments LLC or registered
assigns (the "Owner"), the principal sum of $__________ and to pay interest thereon at the rate of
3.75% per annum, solely from the sources and to the extent set forth herein. Capitalized terms shall
have the meanings provided in the Contract for Private Redevelopment between the Authority and
the Owner, dated as of _____________, 2015 (the "Agreement"), unless the context requires
otherwise.
1. Payments. Principal and interest ("Payments") shall be paid on August 1, 20__ and
each February 1 and August 1 thereafter to and including February 1, 20__ ("Payment Dates") in the
amounts and from the sources set forth in Section 3 herein. Payments shall be applied first to
accrued interest, and then to unpaid principal. Interest accruing from the date of issue through and
including February 1, 20__ shall be compounded semiannually on February 1 and August 1 of each
year and added to principal.
Payments are payable by mail to the address of the Owner or such other address as the
Owner may designate upon 30 days written notice to the Authority. Payments on this Note are
payable in any coin or currency of the United States of America which, on the Payment Date, is
legal tender for the payment of public and private debts.
2. Interest. Interest at the rate stated herein shall accrue on the unpaid principal,
commencing on the date of original issue. Interest shall be computed on the basis of a year of 360
days and charged for actual days principal is unpaid.
3. Available Tax Increment. (a) Payments on this Note are payable on each Payment
Date solely from and in the amount of Available Tax Increment, which shall mean 95% of the Tax
Increment attributable to the Minimum Improvements and Redevelopment Property that is paid to
the Authority by Hennepin County in the six months preceding each Payment Date on the Note.
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(b) The Authority shall have no obligation to pay principal of and interest on this Note on
each Payment Date from any source other than Available Tax Increment and the failure of the
Authority to pay principal or interest on any Payment Date shall not constitute a default hereunder
as long as the Authority pays principal and interest hereon to the extent of Available Tax Increment.
The Authority shall have no obligation to pay unpaid balance of principal or accrued interest that
may remain after the final Payment on February 1, 20__.
4. Default. If on any Payment Date there has occurred and is continuing any Event of
Default under the Agreement, the Authority may withhold from payments hereunder under all
Available Tax Increment. If the Event of Default is thereafter cured in accordance with the
Agreement, the Available Tax Increment withheld under this Section shall be deferred and paid,
without interest thereon, within 30 days after the Event of Default is cured. If the Event of Default
is not cured in a timely manner, the Authority may terminate this Note by written notice to the
Owner in accordance with the Agreement.
5. Prepayment. (a) The principal sum and all accrued interest payable under this Note
is prepayable in whole or in part at any time by the Authority without premium or penalty. No
partial prepayment shall affect the amount or timing of any other regular Payment otherwise
required to be made under this Note.
(b) Upon receipt by Redeveloper of the Authority’s written statement of the
Participation Amount as described in Section 3.6 of the Agreement, fifty percent of such
Participation Amount will be deemed to constitute, and will be applied to, prepayment of the
principal amount of this Note. Such deemed prepayment is effective as of the date of delivery of
such statement to the Owner, and will be recorded by the Registrar in its records for the Note. Upon
request of the Owner, the Authority will deliver to the Owner a statement of the outstanding
principal balance of the Note after application of the deemed prepayment under this paragraph.
6. Nature of Obligation. This Note is one of an issue in the total principal amount of
$_________________, issued to aid in financing certain public redevelopment costs and
administrative costs of a Project undertaken by the Authority pursuant to Minnesota Statutes,
Sections 469.001 through 469.047, and is issued pursuant to an authorizing resolution (the
"Resolution") duly adopted by the Authority on ________, 20__, and pursuant to and in full
conformity with the Constitution and laws of the State of Minnesota, including Minnesota Statutes,
Sections 469.174 to 469.1794, as amended. This Note is a limited obligation of the Authority which
is payable solely from Available Tax Increment pledged to the payment hereof under the
Resolution. This Note and the interest hereon shall not be deemed to constitute a general obligation
of the State of Minnesota or any political subdivision thereof, including, without limitation, the
Authority. Neither the State of Minnesota, nor any political subdivision thereof shall be obligated to
pay the principal of or interest on this Note or other costs incident hereto except out of Available
Tax Increment, and neither the full faith and credit nor the taxing power of the State of Minnesota or
any political subdivision thereof is pledged to the payment of the principal of or interest on this Note
or other costs incident hereto.
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7. Registration and Transfer. This Note is issuable only as a fully registered note
without coupons. As provided in the Resolution, and subject to certain limitations set forth therein,
this Note is transferable upon the books of the Authority kept for that purpose at the principal office
of the City Controller, by the Owner hereof in person or by such Owner's attorney duly authorized
in writing, upon surrender of this Note together with a written instrument of transfer satisfactory to
the Authority, duly executed by the Owner. Upon such transfer or exchange and the payment by the
Owner of any tax, fee, or governmental charge required to be paid by the Authority with respect to
such transfer or exchange, there will be issued in the name of the transferee a new Note of the same
aggregate principal amount, bearing interest at the same rate and maturing on the same dates.
Except as otherwise provided in Section 3.5(d) of the Agreement, this Note shall not be
transferred to any person or entity, unless the Authority has provided written consent to such
transfer and the Authority has been provided with an opinion of counsel or a certificate of the
transferor, in a form satisfactory to the Authority, that such transfer is exempt from registration and
prospectus delivery requirements of federal and applicable state securities laws.
IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions, and things required
by the Constitution and laws of the State of Minnesota to be done, to exist, to happen, and to be
performed in order to make this Note a valid and binding limited obligation of the Authority
according to its terms, have been done, do exist, have happened, and have been performed in due
form, time and manner as so required.
IN WITNESS WHEREOF, the Board of Commissioners of the St. Louis Park Economic
Development Authority have caused this Note to be executed with the manual signatures of its
President and Executive Director, all as of the Date of Original Issue specified above.
ST. LOUIS PARK ECONOMIC
DEVELOPMENT AUTHORITY
Executive Director President
REGISTRATION PROVISIONS
The ownership of the unpaid balance of the within Note is registered in the bond register of
the City Finance Director, in the name of the person last listed below.
Date of Signature of
Registration Registered Owner____ City Controller
Shoreham Apartments LLC
Federal Tax I.D. No. _____________
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Section 3. Terms, Execution and Delivery.
3.01. Denomination, Payment. The Note shall be issued as a single typewritten note
numbered R-1.
The Note shall be issuable only in fully registered form. Principal of and interest on the
Note shall be payable by check or draft issued by the Registrar described herein.
3.02. Dates; Interest Payment Dates. Principal of and interest on the Note shall be payable
by mail to the owner of record thereof as of the close of business on the fifteenth day of the month
preceding the Payment Date, whether or not such day is a business day.
3.03. Registration. The Authority hereby appoints the City Controller to perform the
functions of registrar, transfer agent and paying agent (the "Registrar"). The effect of registration
and the rights and duties of the Authority and the Registrar with respect thereto shall be as follows:
(a) Register. The Registrar shall keep at its office a bond register in which the Registrar
shall provide for the registration of ownership of the Note and the registration of transfers and
exchanges of the Note.
(b) Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the
registered owner thereof or accompanied by a written instrument of transfer, in form reasonably
satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly
authorized by the registered owner in writing, the Registrar shall authenticate and deliver, in the
name of the designated transferee or transferees, a new Note of a like aggregate principal amount
and maturity, as requested by the transferor. Notwithstanding the foregoing, the Note shall not be
transferred to any person other than an affiliate, or other related entity, of the Owner unless the
Authority has been provided with an opinion of counsel or a certificate of the transferor, in a form
satisfactory to the Authority, that such transfer is exempt from registration and prospectus delivery
requirements of federal and applicable state securities laws. The Registrar may close the books for
registration of any transfer after the fifteenth day of the month preceding each Payment Date and
until such Payment Date.
(c) Cancellation. The Note surrendered upon any transfer shall be promptly cancelled
by the Registrar and thereafter disposed of as directed by the Authority.
(d) Improper or Unauthorized Transfer. When the Note is presented to the Registrar for
transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement on
such Note or separate instrument of transfer is legally authorized. The Registrar shall incur no
liability for its refusal, in good faith, to make transfers which it, in its judgment, deems improper or
unauthorized.
(e) Persons Deemed Owners. The Authority and the Registrar may treat the person in
whose name the Note is at any time registered in the bond register as the absolute owner of the
Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or on
account of, the principal of and interest on such Note and for all other purposes, and all such
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payments so made to any such registered owner or upon the owner's order shall be valid and
effectual to satisfy and discharge the liability of the Authority upon such Note to the extent of the
sum or sums so paid.
(f) Taxes, Fees and Charges. For every transfer or exchange of the Note, the Registrar
may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee,
or other governmental charge required to be paid with respect to such transfer or exchange.
(g) Mutilated, Lost, Stolen or Destroyed Note. In case any Note shall become mutilated
or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount, maturity dates
and tenor in exchange and substitution for and upon cancellation of such mutilated Note or in lieu of
and in substitution for such Note lost, stolen, or destroyed, upon the payment of the reasonable
expenses and charges of the Registrar in connection therewith; and, in the case the Note lost, stolen,
or destroyed, upon filing with the Registrar of evidence satisfactory to it that such Note was lost,
stolen, or destroyed, and of the ownership thereof, and upon furnishing to the Registrar of an
appropriate bond or indemnity in form, substance, and amount satisfactory to it, in which both the
Authority and the Registrar shall be named as obligees. The Note so surrendered to the Registrar
shall be cancelled by it and evidence of such cancellation shall be given to the Authority. If the
mutilated, lost, stolen, or destroyed Note has already matured or been called for redemption in
accordance with its terms, it shall not be necessary to issue a new Note prior to payment.
3.04. Preparation and Delivery. The Note shall be prepared under the direction of the
Executive Director and shall be executed on behalf of the Authority by the signatures of its
President and Executive Director. In case any officer whose signature shall appear on the Note shall
cease to be such officer before the delivery of the Note, such signature shall nevertheless be valid
and sufficient for all purposes, the same as if such officer had remained in office until delivery.
When the Note has been so executed, it shall be delivered by the Executive Director to the Owner
thereof in accordance with the Agreement.
Section 4. Security Provisions.
4.01. Pledge. The Authority hereby pledges to the payment of the principal of and interest
on the Note all Available Tax Increment as defined in the Note.
Available Tax Increment shall be applied to payment of the principal of and interest on the Note in
accordance with the terms of the form of Note set forth in Section 2 of this resolution.
4.02. Bond Fund. Until the date the Note is no longer outstanding and no principal thereof
or interest thereon (to the extent required to be paid pursuant to this resolution) remains unpaid, the
Authority shall maintain a separate and special “Bond Fund” to be used for no purpose other than
the payment of the principal of and interest on the Note. The Authority irrevocably agrees to
appropriate to the Bond Fund on or before each Payment Date the Available Tax Increment in an
amount equal to the Payment then due, or the actual Available Tax Increment, whichever is less.
Any Available Tax Increment remaining in the Bond Fund shall be transferred to the Authority's
account for the TIF District upon the termination of the Note in accordance with its terms.
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4.03. Additional Obligations. The Authority may apply or pledge Available Tax
Increment in excess of the amount needed to make Payments due on each Payment Date, to any
other obligations (including without limitation any interfund loan). Any such pledge or
expenditure is subordinate to the Note, including the requirement to pay any accumulated
deficiency in meeting scheduled Payments on the Note.
Section 5. Certification of Proceedings.
5.01. Certification of Proceedings. The officers of the Authority are hereby authorized and
directed to prepare and furnish to the Owner of the Note certified copies of all proceedings and
records of the Authority, and such other affidavits, certificates, and information as may be required
to show the facts relating to the legality and marketability of the Note as the same appear from the
books and records under their custody and control or as otherwise known to them, and all such
certified copies, certificates, and affidavits, including any heretofore furnished, shall be deemed
representations of the Authority as to the facts recited therein.
Section 6. Effective Date. This resolution shall be effective upon approval.
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Reviewed for Administration: Adopted by the Economic Development
Authority __________, 20__
Executive Director President
Attest
Secretary
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b)
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SCHEDULE D
Form of Certificate of Completion
(The remainder of this page is intentionally left blank.)
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CERTIFICATE OF COMPLETION
WHEREAS, the St. Louis Park Economic Development Authority (the "Authority") and
Shoreham Apartments LLC (“Redeveloper”) entered into a certain Contract for Private
Redevelopment dated August 17, 2015 (“Contract”), filed of record as Document No.
_____________ on _________________; and
WHEREAS, the Contract contains certain covenants and restrictions set forth in Articles
III and IV thereof related to completing certain Minimum Improvements; and
WHEREAS, the Redeveloper has performed said covenants and conditions insofar as it is
able in a manner deemed sufficient by the Authority to permit the execution and recording of this
certification;
NOW, THEREFORE, this is to certify that all construction and other physical
improvements related to the Minimum Improvements specified to be done and made by the
Redeveloper have been completed and the agreements and covenants in Articles III and IV of the
Contract have been performed by the Redeveloper, and this Certificate is intended to be a
conclusive determination of the satisfactory termination of the covenants and conditions of
Articles III and IV of the Contract related to completion of the Minimum Improvements, but any
other covenants in the Contract shall remain in full force and effect.
(Signature page follows.)
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b)
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Dated: _______________, 20__. ST. LOUIS PARK ECONOMIC DEVELOPMENT
AUTHORITY
By
Authority Representative
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of _________, 20__
by ______________________, the __________________ of the St. Louis Park Economic
Development Authority, on behalf of the Authority.
Notary Public
This document drafted by:
Kennedy & Graven, Chartered
(MNI)
470 U.S. Bank Plaza
Minneapolis, MN 55402
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b)
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SCHEDULE E
Form of Subordination Agreement
THIS SUBORDINATION AGREEMENT (this "Agreement") is made as of this _____
day of __________, 20__, between _______________ ("Lender"), whose address is at
_________________________, and the ST. LOUIS PARK ECONOMIC DEVELOPMENT
AUTHORITY, a public body corporate and politic ("Authority").
RECITALS
A. Shoreham Apartments LLC, a Delaware limited liability company
("Redeveloper"), is the owner of certain real property situated in Hennepin County, Minnesota
and legally described in Exhibit A attached hereto and incorporated herein (the "Property").
B. Lender has made a mortgage loan to Redeveloper in the original principal amount
of $__________ (the "Loan"). The Loan is the evidenced and secured by the following
documents:
(i) a certain promissory note (the "Note") made by Redeveloper dated
__________, 20__, in the amount of $___________; and
(ii) a certain mortgage, security agreement and fixture financing statement
(the "Mortgage") made by Redeveloper dated __________, 20__, filed __________,
200_, as Hennepin County Recorder/Registrar of Titles Doc. No. __________
encumbering the Property; and
(iii) a certain assignment of leases and rents (the "Assignment") made by
Redeveloper dated __________, 20__, filed __________, 20__, as Hennepin County
Recorder/Registrar of Titles Doc. No. __________ encumbering the Property.
The Note, the Mortgage, the Assignment, and all other documents and instruments
evidencing, securing and executed in connection with the Loan, are hereinafter collectively
referred to as the "Loan Documents."
C. Authority is the owner and holder of certain rights under a certain unrecorded
Contract for Private Redevelopment (the "Contract") by and between Redeveloper and Authority
dated August 17, 2015.
D. Redeveloper is entitled under the Contract to acquire a certain Tax Increment Tax
Revenue Note, Series 20__ in the original principal amount of $______________ (the “TIF Note”).
NOW, THEREFORE, in consideration of the foregoing and as an inducement to Lender to
make the Loan, and for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto represent, warrant and agree as follows:
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1. Consent. The Authority acknowledges that the Lender is making the Loan to the
Redeveloper and consents to the same. The Authority also consents to and approves the collateral
assignment of the Contract and TIF Note (when and if issued) by the Redeveloper to the Lender as
collateral for the Loan; provided, however, that this consent shall not deprive the Authority of or
otherwise limit any of the Authority’s rights or remedies under the Contract and TIF Note and shall
not relieve the Redeveloper of any of its obligations under the Contract and TIF Note; provided
further, however, the limitations to the Authority’s consent contained in this Paragraph 1 are subject
to the provisions of Paragraph 2 below.
2. Subordination. The Authority hereby agrees that the rights of the Authority with
respect to [_____________________] under the Contract are and shall remain subordinate and
subject to liens, rights and security interests created by the Loan Documents and to any and all
amendments, modifications, extensions, replacements or renewals of the Loan Documents;
provided, however, that nothing herein shall be construed as subordinating the requirement
contained in the Contract the Property be used in accordance with the provisions of Section 10.3 of
the Contract, or as subordinating the Authority’s rights under the TIF Note to suspend payments in
accordance with the TIF Note.
3. Notice to Authority. Lender agrees to use commercially reasonable efforts to notify
Authority of the occurrence of any Event of Default given to Redeveloper under the Loan
Documents, in accordance with Section 7.2 of the Contract. The Lender shall not be bound by the
other requirements in Section 7.2 of the Contract.
4. Statutory Exception. Nothing in this Agreement shall alter, remove or affect
Lender’s obligation under Minnesota Statutes, § 469.029 to use the Property in conformity to
Section 10.3 of the Contract.
5. No Assumption. The Authority acknowledges that the Lender is not a party to the
Contract and by executing this Agreement does not become a party to the Contract, and specifically
does not assume and shall not be bound by any obligations of the Redeveloper to the Authority
under the Contract, and that the Lender shall incur no obligations whatsoever to the Authority
except as expressly provided herein.
6. Notice from Authority. So long as the Contract remains in effect, the Authority
agrees to give to the Lender copies of notices of any Event of Default given to Redeveloper under
the Contract.
7. Governing Law. This Agreement is made in and shall be construed in accordance
with the laws of the State of Minnesota.
8. Successors. This Agreement and each and every covenant, agreement and other
provision hereof shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, including any person who acquires title to the Property through
the Lender of a foreclosure of the Mortgage.
9. Severability. The unenforceability or invalidity of any provision hereof shall not
render any other provision or provisions herein contained unenforceable or invalid.
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10. Notice. Any notices and other communications permitted or required by the
provisions of this Agreement shall be in writing and shall be deemed to have been properly given or
served by depositing the same with the United States Postal Service, or any official successor
thereto, designated as registered or certified mail, return receipt requested, bearing adequate
postage, or delivery by reputable private carrier and addresses as set forth above.
11. Transfer of Title to Lender. The Authority agrees that in the event the Lender, a
transferee of Lender, or a purchaser at foreclosure sale, acquires title to the Property pursuant to a
foreclosure, or a deed in lieu thereof, the Lender, transferee, or purchaser shall not be bound by the
terms and conditions of the Contract except as expressly herein provided. Further the Authority
agrees that in the event the Lender, a transferee of Lender, or a purchaser at foreclosure sale
acquires title to the Property pursuant to a foreclosure sale or a deed in lieu thereof, then the Lender,
transferee, or purchaser shall be entitled to all rights conferred upon the Redeveloper under the
Contract, provided that no condition of default exists and remains uncured beyond applicable cure
periods in the obligations of the Redeveloper under the Contract.
12. Estoppel. The Authority hereby represents and warrants to Lender, for the purpose
of inducing Lender to make advances to Redeveloper under the Loan Documents that:
(a) No default or event of default by Redeveloper exists under the terms of the Contract
on the date hereof;
(b) The Contract has not been amended or modified in any respect, nor has any material
provision thereof been waived by either the Authority or the Redeveloper, and the
Contract is in full force and effect;
(c) Such other reasonable certifications as the Lender may request.
13. Amendments. The Authority hereby represents and warrants to Lender for the
purpose of inducing Lender to make advances to Redeveloper under the Loan Documents that
Authority will not agree to any amendment or modification to the or any TIF Note issued under the
Contract that materially affects the collection of Available Tax Increment (as defined in the
Contract) in any way affects the Property without the Lender’s written consent.
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IN WITNESS WHEREOF, this Agreement has been executed and delivered as of the day
and year first written above.
ST. LOUIS PARK ECONOMIC
DEVELOPMENT AUTHORITY
By
Its President
By
Its Executive Director
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _____ day of ___________,
20__, by _______________________ and ______________________ the President and
Executive Director, respectively, of the St. Louis Park Economic Development Authority, a
public body corporate and politic, on behalf of such public body.
Notary Public
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b)
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[LENDER]
By:
Its
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b)
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SCHEDULE F
PRO FORMA
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SCHEDULE G
ASSESSMENT AGREEMENT
_______________________________________________________________________________
ASSESSMENT AGREEMENT
and
ASSESSOR'S CERTIFICATION
By and Between
ST. LOUIS PARK ECONOMIC DEVELOPMENT AUTHORITY
and
SHOREHAM APARTMENTS LLC
This Document was drafted by:
KENNEDY & GRAVEN, Chartered
470 U.S. Bank Plaza
Minneapolis, Minnesota 55402
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b)
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ASSESSMENT AGREEMENT
THIS AGREEMENT, made on or as of the ____ day of _________________, 2015 by and
between the St. Louis Park Economic Development Authority, a public body, corporate and politic
(the “Authority”) and Shoreham Apartments LLC, a Delaware limited liability company (the
“Redeveloper”).
WITNESSETH, that
WHEREAS, on or before the date hereof the Authority and Redeveloper have entered into a
Contract for Private Redevelopment dated August 17, 2015 (the “Redevelopment Contract”),
pursuant to which the Authority is to facilitate development of certain property in the Authority of
St. Louis Park hereinafter referred to as the “Property” and legally described in Exhibit A hereto;
and
WHEREAS, pursuant to the Redevelopment Contract the Redeveloper is obligated to
construct certain improvements (the “Minimum Improvements”) upon the Property; and
WHEREAS, the Authority and Redeveloper desire to establish a minimum market value for
the Property and the Minimum Improvements to be constructed thereon, pursuant to Minnesota
Statutes, Section 469.177, Subdivision 8; and
WHEREAS, the Authority and the City Assessor (the “Assessor”) have reviewed the
preliminary plans and specifications for the improvements and have inspected such improvements;
NOW, THEREFORE, the parties to this Agreement, in consideration of the promises,
covenants and agreements made by each to the other, do hereby agree as follows:
1. The minimum market value which shall be assessed for ad valorem tax purposes for
the Property described in Exhibit A, together with the Minimum Improvements constructed thereon,
shall be $27,421,000 as of January 2, 2017 and $32,260,000 as of January 2, 2018, notwithstanding
the progress of construction by such date, and as of each January 2 thereafter until termination of
this Agreement under Section 2 hereof.
2. The minimum market value herein established shall be of no further force and effect
and this Agreement shall terminate on the earlier of the following: (a) The date of receipt by the
Authority of the final payment from Hennepin County of Tax Increments from the Shoreham Tax
Increment Financing District, or (b) the date when the Note, as defined in the Redevelopment
Contract, has been fully paid, defeased or terminated in accordance with its terms.
The event referred to in Section 2(b) of this Agreement shall be evidenced by a certificate or
affidavit executed by the Authority.
3. This Agreement shall be promptly recorded by the Authority. The Redeveloper
shall pay all costs of recording.
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4. Neither the preambles nor provisions of this Agreement are intended to, nor shall
they be construed as, modifying the terms of the Redevelopment Contract between the Authority
and the Redeveloper.
5. This Agreement shall inure to the benefit of and be binding upon the successors and
assigns of the parties.
6. Each of the parties has authority to enter into this Agreement and to take all actions
required of it, and has taken all actions necessary to authorize the execution and delivery of this
Agreement.
7. In the event any provision of this Agreement shall be held invalid and unenforceable
by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable
any other provision hereof.
8. The parties hereto agree that they will, from time to time, execute, acknowledge and
deliver, or cause to be executed, acknowledged and delivered, such supplements, amendments and
modifications hereto, and such further instruments as may reasonably be required for correcting any
inadequate, or incorrect, or amended description of the Property or the Minimum Improvements or
for carrying out the expressed intention of this Agreement, including, without limitation, any further
instruments required to delete from the description of the Property such part or parts as may be
included within a separate assessment agreement.
9. Except as provided in Section 8 of this Agreement, this Agreement may not be
amended nor any of its terms modified except by a writing authorized and executed by all parties
hereto.
10. This Agreement may be simultaneously executed in several counterparts, each of
which shall be an original and all of which shall constitute but one and the same instrument.
11. This Agreement shall be governed by and construed in accordance with the laws of
the State of Minnesota.
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ST. LOUIS PARK ECONOMIC
DEVELOPMENT AUTHORITY
By
Its President
By
Its Executive Director
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ____ day of ________, 2015 by
____________________ and ___________________________, the President and Executive
Director of the St. Louis Park Economic Development Authority, on behalf of the Authority.
Notary Public
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b)
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SHOREHAM APARTMENTS LLC
By
Robb Bader, Administrative Member
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _____ day of _____________,
2015 by Robb Bader, the Administrative Member of Shoreham Apartments LLC , a Delaware
limited liability company, on behalf of the limited liability company.
Notary Public
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b)
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CERTIFICATION BY CITY ASSESSOR
The undersigned, having reviewed the plans and specifications for the improvements to be
constructed and the market value assigned to the land upon which the improvements are to be
constructed, hereby certifies as follows: The undersigned Assessor, being legally responsible for
the assessment of the above described property, hereby certifies that the values assigned to the land
and improvements are reasonable.
City Assessor for the City of St. Louis Park
STATE OF MINNESOTA )
) ss
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ___ day of ____________,
2015 by _____________________, the City Assessor of the City of St. Louis Park.
Notary Public
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b)
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EXHIBIT A of ASSESSMENT AGREEMENT
Legal Description of Property
Lot 1, Block 1, Shoreham Addition, Hennepin County, Minnesota.
Economic Development Authority Meeting of August 17, 2015 (Item No. 7b)
Title: Redevelopment Contract with Shoreham Apartments, LLC Page 82
Meeting: City Council
Meeting Date: August 17, 2015
Presentation: 2a
EXECUTIVE SUMMARY
TITLE: Recognition of Clark Kube’s Years of Service
RECOMMENDED ACTION: The Mayor is asked to read the certificate and recognize
Construction Code Inspector Clark Kube for his 15 years of service to the City of St. Louis Park.
POLICY CONSIDERATION: None at this time.
SUMMARY: City p olicy states that employees who retire or resign in good standing with over
10 years of service will be presented with a framed certificate from the Mayor, City Manager and
City Council.
Clark Kube is retiring after 15 years of service to the City’s Inspections Department. He will be
in attendance at this meeting. The Mayor is asked to read the certificate and present it to Clark in
recognition of his years of service.
FINANCIAL OR BUDGET CONSIDERATION: Not applicable.
VISION CONSIDERATION: Not applicable.
SUPPORTING DOCUMENTS: None
Prepared by: Ali Timpone, HR Coordinator
Reviewed by: Nancy Deno, Deputy City Manager/HR Director
Approved by: Tom Harmening, City Manager
Meeting: City Council
Meeting Date: August 17, 2015
Presentation: 2b
EXECUTIVE SUMMARY
TITLE: Retirement Recognition Resolution for Office Assistant Nancy Conery
RECOMMENDED ACTION: The Mayor is asked to read the resolution and present a plaque
to Nancy Conery for 37 years of service to the City of St. Louis Park.
POLICY CONSIDERATION: None at this time.
SUMMARY: City policy states that employees who retire or resign in good standing with over
20 years of service will be presented with a resolution from the Mayor, City Manager and City
Council.
Office Assistant Nancy Conery will be in attendance for the presentation at the beginning of the
meeting. The Mayor is asked to read the resolution and present Nancy with a plaque in
recognition of her years of service to the City.
FINANCIAL OR BUDGET CONSIDERATION: Not applicable.
VISION CONSIDERATION: Not applicable.
SUPPORTING DOCUMENTS: Resolution
Prepared by: Ali Timpone, HR Coordinator
Reviewed by: Nancy Deno, Deputy City Manager/HR Director
Approved by: Tom Harmening, City Manager
City Council Meeting of August 17, 2015 (Item No. 2b) Page 2
Title: Retirement Recognition Resolution for Office Assistant Nancy Conery
RESOLUTION NO. 15-____
RESOLUTION OF THE
CITY COUNCIL OF ST. LOUIS PARK, MINNESOTA,
RECOGNIZING THE CONTRIBUTIONS OF AND EXPRESSING APPRECIATION
TO OFFICE ASSISTANT NANCY CONERY
WHEREAS, Nancy Conery began her employment with the City of St. Louis Park 37 years
ago on February 13, 1978; and
WHEREAS, Nancy progressed from her first role as Microfilm Clerk to Office Assistant;
and
WHEREAS, Nancy was instrumental in moving the city from paper to microfilm records
beginning in 1978, then moved the city to its current digital imaging technology in 1995; and
organized the first citywide records purge day; and
WHEREAS, Nancy has been conscientious throughout her career in looking for
improvements in processes, providing a high level of service to customers, recognizing others for
their contributions and providing excellent customer service; and
WHEREAS, Nancy has received many internal recognitions over the years for her assistance
to other departments and her help in completing projects in a timely manner; and
WHEREAS, Nancy will be leaving the City of St. Louis Park to devote time to her family,
writing and traveling;
NOW THEREFORE BE IT RESOLVED that the City Council of the City of St. Louis
Park, Minnesota, by this resolution and public record, would like to thank Nancy Conery for her
great contributions and 37 years of dedicated service to the City of St. Louis Park and wish her
the best in her retirement.
Reviewed for Administration: Adopted by the City Council August 17, 2015
City Manager Mayor
Attest:
City Clerk
Meeting: City Council
Meeting Date: August 17, 2015
Presentation: 2c
EXECUTIVE SUMMARY
TITLE: Community Garden Harvest Festival Day Proclamation
RECOMMENDED ACTION: The Mayor is asked to read and present the proclamation to
Julie Rappaport of SEEDS.
POLICY CONSIDERATION: None at this time.
BACKGROUND: SEEDS (Sustainable Education Edible District/citywide Stewardship) is a
citizen-driven initiative that supports the overall mission of making St. Louis Park a healthier
place to live, work and play. SEEDS offers hands-on educational activities of growing food
"From Soil to Table and Back Again." SEEDS brings together many options of service relating
to people, land, air, water and community through classes, skill shares, volunteer opportunities,
as well as tours of Edible Gardens around St. Louis Park.
On September 19, 2015 SEEDS will host the first annual Community Garden Harvest Festival
Day. The weekend will be filled with tours of edible gardens around town, FREE classes and
workshops on food skills, growing and sustainable efforts, as well as the multiple benefits of
gardening on mind, body, spirit, and planet. Neighborhoods are being asked to form their own
better health goals for 2016 and announce them at the Community Gathering on September 20.
FINANCIAL OR BUDGET CONSIDERATION: Not applicable.
VISION CONSIDERATION: St. Louis Park is committed to being a connected and engaged
community.
SUPPORTING DOCUMENTS: Proclamation
Prepared by: Debbie Fischer, Administrative Services Office Assistant
Approved by: Tom Harmening, City Manager
City Council Meeting of August 17, 2015 (Item No. 2c ) Page 2
Title: Community Garden Harvest Festival Day Proclamation
PROCLAMATION
Community Garden Harvest
Festival Day
WHEREAS, SEEDS is a community-driven initiative that helps support health and
sustainability in St. Louis Park by encouraging the planting of communal and private edible
gardens; and
WHEREAS, SEEDS offers hands-on educational activities of growing food “from
soil to table and back again” through classes, volunteer and internship opportunities that
provide work experience, engage youth in making a difference in their communities and
prepare the next generation of environmentally responsible leaders; and
WHEREAS, SEEDS helps residents learn life-long skills to grow their own food
through sustainable practices and also encourages residents to “Grow an Extra Row” for the
STEP Food Shelf or neighbors in need; and
WHEREAS, community and neighborhood gardens strengthen block clubs, add
beauty to neighborhoods; build community bridges by crossing intergenerational, cultural
and socio-economic divides; present a positive local image; and provide horticultural therapy
and exercise as well as access to healthy food; and
WHEREAS, a Community Garden Harvest Festival Day featuring free classes and
lectures on sustainable practices and food skills, tours of public and private edible gardens
and neighborhood gatherings to determine health goals will be held on September 19, 2015;
NOW THEREFORE, let it be known that the Mayor and City Council of the City of
St. Louis Park do hereby proclaim September 19, 2015, to be the first Community Garden
Harvest Festival Day in St. Louis Park and call upon all citizens in our Community to join in
learning about the multiple health benefits of edible gardens.
WHEREFORE, I set my hand and cause
the Great Seal of the City of St. Louis Park
to be affixed this 17th day of August,
2015.
_________________________________
Jeff Jacobs, Mayor
Meeting: City Council
Meeting Date: August 17, 2015
Presentation: 2d
EXECUTIVE SUMMARY
TITLE: Southwest Twin Cities Beyond The Yellow Ribbon Coalition Update
RECOMMENDED ACTION: No action needed. Jason Gadd, Hopkins City Councilmember
and Coalition co-chair, will present an update on Coalition activities and the upcoming benefit
concert to raise awareness of the military family and veteran support on September 3, 2015.
POLICY CONSIDERATION: None at this time.
SUMMARY: Beyond the Yellow Ribbon is a statewide program started by the Minnesota
National Guard to establish, sustain and create awareness of a comprehensive support network
that connects and coordinates agencies, organizations and resources to meet the needs of service
members, military families and employers in Minnesota. The cities of St Louis Park,
Minnetonka, Hopkins, and Edina have formed the Southwest Twin Cities Beyond The Yellow
Ribbon Coalition which works to connect service members and their families with community
services. Council adopted Resolution No. 12-098 in support of the Coalition in July, 2012.
The Coalition has been receiving requests and fulfilling them throughout the year. 2015 is a year
focused on marketing and getting the word out to veterans and families of the existence of the
Southwest Twin Cities Beyond the Yellow Ribbon Coalition. A part of that is the benefit
concert being held on Thursday, September 3, 2015 at the Hopkins Center for the Arts. The
concert is designed to raise awareness of Beyond the Yellow Ribbon and the support for military
families and veterans. The concert has 3 performers participating, Maiden Dixie, Tim Sigler and
Nashville Recording Artist Beau Davidson. A portion of the proceeds will also go to a partner
organization, Folds of Honor. They provide scholarships to the children of our military
personnel that are killed in action. Attached is a flyer promoting the benefit.
FINANCIAL OR BUDGET CONSIDERATION: Not applicable.
VISION CONSIDERATION: St. Louis Park is committed to being a connected and engaged
community.
SUPPORTING DOCUMENTS: Benefit Concert Flyer
Prepared by: Debbie Fischer, Administrative Services Office Assistant
Approved by: Tom Harmening, City Manager
“We Unite”
BENEFIT CONCERT
FEATURING:
with a special performance by Nashville recording artist
Tim Sigler & Maiden Dixie
THURSDAY SEPTEMBER 3rd, 2015
Presents:
Hopkins Center for the Arts
Doors open for reception at 6:30pm
Show starts at 7:30pm
Tickets: $50 Premier Seats
$30 Main Floor & $20 balcony - seats are limited
To Purchase Tickets, call the box office at 952-979-1111 Option 4
Hours: Tue-Sat Noon-6pm
or online at http://bit.do/WeUnite
Beau Davidson
City Council Meeting of August 17, 2015 (Item No. 2d)
Title: Southwest Twin Cities Beyond The Yellow Ribbon Coalition Update Page 2
Meeting: City Council
Meeting Date: August 17, 2015
Minutes: 3a
UNOFFICIAL MINUTES
CITY COUNCIL STUDY SESSION
ST. LOUIS PARK, MINNESOTA
JULY 27, 2015
The meeting convened at 6:02 p.m.
Councilmembers present: Mayor Pro Tem Tim Brausen, Steve Hallfin, Gregg Lindberg, Anne
Mavity, Susan Sanger, and Jake Spano.
Councilmembers absent: Mayor Jeff Jacobs.
Staff present: Deputy City Manager/Director of Human Resources (Ms. Deno), Director of
Inspections (Mr. Hoffman), Director of Operations & Recreation (Ms. Walsh), Solid Waste
Program Coordinator (Ms. Fisher), Public Works Services Manager (Mr. Merkley), Public
Works Superintendent (Mr. Hanson), Communications and Marketing Manager (Ms. Larson),
and Recording Secretary (Ms. Hughes).
Guests: Mr. Neil Ralston (MAC Planner), Ms. Dana Nelson (MAC Manager of Noise and
Environment), Ms. Lisa Peilen (MAC Commissioner), Mr. Blois Olson (Fluence Media), Mr.
Dan Huff (Minneapolis Health Department), Ms. Madalyn Cioci (Minnesota Pollution Control
Agency), Mr. Paul Kroening (Hennepin County Environment & Energy Department), Mr. Mike
Levy (Plastics Food Service Packaging Group), Mr. Simon Hefty (LitinEco), Ms. Deb McMillan
(TwinWest Chamber of Commerce), Mr. Dan McElroy (Restaurant Association of MN), Mr.
Tim Wilkin (MN Beverage Association), Ms. Kate Davenport (Eureka Recycling), and Ms. Lynn
Hoffman (Eureka Recycling).
1. Future Study Session Agenda Planning – August 10, 2015
Ms. Deno presented the proposed study session agenda for August 10th.
Councilmember Mavity reiterated her earlier request for a study session discussion about how
the City supports small businesses and whether there are specific zoning and land use strategies
that could help guide and incent small business growth in the City.
Ms. Deno agreed to place this item on a future study session agenda.
Councilmember Sanger requested a study session discussion regarding construction noise in
residential neighborhoods and what kinds of controls the City has in place and/or what kinds of
controls could be added to minimize construction impacts in residential neighborhoods.
Ms. Deno agreed to provide information to Council about the City’s current ordinance and
additional controls that could be added as well as information about regulations in other cities.
Councilmember Spano requested that staff also provide information about parking and staging of
materials in construction projects.
2. Metropolitan Airports Commission (MAC) Presentation
City Council Meeting of August 17, 2015 (Item No. 3a) Page 2
Title: Study Session Minutes of July 27, 2015
Mr. Hoffman presented the staff report and introduced MAC Commissioner Lisa Peilen, Ms.
Dana Nelson, MAC Manager of Noise and Environment, and Mr. Neil Ralston, MAC Planner.
Mr. Ralston provided an update of the 2035 Long Term Comprehensive Plan being developed
for Minneapolis-St. Paul International Airport (MSP) and stated the purpose of the
Comprehensive Plan is to update future airport facility needs through 2035, to serve as a road
map to guide the development strategy and shape the seven year CIP, and to assess when facility
improvements are needed to accommodate projected demand in a safe, efficient and cost
effective manner. He presented a graph depicting actual airport traffic levels and advised that in
2014, MSP accommodated an all-time high of 9 million passenger originations at MSP and
accommodated 17 million passenger enplanements, and by 2035 it is expected that MSP will
accommodate 15 million passenger originations and 27 million enplanements. He stated that the
focus areas regarding adequacy of existing facilities include aircraft gates, terminal processors,
concourse sizing, parking, and the departures/arrivals curb fronts and stated that the gates and
terminal processors are largely adequate through the early 2020s and deficiencies are noted in the
parking and curb front areas pre-2020. He stated that new gates at Terminal 2 are required to
accommodate growth and several of the existing facilities at Terminal 1 are strained and there
are projects identified to address these shortfalls. He then presented a rendering of MSP
facilities improvements including expansion of the baggage claim areas and an eight gate
expansion at Terminal 1 as well as the addition of 12 gates at Terminal 2 and improvements to
the ticketing, baggage claim, and international arrivals areas.
Commissioner Peilen pointed out there will be disruptions beginning next year due to
construction projects, including consolidation of the screening points into two larger security
stations and the ticket counters and baggage claim areas are being redone.
Ms. Nelson explained there has been an overall reduction in the 65 DNL contour and the 2035
forecast indicates a total of 7,005 fewer single-family homes and 6,398 fewer multi-family units
inside the 2035 forecast 60 DNL contour. She discussed the day/night average sound level used
by the FAA to determine noise impact around airports and advised that residential homes are
eligible for mitigation within the 65 DNL contour, adding that MAC provides mitigation out to
60 DNL and a mitigation program is currently in place that sunsets in 2023 and provides that if
someone is in a higher noise impact area than the previous program for three consecutive years,
they are eligible for mitigation based on actual noise contours and MAC is currently looking at
possible eligibility for homes south of Lake Harriet. She also discussed the 2035 total operations
forecast of 512,000 and runway use assumptions for 2035 and presented information regarding
total average daily operations, nighttime average daily operations by category and future aircraft
type considerations, stating that Boeing has indicated the newer aircrafts have a 40% noise
reduction from the B737-800. She also presented a comparison of runway use percentages as
well as a comparison of noise contour impact comparison and stated the 2035 forecasted 60 DNL
noise contour is 56.1% larger than the 2014 base case 60 DNL noise contour.
Councilmember Mavity requested MAC documentation regarding noise reduction in order to
compare this information with what the industry is producing.
Mr. Ralston stated that MAC will be meeting with stakeholders before the Long Term
Comprehensive Plan is completed and will schedule a pre-draft publication meeting in August or
September followed by a formal 45-day public review period and two public information
meetings in October.
City Council Meeting of August 17, 2015 (Item No. 3a) Page 3
Title: Study Session Minutes of July 27, 2015
3. Polystyrene Update & Experts/Stakeholder Panel Discussion
Mayor Pro Tem Brausen welcomed everyone to the discussion and stated that before making a
decision regarding polystyrene, Council will undertake a robust public process including a
listening session and public hearing. He introduced Mr. Blois Olson, moderator for the panel
discussion.
Mr. Dan Huff, City of Minneapolis Environmental Services Division Director, discussed the City
of Minneapolis’s “Green to Go” Ordinance and stated one of the goals was to ensure compliance
by education before moving into regulation and the City of Minneapolis developed a fact sheet
that was mailed to 4,000 food related businesses; in addition, the City of Minneapolis worked
with the business association and held community forums and packaging fairs where distributors
were invited to display their products that meet the Ordinance requirements. He also discussed
the exemptions for some products, e.g., polyethylene coffee cups, and also discussed the phased
implementation of the Ordinance.
Ms. Madalyn Cioci, Minnesota Pollution Control Agency, stated the MPCA does not have a
position specific to polystyrene take-out containers and the MPCA supports policies that result in
a net total waste generation reduction and other outcomes such as reduced air and water
pollution. She indicated the Metropolitan Solid Waste policy plan has a goal of 6% reduction in
total generation of waste, whether disposed, recycled or composted, and of that amount the
MPCA wants 60% of that material to be recycled. She stated that substituting one container for
another raises similar questions to the issues regarding single use plastic bags and she would like
to see what a community could do by promoting a reusable takeout food container program,
adding that the City of Portland has a “go box” reusable takeout food container program.
Mr. Paul Kroening, Hennepin County Waste Management, stated that Hennepin County has not
taken a position on polystyrene, has not considered any regulations, and the County Board has
not asked staff to prepare anything for the Board’s consideration. He stated the County’s priority
is to increase recycling and availability of organics collection. He stated the market for
polystyrene recycling is nonexistent in Hennepin County, particularly food service polystyrene
packaging, adding that polystyrene represents approximately 1.5-2% of the waste stream in
Hennepin County.
Councilmember Spano requested further information about the MPCA’s goal of 6% reduction in
total waste.
Ms. Cioci stated that organic material represents approximately 31% of the waste stream and
textiles in the waste stream are growing and represent 4-5% of the waste stream. She agreed to
provide the State’s waste composition study to provide more detail in that regard.
Mr. Mike Levy, Plastics Food Service Packaging Group, discussed their support of polystyrene
and stated that 254 million tons of trash is generated each year and all forms of polystyrene
represents less than a percent of total waste. He discussed the life cycle of polystyrene and
recycling options and urged the City to fully consider recycling options versus a ban on
polystyrene.
Councilmember Mavity requested that City staff see if any research has been done on
polystyrene impacts in Minnesota lakes.
City Council Meeting of August 17, 2015 (Item No. 3a) Page 4
Title: Study Session Minutes of July 27, 2015
Mr. Simon Hefty, LitonEco discussed alternative food packaging to #6 plastic polystyrene,
including Bagasse clamshells, bowls, plates and cups. He stated that plant fiber to go containers
are made from wheat straw obtained after grain extraction and can withstand temperatures up to
200° F. He presented examples of PLA clear-hinged containers that are 100% compostable and
indicated the compostable products industry continues to develop products to meet the needs of
alternative packaging.
Ms. Deb McMillan, Director of Government Affairs, TwinWest Chamber of Commerce, stated
that St. Louis Park has been a leader in adopting policies to incentivize recycling and TwinWest
encourages the City to consider carefully what it wishes to accomplish and to devise a system
that meets those goals and that will not inhibit business growth and retention. She stated the
business community has concerns about a policy that is onerous, burdensome and not required in
other communities, adding that TwinWest Chamber of Commerce favors efforts to encourage
recycling and believes that an approach to reducing plastic and polystyrene that is incentive
based, includes stakeholders in the process and takes business and consumer interests into
consideration works best.
Mr. Dan McElroy, Minnesota Restaurant Association, stated they are concerned about the cost of
alternative packaging, including the Bagasse product, which is dramatically more expensive. He
stated many of the restaurants in St. Louis Park are franchised restaurants that buy their products
through national contracts and a polystyrene ban would require them to order non-standard
products in small quantities, adding it was not reasonable that someone would want to pay more
for a product in St. Louis Park than the same product in a neighboring community. He stated
they are also concerned about enforcement and availability of exceptions.
Mr. Tim Wilkin, Minnesota Beverage Association, stated there is no economical alternative to a
PS lid, which is the standard in the industry for cold beverages and an exemption for these lids
was provided by the City of Minneapolis.
Ms. Lynn Hoffman, Eureka Recycling, stated that Eureka Recycling strongly supports
elimination of polystyrene packaging and products. She stated that 8% of worldwide oil
production is feedstock and production for plastics, including polystyrene, and a third of this is
used as packaging and other short-lived applications. She discussed ways in which polystyrene
endangers Minnesota wildlife and marine life, stating that microparticles are 24% higher in the
Great Lakes and these toxins enter the food chain where it is expected to have deleterious effects
on both wildlife and human health.
Ms. Kate Davenport, Eureka Recycling, stated Eureka Recycling has not found consistent,
reliable markets for polystyrene or Styrofoam and encouraged the City to ask questions of the
MRF about this issue. She stated there are 87 communities across the country that have
implemented bans and felt this was an exciting opportunity to build on the momentum created by
Minneapolis.
Councilmember Mavity stated there is little information available about measuring what is
coming out of the Hennepin Energy Recovery Center (HERC) and formally requested Hennepin
County to provide the City with a report on the waste from the HERC that goes airborne.
Councilmember Lindberg stated it would be helpful for Council to have a conversation with
representatives of the HERC.
City Council Meeting of August 17, 2015 (Item No. 3a) Page 5
Title: Study Session Minutes of July 27, 2015
Councilmember Mavity requested further information about the New York study and Great
Lakes study referenced by Eureka Recycling.
Mayor Pro Tem Brausen thanked all the panelists for participating in the discussion and stated
that the public listening sessions will be held soon and encouraged any interested persons
including members of the Environment & Sustainability Commission to provide comment.
Communications/Meeting Check-In (Verbal)
None.
Mayor Pro Tem Brausen adjourned the meeting at 9:12 p.m.
Written reports provided and documented for recording purposes only:
4. June 2015 Monthly Financial Report
5. Second Quarter Investment Report (April – June 2015)
6. Cityscape Apartments – Special (Conditional) Use Permit Major Amendment &
Variances at 5707 Hwy 7
7. Shared Services Agreement with City of Golden Valley for Central Park West
8. Business Terms for Redevelopment Contract with Shoreham Apartments, LLC
9. Dementia Training Update
10. SWLRT Update
______________________________________ ______________________________________
Melissa Kennedy, City Clerk Tim Brausen, Mayor Pro Tem
Meeting: City Council
Meeting Date: August 17, 2015
Minutes: 3b
UNOFFICIAL MINUTES
CITY COUNCIL MEETING
ST. LOUIS PARK, MINNESOTA
AUGUST 3, 2015
1. Call to Order
Mayor Pro Tem Brausen called the meeting to order at 7:31 p.m.
Councilmembers present: Mayor Pro Tem Tim Brausen, Gregg Lindberg, Anne Mavity, Susan
Sanger, and Jake Spano.
Councilmembers absent: Mayor Jeff Jacobs and Councilmember Steve Hallfin.
Staff present: City Manager (Mr. Harmening), City Attorney (Mr. Mattick), Planning & Zoning
Supervisor (Mr. Walther), Housing Supervisor/Deputy Community Development Director (Ms.
Schnitker), Housing Programs Coordinator (Ms. Olson), Westwood Hills Nature Center
Naturalist (Ms. McConnell), and Westwood Hills Nature Center Activity Specialist (Ms.
Glennon), and Recording Secretary (Ms. Hughes).
1a. Pledge of Allegiance
1b. Roll Call
2. Presentations
2a. Westwood Hills Nature Center Junior Naturalists Recognition
Ms. Glennon stated that the Junior Naturalist program began 25 summers ago and has
grown into 65 dedicated and engaged volunteers and as of today, the Junior Naturalists
donated over 1,800 hours this summer and over the entire Junior Naturalist careers, this
group has donated over 5,400 hours.
Mayor Pro Tem Brausen expressed the City Council’s thanks to the Junior Naturalists for
their service and presented certificates of appreciation to each of the Junior Naturalists.
2b. Wayside House Recognition
Mayor Pro Tem Brausen presented a Certificate of Recognition to Wayside House for
over sixty years of dedicated service in St. Louis Park and throughout the metro area and
introduced Ms. Karina Forrest-Perkins, Ms. Sara Larson, Ms. Sonata King, and Ms.
Cheryl Davidson from Wayside House.
Ms. Forrest-Perkins thanked the City Council and the City for all it has done for Wayside
House and the families served by Wayside House. She stated that Wayside House has
served over 28,000 women and the City of St. Louis Park has been a significant partner in
making that happen.
City Council Meeting of August 17, 2015 (Item No. 3b) Page 2
Title: City Council Meeting Minutes of August 3, 2015
Councilmember Sanger stated she was proud to be associated with Wayside House,
having served on the Board for 20 years, and was pleased that Wayside House continues
to achieve great success in helping women and their families overcome addiction and
mental health issues.
3. Approval of Minutes
3a. Study Session Meeting Minutes July 13, 2015
Councilmember Sanger requested that the fifth sentence of the second paragraph on page
5 be revised to read “She disagreed with the statement in the SDEIS that indicates the
southern interconnect would have a positive impact due to the removal of the wye and
would have a potentially negative impact by permitting more and longer trains traveling
south to Savage but the SDEIS did not address the mitigation needs such as addressing
traffic concerns. would have no impact on railroad operations and stated it will have a
positive impact because it will mean that potentially more and longer trains can run over
the southern interconnect but does not address the mitigation measures needed for that.”
The minutes were approved as amended.
3b. Special Study Session Meeting Minutes July 20, 2015
The minutes were approved as presented.
3c. City Council Meeting Minutes July 20, 2015
The minutes were approved as presented.
4. Approval of Agenda and Items on Consent Calendar
NOTE: The Consent Calendar lists those items of business which are considered to be routine
and/or which need no discussion. Consent items are acted upon by one motion. If discussion is
desired by either a Councilmember or a member of the audience, that item may be moved to an
appropriate section of the regular agenda for discussion.
4a. Accept for filing City Disbursement Claims for the period of June 27, 2015 through
July 24, 2015.
4b. Approve Amendment No. 3 to City Agreement No. 4069, between the City and T-
Mobile Central LLC for communication antennas on the City’s water tower at 5100
Park Glen Road.
4c. Approve Amendment No. 2 to City Agreement No. 4077, between the City and T-
Mobile Central LLC for communication antennas on the City’s water tower at 8301
West 34th Street.
4d. Approve a Temporary On-Sale Intoxicating Liquor License for Church of the Holy
Family at 5900 West Lake Street for their event to be held September 12, 2015.
4e. Adopt Resolution No. 15-103 authorizing the special assessment for the repair of the
sewer service line at 3012 Alabama Avenue South, St. Louis Park, MN P.I.D. 16-117-
City Council Meeting of August 17, 2015 (Item No. 3b) Page 3
Title: City Council Meeting Minutes of August 3, 2015
21-22-0069.
4f. Adopt Resolution No. 15-104 authorizing the special assessment for the repair of the
sewer service line at 3232 Brunswick Avenue South, St. Louis Park, MN. P.I.D. 16-
117-21-23-0077.
4g. Adopt Resolution No. 15-105 authorizing the special assessment for the repair of the
water service line at 8500 28th Street West, St. Louis Park, MN P.I.D. 07-117-21-43-
0058.
4h. Adopt Amended Resolution No. 15-106 authorizing the special assessment for the
repair of the water service line at 3154 Hillsboro Avenue South, St. Louis Park, MN -
P.I.D. 18-117-21-22-0003.
4i. Adopt Resolution No. 15-107 establishing a special assessment for the installation of
a Fire Suppression Sprinkler System at 7420 West Lake Street, St. Louis Park.
4j. Adopt Resolution No. 15-108 accepting the project report, establishing and approving
plans and specifications, and authorizing advertisement for bids for the replacement of
The Rec Center arena refrigeration systems.
4k. Approve for filing Fire Civil Service Commission Meeting Minutes January 22, 2015.
4l. Approve for filing Parks & Recreation Advisory Commission Meeting Minutes
January 21, 2015.
4m. Approve for filing Parks & Recreation Advisory Commission Meeting Minutes March
18, 2015.
4n. Approve for filing Planning Commission Meeting Minutes June 3, 2015.
It was moved by Councilmember Spano, seconded by Councilmember Sanger, to approve
the Agenda and items listed on the Consent Calendar and to waive reading of all
resolutions and ordinances.
The motion passed 5-0 (Mayor Jacobs and Councilmember Hallfin absent).
5. Boards and Commissions
5a. Appointment of Bob Tift to Fire Civil Service Commission
It was moved by Councilmember Mavity, seconded by Councilmember Lindberg, to
appoint Bob Tift to the Fire Civil Service Commission for a term to expire December 31,
2016.
The motion passed 5-0 (Mayor Jacobs and Councilmember Hallfin absent).
6. Public Hearings - None
7. Requests, Petitions, and Communications from the Public – None
8. Resolutions, Ordinances, Motions and Discussion Items
City Council Meeting of August 17, 2015 (Item No. 3b) Page 4
Title: City Council Meeting Minutes of August 3, 2015
8a. Cityscape Apartments – Special (Conditional) Use Permit Major
Amendment & Variances at 5707 Hwy 7. Resolution No. 15-109 and
Resolution No. 15-110.
Mr. Walther presented the staff report and stated that Cityscape Apartments has been in
compliance with its original approvals and conditions since 1989. He advised there was a
recent taking of 1,048 square feet of the property by MN DOT as part of the Highway
100 reconstruction and the light rail bridge project. He explained that the lot area was
4.36 acres and the resulting lot area is 4.34 acres, the density was 35.8 units per acre and
the resulting density is now 36 units per acre, the floor area ratio originally approved was
1.0 and the resulting floor area ratio is 1.01, and the ground floor area ratio was 0.2512
and the increased ground floor area ratio is insignificant. He stated the applicant is also
requesting variances from the current standards to allow an increase in density from 30
units per acre to 36 units per acre and an increase in the floor area ratio from 0.7 to 1.0.
He reviewed the variance criteria and stated that the variances do not impact the health,
safety or welfare of the community, the existing use is consistent with current zoning, the
variances are insignificant compared to the original approvals, the variances are primarily
due to the taking of private land for public purposes and there are practical difficulties
arising out of this taking. He advised that the Planning Commission held a public
hearing and recommends approval of the Special (Conditional) Use Permit Major
Amendment and variances.
It was moved by Councilmember Sanger, seconded by Councilmember Mavity, to adopt
Resolution No. 15-109 Amending and Restating Resolution No. 89-109 Adopted on July
31, 1989, and Granting an Amendment to an Existing Special (Conditional) Use Permit
to Allow a 156-Unit Multiple Family Dwelling at 5707 Highway 7.
The motion passed 5-0 (Mayor Jacobs and Councilmember Hallfin absent).
It was moved by Councilmember Sanger, seconded by Councilmember Mavity, to adopt
Resolution No. 15-110 Granting Variances to Allow an Increase in Residential Density
from 30.0 to 36.0 Units Per Acre and an Increase in Floor Area Ratio from 0.7 to 1.0
Floor Area Ratio for Property Located at 5707 Highway 7.
The motion passed 5-0 (Mayor Jacobs and Councilmember Hallfin absent).
8b. Shared Services Agreement with City of Golden Valley for Central Park
West
Mr. Walther presented the staff report and stated that the Central Park West development
includes two apartment buildings, a hotel, and two office towers to be constructed in five
phases. He presented the site plan and explained that the 199-unit apartment building and
the future office parking ramp will straddle the boundary between Golden Valley and St.
Louis Park and the scope of the proposed Shared Services Agreement will include
permits, plan review, inspections and licensing with St. Louis Park taking the lead on
these items for the Residential Building with a small portion of revenue being shared with
Golden Valley. He stated that in the case of the future parking ramp, Golden Valley will
take the lead on those items covered in the Shared Services Agreement and will share a
portion of revenue with St. Louis Park. He advised that the Golden Valley City Council
will consider this item at their meeting on Wednesday, August 5th and added that both the
City Council Meeting of August 17, 2015 (Item No. 3b) Page 5
Title: City Council Meeting Minutes of August 3, 2015
hotel and future office development projects require a major amendment process and will
be presented to the Planning Commission and City Council for review.
Mayor Pro Tem Brausen asked if the residential units would share a common address.
Mr. Walther replied in the affirmative and stated there will be one address for the entire
residential building. He stated that both cities have a crime free ordinance and the
property owner will have to satisfy both ordinances. He also stated that the residential
units would follow school district boundaries.
Councilmember Mavity requested that staff work closely with the property owner to
make sure residents know where to vote.
Mr. Walther stated that staff would work with the property manager to help them convey
this information to tenants. He stated the Shared Services Agreement can be amended in
the future to include additional items such as property maintenance and staff will
continue to update Council as the development progresses.
It was moved by Councilmember Mavity, seconded by Councilmember Spano, to
authorize the Mayor and City Manager to execute a Shared Services Agreement with the
City of Golden Valley relating to the Central Park West Redevelopment.
The motion passed 5-0 (Mayor Jacobs and Councilmember Hallfin absent).
9. Communications
Mr. Harmening encouraged residents to vote in the Primary Election on Tuesday, August
11th. He reminded residents about the community meeting on Climate Resiliency being
held on Tuesday, August 11th, at 7:00 p.m. at the Rec Center.
Mayor Pro Tem Brausen reminded residents about National Night Out on Tuesday,
August 4th.
10. Adjournment
Mayor Pro Tem Brausen adjourned the meeting at 8:11 p.m.
______________________________________ ______________________________________
Melissa Kennedy, City Clerk Tim Brausen, Mayor Pro Tem
Meeting: City Council
Meeting Date: August 17, 2015
Consent Agenda Item: 4a
EXECUTIVE SUMMARY
TITLE: League of Minnesota Cities (LMCIT) Optional No Fault Sewer Backup Coverage
RECOMMENDED ACTION: Motion to Adopt Resolution electing to continue the current
coverage with the changes from the LMCIT’s.
POLICY CONSIDERATION: Does the Council agree with Staff’s recommendation to
continue the current coverage with the changes from the LMCIT’s?
SUMMARY: Due to the changes from last year’s No-Fault Sewer Backup Coverage the League
of Minnesota Cities requires a formal resolution be passed through each city to approve the
coverage.
The No-Fault Sewer Backup Coverage that we currently possess is the large deductible of
$40,000; with the city having a $150,000 general aggregate limit. This provides the residents
with the most coverage related to sewer backup. This is the first year the league of Minnesota
Cities is requiring annual Council approval of coverage. Staff is recommended that the City
maintains its current coverage.
FINANCIAL OR BUDGET CONSIDERATION: The City will continue to maintain sewer
backup coverage through the League of Minnesota Cities Insurance Trust, and the required
annual motion will be in place in preparation for the new policy year.
VISION CONSIDERATION: Not applicable.
SUPPORTING DOCUMENTS: Discussion
Resolution – LMCIT’s Optional No Fault Sewer Backup Coverage
Prepared by: Coty Hemann, Accountant
Reviewed by: Steve Heintz, Finance Supervisor
Brian A. Swanson, Controller
Approved by: Tom Harmening, City Manager
City Council Meeting of August 17, 2015 (Item No. 4a) Page 2
Title: League of Minnesota Cities (LMCIT) Optional No Fault Sewer Backup Coverage
DISCUSSION
BACKGROUND: No Fault Sewer Back-up and Water Main Break Coverage reimburses a
property owner for up to the coverage limit of clean-up costs and damages caused by a sewer
backup or water main break, irrespective of whether the city was negligent or legally liable for
those damages. One of the other advantages is that it encourages prompt cleanup by the
homeowners, helping to reduce health hazards. The City’s practice has been to carry a
deductible of $40,000. Staff recommends the Council continue with this practice as outlined
below:
Current Practice and Recommended Continued Practice
If the city maintains the $40,000 deductible, an individual claimant would be responsible for any
costs above the coverage limit. The coverage would reimburse the property owner for the cost of
cleaning up the backup, and damage to the property up to the coverage limit. Claim payments are
on a per-occurrence basis and/or annual deductible in the policy.
The City of St. Louis Park in the past has elected to carry the No-fault Sewer Backup coverage
due to the consistency of the claims made by residents. This provides the most protection to the
homeowners. Staff recommends continuing this practice and maintain the $40,000 deductible.
The following resolution allows the no-fault sewer backup coverage to remain in place until the
Council changes this election. Staff will ask Council to consider this question annually as
required by the League of Minnesota Cities Insurance Trust.
City Council Meeting of August 17, 2015 (Item No. 4a) Page 3
Title: League of Minnesota Cities (LMCIT) Optional No Fault Sewer Backup Coverage
RESOLUTION NO. 15 - ____
RESOLUTION ESTABLISHING LIMITED CLEAN UP AND
PROPERTY DAMAGE PROTECTION FOR SEWER BACK-UPS AND
WATER MAIN BREAKS FOR WATER AND SEWER CUSTOMERS
WHEREAS, The City of St. Louis Park provides water and sanitary sewer services to
property within its jurisdiction; and
WHEREAS, water main breaks may cause water to enter into property causing damage;
and
WHEREAS, blockages or other conditions in the City of St. Louis Park’s sanitary sewer
lines may cause the back-up of sewage into properties that are connected to those City of St.
Louis Park’s sanitary lines; and
WHEREAS, water main breaks and sewer back-ups pose a public health and safety
concern; and
WHEREAS, it may be difficult to determine the exact cause and responsibility for a
water main break or sanitary sewer back-ups and
WHEREAS, the City of St. Louis Park desires to encourage the expeditious clean-up of
properties that have encountered damage from water main breaks and sewer back-ups; and
WHEREAS, the City of St. Louis Park desires to minimize the potential of expensive
lawsuits arising out of water main breaks and sanitary sewer back-up claims; and
WHEREAS, the City of St. Louis Park is a member of the League of Minnesota Cities
Insurance Trust (LMCIT); and
WHEREAS, LMCIT has offered the City of St. Louis Park limited “no fault” sewer
coverage and water main break coverage (No-Fault Coverage) that will reimburse users of the
water and sewer system for certain clean-up costs and property damage regardless of whether the
City of St. Louis Park is at fault.
NOW THEREFORE, BE IT RESOLVED, as follows:
The City of St. Louis Park, will reimburse water and sanitary sewer customers for up to $40,000
of clean-up costs and property damages caused by a water main break or sanitary sewer back-up,
regardless of whether the City of St. Louis Park is negligent or otherwise legally liable for
damages, subject to the following conditions:
I. Sanitary Sewer Back-Ups. For Sanitary sewer back-ups:
A. The back-up must have resulted from a condition in the City of St. Louis Park’s sanitary
sewer system or lines and not from a condition in a private line.
B. The back-up must not have been caused by any catastrophic weather or other event which
has been declared by the President of the United States to be a major disaster pursuant to
42 U.S.C. §§ 5121-5206, commonly known as the Stafford Act.
City Council Meeting of August 17, 2015 (Item No. 4a) Page 4
Title: League of Minnesota Cities (LMCIT) Optional No Fault Sewer Backup Coverage
C. The back-up must not have been caused by an interruption in electric power to the City of
St. Louis Park’s sewer system or to any City of St. Louis Park lift station, which
continues for more than 72 hours.
D. The back-up must not have been caused by an amount of precipitation equivalent to
rainfall amounts which exceed:
o 2.0 inches in a 1-hour period; or
o 2.5 inches in a 3-hour period; or
o 3.0 inches in a 6-hour period; or
o 3.5 inches in a 12-hour period; or
o 4.0 inches in a 24-hour period; or
o 4.5 inches in a 72-hour period; or
o 5.5 inches in a 168-hour period.
E. Neither the City of St. Louis Park nor LMCIT will reimburse any costs which have been
or are eligible to be covered under a property owner’s own homeowners’ or other
property insurance, or which would be eligible to be reimbursed under a National Flood
Insurance Protection (NFIP) policy, whether or not the property owner actually has NFIP
Coverage.
F. The maximum amount that the City of St. Louis Park or LMCIT will reimburse is
$40,000 per building, per year. A structure or group of structures served by a single
connection to the City of St. Louis Park’s sewer system is considered a single building.
II. Water Main Breaks. For water main breaks:
A. Neither the City of St. Louis Park nor LMCIT will reimburse any costs which have been
or are eligible to be covered under a property owner’s own homeowners’ or other
property insurance
B. The maximum amount that the City of St. Louis Park or LMCIT will reimburse is
$40,000 to any claimant, regardless of the number of occurrences or the number of
properties affected.
C. Neither the City of St. Louis Park nor LMCIT will pay more than $250,000 for water
main break damages resulting from any single occurrence. All water main break damage
which occurs during any period of 72 consecutive hours is deemed to result from a single
occurrence. If the total water main break damage for all claimants in a single occurrence
exceeds $250,000, the reimbursement to each claimant will be calculated as follows:
1. A preliminary reimbursement figure is established for each claimant, equal to the
lesser of the claimant’s actual damages or $40,000.
2. The sum of the preliminary reimbursement figures for all claimants will be
calculated.
3. Each claimant will be paid a percentage of his or her preliminary reimbursement
figure, equal to the percentage calculated by dividing $250,000 by the sum of all
claimants’ preliminary reimbursement figures.
III. The City of St. Louis Park’s determination to make these payments is contingent on and
expressly limited to the extent that No-Fault Coverage is in force and available to reimburse the
City of St. Louis Park for the costs set forth herein.
IV. The City of St. Louis Park retains the right, in its sole discretion, to revoke, rescind, or
modify this resolution at any time.
City Council Meeting of August 17, 2015 (Item No. 4a) Page 5
Title: League of Minnesota Cities (LMCIT) Optional No Fault Sewer Backup Coverage
V. The City of St. Louis Park hereby rescinds any prior resolution providing no-fault sewer
backup coverage and water main break coverage.
IN WITNESS WHEREOF, the City of St. Louis Park, by action of its governing body,
caused this
Reviewed for Administration: Adopted by the City Council August 17, 2015
City Manager Mayor
Attest:
City Clerk
Meeting: City Council
Meeting Date: August 17, 2015
Action Agenda Item: 4b
EXECUTIVE SUMMARY
TITLE: City Hall Remodeling Project
RECOMMENDED ACTION: Motion to authorize staff to purchase up to $820,000 in office
partitions, workstations, and furnishing with State contract pricing from Hendrickson PSG.
POLICY CONSIDERATION: Are sufficient funds available to pay for the cost of this
project?
SUMMARY: The project is continuing with an estimated completion of November, 2015.
Staffing and organization changes occurring since the project began necessitated review of the
initial office furnishing plan. The following modifications have occurred or are planned to be
implemented with the final plan:
• Workstation was added to the first floor Information Resources offices for
accommodating the newly created Environmental Coordinator position.
• Organization changes in Community Development will result in reconfiguring some
workstations and adding a DIRTT partitioned office for new supervisor position.
• Staff changes in Administration allowed a re-evaluation of the front office layout for
improved coordination of the City Clerk’s office.
• Additional DIRRT panels with glass for improved natural light sharing planned for a
third floor office instead of building hard walls.
These modifications raise the cost of office furnishings by approximately $60,000 and will
exceed the initial February 2nd Council authorization of up to $760,000 in purchases. Council is
requested to increase the authorized purchases for partitions, workstations, and furniture with
state contract pricing from Hendrickson to $820,000 for completion of the city hall remodeling.
FINANCIAL OR BUDGET CONSIDERATION: While the initial project budget of 1.235
million and included contingency is covering regular remodeling discoveries and construction
changes, the office furnishing changes will increase expenditures for the project. The budget
will increase as a result of this motion with available funding from the Capital Replacement
Fund.
VISION CONSIDERATION: Not applicable.
SUPPORTING DOCUMENTS: None
Prepared by: Brian Hoffman, Director of Inspections
Approved by: Tom Harmening, City Manager
Meeting: City Council
Meeting Date: August 17, 2015
Consent Agenda Item: 4c
EXECUTIVE SUMMARY
TITLE: Blue Cross Blue Shield (BCBS) Funding for Health in the Park
RECOMMENDED ACTION: Motion to Approve the Blue Cross Blue Shield of Minnesota
Active Living for All Master Agreement relating to the Health in the Park initiative.
POLICY CONSIDERATION: Does the City Council wish to continue to receive funding
from Blue Cross Blue Shield for the Health in the Park initiative for 2015-2016?
SUMMARY: Last year we received funding from Blue Cross Blue Shield to engage our
community on Health in the Park. We continue to partner with Park Nicollet, St. Louis Park
School District, TwinWest Chamber and Children First.
We are starting on year three, our last year of funding from Blue Cross Blue Shield. Our funding
for year three is $150,000. The Master Agreement is intended to reflect our use of these dollars.
The key areas we will be undertaking over the next year include:
• Support the citizen led action groups which promote active living, better eating and
mental health awareness in St. Louis Park.
• Maintain Health in the Park visibility.
• End of year community feedback and celebration event.
• Work to review internal policies, systems and environment around Health in the Park.
• Work with the neighborhoods to further engrain health and active living into the way we
live.
• Work with local businesses, TwinWest Chamber and Hennepin County to facilitate
dialogue among our business communities with the purpose of engaging them in
developing an active living and wellness culture.
• Undertake community events such as community link, community celebration and
meetings with neighborhoods/champions/partners.
• Develop strategy for Health in the Park to take this initiative beyond the three years of
funding and integrate it into our culture.
The City Attorney has reviewed the agreement and has not suggested any changes.
VISION CONSIDERATION: St. Louis Park is committed to being a connected and engaged
community.
SUPPORTING DOCUMENTS: BCBS of MN Active Living for All Master Agreement
Prepared by: Laura Smith, Volunteer and Wellness Coordinator
Reviewed by: Nancy Deno, Deputy City Manager/HR Director
Approved by: Tom Harmening, City Manager
Page 1 of 12
CFCMA KMA 3.13 city of st louis park alfa sched 3 27jul2015.doc
ENGAGEMENT SCHEDULE #3
TO
ACTIVE LIVING FOR ALL MASTER AGREEMENT
This Schedule is made pursuant to and incorporated into the Active Living For All Master Agreement
bearing an Effective Date of July 1, 2013, and entered into by and between BCBSM, Inc., dba Blue Cross
and Blue Shield of Minnesota (hereafter “Blue Cross”) and City of St. Louis Park (hereafter
“Consultant”). Any capitalized term not otherwise defined herein will have the meaning given to it in the
Active Living for All Master Agreement (the “Agreement”).
1. SCOPE/DESCRIPTION OF SERVICES.
A. Blue Cross’ goal is to improve physical activity amongst Minnesotans. Blue Cross is funding
selected communities to plan for and implement an effective approach to support active living
efforts, with a focus on policy, systems and environmental (PSE) change. The intent is to support
work that increases access to and reduces barriers to routine physical activity.
B. Consultant will continue to lead initiative to generate citizen input, advocacy, and action on PSE
changes to reduce barriers and increase access to routine physical activity in the city of St. Louis
Park. Consultant will support the resulting community action teams that have committed to
organize and take action around a particular health issue within the city of St. Louis Park
including physical activity, healthy eating and mental wellbeing. The Consultant will focus efforts
to create and adopt city policies that will honor, sustain, and implement past citizen engagement
and action team priorities. Policy efforts will include the creation of a healthy policy as well as the
inclusion of health in city planning and zoning efforts. Consultant will also engage residents,
businesses, neighborhoods, and organizations around improving health. Engagement efforts will
have a focus on high priority populations. Collectively, these activities constitute the “Project.”
2. START/END DATE OF SERVICES. Consultant shall start performance of the Services under this
Schedule on July 1, 2015, and complete performance no later than June 30, 2016. During the time
period of July 1, 2016, through July 31, 2016, Consultant is to work only on preparing the July 31
report. All other work detailed in this Schedule is to be completed by June 30, 2016.
3. DESCRIPTION OF TASKS/SERVICES TO BE PROVIDED BY CONSULTANT.
A. The work plan supports active living initiative for the period of July 1, 2015, to June 30, 2016,
approved by Blue Cross project manager, attached hereto as Appendix A to this Schedule. Any
change made to the work plan requires approval in writing by the Blue Cross project manager
and will be incorporated into this Schedule.
B. Consultant will execute the agreed upon work plan as described herein. All projected dates have
up to 30-day variation before additional contractual review is needed. Any deviation from these
projected dates need to be approved in writing by the Blue Cross project manager. All
Consultant Tasks/Services are fully defined within the attached work plan but at a very minimum
these include, but are not limited to:
1. Creation and adoption of city health policy;
2. Begin the process of updating the city’s comprehensive plan with the inclusion of health
language and data;
3. Create new pedestrian-oriented zoning districts and related zoning code around the city’s
three potential light rail station areas;
4. Support citizen-led initiatives via action teams focused on physical activity, healthy eating,
and mental wellbeing; and
City Council Meeting of August 17, 2015 (Item No. 4c)
Title: Blue Cross Blue Shield (BCBS) Funding for Health in the Park
Page 2
Page 2 of 12
CFCMA KMA 3.13 city of st louis park alfa sched 3 27jul2015.doc
5. Engage residents, businesses, neighborhood groups, and community organizations around
community health with particular focus paid to engagement of high priority populations.
C. Consultant and designated subcontractors will complete a core competency assessment to be
used to inform the capacity development and leadership development plan to be developed by
the Blue Cross project manager.
D. Upon request by Blue Cross, Consultant will participate in Blue Cross-sponsored workshops,
conferences, trainings and/or conference calls for project support, planning, best practices, and
other activities identified in the capacity development and leadership development plan including
but not limited to:
1. up to two (2) learning meetings to be scheduled;
2. other events as identified by Blue Cross project manager; and/or
3. other conferences (non-Blue Cross) must be pre-approved in work plan.
E. Consultant shall comply with any and all guidelines, restrictions and standards for the use of Blue
Cross’s name, logo and attribution, including, but not limited to, those set forth in Exhibit 5
(Communications Requirements for Funded Organizations) to the Agreement, which Blue Cross
may amend from time to time, and provide Blue Cross with (a) proofs for review and approval
prior to printing or other publication (including paper or electronic publishing, and creation of
audio/video documentation) of any Project-related material, advertising or video containing
attribution of Blue Cross or Blue Cross’ name or logo, and (b) the opportunity to approve or reject
the placement, color or size of Sponsor’s name or logo on all Project-related material or
advertising. Blue Cross retains all right, title and interest in its corporate name and logo, and
nothing in this Schedule or the Agreement will be construed to constitute a waiver of any other
right or remedy Blue Cross may have relative to the use of its corporate name or logo by
Consultant.
F. Consultant shall acknowledge Blue Cross in materials related to the Project including but not
limited to: promotional literature, brochures, publications, press releases, advertisements and
digital/multi-media content. The following language, or such other language approved by Blue
Cross as set forth in the above mentioned Exhibit 5, shall be used:
Funding for this project is provided by the Center for Prevention at Blue
Cross and Blue Shield of Minnesota, as part of the Blue Cross’ long-term
commitment to tackle the leading causes of heart disease and cancer:
tobacco use, lack of physical activity and unhealthy eating.
G. Consultant may not make any media statements on behalf of Blue Cross under any
circumstance. However, Consultant may publicize that Blue Cross has funded the Project and
advise media to contact Blue Cross directly for more information. In addition, if any media outlet
contacts Consultant requesting comment on behalf of Blue Cross, Consultant shall contact its
Blue Cross communications representative immediately. Any proactive outreach to media shall
be coordinated with Blue Cross communications staff as specified in the above mentioned
Exhibit. Consultant will work collaboratively with Blue Cross, and Blue Cross’ evaluator, to help
develop evaluation plan and will supply information and resources based on evaluation plan.
Upon request by the Blue Cross project manager, Consultant will provide one article/entry/update
for summarizing valuable lessons to help serve as a model in Minnesota.
H. Consultant will dedicate a single staff person responsible for coordinating its funded project
related activities. The staff person will serve as primary contact for Blue Cross and other service
providers.
I. Consultant must initiate contact with Blue Cross project manager at least once per month, or as
agreed upon by Consultant and project manager.
J. Consultant will notify Blue Cross project manager within three business days when there is a
change of personnel on the Schedule.
City Council Meeting of August 17, 2015 (Item No. 4c)
Title: Blue Cross Blue Shield (BCBS) Funding for Health in the Park
Page 3
Page 3 of 12
CFCMA KMA 3.13 city of st louis park alfa sched 3 27jul2015.doc
.
4. The twelve (12) month project budget supports the Project for the period of July 1, 2015, to June 30,
2016, attached hereto as Appendix B, and has been approved by Blue Cross project manager. Blue
Cross reserves the right to refuse payment for any expenses which were not in an approved budget.
5. DELIVERABLES. Consultant shall submit progress reports during the contract period. The reports
will be due on the following dates:
Name of Report Period Covered Due Date
6-month report July - December 2015 January 31, 2016
6-month report January - June 2016 July 31, 2016
Report templates to be provided by Blue Cross Reporting and may include, but is not limited to:
A. a listing of meeting dates and attendees;
B. an overview of any assessment results;
C. a list of stakeholder participants;
D. a summary of any special events; and
E. a portfolio of any media coverage.
6. CONSULTANT PERSONNEL. The following Consultant personnel will perform Services under this
Schedule. Any employee hired after the start date of this Schedule will be sent to Blue Cross project
manager via email within three business days of the new employee’s start date:
Name Employee (E) or
Subcontractor (S)
If subcontractor, state
name & address
U.S.
citizen?
(Y/N)
If not U.S. citizen, indicate
citizenship & type of work
permit or visa
Estimated
hours per
week
Laura Smith E Y 6
Jean Olson E Y 24
Betsy Stringer E Y 24
TBD - Social Media &
project assistant E Y 3
7. CHARGES. Blue Cross agrees to pay Consultant for the Services as specified below:
A. For the Services described herein, Blue Cross shall pay Consultant fees for actual costs for items
listed in Appendix B, Budget.
B. Invoicing and payment shall be pursuant to Section I, part 5 of the Agreement.
C. In no event shall Blue Cross be required to pay more than $150,000 for Services and approved
expenses pursuant to this Schedule unless otherwise mutually agreed upon in writing.
Consultant acknowledges that it will not be paid for Services and expenses that exceed the dollar
amount in the previous sentence unless otherwise agreed upon in writing.
8. EXPENSES. All expenses as outlined in the budget, attached hereto as Appendix B, are subject to
prior written approval by Blue Cross, and may require Consultant to submit an additional detailed
budget and work plan per line item. Blue Cross will reimburse Consultant for the reimbursable
expenses listed in the Budget attached as Appendix B, incurred during the performance of this
Schedule and any related Change Orders. Reimbursable expenses shall be subject to Blue Cross’
Contractor/Consultant Expense Reimbursement Policy, attached as Exhibit 4 to the Active Living for
All Master Agreement, which Blue Cross may amend from time to time. Expenses in excess of the
limit in Appendix B are subject to prior written approval by Blue Cross, and may be incurred only if the
City Council Meeting of August 17, 2015 (Item No. 4c)
Title: Blue Cross Blue Shield (BCBS) Funding for Health in the Park
Page 4
Page 4 of 12
CFCMA KMA 3.13 city of st louis park alfa sched 3 27jul2015.doc
parties agree to such additional expenses pursuant to a Change Order. Consultant will invoice Blue
Cross separately for reimbursable expenses on a monthly basis.
9. SCHEDULE TERMINATION. Subject to the terms and conditions of the Agreement, this Schedule
will terminate upon Consultant’s successful completion of the Services and formal acceptance of the
Deliverables by Blue Cross.
In Witness whereof, the parties have executed this Agreement on the date(s) indicated below.
BCBSM, INC., dba Blue Cross and Blue Shield
of Minnesota
City of St. Louis Park
By: By:
Signature
Paula Phillippe
Sr. Vice President, Human Resources & External
Relations
Signature
Print Name
Print Name
Date Date
City Council Meeting of August 17, 2015 (Item No. 4c)
Title: Blue Cross Blue Shield (BCBS) Funding for Health in the Park
Page 5
Page 5 of 12
CFCMA KMA 3.13 city of st louis park alfa sched 3 27jul2015.doc
APPENDIX A
TO
ENGAGEMENT SCHEDULE #3
Work Plan
City Council Meeting of August 17, 2015 (Item No. 4c)
Title: Blue Cross Blue Shield (BCBS) Funding for Health in the Park
Page 6
Blue Cross® and Blue Shield® of Minnesota is a nonprofit independent licensee of the Blue Cross and Blue Shield Association RFP #733—APPENDIX A Project Work Plan, Year 3, July, 2015 – June, 2016 GOAL 1: Create and adopt city policies that will honor, sustain, and implement the work of Health in the Park. PSE Strategy Actions Resources Needed Person(s) Responsible Timeframe – Start/End Dates MEASURES OF SUCCESS Create Health in All Policy for city and school district that is adopted and integrated into departments, used, and sustainable. Hire consultant to help determine scope of project, and navigate the creation of policies Engage HIP citizen-led groups for advice, feedback and direction. Utilize internal employee wellness committee as needed Consultant Time, staff time, time with city and school district leadership. Subcontract with school district to support their work. Project coordinator Consultant, School district partner Begin July 2015 End June 2016 Leadership buy-in feedback across city departments. Creation/integration of policies Utilization/reference of health in all policy in department meetings Collaborate with Community Development in the implementation of Form Based Code, creating spaces that are walkable, pedestrian friendly and green. Target outreach to property owners Form group of individuals in health and development for “peer review” of work for approval. Open house for draft release- strong outreach and communication of this event. Staff time Funding for TAP- Technical Assistance Panel Project Coordinator, Sr. Community Development Planner. Begins: July 2015 Ends: June 2016, plans will continue after June 2016 Business and resident support of Form Based Code Citizen involvement and feedback City Council Meeting of August 17, 2015 (Item No. 4c) Title: Blue Cross Blue Shield (BCBS) Funding for Health in the ParkPage 7
Blue Cross® and Blue Shield® of Minnesota is a nonprofit independent licensee of the Blue Cross and Blue Shield Association RFP #733—APPENDIX A Utilize TAP- Technical Assistance Panel Integrate health and active living in city comp plan Track items for comp plan to determine how it will integrate. Start groundwork by meeting with comp plan partners. Staff time Consultant time Commitment from city leadership Consultant HIP Staff Community Development Begins: 2016 End: Plans will continue after June 2016 Written and approved recommendations and a commitment for health to be in comp plan. Engage local business, faith based communities to encourage health policy and active living culture. Identify partners at businesses and local community organizations Outreach to communities Hold meeting to share Health In All Policy creation from city/school district, importance of health policy and an active living culture HIP outreach staff time Project Coordinator Budget for community partners meeting- space, food HIP Staff- outreach staff, project coordinator, assistant staff Policy Consultant Begin January 2016 End June 2016 Attendance of partner meetings Commitment and interest from businesses/organizations to create their own health policies. City Council Meeting of August 17, 2015 (Item No. 4c) Title: Blue Cross Blue Shield (BCBS) Funding for Health in the ParkPage 8
Blue Cross® and Blue Shield® of Minnesota is a nonprofit independent licensee of the Blue Cross and Blue Shield Association RFP #733—APPENDIX A GOAL 2: Continue supporting and facilitating citizen-led health initiatives PSE Strategy Actions Resources Needed Person(s) Responsible Timeframe – Start/End Dates MEASURES OF SUCCESS Support citizen led groups: Better Eating, Active Connections, and Wellbeing by creating a system for engaging and activating citizens that is sustainable and impactful. Better Eating will support better eating through public education and environment. Active Connections will work on walkability and movability in the city, and spaces to for the community to be active. Wellbeing will work with partners to reduce the stigma of mental illness. Explore possibility of new action group focusing on active aging. Meet with citizen groups bi monthly to check in, advise on citizen led initiatives. Better Eating will focus on helping the referendum pass in the school district, allowing for kitchens to be updated. Active Connections will work with city departments on sidewalks, trails and park usage. Wellbeing will partner with outside organizations who will be hosting Mental Health Classes Work with Lenox Community Center on possibility of new action group. Staff time, space, funding for food, materials needed. HIP Staff Outreach staff HIP assistant staff Begin: July 2015 End: June 2016 Citizen led groups are active and involved. Volunteer engagement and attendance at bi-monthly meetings. Leaders emerge from action groups, who will sustain HIP beyond June 2016. Analyze citizen volunteer workflow and create strategy for 2016 and beyond. Survey citizen led groups and volunteers for feedback. Gather feedback from current HIP staff. Survey from Wilder Data analysis from Wilder Project Coordinator Outreach staff Wilder Begin: July 2015 End: December 2015 Survey participation Final organizational volunteer structure and involvement Increase in volunteer numbers on action teams. City Council Meeting of August 17, 2015 (Item No. 4c) Title: Blue Cross Blue Shield (BCBS) Funding for Health in the ParkPage 9
Blue Cross® and Blue Shield® of Minnesota is a nonprofit independent licensee of the Blue Cross and Blue Shield Association RFP #733—APPENDIX A Realign structure in staff, volunteer and partner responsibilities. Future: feedback on structure Host end of program community conversation/celebration to hand off HIP to sustainability team. Create list of involved parties Create agenda for conversation, evaluation/feedback needed Reserve space, order materials and food needed Staff time, funding, location, food and outreach, Wilder for evaluation HIP Staff Wilder- evaluations Planning Begins: December 2015 Event: April 2016 Attendance records Evaluation feedback GOAL 3: Engage St. Louis Park residents, businesses, neighborhoods, and other stakeholders with a special focus on high priority populations. PSE Strategy Actions Resources Needed Person(s) Responsible Timeframe – Start/End Dates MEASURES OF SUCCESS Create integration of HIP into neighborhoods to further increase sustainability and keep HIP alive beyond 2016. Utilize neighborhoods as a means of communication for HIP happenings. Review neighborhood grant process to integrate HIP Present at annual neighborhood meeting, with call to action. Staff time, buy in from Community Liaison, PD HIP Staff, Community outreach PD team Begins August 2015 Ends June 2016 Feedback from neighborhoods. Neighborhood commitment and involvement. HIP noted in neighborhood grant review process HIP visibility at NNO (Will be July 2016) City Council Meeting of August 17, 2015 (Item No. 4c) Title: Blue Cross Blue Shield (BCBS) Funding for Health in the ParkPage 10
Blue Cross® and Blue Shield® of Minnesota is a nonprofit independent licensee of the Blue Cross and Blue Shield Association RFP #733—APPENDIX A Encourage HIP focus at each national night out party (?) Actively participate in Community Link to promote presence of HIP and engage residents. Utilize event to gather feedback and input from community on form based code, comp plan Engage community in activities: healthy eating, healthy food and walking. Promote healthy eating, lunches and snack preparation through demonstration. Active engagement from city staff or volunteers from HIP action groups. Funding for programs, food, volunteers from action groups. HIP Staff HIP Action Teams, volunteer support August 2015 Feedback/evaluation Number of participants/attendees Define system to keep Park the Street as a community event to be held each year. Engage departments for support. Create step by step system for planning, creation of events. Staff time, city department partnership. City leadership support Project Coordinator Department Heads Begins January 2016 Ends June 2016 Identified project leads from each department to ensure execution of future PTS events. City Council Meeting of August 17, 2015 (Item No. 4c) Title: Blue Cross Blue Shield (BCBS) Funding for Health in the ParkPage 11
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CFCMA KMA 3.13 city of st louis park alfa sched 3 27jul2015.doc
APPENDIX B
TO
ENGAGEMENT SCHEDULE #3
Budget
City Council Meeting of August 17, 2015 (Item No. 4c)
Title: Blue Cross Blue Shield (BCBS) Funding for Health in the Park
Page 12
SECTION 1: Calculation of the price for labor (staff). List the contractor's staff that will be providing servicesName of person providing service Job titleHourly Rate # of Hours Total PriceLaura SmithOrganizational Development, project coordinator$37.99 313.00 11,890.87$ Jean OlsonCommunity Outreach$21.00 1,248.00 $26,208.00Betsy StringerProject Assistant$13.00 1,248.00 $16,224.00TBDSocial Media & project assistant$12.00 156.00 $1,872.00Total estimated price56,194.87$ SECTION 2: Calculation of other project costs. List all other project costs.Expense categoryExplanationUnit price Quantity Total PriceActive Living Community Events Food and Beverage, outreach, engagement3,000.00$ Community LinkFood, Beverage, Training & Healthy Living Demonstrations3,000.00$ Business and Faith Active Living Food, Place, outreach, engagement5,000.00$ Neighborhood and Champion HIP leaders Promotion, training, and innovation5,000.00$ TravelConference for three staff1,800.00$ 3.00 5,400.00$ Project materials2,500.00$ Consultants/SubcontractorsMeeting facilitationMobius (subcontractor)15,000.00$15,000.00$ Health PolicySubcontractor (TBD)43,405.13$43,405.13$ Form Based CodeTechnical Assistance Panel5,000.00$ 5,000.00$ Develop and Maintain beyond 2016 Outside Facilitator (TBD)1,500.00$ 1,500.00$ End of Year CelebrationHonor our citizens, celebrate5,000.00$ 5,000.00$ Total estimated price93,805.13$ Labor56,194.87$ Project‐related93,805.13$ GRAND TOTAL150,000.00$Center for Prevention ‐ ALfA (Active Living for All) ProgramPrice Proposal TemplatePRICESUMMARYCity Council Meeting of August 17, 2015 (Item No. 4c) Title: Blue Cross Blue Shield (BCBS) Funding for Health in the ParkPage 13
Meeting: City Council
Meeting Date: August 17, 2015
Consent Agenda Item: 4d
EXECUTIVE SUMMARY
TITLE: Hennepin County Residential Recycling Grant Agreement
RECOMMENDED ACTION: Motion to Adopt Resolution authorizing execution of the
Hennepin County Grant Agreement for the City’s residential curbside recycling and organics
program.
POLICY CONSIDERATION: Does the Council wish to receive assistance from the County to
help pay for our recycling and organics recycling program?
SUMMARY: Annually in February the City submits a grant report and application for SCORE
funding. SCORE (Select Committee On Recycling and the Environment) was established by
Governor Perpich to provide a funding source for solid waste programs throughout Minnesota.
SCORE funds are derived from a 6.5% tax on garbage collection and disposal fees. These funds
are distributed to counties for solid waste programs, particularly recycling collection. Since 1988
the City has received annual grants from Hennepin County as an aid in supporting the residential
curbside recycling program that serves all single family through four-plex residential structures.
The County’s share of SCORE funds is divided between cities on a proportional basis by the
number of households.
The County’s current funding policy (grant program) covers the period from January 1, 2012
through December 31, 2015, and is being extended through December 31, 2016. The agreement
provides for the proportional distribution of SCORE funds, which the County receives from the
State of Minnesota. The grant program was expanded to now cover organics recycling, as well as
traditional recycling of paper, plastic, and metal.
This report and request is based on a Hennepin County requirement to provide a Council
Resolution authorizing each agreement. This particular resolution covers the Municipal
Recycling Grant Agreement terminating December 31, 2016. The amount received under the
Agreement, for the year 2015 is $115,610. The terms of this agreement are essentially the same
as in the past agreements.
FINANCIAL OR BUDGET CONSIDERATION: The funding from this grant program is
used to help pay for the City’s recycling and organics collection program.
VISION CONSIDERATION: St. Louis Park is committed to being a leader in environmental
stewardship. We will increase environmental consciousness and responsibility in all areas of city
business.
SUPPORTING DOCUMENTS: Resolution
Amendment No. 1
Funding Policy
Prepared by: Scott Merkley, Public Works Services Manager
Reviewed by: Mark Hanson, Public Works Superintendent
Cindy Walsh, Director of Operations and Recreation
Approved by: Tom Harmening, City Manager
City Council Meeting of August 17, 2015 (Item No. 4d) Page 2
Title: Hennepin County Residential Recycling Grant Agreement
RESOLUTION NO. 15 - ___
RESOLUTION AUTHORIZING AMENDMENT TO
RESIDENTIAL RECYCLING GRANT AGREEMENT BETWEEN
THE CITY OF ST. LOUIS PARK AND HENNEPIN COUNTY
WHEREAS, pursuant to Minnesota Statute 115A.552, Counties shall ensure that
residents have an opportunity to recycle; and
WHEREAS, Hennepin County Ordinance 13 requires each City to implement a
recycling program to enable the County to meet its recycling goals; and
WHEREAS, the County has adopted a resolution to amend the Hennepin County
Residential Recycling Funding Policy funding to incorporate requirements to expend additional
SCORE funds on organics recycling and extend the contract period of the Residential Recycling
Funding Policy from December 31, 2015 to December 31, 2016; and
WHEREAS, in order to receive grant funds, the City must sign the agreement; and
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of St. Louis
Park, Minnesota, that the City Council accepts the agreement as proposed.
BE IT FURTHER RESOLVED, that the City Council authorizes the Mayor, City
Manager or his designee to execute such Residential Recycling Grant Agreement with the
County.
Reviewed for Administration: Adopted by the City Council August 17, 2015
City Manager Mayor
Attest:
City Clerk
City Council Meeting of August 17, 2015 (Item No. 4d) Title: Hennepin County Residential Recycling Grant AgreementPage 3
City Council Meeting of August 17, 2015 (Item No. 4d) Title: Hennepin County Residential Recycling Grant AgreementPage 4
City Council Meeting of August 17, 2015 (Item No. 4d) Title: Hennepin County Residential Recycling Grant AgreementPage 5
City Council Meeting of August 17, 2015 (Item No. 4d) Title: Hennepin County Residential Recycling Grant AgreementPage 6
City Council Meeting of August 17, 2015 (Item No. 4d) Title: Hennepin County Residential Recycling Grant AgreementPage 7
City Council Meeting of August 17, 2015 (Item No. 4d) Title: Hennepin County Residential Recycling Grant AgreementPage 8
City Council Meeting of August 17, 2015 (Item No. 4d) Title: Hennepin County Residential Recycling Grant AgreementPage 9
City Council Meeting of August 17, 2015 (Item No. 4d) Title: Hennepin County Residential Recycling Grant AgreementPage 10
City Council Meeting of August 17, 2015 (Item No. 4d) Title: Hennepin County Residential Recycling Grant AgreementPage 11
City Council Meeting of August 17, 2015 (Item No. 4d) Title: Hennepin County Residential Recycling Grant AgreementPage 12
City Council Meeting of August 17, 2015 (Item No. 4d) Title: Hennepin County Residential Recycling Grant AgreementPage 13
Meeting: City Council
Meeting Date: August 17, 2015
Consent Agenda Item: 4e
EXECUTIVE SUMMARY
TITLE: Special Assessment – Sewer Service Line Repair at 2960 Zarthan Avenue South
RECOMMENDED ACTION: Motion to Adopt Resolution authorizing the special assessment
for the repair of the sewer service line at 2960 Zarthan Avenue South, St. Louis Park, MN
P.I.D. 09-117-21-34-0188.
POLICY CONSIDERATION: The proposed action is consistent with policy previously
established by the City Council.
SUMMARY: Matthew and Tami Henderson, owners of the single family residence at 2960
Zarthan Avenue South, have requested the City to authorize the repair of the sewer service line
for their home and assess the cost against the property in accordance with the City’s special
assessment policy.
The City requires the repair of service lines to promote the general public health, safety and welfare
within the community. The special assessment policy for the repair or replacement of water or sewer
service lines for existing homes was adopted by the City Council in 1996. This program was put into
place because sometimes property owners face financial hardships when emergency repairs like this
are unexpectedly required.
Plans and permits for this service line repair work were completed, submitted, and approved by City
staff. The property owners hired a contractor and repaired the sewer service line in compliance with
current codes and regulations. Based on the completed work, this repair qualifies for the City’s special
assessment program. The property owners have petitioned the City to authorize the sewer service line
repair and special assess the cost of the repair. The total eligible cost of the repair has been determined
to be $3,925.00
FINANCIAL OR BUDGET CONSIDERATION: The City has funds in place to finance the
cost of this special assessment.
VISION CONSIDERATION: Not applicable.
SUPPORTING DOCUMENTS: Resolution
Prepared by: Jay Hall , Utility Superintendent
Reviewed by: Mark Hanson, Public Works Superintendent
Pat Sulander, Accountant
Approved by: Tom Harmening, City Manager
City Council Meeting of August 17, 2015 (Item No. 4e) Page 2
Title: Special Assessment – Sewer Service Line Repair at 2960 Zarthan Avenue South
RESOLUTION NO. 15-____
RESOLUTION AUTHORIZING THE SPECIAL ASSESSMENT
FOR THE REPAIR OF THE SEWER SERVICE LINE AT
2960 ZARTHAN AVENUE SOUTH, ST LOUIS PARK, MN
P.I.D. 09-117-21-34-0188
WHEREAS, the Property Owners at 2960 Zarthan Avenue South, have petitioned the
City of St. Louis Park to authorize a special assessment for the repair of the sewer service line
for the single family residence located at 2960 Zarthan Avenue South; and
WHEREAS, the Property Owners have agreed to waive the right to a public hearing,
right of notice and right of appeal pursuant to Minnesota Statute, Chapter 429; and
WHEREAS, the City Council of the City of St. Louis Park has received a report from the
Utility Superintendent related to the repair of the sewer service line.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of St. Louis
Park, Minnesota, that:
1. The petition from the Property Owners requesting the approval and special assessment for
the sewer service line repair is hereby accepted.
2. The sewer service line repair that was done in conformance with the plans and specifications
approved by the Public Works Department and Department of Inspections is hereby
accepted.
3. The total cost for the repair of the sewer service line is accepted at $3,925.00.
4. The Property Owners have agreed to waive the right to a public hearing, notice and appeal
from the special assessment; whether provided by Minnesota Statutes, Chapter 429, or by
other statutes, or by ordinance, City Charter, the constitution, or common law.
5. The Property Owners have agreed to pay the City for the total cost of the above
improvements through a special assessment over a ten (10) year period at the interest rate of
4.00%.
6. The Property Owners have executed an agreement with the City and all other documents
necessary to implement the repair of the sewer service line and the special assessment of all
costs associated therewith.
Reviewed for Administration: Adopted by the City Council August 17, 2015
City Manager Mayor
Attest:
City Clerk
Meeting: City Council
Meeting Date: August 17, 2015
Consent Agenda Item: 4f
EXECUTIVE SUMMARY
TITLE: Retirement Recognition Resolution for Office Assistant Nancy Conery
RECOMMENDED ACTION: Motion to Adopt Resolution to recognize Office Assistant
Nancy Conery for her 37 years of service to the City of St. Louis Park.
POLICY CONSIDERATION: None at this time.
SUMMARY: City policy states that employees who retire or resign in good standing with over
20 years of service will be presented with a resolution from the Mayor, City Manager and City
Council.
This consent item will officially adopt the resolution that honors Nancy for her years of service.
FINANCIAL OR BUDGET CONSIDERATION: Not applicable.
VISION CONSIDERATION: Not applicable.
SUPPORTING DOCUMENTS: Resolution
Prepared by: Ali Timpone, HR Coordinator
Reviewed by: Nancy Deno, Deputy City Manager/HR Director
Approved by: Tom Harmening, City Manager
City Council Meeting of August 17, 2015 (Item No. 4f) Page 2
Title: Retirement Recognition Resolution for Office Assistant Nancy Conery
RESOLUTION NO. 15-___
RESOLUTION OF THE
CITY COUNCIL OF ST. LOUIS PARK, MINNESOTA,
RECOGNIZING THE CONTRIBUTIONS OF AND EXPRESSING APPRECIATION
TO OFFICE ASSISTANT NANCY CONERY
WHEREAS, Nancy Conery began her employment with the City of St. Louis Park 37 years
ago on February 13, 1978; and
WHEREAS, Nancy progressed from her first role as Microfilm Clerk to Office Assistant;
and
WHEREAS, Nancy was instrumental in moving the city from paper to microfilm records
beginning in 1978, then moved the city to its current digital imaging technology in 1995; and
organized the first citywide records purge day; and
WHEREAS, Nancy has been conscientious throughout her career in looking for
improvements in processes, providing a high level of service to customers, recognizing others for
their contributions and providing excellent customer service; and
WHEREAS, Nancy has received many internal recognitions over the years for her assistance
to other departments and her help in completing projects in a timely manner; and
WHEREAS, Nancy will be leaving the City of St. Louis Park to devote time to her family,
writing and traveling;
NOW THEREFORE BE IT RESOLVED that the City Council of the City of St. Louis
Park, Minnesota, by this resolution and public record, would like to thank Nancy Conery for her
great contributions and 37 years of dedicated service to the City of St. Louis Park and wish her
the best in her retirement.
Reviewed for Administration: Adopted by the City Council August 17, 2015
City Manager Mayor
Attest:
City Clerk
Meeting: City Council
Meeting Date: August 17, 2015
Consent Agenda Item: 4g
EXECUTIVE SUMMARY
TITLE: Call for Public Hearing - Private Activity Rev. Bonds – Shoreham Apartments, LLC
RECOMMENDED ACTION: Motion to Adopt Resolution calling for a public hearing on
September 21, 2015 regarding the issuance of private activity revenue bonds for Shoreham
Apartments, LLC.
POLICY CONSIDERATION:
• Is the City Council willing to conduct a public hearing on September 21, 2015 to consider
the issuance of private activity revenue bonds for Shoreham Apartments, LLC in an
aggregate principal amount not to exceed $40,000,000?
• Is the City Council willing to authorize the publication of the public hearing?
SUMMARY: Bader Development has requested private activity revenue bonds to assist with
the financing of a major mixed-use-redevelopment called The Shoreham at the southwest corner
of CSAH 25 and France Ave. This project meets the requirements for issuing private activity
revenue bonds as it is located within the City, and meets one of the objectives of housing
programs under IRS and MN State Statute requirements. Bader Development has also requested
$1.2 million in Tax Increment Financing assistance from the City of St. Louis Park. More details
on this project are included in a separate staff report to the EDA for the August 17, 2015
meeting.
NEXT STEPS: Pending no objections by the City Council, Kennedy and Graven will submit the
public notice to the required publications regarding the public hearing to be held at the City
Council’s regularly scheduled meeting on September 21, 2015. Pending Council approval on
September 21, 2015, the bonds will close within several weeks of Council approval. The bonds
will be a sold by TCF Bank via a negotiated sale.
FINANCIAL OR BUDGET CONSIDERATION: The City has no obligation to pay the debt
service on these bonds. Per the City’s private activity revenue bond policy, Bader Development
will pay an annual administration fee in the amount of 1/8th of 1% (.125%) of the outstanding
principal of the bonds. This amounts to an estimated $550,000 to $750,000 over the 30 year life
of the bonds, depending on the final dollar amount and structure of the bonds. The City uses this
administration fee in the Housing Rehabilitation Fund.
VISION CONSIDERATION: Not applicable.
SUPPORTING DOCUMENTS: Resolution
Prepared by: Steven Heintz, Finance Supervisor
Reviewed by: Brian A. Swanson, Controller
Greg Hunt, Economic Development Coordinator
Nancy Deno, Deputy City Manager/HR Director
Approved by: Tom Harmening, City Manager
City Council Meeting of August 17, 2015 (Item No. 4g) Page 2
Title: Call for Public Hearing - Private Activity Rev. Bonds – Shoreham Apartments, LLC
RESOLUTION NO. 15-____
RESOLUTION CALLING A PUBLIC HEARING REGARDING A
HOUSING DEVELOPMENT AND THE ISSUANCE OF REVENUE
BONDS THEREUNDER AND PROVIDING PRELIMINARY APPROVAL
TO THE ISSUANCE OF THE REVENUE BONDS
BE IT RESOLVED by the City Council of the City of St. Louis Park, Minnesota (the
“City”), as follows:
Section 1. Recitals.
1.01. The City is a home rule city duly organized and existing under its Charter and the
Constitution and laws of the State of Minnesota.
1.02. Pursuant to Minnesota Statutes, Chapter 462C, as amended (the “Act”), the City
is authorized to issue revenue bonds to provide funds to finance multifamily rental housing
developments located within the City.
1.03. Bader Development LLC, a Delaware limited liability company, and/or Shoreham
Apartments LLC, a Minnesota limited liability company, and/or any affiliate thereof (the
“Borrower”), has proposed that the City issue its revenue bonds in the approximate aggregate
principal amount not to exceed $40,000,000, in one or more series, bearing interest at fixed
and/or variable rates, to be offered publicly and/or privately placed (the “Bonds”). The proceeds
of the Bonds are proposed to be loaned by the City to the Borrower to finance the acquisition,
construction, and equipping of an approximately 148-unit multifamily rental housing
development and functionally related facilities with approximately 202 parking spaces to be
located at 3907 and 3915 Highway 7, 3031 Glenhurst Avenue, and 3914 and 3918 31st Street
West in the City (the “Project”). The Borrower will apply the proceeds of the Bonds to the
following purposes: (i) to finance the acquisition, construction and equipping of the Project; (ii)
to fund of one or more reserve funds to secure the timely payment of the Bonds, if necessary;
(iii) to pay the interest on the Bonds during the construction of the Project, if necessary; and (iv)
to pay the costs of issuing the Bonds.
1.04. As a condition to the issuance of such revenue bonds, the City must adopt a
housing program providing the information required by Section 462C.03, subdivision 1a of the
Act (the “Housing Program”). The City Council must also grant preliminary approval to the
issuance of revenue bonds to finance the multifamily rental housing development referred to in
the Housing Program and authorize the submission of an application to the office of Minnesota
Management & Budget for an allocation of bonding authority with respect to the Bonds to
finance the Project.
1.05. Under Section 147(f) of the Internal Revenue Code of 1986, as amended (the
“Code”), prior to the issuance of the Bonds the City Council must conduct a public hearing after
one publication of notice in a newspaper circulating generally in the City at least fourteen (14)
days before the hearing. Under Section 462C.04, subdivision 2 of the Act, a public hearing must
be held on the housing program after one publication of notice in a newspaper circulating
generally in the City at least fifteen (15) days before the hearing.
City Council Meeting of August 17, 2015 (Item No. 4g) Page 3
Title: Call for Public Hearing - Private Activity Rev. Bonds – Shoreham Apartments, LLC
1.06. Under Section 146 of the Code, the Bonds must receive an allocation of the
bonding authority of the State of Minnesota. An application for such an allocation must be made
pursuant to the requirements of Minnesota Statutes, Chapter 474A, as amended (the “Allocation
Act”).
Section 2. Preliminary Findings. Based on representations made by the Borrower to
the City to date, the City Council hereby makes the following preliminary findings,
determinations, and declarations:
(a) The Project consists of a multifamily rental housing development designed
and intended to be used for rental occupancy.
(b) The proceeds of the Bonds will be loaned to the Borrower and the
proceeds of the loan will be applied to the following purposes: (i) the acquisition,
construction, and equipping of the Project; (ii) the funding of one or more reserve funds
to secure the timely payment of the Bonds, if necessary; (iii) the payment of interest on
the Bonds during the construction of the Project, if necessary; and (iv) the payment of the
costs of issuing the Bonds. The City will enter into one or more loan agreements (or
other revenue agreements) with the Borrower requiring loan repayments from the
Borrower in amounts sufficient to repay the loan when due and requiring the Borrower to
pay all costs of maintaining and insuring the Project, including taxes thereon.
(c) In preliminarily authorizing the issuance of the Bonds and the financing of
the acquisition, construction, and equipping of the Project and related costs, the City’s
purpose is to further the policies of the Act.
(d) The Bonds will be limited obligations of the City payable solely from the
revenues pledged to the payment thereof, and will not be a general or moral obligation of
the City and will not be secured by or payable from revenues derived from any exercise
of the taxing powers of the City.
Section 4. Public Hearing. The City Council shall meet at 7:30 P.M. on Monday,
September 21, 2015, to conduct a public hearing on the Housing Program, the Project, and the
issuance of the Bonds by the City. Notice of such hearing (the “Public Notice”) will be
published as required by Section 462C.04, subdivision 2 of the Act and Section 147(f) of the
Code. The City Clerk of the City is hereby authorized and directed to publish the Public Notice,
in substantially the form attached hereto as EXHIBIT A, in the Sun-Sailor, the official
newspaper of and a newspaper of general circulation in the City, at least fifteen (15) days before
the meeting of the City Council at which the public hearing will take place. At the public
hearing reasonable opportunity will be provided for interested individuals to express their views,
both orally and in writing, on the Project, the Housing Program, and the proposed issuance of the
Bonds.
Section 5. Housing Program. Bond Counsel, as described below, shall prepare and
submit to the City a draft Housing Program to authorize the issuance by the City of up to
$40,000,000 in revenue bonds in one or more series to finance the acquisition, construction, and
equipping of the Project by the Borrower. The City is authorized and directed to submit the
Housing Program to the Metropolitan Council for review and comment pursuant to Section
462C.04, subdivision 2 of the Act.
City Council Meeting of August 17, 2015 (Item No. 4g) Page 4
Title: Call for Public Hearing - Private Activity Rev. Bonds – Shoreham Apartments, LLC
Section 6. Submission of an Application for an Allocation of Bonding Authority.
Under Section 146 of the Code, the Bonds must receive an allocation of the bonding authority of
the State of Minnesota. The City Council hereby authorizes the submission of an application for
allocation of bonding authority pursuant to Section 146 of the Code and the Allocation Act in
accordance with the requirements of the Allocation Act. The Mayor of the City, the City
Manager, the Controller of the City, and Kennedy & Graven, Chartered, acting as Bond Counsel
to the City, shall take all actions, in cooperation with the Borrower, as are necessary to submit an
application for an allocation of bonding authority to the office of Minnesota Management &
Budget.
Section 7. Preliminary Approval. The City Council hereby provides preliminary
approval to the issuance of the Bonds in the approximate principal amount of $40,000,000 to
finance all or a portion of the costs of the Project pursuant to the Housing Program of the City,
subject to: (i) a public hearing as required by the Act and Section 147(f) of the Code; (ii) receipt
of allocation of bonding authority from the office of Minnesota Management & Budget;
(iii) final approval following the preparation of bond documents; and (iv) final determination by
the City Council that the financing of the Project and the issuance of the Bonds are in the best
interests of the City.
Section 8. Reimbursement of Costs under the Code.
8.01. The United States Department of the Treasury has promulgated regulations
governing the use of the proceeds of tax-exempt bonds, all or a portion of which are to be used to
reimburse the City or the Borrower for project expenditures paid prior to the date of issuance of
such bonds. Those regulations (Treasury Regulations, Section 1.150-2) (the “Regulations”)
require that the City adopt a statement of official intent to reimburse an original expenditure not
later than sixty (60) days after payment of the original expenditure. The Regulations also
generally require that the bonds be issued and the reimbursement allocation made from the
proceeds of the bonds occur within eighteen (18) months after the later of: (i) the date the
expenditure is paid; or (ii) the date the project is placed in service or abandoned, but in no event
more than three (3) years after the date the expenditure is paid. The Regulations generally
permit reimbursement of capital expenditures and costs of issuance of the Bonds.
8.02. To the extent any portion of the proceeds of the Bonds will be applied to
expenditures with respect to the Project, the City reasonably expects to reimburse the Borrower
for the expenditures made for costs of the Project from the proceeds of the Bonds after the date
of payment of all or a portion of such expenditures. All reimbursed expenditures shall be capital
expenditures, costs of issuance of the Bonds, or other expenditures eligible for reimbursement
under Section 1.150-2(d)(3) of the Regulations and also qualifying expenditures under the Act.
Based on representations by the Borrower, other than (i) expenditures to be paid or
reimbursed from sources other than the Bonds, (ii) expenditures permitted to be reimbursed
under prior regulations pursuant to the transitional provision contained in Section 1.150-
2(j)(2)(i)(B) of the Regulations, (iii) expenditures constituting preliminary expenditures within
the meaning of Section 1.150-2(f)(2) of the Regulations, or (iv) expenditures in a “de minimis”
amount (as defined in Section 1.150-2(f)(1) of the Regulations), no expenditures with respect to
the Project to be reimbursed with the proceeds of the Bonds have been made by the Borrower
more than sixty (60) days before the date of adoption of this resolution of the City.
City Council Meeting of August 17, 2015 (Item No. 4g) Page 5
Title: Call for Public Hearing - Private Activity Rev. Bonds – Shoreham Apartments, LLC
8.03. Based on representations by the Borrower, as of the date hereof, there are no
funds of the Borrower reserved, allocated on a long term-basis or otherwise set aside (or
reasonably expected to be reserved, allocated on a long-term basis or otherwise set aside) to
provide permanent financing for the expenditures related to the Project to be financed from
proceeds of the Bonds, other than pursuant to the issuance of the Bonds. This resolution,
therefore, is determined to be consistent with the budgetary and financial circumstances of the
Borrower as they exist or are reasonably foreseeable on the date hereof.
Section 9. Costs. The Borrower will pay the administrative fees of the City and pay,
or, upon demand, reimburse the City for payment of, any and all costs incurred by the City in
connection with the Project and the issuance of the Bonds, whether or not the Bonds are issued.
Section 10. Commitment Conditional. The adoption of this resolution does not
constitute a guarantee or a firm commitment that the City will issue the Bonds as requested by
the Borrower. If, as a result of information made available to or obtained by the City during its
review of the Project, it appears that the Project or the issuance of Bonds to finance the costs
thereof is not in the public interest or is inconsistent with the purposes of the Act, the City
reserves the right to decline to give final approval to the issuance of the Bonds. The City also
retains the right, in its sole discretion, to withdraw from participation and accordingly not issue
the Bonds should the City Council, at any time prior to the issuance thereof, determine that it is
in the best interests of the City not to issue the Bonds or should the parties to the transaction be
unable to reach agreement as to the terms and conditions of any of the documents for the
transaction.
Section 11. Effective Date. This resolution shall be in full force and effect from and
after its passage.
Adopted by the City Council of the City of St. Louis Park, Minnesota, this 17th day of August,
2015.
Reviewed for Administration: Adopted by the City Council August 17, 2015
City Manager Mayor
Attest:
City Clerk
City Council Meeting of August 17, 2015 (Item No. 4g) Page 6
Title: Call for Public Hearing - Private Activity Rev. Bonds – Shoreham Apartments, LLC
EXHIBIT A
NOTICE OF PUBLIC HEARING
CITY OF ST. LOUIS PARK, MINNESOTA
NOTICE OF PUBLIC HEARING ON THE APPROVAL OF A HOUSING
PROGRAM FOR A MULTIFAMILY HOUSING DEVELOPMENT AND
THE ISSUANCE OF REVENUE BONDS UNDER MINNESOTA
STATUTES, CHAPTER 462C, AS AMENDED
NOTICE IS HEREBY GIVEN that the City Council of the City of St. Louis Park,
Minnesota (the “City”) will hold a public hearing on Monday, September 21, 2015, at or after
7:30 p.m. at City Hall, 5005 Minnetonka Boulevard in the City, to consider a proposal that the
City approve and authorize the issuance of its revenue bonds (the “Bonds”), in one or more
series, bearing interest at fixed or variable rates, to be offered publicly and/or privately placed,
pursuant to Minnesota Statutes, Chapter 462C, as amended (the “Act”), for the purposes of
(i) financing the acquisition, construction, and equipping of an approximately 148-unit
multifamily rental housing development and functionally related facilities with approximately
202 parking spaces to be located at 3907 and 3915 Highway 7, 3031 Glenhurst Avenue, and
3914 and 3918 31st Street West in the City (the “Project”); (ii) funding one or more reserve funds
to secure the timely payment of the Bonds, if necessary; (iii) paying interest on the Bonds during
the construction of the Project, if necessary; and (iv) paying the costs of issuing the Bonds.
Bader Development LLC, a Delaware limited liability company, and/or Shoreham Apartments
LLC, a Minnesota limited liability company, and/or any affiliate thereof (the “Borrower”), or an
affiliated entity, will own the Project. The estimated aggregate principal amount of the proposed
Bonds is $40,000,000.
Following the public hearing, the City Council will consider a resolution approving a
housing program prepared in accordance with the requirements of the Act and granting approval
to the issuance of the Bonds.
The Bonds will be special, limited obligations of the City, and the Bonds and interest
thereon will be payable solely from the revenues and assets pledged to the payment thereof. No
holder of any Bond will have the right to compel any exercise of the taxing power of the City to
pay the Bonds or the interest thereon, nor to enforce payment against any property of the City
except money payable by the Borrower to the City and pledged to the payment of the Bonds.
Before issuing the Bonds, the City will enter into an agreement with the Borrower, whereby the
Borrower will be obligated to make payments at least sufficient at all times to pay the principal
of and interest on the Bonds when due.
At the time and place fixed for the public hearing, the City Council will give all persons
who appear at the hearing an opportunity to express their views with respect to the proposal. In
addition, interested persons may direct any questions or file written comments respecting the
proposal with the City Clerk, at or prior to said public hearing.
City Council Meeting of August 17, 2015 (Item No. 4g) Page 7
Title: Call for Public Hearing - Private Activity Rev. Bonds – Shoreham Apartments, LLC
Dated: [Date of Publication]
BY ORDER OF THE CITY COUNCIL OF
THE CITY OF ST. LOUIS PARK,
MINNESOTA
/s/ Melissa Kennedy
City Clerk
City of St. Louis Park, Minnesota
Meeting: City Council
Meeting Date: August 17, 2015
Public Hearing Agenda Item: 6a
EXECUTIVE SUMMARY
TITLE: Central Florida Restaurants, Inc. dba T.G.I. Fridays - On-Sale Intoxicating and On-
Sale Sunday Liquor License
RECOMMENDED ACTION: Mayor to open public hearing, take public testimony, and close
public hearing. Motion to approve application from Central Florida Restaurants, Inc. dba T.G.I.
Fridays for an On-Sale Intoxicating and On-Sale Sunday Liquor License for the premises located
at 5875 Wayzata Blvd. with a license term through March 1, 2016.
POLICY CONSIDERATION: Does the Council wish to approve the liquor license for Central
Florida Restaurants, Inc.?
SUMMARY: The City received an application from Central Florida Restaurants, Inc. dba
T.G.I. Fridays, for an On-Sale Intoxicating and On-Sale Sunday Liquor license for the premises
located at 5875 Wayzata Blvd. Current City Code regulations require a public hearing to
consider the issuance of a liquor license for a different licensee at the same premises.
The existing establishment will continue to operate as T.G.I. Fridays under the new ownership
group, Central Florida Restaurants, Inc. All T.G.I. Fridays restaurants in the State will undergo
the same change in ownership.
The Police Department conducted a full background investigation, and nothing was discovered
during the course of the investigation that would warrant denial of the license. The application
and police report are on file in the City Clerk’s office, should Council members wish to review
the information. The required notice of the public hearing was published August 6, 2015.
Should Council approve the liquor license, no actual license will be issued until all requirements
have been met with the City Inspections Department, Hennepin County, and the State Alcohol
and Gambling Enforcement Division.
FINANCIAL OR BUDGET CONSIDERATION: Fees for this applicant include $500 for the
police background investigation and $8,950 for the On-Sale Intoxicating and On-Sale Sunday
annual license fee. Pursuant to City Code provisions, the license fee will be pro-rated for the
remainder of the license period.
VISION CONSIDERATION: Not applicable.
SUPPORTING DOCUMENTS: None.
Prepared by: Melissa Kennedy, City Clerk
Reviewed by: Nancy Deno, Deputy City Manager/HR Director
Approved by: Tom Harmening, City Manager
Meeting: City Council
Meeting Date: August 17, 2015
Public Hearing Agenda Item: 6b
EXECUTIVE SUMMARY
TITLE: MLCV STLP, LLC dba DoubleTree Minneapolis Park Place - On-Sale Intoxicating
and On-Sale Sunday Liquor License
RECOMMENDED ACTION: Mayor to open public hearing, take public testimony, and close
public hearing. Motion to approve application from MLCV STLP, LLC dba DoubleTree
Minneapolis Park Place for an On-Sale Intoxicating and On-Sale Sunday Liquor License for the
premises located at 1500 Park Place Blvd. with a license term through March 1, 2016.
POLICY CONSIDERATION: Does the Council wish to approve the liquor license for MLCV
STLP, LLC?
SUMMARY: The City received an application from MLCV STLP, LLC for an On-Sale
Intoxicating and On-Sale Sunday Liquor license for the DoubleTree Minneapolis Park Place
Hotel currently located at 1500 Park Place Blvd. The DoubleTree Hotel has been operating at
this site, under various ownership groups, since 1997.
The DoubleTree Minneapolis Park Place is in the process of being sold to a new ownership
group, MLCV STLP, LLC. Current City Code regulations require a public hearing to consider
the issuance of a liquor license for a different licensee at the same premises. The establishment’s
name and general manager will remain the same.
The Police Department conducted a full background investigation, and nothing was discovered
during the course of the investigation that would warrant denial of the license. The application
and police report are on file in the City Clerk’s office, should Council members wish to review
the information. The required notice of the public hearing was published August 6, 2015.
Should Council approve the liquor license, no actual license will be issued until all requirements
have been met with the City Inspections Department, Hennepin County, and the State Alcohol
and Gambling Enforcement Division.
FINANCIAL OR BUDGET CONSIDERATION: Fees for this applicant include $500 for the
police background investigation and $8,950 for the On-Sale Intoxicating and On-Sale Sunday
annual license fee. Pursuant to City Code provisions, the license fee has been pro-rated for the
remainder of the license period.
VISION CONSIDERATION: Not applicable.
SUPPORTING DOCUMENTS: None
Prepared by: Melissa Kennedy, City Clerk
Reviewed by: Nancy Deno, Deputy City Manager/HR Director
Approved by: Tom Harmening ,City Manager
Meeting: City Council
Meeting Date: August 17, 2015
Public Hearing Agenda Item: 6c
EXECUTIVE SUMMARY
TITLE: Public Hearing and Establishment of The Shoreham Tax Increment Financing District
RECOMMENDED ACTION: Mayor to open public hearing, take public testimony, and close
public hearing. Motion to Adopt Resolution approving the establishment of The Shoreham Tax
Increment Financing District within Redevelopment Project No. 1 (a redevelopment district).
(The EDA will have considered the above action earlier in the evening.)
POLICY CONSIDERATION: Does the City Council support the establishment of The
Shoreham Tax Increment Financing District to facilitate the construction of a mixed use
redevelopment at the SW corner of CSAH 25 and France Ave?
SUMMARY: Bader Development’s application for Tax Increment Financing (TIF) assistance
in connection with its proposed Shoreham redevelopment at the SW corner of CSAH 25 and
France Ave was reviewed at the June 1st Study Session where it received consensus support.
Constructing The Shoreham project is not financially feasible without TIF assistance. At its June
15th meeting, the City Council set a public hearing date of August 17th for consideration of the
proposed Shoreham Redevelopment TIF District. It is now time to take the final step in the TIF
process which is to formally authorize the creation of the TIF district. Such authorization
enables the EDA to designate tax increment generated from the completed Shoreham
development as partial reimbursement to Bader Development for certain qualified costs incurred
in connection with the construction of the project so as to make it financially feasible.
FINANCIAL OR BUDGET CONSIDERATION: Authorizing the establishment of The
Shoreham TIF District does not, in itself, commit the City to any specific level of financial
assistance for the proposed project. Procedurally, it simply creates the funding vehicle to
reimburse the Redeveloper for a portion of its qualified project costs. The terms and amount of
TIF assistance are specified within the staff report pertaining to the Redevelopment Contract
with The Shoreham Apartments, LLC which is also scheduled for consideration August 17th.
VISION CONSIDERATION: St. Louis Park is committed to providing a well-maintained and
diverse housing stock.
SUPPORTING DOCUMENTS: Discussion
Resolution
Overview and TIF Plan (see EDA staff report)
Prepared by: Greg Hunt, Economic Development Coordinator
Reviewed by: Michele Schnitker, Housing Supervisor
Kevin Locke, Community Development Director
Approved by: Tom Harmening, EDA Executive Director and City Manager
City Council Meeting of August 17, 2015 (Item No. 6c) Page 2
Title: Public Hearing and Establishment of The Shoreham Tax Increment Financing District
DISCUSSION
BACKGROUND: Bader Development (“Redeveloper”) has option agreements to acquire five
properties at the SW corner of CSAH 25 and France Ave. These include two commercial
properties located at 3907 & 3915 Highway 7, (the ASAP building and Battlefield Store
respectively), two single-family homes located at 3031 Glenhurst Ave. and 3914 31st St. and a
townhome duplex located at 3918 31st St. The land assemblage creates a 2.23-acre
redevelopment site.
The Redeveloper proposes to raze the current commercial buildings and residences, remove the
contaminated fill material and soils impacting the site, and construct a mixed-use development
called The Shoreham. The proposed multi-story building would consist of 148 residential units
(of which 20% would be designated for households earning 50% of area median income) and
20,000 square feet of office space (split between Bader Development/Steven Scott Management
and a medical office tenant). Also included would be structured underground and surface
parking.
Request for Tax Increment Assistance
Bader Development submitted an application to the EDA for tax increment finance assistance to
offset a portion of the $7.8 million of extraordinary costs associated with redeveloping the
subject site.
Bader Development’s preliminary sources and uses statements, cash flow projections, and
investor rate of return (ROR) related to The Shoreham project were reviewed by Staff and Ehlers
(the EDA’s financial consultant). The estimates were found to be reasonable and within industry
standards for this type of redevelopment. It was also concluded, given the extraordinary costs
noted above, that without public financial assistance the project would not generate enough of a
return on investment to attract the necessary equity capital to achieve financing (see staff report
on Redevelopment Contract with Shoreham Apartments).
Upon analysis by Staff and Ehlers, and discussion with Bader Development, it was initially
determined that between $1,700,000 and $3,050,000 in tax increment assistance would be
necessary (depending if any grants were awarded) to allow the project to achieve a standard
return. The EDA/City Council reviewed Bader Development’s TIF Application at the June 1st
Special Study Session. Following discussion there was consensus support to favorably consider
reimbursing the Redeveloper for qualified costs incurred in connection with the construction of
the project up to $3,050,000 in tax increment generated by the project minus any grant awards
The EDA has subsequently been informed that the project has been awarded four grants from
DEED, the Metropolitan Council and Hennepin County which total $1,849,075. Given these
grant awards and further review of the Redeveloper’s most recent financial proforma, the amount
of tax increment necessary to make the project financially feasible has been reduced to $1.2
million. Reimbursing the Redeveloper for certain extraordinary costs makes it possible to
construct a high quality project consistent with Livable Communities design principles and other
objectives listed in the City’s Comprehensive Plan. The proposed amount of assistance is
consistent with other similar mixed-use developments the EDA has facilitated in the past.
Upon project completion, verification of qualified costs, and issuance of the TIF Note, tax
increment generated from the increased value of the property would be disbursed to Bader
City Council Meeting of August 17, 2015 (Item No. 6c) Page 3
Title: Public Hearing and Establishment of The Shoreham Tax Increment Financing District
Development on a "pay-as-you-go" basis. This means the Redeveloper must first incur the
construction costs with its own funds. The increased property taxes generated from the
completed project and paid by the Redeveloper (called “tax increment”) is then used to
reimburse the Redeveloper for the above extraordinary costs it incurred during construction of the
project. This is the preferred financing method under the City's TIF Policy. The Shoreham project
met the requirements of a Redevelopment TIF District (25 year TIF District). Under this type of
TIF district, the proposed project would generate the proposed $1.2 million in tax increment in
approximately 4 years.
TIF District Approvals
As noted above, the EDA/City Council reviewed Bader Development’s TIF Application for the
proposed Shoreham project at the June 1st Special Study Session. Following discussion there
was consensus support for favorably considering the project and the Redeveloper’s request for
financial assistance. As a result, Staff was directed to call for a public hearing on the proposed
TIF District and to begin drafting a formal redevelopment contract with Bader Development.
At its June 15th meeting, the City Council set a public hearing date of August 17th for
consideration of the proposed The Shoreham Redevelopment TIF District.
The Planning Commission reviewed The Shoreham Tax Increment Financing Plan on July 15th, as
required by the TIF Act, and determined it was in conformance with the City’s Comprehensive Plan.
A report on the potential business terms that would serve as the basis for a redevelopment
contract with Bader Development was submitted at the July 27th Study Session.
Synopsis of the Proposed TIF District
The subject site is located within the boundaries of the City’s Redevelopment Project Area which
is the portion of the city where the EDA may statutorily establish TIF districts. Inclusion of the
proposed project within a designated Redevelopment Project Area allows the EDA/City Council
to establish a TIF district so as to enable the EDA to provide the proposed financial assistance to
The Shoreham project. As shown in the attached TIF District maps, the proposed Shoreham TIF
District consists of five parcels: 3907 Highway 7, 3915 Highway 7, 3031 Glenhurst Ave. 3914
31st St. and 3918 31st St. Together, these parcels equal approximately 2.2 acres.
Attached is an Overview which summarizes the basic elements of the proposed TIF District.
Details of the proposed TIF District may be found in the attached The Shoreham TIF District
Plan. Both the Overview and TIF Plan were prepared by the EDA’s TIF consultant, Ehlers. In a
general sense, TIF plans may be viewed as enabling legislation. They establish the proposed TIF
district’s classification, geographic boundaries, maximum duration, maximum budget authority
for tax increment revenues and expenditures, fiscal disparities election as well as estimated
impact on various taxing jurisdictions along with findings which statutorily qualify the district.
The specific mutual obligations between the EDA and the Developer as well as the precise terms
of the financial assistance are contained in the separate Contract for Private Redevelopment
between the parties (also to be considered August 17th). Both the TIF Plan and the
Redevelopment Contract need to be approved in order for economic development or
redevelopment projects involving tax increment to proceed.
Duration of the Proposed TIF District
Under the TIF Act, the duration of redevelopment districts is up to 25 years after receipt of the
first increment by the City (a total of 26 years of tax increment). The date of receipt by the City
City Council Meeting of August 17, 2015 (Item No. 6c) Page 4
Title: Public Hearing and Establishment of The Shoreham Tax Increment Financing District
of the first tax increment is expected to be 2017. Thus, the full term of the district is estimated to
terminate in 2043. The EDA and City have the right to decertify the District prior to the legally
required date. As previously indicated, the City’s expressed obligations to the Developer will
likely be satisfied in approximately 4 years. Once those obligations are satisfied, the City may
terminate the district.
TIF District Budget
It should be noted that the financing uses and project costs reflected within the Uses of Funds
(Section 2-10) of the attached TIF Plan is a not-to-exceed budget and not the actual expected
project budget.
Fiscal Disparities Election within the Proposed TIF District
The proposed development will contain commercial property therefore the proposed TIF District
is subject to the fiscal disparities calculation. Consistent with the city’s TIF Policy and past
practice, The Shoreham TIF District will contribute to fiscal disparities (as opposed to the tax
base of the City making the contribution).
Qualifications of the Proposed TIF District
In order to determine if the subject site qualified as a Redevelopment District under Minnesota
Statutes, Section 469.174, Subdivision 10, consulting firm LHB was retained to conduct a TIF
district feasibility analysis. After inspecting and evaluating the subject properties and applying
current statutory criteria, LHB concluded in its report (Report of Inspection Procedures and
Results for Determining Qualifications Of A Tax Increment Financing District As A
Redevelopment District: [Encore} Redevelopment District, St. Louis Park, MN dated May 19,
2015) that the proposed project site qualifies as a Redevelopment District based on the following
findings:
• The proposed TIF District has a coverage calculation of 100 percent which is above the
70 percent requirement.
• 60 percent of the buildings are structurally substandard which is above the 50 percent
requirement.
• The substandard buildings are reasonably distributed.
Thus the proposed TIF District met both the “Coverage Test” and the “Condition of Buildings
Test” and thereby qualified under Minnesota Statutes Section 479.174, Subdivision 10 as a
redevelopment TIF district.
Other findings for the qualification of the proposed TIF District are contained in Appendix G of
the attached TIF Plan.
City Council Meeting of August 17, 2015 (Item No. 6c) Page 5
Title: Public Hearing and Establishment of The Shoreham Tax Increment Financing District
CITY OF ST. LOUIS PARK
HENNEPIN COUNTY
STATE OF MINNESOTA
RESOLUTION NO. 15-____
RESOLUTION ADOPTING A MODIFICATION TO THE REDEVELOPMENT PLAN
FOR REDEVELOPMENT PROJECT NO. 1; AND ESTABLISHING THE SHOREHAM
TAX INCREMENT FINANCING DISTRICT THEREIN AND ADOPTING A TAX
INCREMENT FINANCING PLAN THEREFOR.
BE IT RESOLVED by the City Council (the "Council") of the City of St. Louis Park,
Minnesota (the "City"), as follows:
Section 1. Recitals
1.01. The Board of Commissioners of the St. Louis Park Economic Development
Authority (the "EDA") has heretofore established Redevelopment Project No. 1 and adopted the
Redevelopment Plan therefor. It has been proposed by the EDA and the City that the City adopt a
Modification to the Redevelopment Plan for Redevelopment Project No. 1 (the "Redevelopment
Plan Modification") and establish the Shoreham Tax Increment Financing District (the
"District") therein and adopt a Tax Increment Financing Plan (the "TIF Plan") therefor (the
Redevelopment Plan Modification and the TIF Plan are referred to collectively herein as the
"Plans"); all pursuant to and in conformity with applicable law, including Minnesota Statutes,
Sections 469.090 to 469.1082 and Sections 469.174 to 469.1794, all inclusive, as amended, (the
"Act") all as reflected in the Plans, and presented for the Council's consideration.
1.02. The EDA and City have investigated the facts relating to the Plans and have
caused the Plans to be prepared.
1.03. The EDA and City have performed all actions required by law to be performed
prior to the establishment of the District and the adoption and approval of the proposed Plans,
including, but not limited to, notification of Hennepin County and Independent School District
No. 283 having taxing jurisdiction over the property to be included in the District, a review of
and written comment on the Plans by the City Planning Commission, approval of the Plans by
the EDA on August 17, 2015, and the holding of a public hearing upon published notice as
required by law.
1.04. Certain written reports (the ''Reports") relating to the Plans and to the activities
contemplated therein have heretofore been prepared by staff and consultants and submitted to the
Council and/or made a part of the City files and proceedings on the Plans. The Reports,
including the redevelopment qualifications reports and planning documents, include data,
information and/or substantiation constituting or relating to the basis for the other findings and
determinations made in this resolution. The Council hereby confirms, ratifies and adopts the
Reports, which are hereby incorporated into and made as fully a part of this resolution to the
same extent as if set forth in full herein.
1.05 The City is not modifying the boundaries of Redevelopment Project No. 1, but is,
however, modifying the Redevelopment Plan therefor.
Section 2. Findings for the Adoption and Approval of the Redevelopment Plan Modification.
City Council Meeting of August 17, 2015 (Item No. 6c) Page 6
Title: Public Hearing and Establishment of The Shoreham Tax Increment Financing District
2.01. The Council approves the Redevelopment Plan Modification, and specifically
finds that: (a) the land within the Project area would not be available for redevelopment without
the financial aid to be sought under this Redevelopment Plan; (b) the Redevelopment Plan, as
modified, will afford maximum opportunity, consistent with the needs of the City as a whole, for
the development of the Project by private enterprise; and (c) the Redevelopment Plan, as
modified, conforms to the general plan for the development of the City as a whole.
Section 3. Findings for the Establishment of the Shoreham Tax Increment Financing District
3.01. The Council hereby finds that the District is in the public interest and is a
"redevelopment district" under Minnesota Statutes, Section 469.174, Subd. 10 of the Act.
3.02. The Council further finds that the proposed redevelopment would not occur solely
through private investment within the reasonably foreseeable future and that the increased
market value of the site that could reasonably be expected to occur without the use of tax
increment financing would be less than the increase in the market value estimated to result from
the proposed development after subtracting the present value of the projected tax increments for
the maximum duration of the District permitted by the Tax Increment Financing Plan; that the
Plans conform to the general plan for the development or redevelopment of the City as a whole;
and that the Plans will afford maximum opportunity, consistent with the sound needs of the City
as a whole, for the development or redevelopment of the District by private enterprise.
3.03. The Council further finds, declares and determines that the City made the above
findings stated in this Section and has set forth the reasons and supporting facts for each finding
in writing, attached hereto as Exhibit A.
3.04. The St. Louis Park Economic Development Authority elects to calculate fiscal
disparities for the District in accordance with Minnesota Statutes, Section 469.177, Subd. 3,
clause b, which means the fiscal disparities contribution will be taken from inside the District.
Section 4. Public Purpose
4.01. The adoption of the Plans conforms in all respects to the requirements of the Act
and will help fulfill a need to develop an area of the City which is already built up, and will help
in the preservation and enhancement of the tax base of the City and the State and promote the
construction of high quality housing and commercial space, thereby serving a public purpose.
For the reasons described in Exhibit A, the City believes these benefits directly derive from the
tax increment assistance provided under the TIF Plan. A private developer will receive only the
assistance needed to make this development financially feasible. As such, any private benefits
received by a developer are incidental and do not outweigh the primary public benefits.
Section 5. Approval and Adoption of the Plans
5.01. The Plans, as presented to the Council on this date, including without limitation
the findings and statements of objectives contained therein, are hereby approved, ratified,
established, and adopted and shall be placed on file in the office of the Economic Development
Coordinator.
5.02. The staff of the City, the City's advisors and legal counsel are authorized and
directed to proceed with the implementation of the Plans and to negotiate, draft, prepare and
City Council Meeting of August 17, 2015 (Item No. 6c) Page 7
Title: Public Hearing and Establishment of The Shoreham Tax Increment Financing District
present to this Council for its consideration any further plans, resolutions, documents and
contracts necessary for this purpose.
5.03 The Hennepin County Resident and Real Estate Services Director is requested to
certify the original net tax capacity of the District, as described in the Plans, and to certify in
each year thereafter the amount by which the original net tax capacity has increased or
decreased; and the EDA is authorized and directed to transmit this request to the County Auditor
in such form and content as the Auditor may specify, together with a list of all properties within
the District for which building permits have been issued during the 18 months immediately
preceding the adoption of this resolution.
5.04. The Economic Development Coordinator is further authorized and directed to file
a copy of the Plans with the Commissioner of the Minnesota Department of Revenue and the
Office of the State Auditor pursuant to Section 469.175, Subd. 4a of the Act.
Reviewed for Administration Adopted by the City Council August 17, 2015
City Manager Mayor
Attest:
City Clerk
City Council Meeting of August 17, 2015 (Item No. 6c) Page 8
Title: Public Hearing and Establishment of The Shoreham Tax Increment Financing District
EXHIBIT A
RESOLUTION NO. 15-____
The reasons and facts supporting the findings for the adoption of the Tax Increment Financing
Plan (“TIF Plan”) for the Shoreham Tax Increment Financing District (“District”), as required
pursuant to Minnesota Statutes, Section 469.175, Subdivision 3 are as follows:
1. Finding that the District is a redevelopment district as defined in Minnesota Statutes,
Section 469.174, Subd. 10.
The District consists of five parcels, with plans to redevelop the area for rental housing. At least
70 percent of the area of the parcels in the District is occupied by buildings, streets, utilities,
paved or gravel parking lots or other similar structures and more than 50 percent of the buildings
in the District, not including outbuildings, are structurally substandard to a degree requiring
substantial renovation or clearance. (See Appendix F of the TIF Plan.)
2. Finding that the proposed development, in the opinion of the City Council, would not
reasonably be expected to occur solely through private investment within the reasonably
foreseeable future and that the increased market value of the site that could reasonably be
expected to occur without the use of tax increment financing would be less than the increase in
the market value estimated to result from the proposed development after subtracting the present
value of the projected tax increments for the maximum duration of the District permitted by the
TIF Plan.
The proposed development, in the opinion of the City, would not reasonably be expected to
occur solely through private investment within the reasonably foreseeable future: This finding is
supported by the fact that the redevelopment proposed in the TIF Plan, which meets the City's
objectives for redevelopment, requires a significant investment by the developer. Due to the
inclusion of affordable housing units and the high cost of redevelopment on the parcels currently
occupied by substandard buildings and costs associated with their removal, environmental
remediation, site improvements and utility relocation, and the cost of financing the proposed
improvements, this project is feasible only through assistance, in part, from tax increment
financing. The developer was asked for and provided a letter and a proforma as justification that
the developer would not have gone forward without tax increment assistance.
The increased market value of the site that could reasonably be expected to occur without the use
of tax increment financing would be less than the increase in market value estimated to result
from the proposed development after subtracting the present value of the projected tax
increments for the maximum duration of the District permitted by the TIF Plan: This finding is
justified on the grounds that the cost of demolition, soil remediation, site and public
improvements and utilities result in a total redevelopment cost that is significantly higher than
most developers are willing and able to finance independently. Historically, redevelopment of
this type of property is infeasible without tax increment assistance. The City reasonably
determines that no other redevelopment of similar scope is anticipated on this site without
substantially similar assistance being provided to the development.
Therefore, the City concludes as follows:
City Council Meeting of August 17, 2015 (Item No. 6c) Page 9
Title: Public Hearing and Establishment of The Shoreham Tax Increment Financing District
a. The City's estimate of the amount by which the market value of the entire District will
increase without the use of tax increment financing is $0.
b. If the proposed development occurs, the total increase in market value will be
$32,620,000.
c. The present value of tax increments from the District for the maximum duration of the
district permitted by the TIF Plan is estimated to be $7,311,283.
d. Even if some development other than the proposed development were to occur, the
Council finds that no alternative would occur that would produce a market value increase greater
than $22,829,517 (the amount in clause b less the amount in clause c) without tax increment
assistance.
3. Finding that the TIF Plan for the District conforms to the general plan for the
development or redevelopment of the municipality as a whole.
The Planning Commission reviewed the TIF Plan and found that the TIF Plan conforms to the
general development plan of the City.
4. Finding that the TIF Plan for the District will afford maximum opportunity, consistent
with the sound needs of the City as a whole, for the development or redevelopment of
Redevelopment Project No. 1 by private enterprise.
The project to be assisted by the District will result in increased employment in the City and the
State of Minnesota, the renovation and environmental remediation of substandard properties, and
increased tax base of the State, and will add a high quality development to the City. In addition,
through the implementation of the TIF Plan, there will be an increase in the availability of safe
and decent life-cycle housing in the City.
Meeting: City Council
Meeting Date: August 17, 2015
Action Agenda Item: 8a
EXECUTIVE SUMMARY
TITLE: Ordinance Amending St. Louis Park City Code Chapter 3 – Alcoholic Beverages
RECOMMENDED ACTION: Motion to approve the first reading of an ordinance amending
St. Louis Park City Code Chapter 3 relating to alcoholic beverages and to schedule the second
reading of the ordinance on September 8, 2015.
POLICY CONSIDERATION: Does the Council wish to approve the first reading of the
proposed ordinance and schedule the second reading on September 8, 2015?
SUMMARY: At the July 13, 2015 study session staff provided the Council with an update
regarding new liquor laws adopted during the 2015 legislative session. Following discussion by
the Council, staff was directed to proceed with the following updates:
- Allow holders of brewpub off-sale malt liquor licenses and brewer off-sale malt liquor
licenses to sell malt liquor off-sale between the hours of 8:00 a.m. and 10:00 p.m. in 64
ounce containers (growlers).
- Remove the hours of operation restrictions for the on-sale of malt liquor at brewer taprooms.
This change would expand the hours of operation for the on-sale of malt liquor to match what
is currently allowed by state law.
City staff also identified several other “housekeeping” updates that were incorporated into the
proposed ordinance following discussion with the City Attorney’s office. The following updates
are also proposed at this time:
- Allow the City the ability to issue a microdistillery cocktail room license to the holder of a
microdistillery license. The license would authorize the on-sale of distilled spirits produced
by the distiller for consumption on the premises of or adjacent to one distillery location
owned by the distiller. State laws that apply to a retail liquor license, including laws
governing hours and days of sale, apply to microdistillery cocktail room licenses.
- Allow the City the ability to issue a microdistillery off-sale license to the holder of a
microdistillery license. Off-sale hours and days of sale must conform to the hours of sale for
retail off-sale licensees in the licensing municipality.
- Remove language that exempts liquor license renewal applicants from paying a background
investigation fee.
FINANCIAL OR BUDGET CONSIDERATION: None at this time.
VISION CONSIDERATION: Not applicable.
SUPPORTING DOCUMENTS: Discussion
Ordinance
Minnesota Statute 340A.504
Prepared by: Melissa Kennedy, City Clerk
Reviewed by: Nancy Deno, Deputy City Manager/HR Director
Approved by: Tom Harmening, City Manager
City Council Meeting of August 17, 2015 (Item No. 8a) Page 2
Title: Ordinance Amending St. Louis Park City Code Chapter 3 – Alcoholic Beverages
DISCUSSION
BACKGROUND: At the July 13, 2015 Council study session, staff presented the details of the
omnibus liquor bill and discussed the potential implications for current liquor license holders in
St. Louis Park. One of the new liquor laws included in the bill allowed the sale of growlers on
Sundays by licensed brewers. Another change permitted any on-sale intoxicating license holder,
with a corresponding on-sale Sunday license, to begin their Sunday sales at 8:00 a.m.
Growlers: With respect to the sale of growlers on Sundays by licensed brewers, the State did not
set specific hours during which the off-sale of growlers is permitted. Because the St. Louis Park
City Code directly references State law regarding the permitted hours and days of sale, an
ordinance amendment is required to establish hours of operation for licensed brewers to sell
growlers at off-sale on Sundays. Council directed staff to draft an ordinance amendment that
would allow holders of brewpub off-sale malt liquor licenses and brewer off-sale malt liquor
licenses to sell malt liquor off-sale between the hours of 8:00 a.m. and 10:00 p.m. in 64 ounce
containers (growlers).
Taprooms: The Council also discussed the established hours of operation for brewer taprooms.
Current City Code regulations limit the hours of operation for the on-sale of malt liquor at a
brewer taproom as follows:
Monday - Thursday 3:00 p.m. – 8:00 p.m.
Friday 3:00 p.m. – 10:00 p.m.
Saturday 11:00 a.m. – 10:00 p.m.
Sunday 11:00 a.m. – 8:00 p.m.
Federally Recognized Holidays 11:00 a.m. – 10:00 p.m.
Staff was directed to include an amendment that would remove the hours of operation
restrictions for the on-sale of malt liquor at brewer taprooms and expand the hours of operation
for the on-sale of malt liquor to match what is currently allowed by state law. Staff will review
license fees for taprooms and possible adjustment to the City’s fee schedule at a later date.
Other housekeeping: The additional amendments proposed by staff at this time were discussed
with the City Attorney’s office and included in an effort to avoid bringing forward subsequent
ordinance amendments for the same chapter of the City Code. The proposed amendments are
thought to be “housekeeping” items that will keep our liquor ordinance in line with what is
currently allowed under State law.
Microdistilleries: Since the July 13th discussion with Council, staff has received numerous
inquiries regarding cocktail room licenses and off-sale licenses for microdistilleries. Both types
of licenses were also addressed in the omnibus liquor bill. Staff felt it would be prudent to add
both to the list of licenses that could potentially be issued by the City to prepare for requests
from current and future microdistilleries. Staff will research license fees and propose an
amendment to the City’s fee schedule at a later date. Applicants for either a cocktail room or
microdistillery off-sale license would be subject to compliance with applicable zoning laws and
regulations, similar to all other liquor license applicants.
Renewal of license to include fee covering background investigation: After further review of
current ordinance provisions and liquor license renewal practices, staff also recommends the
City Council Meeting of August 17, 2015 (Item No. 8a) Page 3
Title: Ordinance Amending St. Louis Park City Code Chapter 3 – Alcoholic Beverages
removal of language which exempts liquor license renewal applicants from paying a background
investigation fee. St. Louis Park City Code Sec. 3-65 states that liquor license renewal
applications are subject to a background investigation by the Police Department. Staff feels that
applicants for the renewal of a liquor license should be subject to a background investigation by
the Police Department to ensure that both the applicant and on-site manager have not had any
violations during the previous year that would prohibit them from continuing to hold a liquor
license. To that end, staff feels that the City would need to recover the costs associated with
such investigations. Removal of the language exempting renewal applicants from paying a
background investigation fee is the first step in the process of establishing such a fee. A
background investigation fee for liquor license renewal applications will be proposed on the
2016 fee schedule after additional research and internal discussion with the Police Department.
NEXT STEPS:
September 8, 2015 – Second Reading of Ordinance
October- 2016 Fee schedule
City Council Meeting of August 17, 2015 (Item No. 8a) Page 4
Title: Ordinance Amending St. Louis Park City Code Chapter 3 – Alcoholic Beverages
ORDINANCE NO.____-15
ORDINANCE AMENDING CHAPTER 3, SECTION 57 TO PERMIT
HOLDERS OF BREWPUB AND BREWER OFF-SALE MALT LIQUOR
LICENSES TO SELL GROWLERS ON SUNDAYS; ELIMINATE
CERTAIN RESTRICTIONS ON HOURS OF OPERATION FOR ON-SALE
OF MALT LIQUOR AT BREWER TAPROOMS; PROVIDE FOR
MICRODISTILLERY COCKTAIL ROOM LICENSES AND
MICRODISTILLERY OFF-SALE LICENSES; AND AMENDING
CHAPTER 3 SECTION 59 TO SUBJECT LIQUOR LICENSE RENEWAL
APPLICATIONS TO INVESTIGATION FEE
THE CITY OF ST. LOUIS PARK DOES ORDAIN:
SECTION 1. Chapter 3 is amended as follows:
ARTICLE II. SALE, CONSUMPTION AND DISPLAY
***
Sec. 3-57 Classifications
***
(12) Brewpub off- sale malt liquor license. A brew pub off-sale malt liquor license may be
issued, with the approval of the commissioner, to a brewer who holds an on-sale
intoxicating liquor or 3.2 percent malt liquor license issued by the city for a restaurant
operated in the place of manufacture, subject to the following conditions:
a. The malt liquor sold off-sale must be produced and packaged on the licensed
premises.
b. Off-sale of malt liquor shall be limited to the legal hours for off-sale pursuant to
section 3-105 except an establishment that holds a brewer off-sale malt liquor
license may sell malt liquor off-sale between the hours of 8:00 a.m. and 10:00 p.m.
on Sundays. The malt liquor shall be packaged in 64-ounce containers commonly
known as growlers only.
c. The malt liquor sold off-sale must be removed from the licensed premises before
the applicable off-sale closing time pursuant to section 3-105.
d. The malt liquor sold off-sale shall be packaged in 64-ounce containers commonly
known as “growlers” or in 750 milliliter bottles and shall have the following
requirements for packaging:
(Ord. No. 2388-10, 8-13-10)
1) The containers shall bear a twist type closure, cork, stopper or plug.
City Council Meeting of August 17, 2015 (Item No. 8a) Page 5
Title: Ordinance Amending St. Louis Park City Code Chapter 3 – Alcoholic Beverages
2) At the time of sale, a paper or plastic adhesive band, strip or sleeve shall be
applied to the container and extend over the top of the twist type closure, cork,
stopper or plug forming a seal that must be broken upon opening of the
container or bottle.
3) The adhesive band, strip or sleeve shall bear the name and address of the
brewer/licensee selling the malt liquor.
4) The containers shall be identified as malt liquor, contain the name of the malt
liquor, bear the name and address of the brewer/licensee selling the malt liquor,
and the contents in the container packaged as required herein shall be
considered intoxicating liquor unless the alcoholic content is labeled as
otherwise in accordance with the provisions of Minnesota Rules, part
7515.1100.
e. The retail sales for a brewer/licensee at on-sale or off-sale under this subsection
may not exceed 3,500 barrels per year, provided that off-sales may not total more
than 50 percent of the brewer/licensee's production or 500 barrels, whichever is
less.
f. A brewer operating a brewpub may hold or have an interest in other retail on-sale
licenses, but may not have an ownership interest in whole or in part, or be an
officer, director, agent or employee of, any other manufacturer, brewer, importer, or
wholesaler or be an affiliate thereof, whether the affiliation is corporate or by
management, direction or control. Notwithstanding this prohibition, a brewer
licensed under this provision may be an affiliate or subsidiary company of a brewer
licensed in Minnesota or elsewhere if that brewer's only manufacture of malt liquor
is:
1) As a brewpub as defined herein and limited to the regulations of a brewpub by
this chapter;
2) Manufactured in another state for consumption exclusively in a restaurant
located in the place of manufacture or brewing; or
3) Manufactured in another state for consumption primarily in a restaurant located
in or immediately adjacent to the place of manufacture, if the brewer was
licensed subject to the regulations herein on January 1, 1995.
***
(13) Brewer off-sale malt liquor license. A brewer who has a license from the
Commissioner of Public Safety to brew 20,000 barrels of malt liquor per year may with
the approval of the Commissioner of Public Safety be issued a license by the City for
off-sale of malt liquor subject to the following conditions:
a. The malt liquor sold off-sale must be produced and packaged on the licensed
premises.
City Council Meeting of August 17, 2015 (Item No. 8a) Page 6
Title: Ordinance Amending St. Louis Park City Code Chapter 3 – Alcoholic Beverages
b. Off-sale of malt liquor shall be limited to the legal hours for off-sale pursuant to
section 3-105 except an establishment that holds a brewpub off-sale malt liquor
license may sell malt liquor off-sale between the hours of 8:00 a.m. and 10:00 p.m.
on Sundays. The malt liquor shall be packaged in 64-ounce containers commonly
known as growlers only.
c. The malt liquor sold off-sale shall be packaged in 64-ounce containers commonly
known as “growlers” or in 750 milliliter bottles and shall have the following
requirements for packaging:
1) The containers or bottles shall bear a twist type closure, cork, stopper or plug.
2) At the time of sale, a paper or plastic adhesive band, strip or sleeve shall be
applied to the container or bottle and extend over the top of the twist type
closure, cork, stopper or plug forming a seal that must be broken upon opening
of the container or bottle.
3) The adhesive band, strip or sleeve shall bear the name and address of the
brewer/licensee selling the malt liquor.
4) The containers or bottles shall be identified as malt liquor, contain the name of
the malt liquor, bear the name and address of the brewer/licensee selling the
malt liquor, and the contents in the container packaged as required herein shall
be considered intoxicating liquor unless the alcoholic content is labeled as
otherwise in accordance with the provisions of Minnesota Rules, part
7515.1100.
***
(14) Brewer taproom license. A brewer who has a license from the Commissioner of
Public Safety to brew up to 20,000 barrels of malt liquor per year may be issued a
license by the City for on-sale of malt liquor subject to the following conditions:
a. The malt liquor sold on sale for consumption must be produced by the brewer on
the licensed premises
b. No other beverages containing alcohol may be sold or consumed on the licensed
premises
c. A brewer may only have one taproom license.
d. Hours of operation for on-sale of malt liquor at a brewer taproom shall be within
the following hours:
Monday - Thursday 3:00 p.m. – 8:00 p.m.
Friday 3:00 p.m. – 10:00 p.m.
Saturday 11:00 a.m. – 10:00 p.m.
Sunday 11:00 a.m. – 8:00 p.m.
Federally Recognized
Holidays
11:00 a.m. – 10:00 p.m.
City Council Meeting of August 17, 2015 (Item No. 8a) Page 7
Title: Ordinance Amending St. Louis Park City Code Chapter 3 – Alcoholic Beverages
d. A restaurant is not allowed at a brewery with a taproom license.
***
(15) Microdistillery cocktail room license. A microdistillery cocktail room license may be
issued to the holder of a microdistillery license issued under Minn. Stat. § 340A.22. A
microdistillery cocktail room license authorizes the on-sale of distilled liquor
produced by the distiller for consumption on the premises of or adjacent to one
distillery location owned by the distiller.
a. The city shall, within ten days of the issuance of a microdistillery cocktail room
license inform the commissioner of public safety of the licensee’s name and
address and trade name, and the effective date and expiration date of the license.
The city shall also inform the commissioner of a license transfer, cancellation,
suspension, or revocation during the license period.
b. No single entity may hold both a microdistillery cocktail room and taproom
license, and a cocktail room and taproom may not be co-located.
***
(16) Microdistillery off-sale license. A microdistillery off-sale license may be issued to the
holder of a microdistillery license issued under Minn. Stat. § 340A.22 subject to the
following conditions:
a. The license permits the sale of one 375 milliliter bottle per customer per day of
product manufactured on site;
b. Off-sale shall be limited to the legal hours for off-sale pursuant to section 3-105;
and
c. No brand may be sold at the microdistillery unless it is available for distribution
to by wholesalers.
***
Sec. 3-59. Retail license fees.
(a) Annual fees. The annual fee for all licenses shall be set by the city council, by resolution,
in amounts no greater than those set forth in M.S.A. Ch. 340A.
(b) Prorated fees. If a license application under this division is made during the license year,
the license shall be issued for the remainder of the year for a pro rata fee, with any unexpired
fraction of a month being counted as one month.
(c) Investigation fees. Investigation fees shall be determined by resolution of the city council.
Investigation fees are nonrefundable. No investigation fee shall be charged for a renewal
application. At any time that an additional investigation is required because of a change in the
control of a corporate license, change in manager, change in location or enlargement of the
premises, the licensee shall pay an additional investigation fee. Where a new application is filed
as a result of incorporation or a change of name by an existing licensee and the ownership
control and interest in the license are unchanged, no additional investigation fee will be required.
(d) Payment. All fees required to be paid in connection with a license under this section shall
be paid at the time of the filing of the license application. License and permit fees shall be paid
into the general fund.
City Council Meeting of August 17, 2015 (Item No. 8a) Page 8
Title: Ordinance Amending St. Louis Park City Code Chapter 3 – Alcoholic Beverages
SECTION 2. This Ordinance shall take effect fifteen days after its passage and
publication.
First Reading August 17, 2015
Second Reading September 8, 2015
Date of Publication September 17, 2015
Date Ordinance takes effect October 2, 2015
ADOPTED this 8th day of September, 2015 by the City Council of the City of St. Louis
Park.
Reviewed for Administration:
___________________________________
City Manager
Adopted by the City Council
_____________________________________
Mayor
Attest:
___________________________________
City Clerk
Approved as to form and execution:
_____________________________________
City Attorney
City Council Meeting of August 17, 2015 (Item No. 8a) Page 9
Title: Ordinance Amending St. Louis Park City Code Chapter 3 – Alcoholic Beverages
340A.504 HOURS AND DAYS OF SALE.
Subdivision 1.3.2 percent malt liquor.
No sale of 3.2 percent malt liquor may be made between 2:00 a.m. and 8:00 a.m. on the
days of Monday through Saturday, nor between 2:00 a.m. and 10:00 a.m. on Sunday.
Subd. 2. Intoxicating liquor; on-sale.
No sale of intoxicating liquor for consumption on the licensed premises may be made:
(1) between 2:00 a.m. and 8:00 a.m. on the days of Monday through Saturday;
(2) after 2:00 a.m. on Sundays, except as provided by subdivision 3.
Subd. 2a. Certain dispensing exempt.
Where a hotel possessing an on-sale intoxicating liquor license places containers of
intoxicating liquor in cabinets in hotel rooms for the use of guests staying in those hotel
rooms, and a charge is made for withdrawals from those cabinets, the dispensing of
intoxicating liquor from those cabinets does not constitute a sale for purposes of subdivision
2.
Subd. 3. Intoxicating liquor; Sunday sales; on-sale.
(a) A restaurant, club, bowling center, or hotel with a seating capacity for at least 30 persons
and which holds an on-sale intoxicating liquor license may sell intoxicating liquor for
consumption on the premises in conjunction with the sale of food between the hours of 8:00
a.m. on Sundays and 2:00 a.m. on Mondays.
(b) An establishment serving intoxicating liquor on Sundays must obtain a Sunday license.
The license must be issued by the governing body of the municipality for a period of one
year, and the fee for the license may not exceed $200.
(c) A city may issue a Sunday intoxicating liquor license only if authorized to do so by the
voters of the city voting on the question at a general or special election. A county may issue
a Sunday intoxicating liquor license in a town only if authorized to do so by the voters of
the town as provided in paragraph (d). A county may issue a Sunday intoxicating liquor
license in unorganized territory only if authorized to do so by the voters of the election
precinct that contains the licensed premises, voting on the question at a general or special
election.
(d) An election conducted in a town on the question of the issuance by the county of Sunday
sales licenses to establishments located in the town must be held on the day of the annual
election of town officers.
(e) Voter approval is not required for licenses issued by the Metropolitan Airports
Commission or common carrier licenses issued by the commissioner. Common carriers
serving intoxicating liquor on Sunday must obtain a Sunday license from the commissioner
at an annual fee of $75, plus $30 for each duplicate.
Subd. 4. Intoxicating liquor; off-sale.
No sale of intoxicating liquor may be made by an off-sale licensee:
(1) on Sundays;
City Council Meeting of August 17, 2015 (Item No. 8a) Page 10
Title: Ordinance Amending St. Louis Park City Code Chapter 3 – Alcoholic Beverages
(2) before 8:00 a.m. or after 10:00 p.m. on Monday through Saturday;
(3) on Thanksgiving Day;
(4) on Christmas Day, December 25; or
(5) after 8:00 p.m. on Christmas Eve, December 24.
Subd. 5. Bottle clubs.
No establishment licensed under section 340A.414, may permit a person to consume or
display intoxicating liquor, and no person may consume or display intoxicating liquor
between 1:00 a.m. and 12:00 noon on Sundays, and between 1:00 a.m. and 8:00 a.m. on
Monday through Saturday.
Subd. 6. Municipalities may limit hours.
A municipality may further limit the hours of on and off sales of alcoholic beverages,
provided that further restricted on-sale hours for intoxicating liquor must apply equally to
on-sale hours of 3.2 percent malt liquor. A city may not permit the sale of alcoholic
beverages during hours when the sale is prohibited by this section.
Subd. 7. Sales after 1:00 a.m.; permit fee.
(a) No licensee may sell intoxicating liquor or 3.2 percent malt liquor on-sale between the
hours of 1:00 a.m. and 2:00 a.m. unless the licensee has obtained a permit from the
commissioner. Application for the permit must be on a form the commissioner prescribes.
Permits are effective for one year from date of issuance. For retailers of intoxicating liquor,
the fee for the permit is based on the licensee's gross receipts from on-sales of alcoholic
beverages in the 12 months prior to the month in which the permit is issued, and is at the
following rates:
(1) up to $100,000 in gross receipts, $300;
(2) over $100,000 but not over $500,000 in gross receipts, $750; and
(3) over $500,000 in gross receipts, $1,000.
For a licensed retailer of intoxicating liquor who did not sell intoxicating liquor at on-sale
for a full 12 months prior to the month in which the permit is issued, the fee is $200. For a
retailer of 3.2 percent malt liquor, the fee is $200.
(b) The commissioner shall deposit all permit fees received under this subdivision in the
alcohol enforcement account in the special revenue fund.
(c) Notwithstanding any law to the contrary, the commissioner of revenue may furnish to
the commissioner the information necessary to administer and enforce this subdivision.