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Home My WebLink About1978/09/18 - ADMIN - Minutes - City Council - Joint� 'l . MINUTES JOINT CITY COUNCIL HOUSING AUTHORITY MEETING September 18, 1978 �1� to Order Roll Call Also present were A joint t�eeting of the City Council and Iiousing and Redevelopment Authority was called to order by President Pro Tem Backes at 6:33 p.m. The following Councilmen were present ati roll call: Ronald Backes Jerrold Martin Martha Elstrom Lyle Hanks Keith Meland John Ralles The f ollowing Housing Authority Commissioners were present at roll call: Jim He ltzer Dudley Moylan Jane Tschida Thomas Williams Joel Glotter th e City Manager and the Executive Director. 3. Cherne Pro osal The Executive Director explained the most p osal by A.L. Cherne to develop recent prop • ' in th e Exce ls ior a bank/office bw-lding Boulevard redevelopment area. He continued 0 osal rovides that Mr. Cherne would retain °reviouslyo� that the pr p P �o be cons tructed as p Parcel 1010 and cause the building • would acquire and assume costs associ�eadWi�� .�helo- described, the City , associa cation, demolition, leasehold lmprovements, etc.� this area for parking four parcels adjacent to Wooddale AvenueCi�d Would retain ownership of consistent with Cherne's �roposal. The y ur oses. He further the property and lease it to Cherne for parking P p zO osal be ' hat a contract should be executed should this p P expla�ned t lan obaectives and to accepted, consistent with the urban rand thepdeveloper. secure both the interest of the Cl�Y Write ated that this proPosal wouldope�y �athis would The Executive Director st arcels o� P 750 square feet zero on th e corner P the 28� down to approximate ly er Square �O°� °n result in a write down of $3 P He added that since �6�250' there is less risk °� $ City, �to amount to a total write.dO��olved for the ar for less initial pro j ect cost ls re�1e.Wi g�he f inancial s�° y n uisition costs were for the City in this proposal. IeSCi�a�e land acq xn the proposal, he stiated that tlie hoWe�er, reVenues a re t11e s ame as ' higher than previously submi.tted ��revious plans . • v Council� Housing Authority minutes , Cx t� September 18, 1978; Page 2 t there is no interest projection in that the project is He no ted tha lans f o r a b ond s ale . The Executive small enough so there would be n� p oncluded that the write down value of this proposal is Director � tion approved by the Council and Authority on comparable to the oP 1978. He stated that the.current availebWould bennoeneed for Augus t 8, h ro� ect thus ther ff' ient to fund t e p would be su lc a b ond s ale . In res onse to a question from Chairman Glotter rutiveVDirector ef lained P the Exec XP increments received versus lincr emenC�being derived f rom exis ting that there is currently tax buildings in the district and these funds could.be usHe continuedlthat fund the project costs of the office/bafksustaining and it would take initially this building will not be sel approximately 7 years with a tax increment of approximately $60,000 per year for the building to become self-sustainingbe Doming from other first 3- 5 years of the project, the fa difgbonds were sold, the tax tax increment sources. He e�lained th increments on this particular building would be utilized to pay off the indeb tedness . Councilman Hanks inquired as to if the developer arki llarea, to enter into a lease agreement with annual paymenCs for p S Mr . Cherne s tated that he was not propos ing to pay f or a lease f or the parking spaces. In response to a question from Couunissioner Helt2er, the Executive Director stated that the total lease revenues appearing in the financial statement equal $41,400 or approximately $2,300 per year. He said that this lease is nominal and is equivalent to a write down to $1 per square foot and 8 percent interest over an 18 year period for Che properties acquired along Wooddale Avenue. He explained that Mr. Cherne was interested in a lease �of approximately $1 per year. Councilman Martin e�ressed concern that the developer an additional $200 per month expense for the project. there may be possible joint use of this parking in the time the �ease could be altered and rent allocated to could not assume He stated that future at whi.ch all those benefitt�n�' The Executive Director stated that there should be provisions in the contract relative to the rights of the lease holder and the City with provisions that if the City would want to utilize the property for anoth�r purpose, it could provide comparable parking elsewhere to the lease- holders. v t Cic�� Council Housing Authority minutes, September 1$, 1978� page 3 president Pro Tem Backes stated that the lease agreement should have pzovision for leaseholder maintenance, hold hanaless clauses, etc. �e City Manager questioned whether the developer would be willing to guarantee an assessed valuation on the property. �r, Cherne stated that this guarantee is not necessary in that the �ity is assuming no risk for him to construct the building on his own property at his own expense. Councilman Martin stated �.hat since this project will benefit the most from the parking area, there should be a minimum committment in terms of a lease for the parking spaces. He continued that should the lot be shared by other benefitting properties in the future, these propertiea could also be assessed for use of parking spaces. It was moved by Councilman Martin, seconded by Councilman Hanks to approve the most recent project proposal providing that the developer construct the of f ice/bank building on his property and the City acquire the four parcels adjacent to Wooddale Avenue and develop these parcels into parking area to be leased by t2r. Cherne at a cost of $100 per month, and that the staff draf t a development contract and lease agreement for Council/Authority review and approval. Mr. Cherne indicated that this motion would be acceptable to him. Councilman Elstrom suggested that the rent payments be established on a square foot baeie . ' ' Chairman Glotter project reflects if the developer with the City, he of thi8 pro j ect. stated that the succeas or failure of this on the succese of the entire redevelopment cannot afford $200 per month for the leaee is concerned with the financial viabi�lity The motion passed 10-0-1 (Chairman Glotter abetained) . particular district; � agreement and succeae It was moved by Councilman Meland, eeconded by Couneiexc�� tionioftthe consider the remainder of th e agenda iteme, with th P Ryan proposal, on Septeinber 26, 1978. The motion paesed 11-0. It was moved by Councilman consider the Ryan propoeal night. . � The motion passed 11-0. Hanke, aeconded by Councilman Martin tthat followin8 the regular Council tneeting The meeting wae receseed at 7:30 P•m• � r . usin Authority mi.nutes, September 18, 1978; Page 4 Clty Council Ho g �e �ee�ing reconvened at 9:25 p.m. an Pro osal The Executive Director explained that in 4' R July, 1978, a letter of intent was issued to Ryan Construction Company granting a 60-day right.to negotiate for the develop- ment of property in Park Center and the deve lope r was to prepare more complete plans, additional economi.cal feasibility studies, execution of a development contract� and a provision to make supplemental payment in the event that tax increments would not equaldaandtincludesyarsecond He continued that the plan has now been p resente story containing 15,000 square feet for additional shopping area; the entire development would be 104, 000 square f f or sho s a d mall area.eet for t he sup e r m a r k e t a n d 3 4, 0 0 0 s q u a r e f e e t P He s ta te d t h a t t h e d e v e l o pment pro posal is consistent with the illus trative and urban renewal plan and the intens ity of development is more consistent with these plans and previous proposals. He stated that a contract has been prepared and provides for development as included in the developer's proposal and that a minimum assessed valua- tion is stated and should the development be assessed at a lower value, a supplemental payment will be required. A construction schedule is included in the contract providing f or expedient developmen t of the site. Also included in the contract are provisions for constr uction of a parking facility on a portion of the site at essentially no cos� to the City or Authority and provision relative to insurance of adequate access to Highway 100 during reconstruction of the intersection of 36th Street and Highway 100. The proposal does not represent any public costs and the developer has executed a purchase agreement with the Freidheim Trus t . In response to a question from Councilman Hanks and Chairman Glotter, Mr. Ryan stated that he is not withdrawing interest from the development of a 60,000 foot shopping mall north of Park Center Boulevard however, this proposal would be scheduled after the road configuration at the Highway 100/36th Street intersection is determined; these modifications will substantially effect the size and other aspects of the corner parcel. He stated that he would request another letter of intent at the time of that determination. The Citiy Manager s tated that s ome pub lic cos ts would be involved in acquisition of air rights. Mr. Ryan stated that industrial revenue bondings are not part of the proposal in that �he development exceeds the �5 million dollar limitation. Executive Director stated that the Housing Authority has reviewed the contract and has approved it, conditioned on f avorable action by this joint body. � f � . Cirt� Council Housing uthority minutes, 5. ��ze City Manager stated au th or i ty, the Hous ing party and the Ci ty is September 18, 197g; Page 5 that although the Council ha.s aPproval Authority is the principal contracting a third party beneficiary, It was moved by Councilman Hanks, seconded by Councilman Meland to gpprove the contract agreement as proposed. The motion passed Ad� ournmen t Attes t : 11-0 . vY�_____— • Wendy Borr�� Recording Secre tary Upon a moCion by Councilman Meland, seconded by Councilman Martin, the mee ting was ad j ourned at g: 40 p, m. Konald tiackes � Presi�dent Pro Tem �