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HomeMy WebLinkAbout1985/12/12 - ADMIN - Minutes - City Council - RegularMINUTES SPECIAL CITY COUNCIL MEETING ST. LOUIS PARK, MINNESOTA December 12, 1985 The Mayor called the meeting to order at 5:15 p.m. Present were Lyle Hanks, Tom Duffy, Ron Backes, Allen Friedman, David Strand, Keith Meldnd and Larry Mitchell. Oakmont Properties Resolution No. -220 At the request of the Mayor, the Executive Director of the Housing and Redevelopment Authority gave a status report on the project. The Director advised that a letter had been drafted by legal counsel from the Federal and State agencies had been reviewed by the HRA at a previous meeting and there appeared to be no problems. Relative to the sale of the property, the HRA agrees to the terms in the letter. The City Attorney had talked with the Federal attorney after the last meeting of the Council and HRA. The letter has been redrafted and is considered acceptable. It was also pointed out that minimal excavation will take place on the project and that the developer proposes to go with pilings and bridged construction. The Director pointed out that the resolution is specific to financing only and does not amount to approval of the special permit or any rezoning issues. The Director pointed out that the potential development will produce $200,000 annually in tax increment. Councilman Duffy made reference to the watershed district involvement. Mr. Cox replied that since the soils were not good, they will do a piling and grade beam construction. They will also provide a separate area for storm water detention. Mayor Hanks inquired about the status of the purchase agreement. Jim Steilen, attorney for the Authority, advised that the purchase agreement had been prepared and sent to legal counsel for the developer as of December 12, 1985. They have not had the opportunity to review it. Mayor Hanks pointed out that it is necessary to adopt the resolution at this meeting in order to accommodate the submittal to the MHFA. The last day to do this is December 13, 1985. Mayor Hanks pointed out that this meeting was for finance approval only and is a separate approval from the special permit or approval from the HRA in terms of the development plan. Councilman Strand inquired as to whether or not the Consent Decree has been included into the purchase agreement. The response was that the purchase agreement has the same conditions as in the Consent Decree. The same conditions are contained in the letter which will be sent to the Federal and State agencies. Councilman Mitchell inquired as to how previous developments were handled in this project. The Director responded that projects have been approved 1. %,he north part of the site, but not on the south side of the site. During negotiations regarding the Consent Decree and the RAP, it was agreed that Blocks 2 and 5 could be inserted as eligible for development. Block 1 was previously approved and massive excavation was not required. The development of Block 1 was controlled by the existing stipulation agreement which required that plans were submitted to the Pollution Control Agency and notification would be given if contaminated material was discovered and they were allowed to haul the materials to the south end of the site. This would be different with the development of Block 2, in which case the contaminated materials would have to be hauled to a hazardous waste site. Councilman Meland inquired as to what the cost would be if the materials of Block 1 had to be hauled away. The response was there was no way to know this as they had to be hauled to a hazardous waste site in another state since Minnesota does not have a designated hazardous waste site. Councilman Strand commented that he thought the project was a good project, a good plan and a good developer. He suggested that the Council look at approval of the financing and look at other alternatives for the sale of the property. Mr. Cox responded that since discussing this issue with his financing agency, he has developed an alternative. He would like to get approval for the bonds and escrow the proceeds from the sale, pay the cost of issuance and invest the proceeds of the bonds for a 6-mcnth period. At the end of the 6 -month period, a fixed rate would be established, construction would proceed or the sale would be ended. It was felt this would be enough time to resolve the settlement issues, take soil tests and negotiate a purchase agreement. The conditions of this alternative would be that the Consent Decree is completed and signed by all parties& that no fixed interest rate would be above 10.5% at the time of the permanent financing. This is a condition of the financing agency. Mayor Hanks inquired as to whether or not the resolution should be changed. The response was that the preliminary resolution could remain as is; however, changes in conditions as cited above should be included before the final resolution is adopted before the end of the year. Councilman Friedman inquired as to whether or not the Consent Decree or RAP was approved and questioned why the resolution was before the Council. He was advised that the purpose of this procedure is to ensure that the language of the Consent Decree and the Remedial Action Plan are included in the purchase agreement. Councilman Friedman felt that if Council gave approval to the first and second reading of the financing ordinance, then Council was under obligation to approve the special permit. The City Attorney responded that there are a number of steps to be followed. First is the favorable financing; secondly is the escrowing of the bonds; thirdly, if all does not work out, and the bonds are not used, then the pro- ject is back to status quo. Mayor Hanks pointed out that because of the contemplated changes in the law, it is necessary to pass the preliminary resolution and the final resolution before the end of the year. Mr. Cox indicated that bond counsel needs to know if the project may go forward as it is not legal to sell the bonds for arbitrage purposes. Councilman Friedman responded that approval of the resolution amounts to preliminary approval of the project. He did not feel it was good business to go ahead with this project . Councilman Friedman inquired as to whether or not the attorney could assure there would be absolutely no problems with this development in the future and whether or not the City Attorney would render an opinion to that effect. The attorney responded that an opinion could not be given in response to that question. Councilman Meland pointed out that it would be impossible to give this sort of general opinion and that legal opinions should be given in response to specific questions. Councilman Mitchell referred to the PCA letter of November 27 and inquired as to whether or not a response has been given to that letter. The City Attorney responded that numerous contacts have been made with the Justice Department and the State Attorney General's office in response to the November 27 letter. The result is that the draft of the letter that is dated December 12, which has been approved by the HRA, and is acceptable to legal counsel from the Justice Department and the State Attorney General's office. Changes from the original draft of the letter and changes in response to the November 27th letter have been incorporated. Councilman Duffy reviewed the discussion that was held at the December 5 meeting for the benefit of those Council members who could not be present. Mayor Hanks pointed out that he feels the developer has taken responsibility off the Council. If the project ever goes forward, it will be necessary to give a preliminary and final approval. If there is no Consent Decree, then the project is over. It was pointed out that from the National League of Cities meeting, every city in the country is. passing resolutions to get in under the anticipated sunsetting of the law. For example, the City of Minneapolis is agreeing to issue $180 million for a convention center, and specifics of construction for a convention center have not yet been established. Councilman Strand inquired as to whether or not the resolution should be changed to incorporate the conditions. The HRA Director responded that the conditions should be included in the final resolution after consultation with bond counsel. Mr. Cox replied that when the final resolution is adopted, all documents will be available. It was moved by Councilman Duffy, seconded by Councilman Strand to approve the preliminary resolution and that the final resolution would contain the necessary amended conditions. The motion passed 5-2 (Councilmen Friedman and Mitchell opposed). The meeting adjourned at 6:15 p.m. &NNA ,b C4. mes L..Brimeyer Recording Secretary