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HomeMy WebLinkAbout1988/10/03 - ADMIN - Minutes - Economic Development Authority - Regularr c7 Economic Development Autho rity Minutes October 3, 1988 5:00 p.m. iCROFILMED'. ) This was the first meeting of the newly established Economic Development Authority. Mayor Hanks began the meeting with same prel iminary discuss ion concerning format for the meeting. The Mayor mentioned that four of the six counc ilmembers present are new to this area of redevelopment. He asked the attorney for advi ce in terms of whether or not it would. be necessary for the mayor to chair this meeting as is done with the Counc il or if another person might be more appropriate to which the City Attorney responded it could be the Counc il's discreti on. Mayor Hanks recommended that Councilmember Duf fy serve as a temporary chairman. There being no objections, Councilmember Duffy assumed the chair. 1. Call to Order Chairman Duffy called the meeting to order at 5:10 p.m. 2. Roll Call Members Present: Iyle Hanks , Tom Duffy, Bruce Battaglia, Tarry Mitchel l, Keith Meland and David Strand Member Absent: All en Friedman Staff Present : Sharon Klumpp, Attorney Lee Sheehy, Don Rye, Carmen Kaplan, and Sharon Anderson 3. Approval of Minutes: None 4. New Business a. By-Laws Official Seal Duffy mentioned that it would be necessary for the Authori ty to establish a seal. The attorney recommended that the EDA direct staf f to have a seal prepared and further recommended that three to four copies be purchased . Commiss ioner Strand moved that the EDA adopt an official seal to be prepared by staff. Commissioner Meland seconded the motion which passed 6/0 with Hanks , Duffy, Battaglia, Mitchell, Meland, and Strand voting in favor of the motion. 1 Election or Appointment of Officers Ihe officers and terms were discussed. Commissioner Strand moved that Commissioner Duf fy be nominated as President. Mayor Hanks seconded the motion. There being no other nominations, the vote on the motion was 6/0 with Hanks, Duffy, Battaglia, Mitchell, Meland and Strand voting in favor of the motion. For the office of Vice President, Commissioner Battaglia moved that Commissioner Strand be nominated Vice President. Commissioner Meland seconded the motion. There being no other nominations, the vote on the motion was 6/0 with Hanks , Duf fy , Battaglia, Mitchell, Meland and Strand voting in favor of the motion. For the office of Secretary/Treasurer, it was pointed out that this office need not be held by a commissioner and that it could be a combination office of Secretary/Treasurer or they could be separated because the Treasurer should be a member of the Authority. Commissioner Hanks stated that he felt that it would be more advantageous to have the offices together. Commissioner Strand moved to nominate Commissioner Hanks as Secretary/Treasurer. Commissioner Meland seconded the motion. There being no other nominations, the vote on the motion was 6/0 with Hanks , Duf fy , Battaglia, Mitchell, Meland and Strand voting in favor of the motion. For the office of Assistant Treasurer , Commissioner Strand moved that Sharon Klumpp be nominated as Assistant Treasurer and that that office be transferred to the new Executive Director. Commissioner Meland seconded the motion which passed 6/0 with Hanks , Duf fy , Battaglia, Mitchell, Meland and Strand voting in favor of the motion. ." · %, » 4 Commissioner Hanks moved that the officers be appointed until January 1, 1989. Commissioner Battaglia seconded that motion. Commissioner Meland pointed out that the new councilmember takes office the first Monda y of December and there could be a lapse in time using the January l date. After same discussion, Commissioner Hanks moved that the date be the first meeting in December , 1988. That amendment was agreed to. by the seconder and the vote on the motion was 6/0 with Hanks, Duf fy , Battaglia, Mitchell, Meland and Strand voting in favor of the motion. Amendments Tee Sheehy explained that four votes are required for all actions and that adoption of the by-laws could require a larger number of votes. Commissioner Strand moved that the vote needed to adopt amendments be four; the majority of the entire EDA membership. Commissioner Battaglia seconded the motion which passed 6/0 with Hanks , Duf fy , Battaglia, Mitchell, Meland and Strand voting in favor of the motion. Meetings Commissioner Meland moved that the designated meeting time be the first Monda y of each month at 5:00 p.m. Commissioner Strand seconded the motion which passed 6/0 with Hanks, Duf fy , Battaglia, Mitchell and Strand voting in favor of the motion. ) ) 2 Spec ial Meetings MICROFILMED r:,l. ( The attorney stated that special meetings could be called by the President at his sole discreti on or by the Pres ident and two members as was the case with the Housing and Redevel opment Autho rity . Commissioner Hanks stated it may be preferable that the Pres ident not have to take that respons ib il ity alone. Commi ss ioner Strand felt that the by-laws should be as close to Council procedure as possible. Commiss ioner Strand moved to adopt the same process as the Counc il for calling a special meeting. Comm iss ioner Hanks seconded the motion which would mean that it could be the President or any three members with a 12 hour notice to the membership. The vote on the motion was 6/0 with Hanks , Duffy, Battaglia, Mitchell, Meland and Strand voting in favor of the motion. voting Requirements Commiss ioner Meland moved that this again be the same as Counc il procedure . Commissioner Strand seconded the motion which passed 6/0 with Hanks , Duffy, Battaglia, Mitchell, Meland and Strand voting in favor of the motion. Order o f Bus ines s < . . . e N _ President Duffy suggested that a consent agenda be estab lished simil ar to the Council agenda. Comm iss ioner Hanks moved that the same agenda format be used as the City Counc il . Commissioner Strand seconded the motion which passed 6/0 with Hanks , Duffy, Battaglia, Mitchell, Meland and Strand voting in favor of the motion. Lee Sheehy pointed out that with the direction of the EDA, a new set of By-laws will be drafted for the EDA's approval. Matter of Voting Commissioner Strand moved that the same procedure be adopted as the City Council. Commissioner Battaglia seconded the motion which passed 6/0 with Hanks , Duffy, Battaglia, Mitchell, Meland and Strand voting in favor of the motion. Con tracts President Duffy explained that with the Housing and Redevelopment Authori ty the contracts had to be signed by two parties, namely the Executive Director and the Chairman . In this case, using the names in the By-laws, it would be the Executive Director and the President. Commiss ioner Meland moved that this same policy be adopted for the EDA. Commiss ioner Strand seconded the motion which passed 6/0 with Hanks , Duffy, Battaglia, Mitchell, Meland and Strand voting in favor of the motion. s 3 Ch ecks and Draf ts Commissioner Strand moved that the Executive Director and President be designated as signers. Commissioner Battaglia seconded the motion which passed 6/0 with Hanks , Duffy, Battaglia, Mitchell , Meland and Strand voting in favor of the motion. Rul es of Procedure Commissioner Meland moved that the same Rules of Procedure as the latest Robert's Rule of Order for conduct of business be used . Comm issioner Strand seconded the motion which passed 6/0 with Hanks, Duffy, Battaglia, Mitchell, Meland and Strand voting in favor of the motion. Depository Bank Commissioner Strand moved that it would be appropriate to leave the funds at the current bank, First Western Bank . Commissioner Hanks seconded the motion. In response to a question by Commissioner Strand , the former Executive Director of the Housing and Redevelopment Authority (now acting as consultant to the EDA), Bill Thibault, pointed out that it would be necessary , of course , to set up a separate account and that he had discussed this briefly with the Finance Director relative to long term investments . The motion was 6/0 with Hanks, Duffy, Battaglia, Mitchell, Meland and Strand voting in favor of the motion. Audits Tee Sheehy emphasized that the Statute only states that a form will be given but does not specif ically state that the fo:rm must be audited. Commissioner Strand felt that an audit should be made on an annual basis. Chairman Duffy agreed, and it was concurred by the EDA that an audit should be done on an annual basis. Perdiem It was agreed that this would be placed on an agenda for a City Council meeting at a later date. ) Insurance , Lee Sheehy stated that the City 's Risk Manag er is pursuing this matter and a report will come back to the EDA. ·' . . . . . ~ . . B. Status of Development Districts l. Oak Park Village Bill Thibault gave a summary of current activities for the Oak Park Village Redevelopment District, namely, the Oakmont Project for 3lock 2 and the Touisiana Partners' project for Block 7. With regard to Oakmont, President Duffy asked if the extens ion of the bond would have to be acted on by the Council to which Mr. Thibault stated that it 4 T ] MICROFILMED would and further stated that he felt that a public hearing would not be required. Sharon Klumpp will contact the Bond Counsel to let them know that the next City Council meeting will be on October 17. On the Louisiana Partners' project on Block 7, Mr. Thibault pointed out the current timeframe included the necess ity for execution of a Purchase Agreement: at $185,000 with a certified check of $10,000 by October 15, 1988 and evidence of constructi on financing by October 30, 1988. 2. Excelsior Blvd. Redevelopment District on the Excelsior Blvd. Redevelopment District for Parkshore Place, Mr. Thibault mentioned the easement that the developer is willing to allow as a tradeoff for participation by the Authority in some of the public improv ements. President Duf fy asked if it is the developer's intent to appear before the EDA in November to which Mr. Thibault respo nded that he felt they were anticipating being on the November agenda . Mr. Thibault further stated that the remaining issue is whether the $20,000 will be made available to them. Commissioner Hanks asked if the $20,000 would be a percentage or, if it would be matched by the developer. Mr. Thibault stated that the Authority has usually participated on a fixed basis rather than an a percentage basis in order to assure a maximum amount for the Authority. On the TOW--KO project, Mr. Thibault stated that the developer is asking for a land write down and some public improvements. The project is for 160 units. Mr. Thibault pointed out that the long term lease has been purchased by the partnership. On the Avenue =Mr. Thibault explained that a clarification letter of no action had been received by the PCA . Mr. Thibault further stated that the Authority has offered to promote the project with the lender but that the developer has basically not brought the Authority into that process. Mr. Thibault stated that all properties were purchased under condemnation proceedings and that there are only three projects remaining to be settled in terms of price, namely Nasby, Theros and Cherne. Mr. Thibault further stated that all properties are demolished except for the metal shed building which should be demolished within the next couple of weeks and the Wilkins property which has a lease for an additional six months. In terms of the Contract for Private Development, Mr. Thibault stated that the Housing and Redevelopment Authority had agreed to no action until after December 1. After that date, the EDA could take default measures as desired. " · " 3. Highway 7 Carmen Kaplan reviewed the staf f report for the Highway 7 tax increment district. She stated that four proposals had been received by the City and that they were in the process of refining those proposals. In response to a question by Commissioner Battaglia, Ms. Kaplan stated that none of the four proposals would have an impact on the frontage road. • • 5 Tee Sheehy introduced James Steilen of Popham Haik stating that Mr. Steilen has been providing legal assistance to the Housing and Redevel opment Authority and that Mr . Steilen had been working more closely with the redevel opment projects to date. Commissioner Strand moved that James Steilen be retained as the legal counsel for the EDA. Commissioner Hanks seconded the motion. James Steilen stated that Lee Sheehy is also involved and would be on an on-going basis. The vote on the motion was 6/0 with Hanks , Duf fy , Battaglia, Mitchell, Mel and and Strand voting in favor of the motion. Commissioner Strand asked Mr . Thibault if the Housing and Redevel opment Authority had ever thought of hiring a project manager for On the Avenue project for day-to-day activities to make sure that the project is on track . Mr . Thibault stated that he feels that a lot depends on what happens on December 1. If the EDA has to readvertise for development proposals , it would probably not be necessary. Mr. Thibault further stated that he might have outlined another opti on for the Authority, namely, to encourage more than one developer which could also be explored. There could then be integration of the project elements similar to what has been done in Oak Park Village. President Duf fy stated that there should probably be an Executive Session set to discuss some of the legal ramifications. Tee Sheehy felt that there may be a need to hold such a meeting in October in the area of litigation and condemnation. President Duf fy felt that it would be necessary to have the meeting prior to the October 17 date, at which time the next Council meeting would be held. James Steilen described some of the issues that might be discussed at that meeting. It was decided that the Executive Session would be held on October 10 at 5:00 p.m. Commissioner Battaglia stated that he might be out of town , and it was agreed that the meeting would be taped. A recess was called at 6:45 p.m, until 7:00 p.m. At 7:00 p.m., Bryan Weber, a representative from Can America arrived, and the meeting reconvened.. C. Revised Proposal From Can-America for Additional Tax Increment Assistance Bryan Weber, representing Can America Company , stated that they are seeking $800 per unit or $124,800 per year for the proposed Cityscape project over 7 years. This reflects a $300 per unit increase from the proposal to which the City Counc il previously agreed. He stated that the request for additional tax increment financing has been fueled by the economics of the project due to increased interest rates. Mr. Weber further stated that there is no opportunity for a decreased project cost given the configuration of the site, the quality desired for the project etc. He further feels it will be more than paid back to the City by the increased tax from the project and the adjoining properties. Commissioner Battaglia asked if there would be a fixed interest rate on this project, to which Bryan Weber responded that with the year end participating mortgage, they could be locked into the mortgage rate. Commissioner Battaglia questioned what could change between now and the time to close on the property that might require additional assistance from the City. Bryan Weber stated that if , in ) 1 6 < J MICROFILMED fact, the project with the additional requested assistance does not come to fruition, he feels that he would not be the developer on the property. Commissioner Hanks expressed concern that originally they were looking at $1500 per unit and there would be a 1/3 "rebate" and now it appears it would be about 1/2 per unit. Chairman Duffy asked what Bryan ·Weber felt would be the minimum assessment needed that could be set in an agreement to which Mr. Weber stated $1700 per unit in 1992. President Duffy gave a synopsis of the request that the developer is asking for additional tax increment financing from essentially $500 per unit to $800 per unit. Cormnissioner Meland moved that the developer and staff discuss the revision and bring it back to the EDA. Commissioner Hanks seconded the motion for discussion. Commissioner Strand felt that it should be tied to some minimum value per unit. Commissioner Strand further stated that he felt financing a project to this extent oou1d give impetus to more requests for participation of this nature. He stated that he could not support going at this rate. President Duffy stated that he felt that it is significant to get going on the Highway 7 Redevelopment Area . He further stated that it took some tax increment wo rk in the Excelsior Blvd . area to set the impe tus for that project. Commissioner Hanks asked Mr. Weber what would happen to the project if it were tied to a tax value per unit. Commissioner Hanks pointed out that the City is putting no money up front. In this case, however, he does feel it would be difficult to see the City give anything more than 1/2 of the anticipated tax yield. He suggested $750 per unit or a maximum of $800 perhaps tied into a minimum tax yield of $1600 per unit. Several different financing techniques were discussed. Commissioner Strand felt that it should be $1700 per unit by the first year of payment. Commissioner Battaglia felt that it is impo rtant for the City to be consistent in terms of their policy on tax increment . Bryan Weber stated that the impediment of the grain elevators makes this an exceptional site in terms of the hurdles to make the project economically feasible. Commissioner Hanks withdrew his second to the motion. Commissioner Hanks moved that the EDA allow up to 1/2 of the value of the tax not to exceed $800 per unit with the conting ency that the apartments would have an average tax value of $1700 per unit. Commissioner Meland seconded the motion. James Steilen stated that it might not be possible to tie in a tax value and that it might have to be tied into a set value per unit. This issue will be researched. The vote on the motion was 3/2 with Duffy, Meland and Hanks voting in favor and Battaglia and Strand voting against the motion. The motion did not pass. Commissioner Hanks moved that this item be continued until the Executive Session on October 10. Commissioner Strand seconded the motion which passed 5/0 with Hanks ,' Duffy, Battaglia, Meland, and Strand voting in favor of the motion. f 7 5. Other Bus iness - None 6. Adjournment Commiss ioner Meland moved that the meeting be adjourned. Comm issioner Hanks seconded the motion which passed 5/0 with Hanks , Duf fy , Battaglia, Meland and Strand voting in favor of the moti on. The meeting adjourned at 7:30 p.m. r '5 ) Respectfully Submitted, ls NM la srae Secretary ) ,0 \ 8