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HomeMy WebLinkAbout1988/11/07 - ADMIN - Minutes - Economic Development Authority - Regular( ] Eco nomi c Dev elopmen t Autho ri ty Minutes November 7, 1988 - 5:00 p.m. Counc il Chambers MICROFILMED 1. Cal l to Order Pres ident Duf fy cal led the meet ing to order at 5:04 p.m. 2. Ro ll Cal l Members Presen t: Iyle Hanks, Tom Duf fy , Bru ce Battaglia, Iarry Mitch ell, Al len Friedman , Keith Meland and David Strand . Members Absen t: None Sta ff Presen t: Bill Dixon, Attorney Jim steilen , Don Rye, Carmen Kaplan and Sharo n And erson. 3. App roval of Minutes Commi ssioner Battaglia moved the approval of the minutes of October 3, 1988. Commiss ioner Mel and seco nded the mot ion whi ch passed 4/0 with Mel and , Duf fy , Battaglia and Hanks voting in favor of the motion. Commiss ioner Hanks mov ed approval of the minutes of October 10. Commi ssioner Battaglia seco nded the motion whi ch passed 4/0 with Mel and , Duf fy , Battaglia and Hanks voting in favor of the motion. 4. Pub lic Hear ings - None 5. Reports A. Proposed E.J. Plesko & As soc iates - Parksh ore Catered Living Apartments Mike Goul d, represen ting the developer , stated that the proposal is for 110 units of as sisted living . The site is adjacent to Byerly's and Park Shore Place . Mr. Goul d stated that they are attempting to purchase same additional land next to the parking lot . He feel s that this conce pt can directl y serv e the res idents - of St . Iouis Park. Mr. Goul d introdu ced Jane Morgan, from Walker Mana gement , who is doing the marketing also for Park Shore Place . Jane Morgan stated that she is the Directo r of Hous ing Mana gement for Walker . She descr ibed the concept of assisted living whi ch is primar ily for persons in the 82+ age group and stated that perso ns who require as sis ted living do not fit into the nurs ing home category . The ass is ted living perso ns require approxima tely 1 to 2 hours of nurs ing care per day, whereas the nurs ing home criter ia begins at 2.5 and up. Ms. Morgan stated tha t other serv ices are also offered such as medi cation remind ers , housekeep ing ass istance etc . She stated tha t thi s type of perso nal care has only been avail ab le as a concept for about five 1 Ji- 7-88 MICRO=IL»=5 years. Ms. Morgan explained that there are no assisted living facilities in St. Iouis Park at this time and that this type of facility can keep people in the community. Mike Gould explained that they are in negotiations with Park Nicollet to purchase approx:ilnatley 27, 000 square feet of land and that Park Nicollet would like in exchange, a roadway to connect their facilities with Park Center Boul evard . Mr. Gould stated that they have informed Park Nicollet that additional traffic studies would likely be needed if this were to be considered. Howard Young, architect for the developer, provided details on the concept for the 110 unit design indicating the tieins with Park Shore Place and with the Park Nicollet Medical Center. Mike Gould stated that specifically E. J. Plesko is requesting a land' write down. Commissioner Battaglia stated that in reviewing the pro fora he sees no mention of paying for the roadway to connect the medical center. Mr. Gould stated that this has not been addressed since they are unsure if this concept will be possible. In response to a question by Commissioner Friedman, Mr. Gould stated that they have a letter of intent with Walker Management. Commissioner Friedman asked about a letter of intent with Park Nicollet and an agreement with Park Shore Place. Mr. Gould stated that he could furnish such a copy. Commissioner Friedman asked about the cost of rentals. Mr. Gould stated they are currently working on this aspect. Bill Dixon clarified the questions that Councilman Friedman raised namely the letter of intent with Park Nicollet, the agreement with Park Shore Place, and the cost of rentals. Commissioner Hanks moved that this be referred to staff and that when all of the questions raised have been answered, that this be brought back to an EDA meeting. Commissioner Strand seconded the motion stating that he would like a financial analysis added to that notion. Commissioners Hanks and Strand agreed to the addition. Commissioner Strand stated that he would like information on occupancy of other assisted living facilities in the metropolitan area. 'Ihe vote on the notion was 7/0 with Battaglia, Meland, Duf fy , Hanks, Mitchell, Friedman and Strand voting in favor of the motion. B. Resolution Modifying 85-1 (Highway 7) Redevelopment Financial Plan C. Minimum Assessment Agreement between EDA and Can-America J 2 D. ( ] Development Agreement between EDA and Can-America Commissioner Meland moved to waive reading and adopt a resolution. Commissioner Strand seconded the motion. Commissioner Battaglia stated that it is his understanding that the cost for removal of the elevators is estimated at $500,000 and that the interest rate has increased to 10%. Commissioner Battaglia suggested that if the demolition is less than $500,000 or if the interest rates are less than 10%, that the tax increment be reduced accordingly. President Duf fy suggested that this might be covered under item C on the agenda. Attorney J im Steilen suggested that the resolution should perha ps be considered after item 5C. Mr. Steilen further stated that the development agreement is being negotiated and the assessment agreement is essentially a form which is attached to the development agreement and that that has been provided. In response to a question of clarification by Mr. Strand, J im steilen stated that he felt the Authority could vote on the concept in terms of the subsidy that has been requested. Staff could then finalize all of the agreements within a short period of time. Mr. Steilen further stated that if the subsidy were not approved, same of the changes could be made in the resolution in a more general sense rather than incorporating the Can-America proposal. President Duf fy referred back to Commissioner Battaglia's comments in terms of incorporating language if the demolition is less than $500,000 and if the interest rate is less than 10% increase . Commissioner Strand referred to page 2 of the October 10 minutes in the motion made by Commissioner Hanks that the revised proposal with the maximum of $800.00 per unit or 50% tax rebate cap for the property, not to exceed $800.00 per unit, be approved. Commissioner Hanks asked if the item that Commissioner Battaglia mentioned could be written into the agreement to which J im steilen stated that it could be - it is mainly a question of calculating the ultimate subsidy--legally it could be done. Commissioner Hanks moved that the revised proposal with the maximum of $800.00 per unit or 50% tax rebate cap for the property, not to exceed $800.00 per unit, be approved and that this be adjusted if the demolition is less than the estimated $500,000 or if the interest rate increases less than the projected 10%. Commissioner Battaglia seconded the motion which passed 5 - 1-l with Duf fy , Hanks, Battaglia, Meland and Strand voting in favor of the motion, Friedman opposed, and Mitchell abstaining. Commissioner Friedman stated that he was voting against the motion because he believes that the land costs the developers are paying are too high. He feels that by continually building 3 E . ( ] • MICROFILMED apartments existing rentals will suffer, and if banks have concerns about financing the project, he doesn't understand how the EDA can second guess the bankers. Councilman Meland again moved to waive reading and adopt the resolution. Councilman Strand seconded the motion and the motion passed 6-0-1 with Duf fy , Hanks, Battaglia, Meland, Strand, and Friedman voting in favor of the motion and Mitchell obstaining. Approval of Purchase Agreement with Iouisiana Partners Block 7 Commissioner Hanks asked for clarification on past action on this item from Commissioner Strand and President Duf fy . President Duf fy recapped that at the last meeting of the Housing and Redevelopment Authority, the developer was advised that it is essential that this project move forward with no further delays. Commissioner Strand stated that the developer had been approved and that the Housing and Redevelopment Authority had looked at the concept plan and made remarks. He pointed out that the final plans will still come back to the EDA for approval. Jim Steilen called attention to paragraph 6 of the agreement. He stated that there are remaining questions concerning indemnification and that there could still be some negotiation with the developer depending on what is shown on additional soil tests. Commissioner Hanks expressed concern about receiving the site plan for this site and would not want approval of the Purchase Agreement construed as approval of this plan in its entirety. President Duf fy stated that I..ouisiana Partners, when chosen as the developer, presented a conceptual plan for the site. The Housing and Redevelopment Authority approved them as developer stating that this could be a workable concept plan. Jim Steilen stated that the Agreement states an approved preliminary plan would be attached. If this is not the case, this agreement should not be approved. Commissioner Hanks clarified if the Housing and Redevelopment Authority had approved this with gas pumps. President Duf fy stated that it is not a gas station but rather a convenience store with pump islands. Commissioner Strand commented that there have not been a lot of proposals on this particular piece of property. He further stated that if the EDA does not like the plan, this is the time to raise questions. Commissioner Friedman asked if this is the normal procedure used by the HRA. President Duf fy answered that a Request for Proposals was sent out, proposals were received, and one of the proposals was selected. Commissioner asked if the final plan approved varies from the preliminary plan, if this could be a problem legally. Jim Steilen stated that if the EDA 4 J1-7 -8 3 MICROFILMED required substantial changes, there could be a problem legally. Mr. Steilen also pointed out that the developer would have to go through the City process after EDA approval. Commissioner Friedman asked under EDA paragraph 6B if there are any contingencies in terms of the warranty , if there are soil problems found on the site. Jim Steilen responded that the Authority can refuse to give such an indemnification and that modifications could be made in that section of that agreement. Commissioner Strand asked for clarification if a special permit would be required for this use. Don Rye stated that the zoning is RID and that any use on the site would require a special permit. Commissioner Hanks expressed a problem with the gas pump usage and felt that this should be reflected in the agreement. Mr. Hanks feels that the site has low visibility and is not particularly a desirable site for gas pumps . Jim Waters, representing the developer, stated that they are looking for an agreement to purchase the land. The other issues in his opinion could be covered through a special permit process. Under paragraph 6B they are looking for some wording or protection with regard to problems that may be found in the soil test. Jim Steilen stated that in assessing this development, the EDA has the ability to make any decision it wants for any reason it wants "coming out of the gate". The City has some regulatory authority but has to make its decision based on the law. This body does not have to follow that same law since the EDA owns the land. Mr. Steilen further pointed out that this land is not included within the Reilly Tar settlement, which explains the caution in terms of the soil test. Jim waters expressed that they feel it would be very difficult to get an anchor tenant without the use of the pumps . Commissioner Hanks would like to see the Purchase Agreement approved without the pump islands on the preliminary plan. He further stated that if the EDA is later convinced that the pump islands are necessary and an acceptable part of the development, the islands could be added to the plan at that time. Commissioner Hanks moved that the Purchase Agreement be approved subject to approval of the site plan eliminating the gas pumps and modification to section 6B taking into account the contingencies mentioned by Commissioner Friedman. Commissioner Battaglia seconded the motion. Commissioner Friedman asked the developer if they would still proceed. Jim Waters responded that they have a letter of intent with an anchor tenant and that he feels that elimination of the gas pumps could jeopardize the development. 5 MICROFILMED Jim Waters stated that they felt that they had approval from the HRA of the preliminary plan and that it was contained in the letter of Intent. President Duf fy read the applicable portion from the Letter of Intent to the developer from the HRA, i.e., "use of the site for a surface station is prohibited but at the developers request , the Authority will consider final plans which include a gasoline pump island no longer than 40 feet, containing than no more than three pumps and a total of six nozzles." The vote on the motion was 7/0 with Battaglia, Meland, Duf fy, Hanks , Mitchell, Friedman and Strand voting in favor. 5f Parking Tot Agreement - Block 7 between Phillips Investment (Park Tavern) and EDA Commissioner Meland moved that the EDA authorize execution of a lease agreement by its President and Executive Director for parking on the northerly 185 feet of lot 1, block 7, Oak Park Village with Philips Investment Company , effective December 1, 1988 and terminating Januaray 31, 1989 for a fee of $25 per month. Commissioner Hanks seconded the motion which passed 7/0. 5g. ( ) Status Report on Highway 7/Wooddale Avenue Bill Dixon referred the commissioners to the recommendation. He stated that staff would like the flexibility of looking at a later date than November 22 if necessary. He asked for authorization to proceed with soil borings and expenditures for same and a January 3 EDA meeting date. Commissioner Friedman feels that if a developer gets his own soil borings there are two advantages namely 1) the City is not expending the funds and 2) the developer uses his own people and the City does not have to be challenged on the result. Commissioner strand feels that there is such a great discrepancy in the proposals, that it might be a bit early to have a neighborhood meeting. He asked if staff had any idea of what was slated in the Redevelopment Plan. Carmen Kaplan responded that the land use plan for Highway 7 shows office, retail, or a combination of office/showroom retail. Connnissioner Hanks felt that more in-depth study needs to be made by staff. He feels that it would be a disadvantage in accomplishing a total redevelopment in two sections. He feels that staff should work on schematics with developers before this is considered by the EDA. President Duf fy stated that the EDA needs to decide what they want developed with the area defined and a plan for the type of project and then go forward with RFP's for the site to developers. Commissioner Hanks moved that staff work on this item and that the EDA set a meeting to come up with a plan and that staff could also develop a plan for the site. Commissioner Friedman seconded 6 c7 the motion. Bill Dixon felt that staff should correspond %,y,'//LMED the current interested developers. It was agreed by the first and seconder that this would be a part of the motion. Commissioner Battaglia asked if it would be in the interest of the EDA to listen to developers as it makes the decision. President Duffy stated that he feels that the EDA must first decide on the best proposed use for the site. Bill Dixon clarified that a neighborhood meeting would not be held and that the soil borings would not be made at this time. It was agreed that those items would be delayed. The vote on the motion was 7/0. J o 5h. ] Presentation by Minnesota Pollution Control Agency re On the Avenue Jim Steilen introduced Byron Adams of the Pollution Control Agency (PCA) and Stephen Shekman of the Attorney General's Office. Mr. Steilen stated that he had made it clear to the gentlemen that the information they give this evening is intended to assist the EDA in deciding whether or not to indemni fy a lender. Byron Adams of the PCA restated their comments on the no-action letter. Jim Steilen stated that from the data received there doesn't appear to be a problem and in the worse case, same monitoring wells may have to be installed. Byron Adams stated that one of the questions was if excavation would impact the groundwater. The review of information provided says it will not. The second question is if excavation would dig into contaminated soils and if so how would the developer address that issue. The developer has stated that they would take care of those situations if they come up. Commissioner Strand asked if as suming that everything is addressed as stated, if it was Mr. Adams' opinion that there will likely be remedial action required. Mr. Adams stated not on the development site. He further stated that the investigations to date provide a good data base to assess the property and that same additional monitoring wells are in place to continue to assess the situation. Commissioner Battaglia expressed concern with long term problems and the potential for leakage of contaminated materials changing from the dump site to the development site. Mr. Adams stated that their concern would be with access to the monitoring wells that exist and off-site movement of contaminates. Mr. Adams stated that the borings taken on the development site show no contamination on that site. He further stated that if contaminations from another site affect the development site, the agency doesn't perceive that as being a problem with the development property itself. Commissioner Strand asked if it is the opinion of the State that the parties associated with the development would not be responsible for contaminations originating off from the site. Mr. Shekman responded that with the information now available, 7 ( ] J j1- 7-88 MICROFILMED the activities described are such that those activities would not tie those parties as being responsible under the Super Fund law. He further stated that the City could be tied in as a former owner, however, this would be true whether or not this development were. undertaken. For clarification Commissioner Strand stated that if the developer only developed the property as outlined, they would not be responsible under this law. Mr. Shekman stated that is correct. Commissioner Friedman asked if contaminations moved from the landfill site to this site who would than be responsible. Mr. Shekman stated that the parties responsible for the dump site are responsible for that contamination whereever it goes from that site. He further stated if the contaminants were mishandled, there could then be some responsibility by other parties. Commissioner Friedman asked if those parties connected with the dump site are no longer there, who would than be responsible. Mr. Shekrnan responded that these liabilities follow the owners and that in this case there would be a broad net of liabilities with previous owners of the site. Mr. Adams stated that it is perceived that the contaminants on the site are a small problem and that the developer has in written form stated that they will handle those materials as spelled out by the PCA. In an effort to cover questions by several of the Commissioners, Jim Steilen asked if Mr. Adams felt that the EDA can rely on the data as thorough and if it is possible that it could be wrong. Mr. Adams responded that to the extent that a number of borings were taken on the property and the installation of five monitoring wells he feels that they have a good idea of what is on the development site but there are no guaran tees . Data indicates that the contaminates have leaked through the groundwater and are moving toward the development site. Mr. Steilen than asked compared to other cases if Mr. Adams felt that this was a fairly thorough analysis. Mr. Adams stated that he felt that it is thorough with the environmental data. Commissioner Strand asked if the PCA felt that any additional testing is warranted to which Mr. Adams responded, no. Commissioner Meland asked about the terminology of the word groundwater. Mr. Adams stated that it is the geological glacier materials sitting under the st. Peters sandstone. Jim Steilen asked given the data material if Mr. Adams feels that anyone living on this property etc. have any higher risk of cancer. Mr. Adams stated that he is not a risk assessor-he has only looked at the standards the PCA imposes. He further stated that is why the developer would have to follow specifics outlined by the PCA in removal of any such materials. Fred Katter, representing the developer, asked if the EDA planned to take any action on this matter this evening. Jim Steilen suggested that Mr. Katter might want to give an update on his timetable. Fred Katter stated that this is perhaps the most 8 J7-7-83 MICROFILMEL c7 I visible redevelopment area occuring in St. Iouis Park today. He stated that during the past 11 months they have worked diligently to review this data since the contamination was discovered. They have worked with lenders who are prepared to close as of December 31, 1987. They have continued to meet with and work with those lenders, and those lenders continue to be interested today in closing an the property. Mr. Katter stated that it is imperative that before this occurs, that the City of st. Louis Park take action to indemnify the lender. Mr. Katter stated that the partnership has $1,350,000 of their own money into this project to date. He stated that in addition there is at risk today a million dollar Letter of Credit. Mr. Katter asked for the City's continued suppo rt and diligence to work through this process to indemnification. He feels they have lenders who would move to underwriting with the understanding that they could also than receive indemnification. Mr. Katter asked that the EDA hold a special meeting within the next few days to resolve this question. He would like to move fo:rward with lenders by mid-November and before Thanksgiving. They could than close on the property by approximately December 12 and move to construction of Phase 1 during late winter. 6. Unfinished Business a. By-Laws Bill Dixon stated that under 3.1 in the reference to president, vice president should be inserted. Under 4.1 two holidays should be added, after labor Day, Martin Illther King Day should be added and prior to Rosh Hashanah, President's Day should be added. President Duffy stated that under 4.5 the EDA had requested that the EDA agenda would be similar to the Council agenda and suggested that be changed. Commissioner Mitchell moved approval of the By-laws with the amendments made at this meeting. Commissioner Friedman seconded the motion which passed 7/0. b. Vendors Claims Commissioner Friedman moved approval of the vendor claim's list in the amount of $2,969.84. Commissioner Hanks seconded the motion which passed 7/0, Commissioner Hanks mentioned that three of the EDA members would be cut of town at the next regularly scheduled meeting and suggested that the meeting may be help on an alternate date. It was decided that the next regular EDA meeting would be held on the second Monday of December, December 12, 1988 at 5:00 p.m. The EDA moved to Executive Session at 7:10 p.m. 9 (_l 7. Adjournment Respect fully Submitted, ) la Lyle Secretary ( ] I