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HomeMy WebLinkAbout1989/02/06 - ADMIN - Minutes - Economic Development Authority - RegularMINUTES ECONOMIC DEVELOPMENT AUTHORITY ST. LOUIS PARK, MINNESOTA February 6, 1989 l. Call to Order President Tom Duffy called the meeting to order at 5:30 p.m. 2. Roll Call ] J MICROFILMED The following commissioners were present at roll call: Tom Duffy, Keith Meland, and Lyle Hanks. Allen Friedman arrived at 6:00 p.m. and Larry Mitchell at 6:10 p.m. Also present was attorney Jim Steilen and Bill Dixon, Executive Director. 3. Approval of Agenda It was moved by Commissioner Hanks, seconded by Commissioner Mel and, to approve the agenda for Feb. 6, 1989. The motion passed unanimously. 4. Approval of January 3, 1989 minutes It was moved by Commissioner Mel and, seconded by Commissioner Hanks, to approve the minutes of the January 3, 1989 meeting. The motion passed unanimously. 5. Hearings None. 6. Reports a. Status report: St. Louis Partners- Request for time extension President Duffy said the project was moving forward, albeit slowly. St. Louis Partners was asking for an extension on the contract for private development which would extend the time to April 5, 1989. It was moved by Commissioner Meland, seconded by Commissioner Hanks, to approve the extension. Commissioner Hanks wanted the minutes to reflect that this request for a time extension is at the request of the developer. He felt the EDA had been ready to move on this all along and that he was not faulting the developer. He just wanted it to be known that the EDA has not dragged its feet, that it is willing to meet at any time or any place to keep this project moving. The motion passed 5-0. -]- 1 ] J Minutes-Economic Development Authority February 6, 1989 B. Status report: Park Boulevard Towers (Parkshore Place) President Duffy referenced a letter received from First Trust National Association. Attorney Steilen said he had been able to verify that the assessment agreement, executed as part of the closing, was in fact recorded prior to the recording of any mortgages securing the bonds. He noted the importance of that was if the mortgages were to be foreclosed, the lendors would st ill be subject to the assessment agreement and would have to continue to pay without challenge the level of taxes dictated by the agreement. C. Status report: Highway 7 T.I.F. President Duffy referenced the report from the Director of Community Development stating the final report can be ready for presentation to the EDA in the near future. Commissioner Hanks asked what area was being targeted. The Director of Community Development said the area of focus is the area between Wooddale and the railroad tracks to the southwest of Wooddale, about a one-third mile stretch of land. Commissioner Hanks asked the status of Suburban Plumbing, do they still wish to remain in the project area. The Executive Di rector said staff had met with one of the firms interested in developing the site, and apparently they have an agreement with Suburban Plumbing with some options available that is good until this fall. It was his understanding Suburban could stay or go. Commissioner Meland said he understood Suburban Plumbing had closed its plant on W. Lake St. and Taft Ave. 7. Unfinished business None. 8. New Business MICROFILMED A. Request of Louisiana Partners for soil testing. President Duffy referenced the memo from the Executive Director. The Director said the EDA has had discussion for some time with Louisiana Partners re the subject site. 0n January 12, 1989 a report was issued by STS Consultants that high levels of fuel levels and phenols exist in the part of the parcel where it narrows. It was the consultant's opinion that additional soil borings are necessary in order to better define the areas of contaminated soil . -2- 7 ] J Minutes - Economic Development Authority February 6, 1989 M ICR OFILM=p It was moved by Commissioner Meland, seconded by Commissioner Friedman, to accept the proposal submitted by STS Consultants. President Duffy expressed his concern over the slow progress of this develop- ment. He felt it was important to proceed with further testings, but he wanted to say to Louisiana Partners that when this report is done and filed, they will move expeditiously in the preparation of plans to get the project moving or pull out completely. The motion passed 5-0. B. Lease extension: Park Tavern parking It was moved by Commissioner Hanks, seconded by Commissioner Meland, to authorize execution of a lease agreement for Park Tavern for parking on the northerly 185 ft. of Lot 1, Block 7 Oak Park Village. Commissioner Friedman asked if Park Tavern would have adequate parking when they can no longer lease the other land. The Executive Director thought not. However, it was indicated in the memo that exploration concerning an agreement with Louisiana Partners and the Park Tavern is being suggested so as to more permanently solve the problem. It was noted that when Park Tavern received its permit of occupancy, there was adequate parking. The motion passed 5-0. C. Action to cancel purchase agreement with Oakmont for Lot l, Block 2 in Oak Park Village. Frank Berman, attorney for Oakmont, addressed the EDA stating he had just delivered a letter to the Executive Di rector taking a legal pas it ion on the part of Heskin Partners. He said there is pending litigation over this project started by a lien holder and that there will be other lien holders involved. He said an alternative site for the project had been defeated by one Council vote and the financing then available evaporated. He felt the matter should be resolved and the appropriate City officials should be authorized to sit down and figure a way out of this mess. Attorney Steilen said three groups have filed liens in the approximate $100,000 category and have started an action to foreclose on their liens and the EDA has filed answers. He said there are two aspects of the claims: an unjust enrichment claims which he felt had little chance for success as nothing has been constructed; second, he has spoken to the attorney who has commenced the mechanic's liens. At that time, the attorney was not aware of the nature of the real estate. He said the developer had filed an $800,000 lien which, in his opinion, was illegal and that would be communicated to the developer's attorney. He said he had expressed to Mr. Berman his opinion that any solution involving anything more than the earnest money would be unlikely. Attorney Steilen said he would need time to study the letter Mr. Berman had brought by that evening. -3- Economic Development Authority minutes February 6, 1989 MICROFILMED 7 ] J With regard to the purchase agreement, Attorney Steilen said the terms of the purchase agreement obligated the developer to commence construction of the improvements some time ago. He felt that with the financing having disappeared, there was no likelihood that the project was going to be done by the developer of the site. Before the EDA can deal with another developer, now or in the future, it would be necessary to cancel the purchase agreement of Oakmont. It was moved by Commissioner Meland, seconded by Commissioner Hanks, to direct the attorney to prepare the necessary documents to cancel the purchase agreement and return them to the March 6 EDA meeting. Councilmember Mitchell asked for clarification as to what purpose is served by this action at this time. Was he correct that it would free up the possibility of another developer coming in? He was not aware of anyone particularly interested in this site. The attorney said that was the single advantage of cancelling the purchase agreement. Commissioner Hanks saw other advantages: At this point, the developer has a hold on the land and cancel li ng the agreement would return the land to the City. He had not heard the developer say he was anxious to hold on to the property. Commissioner Mi tchell asked what was the urgency in cancel li ng the purchase agreement so the City could get the land back.-Maybe if cancelling the purchase agreement would facilitate settlement of the potential legal issues, it would make sense. Contrarily, if this action should exacerbate or complicate the legal details, he didn't see that cancelling of the purchase agreement as a positive move. President Duffy said all the EDA is asking for is papers to be drawn up for the meeting in March. By that time, the Authority will have some idea of what has happened in the way of a "negotiated settlement." At least the EDA will be in a position to take another look at it and decide whether to cancel or not. Commissioner Hanks asked the attorney if this proposed action affected the disposal of earnest monies, negotiations or whatever. Attorney Steilen said the action would do two things: (1) it cancels the purchase agreement which eliminates the right of the buyer to purchase the property and thereby essentially gives the City the right to do other things with the property which don't involve the developer; (2) it allows the Authority to take the earnest money as liquidated damages insofar as the failure of the developer to perform the purchase agreement is concerned. He said the drawing up of the papers doesn't affect anything until they are served and the time period runs. The motion passed 5-0. D. Proposal to establish EDA fiscal year as Jan. 1-Dec. 31. This item approved by consent. -q- MICROFILMED 1 E. Briefing from attorney re condemnation matter (Executive Session) 35 o% The EDA decided to hold an executive session after all other items of business had been conducted. 9. Communications and Bills I Economic Development Authority minutes February 6, 1989 A. Claims It was moved by Commissioner Hanks, seconded by Commissioner Meland, that the list of verified claims prepared by the Finance Department dated February 6, 1989 in the amount of $12,547.20 be approved and that the President and Executive Director be authorized to execute the appropriate checks. The motion passed 5-0. 9b. September 1988 financial statement The September 30, 1988 financial statement from G. M. Hansen Co. re former Housing and Redevelopment Authority was received for filing. C. December 31 financial report The December 31, 1988 financial report was ordered filed by consent. 10. Adjournment The Authority adjourned to executive session at 6:20 p.m. .2 Executive Director J -5-