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HomeMy WebLinkAbout1989/07/10 - ADMIN - Minutes - Economic Development Authority - RegularMINUTES ECONOMIC DEVELOPMENT AUTHORITY ST. LOUIS PARK, MINNESOTA July 10, 1989 l. Call to Order President Duffy called the meeting to order at 5:30 p.m. 2. Roll Call The following commissioners were present at roll call: Bruce Battaglia, Thomas Duffy, Keith Meland and Lyle Hanks. Also present were the Executive Director, City Attorney and Director of Community Development. Commissioners Allen Friedman, Jane Tschida and Larry Mitchell arrived shortly thereafter. 3. Approval of minutes of June 19, 1989 meeting It was moved by Commissioner Hanks, seconded by Commissioner Battaglia, to approve the minutes of the June 19, 1989 meeting. The motion passed 4-0. ] 4. Approval of July 10, 1989 agenda ) It was moved by Commissioner Battaglia, seconded by Commissioner Meland, to approve the agenda for July 10, 1989. The motion passed 4-0. 5. Reports There were no reports. 6. Unfinished Business O a. Proposal from Robert Larsen Partners Kelly Doran, Robert Larson Partners, briefly reiterated his comments from previous meetings. He gave a lengthy presentation supporting Robert Larsen's position that retail is the best use for the property (the Golden property) as opposed to office/warehouse as recommended in the McComb Group findings. He said they were looking for three things from the City: (1) participation in eminent domain proceedings for acquisition of several properties surrounding the site; (2) tax increment financing to deal with the surrounding properties and associated costs relative to relocation of a City sewer line running through the property; and (3) that Robert Larsen Partners be appointed the exclusive developer of the piece of property from Wooddale to the Soo Line tracks in an office/showroom manner. Commissioner Hanks cautioned the Authority about not taking positive action on the Robert Larsen Partners. He noted that this was a polluted site and before Council was a developer willing to take on development of it. He wasn't sure any other developer would be interested. -]- ED A minutes July 10, 1989 President Duff y said the EDA must decide if it wants retail on the site. Once that is decided, the EDA must be willing to pay $4+ million in tax increment to get retail on the site. After those two issues are resolved, the Authority could move fo rward in considering overall development of the property Wooddale to Monitor. President Duffy asked if any property would have to be condemned by the City. Mr. Doran responded three properties would have to be condemned. Commissioner Friedman agreed with Commissioner Hanks that it was time to make a decision on this sit e. He was not convinced retail was the best and highest use for the property, but he felt it was a go fo r the best interests of the City. He, along with Commissioner Hanks, was disappointed in the McComb study which seemed to deal more in personalities than in facts. It was moved by Commissioner Friedman, seconded by Commissioner Hanks, that the Authority accept the tentative proposal of Robert Larsen Partners and agree that tax increment financing is necessary to make the project viable. Commissioner Battaglia expressed his concern that the Authority was reacting to an unsolicit ed proposal without taking a long-range look at the over a 11 retail situation in the City. He felt it was the Authority's responsibility to determine if retail on this site makes sense. Commissioner Mel and agreed with the first part of the motion but was not sure he agreed wholly with the second part. He was concerned about condemning a going concern and using tax increment funds for that. Not knowing the separate breakdown in value, this probably should be dictated somewhat by the market. He said he would be willing to look at additional tax increment fu nds after a figure has been reached between the developer and the owners of the property to see whether the C ity would contribute all or part of the tax increment funding required. Commissioner Friedman felt what the EDA was trying to do, in so far as his motion was concerned, was that this is a viable project, that the EDA is interested in the project, that we would like Robert Larsen Partners to develop the project and that the City would sit down and work with them. The second part of the motion was to review the tax increment portion as to what the EDA felt they could or could not do in that vein. Commissioner Friedman noted that development of this with the City fo r a number of years, and the present they have been unsuccessful in attracting anyone to before Robert Larsen Partners came on the scene. He appropriate to go forward. property had been owners have told him develop the property felt it would now be Commissioner Hanks was in sympathy with Commissioner Battaglia's concerns. However, he felt it was so vague as to what, of an industrial, office/showroom, or whatever nature, might be planned for the site. In front of the EDA was a concrete proposal, maybe or maybe not the best use of the site. To him, it was very important that the City would not be involved with the land should any problems be created relative to pollution. Commission Meland asked Commissioner Friedman if his comments relative to tax increment financing were something Commissioner Friedman generally agreed with in terms of his motion. -2- l ) l <? EDA minutes July 10, 1989 Commissioner Friedman said it did agree. Commissioner Battaglia asked Mr. Doran if there were a part of the project that could be accomplished without tax increment financing or condemnation. Mr. Doran responded they could potentially develop the Golden piece as it sits today in a retail fashion. This, of course, would be different from what had been represented to the EDA. However, they fe 1t it made more sense to redevelop the whole area rather than just the Golden site. Discussion followed relative to the City going out for proposals which the Executive Director felt would take 60-90 days to receive. Mr. Doran was concerned that Robert Larsen Partners had a project before the Authority ready to go and that they have made some serious commitments down the road. It was his opinion it was inappropriate for the development of the property to go out again for the RFP process. Commissioner Battaglia still felt that the Authority was reacting instead of pro-acting. President Duffy said the City had heard from numerous developers and what they planned to put on the property. This was the first concrete plan ever received. Commissioner Tschida reitereated her feeling that it would be desirable if the whole stretch from Hwy. 100 to Monitor could be tied together, develop- mentally speaking. Commissioner Mitchell felt the market dictated what would work in this redevelopment. He, also, would like to see a sense of continuity to the redevelopment of both properties. The motion passed 6-1 (Commissioner Battaglia opposed). President Duffy felt the next order of business would be Robert Larsen Partners interest in redeveloping the Wooddale to Soo Line tracks site. The City Manager said proposals had been received for the area from Wooddale to the tracks and some of those people were present. He fe 1t that item should not be dealt with at this time. It was moved by Commissioner Hanks, seconded by Commissioner Mitchell, that nothing be decided this evening, but that staff will work on a Request for Proposal for EDA review and approval at its September 5, 1989 meeting. The motion passed 7-0. b. Non-binding statement of intent re condemnation: Robert Larsen Partners The City Manager noted this item was relative to the parcel covered by the retail proposal of Robert Larsen Partners on the former Golden site which the Authority had indicated they favor. This statement would indicate -3- EDA minutes July 10, 1989 the Authority's intent to acquire property for redevelopment through condemna- tion should the sale of properties not be negotiated. The City Attorney said that both State Statutes and the City's ordinance does provide that a zoning change can be initiated by the City Council without consent of property owners. If the deve l aper were able to purchase the properties, then it would be considered an equitable owner of the property and could thereafter make application for a zoning change. At that point, a non-binding statement of intent would not be needed. It was moved by Commissioner Meland, seconded by Commissioner Hanks, to table this item. The motion passed 7-0. President Duffy clarified the action of the Authority stating it was not- in favor of a statement of intent re condemnation at this point. If Robert Larsen Partners is not able to acquire the properties, then they would return to the Authority with all relevant information and at that point, the Authority could initiate condemnation proceedings. c. Nasby appeal d. St. Louis Centre Partners It was moved by Commissioner Hanks, seconded by Commissioner Meland, that items 6c and 6d be discussed in closed meeting as they involved potential litigation. 7. New Business a. Proposed 1989 and 1990 Economic Development Authority budgets The Authority was not being asked to take any action of this i tern this evening. b. Presentation by David Tolchiner of Auto Technology Mr. Tolchiner said his current retail/service space was rented from the City. They were looking to acquire the Garrison Music building in which to locate his business. He said he would need a special use permit. Of concern is the parking at the Garrison location which is basically none. They would be interested in utilizing the land to the west, the former Pick A Pop location. What he was asking was acquiring the Garrison building and then giving the City first right of refusal in 4-5 years. He al so hoped that building could be worked into the redevelopment of the whole piece of property as previously discussed. Commissioner Hanks wondered if an extension of could be looked into. However, binding the City road in light of the discussions re RFPs this not be feasible. Mr. Tolchiner's lease to 4-5 years down the evening would probably Commissioner Friedman wondered if there could not be a clause in any lease with Mr. Tolchiner that would give him a 90-day notice prior to his relocating. -4- ED A minutes July 10, 1989 The Executive Director noted that demolition of Mr. Tolchiner's current building is scheduled in the very near future. Commissioner Friedman could not understand why a going business was to be demolished when no one had any idea what was going on the property. The Director of Community Development, in answer to that question, said the building was being demo l i shed because its locat ion is going to effect construction of the frontage road and utilities. Commissioner Battaglia was in support of Commission Friedman's suggestion that this fr ontage road project be reevaluated and that the project not proceed until it comes back before the Authority. Bryan Weber, Can-America Realty, wondered what effect a reevaluation would have on the road east of Wooddale which leads directly into his project, the alignment of which all his engineering and design plans have been based. Commissioner Mitchell wondered if it would not be better fo r Mr. Tolchiner to look for a new location now as the City would not want to lead him on 30 days here and 30 days there while trying to determine what was going to be developed on that property. He felt it certainly would not take 4-5 years for redevelopment to commence. He felt the most that could be done that evening would be to ask the Executive Director to delay that part of the frontage road so Mr. Tolchiner could be accommodated to the extent possible, but he didn't know if that would extend much beyond September. 8. Communications and bills a. C 1 aims lis t It was moved by Commissioner Meland, seconded by Commissioner Hanks, to approve the claims list and authorize payment. Commissioner Friedman asked to be provided with a breakdown of the bills submitted by ENSR, Haun, Mansfield/Tanick and Thibault. The motion passed 6-0-1 (Commissioner Friedman abstained). al. Financial statement It was moved by Commissioner Meland, seconded by Commissioner Hanks, to receive the financial statement for filing. The motion passed 7-0. 8b. Cherne's request for partial payment It was moved by Commissioner Battaglia, seconded by Commissioner Mitchell, that the Authority go before the court and ask for security. The motion passed 7-0. -5- ED A m i n u t e s J u l y 1 0 , 1 9 8 9 9 . P u b l i c h e a r i n g r e s a l e o f la n d a t 5 6 6 5 H w y . 7 a n d 5 7 0 5 W . 3 5 t h S t. f o r C i t y s c a p e p r o j e c t T h e r e b e i n g n o o n e w i s h i n g t o s p e a k , t h e P r e s i d e n t c l o s e d t h e h e a r i n g . It was moved by Commissioner Me 1./4,t~~Jnded by Commissioner Hanks to waive reading and adopt resolution/entitled "Economic Development Authority, City of St. Louis Park, a resolution relating to the modification, by revising budgeted costs of the tax increment financing plan for tax increment financing district No. 85-1, located within the Hwy. 7 development district" and "Resolution approving contract for private redevelopment with Cityscape Apartments Ltd. Partnership; Authorizing its execution; and authorizing signatures on the deed of conveyance." The City Attorney said he had received a phone call that afternoon from the lender who was requesting numerous changes in the contract, to wit: (1) the right to make an election and foreclosure as to whether to continue with the development or to abandon the development at any time; (2) they want collateral assignment of the note; and (3) they want insurance provisions in the Authority's contract subordinate to the mortgage insurance provisions. Number 3 is similar to Number l in that if the place were to burn down, they want the ability to choose not to rebuild it. Bryan Weber addressed the Authority. He reiterated that there is not financial exposure, per se, to the Authority or City. The Executive Director asked the City Attorney what. the EDA could do to protect the community from a half-built project. '»25 The City Attorney responded there were no absolute guarantees in that situation. Probably the most substantial guarantee is a practical one: if Aetna has $4 million into construction, he felt they could either abandon the $4 million or spend another $6 million in construction to complete the project and hope to recover its money. He felt in most cases, like it or not, they would be forced to make the additional investment. Mr. Weber said the only way Aetna could not build out the project - which is in the mortgage loan application - is if it is proven there are insufficient insurance proceeds to build it out. He felt there was sufficient protection in the mortgage loan application. It was moved by Commissioner Hanks, seconded by Commissioner Battaglia, to reopen and continue the hearing at 5:30 p.m. on July 17, 1989. The motion passed 7-0. It was moved by Commissioner Meland, to recess to 7:30 p.m. seconded by Commissioner Friedman Executive Director -6-