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HomeMy WebLinkAbout1994/06/06 - ADMIN - Minutes - Economic Development Authority - Regular5 J MINUT ES ECONOMIC DEVELOPMENT AUTHORITY S T. LOUIS PARK, MINN ESOTA Monday, June 6, 1994 1. Call to order The meeting was called to order at 7:15 by President Lyle Hanks. 2. Roll call The following Commissioners were present at roll call: Jeff Jacobs, George Haun, Ron Latz, Robert Young, Gail Dorfman and Lyle Hanks. Allen Friedman arrived shortly thereafter. Also present were the Executive Director (Mr. Meyer) Attorney (Mr. Steilen); Director of Community Development Hagen); and Director of Public Works (Mr. Grube). 3. Approval of minutes EDA (Mr. y ) J It was moved by Commissioner Jacobs, seconded by Commissioner Haun, to approve the minutes of the May 2, 1994 meeting. The motion passed 5-0-1 (Commissioner Young and Dorfman abstained). 4. Approval of agenda It was moved by Commissioner Jacobs, seconded by Commissioner Haun, to approve the agenda for June 6, 1994. The motion passed 6-0. Commissioner Friedman arrived. 5. Reports a. Approval of ramp management agreement Terms of the Redevelopment Agreement between PNMC Holdings and the EDA require the latter to enter into a management agreement for the EDA's parking ramp with PNMC Holdings as well as all costs of its maintenance and operation. Mr. Meyer said there have been some late discussions with Park Nicollet relative to how much manangement control the EDA should maintain over this agreement and staff would like some latitude to work on those items if needed. Based on the fact the ramp is due to be completed and opened on June 17, and the next available EDA meeting date is June 20, it was appropriate to consider adopting the agreement this evening. If there were any substantive changes, the agreement would be brought back to the EDA. I <? It was moved by Commissioner Haun, seconded by Commissioner Dorfman, to approve the Ramp Management Agreement and authorize its execution with the proviso that it will come back to the EDA on Ju n e 20 sh o u ld a n y su b s t a n t i a l ch a n g e s b e r e q u i r e d . T h e m o t i o n p a s s e d 7-0 . Co m m i s s i o n e r J a c o b s a s k e d w h a t it w a s th a t w o u l d b e co m i n g b a c k . C o m m i s s i o n e r H a u n c h a n g e d h i s m o t i o n to "a n y c h a n g e s i n t h e p r o p o s e d a g r e e m e n t ." T h i s w a s a g r e e a b l e to C o m m i s s i o n e r D o r f m a n . M r . M e y e r sa i d o n e o f th e is s u e s is th e r e is la n g u a g e i n t h e ag r e e m e n t th a t p r o v i d e s fo r th e E D A to a p p r o v e a n y e x p e n d i t u r e b e f o r e it is m a d e . S t a f f w a n t s to c l a r i f y w i t h Pa r k N i c o l l e t t h a t that e s s e n t i a l l y m e a n t an o v e r a l l b u d g e t ap p r o v a l , n o t an ab s o l u t e ap p r o v a l o f ev e r y n i c k e l sp e n t in th e p a r k i n g r a m p . T h e m o t i o n p a s s e d 7 -0 . b . A m e n d m e n t to D e v e l o p m e n t A g r e e m e n t w i t h F r a u e n s h u h : F a s t Fo o d Fa c i l i t y M r . M e y e r e x p l a i n e d th e r e is a p r o p o s a l fr o m M c D o n a l d 's th a t w o u ld r e q u i r e m o d i f i c a t i o n to th e D e v e l o p m e n t A g r e e m e n t . M r . S t e i l e n ex p l a i n e d th a t in th e E D A s t a n d a r d R e d e v e l o p m e n t A g r e e m e n t w i t h Fr a u e n s h u h , th e r e is a p r o v i s i o n th a t r e q u i r e s -- in the event of damage to the McDonald's building -- the building be repaired or rebuilt. If it's more than 50% damaged, if they make the decision not to rebuild, they don't have to. They would have to clean up the site and continue to pay real estate taxes as promised in Redevelopment Agreement for its life. In its lease with Frauenshuh, McDonald's is willing to continue to pay real estate taxes as well as ground lease payments to Frauenshuh, but they want the ability to not rebuild the property no matter what the level of damage is. They were looking for the following changes to the Redevelopment Agreement: (1) McDonald's would collect any insurance proceeds in event of damage to the building. Since they are financing the building, they want the same privileges as any lendor would have; (2) McDonald's wants the ability not to have to rebuild. This means the redeveloper would have the right not to have to rebuild. He thought the EDA should look at this: if the property is not rebuilt, does the EDA want to have the right to require some kind of redevelopment on the lot, either within a reasonable period of time (3 years, for example) or else reconvey it back to the Authority so that the Authority can redevelop it. Commissioner Friedman asked what the advantage would be to the EDA to make any changes at this time because he assumed a lot of thought went into the development of the original agreement. Mr. Steilen didn't think there was any particular advantage to the EDA; however, allowing McDonald's to have any insurance proceeds was a reasonable request ontheir part and is a condition to their doing the deal. Mike Broback, attorney for Frauenshuh, spoke. Basically, he . I r M IC R O F IL M E D r, J agreed with Mr. Steilen and said that the ground lease between Frauenshuh and McDonald's and the Redevelopment Agreement are in- consistent with one another. He said they were not seeking a vote tonight; rather, to hear the reasoning of the Authority as to the inconsistencies. Councilmember Friedman did not see the need for any changes as McDonald's is self-financing and would get any money in case of the building being destroyed and also that they have to continue paying the taxes anyway. Commissioner Dorfman felt a vacant lot, in the event of McDonald's not rebuilding, would be a huge disadvantage to the EDA as well as lost jobs. She felt McDonald's felt it would be successful and in the event it was destroyed would want to rebuild. If the Authority says no -- stays with the agreement as it exists -- what did Mr. Broback think the chances were that McDonald's would walk. Mr. Broback said that was why they were not asking for action tonight. They wanted to hear the Authority's input before going to McDonald's. It was moved by Commissioner Friedman, seconded by Commissioner Jacobs, that the item come back to the Authority on June 20, 1994. The motion passed 7-0. l ) 6. New business - None 3 7 . Unfinished business so» None 8 . Other business - None 9. Communications and bills a. Monthly financial statement - It was moved by Commissioner Jacobs, seconded by Commissioner Haun, to receive for filing. The motion passed 7-0. b. Vendor claims - It was moved by Commissioner Jacobs, seconded by Commissioner Haun, to approve and authorize payment. The motion passed 7-0. 10. Adjournment The meeting adjourned at 7:35 on a motion by Commissioner Jacobs, seconded by Commissioner Haun which passed 7-0.