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Home My WebLink About1998/12/07 - ADMIN - Minutes - Economic Development Authority - RegularSCANNED ' ) I A(llt CITY O F S T. L O UIS PARK OFFICIAL MINUTES ECONOMIC DEVELOPMENT AUTHORITY ST . L O UI S PARK , MINNE SO TA December 7, 1998 1 ) J 1. Call to Order President Jacobs called the meeting to order at 7:01 p.m. 2. Roll Call The following Commissioners were present at roll call: Jeff Jacobs, Chris Nelson, Sue Sanger, and Jim Brimeyer. Ron Latz and Mayor Gail Dorfman arrived at 7:05 p.m. Also present were the Executive Director (Mr . Meyer); EDA Attorney (Mr . Lindall), Finance Director (Ms. McBride), Economic Development Coordinator (Mr . Anderson), City Assessor (Mr . Stepnick), Director of Community Development (Mr . Harmening); and City Clerk (Ms. Larsen). 3. Approval of minutes of November 16, 1998 meeting The minutes were approved as presented. 4. Approval of agenda of December 7, 1998 meeting It was moved by Commissioner Nelson, seconded by Commissioner Sanger, to approve the agenda. The motion passed 4-0. 5. Reports - None 6. Old Business - None 7. New Business 7a. Purchase of Commercial Property at 4700 Excelsior Boulevard; Classic Cafe and Bar j Mr . Anderson, Economic Development Coordinator presented a staff report and summarized the content of the purchase price agreement which includes a waiver of any future going concern. Commissioner Nelson asked if pollution was the reason for proceeding with eminent domain. Mr . Anderson stated that this was one of the reasons, but deferred question to EDA Attorney. Mr . Lindall, EDA Attorney stated that there are two things that was of benefit by filing condemnation proceedings. With respect to the environments, if the EDA takes title by condemnation, it does receive protection from environmental liability under both state and federal environmental laws. At this point, there is a possibility of some contamination, but there is not certainty of it. Commi ssioner Nelson asked if this removed the EDA from any chain of title problems aft er the EDA would convey the property to someone else. Mr . Lindall stated that it does give protection with respect to previous condition, but if the EDA were to create some problem of their own it would not provide further protection. He indicated that the other reason for filin g condemn ation is a little more subtle. It doesn't sprin g from any condition that is known to exist here, but from his experience with other condemn ations. He stated that from time to tim e appraisers in a condemn ation proceeding will use as a comparable a purchase by a governm ental agency that has the power of condemn ation under circumstan ces where either the purchase was under threat of condemn ation or maybe an actu al acquisition in condemn ation. Often there will be a purchase where emi nent domain was authoriz ed, but not filed or yet not authorized, but could have been authorized because the governm ental agency does have the power of condemn ation. He stated that in this circumstan ce the City is compromi sing a purchase where part of the purchase price will be going for fixtu res, personal property, an d relocation benefits. This tran saction should not come back and be used as a comparable in another condemn ation in the future and the EDA should try prevent this from happening. Commi ssioner Latz questioned the signifi cant difference between the assessed value of the property and the purchase price of the property. Mr . An derson stated that the reason for the difference was that this tran saction includes the property, fixtures, waiver of going concern, and relocation benefits, so the package is larger than the assessed value. He stated that the am ount the seller cam e back with in their appraisal an d the City's appraisal was considered and staff entered negotiations which considered condemn ation proceedings and how Condemn ation Commi ssioners mi ght view the difference in appraisals. Mr . Stepnick stated that he did review the appraisal and there is always a questions of what sales comparables are used in making the analogy of what the value is. He believed the appraiser may have selected comparables that are outside of St. Louis Park and looked at property different than he did and stated that the market was changing and these factors aren't always factored into his evaluation. Commi ssioner asked if the City was looking at comparables for comm ercial property outside St. Louis Park. Mr . Stepnick stated that the City belonged to the Assessors Data Exchange and looked at comparables throughout the metropolitan area, but what is an ideal comparable is difficult to assess. Commi ssioner Brimeyer asked if Mr . Stepnick looked at relocation benefits, value of going concern, fixtures or sales approach when evaluating a property. Mr . Stepnick stated that this items are not considered, but he does look to the income that the restaurant is generating. Commi ssioner Brimeyer asked if the sellers appraisal puts a value on going concern, income stream approach and name recognition. 3CANNED Mr. Lindall, EDA Attorney stated that the sellers appraisal does not evaluate those items and indicated that not including the relocation benefits and the going concern issue, the owner's appraiser valued the land, buildings, fixtures and equipment much higher than the City's appraiser and this illustrated the disparity and also shows how the City ended compromising at a number between the two values. The difficulty is that the City has to persuade the court appointed Commissioners to who is right and invariably they will end up compromising between the two and in this case it was evaluated that the package being presented is as good as we would do in condemnation given consideration for the relocation benefits, for the cost of going forward, the risk, and getting the waiver of going concern claim. Commissioner Brimeyer asked if Commissioners are allowed to look at the value of going concern when they look at the value. Mr. Lindall stated that it would be a legal issue for the judge to decide unless it isn't dealt with there and comes up first with the Commissioner's hearing, and in that case the City could go back to the court and ask for a motion directing the Commissioners not to consider it. Mr . Meyer, City Manager referred to the Wilkins case in the past to illustrate that it is worthwhile to have the waiver of concern in the agreement. It was moved by Councilmember Nelson, seconded by Councilmember Brimeyer, to approve a Resolution Authorizing Eminent Domain Proceedings to Acquire Certain Real Property located at 4700 Excelsior Boulevard in St. Louis Park. The motion passed 6-0. 1 ) It was moved by Councilmember Nelson, seconded by Councilmember Brimeyer, to authorize the J President and Executive Director to enter into a Purchase Agreement and to execute all necessary documents to complete the acquisition of the property at 4700 Excelsior Boulevard. The motion passed 6-0. 7b. Purchase of Single Family Home at 3742 Ottawa Avenue South (Luedke Property) It was moved by Councilmember Nelson, seconded by Councilmember Sanger, to authorize the President and Executive Director to enter into a Purchase Agreement for the property at 3742 Ottawa Avenue South and to execute all necessary documents to complete the acquisition. The motion passed 6-0. 7c. Resolution concurring with the City Council's action of providing for the issuance and sale of General Obligation Tax Increment Refunding Bonds and authorizing other related actions. It was moved by Councilmember Sanger, seconded by Councilmember Latz, to approve the resolution. The motion passed 6-0. 7d. Adoption of Revised EDA By-Laws It was moved by Councilmember Latz, seconded by Councilmember Nelson, to approve the By- Laws. The motion passed 6-0. 7e. Annual Election of Economic Development Authority Officers It w as m oved by C ouncilm em ber L atz, seconded by C ouncilm ember San ger, to E lect O ffi cers. T he m otion passed 6-0. O ffi cers fo r 19 99 w ere elected as fo llow s: P resident, Jeff Jacobs; Vice-P resident, Gail D orfm an ; T reasurer, B o bby Y oung. In the precedin g action of adoptin g revi sed by-law s, C ouncil autom aticall y appointed the C ity M an ager as E xecutive D ir ect or an d the C ity C lerk as E D A S ecretary . 8. Communications and Bills 8a. Vendor Claims It w as m oved by C ommi ssioner N elson, seconded by C ommi ssioner San ger, to appro ve an d authoriz e paym ent. T he m otion passed 6-0 . 9, Adjournment It w as m oved by C ommi ssioner N elson, seconded by C ommi ssioner B rim eyer, to adjourn the m eetin g at 7:2 6 p.m . T he m otion passed 6-0. President /