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1989 04 20HOUSING AND REDEVELOPMENT AUTHORITY MINUTES APRIL 20, 1989 CALL TO ORDER: Chairman Whitehill called the meeting to order at 7:33 p.m. Members Present: Commissioners Whitehill, Swenson, Horn, Bohn and Robbins. Also present were Don Ashworth, Executive Director and Todd Gerhardt, Assistant Executive Director. APPROVAL OF MINUTES: Motion by Robbins, seconded by Bohn to approve the March 16, 1989 minutes as presented. All voted in favor and the motion carried. Commissioner Swenson requested that in the future if minutes are corrected that a copy of those corrected minutes be included in the next packet. Staff agreed. APPROVAL OF DEVELOPMENT CONTRACT FOR THE MEDICAL ARTS BUILDING: Ashworth explained that the HRA should have received in the mail the final Development Contract for the Medical Arts building and that staff was prepared to answer any questions regarding the agreement. The HRA requested that for future contracts that staff underline any changes throughout the agreement. Staff agreed and stated they will contact the attorney to underline all changes to development contracts. Motion by Robbins, seconded by Bohn to approve the Medical Arts Building Development Contract as presented. All voted in favor and the motion carried. SETTLEMENT AGREEMENT~ KALLESTAD ENTERPRISES: Ashworth explained the settlement of condemnation action with Kallestad, Inc., and that all settlements were in line with the original estimates for the project. Ashworth presented information regarding the acquisition of the Kallestad building (Pony Express Bar)-. If the acquisition is to occur, staff should be directed to acquire the building in the very near future. The HRA expressed some concern on how exactly the area will be converted and that a specific plan be prepared. However, the HRA also felt the negotiation for acquisition should begin imme- diately before the dollar amount got too far out of line. Motion by Whitehill, seconded by Swenson to direct staff to nego- tiate the purchase of the Kallestad property. All voted in favor and the motion carried. DESIGNATION OF LOTUS REALTY AS THE OFFICIAL REDEVELOPER FOR THE PROPERTIES LYING SOUTH OF THE RAILROAD TRACKS BETWEEN GREAT PLAINS BLVD. AND DAKOTA AVENUE: Ashworth stated that Lotus Realty's request to be designated as the redeveloper for those lands north of Highway 5 and south of the railroad tracks is pre- mature at this point. Staff has directed Fred Hoisington to pre- pare a study outlining the uses for this area and a public/private road that may potentially be used. Staff requested that no action be taken on this item until the study is completed. ~OUSING AND REDEVELOPMENT AUTHORITY MINUTES APRIL 20, 1989 PAGE 2 Mr. Brad Johnson addressed the ~RA agreeing with Mr. Ashworth and his findings. Mr. Johnson asked the ERA for their thoughts on the amount of assistance they would provide for the redevelopment of this area. The amount of assistance the ERA might look favorable upon would be the same assistance that was provided to the busi- nesses in the industrial park, i.e. approximately three years worth of taxes for the Eanus redevelopment. The ERA agreed with Mr. Ashworth regarding the acquisition of parcels 4, 6 and 7 and that until Mr. Hoisington completes the study that no further action should be taken regarding the acquisition of these properties. The HRA also stated that Mr. Johnson should continue to work with staff in defining the total costs, increment generated and total amount of assistance needed. Motion by Whitehill, seconded by Swenson to encourage Mr. Johnson to continue working with staff in pursuing the redevelopment of the Hanus area and the ERA would potentially provide three years worth of increment assistance. All voted in favor the motion carried. REVIEW TEE PROPOSED CONTRACT AND PURCHASE AGREEMENT WITH CROSSROADS NATIONAL BANK: Ashworth explained that the ERA should have received the proposed Development Contract with Crossroads National Bank. Staff introduced John Dean to review the agreement. Swenson expressed specific concern over the agreement regarding the following issues: 1. Changing the lot size from 3 acres to 110,000 sq. ft. 2. The timing regarding 'the start of the project. 3. Specific demand regarding the right-in/right-out off of Market Blvd. Swenson was particularly concerned that it is possible that the project may not start for 2 to 3 years. Tom Mork, President of Crossroads National Bank responded to Swenson's concern about the lot size. Mr. Mork felt that through the negotiations it was always understood that the size of the lot would be consistent with the size of the facility constructed. The timing for the project is still anticipated to start yet this fall. Eowever, assurances are needed in case problems do occur and the project may be delayed for whatever reason. Access to Highway 5 is very important and again the bank needs assurance that access will be there and in proper condition. The NRA expressed that they did not want to see the project extended over three years. HOUSING AND REDEVELOPMENT AUTHORITY MINUTES APRIL 20, 1989 PAGE 3 Motion by Whitehill, seconded by Robbins to approve the Development Contract with the changes as presented by John Dean. All voted in favor with the exception of Swenson who abstained. Motion carried. APPROVAL OF EMPAK SPECIAL ASSESSMENT AGREEMENT: Gerhardt explained that this item was the first draft of the Special Assessment Agreement which includes the modification of the total incentives arrived at through calculating three years worth of taxes. The proposed Empak agreement would provide $561,774 worth of assistance. The estimated specials and land write-down would total $535,395, leaving the remaining increment of $26,379. Staff recommends approval of the Private Development Contract with County 17 Chanhassen Partnership for the development of a 94,590 sq. ft. office/manufacturing facility. Motion by Whitehill, seconded by Horn to approve the Private Development Contract with County Road 17 Chanhassen Partnership. All voted in favor and the motion carried. CONSIDERATION OF ASSISTANCE FOR OAKVIEW HEIGHTS TOWNHOUSE DEVELOPMENT: Gerhardt explained that Mr. Dean Johnson requested time on the agenda to receive input from the HRA regarding his pro- posed townhouse development. The HRA expressed concern by pro- viding any land write-down regarding the development or even providing special assessment assistance. Horn explained that he would not take any action on this item until the Planning Commission and City Council provided input regarding the overall planning of this project and how it may fit into the City's plans. Motion by Whitehill to provide special assessment assistance only with no land write-down. The motion died for lack of a second. Swenson expressed reservation to provide assistance to an owner occupied project and writing down the costs associated with the development compared to those projects outside the district with no assistance. No further action was taken on this item. SPECIAL ASSESSMENT REDUCTION AGREEMENT~ HOTEL SITE: Ashworth explained the details of the project regarding the building demo- lition and site work. Staff requested the HRA to authorize staff to enter into a special assessment reduction agreement with the hotel property owners subject to the following conditions: - The special assessment agreement shall be calculated in exactly the same manner as for all special assessment reduction agreements to date with the exception of the following two points; and HOUSING AND REDEVELOPMENT AUTHORITY MINUTES APRIL 20, 1989 PAGE 4 - An additional section be added permitting the developer to be reimbursed for grading expenditures associated with the parking lot project with the right for him to use the excess material from the parking lot area in any manner desired by him; and - That a section be added to the reduction agreement allowing for the developer to be reimbursed costs of demolishing the flat/gable roofed sections of the Instant Web building with reimbursement of both the grading and demolition to occur in November, 1989. Motion by Horn, seconded by Swenson to approve the special assessment reduction agreement with the Hotel Partners with the conditions as outlined by staff. All voted in favor and the motion carried. ACQUISITION OF THE FLAT-ROOFED AND GABLE-ROOFED PORTIONS OF THE OLD INSTANT WEB BUILDING FOR THE HOTEL SITE: Ashworth explained the detail associated with the development of the hotel and suggested we provide assistance to the hotel similar to that pro- vided to Retail West and Medical Arts. The details as explained would provide $150,000 land write-down on Lot 1, Block 1, Chanhassen Mall and $75,000 for demolition and site grading. Motion by Whitehill, seconded by Robbins to provide assistance in the costs incurred by the Hotel Partnership for demolition and site grading and that invoices for these costs be submitted for reimbursement. The HRA will also assist in land write-down of $150,000 on Lot 1, Block 1, Chanhassen Mall if the hotel is built on this site. The subject shown on the agenda was incorrect and acquisition was not the action taken by the HRA. All voted in favor and the motion carried. APPROVAL OF BILLS: Motion by Robbins, seconded by Bohn to approve the bills as presented. All voted in favor and the motion carried. ADJOURNMENT: Bohn moved, seconded by Swenson to adjourn the meeting at 9:45 p.m. All voted in favor and the motion carried. Prepared by: Todd Gerhardt