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1988 06 02HOUSING AND REDEVELOPMENT AUTHORITY MINUTES JUNE 2, 1988 CALL TO ORDER: Vice-Chairman Horn called the meeting to order at 7:34 p.m. Members present: Commissioners Horn, Bohn and Swenson. Chairman Whitehill came late. Commissioner Robbins was absent. Also present were Don Ashworth, City Manager and Todd Gerhardt, Administrative Assistant. APPROVAL OF MINUTES: Motion by Bohn, seconded by Swenson to approve the April 21, 1988, minutes as presented. All voted in favor and the motion carried. SHOPPING CENTER PROPOSAL - DISCUSSION: Don Ashworth explained the background which has occurred between the city and MARCOR/ Cooper's/CHADDA. Ashworth further explained that staff has some reservations about the proposed subsidy for the grocery store such as the legal ramification, the new calculation of business taxes, and consistency of policy and reaction from the citizenry. Ashworth then introduced Jim Winkels of MARCOR Properties, Inc. Mr. Winkels presented their concept for Town Square Center which is to include a 16,000 square foot supermarket, a 14,000 square foot future addition, and 64,000 square feet of retail (variety store, hardware store, drug store, etc.). The amount of assistance which MARCOR is requesting is $860,000, of this amount $430,000 would be used as land writedown and a loan of $430,000 to the developer. The loan would then be repaid from the tax increments as they become available. Ashworth introduced John Dean from the LeFever firm to give the financial team analysis of the proposal. Mr. Dean expressed the same concerns that Mr. Ashworth had on the legal ramification on the use of tax increment. Mr. Dean further explained if it was the intent to see a supermarket in Chanhassen, staff and the financial team of Dean/Merry/Voto should be directed to work with MARCOR to work out the problems as presented by Mr. Ashworth and come back to the HRA in two weeks with the results of the team findings. Motion by Whitehill, seconded by Horn, to direct staff and the financial team to work out final details associated with the financial assistance for the shopping center proposal as pre- sented and that results be presented to the HRA on June 16, 1988. All voted in favor and the motion carried. DEVELOPMENT CONTRACT - MEDICAL ARTS FACILITY: Ashworth explained that CHADDA has requested time on this agenda that they may pre- sent their proposal for the Medical Art building. Ashworth then gave a short overview of his memo to the HRA mem- bers. Staff then asked the HRA to direct staff to work with CHADDA in negotiating those items under question in the "Master Redevelopment Agreement". HRA Minutes June 2, 1988 Page 2 OLD INSTANT WEB BUILDING - BLOOMBERG OPTION AGREEMENT: Ashworth explained that the HRA entered into an option agreement with Bloomberg Companies on the portion of the old Instant Web building presently owned by the HRA. Bloomberg Companies are exercising their option to purchase that portion of the old Instant Web building. Included in the HRA packet is the amended option agreement as drafted by John Dean. Staff recommends approval of the agreement and that staff should be directed to work with Bloomberg Companies in completing negotiations. Motion by Bohn, seconded by Swenson, to approve the amended option agreement and direct staff to finalize negotiations with Bloomberg Companies. All voted in favor and the motion carried. AWARD OF BIDS Windows/Siding Repairs at Old Villaqe Hall: Ashworth explained that in his memo to the HRA was a request for $5,600 for replacing missing siding and repair of windows. Since construc- tion started, it was determined by the contractor that the city would be better off by residing the entire building then trying to patch the holes. Ashworth further explained that HRA should consider finishing off the back room of the old Village Hall as part of this project. The esitmate for this construction is $9,500. Ashworth then explained that if the building is going to be reused, the heating and cooling system should be upgraded. Staff has received two bids from Carver Heating and Cooling from $3,489 and from Merit HVAC, Inc. for $3,089. The last item for the HRA to award bids to is the extension of secondary utility conversions to Shafer Contracting for $43,472. Staff recommends approval of the following award of bid items to: 1. Terry Stodola Construction (remove and replace siding on Old Village Hall for $5,600). 2. Terry Stodola Construction (installation of wood floor in back portion of Old Village Hall for $9,500). 3. Merit HVAC, Inc. (heating and cooling system for Old Village Hall for $3,098). 4. Shafer Contracting Co. (for installation of secondary utility conversions for $43,472). Motion by Swenson, seconded by Bohn, to award the bids as pre- sented by staff. All voted in favor and the motion carried. HOUSING PROPOSAL - MODIFICATION OF AGREEMENT: Ashworth explained that due to the legislature's action this year, subsidy can only be given for 10 years. Currently, the development contract pro- vides for a twelve year subsidy. Staff recommended that the HRA HRA Minutes June 2, 1988 Page 3 instruct the Attorney's Office to develop the technical mechanism to reduce the years from 12 to 10 years. Motion by Swenson, seconded by Bohn to direct John Dean to develop the technical mechanism to reduce the years from 12 to 10 years and that the actual performance still provide for the pro- mises made in the original plan. All voted in favor and the motion carried. DOWNTOWN UPDATE: Ashworth gave a verbal presentation on the progress to date on the construction throughout the downtown area. NEW BUSINESS/BERNIE EANSON: The ERA discussed Mr. Eanson's pro- posed development on West 79th Street. Mr. Eanson requested additional financial assistance in getting the project completed. The ERA directed Mr. Eanson to work with the financial team to come up with a program that would assist in helping the project come on line. APPROVAL OF BILLS: Motion by Swenson, seconded by Bohn, to approve the bills as presented. All voted in favor and the motion carried. ADJOURNMENT: Motion by Bohn, seconded by Swenson, to adjourn the meeting at 10:40 p.m. All voted in favor and the motion carried. Prepared by Todd Gerhardt Administrative Assistant