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1987 06 11HOUSING AND REDEVELOPMENT AUTHORITY MINUTES JUNE 11, 1987 CALL TO ORDER: Vice-Chairman Horn called the meeting to order at 7:31 p.m. Members present: Whitehill, Swenson, Horn, Bohn, and Robbins. No members were absent. Also present was Todd Gerhardt, Administrative Assistant. APPROVAL OF MINUTES: Motion by Swenson, seconded by Bohn to approve the May 14, 1987, minutes, with the addition that the retention pond be included in the first phase of construction on the downtown redevelopment project. All voted in favor and the motion carried. RESOLUTION REQUESTING THE NEED FOR FINANCING OF TAX INCREMENT BONDS: Gerhardt explained that the HRA needs to act on this item as part of the General Obligation Bond Sale set for the City Council meeting on June 15, 1987. Swenson stated that she agreed with the City Manager's memo and that the project should fall under the 429 public improvement procedures and not as a general obligation bond. Chairman Whitehill moved that the HRA adopt the resolution for need of general obligation tax increment bonds to finance the downtown public improvements. Seconded by Horn. All voted in favor with the exception of Swenson, who abstained. Motion carried. CHADDA PRESENTATION: Gerhardt explained that CHADDA has requested time on this agenda that they may introduce key individuals and their roles in redeveloping the downtown. Brad Johnson, a repre- sentative of CHADDA, started the presentation by explaining the status of Retail West and Housing. Mr. Johnson then introduced Gary Cooper, the owner of Cooper's Grocery Store in Chaska. Mr. Cooper explained that he is con- sidering building a grocery store in Chanhassen and would like to start construction next spring, depending on the results of Super Valu's new market study. Mr. Johnson then introduced Dr. David McCollum, owner of the Chanhassen Clinic. Dr. McCollum expressed his interest of expanding his business and the need for 7,500 sq. ft. to operate successfully. Mr. Johnson stated that to meet the needs and time frame of Dr. McCollum, CHADDA is proposing to build a two story - 30,000 sq. ft. clinic, retail, and office building on the Retail Central site. CHADDA requested that the HRA give conceptual approval for a facility like this on the Retail Central site. The last area for discussion was the Hanus Truck facility. Mr. Johnson explained that the Hanus facility will be vacated by fall of 1987 and that the building would be tied up in bankruptcy court. Mr. Johnson showed a plan of how the facility could be changed from a truck repair shop to a retail facility. Potential tenants for this site would be Chanhassen Lawn and Sports, Automotive HRA MINUTES June 11, 1987 Page 2 Unlimited, Chanhassen Bait and Tackle, and a Garden Center. Mr. Johnson stated that by converting the Hanus facility into retail space, we can keep those businesses located in the Retail Central location in Chanhassen. CHADDA DAY CARE FACILITY - WATERFORD DEVELOPMENTw BRIAN CAREY: Gerhardt introduced Brian Carey from Waterford Development Group, Inc. to explain their proposal for the development of a 5,000 sq. ft. day care facility adjacent to Kenny's Market. Mr. Carey explained that Building Block Day Care is a Chartered 501C3 Corporation that has existed for 15 years as a non-profit cor- poration. Financing for the development will be secured through the sale of tax-exempt bonds. Mr. Carey also stated that even though they are a non-profit organization, they still must pay property taxes. Waterford Development Company is hoping to start construction in September, 1987. Mr. Johnson then explained the contingencies for the development of the day care facility. The major portion of the development deals with the relocation of Loren Anderson (Automotive Unlimited gas station) and the financial restruc- turing for the acquisition and demolition of the building. Mr. Johnson further explained that the financial team must review the excess incremenets from Retail West and Housing and how they may be used toward the day care project. Chairman Whitehill made the motion to direct the financial team to present the HRA with a reasonable way of financing the day care facility. Seconded by Robbins. All voted in favor and the motion carried. CHADDA EXPENSESw REIMBURSEMENT: Gerhardt explained that CHADDA has requested to be reimbursed for expenses that occur for the development of financial runs and legal expenses during the develop- ment contract process. Clayton Johnson, a representative of CHADDA, explained that the addition of $2,484 be added to John Dean's recommendation. At a meeting held on June 10, 1987, at City Hall, Mr. Dean agreed that these expenses be added to the recom- -endation. Chairman White made the motion to approve the reimbursement to CHADDA for expenses incurred during the development contract pro- cess, subject to written notification from John Dean as to changes suggested by CHADDA. Seconded by Bohn. All voted in favor and the motion carried. OUTLOT B~ RETTLER ACQUISITION: Gerhardt explained that the HRA will be acquiring Outlot B, Chanhassen Lakes Business Park and the Rettler property this year. The monies for these acquisitions do exist; however, we would be reducing our working capital by a large amount. To preserve some working capital for the HRA, the HRA MINUTES June 11, 1987 Page 3 City Manager has asked our legal department to research the lega- lity of having the City provide the HRA with a short-term loan from idle funds of the City. Motion by Chairman Whitehill to approve a short-term loan with the City at an interest rate between 8% and 9%. Seconded by Robbins. All voted in favor and the motion carried. EXISTING BUSINESSES - LOAN REDUCTION PROGRAM: Gerhardt explained that he visited several cities which provide some type of loan reduction to businesses who want to improve their storefronts. The need in Chanhassen has been expressed by several downtown busi- nesses, specifically, Tom Krueger, the owner of the Riviera Restaurant. Through the City's research, we have found that cities visited have very sound and self-supporting programs. The disadvantage of these programs are that they appear to be long-term commitments. The City Manager, Don Ashworth's proposal, as expressed in his memo, reduces the long-term method of twenty years to a short-term of four to five years. Chairman Whitehill expressed concern on the amount of principal that would be needed for the Krueger property. Gerhardt explained that the architect has not yet completed his cost analysis of the Krueger property and until that analysis is complete, the amount of loans could be decided. Chairman Whitehill made the motion to approve the City Manager's Loan Reduction Program concept. Seconded by Horn. All voted in favor and the motion carried. AIR PHOTOGRAPHS: Gerhardt gave an update on the status of the aerial photographs of the City's natural amenities. Phase II of the project is scheduled to start in fall. Staff also stated that after final selection is made, staff will present their fin- dings to the HRA for their approval. APPROVAL OF MAY BILLS: Motion by Whitehill, seconded by Bohn, to approve the May bills. All voted in favor and the motion carried. Motion by Horn, seconded by Robbins to adjourn the meeting at 10:10 p.m. All voted in favor and the motion carried. Minutes Prepared by: Todd Gerhardt