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1982 08 19 . e . MINUTES CHANHASSEN HOUSING AND REDEVELOPMENT AUTHORITY REGULAR MEETING AUGUST 19, 1982 CALL TO ORDER Chairman Bill Gullickson called the meeting to order at 7:35 p.m. Present were Commissioners Horn, Whitehill, Gullickson, and Bohn. Commissioner Russell arrived at 8:40 p.m. Executive Director Martin and City Attorney Larson were also present. APPROVAL OF MINUTES Whitehill moved, seconded by Bohn, to approve the minutes of the May 20, 1982 meeting as presented. All voted in favor and the motion carried. ELECTION OF OFFICERS Whitehill moved, seconded by Horn, the re-election of the same officers for 1982-83 as had served during 1981-82: Chairman- Bill Gullickson; Vice-Chairman - Cliff Whitehill; and Secretary - Jim Bohn. All voted in favor and the motion carried. HAVLIK PROPERTY PURCHASE OPTION AGREEMENT EXTENSION (Parcel #30) John Havlik was present and questioned the method used by the HRA's appraiser in determining the current fair market value of his property. Larson explained that the use of hypothetical fac- tors in the analysis of land value was not unusual, and that this approach was only one of several used by certified appraisers in determining the value of real property. Havlik said that he would accept the new appraised value and live-up to his agreement with the HRA if the option term was extended in accordance with the agreement. Whitehill moved, seconded by Bohn, to extend the purchase option agreement for the Havlik Property for a three (3) month period (September 1 - December 1, 1982) in accordance with Section 3.1(a}, and to adjust the purchase price to a total of $250,105, in accordance with Section 6.1 of the Agreement and with the reappraised fair market value of the property. All voted in favor and the motion carried. RIVIERA PROPERTY PURCHASE OPTION AGREEMENT EXTENSION (PARCEL #31) Bohn moved, seconded by Whitehill, to extend the purchase option agreement for the Riviera Supper Club property for a three (3) month period (September 1 - December 1, 1982) in accordance with Section 3.1(a}, and to adjust the purchase price to a total of $405,606, in accordance with the Section 6.1 of the agreement and with the reappraised fair market value of the property. All voted in favor and the motion carried. HRA Minutes (8-19-82) continued - Page 2 4It. OFFER TO SELL CENEX SERVICE STATION (PARCEL #40) Representatives of Minnesota-Victoria Oil Company were present to discuss their offer to sell the Cenex Service Station property to the HRA for $100,000. Whitehill asked if Cenex would be interested in a lease-back arrangement with the HRA if the property were purchased by the HRA. He also asked if Cenex would be willing to guarantee the lease as a condition of purchase by the HRA. A representative from Cenex replied that Cenex is not interested in operating the station, but the current tenant has expressed an interest in either buying or leasing the business. The tenant only leases the service bays presently, while Cenex operates the fuel pumps. Cenex would agree to provide the necessary fuel supply if the property were purchased by either the HRA or current tenant. e Whitehill asked about the terms of the current lease and the potential revenue for lease of the fuel pumps. The Cenex repre- sentative said that the current lease is on an annual basis and that it is due to expire on October 1, 1982. The tenant pays $500 per month in rent, while Cenex pays utilities, taxes, and insurance. He suggested that any future lease provide that all expenses be the obligation of the tenant and that the fuel pumps be leased at a rate of 7!9 per gallon of fuel pumped, payable on a monthly basis. He added that approximately 20,000 gallons of fuel is currently being sold each month. The Cenex representative added that the property has been offered to the current tenant for a price of $100,000, with terms of 20% down payment and an 8 year Contract for Deed at 12% interest. Whitehill expressed concern about the financial capacity of the current tenant to meet lease payment obligations and restated his feeling that Cenex should be required to guarantee any lease arrangement if the HRA purchases the property. He added that any purchase by the HRA without a guaranteed lease would be too great a risk, and that the HRA could potentially end up with a vacant business property. Whitehill moved, seconded by Horn, to table the offer to sell the Cenex property until the seller determines whether or not they will guarantee the lease as a condition of any purchase by the HRA. The seller must also provide the HRA with specific details of any proposed leasing arrangement so that a financial analysis of such a transaction can be made prior to any committment by the HRA. All voted in favor and the motion carried. . e e Ie I , I HRA Minutes (8-19-82) continued - Page 3 APPROVAL OF 1983 OPERATING BUDGET (RESOLUTION #82-8) Martin presented the proposed 1983 HRA Operating Budget (Fund #460), which also provides for the full prepayment of Dayco Concrete and Fluoroware Special Assessment Reduction Agreement Obligations in December, 1982. Bohn moved, seconded by Horn, adoption of Resolution #82-8 approving the 1983 HRA Operating Budget (Fund #460), as prepared by the Executive Director and as presented to the HRA. All voted in favor and the motion carried. UNITED MAILING, INC. ASSESSMENT AGREEMENT (RESOLUTION #82-9) Bohn moved, seconded by Whitehill, adoption of Resolution #82-9 ratifying the execution of the United Mailing, Inc. Assessment Agreement during the absence of the Executive Director. All voted in favor and the motion carried. APPOINTMENT OF HRA DEPUTY EXECUTIVE DIRECTOR, (RESOLUTION #82-10) Horn moved, seconded by Bohn, adoption of Resolution #82-10 appointing Don W. Ashworth as the Deputy Executive Director of the HRA. All voted in favor and the motion carried. APPROVAL OF BILLS Whitehill moved, seconded by Horn, to approve the bills from June, July, and August, 1982, as presented. All voted in favor and the motion carried. Commissioner Russell arrived at this point in the meeting. apologized for his late arrival, but said that the entrance had been inadvertently locked and that he couldn't get into Hall. He door City NEW BUSINESS Martin informed the Commissioners that he and the City Engineer had recently inspected the heating and ventilating systems in the Instant Web building in anticipation of the upcoming heating season. He expressed concern with certain operational charac- teristics of the system and said that a mechanical engineer may be brought in prior to the relocation of Instant Web in order to better assess the system's operational needs if the building stands vacant throughout this winter. Martin also said that he was exploring possible short-term lease arrangements for the Instant Web building with several parties. Instant Web has informed him that they will complete the reloca- tion to their new building around January 1, 1983. . e e HRA Minutes (8-19-82) Continued - Page 4 Martin also updated the Commissioners on his recent discussions with Kraus-Anderson concerning a redesign of the Downtown Redevelopment Project. He said that Kraus-Anderson was asked to prepare a Concept Plan for staff review which includes the ideas discussed to date. This plan will be forwarded to the HRA for initial review and discussion at an upcoming meeting sometime this fall. ADJOURNMENT Whitehill moved, seconded by Russell, to adjourn the meeting at 9:00 p.m. All voted in favor and the motion carried.