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EDA 1994 06 23FILE COPY AGENDA HOUSING AND REDEVELOPMENT AUTHORITY THURSDAY, JUNE 23, 1994, 7:30 P.M. CHANHASSEN CITY HALL, 690 COULTER'DRIVE CALL TO ORDER APPROVAL OF MINUTES 1. Approval of May 19, 1994. VISITOR PRESENTATIONS Anyone wishing to address the HRA may do so at this time. OLD BUSINESS 2. Request for Special Assessment Assistance for Outlot A and Lot 4, Market Square, Bloomberg Companies. 3. Update on the Hanus Facility Roof. NEW BUSINESS 4. Consider a Request from Market Square Partnership Regarding Assistance for Expansion, Festival Foods. 5. Consider Voiding the Contract with the Medical Art's Partnership regarding the Second Phase of the Medical Art's Project. 6. Approval of Bills. HRA PRESENTATIONS AD,IOURNMENT CHANHASSEN HOUSING AND REDEVELOPMENT AUTHORITY REGULAR MEETING MAY 19, 1994 Chairman Bohn called the meeting to order at 7:30 p.m. MEMBERS PRESENT: Don Chmiel, Mike Mason, Gary Boyle, and Jim Bohn MEMBERS ABSENT: Charlie Robbins STAFF PRESENT: Don Ashworth, Executive Director and Todd Gerhardt, Asst. Executive Director APPROVAL OF MINUTES: Chmiel moved, Mason seconded to approve the Minutes of the Housing and Redevelopment Authority meeting dated March 31, 1994 as presented. All voted in favor and the motion carried. VISITOR PRESENTATIONS: None. REJECT BIDS ON THE HANUS FACILITY ROOF. Gerhardt: Mr. Chairman and HRA members. In your packet is a request from staff to reject bids on the Hanus remodeling project. Staff was a little disappointed in the bids we received. Three bids from contractors for that project and the bids were over the architect's estimate by approximately $130,000.00 and staff at this time is making a request to check the bids and that we're going to sit down with the architect and relook at the plans themselves and meet with a couple of general contractors to see what we can do to bring this project back in line with our estimate. The architect has preliminarily met with a few of the contractors and he feels confident that making some of the alterations to the plans, we will be able to meet that estimate. Chmiel: Then going with the general contractor rather than through the architect portion itself, right? Gerhardt: We will be meeting with both, probably general contractor and an architect and we'll have to come back and ask that we go out to bids again and we already saw plans and specs with modifications to try to get this project back in line. Chmiel: Great. Bohn: Okay, do you need a vote on rejecting. Gerhardt: You should make a motion to reject the bids. Housing and Redevelopment Authority - May 19, 1994 Mason: I'd like to make a motion that we reject all bids received on May 5, 1994 and yeah, direct staff to look at other alternatives to complete the process. Boyle: I'll second that. Mason moved, Boyle seconded that the HRA reject all bids on the Hanus Remodeling project and direct staff to look at other alternatives to complete the process. Ail voted in favor and the motion carried. CONSIDER CHANGE ORDER TO HANUS FACILITY UPGRADING AGGREGATE BASE AND TO HAUL DIRT FOR PEDESTRIAN BRIDGE. Gerhardt: Included in your packet again is the request for the proposed change order. If you remember the Hanus building was broken into two projects. One was the parking lot and landscaping around the Hanus facility and on part of the Apple Valley Red-E-Mix site for the tow lot area the HRA will have. Included in that specifications we had 9 inches of gravel and 3 inches of bituminous and city specifications call for 12 inches of rock and 3 1/2 inches of bituminous. So staff is requesting that to rebuild these parking lots we need to put city specifications based on truck traffic that will be using that facility and around. There is some question in the soils in the area. The beefed up parking lot should be done. At this point we're requesting on the one section you should take action. There's a change order for changing the specifications at a cost estimate of $11,673.00. And then the second item on that, was for the pedestrian bridge and with that one, what we're going to be doing is bringing dirt in to bring that elevation of the bridge up in line with MnDot's specifications for the height of the bridge and also to match the grades of the land on the south embankment area along Lake Drive East. Bohn: Do I have a motion? Chmiel: Well, I have a question Mr. Chair. Was there any kinds of soils that we could possibly get from the Byerly's site to utilize there? And rather than have them haul it somewhere else, just put it right in that particular location and thereby maybe cutting some of those costs? Gerhardt: The estimates that we received from Buck's Blacktop does include fill material from the Byerly's site and Charlie James has offered that to us at no cost so we're not paying for the dirt. The route of traffic that they would have to use. Go down CR 17, down TH 5 and come up TH 101. So the dirt is free and then...back side of the Hanus building too and that would also be at no cost and even hauling it over there...cost so we're trying to use as much of the material as close to the site as possible. And it just makes sense for that portion Housing and Redevelopment Authority - May 19, 1994 to use Buck's Blacktop to match in with the natural grades of the north embankment of the pedestrian bridge. You're kind of doing half a project and the same contractor's...finishes off the grading work or the berm along the Hanus facility property. Bohn: Is he going to be grading all the way down to the old Taco Shop? Gerhardt: No. It will end, we finish the plans for that. We do not know how that area's going to lay out so you would have to approve the set of plans of how you want to see that area landscaped. So that will probably come under number 5 on your agenda. When you discuss the process that we're going to go through on that. Ashworth: Todd, if I could Mr. Chairman. Maybe I should add that Todd is correct. Charlie had made that offer to provide the dirt. However, as part of the settlement agreement as a part of our acquisition for part of his property, moving of 78th Street. So you'll be seeing that. It's a little more complicated than just to say that the dirt is free but there's no other strings going along with it. I should make you aware of that. You will be seeing that probably this next month. Bohn: Do I have a motion? Chmiel: I would so move to consider change order, Hanus facility. Staff recommends HRA direct staff to proceed to change orders. Item 1, with the upgrading of the depth of aggregate base for the amount of $11,673.00 and the construction of the embankment at the north end of the pedestrian bridge at $17,397.00. Mason: Second. Chmiel moved, Mason seconded that the HRA direct staff to process two change orders as follows: 1. Upgrading the depth of the aggregate base and the thickness of the bituminous to meet city standards at a cost of approximately $11,673.00. 2. The construction of the embankment at the north end of the pedestrian bridge at a cost of approximately $17,397.00. All voted in favor and the motion carried unanimously. Housing and Redevelopment Authority - May 19, 1994 REVIEW SENIOR HOUSING PROPOSALS. Ashworth: As the HRA is aware, we had a joint session with the City Council to look at senior housing on this past Monday night. City Council acted to set the next work session date for June 20th at 5:30 p.m. We would see that as another again joint session with the HRA, City Council. We're anticipating, it was at least my understanding of that last meeting that the primary concern, at least as I heard it from City Council, was to insure that if we went into this type of project, that financially it would be feasible. We wanted to hear from people like some of our...county counterparts who have done similar type of projects and are any of those in financial risk or not. And again, I primarily heard that the emphasis of the Council not taking any further action at our last work session was really one of just wanting to be assured that financially that this was the best way to go. The sale of essential purpose bonds. Putting GO backing behind that. I did not hear anybody say that this is not something that you want to do. I think if you polled everyone, there'd be a general consensus saying yes, we would like to do this. We want to do this. But I think there was a lot of concern as to the financial aspect. And again, they did act Monday night to set up the next work session for June 20th to try to answer some of those questions so I would, the HRA just acknowledge that they will have that work session on June 20th. In the meantime I might note that Sharmin has been trying to keep the seniors aware of what is transpiring in both Planning Commission, City Council and the HRA and I think it's because this item did appear on your HRA agenda that we do have several senior citizens present. I don't know if they wish to speak this evening or not. Bohn: Would anybody like to speak to the HRA about senior housing? Audience: Do you have a program in mind as to how you're going to subsidize any of the apartments or not? Bohn: Would you go up to the microphone please? Chmiel: So we can, we have this recorded so we'd like you to come up to the microphone. We can't pick you up from the chair there. Audience: Are you planning on having any kind of a program that would subsidize some of the apartments? And if they would be subsidized, who would they be subsidized by who? Ashworth: There's a number of alternatives that you can look to and I think it's fair to say that...and see units subsidized. One thing would assure that is that we would try to have as many units as possible qualified under what's referred to as the Section 8 plan that's administered by the Metropolitan Council. I should make you aware of the fact that there's 4 Housing and Redevelopment Authority - May 19, 1994 really not enough of those units around for the need so when the Mayor and I had visited Waconia, a number of those units similarly fall under that Section 8 program. But for people wanting to get in there, it takes almost a 2 year period of time to gain qualification. You can establish local programs and that's one of the things that we'll be exploring and one of the things we'll be talking about on June 20th. Audience: That's what I was wondering about because I am in a subsidized building now... and I used to live in Chan and I want to get back here so badly and I was wondering. And I did call, or I had somebody call the HRA today and they said they have a waiting list of 3,500 that you're going to take care of first. So I was just wondering if there was any other program so that I would be able to come in here without that. Ashworth: 3,500, that's. Audience: That isn't just for Chan. I think that is for the State I think. Ashworth: Probably the metro. Audience: I got it from the Linkage Line. Senior Linkage Line. Ashworth: Given the total number of units that they've used up. I know that sounds like a lot with the number of metro wide units that are subsidized. I would guess that would put it probably into a 2 year waitlist thing. It would be nice to be able to establish in a local program where we could establish local criteria. I think one of the things that was very disappointing with the complex here in downtown. That's both senior as well as a low and moderate income facility. Audience: I was over there, yes. Ashworth: But what happens on that is that a divorced individual with 2 or 3 children making $12,000.00 to $15,000.00 a year will be the first one to get the unit over a senior citizen who may have $6,000.00 or $8,000.00 in social security with potentially $80,000.00 or $100,000.00 in the bank from the sale of their home. And so as a result. I haven't considered the HUD program as a very good one. Audience: I guess that's all. Bohn: Thank you. If there's nothing else, we'll go on to review of the entry monuments. Housing and Redevelopment Authority - May 19, 1994 ENTRY MONUMENTS. Gerhardt: Mr. Chairman, HRA members. At our last City Council meeting, staff had Michael Schroeder give a presentation to the City Council on soliciting their input on entry monuments and what they thought was appropriate in what location. From that meeting it was determined at the Council level that they would like the entry monuments at the intersection of County Road 17 and Highway 5, Market Boulevard and Highway 5 and also the north leg of TH 101 and Highway 5 as the three projects that they wanted to initiate this year. And included in those they do not want to see any detailed signage at TH 101 and CR 17. They wanted to try to emphasize those intersections with more of a landscaped feature in those areas. They would be interested however in signage of some sort at the intersection of Market and Highway 5. Depending on the cost and the detail. From that staff was directed, which we then directed Michael to start putting some schematic designs together for those areas. Once he has those completed, staff will bring them back to City Council and HRA for your review and comments. Right now that's the process that we have in place. Boyle: Todd, was he given a little direction on cost? I mean a parameter. Gerhardt: There was, they wanted to give us numbers. You know they wanted to lay out the money but taking into account the area that you have there. We just couldn't do that. We felt that it was better for him to come in and to lay it out and come back and say this is how much the budget would be if you were to go with these different scenarios. Mason: Yeah, I do recall, I think he felt very, we made him aware of the fact that we wanted to keep it as, not as cheap but as inexpensive as possible. We weren't looking to spend hundreds of thousands of dollars but he's not, I don't think he'll be coming back with something pie in the sky. I would certainly hope he wouldn't. Boyle: Based on past experiences, is the reason I question that. Mason: Would you agree with that Don? Chmiel: Yes. Bohn: Any other discussion? We'll go on. Mason: I'm just curious if anyone on HRA had any comments on that. As I will be talking with City Council about what we discussed on this. Bohn: Feelings for. Housing and Redevelopment Authority - May 19, 1994 Chmiel: In other words, the two of you guys. Bohn: I was just thinking about the money it was going to cost. That's the only thing I was interested in. Boyle: I think the letter said it quite appropriately. Tastefully and not very expensive. Mason: That's what we're looking for, that's right. Boyle: It hits the nail right on the head. Gerhardt: That's how the Council felt about it. They were very concerned that they didn't want to run into something that would gobble up, they would rather see a plan that had the money put into trees than into 5 vertical elements or signage or the fact that they wanted to try to come in with more of a landscape entrance theme than getting into expensive... Bohn: I wish we would have thought of that 3 years ago. Mason: Live and learn. CONSIDER MODIFYING THE REDEVELOPMENT AGREEMENT WITH RYAN CONSTRUCTION ON OUTLOT B~ RETAIL ADDITION. Ashworth: We have the development contract included in your packet for the Ryan development west of Target. This has been a very difficult one because when they had originally approached the HRA, they had anticipated not only being able to bring Target into the community. Potentially reap some benefits off of that but in addition, be able to develop the 5 outlots that had originally been planned for that area. As this item went through the Planning Commission, it became quite obvious that the Planning Commission would not accept that level of density. And in addition, you wanted to see a large band of green space literally surrounding the entire development proposal. That reduced the development potential from the 5 lots to 3 and in the process of doing that, literally took most of the money that the developer might normally receive out of a contract like this, out of the picture and they're currently basically in front of you saying they would like to finish this but quite truthfully they're doing it solely on the basis of trying to recoup costs that they've put in during the last 3 year period of time. I think the contract meets the guidelines that you've given staff. Again, there is the large green band that is both to the southwest and north of the proposed 3 development sites. The level of help has been reduced. It's generally closer to half of what you might normally provide, which I think was another goal of the HRA. Todd has some minor type of changes that they have requested since this document was sent out. Maybe I Housing and Redevelopment Authority - May 19, 1994 should quit at this point and ask if there's any general questions about the contract as it's in front of you. Approval is recommended. Bohn: Any questions? Mike. Mason: No. Boyle: It seems to me that must be a considerable amount of green space to reduce the lots from 5 to 3. I would only question, is it really necessary? I mean we all like to have some green area and make it look very nice but we also have to consider the right business decisions I think sometimes. Do we really need that much green space to make it look right? That's my only question. Ashworth: I think that some of the things that happened, you really can't have half lots recorded so once you lost the one and then started eating into the other, it's much easier to just kind of reconfiguring the whole thing as 3 lots versus the 5. I think the Planning Commission's position is pretty adamant. They did not want to see the density that had originally been shown on those plans and I got the feeling that at least the Council concurred. I don't know if that's a fair statement or not. Gerhardt: City Council did approve the specifications for the green area...and that was the difficulty...38% green area. Ashworth: That was significantly higher but again, there was a great deal of concern as to that being one of the entry areas into the community and back to this whole Bill Morrish theme of rooms and entry areas, etc. We very much followed kind of a plan that he had laid out as it dealt with that intersection. And like I said, the Planning Commission really felt that that was the way to go so. Bohn: To build on that one lot, wouldn't they have had to put a retaining wall in? Ashworth: I don't know a retaining wall. Bohn: Well on the comer, it seems like it's much higher than it is. Gerhardt: They're going to have to mass grade the site...there's the ravine that needs to be filled or graded down and so there will be substantial grading. You also have, it's a very difficult site to develop. Tom from Ryan Construction is here and...some of the pitfalls. There are some poor soils out there. There's a major fiber optic telephone line that goes through the property. There's a gas line. There's a sewer line. There's a water line. And Housing and Redevelopment Authority - May 19, 1994 you have to try to move the buildings and footings around all those because you just can't move those fiber optic lines. You can't move a large watermain. Those just make things cost prohibitive. So in conjunction with those and site coverage percentages, they just didn't feel that that fourth lot could fit and Bill brought that to our attention last December and it was viewed with the scenario that we would have a little mom green area. Bohn: Are they going to move Perkins further to the east? Gerhardt: Not so much the Perkins I think was the problem. That's pretty much out of the utility area. It's the other two. Well they had one, Taco Bell is in. That one they could fit inbetween some of the units but they haven't picked a third user yet but that's the other one that they're having trouble, or would have trouble in moving things around and getting a fourth lot. The Perkins takes the larger percentage of the site. I think they have 1.2 acres or 1.3 so they're taking the most southerly portion of the property. And that's where the fourth lot is...parking at Perkins squeezes out a fourth lot that you could try to fit in them and still meet the 38% green. Bohn: Any other questions? Chmiel: I had just, Don. Maybe you can just sort of fill me in on this. Under Article II, page 6, Section 2.2, subparagraph (c). Is there any kinds of ballparks that we're looking at as far as that blank for total dollars? That would come into that. Gerhardt: Did we... 1.5 or 1.4. Something like that. Tom Palmquist: I believe it was 1.2. Gerhardt: 2? Okay. $1,200,000.00. Chmiel: Okay. Gerhardt: The other changes that are occurring in the plan that are not highlighted call for not having that third user. Ryan has requested that they get a 6 month extension on the one lot so that would take them, that they would have to build something on that third lot by July 1st of 1995. And that the other two lots would have to be completed, as the plan calls, by January 1st of 1995. So you're giving a 6 month extension to the third lot and right now they have not come to terms with a third user of that. Chmiel: Yeah, that was my question. 9 Housing and Redevelopment Authority - May 19, 1994 Gerhardt: Boyle: Just the one lot. Bohn: Boyle: And then with that you are extending the increment into 1999 for that one lot. Any other questions? I have no further questions. Bohn: Can we have a vote, or motion? Boyle: The motion is on the extension is what we're looking for, is that correct? month extension. Is that for another? Don, the 6 Gerhardt: That and the agreement has several modifications in the last item...Were there any other corrections that they changed which. Tom Palmquist. Excuse me. Mr. Chairman, members of the HRA. Staff. I'm Tom Palmquist from Ryan Construction Company. Good evening. I have just a couple of points... (There was a tape change at this point in the discussion.) Ashworth: ...or their interpretation of how they want it recorded. Chmiel: It would be in our best interest to just sit back...resolve between the attorneys before any motion should be moved on this? Ashworth: They'll have to respond to that. Last time when I had talked with Bill McHale, he desperately wanted to see this moved as quickly as possible because he knows that the timing is going to be very, very close for him to have 2 out of these 3 projects closed, open and operational by December 31st. There is a tremendous amount of work. And again, Ryan should respond to that question. Tom Palmquist: I guess I will. The feeling I guess that we have for that is that if the HRA does request tabling the issue until matters clear, given the time constraints, I see no other way to get the development done but to expand the window in which it's to be completed beyond January 1, 1995 and that's not something that I know staff wants to do. It's not something we want to do and frankly, the users that we're currently working with likely will not ride the bus with us until that process is completed. Boyle: Don, is there any legal ramifications for moving on this tonight? 10 Housing and Redevelopment Authority - May 19, 1994 Ashworth: No. I don't see any. And again, in talking with Gary this morning, I also had a conversation with Charlie James. The three of us see no problem in trying to be able to put this into a format that makes Ryan's attorneys happy. It's really a format problem. Boyle: And we would be improper order to move on this tonight, in staff's opinion? Ashworth: That's our opinion, yes. Boyle: I would like to make a motion then I guess Mr. Chairman that we approve the development agreement as so stated and changed by Ryan Construction Company. Bohn: Second? Mason: I'll second it. Boyle moved, Mason seconded that the HRA approve modifying the Redevelopment Agreement with Ryan Construction on Outlot B with the corrections made by staff. Ali voted in favor and the motion carried. Bohn: Discussion. Chmiel: Just one other quick question. What's this conveying title of right-of-way property that's involved in here, as was mentioned? Gerhardt: That's an old railroad right-of-way. It's MnDot right-of-way. There's a small little square. I mean if you look at it... Chmiel: Okay. I couldn't visualize where the railroad was coming in there. Gerhardt: Chmiel: Boyle: I did the same. I assumed it included everything that was proposed. Chmiel: The 6 month extension. July of '95 for the third lot to January '95. '95 for the third lot and the other two were January of '95. There's just one correction and that included the 6 month extension and... Yeah. At least I noted that in mine. No. July of 11 Housing and Redevelopment Authority - May 19, 1994 CONSIDER APPROVING PURCHASE AGREEMENT FOR THE SOUTH TOUCHDOWN AREA FOR THE PEDESTRIAN BRIDGE. Gerhardt: The next item is considering approval of a purchase agreement for the south end of the pedestrian bridge. Attached for your consideration tonight is the purchase agreement between the HRA and Mortenson Development Company for the southerly embankment along Lake Drive for the pedestrian bridge. The purchase calls for the HRA to pay $3.25 a square foot or approximately 26,000 square feet of land on the new Lake Drive and the new pedestrian embankment area. I've included a map that shows, this last attachment shows how the pedestrian will land on the south side and one of the questions that may come to you is do we need that much land. It's a difficult piece and as you bring the Ixail down and we have to continue to bring the trail farther west to get those grades necessary to meet the ADA requirements. And to properly grade the site. So it's staff recommendation to approve the purchase agreement as drafted for a purchase price of $84,788.00. Chmiel: Todd, what side of the highway are we talking about? Bohn: The south side. Chmiel: On the south side, right. We own what's on the north side. Gerhardt: Yeah, this would be directly to the east of the ball diamonds out there. There's a high point. A high field over there so it would be east of the Legion ball diamond. Bohn: Would there be any of the Mortenson property left? Gerhardt: Yes. Yes. There would be, I think they own approximately 4 acres so of that 4 acres we're taking 28,000 square feet, which is roughly a little more than a half acre. Boyle: I feel it only appropriate that I express the concern of the amount of dollars that we are spending on this particular, it continues to climb every time we get into it. I don't think we have another option. We need the property to complete the project so. Not another option that I'm aware of anyway. Chmiel: Does that all take into consideration the total cost for that bridge? Didn't we have a ballpark figure? Gerhardt: The costs that you've seen to date only included the bridge construction. It did not take into account land acquisition and embankment construction. 12 Housing and Redevelopment Authority - May 19, 1994 Chmiel: Okay. Gerhardt: So this would be up and above that estimate. I have those upstairs. I can bring those down...to see those I can get your copies of the last estimates for that bridge. Boyle: Todd, is it in staff's opinion that this $3.25 a square foot is a fair and equitable price to pay for that property? Gerhardt: It is a fair market value for that piece of property. I think we had an appraisal done on the property and Harvey came in at $3.00 a square foot and they of course wanted more. We came to terms at $3.25. They were very friendly in negotiations. They were looking for $3.50 and we halved it. So it's, $3.25 is fair. They were trying to make other concessions along with it. They wanted to be able to put in a sign that would be grandfathered in and things like that and we said that we couldn't bind future Council to...on how they may develop their property and it's just part of the negotiations. Boyle: Can we make this a toll bridge for the first 5 years maybe and recoup some of it? Chmiel: A nickel for each bicycle going across. Mason: Kids pay a penny. Boyle: Just one other question Todd. I know this is going to grab some memory but what is the total now? The total cost and then how much is, just to refresh the memory. If you don't have it right now that's. Okay, I was just curious. Gerhardt: I think you're up to 450. Boyle: Approximately. Gerhardt: Not including the 84 and not including the $17,000.00 in grading. In grading that up. Boyle: Maybe I shouldn't be joking about the toll. I have no more questions Mr. Chairman. Bohn: Don? Chmiel: No, I don't have any questions. 13 Housing and Redevelopment Authority - May 19, 1994 Gerhardt: In the total project, that's not your contribution. It's still going to be $250,000.00 that goes towards it so you're going to get a total project cost that would probably be up to $800,000.00... Mason: Bridges don't come cheap. Boyle: Very nice bridges. Mason: It is. Bill Morrish was impressed with it last night, as a matter of fact. I'll make a motion to consider to, not to consider but to approve purchase agreement for the south end of the pedestrian bridge as per staff recommendations. Bohn: Do I have a second? Boyle: Okay, I'll second it. Mason moved, Boyle seconded that the HRA approve the purchase agreement with Mortenson Development Company for the southerly embankment for the pedestrian bridge as drafted and direct staff to schedule a closing. Ail voted in favor and the motion carried. Bohn: Richard? Richard Wing: As a member of the Highway 5 Task Force, we thank you. This is one of the ...windows that was identified by Bill Morrish as one of the sight line discussions of the city. Bohn: Thank you. REVIEW ARCHITECTURAL STYLE FOR OUTLOT A AND LOT 4, MARKET SQUARE. Gerhardt: As some of you may know, the HRA does have architectural approval of developments that are in your control and tonight you have Brad Johnson...here tonight to present their proposed development of a Wendy's and office retail center for Outlot A and Lot 4 on Market Square Addition. At this time I'd like to have that partnership come up and present their plan to the HRA. Vemelle Clayton: Good evening. I'm Vernelle Clayton...and for the benefit of those of you who haven't seen the plan, and Gary I guess you're probably the only one who hasn't really taken a look at them...site plan will tell you where they are. With our colored version of our 14 Housing and Redevelopment Authority - May 19, 1994 landscaped plan. That kind of shows a little more prettier version. This is this building and this is the Wendy's building. Both buildings have been redesigned since we first visited with your group last September or October. This one is the one that has under gone the most dramatic changes. It's been designed to both coordinate with the architectural elements of Market Square and with the elements of architectural that you see up and down main street, particular in the near by vicinity of the comer. The way in which it coordinates with Market Square is, we use some of the same construction materials along the bottom. Using some of the same colors as the awnings on the window trim and the pillar, picking up the pillar accesses of the... The other aspect of the architecture...better looking buildings of the city and we think this will be among the best looking with all of the brick and so forth. I think, and with all the glass. It will be a relatively dramatic appearance, particularly in the evening I think with the lights on inside...That then is the building...relatively brief about those and you can ask questions. The other building will pick up on the same color. The brick is relatively close to the color we'll be using on that one. Picking up on the brick. Since we visited with you we've added the roof element over the...color and they'll be coordinated as much as possible with Market Square. As many of you have chatted with me and said, well we're essentially through the Council. We are essentially that. We have, this is the landscaping plan that was...This is the landscaping plan that they...addition of some trees that people... Mason: That's the south side right, Vemelle? Vemelle Clayton: This is the south side. This is an entrance. In case any of you have been experiencing what we've experienced...we're also cutting this back a bit so that the curve in turn in will be a lot better... Bohn: How many more trees did you add to it? Richard Wing: More than the number of trees, just the reality that that isn't the place to be putting in large amounts of trees and materials. I think it was my wish to really...sight lines with the reality that this really isn't an appropriate...I think we had about 5...but their landscape architect was very...and this is pushing our limit and what really fit in there realistically. So this is a realistic compromise. I think they did a nice job. Boyle: These are actual trees, not bushes. These are trees? I mean like a. Richard Wing: They're all overstory... Boyle: I'm sorry. Vemelle Clayton: The term these days, the clinical correct term in reference to trees in 15 Housing and Redevelopment Authority - May 19, 1994 parking lots is overstory. So these are overstory trees. It means you can see under them. The purpose is to make it cooler...parking lot. So these big brown circles are the trees and then the little...circles are shrubs. Mason: Now you showed, on the other side you don't show that many trees I don't think. Vemelle Clayton: This is with the addition. Mason: Okay, okay. I guess our purpose there is to present the architecture to you and I don't have it in a nutshell down there but I'd be happy to answer questions. Boyle: Tremendous improvements from the first time that I think we all saw it. I guess, I'm going to ask a question. Only as still the rookie on the HRA. At what level of responsibility does it rest on HRA when it comes to architectural approvement? The Planning Commission has looked at it. Given their opinion. City Council has done it. Voiced their approval I assume. What level is it the responsibility of the HRA when it comes to architectural approval? Ashworth: You don't have any, there's nothing under State law to provide architectural review...over to Housing and Redevelopment Authority. You've established no local procedures as you filter that. But there's one very obvious thing that provides you the ability to do that...and that is they're looking for your assistance. Boyle: Okay, this is a courtesy. Ashworth: ...you make a decision that you want to review the architecture and that's up to you. If they don't want to take and show you the architecture, you don't have to provide them assistance. Boyle: Thank you Don. Vemelle Clayton: That's a segway into a question that I had. I don't know how much format you exactly want to use tonight. We have two issues that are on the agenda plus our request that you suggested for assessment break down and one additional land that we'd like to consider and that being the movement of the utility boxes that currently are located up here over...It costs about $10,000.00... Boyle: Separating? Or do we do it all at once? Chmiel: Go ahead. I was just going to say something in itself but that's alright. I guess my 16 Housing and Redevelopment Authority - May 19, 1994 position is, I see us in no position to relocate those at HRA's cost. They've been put there before and been relocated. I always feel two times with us and out. If there's an additional cost that's required, then I think it should be bom by the developer. At least that's my position. Vemelle Clayton: I don't understand what you're saying. Chmiel: Well, we moved that once before. And then we moved it a second time because of some other problems that existed and to move it the third time, I don't think we should do it anymore. Vemelle Clayton: You don't think it should be moved anymore, period? Chmiel: Well if the developer wants to move it from existing location to the new proposed location, I would say that's fine. Vemelle Clayton: What we were asking is not essentially that you out and out pay for it. But that you allow us to, that it be paid as we repay the cost on TIF. So we'd be paying for it out of taxes. That was what our proposal was going to be. The problem that we're having up here is that there's a requirement that there be a 10 foot clearance around them so they can get at them and you can't have any shrubs around them. So on that...our 100 set comer we have...sitting there and the cost is only about $10,000.00 but we don't feel like it's, and there's some question too. I know we aren't sure of that. We had a surveyor out there...it appears that they might be outside of the easement. I don't know about that. But we didn't think it was...that we might get some help from you all. Boyle: Well I would definitely agree that that does not enhance that comer at all. Chmiel: They're not pretty. Boyle: It's not pretty and it probably should not be there. How did it get there? Vemelle Clayton: ...was done by the planning department or the Council. I think it was done by NSP that's coming along and saying, this is where we put the boxes. We need to put these boxes out here and suddenly there it was. Chmiel: They're normal required to put them in right-of-way segments of the city and if that's the case where it's outside of that easement, then it would be up to NSP to relocate that facility or move it to your desired choice. If it's on, if it would be on that property. 17 Housing and Redevelopment Authority - May 19, 1994 Ashworth: I think at least one of those, if not two, are the controller units for the signals. Vernelle Clayton: One is and that's the one we're hoping to include that in the designs... That one I understand can't be moved... Chmiel: That's true. Boyle: Well, in regards to color, landscaping, and construction materials, I have no problems with what you presented tonight. I think it looks quite good. Bohn: Mike. Mason: I basically agree. But Vernelle, help me out a little bit. We had talked I think on Council something about changing the shingle on the roof. What happened? Vernelle Clayton: We've included that in our plans. Boyle: On what building? Oh, on the Edina Realty? Mason: Yeah. To the. Vemelle Clayton: To give a little more texture, right. Mason: Yeah. I think it looks nice. Bohn: I have a question. We're buying this property, or selling this property? Never mind, next item. Any other questions on the architectural? No? Boyle: There is an issue I believe however on the boxes, is there not? Mason: Yeah...deal with that now. I don't think so. Chmiel: Yeah. No, I don't think that's necessarily within that function. Mason: I would want to get an opinion from staff on all that kind of stuff before I said anything on that. Boyle: Okay. We're looking, I think Todd it was agreed that we're looking for some staff recommendations and opinions regarding the boxes before we. 18 Housing and Redevelopment Authority - May 19, 1994 Bohn: The electrical boxes? Boyle: The electrical boxes. How's that for passing the buck? Mason: It doesn't have to be done tonight. Chmiel: I don't think that's something that has to be resolved this evening. Gerhardt: I don't think so. There's going to have to be some agreement on the, her second request for special assessment assistance and if you want to deal with that now too. I'd kind of like to get your feedback. I think Vernelle is asking also that through the increment that would be created off of this site, to write down the existing specials. Right now the purchase agreement which is the second item of this issue is for you to hold the public hearing regarding the land sale. Once you're in agreement with the project, and then direct staff to execute the purchase agreement. And then Vernelle's asked for special assessment assistance and I do not know right now how much specials are against the property but we would look at our next meeting to deal with that issue and put an agreement together similar to the one that Ryan has tonight. Right now the purchase agreement calls for the development to pay the specials on the site prorated back to the time that we acquired it. So I don't know how you feel on that issue. If you want to discuss that among yourselves and give us some feedback on that or if you're looking for staff's recommendation on that. We can review that also. Bohn: Alright, can I have a motion on item number 8? Chmiel: I would so move. Mason: Second. Chmiel moved, Mason seconded to approve the proposed architectural styles as proposed by Wendy's and for the office/retail center for Market Square. All voted in favor and the motion carried. PUBLIC HEARING REGARDING THE LAND SALE OF OUTLOT A AND LOT 4, MARKET SQUARE. Gerhardt: Mr. Chairman, under State Statute the HRA must hold a public hearing when disposing of property. The sale of Outlot A and Lot 4 was published in the newspaper on May 5th. You have opened the public hearing to take citizen comment and staff would recommend that anybody that would like to comment on that sale do so at this time. 19 Housing and Redevelopment Authority - May 19, 1994 Bohn: Would anybody wish to address the HRA at this time? Richard. Richard Wing: ...situation at all. First thing here...Villager Newspaper. I wasn't very kind to Dean Trippler necessarily and my concern of his coverage that he's giving the Council and the types of quantity and quality and we had a little discussion about that. He was a...and I guess I stand by my position but in the meanwhile he tums around and his editorial that he wrote clearly was in support of...his own feelings and comments and...and his comment that there's an opportunity to make the city a developer, the developer...that'd be my goal for the future. That all of us try to make that an aim to try and extract a little more quality. In this case...very respectful and tried very hard to do what you could to make this go with the city. I just want to go back to the Planning Commission motion because it kind of slid, it gets in the process and I don't feel staff represented it very well and Council failed to discuss it. And the motion denied this proposal on what they felt was a parking problem and the parking problem fight now is based on 15,000 population...30 or 35 .... completed at Planning Commission and then it went to Council and then a council member brought it up... (There was a tape change at this point in the discussion.) Vernelle Clayton: ...the Council which is why it didn't get addressed much in depth because the perception was the problem was going to be solved. As to parking on site, there's adequate parking. We're installing 2 more than the code requires and the parking overall, the...addition was anticipated with the PUD parking approval at that time. That technically was a...The parking we're proposing here is greater than required, even without considering... the PUD. This meets the requirements that... Bohn: Is there a sidewalk going in there? Vernelle Clayton: Yes. Here and here. And there will be another sidewalk that will come down here...and then it will then go down over into that north... Bohn: How about the Festival coming up Market Boulevard? Vernelle Clayton: Well that's part of the proposal so I can't answer that right now... Richard Wing: While Vernelle's up there can I just ask another question for you to address... and right now I don't think that's a problem. The Council addressed that...it's very common to see 6 to 12 cars at McDonald's lined up at lunch or during dinner time. I have not seen that at Wendy's. I haven't seen those type of lines but as this is a permanent structure and as our population doubles, will in fact that stacking be inappropriate...parking lot and are we creating a problem that we will not be able to resolve... 20 Housing and Redevelopment Authority - May 19, 1994 Vemelle Clayton: I think that I have talked about that issue with each of the members and Wendy's...paying window and pick-up window. Paying window. Another one here. Another one here. Ordering and that's...so you can have 6 cars there before they start parking behind any of these. And the issue that someone suggested was that they probably weren't terribly concerned about a car tying up a parking stall but they would be concerned if they went out into the street and that possibility is quite remote. On the other hand...quite politely referred to Wendy's...and try to make a living there and they're comfortable... Boyle: Well Wendy's evidentally has done this many times and they don't feel that's a, the stacking is an issue, I guess I wouldn't either. It seems a few cars to me, I mean just like you say, I think Wendy's is the one that does the business there and they're comfortable with that few of cars stacking. Is the stacking location starting from the order point or from the window? Oh, from the window where they receive it. Vemelle Clayton: They come through here. You've got one car here and presumably they consider everybody else behind them stacked. Chmiel: If they don't have an order ready, so it doesn't hold up or combine additional stacking, is there any area they can pull off to to pick up their purchases? John Noga: Maybe I should answer that. Vemelle Clayton: John Noga from Wendy's. John Noga: Thank you. First of all, this is the same stacking we have on all of our stores. We find that the maximum stacking for us or the ideal stacking is about 6 cars. We don't have the volume that McDonald's has. McDonald's restaurant does a far greater volume, unfortunately, than we do. We'd like to have their volume but we don't. We also have the double drive thru in terms of having two windows. One is a window for taking your change, your cash and the other one is for delivering the product. And that moves the customers through the process a lot faster, and you see that on...you see that on Burger King's and that's the latest way of doing things because it does move the flow of traffic faster. And then you had one other question. Chmiel: The area to pull off in the event an order is not. John Noga: We don't have that and the reason for that is we make all our products fresh for the customer. So when you order your product at the window, by the time you make the change with the change person, the product is delivered fresh. And McDonald's, because I 21 Housing and Redevelopment Authority - May 19, 1994 used to work for McDonald's. They pre-mark their product so therefore if you say ordered a fish sandwich. They don't have any fish sandwiches ready at that time, then they ask you to pull over to the side and they'll make it fresh for you and then bring it out. So their system is a little bit different and, I'm not saying anything to degregate them. It works for their system where our system, we make the sandwich fresh to order so we have everyone designed so that they can deliver that sandwich in a fast convenient way. Jurij Ozga: Most of our drive thru lane has a by-pass lane so in the instance that somebody wants to pull out and go out into the street, so he's not stuck... Boyle: On the south end of the building, how many parking spots are there? How many stalls, parking stalls on the south portion? Yes, in that area there. I'm not trying to be a .... just curious. John Noga: 33. Boyle: 33. John Noga: We recommend 35 on a lot so this will have almost that requirement just on one side, not counting. Chmiel: John, in determining those basic needs, how do you normally look at that? Do you look by what population is within a community or how do you determine the basic needs for that? John Noga: You look at an average market in terms of population base. Now because of the Byerly's and the Target, we know that the population drawn to this market should run larger than...the city. So we look for an average population of about 30,000 people to support the store. And we believe we will have that since the Target and Byerly's uses a lot more than that population to support their stores. We think your village will take off...and draw from a lot of other villages into the retail market... Bohn: I have a question. If you came off of main street on the sidewalk, you wanted to go into Wendy's, what sidewalk would you walk on? Vemelle Clayton: 78th Street is what we call main street here. You're coming along here and...walk down there, over here or... Bohn: Where's the sidewalk? You said walk. 22 Housing and Redevelopment Authority - May 19, 1994 Vemelle Clayton: This is the sidewalk coming... Bohn: Where does it end? Go back to right there. Yeah, right there. You come in, inside the Edina building. Okay, you keep on walking. Vemelle Clayton: Okay. This is essentially the sidewalk to the Edina building. This was the sidewalk to the... Bohn: So you have to walk all the way around the. Vemelle Clayton: You can walk across there. Bohn: There's no sidewalk then. There's no sidewalk in that curbing area then. Vemelle Clayton: No. The reason for that Jim is that we decided that the place for the real sidewalk entrance to Market Square really was over here where it...this way over here and they could...over to the rest of the. Bohn: I was just thinking about pedestrians walking on the sidewalk coming from that direction, walking to Wendy's. John Noga: There is no break over in the landscaping... Vemelle Clayton: One of the reasons that we didn't do that is because we didn't want to encourage people to come in here, park here and go into Wendy's. This is a fairly needed parking lot slots. Bohn: I was just thinking along the Edina Realty building. Keep on crossing the parking lot over to Wendy's. John Noga: Their own patrons can walk across. Vemelle Clayton: Well they'll be coming out doors all along here and...cut across. Bohn: No, I meant on that western side of the Edina Realty building. The sidewalk...No, I meant on the western side of the Edina Realty. Right there. Keep going straight. Cross over where that tree is and the sidewalk there connecting. Vemelle Clayton: Well see that was the problem with people coming in here to park and run into Wendy's and take up the Edina parking spots. 23 Housing and Redevelopment Authority - May 19, 1994 John Noga: ...coming from this building. If they wanted to have lunch, they could walk across without walking on grass or stones or... Bohn: Well in the winter time they'd be walking around the driveway because there'd be snow up there unless there was a sidewalk to keep them from walking inside the parking area. Boyle: I believe maybe moving back onto the hearing itself regarding the land sale is probably apropos at this time. Gerhardt: At this point I guess I would suggest that the HRA close the public hearing. Mason moved, Boyle seconded to close the public hearing. All voted in favor and the motion carried. The public hearing was closed. Bohn: The public hearing is closed. I'd like to ask the question. We're buying this, or selling this property back to the Bloomberg Companies for $2.50 a square foot? Gerhardt: That is what the repurchase agreement calls for. I attached that agreement. Chmiel: That's maybe what the question Jim's asking is, we're paying $3.25. He's looking probably at $2.50. On the previous, one of the previous items that had been on. Bohn: We're paying Mortenson $3.25. Chmiel: Yeah. That was all contained within the agreement for the $2.50, is that correct? Gerhardt: That is correct. Boyle: And I believe, if I'm not mistaken, that was discussed in a previous meeting. Gerhardt: That was... Chmiel: Yeah, but from my understanding too is that the buyer's going to pay all the general real estate taxes that are levied against that property. Gerhardt: Yes. Chmiel: And in addition to that, at closing they're going to pay in full or assume all unpaid pending special levies that are there. 24 Housing and Redevelopment Authority - May 19, 1994 Gerhardt: Well that was Vernelle's request that the increment generated off this site. Chmiel: Yeah. Gerhardt: That they would, the HRA use the increment generated from both the Wendy's and the retail office facility to pick those up. Right now the...calls for them t, ~ay in full. Brad Johnson: Can I clarify something? Bohn: Brad. Brad Johnson: Back whenever that was, 1987-88 when we started this project, we originally requested that we be allotted all of the TIF for these lots. Just like we did the rest of Market Square. The city said no. But that they would be willing to have us pick up the special assessments one day against the parcel. Had that not been true, we probably would not have agreed to all the special assessments that are now levied against the property. And this went on for a long time. You rebuilt that road a number of different times and so...but I think you can read the redevelopment agreement and you'll see that it says that we cannot request any more than the special assessments that are pending to be used as TIF, which is...about a year, year and a quarter. Is that about right, for the whole project? It's not very much. And maybe one of your staff can...and that's been the standard practice throughout the city... You've done that with Charlie. You've done it with every deal we've done. We're just not asking for any additional write downs or anything like that. And I think that's standard policy...But we're not asking for that today. Chmiel: You're right. Mason: They're not asking for that today. Chmiel: No. Mason: Well, yeah. I mean I think this is, I look at this item as quite honestly kind of a done deal, and that's certainly discussion we'll take up later on. Past practice or whatever. With that in mind, I'm willing to make a motion on this. Bohn: Do I hear a second? Mason: In fact I'll make the motion. There, I just made the motion. Boyle: And the motion is? 25 Housing and Redevelopment Authority - May 19, 1994 Mason: We're in agreement to go ahead with the resale of Outlot A and Lot 4, Block 1 to Bloomberg Companies based on the agreement as stated. Boyle: I'll second that. Mason moved, Boyle seconded that the HRA direct staff to execute an agreement and schedule the closing for the resale of Outlot A and Lot 4, Block 1, Market Square to Bloomberg Companies. The terms of this agreement call for Bloomberg Companies to pay the HRA $2.50 a square foot and pay all the assessments against the two lots. The total estimated purchase price is approximately $200,000.00, not including special assessments. All voted in favor and the motion carried. Gerhardt: Staff would prepare a report at the next HRA meeting regarding the relocation of the transformers and special assessments...for reconsideration. APPROVAL OF BILLS. Chmiel: We're starting to roll out the checks. Gerhardt: That's two months worth. Mason: That's right. I saw that and went whoa, but it is 2 months. Yeah, thank you Don. Bohn: What are we doing with BRW again? Chmiel: So moved. Mason: Second. Chmiel moved, Mason seconded to approve the HRA bills as presented. All voted in favor and the motion carried. HRA PRESENTATIONS: Bohn: Do we have any special HRA presentations, Todd? Gerhardt: The HRA presentations are any items that you may want to discuss. I do not have any. Mason: I move adjournment Mr. Chairman. 26 Housing and Redevelopment Authority - May 19, 1994 Chmiel: adjourn? Mason: Bohn: Mason: Boyle: Boyle: Well I have about 4 or 5. I have just a couple. But that won't take very long. First question is, when do we You're getting bitter at pulling my chain Don. I don't know about that. Should we adjourn at 9:00? So moved. Second. Mason moved, Boyle seconded to adjourn the meeting. Ali voted in favor and the motion carried. The meeting was adjourned at 9:00 p.m.. Submitted by Don Ashworth Executive Director Prepared by Nann Opheim 27 / MEMORA~M CITY OF 690 COULTER DRIVE · P.O. BOX 147 · CHANHASSEN, MINNESOTA 55317 (612) 937-1900 · FAX (612) 937-5739 TO: Housing and Redevelopment Authority FROM: Todd Gerhardt, Asst. Executive Director DATE: June 17, 1994 SUB J: Consider Approval of Special Assessment Assistance for Outlot A and Lot 4, Market Square At our last HRA meeting, Bloomberg Companies had formally requested the HRA for special assessment assistance for Outlot A and Lot 4, Market Square. The HRA then directed staff to review their request and place the item on the next agenda. Bloomberg Companies is requesting to enroll in the HRA's special assessment reduction program and is seeking assistance in writing down the special assessments and land write down against Lot 4 and Outlot A. As you know, the HRA has already approved the architectural style for their development of a Wendy's Restaurant and a 10,000 square foot office/retail building. The total amount of special assessments against the proposed site is $111,467.94. As a part of the repurchase agreement, the HRA also provided an $80,000 land write down incentive, which should be included as part of the overall calculation of available incentives. Based on the HRA's 2½ year special assessment reduction program, the estimated amount of incentives available total $196,425.00 (see Attachment #1). In this case, the HRA could write down all the special assessments ($111,467.94) and the $80,000 in land write down incentives. Remaining Special Assessments Land Write Down Incentive Total Amount Requested $111,467.94 $ 80,000.00 $191,467.94 2~ years of Taxes Remaining Increment $196,425.00 $ 4,957.06 HRA June 17, 1994 Page 2 We are not sure if Bloomberg Companies are still requesting the assistance for relocation of transformers but expect them to make a formal decision at Thursday night's meeting. RECOMMENDATION Staff would recommend that the HRA direct staff to draft a Private Redevelopment Agreement with Bloomberg Companies and their request for $191,467.94 in special assessment and land write down assistance. ATTACHMENT 1. Estimated taxes. June, 1994 ESTIMATED REAL ESTATE TAXES BASED ON THE STATE'S FORMULA FOR 1994 Minimum Market Value: Base value $ 1,700,000 - 400,000 $ 1,300,000 - 100,000 $ 1,200,000 x 4.6% $ 55,200 + 3,000 58,200 x (the first $100,000 of Market value is calculated at 3%) 135% (Tax Capacity %) 78,570 Total Taxes PROPOSED DEVELOPMENT INCENTIVE $ 78,570 Yearly Taxes x 2.5 Years $ 196,425 Total Taxes Total Specials Against Site Total Land Write-down Incentives Subtotal Total Incentives Available Remaining Increment 111,467.94 80,000.00 191,467.94 $ 196,425.00 - 191,467.94 $ 4,957.06 MEMORANDUM .3 CITY OF 690 COULTER DRIVE · P.O. BOX 147 · CHANHASSEN, MINNESOTA 55317 (612) 937-1900 · FAX (612) 937-5739 TO: FROM: DATE: Housing and Redevelopment Authority Todd Gerhardt, Assistant Executive Director ~k~:?. June 16, 1994 SUB J: Update on Hanus Facility Roof As you may remember, at our last meeting the HRA rejected the bids for the Hanus Remodeling Project and staff was directed to review other alternatives. In reviewing the options available, staff would propose the following: 1. Amend the project to include three separate bids as follows: Sign Package: Canopies as designed; Remove non-illuminated sign, and construct and replace with wall signs as designed. bo Painting Package: Paint the building as described on the construction documents. Miscellaneous masonry repairs as described on the construction documents. Co Roof Screen and Re-Roofing: This part of the project will be delayed until the landscaping and pedestrian bridge is installed to determine if the existing roof needs to be screened. Staff will also act as the general contractor for the painting and canopy/signage packages, with the assistance of Stefan/Larson Associates, and develop the plans and specifications for the bid packages. If the HRA is in agreement with this proposed alternative, staff will move ahead and propose a construction schedule to complete this work by the fall. Staff would also recommend that the HRA return Mr. Kirt's check in the amount of $50,000 that was earmarked for the re- roofing of the building until such time as it deems necessary to install the canopy. MEMORA~JM CITY OF 690 COULTER DRIVE · P.O. BOX 147 · CHANHASSEN, MINNESOTA 55317 (612) 937-1900 · FAX (612) 937-5739 TO: Housing and Redevelopment Authority FROM: Don Ashworth, Executive Director DATE: June 17, 1994 SUB J: Consider a Request from Market Square Parmership Regarding Assistance for Expansion, Festival Foods Approximately nine months ago, the HRA considered a request from Byerly's for assistance for their proposed new facility in Chanhassen. At that time, Market Square tenants (primarily Festival Foods) asked that the assistance not be provided as Byerly's decision to locate in Chanhassen could significantly hurt their business. Their rationale went something like "You provided assistance to us to locate our store in Chanhassen during a period of a relatively weak market. Why would you now provide assistance to a second store if that decision were to close our store." Staff's position was twofold, i.e.: 1) the HRA has never chose which business should locate in Chanhassen or not - such decision being a part of the free market. Further, in instances where competition has occurred, the existing business has become stronger after the competition occurs than before, i.e. Chanhassen Inn's protest against Country Suites, etc.; and 2) staff has had the opportunity to review the market projections for both Byerly's after their opening as well as what affect that opening would have on Festival Foods. The statistics we have reviewed revealed that Festival Foods would see a relatively large reduction in their per weekly sales as a result of Byerly's opening; however, if Festival Foods would counterattack by adding an additional 10,000 square feet to their store and thus put them into a pricing position of a "Rainbow," their market position would not only stay at current levels, but would improve. Although the HRA supported the staff recommendations, the HRA did state that they supported Festival Foods and would attempt to do whatever was within their power to help Festival Foods stay as a viable entity within our community. Staff welcomes the support we received from the HRA and are pleased to state that in various private meetings since that time, that Festival/Gateway representatives have confirmed that the recommendation we made to the HRA was a correct one. Their application to increase the size of Festival Foods has been delayed recognizing the corporate structure that they need to go through for any type of expansion, i.e. local ownership approval, Gateway approval, and Scribner approval. Those hurdles were further complicated by the fact that Scribner was in the middle of a merger. HRA June 17, 1994 Page 2 I am pleased to announce that Festival Foods has made application to add an additional 10,000 square feet to their facility. As a part of making that application, they are also requesting assistance from the HRA. As the HRA's policy, as of nine months ago, was for three years of increment, that is the assistance that they are seeking. Current policy would be to provide no more than 2~A years recognizing that the HRA will receive increment for no more than 5 additional years. Staff will ask Holmes and Graven to develop the assistance package around whichever of these two numbers the HRA chooses. A technical question does exist in that our ability to buy and resell the property for an amount equal to the assistance is not probable, no soil corrections are likely and special assessment costs have been previously been abated. John Dean is currently researching what tool may be available to provide whatever level of assistance is set. [Note: The original approval by the Planning Commission/City Council included the 10,000 square foot addition. All requirements such as expanded parking were put into place as a part of the original construction. Accordingly, no additional Planning Commission/City Council actions are required and construction could likely start within the next two weeks. Festival Foods hopes to have an "opening" for their new addition on or before the date that Byerly's opens.] CITY OF 690 COULTER DRIVE · P.O. BOX 147 · CHANHASSEN, MINNESOTA 55317 (612) 937-1900 · FAX (612) 937-5739 MEMORANDUM TO: FROM: DATE: SUB J: Housing and Redevelopment Authority Todd Gerhardt, Asst. Executive Director June 17, 1994 Consider Voiding the Contract with the Medical Art's Partnership Attached you will find a resolution outlining the terms of the agreement between the HRA and Chanhassen Medical Arts Limited Partnership in developing the second phase of the Medical Arts Facility. Staff feels that the partnership has failed in exercising their rights in developing this property under the terms of the Contract for Private Development dated October 2, 1989. Based on these findings, the developer has lost their rights regarding the development of Phase II improvements. Staff would recommend that the HRA approve the attached resolution and direct staff to seek another developer for the construction of Phase II or renegotiate the contract with the current developer. ATTACHMENT 1. Resolution. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF CHANHASSEN, MINNESOTA RESOLUTION Date Motion By Resolution No. Seconded By RESOLUTION REGARDING PHASE II MEDICAL ARTS PROJECT WHEREAS, the Housing and Redevelopment Authority in and for the City of Chanhassen, Minnesota (the "HRA") and Chanhassen Medical Arts Limited Partnership (the "Developer") entered into that certain Contract for Private Development (the "Contract") dated October 2, 1989 regarding development of the Chanhassen Medicai Arts Project; and WHEREAS, the Contract contemplated development of Phase I of the project immediately following the execution of the Contract and allowed the Developer the option to develop Phase II in the future; and WHEREAS, Section 3.1 of the Contract required the Developer to give the HRA written notice of its intent to exercise its option regarding Phase II by December 31, 1990 and go close on the Phase II property on or before December 31, 1991; and WHEREAS, Section 4.2 of the Contract required the Developer, if it chose to exercise its option regarding the Phase II property, to begin construction of the Phase II improvements on or before April 1, 1992 and to complete the same on or before April 1, 1993; and WHEREAS, the Developer has not given the HRA notice of its intent to exercise its option regarding Phase II, has not closed on the property and has not begun construction as of this date; and R~{B71775 CH130-14 WHEREAS, Section 4.4 of the Contract gives the HRA the right, upon failure by the Developer to exercise its option regarding Phase II, to substitute another developer or proceed in any way it desires regarding Phase II. NOW, THEREFORE, BE IT RESOLVED By the Housing and Redevelopment Authority in and for the City of Chanhassen, Minnesota as follows: 1. The HRA finds that the Developer has failed to exercise its option with regard to the Phase II improvements. 2. The HRA declares the Developer to have no rights regarding the construction of the Phase II improvements because of its failure to exercise its option in a timely manner. 3. The HRA staff is authorized and directed to seek another developer for the construction of the Phase II improvements or for an alternative use of the Phase II property. DATED: , 1994. ATTEST: Donald Ashworth, Executive Director James R. Bohn, Chairperson R~BT1775 C~130-14 2 CHANHASSEN H.R.A. CHECK # A N O U N T O55136 420.55 055137 335.00 055138 3,545.63 055139 3,109.47 055140 125.00 055141 34.40 055142 2,059.54 055143 13,231.00 8 22,860.59 ACCOUNTS PAYABLE 05-23-94 PAGE CLAIMANT PURPOSE CAMPBELL, KNUTSON TODD GERHARDT HOISINGTON KOEGLER GROUP HOLMES & GRAVEN NAHRO ROAD RUNNER STRGAR-ROSCOE-FAUSCH INC THOMAS ZWlCKEL JR CHECKS WRITTEN FEES, LEGAL TRAVEL & TRAINING FEES, SERVICE FEES, LEGAL SUBSCRIPT. & MEMBERSHIPS FEES, SERVICE FEES, SERVICE SPL ASSESSMENT PAYMENTS CHANHASSEN H.R.A. CHECK # A M O U N T 054290 4,415.00 1 4,415.00 ACCOUNTS PAYABLE 06-13-94 PAGE CLAIMANT PURPOSE CARVER COUNTY TREASURER OTHER ACQUISITION COSTS NECESSARY EXPENDITURES SINCE LAST COUNCIL MEETING CHANHASSEN H.R.A. CHECK # 055258 055259 055260 055261 055262 AMOUNT 15.35 1,707.50 548.00 4.26 1,663.00 055263 055264 055265 055266 9 TOTAL OF 13.12 9,875.36 4,710.89 49.41 18,586.89 10 CHECKS TOTAL ACCOUNTs PAYABLE 06-13-94 CLAIMANT PURPOSE DONALD ASHWORTH BRW, INC. CAHPBELL, KNUTSON CITY OF CHANHASSEN COVERBIND CORPORATION PAGE 2 FOCUS ONE HOUR PHOTO HOISINGTON KOEQLER GROUP HOLMES & GRAVEN LEAGUE OF MINN CITIES CHECKS WRITTEN 23,001.89 TRAVEL & TRAINING FEES, SERVICE FEES, LEGAL PRINTING AND PUBLISHING USE TAX PAYABLE AND-OFFICE EQUIPMENT AND-SALES TAX ON PURCHASES PROMOTIONAL EXPENSE AND-SALES TAX ON PURCHASES FEES, SERVICE FEES, SERVICE WORKERS COMPENSATION ADMINISTRATIVE SECTION ROBERT A. AL.qOP RONALD H. BATTY gfZFl4gN J. BU~UL JOIE~ B. MARY G. ~ N. ~ORRINE ~ HEINE JA~ S. DA~ J. K~N~Y JO~ ~ ~Zso~ W~G~N H. C~L~ ROStaT J. ~SLC HOLMES & GRAVEN CHARTERED 470 Pillsbury Ctmter, Minneapolis, Minnesota 55402 (612) 33%93OO Facsimile (612) 337-9310 WRITER'S DIRECT DIAL 337-9209 VIA RAPIFAX AND MAIL RORERT C. LONG LAURA K. MOLLgT BARBARA L. POR'INVOOD JAMES M. STROMMEN JnMES J. THOMSON, J~ LARRY M. WLrit-~ tt~M BONNIE L. WIL~S GARY P. WINTER DAVXD L. GRAVEN (1929-1991) OF COUNSEL ROBERT C. CAItLSON ROBERT L. DAVIDSON T. JAY SA~n~N June 8, 1994 Todd Gerhardt Assistant Manager City of Chanhassen 690 Coulter Drive P. O. Box 147 Chanhassen, MN 55317-0147 RE: PRN Music Corporation v. CountV of Carver Dear Todd: Enclosed is a copy of Judge Doar's order denying our motion for partial summary judgment. Judge Doar concluded that the agreement between the HRA and PRN is unenforceable because the development of the property occurred prior to the execution of the agreement. The order is not appealable at this time. It is possible to appeal after final judgment has been entered in the matter on the valuation issues. An appeal would, however, not be necessary if the property is valued in excess of the value established in the minimum assessment agreement. The HRA also has the option of obtaining reimbursement from PRN for the special assessments that have been paid to date. In that regard, you will recall that in their memorandum in opposition to our motion, PRN stated that "If the agreement is voided by this Court, PRN will reimburse the HRA for the special assessment payments that the HRA made on behalf of PRN." Please feel free to call me or John Dean. incereJ~, Enclosure CC: JJT71346 CH130-29 John Dean (w/enclosure) Ron Batty (w/enclosure) 0 1994 CiT_Y O? CHANHASSE~ STATE OF MINNESOTA COUNTY OF CARVER TAX COURT FIRST JUDICIAL DISTRICT REGULAR DIVISION PRN Music Corporation, Petitioner, vs. County of Carver, Respondent, and Housing and Redevelopment Authority of Chanhassen, Intervenor- Respondent. ORDER DENYING MOTION FOR PARTIAL SUMMARY JUDGMENT File No. C8-92-523 Dated: June 7, 1994 This matter was heard by the Honorable Kathleen Doar, Judge of the Minnesota Tax Court, on April 21, 1994, at the Carver County District Court Facilities, in Chaska, Minnesota, upon Respondent and Intervenor Respondent's Motion for Partial Summary Judgment. Thomas R. Wilhelmy, Attorney at Law, represented the Petitioner. Michael A. Fahey, Assistant Carver County Attorney, represented the Respondent. James J. Thomson, Attorney at Law, represented Intervenor- Respondent. The Court, having heard and considered the arguments of counsel, and upon all of the files, records and proceedings herein, now makes the following: ORDER 1. Respondent's and Intervenor Respondent's Motion for Partial Summary Judgment is denied. 2. The property subject to this Petition shall be valued at its fair market value pursuant to Minn. Stat. S 273.11. The Tax Court Administrator shall set the matter for trial. IT IS SO ORDERED. The O~fice o! th~ ~inesota Tax Court hereby certify that the attac.h .ed ins.tr~.me~nt BY THE CO~T 't~ a t~e and correct copy of the ongma~ ~ file and of re~o~ t~ e~e.~ Co~ (~ ~"~ ~ m MINNESOTA TAX COURT DATED: June 7, 1994 MEMORANDUM Petitioner, PRN Music Corporation ("PRN"), challenges the January 2, 1991, estimated market value of property located in Chanhassen. Carver County and the Housing and Redevelopment Authority of Chanhassen (the "HRA") bring this Motion for Partial Summary Judgment arguing that the terms of a May 15,.1989 minimum assessment agreement between PRN and the HRA (the "Agreement") preclude this challenge. We find the Agreement invalid and instruct the Tax Court Administrator to set the matter for trial. The material facts are not in dispute. In December of 1977, the City of Chanhassen and the HRA approved a redevelopment and 2 tax increment financing plan (the "Plan") for downtown Chanhassen. The subject property is located ~n the redevelopment district. Public improvements including streets, curb and gutter and sanitary and storm sewers were constructed in the redevelopment district from 1981 to 1983, funded by bonds issued by the City. A special assessment of $89,039.44 was levied against the subject property in 1983. PRN purchased the subject property in the fall of 19851 and completed the construction of a reccrding studio, known as Paisley Park, in 1987. On May 15, 1989, PRN and the HRA executed the Agreement. The Agreement provided: (1) that the HRA would pay $87,256 of the special assessments levied against PRN's property; (2) that PRN would construct improvements worth at least $5,013,000; and (3) that the assessor's market value for the PRN property would be at least $5,013,000 during the term of the Agreement. The determination of market value by contract is the exception to the rule in Minnesota. Assessors are generally directed to value land and improvements at fair market value. Minn. Stat. § 273.11. An assessor may value property at more than its fair market value pursuant to a minimum assessment agreement. Minn. Stat. § 469.177, subd. 8, Commercial State Bank in St. Paul v. County of Ramsey, File Nos. C5-90-5871 and C5-91- 1684 (Minn. Tax Ct. Sept. 9, 1991). Because a minimum assessment i PRN purchased the property from a private party not from the City or the HRA. agreement is statutory authority to vary from the general rule, we have required strict compliance with Minn. Stat. § 469.177, subd. 8 requirements. Zaidan Holdinqs, Inc. v County of Anoka, File No. C3-91-5135 (Minn. Tax Ct. Order dated Mar. 17, 1992); Winnetka Partners Limited Partnership v. County of Hennepin, File No.· TC-18921 (Minn. Tax Ct. Order dated May 16, 1994). Petitioner presents several arguments in support of its claim that the Agreement is not legally enforceable. Petitioner agrees that the HRA had the autkority to enter into the Agreement but argues that in this case, where the development of the property occurred prior to the execution of the Agreement, the Agreement is invalid. We agree. Intervenor and Intervenor-Respondent argue that "the HRA was retroactively making available to PRN public assistance that would have been provided at the time of the development." Respondent's Br. at 7. Our review of the history of Minn. Stat. § 469.177, subd. 8 and amendments made in 1990 and 1991 convinces us that the law did not authorize retroactive public assistance in 1989. Wl%en the Agreement was executed Minn. Stat. S 469.177, subd. 8 (1988) read in relevant part as follows: Assessment agreements. An authority may, upon enterinq into a development or redevelopment aqreement pursuant to section 469.176, subdivision 5, enter into a written assessment agreement, in recordable form with the developer or redeveloper of property within the tax increment financing district which establishes a minimum market value of the land and completed improvements to be the land and completed improvements to be constructed thereon until a specified termination date .... Upon transfer of title of the land to be developed or redeveloped from the authority to the developer or redeveloper, the assessment agreement, together with a copy of this subdivision, shall be filed for record. Minn. Stat. § 469.177, subd. 8 (1988) (underscoring supplied). We note that if the legislature had intended to allow owners of existing improvements to enter into assessment agreements in 1989, it could have. As noted below, it did in 1991.2 Minn. Stat. § 469.177, subd. 8 was amended 1991 to read as follows: Assessment Agreements. An authority may enter into a written assessment agreement in .....~~ form with a ...... ~ .... ~ .... ~ or ~ .... ~ ....~ ~ ...... ~ .... ~ th~ tax ~-~~ bli hing i i ...........~ ~ny person esta s a m n mum market value of ~ land -~ .... ~-~ existing ~imDrovements, o__r improvements to be constructed +~ ........ ~ ~ -~~ a district, if the pvQperty is owned or wil~ be owned b_y the person. 1991 Minn. Laws, ch. 291, art. 10, ~ 13. Minn. Stat. § 469.177, subd. 8 (1991) allows the execution of a minimum assessment agreement with the owner of an existing improvement. If the agreement at issue here had been executed z. Minn. Stat. § 469.177, subd. 8 was amended in 1990 to remove the words "upon entering into a development or redevelopment agreement pursuant to section 469.176, subdivision 5. 1990 Minn. Laws, ch. 604, art.7, § 22. 5 after the adoption of the 1991 amendment, we would rule differently. We believe that the significance of the 1991 amendment is clear: the law in 1989 did not authorize a minimum assessment agreement with an owner of an existing improvement. The Agreement did not meet the requirements of the authorizing statute in force at the time of its execution. It is therefore not binding for assessment purposes and the matter shall be set for trial on the issue of value. K.D. May 17, 1994 Mr. Todd Gerhardt Assistant City Manager City of Chanhassen 690 Coulter Drive P.O. Box 147 Chanhassen, Minnesota 55317 Hoisington Koegler Group Inc. RE: Community Entries Dear Mr. Gerhardt: I thought it would be worthwhile restating the Council's ideas relative to the entries to Chanhassen for the HRA. I would also be interested to kntIw of the HRA's ideas, comments or concerns before we get too far into this exercise. It is important to note that the notion of defining entries to Chanhassen has been explored previously and, in fact, considerable effort has been put toward a few ideas. We will not be discarding the previous work; it will be used to help guide us in the most appropriate direction. Because of the work of the Design Center for the American Urban Landscape, the Highway 5 study and our work with Downtown and Vision 2002, a better context has been defined for "entry" to Chanhassen, and most important, what character elements of the community should be reflected in the entry statement. I have attached a copy of the outline distributed to Council the night entries were discussed. After some discussion of potential directions, the Council identified three areas as entry points -- each with a character derived from and reflective of the Chanhassen landscape. The three areas are: Highway 101, West 78th Street and Highway 5 (including the Taco Shop and the ready-mix site) -- the character discussed for this area might have an emphasis on maple trees. Land Use/Environmental ~ Planning/Design 7300 Metro Boulevard /Suite 525 ' Minneapolis, Minnesota 55439 ' (612) 835-9960 ' Fax: (612) 835-3160 Mr. Todd Gerhardt May 17, 1994 Community Entries Page 2 Market Boulevard and Highway 5 -- the wetlands that surround this intersection might be the element of the landscape that informs that character of this entry. Powers Boulevard and Highway 5 -- oak trees near Target and on the hill above the Byerly's development might be used as the character element for this entry. If monumentation is used, the Council felt it should occur at the Market Boulevard entry. As we explore the entry areas, we will study opportunities for combining the entry features with the development of open space or parks. This was a desire of one Council member, as it would allow for any available funds to be put to wider use. Cost was also a concern. As we study the entry areas and conceive solutions, cost estimates will be established to aid in making choices and determining appropriate directions. Our work will proceed by investigating concepts for each entry area defined by Council, with further input from the HRA. Once we have more firm ideas, we will be reviewing the concepts with Council and HRA. Please call me if you need further information or have any questions. Sincerely, Hoisington Koegler Group Inc. Michael Schroeder, RLA Chanhassen Entries Chanhassen City Council May 9, 1994 Hoisington Koegler Group Inc. Setting Direction for Entry Features I Previous Studies Barton Aschman HGA V~sion 2002 2 Locations Dell Road and Highway 5 Highway 101, West 78th Street, Highway 5 (including the AVR site and the Taco Shop site) Great Plains Boulevard and Highway 5 Market Boulevard and Highway 5 Powers Boulevard and Highway 5 Other locations... 3 Principles Identification The entry features should mark the boundaries of the community or important districts within the community. Continuity The entry features should have some relation to one another, providing a series of gateways through the community. Character The entry features should reflect the community -- its landscape, people and place. 4 Definition and Direction What should signify entry to Chanhassen? A contrast with surroundings A concrete statement A feature that is obvious Strength through differences A similarity to surroundings An abstract statement A feature that is subtle Strength through relationships To what degree should it be a... Monument?... Marker?... Clue? 5 Other Issues or Ideas... Land Use / Environmental · Planning / Design 7300 Metro Boulevard / Suite 525 · Minneapolis, Minnesota 55439 ' (612) 835-9960 ' Fax: (612) 835-3160 Mr. Todd Gerhardt City of Chanhassen 690 Coulter Drive P.O. Box 147 Chanhassen, Minnesota 55317 Hoisington Koegler Group Inc. May 12, 1994 Dear Mr. Gerhardt: I met with each tenant of the Hanus Building this morning to review the work, the proposed schedule and the need for each to remove or relocate their property to accommodate construction. For the most part, the tenants will be cooperative; there may be problems with one, and I would like to have a plan for addressir~g the situation ShoUld it arise. "~ Marine Fiberglass has indicated that they need two weeks to move the boats. By that time, their work on the boats would be complete and they would have been picked up by their owners. I restated the need for cooperation, but I am not sure that I was heard. In the event that the boats (or the property of other tenants) are not out of the construction zone, a possible course of action would be to have the contractor relocate the property. In this way, the contractor can move what needs to be moved, when it must be moved, and to a location that is not in conflict with the work. It would seem that this would present the least obstruction to the process of the work. The cost of this work, if necessary, has not been considered as a part of the work. It would be considered extra work, and a change order would be required. We could establish some estimates to understand the scope of the change, if necessary. The cost would be for time and materials, plus a commission to perform or coordinate the work. I hope that this is not necessary, but I want to be prepared. There may also be a great deal of unclaimed material on the site. Our contract calls for the removal and disposal of miscellaneous debris as a part of the lump sum price for grading, but the contractor may consider some items more than "miscellaneous". On this one, we might .just wait and see, and then deal with it if it becomes an issue. Land Use/Environmental · Planning/Design 7300 Metro Boulevard / Suite 525 · Minneapolis, Minnesota 55439 · (612) 835-9960 ' Fax: (612) 835-3160 Mr. Todd Gerhardt May 12, 1994 Page 2 I have sent another notice to each of the tenants reminding them of the date of construction start and the imperative for removing the property. A copy of that correspondence is attached. Finally, a representative of Marine Fiberglass pointed out that to store their property in a remote location may present a security problem. This is a reasonable issue; it might be a good idea to ask the sheriff to make an occasional patrol of the area. Please call me if you have a_ny questions. Sincerely, Hoisington Koegler Group Inc. Michael Schroeder, RLA Hoisington Koegler Group Inc. MEMORANDUM DATE: TO: FROM: RE: May 12, 1994 Tenants of the Han~s.B~ilding Michael Schroederl ~ · Start of Construction As I discussed with you today, the start of construction has been rescheduled for May 23, 1994 in order that work on an adjacent site can be accommodated as a part of this construction. This should help to allow additional time for relocating any property or materials that may be in the way of the construction. It is imperative to have any property or materials relocated by that time. Unless other arrangements have been made, the City would like property to be stored on the old ready-mix site, near the dirt pile at the east end of the site. I have asked the City to arrange for a patrol of the area by the sheriff, as requested by one tenant. The City recognizes that this work and the remote storage location are an inconvenience, but I have been assured by the contractor that all possible will be done to accommodate your needs during construction. Please work with the contractor, informing them of your needs for access for each day, and well in advance if it appears that their work will conflict with your immediate needs for access. To the extent that the contractor's needs are recognized as well, construction will be performed in the most expeditious manner. Thank you again for your cooperation on this project. Please call me or Todd Gerhardt at the City of Chanhassen if you have any questions. Todd Gerhardt, City of Chanhassen Uldis Ermanis, Buck Blacktop, Inc. Land Use / Environmental · Planning / Design 7300 Metro Boulevard; Suite 525 · Minneapolis, Minnesota 55439 · (612) 835-9960 · Fax: (612) 835-3160 June 9, 1994 VIA COURIER Mr. Thomas Lander Mortenson Development Company 700 Meadow Lane North Minneapolis, MN 55422 Re: Chanhassen HRA/Pedestrian Bridge Project Mortenson Development Company Real Estate Transaction Our File No. 12668/329 Dear Tom: Enclosed for your review and your company's execution please find the following documents: 1. Three originals of the Purchase Agreement signed by Chanhassen HRA; 2. Warranty Deed; 3. Affidavit Regarding Corporation; 4. Certificate of Real Estate Value; 5. Partial Release of Mortgage; and 6. Certificate pursuant to Section 4.3.3 of the Purchase Agreement. Please have the enclosed documents signed and bring the same along to the closing presently scheduled for June ~Sth at ~0:00 a.m. at Carver County Abstract in Chaska. Please note that the Deed will have to be stamped b~ City staff prior to the closing. If it is convenient for yo~, please stop by Chanhassen City Hall prior to the closing and have this accomplished. Please contact Kate Aanenson to have thUs~/- accomplished. ~ R~CEi¥SD / JL!i' 1 1994 Mr. Thomas Lander June 9, 1994 .Page 2 ~ Also note I have enclosed three signed Purchase Agreements. The Purchase Agreement signed by Mortenson Development Company forwarded to the City Hall cannot be located. Finally, I have requested that a final survey be completed. As soon as I receive the survey, I will forward a copy to you for your review. If you wish to discuss any particulars of this transaction prior to closing, please contact me. JRW:rlt Enclosure cc: Mr. Todd Gerhardt Ms. Kate Aanenson Mr. Fred Hoisington Very truly yours, CAMPBELL, KNUTS ON/~S~OTT Walston 12614 CITY OF 690 COULTER DRIV(E612)P~)O3~/B109~; :7F;x~6H1A~ ~,~7S~E73N~ MINNESOIA 55317 June 14, 1994 Mr. Donald Kallestad Kallestad Enterprises, Inc. 431 West 78th Street Chanhassen, MN 55317 Re: Request for Relocation Expenses Dear Mr. Kallestad: Enclosed is a copy of the City Attorney's opinion regarding your request for relocation expenses. Based on these findings, your request for relocation expenses from either the City of Chanhassen or the Chanhassen Housing and Redevelopment Authority have been denied. If you have any additional questions regarding this issue, please do not hesitate to call me at 937-1900, ext. 119. Sincerely, Todd Gerhardt Assistant City Manager Enclosure pc: Don Ashworth, City Manager CA~IPBELL, KNUTSON, SCOTT & FUCHS, P.A. June 8, 1994 Fa× I(,l-') 4~2-5%J Mr. Todd Gerhardt Chanhassen City Hall 690 Coulter Drive, Box 147 Chanhassen, Minnesota 55317 RE: Kallestad Enterprises, Inc. Dear Todd: Enclosed is a copy of the purchase agreement between the HRA and Kallestad Enterprises, Inc. The copy I have was signed by Kallestad, I assume it was subsequently signed by the HRA. Paragraph 17 of the purchase agreement provides: "Seller hereby waives the right to any additional compensation for relocation expenses. The relocation expenses are part of the purchase price paid herein." Kallestad was represented by an attorney in negotiating the agreement with the HRA. Kallestad Enterprises, Inc. is not entitled to any additional compensation for relocation expenses. Enclosure f~~yours, ' CAMPBE~L, KNUTSON, ScoTr RECEIVED JUN I u 1994 Cll'Y OF CHANHASSEa Off'icc Ccr, tcr · 13S© C,,q,,,rarc Center Curve ' Eagan, MN 55121 PURCHASE AGREEMENT AGREEMENT made this day of , 1989, between the HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF CHANHASSEN, a public body corporate and politic under the laws of the State of Minnesota (hereinafter "Buyer"), and KALLESTAD ENTERPRISES, INC., a Minnesota corporation (hereinafter "Seller"). RECITALS A. Seller is fee owner of certain real property ("subject property"), including the building, fixtures, and improvements thereon, situated in Carver County, Minnesota, legally described on the attached E×kibit "A~, with tke street address of 431 West 78th Street, city of Chanhassen, Minnesota. B. Buyer desires to purchase and Seller desires to sell the subject property pursuant to the terms and conditions of this agreement. NOW THEREFORE, IN CONSIDE?~ATION OF THE FOREGOING AND THE I~UTUAL COVENANTS CONTAINED HEREIN, BUYER AND SELLER HEREBY AGREE AS FOLLOWS: 1. Purchase Price. Buyer shall pay to Seller as consideration for the purckase of the subject property the sum of five hundred thousand and no/100 Dollars ($500,000.00). The purchase price is payable as follows: a. Two hundred ten thousand dollar ($210,000) in cash, as earnest money, receipt of which is hereby acknowledged by Seller; and b. Two hundred ninety thousand dollars ($290,000.00) payable at closing by check or wire transfer. r08/22/89 2. Fixtures. There is included in this sale, without the payment of any additional consideration or monies whatsoever, all fixtures and leasehold improvements now located on the premises. 3. Personal Property. There is not included in this sale any personal property including, but not limited to th~ property listed on the attached Exhibit #B". 4. Title to Property. Seller shall, within a reasonable time after acceptance of this agreement, furnish a registered property report or abstract, certified to date to include proper searches covering bankruptcies, state and federal judgments and liens. Buyer shall be allowed ten (!0) business days after receipt for examination of title and making any objections, which shall be made in writing or deemed waived. If any objection is so made, Seller shall be allowed one hundred twenty (120) days to make title marketable. Pending correction of title, payments hereunder required shall be postponed, but upon correction of title and witkin ten (10) days after Written notice to Buyer, the parties shall perform this agreement according to its terms. If title is not / corrected within one hundred twenty (124 days from the date of written objection, this agreement shall be null and void, at option of Buyer, neither party shall be liable for damages hereunder to the other. If title is marketable or is corrected within said time, and Buyer defaults in any of the agreements herein, Seller may terminate the agreement. This provision shall not deprive either party of the right of specific performance of this agreement. 5. Taxes and Special Assessments. Real estate taxes due and payable in years prior to closing and in the year of closing shall be paid by Seller. Seller shall pay all pending and levied special -2- assessments, including installments of special assessments due and payable in 1989... 6. Closing and Possession. The closing shall take place at Chanhassen City Hall, 690 Coulter Drive, Chanhassen, Minnesota, on or before September 15, 1989. Buyer shall be entitled to possession of the subject property upon closing. The Seller shall deliver at closing in form reasonably acceptable to the Buyer a warranty deed, duly executed and acknowledged, which conveys the property to the Buyer. 7. Closing Costs. Seller shall pay the cost of obtaining the abstract to the subject property, the recording fees for corrective instruments, if required, to place title in Seller's name, and the state deed tax. Buyer shall pay all recording charges and fees relating to the filing cf the deed and the recording of any corrective instruments required by the eminent domain proceeding. 8. Liabilities, Obligations, and Bulk Sales Act. Seller and Buyer waive the provisions of the Minnesota Bulk Sales Act, Minnesota Statutes Section 336.6-104 et seq, provided, however, that it is understood and agreed that the Buyer specifically does not assume any liabilities of the Seller relating to such statutes. Further, the Seller agrees to indemnify and hold harmless the Buyer against and from any claims, alleged claims, and liabilities of Seller and in connection with any costs, expenses, and attorney's fees incurred by Buyer in respect of the same. 9. Utility Payments. All utility payments shall be paid by Seller up to the closing date. 10. Representations and Warranties by Seller. The Seller makes the following representations and warranties, to the Buyer as indicated, -3- which shall be true at the time of the closing as if the representations and warranties were made at that time. Ail representations and warranties and other agreements made by the Buyer shall survive the closing. a. The Seller has full power and authority to enter into a performance agreement in accordance with its terms; b. The Seller has not received any notice or communication from any governmental entity indicating that a condition exists with respect to the property or with respect to the improvements thereon which violates any city, county, state, or federal law, ordinance, regulation, or code; nor has any notice or communication been received from an insurance carrier of the property regarding dangerous, illegal, or other conditions requiring corrective action; c. The property is not subject to any outstanding agreement(s) of sale, option(s), or other right(s) of third parties to acquire any interest therein, except from the occupancy rights of tenants in possession; d. There is no litigation pending or, to the Seller's knowledge, threatened against or relating to any of the preperty, nor does the Seller know or have reasonable grounds to know of any basis for any such action, and the Seller hereby agrees to indemnify the Buyer, hold it harmless, and protect and defend it from and against any and all claims, demands, damages, losses, liens, liabilities, actions, causes of action, and other proceedings of any nature, together with all costs and expenses thereof (including, without limitation, reasonable attorney's fees and court costs) resulting directly or indirectly in any manner from such pending or threatened litigation; e. The Seller warrants that to the best of its knowledge there is presently no asbestos or substances located, stored, used or disposed of on the property which are listed as "hazardous" or "toxic" in the Comprehensive Environmental Response Compensation Act, 42 U.S.C. Sec. 9601 et seq., or any other federal, state, or local law regulating toxic or hazardous substances. If the Buyer incurs any expenses or damages as a result of this representation being erroneous, Seller will indemnify and hold the Buyer harmless from any such expenses and damages including, but not limited to, reasonable attorney's feet the Buyer may incur as a result; f. Ail public utilities, including without limitation, sewers, water, electric, gas, telephone, required for the development of the property, either enter the property through public roads or adjoining private land and do so in accordance with valid public easements or private easements. All such public utilities are installed or operating, and all installation and connection charges have been paid for in full; -4- g. The Seller has not failed to disclose to the Buyer any material adverse fact or condition regarding this Agreement or the transactions contemplated hereunder of which the Seller is aware; h. To the best of the Seller's knowledge and belief there are no off-record agreements relating to entrances, exits, access, and service roads affecting the property; i. To the best of the Seller's knowledge there are no material defects in the fitness or physical condition of the property; j. Seller warrants that, to the best of its knowledge, all appliances, air conditioning, wiring and plumbing systems used and located on the premises will be in proper working order on the date of closing; k. Ail fixtures sold under this Purchase Agreement are free and clear of all liens or encumbrances and are not subject to any unrecorded interest; !. There are no written lease agreements or other contracts involving the subject real property; m. Seller warrants that there have been no problems of water or damage caused by water or ice build-up on the roof of the property; n. Seller warrants that prior to the closing date payment in full will have been made for all labor, materials, machinery, fixtures, or tools furnished within the 120 days immediately preceding the closing date in connection with construction, alteration, or repair of any structure on or improvement to the property. To the extent payment has not been made, the Seller shall indemnify and hold the Buyer harmless from such charges and resulting liens, including reasonable attorney's fees incurred by the Buyer. o. Seller warrants that within two (2) weeks after closing the satellite dish and signs on the property will be taken down and removed from the property. p. Seller warrants that within two (2) weeks after closing the bar and restaurant shall be permanently closed. 12. Default. a. In the event the Seller substantially defaults in any terms or conditions of this Purchase Agreement, the Buyer shall have the option to declare this Agreement null and void, but Seller shall retain the earnest money. In addition, Buyer shall have available all other remedies available in law or equity. -5- b. In the event the Buyer defaults in any terms or conditions under this Purchase Agreement, the Seller shall have the option to declare this Agreement null and void and shall be entitled to retain the earnest money payment. In addition, Seller shall have available all other remedies available in law or equity. In the event Buyer defaults and Notice of Cancellation is served upon Buyer pursuant to M.S.A. § 559.21, the termination period shall be thirty (30) days. 13. Notices. All notices, requests, demands, and other communications provided for in this Agreement shall be in writing and shall be deemed to have been given, if mailed, certified mail, postage paid, to the addressee as stated below, which addresses may be amended in writing from time to time: Buyer: Housing and Redevelopment Authority in and for the City of Chanhassen 690 Coulter Drive, Box 147 Chanhassen, Minnesota 55317 Attention: Don Ashworth Seller: Kallestad Enterprises, Inc. 431 West 7$th Street Chanhassen, Minnesota 55317 14. Damage. in the event that the property herein sold or any structures located thereon are destroyed or substantially damaged by fire or any other cause before the closing date, this Agreement shall become null and void, at the Buyer's option, but Seller shall nonetheless retain the $210,000 earnest money payment. ~5. Broker. The sale was not brought about through the effort of any broker and no commissions are required to be paid by either party. If, however, a commission is required to be paid, it shall be paid by the Seller. ~6. Lease. At closing the Authority will lease the subject property to Seller and Seller will lease the subject property from the Authority. The form of the lease is attached hereto as Exhibit -6- 17. Relocation Benefits. Seller hereby waives the right to any additional compensation for relocation expenses. The relocation expenses are part of the purchase price paid herein. 18. Entire Agreement. This Agreement supersedes all prior agreements and understandings between the parties whether oral or written. This Agreement incorporates the entire understanding of the parties hereto and shall only be modified upon the written consent of both parties. BUYER: H©USING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF CHANHASSEN BY: Clifford Whitehi!i, Chairperson AND Don Ashworth, Executive Director SELLER: KALLESTAD ENTERPRISES, INC. -7- EXHIBIT A Co~encing at n point eight rods Wes: from NE corner of NWl/4 of Sec:ion 13, Tow~..si~ip 116, Range 23; thence So,:th two rods LO thc: line of the public road and the starting pain: of th: description of :to land herei;, described; thence running West on the South ~ine of said road .~ fee:; :hen,.e South parallel wi~h ~he Ea=t llne of sa:d quarter section tS0 feet :o a post; thence East 60 feet to a post; thence ~o.~h 150 feet :o th, place of baglnning; situated in :h~ NE1/4 of NWl/4 of Section 13. Tra~t II Comz, encing at a point, said point being the NE corner of k~l/* of Section 13, To~ship 116, Kange 23; running thence West on the North Section line of Sec:ion 13, To~mship and Range aforesaid, a distance of 252 fee~; thence due Sou~h a distance of lBS feet [o a point; thence due East a distance of 60 feet to a point which is tho point of besinning of ~he lanf herein to be described; thence due South a di~tance of 196 fee: to a poln~; thence due East a distance of 60 feet :o a point; :hence f~c !~or:h a distance of 196 feet to a polut; :hence due West a distance of 60 fee:~ to the place of beginning. Said tract being in the NE1/4 of XW1/4 of Section 13, Tou~shlp 116, £ange 23 West. Tract III A tract al:ua:ed in the Northeast Quarter of the Nor::hwest Quarter (NE1/4 of ~,~i/~) of Section 13, To~ship 116, Range 23, descril.ed as follows: geglnning at :he Southwest corner of Tract I hereinbefore described; thence Southerly 5 feet more or less to :he Northwest corner of Tract II hereinbefore described; thence Easterly 60 fee: ~orc or less alc~g ;he Nor~i~erly llne of Tract ii to :he Nor:kcas~ corner of said Tract II; :i~nece Northerly 5 fee: ~ore or less ~o :he Sou:haas: ccrner of zaid Tract I; :hence Westerly 60 feet more nr less along :he Sou:heriy line of ~aid Tract I to the print of beginning. EXCEPTING THEREFROM: That part of the ab6ve described property taken by the City of Chanhassen in that eminent domain proceedin~ entitled City of Chanhassen vs. Henry A. Pauly, et al, Court File No. 88-22584D. EXHIBIT "B" All personal property situated on the property described in Exhibit "A" including but not limited to the following: All chairs, tables, glasses, glassware, cash register, speakers, audio and video equipment, televisions, video games, cigarette machine, liquor dispensing system, tap beer stanchion, (tap head brass), pop guns, freezers, all kitchen equipment and stainless steel sinks in kitchens; (and if vent hood removed area to be restored), ceiling fans (4); all studio (sound and video) equipment, refrigerator, stove, dishwasher, dryer, and all window air conditioning units (except those built in); and satellite dish antenna. REAL ESTATE AGREEMENT THIS AGREEMENT, made and entered into this day of , 1989, by and between THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF CHANHASSEN, a public body corporate and politic under the laws of the State of Minnesota ("Authority"), and KALLESTAD ENTERPRISES, INC., a Minnesota corporation ("Tenant"). I. Lease. The Authority hereby leases to Tenant, subject to the terms and conditions of this Agreement, and the Tenant hereby leases from the Authority the property described on the attached Exhibit "A". 2. Term. This lease shall commence on the date the Authority acquires possession of the subject property and shall terminate on September 15, 1991. The Tenant may, however, terminate this lease at any earlier date by giving the Authority thirty (30) days advance written notice. 3. Rent. The Tenant shall pay to the Authority rent of One Dollar ($1.00) for the term of the lease. 4. Tenant's Covenants. Tenant hereby agrees as follows: (a) To use the property for the following purposes only: recording studio, offices, living quarters in second floor apartment. (b) At all times during the term of this lease, the Authority shall have the right, by itself, its agents and employees, to enter into and upon the leased premises during reasonable business hours upon reasonable notice for the purpose of examining and inspecting the same. (c) Not to assign or sublet this lease, and not to make or suffer any alteration to be made in or on the subject property, without the written consent of the Authority, except for non-structural or non-bearing walls for studio r08/22/$9 isolation and related studio wiring and electrical, and not to allow any liens to be placed on the subject property. The improvements proposed by Tenant, delineated on the attached Exhibit #B~, are approved by the Authority. (d) Rot to call on the Authority to make any improvements or repairs on the subject property of any nature whatsoever, but Tenant hereby specifically covenants and agrees to keep the same in good order and condition at his own cost and expense. (e) To pay the Authority all costs and expenses, including attorney's fees in a reasonable sum in any action brought by the Authority to recover any rent due and unpaid hereunder, or for the breach of any of the covenants or agreements contained in this lease, or to recover possession of the subject property, whether such action progresses to judgment or not. (f) If any rent shall be due and unpaid, or if default shall be made in any of the covenants or agreements on the part of tke Tenant contained in this lease, the Authority may, at its option, at any time after such default or breach, and without any demand on or notice to Tenant or to any other person, of any kind whatsoever, reenter and take possession of the subject property and remove all persons therefrom, and Tenant waives any legal remedy to defeat the Authority's right of possession hereunder. (g) To indemnify, save, and hold harmless the Authority and any agents or employees thereof from all claims, demands, actions or causes of action of whatsoever nature or character, including but not limited to negligence on the part of the Authority, its agents or employees, arising out of or by reason of the lease of the subject property by the Authority to tke Tenant. (h) Should the Tenant hold over after the expiration of the term of this lease with the consent of the Authority, express or implied, said tenancy shall be deemed to be a tenancy only from month to month, subject otherwise to all of the terms and conditions of this lease so far as applicable. (i) The subject property described herein may be used for any of the purposes stated in paragraph (a) above; however, it is the sole and exclusive responsibility of the Tenant in the use of the property to comply with any and all laws, rules, regulations, or ordinances imposed by any jurisdiction affecting the use to which the subject property is proposed to be put. Inability or failure on the part of the Tenant t0 comply with any or said laws, rules, regulations, or ordinances will not relieve the Tenant of the obligation to pay the rental provided herein. -2- (j) The Tenant shall be required to maintain a policy of comprehensive general public liability insurance covering the subject property during the term of the lease in the following amounts: Minimum coverage per person per occurrence of $500,000; minimum coverage per occurrence of $1,000,000. Prior to execution of this lease the Tenant shall furnish a certificate of insurance to the Authority. Such insurance coverage policy shall be equal to or better than a Comprehensive Personal Liability; Owners, Landlords, and Tenants Liability; Manufacturers and Contractors Liability; and Comprehensive General Liability policies, consistent with the risk involved. The Authority shall be named as an additional insured on the policies. (k) The Tenant shall be required to maintain an insurance policy against loss by fire on the subject property issued by such company as Authority shall approve for the full insurable value. The policy shall be made payable in the case of loss to the Authority. Prior to execution of this lease the Tenant shall furnish a certificate of insurance to Authority evidencing the coverage. In the event the building on the subject property is damaged or destroyed by fire during the term, this lease shall automatically terminate. (!) In addition to the rent specified in paragraph 3 of this agreement, Tenant shall pay all utility charges and real estate taxes payable in 1989 and 1990. Real estate taxes payable in 1991 shall be pro-rated as to tenant occupancy. Payment shall be made within ten (10) days after the Authority requests payment. Installments of special assessments, if any, payable during the term of this lease shall be paid by the Authority. 5. Condition of Property. The Tenant has examined the subject property and is satisfied with its condition. The Tenant agrees to rent the subject property in "AS IS" condition without reliance upon any representations from the Authority about the condition of the subject property. 6. Notice. Ail notices, certificates, or other communications required to be given to the Authority and the Tenant hereunder shall be sufficiently given and shall be deemed given when delivered or deposited in the United States mail in -3- registered form with postage fully prepaid and addressed as follows: If to the Authority: Housing and Redevelopment Authority in and for the City of Chanhassen 690 Counter Drive, Box 147 Chanhassen, Minnesota 55317 Attention: Mr. Don Ashworth If to the Tenant: Kallestad Enterprises, Inc. 431 West 78th Street Chanhassen, Minnesota 55317 The Authority and the Tenant, by notice given hereunder, may designate different addresses to which subsequent notices, certificates, or other communications will be sent. 7. Removal of Building. If the Authority, in its sole discretion, decides to demolish the building on the subject property upon the end of the term or within ninety (90) days thereafter, the Tenant shall have the right, but not the obligation, to remove the building, which removal the Tenant must complete within ninety (90) days after receipt of notice from the Authority that Tenant can remove it. If the Tenant removes the building, the Tenant must comply with all applicable standards, rules, and ordinances in doing so. IN WITNESS WHEREOF, this agreement has been executed by the parties the day and year first above written. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF CHANHASSEN BY: AND Clifford Whitehill, Chairperson Don Ashworth, Executive Director -4- KALLESTAD ENTERPRISES, INC. BY: ItS STATE OF MINNESOTA ) ( SS. COUNTY OF CARVER ) The foregoing instrument was acknowledged before me this day of , 1989, by Clifford Whitehill and by Don Ashworth, respectively the Chairperson and Executive Director of the Housing and Redevelopment Authority in and for the City of Chanhassen, a public body corporate and politic under the laws of the State of Minnesota, on its behalf. NOTARY PUBLIC STATE OF MINNESOTA ) ( ss. COUNTY OF CARVER ) The foregoing instrument was acknowledged before me this day of , 1989, by the of Kallestad Enterprises, Inc., a Minnesota corporation, on its behalf. NOTARY PUBLIC DRAFTED BY: Grannis, Grannis, Farrell & Knutson, P.A. 403 Norwest Bank Building 161 North Concord Exchange South St. Paul, MN 55075 (612) 455-1661 -5- EXH}B}T A TrSct ! Co~r~unclng at a point eight rods Nest from NE corner of NWl/fi of 5et:ion 13, To~msi~ip 116, ~nnge 23; thence So~:th two reda to :h~: line of the public road and the s~arting point of t}:: description of :!c land herein described; thence running Wes~ on the South %ine of ~aid road ;~ feel; ~hen,:e South parallel with the Ea~: line of s;,:d quarter section tS0 feet ~o a post; thence East 60 feet to a post: ~hence Nozth !50 fee: ~o th~ place of beDinning; situated in [he NE1/& of ~:%~!/4 of Section 13. Trart II Co~.~,encing a: n point, said point being the NE corner of K"*'i/a of Section 13, Towmship 116, Range 23; running thence :,'cst on the North Section line of Section 13, Township mad Rmn);e aforesoid, o di~:ance of 252 feeL; ~hence 60 fee: to a point which is ~he pein: of beginning of the land Lercin to be de:ct!bed; thence due South a al!trance of 196 feet :o a poin;~ thence due E~s~ a dis:anco of 60 feet to ~ point; thence duc Kor:h a distance of 196 feet to a poi:,:; thence due %;est n distance of 60 fee~ to the place of beginning. Snld tract being in thc Ngl/4 of :~%Cl/4 of Section 1J, To.reship 116. Range 23 Wes~. !ii situated in t!,e ~':¢rtheast Quarter ~f the Nor::hwest Quarter (::El/4 of of Section !3, Township 1!6, Range 23, descril.ad as follows: ~uginnlng at the Sout!;we~: corner of Tract I hereinbefore described; :hence So~:herly 5 fee: more or less :o :he ~:or:hwest corner of Tract I! hereinbefore described; :hence Easterly 60 feet more or less :,lou~; :he NorLher!y llne of Tr~c: Ii :c the Nor:boas: corner of seid Iract 1I; timuce Nortkerly 5 feec more or less to the Sou:beast corner of said Tract Z; :hence Wes:off:: 60 fee: more nr less along the Southerly line of ~ai:t Tn'ac: i to tho poln: of beginning. EXCEPTING THEREFROM. That part of the ab6ve described property taken by the City of Chanhassen in that eminent domain proceedin~ entitled City of Chanhassen vs. Henry A. Pauly, et al ~eurt File No. 88-22584D. ' f' i. i. I [. ..... Existing Bar Entrance Sliding Glass >ocr T,mpor~ry Wall~ Buil ding Dimensions ~ -43'x -70'