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HRA 1981 07 23AGENDA Chanhassen Housing and Redevelopment Authority Thursday, July J& 1981 Chanhassen City Hall, 69 Coulter Drive City Council Chambers 7:30 p.m. 7:30 p.m. 1. 2. 3. 4. 5. 6. 7. 8. 9. 9:00 P.M. 10. Call to Order. Approve minutes of June 18, 1981. Status Report on Downtown Project Bond Sale. Discuss Attorney's opinion regarding zoning district plan for Redevelopment Project Area. Authorize inflationary adjustment for Downtown Project Property Acquisitions. Status Report on Downtown Project Acquisition and Relocation negotiations. Discuss Proposal for locating Sculpture in Downtown Courtyard. Old Business New Business Adjournment i I l L I I r 7 I t r I, Chanhassen Housing and Redevelopment Authority Meeting June 18, 1981 Minutes Called to Order: Horn, Bohn and Whitehill were present; Chairman Gullickson and Russell were absent. The meeting was called to order at 8:30 p.m. Approval of Minutes: Motion by Horn, seconded by Bohn to approve the HRA minutes of June 11, 1981 as presented. Motion carried. Review of Proposed Zoning Ordinance Revisions: Scott Martin reviewed the background of the preparation of the Zoning Ordinance revision report. Paul Krause, BRW, explained the reasons why the overlay district concept was discarded in favor of comprehensive zoning Ordinance amendments for all Commercial and Industrial Uses in the Down- town Project Area. The general philosophy behind the report was to provide different levels of commercial development around the Downtown Core Area, and an industrial zone that would ac- commodate a variety of light industrial and office uses sup- portive of the city's population and overall employment needs. Bohn and Horn preferred to extend the B -1 district along the west side of the B -3 district, up to the Burdick Office Park. Whitehill thought the B -3 District should be extended into this area, rather than the B -1 District. This change would eliminate the proposed Frontier Home Center from the Bloomberg Co. Site just west of the ring road. The Board also felt that the B- 2 District should be extended to encompass the southerly half of the R -4 District lying north of West 78th Street, just east of Powers Boulevard. Whitehill moved that the comments of the HRA be forwarded to the Planning Commission along with the Draft Ordinance, and that the other members of the HRA (Gullickson, Russell) be invited to submit their comments along with the HRA's. Horn seconded. All voted in favor and the motion carried. Sorenson Property Appraisal: Bohn moved, seconded by Horn, to acquire the Sorenson property at the appraised value of $22,000. Motion carried. Resolution #81 -4: Horn solution #81 -4, revising Cost budget, as provided $300,000 from "Refinance to "Option Cost for Land and the motion carried. noved, Bohn seconded, approval of Re- the proposed Public Redevelopment in Resolution #81 -3, by transferring of Temporary Improvement Bonds of 1978" Acquisitions ". All voted in favor Chanhassen HRA Minutes June 18, 1981 Page 2 CHRA Negotiation Procedures: Martin expressed concern that owners of property to be acquired for the Downtown Project would attempt to circumvent the formal negotiation process by contacting individual commissioners for specific concessions. He asked that all negotiations be handled solely by the Attorney. Review of Downtown Implementation Flow Chart: Martin reviewed the flow chart for implementation of the Downtown Redevelopment Project and advised the Commissioners of current activities being done to carry out the,HRA's responsibilities under the timetable. Adjournment: Bohn moved, seconded by Horn, to adjourn the meeting at 11:15 p.m. - motion carried. C STAFF REPORT TO: FROM: DATE: RE: CITY OF IT3 CHANHASSEN 690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317 (612) 937 -1900 Chanhassen Housing & Redevelopment Authority Scott A. Martin, Executive Director July 9, 1981 Downtown Project Bond Sale As you may already know�on July 6, 1981 the City Council rejected the only bid received for the initial bond issue for implementation of the Downtown Redevelopment Project. A group of local Twin City bond investors submitted a bid bearing an interest rate of 11.42 %. The financial feasibility analysis prepared by Juran and Moody, Inc., City Bond Consultant, determined that the maximum interest rate for feasibility of the first bond issue is 10.88. Consequently, upon Council rejection of the bid, our bond consultant was instructed to negotiate with any interested parties during the next thirty (30) day period for sale of the $4,715,000 in bonds at a rate of 10.8% or less. I will update you on any progress made in this area during the next week at our regular meeting of July 16. CITY OF CHANHASSEN 690 COULTER DRIVE a P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317 (612) 937 -1900 STAFF REPORT TO: Chanhassen Housing & Redevelopment Authority FROM: Scott A. Martin, Executive Director DATE: July 10, 1981 111111 RE: Zoning for property lying West of the Downtown Ring Road. At the June 18, 1981 BRA meeting, we reviewed the proposed Zoning Ordinance Revisions as prepared by BRW and myself. Emphasis was placed on the proposed Zoning District plan and permitted uses in each Zoning District, especially as it affects the over- all Redevelopment Project Plan. Of particular interest was the configuration of the proposed r B -2 (General Business) District, which lies just west of the Ring Road. The Commissioners present at this meeting felt that either the B -3 (Central Business) or B -1 (limited Business) District should be extended to the area between the westerly part of the Ring Road and the easterly boundary of Burdick Office Park. This recommendation had the impact of eliminating the proposed Frontier Home Center from Bloomberg Companies' site located adjacent to the southwesterly corner of the ring road, since neither the B -1 or B -3 districts would allow the construction of a "Home Center ". The action by the HRA concerns me, in that throughout the negoti- ation process with Bloomberg Co., it was understood by both parties that the existing lumber and hardware facilities would be relocated into a new Home Center to be constructed on Bloomberg's property (as described above). The construction of the Home Center was included in the "mandatory minimum improvements" to be constructed r by Bloomberg Co. as part of the Redevelopment Project. I l r I Chanhassen HRA July 10, 1981 Page 2 Therefore, it appears to me that the City and HRA not only has a moral obligation, but also a legal obligation (according to the City Attorney's opinion attached) to provide suitable zoning for construction of Bloomberg's Home Center on the vacant site lying adjacent to the ring road and railroad. Report Attachment 1. City Attorney's legal opinion dated July 1, 1981. RUSSELL H. LARSON rCRAIG M.MERTZ OF COUNSEL HARVEY E. SKAAR MARK C. MCCULLOUGH LARsow & 31ERTZ ATTORNEYS AT LAW 1900 FIRST BANK PLACE WEST MINNEAPOLIS, MINNESOTA 55402 TELEPHONE (612) 335 -9565 F July 1, 1981 I Scott A. Martin Executive Director Chanhassen H.R.A. c/o Chanhassen City Hall Chanhassen, Mil 55317 I Re: Bloomberg Development Contract Dear Scott: You have asked for a legal opinion as to whether the H.R.A. is r obligated to allow construction of Bloomberg's "home center' on Bloomberg's parcel of land which is located immediately outside of the ring road on the southwest. Because of various clauses in the development contract dated May 27, 1981, we must answer this question in the affirmative. The term "Minimum Improvements" is defined on pages 5 and 6 of the contract as: 1. The "item 'a' improvements" consisting of 20,000 square feet of new commercial. . .space. . .to be =;- constructed on lands now owned by the Redeveloper (emphasis supplied), and 2. The "item 'b' improvements" consisting of conversion of the Frontier Hardware and Lumber Building, and (I 3. The "item 'c' improvements" consisting of the hotel. TOn page 19a( 54.1) the contract states: "The Redeveloper agrees that it will construct T the Minimum Improvement on its property described in Exhibit C. " Exhibit C depicts the Bloomberg property located inside the zing jj road and the Bloomberg property which lies south of Picha Drive II and East of the Burdick property. T Scott A. Martin Executive Director Chanhassen H.R.A. Page 2 July 1, 1981 The intent to locate the home center on the Bloomberg owned property is also indicated by the fact that Bloomberg's obligation to start construction of the home center does not arise until the City commences construction on the southerly and westerly portion of the ring road (See §4.3 of contract), because it is the ring road itself which will provide road access to the home center site. In addition, it should be noted that the acquisition list in the H.R.A. plan document does not include any alternative sites for the home center, leading one to the conclusion that the home center is to be constructed on property already owned by the Redeveloper. In redevelop- ment work, the Redeveloper commits to construct certain improvements on land that the Redeveloper either already owns or that the Redeveloper will purchase from the H.R.A. The Redeveloper cannot commit itself to construct improvements on property owned by a third party unless that property is on the H.R.A.'s acquisition list. Thus, we conclude that the H.R.A. must allow the construction of the home center on the Bloomberg property located immediately southwest of the ring road. CMM /nj l ;yam: K "_... Very truly yours,i�' Craig M. Mertz it 11 it IT r Staff Report CITY OF CHANHASSEN 690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317 (612) 937 -1900 TO: Chanhassen Housing & Redevelopment Authority FROM: Scott A. Martin, Executive Director �11NII� DATE: July 8, 1981 W•\ SUBJ: Inflation Adjustment Policy for Downtown Project Property Appraisals During the course of recent Downtown Project acquisition and relocation negotiations, we have been confronted with several requests for an upward adjustment of property and relocation appraisals due to inflation over the past 12 -15 months. HRA appraisals for acquisition and reloca- tion were completed last year, and are based on last year's property values. Property owners contend that appraisals should be adjusted upwards by anywhere from 10 % -14% based on their perceived rate of infla- tion. Most owners are relying on the Federal Government's popular Consumer Price Index (CPI) as the basis for establishing an across -the- board increase in acquisition and relocation appraisals. However, I am very uncomfortable with accepting the CPI as the basis for adjusting our appraisals in negotiations with property owners. The CPI includes such things as food and energy prices, as well as the cost of borrowing money. It does not necessarily represent the rate of increase for commercial and industrial land during the last year. Consequently, I have contacted several professionals familiar with recent trends in commercial /industrial land appreciation rates for appraisals. This method of updating our appraisals seems much more � logical and is much less expensive than ordering new appraisals at this time. A summary of my findings follows: The April, 1981 City Cost Index from Marshall Valuation Service I provides a resource for determining the increase in construction ' costs for selected cities during certain periods. For example, the cost of constructing a concrete block building in the Minne- i apolis area increased by 4.95% between July, 1980 and April, 1981, I a 9 -month period. If this rate of increase were extended over a 12 -month period, the increase would be 6.6 %. According to the Spring, 1981 Industrial Real Estate Market Survey of the Society of Industrial Realtors, sales prices of industrial buildings have remained relatively stable during T the period from Spring 1980- Spring, 1981, particularly for buildings containing less than 20,000 sq. ft. Although this report is concerned only with industrial, and not commercial T properties, a parallel can be drawn between the two according to my expert resource. Chanhassen HRA Page 2 Coldwell Banker's report of February, 1981 on the Twin Cities Commercial Real Estate Market states that the average price for commercial land in the Twin Cities is $1.50 /sq. ft., with a typical range of $1.25 -$1.90 per sq. ft. All of our property appraisals are well above the average. Conclusion Although the above information falls short of providing us with hard facts on the rate of appreciation of local commercial real estate values during the past year, it does provide us with the knowledge that property values during a period of recession and high interest rates do not necessarily increase at the same rate as indicated by the overall Consumer Price Index. In fact, real estate professionals agree that we currently are and have for quite some time been in a "buyer's market ". They point to many instances of significant reductions in asking prices for real estate during the past year, due primarily to the high cost of financing. Recognizing that the HRA is not necessarily dealing with willing and anxious sellers, we nonetheless must guard against arbitrarily paying more than Fair Market Value for properties necessary to implement the Downtown Redevelopment Project. In the same sense, our relocation assistance payments must be based on facts, in accordance with law. We should be (and I believe we sincerely are) willing to negotiate in good faith with all property owners and tenants affected by the Downtown Project, but all such negotiations must be consistent and must be carried out according to law. Our Relocation Specialist will be working closely with our Attorney during the entire acquisition/ relocation process. We are prepared to make whatever adjustments are legitimate and necessary to update our relocation benefits on a case -by -case basis. We should be equally prepared to make adjustments in appraised values of real property to better reflect current real estate land values.' Recommendation Based upon the best information available, I recommend the establishment of the following HRA Policy: Staff shall utilize a 6% land appreciation rate as a general guideline for adjusting property appraisals in conjunction with all property acquistion negotiations. This rate shall be applied at a rate of h% per month from the date of the most recent HRA appraisal. If specific negotiations reach an impasse due to a significant disagreement over the adjusted appraised value of certain properties, staff will encourage the property owner to arrange for a second certified appraisal of his property in order to help resolve such differences. The property owner's appraiser must be certified to conduct such an appraisal and said appraiser must be approved by Staff prior to commencement of the appraisal. The property owner will be reimbursed up to $300 (not to exceed the actual cost of the appraisal) for the cost of such an appraisal, upon satisfactory completion of the appraisal. i r Chanhassen HRA Page 3 If minor adjustments to the HRA appraisal buyunu q+A4-ea� are necessary to reach a negotiated settlement, Staff shall have the authority to use its discretion in making such adjustments prior to presenting the negotiated settlement to the HRA for final acceptance and approval. :3sy38sica�..: ' ✓__:;� - �iA= z`uv.3?feaxsiK��'i*.i-';:,. ���n- z.'YG�.- r- '�i ^"° -. -. zr�.. - -:. _eta:,- .._ >�.... ': >c. .. ..� STAFF REPORT CITY OF CHANHASSEN 690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317 (612) 937 -1900 TO: Chanhassen Housing & Redevelopment Authority l I FROM: Scott A. Martin, Executive Director DATE: July 10, 1981 SUBJ: Status of Downtown Project Acquisition & Relocation Negotiations Attached for your review are copies of correspondence from Russ Larson concerning acquisition of the John Havlik and i Mike Sorenson properties. Mr. Larson will be at the meeting of July 16, 1981 to further discuss and update you on these and other acquisition nego- tiations. I l I LARSON & MERTZ ATTORNEYS AT LAW 1900 FIRST BANK PLACE WEST - RUSSELL H. LARSON MINNEAPOLIS, MINNESOTA 55402 TELEPHONE CRAIG M. MERT2 (612) 335 -9565 OF COUNSEL May 29, 1981 HARVEY E. SKAAR MARK C. McCULLOUGH Mr. Scott Martin Executive Director Housing & Redevelopment Authority Box 147 h Chanhassen MN 55317 Re: Chanhassen Tire and Auto (John Havlik) Acquisition Parcel 30 rDear Scott: t! As the HRA appraisal file will indicate, the Chanhassen Tire & Auto land and building were appraised on March 26, 1980, at a value of $165,000.00. The immovable equipment was appraised at $25,605, and relocation benefits were appraised at $10,000. The total values are set out as follows: Land and building 165,000 Immovable equipment 25,605 Relocation 10,000 j 200,605 l, John Havlik appeared before the HRA on December 18, 1980, and presented 7 his arguments that in order to relocate his business to a corner lot on West 78th Street (Burdick Park) he would require considerable additional financial assistance from the HRA. Thereupon, on December 18, 1980, by a motion made by Cliff Whitehill, seconded by Jim Bohn, the HRA adjusted the total appraisal from $200,605 to $246,105. In the same motion the land cost credit was fixed at 15% of the new site and new building cost. Those voting for the motion were Bill Gullickson, Cliff Whitehill, Jim Bohn and Mike Niemeyer. Tim Russell was absent. This action by the HRA was taken under the authority of the "draft" resolution of November 20, 1980, which covered severe financial hardship cases. You will recall that you an a to discuss this entire approach at a meeting the week of June 1. Ve tr 1 yours, r '� CITY OF CHANHASSEN RECEIVED 7 RUSSEL H. LARSON Chanhassen City AttorneyjLIN 1 1981 _ l RHL: ner COMMUNITY DEVELOPMENT DEPT. I RUSSELL H. LARSON CRAIG M. MERTZ I OF COUNSEL HARVEY E. SKAAR MARK C. MCCULLOUGH _ Scott A. Martin Executive Director Chanhassen HRA Chanhassen MN 55317 7 L I. F F I r I' Dear Scott: LARSON & MERTZ ATTORNEYS AT LAW 1900 FIRST BANK PLACE WEST MINNEAPOLIS, MINNESOTA 55402 TELEPHONE (612) 333 -ISII July 8, 1981 Re: Acquisition Parcel #8 Michael Sorenson Property Please be advised that I met with Mike Sorenson on Tuesday, July 7th, to negotiate for the purchase of his vacant tract of land at West 79th Street and #101. After the customary discussion as to values, I offered $18,000 for the tract. Mike's demand is $25,000 if the acquisition can be accomplished within 30 days. Mike informs me that there are no assessments against the property. You have indicated that this acquisition is funded for 1981 and that we need not wait for the first.bond sale. Please submit the Mike Sorenson RHL:ner HRA for consideration. Ve tru urs, RUSSELL H. LARSON Chanhassen City Attorney CITY OF CHANHASSEN F?ECEIVED JUL 9 1981 COMMUNITY DEVELOPMENT DEPT. a• f OFF.: RM GOUTIiWEST PI. 31BIrG & IIEATI \G CO. COMMERCIAL 6 REMIDRNTIAL r INSTALLATION . REMODELINU . NF.RVICE 7600 ERIE AVENUE Ir CHANHASSEN. MINN. 55817 1 — June 16, 1981 r Russell Larson City Attorney Chanhassen, Minnesota Dear Russell, V The following is a list of expenses which I incurred on the property and project at 7901 Great Plains Boulevard from May 1, 1979 to June 7, 1981. I. Landscape fees paid to Herb Baldwin in the amount of $1,712.10. 2. Survey costs of $450.00 paid to Scholl Madson. 3. Increased building costs at the rate of 10% per year; approximately $8,000.00 on a $40,000.00 building. The above costs do not reflect approximately 100 hours of my time and effort in the above named project, which includes preliminary council meetings, meetings with city planners and managers, planning r" commission meetings, HRA meetings, and all other meetings applicable II to the project. r Sincerely, r" Michael J. Sorensen i x 4 , j S'., 1 E 9n a tk� k Y iai � ki f r f i - iST 4V 3es a' and. Adjacent. Parcels` Pal pJl 12.00 a k, $., 3..60 ,, A is 3 r herb baldwin landscape architect route two jordan minnesota five five 3 sI L ; P, fir, ,;• liwT� j P ichael J' Sore'nden outhvzdti Plumbing and Heating Co )o6 Erie Avenue lanhas- sen k lnesota' 317'� E 'i '.i ,,,,•, 3 iS', 1''� t j yam. Yi Z t f 3 .'i Site Planning Project /Highway 101 at 7.9th Street ,West FINS.:: ze .proiessionai, landscape architectural 'services .rendered ,9.` February .1,980 S ;r 3es a' and. Adjacent. Parcels` Pal pJl 12.00 a k, $., 3..60 ,, A is 3 r herb baldwin landscape architect route two jordan minnesota five five f sl 1,� j°�^ r 1 1 I s i Y� 1, 3'• lily aI 1 1' '° S . t, s 1 �1 -0 is Ys {'>f 1! o-1 d i5$ �d.r1 �1 'l4 H,� 1 1, !1 t ' t u t t S� it al; 1, -a" '� rat 1 1 a d.. s 1. %19 �jgtl4�ii elit �lat} 1 }t ' t a y v n : uk t n f tt b az 31a« '{'a,F 3oNt"i r�all�ra j Miehael,� Sorensen„ Southwest Plumbing and Heating Co ¢ : tliya, ?606 Erie Avenue Nr C.hanhassen�; r[.. 1�'ZI1123e SQta Yx <K w 1, a.t,;i3jty, j 7� P it i 4 L "1 =5531 1 �nw Plannin g Pro ect Hi hwa 1@1 at r � � � g Y 7,9th Street West {! _ _ Ym 1t�.it lit +' 1'1.9 yr.�`l U t � 1. 4 t L ee for the Professional landscape architectural servlves r`endere&' throlzghh 31 January 1980 r k A��1 y�a��s %P1��4 �h�LH t 1 s e x � s•: F gyacy't��}L(r i { `�' PTA; Fi � cni 3D' FarCe1 and A* ;t'1p cent Parcels ' v� )q 28. U0 r 1, 111(ibi7 kt Fandt t + F' i sl�Q p; nt,requested at this time �F 7 h0` 1 I" t 1 1. 1 2N \ 1: tj? Y•1 F. :'ti Al�i1 :1`' r 1' t landscape architect route two Jordan minnesota five fiveJt}; 356! 91N Mji t I #. 1 I e F Ry I jar 1.�i i t. r r sS K � { x chael J S_ orensen , outhwest Plaumbing and Heating Co 1 7606 Erie Avenue ' Chanhassen , MN vt 55317 k .fI re Site :Planning Project /Highway 101 at 70th Streat West STATEMENT s Fee; for the (professional landscape architectural se rvices rendered tlxrc 16 -h'31 December 1979 Horb L'-a.ldwir_, Landscape Architect Principal o asen /Kurvis Parcel $ 275.00 a. n s e n Parcel (revisions) $ 325.00 b m 371 OCR x1 e N t t, 36L.6o _� \N�- ,(,.�� 1� Total a=nount requested at this 'time $1, 636.00 ,LLj 1" 1# C�� ii � J +i'l 4,ki ( { ; {T v 4 r ! i ,.g° i x}i4 1C January /✓/ 1G /� n � , I 037 y �F +r try F 'It s5} y5, r M �seLbbaldwin landscape architect route two jordan minnesota five five three five two y. u i' .r 71 1 xt VJ �� A STAFF REPORT CITY OF CHANHASSEN 690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317 (612) 937 -1900 TO: Chanhassen Housing & Redevelopment Authority FROM: Scott A. Martin, Executive Director ��y1 DATE: July 9, 1981 YyV• 1 SUBJ: Sculpture for Downtown Courtyard Although it may seem somewhat premature, I have met with Mr. Neal Dalen, a sculptor who works in Chanhassen, about the possibility of creating a unique sculpture for placement in the downtown courtyard. Mr. Dalen's work was recently brought to my attention by Michael Vargo, Technical Director for the Chanhassen Dinner Theaters, who thought that the work of a local artist would be a special addition to the courtyard. Attached is Mr. Dalen's resume and a photograph of one of his metal �- sculptures, which has been shown at several art shows. I should point out that he works almost exclusively with metal in the creation of his sculptures. The cost of one of his works is obviously dependent on the size and design of the particular piece, but he indicated that a price range of $10,000- $25,000 would be likely for.a work to be displayed in the courtyard. Of course, the HRA would be given the opportunity to provide input into the general design of the sculpture (i.e. size, location, form). If you are interested in pursuing this idea further, you should let me know so a specific budget for courtyard improvements can include the cost of an HRA commissioned sculpture, and so a sculpture can be included in the final overall design of the courtyard. Report Attachments 1. Resume of Neal F. Dalen 2. Photograph of Dalen sculpture r Neal F. Dalen Born: Nelson, MN 12/13/38 Education: Graduate of St. Louis Park, MN High School — 1958 Attended St. Cloud State Teachers College, St. Cloud, MN 1958 -1960 Attended University of Minnesota, Major in Theater Design — 1961 -1963 In 1963 I accepted a position with The Tyrone Guthrie Theater where I spent fourteen (14) years creating artistic sets and props. In 1977 I opened my own studio ( Dalen Designs), designing and sculpting special projects for TV, Theater, Industry and Private Commissions. Sculpture Commissions: 1. Dayton's Home Store, Edina, MN 2. Hennepin Federal Savings and Loan, Minneapolis, MN 3. Dr. & Mrs. Leonard Wurman, Wausau, WI 4. Mr. & Mrs. Steve King, St. Paul, MN Art Show 1. 2. 3. 4. l r F l s: Peavey Plaza Sculpture Show, Minneapolis, MN Minnesota Wildlife Heritage Show, Minneapclis.,MN Como Zoological Society Show, St. Paul, MN Ducks, Unlimited Dinners m