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HRA 1983 09 15r AGENDA REGULAR MEETING CHANHASSEN HOUSING AND REDEVELOPMENT AUTHORITY THURSDAY, SEPTEMBER 15, 1983 CHANHASSEN CITY HALL, 690 COULTER DRIVE CITY COUNCIL CHAMBERS 7:30 P.M. 7:30 p.m. - 1. Call to Order. 2. Approve Minutes of August 18, 1983 Meeting. 3. Presentation of Consultant Proposals for Downtown Project Marketing Program. 4. Adopt 1984 Operating Budget. 5. Approve Agreement Between HRA and City Adopting Tax Increment Financing Plan. G. Old Business: a. Approve Non - Exclusive Listing Agreement with Klingelhutz- Cravens Realtors. b. Report on Mortgage Revenue Bond Program. C. Report on Proposal to Lease Space in Old Instant Web Building for Seasonal ReQre tional Vehic Storage. �w °""""" 7. New Busines - a. Downtown Project Market Study Proposal. 8. Approval of Bills. 10:00 P.M. - 9. Adjournment. r MINUTES CHANHASSEN HOUSING AND REDEVELOPMENT AUTHORITY REGULAR MEETING AUGUST 18, 1983 CALL TO ORDER Chairman Whitehill called the meeting to order at 7:40 p.m. Present were Commissioners Swenson, Horn, Bohn, Whitehill and Russell. No one was absent. Also present was Executive Director Martin. r APPROVAL OF MINUTES Russell moved, seconded by Whitehill, to approve the minutes of the July 21, 1983 meeting as presented. All voted in favor and the motion carried. DOWNTOWN PROJECT MARKETING CAMPAIGN STRATEGIES: KOSMO COMPANIES Ladd Conrad of Kosmo Companies presented proposed Downtown Project Marketing Campaign strategies and some graphic design ideas for both Downtown Project and Chamber of Commerce promo- tional materials. Conrad estimated that Marketing Program develop- ment costs from his firm would probably be somewhere between $4,000 - $7,000. He was unable to provide the Board with an estimated cost for printing and photo work since the number of copies desired by the Chamber has not been determined and the number of pages to be included in Downtown Project promotional materials is unknown at this time. Following the review and discussion of Kosmo Companies presen- tation, Swenson moved, seconded by Horn, to temporarily table this item until later in the meeting. All voted in favor and the motion carried. Commissioner Horn left the meeting at this time (9:30 p.m.) REVIEW OF PROPOSED 1984 BRA OPERATING BUDGET Executive Director Martin presented his recommended 1984 Operating Budget for preliminary review by the Board. Included with his presentation were future long -term revenue and expen- diture projections developed with the assistance of BRW (revenue) and DeLaHunt Voto and Company, which have been included in the proposed "Tax Increment Financing Plan ". Martin noted that 1984 Tax Increment receipts were projected to increase by approximately 50 percent over 1983. However, expenses were also up substantially due primarily to projected opera- tional and maintenance expenses of nearly $70,000 for the old Instant Web Building. He recommended that no formal action be taken on the proposed 1984 Budget until the savings from the recent refunding bond sale were plugged into the Tax Increment Financing Plan. HRA Minutes August 18, 1983 Page 2 The Commissioners briefly discussed the proposed budget, but took no action to approve or modify it. Final review and approval of the 1984 Budget will be scheduled for the September 15, 1983 meeting. REPROGRAMMING OF CDBG FUNDS Martin presented a list of eligible program activities and several recommendations for reprogramming of $105,417 in Community Development Block Grant (CDBG) funds previously set aside for senior citizen housing site acquisition. The recent HRA Housing Needs Survey failed to justify the use of CDBG funds for this purpose. Commissioner Swenson recommended that funds be allocated for a broad -based general retail market study in addition to the pro- posed funding for the Downtown Project Marketing Plan. She felt that prospective developers may require such a study, since the Retail Systems Supermaifket Study is rather narrow in scope. Commissioner Whitehill expressed strong support for the proposed Housing Rehabilitation Grant Program. Whitehill moved, seconded by Bohn, to recommend that Year VII, VIII, and IX CDBG funds currently allocated to Senior Citizen Housing Site Acquisition be reprogrammed by the City Council as follows: 1. Land Clearance and Site Preparation $45,000 2. Downtown Project Marketing Plan 20,000 3. Housing Rehabilitation Program 40,417 All voted in favor and the motion carried. DOWNTOWN PROJECT LAND ACQUISITION Martin reported on the status of negotiations for one -year exten- sions to the Chanhassen Tire and Auto and Riviera Supper Club Purchase Option Agreements. He advised the Board that both par- ties had rejected the HRA's original offer of a lump sum cash payment not applied to the purchase price in exchange for the one -year option extension. John Havlik of Chanhassen Tire and Auto was present to express his interest in maintaining some form of option agreement with the HRA during the next year and offered to negotiate further for the option extension if the option agreement included the addi- tional $11,000 relocation benefit earlier promised by the HRA if he rebuilds within the Tax Increment District. He also said that he would be willing to negotiate the amount paid for the option extension. HRA Minutes r August 18, 1983 Page 3 Martin recommended that acquisition negotiations be suspended with owners of the properties currently under option and that the options be allowed to expire as of September 1, 1983. He also r recommended that the HRA not pursue acquisition of these proper- ties or the Huber Property (Project Parcel #26) until such time as a firm private development committment is received for Phase One Downtown Project Construction, and the HRA's ability to fund each acquisition is assured. Whitehill moved, seconded by Swenson, to suspend acquisition negotiations for the Huber, Chanhassen Tire and Auto, and Riviera Supper Club properties until such time as a firm private develop- ment committment is received for Phase One Downtown Project Construction. All voted in favor and the motion carried. Whitehill reaffirmed the position of the HRA to pay Mr. Havlik an additional $11,000 in relocation benefits should he rebuild his business within the Tax Increment District following future HRA acquisition of his property. REQUEST FOR FUNDS: SPECIAL DINNER MEETING WITH GOVERNMENTAL OFFICIALS Martin presented a request by the City Manager for HRA funding of a special dinner meeting to be hosted by the City for State, Local, and Regional Governmental Officials. He advised the Board that HRA funding of business promotional activities such as this is a legitimate use of Tax Increment funds according to legal counsel, and recommended approval of the City Manager's request up to a maximm expenditure of $1,000. Whitehill moved, seconded by Bohn, to approve funding of up to $1,000 for the proposed special dinner meeting subject to the preparation of a meeting agenda and formal presentation to-insure that the meeting is focused on economic and business development issues important to Chanhassen. The HRA must also review and approve the meeting agenda and presentation prior to the special meeting. All voted in favor and the motion carried. DOWNTOWN PROJECT MARKETING PLAN r Whitehill moved, seconded by Swenson, to direct the Executive Director to secure at least three (3) proposals from qualified advertising agencies (including Kosmo Companies) for the develop- _ ment of a professional marketing program for the Downtown Redevelopment Project and the Chanhassen Chamber of Commerce. Qualified agencies should present their proposal at the September 15 meeting. All voted in favor and the motion carried. HRA Minutes August 18, 1983 Page 4 OLD BUSINESS KRAUS ANDERSON /SUPERMARKET NEGOTIATIONS Martin reported that he had been advised by Dennis Spalla of Kraus Anderson within the last week that the major supermarket chain which they were negotiating with had decided not to locate in Chanhassen in the near future. Spalla indicated that no other negotiations were underway with other supermarket interests, nor did he have any reasonable expectations that any supermarket would be interested in the Downtown Project during the next year or two. RAILROAD CROSSING IMPROVEMENT PROJECT Martin reported that the planned railroad crossing improvement project on West 78th Street which is partially funded by the HRA (estimated $4,000) will not begin construction until later this fall according to the County Engineer. Completion of this pro- ject is scheduled for next spring. CERA FLEA MARKET Martin reported that he has authorized the Chanhassen Estates Residents Association to use the old Instant Web parking lot for a Flea Market scheduled for August 28, 1983. BOWLING CENTER MARKET STUDY Martin reported that he has contacted both AMF and Brunswick regarding our potential interest in developing a bowling center in the old Instant Web Building. He was advised that AMF does not conduct market analysis studies for new bowling centers, but did receive a proposal from Brunswick to do a market study at a cost of $1,200. He requested funding for such a study and authorization to contract with Brunswick. Whitehill felt that a Bowling Center Market Study should be included as part of the broader -based retail market analysis study proposed earlier this evening during CDBG reprogramming discussions. He also preferred to delay any decision on funding for a Bowling Center Study until the recently established Community Recreational Facilities Committee has met to consider the desirability of a bowling center as part of the proposed com- munity center. He added that the Recreational Facilities Committee should be advised at their first meeting (August 31) that the HRA will give their full support to their study efforts. r T a HRA Minutes August 18, 1983 Page 5 NEW BUSINESS APPROVAL OF LAKE PRODUCTS, INC. LEASE IN OLD INSTANT WEB BUILDING Swenson moved, seconded by Bohn, to approve the proposed six - month lease with Lake Products, Inc. (Mid - America Golf Supply) for rental of storage space in the old Instant Web Building at a rate of $1.75 per square foot, and to authorize the Chairman and Executive Director to execute said lease on behalf of the HRA. All voted in favor and the motion carried. RENTAL OF OLD INSTANT WEB BUILDING FOR SEASONAL BOAT STORAGE Commissioner Whitehill requested the Executive Director to explore the potential for renting space in the old Instant Web Building for seasonal boat storage. Martin explained that a ramp would need to be constructed in order to allow for drive -in access into the warehouse section of the building, which could be rather costly. He agreed to pursue this idea and report back at the next meeting. APPROVAL OF BILLS Whitehill moved, seconded by Swenson, to approve the bills for August, 1983, as presented. All voted in favor and the motion carried. ADJOURNMENT Bohn moved, seconded by Russell, to adjourn the meeting at 10:50 p.m. All voted in favor and the motion carried. 3 CHANHASSEN HOUSING & REDEVELOPMENT AUTHORITY 690 COULTER DRIVE P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317 (612) 937 -1900 MEMORANDUM TO: Chanhassen Housing and Redevelopment Authority FROM: Scott A. Martin, Executive Director DATE: September 8, 1983 SUBJ: Downtown Project Marketing Program RFP. As directed at the meeting of August 18, 1983, I have prepared and distributed the attached "Request for Proposal" to six (6) advertising agencies which were selected from a directory of local Twin City agencies published annually by the industry. The ' number of agencies invited to submit a proposal was expanded to six in order to provide us with a variety of proposals to con- sider. A list of agencies invited to submit proposals is attached for your reference. As of this writing, I have not yet received any proposals for your review. The proposal submittal deadline was established as next Tuesday, September 13 in order to give interested firms an adequate amount of time to prepare their proposals. I will review each proposal upon receipt and determine whether or ' not to invite the agency to present their proposal to you during next week's meeting. Each agency has been advised to limit their presentations to ten minutes, plus any additional time you may require for questions. Attachments 1. A copy of cover letter sent to all agencies. 2. Request for Proposal. 3. List of agencies invited to submit proposals. f ® CHANHASSEN HOUSING & REDEVELOPMENT AUTHORITY 690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317 (612) 937 -1900 August 31, 1983 Mr. Jack Robertson Executive Vice President Development Counselors, Inc. 2409 Russell Avenue South Minneapolis, MN 55405 Dear Mr. Robertson: The Chanhassen Housing and Redevelopment Authority (HRA) is interested in seeking a qualified developer to construct a new shopping center in Downtown Chanhassen in a manner consistent with our adopted Downtown Redevelopment Plan. The City of Chanhassen and the Chanhassen Chamber of Commerce are also interested in developing business promotional materials and community data resources which will help lure new business and residents to Chanhassen. We believe that promotional materials could be developed to support both needs. Therefore, the Chanhassen HRA is now seeking competitive bids from advertising agencies and development consultants who are capable of fulfilling the needs outlined in the enclosed Request for Proposal. If your firm is interested in bidding on this marketing program, you should submit a written proposal to me no later than Tuesday, September 13, 1983 which addresses the project specifications contained in the enclosed document. All qualified bidders will also be required to make a ten (10) minute presentation to the HRA Board of Commissioners on Thursday, September 15, 1983 at 7:30 p.m. at Chanhassen City Hall. The HRA will likely make their consultant selection following the presentations on September 15th. Please do not hesitate to contact me if you have any questions concerning the enclosed RFP. S incerel, Scott A. Martin Executive Director" ,g Enclosure +..+rn;w..,.- .�w.ds. .. .,..• ..... e,«. iss- t«a..z.a..- M'a:.'�+i.�.Ow.:" ', Z..: ":. :�.....<.: ��_: ,. ,a- CHANHASSEN HOUSING AND REDEVELOPMENT AUTHORITY Request For Proposal Chanhassen Downtown Redevelopment Project Marketing Program 7 r Project Primary To identify marketing strategies and design concepts which would help interest developers in the Chanhassen Downtown Redevelopment Project. Secondary To develop and update a marketing tool to be used by the Chanhassen Chamber of Commerce. Background Previous prospective developers have indicated that it is not economically feasible to redevelop Chanhassen's Central Business District as originally planned. The economy has limited construction of both residential and commercial projects during the past 3 years. There has been no major effort to date by the City to seek proposals from other developers for redevelopment of Downtown Chanhassen. There is a great deal of history, plans, research, and studies available for prospective developers. Most developers seem to be apprehensive towards working with local governments due to red tape, politics, etc. which can delay project implementation. Developers have many development alternatives to consider throughout the Metropolitan Area. Chanhassen may not have a strong business image. j The Chamber of Commerce has expressed a need to update its current literature which would help support the HRA's marketing effort. Program Goals and Objectives To create a unique marketing program to interest at least three developers in taking the next step of reviewing all the details and data generated on the Downtown Redevelopment Project up to this point in time. To receive at least one firm proposal from the developers contacted. To develop the interest and attention - getting devices necessary to get the developers to consider the opportunity in Downtown Chanhassen. To develop the sales and followup tools to continue fostering the developers interest. To update and standard4ze support literature for the Chamber of Commerce. To economize the production expenses by fulfilling as many Chamber needs as possible. To develop two targeted programs. To support the current business community and their employees. To lure prospective businesses to Chanhassen. To attract new area residents and to service and aid current residents. To help in fund raising and membership development for the Chamber. -2- Program Needs /Requirements Cost efficient (Chamber and HRA) Flexible but targeted r Multipurpose Projects community image and character Entices developer to take next p e t step Develops a community position and character r Brief /simple Update current data Fulfill Star City designation requirements To lure and service people and businesses Requirements by User HRA /City Chamber To state the need and offer To provide a lure to prospective businesses To show sincerity of city To provide data To lure or motivate developers To assist new residents to action To present an attractive, Need flexibility simple package To present market and economic To assist current businesses data To do a high quality Ability to update job - economically -3- The Market HRA /City Area /Local Developers Target 10 to 15 /qualify leads Experienced in shopping center development Experienced with Tax Increment Financing (Preferred) r -4- Chamber Current chamber members Prospective businesses New and prospective residents Tourists Potential Program Content HRA /City The Offer Positioning Statement Background /History Community Needs Requirements Support Data Available Studies Past Proposals City Data Planning Data Photographs Designs The Next Step -5- Introduction Community Profile Education Government Recreation Business /Industry Entertainment /Culture Agriculture The Future Transportation Organization Financial Aids Fact Sheet Taxes Utilities Medical Services Housing Maps Project Specifications Proposals should contain the following: - Background of Agency - Key Personnel to be assigned to the project - Listing of Governmental, Chamber of Commerce, and similar non- profit organization clients - Similar projects and their results - An overall marketing theme and creative ideas - Any art which would visually communicate marketing theme - outline of program development process /timing: Project must be completed within 60 days from date contract is awarded. - Agency Requirements of the HRA & Chamber to complete project - Project Development Costs (need not include production costs, since production of finished product may be performed by Chamber) RFP Mailing List Downtown Project Marketing Program Busch & Partners, Inc. 1111 West 22nd Street Minneapolis, MN 55405 Mr. Matt Crawford 309 Eden 100 Building 5100 Eden Avenue Edina, MN 55436 Mr. Arnie Hed 3860 Lone Cedar Circle Chaska, MN 55318 t Mr. James S. Kosmo, President Kosmo Companies 900 Bremer Tower St. Paul, MN 55101 Mr. Jack Robertson Executive Vice President Development Counselors, Inc. 2409 Russell Avenue South Minneapolis, MN 55405 Mr. Brad Solem, President The Ad Agency 711 Smith Avenue South St. Paul, MN 55107 I r CREATIVE COMMUNICATIONS, 3860 lone cedar circle, chaska, minnesota 553180 (612) 474 -5182 September 13, 1983 Mr. Scott A. Martin i Executive Director Chanhassen Housing and Redevelopment Authority 690 Coulter Drive P.O. Box 147 Chanhassen, Minnesota 55317 Dear Scott: Thank you for the Request for Proposal from the Chanhassen Housing and Redevelopment Authority. r As you are aware, I have been active in the Chanhassen Community and the Chanhassen Chamber of Commerce. Some of my personal I activities include: f 1. Developed a 32 -page tabloid publication promoting the Chanhassen community soliciting the advertising support to pay for printing and production. There was no cost to the Chamber of Commerce. 2. Held a "Progress Day" at the Chanhassen Dinner Theatre on behalf of the Chamber of Commerce arranging the appearance of Larry Wilson as a guest motivational jspeaker. 3. Coordinated the Chamber of Commerce sponsorship of I a Chanhassen Community Christmas Concert involving community churches. 4. Developed the goals and objectives and annual activities plan for the Chamber of Commerce in 1981 and 1982. r These activities were performed by Creative Communications as a contribution to the Chanhassen Community with no cost to the Chamber. r 1 Mr. Scott A. Martin Chanhassen Housing and Redevelopment Authority September 13, 1983 Page 2 In addition to these activities, we have investigated the following additional community growth and promotional opportunities. 1. We submitted a letter requesting that the Housing and Redevelopment Authority investigate the possi- bility of acquiring the Guy Petersen property to develop a gateway park to the City of Chanhassen. We met with Dr. Francis de Vos, University of Minne- sota Landscape Arboretum to solicit his support in the design of the City entrance park. 2. We have submitted a proposal to propogate Sugar Maple trees from the colorful Boley tree for use in plantings throughout the City. We have suggested a city -wide reforestation program to enhance the natural beauty of the community. 3. We have encouraged the development of a "FOLKETSHUS" community center that would include youth center, senior citizens activities, library, athletics, comunity theater, etc. We have met with the Chanhassen Legion to enlist their support in the development of the Community Center program. We have been very supportive of any activity that will enhance the natural beauty of Chanhassen and will encourage community development and community pride. We have worked with Dr. David McCollum assisting him on the difficulties in establishing a medical practice in a very segmented community. We have met with many different developers interested in the Chanhassen area to discuss opportunities. The most visible is the graphic arts complex including the Instant Web, Inc. and United Mailing, Inc. plants. The most recent is the Chanhassen Country Inn development adjacent to Lake Ann Park. We have attached our approach to marketing. We have used the attached structured marketing plan with many different clients including the 3M Company, Sperry Univac, Honeywell, Lutheran r u Page 3 Church in America, etc. Marketing is often complicated, yet simple. You identify a need and fill it or you create a need and fill it. In Chanhassen we believe we have to "create" the need. We noted in the RFP that "Project must be completed within 60 days from date of contract award ". This is not realistic. We would encourage the HRA members to examine the need for marketing and communications assistance over a 12 month period. The annual contract may be, in fact, extended if progress can be measured and the investment is cost - effective. We believe we are honest in our approach to marketing and positioning. We dp not want to create a marketing program r with gloss and glitter and little substance. We want to prepare a plan and assist in the execution that will provide our community with lasting benefits. As we have mentioned in many meetings, we believe the true objective in good planning and development is to increase _ the value of Chanhassen property i.e., a $100,000 home located in Crystal or Brooklyn Center would be worth $115,000 because it is located in Chanhassen. In my position as a marketing and management consultant to the graphic arts companies in Chanhassen, I am in an usually good position to provide the HRA and the Chanhassen Chamber — of Commerce with low cost or no cost promotional materials. The management of the Instant Web, Inc., The Press, and United Mailing, Inc. are very community minded and are supportive of good sound community relations. Sincerely, 0 Arnie Hed CREATIVE COMMUNICATIONS AH:jm Attachments: Market Planning Summary CITY OF CHANHASSEN Background Information RECEIVED SEP13 COMMUNITY DEVELOPMENT DEP-, MARKET PLANNING We will briefly outline the planning steps used in the development of a formalized marketing plan. We cannot determine a plan for the HRA or for the City of Chanhassen, but we can crystalize thinking, provide research, recognize problems and opportunities, outline creative strategies and prepare the materials need to achieve both short term and long term marketing objectives. PLANNING FORMAT 1. Background: This is the documentation of past efforts in the development of the community business district. This area should include all history relevant to the current development status. 2. Problems and Opportunities: This is a detailed accounting of strengths and weaknesses. A candid appraisal of where we have been, where we are and where we want to be and why. a. We believe that a_strong community usually has a strong bank, supportive newspaper and good schools. b. In discussions with Dr. McCollum, he has had to provide patient care at Methodist Hospital, St. Louis Park; St. Francis, Shakopee; and Ridgeview, Waconia. c. Chanhassen students attend schools in Minnetonka, Chaska and Eden Prairie. 3. Marketing Objectives: Establish precise (MBO) objectives that can be evaluated and measured to determine progress. We would want to establish both short and long range objectives. 4. Marketing Communications Plan: Based on the information gathered and studied, we will develop a plan that outlines the most appropriate and cost /effective marketing commun- ications answers to identified needs. a. We have an identity problem. Herb Bloomberg initiated a "frontier theme ". The City built a contemporary administrative building. The Country Inn plans a Colonial Inn and Conference Center. t^ t Planning -- 2 5. Timetable: This is the assignment of specific projects and responsibilities on a planned r realistic schedule. I 6. Budget: Estimating budgets can be relatively easy ^, when the first five steps have been detailed. At this point, we can determine and adjust our priori- ` ties to meet our objectives with dollars available. 7. Measurement: Although the results of marketing and communications programs are often difficult to measure, it is important to establish periodic progress reviews. Did we accomplish our stated objectives? Can we improve? Where can we improve? These are the basic planning steps recommended. My services include, not only the planning, but the creative and production requirements. I would personally work with the HRA, the City of Chanhassen, the Chamber of Commerce and others as directed to accomplish stated objectives. We recommend that the specifications in the HRA Request for Proposal be amended so that we would have a more realistic program for success. We recommend that the program be segmented into three phases. The first phase for 4 months would be market planning; the second phase for 4 months would be communications assignments determined through market planning; and the third phase is selective marketing by individual calls on potential developers. We would personally handle the assignment on the following fee schedule. PHASE I ......... .....................$6,000.00 PHASE II ....... ......................$6,000.00 PHASE III ...... ......................$2,000.00 I CITY OF CHANHASSEN RECEIVE® 5EP 131983 COMMUNITY DEVELOPMENT DEP BACKGROUND: Arnold W. Hed 3860 Lone Cedar Circle Chaska, MN 55318 COMMUNITY DEVELOPMENT BACKGROUND: 1. Marketing and development for a variety of business developments and shopping centers. a. Knollwood Plaza b. Hub Shopping Center C. Crystal Shopping Center d. White Bear Shopping Center e. Golden Valley Shopping Center f. Pierre Moran Shopping Center Elkhart, Indiana g. Orange Grove Shopping Center Los Angeles, California 2. Original incorporator of the International Council of Shopping Centers. 3. Owner of Community Enterprises, syndicator of "Help Build Opportunity" and "Hometown Satisfaction Guarantee" programs used in more than 600 business communities throughout the United States. 4. Speaker at various Chamber of Commerce and Rotary Clubs on "Hometown Business Development ". 5. Marketing consulting with Dayton Development Corporation, American Shopping Centers, Draper and Kramer, Inc., Rooney_ & Jones, Inc., Trach Construction, etc. CURRENT CLIENTS: 1. Marketing and management consultant with International Aquaculture Research Institute, Hagerman, ID; Zeigler Bros., Inc., Gardners, PA, pet foods, laboratory animal diets; Instant Web, Inc., United Mailing, Inc., Victory Envelope, Inc., graphic arts; Sperry, Univac Division, military defense electronics; MEBIO, INC., Luscerne, Switzerland, feed supplements. Background -- 2 PREVIOUS EXPERIENCE: 1. Vice President, Director of Marketing, Holden Industries, Inc. 2. Vice President, Account Supervisor, Darcy, MacManus, Massius Worldwide, St. Paul offices. 3. Partner Strandberg —Hed Advertising Agency. t CITY Of CHANHASSEN P =r'F -IVE© SEP13M COMMUNITY DEVELOPMENT DEPT i I COMPANIES 7 September 13, 1983 Scott Martin Executive Director Chanhassen HRA 690 Coulter Drive Chanhassen, MN 55317 Dear Mr. Martin: !I I am submitting this proposal in response to your Request for Proposal for the Chanhassen HRA. Attached are the responses we have to your specific agency requirements as well as our recommendation as to the marketing theme, ideas, and strategy. Please note that we have not changed our original proposal. We feel very com- fortable with the general direction and would only change a few of the detailed elements such as: • replacing the design of the ribbon with an imprinted tree with the message "we'll give you the right environment. • beefing up the package for the developers by printing the cover on an oak vaneer. • consider the -use of a tape recorded message sent along with - the introductory package. • we would also recommend the chamber seek out a $5,000 tourism grant. If you or the HRA has any questions, we would be happy to answer them at your convenience. LC:sk Enclosures CITY Of CHANHASSEH SEP 13198 COMMUNITY DEVELOPMENT DE ?` KOSMO COMPANIES 900 BREMERTOWER ST. PAUL, MINNESOTA 55101 612 - 292 -1992 Our Qualifications Very briefly, we feel Kosmo Companies is a sound candidate for such a project in that: • we are very familiar with the city and with the downtown project. • we have worked with other similar clients and have extensive knowledge of direct mail and sales presentations. • we have significant retail knowledge and many retail customers. • we have useful contacts, such as the Saint Paul Port Authority and other contractor and developer groups. • we know the tourism market which would significantly help in market- ing with the Chamber. t • we have worked with developers and understand their needs and con- cerns. • the agency has four individuals with advanced degrees in marketing and marketing research. • the agency is positioned to provide unique marketing tools for practical marketing budgets. • our clients are our best reference and we welcome your inquiries. • we have a broad background and knowledge of similar chamber projects. Kosmo Companies Agency Background Kosmo Companies is a full service marketing and advertising agency serving the retail, non - profit, hospitality, attractions and medical industries. Our client base has been developed over the last few years into a substantial list of local and regional customers. Current customers are now getting us into both national and international marketing. I have attached a list of references as well as clients for your review. mo Companies Personnel Assigned to Chanhassen The project group assigned to your account would be Ladd Conrad, as supervisor, Val Johnson and Susan Fournier as art directors, and Jim Kosmo as PR supervisor (if needed). Ladd Conrad As you are aware, Mr. Conrad is a resident of Chanhassen and is very familiar with the city and more specifically the downtown project. He is also familiar with retailing and commercial development as a result of his employment with Target and his work on many retail and food accounts. Conrad also holds an MBA in marketing and research. Jim Kosmo A national award winning newspaper journalist in the 1960's, Kosmo was the first director of public information and advertising for the Twin Cities Area Metropolitan Transit Commission. He joined lVorthstar Public Relations, Inc. in 1971 (subsidiary of Campbell- Mithun Adver- tising) as senior account executive and editorial services manager and supervised major accounts such as Piper, Jaffray & Hopwood, F & M Savings Bank, Bemis Company, Radisson Corporation, and Trane Air Con= ditioning. In 1976 he was named director of communications for the Minnesota Medical Association and later was promoted to a similar posi- tion with the American Medical Association (Chicago, Ill.). He returned to Minnesota in 1979 as president of the family boating business, Padelford Packet Boat Co., Inc. an excursion and charter boat company. Kosmo holds a B.A. in Journalism from Metropolitan State University, M.B.A. from the College of St. Thomas, and has been awarded accredita- tion by the Public Relations Society of America. erie Johnson Formerly the art director /production manager with Robert Platt Adver- tising, St. Paul, Ms. Johnson was graduated from the College of St. Catherine and has completed post - graduate studies in art and design with the Institute of Advanced Advertising Studies and Minneapolis College of Art and Design. She is a member of Delta Phi Delta, art honor fraternity. Susan Fournier Nis. Fournier serves as graphic artist and art director for Kosmo Com- panies. Previously, she had served for 10 years as art teacher in Hopkins, Minn. and Rockford, Ill. As a practicing artist, she has participated in several local art shows and continues to teach on a limited basis. , mo Companies Listing of Governmental, Chamber of Commerce, and Similar Non Profit Organization Clients Red Wing Pottery Association Red Wing Tourism & Promotion Association North Metro Convention and Hospitality Association St. Paul Exhibition, Convention and Visitor's Bureau St. Paul Divison of Public Health Indian Health Board Family Services of Greater St. Paul St. Paul Downtown Council St. Paul Chamber Minnesota Metroland, Inc. Red Wing Chamber KOsmo ComDani @S Similar Projects & Their Results Red Wing The most recent project we have worked on which relates to the Chan- hassen project is our tourism project for the City of Red Wing. Their objective is to lure tourists (not developers) to the city.- Kosmo Companies developed a total marketing program which would develop an overall theme for the community, but would also treat each participating company on an individual basis. Clients ranged from the St. James Hotel to Red Wing Pottery, to restaurants and attractions. End products included logos, billboards, brochures, radio advertising, and major PR exposure. Final results for this program are not tallied as of yet, but we are aware of some dramatic sales increases for many of the area's merchants (over 50% increases). St. Paul Civic Center This project was aimed at increasing convention business in the city of St. Paul. The cornerstone of the program which we presented and developed was a direct mail brochure, directed at corporate convention planners. The brochure and sales solicitation activity had to interest planners in St. Paul as well as sell the technical aspects of the building itself. Results of the program are still not conclusive but sales are up over 10% for future conventions. Micro Research, Inc. As a new research and development firm, Micro Research needed a marketing plan to target company presidents and research managers- -the key decision makers in new product development. A direct mail program was initiated aimed at select industries within a 500 miles radius. The program was implemented in steps so as to insure the sales efforts could follow up all leads. Clients and sales have increased to a point that the marketing campaign had to be temporarily halted. mo Companies I Outline of Program Action Timing Approve concept, goal, direction. 10 Define Chamber role and financial contribution. 20 Review program in a test developer and with a 20 city or agency already familiar with tax increment districts. Define the offer. Position Chanhassen. 25 Define specific contents of the program and 25 support data needed. Data collection and sorting 25 Photograph development Writing /editing Detailed target market 30 Graphics design 30 Layout Review 45 Production- printing 40 Output -final product 50 Kosmo Como anies 0 Agency Requirements To complete the project in a timely basis the HRA or executive director must be willing to spend significant time in the development and review of the literature. The HRA must be willing to define what they are offering to lure a potential developer. They must be willing to spend the time and seek the support for a positioning statement of the community's interest and intent. Because of the nature of this marketing program, the HRAs director and HRA members must be willing to make follow up sales calls on the phone and in person. The sales material and attention getting devices will be only as good as the offer and the quality and sincerity of the sales effort. Assigning one person to make day -to -day decisions on material and artistic content is important for speed and continuity. mo Companies Project Cost The above costs are daximum amounts based on the scope of the project at the current time. Costs not incurred will not be billed. Expenses not covered include printing, photo separations, studio recording or any additional out -of- pocket expenses. o Companies Task HRA Chamber ;i7 Detailed Concept $2,500 0 . _ Photography 500 500 Copywriting 500 500 Art 500 100. Layout /Design 500 500 Typesetting 450 360 Keyline 400 360 Total $5,350 $2,320 The above costs are daximum amounts based on the scope of the project at the current time. Costs not incurred will not be billed. Expenses not covered include printing, photo separations, studio recording or any additional out -of- pocket expenses. o Companies 4. CHANHASSEN HOUSING & REDEVELOPMENT AUTHORITY Iml 690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317 (612) 937 -1900 MEMORANDUM TO: Chanhassen Housing and Redevelopment Authority FROM: Scott A. Martin, Executive Director DATE: September 8, 1983 SUBJ: Adoption of 1984 HRA Operating Budget Attached for your review and approval is my proposed 1984 BRA Operating Budget. No modifications have been made to the proposed budget since your initial review on August 18, 1983. t In addition to operational /administrative expenses, the 1984 Budget includes HRA Revenue projections and long -term debt committments . For a broader perspective of the HRA's financial condition than is available within the annual budget, you should refer to the recently updated "Tax Increment Financing Plan" (which is included in this packet for formal adoption under Agenda Item #5). Following your adoption of this budget, it will be forwarded to the City Council for their approval. Approval of the attached HRA Resolution #83 -4 (adopting the 1984 HRA Budget) is recommended. Attachments 1. Proposed 1984 HRA Operating Budget. 2. HRA Resolution #83 -4. CHANHASSEN HOUSING AND REDEVELOPMENT AUTHORITY PROPOSED 1984 OPERATING BUDGET 'TAX INCR94ENT FUND #460 Long -Term Debt: Special Assessment Payments 14,049 134,800 67,441, 70,303 Bonded Debt Service 558,142 340,000 823,300* 456,568 Total Long -Term Debt: 572,191 474,800 890,741 526,871 Total Expenditures 630,923 550,520 1,026,571 690,521 *Includes $265,000 required to fund escrow for 1983 Refunding Bond Issue. 4 _ 1982 1983 1983 1984 REVENUE: Actual Budgeted Estimated Budget Tax Increment Receipts $326,696 $464,000 $402,000 $611,000 Interest Earnings 71,405 33,500 30,000 -0- Building Rental -0- -0- 19,500 1,500 Other 182 -0- -0- -0- Total Revenue 348,283 497,500 451,500 612,500 EXPENDITURES: Current: Personnel Services 39,372 42,420 40,830 44,900 Materials & Supplies 33 500 350 500 Contractual Services 19,327 32,800 94,650 118,250 Total Current Expenditures 58,732 75,720 135,830 163,650 Long -Term Debt: Special Assessment Payments 14,049 134,800 67,441, 70,303 Bonded Debt Service 558,142 340,000 823,300* 456,568 Total Long -Term Debt: 572,191 474,800 890,741 526,871 Total Expenditures 630,923 550,520 1,026,571 690,521 *Includes $265,000 required to fund escrow for 1983 Refunding Bond Issue. 4 _ i r i CHANHASSEN HOUSING AND REDEVELOPMENT AUTHORITY TAX INCREMENT FUND #460 PROPOSED 1984 OPERATING BUDGET DETAIL Estimated 1983 Contractual Services 4300 Consulting Fees 20,000 4310 Telephone 100 4320 Utilities t 38,000 4340 Printing and Publishing 250 4360 Subscriptions and Memberships 200 4370 Travel and Training 1,200 4375 Promotional Expenses 1,500 4420 Administrative Fees (Overhead) 11,100 4481 Insurance, Buildings 3,900 4509 Remittance to Other Agencies 4,400 4510 Repair & Maintenance -Bldg. & Grounds 14,000 4751 Awarded Construction Contracts -0- Total Contractual Services $94,650 Proposed 1984 30,000 150 40,000* 500 250 750 2,000 1-1,900 4,200* 22,000* 2,500* 4,000 $118,250 *Expenses for Operation & Maintenance of old Instant Web Building ($68,700). CITY OF CHANHASSEN HOUSING AND REDEVELOPMENT AUTHORITY RESOLUTION DATED: September 15, 1983 RESOLUTION NO. 83 -4 MOTION BY COMMISSIONER: SECONDED BY COMMISSIONER: RESOLUTION ADOPTING 1984 BRA OPERATING BUDGET WHEREAS, the HRA Executive Director has prepared and recommended a 1984 Operating Budget for the HRA; and WHEREAS, said recommended Budget was presented to this Authority and duly reviewed and discusssed at regular meetings held on August 18 and September 15, 1983; and WHEREAS, this Authority finds that said Operating Budget adequately responds to the anticipated needs of this Authority during 1984, and WHEREAS, this Authority finds that said Budget is based upon reasonable revenue assumptions to the best of our knowledge. NOW, THEREFORE, BE IT RESOLVED by the Commissioners of the Chanhassen Housing and Redevelopment Authority that the 1984 Operating Budget (identified as Tax Increment Fund #460) is hereby approved as presented by the Executive Director, and as attached and made a part of this Resolution. Adopted this 15th day of September, 1983. Cliff Whitehill, Chairman ATTEST: Scott A. Martin, Executive Director Yes No Absent E, CHANHASSEN HOUSING & REDEVELOPMENT AUTHORITY 690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317 (612) 937 -1900 MEMORANDUM TO: Chanhassen Housing and Redevelopment Authority -- FROM: Scott A. Martin, Executive Director kpK DATE: September 9, 1983 SUBJ: Agreement Adopting Tax Increment Financing Plan and Establishing Procedures for the Accounting and Reporting of Tax Increment Transactions Attached for your review and appproval is the above referenced proposed agreement between the City and HRA. You may recall that the City /HRA Auditor (DeLaHunt Voto and Company) strongly recommended earlier this year that such an agreement be prepared in order to guarantee the City receipt of sufficient tax increment funds to meet outstanding debt obliga- tions of the City incurred to finance Downtown Redevelopment Project Area activities. Preparation of this agreement was delayed primarily due to our recent change in legal counsel. This agreement prioritizes the use of future Tax Increment funds in the event actual receipts are insufficient to cover actual HRA expenses (see Paragraph III of Agreement). The agreement also formally adopts the "Tax Increment Financing Plan" developed by the Auditor earlier this year. (You have reviewed this document on two separate occasions during the past several months.) An up -to -date edition of the financing plan is being prepared by DeLaHunt Voto, but is not completed as of this date. A copy of the Plan will be delivered to you on Monday for your review prior to next Thursday's meeting. Approval of the proposed Agreement is recommended. Attachments 1. Letter from Jim Holmes dated September 2. Proposed Agreement between City and HRA Transactions. i 8, 1983. re: Tax Increment P JAMES S. HOLMES r' Allornev at Law September 8, 1983 City Council City of Chanhassen 690 Coulter Drive — Chanhassen, Minnesota 55317 HOLMES & GRAVEN CHARTERED 470 Pillsbury Center. Minneapolis, Minnesota 55402 Telephone: 612/338 -1177 RE: Agreement Between City of Chanhassen and Chanhassen HRA Establishing Fund Accounting System Our File No. CH130 -3 Ladies and Gentlemen: The Chanhassen Housing and Redevelopment Authority (the "Authority ") has asked our office to draft an agreement between the Authority and the City 'of Chanhassen (the "City ") to govern the allocation of tax increment funds received from the Chanhassen Downtown Redevelopment Project Area (the "Project Area "). The City has expressed concern that it be guaranteed receipt of sufficient tax increment funds to meet the financial obligations it incurred to finance the Project Area. The Authority desires to maintain its autonomy in developing and implementing its annual budget. We have drafted an agreement which we believe addresses both entities' concerns and which we believe comports with the legal requirements for the public bodies involved. The basic premise underlying the proposed agreement is that the Carver County Auditor will make tax increment payments directly to the Authority. Minnesota Statutes Section 462.585, Subd. 3 provides that "the county treasurer shall rem t to the [housing and redevelopment] authority, instead of the taxing districts," the tax increment revenue. Therefore, it would be clearly contrary to law to require the county auditor to pay the tax increment funds generated by the Project Area directly to the City. The proposed agreement further provides that the Authority will prepare its own budget (the "Budget ") which it will submit to the City for review and comment. The agreement sets forth the revenue assumptions which must be used. If the Budget is in balance, the City's only role is to review and comment. If the Budget contemplates Authority borrowing from the City to meet any of its obligations, whether debt service, assessment reduction payments or operating expenses, then the City has the right to approve or disapprove the Budget. Because of the City's concern over protecting outstanding debt obligations, Section III of the Agreement attempts to more specifically deal with fund allocation. The Authority must pay over tax increment for debt service upon receipt and must City Council September 8, 1983 Page 2 deposit in its own accounts receipts which will be required to meet assessment reduction obligations. It is our legal opinion that while the City may review and consult with the Authority regarding the Budget, control of the Budget by the City would be an unlawful delegation of the Authority's statutory obligations under Section 462.445 of the Minnesota Statutes. It has long been the law in Minnesota that a political subdivision of the state may not delegate administrative powers which call for judgment or discretion without the express authorization of state statute. The Alexander Co. v. City of Owatonna, 222 Minn. 312, 24 N.W.2d 244 (1946). Section 462.445, Subd. 1(3) allows an authority to delegate powers and duties to an agent or employee but does not allow such delegation to another public body Subd. 4(2) and Subd. 5 of the same statute contain other provisions allowing limited delegation of an authority's duties and powers, but there is nothing which allows an authority to make a wholesale assignment of one of its major discretionary responsibilities back to the municipality which created it. The Board of Commissioners of the Authority cannot legally abdicate their responsibility to exercise judgment and discretion with respect to administering the Project Area. In addition, the Authority's only obligation pursuant to the bond sales resolution, the redevelopment plan and the pledge agreement is to allocate to the City amounts sufficient to pay principal and interest on the bonds as those amounts become due. Those documents impose no obligation on the Authority to pledge to the City all the tax increment as received. The Tax Increment Agreement, in aragraph 1, pledges to the City "all tax increment payments made to the Authority] by the Carver County Auditor from the Project Area ... for the purposes of paying all bonds of the City ... issued ... for the financing of public redevelopment costs in the Project Area ..." Paragraph 5 directs segregation of revenues by the Authority on its bonds and records and payment to the City for debt service on the bonds. The bond sales resolution comports with the language by providing merely that "all tax increments ... from the Project Area ... received by the City from the [HRA] ... pursuant to the Tax Increment Agreement ... are pledged to the Debt Service Fund." The City is therefore not legally entitled to receive all the tax increment revenues, nor is it entitled to make the sole determination as to the allocation of those revenues. The City is not without recourse, however, to insure that the tax increment revenues are first used to pay the debt service obligation the City assumed in order to finance the Project Area. The proposed agreement protects the City by giving the City's debt service obligations first priority in the allocation of the tax increment revenues. The Authority is required to allocate the tax increment revenues it receives first to the City's tax increment bonds and then to assessment reduction obligations which, in turn, service part of the City's assessment bonds. Only after the Authority has allocated funds sufficient to pay allocable portions of these City obligations is the Authority allowed to determine how to expend any remaining tax increment revenues. ,Ir , i 7 r City Council September 8, 1983 Page 3 It is our hope that this agreement will insure that the tax increment revenues will not be used for any purpose until the City has first been paid, while at the same time preserving the Authority's autonomy in the preparation of its Budget. If you have any questions, please feel free to call me. 0 i A AGREEMENT BETWEEN THE CITY OF CHANHASSEN AND THE CHANHASSEN HOUSING AND REDEVELOPMENT AUTHORITY ESTABLISHING PROCEDURES FOR THE ACCOUNTING AND REPORTING OF TAX INCREMENT TRANSACTIONS THIS AGREEMENT, made and entered into this day of , 1983, by and between the City of Chanhassen, Minnesota, a municipal corporation organized and existing under the Laws of the State of Minnesota (the "City "), and the Housing and Redevelopment Authority in and for the City of Chanhassen, Minnesota, a public body corporate and politic formed and existing under the Laws of the United States of America and the State of Minnesota (the "Authority "). WITNESSETH: WHEREAS, the Authority has approved a redevelopment project known as "Chanhassen Downtown Redevelopment'Project" (the "Project Area "), and has, by appropriate action applied to the City Council for approval of the Project Area; and WHEREAS, the City has by resolution duly approved the Project Area including the establishment of tax increment financing therein; and WHEREAS, the Carver County Auditor pursuant to law makes all tax _ increment payments to the Authority; and WHEREAS, Minnesota Statutes, 55462.585, 273.74 and 273.77 authorize tax increment agreements between a Housing and Redevelopment Authority and the municipality within which such redevelopment projects are situated; and WHEREAS, the City and the Authority have entered into such a tax increment agreement (the "Tax Increment Pledge Agreement "), which is dated June 15, 1981, wherein the Authority has pledged certain tax increment received from the Carver County Auditor to the City for the purpose of paying the principal of and interest on any bonds issued by the City in aid of the Project Area; and WHEREAS, the City and the Authority have entered into a Joint Powers Agreement for Accounting Services (the "Accounting Agreement ") dated April 5, 1982, wherein the Authority has agreed to utilize and the City agreed to make available certain accounting services of the City Treasurer's office; and WHEREAS, the Authority has entered into various assessment agreements ( "Assessment Agreements ") with developers of sites within the Project Area whereby the Authority has contractually agreed to make payments from tax increment collected in the Project Area to or on behalf of the developer in reduction of special assessments levied against such sites; and WHEREAS, the parties hereto wish to refine the aforesaid agreements and establish specific procedures for receiving, accounting and reporting tax increment payments made by the Carver County Auditor to the Authority in connection with debt service on City tax increment and special assessment general obligation bonds. -1- NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter contained, it is agreed by and between the parties hereto as follows: I. Preparation and Submittal to City of Authority Budget. On or before September 1st of each year the Authority shall prepare and submit to the City an operating budget (the 'Budget ") for the following calendar year. The Budget format and assumptions for estimated tax increment receipts shall be substantially consistent with the Tax Increment Financing Plan, dated , hereby adopted by the City and attached hereto as Exhibit A and incorporated herein by reference. II. City Approval of Budget. A. The City shall have the right to review and comment upon the Budget during its regular budgetary process. The Authority shall provide such additional material,. information and data as the City may reasonably request. Comments of the City in reviewing the Budget shall be considered by the Authority at a regular or special meeting of the Board of Commissioners thereof. B. Notwithstandirng paragraph ILA, above, in the event that the Budget reflects a need to borrow funds from the City to pay any portion of Authority annual expenditures, whether for debt service, assessment reduction payments or operating expenses, then the City shall have the right to approve or disapprove the Budget. If under such circumstances the Budget is disapproved by the City, the City may require the Authority to submit a new Budget or may assume the responsibility of preparing the Budget for that year only. III. Pavments for Authority /City Obligations. It is agreed by the parties that in the event actual Receipts are insufficient to cover actual Authority expenses, the following priority will exist: -- First, to scheduled debt service on any City bonds to which tax increment has been pledged; -- Second, to payments pursuant to existing Assessment Reduction Agreements; and Third, to all other Authority expenses. In order to assure implementation of this paragraph III, the following procedures shall be followed: A. Within ten (10) days of receipt by the Authority of tax increment payments from the Carver County Auditor (expected to be on or about July 1st and December 1st of each year), the Authority shall remit to the City, for deposit in the appropriate City debt service account, an amount equal to fifty -two and one -half percent (52.5 %) of scheduled principal of and interest on outstanding tax increment general obligation bonds to become due during the Budget year. -2- B. Within ten (10) days of receipt by the Authority of each tax increment payment from the Carver County Auditor (expected to be on or about July 1st and December 1st of each year), the Authority shall deposit in an assessment reduction account established and maintained by the Authority an amount equal to fifty percent (50 %) of all assessment reduction payments due or to become due pursuant to existing Assessment Agreements during the Budget year. C. The balance of any tax increment Receipt may be deposited or expended by the Authority in accordance with the Budget. The Authority shall refrain from establishment of any new program or the incurring of any additional obligation which would impair its ability to make the payments and deposits described in this paragraph; provided, however, that the incurring of obligations which can reasonably be expected to be serviced by projected tax increment revenues, as evidenced by the Budget, shall not constitute such an impairment. IV. Titles of Sections. Any titles of the parties and sections of this agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting this agreement. f IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed the day and year first above written. ^, (SEAL) - (SEAL) CITY OF CHANHASSEN By Mayor By City Manager HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF CHANHASSEN, MINNESOTA By Chairman By Executive Director -3- 0 DELAHUNT UOTO & CO., LTD. CERTIFIED PUBLIC ACCOUNTANTS Birch Lake Professional Building • 1310 E. Hwy. 96 s White Bear Lake, MN 55110 • Phone 426 -3263 September 12, 1983 RONALD 1. DELAHUNT, RETIRED ROBERT J. VOTO, CPA TIMOTHY E. REARDON, CPA ROBERT G. TAUTGES, CPA Mr. Scott Martin Executive Director Chanhassen BRA 690 Coulter Drive Chanhassen, MN 55317 Dear Scott: Transmitted herewith are fifteen copies of the updated TAX INCREMENT DISTRICT #1 (CARVER COUNTY) TAX INCREMENT FINANCING PLAN dated August 1983. Several high- lights of the updated projections are as follows: Debt Service Payments. The new debt service schedule has been included. Total payments required (including amounts to fund the escrow) have been reduced by over $388,000. This savings will directly (and favorably) effect the amount of monies available for other purposes consistent with the overall tax increment plan. These savings (by year) are as follows: COMMUNITY DEVELOPMENT DEPT MEMBERS OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • PRIVATE COMPANIES PRACTICE SECTION MINNESOTA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS MUNICIPAL FINANCE OFFICERS ASSOCIATION • MINNESOTA ASSOCIATION OF SCHOOL BUSINESS OFFICIALS 5 Required Transfers to Debt Service Fund Before After Cumulative Advance Advance Increase Increase Year Refunding Refunding (Decrease) (Decrease) 1983 $ 479,238 $ 644,619 $ 165,381 $165,381 1984 563,256 477,683 (85,573) 79,808 1985 567,881 483,445 (84,436) (4,628) 1986 583,300 502,929 (80,371) (84,999) 1987 599,861 533,521 (66,340) (151,339) 1988 620,797 601,838 (18,959) (170,298) 1989 659,031 665,342 6,311 (163,987) 1990 691,511 693,843 2,332 (161,655) 1991 718,248 731,472 13,224 (148,431) 1992 740,331 759,257 18,926 (129,505) 1993 778,669 802,838 24,169 (105,336) 1994 807,841 836,025 28,184 (77,152) 1995 829,100 871,551 42,451 (34,701) 1996 862,978 911,579 48,601 13,900 1997 885,657 941,358 55,701 69,601 1998 888,438 661,388 (227,050) (157,449) 1999 351,726 120,560 (231,166) (388,615) Total $11,627,863 $11,239,248 $(388,615) CITY OF CHANHASSEN RECEIVED sr p 1293 COMMUNITY DEVELOPMENT DEPT MEMBERS OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS • PRIVATE COMPANIES PRACTICE SECTION MINNESOTA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS MUNICIPAL FINANCE OFFICERS ASSOCIATION • MINNESOTA ASSOCIATION OF SCHOOL BUSINESS OFFICIALS 5 'Mr. Scott Martin _ September 12, 1983 Page 2 r The preceding schedule indicates that required transfers from the Tax Increment Fund actually increased in 1983 and on a cumulative basis, the required transfers are increased through 1984. For 1985 through 1988, however, the cumulative savings is $170,298. The adjusted transfer schedule indicates that overall savings are $388,615. In marketing the bonds, a change from "August only" principal payments was made to have principal retired in both February and August. This change, in turn, requires greater balances to be maintained at December 31 of each given year in order to retire the higher February (principal included) payments. The preceding schedule reflects all of the above changes. Tax Increment Collections. An additional Exhibit (1 -B) has been added to present collections of tax increments at 90% (in addition to 95% and 1008). Actual collections compared to projections provided by your consulting engi- neer have been as follows: July, 1982 December, 1982 February, 1983 Subtotal July, 1983 December, 1983 Projected By Consulting Engineer Dated February 16, 1983 151,505 138,611 32,235 322,351 193,748 177,259 Percent Actual Collected 167,063 110.278 142,268 102.64 21,062 65.34 330,393 170,402 87.95 NOT AVAILABLE The above schedule is not sufficient to conclude that collections will be e less than projected on a long term basis. Commercial property generally is allowed three years before tax forfeit proceedings begin. The HRA, however, should be concerned with short -term effects of reduced collections as well as long term results. At 1008 collection, the financial projections indi- cate a deficit of $147,000 in 1984 with the deficit continuing until 1985. Collections of less than 1008 will increase the projected deficits as pre- sented in Exhibits 1 -A and 1 -B. We recommend that the HRA monitor actual collections compared to projected collections and determine if plan adjust - ment actions are required. Such monitoring procedures should include detailed supporting data relating to specific parcels as well as summary revenue (actual and projected) information. 'Mr. Scott Martin September 12, 1983 r. Page 3 I _ Administrative Expenditures. A major change from the original February, f 1983 projection is the change in administrative expenditures. A comparison of projected expenditures is as follows: !- Administrative Expenditures February, 1983 August, 1983 Projection Projection Increase r 1983 $ 90,332 $135,830 $ 45,498 1984 94,849 163,650 68,801 1985 99,591 171,833 - 72,242 1986 104,570 104,683 113 1987 109,799 109,917 118 Total five year increase $186,772 _ The above change in projection is primarily the result of higher than anti - cipated building maintenance expenditures. These increased expenditures adversely effect the projections and substantially negate the positive effects of the advance refunding and the residual construction transfer. The above schedule is based upon disposal of the building by the end of 1985. Maintaining the building beyond that point will further reduce projections. Earlier disposal, however, will improve projections for all .- years. The benefits of converting the building could favorably effect the projections in several ways. First, the burden of operating expenditures would be eliminated. Second, the sale of the building could produce imme- diate sale proceeds and more importantly, if under commercial use, the tax increments collected would be a continuing and escalating benefit. r Project /Program Financing. There have been three adjustments in this area as follows: • Updated amounts of required transfers from the Tax Increment Fund to the Permanent Improvement Bonds of 1983 has been substituted for the estimated transfers of the February 1983 report. • The pending assessment roll for United Mailing will not be payable before 1985. Scheduled payments under the special assessment reduc- tion program for the pending roll have been moved forward by one year (first payment in 1985 instead of 1984). • Energy control assessment reduction payments have been included. The proposed transfers to the $1,330,000 Permanent Improvement Bonds of 1983 Fund in lieu of property taxes are more fully explained in Note 5 of the Tax Increment Financing Plan. These proposed transfers are basically for impro- vements to City owned land which was acquired to achieve the preliminary phases of the overall plan. The February report had estimated $1,118,000 of such transfers. The actual amounts required total $1,150,000. The official resolution awarding the bond sale did not include the required property tax levies. We understand that an amendment to the resolution will be made in -, the amounts presented in Schedule 1 -B. . 'Mr. Scott Martin September 12, 1983 r Page 4 r Authorization and accounting procedures. In order to implement and maintain the Tax Increment Financing Plan, several authorizations and related accounting procedures must be effected. For your convenience, the following r is a listing of such procedures: ' During 1983, pass a resolution authorizing the closing of the Ring Road Construction Fund (604) to the Tax Increment Debt Service Fund (306). • During 1983, record the above transfer between funds. The projec- tions estimate the amount available to be $157,000. The actual amount at the time of authorization, however, should be used to effectively close Fund 604. • During 1983, approve the transfer from the Tax Increment #1 Fund to the Tax Increment Debt Service Fund of approximately $644,619 as per Exhibit 3 of the Report. This amount can be adjusted depending upon the actual residual construction fund transfer (i.e. transfer can be reduced if the construction closing provides greater than $157,000 and vice versa). • For 1984 and future years, effect a blanket authorization to transfer one -half of the annual required transfer (per Exhibit 4) each July and December from the Tax Increment #1 Fund to the Tax Increment Debt Service Fund. This authorization should be a part of the City /HRA agreement which is currently being drafted. • For 1986 and future years, an official action cancelling the sche- duled property tax levies of the $1,330,000 Permanent Improvement Bonds of 1983 should be effected. In the same action, authorization to transfer a like amount from the Tax Increment #1 Fund to the 1983 Permanent Improvement Bond Fund should be effected. As discussed earlier, these transfers are detailed on Schedule 1 -B and Note 5 of the Report. • For 1983 and future years, an interfund payment of assessments should be recorded. The assessment reduction expenditures should be recorded with the payment received in the various special assessment debt service funds. The amounts of these payments are detailed in Schedule 1 -B of the Report. We recommend that a check list of required transactions be made to assure that all transactions are effected on a timely basis. ` .Mr. Scott Martin September 12, 1983 Page 5 I 1 Summary. The updated financial projections for Tax Increment District #1 indicate that deficits will be maintained at least through 1986. Careful monitoring of projected to actual results will allow the HRA to effectively manage the financial position of the Tax Increment Fund. A word processing disk (compatible with the City's word processor) is available from our office to assist in the internal updating of projections as circumstances change. Please advise us of your intentions to internally update the pro- . jections to provide you with the disk and instructions to update. If you have further questions or wish to discuss the contents of this letter, please advise. Very truly yours, DE LA HUNT VOTO & CEO. ^, LTD. 14 qt / if Robert G. Tautges, C RGT /111 enc. CC: Correspondence File Financial Statement File 0 %a. CHANHASSEN HOUSING & REDEVELOPMENT AUTHORITY Iml 690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317 (612) 937 -1900 MEMORANDUM TO: Chanhassen Housing and.Redevelopment Authority FROM: Scott A. Martin, Executive Director 0A DATE: September 9, 1983 SUBJ: Listing Agreement with Klingelhutz- Cravens Realtors for Downtown Redevelopment Project Properties On May 19, 1983, Al Klingelhutz and Earl Cravens presented a request to the HRA to be paid a fee by the HRA if they were suc- cessful in producing a developer for the Downtown Redevelopment Project (see attached). The HRA was receptive to their proposal at that time, but delayed any formal action on this request pending receipt of a proposed legal agreement from them which outlines the specifics of their proposal. The attached "Open Listing Form" was prepared by Klingelhutz- Cravens and delivered to me on September 2, 1983. I have reviewed the proposed listing agreement and am rather uncomfort- able with its content (or lack thereof). I have provided Jim Holmes with a copy of the agreement and have asked for his opinion concerning potential legal issues and HRA liability exposure if approved in its current form. Mr. Holmes was unable to complete his review and response on such short notice, but has assured me that such will be available for your consideration during next Thursday's meeting. Attachments 1. Letter from Klingelhutz- Cravens Realtors dated May 18, 1983. 2. HRA Minutes of May 19, 1983. 3. "Open Listing Form" Prepared by Klingelhutz- Cravens Realtors (dated Received September 2, 1983). i x' May 18, 1983 City of Chanhassen Housing and Redevelopment Authority Chanhassen, Minnesota 55317 Dear HRA Member: We are very interested in the orderly development of all of Chanhassen and our opinion is that the development of the Downtown Redevelopment plan is crucial to the healthy development of the City of Chanhassen. P We are currently talking to a couple of developers who are capable of developing the project to the satisfaction of the HRA and the City of Chanhassen. We propose that in the event Klingelhutz— Cravens, Realtors were successful in producing a developer, who was satisfactory to the HRA, and subsequently a contract relationship could be reached between the developer and the HRA, that Klingelhutz— Cravens, Realtors be paid a fee by the HRA equal to 5% of all of the land and buildings purchased by the developer in downtown Chanhassen. We would be expending considerable time and effort in locating and consumating a contractual agreement between the HRA and the developer and feel that the benefits to the City would by far outweigh the costs involved. We are not proposing that our firm take an exclusive listing on the HRA properties, but we do feel that, in the event, we are able to produce a satisfactory developer to do the job, we should be compen- sated. Your consideration of this proposal would be greatly appreciated. Sincerely, KLINCELHUTZ— CRAVENS, REALTORS Al H. Klingelhutz E.W. Cravens , 7811 GREAT PLAINS BLVD., P.O. BOX 427, CHANHASSEN, MN 55.317 • (612) 934 -0000 =inute Review of Housing Needs Survey The results of the recently completed Housing Survey were briefly reviewed and discussed. Martin recommended that no specific action be taken on this item until he had an opportunity to analyze the responses. Martin added that he will be meeting with representatives from HUD and Hennepin County to determine what direction the City should be taking in regards to the establish- ment of housing programs and the use of Community Development Block Grant Funds. Insurance Settlement for Repair of Old Instant web Buildin Martin reported on the status of the proposed insurance settle- , ment for repair of the area damaged by collapse of a section of roof in the Old Instant Web Building. He explained that only r $8,600 would be saved if the interior were not fully restored, since the insurance company applied a 50% depreciation factor to this area if not restored under the HRA's Replacement Cost Coverage. Russell moved, seconded by Horn, to approve full restoration and repair of all damaged areas in the building, since cost savings for only partial restoration were minimal. All voted in favor and the motion carried. HRA Legal Services Martin reported on the recent change in HRA Legal Services preci- pitated by the appointment of a new City Attorney. He explained that City Attorney, Roger Knutson of the law firm of Grannis and Grannis would be responsible in the future for providing legal assistance to the HRA on routine matters. The law firm of Holmes and Graven will continue to be used for more complex legal mat- ters, since their office specializes in HRA and Tax Increment law. r Appointment to HRA Martin reported that Councilwoman Pat Swenson was appointed by the Mayor and Council to fill the expiring term of Chairman Bill Gullickson, effective June 1, 1983. The Commissioners expressed their thanks to Bill Gullickson for his many years of service on the HRA and wished him the best of luck in the future. Request for Broker's Fee- Klingelhutz & Cravens Realtors Earl Cravens was present to seek an agreement with the HRA that would provide his firm with a brokerage fee if they were to pro - 7 duce a developer for the Downtown Redevelopment Project who would ultimately construct all or a portion of the planned private HRA Minutes May 19, 1983 Page 3 improvements in the Downtown Core Area in a manner acceptable to the HRA and City Council. He submitted a letter (dated May 18, 1983) which outlined his proposal to be paid a fee by the HRA equal to 58 of all of the land and buildings purchased by the developer in downtown Chanhassen. Gullickson felt that the proposed 5% fee was reasonable and that such an arrangement would have minimal risk from the standpoint of the HRA. Martin recommended against the proposal because he believes that the HRA, through the Executive Director's office, should be seeking project developers, rather than paying a finder's fee for such an effort. He felt that a well coordinated professional marketing campaign developed by the HRA would be the most suc- cessful approach. He expressed concerns about the amount of staff time which might be consumed by a parade of unqualified developers that might;be brought to the HRA by a paid broker. r The Commissioners asked Mr. Cravens to present the Executive Director with a proposed legal agreement that outlines this pro- posal in a specific manner. No action was taken on this request although the Commisssioners agreed with the general concept of the proposal. Russell moved, seconded by Bohn, to approve a preliminary authorization for the expenditure of up to $10,000 for prepara- tion of an HRA promotional campaign designed to market the Downtown Redevelopment Project to selected developers. The Executive Director should pursue this with a qualified consultant and conduct a telephone poll of all Commissioners once a firm budget is available for this project. The purpose of the telephone poll is to formalize this preliminary authorization of funds. All voted in favor and the motion carried. New Business Martin reminded the Commissioners that the next regular meeting will be the annual meeting, which will include the election of a new Chairman, Vice - Chariman, and Secretary for the next year. Adjournment Horn moved, seconded by Bohn, to adjourn the meeting at 9:30 p.m. All voted in favor and the motion carried. OPEN LISTING FORM THE LETTER OF AUTHORITY TO SELL PROPERTY GUARANTEEING DELIVERY OF PROPERTY UPON PROCUREMENT OF A QUALIFIED BUYER SUBJECT TO PRIOR NEGOTIATIONS 7 In consideration for the services of Klingelhutz- Cravens, Realtors, herein- after called Broker, the City of Chanhassen and /or the Housing and Redevelopment Authority of Chanhassen, Minnesota, hereby lists as a non- exclusive listing for a period of one year from the date hereof, to sell the following described prop- erty in the City of Chanhassen, Carver County, State of Minnesota, and known as: All the real property owned by, or to be acquired by, the Housing and Redevel- opment Authority of Chanhassen, Minnesota, located within the proposed Ring Road area of the Downtown Development Project of Chanhassen, Minnesota. Terms of Sale: The terms of the sales shall be mutually agreed to by the City of Chanhassen and the Buyers. p r Title: Evidence of Title shall be by the delivery of an Abstract of Title or a Registered Property Abstract, certified to date, showing a good and marketable Title in Sellers. Conveyance: Conveyance shall be by General Warranty Deed. The sellers herein agree to pay said Broker, as commission, Five per cent (5 %), of the selling price of any land or buildings sold by broker in the area _ above described during the time set forth herein. However, it is mutually under- ' stood and agreed that the Sellers reserve the right to sell said any or all of said property with other Real Estate Brokers, and in the event of a sale by Sellers or by another Broker, then no commission shall become due and payable to the within named broker. r i r Should a sale be made within six (6) months after this listing agreement terminates to parties with whom said named Broker may negotiate during the term hereof and said Broker notifies Sellers in writing during the term hereof, then Sellers agree to pay said commission to said Broker. Should a deposit of amounts paid on account of Purchase be forfeited by a purchaser, one -half thereof may be retained by said Broker and the balance shall be paid to Sellers. The Brokers share of any said deposit of amounts paid on account of Purchase, however, shall not exceed the amount of the commission. CITY OF CHANHASSEN PECE- DEED HI -2° COMMUNITY DEVELOPMENT DEPT The sellers hereby acknowledge receipt of a copy of this Authority to Sell which has been executed in duplicate. Signed on the day of , 19 _ Sellers: t In consideration of the foregoing Non - exclusive listing, the undersigned Broker agrees to use diligence in procuring a Buyer. Klingelhutz- Cravens, Realtors Date By. Partner NON - EXCLUSIVE LISTING AGREEMENT THIS NON - EXCLUSIVE LISTING AGREEMENT, entered into this day of , 1983, between Klingelhutz- Cravens, Realtors, a general partnership under the laws of the State of Minnesota ( "Broker ") and THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF CHANHASSEN, MINNESOTA, ( "Seller "), WITNESSETH: WHEREAS, Seller desires to employ Broker as its non - exclusive agent for the purpose of selling certain properties of Seller more particularly described hereinafter, and Broker desires to act in such capacity, upon the terms and conditions hereinafter set forth. NOW, THEREFORE, consideration of the premises, and the covenants and agreements hereinafter contained, the parties agree as follows: 1. Non - Exclusive Listing. Seller hereby appoints Broker as its non- exclusive agent for a period of one year from the date hereof to sell, in one or more transactions, the following described property in the City of Chanhassen, Carver County, Minnesota: all real property owned by, or to be acquired by, The Housing and Redevelopment Authority in and for the City of Chanhassen, Minnesota, located within the proposed Ring Road area of the Downtown Development Project of the City of Chanhassen, Minnesota. (All of such property, or any part thereof, is referred to herein as the "Property ".) All of the terms and conditions of any sale of the Property shall be as- mutually agreed by the Seller and the particular buyer thereof. This Agreement shall not apply to any transfer, dedication, or disposition of the Property to any public body, governmental subdivision or governmental agency. 2. Title Evidence. Seller shall be responsible to provide any title evidence required by any purchase agreement with respect to the Property, whether abstract of title, commitment for title insurance, or otherwise. Nothing herein contained shall require Seller to deliver any title evidence, or any form of title evidence, other than as required under any purchase agreement. 3. Conveyance. Conveyance of the Property shall be by warranty deed, limited warranty deed, quit claim deed, contract for deed for any of the foregoing conveyances, ground lease, or any other form of conveyance specified in the particular purchase agreement. Further, any conveyance may be made subject to such title exceptions, and to any covenants, conditions or restrictions imposed by the Seller, as set forth in such purchase agreement. 4. Broker's Commission: How Computed and When Deemed Earned. Upon the Sale hereinafter defined) of the Property to a person procured by Broker, Broker shall be entitled to a commission in the amount of five percent (5 %) of the fair market value of the Property (including land and buildings). As used herein, "Sale" shall be deemed to occur upon the closing of a conveyance of such Property of the type described in Paragraph 3. It is specifically understood and agreed that the procurement by Broker of a ready, willing and able buyer, or the -1- r execution of a purchase agreement with respect to the Property,. shall not constitute a Sale nor, by itself, entitle Broker to a commission hereunder. The fair market value of the Property. shall be established by an appraiser mutually acceptable to Broker and Seller. In the absence of any agreement on such fair market value, the issue shall be arbitrated in the manner hereinafter set forth. Any commission with respect to the Sale shall be payable to Broker at the time of the Sale. 5. Advertising. Any and all advertising with respect to the Property shall be subject to the prior approval of Seller. 6. Participation by Other Brokers; Sales by Seller. Seller may engage or contract with other real estate brokers or agents for the sale of all or any part of the Property during the term of this agreement and may negotiate any sales with such agents or brokers or with principals directly, with no liability to Broker whatsoever under this agreement for commission or otherwise. Without limiting the foregoing, Seller may give written notice to Broker that it is dealing or proposes to deal with a particular person on a particular Property; if this notice is given, Broker shall indicate in writing to Seller within seventy -two (72) hours of such notice that Broker has previously exposed the property to, or negotiated with such person with respect to such Property; failure to give such notice shall be deemed acknowledgement on the part of Broker that Broker will, with respect to any transaction involving both the particular person and Property named in the notice, make no claim for commission. 7. Sale After Termination of Agreement. Broker may submit to Seller within seventy -two 72) hours after the termination of this agreement, a written list of the names and addresses of persons with whom Broker has exhibited portions of the Property or negotiated regarding the Property, such list to specify the particular Property exhibited to each such person or persons. Such list shall be conclusive upon Seller unless Seller shall, within ten (10) days of its receipt thereof, deliver written objection to Broker regarding the inclusion of any person or specific Property on such list. In the event of a consummation of a Sale to any person included on such list (and not objected to in the manner above - described) r which Sale is of a property specified on such list as having been exposed to such I person and which is consummated within six (6) months after the termination of this agreement, Broker shall be entitled the commission herein described with respect to such Sale. 8. Arbitration of Certain Disputes. Any dispute between the parties _ with respect to whether Broker shall have procured a particular person to whom a Sale was made or with respect to the fair market value of any Property shall be arbitrated as follows: the parties shall mutually agree upon one arbitrator, and in the event of their failure to so agree, each party shall select one arbitrator, which two (2) arbitrators shall chosen shall select a third. Each party shall bear its own expenses in conjunction with the conduct of such arbitration, and any award of the arbitrator (or any two of the three arbitrators, if three arbitrators are employed) shall be final and enforceable in a manner of a judgment of a Minnesota District Court. 9. Hold Harmless. Broker shall defend, indemnify and hold harmless Seller from any claim, demand, judgment or cause of action against Seller arising out of or claimed to arise out of any act or omission of Broker with respect to this -2- r Agreement and shall further defend, indemnify and hold harmless Seller from and against any claim of commission by any other broker or agent claiming to have procured a purchaser with respect to whom Broker has received a commission under this agreement. 10. Notices. Any notice required or permitted to be given hereunder shall be deemed given when hand delivered or deposited in United States mail, postage prepaid, to the parties at the following address: If to Broker: If to Seller: or to such other address as either party may designate in writing to the other 11. Entire Agreement. This agreement expresses the entire agreement of the parties and supersedes any other agreements whether oral or written; it can be modified only by a writing signed by the party against whom such modification is sought to be enforced. IN WITNESS WHEREOF, the parties have executed this Non - Exclusive Listing Agreement the day and year first above- written. THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF CHANHASSSEN, MINNESOTA 0A Its KLINGELHUTZ- CRAVENS, REALTORS, a Minnesota General Partnership 0 Its -3- CITY OF CHANHASSEN RECEIVED sFP 161983 COMMUNITY DEVELOPMENT Wi M CHANHASSEN HOUSING & REDEVELOPMENT AUTHORITY 690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317 (612) 937 -1900 MEMORANDUM TO: Chanhassen Housing and Redevelopment Authority FROM: Scott A. Martin, Executive Director WW1, DATE: September 8, 1983 SUBJ: Status Report on Mortgage Revenue Bond Program. As directed at your July 21, 1983 meeting, I have further explored the potential for establishing a Mortgage Revenue Bond Program in conjunction with several cities located in Carver County. To date, I have attended three meetings concerning program requirements and application procedures. A brief summary of this program follows. Program Eligibility - Single Family /owner- occupied units only (both new and existing attached and detached Single Family Homes are eligible but for _ our purposes only new construction should be included in our local program.) Maximum Sale Price - $83,000 new construction. - Household Income Limits - $35,000 gross annual income (some adjustments are made for family size). - 90% of mortgage funds must be reserved for first -time home buyers. - Mortgages are 30 year, assumable fixed -rate conventional mortgages with a 58 down payment. (Mortgages are offered through local lenders.) - Interest rates generally are between 11% to 3% lower than market rates. Program Requirements City must adopt Housing Plan and Program which establishes need and desire for the program. - Housing Plan must be approved by Metropolitan Council. Memorandum - Mortgage Revenue Bond Program September 8, 1983 Page 2 - Application for approval to sell bonds must be submitted to the Minnesota Housing Finance Agency (MHFA) by January 2, 1984. Cities compete for a total of $27.5 million in funding availability statewide (exclusive of Minneapolis and St. Paul). No city can apply for more than $10 million in bonds. Application rankings are based primarily upon the degree of local contributions to the program (i.e. developer's committments, lender participation, public funds). - Must have committments from at least two builder /developers before application is submitted to MHFA. - Must sell bonds within one year of application approval by MHFA. The bonds sold under the Mortgage Revenue Bond Program are tax exempt issues, which generates the substantial reduction in mortgage interest rates compared to conventional market rate mortgages. Since the bonds are revenue bonds, neither the City nor HRA are obligated for the repayment of bonded debt. Such a bond sale does not affect the City's bond rating, nor does the City's current bond rating affect the interest rate at which bonds are sold. Since builder /developer interest is a crucial element in packaging this program, a meeting with builders and program experts has been scheduled for September 19, 1983 in order to explain program details and determine their level of interest. My discussions to date with several active builder /developers in Chanhassen indicate that there is a great deal of interest in below market mortgage money for housing projects tentatively planned for 1984 construction. I will attempt to answer any questions you may have concerning this program at your September 15 meeting. Although no specific action is necessary at this time, I would like your reaction to the program in general and some indication as to whether or not you desire to pursue it. Attachment 1. Excerpt from July 21, 1983 HRA minutes. t HRA Minutes July 21, 1983 Page 3 of the building, which consists of the "original building" and the single- story, flat roofed addition located immediately to the ii— west, would allow site preparation for first phase retail develop - ment to proceed, and therefore, provide a marketable property for redevelopment. r The HRA endorsed this recommendation and supported the Executive Director's proposal to finance demolition and site preparation costs of approximately $35,000- $40,000 with reprogrammed Community Development Block Grant funds. The proposed marketing campaign fo be directed at selected, qualified commercial developers in an effort to obtain developer interest in Downtown Project construction was also discussed by the HRA. Commissioner's Swenson, Horn and Russell felt that the �- HRA should be seeking competitive bids for this effort from at least three marketing firms. The only proposal which has been submitted for consideration is Kosmo Companies of St. Paul. Whitehill reviewed the recommendation of the Steering Committee that any HRA marketing campaign should be flexible enough to also provide promotional materials which could also be used by the Chamber of Commerce in promoting business and industry develop- ment, as well as information to new residents and employees in the City. — The HRA felt that a more specific proposal was needed before any final decision could be made on the selection of a marketing firm for this project. Whitehill moved, seconded by Bohn, to authorize the payment of $500 to Kosmo Companies for the development of more detailed marketing campaign strategies and design concepts, for HRA review at a special meeting on either August 2 or 11, 1983. All voted in favor and the motion carried. APPROVAL OF BILLS Russell moved, seconded by Horn, to approve the bills for June and July, 1983, as presented. All voted in favor and the motion Ccarried. NEW BUSINESS: MORTGAGE REVENUE BOND PROGRAM The HRA expressed interest in encouraging the construction of new ' housing in the city and directed the Executive Director to look into the establishment of a Mortgage Revenue Bond Program to pro- f vide below market rate financing for new construction. Martin i felt that a joint program with the Carver County HRA may be feasible if enough interest exists in other communities in the county. He will report back with information, on such a program within the next two months. I ( e. CHANHASSEN HOUSING & REDEVELOPMENT AUTHORITY Iml 690 COULTER DRIVE - P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317 (612) 937 -1900 - MEMORANDUM TO: Chanhassen Housing and Redevelopment Authority FROM: Scott A. Martin, Executive Director DATE: September 9, 1983 SUBJ: Proposal to Rent Space in Old Instant Web Building for Seasonal Storage of Recreational Vehicles During our meeting of August 18, 1983, Commissioner Whitehill requested that I explore the feasibility of renting storage space in the old Instant Web) Building for boats and other types of recreational vehicles on a seasonal basis. My review of the feasibility of renting storage space for this purpose has identified the following: According to the City Engineer, the estimated cost of constructing an earthen ramp with an asphalt mat which would provide adequate access into the warehouse section of the building is $1,500. This project could be done utilizing city crews. - The size of the overhead door opening into the building is marginal, at best, for this purpose. The door opening measures only 9110" x 9110 ", which is substantially smaller than drive -in doors in most storage buildings. This door- way has inadequate height to accommodate many larger, motorhomes and insufficent height and width for boats typi- cally based on Lake Minnetonka. - Due to the nature of the building floor plan we cannot guarantee the security of the storage area, which would likely be a primary concern to most RV owners. We cannot economically close off sections of the building - entire walls would need to be constructed. - I have concerns about the effect of seasonal rental by numerous RV owners (tenants) upon our insurance costs and potential exposure to liability actions. Our insurance company will provide me with information concerning this item before next week's meeting. Chanhassen HRA September 9, 1983 Page 2 - Access to stored equipment by individual owners will create some logistical problems for staff, since no one will be at the building on a regular basis. This type of rental arrangement seems fairly simple to administer on the sur- face, but I am concerned that it could become very time consuming. Staff time would be better spent trying to market the downtown project in my opinion. I would recommend that we not proceed with the rental of seasonal storage space in the old Instant Web Building, as I believe that the negatives outweigh the positives. 0 W. CHANHASSEN HOUSING & REDEVELOPMENT AUTHORITY 690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317 (612) 937 -1900 MEMORANDUM TO: Chanhassen Housing and Redevelopment, Authority FROM: Scott A. Martin, Executive Director A��A - DATE: September 14, 1983 ®v� SUBJ: Proposed Reprogramming of Community Development Block Grant - Funds On August 22nd and again on September 12, 1983, the City Council considered the HRA's recommended use of $105,417 in CDBG funds which must be reprogrammed from Senior Citizen Housing Site Acquisition to other eligible program activities. As you know, the HRA considered the reprogramming of these funds on August 18, 1983 and unanimously recommended the following program budget: 1. Land Clearance and Site Preparation $ 45,000 2. Downtown Project Marketing Plan 20,000 3. Housing Rehabilitation Program 40,417 Total $105,417 The City Council tabled this item on September 12 so that other program options could be presented for their consideration prior to taking action on the reprogramming. The Council also directed staff to provide the BRA with an opportunity to review other program options before further Council consideration. I reviewed this matter with the Urban Hennepin County CDBG Program Administrator, and we jointly developed the following list of eligible program activities for your consideration. Any combination of programs can be selected, as long as the total budget does not exceed $105,417. 1. Senior Citizen Center: Funds could be set aside for par- _ tial renovation costs of the old Instant Web Building as a Senior Citizen Activity Center. This project would require demonstration of income qualification of local seniors, since federal law requires that low and moderate income - persons must benefit from such a program. r e, Memorandum - CDBG Reprogramming September 15, 1983 Page 2 I r r r- 2. Day Care Center: Funds could be earmarked for development of a Day Care Center facility in the old Instant Web Building. Funding for this program could be provided in the form of a low- interest loan or grant to a Day Care pro- vider who would guarantee creation of an agreed to number of jobs in exchange for funds necessary for renovation of leasehold space. The City could also use CDBG funds to make these improvements as part of the building renovation and lease this space to the Day Care provider. According to the Day Care Coordinator for the Carver County Social Services Department, there is a substantial need for additional day care facilities in Chanhassen, especially for infants and toddlers. 3. Small Business Assistance Program: CDBG funds can be used to provide low interest loans to small businesses who wish - to expand or upgrade their facilities. Loans would be offered through local lenders and interest rates could be reduced to zero percent if desirable. New jobs which are available to low and moderate income persons must be created for eligibility in this.program. (Although such a program may be desirable for improving existing businesses, I believe that it has very limited application in Chanhassen since the Downtown Redevelopment Plan provides for the acquisition and relocation of all blighted business properties in the Downtown area, and business expansion in the Business Park is already eligible for the special . assessment reduction program. In my opinion, such a program would only make sense for business located along Hwy. 212 in southern Chanhassen.) 4. Diseased Tree Removal: CDBG funds can be used for the removal of diseased trees from public property and from private property owned by low and moderate income I persons. ` Such a program would be administered locally, and according to Hennepin County staff is a very low priority program with HUD due to relatively high administrative costs. 5. Sumner Youth Employment Program: Teenagers from low and moderate income families could be hired with CDBG funds to 'perform public service jobs during the summer months. Typically, such jobs involve park maintenance and recreation program activities. (This option is not recom- mended, since the City obtained funds earlier this year from the Federal Jobs Program for a Summer Youth Employment program during 1984 and 1985. Additional funding is not required to meet projected needs.) The above options, together with those eligible program activities considered by the BRA and City Council during meetings in August, y 9 � 2 �. _. H w .....n _, _ _ .Rb ..... _ w ..yem+ e., nR.�.- 1•JSisUi.+.L.�i. ) u41 Memorandum - CDBG Reprogramming September 15, 1983 Page 3 1983, represent a complete listing of potential programs for which CDBG funds may be reprogrammed. The HRA should consider these options on September 15, 1983 and recommend specific program budgets for City Council consideration on September 19, 1983. 'Ca. CHANHASSEN HOUSING & REDEVELOPMENT AUTHORITY 690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317 (612) 937 -1900 MEMORANDUM TO: Chanhassen Housing and Redevelopment Authority FROM: Scott A. Martin, Executive Director A/eAA. DATE: September 8, 1983 SUBJ: Downtown Project Market Study During our consideration of proposed Community Development Block Grant fund reprogramming options at the August 18, 1983 meeting, Commissioner Swenson recommended that funds be set aside for a general retail market study to provide prospective developers and existing businesses with broader market data than is available from the Retail Systems Supermarket Study completed last spring. As a result of this recommendation, the BRA decided to recommend an increase of $5,000 in CDBG funding for the pro- posed "Downtown Project Marketing Plan ". However, no specific action was taken by the HRA to order a broad -based market study once CDBG monies were reprogrammed by the City Council and funded activities were approved by HUD. Since our last meeting, I have discussed the benefits and need for such a retail market study with several private development professionals. My discussions were prefaced with a briefing on our current efforts to "market" the Downtown Project with the help of an advertising agency, and a general review of our recent attempts to attract a supermarket to the project (including the results of the Retail Systems Study). Everyone that I have conferred with advised me to have a compre- hensive market study conducted before we attempt to "sell" the City of Chanhassen (in general) and the Downtown Project (in particular) to any prospective developer experienced in commer- cial development. The basis for this advice was twofold. First of all, the Retail Systems Study identified some potentially critical weaknesses in our retail trade area. Those weaknesses should be specifically identified before we approach prospective developers about - rebuilding Downtown Chanhassen. In other words, before we go about trying to market our Downtown Project, we need to know exactly what it is we have to "sell ". Memorandum - Market Study September 8, 1983 Page 2 Secondly, Chanhassen has never conducted a broad -based market study. Almost every developer will require such market data before committing time and energy to our Downtown Project. When the Tax Increment Financing District was established and the current Redevelopment Plan was adopted, neither Kraus - Anderson, Super Valu, nor Bloomberg Companies sought a market study. Their interest in the Downtown Project was fueled by the projected housing boom that was anticipated from the Dunn and Curry pro- jects. Obviously, this population explosion has not materialized, but other market forces beyond our local control continue to adversely impact our retail trade area. Another consideration relative to "if" and "when" we might order a general market study is related to project financing. I have just been advised that CDBG funds can be used to pay for the market study, but only if this study is conducted and completed before we begin our Downtown Project Marketing Campaign. With the above in mind, I have contacted a well- respected firm which specializes in Retail Market Analysis and asked them to prepare a proposal for your consideration. Due to time constraints, their written proposal will not be available until next Thursday, September 15. Although I do not expect you to make any decision concerning this issue at your next meeting, I did want you to be aware of my discussions and concerns and I want to give you a good idea of the estimated cost of such a market study. The City Council is expected to act upon CDBG reprogramming recommendations on Monday, September 12. If monies are allocated for this purpose, I would recommend that I be authorized to select a qualified consultant and proceed with the market study as soon as possible. CHANHASSEN H.R.A. A C C O U N T S P A Y A B L E 09 -19 -83 PAGE 1 J CHECK# AMOUNT CLAIMANT PURPOSE J 014851 5.00 CARVER COUNTY TREASURER FEES, SERVICE J 1 5.00 NECESSARY EXPENDITURES SINCE LAST COUNCIL MEETING J CHANHASSEN H.R.A. A C C O U N T S P A Y A B L E 09 -19 -83 PAGE 2 CHECK$ AMOUNT CLAIMANT PURPOSE J 019254 525.48 B R W INC FEES, SERVICE 019255 300.00 HOLMES + GRAVEN FEES, SERVICE .J 019256 500.00 KOSMO COMPANIES FEES, SERVICE 019257 35.12 SCOTT MARTIN PROMOTIONAL EXPENSE AND -REP. + MAINT.,BLDG + GND 019258 18.52- MERLIN'S HARDWARE HANK REP. + MAINT.,BLDG + GND 019259 12.00 MERTZ LAW OFFICE FEES, SERVICE J 019260 77.65 MCGUIRE -TWIN CITY PLMBG. REP. + MAINT.,BLOG + GND 7 1,468.77 CHECKS WRITTEN TOTAL OF 8 CHECKS TOTAL 1,473.77 <J J J J V `S' e Kosmo Companies August 31, 1983 Scott A. Martin Chanhassen Housing & Redevelopment Authority 690 Coulter Dr. P. 0. Box 147 Chanhassen, MN 55317 Marketing Plan 900 Bremer Tower St. Paul, MN 55101 242 -1992 .W $500.00 �K. 40 "43n CITY OF CHANHASSEN DECEIVED SEP -20, COMMUNITY DEVELOPMENT DEPT Public Relations Advertising Graphic Design TERMS: Net due in 10 days. A service charge of 1.5% per month will be Secretarial Services charged on any balance not paid within 30 days of initial billing. HOLMES & GRAVEN CHARI -FRED 470 Pillsbury Center, Minneapolis. Minnesota 5540: Telephone 612 /338 -1177 Invoice 83084. AUGUST 251 1983 CH130 1 CHANHASSEN HRA GENTIRAL C/O SCOTT MARTIN PO 80X 147 CHANHASSEN, MN 55317 FOR ALL LEGAL SERVICES FROM JUNE 14P 1983 THRU JUNE 17i 1983 AS FOLLOWS. :6/14183 RESEARCH 6/15/83 DRAFT LETTER 6/17/83 INTRAOFFICE CONFERENCE (- r I r� i _F- MINNEAPOLIS • CHEYENNE • DENVER • BRECKENRIDGE • PHOENIX City of Chanhassen 7610 Laredo Drive Chanhassen, MN 55317 A7TN: Mr. Scott Martin INVOICE DATE: July 31, 1983 JOB NO: 62 -8214 RE: Engineering /Planning /Surveying Services for Downtown Redevelopment Project as per Agreement Per Diem Services - Phase I Work Task 1.7 o Meetings with staff - on -going consultation Period of July, 1983 Classification Hours Principal 2.00 Sr. Associate 3.00 Associate 4.00 Salary Cost - $ 262.74 Fee - S 262.74 x 2.0 = $ 525.48 0,K. �^ % 11213 CITY OF CHANHASSEN RECEIVED COMMUNITY DEVELOPMENT DEPT BENNETT. RiNGROSE. WOLSHELO. JARVIS, GARDNER, INC. • 2829 UNIVERSITY AVENUE SE • MINNEAPOLIS, MN 55414 • PHONE 6121379 -7878