HomeMy WebLinkAbout1997-07-21 HRA Regular Meeting {
. MINUTES
OF THE REGULAR MEETING OF THE
EDINA HOUSING AND REDEVELOPMENT AUTHORITY
HELD AT CITY HALL
JULY 21, 1997 - 7:00 P.M.
ROLLCALL Answering rollcall were Commissioners Faust, Hovland, Kelly, Maetzold
and Chairman Smith.
CONSENT AGENDA ITEMS APPROVED Motion made by Commissioner Maetzold
and seconded by Commissioner Hovland to approve and adopt the HRA Consent
Agenda items as presented.
Rollcall:
Ayes: Faust, Hovland, Kelly, Maetzold, Smith
Motion carried.
*MINUTES OF THE HRA MEETING OF JULY 7 1997, APPROVED Motion made by
Commissioner Maetzold and seconded by Commissioner Hovland approving the
Minutes of the Regular HRA Meeting of July 7, 1997.
Motion carried on rollcall vote -five ayes.
. PURCHASE AGREEMENTS FOR TWO S PROPERTIES AND KUNZ OIL COMPANY
APPROVED Director Hughes explained that staff has concluded negotiations with Two
S Properties (formerly Four S Properties) and Kunz Oil Company, with respect to the
purchase of their properties on Eden Avenue. The basic terms of the agreements are
as follows:
KUNZ OIL COMPANY
PURCHASE PRICE: $995,000.00
OCCUPANCY: Kunz Oil may occupy property for up to six months following closing.
During this period of occupancy, rent will be payable to the HRA at the rate of
$6,218.75 per month on a net — net — net basis. Following the initial six month rental,
Kunz Oil may continue to rent the property on a month-to-month basis.
CLOSING DATE: The proposed closing date is September 15, 1997, or earlier at the
HRA's option.
TWO S PROPERTIES
PURCHASE PRICE: $1,800,000.00
CLOSING DATE: September 15, 1997, or earlier, at the HRA's option. The proposed
• Purchase Agreement also provides that the purchase price will increase by $500.00 per
day after August 15, 1997.
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Director Hughes provided proposed Purchase Agreements with Kunz Oil Company and •
Two S Properties to the HRA. The terms of the Kunz Oil Purchase Agreement have
been agreed to by the seller. The Purchase Agreement with Two S has not as yet been
reviewed by Attorney's for the seller, due to the recent conclusion of the negotiations.
Both purchase agreements contain standard language concerning the HRA right to
examine the environmental condition of both properties. Several studies have been
conducted on these properties. We will review these studies and conduct new tests if
needed prior to closing.
FINANCING
Mr. Gilligan, City Attorney, and Mr. Wallin, Director of Finance, met with staff and
reviewed alternatives for financing the proposed acquisition. The alternatives are as
follows:
1. The issuance of General Obligation Tax Increment Bonds.
2. The issuance of General Obligation Temporary Tax Increment Bonds.
3. The issuance of an Internal Bond whereby the HRA would borrow from the •
reserve balance of the Grandview Tax Increment District and other tax increment
districts to finance the purchase.
Based upon the present reserve balances of our tax increment districts, we recommend
alternative #3, i.e. internal financing for the purpose of acquiring these properties. This
alternative would reduce significantly our costs of borrowing and recognizes that our
intentions are to re-sell these properties for development within a relatively short time
frame. If necessary, the HRA could refund this internal financing with temporary bonds
at a later date, if the resale of the property required more time or if the cash flow
requirements of the tax increment districts required additional capital. Internal financing
also would permit the HRA to close on these transactions in a more timely fashion.
Staff believes the proposed acquisitions fit within the budgeted amounts, as approved
by the HRA, when the Grandview Tax Increment District budget was amended earlier
this year. We recommend acceptance of the proposed Purchase Agreements.
Commissioner Maetzold pointed out his professional association with Kunz Oil
Company through his employer, National City Bank. He checked with both staff and the
City Attorney who reviewed the possibility that there would be a conflict of interest in the
purchase of the Kunz Oil Company property. The City Attorney and staff have
determined no conflict of interest exists. Commissioner Maetzold reported he also
spoke to Walter Kunz. •
Director Hughes pointed out the Purchase Agreement with Kunz is conditioned upon
closing with Lewis Engineering. The HRA did not want to own only just the Kunz
property and not the Lewis property.
Following a brief Council discussion, it was suggested that the following points be
added to the final Purchase Agreement:
1. Acquisition of a Title Insurance Policy be made a requirement of the purchase
with the HRA listed as a named insured; and
2. Upon termination of the Property and Casualty Insurance Policy, the HRA
would be notified within 30 days of the impending cancellation.
Commissioner Kelly made a motion authorizing the Chairman and Secretary to
sign the Purchase Agreement for purchase of the Two S Property located on
Eden Avenue for the Purchase Price of $1,800,000.00. Commissioner Faust
seconded the motion.
Rollcall:
Ayes: Faust, Hovland, Kelly, Maetzold, Smith
Motion carried.
Commissioner Maetzold made a motion authorizing the Chairman and Secretary
to sign the Purchase Agreement for purchase of the Kunz Oil Company property
on Eden Avenue for the Purchase Price of $995,000.00. Commissioner Hovland
seconded the motion.
Rollcall:
Ayes: Faust, Hovland, Kelly, Maetzold, Smith
Motion carried.
CLAIMS PAID Commissioner Maetzold made a motion to approve payment of the
HRA Claims as shown in detail on the Check Register dated July 16, 1997, and
consisting of one page totaling $12,001.25. Commissioner Hovland seconded the
motion.
Rollcall:
Ayes: Faust, Hovland, Kelly, Maetzold, Smith
Motion carried.
There being no further business on the HRA Agenda, Chairman Smith declared the
meeting adjourned.
Executive Director