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HomeMy WebLinkAbout1989-11-06 HRA Regular Meeting MINUTES EDINA HOUSING AND REDEVELOPMENT AUTHORITY NOVEMBER 6. 1989 Answering rollcall were Commissioners Rice, Smith and Richards. Commissioner Kelly arrived at 7:03 p.m. Chairman Richards announced that Commissioner Paulus was absent because she was representing the Edina City Council at an Edina School District Strategic Planning Retreat. MINUTES of the HRA Meeting of October 16, 1989 were approved as submitted by motion of Commissioner Rice, seconded by Commissioner Smith. Ayes: Rice, Smith, Richards Motion carried. AMENDMENT OF CONTRACT FOR DEED AND AMENDMENT TO REDEVELOPMENT AGREEMENT - CENTENNIAL LAKES APPROVED Executive Director Hughes stated that South Edina Development Corporation (SED) , the Centennial Lakes Developer, has the option to buy land from the HRA pursuant to the Redevelopment Contracts for Centennial Lakes. To maintain that option SED must, among other requirements, make all payments to Hedberg under the Hedberg Contract for Deed. An interest payment in the amount of $801,797.22 is now due and SED will be making that payment. SED has also worked out an agreement (Second Amendment to Contract for Deed) with Hedberg to allow deferral of the interest payment due October 13, 1990 in the same amount (Deferred Interest) . If deferred, that amount would be added to principal. The agreement also reduces the amount of interest to be paid for releases of land from interest on all unpaid principal to interest only on the principal amount paid for the release. Director Hughes said that he and Attorney Erickson have been discussing this matter with SED. They have concluded that the reduction in the interest required to be paid for any release is a benefit to the HRA and the Foundation, and that deferral of the Deferred Interest and addition thereof to the principal is not adverse to the HRA or the Foundation if SED agrees to pay any interest on other Deferred Interest while it is the holder of the option. SED has agreed in a proposed amendment (Third Amendment) to the HRA Contract to pay any interest that would ultimately be due on the Deferred Interest without reimbursement by the HRA. Staff would recommend approval of the Second Amendment to Contract for Deed and the Third Amendment to the HRA Contract. Commissioner Smith asked if the HRA would have a liability if the interest is never paid. Director Hughes explained that the agreement with SED provides that, if SED defaults on the contract and then the HRA were to step in and make the payments current and sell to another developer, the HRA would be obliged to reimburse SED for any payments that they had made to date. He said this would not put the HRA at any greater liability than it presently faces except for the interest on interest. Commissioner Smith asked what has changed to bring this about and how this would affect any prior guarantees. Director Hughes said that the principal change is the office market. SED does not see the office development occurring in the near term due to market conditions. They are buying some time with this deferral hoping the market will loosen up. SED has guaranteed payment in lieu of taxes, e.g. they will make payments on the first office building starting in 1991 whether or not that office building has been built. Commissioner Smith introduced the following resolution and moved its adoption: RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF VARIOUS DOCUMENTS BE IT RESOLVED by the Board of Commissioners of the Housing and Redevelopment Authority of Edina, Minnesota (the "HRA"), as follows: 1. Recitals. The HRA and the Edina City Council have previously approved a redevelopment plan, as defined in Minnesota Statutes, Section 462.421, subdivision H.R.A. Minutes - 11/6/89 Page 2 15, designated as the Southeast Edina Redevelopment Plan, and have approved various amendments thereto (as so amended, the "Redevelopment Plan"). Acting pursuant to the Redevelopment Plan, the HRA has acquired certain land in the area included in the Redevelopment Plan pursuant to a Contract for Deed dated as of October 3, 1989, with John W. Hedberg and Kenneth M. Anderson, as personal representatives of the Estate of Fred W. Hedberg (the "Contract for Deed"), and the HRA has entered into an Amended and Restated Land Sale Agreement and Contract for Private Redevelopment between the HRA and Foundation dated as of September 30, 1988 (the "Agreement"). In connection with the transactions contemplated by the Contract for Deed and the Agreement, it is now proposed that a Second Amendment to Contract for Deed, and an Amendment No. 3 to the Agreement be executed and delivered by the HRA, both as presented to and reviewed by the Board. 2. Authorization for Execution and Delivery of Documents. Any two officers of the HRA are authorized and directed to execute said Second Amendment to Contract for Deed and said Amendment No. 3 to the Agreement with such changes and modifications as may be approved by the Executive Director and Attorney for the HRA. The execution of such instruments and agreements by any two officers of the HRA shall be conclusive evidence of the approval of such documents by the HRA in accordance with this Resolution. Dated as of the 6th day f November, 1989. ATTES Chairman ecutive if ctor Motion for adopts n of the resolution was seconded by Commissioner Kelly. Rollcall: Ayes: Kelly, Rice, Smith, Richards Resolution adopted. RESOLUTION ADOPTED CONVEYING PHASE IV CENTENNIAL LAKES CONDOMINIUNS Director Hughes recalled that several months ago the Centennial Lakes condominium developer, Laukka Development, presented the concept of constructing a condominium building designed for more affluent purchasers on the Phase IV site. On October 11, 1989, a letter was received from Laukka Development stating that they will not proceed with the construction of this semi-luxury condominium building due to market response. As such, Laukka proposes to develop the Phase IV site with a building identical to that under construction on Phase III. This building is proposed to contain 42 units, most of which would be served by an elevator. As with Phase III, the average sale price of the Phase IV condominiums will be somewhat higher than Phases I and II. This increase in sale price is principally due to the cost of the elevator. Due to the increase, fewer units will be affordable to moderate income purchasers. Based on the current policy of limiting second mortgages to units selling for $90,000 or less, 13 units in Phase IV will qualify for second mortgage assistance. As with Phase III, second mortgage funds that would normally be allocated to Phase IV will instead be reallocated to other buildings in the project to assist moderate income purchasers. Staff would recommend adoption of a resolution authorizing execution of documents conveying the Phase IV condominium lot to the condominium developer. Chairman Richards said he was concerned that after completion of all phases there might be money in the second mortgage pot that is not used. Larry Laukka, developer, commented that as the program was developed originally there was $193,000 in mortgage money that went into the second mortgage pool. At this point buildings 1, 2 and 3 have been marketed and there is about $100,000 left in the pool, with approximately 25 units eligible. Mr. Laukka said he did not sense that there would be any money left over in the second mortgage pool and that it was his obligation to see that all money in the pool is used. H.R.A. Minutes - 11/6/89 Page 3 Mr. Laukka said that the statistics indicate that of the first 73 sales in the development, 82.19% of those fall within the median income guidelines, although not all are eligible for second mortgage money. He observed that the program now is working and that by putting building 4 back on line as it was planned initially does not problem the development. Building 5 will be a non-elevator building and that will provide more housing units that fall into the $90,000 guideline. At this time Building 6 is also planned to be a non-elevator building. Demographics for the project are also following consistently with the Edinborough project in which 15% of the 392 buyers were "empty nesters" (people over 55) . Mr. Laukka said that prior to conveyance of Phases V and VI the Council would have the chance for input concerning those buildings. At that time the status of the development would be reviewed in terms of money available in the second mortgage pool and as to reaching the median income level as the program was designed. Commissioner Kelly introduced the following resolution and moved its adoption: RESOLUTION RATIFYING AND AUTHORIZING THE EXECUTION AND DELIVERY OF VARIOUS DOCUMENTS BE IT RESOLVED by the Board of Commissioners of the Housing and Redevelopment Authority of Edina, Minnesota (the "HRA"), as follows: 1. Recitals. The HRA and the Edina City Council have previously approved a redevelopment plan, as defined in Minnesota Statutes, Section 462.421, subdivision 15, designated as the Southeast Edina Redevelopment Plan, and have approved various amendments thereto (as so amended, the "Redevelopment Plan") . Acting pursuant to the Redevelopment Plan, the HRA has acquired certain land in the area included in the Redevelopment Plan and it has been proposed that the HRA sell and transfer a portion of such land to the East Edina Housing Foundation (the "Foundation"), pursuant to a Land Sale Agreement by and between the HRA and the Foundation (the "Agreement") . By a resolution adopted March 7, 1988, the HRA approved the form of the Agreement and authorized any two officers of the HRA to execute and deliver the Agreement on behalf of the HRA with such modifications as were deemed appropriate and approved by the Chairman and the Executive Director of the HRA. Pursuant to such authorization the Chairman and Vice Chairman of the HRA executed and delivered the Agreement dated on or as of March 14, 1988. Subsequently, by resolution dated September 12, 1988, the HRA approved execution and delivery by any two officers of the HRA, on behalf of the HRA, of an Amended and Restated Land Sale Agreement and Contract for Private Redevelopment between the HRA and Foundation with such modifications as the attorney for the HRA and Executive Director of the HRA should approve (the "Amended Agreement") . Pursuant to such authorization the Chairman and Secretary of the HRA executed and delivered the Amended Agreement dated on or as of September 30, 1988. In connection with the transactions contemplated by the Amended Agreement, it is now proposed that Phase IV of the Condominium Development be commenced on the property described on Exhibit A hereto (the "Phase IV Condominium Property") and that the Phase IV Condominium Property be conveyed pursuant to the Amended Agreement and on the same terms and conditions as the Phase III Condominium Property was conveyed with such changes and modifications as may be approved by the Executive Director and the Attorney to the HRA, including those resulting from the proposed addition of an elevator and the proposed sale of units without the use of second mortgages. 2. Authorization for Execution and Delivery of Documents. Any two officers of the HRA are authorized and directed to execute such instruments and agreements as may be required or be desirable to accomplish the conveyance of the Phase IV Condominium Property pursuant to the Amended Agreement with such changes and modifications as may be approved by the Executive Director and Attorney for the HRA. The execution of such instruments and agreements by any two officers of the HRA shall be conclusive evidence of the approval of such documents by the HRA in accordance with this Resolution. EXHIBIT A THE HOMES OF CENTENNIAL LAKES PHASE IV CONDOMINIUM LAND DESCRIPTION Lot 4, Block 1, THE HOMES OF CENTENNIAL LAKES, according to the recorded plat H.R.A. Minutes - 11/6/89 Page 4 thereof, Hennepin County, Minnesota. Motion for adoption of the resolution was seconded by Commissioner Smith. Rollcall: Ayes: Kelly, Rice, Smith, Richards Resolution adopted. BID AWARDED FOR DECK WATERPROOFING PHASES II & III CENTENNIAL LAKES CONDOMINIUMS Motion was made by Commissioner Rice for award of bid for deck waterproofing Phases II & III Centennial Lakes Condominiums to recommended low bidder, Kremer & Davis, at $19,505.00. Motion was seconded by Member Smith. Ayes: Kelly, Rice, Smith, Richards There being no further business on the HRA Agenda, motion of Commissioner Kelly was seconded by Commissioner Smith for adjournment. Mo ion carri d ti animously. ExecutiV6 birector