HomeMy WebLinkAbout2018-06-14 HRA Regular Meeting Agenda PacketPage 1
MINUTES
OF REGULAR MEETING
OF THE EDINA HOUSING AND REDEVELOPMENT AUTHORITY
MAY 24, 2018
7:30 A.M.
I. CALL TO ORDER
Chair Hovland called the HRA meeting to order at 7:34 a.m.
II. ROLLCALL
Answering rollcall were Commissioners Brindle, Fischer, Chair Hovland, Staunton, and Stewart.
III. APPROVAL OF MEETING AGENDA
Motion made by Commissioner Fischer seconded by Commissioner Stewart amending the agenda
by removing Consent Agenda Item V.D. Pentagon Park Master Redevelopment Agreement
Update and approving the Meeting Agenda.
Ayes: Brindle, Fischer, Hovland, Staunton, Stewart
Motion carried.
IV. COMMUNITY COMMENT – None.
V. CONSENT AGENDA ADOPTED
Motion made by Commissioner Fischer seconded by Commissioner Brindle approving the consent
agenda as follows:
V.A. Approve minutes of May 10, 2018 Regular HRA Meeting.
V.B. Approve Release Agreement with the City of Edina Housing and Redevelopment Authority
and Centennial Lakes Plaza, LLC, 7401 and 7501 France Avenue.
V.C. Approve Second Amendment to Edina Market Street Redevelopment Agreement.
Ayes: Brindle, Fischer, Hovland, Staunton, Stewart
Motion carried.
VI. REPORTS/RECOMMENDATIONS – (Favorable vote of majority of HRA Board Members
present to approve except where noted).
VI.A. 5146 EDEN AVENUE FINAL ACTION REGARDING PRELIMINARY DEVELOPMENT
AGREEMENT WITH FRAUENSHUH, INC.
Economic Development Manager Neuendorf stated staff recommended terminating the May 31, 2018,
preliminary development agreement with Frauenshuh, Inc. Mr. Neuendorf explained that while staff continued
working with the Frauenshuh, Inc. team and had extended the agreement twice, they were no closer to resolving
outstanding issues. Mr. Neuendorf said late last night, staff received a letter requesting another 30-day extension
and new concepts Scenario B.1 and B.2. He said the new concepts may change staff’s recommendation but he
was not able to review them given the late submission. The HRA asked what impact another 30-day extension
would have and Mr. Neuendorf explained that within the last two weeks staff made significant progress with
Frauenshuh, Inc.; however, there were several significant issues to be resolved including agreeing on the price of
the land. The HRA agreed that progress was made within the last two weeks and felt that another extension
would allow them to resolve outstanding issues.
Dean Dovolis, DJR Architecture, presented Scenario B.1 and B.2. Mr. Dovolis explained that in both scenarios,
the market rate and affordable housing units were combined; other changes included placing the civic space at
the northwest corner for more green space and potential expansion, and combining private and public parking.
Motion of Commissioner Fischer seconded by Commissioner Staunton to extend the Preliminary
Development Agreement with Frauenshuh, Inc. 30-days.
Ayes: Fischer, Hovland, Staunton, Stewart
Nay: Brindle
Motion carried.
Minutes/HRA/May 24, 2018
2
VI.B. REQUEST FOR DEVELOPMENT ASSISTANCE FOR PENTAGON PARK SOUTH, 4815-
4901 WEST 77TH STREET AND 7710 COMPUTER AVENUE;
and
V.D. PENTAGON PARK MASTER REDEVELOPMENT AGREEMENT UPDATE
Mr. Neuendorf explained the 12.1-acre south parcel site was proposed to be redeveloped into a mixed-use
project including hotel, office and retail. A joint venture was anticipated with Hillcrest Properties, Pentagon
Revival and Solomon Real Estates. The property owner and joint venture partner requested the use of tax
increment financing (TIF) to offset the cost of some extraordinary site conditions. Mr. Neuendorf noted the
amount of the request was not currently known because the team was still working on cost estimates; however,
he noted an estimated amount of $5M for eligible reimbursable costs for soil remediation and district parking.
He reminded the HRA that a TIF District was created in 2014 in anticipation of the redevelopment of the
Pentagon Park area. Mr. Neuendorf offered 12 recommendations for discussion purposes as the HRA considered
financial involvement.
The HRA’s discussion focused primarily on providing TIF for the construction of structured public parking. The
HRA felt the businesses would benefit more than the public and therefore, TIF should not be the only funding
source. Centennial Lakes and 50th & France were mentioned as areas with structured parking with pay-back
options. Mr. Neuendorf noted that the 2014 Master Redevelopment Agreement included parking as an eligible
qualified cost because park users would benefit; he also noted the complexity of developing the entire Pentagon
Park area over a period with several different developers. The HRA said it was important to identify the scope
and scale of the public infrastructure to understand the right amount of TIF.
Regarding the Pentagon Park Master Redevelopment Agreement, Mr. Neuendorf updated the HRA that
amendments would be necessary to coordinate with the pending proposals for the north and south parcels. He
said the Master Agreement should be modified this summer so that construction could begin later this year.
VI.C. RESOLUTION NO. 2018-04 SUPPORTING AFFORDABLY-PRICED HOUSING AT 4100
WEST 76TH STREET
Mr. Neuendorf explained that Aeon, a non-profit developer of affordably-priced housing, requested TIF support
of $2.4M (reduced from $3M) to build an 80-unit apartment. Aeon is pursuing other funding sources including
the Minnesota Housing Finance Authority (MHFA) and local municipalities financial support was taken into strong
consideration when MHFA evaluates the readiness of a project to secure tax credits. The MHFA application
deadline was June 14.
The HRA was supportive of the project because it aligned with their mission and purpose to have new housing
at a variety of price points. Discussion included using TIF money to fund projects around the City so that
affordably-priced housing was not restricted to certain areas and blending buildings seamlessly into the
community; new affordable housing manager to help identify the roles of the HRA and the Edina Housing
Foundation (EHF), and if the EHF would be better at distributing TIF funds; opportunity to learn and leverage
resources beyond affordably-priced housing for residents with median income of 30-60 percent and consider
median income of 80-100 percent.
Motion of Commissioner Staunton seconded by Commissioner Brindle approving Resolution
2018-04 demonstrating support for a new affordable housing project that is applying for tax credits
in June 2018.
Ayes: Brindle, Fischer, Hovland, Staunton, Stewart
Motion carried.
VII. CORRESPONDENCE
VII.A. CORRESPONDENCE – None.
IX. MAYOR AND COUNCIL COMMENTS – None.
Minutes/HRA/May 24, 2018
3
X. EXECUTIVE DIRECTOR’S COMMENTS
Executive assistant Allison stated that Executive Director Neal recommended the HRA considered cancelling
the July 12, August 30, September 27, and December 27 HRA meetings.
Motion of Commissioner Brindle seconded by Commissioner Fischer approving staff to make
proposed changes to the 2018 HRA Meeting Schedule.
Ayes: Brindle, Fischer, Hovland, Staunton, Stewart
Motion carried.
XII. ADJOURNMENT
There being no further business on the HRA Agenda, Chair Hovland declared the meeting adjourned at 9:05
a.m.
Respectfully submitted,
___________________________________________
Scott Neal, Executive Director
195978v36 1
(reserved for recording information)
GRANT OF TEMPORARY EASEMENT
THIS EASEMENT AGREEMENT (“Agreement”) is made and entered as of the ____
day of June, 2018, by and between the HOUSING AND REDEVELOPMENT AUTHORITY
OF EDINA, MINNESOTA, a public body corporate and politic of the State of Minnesota
(“HRA”), and MITCHELL J. MONSON and JAN Y. MONSON, husband and wife
(“Grantors”).
RECITALS
A. HRA is the fee owner of the real property located at 3930, 3936, 3940 and 3944
Market Street, which property is legally described on Exhibit A (“HRA Property”);
B. Grantors are the fee owners of the property abutting the HRA Property at 3945 49th
Street West, which property is legally described on Exhibit B (“Grantor Property”);
C. In connection with the improvements located on the HRA Property, including
construction of additional public parking as part of City Public Works Project 18-001, the HRA (i)
requires a temporary construction easement over approximately the southerly 3 feet of the Grantor
Property legally described in Exhibit C (“Construction Easement Premises”) and (ii) will also need
to obtain a crane swing easement in the aerial portion of the Grantor Property as legally described in
195978v36 2
Exhibit D (“Aerial Easement Premises”) in connection with the construction work on the HRA
Property;
D. In response to the Grantor’s request to remove the four mature trees along the shared
property line, the temporary easement will reflect the need to use a larger portion of the Grantor’s
back yard and possibly the construction crane to carry out this request.
NOW, THEREFORE, in consideration of the sum of One and No/100 Dollars ($1.00) and
other good and valuable consideration to it in hand paid by the HRA, the receipt and sufficiency of
which is hereby acknowledged by Grantors:
1. Construction Easement. Grantors do hereby grant unto the HRA, its successors and
assigns, a temporary easement over, across, on and through the Construction Easement Premises
for the following purposes:
a. construction on the HRA Property;
b. the right of ingress to and egress from the portions of the Construction Easement
Premises identified herein for (i) construction of the HRA Property and (ii) completion of the
City’s work contemplated in the Construction Mitigation letter dated June ___, 2018 from the City
of Edina to Grantor (the “Mitigation Letter”);
c. possible excavation and grading of soil within the Construction Easement Premises
to create safe working conditions and prevent landslide in connection with the work on the HRA
Property.
2. Aerial Easement. Grantors do hereby grant unto the HRA, its successors and
assigns, a temporary easement over the Aerial Easement Premises for the purpose of allowing the
crane located on the HRA Property to swing within the Aerial Easement Premises, at least 30 feet
above grade, in connection with construction of improvements located on the HRA Property;
195978v36 3
however, under no circumstances shall the crane lift any loads over the Grantor Property, except
those loads related to the removal of the mature trees located on the Grantor Property.
3. Use. Use of the Construction Easement Premises and the Aerial Easement
Premises during the term of this Agreement shall be at the will of the HRA, its successors and
assigns; it being the intention of the parties hereto that the Grantors hereby grant the uses herein
specified without divesting itself of the right to use and enjoy the Construction Easement Premises
and the Aerial Easement Premises, subject only to the HRA’s right to use the same for the
purposes herein expressed.
4. Scope of Easement. The term of this Agreement shall retroactively commence on
March 21, 2018 and expire upon the later of: (i) completion of the improvements on the HRA
Property or (ii) completion of the City’s work contemplated in the Mitigation Letter. It is
anticipated that this Agreement will terminate on or before October 31, 2018.
5. Repair and Restoration. The HRA shall be responsible for the repair and
restoration of any damage done in the temporary easement areas by the HRA, its employees,
agents or contractors during the term of this Agreement and shall be completed prior to the
expiration of the term of this Agreement.
6. Indemnification.
A. Subject to the statutory limits under Minnesota Statutes chapter 466, the HRA will
indemnify, defend and hold Grantors harmless from any and all claims, liabilities or causes of
action, including attorneys’ fees and costs, arising out of the use of the easements by the HRA and
its employees, contractors and agents, except to the extent caused by the negligence or willful
misconduct of Grantors or their successors or assigns. Nothing herein shall be deemed a waiver by
the HRA of the limits of liability set forth in Minnesota Statutes, Chapter 466 and the HRA shall
not be obligated to indemnify the Grantors for any amounts in excess of the limits set forth therein,
195978v36 4
less any amounts that the City is required to pay on behalf of itself, its officers, agents and
employees for claims arising out of the same occurrence.
7. Grantors’ Covenant. The above named Grantors, for themselves, their successors
and assigns, do covenant with the HRA, its successors and assigns, that they are well seized in fee
title of the above described Grantor Property; that they have the sole right to grant and convey the
easements identified in this Agreement to the HRA; that there are no unrecorded interests in the
Grantor Property; and that they will indemnify and hold the HRA harmless for any breach of the
foregoing covenants.
[remainder of page intentionally blank]
[signature pages to follow]
195978v36 5
IN TESTIMONY WHEREOF, the Grantors hereto have signed this document this
_______ day of __________________, 2018.
GRANTORS:
Mitchell J. Monson
STATE OF _____________________ ) )ss.
COUNTY OF ___________ )
The foregoing instrument was acknowledged before me this _________ day of
__________________, 2018, by Mitchell J. Monson, spouse of Jan Y. Monson.
___________________________________
NOTARY PUBLIC
195978v36 6
__________________________________
Jan Y. Monson STATE OF MINNESOTA )
)ss.
COUNTY OF ___________ )
The foregoing instrument was acknowledged before me this _________ day of
__________________, 2018, by Jan Y. Monson, spouse of Mitchell J. Monson.
___________________________________
NOTARY PUBLIC
195978v36 7
IN TESTIMONY WHEREOF, the HRA hereto has signed this document this _______ day of
June, 2018.
HRA: HOUSING AND REDEVELOPMENT AUTHORITY OF EDINA, MINNESOTA
By:_________________________________ James B. Hovland, Its Chair
And:________________________________
Robert J. Stewart, Secretary
Attested By:______________________________
Scott Neal, Executive Director
STATE OF MINNESOTA )
)ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this _______ day of June, 2018, by
James B. Hovland, Robert J. Stewart, and Scott Neal, the Chair, Secretary and Executive Director of
the HOUSING AND REDEVELOPMENT AUTHORITY OF EDINA, MINNESOTA, a public
body corporate and politic of the State of Minnesota, on its behalf.
___________________________________
NOTARY PUBLIC
DRAFTED BY: CAMPBELL KNUTSON
Professional Association Grand Oak Office Center I 860 Blue Gentian Road, Suite 290
Eagan, Minnesota 55121 Telephone: 651-452-5000
195978v36 8
EXHIBIT “A”
TO GRANT OF TEMPORARY EASEMENT
Legal Description of HRA Property (3930 to 3944 Market Street): Lot 1, Block 1, Edina Market Street, according to the recorded plat thereof, Hennepin
County, Minnesota.
195978v36 9
EXHIBIT “B” TO
GRANT OF TEMPORARY EASEMENT
Legal Description of Grantor Property (3945 49th Street West):
That part of Lot 1, Block 1, V.H Adams Addition, Hennepin County, according to the recorded plat thereof, lying East of the West 8 feet of Lot 1.
195978v36 10
EXHIBIT “C” TO
GRANT OF TEMPORARY EASEMENT
Legal Description of Construction Easement Premises:
The temporary construction easement shall be on the Southerly fifteen (15) feet of the following described property but shall not extend into the existing walls of the residence or garage:
That part of Lot 1, Block 1, V.H. Adams Addition, Hennepin County,
Minnesota, according to the recorded plat thereof, lying East of the West 8
feet of Lot 1.
195978v36 11
EXHIBIT “D” TO GRANT OF TEMPORARY EASEMENT
Legal Description of Aerial Easement Premises: That part of Lot 1, Block 1, V.H. Adams Addition, Hennepin County, Minnesota,
according to the recorded plat thereof, lying East of the West 8 feet of Lot 1.
June 14, 2018
Jan and Mitchell Monson
3945 West 49th Street
Edina, Minnesota 55424
RE: City of Edina Project No. PW18-001 (North Ramp Expansion)
Construction Mitigation for 3945 W. 49th Street
Dear Mr. and Mrs. Monson,
As you know, the City is expanding the North Parking Ramp located at 3930 to 3944 Market Street (formerly 49-1/2
Street). Portions of this project are immediately south of your property. This project is funded by the Edina Housing and
Redevelopment Authority (HRA) and referred to as Project PW18-001.
The project includes the addition of a new fourth level of public parking on top of the existing building. Comparable four-
level additions on the east and west ends of the parking garage will also be constructed. The new additions will include
new retail space on the street level. The construction will be substantially completed in September 2018.
Due to the unique conditions that exist along the shared property line with your property at 3945 West 49th Street, the
Edina HRA extends the following mitigation strategies. This letter supersedes and replaces the letter dated April 4, 2018.
1) TREES ALONG THE PROPERTY LINE – Although previous effort has been made to preserve the four
mature trees along the shared property line, the new strategy is to remove and replace these trees.
a. City will remove the four existing trees located along the fence on your property. This includes
removal/grinding of stumps and debris from the property. City will restore the impacted area with
clean fill, as needed to level your back yard to existing conditions. Re-seeding will be the
responsibility of the landscaper who installs the new plantings (see 1f below).
b. City will attempt to remove the trees by going over City property. If this is no longer possible (due
to utility lines or the in-progress construction of the parking garage), the trees will be removed by
going through your front yard. City will restore portions of your front yard disturbed by removal of
the trees with clean fill and seed.
c. The existing fence along the shared property line will be removed as part of the tree removal effort.
d. The tree and fence removal will occur between June and July 2018.
e. The City or the contractor will alert you in advance when this work is scheduled.
f. City will reimburse you for ten new upright shrubs or four new trees or a combination thereof to be
installed on your property along the shared fence, in an amount not to exceed approximately $7,000.
This amount will also include mulching, grass restoration and related work to create a healthy
PW18-001 Construction Mitigation – 3945 Monson
June 14, 2018
Page 2
growing environment. Half of this amount will be provided upon execution of this agreement with
the remainder provided upon completion of the work and presentation of paid invoice. This
reimbursement also includes restoration of the grass and other impacted portions of the yard. You
can use a contractor of your choice to install exactly the items and the schedule that you prefer.
Installation should be completed in calendar year 2018 or 2019.
2) TEMPORARY CONSTRUCTION FENCE – A temporary fence will be installed to maintain an effective
enclosure for your dog during the work.
a. City will install a temporary construction fence (4 to 6 feet tall) prior to or in conjunction with tree
removal.
b. The fence will extend from the west to the east boundaries of your property. The fence will be
installed approximately 15 feet north of the existing wood fence to allow adequate room for tree
removal and earthwork to occur.
c. The temporary fence will include mesh or screening to increase privacy and to collect large debris
generated by the construction work.
d. This fence will be removed after installation of the new permanent fence.
3) NEW RETAINING WALL AND NEW FENCE
a. As part of the parking garage project, City is installing a new retaining wall along the shared property
line. This wall is on City property. The top of the retaining wall will be within approximately 12
inches of the elevation of your yard. The elevation will vary to due to the slope of your back yard
(higher on the east and lower on the west). The soil on the City’s property will slope toward the
parking garage so that storm water remains on the City property rather than your backyard.
b. City will install a new cedar fence approximately parallel with the new retaining wall. This fence will
be L-shaped and return to the face of the existing parking garage near the grassy area. This fence will
be on City property.
c. City will infill the resulting 2-5 feet wide gap between the new fence and the existing fence along
the west side of your property with an 5-6 foot tall wooden fence that matches the design and
height of the existing fence.
d. New fence along shared property line to be 8 feet tall (nominal) cedar of similar style as your existing
fence. It will be sealed on both sides to prevent weathering. Decorative caps (similar to those on the
existing fence) will be installed on the posts. The fence segments will be stepped to accommodate
elevation changes (not sloped). Adequate ground clearance (approx. 2.5 inches) will be provided to
prevent premature deterioration.
e. Workers may need to work along the southern edge of your property to install and finish this new
fence.
f. If the new fence on City property requires maintenance or repair in the future please contact the
City of Edina’s Facility Manager for corrective action.
PW18-001 Construction Mitigation – 3945 Monson
June 14, 2018
Page 3
g. The City will provide reimbursement for replacement of the existing fence along the east property
line in an amount up to approximately $7,000. Half of this amount will be provided upon the
execution of this agreement with the remainder provided upon completion of the work and
presentation of paid invoice. This fence is anticipated to extend from the southern property line to
your garage. You can use a contractor of your choice to install exactly the style and the schedule that
you prefer. Installation should be completed in calendar year 2018 or 2019.
4) EXISTING SHRUBS ON CITY PROPERTY – The City will remove the dead arbor vitae shrubs on City
property near the south eastern corner of your property. This includes removal of the root ball and
removal from the site.
a. The grassy area with shrubs on City property on the north side of the existing parking garage will
remain in substantially the same condition as currently exists and will not be re-graded as part of this
PW-001 project.
b. Please contact the City of Edina Facilities Manager if the remaining shrubs need attention in the
future.
5) TEMPORARY EASEMENTS – Temporary easements are necessary (i) in limited portions of your back
yard to construct the City’s project, primarily a new retaining wall; (ii) in limited portions of your back
yard to remove existing trees and install a new fence to screen your back yard from the parking garage
and (iii) to allow a construction crane located on the City property to swing over the rear portion of
your property.
a. Due to the proximity of your home to the construction activity, City will provide compensation for
these temporary easements at the rate of $1,000 per month. The compensation period will begin on
March 21, 2018 and extend until the new fence is installed to screen the parking garage and the
tower crane is removed, but no later than October 21, 2018.
b. Presuming that all documents are executed by June 18, 2018, the fence work is anticipated to be
completed and the crane removed in July 2018.
c. Upon execution of this agreement, City will provide compensation for 4 months. If the easements
are required past July 21, additional compensation will be provided upon completion of the project.
Partial months will be pro-rated at $250 per week.
6) LEGAL FEES – The City will provide reimbursement for reasonable legal fees incurred relative to this
easement not to exceed $3,000. Please submit a copy of the invoice(s) for reimbursement.
7) FUTURE CONCERNS – As the City strives to be good neighbors, please feel free to reach out to City
Staff in the future if noise levels in the parking garage are excessive or if you notice elements of City
property that need repair or attention. Please direct any future concerns to the City of Edina Facilities
Manager.
PW18-001 Construction Mitigation – 3945 Monson
June 14, 2018
Page 4
The compensation and action outlined in this letter will be effective upon receipt of a fully executed Temporary Easement
Agreement. The removal of trees will be scheduled as soon as the City receives your written direction (via email or
letter) to proceed.
Thank you for your patience as the City makes another major investment in the neighborhood.
Scott Neal
City Manager and HRA Executive Director
c. Brian Olson, Public Works Director
Bill Neuendorf, Economic Development Manager
1
197949v1
GRANT OF PERMANENT EASEMENT
EDINA HOUSING AND REDEVELOPMENT AUTHORITY, a body politic and
corporate under the laws of the State of Minnesota, the Grantor, hereinafter referred to as the
"HRA", in consideration of One Dollar ($1.00) and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, does hereby grant unto LB 49th ½
STREET, LLC, a Minnesota limited liability company, hereinafter referred to as the “Grantee”,
its successors and assigns, a permanent easement for electric utility purposes including lines, a
pole, and appurtenances, hereinafter referred to as “public utilities”, over, across, on, under, and
through land situated within the County of Hennepin, State of Minnesota, as legally described
on the attached Exhibit “A”.
INCLUDING the rights of the Grantee, its contractors, agents, servants and assigns, to
enter upon the permanent easement premises at all reasonable times to construct, reconstruct,
inspect, repair, and maintain said public utility systems over, across, on, under, and through the
permanent easement premises, together with the right to grade, level, fill, drain and excavate the
permanent easement premises, and the further right to remove trees, bushes, undergrowth, and
other obstructions interfering with the location, construction, and maintenance of said public
utility easement.
The above named Grantor, for itself, its successors and assigns, does covenant with the
Grantee, its successors and assigns, that it is well seized in fee title of the above described easement
premises; and that it has the sole right to grant and convey the easements to the Grantee; that there
2
197949v1
are no unrecorded interests in the easement premises; and that it will indemnify and hold the
Grantee harmless for any breach of the foregoing covenants.
IN TESTIMONY WHEREOF, the Grantor hereto has signed this document this ____
day of ______________, 2018.
GRANTOR: EDINA HOUSING AND
REDEVELOPMENT AUTHORITY
By: _________________________________
James B. Hovland, Its President
By: _________________________________
Robert J. Stewart, Its Secretary
Attest:
Scott Neal, Its Executive Director
STATE OF MINNESOTA )
)ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ______ day of
______________, 2018, by James B. Hovland, Robert J. Stewart, and Scott Neal, respectively
the President, Secretary and Executive Director of Edina Housing and Redevelopment
Authority, a body politic and corporate under the laws of the State of Minnesota, on behalf of the
entity.
___________________________________
Notary Public
THIS INSTRUMENT WAS DRAFTED BY:
CAMPBELL KNUTSON
Professional Association
Grand Oak Office Center I
860 Blue Gentian Road, Suite 290
Eagan, Minnesota 55121
Telephone: (651) 452-5000
RNK
3
197949v1
EXHIBIT “A”
TO
GRANT OF PERMANENT EASEMENT
Legal description of the subject property:
Lot 1, Block 1, EDINA MARKET STREET, Hennepin County, Minnesota.
Legal description of easement area:
A permanent easement for public utility purposes (including utility lines, utility poles, and
appurtenances) over, across, on, under, and through the North 8.00 feet of the West 8.00 feet of
Lot 1, Block 1, EDINA MARKET STREET, Hennepin County, Minnesota.
[Property address: 3930 Market Street, Edina, MN 55424; PIN 18.028.24.14.0141; abstract and
torrens]
197946v1
GRANT OF PERMANENT EASEMENT
LB 49th ½ STREET, LLC, a Minnesota limited liability company, hereinafter referred to
as "Grantor", in consideration of One Dollar ($1.00) and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, does hereby grant unto the CITY
OF EDINA, a Minnesota municipal corporation, the Grantee, hereinafter referred to as "City", its
successors and assigns, a permanent easement for electric utility purposes including lines, a pole,
and appurtenances, hereinafter referred to as “public utilities”, over, across, on, under, and through
land situated within the County of Hennepin, State of Minnesota, as legally described on the
attached Exhibit “A”.
INCLUDING the rights of the City, its contractors, agents, servants and assigns, to enter
upon the permanent easement premises at all reasonable times to construct, reconstruct, inspect,
repair, and maintain said public utility systems over, across, on, under, and through the permanent
easement premises, together with the right to grade, level, fill, drain and excavate the permanent
easement premises, and the further right to remove trees, bushes, undergrowth, and other
obstructions interfering with the location, construction, and maintenance of said public utility
easement.
197946v1
The above named Grantor, for itself, its successors and assigns, does covenant with the City,
its successors and assigns, that it is well seized in fee title of the above described easement premises;
and that it has the sole right to grant and convey the easements to the City; that there are no unrecorded
interests in the easement premises; and that it will indemnify and hold the City harmless for any
breach of the foregoing covenants.
IN TESTIMONY WHEREOF, the Grantor hereto has signed this document this ____
day of ______________, 2018.
GRANTOR:
LB 49th ½ STREET, LLC
By ________________________________
_____________________________
Its ________________________
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this ______ day of
______________, 2018, by ___________________________, the _____________________ of LB
49th ½ Street, LLC, a Minnesota limited liability company, on behalf of the entity.
___________________________________
Notary Public
THIS INSTRUMENT WAS DRAFTED BY:
CAMPBELL KNUTSON
Professional Association
Grand Oak Office Center I
860 Blue Gentian Road, Suite 290
Eagan, Minnesota 55121
Telephone: (651) 452-5000
RNK
197946v1
EXHIBIT “A”
TO
GRANT OF PERMANENT EASEMENT
Legal description of the subject property:
Lot 1, Block 1, Replat of Lot 6, Block 1, Lund Kruse Addition, and the West 35 feet of the East 172
feet of the South 125 feet of the North 272.5 feet of Lot 36, Auditors Subdivision Number 172;
together with that portion of West 49th ½ Street now vacated described as follows:
The North 1.25 feet of the east 68.76 feet of that part of West 49th ½ Street abutting the south
boundary of the tract of land described as “Lot 1, Block 1, Replat of Lot 6, Block 1, Lund
Kruse Addition, and the West 35 feet of the East 172 feet of the South 125 feet of the North
272.5 feet of Lot 36, Auditors Subdivision Number 172”,
according to the plat thereof on file and of record in the office of the Hennepin County Recorder,
Minnesota.
Legal description of easement area:
A permanent easement for public utility purposes (including utility lines, utility poles, and
appurtenances) over, across, on, under, and through the North 8.00 feet of the West 8.00 feet of
the East 145.00 feet of the South 150.00 feet of the North Half of Lot 36, AUDITOR’S
SUBDIVISION NO. 172, Hennepin County, Minnesota.
[Property address: 3948 Market Street, Edina, MN 55424; PIN 18.028.24.14.0108; abstract]
4
197946v1
MORTGAGE HOLDER
CONSENT TO EASEMENT
_________________________________, a ___________________________, which holds
a mortgage on all or part of the property more particularly described in the foregoing Grant of
Permanent Easement, which mortgage was filed for record _____________________, as Document
No. _________________ with the office of the Recorder/Registrar of Titles for Hennepin County,
Minnesota, for good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, does hereby join in, consents to, and is subject to the foregoing Grant of Permanent
Easement.
____________________________________
By:
Its:
STATE OF ______________)
) ss.
COUNTY OF ____________ )
The foregoing instrument was acknowledged before me this ______ day of ____________,
2018, by _________________________________ the ______________________________ of
______________________________, a ______________________________, on behalf of the
entity.
_____________________________________
Notary Public
THIS INSTRUMENT WAS DRAFTED BY:
CAMPBELL KNUTSON
Professional Association
Grand Oak Office Center I
860 Blue Gentian Road, Suite 290
Eagan, Minnesota 55121
Telephone: (651) 452-5000
RNK
June 14, 2018
Board of the Edina Housing and Redevelopment Authority
Bill Neuendorf, Economic Development Manager
North Ramp Expansion: Recommendation to Discontinue Employee Shuttle
Service
Information / Background:
On April 26, 2018, the HRA Board authorized an employee shuttle service to provide an alternative so that
additional parking stalls could be made available for customers at 50th & France during the expansion of the
North Ramp. This service was initiated upon the urging of some of the key employers and property owners
in the business district.
Arrangements have been made to secure over 100 off-site parking stalls in up to 3-different locations and a
first-class shuttle operator was engaged to provide round-trip service every 15-minutes during the morning
and evening commutes. This service has been provided since April 23 at a daily rate of $487.50.
Incentives were offered to employers and employees to encourage them to free up more convenient
parking stalls for their customers.
To date, approximately $20,000 has been committed to this employee shuttle.
Despite several efforts to encourage employees to use this free service, ridership is very low. A total of 8
employees have registered to use this service and 4 employees use this service on a daily basis.
The largest employer and largest property owner has not been willing to require or encourage their
employees to use this service. They have requested greater incentives in order to promote the free service.
Due to the high cost and low effectiveness of this program, staff recommends that this service be
discontinued as soon as possible. The employees that registered for the service will be provided the
incentive that was initially offered.
City of Edina • 4801 W. 50th St. • Edina, MN 55424
Request for Purchase
Date: June 14, 2018
To: Members of Edina Housing and Redevelopment Authority
From: Brian E. Olson, Director of Public Works
Bill Neuendorf, Economic Development Manager
Subject: Request for Purchase: North Ramp Expansion and Retail Shell
Construction, Improvement Project PW-18-001
Purchase
Subject to:
☒List Quote/Bid
☐State Contract
☐Service Contract
The
Recommended
Bid is:
☐Within Budget
☒Not Within Budget
The construction contract for the North Parking Ramp Expansion and Retail Shell Construction
project, Improvement PW 18-001 was approved by the Housing and Redevelopment Authority
(HRA) on December 5, 2017. The authorized expenditure of $9,325,651 was less than the
Budgeted Amount for the Capital Expense portion ($9,459,409) of this project. Please note that
this amount does not include other approved expenses related to the project such as
architecture/engineering design fees and owner’s representation fees.
This original approval included a 10% construction contingency and authorization for the Director
of Public Works to approve individual change orders up to $50,000 as long as the construction
contingency ($850,241) has not been utilized. These arrangements have proven essential to keep
construction moving on pace without delays.
Date Bid Opened or Quote Received: Bid or expiration Date:
11/29/2017 12/29/2017
Company: Amount of Quote or Bid:
Adolfson & Peterson Construction
Original 10% contingency
Additional contingency requested
$ 8,502,410 Approved December 2017
$ 850,241 Approved December 2017
$ 9,325,651 Total Approved Dec. 2017
$ 250,000 Requested June 2018
$ 9,602,651 Total Requested June 2018
Recommended Quote or Bid:
Page 2
City of Edina • 4801 W. 50th St. • Edina, MN 55424
Request for Purchase
Department Director Authorization: ________________________________________
City Council Authorization Date: ______________________ (for purchases over $20,000 only)
On February 1, 2018, the HRA approved a change order to allow the use of a single tower crane
for $396,125. The scope of this change order was modified during construction by A&P to include
the use of two tower cranes to be erected simultaneously to more effectively construct the
project. The authorized cost for this work was $388,291.25 – approximately 47% of the overall
construction contingency. While the tower crane change order has proven valuable in limiting
disruption to the local customers and general public, it has strained the overall budget.
The purpose of this request is to readjust the construction contingency amount to efficiently and
effectively complete the project.
To date, staff has officially authorized a total of $768,574.46 in change orders and are nearing the
previously agreed upon construction contingency. Over half of these costs are a result of changes
to the design and scope intended to minimize impacts to adjacent property owners. The
remainder of the costs are due to design and construction adjustments due to unforeseen
conditions related to remodeling a 26-year old structure without fully accurate as-built drawings.
With the project approximately 50 percent complete and the most difficult work completed, staff
seeks authorization to amend the capital budget to include an additional $250,000 in
contingencies. Based on a strong understanding of the project outlook, this amount is anticipated
to be satisfactory to complete the project.
Staff is recommending an amendment to the project budget and authorization to spend up to
$9,602,651 on the capital expenses associated with expanding the North Parking Ramp.
Page 3
City of Edina • 4801 W. 50th St. • Edina, MN 55424
Request for Purchase
Department Director Authorization: ________________________________________
City Council Authorization Date: ______________________ (for purchases over $20,000 only)
Budget Impact
• 9232.6710 - Centennial Lake TIF District – Contracted Services
• The funding source for this project is the sale of the Center Ramp site and TIF
monies from the Centennial Lakes Fund. Grant funds may also be used for portions
of the environmental remediation.
• After completion, a private developer will purchase the retail shells constructed on
the first floor – paying for the construction costs plus the leasable space.
Environmental Impact
• Energy – This is an expansion of the existing parking facility so there will be more
use proportional to the number of stalls that are added to the facility.
• Water – The same relative amount of water will be used for the expansion as the
primary use of the water will be fire suppression.
• Natural Resources – Soil was cleaned with Hooten and Edina Realty demolition
projects.
• This project creates an improved district-wide parking resource. This shared
resource is more efficient than if each commercial property provided individual
parking facilities.
• The facility has been designed to allow for a future half level of parking, if additional
parking is required in the future. The structural design of the new expansion wings
has also been increased to accommodate a higher weight load to facilitate a change
in use if parking needs diminish in future generations.
Community Impact
• Public Works will administer this contract with the assistance of the Economic
Development Manager and the Business Liaison.
• This parking ramp expansion serves to increase the parking availability for the district.
• This project should have a long term positive impact to the district. Market Street will
no longer be an entrance to two parking facilities. There will be vibrancy on the street
level and increased parking within the district.
• This project will incorporate permeable pavers to lessen the storm water discharge to
the creek.
North Parking Ramp Expansion
CHANGE ORDER SUMMARY 6/13/2018 6/13/2018
Prepared by SRF Consulting Group, Inc.
GC CHANGE
ORDER REQUEST
NUMBER
Reference
RFI/PR/ASI/CCD#
Initial Requested
Change Order Amount
Initial
Requested
Change In
Schedule
Approved Change
Order Amount
Approved
Change In
Schedule
APPROVED
FOR C.O. #
(Date)
DESCRIPTION COMMENTS
1 RFI-012 $11,849.00 0.0 $11,849.00 0.0 #1 (2/23) Demo Precast at Level 3 Existing precast spandrel at level 3bay to be demo'd was not shown to be removed.
2R COPR #1 $42,135.00 0.0 $31,225.00
$388,291.25
0.0 #2 (2/27) Revise floor elevation; Struct revisions; Additional metal panels; Grading revisions for Van Access, Revisions to walls for CIP
stair, Additional metal panels at stair towers;
N/A CCD #2 $401,000.00 0.0 0.0 #3 (3/7) CCD #2 - Modify to Tower Cranes
4 RFI - 020 $34,666.00 0.0 r' $34,666.00
$1,277.00
$1,919.00
$1,448.00
$43,150.00
0.0 #4 (3/13) Column Splices Changes due to column demo.
7 RFI - 033 $1,277.00 0.0 0.0 #4 (3/13) Column Rebar Changes due to column demo
8 RFI - 029 $1,919.00 0.0 0.0 #4 (3/13) Column Lap Bars Changes due to column demo
10 RFI - 026 $1,448.00 0.0 0.0 #4 (3/13) Column A10 Changes due to column demo
19 SI #01; RFI-32
RFI-53 $43,150.00 3.0 3.0 #5 (3/14) SI #01 Struct revisions at B1 Foundation Column dowel revisions; shoring revisions; Demo existing grade
beam
5 RFI - 021 $7,051.00 0.0 $7,051.00
$11,306.00
0.0 #6 (3/15) Mechanical revision revise piping to accommodate footing extension;
14 N.A. $11,306.00 0.0 0.0 #6 (3/15) Demo of B-1- Size Discrepancy Additional foundation demo
20 N.A. $1,030.00 0.0 ... $1,031.00 I
$22,341.00
$16,291.00
$6,490.00
$8,932.00
$3,240.00
$3,128.00
0.0 #6 (3/15) B-2- Soil Correction - Directed by Braun Braun used wrong Grids
3 City Review Comments $33,579.00 0.0 0.0 #9 (3/26) City Review Comments Add fire proofing to three stair towers and raise SE tower by 4"
6 Owner $16,291.00 0.0 0.0 Asphalt Parking Lot (Design & Reissue) Need to finalize work here
11 N.A. $6,490.00 0.0 0.0 #12(5/31) Street Lights - Temp Power Approved for pending CO
12 N.A. $8,932.00 0.0 #10 (5/18) Repair - Elevator Feeder
13 N.A. $3,240.00 0.0 0.0 #10 (5/18) Electrical Revisions Electrical Removals Not on Plans
15 RFI - 045 $3,128.00 0.0 0.0 Elevator Drain Increase size from 3" to 4" to comply w/ code
16 N.A. $110,925.00 0.0 $0.00 0.0 n.a. Additional Supervision (Closed) Not Approved
17R SI #03 $17,312.00 0.0 $17,312.00
$2,826.00 0
0.0 #10 (5/18) SI #03 Mechanical Revisions Add roof drains, riser pipe, underground piping; X-ray and core drill existing slab; Add secued valves to DSP Fire Prot.;
18 RFI-048 $2,876.00 0.0 0.0 #11 (5/23) Structural Revision; Revise existing Precast Spandrel Connection
21R CCD #1; RFI-049 $60,122.00 TBD $43,633.00
$3,305.00
0.0 #8 CCD #1 -Structural Revisions Stop P/T slab Demolition; Add Reinforced beam ledges; restore slab;
32 CCD#1 $3,305.00 0.0 0.0 #10 (5/18) CCD #1 -Electrical Revisions Repair partially demo'd lighting at slab not being demo'd now.
22 N.A. $4,917.00 1.0 $4,917.00
$52,000.00
$2,816.00
1.0 #7 Gas Leak in Market Street One day of General Conditions, Temp heat cost, and Supt.;
23 N.A. $60,000.00 (13.0) (13.0) Incentive Pay for Early Partial Occupancy 13 days early finish
24 RFI - 042 $2,816.00 0.0 0.0 #11 (5/23) Electrical revision; Add Elevator Smoke Detector at Lvl 4
25 RFI - 074 $5,640.00 0.0 $5,640.00 0.0 #11 (5/23) Elect Revision Light Fixture Mounting Rev.
26 RFI - 075 $8,136.00 0.0 $8,136.00
$5,104.00
$46,627.00
$60,714.00
0.0 #11 (5/23) Elect Revision Add Light Fixtures at Stair
27 RFI - 057/083 $5,104.00 0.0 0.0 #11 (5/23) Structural Revision; Add PIT Stressing Boxes
28 COPR #3 $46,627.00 0.0 0.0 #13 (6/1) Brick and Medallion Revisions Changes due to column demo
30 COPR #2 $60,714.00 0.0 0.0 Add Fence; Revise NW wall; Add Girder; Chamfer & Drip Edge Add Fence; Revise NW wall; Add Girder; Chamfer & Drip Edge
31 RFI - 069 $1,597.00 0.0 1,597.00 0 .0 Structural Revision; Deck Bearing Angle
33 CCD #3 $8,852.00 0.0 $38,819.00
7
0.0 Mechanical Revisions Relocate elev sump and storm lines out of retail areas
34 ASI #5 $3,041.00 0.0 $3,041.00 0.0 Mechanical Revision
35 RFI 97 $13,972.00 0.0 $13,972.00 0.0 Elevator Phone lines
CAUserstolson\AppDatalocal\MicasgaMindows\Temporary Internet Files\Content. Outlook\INH9P3IV\CO Summary Worksheet_North Ramp Extension06132018 (version 2).xls.xlsx
North Parking Ramp Expansion
CHANGE ORDER SUMMARY 6/13/2018 6/13/2018
Prepared by SRF Consulting Group, Inc.
GC CHANGE
ORDER REQUEST
NUMBER
Reference
RFI/PR/ASI/CCD#
Initial Requested
Change Order Amount
Initial
Requested
Change In
Schedule
Approved Change
Order Amount
Approved
Change In
Schedule
APPROVED
FOR C.O. #
(Date)
DESCRIPTION COMMENTS
36 n a $3,735.00 0.0 11— $3,735.00 _EI
$0.00
0.0 remove existing footing
37 n a $27,524.00 0.0 0.0 n.a. Smaller pump for deck pours
38 COPR #7 $2,347.00 0.0 $2,347.00 0.0 Revise doors at garbage areas
39 ASI #4 $48,502.00 0.0 L $36,000.00 11 0.0 Street Lights, Mechanical Revs
40 COPR #5 $14,256.00 0.0 $14,256.00 0.0 Anti-graffiti
41 N.A. $13,148.00 I $13,148.00.A RAP 20% of $65,742 = ($717 West , $12,431 East) 20 % Removal costs for Contaminated Soil
RFI-011 Barriers Cables - 2nd to 3rd
RFI - 030 Top Wall Elevations
9R RFI - 035 $19,036.00 0.0 r $15,819.00 0.0 #11 (5/23) Replace and reinstall insullation below grade slab SOG Insulation
RFI - 001 SOG Removal at Grid 10
RFI - 051 Floor Heights
RFI - 037 Loop Detector
Net Security Allow $50,000.00 0.0 $51,000.00 $60k Allow -(Protech ($55k); Comlink ($36k); Server (20k))
N>A> $0.00 ($20,000.00) Net credit for paint revisions
RFI - 071
$50,000.00
$38,173.00
$10,000.00
$10,000.00
$10,000.00
Thickened Slab
NA $50,000.00 Design and construct the NE wall for as-built conditions.
29R-1 COPR #4 $64,750.00 0.0 #12 (5/31) Screen North Elevation Add Louvers unless existing
COPR #4 $0.00 Potential GCs for Louver install.
N.A. $15,000.00 0.0 Temp Power by Owner Xcel cost to move NE pole twice
N.A. $10,000.00 1.0 1.0 Weather Delay Est COR for record April Snowfall beyond 90 percentile.
Nothing submitted vet
$1,362,745.00 4.0 $1,138,572.25 4.0
$ 625,470
$ 331,900
Sum cost to minimize adjacent impact
Sum cost for as-built/unforeseen conditions.
CAUserstolson\AppData\Local\MictgagMindows\Temporary Internet Files\Content.Outlook\INH9P31V\CO Summary Worksheet North Ramp Extension06132018 (version 2).xls.xlsx
June 14, 2018
Board of the Edina Housing and Redevelopment Authority
Bill Neuendorf, Economic Development Manager
Tax Increment Financing for Pentagon Park North:
4600-4660 West 77th Street
Information / Background:
A Tax Increment Financing (TIF) District was established in 2014 in anticipation of the
redevelopment of the antiquated office buildings known as Pentagon Park. Prior to that time, the
properties had fallen into foreclosure after a previous redevelopment effort failed during the Great
Recession. Occupancy plummeted during this time period as did the valuation of the properties.
In 2013-2014 Hillcrest Development re-assembled the properties and was granted preliminary
rezoning for a mixed-use office park. The Edina Housing and Redevelopment (HRA) entered into a
Master Redevelopment Agreement with Hillcrest Development (dba Pentagon Revival).
About 11 of the 28-acre North Parcel is proposed to be sold to Chase Real Estate and
redeveloped into two multi-family housing buildings to be leased at market rates. One building
would be a traditional apartment complex while the second building would be a senior living facility
containing independent living, assisted living and memory care units. Nursing care/rehab units might
also be included. Both buildings would be located along the southern edge of Fred Richards Park.
The redevelopment of this portion of the site would also include a new access road to the park,
new sidewalks to the park and shared public parking along the edge of the park. Amenities such as
public art, bus shelters and dog parks are also envisioned.
The market rate apartments would begin first, with the senior building beginning a few months
later. The apartments would be delivered in two phases beginning in 2020 with a 2 to 3-year lease-
up period. The senior building would be delivered in 2020 with a similar lease up period. The
estimated construction cost of this overall project is $141 million.
To date, City staff and Planning Commission have recommended that the rezoning be denied, but
final consideration by the City Council is scheduled on June 19, 2018.
STAFF REPORT Page 2
DEVELOPER’S REQUEST
The developer has requested two TIF Notes totaling $14.37 million (payable with the District’s
remaining 24 years of incremental property taxes potentially generated by the site). This is
approximately 11% of the overall cost of the proposal.
Staff has engaged Ehlers Associates to analyze the pro forma. Dorsey & Whitney has been engaged
to prepare the Term Sheet and provide legal analysis on behalf of the HRA. After several
conversations and initiation of a draft Term Sheet, City staff and developers have not been able to
reach agreeable terms. Staff is not supportive of the full amount requested.
Financial analysis of the pro forma confirms that tax increment financing is necessary so that the
project yields a market-rate return to the developer. There is significant expense in correcting the
existing soils to support new construction and to manage storm water collected from the site.
There are also expenses in building a public roadway and allowing shared parking near the Fred
Richards Park. The present value of the TIF generated is approximately $20 million. The Ehler’s
financial analysis indicates, however, that the $14.37 million requested would deliver a financial
return higher than the market would typically require for this type of project. A typical market
return is in the 8 to 10 % range as measured on cash on equity basis. The requested amount is
estimated to deliver a return greater than 10%.
While this proposal would deliver significant improvements compared to the existing conditions, it
is staff’s opinion that the level of public amenity and benefit delivered is less than anticipated in the
2014 Master Redevelopment Agreement. As such, staff recommends that TIF assistance be
provided only to bring the developer’s return up to the 8% typically required for a project of this
type to move forward.
STAFF RECOMMENDATION
As an alternative to the developer’s request for $14.37 million, staff recommends TIF support
through TIF Notes in the total amount of $9.89 million. This is 7% of total project costs.
1) Issue two pay-as-you-go TIF Notes, one for each phase of the project
a. Each Note issued prior to the July 15, 2019 deadline and after statuatoryTIF-eligible
expenses are incurred
b. Notes sized using returns analysis and within property tax projections by Ehlers
c. Intended to reimburse for extraordinary soil corrections, demolition, storm water
management and construction of streets, trails, public/shared parking and pedestrian
amenities
d. Public easements required for site improvements such as sidewalks, trails, bicycle
amenities, transit shelters/stations, and at least 97 public parking stalls
e. Public right-of-way dedicated for new street leading to Fred Richard Park
STAFF REPORT Page 3
f. Repayment limited to 80% of tax increment collected to allow for standard 10%
administration and an additional 10% to be pooled to a future affordably-priced
housing project located on an adjacent parcel
2) Market-rate Building TIF Note estimated at $5.66 million (present value)
a. Begins to accrue interest and be payable after completion of the approx. 365 unit
market rate apartment building - likely 2020.
3) Senior Building TIF Note estimated at $4.23 million (present value)
a. Begins to accrue interest and be payable after completion of the approx. 225 unit
Senior Building – likely 2020.
4) City to review pro forma and actual costs of each phase prior to payments on Notes to
confirm the “but-for” test
5) Typical “look-back” and “claw-back” provisions to verify that the committed TIF monies
were needed in full to finance the redevelopment and to reduce the continuing public
contributions if higher than anticipated returns are achieved during the 20+ year duration of
the TIF Notes
6) Developer to provide annual maintenance support to the adjacent park at a mutually
agreeable price per unit.
In the most recent meeting with the developers, they indicated that this recommended level of TIF
assistance was not adequate and that they would require additional TIF assistance to move forward
with the project.
ADDITIONAL ISSUES TO BE RESOLVED
The 2014 TIF Master Redevelopment Agreement would have to be amended to allow a Secondary
Redeveloper to purchase the North Parcel and construct a project that is significantly different than
the original office/hotel proposal. While most changes are relatively minor, three significant issues
are still in need of resolution. Staff has met with the developer and property owner on several
occasions, but so far, no resolution has been reached on these issues.
1) Affordable Housing Policy – The current proposal does not include affordably-priced
housing. The property owner and developer intend a different developer to deliver
affordable housing on an adjacent site in the future. Dominium, a non-profit housing
developer has recently executed a purchase agreement and submitted a letter to confirm
their potential interest in that site. This is a good faith sign of their intention to pursue a
future project. At this time, however, there is no formal proposal and no firm commitment.
STAFF REPORT Page 4
It is anticipated that Dominium would seek its primary funding via Low Income Housing Tax
Credits issued through Minnesota Housing Finance Agency in the 2019 application cycle.
They have indicated that they will also need local financial support such as TIF to make the
affordable project viable. At this time, it is unlikely that the project will be scheduled to
incur costs prior to the Pentagon Park TIF District’s July 2019 deadline. Thus, alternative
means of local funding will need to be pursued.
Based on these conditions, City staff recommends that some type of security be pledged in
case the Dominium concept does not come to fruition in a timely fashion. Based on the
City’s clarified ‘buy-in’ policy of $100,000 per unit, the security for the 554 units of market-
rate, independent and assisted living units would equal $5.54 million. The memory care units
have not been assessed a fee because they are more similar to a skilled nursing facility than
a traditional apartment. The buy-in fee would also not be applied to any nursing care/rehab
units included in the final design.
Neither the property owner or developer are willing to provide that amount of security.
Alternatively, they propose $3 million in total security through a combination of land valued
at $1.9 million and a $1.1 million letter of credit.
Staff recommends that if the affordably-priced project is unable to be entitled
simultaneously with the market-rate projects, security be provided at a level consistent with
the City Policy. This would require an additional $2.54 million of security. Direction from
the HRA Board would be helpful if terms of a Redevelopment Agreement are to be
successfully negotiated.
2) Shared Public Parking – One of the original goals of the TIF Redevelopment Agreement
was to share resources between the public park and private properties within the
Redevelopment District. The Park Master Plan calls for a total of 230 shared parking stalls
adjacent to the park for the shared benefits of tenants, residents and community members
at-large. While the developer is willing to contribute 97 stalls to this goal, the property
owner of the remaining parcels is only willing to contribute the additional 130 stalls if the
City or HRA makes an additional TIF contribution of $1.75 million. This request is contrary
to the spirit of the original Redevelopment Agreement and it is unclear where these
additional funds would come from.
Direction from the HRA Board would be helpful regarding the need for shared parking in
excess of the 97 stalls provided by the Sienna project by Chase Real Estate.
3) Reconstruction of West 77th Street – Zoning conditions recommended by staff include
implementation of the property owner’s original pledge to reconstruct W. 77th Street. At
this point, this work does not appear to be funded. This is also an issue that should be
resolved if a Redevelopment Agreement is to be successfully negotiated.
STAFF REPORT Page 5
FUTURE OPTIONS
If this proposal does not move forward, the property owner (Hillcrest Development/Pentagon
Revival) is at risk of being restricted by the five-year rule imposed by Minnesota Statute. If this
proposal does not move forward, it is unlikely that any significant activity would take place prior to
the 5-year deadline (July 2019).
If the 5-year deadline passes, the City and property owner still have a wide variety of options for the
site. Based on the age, condition and layout of the existing buildings, it is likely that a new TIF District
could be explored for a project that yields greater public benefits. This could allow the property owner
additional time to create the best project without the urgency of an expiring deadline.
Future options include:
1) Renovation and re-occupancy of the existing buildings by new tenants
2) Redevelopment at a smaller scale that is self-financed
3) A Renewal and Renovation TIF District could be pursued to create new opportunities on
the site
4) A Housing TIF District could be pursued to create new opportunities on the site
5) A Redevelopment TIF District could be pursued to create new opportunities on the site
6) Special legislation could be pursued to extend the five-year deadline
7) City financial participation is possible using Tax Abatement
SUMMARY AND RECOMMENDATION
City staff and developers have been unable to reach mutually agreeable terms, despite extensive
negotiations. After reviewing the financial pro forma, staff recommends a $5.66 million TIF Note to
enable the market rate apartment building to receive a market-rate return. Additionally, staff
recommends a separate $4.23 million TIF Note to enable the senior apartment building to receive
a market-rate return. Based on the limited amount of tangible public benefits, a higher TIF
contribution is not recommended.
ALTERNATE #1 - Approve the developer’s request for $14.73 million in TIF Notes to deliver
two new multi-family housing buildings leased at market-rates.
ALTERNATE #2 - Reject the use of TIF for this project. Several realistic options remain if the
HRA Board is not supportive of either the developer’s request or the staff’s
recommendation.
# # #
STAFF REPORT Page 6
Background Information for Reference
1) 2014 Site Plan granted Preliminary Zoning and referenced
in Master TIF Agreement
2) November 2017 Site Plan – submitted for sketch plan
review
3) April 2018 Site Plan - submitted for preliminary approval
STAFF REPORT Page 7
2014 Preliminary Zoning Approvals and Master TIF Redevelopment
Agreement (Minimum Improvements)
STAFF REPORT Page 8
November 2017 Sketch Plan
STAFF REPORT Page 9
April 2018 Site Plan
(Preliminary Approval to be considered by City Council on 6/19/2018)
2140 County Rd 42 West, Burnsville, MN 55337 | 952-898-5600 | www.ChaseRE.com
Sienna on the Park
Pentagon North Redevelopment
2140 County Rd 42 West, Burnsville, MN 55337 | 952-898-5600 | www.ChaseRE.com
Bill Neuendorf
Economic Development Manager, City of Edina
RE: TIF - Pentagon North Housing Redevelopment – Sienna on the Park
June 8, 2018
Bill,
Our Sienna on the Park project team is committed and thrilled to be partnering with the City of Edina in
transforming such a significant and underutilized - yet high potential - part of the city. With it will bring a
funding source for public improvements, kickstart the new Fred Richards Park and be a catalyst for
future, adjacent redevelopment.
The City’s TIF commitment will provide the financial mechanism to overcome the extraordinary costs of
1) demolishing 250,000 SF of office buildings 2) correcting significant depths of unsuitable swamp-
outwash soils 3) countering the 100-year floodplain + high water table 4) support the various public
improvements.
The site challenges - combined with rising construction costs and peaking market factors - brings serious
risks into planning such a substantial, $140M+ project. These risks may be considered when sizing the
appropriate amount of the City’s TIF commitment – to enable a project to be successful through
construction but provide the City the ability to ‘lookback’ at its investment in future years. Our financial
team has proven out an approx. $14M TIF note through analysis and various scenarios. Our studies have
been utilizing early 2018 construction estimates and current rental market conditions.
Our goal is to partner in financing a project to be successful that would otherwise not occur. When
disregarding the costs of the public improvements, 95% (or $127M) of the project is privately financed.
And the project generates significantly more TIF than proposed to be utilized.
Despite the challenges ahead of us, our team is committed to delivering a successful project. We plan to
further coordinate the perimeter improvements with the City, Parks + Rec and Planning departments as
soon as possible - to dive further into the details of how the shared property line can blend the
landscape and public amenities to the Fred and Nine Mile Creek Regional Trail.
Our team looks forward in seeing this transformation take shape with the City of Edina.
2140 County Rd 42 West, Burnsville, MN 55337 | 952-898-5600 | www.ChaseRE.com
In showcasing our shared goals in investing in this redevelopment, we believe the following points may
help summarize the broader benefits to our neighbors and the Public.
List of Project Benefits:
Removal of blight – demolition of vacant office buildings and 1000 surface parking stalls
o 70% reduction in surface parking area
550 underground stalls = 175,000 SF garage
o 90,000 SF of new green space
o 190,000 SF future tree canopy
o 1,000 linear feet of 77th Street revitalized and 500’ road access to park
o 5,000+ feet of new sidewalk and trails
o Public art, enhanced street lighting, boulevards, way finding, monument signs
Investment and funding source to kickstart the Fred’s park improvement plans
o New direct public road and trails to the Fred + 10’ walk & bike trail
o 97 Fred Richards Park shared parking stalls directly facing the park
o Enhanced water features, berms and landscaping adjoining park’s property
o Community Dog Park, community garden, picnic areas, outdoor games along shared
property line.
o 4 Trail connections to Nine Mile Creek Regional Trail
575 new apartment homes and senior suites.
o Jumpstarting a new neighborhood from vacant office/industrial setting into a new
community; one that begins with a variety of residents in ages, needs and services.
o Bring further investment into remaining phases.
o Influx of future residents will support the complimentary mixed-use projects of
Pentagon South and surrounding neighborhood businesses
100 affordable homes being delivered with our Dominium partner.
Project value and tax increases of 25x and 10x.
Joe McElwain – Chase Real Estate
2140 County Rd 42 West, Burnsville, MN 55337 | 952-898-5600 | www.ChaseRE.com
=
7.7M Corrections (5%)
6.7M Public Improvements (5%)
127M Construction (90%)
*TIF typically pays 90% to Developer for TIF Note repayment and 10% to City Overhead.
The project’s increment will be uniquely distributed:
80% to note repayment
10% to City overhead
10% reserved for affordable housing pooling
Current Property Taxes = $ 200,000
o Stabilized Property Taxes = $2,000,000
Current Value = $ 5,800,000
o Future Value Year 2023 = $ 160,000,000
Soil Corrections
Demolition
TIF Project Cost Value
$14M
($20M Available)
80/10/10 Structure*
$141M
$127M
Privately Financed
$160M
(Stabilized 2023)
25x+ gain
in property value
10x gain
In property taxes
Public
Improvements
Use of TIF:
June 14, 2018
Board of the Edina Housing and Redevelopment Authority
Bill Neuendorf, Economic Development Manager
Tax Increment Financing for Pentagon Park South:
4815-4901 West 77th Street and 7710 Computer Avenue
Information / Background:
A Tax Increment Financing (TIF) District was established in 2014 in anticipation of the
redevelopment of the antiquated office buildings known as Pentagon Park. Prior to that time, the
properties had fallen into foreclosure after a previous redevelopment effort failed during the Great
Recession. Occupancy plummeted during this time period as did the valuation of the properties.
In 2013-2014 Hillcrest Development re-assembled the properties and was granted preliminary
rezoning for a mixed-use office park. The Edina Housing and Redevelopment (HRA) entered into a
Master Redevelopment Agreement with Hillcrest Development (dba Pentagon Revival). The next
year, they razed the aging building on the “South Parcel” and prepared a ‘shovel ready’ site.
The 12.1 acre South Parcel is proposed to be redeveloped into a mixed-use project including
hotels, office and retail. The site would be served by surface and structured parking and would
include new green space. The developer has requested flexibility in the actual type of buildings
delivered in case the office market continues to be slow.
A joint venture is anticipated including Hillcrest Development/ Pentagon Revival and Solomon Real
Estate. Several “pads” would be prepared by the property owner and sold to third-parties to build
and operate the individual buildings. The two-phase redevelopment effort is estimated to cost
more than $140 million (approximately $70 million per phase).
The proposed site plan secured Preliminary Zoning Approval on June 5, 2018.
STAFF REPORT Page 2
DEVELOPER’S REQUEST
The developer has requested an $18.1 million TIF Note (payable with the TIF District’s remaining
24 years of incremental property taxes potentially generated by the site). This is approximately 26%
of the Phase 1 cost and approximately 13% of the overall cost of the two-phase proposal. Most
projects funded with TIF aim for no more than 10% unless exceptional conditions exist.
The developer has indicated that the single largest contributor to this TIF request is the high cost
of structured parking. While parking is a TIF-eligible expense according to Minnesota Statute, Edina
prefers to subsidize parking only when it can serve a larger public purpose. There is not currently a
defined need for public parking in this location.
Staff acknowledges that this site has hurdles to redevelopment including high demolition costs and
high costs of soil correction and site preparation. Those are some of the key reasons that a Tax
Increment Financing District was established in 2014.
Staff further acknowledges that the greatest financial risk, however is taken by the property owner
and investors. If completed according to the current proposal, the site could deliver several
benefits to the general public including:
Growth of property tax base
New business and employment opportunities
New lodging opportunities, including new lodging taxes
New services for area residents and employees
Reinvigoration of a tired commercial site that has been vacant and underused for years
Potential catalyst to attract additional investment to this commercial/industrial area
Improved public realm including, sidewalks, transit stations, public art and landscaping
The degree of development and degree of tax base growth, however, is much less than originally
anticipated. The 2014 TIF Master Agreement anticipated 375-425 hotel rooms, 500,000 SF office
and 25,000 SF retail. The current best-case outcome is 346 hotel rooms, 244,000 SF office and
11,000 SF retail - about half the size of the original concept. This reduced scale also reduces the
potential benefit to the community’s tax base upon completion.
Based on the information made available for review, staff finds that Phase 2 of the current proposal
is highly speculative and the Phase 1 requires an unusually high level of public financial participation
compared to other projects in Edina and the metro area. After several conversations, City staff and
developers have not been able to reach agreeable terms. Staff is not supportive of the full amount
requested, especially considering the limited impact of the final vision.
ALTERNATIVE PROPOSAL
Staff has engaged Ehlers Associates and Dorsey & Whitney to help analyze the request and propose
an alternative to the developer’s request. The following alternative has been prepared:
STAFF REPORT Page 3
1) Issue two pay-as-you-go TIF Notes, one for each phase of the project
a. Each Note issued prior to the July 15, 2019 deadline and after TIF-eligible expenses
incurred
b. Notes sized using tax projections by Ehlers ($14.4 million anticipated instead of
$18.1 million)
2) Phase 1 TIF Note estimated at $7.7 million (present value)
a. Begins to accrue interest and be payable after completion of all Phase 1 Elements
(site work, two retail buildings, two hotels, parking structure and green plaza) –
likely 2021.
b. Intended to reimburse for site improvements, right-of-way improvements and
related legal/professional fees
c. Public easements required for site improvements such as sidewalks, trails, bicycle
amenities, pedestrian plazas, transit shelters/stations, and green plaza
3) Phase 2 TIF Note estimated at $6.7 million (present value)
a. Begins to accrue interest and be payable only after completion of all Phase 2 Elements
(retail/office building, parking structure, and two office buildings) – likely 2023.
b. Intended to reimburse for structured parking necessary to attract multiple large-
scale users that create a vibrant mixed-use destination
c. Public easements required for parking structures and/or easement on surface
parking lot closer to Fred Richards Park
4) City to review pro forma and actual costs of each phase prior to issuance of Notes to
confirm the “but-for” test
5) Extensive “look-back” and “claw-back” provisions to verify that the committed TIF monies
were needed in full to finance the redevelopment and to reduce the future public
contributions if higher than anticipated returns are achieved during the 20+ years of the TIF
Notes
In the most recent meeting with the developers, they indicated that these alternative terms were
not acceptable and that they require greater flexibility to redevelop the site.
FUTURE OPTIONS
If this proposal does not move forward, the developer is at risk of being restricted by the five-year
rule imposed by Minnesota Statute. If this proposal does not move forward, it is unlikely that any
significant mixed-use activity will take place prior to the 5-year deadline (July 2019).
If the 5-year deadline passes without redevelopment, the City and developer still have a few
different opportunities to bring about redevelopment of the vacant site. Possible options include:
STAFF REPORT Page 4
1) Redevelop at a smaller scale with surface parking instead of structured parking
2) City financial participation is possible using Tax Abatement
3) Special legislation could be pursued to extend the five-year deadline
4) A Renewal and Renovation TIF District (or possibly another Redevelopment TIF District)
could be pursued if combined with other surrounding parcels with qualifying buildings
Since Option 1 has limited impact and Options 3-4 require participation by third-parties, staff and
Ehlers investigated Option 1 to better understand its fiscal impact.
The developer has indicated there is solid interest by two hotel groups and possibly retail tenants. It
is possible that those four elements could be delivered using surface parking instead of more
expensive structured parking. To be clear, this alternative has not been confirmed by the developers.
Ehlers has prepared an estimate of the fiscal impact of redevelopment of the commercial site at an
intensity that is market driven and self-financed. This estimate presumes that the Phase 1 elements
– two hotels and two retail buildings - proceed using less expensive surface parking rather than
structured parking. The proposed office buildings would not be delivered in this scenario because
the land is used for parking instead of buildings. The attached memo indicates that this scale of self-
financed development delivers substantial positive impacts to the local tax base. It would take
several decades for the proposed TIF-funded project to match this fiscal impact.
SUMMARY AND RECOMMENDATION
City staff and developers have been unable to reach mutually agreeable terms despite extensive
negotiations. In an effort to revitalize the vacant site, staff recommends a $7.7 TIF Note to induce
high quality mixed uses on the site (Phase 1). Additionally, a separate $6.7 TIF Note is
recommended but only to incentivize new commercial development that creates significant new
employment and business opportunities on the site. These notes would only be payable upon
completion of the proposed elements. The full TIF request and a second TIF Note with undefined
outcomes is not recommended.
ALTERNATE #1 - Approve the developer’s request for a $18.1 million TIF Note to allow a
potential mixed-use project to proceed. The actual elements to be delivered
would be market-driven and subject to change but the TIF Note would be
payable upon certification that qualified costs have been incurred
ALTERNATE #2 - Reject the use of TIF for this project. The site appears to have potential to
deliver a less intensive development without TIF support. While fewer built
elements might reduce the overall vibrancy of the site, a self-financed
commercial project would deliver a strong boost to the property tax base
without the need to wait for the expiration of the TIF District in 2043.
# # #
STAFF REPORT Page 5
Background Information for Reference
1) 2014 Site Plan granted Preliminary Zoning and referenced in Master
TIF Agreement
2) 2014 Master TIF Agreement – Overall Pro Forma
3) November 2017 Site Plan – submitted for sketch plan review
4) May 2018 Site Plan - submitted for preliminary approval
STAFF REPORT Page 6
2014 Preliminary Zoning Approvals and Master TIF Redevelopment
Agreement (Minimum Improvements)
STAFF REPORT Page 7
2014 Master TIF Agreement – Overall Pro Forma
Original TIF Agreement
anticipated up to $52 M
in structured parking as
“eligible costs”
Original TIF
Agreement
anticipated approx.
equal amounts of
equity and TIF
STAFF REPORT Page 8
November 2017 Sketch Plan
STAFF REPORT Page 9
May 2018 Site Plan (granted Preliminary Approval on 6/5/2018)
Memo
To: Bill Neuendorf - Economic Development Manager, City of Edina
From: Nick Anhut – Ehlers and Associates
Date: June 10, 2018
Subject: Pentagon Park – South Site TIF Analysis and Project Review
The City requested Ehlers to review the Pentagon Park – South Site project development pro forma and related request for up to $18.1 million of Tax Increment Financing (TIF) assistance. The project includes the following components:
Phase I Retail: 7,500 and 4,300 square foot buildings, and Retail/Office building of 19,000 square feet
Hotels: 193-room dual flag hotel, and 153-room extended stay hotel
Phase II Commercial Office: two office towers of 125,000 and 100,000 square feet
We have reviewed the developer’s TIF request and what information the developer has
provided to date on the project financing to include: project phasing, land and sitework
costs, and the expected lease/rental rates and operating costs for the retail and office components. We have also estimated the potential TIF cashflow generated by the proposed
development. Below are our comments with regards to the pro forma and TIF request.
Tax Increment
Estimated Total Taxable Property
Market Value Total Market Tax ProjectNew Use Per Sq. Ft./Unit Sq. Ft./Units Value Class Tax Capacity
Phase I Retail 430 7,500 3,225,000 C/I Pref.63,750
Phase I Retail 430 4,300 1,849,000 C/I Pref.36,230Phase I Retail/Office 300 19,000 5,700,000 C/I Pref.113,250Phase I Hotel 110,000 193 21,230,000 C/I Pref.423,850
Phase I Hotel 110,000 153 16,830,000 C/I Pref.335,850
Phase II Office I 230 125,000 28,750,000 C/I Pref.574,250
Phase II Office II 230 100,000 23,000,000 C/I Pref.459,250TOTAL100,584,000 2,006,430
PROJECT INFORMATION (Project Tax Capacity)
Allocated 2018
Land Value
In 2014 when the TIF District was created, the site’s base value was set at a taxable market
value of $5,360,000. Using the higher end assessed market values of comparable properties in Edina and adding 1% annual growth factor, Phase I of the project is expected
to generate a present value of $7.7 million in TIF (at a 6% interest rate). Phase II potentially
Pentagon Park – South Site TIF Analysis and Project Review June 10, 2018
Page 2
generates an additional $6.7 million totaling $14.4 million over the remaining 24 years of the Pentagon Park TIF District.
The developer is requesting $18.1 million in the form of a Pay-Go TIF Note to offset the
project gap. This amount is likely only to be achieved anticipating higher than market valuation and 2% annual growth to generate the TIF revenue. While it is the developer’s
risk whether the TIF cashflow will prove sufficient to pay the full Note balance, the HRA
should expect either of a $14.4 or $18.1 million TIF commitment will demand the full 24
years remaining in the TIF District. Pro Forma Review
1. Phase I Acquisition and Sitework Cost: The developer has indicated significant sitework and supporting infrastructure investment must be made to deliver the density on the 12-acre site. Including acquisition and demolition costs to date, total
sitework costs are in excess of $14 million.
2. Structured Parking: Site density requires structured parking facilities adding significantly to the Total Development Cost (TDC). The Phase I parking costs are
estimated at $11,445,964 or ~$29,350 per stall.
3. Site Cost Recovery: Upon completion, it is expected up to $8 million of the above site and parking investment may be offset by proceeds from sale of the pad-ready retail and hotel sites.
4. Commercial Leases: Commercial rents on a triple net basis range from $38 sq/ft
for retail, and $20 to 29 sq/ft for the potential uses within the retail/office building. These are at the higher-end range for the market.
5. Returns/Cash Flow: The project’s retail components are anticipated to produce
adequate market returns assuming TIF can offset a portion of site improvement and parking infrastructure costs. Without TIF, the achievable rent and operating expense do not indicate the ability to absorb the full land and site development costs.
Projections for the hotel components have not been made available.
Financial Feasibility
Overall, the developer has indicated the project site and infrastructure costs make the
development financially feasible only with an $18 million TIF commitment from the HRA.
The investment creates density on the site to enable the possibility of a future Phase II
office component. The developer has indicated the Phase I retail and hotel elements are feasible today, however existing market conditions for office development challenge the
feasibility of Phase II.
Alternative Development Staff has requested Ehlers perform a break-even analysis to evaluate the potential TIF
investment believing that a reduced density alternative project consisting only of the Phase I
retail and hotel elements is feasible in the near term. By surface parking over the full 12-acre site, a reduced density project may significantly cut the development’s up front infrastructure costs and therefore reduce the need for public assistance.
Pentagon Park – South Site TIF Analysis and Project Review June 10, 2018
Page 3
We have estimated the tax generation from both the reduced and full density development elements. The following chart tracks the cumulative city property tax receipts of the
reduced alternative against the deferred collections from an $18 million TIF investment in
the proposed full-scale project. The analysis assumes development occurs along the same
timeline and includes the same 1% valuation growth use in our TIF projections.
Assuming no public assistance, a scaled down partial redevelopment Phase I Retail and Hotel project starts generating additional city property taxes immediately. Although the Office elements add considerable tax value, city tax receipts would be deferred through
2043 due to TIF expenditures. The Full Redevelopment Project’s (Phase I and II) net tax
generation does not “break-even” with a scaled down Phase I project until after the year
2060.
This is not a complete cost-benefit analysis and does not take into consideration whether
the Full Redevelopment and $18.1 TIF request provides other public benefits (use of site
amenities, etc.). However, it does provide context for consideration of the level of TIF investment assuming a viable alternative exists to redevelop this site. As it may take a significant amount of time (42 years, above) to recover the tax benefits, the HRA should
consider whether the TIF investment for the Full Redevelopment Project is expected to
deliver the level of public benefit necessary to justify it.
Please contact me at 651-697-8507 with questions.
June 14, 2018
Board of the Edina Housing and Redevelopment Authority
Bill Neuendorf, Economic Development Manager
Market Street Redevelopment: Construction Mitigation Update
Information / Background:
The redevelopment of two significant projects on Market Street has been under construction for
approximately 6-months. The expansion of the North Parking Ramp and construction of the Nolan Mains
apartment/retail building with new Center Ramp began in January. Construction is on pace for the scheduled
completion of the North Ramp in September 2018 and completion of the Nolan Mains/Center Ramp in Fall
2019.
While initially planned to be constructed sequentially, the construction schedules for both projects were re-
arranged to be constructed simultaneously. This was done based on the suggestion from the local business
community. A shorter overall schedule was preferred so that the total duration of the construction could be
reduced from about 30-months to about 20-months. With the simultaneous construction, only one holiday
season would be impacted (instead of 2 or 3).
As anticipated, the construction work has impacted some of the businesses located north of 50th Street. It is
noted that there are other factors (difficult winter weather, changing demographics and competition) that
influence customer traffic that also may have contributed to the business impacts.
To date, four businesses have closed and three new businesses are in the process of re-opening locations
adjacent to the construction site.
• Ala Mode – closed Edina and Wayzata locations
• Crisp & Fresh – under construction (replaced Ala Mode)
• Dana’s –closing Edina and Bloomington locations
• Fringe – closed
• Moderna Kouzina – under construction (replaced Mozza Mia)
• Room No. 3 – closed
• Tooth and Nail – opened (replaced Fringe)
STAFF REPORT Page 2
In recent weeks, City staff has heard from three additional businesses who have indicated that their
customer traffic is below the expected level and that they have difficulty finding new employees to work in
the area. Two of these businesses lease space near the construction site. One of the businesses owns their
building. The businesses have adjusted hours and staffing. The tenants have unsuccessfully requested rent
concessions from their landlords. These businesses have inquired whether the City can take additional steps
to address their declining revenue and challenges in bringing in new staff.
The City and developers held numerous listening sessions with local businesses in 2017 to identify concerns
and challenges related to the construction activity. Those conversations resulted in the creation of a
Construction Mitigation Strategy in December 2017.
To date, the City has hired a part-time Communications Liaison, provided expanded valet service for
customers and employees, tried an off-site employee shuttle, encouraged employees to park off-site to
improve conditions for customers, and provided district-wide advertising. Several businesses have used the
construction activity as a message to retain customers. The Business Association has increased marketing
efforts during the construction period.
At this time, staff recommends that the December 2017 plan be followed and also suggests that the City
continue an open dialogue with businesses and landlords to be open to cooperative action.