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HomeMy WebLinkAbout2018-06-14 HRA Regular Meeting MinutesMINUTES OF REGULAR MEETING OF THE EDINA HOUSING AND REDEVELOPMENT AUTHORITY JUNE 14, 2018 7:30 A.M. 1. 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. 111. APPROVAL OF MEETING AGENDA Motion made by Commissioner Brindle seconded by Commissioner Fischer approving the Meeting Agenda. Ayes: Brindle, Fischer, Hovland, Staunton, Stewart Motion carried. ►V. COMMUNITY COMMENT — None. V. CONSENT AGENDA ADOPTED Motion made by Commissioner Fischer seconded by Commissioner Brindle approving the consent agenda. V. A. Approve minutes of May 24, 2018 Regular HRA Meeting. V.B. Approve Temporary Easement and authorize staff to implement the terms of the mitigation letter to address construction impacts of the North Ramp Expansion: 3945 West 49th Street V.C. Approve the Grant of Permanent Easement for the North Parking Ramp at 3930-3944 Market Street. V.D authorize staff to discontinue the employee shuttle service provided for 50th and France and to terminate the service contract with Total Transportation LLC. 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. REQUEST FOR PURCHASE: NORTH RAMP EXPANSION AND RETAIL SHELL CONSTRUCTION, IMPROVEMENT PROJECT PW-18-001 Director Olson explained that an additional $250,000 in contingencies was needed because of unforeseen soil conditions and incomplete as-built drawings. Mr. Olson explained the amount would complete the project. He reviewed a summary of Change orders with the HRA. Motion of Commissioner Fischer seconded by Commissioner Brindle approving Request for Purchase authorizing an additional $250,000 in contingencies for the North Ramp Expansion and Retail Shell Construction, Improvement Project PW- I 8-001. Ayes: Brindle, Fischer, Hovland, Staunton, Stewart Motion carried. VI.B. TAX INCREMENT FINANCING FOR PENTAGON PARK NORTH, 4600-4660 WEST 77TH STREET Economic Development Manager Neuendorf gave an overview of the Pentagon Park North project and explained that based on analysis from the City's advisor, Ehlers Associates, staff could not recommend approval of the developer's full TIF request of $14.37 million because it would deliver a financial return greater than ten percent which was higher than the market would typically require for this type of project. Mr. Neuendorf said staffs recommendation of $9.8 million was based on extraordinary soil conditions, public benefits such as sidewalk, Page I Minutes/HRA/June 14, 2018 park access and parking, a new street, and an eight percent return. Mr. Neuendorf explained the 2014 Master Agreement included affordable housing, but because the developer was not planning affordable housing in Phase I, staff would need a guaranty of Phase II affordable housing if the partnership with Dominium was not successful. Jay Lindgren, consultant attorney, Dorsey & Whitney, added that a written contract with the developer was needed within the next 30-45 days and TIF monies must be obligated or expended by July 2019. HRA's discussion included: • Staff's concern with the developer's rate of return • Approving the developer's full request with claw-back provision • Adding a cap on developer's return; unknown costs would be risky • Staff's recommendation of seven to eight percent rate of return; some Commissioners would consider ten percent rate of return • Property value of $5.5 million that could become $160 million • Lack of affordable housing was a significant concern Joe McElwain, Chase Real Estate, presented the proposed development schedule, value created, TIF capacity and use, and extraordinary costs allocated to TIF. Mr. McElwain stated the ten percent rate of return was far into the future. He agreed with the claw-back provision, being flexible and adjusting as necessary, and explained that the developer could not have affordable housing for assisted living because residents needing affordable housing would not be able to afford assisted living. Also in attendance for the developer were Tom Aarestad and Andy Chase. Motion of Commissioner Stewart seconded by Fischer to approve the level of TIF assistance recommended by staff and authorize staff to engage advisors to negotiate Term Sheets and prepare a full redevelopment agreement with Chase Real Estate. During discussion commissioners determined a formal motion was not necessary, that direction could be given to staff. Motion of Commissioner Stewart seconded by Commissioner Fischer to withdraw the motion. Ayes: Brindle, Fischer, Hovland, Staunton, Stewart Motion carried. The HRA directed staff to negotiate Term Sheets and the Redevelopment Agreement with Chase Real Estate. VI.C. TAX INCREMENT FINANCING FOR PENTAGON PARK SOUTH, 4815-4901 WEST 77TH STREET Mr. Neuendorf gave an overview of the Pentagon Park South project and explained that the concerns were similar as with Pentagon Park North. He said the developer requested $18.1 million and staff's recommendation was $14.4 million based on need and public benefit. Mr. Lindgren stated the two major concerns were the City would be contributing 26 percent TIF if only Phase I was completed and, paying for parking that would be used primarily by the hotel. Mr. Lindgren added the HRA can pay for parking with TIF. Developer Scott Tankenoff expressed frustration with the process which he said had been going on since 2014. The HRA expressed concerns with the amount of TIF requested but felt looking broadly at redevelopment in the area and opportunities for job creation could justify the developer's request despite minimal public benefit. The HRA directed staff to negotiate Term Sheets with Solomon Real Estate and Hillcrest Properties. VI.D. MARKET STREET REDEVELOPMENT CONSTRUCTION MITIGATION UPATE This item was postponed to the June 18 HRA meeting. VII. CORRESPONDENCE VII.A. CORRESPONDENCE — None. IX MAYOR AND COUNCIL COMMENTS — None. 2 Scott Neal/Executive Director Minutes/HRA/June 14, 2018 X EXECUTIVE DIRECTOR'S COMMENTS XII. ADJOURNMENT There being no further business on the HRA Agenda, Chair Hovland declared the meeting adjourned at 9:50 a.m. Respectfully submitted, 3