Loading...
HomeMy WebLinkAbout1996-05-06 HRA Regular Meeting • MINUTES OF THE EDINA HOUSING AND REDEVELOPMENT AUTHORITY HELD AT CITY HALL MAY 6, 1996 ROLLCALL Answering rollcall were Commissioner Maetzold, Smith and Chairman Richards. Commissioner Kelly entered the meeting at 7:04 P.M. CONSENT AGENDA ITEMS APPROVED Motion made by Commissioner Smith and seconded by Commissioner Maetzold adopting the HRA Consent Agenda as presented. Rollcall: Ayes: Maetzold, Smith, Richards Motion carried. *MINUTES OF THE HRA MEETING OF APRIL 15, 1996, APPROVED Motion made by Commissioner Smith and seconded by Commissioner Maetzold approving the HRA Minutes of April 15, 1996. Motion carried on rollcall vote -three ayes. TAX INCREMENT ASSISTANCE AGREEMENT APPROVED Executive Director Hughes • explained on September 5, 1995, Council approved an amended overall development plan for that portion of Centennial Lakes located south of West 76th Street. The amended plan illustrated five, multi-story office buildings containing a total floor area of more than one million square feet. Subsequent to the September approvals, our developer, United Properties, has been actively pursuing the development of the Phase I office building. This building is proposed to be located at the intersection of Minnesota Drive and France Avenue and would total 130,000 square feet of floor area plus an attached restaurant. United Properties prepared final development plans for the Phase I building and is scheduled to seek final approval from the Council at the May 20, 1996, meeting. OVERVIEW OF CENTENNIAL LAKES Director Hughes noted that the Hra's involvement in the Centennial Lakes Development dates to October 1988 when the HRA entered into a Contract for Deed and a redevelopment agreement with respect to the property. Since that time, nearly all of the Centennial Lakes Development has taken place or is under construction, with the exception of the proposed office development located south of West 76th Street. The HRA owns most of the property south of West 76th Street by way of a Contract for Deed. The vendor with respect to this Contract for Deed has been the estate of Fred Hedberg. In 1995, the vendor's interest was transferred to the Centennial Lakes Limited Partnership. The Board of Governors of this partnership are the grandchildren of the decedent. John W. and Jean Hedberg (the decedent's son and daughter-in-law) continue • to retain a separate interest in the property. • In accordance with our Redevelopment Agreement, United Properties retains development rights on the vacant property through the year 2000. These development rights are retained provided that it performs certain obligations including the payment of all obligations with respect to the Contract for Deed. TAX INCREMENT FINANCING ASSISTANCE Approximately two months ago, United Properties requested staff to consider the possibility of providing tax increment financing assistance with respect to the Phase I office building. Director Hughes reiterated that United Properties has noted that although demand for office space has increased significantly, other office sites in the vicinity of Centennial Lake have secured public assistance such that Centennial Lakes is at a significant competitive disadvantage. He pointed out a letter had been received dated March 4, 1996, from United Properties, outlining the competitive advantage of the proposed Meridian Center Development at 1-494 and 35W in Richfield. Staff has independently verified the public assistance package outlined in United Properties letter. Staff has analyzed and negotiated potential tax increment assistance programs with United Properties within the past two months. Based upon these negotiations, staff is recommending that the HRA enter into an agreement with United Properties whereby 25% of the tax increment generated annually by the Phase I development are returned to the developer. This assistance would continue until the termination of the tax increment financing district which is expected to occur in approximately 2014. Under the terms of the • recommended agreement, the tax increment assistance could only be used for the purpose of inducing prospective tenants to locate in the Phase I building. Upon approval, United Properties would commit to commence construction of the Phase I building prior to August 15 of this year (this commitment contingent upon United Properties pre-leasing one full floor in the building prior to development). Based upon an estimated captured tax increment for the Phase I development of approximately $4.00 per square foot of floor area, the proposed 25% assistance would equate to approximately $1.00 per square foot of floor area annually. The actual amount could vary from year to year, depending upon the tax increments actually collected by the HRA. REASONS FOR ASSISTANCE Director Hughes explained that the HRA has historically refrained from providing direct assistance to a private redevelopment. The proposed assistance package clearly departs from that policy. In this case, staff recommends approval for the following reasons: 1. The Centennial Lakes site is clearly competing with other office sites in the southwest sector. We believe the assistance is necessary to level the playing field with competing developments. 2. We believe that the public/private relationship with respect to the Centennial Lakes development is much stronger than other tax increment financing districts in the City. This is indeed a joint venture development which can be distinguished from other developments in • the City. 3. We believe that there is clearly an advantage for Centennial Lakes if the Phase I office building is the first multi-tenant office building to commence construction in the southwest sector of the metropolitan area. We believe that this will promote the development of the remainder of the site in a more timely fashion. 4. By accelerating the development schedule, the City receives park dedication fees and park maintenance fees sooner than it would otherwise. Under the terms of our agreement, the park dedication fee associated with the first building is approximately $130,000.00 and the ongoing park maintenance fees equate to 20¢ per square foot of floor area annually. 5. After providing the 25% tax increment financing assistance, the HRA will still net 75% of the Phase I increment which will be beneficial for retiring existing and future bonded indebtedness of the district. Director Hughes recommended authorizing the Amendment to the Redevelopment Contract to provide tax increment assistance for the Phase I Centennial Lakes Office Building equal to 25% of the annual tax increments generated by the Phase I office building. Following a brief discussion, Commissioner Smith made a motion authorizing the Redevelopment Contract providing tax increment assistance for the Phase I Centennial Lakes Office Building to United Properties equal to 25% of the annual tax increments generated by the Phase I office building. Commissioner Maetzold seconded the motion. Ayes: Kelly, Maetzold, Smith, Richards Motion carried. CLAIMS PAID Commissioner Kelly made a motion to approve payment of the following claims as shown in detail on the Check Register dated May 2, 1996, and consisting of 1 page totaling $20,170.78. Motion seconded by Commissioner Maetzold. Rollcall: Ayes: Kelly, Maetzold, Smith, Richards Motion carried. There being no further business on the HRA Agenda, Mayor Richards declared the meeting adjourned. Executive Director