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HomeMy WebLinkAbout1997-11-03 HRA Regular Meeting 1 MINUTES • OF THE REGULAR MEETING OF THE EDINA HOUSING AND REDEVELOPMENT AUTHORITY HELD AT CITY HALL NOVEMBER 3, 1997 - 7:00 P.M. ROLLCALL Answering rollcall were Commissioner Faust, Hovland, Maetzold and Chairman Smith. Commissioner Kelly entered the meeting at 7:14 P.M. CONSENT AGENDA ITEMS APPROVED Motion made by Commissioner Maetzold and seconded by Commissioner Hovland approving and adopting the HRA consent Agenda as presented. Rollcall: Ayes: Faust, Hovland, Maetzold, Smith Motion carried. PROPOSED PURCHASE OF LEE PROPERTY AT 50T" AND FRANCE APPROVED Executive Director Hughes said on October 15, 1997, Edina Properties, Inc. withdrew its application with respect to the redevelopment of its property adjoining the Edina Theater. Staff was also advised that Edina Properties intended to terminate its Option Agreement on the Lee property (the "property") located west of the 49 Y2 Street parking ramp to accommodate parking demand potentially created by the expansion of the • Edina Theater. At the October 20th meeting, staff advised that the HRA might wish to take assignment of this Option in order to preserve the Property for future parking expansion. Staff further advised that time was of the essence in that the Option would terminate on October 251h unless extended by the payment of the monthly Option fee of $2,500.00. Staff was directed by the HRA to 1) request that Edina Properties extend the Option for one month at its expense, and 2) return with additional details concerning the Option. Mr. Hughes advised that Edina Properties agreed to extend the Option until November 25, 1997. Mr. Hughes presented a copy of the Option Agreement with major terms as follows: Purchase Price: $225,000.00 Option Fee: $2,500.00 on or before the 25th of each month. The option fees are NOT refundable and are NOT applied to the purchase price. Term: The option terminates on January 21, 1998. Taxes & Special Assessments: Seller pays taxes and special assessments payable in the calendar year prior to closing. Current year taxes and specials are prorated between buyer and seller. (Note: If the HRA closed on the purchase in 1998, the 40 Property would remain taxable for pay 1998 but would enjoy tax exempt status for pay 1999.) i s. HRA/MINUTES November 3, 1997 • Page 2 Investigations: The buyer is responsible for all environmental investigations prior to closing. No such investigations have been performed to our knowledge. Assignment: Either party may assign its rights under the agreement with prior written consent of the other party. Executive Director Hughes briefed the HRA concerning the size of the property, the current Assessor's Estimated Market Value, and the potential of the property to accommodate additional parking. Mr. Hughes said staff recommends the HRA request Lund's assign its rights under the Option Agreement to the HRA. Reasons for this recommendation are as follows: • The purchase price seems fair and reasonable given that it essentially reflects the Assessor's Estimated Market Value. • Purchase of the Property preserves the HRA's ability to construct additional off-street parking in the future if warranted. • Expansion of the 49 '/2 Street ramp is the most logical method of providing • additional off-street parking if the HRA wishes to add such parking. Other existing ramps at 501h and France are not structurally capable of vertical expansion. Other potential ramp locations are less desirable in staffs opinion, e.g. Lund's Grocer Store parking lot, the lot west of the middle ramp, or the lot west of the Post Office. • If the Property is not needed for parking purposes, staff believes it can be re- marketed for future redevelopment. Commissioner Faust inquired whether we have an option to buy. Executive Director Hughes stated if authorization were granted, Lund's would be asked to assign us the option to buy and they would then seek permission from the seller to assign their rights for purchase also. The HRA would then be the beneficiary of the option and would do environmental tests on the site to make sure it is not contaminated, report back to the HRA and eventually head towards closing and acquisition of the Property. If, after environmental tests the site was found to be unacceptable, or if the HRA wished to reconsider, the HRA could back out without penalty except for the $2,500 per month to preserve the option. Commissioner Maetzold asked how this will be funded. Executive Director Hughes explained this is an eligible tax increment financing expense and funding would be from accumulated reserves from the 50th and France tax increment district. Commissioner Maetzold asked if a funding source could be from special assessments from the businesses in the area. Executive Director Hughes answered in the past parking has r HRA/MINUTES • November 3, 1997 Page 3 been constructed through a combination of tax increment financing (80%) and special assessments (20%) and the same method could be used again. The formula could be adjusted if the law permitted use of tax increments on the project. Commissioner Maetzold inquired whether the site is marketable. Executive Director Hughes stated it is a marketable site and it is Zoned PC-2, Planned Commercial District, which is the same as the rest of the property. Attorney Gilligan was asked to check if the Property were encumbered by easements and none were found. A 20 foot building setback would be required from the rear property line. The site would accommodate a two story building to within 20 feet of the north property line. One desirable scenario would be if it could be marketed and redeveloped with the property to the west. Commissioner Hovland questioned the reduction in price of the Property and its marketability. Executive Director Hughes said the price at $225,000 is more in keeping with sales within the 50th & France area. Commissioner Hovland asked what the cost is per parking stall, historically. Executive Director Hughes commented it is varied. The last ramp built cost approximately $900,000.00 ($8,000 - $9,000 per stall).The HRA has never purchased land before for parking at 501h & France. . Chair Smith asked if a 20 foot setback is normally required from the rear lot line. Executive Director Hughes said yes, approximately. The 49 '/2 Street ramp was granted a setback variance conditioned upon additional landscaping. Chair Smith inquired if Edina Properties in their approved development west of the Theater were required to pay in construction money. Executive Director Hughes said typically an equalizing assessment is required, or approximately $2.00 per foot of floor area. Commissioner Kelly asked if Lund's has appraised the site. Executive Director Hughes said no appraisal had been done, to his knowledge. Commissioner Faust asked if the proposed purchase is completed could the lot be used for surface parking. Executive Director Hughes said yes it could be utilized. Commissioner Hovland asked when the previous Council approved the retail office project between the Theater and Doctors building, was consideration given to a staging area for equipment. Could the proposed site be used for this purpose. Chair Smith called for public comment. No comments were heard. Commissioner Kelly suggested staff contact the Lee Family to see if the monthly $2,500.00 could be credited to the purchase price. He stated it is reasonable to take the position that if the Option is not exercised the payment would be non-refundable. ti HRA/MINUTES November 3, 1997 Page 4 . Chair Smith asked direction from the Council, to proceed with a purchase agreement, subject to an environmental assessment, and for all payments after November 25, 1997, be applied to that purchase price, until closing. Commissioner Maetzold made a motion to approach and request from Lund's the assignation of its rights under the _Option to the HRA, with respect to the purchase of the Lee Property at 50`h & France, to order the environmental assessment to be completed, and to request the monthly fee of $2,500.00 be applied to the purchase price. Commissioner Kelly seconded the motion. Rollcall: Ayes: Faust, Hovland, Kelly, Maetzold, Smith Motion carried. CLAIMS PAID Commissioner Hovland made a motion to approve payment of the following claims as shown in detail on the Check Register dated October 29, 1997, and consisting of one page totaling $21,641.66. Commissioner Faust seconded the motion. Rollcall: Ayes: Faust, Hovland, Kelly, Maetzold, Smith Motion carried. • There being no further business on the HRA Agenda, Chair Smith declared the meeting adjourned. Executive Director •