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HomeMy WebLinkAbout1987 06-11 EBFAAGENDA Earle Brown Farm Committee June 11, 1987 Council Chambers ' 1. Call to Order: 7:30 a.m. 2. Roll Call ' 3. Subcommittee Report 4. Economic Development Authority 5. Development Team Recommendation 6. Other Business 7. Adjournment 1 LeFevere Lefler Kenneth, (Ylil•lell 8, ' Drawz a Professional Association 2000 First Bank Place West May 8, 1987 inneapolis innesota 55402 Telephone (612) 333-0543 Telecopier (612) 333-OW Mr. Brad Hoffman layton L. LeFevere l HRA Coordinator erbert P. Lefler City of Brooklyn Center J. Dennis O'Brien 6301 Shingle Creek Parkway ~ohn E. Orawz avid J. Kennedy Brooklyn Center, Minnesota 55430 oseph E. Hamilton John B. Dean Re: Economic Development Authority Glenn E. Purdue Richard J. Schieffer Earle Brown Farm Project harles L. LeFevere erbert P. Lefler III Dear Brad: James J. Thomson, Jr. omas R. Galt yle Nolan fa At our meeting on April 21 we discussed at some length anF.Rice i various possibilities for the redevelopment of the farm John G. Kressel ;M.Strommen buildings in the Earle Brown Redevelopment Project H. Batty Area. One option discussed was the ownership and P. Jordan operation of the site and buildings by the HRA which J. Erickson William R. Skallerud would make various improvements including a trade show odney D. Anderson center and office space and lease these improvements to orrine A. Heine private parties or otherwise manage them. I expressed avid D. Beaudoin Paul E. Rasmussen some reservation about the authority of the HRA to teven M. Tallen engage in such activities because the basic function of ary F. Skala an HRA is to redevelop for private use and stimulate, Witopher J. Harristhal hris mothy J. Pawlenty y or otherwise provide for, housing opportunities for Rolf A. Sponheim lower income persons; and I have difficulty finding legal authority for the HRA to conduct the activities 1 at the farm site we spoke about (I'll refer to those activities as the Project.) ' I have reviewed Minnesota Statutes, Chapter 458C relating to Economic Development Authorities and, although the statute is not a model of clarity, have concluded that an Economic Development Authority (EDA) can undertake the Project. I think a fair reading of the statute (and I know from its legislative history) indicates a clear intent to authorize, among other things the kinds of activities contemplated for the Project. (For your general information I'm enclosing a copy of the statue and a copy of a letter to the City ,r of Minnetonka discussing the EDA Act.) The establishment of the EDA is relatively simple - an ' enabling resolution after public hearing - but two Mr. Brad Hoffman May 8, 1987 ir Page 2 basic issues must be resolved before that step is undertaken by the City. First, you'll note from Sections 458C.03 and 458C.06 that the EDA may be assigned any or all of the powers of an HRA, a Development District under Chapter 472A or any other economic development power of the City and that existing projects of those types may be trans- ' ferred to the EDA. Since the HRA is composed of City Council members it seems logical that the EDA would be composed of the City Council (which is authorized by ' Section 458C.08, Subd. 2(d)). The EDA then could continue to operate the Earle Brown Project Area with its HRA powers. ' Second, since an EDA may only establish economic development districts which meet the standards of Section 273.73, Subdivision 10 (that is, redevelopment tax increment financing districts) it may be desirable to specify.that the EDA not exercise the powers of the City under Chapter 472A relating to development dis- tricts. In that case the City could if it wished set up "housing" and "economic development" TIF districts whenever necessary. ' After those decisions are made the remaining procedural steps are rather simple. Implementation of the Project is clearly authorized by various sections of the EDA Act where there is clear authority for the EDA to acquire land and structures, leave them for private use and even (in a curious holdover from the Port Authority law) become a limited partner in an economic development project. While a ' limited tax levy for support is authorized - .75 mills - I would think the EDA would want to try to make its operation self-financing, retaining the tax levy for operations and matching of state and federal (if any) grant and loan programs. There are some drawbacks to an EDA that you should note. The EDA is subject to audit by the State Auditor 1 (Sec. 458C.13). The EDA does not, like a Port Authori- ty have the power to construct buildings for sale or lease. Unlike a Port Authority the EDA's power to issue general obligation bonds is subject to voter approval which I suspect makes such financing impracti- cal. Revenue financing for economic projects and ' Mr. Brad Hoffman May 8, 1987 Page 3 general obligation tax increment financing for redevel- opment projects is available under the Act. An EDA does not have tort liability immunity up to stated limits as do other governmental entities. See Sec. ' 458C.07. I hope these general comments, are useful. We'll be happy to discuss the matter further at any time and to assist in setting up the EDA if the City decides to take that step. ' very truly, David J. Kennedy DJK:caw ' cc: Gerald Splinter Charlie LeFevere Enclosure R 1 I MEMORANDUM TO: Earle Brown Farm Committee FROM: Brad Hoffman, HRA Coordinator DATE: June 9, 1987 SUBJECT: Development Process Acceptance of a development concept from the subcommittee by the full committee of the Earle Brown Farm would signal the start of the actual restoration of the Farm. The next step would be the formation of a design team. Staff proposes that the development be handled in three (3) phases. The first phase is the design phase. During this period, the-working drawings for the Farm, the site plan, the landscape plan, and so forth are all developed. The final plans would be brought to the committee for comment and to the HRA for approval. The second phase would be the actual construction/re- storation of the Farm. We are recommending a turn-key approach. The HRA enters into a contract to design- build a project, the Farm; and upon completion, the facilities are turned over to the owner (HRA). During the construction, the HRA functions only as an interested party with a right to impose itself to make major decisions. The day to day construction, the subcontract bidding, and so forth are all handled by a construction management firm. The third phase occurs when the HRA takes possession of-the completed project. At that point, we recommend a management firm or property manager take charge and manage the facility for the HRA. The management firm would be responsible for the day to day operations and maintenance of the buildings, the leasing of the buildings, promotion and scheduling of the hippodrome, provide necessary accounting reports for the facilities, the collection of rents, and the submission of an annual budget. For the design portion of this process, staff recommends the creation of a design team. The team would be comprised of City staff, the selected construction management firm (designer-contractor), and the property management firm. The construction management firm would be responsible for the design with the rest of the group reviewing and commenting. The final design would be reviewed by the Earle Brown Farm Committee. Memo to Earle Brown Farm Committee June 9, 1987 Page 2 Selection of the construction management firm and the property manager would be accomplished in a manner similar to the selection of Quality Decisions, Inc. who did our market analysis of a senior center. Prospective developers and property managers would submit portfolios. An interview group made of Council representation, Farm committee representatives, and staff would make a recommendation to the full Earle Brown Farm Committee. The selected firms would then make a presentation to the committee as a whole for a recommendation to the HRA. If this concept is acceptable to the committee, the committee should recommend it to the HRA. If accepted there, a representative of the committee should be designated to help select the construction management and the property management firm. We will discuss this in greater detail at Thursday's meeting.