HomeMy WebLinkAbout2002 06-24 EDAP • EDA MEETING
City of Brooklyn Center
June 24, 2002 AGENDA
1. Call to Order
2. Roll Call
3. Approval of Agenda and Consent Agenda
-The following items are considered to be routine by the Economic Development Authority
(EDA) and will be enacted by one motion. There will be no separate discussion of these
items unless a Commissioner so requests, in which event the item will be removed from the
consent agenda and considered at the end of Commission Consideration Items.
a. Approval of Minutes
- Commissioners not present at meetings will be recorded as abstaining from the vote
on the minutes.
1. June 10, 2002 - Regular Session
4. Commission Consideration Items
• a. Resolution Determining Substantial Completion of Minimum Improvements to Mall
for Purposes of Amended and Restated Development Agreement with Talisman
Brookdale, LLC
-Requested Commission Action:
- Motion to adopt resolution.
5. Adjournment
EDA Agenda Item No. 3a
® MINUTES OF THE PROCEEDINGS OF THE
ECONOMIC DEVELOPMENT AUTHORITY
OF THE CITY OF BROOKLYN CENTER
IN THE COUNTY OF HENNEPIN AND THE
STATE OF MINNESOTA
REGULAR SESSION
JUNE 10, 2002
WEST FIRE STATION — TRAINING ROOM
1. CALL TO ORDER
The Brooklyn Center Economic Development Authority (EDA) met in regular session and was
called to order at 7:58 p.m. by President Myrna Kragness.
2. ROLL CALL
President Myrna Kragness, Commissioners Kay Lasman, Ed Nelson, Bob Peppe, and Tim Ricker.
Also present: City Manager Michael McCauley, Assistant City Manager Jane Chambers, Planning
and Zoning Specialist Ron Warren, City Attorney Charlie LeFevere, and Deputy City Clerk Maria
Rosenbaum.
3. APPROVAL OF AGENDA AND CONSENT AGENDA
A motion by Commissioner Nelson, seconded by Commissioner Ricker to approve the agenda and
consent agenda. Motion passed unanimously.
3a. APPROVAL OF MINUTES
A motion by Commissioner Nelson, seconded by Commissioner Ricker to approve the May 28,
2002, regular session minutes. Motion passed unanimously.
4. COMMISSION CONSIDERATION ITEMS
4a. RESOLUTION AMENDING DEVELOPMENT AGREEMENT BY AND
BETWEEN ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN
CENTER AND JOHNCO LLC
Executive Director Michael McCauley discussed that this resolution would delete Section 3.10
Paragraph c (vii), which had been inadvertently missed when the development agreement had been
prepared.
® 06/10/02 -1- DRAFT
RESOLUTION NO. 2002 -09 •
Commissioner Ricker introduced the following resolution and moved its adoption:
RESOLUTION AMENDING DEVELOPMENT AGREEMENT BY AND BETWEEN
ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER AND JOHNCO LLC
The motion for the adoption of the foregoing resolution was duly seconded by Commissioner
Lasman. Motion passed unanimously.
5. ADJOURNMENT
A motion by Commissioner Lasman, seconded by Commissioner Nelson to adjourn the meeting at
8:00 p.m. Motion passed unanimously.
President
•
06/10/02 -2- DRAFT
0
EDA Agenda Item No. 4a
•
its adoption: Commissioner introduced the following resolution and moved
®
EDA RESOLUTION NO.
RESOLUTION DETERMINING SUBSTANTIAL COMPLETION OF MINIMUM
IMPROVEMENTS TO MALL FOR PURPOSES OF AMENDED AND
RESTATED DEVELOPMENT AGREEMENT WITH TALISMAN BROOKDALE
ASSOCIATES, L.L.C.
WHEREAS, the Economic Development Authority (EDA) and Talisman Brookdale
Associates, L.L.C. entered into an Amended and Restated Development Agreement; and
WHEREAS, Section II1.3 of the Amended and Restated Development Agreement
requires substantial completion of the minimum improvements to the mall by August 15, 2002; and
WHEREAS, substantial completion of the improvements to the interior of the mall
has occurred; and
WHEREAS, the Amended and Restated Development Agreement does not require
full completion of all of the construction and other required activities by Talisman Brookdale
Associates, L.L.C. until August of 2003; and
® WHEREAS, Talisman Brookdale Associates, L.L.C. has requested a determination
that it is in compliance with the requirements of Section III.3 with respect to the completion of
minimum improvements to the mall by August 15, 2002; and
WHEREAS, Section II.2 (11) requires the expenditure of $50,000,000 in capital
costs; and
WHEREAS, by letter dated March 27, 2001, Talisman Companies L.L.C. clearly
requested inclusion of certain architectural fees, engineering fees, legal costs related to leasing,
construction management, and construction engineering; and
WHEREAS, the total $50,000,000 placed in the Amended and Restated Development
Agreement was based on the March 27,200 1, letter from Talisman Companies L.L.C., provided such
fees were paid to third parties as required by Section II.2 (11).
NOW, THEREFORE, BE IT RESOLVED by the EDA in and for the City of
Brooklyn Center that the Executive Director be and hereby is authorized to make written
confirmation on behalf of the EDA that Talisman Brookdale Associates, L.L.C. is in compliance
with Section III.3 of the Amended and Restated Development Agreement by virtue of substantial
completion of the minimum improvements, while clearly indicating that additional expenditures and
improvements both inside the mall and for landscaping and parking lot improvements remain yet to
e be completed.
EDA RESOLUTION NO.
AND, BE IT FURTHER RESOLVED that the Executive Director be and hereby is
authorized to acknowledge that the $50,000,000 minimum expenditure required by Section 11.2 (11)
does include architectural fees, engineering fees, legal costs related to leasing, construction
management, and construction engineering for purposes of the $50,000,000 minimum expenditure
requirement, provided any such fees are paid to unrelated third parties.
Date President
The motion for the adoption of the foregoing resolution was duly seconded by commissioner
• and upon vote being taken thereon, the following voted in favor thereof.
and the following voted against the same:
whereupon said resolution was declared duly passed and adopted.
•
TALISMAN COMPANIES, L.L.C.
COMMERCIAL DEVELOPMENT, LEASING & MANAGEMENT
•
June 11, 2002
Mr. Michael J. McCauley
City Manager
City of Brooklyn Center
6301 Shingle Creek Parkway
Brooklyn Center, MN 55430 -2199
Re: Brookdale — Mall Tax Increment Financing
• Dear Mike:
This letter will acknowledge that Talisman Brookdale Associates, L.L.C., the
owner of Brookdale Mall, has substantially completed the Minimum
Improvements to the mall, exclusive of spending all necessary monies on tenant
improvements and landscaping and parking lot improvements as contemplated in
that certain letter dated March 27, 2001, attached hereto and Article III, Section
111.3 of the Amended and Restated Agreement between the Economic
Development Authority of Brooklyn Center, Minnesota and Talisman Brookdale
L. L. C.
It is further acknowledged by the parties, that Article II, Section 11.3 (11) shall
allow the Developer until August 1, 2003 to complete and certify that is has spent
at least $50,000,000 on the capital costs of construction of the Minimum
Improvements, as further contemplated by the August 1, 2003 end date for
satisfaction of preconditions to funding specified in Article VI.I.
It is further understood that the term "soft costs" specified in the letter of March
27, 2001, and in specific, items 5 through 10 of Group I, shall be affirmed as
qualifying soft costs for the purposes of achieving the $50 million requirement of
capital expenditures as required in Article II, Section 11.3 (11).
•
1500 SAN REMO AVENUE, SUITE 135 • CORAL GABLES, FLORIDA 33146 • (305) 662 -9559 • Fax (305) 662 -9616
Page Two
June 11, 2002
It would be most appreciated, considering the sensitivities of my investors and
lenders, that the city acknowledge the foregoing and that the Economic
Development Authority pass a resolution regarding the same.
Yours very truly,
�
A inger
r sident &
Approved by:
Michael J. McCauley Date
City Manager
• Brooklyn Center, MN
JAS /br
c: \mydocum ents \mydoc um ents \b rookd a I e /061102tif. doc
0
1500 SAN REMO AVENUE, SUITE 135 • CORAL GABLES, FLORIDA 33146 • (305) 662 -9559 (Fax (305) 662 -9616
JUN - 07 -2002 11:57 CITY BROOKLYN CENTER 763 569 3494 P.04i06
W-j U c
TALISMAN COMPANIES, L.L.C.
l COMMERCIAL DEVELOPMENT, LEASING & MANAGEMENT
•
March 27, 2001
Via Facsimile and FedEx
Mr. Michael 1, McCauley
City Manager
City of Brooklyn Center
6301 Shingle Creek Parkway
Brooklyn Center, MN 55430 -2199
Re: Brockdale Center
:Dear Mike:
In response to your request as to an anticipated cost breakdown for the redevelopment of
Brookdale Mall, the following details these costs for Group 1:
1. Remodelin x erasion
� P $18,750,000
2. Relocation/Termination of Leases $ 317,000
3. Payments to Department Stores $11,760,000
4. Tenant Improvement Disbursements $11 , 880 ,000
5. Financing Costs $ 4,300,000
6, Interest Carry during Construction $ 1,200,000
7. Architecture/Engineering $ 1,500,000
8. Leasing Legal $ 200,000
9. Construction Management Fees $ 400000
10. Construction Engineers/Inspections S 200 ?000
Total $50,507,000
In addition, the following other costs have or will be expended, referred to as Group H:
1. Acquisition S25
2. Costs to Acquire $ 1,500,000
3. Travel Costs $ 650,000
4. Legal $ 600,000
5. Other Miscellaneous Costs (Grand Opening, etc.) $ 6,000.000
Total $33,750,000
•
1500 $AN R EMO AVENUE, suITE 135 - CORAL GABLES, FLORIDA 33146 - (305) 662 -9559 - Fox (305) 662 -9616
JUN -07 -2002 11:57 CITY BROOKLYN CENTER Yb3 5b3 34y4 r.b5iub
Larch 27, 2001
Page Two
The total cost of the project is $84,000,000, Talisman and its partners are contributing
$26,500,000 in cash equity plus a $2,000,000 escrow for cost overruns. As you can
observe, this is significantly more investment than the original contemplated $10,000,000
investment.
Talisman respectively request that those items listed as Group I costs, and as verified on
audit, be counted toward satisfying the $50 million requirement as specified in Article TI,
Section H.2 G 1) of the TJF Development Agreement.
Thank you for your prompt attention to this matter.
Yours very truly,
Talisman Brookdale, LLC
J es A. Schlesin
President
Enclosures
iFnn SAN RFMO AVENUE. SUITE 136 - CORAL GABLES. FLORIDA 33116 • (305) 662 -0559 • FON (305) 662 -9616
JUN - 07 -2002 11:57 Ul I Y BROOKLYN CL=N I tk rb.3 5bJ 3474 I'. Ob /46b
■
S nuisance, or public safety problems which may arise in connection
with the construction and operation of the Project.
(11) The Developer will expend at least
capital costs of construction of $50,000,000 on the
the Minimum Improvements,
payments to the owners of the Anchor Tenants for remodeling
costs, acquisition of the Penny's store, and demolition costs of
Development Property or Adjacent Property, which costs are
exclusive of equipment or other personal Property costs° such as architectural, engineering, manageementd,any ,s °ft
administrative overhead, financing and legal costs,
payments made by Developer to unrelated third partie except that
s not to
exceed $7,800,000 for architectural /engineering fees, legal costs
directly related to leasing, construction management, and
construction engineering and inspection will be considered
capital costs of construction for purposes of this section (11).
(12) The construction of the Minimum Improvements has
commenced on or before March 1, 2000, and barring Unavoidable
Delays, the Minimum Improvements will be substantially completed
by August 15, 2002. Notwithstanding the foregoing, the Developer
represents that the Development Property will have a market value
of at least $45,000,000 as of January 2, 2003.
(13) The Developer has received assurances from the owner
of the Daytons store located on the Adjacent Development Property
• that the construction of the Daytons Minimum Improvements will
commence on or before March 1, 2002, and barring unavoidable
Delays, the Daytons Minimum Improvements will be substantially
completed by March 30, 2003. Notwithstanding the foregoing, the
1
Developer represents that the Adjacent Development Property will
have a market value of at�least $30,000,000 as of January 2,
2004.. I
I
(14) No part of the Development Property shall be leased or
used as for an adults -only entertainment center, adults
bookstore, adults -only motion picture theater,
'rap parlor or sauna, massage parlor,
and the Developer covenants and agrees that
its objective in developing the Development Property include the �.
preservation of a wholesome and first class, quality image for I
the Development .Property and Developer shall not cause the
Development P Prop erty p y to be used for an event
which i Y n or other i
s inconsistent Purpose
intent with decent and p �
Y good taste.
i
•
sa szee.9
7
TOTAL P.06
Office of the City Manager
. Michael J. McCauley
City Manager
June 7, 2002
Mr. James A. Schlesinger
President,
Talisman Companies L.L.C.
1500 San Remo Avenue, Suite 135
Coral Gables, Florida 33146
Re: Amended and Restated Development Agreement
Dear Mr. Schlesinger:
Attached is a copy of page 7 of the Amended and Restated Development Agreement and your letter
of March 27, 2001 identifying the costs you requested by included in the computation of capital
costs. In (11), the Amended Agreement reflects the modification of the original agreement to allow
certain "soft" costs to be included as capital costs of construction for purposes of the $50,000,000
minimum expenditure requirement. Those "soft" costs include payments to third parties by Talisman
for:
- architectural fees
engineering fees
legal costs related to leasing
construction management
construction engineering.
If there is any ambiguity about actual interest costs in (11), I believe we can resolve that ambiguity
since they were clearly part of your letter of March 27, 2001 that formed the basis for the
modification of the agreement to provide up to $7.8 Million in "soft" costs.
Section lII.3 requires substantial completion of the Minimum Improvements to the Mall by August
15, 2002. At this stage it appears that you are well along on meeting that requirement inside the Mall.
There are landscaping and parking lot improvements that may not be finished by August 15"', but it
appears reasonable likely that you will be substantially complete for purposes of Section III.3. We
could always have the EDA consider the matter to provide a resolution acknowledging substantial
completion for purposes of Section II1.3 if that would be useful.
I hope that this letter addresses the issues that we discussed this morning. Please advise if further
information is required.
Sincerely,
Michael J. McCauley
City Manager
Cc: Mayor & Council Members
Brad Hoffman
O