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HomeMy WebLinkAbout2001 06-25 HRAP HRA MEETING City of Brooklyn Center June 25, 2001 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 Housing and Redevelopment Authority 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. Special Session — December 11, 2000 4. Commission Consideration Item a. Resolution Authorizing Acceptance of Payment in Satisfaction of the Termination Agreement Dated the 28"' Day of November 2000 By and Between the Housing • and Redevelopment Authority (HRA) of the City of Brooklyn Center, the City of Brooklyn Center, and Brookdale Associates Limited Partnership (Successor and Interest to Brookdale Three Limited Partnership) .Requested Commission Action: - Motion to adopt resolution. 5. Adjournment HRA Agenda Item No. 3a MINUTES OF THE PROCEEDINGS OF THE HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA SPECIAL SESSION DECEMBER 11, 2000 CITY HALL 1. CALL TO ORDER The Brooklyn Center Housing and Redevelopment Authority (HRA) met in special session and was called to order by Chair Myrna Kragness at 7:00 p.m. 2. ROLL CALL Chair Myrna Kragness, Commissioners Debra Hilstrom, Kay Lasman, Ed Nelson, and Robert Peppe. Also present: Executive Director Michael J. McCauley, Assistant City Manager Jane Chambers, Finance Director Charlie Hansen, Public Works Director Diane Spector, City Attorney Charlie LeFevere, and Deputy City Clerk Maria Rosenbaum. 3. APPROVAL OF AGENDA AND CONSENT AGENDA A motion by Commissioner Hilstrom, seconded by Commissioner Nelson to approve the agenda and consent agenda. Motion passed unanimously. 3a. APPROVAL OF MINUTES A motion by Commissioner Hilstrom, seconded by Commissioner Nelson to approve the minutes from the special session on November 27, 2000. Motion passed unanimously. 4. COMMISSION CONSIDERATION ITEMS 4a. HRA 2001 TAX LEVY AND BUDGET - RESOLUTION ESTABLISHING THE FINAL TAX LEVY FOR THE BROOKLYN CENTER HOUSING AND REDEVELOPMENT AUTHORITY FOR THE YEAR 2001 - RESOLUTION APPROVING THE FINAL BROOKLYN CENTER HOUSING AND REDEVELOPMENT AUTHORITY BUDGET FOR THE YEAR 2001 PURSUANT TO MSA CHAPTER 469.033, SUBDIVISION 6 AND MSA CHAPTER 469.107, SUBDIVISION 1 ® 12/11/00 -1- DRAFT Executive Director Michael McCauley discussed that the purpose of having the Housing and Redevelopment Authority (HRA) and Economic Development Authority (EDA) meetings prior to the City Council meeting is to have the HRA and EDA approve the 2001 Tax Levy and Budget before the City Council approves their budgets for 2001. RESOLUTION NO. 2000-05 Commissioner Hilstrom introduced the following resolution and moved its adoption: RESOLUTION ESTABLISHING THE FINAL TAX LEVY FOR THE BROOKLYN CENTER HOUSING AND REDEVELOPMENT AUTHORITY FOR THE YEAR 2001 The motion for the adoption of the foregoing resolution was duly seconded by Commissioner Lasman. Motion passed unanimously. RESOLUTION NO. 2000-06 Commissioner Hilstrom introduced the following resolution and moved its adoption: RESOLUTION APPROVING THE FINAL BROOKLYN CENTER HOUSING AND REDEVELOPMENT AUTHORITY BUDGET FOR THE YEAR 2001 PURSUANT TO MSA CHAPTER 469.033, SUBDIVISION 6 AND MSA CHAPTER 469.107, SUBDIVISION 1 The motion for the adoption of the foregoing resolution was duly seconded by Commissioner Lasman. Motion passed unanimously. 5. ADJOURNMENT A motion by Commissioner Nelson, seconded by Commissioner Peppe to adjourn the meeting at 7:03 p.m. Motion passed unanimously. Chair 12/11/00 -2- DRAFT HR.A Agenda Item No. 4a City of Brooklyn Center A Millennium Community • MEMORANDUM TO: Mayor Kragness, Councilmembers Lasman, Nelson, P ppe, and Ricker FROM: Michael J. McCauley, City Manager DATE: June 15, 2001 SUBJECT: Settlement with Brookdale Three Limited Partnership In connection with the purchase of the Brookdale Corporate Center Three, the City, the Housing and Redevelopment Authority (HRA), and Brookdale Associates Limited Partnership (successor and interest to Brookdale Three Limited Partnership) entered into an agreement that facilitated the sale of the property so that it would be repositioned and redeveloped. In connection with that sale, the termination agreement identified potential obligations under a deficiency agreement that had been entered into in 1985 between the HRA and Brookdale Three Limited Partnership. Pursuant to the termination agreement, the parties agreed that the maximum amount of payment that would be made under the deficiency agreement would be $335,000 or the maximum amount which could be paid on the payment date pursuant to the terms of the deficiency agreement whichever was less. The reason for the limitation or cap was to set sometime of limit on the potential liability for Brookdale Associates Limited Partnership. The agreement further went on to provide a mechanism in which the actual the deficiency payments that would be allowable under the Internal Revenue code would be determined and an appeal process to resolve differences of opinion. Springsted has undertaken additional study and review of the parties' position on estimated market value and what would constitute deficiency payments based on those market values and taxes actually paid. That analysis has indicated a range of the maximum amount that the City and HRA would be able to obtain under the termination agreement that ranges from a high of $266,773.99 to a potentially negative value. In the discussions to bring the termination agreement to a close, the position of the parities basically ranged from $83,515 to $266,773. The proposed resolution would have the City and HRA receive $176,000 in final and full settlement of the obligations under the termination agreement. This would be a reasonable result and avoid expensive efforts to deal with fixing the actual obligations for real estate taxes payable in the period 1992 through 1996, which were the years for further review and negotiation as identified in the termination agreement. These monies would be used for debt service pursuant to the applicable regulations etc., regarding this district. As this represents a reasonable resolution of the situation and provides a substantial amount of money that will be placed in the debt service account, I would recommend its approval. 6301 Shingle Creek Parkway Recreation and Community Center Phone & TDD Number Brooklyn Center, MN 55430 -2199 (763) 569 -3400 City Hall & TDD Number (763) 569 -3300 FAX (763) 569 -3434 FAX (763) 569 -3494 Commissioner introduced the following resolution and moved its adoption: HRA RESOLUTION NO. RESOLUTION AUTHORIZING ACCEPTANCE OF PAYMENT IN SATISIFICATION OF THE TERMINATION AGREMEENT DATED THE 28 DAY OF NOVEMBER 2000 BY AND BETWEEN THE HOUSING AND REDEVELOPMENT AUTHORITY (HRA) OF THE CITY OF BROOKLYN CENTER, THE CITY OF BROOKLYN CENTER, AND BROOKDALE ASSOCIATES LIMITED PARTNERSHIP (SUCCESSOR AND INTEREST TO BROOKDALE THREE LIMITED PARTNERSHIP) WHEREAS, as of the 28 Day of November 2000, the City, the HRA, and Brookdale Associates Limited Partnership entered into an agreement to terminate the deficiency agreement dated December 19, 1985, between the HRA and Brookdale Three Limited Partnership and various other agreements identified in the termination agreement of November 28, 2000; and WHEREAS, the parties agreed that there would be further calculation and discussion regarding the maximum payment to be received by the City and HRA pursuant to the deficiency agreement; and WHEREAS, further review of the market value of the property and what would constitute deficiency payments by virtue of the payment of taxes in excess of the fair market value of the property have been undertaken; and WHEREAS, the parties have proposed a final settlement pursuant to the termination agreement of November 28, 2000. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Brooklyn Center that the Executive Director is hereby authorized to accept the payment of $176,000 in full and complete discharge of the obligations of Brookdale Associates Limited Partnership under the termination agreement of November 28, 2000, for any and all deficiencies owed under the agreements identified in the termination agreement of November 28, 2001. Date Chair 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. TERMIlNATION AGREEMENT I THIS TERMINATION AGREEMENT ("Agreement "), made this A�day of 2000, by and between The Housing and Redevelopment Authority of the City of Brooklyn Center, a Minnesota public body corporate and politic ( "HRA ") the City of Brooklyn Center, a Minnesota public body corporate and politic ( "City ") and Brookdale Associates Limited Partnership, a Minnesota limited partnership successor in interest to Brookdale Three Limited Partnership ( "Brookdale "). RECITALS HRA and Brookdale are parties to a Deficiency Agreement dated December 19, 1985, between HRA and Brookdale Three Limited Partnership (the "Deficiency Agreement "), relating to tracts A and H, registered land survey No. 1594, Hennepin County, Minnesota (the "Property ") and recorded as Docurnent ",o. 1695004, and an Assessment Agreement and Certification of Assessor dated December 19, 1985, between HRA and Brookdale Three Limited Partnership (the "Assessment Agreement "), relating to the Property and recorded as Document No. 1695005, and a Contract for Private Development dated December 19, 1985 filed December 31, 1985, as Document No. 1695001 among the HRA, the City, Brookdale Three Limited Partnership, and Brookdale Corporate Center, a limited partnership ("Contract for Private Development "). In consideration of Brookdale's agreement to pay the amount determined pursuant to this Agreement to BRA, HRA and City hereby terminate the, Deficiency Agreement and Assessment Agreement. The City and HRA also hereby terminate the Contract for Private Development but only as it relates to Lot 2, Block 1, Brooklyn Farm, Hennepin County, Minnesota. Nothing herein shall act to terminate the Contract for Private Development as it relates to Lot 1, Block 1, Brooklyn Farm, Hennepin County, Minnesota. NOW, THEREFORE, the parties hereto agree as follows: 1. On or before the "Payment Date," (or, if applicable, the payment date set forth in Section l .c.) Brookdale shall pay to HRA an amount (the "Payment ") equal to the lesser of $335,000 or the maximum amount which could be paid on the Payment Date pursuant to the terms of the Deficiency Agreement, including the provisions thereof incorporating the limitations of Section 6.1(04) of the Development Agreement, as defined below, to pay all tax increment deficiencies payable in 2003 and all prior years. For purposes of this Agreement, it shall be conclusively presumed that no "private payments" for purposes of the Internal Revenue Code were or would be included in real estate taxes payable in 1997 or any later year or in 1991- or any prior year, and that the tax increment deficiency under the Deficiency Agreement in payment years 2001, 2002 and 2003, calculated without reference to the limitation in Section 6.1(04) of the Development Agreement, would be $53,726.58 per year. a. The "Payment Date" shall be the later of the 30 day after the date of the Agreement or the tenth day after the day the HRA provides Brookdale written notice of such tax increment deficiency and all calculations of the tax increment deficiency prepared by its consultants and attorneys for real estate taxes 1227977v6 paid during the term of the Deficiency Agreement, including without limitation, calculation of the limitations on tax deficiency set forth in Section 6.1(04) of the contract for Private Development, dated December 19, 1985 among the HRA, City, Brookdale Three Limited Partnership, and Brookdale Corporate Center ( "Development Agreement"). b. Brookdale shall have the right to contest any such calculations by written notice delivered to City on or prior to the Payment Date. In the event the parties disagree as to the correctness of the calculations, the parties shall seek the written opinion of Joseph Gonnella, Esq. of the Dorsey Whitney law firm. If Joseph Gonnella is unavailable, the parties shall seek the written opinion of Lynn Endorf of the Dorsey Whitney law firm. If Lynn Endorf is unavailable, the parties shall seek the written opinion of a mutually acceptable bond attorney who is regularly retained to advise developers, owners and municipalities as to tax exempt financing and who regularly renders opinions as to tax exempt bonds. (i) If Joseph Gonnella and Lynn Endorf are unavailable and the parties cannot agree as to such attorney, within ten (10) days of delivery of Brookdale's written notice of objection (such notice delivery date hereafter called "Notice Date "), Joseph Gonnella and Lynn Endorf shall jointly select an attorney who is regularly retained to advise developers, owners and municipalities as to tax exempt financing and who regularly renders opinions as to tax exempt bonds. (ii) Brookdale shall have the right to submit a memorandum to the attorney explaining Brookdale's position within five (5) days of the later of the date of Brookdale's notice of its contest of any such calculations or the date the attorney is selected. (iii) The selected attorney shall render an opinion to the HRA, City, Brookdale and BCC Associates, LLC as to the correct calculation of the deficiency and the correct calculation of the limitations imposed by Article VI of the Development Agreement including the opinion that such deficiency payment shall not affect the tax exempt status of the bonds within thirty (30) days of being selected and notified of the dispute. Such opinion shall resolve the dispute as to the calculation of such deficiency and the calculation of any limitations on such deficiency. The opinion, as a resolution of such disputes, shall be final and nonappealable. (iv) Brookdale shall pay the cost of the attorney' retained pursuant to the process outlined above. C. Payment of such tax increment deficiency shall be postponed pending resolution of any such dispute but shall be paid within seven (7) days of such resolution. 1227977v6 2 r ' w 2. In consideration of Brookdale's commitment to make the Payment, the City, HRA and Brookdale hereby terminate the Development Agreement, the Deficiency Agreement and Assessment Agreement and the City and HRA hereby releases and discharges Brookdale, Brookdale Three Limited Partnership and their respective successors and assigns from any and all obligations and liabilities, for payment or otherwise, now existing or hereafter arising under the Development Agreement the Deficiency Agreement or Assessment Agreement. 3. A notice, demand or other communication under the Agreement by any party to another party shall be sufficiently given or delivered if and when it is sent by mail, postage prepaid, return receipt requested or delivered personally to the following addresses: As to the HRA: Executive Director The Housing and Redevelopment Authority in and for the City of Brooklyn Center 6301 Shingle Creek Parkway Brooklyn Center, Minnesota As to the City: City Manager City of Brooklyn Center 6301 Shingle Creek Parkway Brooklyn Center, Minnesota As to Brookdale: Brookdale Associates Limited Partnership a c/o Ryan Properties, Inc. 900 Second Avenue South Minneapolis, Minnesota 55402 Attention: John Kelly [Signature pages to follow] • 1227977v6 3 IN WITNESS WHEREOF, the parties hereto have caused these presents to be made as of the day and year first above stated. THE HOUSING REDEVELOPMENT AUTHORITY OF THE CITY OF BROOKLYN CENTER y [ts And W N4,4 hj��� Its STATE OF MINNESOTA ) ss. COUNTY OF HENNEPIN ) The fore oing instrum t was acknowle4ged before me r 's � day of No ember, 20 0, by t t/t i�� C ,the YL rj �h t d by !1 , ,the of The Housing and Red elopment thorny in and for the City of Brooklyn Center, a Minnesota public body corporate and politic, on behalf of The Housing and Redevelopment Authority in and for the City of Brooklyn Center. 41 j- Jelvi Notary Public MARIA L. ROSEN13AUM NOTARY PUBLIC- MINNESOTA My Commission Expires Jan. 31, 2405 it s 1227977v6 4 BROOKDALE ASSOCIATES LIMITED PARTNERSHIP By Brookdale Three Limited Partnership, its general partner By Ryan Properties, Inc., its general partner `l STATE OF MINNESOTA ) ss. COUNTY OF HENNEPIN The foreZoing ins ent was acknowledged before me thiday of November, 2000, byJ Okn 961 Sr. , the V I te, Residue of Ryan Properties, Inc., general partner of Brookdale Three Limited Partnership, general partner of Brookdale Associates Limited Partnership, a Minnesota limited partnership, on behalf of the limited partnership. Notary Public Fe LISA M. ADAIR Notary Public - Minnesota My Commission Expires Jan .31 2M 1227977v6 5 n CITY OF BR KLYN CE ER By ts_ And By Its STATE OF MINNESOTA ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was ackno ledged beflorp me on this ;A da of tent 2000 by 1 and Tnwrn a S?the and - - a .,,,i &If the Ci of Brookl39 Center, a Minnesota municipal corp6ration. q. r Notary Public s MARIA L ROSENBAUM NOTARY PUBLIG-MINKSOTA Mr CDMMWM Eom JOL at, 205 DRAFTED BY: BRIGGS AND MORGAN, P.A. (JRS) 2400 IDS Center 80 South Eighth Street Minneapolis, MN 55402 612 - 334 -8400 • 1227977x6 6