HomeMy WebLinkAbout2001 09-24 EDAP EDA MEETING
• City of Brooklyn Center
September 24, 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 Economic Development 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. September 10, 2001— Regular Session
4. Commission Consideration Item
a. Resolution Approving Assignment and First Amendment to Development Agreement
By and Between Economic Development Authority of the Brooklyn Center and
Eagle Crest Northwest Inc.
• 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
SEPTEMBER 10, 2001
CITY HALL
INVOCATION
Brandon Manske, resident of Brooklyn Center, offered the invocation.
1. CALL TO ORDER
The Brooklyn Center Economic Development Authority (EDA) met in regular session and was
called to order by President Myrna Kragness at 7:01 p.m.
2. ROLL CALL
President Myrna Kragness, Commissioners Kay Lasman, Ed Nelson, Bob Peppe, and Tim Ricker.
Also present: Executive Director Michael J. McCauley, Assistant City Manager Jane Chambers,
Public Works Director Diane Spector, City Attorney Charlie LeFevere, and Deputy City Clerk Maria
Rosenbaum.
3. APPROVAL OF AGENDA AND CONSENT AGENDA
Councilmember Ricker requested that the minutes of August 27, 2001, be amended to indicate that
he was present at the meeting.
A motion by Commissioner Lasman, seconded by Commissioner Peppe to approve the agenda and
consent agenda as amended. Motion passed unanimously.
3a. APPROVAL OF MINUTES
A motion by Commissioner Lasman, seconded by Commissioner Peppe to approve the August 27,
2001, regular session with the amendment made to add Councilmember Ricker to the roll call.
Motion passed unanimously.
4. COMMISSION CONSIDERATION ITEMS
4a. PRELIMINARY EDA 2002 TAX LEVY AND BUDGET
09/10/01 -1- DRAFT
1. RESOLUTION ESTABLISHING A PRELIMINARY TAX CAPACITY
LEVY FOR THE BENEFIT OF THE CITY OF BROOKLYN CENTER
ECONOMIC DEVELOPMENT AUTHORITY FOR FISCAL YEAR
2002
2. RESOLUTION APPROVING THE PRELIMINARY BUDGET FOR
THE CITY OF BROOKLYN ECONOMIC DEVELOPMENT
PURSUANT TO MINNESOTA STATUTES CHAPTER 469
Executive Director Michael McCauley discussed these resolutions would approve establishing the
EDA preliminary tax levy and budget for the year 2002.
RESOLUTION NO. 2001-16
Commissioner Nelson introduced the following resolution and moved its adoption:
RESOLUTION ESTABLISHING A PRELIMINARY TAX CAPACITY LEVY FOR THE
BENEFIT OF THE CITY OF BROOKLYN CENTER ECONOMIC DEVELOPMENT
AUTHORITY FOR FISCAL YEAR 2002
The motion for the adoption of the foregoing resolution was duly seconded by Commissioner
Lasman. Motion passed unanimously.
RESOLUTION NO. 2001-17
Commissioner Nelson introduced the following resolution and moved its adoption:
RESOLUTION APPROVING THE PRELIMINARY BUDGET FOR THE CITY OF BROOKLYN
ECONOMIC DEVELOPMENT PURSUANT TO MINNESOTA STATUTES CHAPTER 469
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
7:03p.m. Motion passed unanimously.
President
09/10/01 -2- DRAFT
EDA Agenda Item No. 4a
MEMORANDUM
TO: Michael J. McCauley, City Manager
FROM: Tom Bublitz Community Development S ecialist /
�' P p
DATE: September 18, 2001
SUBJECT: Resolution Approving Assignment and First Amendment to Development By and
Between Economic Development Authority of Brooklyn Center and Eagle Crest
Northwest Inc.
The Brooklyn Center Economic Development Authority (EDA) approved Resolution 2000 -24 which
authorized approval of a Development Agreement between the Economic Development Authority of
Brooklyn Center and Eagle Crest Northwest Inc. The Development Agreement contemplated sale of
the property to Eagle Crest for construction of 21 single family detached townhomes on the EDA
owned property located at Willow Lane and 252.
Pursuant to Section 3.8 of the Development Agreement the Developer was granted the right to enter
upon and inspect, analyze and test the Development Property for all reasonable purposes, including
conducting soil tests. On July 19, 2001, the Developer authorized STS Consultants, Consulting
Engineers, to conduct soil borings on the Development Property. STS took five soil borings on the
Development Property. The location of the soil borings B -1 through B5, are shown on the attached
map provided by STS. Soil boring B -5 was taken at the site of the former Brookdale Motel. The
remainder of the borings were taken at locations on the Development Property where no record of
any foundations or structures existed.
After analyzing the soil borings, STS concluded that "in our opinion, much of the existing fill on this
property is presently unsuitable for foundation support, although some of it would be reusable as
structural fill ". The results of the STS soil borings suggest a large portion of the Development
Property contains fill material unsuitable for foundation support. The existence of this suspected fill
material, except for the old Brookdale Motel site, was not known to the Developer or the EDA at the
time the Development Agreement was executed.
Calculations done by the Developer's engineering firm, Westwood Professional Services, indicate
that soil correction (excavation and compaction) resulting from the suspected fill material could cost
between $14,700 and $17,500.
The Development Agreement provides that the sale of the Development Property is on an "as is
conveyance with no warranties express or implied, except as those expressly stated" in the
agreement. Although there were no assurances made to the Developer with regard to the soils on the
Development Property, the results of the soil boring tests were unanticipated by both the EDA and
MEMORANDUM
September 18, 2001
Page 2
the Developer. The worst soil conditions appear to be on the northerly part of the site, in areas where
no structures were ever known to be built and where no record of any soil disturbance or deposit of
fill material exists.
As a result of this unanticipated cost, relative to soil correction, staff has prepared an amendment to
the Development Agreement that would reduce the purchase price of the property by $5,000 from
$280,000 to $275,000, as partial compensation for the unanticipated soil correction work.
In addition to the amendment relative to the soil compaction issues, Eagle Crest Northwest Inc.
wants to assign its interest in the Development Agreement to Sylvia Development LP. The
Development Agreement provides for such an assignment or transfer. In addition to the assignment
to Sylvia Development LP, Eagle Crest Northwest Inc. has created a new corporation, Eagle Crest
Northwest Townhomes Inc., that will actually build the townhouse project on the Willow Lane site.
Both Eagle Crest Northwest Inc. and Eagle Crest Northwest Townhomes Inc. are owned by brothers
John and William Gleason. The Eagle Crest Northwest Inc. corporation is a dormant corporate
entity and the new corporation, Eagle Crest Northwest Townhomes Inc., will be the builder for the
• Willow Lane project. Sylvia Development LP (limited partnership) will be the developer for the
project and will be responsible for the financing for the project. The general partner for Sylvia
Development LP, is Sylvia Development Inc. which had a substantial role in the development of the
housing around Edinburgh in Brooklyn Park. It should also be noted that Eagle Crest Northwest Inc.
shall remain liable under the terms of the Development Agreement in addition to Sylvia
Development LP and Eagle Crest Northwest Townhomes Inc.
A copy of the amendment to the Development Agreement along with a resolution approving the
amendment is included with this memorandum. A closing on the Development Property has been
scheduled for September 25, 2001.
•
SOIL BORING MAP 3
V.MU M A
tllWllW A t
• P110PERTY IIIIE. —
O LT n;r= I—)
-�'• B-3
• S % � i
V '
3mmv WADVAL I � • Ot0 :921 _
so R
W.
R w
6 .4 : y ers 7 i
i � y�•_ -- 7 �' R �r�sine aec
�,L To a swoxa (Txl
�.,�, g =• r d too
cmwrc tRCc
TO K vacsERVW V W-)
R
a , R
ISO
j •
3 goo \ne Nw1 ea
B-
r ,
w 1—. R,�
j snsuw s xwiruE ua :: -
sTNEEt B-1
40 Igo
c
i - - 9W '�`"Er TiE
ASSIGNMENT AND FIRST AMENDMENT TO
DEVELOPMENT AGREEMENT
THIS ASSIGNMENT AND FIRST AMENDMENT TO DEVELOPMENT
AGREEMENT ( "Assignment ") is made as of September , 2001 by and between the
Economic Development Authority of Brooklyn Center ( "Authority "), Eagle Crest Northwest,
Inc., ( "Assignor "), and Sylvia Development, LP, a Minnesota limited partnership ( "Assignee ").
RECITALS
A. Authority and Assignor entered into a Development Agreement dated December
11, 2000 ("Agreement ") pursuant to which the Authority agreed to sell and convey to Assignor
certain real property located in Hennepin County, Minnesota ("Development Property ").
B. Authority, Assignor and Assignee intend and agree that Assignor's right, title and
interest in the Agreement, shall inure to the benefit of and be assigned and transferred to
Assignee, and that the purchase price for the • Development Property be reduced, all upon the
terms and conditions as hereinafter provided.
NOW, THEREFORE, in consideration of the recitals set forth above and other good
and valuable consideration, the parties hereto agree as follows.
1. Amendment to Agreement. The Agreement is amended as follows:
a. Article III Section 3.5: Purchase Price. The total p
urchase rice to be
p
paid by Assignee to Authority for the Development Property is reduced from $280,000 to
$275,000.
b. Except to the extent amended hereby, all other terms and conditions of the
Agreement remain in full force and effect.
2. Assignment by Assignor. Assignor hereby assigns and transfers to Assignee all
right, title and interest of Assignor in the Agreement, and Authority hereby consents to such
assignment.
3. Acceptance of Assignment. Assignee hereby accepts the assignment of the
Agreement and Assignee assumes and agree'§ to keep, perform and fulfill all of the duties,
covenants, provisions, conditions and obligations of Assignor contained in the Agreement, as
amended by this Assignment.
4. Future Assignments. The consent by Authority to the assignment described
herein shall not be deemed to constitute the consent to any future assignment of the Agreement
by Assignee.
5. Designation of Builder. Authority hereby consents to Assignee's designation of
Eagle Crest Northwest Townhomes, Inc., as its contractor to build the Minimum Improvements
(as defined in the Agreement) on the Development Property.
g ) P P rtY .
6. Continuing Liability. Notwithstanding the assignment of the Agreement by
Assignor, Assignor shall continue to be liable under the terms of the Agreement, as amended
hereby. In the event Assignee fails to perform or otherwise defaults under any of the terms of
the Agreement, as amended hereby, the liability of Assignor and Assignee to Authority shall be
joint and several.
7. Authority. Each of the parties signing this Assignment hereby warrants and
represents that it has the full legal power, authority and right to execute, deliver and perform the
obligations under this Assignment, that this Assignment has been duly authorized by all requisite
actions on the part of such warranting party, and that no remaining action or third party action is
required to make this Assignment binding upon such party.
8. Governing Law. This Assignment shall be construed and enforced in accordance
with the laws of the State of Minnesota.
(Signatures appear on following pages)
•
IN WITNESS WHEREOF, Seller and Buyer have executed this Amendment as of the
day and year first above written.
ECONOMIC DEVELOPMENT
AUTHORITY OF BROOKLYN CENTER
By
Secretary
STATE OF MINNESOTA )
) ss
COUNTY OF H
The foregoing instrument was acknowledged before me this day of ,
2001, by , the Secretary, of the Economic Development Authority of
Brooklyn Center, a body corporate and politic organized and existing under the Constitution and
laws of the State of Minnesota, on behalf of said Authority.
Notary Public
i
EAGLE CREST NORTHWEST, INC.
By:
Its:
STATE OF MINNESOTA )
) ss
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of
, 2001, by , the of Eagle Crest Northwest,
Inc., a Minnesota corporation, on behalf of said corporation.
Notary Public
SYLVIA DEVELOPMENT, LP.
By:
Its:
STATE OF MINNESOTA )
) ss
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of
2001, by , the general partner of Sylvia Development,
LP, a Minnesota corporation, on behalf of said limited partnership.
Notary Public
This instrument drafted by:
Briggs and Morgan, P.A. (DGG)
2200 First National Bank Building
Saint Paul, MN 55101 -1396
This instrument drafted by:
Briggs and Morgan, P.A. (DGG)
2200 First National Bank Building
Saint Paul, MN 55101 -1396
• BUILDER'S ACKNOWLEDGEMENT AND AGREEMENT
The undersigned hereby r
g y and warrants to Economic Development Authority of
Brooklyn Center ("Authority") that it has reviewed the Development Agreement dated
December 11, 2001 by and between Authority and Eagle Crest Northwest, Inc., as amended by
the attached Assignment and First Amendment to Development Agreement, and that the
undersigned agrees that it will, as the contractor of the Developer under said Development
Agreement, observe and perform all of the terms and conditions of said Development A ee
�' � p Agreement
relating to the construction of the Minimum Improvements on the Development Property, as
those terms are defined in the Development Agreement.
EAGLE CREST NORTHWEST
TOWNHOMES, INC.
By
Its
STATE OF MINNESOTA )
)ss
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this day of September,
2001, by . the of Eagle Crest Northwest
Townhomes, Inc., a Minnesota corporation, on behalf of the corporation.
Notary Public
•
. Commissioner introduced the following resolution and
moved its adoption:
EDA RESOLUTION NO.
RESOLUTION APPROVING ASSIGNMENT AND FIRST AMENDMENT TO
DEVELOPMENT AGREEMENT BY AND BETWEEN ECONOMIC
DEVELOPMENT AUTHORITY OF BROOKLYN CENTER AND EAGLE CREST
NORTHWEST INC.
WHEREAS, on December 11, 2000, the Brooklyn Center Economic
Development Authority (EDA) approved Resolution No. 2000 -24 Resolution Approving
Development Agreement Between the Brooklyn Center Economic Development Authority and
Eagle Crest Northwest Inc. for the Sale of the EDA Owned Property Located at 66 Avenue
North and Willow Lane (Development Property) and Authorizing EDA Executive Director to
Execute the Development Agreement; and
WHEREAS, Eagle Crest Northwest Inc. desires to assign their interest in the
Development Agreement to Sylvia Development LP, a Minnesota limited partnership; and
WHEREAS, Article XII in the Development Agreement provides for the transfer
or assignment of the Development Agreement by Eagle Crest Northwest Inc.; and
• WHEREAS, the EDA has determined the assignment of Eagle Crest Northwest
Inc.'s interest in the development to Sylvia Development LP complies with the terms and
conditions set forth in the Development Agreement; and
WHEREAS, Section 3.5 of the Development Agreement establishes the purchase
price of the Development Property at $280,000; and
WHEREAS, Section 3.8 of the Development Agreement provides that the
Developer is hereby granted the right to enter upon and inspect, analyze, and test the
Development Property for all reasonable purposes, including conducting soil tests; and
WHEREAS, on July 19, 2001 STS Consulting Engineers, on behalf of the
Developer, conducted a soils analysis of the Development Property, including five soil borings
taken on the Development Property; and
WHEREAS, STS Consultants concluded from the soil boring data that soil
correction work would be necessary to make the Development Property suitable for foundation
support; and
WHEREAS, the condition of the soils on the Development Property pursuant to
the soil boring data from STS Consultants, was unknown to the EDA and Developer at the time
of the execution of the Development Agreement; and
f
RESOLUTION NO.
WHEREAS, corrective action to make the soil conditions suitable for foundation
support must be undertaken by the Developer; and
WHEREAS, the Developer has requested a reduction in the purchase price of the
Development Property to provide partial compensation for the anticipated soil correction work
on the Development Property.
NOW, THEREFORE, BE IT RESOLVED by the Economic Development
Authority in and for the City of Brooklyn Center, Minnesota as follows:
The EDA hereby approves the Assignment and First Amendment to Development
Agreement By and Between Economic Development Authority of Brooklyn
Center and Eagle Crest Northwest Inc. and authorizes the EDA Secretary to sign
the Amendment along with all other documents necessary for closing on the
Development Property.
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.
i