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HomeMy WebLinkAbout1999 01-25 EDAP Regular Session EDA MEETING 40 City of Brooklyn Center January 25, 1999 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. Regular Session - January 11, 1999 4. Commission Consideration Items a. Resolution Approving Extension Agreement with Boulevard Shoppes, LLC, and Rescinding Notice of Termination of Contract for Private Redevelopment -Requested Authority Action: - Motion to approve resolution. b. Discussion of Acquisition of Owner - Occupied Residences -Requested Authority Action: - Discussion and approval of proceeding with acquisition by EDA. 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 JANUARY 11, 1999 CITY HALL 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 8:50 p.m. 2. ROLL CALL President Myrna Kragness, Commission Members Debra Hilstrom, Kay Lasman, Ed Nelson, and Robert Peppe. Also present: Executive Director Michael J. McCauley, Assistant City Manager/HR Director Jane Chambers, City Attorney Charlie LeFevere, and Recording Secretary Maria Rosenbaum. 3. APPROVAL OF AGENDA AND CONSENT AGENDA • A motion by Commissioner Lasman seconded b Commissioner Hilstrom to approve the agenda Y PP g and consent agenda. Motion passed unanimously. 3a. APPROVAL OF MINUTES A motion by Commissioner Lasman, seconded by Commissioner Hilstrom to approve the minutes from the regular session on December 14, 1998. Motion passed unanimously. 3b. RESOLUTION DESIGNATING DEPOSITORIES OF EDA FUNDS RESOLUTION NO. 99 -01 Commissioner Lasman introduced the following resolution and moved its adoption: RESOLUTION DESIGNATING DEPOSITORIES OF EDA FUNDS The motion for the adoption of the foregoing resolution was duly seconded by Commissioner Hilstrom. Motion passed unanimously. • 1/11/99 -1- DRAFT 4. COMMISSION CONSIDERATION ITEMS 4a. RESOLUTION ELECTING OFFICERS FOR THE ECONOMIC • DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF BROOKLYN CENTER RESOLUTION NO. 99-02 Commissioner Lasman introduced the following resolution and moved its adoption: RESOLUTION ELECTING OFFICERS FOR THE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF BROOKLYN CENTER The motion for the adoption of the foregoing resolution was duly seconded by Commissioner Hilstrom. Motion passed unanimously. 4b. RESOLUTION DIRECTING NOTICE OF TERMINATION PURSUANT TO ARTICLE XI OF THE CONTRACT FOR PRIVATE REDEVELOPMENT BY AND BETWEEN THE ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF BROOKLYN CENTER, MINNESOTA, AND BOULEVARD SHOPPES, LLC Executive Director Michael McCauley outlined the current status of the redevelopment agreement • between Boulevard Shoppes, LLC and the Economic Development Authority (EDA). The contract between the EDA and Boulevard Shoppes LLC required the redeveloper to provide proof of control of all of the property in the proposed redevelopment area by December 31, 1998. As of the date of the memorandum of January 6, 1999, the redeveloper had not demonstrated control of all of the property. Mr. Nelson did visit with staff today and presented some financing materials, but not control of the property. Mr. McCauley indicated that he advised Mr. Nelson that he could make his presentation to the EDA with the redeveloper's request for an extension. Regardless of what direction the EDA chose to take with respect to the redeveloper's request for an extension of the agreement, the City Manager was recommending that the EDA consider a plan at its January 25, 1999, meeting for the EDA to voluntarily acquire the owner- occupied residences in the redevelopment project area. Staff had previously not interjected itself into the acquisition of the property during the term of the redevelopment agreement with Boulevard Shoppes, LLC so as to not interfere with the contractual arrangement. Mr. Nelson addressed the EDA requesting a 60 -day extension of the agreement to March 15, 1999. Mr. Nelson stated that he had been working on this project and that putting it together was difficult. He further stated that he has shown good faith by obtaining purchase agreements on a number of properties and that he had actually purchased one of the homes. Mr. Nelson distributed to the EDA a site map showing the properties that he had acquired or had purchase agreements with and how they laid out on his proposed project area. 1/11/99 -2- DRAFT The EDA discussed its options with respect to this project. President Kragness indicated that she • understood Mr. Nelson's statements regarding the efforts that he had undertaken and the progress that he had made. Mr. McCauley outlined three general options for the EDA: * Notice of termination * Indicate that it would favor negotiations with Mr. Nelson on a 60 -day extension to March 15, 1999 * Continue the discussion to the January 25, 1999, meeting for a specific written proposal regarding these matters Commissioner Hilstrom inquired if it would be possible to go forward with discussions with the residents while negotiations for a written extension of the agreement went forward and how would that impact the ten -day notice. That is, Commissioner Hilstrom was concerned that if an agreement was not reached at the January 25, 1999, meeting it would postpone by an additional ten days the effective termination, putting termination well into February. Mr. McCauley inquired of City Attorney Charlie LeFevere as to whether the EDA could delegate to the Executive Director authority to negotiate an extension on the terms that had been outlined, including Mr. Nelson's offer that the EDA could go forward with acquisition discussions without breeching the agreement with the redeveloper and if those negotiations were unsuccessful to give the ten -day notice. Mr. LeFevere suggested that the EDA could direct that the ten -day notice be given in a fashion that would not make it effective until January 26, 1999. Under this arrangement, if a satisfactory proposal was presented to the EDA, it could rescind its termination at the January 25, 1999, meeting before it became effective on January 26, 1999. Mr. McCauley suggested to the EDA that Mr. LeFevere's • proposal was a better solution. A motion by Commissioner Lasman, seconded by Commissioner Nelson that staff negotiate with the redeveloper for an extension to the contract that would provide that the redeveloper would waive its rights with respect to the EDA acquiring residential properties and that the redeveloper agree to assign any purchased contracts and agreements to the EDA if he did not complete his performance by March 15, 1999, and that the redeveloper be given until March 15, 1999, to fully perform under the agreement and that the Executive Director be directed to give the redeveloper notice of termination such that the notice would be effective January 26, 1999, if not rescinded by the EDA. Motion passed unanimously. 4c. RESOLUTION APPROVING THE ACQUISITION OF REAL PROPERTY LOCATED AT 6918 JUNE AVENUE NORTH, AND APPROVING PURCHASE AGREEMENT BETWEEN THE ECONOMIC DEVELOPMENT AUTHORITY AND THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Mr. McCauley discussed the resolution approving the acquisition of real property located at 6918 June Avenue North, and approving purchase agreement between the EDA and the Department of Housing and Urban Development. 1/11/99 -3- DRAFT RESOLUTION NO. 99-03 Commissioner Hilstrom introduced the following resolution and moved its adoption: S RESOLUTION APPROVING THE ACQUISITION OF REAL PROPERTY LOCATED AT 6918 JUNE AVENUE NORTH, AND APPROVING PURCHASE AGREEMENT BETWEEN THE ECONOMIC DEVELOPMENT AUTHORITY AND THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT The motion for the adoption of the foregoing resolution was duly seconded by Commissioner Lasman. Motion passed unanimously. 4d. RESOLUTION APPROVING AGREEMENT FOR FOOD SERVICE MANAGEMENT AND SEPARATION AGREEMENT (D'AMICO) 4e. RESOLUTION APPROVING A FOOD SERVICE MANAGEMENT AGREEMENT FOR THE EARLE BROWN HERITAGE CENTER (FLIK INTERNATIONAL CORPORATION) Mr. McCauley requested approving item 4d and 4e under one motion. Item 4d was to close out and terminate with D'Amico and Partners Hospitality Consultants, and item 4e was to approve a food service agreement with Flik International Corporation. RESOLUTION NO. 99-04 • Commissioner Lasman introduced the following resolution and moved its adoption: RESOLUTION APPROVING AGREEMENT FOR FOOD SERVICE MANAGEMENT AND SEPARATION AGREEMENT The motion for the adoption of the foregoing resolution was duly seconded by Commissioner Hilstrom. Motion passed unanimously. RESOLUTION NO. 99 -05 Commissioner Lasman introduced the following resolution and moved its adoption: RESOLUTION APPROVING A FOOD SERVICE MANAGEMENT AGREEMENT FOR THE EARLE BROWN HERITAGE CENTER The motion for the adoption of the foregoing resolution was duly seconded by Commissioner Hilstrom. Motion passed unanimously. 1/11/99 -4- DRAFT • 5. ADJOURNMENT A motion by Councilmember Hilstrom, seconded by Councilmember Lasman to adjourn the meeting at 9:42 p.m. Motion passed unanimously. President • 1/11/99 -5- DRAFT EDA Agenda Item No. 4a • Office of the City Manager City o f Brooklyn Center A great place to start. A great place to stay. • Michael I McCauley City Manager MEMORANDUM TO: Mayor Kragness, Councilmembers Hi om, Lasman, Nelson, and Peppe FROM: Michael J. McCauley, City Manager DATE: January 21, 1999 SUBJECT: Proposed Addendum to the Contract with Boulevard Shoppes, LLC Mr. LeFevere has prepared an Addendum to the Contract for Private Redevelopment that incorporates Mr. Nelson's request for an extension until March 15th. The terms of the Addendum require Boulevard Shoppes, LLC, to provide proof by 4:30 p.m. on March 16, 1999, that all portions of the redevelopment property not owned by the Economic Development Authority have been acquired by the redeveloper and • closing has occurred on those properties. By the terms of the Addendum, the Agreement automatically terminates, without any further notice if such property acquisition has not been demonstrated by March 16th. As indicated in Mr. Nelson's presentation to the EDA, the Addendum requires Boulevard Shoppes, LLC, to assign any purchase agreements that it had acquired to the EDA in the event of termination of the Agreement. The Addendum also provides that the EDA may negotiate with owners of single - family residential houses in the redevelopment property and purchase such homes. • 6301 Shingle Creek Pkwy, Brooklyn Center, MN 55430 -2199 • City Hall & TDD Number (612) 569 -3300 Recreation and Community Center Phone & TDD Number (612) 569 -3400 • FAX (612) 569 -3494 An Affirmative Action /Equal Opportunities Employer Commissioner introduced the following resolution and • moved its adoption: EDA RESOLUTION NO. RESOLUTION APPROVING EXTENSION AGREEMENT WITH BOULEVARD SHOPPES, LLC, AND RESCINDING NOTICE OF TERMINATION OF CONTRACT FOR PRIVATE REDEVELOPMENT WHEREAS, attached hereto and incorporated herein by reference as Exhibit A is a proposed extension agreement with Boulevard Shoppes, LLC; and WHEREAS, the terms and conditions set forth in the attached extension agreement are reasonable and proper; and WHEREAS, the Economic Development Authority had previously authorized and given notice of termination to Boulevard Shoppes, LLC, of the contract for private redevelopment dated as of June 11, 1998; and WHEREAS, execution of the extension agreement with Boulevard Shoppes, LLC, extends the time within which the redeveloper may perform under the contract. • NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority in and for the City of Brooklyn Center that the extension agreement set forth in Exhibit A be and hereby is approved. BE IT FURTHER RESOLVED by the Economic Development Authority in and for the City of Brooklyn Center that the notice of termination of the contract for private redevelopment that would have been effective January 26, 1999, be and hereby is rescinded. 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. • Exhibit A ADDENDUM TO CONTRACT FOR PRIVATE REDEVELOPMENT • This Agreement is made on or as of the day of , 1999 by and between the Economic Development Authority in and for the City of Brooklyn Center, a public body corporate and politic (the "Authority") and Boulevard Shoppes, LLC, a Minnesota limited liability company (the "Redeveloper "); WITNESSETH: WHEREAS, the Authority and the Redeveloper entered into a contract entitled "Contract for Private Redevelopment by and between Economic Development authority in and for the City of Brooklyn Center and Boulevard Shoppes, LLC" dated as of June 11, 1998 (the "Redevelopment Agreement "); and WHEREAS, Section 11.1 of the Redevelopment Agreement provided generally that the Authority had the right to terminate the Redevelopment Agreement if closing on the Redevelopment Property (as defined therein) had not occurred by December 31, 1998; and WHEREAS, closing on the Redevelopment Property had not occurred prior to December 31, 1998 nor had Redeveloper requested that portions of the Redevelopment Property which it had been unable to acquire be acquired by the Authority pursuant to Sections 3.1 and 3.2 of the Redevelopment Agreement; and • WHEREAS, Redeveloper has requested that the Redevelopment Agreement not be terminated, has indicated a desire to continue to pursue redevelopment of the Redevelopment Property and has requested that the Redevelopment Agreement be amended as hereinafter set forth; and WHEREAS, the Authority has determined that it is in the best interests of the public to amend the Redevelopment Agreement in accordance with this Addendum. NOW, THEREFORE, ON THE BASIS OF THE FOREGOING AND THE MUTUAL PROMISES HEREINAFTER SET FORTH, IT IS AGREED AS FOLLOWS: 1. The Redevelopment Agreement is amended as set forth in this Addendum. In all other respects the Redevelopment Agreement shall remain in full force and effect. 2. Section 11.1 of the Redevelopment Agreement is amended to read: "This Agreement shall automatically terminate, without further action or notice by either party, at 4:30 o'clock p.m. March 16, 1999 unless Redeveloper has provided written proof to the Authority prior to said date and time that all portions of the Redevelopment Property which are not then owned by the Authority have been acquired by the Redeveloper, and closing has occurred thereon, or unless the parties agree in writing to a further extension, time being of the absolute essence hereof." • CLL- 156791 1 BR305 -56 Exhibit A 3. Section 11.2 of the Redevelopment Agreement is deleted. 4. The Authority may, in its absolute and sole discretion, negotiate with the owners of single family residential houses in the Redevelopment Property which are not owned by, or subject to options or purchase agreements with, the Authority or the Redeveloper, enter into agreements and purchase such properties on such terms and conditions as the Authority deems fair and reasonable. Properties so acquired shall be treated in all respects under the Redevelopment Agreement as though such properties had been acquired prior to the date of the Redevelopment Agreement, and the costs of acquiring such properties shall be included as Land Acquisition Costs (as defined therein). 5. Properties acquired by the Authority will be subject to the terms of the Redevelopment Agreement; provided, however, that Redeveloper shall not be entitled to possession of such properties prior to May 15, 1999. 6. In the event of termination of this Agreement the Authority shall have the following rights with respect to those portions of the Redevelopment Property in which the Redeveloper has an interest: a) In the case of properties for which Redeveloper has a non - assignable option or purchase agreement as of the date of termination, Redeveloper will cooperate with the Authority, at the request of the Authority, in attempting to secure permission to assign said option or purchase agreements to the Authority. If Redeveloper acquires any of such properties pursuant to any such option or purchase agreement or amendment or extension thereof, Redeveloper shall immediately give notice of such acquisition to the Authority, and such properties shall be subject to paragraph 6 b) of this Addendum. b) Redeveloper will convey to the authority upon written demand made within thirty (30) days of the date of termination of this Agreement any portions of the Redevelopment Property owned by Redeveloper as of the date of termination. In the case of properties acquired after termination and subject to paragraph 6 a) of this Addendum such written demand shall be made within thirty (30) days of notice of acquisition given by the Redeveloper. Conveyance for each such property shall be by warranty deed, conveying marketable title for a purchase price equal to the amount paid by Redeveloper to the previous owner. Closing shall occur within one hundred twenty (120) days after the Authority's written demand, or sixty (60) days after receipt by the Authority of evidence of marketable title (extended, up to date abstract of title or RPA which shall be provided by Redeveloper at Redeveloper's expense within sixty (60) days of receipt of the Authority's demand), whichever occurs later. • c) Redeveloper will assign to the Authority all options or purchase agreements for any CLL- 156791 2 BR305 -56 Exhibit A portion of the Redevelopment Property in which the Redeveloper has an assignable interest as of the time of termination within fifteen days of receipt of written demand • therefor by the Authority (which demand shall be given within thirty (30) days after termination). Upon receipt of assignment, the Authority shall pay to Redeveloper an amount equal to the amount of earnest money, or option payment paid by Redeveloper to the owner of the parcel. IN WITNESS WHEREOF, the Authority has caused this Agreement to be duly executed in its name and behalf and its seal to be hereunto duly affixed and the Redeveloper has caused this Agreement to be duly executed in its name and behalf on or as of the date first above written. ECONOMIC DEVELOPMENT AUTHORITY IN AND FOR THE CITY OF BROOKLYN CENTER, MINNESOTA By Its President By • Its Executive Director STATE OF MINNESOTA ) SS. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this day of , 1999 by and , the President and Executive Director of the Economic Development Authority in and for the City of Brooklyn Center, Minnesota, a public body politic and corporate, on behalf of the Authority. Notary Public CLL- 156791 3 BRi05 -56 Exhibit A BOULEVARD SHOPPES, LLC By Its STATE OF MINNESOTA ) SS. COUNTY OF ) The foregoing instrument was acknowledged before me this day of , 1999 by the of Boulevard Shoppes, LLC, a Minnesota limited liability company, on behalf of the company. Notary Public CLL- 156791 4 BR305 -56 EDA Agenda Item No. 4b • City of Brooklyn Center A great place to start. A great place to stay. • To: Mayor Kra ness and Council e Nelson and Pe y g Members Hilstrom, Lasman, pp e From: Michael J. McCauley City Manager Date: January 20, 1999 Re: 69th Home Acquisition As was discussed at the January 11 th meeting, we would propose that the EDA authorize, in concept, acquisition of owner occupied homes located within the redevelopment project area. Acquisition would be on a voluntary basis with home owners. Individual acquisitions would be brought back to the EDA for final approval of the acquisition terms and agreement. Funding for acquisition would come from EDA Fund balance and TIF District #3 Fund balance. If these 2 sources were to be short of the necessary funds, a modest amount could be taken from EDA bond proceed interest to be earned in 1999. The proposed distribution of funding would be: EDA Fund $230,000 • TIF District #3 $300,000. EDA Fund balance is projected to be $632,265 at year end 1998 and $768,336 at year end 1999. Included in the 1998 Fund Balance is a $180,000 receivable from CDBG reimbursement. TIF District #3 Fund balance is projected at $414,972 at year end 1998. Fund balance in TIF District #3 would increase approximately $550,000 in 1999, unless funds were used from District #3 for debt service in District #2. For cash flow purposes, monies used may come from EDA bond proceeds on a temporary loan, repaid from EDA and TIF District #3 funds as received. EDA funds are used to cash flow construction of homes in the 53rd project. The timing of the receivable payment would impact cash availability depending on the timing of house acquisitions in the 69th redevelopment project area. Current Projections: EDA Fund Balance 1998 $632,265 TIF Dist. #3 1998 414,972 EDA Fund Balance 1999 $768.336 TIF Dist. #3 1999 963.173 Impact of 69th Acquisition 230 0000 (300,000) Revised Projected Fund Balances $468.336) $663.173 As indicated, these fund balances do not represent cash, to the extent there are receivables that • should be converted to cash before May in the EDA fund. While the EDA bond proceeds are 6301 Shingle Creek Pkwy, n Center MN 55430 -219 • g y, y 9 City Hall &TDD Number (612) 569 -3300 Recreation and Community Center Phone & TDD Number (612) 569 -3400 • FAX (612) 569 -3494 An Affirmative Action /Equal Opportunities Employer currently earmarked for the Brooklyn Boulevard project, $120,000 in interest is projected for 1999 and use of a loan from those funds, if needed for cash flow purposes in acquisition, would not impact the Brooklyn Boulevard project. If the EDA was comfortable with these potential sources of funding for acquiring houses in the 69th redevelopment project area, we would request authorization to receive offers from owners to sell their homes in the redevelopment project area, negotiate with the owners over those offers (including assignments of existing purchase agreements between owners that Boulevard Shoppes, LLC), and present specific proposals to the EDA for approval. •