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HomeMy WebLinkAbout2010 06-14 EDAM Regular Session 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 14, 2010 CITY HALL — COUNCIL CHAMBERS 1. CALL TO ORDER The Brooklyn Center Economic Development Authority (EDA) met in Regular Session called to order by President Tim Willson at 7:31 p.m. 2. ROLL CALL President Tim Willson and Commissioners Kay Lasman, Tim Roche, Dan Ryan, and Mark Yelich. Also present were Executive Director Curt Boganey, Director of Business and Development Gary Eitel, Assistant City Manager/Director of Building and Community Standards Vickie Schleuning, City Attorney Charlie LeFevere, and Carla Wirth, Timesaver Off Site Secretarial, Inc. 3. APPROVAL OF AGENDA AND CONSENT AGENDA Commissioner Yelich moved and Commissioner Lasman seconded approval of the Agenda and Consent Agenda, and the following item was approved: 3a. APPROVAL OF MINUTES 1. May 24, 2010 — Regular Session Motion passed unanimously. 4. COMMISSION CONSIDERATION ITEMS 4a. RESOLUTION NO. 2010 -12 AUTHORIZING THE ACQUISITION OF PROPERTY TO FACILITATE NEIGHBORHOOD IMPROVEMENTS AND REDEVELOPMENT OPPORTUNITIES WITHIN THE BROOKLYN BOULEVARD CORRIDOR (NORTHBROOK APARTMENTS — 6037 BROOKLYN BOULEVARD) Director of Business and Development Eitel introduced the item, discussed the history, and stated the purpose of the proposed resolution to acquire property to facilitate potential reimaging opportunities on Brooklyn Boulevard. He explained the purchase agreement provides for the voluntary sale of the Northbrook Apartment building for $505,000 with a closing date of 06/14/10 -1- August 2, 2010, and requires the City to comply with relocation of eligible tenants on or before August 25, 2010. Mr. Eitel presented a map depicting the alignment of Brooklyn Boulevard and described the streetscape improvements from 65 Avenue to the City's northerly boundary that were approved in early 2000. The next phase of that reimaging is the southern portion of Brooklyn Boulevard from 63 Avenue to Highway 100. He described how Brooklyn Boulevard acts as a gateway and "front door," opening to the easterly and westerly neighborhoods, and noted the properties acquired to date that allowed the closure of driveways to make Brooklyn Boulevard a safer corridor. Mr. Eitel advised that in the future, the EDA will consider demolition to remove the building from this site. The acquisition, relocation costs, and demolition will be funded from TIF District 3, which was created through special legislation, and currently has a fund balance of about $2 million. Commissioner Roche moved and Commissioner Yelich seconded adoption of EDA RESOLUTION NO. 2010 -12 Authorizing the Acquisition of Property to Facilitate Neighborhood Stabilization Program Improvements and Redevelopment Opportunities within the Brooklyn Boulevard Corridor (Northbrook Apartments — 6037 Brooklyn Boulevard). Motion passed unanimously. 4b. RESOLUTION NO. 2010 -13 APPROVING DEVELOPMENT AGREEMENT SUBORDINATION AGREEMENT AND AGREEMENT REGARDING COVENANT AND RESTRICTION WITH RESPECT TO THE PAYMENT OF REAL ESTATE TAXES TO BE ENTERED INTO BY ECONOMIC DEVELOPMENT AUTHORITY OF BROOKLYN CENTER, MINNESOTA, PH MINNEAPOLIS, LLC, TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA, AND WELLS FARGO BANK NORTHWEST NATIONAL ASSOCIATION City Manager Curt Boganey introduced the item, discussed the history, and stated the purpose of the proposed resolution. If approved, closing on the land sale should go forward within a week and construction commence soon thereafter. Mr. Boganey presented the terms of the subordination agreement that protects Teacher's Insurance and Annuity Association of America's (the lender) interest in this mortgaged property regardless of any claims, violations, defaults, or foreclosures that may occur and provides for Teacher's Insurance and Annuity Association of America's (the lender) right to cure any notice of default. In consideration of the EDA's execution of the subordination agreement, PH LLC (the developer) agrees to pay taxes on this property for a period of 20 years regardless of what happens in terms of foreclosure or default. This provision was not part of the original deal and will be included in the development agreement and filed so it runs with the property in the event of resale. 06/14/10 -2- Mr. Boganey emphasized that it is not the EDA's intent to acquire this Class A building. The EDA concurred and indicated it is the EDA's intent to bring jobs and taxes to the City and have this Class A building constructed. Mr. Eitel explained that after the closing, the property will be reassessed. He estimated that after construction, the taxable value will exceed $20 million and result in taxes of about $750,000 that will be collected for a period of at least 20 years. Commissioner Lasman moved and Commissioner Yelich seconded adoption of EDA RESOLUTION NO. 2010 -13 Approving Development Agreement Subordination Agreement and Agreement Regarding Covenant and Restriction with Respect to the Payment of Real Estate Taxes and Authorizing Execution of Closing Documents. Dan VanDyke, Briggs and Morgan, commented on the challenge of financing this project at the rate of $300 per square foot, double the average cost, due to security requirements. He indicated they realize that the EDA does not want to own a federal office building and the subordination agreement agrees that for as long as the GSA lease is in place, the EDA will "stay on the sidelines" and let the lender-cure any notice of default. He agreed that Teacher's has better resources to complete this project than the City or EDA and acknowledged there is no "wiggle room" for payment of taxes. Mr. VanDyke advised that through discussions with the developer and lender, they agree that the only way this building would default is if they have wildly underestimated construction costs which are currently estimated at double what would be expected for a building of this size. He indicated the property closing will be on Wednesday, June 16, 2010. Mayor Willson extended the City's appreciation to Mr. VanDyke for his work on this project. Motion passed unanimously. 5. ADJOURNMENT Commissioner Roche moved and Commissioner Yelich seconded adjournment of the Economic Development Authority meeting at 7:58 p.m. Motion passed unanimously. 06/14/10 -3- STATE OF MINNESOTA) COUNTY OF HENNEPIN) ss. Certification of Minutes CITY OF BROOKLYN CENTER) The undersigned, being the duly qualified and appointed Secretary of the Economic Development Authority (EDA) of the City of Brooklyn Center, Minnesota, certifies: 1. That attached hereto is a full, true, and complete transcript of the minutes of a Regular Session of the Economic Development Authority (EDA) of the City of Brooklyn Center held on June 14, 2010. 2. That said meeting as held pursuant to due call and notice thereof and was duly held at g P Y Brooklyn Center City Hall. 3. That the Economic Y( EDA Authorit Development adopted said minutes at its June 28 P ) a p 2010, Regular Session. etary President i 06/14/10 -4-