HomeMy WebLinkAbout2016 03-28 EDAPEDA MEETING
City of Brooklyn Center
March 28, 2016 AGENDA
Call to Order
—The EDA requests that attendees turn off cell phones and pagers during the meeting. A
copy of the full City Council packet, including EDA (Economic Development Authority),
is available to the public. The packet ring binder is located at the front of the Council
Chambers by the Secretary.
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
1. February 22, 2016— Regular Session
4. Commission Consideration Items
a.Resolution Approving Modification to Redevelopment Plan for Housing
Development and Redevelopment Project No. 1, Establishing Tax Increment
Financing District No. 7 (Redevelopment District) Therein and Approving a Tax
Increment Financing Plan Therefor (Opportunity Site)
Requested Commission Action:
—Motion to adopt resolution.
b.Resolution Accepting Rudra Management's Letter of Intent for Development of
Lot 2, Block 1, Brooklyn Farm 2nd Addition and Authorizing the Preparation of a
Development Agreement (Phase II Embassy PUD Site)
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
FEBRUARY 22,2016
CITY HALL - COUNCIL CHAMBERS
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The Brooklyn Center Economic Development Authority (EDA) met in Regular Session called to
order by President Tim Willson at 8:52 p.m.
2.ROLL CALL
President Tim Willson and Commissioners April Graves, Lin Myszkowski, and Dan Ryan.
Commissioner Kris Lawrence-Anderson was absent and excused. Also present were Executive
Director Curt Boganey, Public Works Director/City Engineer Steve Lillehaug, Director of
Business and Development Gary Eitel, City Attorney Troy Gilchrist, and Denise Bosch,
TimeSaver Off Site Secretarial, Inc.
3.APPROVAL OF AGENDA AND CONSENT AGENDA
Commissioner Myszkowski moved and Commissioner Graves seconded to approve the Agenda
and Consent Agenda, and the following item was approved:
3a. APPROVAL OF MINUTES
1. February 8, 2016— Regular Session
Motion passed unanimously.
4. COMMISSION CONSIDERATION ITEMS
4a. RESOLUTION NO. 2016-07 AUTHORIZING THE ACQUISITION OF
PROPERTY TO FACILITATE NEIGHBORHOOD IMPROVEMENTS
AND REDEVELOPMENT OPPORTUNITIES WITHIN THE BROOKLYN
BOULEVARD CORRIDOR (3600 61ST AVENUE NORTH)
Director of Business and Development Gary Eitel provided background information; an aerial
site map; property information; purchase agreement information; budget issues and his
recommendation to approve the resolution.
02/22/16 -1- DRAFT
President Willson stated that he is glad to see that they will have the property available for future
use.
Commissioner Myszkowski moved and Commissioner Graves seconded to adopt
RESOLUTION NO. 2016-07 Authorizing the Acquisition of Property to Facilitate
Neighborhood Improvements and Redevelopment Opportunities within the Brooklyn Boulevard
Corridor (3600 61st Avenue North)
Motion passed unanimously.
5. ADJOURNMENT
Commissioner Ryan moved and Commissioner Graves seconded adjournment of the Economic
Development Authority meeting at 9:01 p.m.
Motion passed unanimously.
02/22/16 -2- DRAFT
EDA Agenda Item No. 4a
EDA ITEM MEMORANDUM
DATE: March 28, 2016
TO: Curt Boganey, City Manager
FROM: Gary Eitel, Director of Business & Development
SUBJECT: Resolution Approving a Modification to the Redevelopment Plan for Housing
Development and Redevelopment District No. 1, Establishing Tax Increment
Financing District No. 7 (Redevelopment District) Therein and Approving a Tax
Increment Financing Plan Therefor (Opportunity Site)
Recommendation:
It is recommended that the Economic Development Authority consider approval/adoption of a
Resolution Approving a Modification to the Redevelopment Plan for Housing Development and
Redevelopment District No. 1, Establishing Tax Increment Financing District No. 7
(Redevelopment District) Therein and Approving a Tax Increment Financing Plan Therefor
(Opportunity Site)
Background:
On September 14, 2015, the City Council/FDA Work Session included a discussion on a
preliminary development agreement (Contract for Exclusive Negotiations with Sand
LLC) for the development of a market rate apartment and commercial Planned
Unit Development within the southern portion of the Opportunity Site. The majority consensus
of the City Council/EDA was to move forward with the development plan.
On October 12, 2015, the EDA adopted Resolution No. 201522, a Resolution Approving
Agreements Related to the Development of the Opportunity Site, which included a Preliminary
Development Agreement (Contract for Exclusive Negotiations) that identified the roles and
responsibilities of the EDA as the Master Developer of the Opportunity Site; Sand Development,
LLC as the Redeveloper (builder and manager) of the residential portion of the site; and the
following preliminary development tasks to be completed before proceeding with a final
development agreement:
1.The EDA finds the design schemes and planned improvements developed by Sand
Development meet the City's vision for the redevelopment of the Opportunity Site.
2.The necessary findings and assurances that the project is feasible and marketable are
made by Sand Development.
3. The EDA approves the necessary infrastructure improvements and determines that they
are economically feasible to be funded through a Tax Increment Bond.
On January 25, 2016, the City Council/FDA Work Session included a review of the Conceptual
Master Plan illustrating the conceptual development of the southern 32 acres of the Opportunity
site for the phased development of seven apartment buildings, comprising a total of 746 market
rate apartment units; a two acre commons area with pool & activity building; a 50,000 sf.
IWission: Ensuring on attractive, clean, safe, inclusive community that enhances the quality of life
for all people and preserves the public trust
performing arts center with structure parking providing 160 stalls; public and private utility and
street improvements to serve the development.
The consensus of the City Council/EDA was that this Conceptual Master Plan provided by Sand
Development and Solution Blue met the City's vision for the redevelopment of its 32 acres
within the southern portion of the Opportunity Site and satisfactorily addressed the provisions of
the Preliminary Development Agreement necessary to proceed with the preparation of a Final
Development Agreement.
On February 8, 2016, the EDA adopted Resolution No. 2016- 06, A Resolution Authorizing the
Preparation of a Final Development Agreement Related to the Development of the Opportunity
Site.
On March 28, 2016, the City Council is conducting a public hearing on the creation of Tax
Increment District No. 7, a 25 year Redevelopment District that is an essential part of the
redevelopment plans and infrastructure improvements for properties within the Southern Portion
of the Opportunity Site and the redevelopment of the former Kohl's site within the Shingle Creek
Crossing Development.
A copy of this Tax Increment Financing Plan, staff memorandum, and related background
information are included in the March 28th City Council agenda packet.
Tax Increment Financing District No. 7
The Finance Plan for TIF 7 identifies that the following development is expected to occur within
the next 9 years and projects TIF revenue during the life of the District of $54,637,164:
• 749 market rate apartments having a unit value of $100,000 each,
• 60 townhome units having a unit value of $200,000 each,
o $5,750,000 of commercial value through redevelopment and/or renovation of the Kohl's
site, and
• 2% annual market value inflator.
The budget for the district is identified in Section III.G as follows:
$21,401,928 Land/Building acquisitions, Demolition, Special Assessment, Public Utilities,
Site Improvements/Preparation costs, and other Eligible Improvement Costs.
$27,771,521 Interest Expenses
$ 5,463,715 Administrative Costs
The Plan provides the EDA with the flexibility of to finance any or all public costs by using pay-
as-you-go assistance, internal funding, general obligation or revenue debt, or any other financing
mechanism authorized by law. The plan also reserves the right to use other sources of revenue
legally applicable to the Project Area to pay such costs, including, but not limited to special
assessments, utility revenues, federal or state funds, and investment income.
Mission: Ensuring an attractive, clean, safe, inclusive coinmillilty that en/i ances the quality of life
for all people and preserves (lie public trust
The creation of this tax increment district establishes the financing tool for the EDA to undertake
the necessary public street, utilities, and storm water management improvements; to bridge
funding gaps for the private financing of the housing units; and to undertake enhancements to the
project to promote a quality of life environment necessary to achieve the City's vision for the
redevelopment of the Opportunity site.
The use of this financing tool is intended to occur as a companion action with the City Council's
approval of a governing PUD plans and the platting of the project area into buildable lots; Site
Plan approvals initiated by the Developer/Builder on the individual lots, and the EDA's
conveyance of these lots when construction is ready to commence.
During the development stages of this project the EDA will continue to have the primary
responsibility of strategizing how to effectively use this financing tool to achieve the desired
redevelopment of the Opportunity Site.
Budget Issues:
The costs associated with establishing Tax Increment Financing District No. 7 and related site
preparation costs will be funded by Tax Increment District No. 3.
The first year of tax increment for this district is scheduled to occur in 2019.
Strategic Priorities:
Targeted Redevelopment
Mission: Ensuring an attractive, clean, safe, inclusive conununity that enhances the quality of life
for all people and preserves the public trust
Housing Development and Redevelopment Project No. 01
and Tax Increment Financing (TIF) District No. 7 (Proposed)
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Commissioner introduced the following resolution and moved its
adoption:
EDA RESOLUTION NO. 2016-
RESOLUTION APPROVING A MODIFICATION TO THE
REDEVELOPMENT PLAN FOR HOUSING DEVELOPMENT AND
REDEVELOPMENT PROJECT NO. 1, ESTABLISHING TAX INCREMENT
FINANCING DISTRICT NO. 7 (REDEVELOPMENT DISTRICT) THEREIN
AND APPROVING A TAX INCREMENT FINANCING PLAN THEREFOR
(OPPORTUNITY SITE)
WHEREAS, it has been proposed that the Economic Development Authority of
the City of Brooklyn Center, Minnesota (the "EDA") modify the Redevelopment Plan for its
Housing and Redevelopment Project No. 1 (the "Redevelopment Project"); and establish Tax
Increment Financing District No. 7 ("TIF District No. 7") within the Redevelopment Project and
adopt the Tax Increment Financing Plan (the "TIF Plan") therefor (collectively, the "Plans"); all
pursuant to and in conformity with applicable law, including Minnesota Statutes, Sections
469.001 through 469.047 and Sections 469.174 through 469.1794, as amended; all as reflected in
that certain document entitled in part "Modification to Redevelopment Plan for Housing
Development and Redevelopment Project No. 1 and Tax Increment Financing Plan for Tax
Increment Financing District No. 7 (Redevelopment District)" dated March 28, 2016, and
presented for consideration by the Board of Commissioners (the "Board") of the Economic
Development Authority of the City of Brooklyn Center, Minnesota (the "EDA");
WHEREAS, the Board has investigated the facts relating to the Plans;
WHEREAS, the EDA has performed all actions required by law to be performed
prior to the adoption and approval of the Plans, including but not limited notice to the County
Commissioner representing the area of the County to be included in TIF District No. 7, delivery
of the Plans to the County and School Board and a review of the Plans by the Brooklyn Center
Planning Commission; provided that that City Council will hold a public hearing thereon on the
date hereof following notice thereof published in accordance with state law;
WHEREAS, the TIF District is being established to facilitate the acquisition,
construction and equipping of approximately 749 market rate apartment units, 60 owner-
occupied townhome units, and approximately 10,000 square feet of commercial/retail buildings
(the "Development"); and
WHEREAS, the initial phase of the Development will be constructed by Sand
Development, LLC (or an affiliate, the "Initial Developer").
NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners (the
"Board") of the Economic Development Authority of the City of Brooklyn Center, Minnesota
(the "EDA"), as follows:
EDA RESOLUTION NO. 2016-
Section 1. Findings for the Adoption and Approval of the Plans.
1.01. The Board hereby finds that the boundaries of the Project Area are not
being expanded and the Redevelopment Plan is not being modified other than to incorporate the
establishment of TIF District No. 7 therein and therefore the Board reaffirms the findings and
determinations originally made in connection with the establishment of the Redevelopment
Project area and the adoption of the Redevelopment Plan therefor.
1.02. The Board hereby finds that TIF District No. 7 is in the public interest and
is a "redevelopment district" within the meaning of Minnesota Statutes, Section 469.174,
Subdivision 10, because TIF District No. 7 consists of a project or portions of a project within
which the following conditions, reasonably distributed throughout TIF District No. 7, exist: (1)
parcels consisting of at least 70% of the area of TIF District No. 7 are occupied by buildings,
streets, utilities, paved or gravel parking lots, or other similar structures; and (2) more than 50%
of the buildings located within TIF District No. 7 are deemed "structurally substandard" (within
the meaning of Minnesota Statutes, Section 469.174, Subdivision 10(b)) to a degree requiring
substantial renovation or clearance. TIF District No. 7 consists of 12 parcels and all of the
parcels are "occupied" as defined in Minnesota Statutes, Section 469.174, Subd. 10(a)(1) in that
at least 15% of the area of the parcel is occupied by buildings, streets, utilities, paved or gravel
parking lots or similar structures. Based on the Report of Inspection Procedures and Results for
Determining Qualifications of a Tax Increment Financing District, dated November 10, 2015,
prepared by LHB, Inc. (the "Redevelopment Assessment"), 8 of the 14 buildings (not including
outbuildings) in TIF District No. 7 (57.1%, which is more than 50% of the buildings within TIF
District No. 7), are found to be structurally substandard, are not in compliance with applicable
building codes, and could not be brought into such compliance at a cost of less than 15% of the
cost of constructing new structures of the same size and type on the subject sites, respectively.
These findings are based in part upon on-site examination of those 8 substandard buildings and
the written Redevelopment Assessment report substantiating the structurally substandard nature
of the buildings. The reasons and supporting facts for the determination that TIF District No. 7 is
a redevelopment district under the statute are set forth in the Redevelopment Assessment, which
is incorporated herein by reference, and a copy of which is on file with the Executive Director.
1.03. The Board hereby makes the following additional findings in connection
with TIF District No. 7:
(a) The Board further finds that the proposed development, in the opinion of
the Board, would not occur solely through private investment within the
reasonably foreseeable future and, therefore, the use of tax •increment
financing is deemed necessary. The specific basis for such finding being:
The construction of the Development would not be undertaken in the
reasonably foreseeable future. The property has remained underutilized
for several years despite previous efforts to redevelop the property. The
EDA RESOLUTION NO. 2016-
demolition, redevelopment and public infrastructure costs are higher than
for new development. The Developer has represented that it could not
proceed with the Development without tax increment assistance.
(b)The Board further finds that the TIF Plan conforms to the general plan for
the development or redevelopment of the EDA as a whole. The specific
basis for such finding being:
The TIF Plan will generally compliment and serve to implement policies
adopted in the City's comprehensive plan. The development contemplated
on the property is in accordance with the existing zoning for the property.
The Planning Commission has reviewed the Plans, and approved the same
as being in conformity with the City's comprehensive plan and the general
plan for the development and redevelopment of the City as a whole.
(c)The Board further finds that the TIF Plan will afford maximum
opportunity consistent with the sound needs of the EDA as a whole for the
development of TIF District No. 7 by private enterprise. The specific
basis for such finding being:
The Development proposed to occur within the TIF District No. 7 to be
completed, owned and operated by the Developer and will afford
maximum opportunity for the development of the applicable parcels
consistent with the needs of the City. The Development will increase the
taxable market valuation of the City and the available housing and
commercial facilities in the City. Without the construction of necessary
public infrastructure, private enterprise would not undertake the
Development.
(d) For purposes of compliance with Minnesota Statutes, Section 469.175,
Subdivision 3(b)(2)(ii), the Council hereby finds that the increased market
value of the site that could reasonably be expected to occur without the
use of tax increment financing ranges from $0 to some modest amount
based on small scale development that could be possible without
assistance, which is less than $127,477,094 which is the increase in the
market value estimated to result from the proposed development
(approximately $151,342,929, assuming no annual inflation) after
subtracting the present value of the projected tax increments for the
maximum duration of the TIF District (approximately $23,865,835).
Thus, the use of tax increment financing will be a positive net gain to the
City, the School District, and the County, and the tax increment assistance
does not exceed the benefit which will be derived therefrom.
EDA RESOLUTION NO. 2016-
1.04. The EDA elects to retain all of the captured tax capacity to finance the
costs of the TIF District. The EDA elects the method of tax increment
computation set forth in Minnesota Statutes, Section 469.177, Subd. 3(a).
1.05. The EDA elects to delay the receipt of the first increment until tax payable
year 2019.
1.06. The provisions of this Section 1 are hereby incorporated by reference into
and made a part of the TIF Plan.
1.07. The Board further finds that the Plans are intended and in the judgment of
the Board their effect will be to promote the public purposes and
accomplish the objectives specified in the TIF Plan for TIF District No. 7
and the Redevelopment Plan for the Redevelopment Project.
Section 2. Approval and Adoption of the Plans Policy on Interfund Loans and Advances.
2.01. The Plans, as presented to the Board on this date, including without
limitation the findings and statements of objectives contained therein, are
hereby approved, ratified, established, and adopted, and shall be placed on
file in the office of the City Finance Director. Approval of the Plans does
not constitute approval of any project or a development agreement with
any developer. Subject to approval by the City Council following a public
hearing, the Business and Development Director is hereby directed to
request, in writing, the Hennepin County Auditor to certify the new TIF
District No. 7 and to file the Plans with the Commissioner of Revenue and
the Office of the State Auditor.
2.02. The Board hereby approves a policy on interfund loans or advances
("Loans") for TIF District No. 7, as follows:
(a)The authorized tax increment eligible costs (including without
limitation out-of-pocket administrative expenses in an amount up
to $5,463,715) payable from the District, as its TIF Plan is
originally adopted or may be amended, may need to be financed on
a short-term and/or long-term basis via one or more Loans, as may
be determined by the City Finance Director from time to time.
(b)The Loans may be advanced if and as needed from available
monies in any fund or account of the EDA designated by the City
Finance Director. Loans may be structured as draw-down or "line
of credit" obligations of the lending fund(s).
EDA RESOLUTION NO. 2016-
(c)Neither the maximum principal amount of any one Loan nor the
aggregate principal amount of all Loans may exceed $54,637,164
outstanding at any time.
(d)The maximum term of any Loan shall not exceed 26 years or such
earlier date as the City Finance Director may specify in writing.
(e) The outstanding and unpaid principal amount of each Loan shall
bear interest at the rate prescribed by the statute (Minnesota
Statutes, Section 469.178, Subdivision 7), which is the greater of
the rates specified under Sections 270C.40 or 549.09 at the time a
Loan, or any part of it, is first made, subject to the right of the
EDA Finance Director to specify a lower rate (but not less than the
EDA's then-current average investment return for similar amount
and term).
Such Loans within the above guidelines are pre-approved. The
Loans need not take any particular form and may be
undocumented, except that the City Finance Director shall
maintain all necessary or applicable data on the Loans.
March 28, 2016
Date President
ATTEST:_________________
Secretary
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 EDA Resolution was declared duly passed and adopted.
EDA RESOLUTION NO. 2016-
SECRETARY' S CERTIFICATE
I, the undersigned, being the duly qualified and acting Secretary of the Economic
Development Authority of the City of Brooklyn Center, Minnesota, DO HEREBY CERTIFY
that I have carefully compared the attached and foregoing extract of minutes of a duly called and
regularly, held meeting of the Board of Commissioners of said EDA held on March 28, 2016,
with the original minutes thereof on file in my office and I further certify that the same is a full,
true, and correct transcript thereof insofar as said minutes relate to the tax increment and related
actions referenced therein with respect to the EDA's Housing and Redevelopment Project No. 1
and Tax Increment Financing District No. 7 therein.
WITNESS My hand this day of March, 2016.
Secretary
Economic Development Authority of the City
of Brooklyn Center, Minnesota
EDA ITEM 4.
A
Resolution Approving a Modification to the
Redevelopment Plan for Housing Development and
Redevelopment District No. 1, Establishing Tax
Increment Financing District No. 7 (Redevelopment
District) Therein and Approving a Tax Increment
Financing Plan Therefor (Opportunity Site)
B:
ACKGROUND
On September 14, 2015,
the City Council/EDA
Work Session included
a discussion on a
preliminary
development agreement
(Contract for Exclusive
Negotiations with Sand
Development LLC) for
the development of a
market rate apartment
and commercial
Planned Unit
Development within the
southern portion of the
Opportunity Site.
On October 12, 2015, the EDA adopted Resolution No.
2015-22, a Resolution Approving Agreements Related
to the Development of the Opportunity Site.
The Preliminary Development Agreement (Contract
for Exclusive Negotiations) identified the roles and
responsibilities of the EDA as the Master Developer
of the Opportunity Site; Sand Development, LLC as
the Redeveloper (builder and manager) of the
residential portion of the site; and the following
preliminary development tasks to be completed before
proceeding with a final development agreement:
The EDA finds the design schemes and planned
improvements developed by Sand Development meet the
City’s vision for the redevelopment of the Opportunity Site.
The necessary findings and assurances that the project is
feasible and marketable are made by Sand Development.
The EDA approves the necessary infrastructure
improvements and determines that they are economically
feasible to be funded through a Tax Increment Bond.
On January 25, 2016, the City Council/EDA
reviewed the Conceptual Master Plan illustrating
the conceptual development of the southern 32 acres
of the Opportunity site for the phased development
of seven apartment buildings, comprising a total of
746 market rate apartment units; a two acre
commons area with pool & activity building; a 50,000
sf. performing arts center with structure parking
providing 160 stalls; public and private utility and
street improvements to serve the development.
TIFDN. 7
AXNCREMENTINANCINGISTRICTO
The Finance Plan for TIF 7 identifies that the following
development is expected to occur within the next 9
years and projects TIF revenue during the life of the
District of $54,637,164:
749 market rate apartments having a unit value of
$100,000 each,
60 townhome units having a unit value of $200,000
each,
$5,750,000 of commercial value through
redevelopment and/or renovation of the Kohl’s site,
and
2% annual market value inflator.
TIF 7 B:
UDGET
$21,401,928Land/Building acquisitions,
Demolition, Special Assessment, Public Utilities,
Site Improvements/Preparation costs, and other
Eligible Improvement Costs.
$27,771,521Interest Expenses
$ 5,463,715Administrative Costs
The Plan provides the EDA with the flexibility of to
finance any or all public costs by using:
pay-as-you-go assistance,
internal funding,
general obligation or revenue debt, or
any other financing mechanism authorized by
law.
The plan also reserves the right to use other
sources of revenue legally applicable to the Project
Area to pay such costs, including, but not limited
to:
special assessments, utility revenues, federal or
state funds, and investment income.
The creation of this tax increment district establishes
the financing tool for the EDA to undertake the
necessary public street, utilities, and storm water
management improvements; to bridge funding gaps
for the private financing of the housing units; and to
undertake enhancements to the project to promote a
quality of life environment necessary to achieve the
City’s vision for the redevelopment of the Opportunity
site.
The use of this financing tool is intended to occur as a
companion action with the City Council’s approval of
a governing PUD plans and the platting of the project
area into buildable lots; Site Plan approvals initiated
by the Developer/Builder on the individual lots, and
the EDA’s conveyance of these lots when construction
is ready to commence.
R:
ECOMMENDATION
It is recommended that the Economic Development
Authority consider approval/adoption of a Resolution
Approving a Modification to the Redevelopment Plan for
Housing Development and Redevelopment District No.
1, Establishing Tax Increment Financing District No. 7
(Redevelopment District) Therein and Approving a Tax
Increment Financing Plan Therefor (Opportunity Site)
EDA Agenda Item No. 4b
DATE: March 28, 2016
TO: Curt Boganey, City Manager
FROM: Gary Eitel, Director of Business & Development
SUBJECT: Letter of Intent by Rudra Management for the Purchase and Hotel Development
of a Marriott Fairfield Inn & Suites on Lot 2, Block 1, Brooklyn Farm 2nd
Addition (Phase II Embassy PUD)
Recommendation:
It is recommended that the Economic Development Authority consider approval/adoption of a
Resolution Accepting Rudra Management's Letter of Intent for Development of Lot 2, Block 1,
Brooklyn Farm 2 Addition and Authorizing the Preparation of a Development Agreement
(Phase II Embassy PUD).
Background:
On May 13, 2013, the EDA adopted Resolution No. 2013 - 03, A Resolution Accepting
Minnesota Hospitality Inc.'s Letter of Intent for Development of Lot 2, Block 1, Brooklyn Farm
2nd Addition and Authorizing the Preparation of a Development Agreement (Phase II Embassy
PUD Site). The resolution authorized the following actions:
1.The Executive Director execution of the Letter of Intent with Minnesota Hospitality
Inc. for the development of a 4 story 81 room extend stay hotel, consistent with the
conceptual development plans of the approved PUD plans.
2.To proceed with the negotiations for the sales of this site, excluding the portion of the
lot containing the pond and trail, for $500,000, with similar provisions for a 10 year
Tax Abatement Plan, as approved for the initial Phase II development.
3. To proceed with the preparation of a development agreement with terms, conditions,
and actions necessary for the conveyance and development of Lot 2, Block 1,
Brooklyn Farms 2 nd Addition.
Attached for your reference is a copy of Resolution No. 2013-03 and the accompanying staff
memorandum which outlines the history of the initial development of approvals for the Embassy
Suites Hotel (Phase I) and the Phase II development of the adjacent 2.18 acre lot for a
complimentary 75 unit hotel.
On July 8, 2013, the City Council adopted Resolution No. 2013-73, a resolution accepting the
Planning Commission's recommendation pertaining to the EDA's application to amend the
conceptual development plans of the PUD to facilitate a reorientation of the building and parking
lot for an 81 unit hotel.
Attached for reference is a copy of the resolution, the 2007 PUD Development Plan and
approved conceptual development plan for the Phase II site.
Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life
for al/people and preserves the public trust
I V Mk'A L'A I*'4 (I] 1I 1IJ3 I
Letter of Intent for Sales and Development of Phase II Embassy PUB Site:
The attached Letter of Intent by Rudra Management provides for the purchase of the Phase II site
for the development of a 4 story, 83 room Marriott Fairfield Inn and Suites which is consistent
with the approved PUD plans for this site.
Attached is a copy of their site plan and marketing information on the Fairfield Inn & Suites
Hotel by Marriott.
The proposal provides a purchase price of $100,000 without considerations of a tax abatement
program with construction to commence by the 3rd quarter of 2016 and completed by the summer
of 2017.
Springsted Financial has estimated the present net value of a 10 year tax abatement for this hotel
valued at $5.6M to be approximately $400,000.
Budget Issues:
The EDA has a fund balance of approximately $1,000,000 and is in a financial position that does
not necessitate the reimbursement of the funds previously used to complete the link connecting
the Embassy Suites Hotel to the Earle Brown Heritage Conference Center.
The development of a Marriot Fairfield Hotel at this site will complement the marketing efforts
by the Earle Brown Heritage Center for conferences and receptions.
Strategic Priorities:
Targeted Redevelopment
Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life
for all people and preserves the public trust
Commissioner introduced the following resolution
and moved its adoption:
EDA RESOLUTION NO.
RESOLUTION ACCEPTING RUDRA MANAGEMENT'S LETTER OF
INTENT FOR DEVELOPMENT OF LOT 2, BLOCK 1, BROOKLYN FARM
2ND ADDITION AND AUTHORIZING THE PREPARATION OF A
DEVELOPMENT AGREEMENT (PHASE II EMBASSY PUD SITE)
WHEREAS, on June 27, 2005, the City Council adopted Resolution No. 2005-97,
which approved the rezoning of a 6.2 acre parcel from CiA to PUD/C1A for the development of
a 250 room hotel containing a 100 seat restaurant and a 32,000 sq. ft. water park facility; and
WHEREAS, on October 23, 2006, the City Council adopted Resolution No. 2006-
121, which approved a Property Tax Abatement Plan and Development Agreement with
Brooklyn Hotel Partners in connection with two full service hotels and related facilities; and
WHEREAS, on October 23, 2006, the EDA adopted Resolution 2006-12, which
deleted this 6.2 acre parcel from Tax Increment Financing District No. 2 and Approved and
Authorized the Execution of a Development Agreement; and
WHEREAS, on May 14, 2007, the City Council adopted Resolution 2007-70,
which approved an amendment to the PUD/C1A Development Plans for the 1st phase of a two
building hotel complex, consisting of an eight story, 175 room Embassy Suites Hotel and 100
seat restaurant with a physical connection to the Earle Brown Heritage Center; and
WHEREAS, on July 9, 2007, the City Council adopted Resolution No. 2007-100,
approving the Final Plat of Brooklyn Farm 2' Addition, which created a 4.02 acre lot for the 1 "
phase development of an Embassy Suites Hotel and a 2.18 acre, lot for the 2nd phased as
conceptually illustrated on the approved PUD Development Plans; and
WHEREAS, on July 23, 2007, October 8, 2007, and December 27, 2007, the
EDA adopted Resolution 2007-12, Resolution No. 2007- 19, and Resolution No. 2007-23 which
approved minor amendments to the Development Agreement Between the Economic
Development Authority and Brooklyn Hotel Partners; and
WHEREAS, the Brooklyn Hotel Partners completed the 175 room hotel and 100
seat restaurant in 2009, but were unable to complete the pedestrian link to the Earle Brown
Heritage Center and were in default to the terms of Development Agreement; and
WHEREAS, on June 28, 2010, the EDA adopted Resolution No. 2010-14, the
Fourth Amendment to the Development Agreement and Certain Related Agreement which
modified and amended the following:
EDA RESOLUTION NO.
1.The rights and obligations of the Authority, the City, and the Developers as it
related to the construction of the connection and development of the Phase II site,
2.Amended the Parking, Access and Pedestrian Link Agreement relating to the
location of the link to be constructed by the EDA,
3. Revised the Lease Agreements for the D-Barn; and
WHEREAS, on April 11, 2011, the EDA adopted Resolution No. 2011-08, which
approved a Spending Plan authorized under the 2010 Minnesota Jobs Act, which enabled
$360,000 from Tax Increment District No. 2, to fund the construction of the portion of the link
relating to the D-Barn Lease and the EDA advanced the funds projected from the future sales of
the Phase II site to complete the pedestrian link to the Earle Brown Heritage Center; and
WHEREAS, on October 10, 2011, the EDA adopted Resolution No. 2011-22
which approved the termination of the Cement Pond/Fountain Easement, accepted a new trail
easement from Wings Financial, and conceptualized the future trail, lighting, and placement of a
fountain within the pond; and
WHEREAS, on May 13, 2013, the EDA accepted a Letter of Intent with
Minnesota Hospitality Inc. for the construction of a 4 story, 81 room extended stay hotel with
similar provisions for a Tax Abatement Plan as approved for the initial Phase II development and
authorized the preparation of a development agreement; and
Whereas, On July 8, 2013, the City Council adopted Resolution 2013-73 which
approved an amendment to the 2007 PUD plans for the Embassy Phase II site providing for the
reorientation of the hotel pad site, expansion of the hotel size and parking lot, and established
architectural standards; and
Whereas, the Minnesota Hospitality Inc. did not proceed with their development
plans for an 81 room Candlewood Hotel; and
Whereas Rudra Management has submitted a Letter of Intent to acquire the
Embassy Phase II lot, exclusive of pond and trail, for the development of an 83 room Marriott
Fairfield Inn & Suites for the amount of $100,000 without the benefits of a 10 year tax abatement
program.
NOW, THEREFORE, BE IT RESOLVED by the Economic Development
Authority in and for the City of Brooklyn Center that the Executive Director is hereby authorized
to execute the Letter of Intent with Rudra Management, and to proceed with the negotiations and
preparation of the appropriate development agreement and actions necessary for the conveyance
and development of Lot 2, Block 1 Brooklyn Farms 2nd Addition. (Phase II Embassy PUD Site)
March 28, 2016
Date President
EDA RESOLUTION NO.
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.
EMBASSY II SITE Cih,,f
FAIRFIELD MARRIOTT HOTEL LAYOUT BROOKLYN
(DRAFT) L
cENTER
FAIRFIELD
INN & SUITES()
)tarriott.
Mr. Curt Boganey
Executive Director Economic Development Authority
City of Brooklyn Center
6301 Shingle Creek Parkway
Brooklyn Center, Minnesota 55430
Fairfield Inn & Suites by Marriott
Rochester Mayo Clinic Area! Saint Marys
470 17th Avenue NW I Rochester, MN 55901
T 507.258.7300 I F 507.258.7319
fairfieldinn.com/rstfi
Operated under a license agreement
From Marriott International, Inc.
Dear Mr. Boganey,
Over the last few months we have discussed acquiring the City property at 6250 Earle Brown Drive.
We have worked through preliminary site plans, discussed the development with City staff, and have
completed some significant market research regarding the viability of the site. As a result of these efforts,
we are optimistic that there is an opportunity to develop the site into a Upscale Limited Service Hotel.
Specifically a Marriott Fairfield Inn and Suites.
One of the most significant challenges to developing the site is the existing development agreement with
Brooklyn Center Hotel Partners. We understand that they have defaulted on the agreement which caused
the City of Brooklyn Center EDA to build the walkway at a expense of approximately $500,000.00. And
that you would like to be reimbursed for this expense through the sale of this property.
Although that is a nice idea it does not change the fact that Brooklyn Center Hotel Partners is still in a
position where they have no cost in the land, a tax abatement and they directly benefit by being
connected to the Earle Brown Conference Center. I don't believe we should have to pay for their default
on a condition that directly benefited Brooklyn Center Hotel Partners. We should have the opportunity to
be in the same position that currently exists for them.
This letter defines the terms under which we would be interested in acquiring the property.
TM
FAIRFIELD
INN&St.ThTES®
,XarnotI,
Purchase Price: $100,000.00
Fairfield Inn & Suites by Marriott
Rochester Mayo Clinic Area/ Saint Marys
470 17th Avenue NW I Rochester, MN 55901
T507.258.7300 I F507.258,7319
fairfleldinn.com/rstfi
Operated under a license agreement
from Marriott lntnrnotlonal. Inc.
1.Earnest Money: Purchaser shall deposit $10,000.00 earnest money to be paid upon execution of a
development agreement. All earnest money shall be held by Commercial Partners Title, LLC (Titl e )
pursuant to escrow instructions reasonably satisfactory to counsel for Seller and Purchaser.
2.Purchaser Contingencies: Any obligation of on the part of the Purchaser to purchase the property
shall be contingent upon each of the following being satisfied on or before the end of the due diligence
period.
a.Title to the property shall be acceptable to purchaser;
b.The property shall have received acceptable environmental assessments and geotechnical analysis;
c.The property shall have received such soil tests, inspections, reviews, surveys, examinations and storm
water! drainage requirements as Purchaser deems necessary, with the results of each being satisfactory
to Purchaser.
d.Purchaser shall have obtained all necessary government approvals necessary for the propose use
(this may include the establishment of a tax abatement or TIF District).
e. Purchaser shall have confirmed the financial viability of the development.
Purchaser shall make the determination of whether each of the forgoing contingencies has been satisfied
in its sole discretion. Purchaser shall use commercially reasonable efforts to satisfy each such
contingency by the end of the applicable contingency period.
3. Real Estate Taxes and Special Assessments: The real estate taxes due and payable in the year of
closing (excluding any installment of special assessments payable therewith) shall be prorated based on
a calendar year and the date of actual closing ("Closing Date"). Seller shall pay all outstanding levied,
deferred and pending special assessments on or prior to the Closing Date.
FA IRFIELD
1NN&SUITES
JXarrioft
Fairfield Inn & Suites by Marriott°
Rochester Mayo Clinic Area/ Saint Marys
470 17th Avenue NW I Rochester, MN 55901
T 507.258.7300 I F 507.258,7319
fairfiedinn.com/rstfi
Operated Undo; a license agreement4.Due Diligence: All of Purchasers inspections and document review in the nature of due diIigenMardottntnmauona.Inc.
relating to items 2a, 2b, 2c, 2d and 2c above must be completed on or before (90) days from the date of
execution by both parties of the Purchase Agreement ( Due Diligence Period). During this period we will
be testing the viability of gaining the necessary municipal approvals to proceed. If Purchaser elects to
continue with its pursuit of the acquisition after (90) days, the $10,000.00 dollar Earnest Money deposit
will become non-refundable.
If the contingency set forth in Item 2d has not been satisfied by the expiration of the Due Diligence Period,
Purchaser may elect to waive or terminate this agreement.
5.Representations of Seller: Seller is selling the property 'as is". Notwithstanding the foregoing,
however, the Purchase Agreement entered into by the parties shall contain such representations as are
mutually agreed to by the parties, but at minimum an environmental representation which shall be based
on the actual knowledge of an appropriate representative of Seller without independent investigation, to
afford Purchaser the "innocent purchaser" safe harbor afforded by Minn. Stat. Section 115B.03 subd. 3.
Seller will install and maintain at Seller's expense a fountain, walkway, sidewalks and green areas around
the pond area that abuts this site. The property shall be conveyed to Purchaser at closing by a recordable
limited warranty deed containing only such exceptions considered acceptable to Purchaser.
6.Purchase and Sale Agreement: Purchaser's attorney shall prepare and provide to Seller and it's
attorney an initial draft of the purchase agreement as soon as possible after full execution of this Letter of
Intent.
7.Confidentiality: The parties and their agents hereto will keep the existence of the terms of this Letter of
Intent and the proposed purchase confidential, except as required by law, or as otherwise agreed. The
parties agree that they may each disclose the terms hereof to their respective attorneys, accountants and
lenders.
8. Closing Date: Closing shall occur within 14 days of the end of the due diligence period.
FATRFIELD
INN & SU1TES@
arntt
Fairfield Inn & Suites by Marriott 5
Rochester Mayo Clinic Area/ Saint Marys
470 17th Avenue NW J Rochester, MN 55901
T 507.256.7300 1 F 507.258.7319
fairti&dinn.com/rstfi
Operated Under U licence cement9: Good faith Negotiations: For period of (30) days from the date of the acceptance of this Letter 0fonr1crriettinernatronai.Iee.
Intent, representatives of the Purchaser and Seller shall negotiate in good faith with a view to preparing a
Purchase Agreement that can be presented to the governing bodies of the parties for consideration.
The terms of this Letter of Intent are a non-binding outline of terms that will form the starting point for such
negotiations. In the event the Purchase Agreement is not entered into by the parties within the said (30)
day period, either the Seller or Purchaser may terminate this Letter of Intent by delivering to the other a
written notice of termination.
10.Other Negotiations: Until the execution of a Purchase Agreement or until the termination of this Letter
of Intent Seller agrees not to enter into any discussions or negotiations with any third parties regarding
the sale of the Property.
11.Title Insurance; Payment of Costs: The parties shall split the cost of the Commitment and Purchaser
shall pay the cost of its title insurance premium and any policy endorsements it requires. Seller will pay for
the cost of the deed tax stamps and will pay for all other closing costs customarily paid for by Seller in the
metropolitan Twin Cities area. The cost of any closer from Commercial partners Title shall be paid for by
the Purchaser. Purchaser shall pay the costs of recording the instruments of conveyance, and pay all
other costs customarily paid by a Purchaser in the metropolitan Twin Cities area. Each Party shall pay its
own attorney's fees. Purchaser shall pay the fees due to Commercial Realty and Consulting, LLC at
closing.
12.Soil Conditions: Purchaser will at its own expense pay for soil studies of the site.
13.Environmental: Purchaser shall pay for an environmental study of the site.
14. Restoration of Property and Indemnification: After each test or investigation the Purchaser performs
on the property, Purchaser shall promptly restore the property to substantially the same condition as it
existed before the test or investigation occurred. The Purchase agreement shall contain a mutually
acceptable provision obligating the Purchaser to defend, indemnify and hold the Seller and the property
harmless from all claims, losses, expenses and liens associated with the Purchaser's testing and
•
•.• C
FAIRFIELDINN&SUITESG
)arnott.
Fairfield inn & Suites by Marriott
Rochester Mayo Clinic Area/ Saint Marys
470 17th Avenue NW I Rochester, MN 55901
T 507.258.7300 1 F 507.258.7319
1airfieidnn.com/rstfi
Operated under a kcense agleemuntinspection of the Property. Purchaser shall pay each vendor performing such services as they are t,om Marriott IetnrnaonaI.Inc -
performed and shall not allow any liens to attach to the Property as a result of such services.
15.Contingency: It is acknowledged that this Letter of Intent is contingent upon the two parties signing a
fully executed Purchase Agreement. Only a mutually accepted Purchase Agreement will bind either party
to the terms of this Letter of Intent.
16.Acceptance: This Letter of Intent is open for acceptance until the close of business on March 29,
2016.
We have just completed an identical hotel in Rochester r, Minnesota. We believe we have done enough
homework to get us to this point and we have the ability to complete the project. If the above basic
terms and conditions are acceptable please indicate by signing below and returning one (1) original to
our attention, We will then proceed towards a final Purchase Agreement. Should you have any questions,
please do not hesitate to call. We look forward to working with you.
Harshal Patel Mr. Curt Boganey
Rudra Management Executive Director,
Economic Development Authority
City of Brooklyn Center, MN.55430
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Member Dan Ryan introduced the following resolution and
moved its adoption:
RESOLUTION NO. 2013-
RESOLUTION REGARDING THE RECOMMENDED DISPOSITION OF
PLANNING COMMISSION APPLICATION NO. 2013-007 SUBMITTED BY
ECONOMIC DEVELOPMENT AUTHORITY FOR THE CITY OF BROOKLYN
CENTER OF A PLANNED UNIT DEVELOPMENT AMENDMENT TO THE
2007 BROOKLYN HOTEL PARTNERS LLC/EMBASSY SUITES PLANNED
UNIT DEVELOPMENT TO PROVIDE FOR THE ALLOWANCE OF A NEW
81-UNIT CANDLEWOOD SUITES HOTEL (LOCATED AT 6250 EARLE
BROWN DRIVE)
WHEREAS, City Council Resolution No. 2005-97 adopted on June 27, 2005
approved a rezoning from CiA (Service-Office, no height limit) to PUD/Ci A (Planned Unit
Development/Service- Office, no height limit) of a 6.2 acre site located on the east side of the west
leg of Earle Brown Drive (to be addressed as 6300 Earle Brown Drive, the "Subject Site"); and
WHEREAS, that proposal comprehended the rezoning of the above mentioned
property and the original development plan approval of a 250 room hotel containing a 100 seat
restaurant and a 32,000 sq. ft. water park facility on the Subject Site, which never developed; and
WHEREAS, Planning Commission Application No, 2007-008 consisted of a
PUD Amendment submitted by Brooklyn Hotel Partners, LLC, to allow construction of a two
building hotel complex, one consisting of an eight story, 175 room Embassy Suites hotel, a 100
seat restaurant and physical connection to the Earle Brown Heritage Center, along with a future
Phase II development of a complimentary 75-room, unidentified hotel; and
WHEREAS, on May 14, 2007, the City Council adopted Resolution No. 2007-70,
which accepted the PUD Amendment comprehended by Brooklyn Hotel Partners, LLC, and
allowed the development of the new Embassy Suites hotel to begin; and
WHEREAS, in 2009, Brooklyn Hotel Partners, LLC completed the main
construction of the Embassy Suites Hotel, but failed to complete the physical connection (the
"Link") to the Earle Brown Heritage Center and other improvements as required under the PUD
Development Agreements with the City; and
WHEREAS, due to this failure to complete the PUD Improvements, the City's
EDA adopted Resolution No. 2010-14, an amendment to the Development Agreement which
included the following actions:
Amended the rights and obligations of the Economic Development
Authority, the City and Developer relating to the developer's forfeiture of
any rights to the Phase II development;
RESOLUTION NO. 2013-73
2. Confirmed the D-Barn Lease Agreement and easements for the EDA's
construction of the link;
Approved adjustments to the payment of tax abatements for the Phase I
development, including the right of set off to secure the D-Barn Lease and
Link Maintenance Agreement; and
4. Conveyed the development rights for Phase II to the EDA and the
obligation to construct the link to the Earle Brown Heritage Center.
WHEREAS, the EDA has now entered into a letter of intent with Minnesota
Hospitality Inc. to provide a new four story, 81-unit Candlewood Extended Stay Hotel on the
Subject Site, providing the City approves a PUD Amendment to allow this new hotel development
to take place on the Subject Site, with certain conditions; and
WHEREAS, the Planning Commission considered the conceptual development
plans for Phase II by Minnesota Hospitality Inc. to include the following changes from the
conceptual plans illustrated on the 2007 Hotel plans approved as part of the Brooklyn Hotel
Partners PUD application, which are noted as follows:
1)The orientation of the hotel has changed from a westerly entrance facing
Earle Brown Drive to a central entrance facing the main entrance drive
and entrance to the Embassy Suites Hotel;
2)The plan changes the unidentified hotel with a minimum 75-room hotel
and 85 parking stalls to an 81-unit Candlewood Extended Stay Hotel with
86 parking stalls;
3)The plan continues to utilize the shared access points on Summit Drive
and now provides a connection to the sidewalk within the Earle Brown
Drive boulevard and the trail connection to the Earle Brown Heritage
Center;
4)The plan provides additional green space and yard area which
complements the open space and outdoor court area of the adjacent office
building; and
5) The architectural development standards for this hotel are identical to the
Shingle Creek Crossing PUD, which include the following:
i. At least 50% of all four sides of wall surfaces of the hotel will be
constructed of Class I materials and the remainder of Class II
materials. Class I materials include: brick or acceptable brick-type
material, natural looking stone, textured cement stucco, copper,
architectural panels or masonry units with enhanced detailing such as
patterns, textures color, dimension, banding, brick inlay or glass.
RESOLUTION NO. 2013-73
Class II materials include: EFIS, pre-finished metal, concrete block,
fiber-reinforced cement board siding, canvas or vinyl awnings.
WHEREAS, the Planning Commission is allowed to consider the uniqueness of
each PUD, which enables the specifications and standards for streets, utilities, public facilities,
approval of land subdivisions, and modifications to zoning standards; and as part of this
application, the EDA requests consideration to the following modifications:
1.That the parking standards for this project are adjusted from one space for
each unit plus one space for each employee on any one shift is modified to
one space for each unit plus one space for each employee on the evening
shift; and
2.That as part of the site plan approval the City will consider a simple metes
and bound description to facilitate a land division and combination of the
eastern portion of this platted lot (pond and trail) to the Earle Brown
Heritage Center, in lieu of a formal replat of Lot 2, Block 1, Brooklyn
Farm 2'" Addition.
WHEREAS, the Planning Commission held a duly called public hearing on June
26, 2013, whereby a staff report and public testimony regarding the Planned Unit Development
Amendment were received and considered by the Planning Commission; the Planning Commission
considered the Planned Unit Development Amendment request in light of all testimony received,
including the guidelines for evaluating such amendments as contained in Section 35-355 of the
City's Zoning Ordinance and the City's Comprehensive Plan; and
WHEREAS, upon full consideration of this item, the Planning Advisory
Commission of the City of Brooklyn Center adopted Planning Commission Resolution No. 2013-
08, which provides a favorable recommendation to the City Council that Application No. 2013-007
be approved, subject to the following conditions and considerations
1)The Planned Unit Development Amendment is compatible with the
standards, purposes and intent of the Planned Unit Development section of
the City's Zoning Ordinance.
2)The Planned Unit Development Amendment proposal will allow for the
utilization of the land in question in a manner which is compatible with,
complimentary to and of comparable intensity to adjacent land uses as
well as those permitted on surrounding land.
3) The Planned Unit Development Amendment comprehended under this
review includes the following changes from the conceptual plans
illustrated on the 2007 Hotel plans approved as part of the Brooklyn Hotel
Partners PUD application, which are noted as follows:
RESOLUTION NO. 2013-73
A.The orientation of the hotel is changed from a westerly entrance
facing Earle Brown Drive to a central entrance facing the main
entrance drive and entrance to the Embassy Suites Hotel;
B.The plan changes the unidentified hotel with a minimum 75-room
hotel and 85 parking stalls to an 81-unit Candlewood Extended
Stay Hotel with 86 parking stalls;
C.The plan shall utilize the shared access points on Summit Drive,
and shall provide a connection to the sidewalk within the Earle
Brown Drive boulevard and the trail connection to the Earle Brown
Heritage Center;
D.The plan shall provide additional green space and yard area, which
complements the open space and outdoor court area of the adjacent
office building; and
E. The architectural development standards for this hotel shall be
identical to the Shingle Creek Crossing PUD, which include the
following:
i. At least 50% of all four sides of wall surfaces of the hotel
will be constructed of Class I materials and the remainder
of Class II materials. Class I materials include: brick or
acceptable brick-type material, natural looking stone, textured
cement stucco, copper, architectural panels or masonry units
with enhanced detailing such as patterns, textures color,
dimension, banding, brick inlay or glass. Class II materials
include: EFIS, pre-finished metal, concrete block, fiber-
reinforced cement board siding, canvas or vinyl awnings.
4) The utilization of the property as proposed under the Planned Unit
Development Amendment is considered a reasonable use of the property
and will conform to the ordinance standards except for allowing:
a)A green strip along the Earl Brown Drive right of way that is less
than 15 ft. This modification from the CIA ordinance standard is
justified on the basis of the development plan being an appropriate
plan for this area and that it is off set or mitigated by various
factors contained in the approved site plan.
b)The parking standards for this project are adjusted from one space
for each unit plus one space for each employee on any one shift is
modified to one space for each unit plus one space for each
employee on the evening shift.
RESOLUTION NO. 2013-73
c) That as part of the site plan approval the City will consider a
simple metes and bound description to facilitate a land division and
combination of the eastern portion of this platted lot (pond and
trail) to the Earle Brown Heritage Center, in lieu of a formal replat
of Lot 2, Block 1, Brooklyn Farm 2nd Addition.
5)The Planned Unit Development Amendment proposal is colisidered
consistent with the recommendations of the City's Comprehensive Plan for
this area of the city.
6)The Planned Unit Development Amendment proposal appears to be a
good long range use of the existing land and this development can be
considered an asset to the community.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Brooklyn Center, Minnesota, that Application No. 2013-007 submitted by the Economic
Development Authority for the City. of Brooklyn Center of a Planned Unit Development
Amendment to the 2007 Brooklyn Hotel Partners LLC/Embassy Suites Planned Unit
Development, in order to provide for the allowance of a new 81-Unit Candlewood Suites Hotel,
located at 6250 Earle Brown Drive, is hereby approved subject to the additional planned unit
development allowances and conditions memorialized herein.
July 8, 2013 ( -
Date Mayor
ATTEST: jfrJ LL'n', 11p Jt,
City Clerk
The motion for the adoption of the foregoing resolution was duly seconded by member
Lin Myszkowski
and upon vote being taken thereon, the following voted in favor thereof:
Tim Willson, Carol Kieven, Kris Lawrence-Anderson, Lin Myszkowski, and Dan Ryan;
and the following voted against the same: none;
whereupon said resolution was declared duly passed and adopted.
11
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DATE: May 13, 2013
TO: Curt Boganey, City Manager
FROM: Gary Eitel, Director of Business & Development
SUBJECT: Letter of Intent by Minnesota Hospitality Inc. for the Purchase and Hotel
Development of Lot 2, Block 1, Brooklyn Farm 2nd Addition (Phase II Embassy
PUD)
Recommendation:
It is recommended that the Economic Development Authority consider approval/adoption of the
Resolution Authorizing the Executive Director to execute the Letter of Intent with Minnesota
Hospitality Inc. and to proceed with the negotiations and preparation of the appropriate
development agreement and actions necessary for the conveyance and development of Lot 2,
Block 1, Brooklyn Farm 2 nd Addition. (Phase II Embassy PUD)
Background:
On June 27, 2005, the City Council approved the rezoning of a 6.2 acre parcel from CIA
PUD/CIA for the development of a 250 room hotel containing a 100 seat restaurant and a 32,000
sq. ft. water park facility.
The development plans were revised by the City Council on May 14, 2007 to provide for the
phased development of two hotels:
- Phase I was an eight story, 175 room Embassy Suites Hotel on a 4.02 acre lot that
included a 100 seat restaurant and a physical connection to the Earle Brown Heritage
Center.
Phase II conceptually illustrated the location of a second hotel and the agreement
identified the following Hotel Flags: Holiday Inn Express, Marriot Courtyard, Hilton
Garden Inn, Indigo, Cambria, Staybridge, Homewood, Hampton, Comfort, or another
equivalent hotel flag acceptable to the Authority with no less than 75 rooms, which
hotel need not be a full service hotel.
Attached for your reference is a copy of conceptual development plans and City Council
Resolution No. 2007-70, which approved the amendment to the PUD Development Plans.
In 2006, the City Council and EDA conducted the necessary public hearings to remove this
property from Tax Increment District No. 2, establish a Tax Abatement Plan, and execution of a
Development Agreement which included the authorization for the phased conveyance of the
property to Brooklyn Hotel Partners.
Mission: Ensuring on attractive, clean, soft, inclusive community that enhances the quality of life
for all people and preserves the public trust
In 2007, the City Council approved the final plat of Brooklyn Farm 2'' Addition which created a
4.02 acre lot for the Embassy Hotel project and a 2.18 acre lot for the Phase II site. The eastern
1/3 of the Phase II site included the existing pond, a portion of a cement pond, and the majority
of the trail which connected to the Earle Brown Farm site.
Attached is an aerial photograph of the Phase II site which illustrates the location of an access
easement for the use of the main drive which enters the Embassy Hotel and the buildable area of
approximately 1.5 acres.
In 2009, the developer completed the Embassy Suite Hotel and informed the EDA that he was
not in a position to complete the link to the Earle Brown Heritage Center.
After months of negotiations on the developer's default in the terms of the Development
Agreement by not completing the required Minimum Improvements, the EDA adopted
Resolution No. 2010-14, an amendment to the Development Agreement which amended the
rights and obligations of the Authority, the City, and Developer relating to the developer's
forfeiture of any rights to the Phase II development; confirmed the D-Bam Lease Agreement and
easements for the EDA' s construction of the link; approved adjustments to the payment of tax
abatements for the Phase I development, including the right of set off to secure the D-Barn Lease
and Link Maintenance Agreement; and conveyed the development rights for Phase II to the EDA
and the obligation to construct the link to the Earle Brown Heritage Center.
Letter of Intent for Sales and Development of Phase II Embassy PUD Site:
The attached Letter of Intent by Minnesota Hospitality Inc. provides for the purchase of the
Phase II site for the development of a 4 story, 81 room Candlewood Extended Stay Hotel.
The purchase amount is $500,000 with a closing date scheduled to occur in 2013 after the
developer has been issued approval from the InterContinental Hotels Group; received the
necessary approvals from the EDA and City Council and a building permit; and has provided the
City with a copy of its Financing Commitment.
The terms also include the following which will be incorporated into the Development
Agreement:
a.The provision of a 10 year tax abatement program similar in structure to the prior tax
abatement agreement for the Phase II development as approved in 2006.
b.The City and EDA approvals will include the necessary public hearings and actions
necessary to amend the PUD Plans; a Re-Plat or Land Division to separate the portion
of the lot occupied by the pond & trail; establish a Tax Abatement Plan; approval of
a Business Subsidy Agreement; and resolution with economic findings for the
conveyance of EDA owned land.
c. Architectural development standards identical to the Shingle Creek Crossing PUD,
• At least 50% of all four sides of wall surfaces of the hotel will be constructed
of Class I materials and the remainder of Class II materials.
Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life
for (Ill people and preserves the public trust
Class I materials include: brick or acceptable brick-type material, natural looking
stone, textured cement stucco, copper, architectural panels or masonry units with
enhanced detailing such as patterns, textures color, dimension, banding, brick
inlay or glass.
Class II materials include: EMS, pre-finished metal, concrete block, fiber-
reinforced cement board siding, canvas or vinyl awnings.
Budget Issues:
The sales of the Phase II is sufficient to repay the EDA' s advancement of funds used to complete
the construction of the link connecting the Embassy Suites Hotel to the Earle Brown Heritage
Center.
The tax abatement of the local share of property taxes is a factor of the assessed valuation of the
completed project, the City's tax rate, and the percent of contribution required for the fiscal
disparity fund and is projected to be in the range of approximately $30,000 - $40,000 annually.
As an example, a property with an assessed valuation of $3,000,000 would have a tax capacity of
approximately $60,000 of which the application of the 2012 fiscal disparity contribution rate of
35.1835% would leave 64.8165% for local taxation or a tax capacity of $38,890 times the local
tax rate (2013) 0.72.202 equals approximately $28,079 that would be available for a tax
abatement.
Council Goals:
1.We will proceed aggressively with implementation of City's redevelopment plans
2.We will improve the city's image
Mission: Ensuring an attractive, clean, safe, inclusive community that enhances the quality of life
for all people and preserves the public trust
Commissioner Dan Ryan introduced the following resolution and
moved its adoption:
EDA RESOLUTION NO. 2013-03
RESOLUTION ACCEPTING MINNESOTA HOSPITALITY iNC'S LETTER OF
INTENT FOR DEVELOPMENT OF LOT 2, BLOCK 1, BROOKLYN FARM 2ND
ADDITION AND AUTHORIZING THE PREPARATION OF A DEVELOPMENT
AGREEMENT (PHASE II EMBASSY PUD SITE)
WHEREAS, on June 27, 2005, the City Council adopted Resolution No. 2005-97,
which approved the rezoning of a 6.2 acre parcel from CiA to PUD/C1A for the development of a
250 room hotel containing a 100 seat restaurant and a 32,000 sq. ft. water park facility; and
WHEREAS, on October 23,2006, the City Council adopted Resolution No. 2006-
121, which approved a Property Tax Abatement Plan and Development Agreement with Brooklyn
Hotel Partners in connection with two full service hotels and related facilities; and
WHEREAS, on October 23, 2006, the EDA adopted Resolution 2006-12, which
deleted this 6.2 acre parcel from Tax Increment Financing District No. 2 and Approved and
Authorized the Execution of a Development Agreement; and
WHEREAS, on May 14,2007, the City Council adopted Resolution 2007-70, which
approved an amendment tothe PUD/C1A Development Plans. for the l phase of a two building
hotel complex, consisting of an eight story, 175 room Embassy Suites Hotel and 100 seat restaurant
with a physical connection to the Earle Brown Heritage Center; and
WHEREAS, on July 9,2007, the City Council adopted ResolutionNo. 2007-100,
approving the Final Plat of Brooklyn Farm 2"' Addition, which created a 4.02 acre lot for the 1st
phase development of an Embassy Suites Hotel and a 2.18 acre lot for the 2n phased as conceptually
illustrated on the approved PUD Development Plans; and
WHEREAS, on July 23,2007, October 8, 2007, and December 27, 2007, the EDA
adopted Resolution 2007-12, ResolutionNo. 2007- 19, and ResolutionNo. 2007-23 which approved
minor amendments to the Development Agreement Between the Economic Development Authority
and Brooklyn Hotel Partners; and
WHEREAS, the Brooklyn Hotel Partners completed the 175 room hotel and 100
seat restaurant in 2009, but were unable to complete the pedestrian link to the Earle Brown Heritage
Center and were in default to the terms of Development Agreement; and
WHEREAS, on June 28, 2010, the EDA adopted Resolution No. 2010-14, the
Fourth Amendment to the Development Agreement and Certain Related Agreement which modified
and amended the following: .
FDA RESOLUTION NO. 2013-03
1.The rights and obligations of the Authority, the City, and the Developers as it related
to the construction of the connection and development of the Phase II site,
2.Amended the Parking, Access and Pedestrian Link Agreement relating to the location
of the link to be constructed by the EDA,
3. Revised the Lease Agreements for the D-Barn; and
WHEREAS, on April 11, 2011 the EDA adopted Resolution No. 2011-08, which
approved a Spending Plan authorized under the 2010 Minnesota Jobs Act, which enabled $360,000
from Tax Increment District No. 2, to fund the construction of the portion of the link relating to the
D-Barn Lease and the FDA advanced the funds projected from the future sales of the Phase II site to
completethe pedestrian link to the Earle Brown Heritage Center; and
WHEREAS, on October 10, 2011, the EDA adopted RésolutlonNo. 2011-22, which
approved the termination of the Cement Pond/Fountain Easement, accepted a new trail easement
from Wings Financial, and conceptualized the future trail, lighting, and placement of a fountain
within the pond; and
WHEREAS, Minnesota Hospitality Inc. has expressed an interest in the
development of the Phase III site for the construction of a 4 story, 81 room extended stay hotel
consistent with the conceptual development plans of the approved PUD plans and with similar
provisions for a Tax Abatement Plan as approved for the initial Phase II development, and
Whereas, Minnesota Hospitality Inc. has provided a letter of intent for the
purchase of Lot 2, Block 1, Brooklyn Farm Second Addition, excludes the area of the pond and trail,
for the amount of $500,000 with terms and conditions to be formalized in a development agreement.
NOW, THEREFORE, BE IT RESOLVED by the Economic Development Authority
in and for the City of Brooklyn Center that the Executive Director is hereby -authorized to execute the
Letter of Intent with Minnesota Hospitality Inc, and to proceed with the negotiations and preparation
of the appropriate development agreement and actions necessary for the conveyance and
development of Lot 2, Block I Brooklyn Farms 2nd Addition. hase II Embasy PUD Site)
May 13, 2013
Date President
The motion for the adoption of the foregoing resolution was duly seconded by CommissionerLin Myszkowski
and upon vote being taken thereon, the following voted in favor thereof:
Tim Willson, Carol Kieven, Kris Lawrence-Anderson, Lin Myszkowski, and Dan Ryan
and the following voted against thç same: none;
whereupon said resolution was declared duly passed and adopted.
LETTER OF INTENT BY RUDRAMANAGEMENT
FOR THE PURCHASE AND HOTEL
DEVELOPMENT OF A MARRIOTT FAIRFIELD INN
& SUITES ON LOT 2, BLOCK 1, BROOKLYN
FARM 2 ND ADDITION (PHASE II EMBASSY PUD)
EDA Meeting
March 28, 2016
Agenda Item
No. 4.b
Location Map
2006 Aerial Map
6300 Earle Brown Dr. 6300 Earle Brown Dr.
Embassy SuitesEmbassy Suites
Location Map
2012 Aerial Map
6150 Summit Dr. 6150 Summit Dr.
Earle Brown CenterEarle Brown Center
EDA Parcel
6160 Earle Brown Dr. 6160 Earle Brown Dr.
Wings FinancialWings Financial
Lot 2, Block 1, Brooklyn
Farm 2 nd Addition
(Phase II Embassy PUD)
Background
June 2005
-City Council approves rezoning 6.2 acre parcel from
•
C1A to PUD/C1A for development of 250-room hotel; 100-seat
restaurant; 32,000 sf. water park facility.
2006
-Development agreement and 10 year tax abatement plan
•
May 2007
-PUD plans revised by City Council to provide for
•
phased development of two hotels:
Phase I = eight story, 175 room Embassy Suites Hotel on a 4.02
•
acre lot; 100 seat restaurant; connection to the Earle Brown
Heritage Center.
Phase II = conceptual location of a second hotel; agreement
•
identified a number of national well-known hotel groups
(accepted by EDA); no less than 75 rooms; full service hotel.
2007 PUD Development Plan
Background
2007
nd
-City approves Final Plat of Brooklyn Farm 2Addition –creating 4.02
•
acre lot for the Embassy Hotel project & 2.18 acre lot for the Phase II site.
Late 2007
-project under construction; completed early 2009
•
2009
-developer completes Embassy Suite Hotel; informs EDA he is unable
•
to complete the link to the Earle Brown Heritage Center
2010
th
-Negotiations led to 4Amendment & Certain Related Agreements
•
(Res. 2010-14):
i.developer’s forfeiture of any rights to the Phase II development;
ii.confirmed the D-Barn Lease Agreement and easements for the
EDA’s construction of the link;
iii.approved adjustments to the payment of tax abatements for the
Phase I development, including the right of set off to secure the
D-Barn Lease and Link Maintenance Agreement; and
iv.conveyed the development rights for Phase II to the EDA and the
obligation to construct the link to the Earle Brown Heritage
Center.
2011
-EDA completed the link to Earle Brown Heritage Center.
•
Background Continued:
May 13, 2013, the EDA adopted Resolution No. 2013 –03, A Resolution
Accepting Minnesota Hospitality Inc.’s Letter of Intent for Development of
nd
Lot 2, Block 1, Brooklyn Farm 2Addition and Authorizing the Preparation
of a Development Agreement (Phase II Embassy PUD Site).The
resolution authorized the following actions:
The Executive Director execution of the Letter of Intent with Minnesota
1.
Hospitality Inc. for the development of a 4 story 81 room extend stay
hotel, consistent with the conceptual development plans of the approved
PUD plans.
To proceed with the negotiations for the sales of this site, excluding the
2.
portion of the lot containing the pond and trail, for $500,000, with similar
provisions for a 10 year Tax Abatement Plan, as approved for the initial
Phase II development.
To proceed with the preparation of a development agreement with terms,
3.
conditions, and actions necessary for the conveyance and development
nd
of Lot 2, Block 1, Brooklyn Farms 2Addition.
July 8, 2013, the City Council adopted Resolution No. 2013-73, a resolution
accepting the Planning Commission’s recommendation pertaining to the EDA’s
application to amend the conceptual development plans of the PUD to facilitate
a reorientation of the building and parking lot for an 81 unit hotel.
Letter of Intent for Sales and Development of
Phase II Embassy PUD Site
Planned Development of a 4 story, 83 Room Marriott Fairfield
•
Inn & Suites
Construction planned to start in the 3 rd quarter of 2016 with
•
completion by the summer of 2017. (9 month construction
schedule)
Purchase Price of $100,000 with no tax abatement plan.
•
Earnest Money of $10,000 which is nonrefundable at a 90 day
•
due diligence period.
Recommended Action
It is recommended that the Economic Development
•
Authority consider approval/adoption of a Resolution
Accepting RudraManagement’s Letter of Intent for
Development of Lot 2, Block 1, Brooklyn Farm 2 nd
Addition and Authorizing the Preparation of a
Development Agreement (Phase II Embassy PUD).