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HomeMy WebLinkAboutHousing & Redevelopment Authority Minutes 04-26-2012APPROVED MINUTES PLYMOUTH HOUSING AND REDEVELOPMENT AUTHORITY April 26, 2012 PRESENT: Chairman Jeff Kulaszewicz, Commissioners Paul Caryotakis, Carl Runck and Jim Willis ABSENT: Commissioner Bob Stein STAFF PRESENT: Housing Program Manager Jim Barnes and Office Support Representative Janice Bergstrom OTHERS PRESENT: Paul Tucci, Grace Management Representative Jody Boedigheimer 1. CALL TO ORDER Chairman Kulaszewicz called the Plymouth Housing and Redevelopment Authority meeting to order at 7:00 p.m. 2. CONSENT AGENDA A. Approve HRA Meeting Minutes from March 22 and April 10, 2012. Commissioner Runck changed verbiage in the March 22, 2012 minutes on page 4, paragraphs 5 and 6, to read as follows: Paragraph 5: "Commissioner Runck stated that making an office use work is pretty tough unless you have an anchor tenant lined up." Paragraph 6: "Commissioner Runck said that with the lakeside park, that would seem to be logical." B. Plymouth Towne Square. Accept Monthly Housing Report for March, 2012. C. Vicksburg Crossing. Accept Monthly Housing/Marketing Report for March, 2012. MOTION by Commissioner Willis seconded by Commissioner Caryotakis, to approve the consent agenda with amendments. Vote. 4 Ayes. MOTION approved. 3. OLD BUSINESS A. Oppidan Development. Review and approve the development agreement with Oppidan for TIF District 1-3 for redevelopment of the Plymouth Shopping Center located on State Highway 55 just west of County Road 73. Approved Plymouth Housing and Redevelopment Authority April 26, 2012 Page 2 Housing Program Manager Barnes gave an overview of the staff report. Housing Program Manager Barnes noted the interest rate is now 6%, which is one-half percent less than August, 2011 assumption. He reviewed the two issues which have now been resolved satisfactorily between Shelter Corporation and the HRA. Housing Program Manager Barnes said the language in the development agreement is now specific that Oppidan will be responsible for the public improvements. Housing Program Manager Barnes said language in the Declaration of Covenants was changed to say that any entity at this site must either pay taxes or enter into an agreement with the City for payment in lieu of taxes in an amount sufficient to meet the HRH's obligations at a minimum. Commissioner Willis asked the proposed date of the payment schedule. Housing Program Manager Barnes responded the first payment would be December 31, 2012 provided improvements have been verified as completed. Commissioner Willis asked when the interest begins to accrue. Housing Program Manager Barnes said interest on the entire note will begin to accrue on December 31, 2012, and any interest accrued in the first couple years will be added on to the end of the note. Commissioner Willis asked who would hold this note. Housing Program Manager Barnes said the note will be issued to Oppidan, or their LLC which is KTJ 198 who will assign it to Minnwest Bank who will hold note. Commissioner Willis asked how many people are involved with the TIF note. Housing Program Manager Housing Program Manager Barnes introduced Paul Tucci, representing Oppidan Development. Mr. Tucci said there are two parties involved — Oppidan, Inc. and the owner of Oppidan, Inc. Commissioner Willis asked if either of those parties ever been subject to bankruptcy proceedings. Mr. Tucci said not in their existing format. Commissioner Willis said the City is not at risk in respect to its credit, but the City's name is on this. He said it would create a lot of problems for the community if any part of this project goes south" because one of the three developers does not develop it. He asked Housing Program Manager Barnes if he is comfortable that everything has been covered. Housing Program Manager Barnes stated he is comfortable with the tax increment that if something happens and a portion of this development does not occur, the City would be able to Approved Plymouth Housing and Redevelopment Authority April 26, 2012 Page 3 capture any of the tax increment and complete the public improvements including the demolition of the building and have the site ready for a viable project. Housing Program Manager Barnes concluded that after discussions with the City Attorney, financial advisors and Executive HRA Director Steve Juetten, the City is protected and we are comfortable going forward. Commissioner Willis asked if the developer is late in any aspect of the project, that would delay the increment which in turn means the interest on the note will increase at 6%. Housing Program Manager Barnes clarified that if timelines were not met they would be in default and the interest stops accruing. Commissioner Willis asked if McDonald's has signed a purchase agreement. Mr. Tucci said they received the final version today but neither Davis' nor McDonald's agreements are executed yet. He said Shelter Corporation has executed documents. Mr. Tucci said Davis expects to be in the ground by August or September to accommodate their anchor tenant. Mr. Tucci concurred with Housing Program Manager Barnes' statement regarding their obligations and said their intention is to build the road in two phases. He said the first phase would be done by November, 2012. Mr. Tucci said 2015 is the outside date; they plan to have the second phase completed by 2013. Commissioner Willis asked if the utilities will go through the area being surcharged. Mr. Tucci stated they would not. Chairman Kulaszewicz asked if the contractual date is 2015. Mr. Tucci said the contract with the end users is 2015. He said from the tax increment standpoint there are minimum values that will commence whether we build or not. Mr. Tucci explained that everyone is aware that if you buy the lot, you take your share of assessments on interim value and full final value, and you are taxed on the full value in two years. Commissioner Willis asked if the City Assessor has signed off on that. Housing Program Manager Barnes answered affirmatively. Chairman Kulaszewicz said these improvements are necessary anyway, whether they build or not. Housing Manager Barnes said Community Development staff concurs that removing the building makes it a more marketable site. He said putting the new road on the north side of the site makes the most sense because of wetlands and the amount of soil correction needed on the south side would make it too expensive. Commissioner Willis concurred; he said the medical lot will have the most soil issues. Approved Plymouth Housing and Redevelopment Authority April 26, 2012 Page 4 Mr. Tucci agreed and said $750,000 will be used for soil corrections. He said most of the soil is piling on the building site, and some top soil would be used for berming on the site. Mr. Tucci said there will be a floating parking lot. Chairman Kulaszewicz asked for clarification of the two changes in the documents. Housing Program Manager Barnes said revisions include replacing the term "Master Developer/Developer" with "Developer", which is Oppidan. Housing Program Manager Barnes said the Declaration of Restricted Covenants where amended to remove the list of types of corporations or entities that would not be able to own one of the parcels. Commissioner Willis asked if there is any loophole on the issue of the covenant and its legality. Housing Manager Barnes said the City's bond attorney was comfortable with the legality because the Declaration of Covenants is a recordable document that runs with the property. He said the attorney was unable to find any other case law findings that this document would not be supported. Housing Program Manager Barnes said the attorney reviewed this with the County who also felt this would be supported. Commissioner Willis said if there was a litigation on this, the City would be party to it - not the County. MOTION by Commissioner Willis, seconded by Commissioner Caryotakis, to approve the development agreement with Oppidan for TIF District 1-3 for redevelopment of the Plymouth Shopping Center located on State Highway 55 just west of County Road 73. Vote. 4 Ayes. MOTION approved. Chairman Kulaszewicz introduced Grace Management Representative Jody Boedigheimer, who gave an overview of activity at Plymouth Towne Square and Vicksburg Crossing. Grace Management Representative Bodigheimer said Officer Angela Haseman visited Plymouth Towne Square and gave a refresher course on security issues and awareness of scams that target seniors. She said it has been quiet at both senior buildings, and they are at full capacity and turning apartments quickly. Commissioner Caryotakis asked about the market and if rents are strengthening a bit. Grace Management Representative Boedigheimer said she did not feel we are at the bottom end of the market in terms of our rates. She said they rarely have vacancies and the past 16-17 months have been a positive experience. Commissioner Runck asked how many tenants have early onset Alzheimer's or dementia. He said people who can be vulnerable to scammers tend to be in that group. Commissioner Runck said they tend to live independently longer than they should, on average. Approved Plymouth Housing and Redevelopment Authority April 26, 2012 Page 5 Grace Management Representative Bodigheimer said they see other issues such as a resident not being able to take care of themselves with cooking or bathing become too difficult. She said in both buildings they have 6-8 residents who receive some personal care support. Grace Management Representative Bodigheimer said once a year staff may need to talk with family members regarding a better suited environment. 4. ADJOURNMENT MOTION by Chairman Kulaszewicz, without objection, to adjourn the meeting at 7:26 p.m. MOTION approved.