5.5.A&B SR 07-14-2003Item ~ 5.5. A&B
MEMORANDUM
TO:
FROM:
DATE:
Mayor & City Council
Catherine Mehelich, Director of Economic Developmen/~//~
July 14, 2003
SUBJECT: HRA Downtown Revitalization Project
Attachments · Downtown Revitalization Project - Redevelopment Concept
· MetroPlains Development Preliminary Time Table
· Letter of Understanding
· Resolution of Support of a Proposal by MetroPlains Development, LLC to
Construct Housing Rental Units in the City of Elk River
Background
At its June 23rd meeting, the City Council heard a presentation from MetroPlains
Development regarding concept options for the Downtown Revitalization Project. One
week later the HRA reviewed the open house public feedback and directed staff and
MetroPlains to proceed in preparing a list of Development Agreement issues for the
redevelopment of the Jackson Block and Bluff Block, in accordance with the attached
Redevelopment Concept.
The financial feasibility of the project depends on the city and developer's ability to receive
financial assistance from a variety of resources. As part of the proposed timing, MetroPlains
anticipates submitting a Multifamily and Housing Tax Credit application to the MN Housing
Finance Agency by July 24~h. As part of the submission, some general consensus issues, as
outlined in the attached Resolution of Support, will need to be reached with details to follow
over the next 3 to 4 months. A representative from MetroPlains will be present at the
meeting to discuss the proposed application.
Requested Actions
Following the City Council's review and discussion, the HRA is recommending that the City
Council consider the following actions:
Consider approval of the attached Letter of Understanding between the City of Elk
River and MetroPlains Development for the future sale of the city-owned Jackson
Block property (public parking lot), and
H:\SHRDOC~)owntown Revitalization~Vlemos\Council 7-14.doc
HRA Downtown Revitalization Project
July 14, 2003 City Council Meeting
Page 2 of 2
Consider adoption of the attached Resolution of Support of a Proposal by
MetroPlains Development, LLC to Construct Housing Rental Units in the City of
Elk River.
While the MHFA application needs to be submitted, receipt of the funds will be contingent
on the HRA and developer reaching a final Development Agreement and the analysis of
financial need. In the next several months the staff and developer will be working to process
other requests for financing.
City
River
Open House Comment Form
JUNE 2003 .... ~
~,~oumtown .Elk ~River's. Role.
_ As a Vital Retail, Commercial and Residential Area.
Primary Goal of Downtown
Revitalization Project:
To assure the long-term viability of downtown by mak-
ing a connection to the rest of the community and by
utilizing the riverfront location. Redevelopment will
enhance downtown Elk River's role as a residential,
retail and commercial area and also revitalize invest-
ment in the downtown business district.
Development Objectives:
· Mixed use (residential/retail/service)
· Consideration of the historic context study results
· Strengthen connection to the community
· Traditional downtown design elements
· Brick, stucco, stone materials with visual breaks in
the building design
· Increased residential density
· Pedestrian orientation
· Increase exposure to the riverfront
· Recognize those buildings that have potential for
rehabilitation
· Replace market/economic obsolete buildings
· Multiple types of housing products (i.e. town-
homes, senior rental coops, market rate
apartments)
BLUFF BLOCK DEVELOPMENT
BLUFF BLOCK DEVELOPMENT:
-- 10,000 s.f. commercial on first floor along
Main Street
-- 52 units of for-sale housing
-- 3 and 4 stories
-- 70-80 below grading parking stalls for housing
& commercial residents
-- Connection to City's Riverwalk development
JACKSON BLOCK DEVELOPMENT:
-- 10,000 s.f. commercial on first floor along
Jackson Street and at the corner of Jackson
and Main
-- 32 units rental housing
-- 3 stories
-- Up to 66 below grade parking units for housing
residents and commercial, 18 surface units, and
9 additional on-street parking spaces
JACKSON BLOCK DEVELOPMENT
ELK RIVER REVITALIZATION PRELIMINARY TIMETABLE
July '03 Purchase Agreement or Memo of Understanding w/City of Elk River
July 24, '03 MHFA Application
Aug-Oct '03 Development Agreement
Sept. '03 Environmental Review
Sept.-Oct. '03 'I'IF Conclusion
Oct. '03 DTED Application/Small Cities Group
Nov. '03 MHFA Award
Sept.'03-Jan. '04 Site Acquisition/Relocation
Sept.-Nov. '03 Plan Preparation
Nov.- Dec. '03 Plan Approvals
Jan.-June '04 Pre-sales of 'For Sale' Units
Jan.-March '04 Financial Closings
Jan.-March '04 Jurisdictional Authorities Sign-offs/Approvals
April-May '04 Demolition
May-June '04 Infrastructure Improvements
June'04-June '06 Construction of Two Phases
.,2003
MetroPlains Development, LLC
1600 University Avenue, Suite 212
St. Paul, MN 55104-3825
Re: Letter of Understanding
City of Elk River Redevelopment
To MetroPlains Development, LLC:
This letter is written as evidence of "site control" by MetroPlains Development, LLC (the
"Redeveloper"), of certain real property (the "Property") currently owned by the City of Elk
River (the "City") for purposes of submitting an application for housing tax credits to the
Minnesota Housing Financing Agency. A legal description of the Property is contained on
Exhibit A to this letter of understanding.
The Redeveloper and the Housing and Redevelopment Authority In and For the City of
Elk River (the "Authority") entered into a Preliminary Redevelopment Agreement dated October
28, 2002. The Preliminary Redevelopment Agreement was extended by an amendment dated
April 28, 2003. The Authority is the agency of the City responsible for the coordination and
implementation of development and redevelopment activities on behalf of the City. The purpose
of the Preliminary Redevelopment Agreement was to allow the Redeveloper to work with the
Authority toward conceptualizing, designing and implementing one or more phases of a
revitalization project in the downtown area of the City. As a part of that process, the Authority
and the Redeveloper identified the Property as a site for a new development in the City.
It is currently proposed that the Redeveloper will cause the construction of a development
on the Property consisting of 32 units of tax credit housing with a three story underground
parking facility and approximately 9,500 square feet of commercial space (the "Development").
The Redeveloper and the Authority have agreed to proceed in good faith with the negotiation and
execution of a formal redevelopment agreement (the "Contract") implementing the proposed
development. That Contract will provide, among other matters, that the Authority will convey
the Property to the Redeveloper for construction of the Development. If the Contract is
executed, subject to satisfaction of all conditions precedent in the Contract, the City will convey
the Property to the Authority for conveyance to the Redeveloper or will convey the Property
directly to the Redeveloper. The execution of the Contract is conditioned on each party
determining in its discretion that executing the Contract is in its best interests.
This letter of understanding shall be effective until December 31, 2004. If for any reason a
Contract has not been entered into by the Authority and the Redeveloper within the term of this
letter of understanding or any mutually approved extension thereof, this letter of understanding
shall be null and void and neither the City nor the Redeveloper shall have any liability or
obligations to the other.
H:\SHRDOC\Downtown Revitalization\Memos~netroplains elk river letter of intent july 7.doc
The City agrees that during the term of this letter of understanding, the City will not
negotiate with or enter into a similar letter or agreement with any third party concerning the
Property.
This letter of understanding may only be modified and the term hereof may be extended
only through written amendments signed by the City and Redeveloper.
If the Redeveloper is in agreement with and willing to be subject to the terms of this letter
of understanding, please sign this letter where indicated below.
CITY OF ELK RIVER
By
Its
METROPLAINS DEVELOPMENT, LLC
Dated: By.
Its
EXHIBIT A TO LETTER OF UNDERSTANDING
Legal Description of Property
Commencing at a point on the Easterly extension of the South line of Block Two (2),
Village of Elk River, Seventy-six (76) feet Easterly from the Southeast corner of said Block Two
(2); thence on and along said Easterly extension of the South Line of Block Two (2) a distance of
Eighty-two (82) feet; thence Northerly at right angles a distance of One Hundred Fifty (150) feet;
thence Westerly at right angles and parallel with the said Easterly extension of the South line of
Block Two (2) a distance of Eighty-two (82) feet; thence Southerly at right angles a distance of
One Hundred Fifty (150) feet to the point of beginning, and being a part of Princeton Street in
the Village of Elk River.
H:\SHRDOC\Downtown RevitalizationWlemos\metroplains elk river letter of intent july 7.doc
RESOLUTION NO.
A RESOLUTION OF SUPPORT OF A PROPOSAL BY METROPLAINS
DEVELOPMENT, LLC TO CONSTRUCTHOUSlNG RENTAL UNITS IN THE
CITY OF ELK RIVER
WHEREAS, the Elk River Housing and Redevelopment Authority has entered into a
Downtown Revitalization Plan which demonstrates the need for diversity in the Central Business
District including the provision of Low/Moderate income housing, retail and office space; and
WHEREAS, MetroPlains Development, LLC has made a proposal to the City of Elk
River and the Elk River HRA to construct up to 32 units of housing with rental rates of
approximately $600-$700 per month to meet some of the housing needs that have been identified in
the Housing Plan 2001-2005 prepared by the Central Minnesota Housing Partnership and the
Market Analysis for Downtown Elk River prepared by Maxfield Research; and
WHEREAS, the City of Elk River supports the application of MetroPlains Development
LLC for Low Income Housing Tax Credits through the Minnesota Housing Finance Agency; and
WHEREAS, the City of Elk River supports the use of Tax Increment Financing by the
City of Elk River for the redevelopment of the Central Business District; and
WHEREAS, the City of Elk River supports costs avoidance for the construction of 32
housing units by providing some donated land, waiver of development specific assessments,
WAC/SAC reductions, density bonuses, reducing setbacks, reducing parking requirements,
decreasing road widths, flexibility in site development standards and zoning code requirements and
by working with MetroPlains Development in order to fast-track the permit and approval process
WHEREAS, the City of Elk River agrees to enter into a Letter of Understanding with
MetroPlains Development LLC for the sale of the property described in the Letter of
Understanding; and
NOW THEREFORE, BE IT RESOLVED that the City Council of the City of Elk River
hereby adopts this resolution expressing its general support for the rental housing proposal by
MetroHains Development, LLC, and its commitment to provide ongoing assistance to bring the
project to completion, including financial assistance as may be appropriate in the sole discretion of
the City Council, to successfully complete the project.
Passed and adopted this 14th day of July 2003.
ATTEST:
Stephanie A. Klinzing, Mayor
Patrick D. Klaers, City Administrator
S:\Downtown Revitalization\Memos\RESOLUTiON NO1 .doc