5.2. HRSR 02-02-2004 ITEM #
.\4�j
•
City of
Elk
•
River
MEMORANDUM
TO: Housing & Redevelopment Authority
FROM: Catherine Mehelich, Director of Economic Developmen
DATE: February 2, 2004
SUBJECT: Consider Extension of Preliminary Redevelopment Agreement with
MetroPlains Development, LLC
Attachments
• Correspondence from LaVerne Hanson,Jr.,MetroPlains Development, 1/28/04.
• Original Preliminary Redevelopment Agreement,October 28, 2002.
Background
• A Preliminary Redevelopment Agreement was entered into between the HRA and its selected
developer,MetroPlains Development,in October 2002 to provide a basic framework and certain
understandings for examining the possibility of implementing the MetroPlains proposed project. In
April 2003 the HRA extended the agreement for six months. The HRA granted second extension
of the agreement the following October for a period until January 30,2004.
At its January 5th work session meeting,the FIRA directed staff to continue to work with
MetroPlains through several issues that remain outstanding,namely the linkage of the Jackson Block
and Bluff Block developments. Staff continues to work closely with Ehlers&Assoc.,the project
attorney,and the developer to negotiate development agreement terms.
The HRA's Preliminary Redevelopment Agreement with MetroPlains expired on January 30, 2004.
For the purposes of its financing application to MN Housing Finance Agency,MetroPlains is
requesting that the I-RA consider a motion to continue to work with MetroPlains Development
under the spirit of the Preliminary Redevelopment Agreement,including Jackson Block, for an
extension period up to March 1, 2004. Staff has been advised that a formal extension by written
amendment to the agreement is not necessary.
While staff believes that 30-days should be sufficient to work out the terms of the development
agreement, at the same time staff believes that an additional 30-days could be necessary to draft the
language in the development agreement for the HRA's review and consideration at a regular
meeting.
4111 Recommendation
Staff recommends the HRA consider granting an extension of the Preliminary Redevelopment
Agreement with MetroPlains Development,LLC for a period up to April 5, 2004.
IfIETROPLAINS
METROPLAINS PROPERTIES INC
• m
METROPLAINS DEVELOPMENT LLC
" h o u s i n g t h e h e a r t l a n d "
January 28, 2004
Catherine Mehelich A, 7 n-
Director of Economic Development
City of Elk River
13065 Orono Parkway
Elk River MN 55330
RE: Pre-Development Agreement
Dear Catherine:
We continue to work through the issues of the development agreement. Like most
development agreements they are complicated and take a fair amount of time for all
parties to review, respond and negotiate the details. The development agreement with the
HRA of Elk River is no exception. Although significant progress is being made some
critical details remain unresolved and are continuing to be worked on. The Preliminary
Development Agreement expires on January 30th. We also are continuing to be active in
•' the process of securing financing and the details of just how this project would come
together, which is equally complicated and takes more time than anticipated. We,
therefore, request that the Preliminary Development Agreement be extended until March
1, 2004. We thank you for the understanding of the complicated details that a
development agreement brings.
We appreciate the continued coordination and team building with the HRA, City of Elk
River and MetroPlains to realize this important project in the revitalization of Downtown
Elk River.
Sincerely,
`r ;.- �
—LaVerne Hanson, Jr.
cc: Larry Olson
Jeanne Kelsey
Rick Martens
0
SPRUCE TREE CENTRE • 1600 UNIVERSITY AVE. • SUITE 212
ST PAUL MINNESOTA 55104-3825
6., ,4(, 1848 3 i-AA oS I 046 0`,4 a :wwwrnetrODluu.0m.
Preliminary Redevelopment Agreement
•
This Preliminary Redevelopment Agreement (the "Agreement") is dated as of October
28, 2002; is by and between the Housing and Redevelopment Authority in and for the City of Elk
River, Minnesota(the "HRA"), and MetroPlains Development, LLC, a Minnesota limited
liability company("MetroPlains"); and provides as follows:
1. Recitals.
(a) The HRA and the City of Elk River have been examining the need to
revitalize and redevelop the City's downtown business district.
(b) Pursuant to a recent "request for proposals" process, MetroPlains was
selected by the HRA to work toward conceptualizing, designing and implementing one or
more initial phases of the downtown revitalization project. At the present time, these
initial phases of MetroPlains, should they prove feasible and acceptable in all other
respects, are expected to entail mixed-use development, including residential and retail
components (the "MetroPlains Project") and are expected to occur within but not
necessarily to encompass entirely the shaded areas indicated on the attached Exhibit A
(the "Exclusive Sites").
(c) The purpose of this Agreement is to provide a basic framework and certain
• understandings for examining and possibly implementing the MetroPlains Project. The
HRA and MetroPlains agree to work diligently and in good faith with each other to
realize mutually satisfactory results of the kind envisioned hereby, without committing
either party to a project which it does not find acceptable in its own judgment and
discretion.
2. Terms of Agreement.
(a) The term of this Agreement (the "Term") shall extend from the date hereof
through May 1, 2003, upon which date this Agreement shall expire unless extended in
writing by the parties in their sole and absolute discretion, respectively. Upon expiration
of this Agreement, neither party shall have any right or obligation hereunder, except that
the provisions of subparagraph (g) below respecting the use and final accounting of the
$15,000 deposit described therein shall continue to apply in accordance with the terms
thereof.
(b) MetroPlains will proceed with due diligence to examine the feasibility of
and develop,if possible, more specific plans and locations (within the Exclusive Sites)
for the MetroPlains Project. MetroPlains will keep the HRA apprised from time to time
of its progress in developing such plans. As those plans proceed, it is anticipated that the
parties would work in good faith toward drafting a mutually acceptable definitive
redevelopment agreement ("Redevelopment Agreement")respecting the terms and
conditions and other specifics relating to the undertaking and completion of the
• MetroPlains Project, including anticipated tax increment or other financial assistance
1457233v3 1
from the HRA, if applicable. The parties recognize that a final Redevelopment
• Agreement may involve HRA assistance in the assembly and acquisition of real property
for the MetroPlains Project, including the exercise of eminent domain powers in
accordance with, subject to and as may be permitted by applicable law. During the Term,
the HRA agrees that it will not enter into or negotiate a similar development or
redevelopment agreement with any developer or redeveloper other than MetroPlains for a
project within the Exclusive Site and that it will not agree with any such alternate
developer to provide tax increment or other financial assistance, eminent domain
assistance, or other assistance in connection with any development or redevelopment
undertaken within the Exclusive Area with any party other than MetroPlains.
(c) As the plans of MetroPlains for the MetroPlains Project shall evolve,
MetroPlains shall hold a public meeting and open house to present such plans to the
public and to solicit public input on those plans before any final Redevelopment
Agreement can be finalized.
(d) While the HRA acknowledges that tax increment financing and/or lawful
eminent domain powers may need to be exercised in order to make any MetroPlains
Project feasible and possible, a final commitment in those areas, as well as any other final
commitments respecting the HRA's role in or assistance to the MetroPlains Project, can
only come if and when a final Redevelopment Agreement is approved and executed by
the HRA's duly authorized representatives, following approval thereof by the HRA Board
of Commissioners in its sole and absolute discretion. Similarly, the HRA understands
• that unless and until MetroPlains executes a final Redevelopment Agreement, it has not
made any final commitment with respect to undertaking or completing the MetroPlains
Project.
(e) It is understood that the plans for the MetroPlains Project must be
submitted in accordance with all City design guidelines and planning and zoning
requirements, subject to such conditional use permits, planned unit developments,
variances and other procedures and processes which may be available pursuant to
applicable local codes. The list of current City development fees which may (or may not)
apply to the MetroPlains Project is attached hereto as Exhibit B. Actual amounts will be
determined at the time of formal application and project approval where applicable.
(f) During the Term, in connection with discussing and attempting to
negotiate a final Redevelopment Agreement, the HRA and MetroPlains will need to agree
upon final site boundaries for the MetroPlains Project, and the BRA in its discretion will
be examining with the City the appropriate boundaries of any tax increment financing
district or "project area" relative to that tax increment financing district.
(g) No later than November 4, 2002, and as a condition precedent to the
effectiveness of this Agreement, MetroPlains shall deposit with the HRA $15,000 which
may be used to pay certain expenses incurred by the HRA or the City in reviewing,
responding to or analyzing the MetroPlains Project proposals. These eligible expenses
would not include HRA/City staff time but would include HRA/City legal fees for work
• on this Agreement and the Redevelopment Agreement, financial consulting fees related
1457233v3 2
to analyzing the feasibility of the MetroPlains Project or providing tax increment
projections, and engineering fees related to advising on or examining present public
infrastructures in the downtown area relative to (or respecting future improvements
necessitated by) the MetroPlains Project. When the HRA/City draws against these funds
from time to time, it shall promptly provide MetroPlains with a copy of the actual billing
involved. Within 60 days of the end of the Term, the HRA will give MetroPlains a final
accounting of this deposit and will return any funds which are not needed to pay or
reimburse for such eligible expenses. MetroPlains shall not be required to pay more than
$15,000 pursuant to this subparagraph, even if the total of eligible HRA/City expenses
exceeds that amount. The existence of this funding and utilization thereof by the
HRA/City shall in no way compromise the judgment or discretion of the HRA/City as to
the acceptability of the MetroPlains Project or the proposed provisions of a
Redevelopment Agreement.
3. Miscellaneous. This Agreement shall be governed by the laws of the State of
Minnesota and may be executed in any number of counterparts, each of which shall constitute an
original hereof and all of which shall constitute one in the same instrument. It is understood and
agreed that MetroPlains may form one or more separate entities to proceed with one or another
of the individual phases of the final MetroPlains Project; similarly, it is understood that aspects
of the final implementation of any Redevelopment Agreements, or any one or more of such
agreements themselves, may in the end be executed in the name of the City.
IN WITNESS WHEREOF, the HRA and MetroPlains have executed this Agreement by
• their duly authorized representatives as of the date first above written.
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF ELK RIVER, MINNESOTA
•
By f k'Ar !' r1 _
Its Board Chair, Ate,?
By
is Executive Director
METROPLAINS DEVELOPMENT, LLC
By
Its Ut • niT
1457233v3 3
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DEVELOPERS AGREEMENT 9/
9/24/2002
c.,r .i 3RAwn BY: 1
El AREA OF DEVELOPMENT 0�+L 11.
Rp � SCALE:
iver ND NUMBERS NOT TO SCAB_
EXHIBIT B
•
City of Elk River
Applicable Fees
The following list of fees may or may not apply to your project. This list is not intended to be
all-inclusive but a snapshot of possible fees that should be considered by any applicant.
Park Dedication If land is being platted. Paid at time
of final plat.
Surface Water Management If land is being platted.
Trunk Sewer& Water Fee If land is being platted.
Sewer Availability Charge (SAC) For connection to municipal sewer;
Based on building design.
Water Availability Charge (WAC) For connection to municipal water;
Based on building design.
Building Permit Fees Based on square footage and construction type;
Established by MN State Building Code.
110 Plan Check Fees Based on square s q footage e and construction type;
Established by MN State Building Code.
Electric Connection Fees For connection to municipal electric;
Based on percentage of service construction cost.
Streetlight(s) Based on site layout.
•
1457233v3 B-1