7.1. HRSR 05-06-2019
Request for Action
To Item Number
Housing and Redevelopment Authority 7.1
Agenda Section Meeting Date Prepared by
General Business May 6, 2019 Amanda Othoudt, EDD
Item Description Reviewed by
Main and Gates Redevelopment TIF Analysis Cal Portner, City Administrator
Reviewed by
Action Requested
Approve, by motion, the Main and Gates Redevelopment TIF Analysis proposal by LHB Corporation.
Background/Discussion
At their November 7, 2017, meeting, the HRA expressed interest in purchasing residential properties
along east Main Street connecting to Highway 169 for a potential redevelopment project that would align
with the Mississippi Connections Plan. There are seven properties in the proposed redevelopment area
and four properties have been purchased. Staff is working with the property owners of two more
properties within the redevelopment area.
Interfund loan resolutions were approved by the HRA and Council in December in the event a TIF
District is created to pay for acquisition, demolition and site prep costs incurred as part of this project.
If the HRA plans to create a Redevelopment TIF District, a blight analysis will need to be conducted
before the properties are demolished. To qualify as a redevelopment TIF District, more than 50% of the
buildings within the proposed district will need to be found to be substandard.
Financial Impact
LHB, Corp. will inspect up to seven properties to determine eligibility for a redevelopment TIF district.
The cost to perform the inspections and to compile the report outlining the findings will not exceed
$13,800. The cost of the inspection depends on the number of properties inspected, and total cost will
decrease if fewer buildings are inspected.
Attachments
LHB, Corp., Proposal
The Elk River Vision
A welcoming community with revolutionary and spirited resourcefulness, exceptional
service, and community engagement that encourages and inspires prosperity
January 7, 2019
Amanda Othoudt
Economic Development Director
City of Elk River
13065 Orono Parkway
Elk River, MN 55330
MAIN AND GATES REDEVELOPMENT TIF ANALYSIS
Dear Amanda,
Thank you for the opportunity to submit a proposal for the Main and Gates Redevelopment TIF
analysis in Elk River, Minnesota. LHB is a full-service architecture, planning and engineering firm
with 250 employees in our Minneapolis, Duluth, Cambridge, and Superior, Wisconsin offices.
Our Government studio has extensive experience working with local governments on their
planning, design, architectural and engineering needs. Having been personally involved on various
city councils and planning commissions, I understand how cities function and the importance of
maintaining the support of your appointed and elected officials and community throughout the
process.
PREVIOUS EXPERIENCE
LHB has significant experience with a variety of inspection and facility assessment projects,
including the analysis of over 200 TIF Districts. Examples include:
• City of Columbia Heights TIF inspection services
• City of St. Paul TIF inspection services
• City of St. Anthony Village, NW Quadrant TIF inspection services
• City of St. Louis Park TIF District inspection services
• City of Mound TIF District “1-2” inspection services
• City of Osseo TIF inspection services
• City of New Richmond, WI TIF inspection services
• Minnesota State Colleges and Universities system facility assessments
• State of Minnesota Facility Assessments
• Property Condition Assessments for the St. Paul Department of Planning and Economic
Development (Franklin/Emerald Neighborhood)
• Condition surveys for every DNR facility in the State of Minnesota, 2014
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Elk River Main and Gates TIF Analysis – January 7, 2019
TEAM CREDENTIALS
Michael A. Fischer, AIA, LEED AP - Project Principal/TIF Analyst
Michael has 32 years of experience as project principal, project manager, project designer and
project architect on planning, urban design, educational, commercial and governmental projects.
He has become an expert on Tax Increment Finance District analysis assisting over 100 cities with
strategic planning for TIF Districts. He is an Architectural Principal at LHB and currently leads
the Minneapolis office.
Michael completed a two-year Bush Fellowship, studying at MIT and Harvard in 1999, earning
Masters degrees in City Planning and Real Estate Development from MIT. He has served on more
than 50 committees, boards and community task forces, including a term as a City Council
President and as Chair of a Metropolitan Planning Organization. Most recently, he served as Chair
of the Edina, Minnesota planning commission and is currently a member of the Edina city council.
Michael has also managed and designed several award-winning architectural projects, and was one
of four architects in the Country to receive the AIA Young Architects Citation in 1997.
Phil Waugh – Project Manager/TIF Analyst
Philip is a project manager with 13 years of experience in historic preservation, building
investigations, material research, and construction methods. He previously worked as a historic
preservationist and also served as the preservation specialist at the St. Paul Heritage Preservation
Commission. Currently, Phil sits on the Board of Directors for the Preservation Alliance of
Minnesota. His current responsibilities include project management of historic preservation
projects, performing building condition surveys and analysis, TIF analysis, writing preservation
specifications, historic design reviews, writing Historic Preservation Tax Credit applications,
preservation planning, and grant writing.
Jonathan Pettigrew, AIA – Inspector
Jonathan Pettigrew has worked in architecture and construction for the last twenty years in
Minnesota, California and Washington. His experience includes a variety of commercial and
residential project types and scales, from single-family homes to a 300,000 square foot multi-building
office complex. He has significant experience in code reviews and building systems inspections and
analysis. Jonathan received his Minnesota architect’s license in 2004. He brings a strong interest in
sustainability and an eye for detail to his work. He enjoys working with clients, consultants and
contractors to bring projects together successfully.
Phil Fisher – Inspector
For 35 years, Phil Fisher worked in the field of Building Operations in Minnesota including White
Bear Lake Area Schools. At the University of Minnesota, he earned his Bachelor of Science in
Industrial Technology. He is a Certified Playground Safety Inspector, Certified Plant Engineer, and
is trained in Minnesota Enterprise Real Properties (MERP) Facility Condition Assessment (FCA).
His FCA training was recently applied to the Minnesota Department of Natural Resources Facilities
Condition Assessment project involving over 2,000 buildings.
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Elk River Main and Gates TIF Analysis – January 7, 2019
SCOPE OF SERVICES
LHB will provide the following services based upon the terms and conditions described below.
1. Survey the TIF District to determine if it meets applicable coverage test.
A. To meet the coverage test, parcels consisting of 70 percent of the area of the district
must be “occupied” by buildings, streets, utilities, or paved or gravel parking lots.
B. A parcel is not considered “occupied” unless at least 15% of its total area contains
improvements.
2. Conduct a visual review of building(s) interior and exterior:
A. Obtain property owner’s consent for inspection.
B. Document property conditions relative to Minnesota Statutes Section 469.174
Subdivision 10.
3. Estimate building(s) replacement cost:
A. Replacement cost is the cost of constructing a new structure of the same square footage
and type on the site.
B. A base cost will be calculated by establishing the building class, type and construction
quality.
C. Identify amenities, which increase the value of the building over the standard
construction quality level.
D. Review building permits for each parcel.
E. The base cost and cost of amenities will be totaled to determine the replacement cost
for the property.
4. Evaluate building(s) existing condition:
A. “Structurally substandard shall mean containing defects in structural elements or a
combination of deficiencies in essential utilities and facilities, light and ventilation, fire
protection including adequate egress, layout and condition of interior partitions, or
similar factors, which defects or deficiencies are of sufficient total significance to justify
substantial renovation or clearance.”
5. Determine Building(s) Code Deficiencies:
A. Determine technical conditions, which are not in compliance with current building
code applicable to new buildings.
B. Provide opinion of probable cost to correct identified deficiencies.
C. Compare cost of deficiency corrections to replacement value of building.
6. Prepare and deliver report:
A. Prepare a written narrative analysis of the District describing why the property within
the District does or does not meet the criteria as “structurally substandard” as
established in Minnesota Statutes Section 469.174, subdivision 10.
B. Deliver final reports via email PDF.
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Elk River Main and Gates TIF Analysis – January 7, 2019
ASSUMPTIONS
1. LHB will inspect up to seven buildings on seven parcels. We will inspect both the
interior and exterior of the buildings and evaluate the coverage of the parcel(s). The
Client will provide the following:
• A scalable parcel map and/or aerial photo of the area to be inspected, including GIS
information with specific parcel data, including parcel area measured in square feet.
• A list of all parcels affected including name of owner, current known business or
resident name and address.
• Available information regarding the condition of the structures, including past
building permit information, and known code violations.
STANDARD OF CARE
LHB shall perform services consistent with the professional skill and care ordinarily provided by
other professionals practicing in the same or similar locality under the same or similar
circumstances.
Any report prepared by LHB represents a professional opinion based upon information available
and arrived at in accordance with generally accepted professional standards. Other than as
contained in the report, LHB makes no express or implied warranty.
Short of complete deconstruction to examine every element at every location, no assessment can
reveal all conditions which may exist. Additional testing, assessment, or demolition, may uncover
conditions which would make it necessary to modify LHB’s conclusions or recommendations.
Any report prepared for the purpose described in this Agreement is for the exclusive use by those
to whom the report is addressed. LHB will not and cannot be held liable for the unauthorized
reliance upon this report by any third party.
COMPENSATION
We propose to work on an hourly basis with the following key staff:
Project Principal, Michael Fischer (TIF analysis) $276/hour
Project Manager $165/hour
Project Architect/Inspector $145/hour
Project Administrator $85/hour
We will work on an hourly basis not to exceed Thirteen Thousand Eight Hundred dollars ($13,800)
including reimbursable expenses for the inspection of the properties, including a full report
outlining the findings for the proposed TIF District.
Payments are due and payable upon receipt of our invoice. Unpaid balances 60-days after invoice
date shall bear interest at the rate of 8% annually.
Failure to make timely payment to LHB is a material breach of this Agreement and may, at LHB’s
sole discretion, result in a suspension or termination of services, and may, at LHB’s sole discretion,
result in the termination of the Client’s limited license authorization to use LHB’s copyrighted
Instruments of Service.
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Elk River Main and Gates TIF Analysis – January 7, 2019
ADDITIONAL SERVICES
If there is a material change in the circumstances or conditions that affect the scope of work,
schedule, allocation of risks or other material terms, LHB shall notify the Client. The Client and
LHB shall promptly and in good faith enter into negotiation to address the changed conditions
including equitable adjustment to compensation. The fees and costs for any additional services will
be based upon LHB’s Standard Hourly Rates and Standard Reimbursable Schedule.
SCHEDULE
The final report typically requires 30-45 days to complete from the time we are authorized to start.
We can make preliminary conclusions prior to our full report being completed if necessary to allow
other consultants and the client to begin their work.
CONSEQUENTIAL DAMAGES
LHB and Client waive consequential damages for claims, disputes or other matters in question
arising out of or relating to this Agreement.
LIMIT OF LIABILITY
To the maximum extent permitted by law, the Client agrees to limit LHB’s liability for the Client’s
damages to the sum of Ten Thousand Dollars ($10,000) or the amount of fee paid to LHB,
whichever is greater. This limitation shall apply regardless of the cause of action or legal theory
pled or asserted.
USE OF LHB’S DOCUMENTS
The documents prepared by LHB are solely for use with respect to this project. All documents
prepared by LHB pursuant to this Agreement are the instruments of services to the Project and
LHB shall retain all common law, statutory and other reserved rights, including copyright. LHB
grants to Client a nonexclusive limited license solely for the purposes of evaluating and executing
the Project. The Client shall not assign, delegate, sublicense, or otherwise transfer any license
granted herein to another party.
To the extent the documents are transferred or are modified, supplemented or otherwise altered
by the Client, subsequent design professional, or any other party, the Client agrees to indemnify,
defend and hold LHB harmless for any claims, demands, damages or causes of action arising out
of such transfer or modification, supplementation or alteration.
OTHER CONDITIONS
The laws of the State of Minnesota shall govern this Agreement. Any provision of this agreement
later held to violate a law or regulation shall be deemed void. All remaining provisions shall
continue in force.
The Client recognizes that materials prepared by others may be subject to copyright protection and
warrants to LHB that any documents provided by the Client do not infringe upon the copyright
held by another.
Unless the parties mutually agree otherwise, the parties shall endeavor to settle disputes by
mediation. A demand for mediation shall be filed, in writing, within a reasonable period of time
after a claim, dispute or other matter in question has arisen.
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Elk River Main and Gates TIF Analysis – January 7, 2019
LHB and the Client, acting through the Client's legal representative, will, to the fullest reasonable
extent, cooperate and coordinate efforts in preparing necessary responses to any third party
challenges to the inspections. The Client agrees to pay LHB its regular hourly rates for time spent
as a result of a third party legal challenge
If the terms and conditions of this Agreement are acceptable, please sign and return a copy to LHB.
CLIENT NAME LHB, INC.
By:
(Signature)
By: (Signature)
Its:
(Title)
Its: Principal
(Title)
Name: (Printed Name)
Name: Michael A. Fischer, AIA (Printed Name)
C:\Users\MAFISCH\Documents\MIKE DOCUMENTS\LHB\TIF\TIF Agreements\2019 Agreements\Elk River Main and Gates
Redevelopment TIF Analysis 1-7-19.docx