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HomeMy WebLinkAbout11.04.91 Council Packet AGENDA COUNCIL MEETING REGULAR NOVEMBER 4, 1991 1. CALL TO ORDER 2. APPROVE AGENDA 3. APPROVE MINUTES a. October 15, 1991 - Special b. October 19, 1991 - Special c. October 21, 1991 - Regular 4. CITIZENS COMMENTS 5. PUBLIC HEARINGS a. Set Public Hearing - Establishing TIF District #3 - Lexington Standard b. Set Public Hearing- Review Various Liquor Licenses/Therapeutic Massage c. 7:30 P.M. - Preliminary Plat of Silver Springs 6. PETITIONS, REQUESTS AND COMMUNICATIONS a. Request to Barricade Locust Street from 5th to 6th Streets b. Appoint 1992 EDC Representative/Acknowledge Continuing Participation c. Comprehensive Plan Amendment/MUSA Boundaries 7. ORDINANCES AND RESOLUTIONS a. Urging Dakota County to Pursue a Co-Composting Facility b. Sale of $950,000 G.O. Improvement Bonds 8. UNFINISHED BUSINESS a. MSA Designation - 208th Street - Middle School Project 9. NEW BUSINESS a. CDBG Grant Agreement - Exchange Bank Building Project 10. MISCELLANEOUS a. Administrator's Evaluation 11. CONSENT AGENDA a. Approve Proposal by EID, Inc. - Weight Based System b. Resolution Approving EPA MITE Grant Application c. Sale of 1 Yard Cubic Dumpsters d. Auditor Selection - 1991 Financial Audit e. School/Conference Request - Public Works f. School/Conference Request - All Departments g. School/Conference Request - Public Works h. Extend Grading Permit - Akin Road Elementary School i. Partial Payment - Project 91-11 - Sidewalk Maintenance j. School/Conference Request - Fire/Rescue k. Budget Adjustments 1. Hiring Permanent Part Time Help - Liquor Store m. School/Conference Requests - Engineering n. Change Orders- Project 91-10 o. Agreement for Cable for Banners and Christmas Decorations p. Approve Payment of the Bills 12. ADJOURN AGENDA REQUEST FORM 61,D ITEM NO. NAME: Larry Thompson I r )0"' DEPARTMENT: Administration ate DATE: October 17, 1991 MEETING DATE: November 4, 19912-01&:: / q CATEGORY: Petitions, Requests and Communications SUBJECT: Appoint 1992 EDC Representative/Acknowledge Continuing Participation EXPLANATION: Per EDC Joint Powers Agreement REFERENCE MATERIAL/RESPONSIBILITY: Request - Larry Thompson REFERRED TO: (NAME) DEPARTMENT: Larry Thompson Administration Jerry Henricks EDC Wayne Henneke Finance 14RE-72r7e4r4r--°----'" 1 Farmingfon Economic Bevelopment Commission , 325 OAK STREET, FARMINGTON, MINNESOTA 55024 PHONE 612-463-7111 =.4Lirap GERALD A. HENRICKS, DIRECTOR October 10, 1991 Larry Thompson City of Farmington 325 Oak Street Farmington, MN 55024 Dear Mr. Thompson, Per the Economic Development Commission ' s Joint Powers Agreement Section #2, representatives to the Economic Development Commission for the City of Farmington should be appointed. The City should take the appropriate action to appoint their 1992 representative at the November City Council meeting. Under Section 8, Length of Agreement of the Joint Powers Agreement, each sponsor of the EDC shall, by December 31, 1991, provide written notice of continued agreement to sponsor the EDC or to provide written notice to, withdraw from sponsorship of the EDC at least one year in advance of such withdrawal . Therefore, the board should determine whether or not they plan to continue to participate in the EDC for the 1993 calendar year by December 31, 1991 . If there are any questions, please feel free to contact me. Sincerely, 4°4.424eX: #-,124-eilfct) Gerald A. Henricks EDC Director AGENDA REQUEST FORM ITEM NO. `A NAME: Larry Thompson DEPARTMENT: Administration DATE: October 28, 1991 MEETING DATE: November 4, 1991 CATEGORY: New Business SUBJECT: CDBG Grant Agreement - Exchange Bank Project EXPLANATION: Dakota County HRA is requiring an agreement setting forth various time lines relating to the Exchange Bank project. REFERENCE MATERIAL/RESPONSIBILITY: Memo/Agreement - Larry Thompson/Jerry Henricks REFERRED TO: (NAME) DEPARTMENT: Larry Thompson Administration Development Committee HRA Members 4/27�y�277-'" SIGNATURE MEMO TO: MAYOR AND COUNCIL SUBJECT: EXCHANGE BANK/LARSON BUILDING - CDBG GRANT AGREEMENT DATE: OCTOBER 30, 1991 Attached please find a memo to Jerry Henricks relating to a CDBG agreement between the City, Farmington HRA and Dakota County HRA. My concerns were presented to the Farmington HRA, which directed the Executive Director and HRA Attorney to negotiate an agreement with City staff to present to the City Council. Attached is a copy of the proposed agreement, which sets forth various "trigger" dates which would guarantee reasonable assurances that the blighted conditions would be "abated" by June, 1993. My greatest concern at this time is not the conditions set forth in the Dakota. County HRA agreement, or the proposed agreements between the City and the Farmington HRA, but the status and future of the project itself. I believe that the renovation of the Exchange Bank Building is, probably, one of the top priorities on individual HRA members' and Councilmembers' lists. Now that definite deadlines have been set, along with certain proposed "trigger" dates, I believe both boards should be on the same page as to what course of action is anticipated over the next several months. In short, I believe everyone agrees on the "ends" but the means of achieving these ends should be understood by everyone. For example, the ultimate abatement of the blighted conditions, as proposed in the City/HRA agreement if no developer agreement is signed, is to demolish the property and than repay the $171,000 to the Dakota County HRA. There has been no direction on this matter. Also, there appears to be difficulty in attracting a private developer willing to invest $600,000 to $800,000 needed to rehab the property without a long term commercial tenant. Given the economic realities, is it reasonableto assume that a commercial tenant will be found, or should other avenues be explored in conjunction, such as mixed use (commercial/housing) or public purpose (library)? It has been the general policy of the City to allow the HRA to pursue its mission in an independent manner, but I feel that due to the politically sensitive nature of this project and its importance, combined with the City's $181,000 financial stake, the two groups should meet in a work session to discuss this matter and establish a mutual understanding on a course of action. Again, without Council direction, it is difficult to recommend an agreement protecting the City's interest. The attached agreement will provide reasonable assurance that the City will not have to repay the $181,000, but at the expense of providing the demolition of the building as "surety". One thing that is relatively certain is that if the City does not sign the CDBG agreement with the Dakota County HRA, the Larson building will not be acquired, and without the Larson building, there is little chance the Exchange Bank Building will be renovated. The Larson Building has a closing date of November 8, 1991 which requires Council approval of the CDBG agreement before that date. If the City wishes to provide safeguards against repayment of the $181,000, it must be understood that the demolition of the property is an option which may have to be exercised. The only other surety I can think of would be the HRA guaranteeing the repayment, but based on their cash projections, I do not believe this is an option. I would recommend the Council meet with the HRA in a work session some time during the week of November 11, 1991 to discuss this matter. It is also recommended the agreements between the City, Farmington HRA and Dakota County HRA, and between the City and the Farmington HRA be approved at the November 4th Council meeting. Larry Thompson City Administrator cc: HRA Members Development Committee file LT/mh MEMO TO: JERRY HENRICKS SUBJECT: CDBG PREPAYMENT AGREEMENT DATE: OCTOBER 25, 1991 I have reviewed the proposed CDBG Repayment Agreement between Dakota County HRA, City and the Farmington HRA and have a major concern with the situation it places the City in. If the City agrees to the terms, it would have no control over the developments or demolition of the property, yet would agree to, in essence co-sign a note. If the property is not developed or demolished within the allotted time period, the City would become equally responsible for the repayment of approximately $171,000. I don't have any solutions at this time, but would like to discuss the issue at the October 29, 1991 Development Committee meeting. /a17 7/2.7664#1 Larry Thompson • City Administrator LT/sm cc: Development Committee file DAKOTA COUNTY DAKOTA COUN'T'Y • HOUSING & a ; REDEVELOPMENT HRA . AUTHORITY MI:111 2406- 145th STREET WEST ROSEMOUNT. MINNESOTA 55068 612-423-4800 Serving People and Communities MEMORANDUM TO: 7R2 ( genziciLs FROM: V S(\n. L n-F DATE: 1011 (q I RE: / gee L / ap6 pp2 ("Le ,sefte,,x1 apiy,,,,01741 alite"04(d) chu / v /i)-3/4)/ . ieti46 -6k6,t 7 i• J rt,r,t/te at &Pi AW4y ag-' `g, ;,144)/ ar,eida . Agreement This Agreement, made this day of , 1991 by and between the Dakota County Housing and Redevelopment Authority, hereinafter referred to as the "HRA" and the City of Farmington, hereinafter referred to as the "City", and the Farmington Housing and Redevelopment Authority, hereinafter referred to as the "City HRA" . Witnesseth that: WHEREAS, the HRA is the administrator for Dakota County's Community Development Block Grant Program (CDBG) , funding for which is provided through the U.S. Department of Housing and Urban Development (HUD) ; and WHEREAS, the City has applied for an allocation of CDBG funds for the purpose of acquiring certain properties, legally described in Exhibit A hereto attached, for the purpose of eliminating the physical deterioration of these properties, which deterioration is deemed to constitute a blighted condition within the City of Farmington; and WHEREAS, the City has designated the City HRA as the body responsible for carrying out its CDBG project; and WHEREAS, the CDBG program is governed by certain rules and regulations, found at 24 CFR Part 570, the provisions of which regulations it is the responsibility of the HRA to enforce. NOW THEREFORE, the HRA, the City, and the City HRA, under the conditions hereinafter set forth, do agree as follows: I. The City and the City HRA have acquired, using CDBG funds, the property identified as "Parcel 1" on Exhibit A attached 'and commonly known as the Exchange Bank, at a total cost in CDBG funds of $91,519.24. II. The City and the City HRA intend to acquire, using CDBG funds, the property identified as "Parcel 2" on Exhibit A attached, and commonly known as the Larsen Building. The total CDBG expenditure for this acquisition shall be the total of: A. The Fair Market Value of the property as determined by an appraisal of the property done by RW Kirchner & Associates and dated September 11, 1991, and reviewed on October 12, 1991, which value is $26,000. B. The cost to the sellers of the Larsen Building to obtain a comparable replacement dwelling, less the purchase price of the Larsen Building. -2- C. The cost of moving and/or storage of the possessions of the sellers of the Larsen Building to a replacement dwelling or storage facility. D. Costs incidental to the transfer of title of the Larsen Building and of the replacement dwelling. III. CDBG funds are required by regulation to be expended on projects which achieve certain federal objectives. The acquisition of the two parcels in the City of Farmington has as the federal objective the elimination of slums and blight. This objective can be met by rehabilitating the blighted properties to eliminate the conditions which caused them to be considered blighted or by demolishing the structures. Failure to achieve the objective within a reasonable period of time after the expenditure of CDBG funds will result in HUD requiring that the CDBG funds be repaid to the federal government through a finding of noncompliance with federal regulations. To avoid the possibility of having such a finding, the City and the City HRA shall agree that it will have met the federal objective of elimination of slums and blight within three years of the initial acquisition made under this project, which date shall be established as June 1, 1993. By this date the City and the City HRA shall have either: A. Executed a contract to demolish all structures on parcels 1 & 2; or B. Executed a binding redevelopment agreement with a third party covering the properties that will guarantee that all substandard or blighted conditions affecting the properties will be removed within a clearly defined period of time. IV. Failing the attainment of the conditions set forth above by June 1, 1993, or obtaining written approval from HUD extending time period to attain the conditions. The City and the City HRA jointly and severally agree to repay to the HRA promptly the total of the amounts set forth in articles 1 & 2 above plus any interest or penalty if assessed by HUD. The HRA shall return the repaid amount to the federal government in accordance with CDBG regulations. -3- In Witness Whereof, the HRA, the City and the City HRA have executed this Agreement on or as of the date first written above. For the City of Farmington By: Eugene "Babe" Kuchera Its: Mayor Date: For the Farmington Housing & Redevelopment Authority By: •Carol K. Sprute Its: Chairperson Date: For Dakota County Housing & Redevelopment Authority By: •Mark S. Ulfers Its: Executive Director Date: EXHIBIT A PARCEL 1 Part of Lots 4 & 5, Block 22 in the Town of Farmington commencing at the SE corner of Lot 5, West 100 feet, North 70 feet, East 20 feet, South 1 foot, East 80 feet to the East line of Lot 5, then South 69 feet to the point of beginning. Except the West 30 feet of the above described property. PARCEL 2 The West 30 feet of part of Lots 4 & 5, Block 22 in the Town of Farmington commencing at the SE corner of Lot 5, West 100 feet, North 70 feet, East 20 feet, South 1 foot, East 80 feet to the East line of Lot 5, then. South 69 feet to the point of beginning. DELEGATION OF DUTIES AGREEMENT THIS AGREEMENT, made and entered into this day of , 1991, by and between the City of Farmington, hereinafter referred to as "City", and the Farmington Housing and Redevelopment Authority, hereinafter referred to as the "HRA" . WITNESSETH THAT: WHEREAS, in 1990 the City was the recipient of CDBG funds for the purpose of purchasing the former Exchange Bank Building, with said funds having been expended for that purpose and said property being placed in the name of HRA; and WHEREAS, the City is the recipient of CDBG funds for the purpose of purchasing the property adjacent to the Exchange Bank Building with said closing to be held on or about November 8th, 1991, with the property to be placed in the name of the HRA; and WHEREAS, the City, the HRA, and the Dakota County HRA are in the process of entering an Agreement whereby said aforestated properties purchased with CDBG Funds are to be rehabilitated or demolished to fulfill the intents and purposes of the CDBG Grants by the 1st day of June, 1993 , or, to repay said CDBG Funds to the Dakota County HRA in the event said conditions are not met or an extension in respect thereto received from HUD; and WHEREAS, the City is the recipient of said CDBG Funds and legally the primary party responsible for repayment in respect thereto in the event the terms and conditions of rehabilitation or removal are not complied with; and 1 WHEREAS, it is the intention of the City and the HRA to establish the duties and responsibilities of each regarding actions to be taken in respect to the above described properties. NOW THEREFORE IT IS mutually agreed as follows: 1. Both of the parties hereto acknowledge that the City is and has been the recipient of the CDBG Funds, that the HRA holds and will hold the above described property in the name of HRA for the benefit of the City, and that the City is ultimately liable and responsible for satisfaction of the conditions of the Grant or repayment in respect thereto in the event the purposes of the Grant are not satisfied. 2. That the HRA, as primary agency for redevelopment of the Farmington downtown area and actions associated therewith shall use its best efforts to advertise and enter into a development Agreement acceptable to the City for rehabilitation of the above described properties and to report, on a continuing basis, to the City its efforts in respect thereto. 3 . That if the HRA does not enter into a Development Agreement acceptable to the City, by July 1, 1992, for the rehabilitation and/or removal of blighted conditions in respect to the above described properties, the HRA shall report said event to the City and the HRA shall further initiate proceedings to have the property removed from the register of historical buildings and to prepare for demolition of the properties with said demolition to occur on or before the 1st day of June, 1993 , or to have obtained, in a timely 2 manner, an extension of said demolition deadline from the Housing and Urban Development Agency of the Federal Government. 4. That in conjunction with this Agreement both the City and the HRA members are to meet and to establish a list of priorities in respect to redevelopment of the properties and guidelines for the renovation or demolition of said properties and that the mutually acceptable priorities and guidelines established by said bodies shall be incorporated into this Agreement by reference and shall be binding and in full force and effect upon each of the parties hereto in conjunction herewith. IN WITNESS WHEREOF, the City and the HRA have executed this Agreement on or as of the date first written above. City of Farmington, Minnesota Housing and Redevelopment Authority of the City of Farmington, Minnesota BY: BY: Eugene "Babe" Kuchera Carol K. Sprute Its - Mayor Its - Chairperson BY: BY: Larry Thompson Gerald A. Henricks Its - City Administrator Its - Executive Director 3 AGENDA REQUEST FORM ITEM NO. 1 NAME: Larry Thompson DEPARTMENT: Administration — ei DATE: October 28, 1991 „11:,/6L__ MEETING DATE: November 4, 1991 CATEGORY: New Business SUBJECT: CDBG Grant Agreement - Exchange Bank Project EXPLANATION: Dakota County HRA is requiring an agreement setting forth various time lines relating to the Exchange Bank project. REFERENCE MATERIAL/RESPONSIBILITY: Memo/Agreement - Larry Thompson/Jerry Henricks REFERRED TO: (NAME) DEPARTMENT: Larry Thompson Administration Development Committee HRA Members /10.Afwaa-yr.,.1", SIGNATURE +. MEMO TO: MAYOR AND COUNCIL SUBJECT: CDBG DELEGATION OF DUTIES DATE: NOVEMBER 1, 1991 Attached please find a memo from the HRA Executive Director relating to the CDBG Delegation of Duties Agreement. As you will note, the action was taken subsequent to my October 30,1 991 memo. By deleting Paragraph #3, the agreement now basically states: 1) The City is responsible for repayment of the CDBG funds ($181,0001) in the event the terms of the grant are not satisfied. 2) The HRA will use its best efforts to secure a developer. 3) The HRA and City will meet to establish guidelines. As noted in the Director's memo, the HRA felt inclusion of demolition of the last structure of any architectural value in the downtown are was not a satisfactory solution. I would concur with that position if the Council and HRA can identify a plan of action to repay the $181,000 in the event the grant conditions are not satisfied. It should be noted that the Council is literally at the 12th hour onthe project and, if the project has a chance of succeeding, the Council must approve the CDBG agreement with the Dakota County HRA. If it is not approved, the HRA can not close on the Larson property because of insufficient funds. The closing is set for November 8, 1991 and apparently that date cannot be changed. It would be my recommendation that the Council not approve the Delegation of Duties agreement as proposed by the HRA because of the existing language under Paragraph #1. Without the agreement, the HRA and City are jointly responsible for the repayment of this grant. With the agreement, the City assumes sole responsibility for repayment. This language was acceptable with the inclusion of Paragraph #3 since there were assurances that the terms of the grant would be satisfied. I would propose the following options be considered. A. Approve the CDBG agreement between the Dakota County HRA, City and Farmington HRA without the Delegation of Duties agreement proposed by the HRA. This would require the Council to trust the HRA act in good faith to either satisfy the terms of the grant or repay the $181,000 itself. B. Approve the CDBG Grant Agreement and the Delegation of Duties Agreement originally recommended by the HRA and City staff. This would require recon- sideration of the agreement at the HRA's November 6, 1991 meeting. C. Approve the CDBG agreement and modify Paragraph #1 of the Delegation of Duties Agreement to state the Farmington HRA is ultimately liable and responsible for the satisfaction of the conditions of the grant or repayment of the funds and to strike "and legally the primary party responsible for repayment in respect thereto in the event the terms and conditions of rehabilitation or removal are not complied with" on page 1. D. Approve the CDBG agreement and modify Paragraph #3 of the Delegation of Duties agreement by indicating the property will revert to the City if a developers agreement is not signed by July 1, 1992. Again, it is my feeling that the renovation of the Exchange Bank Building is a top priority, but it must be understood that by signing the two agreements, the City will be responsible for repayment of the $181,000 in the event the grant conditions are not met and the HRA will control title to the property. .40/ w1211"47144r------------1 L rry Thompson City Administrator cc: HRA Members Jerry Henricks Development Committee Dave Harmeyer Ernie Darflinger file MEMO TO: LARRY THOMPSON SUBJECT: DELEGATION OF DUTIES AGREEMENT DATE: OCTOBER 31, 1991 At the OCtober 30, 1991 HRA Special meeting, the board approved the above mentioned agreement with Section 3 being omitted. It was the boards position the dates and prioritization of course of action should be decided when the City council and the HRA has their joint meeting. Secondly, the board felt the inclusion of demolition of the last structure of any architectural value in downtown Farmington was not a satisfactory solution in eliminating the blighted conditions. It is the request of the board that the joint meeting between the HRA and the City Council should occur on Wednesday, November 13,1991 at the City Hall at 7:00 P.M. If this time or date creates a conflict for the Council, please inform me. Attached are the two signed and initialed Delegation of Duties Agreement with the modification for Council approval and signature. 'Id:42442AP: A./‘0g41.4.4.1:004L) Gerald A. Henricks HRA Executive Director GAH/sm DELEGATION OF DUTIES AGREEMENT THIS AGREEMENT, made and entered into this day of , 1991, by and between the City of Farmington, hereinafter referred to as "City", and the Farmington Housing and Redevelopment Authority, hereinafter referred to as the "HRA" . WITNESSETH THAT: WHEREAS, in 1990 the City was the recipient of CDBG funds for the purpose of purchasing the former Exchange Bank Building, with said funds having been expended for that purpose and said property being placed in the name of HRA; and WHEREAS, the City is the recipient of CDBG funds for the purpose of purchasing the property adjacent to the Exchange Bank Building with said closing to be held on or about November 8th, 1991, with the property to be placed in the name of the HRA; and WHEREAS, the City, the HRA, and the Dakota County HRA are in the process of entering an Agreement whereby said aforestated properties purchased with CDBG Funds are to be rehabilitated or demolished to fulfill the intents and purposes of the CDBG Grants by the 1st day of June, 1993, or, to repay said CDBG Funds to the Dakota County HRA in the event said conditions are not met or an extension in respect thereto received from HUD; and WHEREAS, the City is the recipient of said CDBG Funds and legally the primary party responsible for repayment in respect thereto in the event the terms and conditions of rehabilitation or removal are not '4 complied with; and WHEREAS, it is the intention of the City and the HRA to establish the duties and responsibilities of each regarding actions to be taken in respect to the above described properties. NOW THEREFORE IT IS mutually agreed as follows: 1. Both of the parties hereto acknowledge that the City is and has been the recipient of the CDBG Funds, that the HRA holds and will hold the above described property in the name of HRA for the benefit of the City, and that the City is ultimately liable and responsible for satisfaction of the conditions of the Grant or repayment in respect thereto in the event the purposes of the Grant are not satisfied. 2. That the HRA, as primary agency for redevelopment of the Farmington downtown area and actions associated therewith shall use its best efforts to advertise and enter into a development Agreement acceptable to the City for rehabilitation of the above described properties and to report, on a continuing basis, to the City its efforts in respect thereto. 3 . - if the HRA does not enter into a Development Agre acceptable • the City, by July 1, 1992, for th= rehabilitation an. .r removal of blighted onditions in respect to the above des- ibed pro. - ies, the HRA shall report said event to the Ci - 'd the HRA shall further initiate proceedings - ave the pro -rty removed from the register of his - ical buildings and to pr- . re for demolition of the pro- -rties with said demolition to occur= or before • day of June, 1993 , or to have obtained, in a tin - 2 - - an extension of said demolition dead Housing and Urban i • • ent .. - of the Federal 4. That in conjunction with this Agreement both the City and the HRA members are to meet and to establish a list of priorities in respect to redevelopment of the properties and guidelines for the renovation or demolition of said properties and that the mutually acceptable priorities and guidelines established by said bodies shall be incorporated into this Agreement by reference and shall be binding and in full force and effect upon each of the parties hereto in conjunction herewith. IN WITNESS WHEREOF, the City and the HRA have executed this Agreement on or as of the date first written above. City of Farmington, Minnesota Housing and Redevelopment Authority of the City of Farmington, Minneso BY: BY: (& Eugene "Babe" Kuchera Carol K. Sprute Its - Mayor Its - Chairpers BY: BY. 4. Larry Thompson Gerald A. Henricks - Its -- City Administrator Its - Executive Director 3 MEMO TO: MAYOR AND COUNCIL SUBJECT: EXCHANGE BANK/LARSON BUILDING - CDBG GRANT AGREEMENT DATE: OCTOBER 30, 1991 Attached please find a memo to Jerry Henricks relating to a CDBG agreement between the City, Farmington HRA and Dakota County HRA. My concerns were presented to the Farmington HRA, which directed the Executive Director and HRA Attorney to negotiate an agreement with City staff to present to the City Council. Attached is a copy of the proposed agreement, which sets forth various "trigger" dates which would guarantee reasonable assurances that the blighted conditions would be "abated" by June, 1993. My greatest concern at this time is not the conditions set forth in the Dakota County HRA agreement, or the proposed agreements between the City and the Farmington HRA, but the status and future of the project itself. I believe that the renovation of the Exchange Bank Building is, probably, one of the top priorities on individual HRA members' and Councilmembers' lists. Now that definite deadlines have been set, along with certain proposed "trigger" dates, I believe both boards should be on the same page as to what course of action is anticipated over the next several months. In short, I believe everyone agrees on the "ends" but the means of achieving these ends should be understood by everyone. For example, the ultimate abatement of the blighted conditions, as proposed in the City/HRA agreement if no developer agreement is signed, is to demolish the property and than repay the $171,000 to the Dakota County HRA. There has been no direction on this matter. Also, there appears to be difficulty in attracting a private developer willing to invest $600,000 to $800,000 needed to rehab the property without a long term commercial tenant. Given the economic realities, is it reasonableto assume that a commercial tenant will be found, or should other avenues be explored in conjunction, such as mixed use (commercial/housing) or public purpose (library)? It has been the general policy of the City to allow the HRA to pursue its mission in an independent manner, but I feel that due to the politically sensitive nature of this project and its importance, combined with the City's $181,000 financial stake, the two groups should meet in a work session to discuss this matter and establish a mutual understanding on a course of action. Again, without Council direction, it is difficult to recommend an agreement protecting the City's interest. The attached agreement will provide reasonable assurance that the City will not have to repay the $181,000, but at the expense of providing the demolition of the building as "surety". One thing that is relatively certain is that if the City does not sign the CDBG agreement with the Dakota County HRA, the Larson building will not be acquired, and without the Larson building, there is little chance the Exchange Bank Building will be renovated. The Larson Building has a closing date of November 8, 1991 which requires Council approval of the CDBG agreement before that date. If the City wishes to provide safeguards against repayment of the $181,000, it must be understood that the demolition of the property is an option which may have to be exercised. The only other surety I can think of would be the HRA guaranteeing the repayment, but based on their cash projections, I do not believe this is an option. I would recommend the Council meet with the HRA in a work session some time during the week of November 11, 1991 to discuss this matter. It is also recommended the agreements between the City, Farmington HRA and Dakota County HRA, and between the City and the Farmington HRA be approved at the November 4th Council meeting. :77 Larry Thompson City Administrator cc: HRA Members Development Committee file LT/mh MEMO TO: JERRY HENRICKS SUBJECT: CDBG PREPAYMENT AGREEMENT DATE: OCTOBER 25, 1991 I have reviewed the proposed CDBG Repayment Agreement between Dakota County HRA, City and the Farmington HRA and have a major concern with the situation it places the City in. If the City agrees to the terms, it would have no control over the developments or demolition of the property, yet would agree to, in essence co-sign a note. If the property is not developed or demolished within the allotted time period, the City would become equally responsible for the repayment of approximately $171,000. I don't have any solutions at this time, but would like to discuss the issue at the October 29, 1991 Development Committee meeting. /a7 72761-.1'r Larry Thompson City Administrator LT/sm cc: Development Committee file DAKOTA COUNTY DAKOTA COUNTY HOUSING & REDEVELOPMENT 71i H R A . AUTHORITY .�� 2496- 145th STREET WEST ROSEMOUNT, MINNESOTA 55068 .'-- 1 attiuw 612-423-4800 Serving People and Communities MEMORANDUM TO: 7-cp. PY i nziw FROM: V S DATE: Oil (q RE: tAc4geeirivict ap6 17C ) -eicA • of d ?6pity2761-xiatot 7�U , /tm,u4/6-14 / 0 /)-)/4)/ . -a26,t 6/Ake 6y4-/e 4 t"") 4:1(k' irttrtt, • fr'G Ca/t 5114/11 4141) 061.7/ e /1/1?.i4elh_ IC/44)/ g/144 r"A/1117 r afella - Ca-u q Agreement This Agreement, made this day of , 1991 by and between the Dakota County Housing and Redevelopment Authority, hereinafter referred to as the "HRA" and the City of Farmington, hereinafter referred to as the "City", and the Farmington Housing and Redevelopment Authority, hereinafter referred to as the "City HRA". Witnesseth that: WHEREAS, the HRA is the administrator for Dakota County's Community Development Block Grant Program (CDBG) , funding for which is provided through the U.S. Department of Housing and Urban Development (HUD) ; and WHEREAS, the City has applied for an allocation of CDBG funds for the purpose of acquiring certain properties, legally described in Exhibit A hereto attached, for the purpose of eliminating the physical deterioration of these properties, which deterioration is deemed to constitute a blighted condition within the City of Farmington; and WHEREAS, the City has designated the City HRA as the body responsible for carrying out its CDBG project; and WHEREAS, the CDBG program is governed by certain rules and regulations, found at 24 CFR Part 570, the provisions of which regulations it is the responsibility of the HRA to enforce. NOW THEREFORE, the HRA, the City, and the City HRA, under the conditions hereinafter set forth, do agree as follows: I. The City and the City HRA have acquired, using CDBG funds, the property identified as "Parcel 1" on Exhibit A attached 'and commonly known as the Exchange Bank, at a total cost in CDBG funds of $91,519.24. II. The City and the City HRA intend to acquire, using CDBG funds, the property identified as "Parcel 2" on Exhibit A attached, and commonly known as the Larsen Building. The total CDBG expenditure for this acquisition shall be the total of: A. The Fair Market Value of the property as determined by an appraisal of the property done by RW Kirchner & Associates and dated September 11, 1991, and reviewed on October 12, 1991, which value is $26,000. B. The cost to the sellers of the Larsen Building to obtain a comparable replacement dwelling, less the purchase price of the Larsen Building. . r -2- C. The cost of moving and/or storage of the possessions of the sellers of the Larsen Building to a replacement dwelling or storage facility. D. Costs incidental to the transfer of title of the Larsen Building and of the replacement dwelling. III. CDBG funds are required by regulation to be expended on projects which achieve certain federal objectives. The acquisition of the two parcels in the City of Farmington has as the federal objective the elimination of slums and blight. This objective can be met by rehabilitating the blighted properties to eliminate the conditions which caused them to be considered blighted or by demolishing the structures. Failure to achieve the objective within a reasonable period of time after the expenditure of CDBG funds will result in HUD requiring that the CDBG funds be repaid to the federal government through a finding of noncompliance with federal regulations. To avoid the possibility of having such a finding, the City and the City HRA shall agree that it will have met the federal objective of elimination of slums and blight within three years of the initial acquisition made under this project, which date shall be established as June 1, 1993. By this date the City and the City HRA shall have either: A. Executed a contract to demolish all structures on parcels 1 & 2; or B. Executed a binding redevelopment agreement with a third party covering the properties that will guarantee that all substandard or blighted conditions affecting the properties will be removed within a clearly defined period of time. IV. Failing the attainment of the conditions set forth above by June 1, 1993, or obtaining written approval from HUD extending time period to attain the conditions. The City and the City HRA jointly and severally agree to repay to the HRA promptly the total of the amounts set forth in articles 1 & 2 above plus any interest or penalty if assessed by HUD. The HRA shall return the repaid amount to the federal government in accordance with CDBG regulations. -3- In Witness Whereof, the HRA, the City and the City HRA have executed this Agreement on or as of the date first written above. For the City of Farmington By: Eugene "Babe" Kuchera Its: Mayor Date: For the Farmington Housing & Redevelopment Authority By: Carol K. Sprute Its: Chairperson Date: For Dakota County Housing & Redevelopment Authority By: Mark S. Ulfers Its: Executive Director Date: ' EXHIBIT A PARCEL 1 Part of Lots 4 & 5, Block 22 in the Town of Farmington commencing at the SE corner of Lot 5, West 100 feet, North 70 feet, East 20 feet, South 1 foot, East 80 feet to the East line of Lot 5, then South 69 feet to the point of beginning. Except the West 30 feet of the above described property. PARCEL 2 The West 30 feet of part of Lots 4 & 5, Block 22 in the Town of Farmington commencing at the SE corner of Lot 5, West 100 feet, North 70 feet, East 20 feet, South 1 foot, East 80 feet to the East line of Lot 5, then South 69 feet to the point of beginning. t � DELEGATION OF DUTIES AGREEMENT THIS AGREEMENT, made and entered into this day of , 1991, by and between the City of Farmington, hereinafter referred to as "City", and the Farmington Housing and Redevelopment Authority, hereinafter referred to as the "HRA". WITNESSETH THAT: WHEREAS, in 1990 the City was the recipient of CDBG funds for the purpose of purchasing the former Exchange Bank Building, with said funds having been expended for that purpose and said property being placed in the name of HRA; and WHEREAS, the City is the recipient of CDBG funds for the purpose of purchasing the property adjacent to the Exchange Bank Building with said closing to be held on or about November 8th, 1991, with the property to be placed in the name of the HRA; and WHEREAS, the City, the HRA, and the Dakota County HRA are in the process of entering an Agreement whereby said aforestated properties purchased with CDBG Funds are to be rehabilitated or demolished to fulfill the intents and purposes of the CDBG Grants by the 1st day of June, 1993, or, to repay said CDBG Funds to the Dakota County HRA in the event said conditions are not met or an extension in respect thereto received from HUD; and WHEREAS, the City is the recipient of said CDBG Funds and legally the primary party responsible for repayment in respect thereto in the event the terms and conditions of rehabilitation or removal are not complied with; and 1 • WHEREAS, it is the intention of the City and the HRA to establish the duties and responsibilities of each regarding actions to be taken in respect to the above described properties. NOW THEREFORE IT IS mutually agreed as follows: 1. Both of the parties hereto acknowledge that the City is and has been the recipient of the CDBG Funds, that the HRA holds and will hold the above described property in the name of HRA for the benefit of the City, and that the City is ultimately liable and responsible for satisfaction of the conditions of the Grant or repayment in respect thereto in the event the purposes of the Grant are not satisfied. 2. That the HRA, as primary agency for redevelopment of the Farmington downtown area and actions associated therewith shall use its best efforts to advertise and enter into a development Agreement acceptable to the City for rehabilitation of the above described properties and to report, on a continuing basis, to the City its efforts in respect thereto. 3 . That if the HRA does not enter into a Development Agreement acceptable to the City, by July 1, 1992, for the rehabilitation and/or removal of blighted conditions in respect to the above described properties, the HRA shall report said event to the City and the HRA shall further initiate proceedings to have the property removed from the register of historical buildings and to prepare for demolition of the properties with said demolition to occur on or before the 1st day of June, 1993 , or to have obtained, in a timely 2 manner, an extension of said demolition deadline from the Housing and Urban Development Agency of the Federal Government. 4. That in conjunction with this Agreement both the City and the HRA members are to meet and to establish a list of priorities in respect to redevelopment of the properties and guidelines for the renovation or demolition of said properties and that the mutually acceptable priorities and guidelines established by said bodies shall be incorporated into this Agreement by reference and shall be binding and in full force and effect upon each of the parties hereto in conjunction herewith. IN WITNESS WHEREOF, the City and the HRA have executed this Agreement on or as of the date first written above. City of Farmington, Minnesota Housing and Redevelopment Authority of the City of Farmington, Minnesota BY: BY: Eugene "Babe" Kuchera Carol K. Sprute Its - Mayor Its - Chairperson BY: BY: Larry Thompson Gerald A. Henricks Its - City Administrator Its - Executive Director 3 AGENDA REQUEST FORM ITEM NO. NAME: Paul Asher DEPARTMENT: Liquor Store DATE: October 29, 1991 MEETING DATE: November 4, 1991 CATEGORY: Consent Agenda SUBJECT Hiring Permanent Part Time Help EXPLANATION: Self Explanatory REFERENCE MATERIAL/RESPONSIBILITY: Memo/Application - Paul Asher REFERRED TO: (NAME) DEPARTMENT: Larry Thompson Administration Wayne Henneke Finance Paul Asher Liquor Store Rosemary Swedin Finance GNATDRE ! f MEMO TO: MAYOR AND COUNCIL SUBJECT: HIRING OF PERMANENT PART TIME LIQUOR STORE CLERK DATE: OCTOBER 30, 1991 I would like to hire Robert Messinger and/or Lee Myers as permanent part time liquor store clerks. Copies of the applications are attached. Paul J. Asher CA'°'' Liquor Store Manager PJA/mh ♦ r '/D 1752-A-)2 (PZ /G AGENDA REQUEST FORM ITEM NO. /3 a LU Iv NAME: Tom Kaldunski / DEPARTMENT: Public Works f J� '. DATE: November 4, 1991 1 � IAl MEETING DATE: November 4, 1991 CATEGORY: Add On SUBJECT: Mega Storm EXPLANATION: I will be requesting Contingency Funds for work done to clean up following the mega storm that dumped 28}" in the Twin City area. REFERENCE MATERIAL/RESPONSIBILITY: Memo/Tom REFERRED TO: (NAME) DEPARTMENT: Larry Thompson Administration Wayne Henneke Finance Tom Kaldunski Public Works Jerry Bauer Public Works 40 glef SIGNATURE r MEMO TO: MAYOR AND COUNCIL SUBJECT: HEAVY SNOWFALL DATE: NOVEMBER 4, 1991 The City of Farmington was affected by heavy snowfall and blizzard conditions starting on Thursday, October 31, 1991. A record breaking total of 28i inches fell in the Twin City area. The Public Works crews have been out working at opening up the City's streets. I commend them for their efforts. As part of this storm, the crews had to work many overtime hours. Approximately 158 hours of overtime have been worked to date. This will cost $3,301.64. The Public Works Department 1991 overtime budget will be overextended. I hereby request that the Council authorize the use of the City's Contingency Funds (current balance $25,505). To fund this impact of the mega storm, Wayne will prepare a budget adjustment to cover all unforseen expenses from this storm and present it at the next Council meeting. In addition, some overtime for the solid waste crews should be funded as well as $1,000 rental fee for a large commercial snow blower to clean up areas with heavy drifting. 11/4141i Thomas J. dunski Director of Public Works/City Engineer cc: file • Larry Thompson TJK Wayne Henneke Jerry Bauer TJK/js