030491 CC Sp AgP
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CITY OF SHOREWOOD
SPECIAL COUNCIL MEETING
MONDAY, MARCH 4, 1991 .
COUNCIL CHAMBERS
5755 COUNTRY CLUB ROAD
/ 7:30 P.M.
AGENDA
1. CONVENE SPECIAL COUNCIL
A. Pledge of Allegiance
B. Roll Call
Lewis_
Mayor Brancel_
Gagne_
Stover_
Daugherty _
C. Review Agenda
2.
. . I
MODIFICATIONS TO WATERFORD T.r.F. PLAN (Tabled from 25 February
Meeting)
(see 25 February Council information packet for
Financial Advisory Board's Recommendation)
3. ADJOURNMENT
.
3/4/91
CONTRACT
FOR
TAX INCREMENT FINANCE DEVELOPMENT
BY AND BETWEEN
THE CITY OF SHOREWOOD, MINNESOTA
AND
TRIVESCO
A MINNESOTA GENERAL PARTNERSHIP
.... .
..
TABLE OF CONTENTS
~
In traduction ................ -. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . .. 1
ARTICLE I
Section 1.1
ARTICLE II
Section 2.1
Section 2.2
ARTICLE III
Section 3.1
Section 3.2
Section 3.3
Section 3.4
Section 3.5
Section 3.6
Section 3.7
Section 3.8
ARTICLE IV
Section 4.1
ARTICLE V
Section 5.1
Section 5.2
ARTICLE VI
Section 6.1
ARTICLE VII
Section 7.1
Section 7.2
Section 7.3
Section 7.4
Section 7.5
Section 7.6
Section 7.7
Section 7.8
Section 7.9
Section 7.10
Section 7.11
Definitions
2
....................... ........ ......
Definitions
2
.... ............. ....... ....... ......
Representations and Warranties................... 4
Representations and Warranties of the City 4
Representations and Warranties of the Developer. 4
Construction of the Project; Financing and Liens 5
Construction Done by Developer .................. 5
Commencement and Completion of Construction ..... 5
Construction Done by City ....................... 6
General Restrictions ................... ...... ... 6
Notice of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. '6
Destruction of Project .......................... 6
Insurance ....................................... 7
Condemnation .................................... 7
Payment of Real Property Taxes................... 7
Real Property Taxes ............................. 7
Tax Increment Revenue Bonds........ ......... ..... 8
Issuance of Tax Increment Revenue Bonds ......... 8
Use of Tax Increments ........................... 8
Termination ..................................... 10
Termination ..................................... 10
General Provisions............................... 10
Restrictions on Use ......... .................... 10
Conflicts of Interest ........................... 10
Provisions Not Merged with Deed ................. 10
Titles of Articles and Sections ................. 10
Notices and Demands ............................. 11
Counte.rparts .................................... 12
Law Governing ................................... 12
Partial Invalidity .............................. 12
Assignment ........................................ 12
Rights Cumulative ............................... 12
Amendments, Changes, and Modifications .......... 12
Signatures .............................................................. 13
Acknowledgments ......................................................... 14
CONTRACT FOR TAX INCREMENT FINANCE DEVELOPMENT
THIS CONTRACT, made on and entered into as of the _____ day of
, 1990, by and between the City of Shorewood, Minnesota, a
municipal corporation organized and existing under the laws of the State of
Minnesota (the City), and Trivesco, a Minnesota general partnership
consisting of Steiner and Koppelman, Inc., Robert H. Mason, Inc., and
Highland Properties, Inc. (the Developer).
WHEREAS, the City has all the powers of a municipal corporation under
Minnesota law; and
WHEREAS, as of the date of this Contract there has been prepared and
approved by the City Council a Development District No. 1 and the Development
Program relating thereto (which program as it may be amended, is referred to
as the "Economic Development Plan"); and
WHEREAS, there is included in the Economic Development Plan a Tax
Increment Financing Plan (which plan as may be amended is referred to as "the
Tax Increment Financing Plan"), providing for the use of tax increment
financing in connection with the Economic Development Project; and
WHEREAS, the prompt development of the certain area in the Economic
Development Project, which is not now in productive use or in its highest and
best use, the encouragement of business expansion and improvements, the
maintenance of balanced commercial activities, and the securing of additional
employment opportunities are some of the stated objectives of the Economic
Development Plan and the Tax Increment Financing Plan; and
WHEREAS, in order to achieve the objectives of the Economic
Development Plan and particularly to undertake certain roadway, interchange
and utility improvements in order to make the land in the Project area
suitable for development by private enterprise in conformance with the
Economic Development Plan and in accordance with the development stage plan
approved by the Council on November 20, 1989, the City has determined to
provide aid for the Economic Development Plan through tax increment financing
of the Public Improvements defined herein.
WHEREAS, the City believes that the COll...J!-tplction of a development
consisting of 54 twin homes and approximatelt~,000)square feet of
retail/office space is in the best interests of ~City, and the health,
safety, morals and welfare of its residents, and in accord with the public
purposes and provisions of the applicable state and local laws and
requirements under which the Economic Development Plan has been undertaken
and is receiving assistance.
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NOW, THEREFORE, in consideration of the mutual covenants herein
contained, it is hereby agreed by and between the parties hereto as follows:
ARTICLE I
Definitions
Section 1.1 Definitions. In this Contract unless a different
meaning clearly appears from the context:
"Articles and Sections" mentioned by number only are the respective
Articles and Sections of this Agreement so numbered.
"Assessor's Market Value" means the market value of the Project as
determined by the Assessor for the City of Shorewood.
"Bonds" means the tax increment revenue bonds to be issued by the
City, the proceeds of which will be used to finance the public improvements
of the Project described in Section 2.1(4}. The term "Bonds" shall also
include any bonds or obligations issued to refund any bonds.
"Certification Date" means April 29, 1990, which is the date on which
the City requested certification of original tax capacity value of Tax
Increment Financing District No.1.
"City" means the City of Shore~iood, Hinnesota.
"Contract" means this Contract for Tax Increment Finance Development
by and bet~veen the City and the Developer, as the same may be from time to
time modified, amended or supplemented.
"Council" means the City Council of Shore~.lood, Minnesota.
"Countv" means the County of Hennepin, Minnesota.
"Develocer" means Trivesco.
"Development Property" means the real property described in Exhibit 3
of this Contract.
"Economic Development Plan" means the City of Shorewood Development
Program for Development District No.1, originally adopted by the Council on
April 23, 1990, and as amended and as it shall be amended.
"Economic Development proiect" means the City of Shorewood
Development District No.1, as described in the legal description attached as
Exhibit 1 hereto.
"Parcel A" means Parcel A as described in the legal description
attached as Exhibit 2 hereto.
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"Parcel a" means Parcel a as described in the legal description
attached as Exhibit 2 hereto.
"Party" means either the Developer or the City.
"Parties" means the Developer and the City.
"proiect" means the Development Property and the completed
improvements and buildings.
"proiect Area" means the real property located within the boundaries
of the Economic Development Project.
"Public Improvements" includes (1) improvements to the State Highway
7 frontage road, (2) construction of the intersection of State Highway 7 and
Old Market Road, (3) construction of Old Harket Road, (4) installation of
watermains, and (5) the closing of slip ramps onto State Highway 7.
"State" means the State of Minnesota.
"Tax Increment" means the tax increment generated by the Project,
calculated as provided in Hinn. Stat. Sections 469.174 - .179.
"Tax Increment District" means the City of Shorewood Tax Increment
Financing District No.1, adopted by the Council on April 23, 1990, and
requested for certification on April 29, 1990.
"Tax Increment Financinq Act" means the statutes located at Hinn.
Stat. Sections 469.174 - .179.
"Tax Increment Financinq Plan" means the Tax Increment Financing Plan
for the Tax Increment District.
"Tax Official" means any City or County Assessor; County Auditor,
City, or County or State Board of Equalization; the Commissioner of Revenue
of the State; or any State or Federal District Court, the Tax Court of the
State or the State Supreme Court.
"Termination Date" means December 31, 1999. (6 ltP
"Unavoidable Delavs" means delays, outside the control of the Party
claiming its occurrence, which are the direct result of strikes, other labor
troubles, unusually severe or prolonged bad weather, acts of God, fire or
other casualty to the Project, litigation commenced by third
parties which, by injunction or other similar judicial action or by the
exercise of reasonable discretion, directly results in delays, or acts of any
federal, state or local government unit (other than the City) which directly
result in delays, or the failure to secure City approval of the construction
plans for the Project.
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ARTICLE II
Representations and Warranties
Section 2.1. Representations and Warranties of the City. The City
makes the following representations and warranties:
(1) The City has all the powers of a statutory city under the laws
of the State. The City has the power to enter into this Contract and carry
out its obligations hereunder.
(2) The Tax Increment District is a "tax increment financing
district" within the meaning of the Tax Increment Financing Act, and was
created, adopted and approved in accordance with the provisions of the Tax
Increment Financing Act.
(3) The Project contemplated by this Contract is in conformance with
the development objectives set forth in the Economic Development Plan and Tax
Increment Financing Plan, and in accordance with the development stage plan
approved by the Council.
( 4 ) The City shall issue the Bo~ and use the proceeds thereof to
finance the Public Improvements. .-~,--_.---._---------_.--'
(5) The City has authority, but does not anticipate purchasing
property within the Economic Development Project.
(6) The City shall satisfy such conditions of this Contract and of
the Bond Purchase Agreement of even date between Developer and the City prior
to June 1, 1991, so that the Tax Increment Financing Plan will not terminate
and the Bonds will be issued.
Section 2.2 Representations and Warranties of the Developer. The
Developer makes the following representations and warranties:
(1) The Developer is a general partnership under the laws of this
state, has power to enter into this Contract and to perform its obligations
hereunder.
(2) The Developer will cause the Project to be constructed, operated
and maintained in accordance with the terms of this Contract and the Amended
Development Agreement of August 12, 1985, between the City and the
Developer. The Developer shall also comply with all local, state and federal
laws and regulations (including, but not limited to, environmental, zoning,
energy conservation, building code and publiC health laws and regulations).
(3) The Developer has or will obtain, or cause to be obtained, all
required permits, licenses and approvals, and has met all requirements of all
applicable local, state, and federal laws and regulations which must be
obtained or met before the Project may be lawfully constructed.
( 4 ) Neither the execution and deli very of this Contract, the
consummation of the transactions contemplated hereby, nor the fulfillment
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of or compliance with the terms and conditions of this Contract is prevented,
limited by or conflicts with or results in a breach of, the terms, conditions
or provisions of any contractual restriction, evidence of indebtedness,
agreement or instrument of whatever nature to which the Developer is now a
party or by which it is bound, or constitutes a default under any of the
foregoing. This representation and warranty does not apply to that certain
Purchase Agreement between Developer and Sherman-Boosalis Interests, Inc.,
dated October 26, 19'90, relating to the purchase and development of the
Development Property.
(5) Developer agrees that City, its agents, and employees, shall not
be personally liable or responsible in any manner to Developer, Developer's
contractors or subcontractors, material men, laborers, or to any other
person, firm, or corporation whomsoever, for any debt, claim, demand,
damages, action, or causes of action of any kind or character arising out of
or by reas of this Contract of the performance of the work and improvements
hereunder; Developer shall save City, its agep.y. and employees harml~s ~
any and all c aims, ges, e , ac ~ons, or causes of action arising
__therefrom and the costs, disbursements, and expenses of defending the s~
\ except for any work performed by City, and except for the City's contractual
~ations to the Deve:oper under this Contract.
(6) The Developer will cooperate fully with the City in resolution
of any traffic, parking, trash removal or public safety problems which may
arise in connection with the construction and operation of the Project.
(7) The Developer would not undertake the Project without the
construction of the Public Improvements by the City to be financed pursuant
to this Contract.
ARTICLE III
Construction of the Proiect: Financinq and Liens
Section 3.1 Construction Done bv Developer. The Developer agrees
that it will construct the Project, called Waterford Phase Three, including
the construction of at least 32,000 square feet of retail/office space on
Parcel A, and all necessary public improvements associated with the Project
on the Development Property excluding Public Improvements to be constructed
by the City, in conformance with the Planned Unit Development Agreement to be
executed by the parties, and in accordance with the Amended Development
Agreement dated August 12, 1985.
Section 3.2 Commencement and Completion of Construction. The
Developer shall commence construction of the Project and shall complete
construction of the Project in accordance with the schedule set forth in the
Planned Unit Development Agreement to be executed by the parties.
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The Developer agrees for itself and every successor in interest to
the Development Property, or any part thereof, that the Developer, and such
successors and assigns shall, in good faith, construct the Project in
accordance with this Contract and during such construction, designated
representatives of the City shall be allowed to enter upon the Development
Property to inspect any and all such construction.
Section 3.3 Construction done by City. The City agrees to construct
the "Public Improvements" defined in Section 1.1 herein promptly after
issuance of the Bonds.
Section 3.4 General Restrictions. The Developer agrees for itself,
and its successors and assigns, and every successor in interest to the
Property, that the Developer and its successors and assigns shall:
(a) Not discriminate on the basis of sex, color, creed, national
origin, in the sale, lease or rental, or in the use or
occupancy of the Property or the facilities, or any part
thereof;
(b) Not cause the Project to be removed from the public tax rolls
or to become exempt from assessment for general ad valorem
real estate taxes by reason of any conveyance, lease or other
action.
Section 3.5 Notice of Default. Whenever the City shall deliver any
notice or demand to the Developer with respect to any breach or default by
the Developer in its obligations or covenants under this Contract, the City
shall at the same time forward a copy of such notice or demand to each holder
of any permitted mortgage, lien or other similar encumbrance at the last
address of such holder shown in the records of the City.
Section 3.6 Destruction of Proiect. So long as any of the Bonds are
outstanding under this Contract and prior to the sale of completed
improvements comprising the Development Property, in the event of destruction
of any portion of the Project which reduces the Assessor's Market Value of
the Property below the assessor's market value ~etermined most recently to
such destruction, the following shall apply:
(a) The Developer shall as soon as reasonably possible, and in
any event on or before the second succeeding December 31
following such destruction, time being of the essence,
repair, rebuild or replace the damage to such extent as will
cause the Assessor's Market Value of the Project to equal or
exceed the Assessor's Market Value thereof as finally
determined most recently prior to such destruction; or
(b) If such repair, rebuilding or replacement is not completed by
such date, the Developer shall be liable to the City for
damages in an amount equal to the difference between the Tax
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Increment received by the City in each subsequent year and
the Tax Increment that would have been received by the City
had such repair, rebuilding or replacement been completed by
such date..
Section 3.7 Insurance. During the tenn of this Contract and prior
to the sale of completed improvements comprising the Development Property,
until the Bonds are paid in full, the Developer shall maintain (or cause to
be maintained) with reputable insurance company or companies licensed to do
business in Minnesota such insurance covering the Project including all
buildings on Parcel A in such amounts as are customarily carried on such
properties.
The Developer shall annually file with the City a schedule describing
all such policies in force, including the types of insurance, name of
insurers, policy numbers, effective dates, terms and duration and any other
information the Developer deems pertinent.
Section 3.8 Condemnation. In the event of condemnation of any or
all of the Project prior to the sale of completed improvements comprising the
Development Property, other than by the City, which reduces the Assessor's
l.!arket Value of the completed Project below the assessor's market value
determined most recently to such condemnation, the Developer shall take the
action specified in Section 3.6(a)i or if such actions cannot be performed,
~ the Developer shall pay to the City, an amount of the condemnation proceeds
thereof equal to the amount outstanding on the Bonds, and the City shall use
the amounts so paid for repayment of the Bonds.
ARTICLE IV
Payment of Real Propertv Taxes
Section 4.1 Real Property Taxes. The Developer shall timely pay all
real property taxes payable with respect to the Development Property and any
other statutory duty which shall accrue subsequent to the date of its
acquisition of title to the Development Property and prior to the sale of any
portion of the property.
The Developer agrees that prior to the Termination Date:
(a) It will not seek administrative review or judicial review of
the applicability of any tax statute relating to the taxation
of real property contained on the Development Property
determined by any tax official to be applicable to the
Project or the Developer or raise the inapplicability of any
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such tax statute as a defense in any proceedings, including
delinquent tax proceedings;
(b) It will not seek administrative review or judicial review of
the constitutionality of any tax statute relating to the
taxation of real property contained on the Development
Property determined by any tax official to be applicable to
the Project, or the Developer, or raise the
unconstitutionality of any such tax statute as a defense in
any proceedings, including delinquent tax proceedings~
(c) It will not seek any tax deferral or abatement, either
presently or prospectively authorized under Minn. Stat.
Section 270.07, or any other state or federal law, of the
taxation of real property contained in the Development
Property between the date of execution of this Contract and
the Termination Date; and
(d) Notwithstanding the prohibitions set out in paragraphs (a),
(b), and (c) above, nothing in this Contract shall prohibit
the Developer from seeking a reduction in the market value of
real property contained in the Development Property provided
such reduction does not fall below an Assessor's Market Value
sufficient to pay scheduled debt service on the Bonds.
ARTICLE V
Tax Increment Revenue Bonds
Section 5.1 Issuance of Tax Increment Revenue Bonds. The City
agrees to take all steps necessary to issue the Bonds and shall exercise its
best efforts to issue the Bonds at such time as shall, in the judgment of the
City, be necessary and desirable to finance the construction of the Public
Improvements described in Section 2.1 (4).
Section 5.2 Use of Tax Increments. The City shall be free to use
any Tax Increment received from the Tax Increment District for any purpose
for which such increments may lawfully be used pursuant to the provisions of
Minn. Stat. Sections 469.174 - .179, except that no tax increment received by
the City shall be used for a purpose other than the payment of principal and
interest on the Bonds until such time as all principal and interest of the
bonds has been paid in full or a cash reserve has been established in a
sufficient amount to pay all principal and interest of the Bonds is full,
when due. Tax increment may be used as follows:
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(1) To pay principal and interest on the Bonds.
(2) To finance or otherwise pay the public costs set forth in the
Tax Increment Financing Plan.
(3) To accumulate or maintain a reserve securing the payment when
due of the principal and interest on the Bonds or other bonds
to pay public costs.
(4) Return the excess to the County Auditor for redistribution to
the respective tax jurisdictions in proportion to their tax
capacity.
The City pledges and agrees to collect from the County Auditor of
Hennepin County, Minnesota, the entire Tax Increment derived from the
Project. For purposes of this Contract, Tax Increment is received "with
respect to" a particular calendar year if the Tax Increment was generated by
ad valorem real property taxes ( or taxes in lieu thereof pursuant to Minn.
Stat. Section 469.176) first becoming due and payable in such calendar year,
irrespective of when such Tax Increment is actually paid to the City, subject
to the provisions of the preceding two paragraphs.
To the extent excess Tax Increments exceed in any year the amount
necessary to pay the public costs authorized by the Development Program and
Tax Increment Financing Plan, the City shall be free to use such excess Tax
Increments for any purpose, consistent with any covenants made with respect
to the Bonds, for which the excess Tax Increments may lawfully be used as
provided in Minn. Stat. Section 469.176, Subd. 2; and the City shall have no
obligations to Developer with respect to the use of such excess Tax
Increments. The City may use the excess amount to:
(1) prepay the outstanding Bonds;
(2) discharge the pledge of Tax Increments thereto;
(3) pay into an escrow account dedicated to the payment of the
Bonds;
(4) return the excess to the County Auditor for redistribution to
the respective taxing jurisdictions in proportion to their
tax capacity rate.
In addition, the City may choose to modify Tax Increment Financing
Plan No.1, consistent with any covenants made with respect to the Bonds, in
order to finance additional public costs of the Development District.
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ARTICLE VI
Termination
Section 6.1 Termination. This Contract shall terminate, and neither
City nor Developer shall have any further obligations hereunder, on the
earlier of the following dates:
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(1) ~une-'l, 1~9)', if Developer has not purchased the Bonds
pursuant to the Bond Purchase Agreement of even date herewith
between the City and Developer; or
(2) The Termination Date, as defined in Article I herein.
ARTICLE VII
General Provisions
Section 7.1 Restrictions on Use. The Developer agrees for itself,
its successors and assigns and every successor in interest to the Development
Property, or any part thereof, that the Developer and such successors and
assigns shall devote the Development Property to, and only to, and in
accordance with the uses specified in the ShorewoodCity Code or in this
Contract.
Section 7.2 Conflicts of Interest. No member of the governing body
or other official of the City shall have any financial interest, direct or
indirect, in this Contract, the Project, or any contract, agreement or other
transaction contemplated to occur or be undertaken thereunder or with respect
thereto, nor shall any such member of the governing body or other official
participate in any decision relating to the Contract which affects its
personal interests or the interests of any corporation, partnership or
association in which it is, directly or indirectly, interested. No member,
official or employee of the City shall be personally liable to the Developer
or any successors in interest, in the event of any default or breach by the
City or for any amount which may become due to the Developer or successor or
on any obligations under the terms of the Contract.
Section 7.3 Provisions Not Merqed With Deed. None of the prov1s1ons
of this Contract shall be merged by reason of any deed transferring any
interest in the Development Property, and any such deed shall not be deemed
to affect or impair the provisions and covenants of this Contract.
Section 7.4 Titles of Articles and Sections. Any titles of the
several parts, Articles and Sections of the Contract are inserted for
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convenience of reference only and shall be disregarded in construing or
interpreting any of its provisions.
Section 7.5 Notices and Demands. Except as otherwise expressly
provided in this Contract, a notice, demand or other communication under the
Contract by either party to the other shall be sufficiently given or
delivered if it is dispatched by registered or certified mail, postage
prepaid, return receipt requested, or delivered personally; and
(a) In the case of the Developer, is addressed to or delivered
personally to the Developer at the following address:
To Trivesco:
Trivesco
c/o Steiner & Koppelman, Inc.
Attention: Mr. Thomas Kordonowy
3610 South Highway 101
Wayzata, Minnesota 55391
~iitJ.'1 Copies to:
Randal Travalia
Robert H. Mason, Inc.
14201 Excelsior Boulevard
Minnetonka, Minnesota 55345
Hark Z. Jones
Highland Properties, Inc.
5290 Villa vlay
Minneapolis, Minnesota 55435
Jeremy S. Steiner
Vesely, Miller & Steiner
400 NO~iest Bank Building
1011 First Street South
Hopkins, Minnesota 55343
(b) In the case of the City, is addressed to or delivered
personally to the City at the following address:
Ci ty of Shorewood
5755 Country Club Road
Shorewood, Minnesota 55331
(c) Either party may upon written notice to the other party
change the address to which such notices and demands are
made.
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Section 7.6 Counteroarts. This Contract is executed in any number
of counterparts, each of which shall constitute one and the same instrument.
Section 7.7 Law Governinq. This Contract will be governed and
construed in accordance with the laws of Minnesota.
Section 7.8 Partial Invaliditv. If anyone or more of the
covenants, agreements or provisions of this Contract shall be determined by a
court of competent jurisdiction to be invalid, the invalidity of such
covenants, agreements, and provisions shall in no way affect the validity or
effectiveness of the remainder of this Contract and this Contract shall
continue in force to the fullest extent permitted by law.
Section 7.9 Assianment. Neither the City nor the Developer shall
have the right to assign its rights or obligations hereunder without the
written consent of the other party, except that the City may assign all or
any part of its rights and duties under this Contract (except its obligation
to issue Bonds) to any governmental unit.
Section 7.10 Riahts Cumulative. The rights and remedies of the
parties of this Contract, whether provided by law or by this Contract, shall
be cumulative, and the exercise by either party of anyone or more of such
remedies shall not preclude the exercise by it, at the same or different
times, of any other remedies for the same default or breach or of any of its
remedies for any other default or breach of the party. Delay by a party
instituting or prosecuting any cause of action or claim hereunder shall not
be deemed a waiver of any rights hereunder.
Section 7.11 Amendments, Chanqes and Modifications. This Contract
may be amended or any of its terms modified only by written amendment
authorized and executed by the City and the Developer.
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)-
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CHRONOLOGY OF WATERFORD PHASE III
DEVELOPMENT PLAN/TIF PLAN
3/4/91
Auqust 12. 1985 - Based upon Comprehensive Plan Amendment and
P.U.D. Concept Plan approved in 1984, city and Trivesco enter into
a development agreement for single-family residential, commercial
and multiple-family residential development (144 units). Third
phase commercial and multiple-family is subject to approval of an
intersection on Highway 7 being approved by MNDOT.
Seotember 12. 1989 - Planning commission held a public hearing on
the development stage plan and preliminary plat proposed by
Sherman-Boosalis for a strip commercial center, convenience
store/gas station and 54 twin homes. The hearing was continued to
October 24, 1989.
October 24. 1989 - Planning Commission recommended approval of the
development stage plan and preliminary plat, with certain
conditions (no gas station), to the City Council.
November 13. 1989 - City Council reviewed Planning Commission
recommendation on the development stage plan and preliminary plat
for Waterford Phase III and heard public comments. Council
directed the City Attorney to prepare findings of fact approving
the development stage plan and preliminary plat.
November 20. 1989 - City Council adopts Resolution 99-89 granting
development stage plan approval and preliminary plat for Water ford
Phase III.
December 4. 1989 - City Council authorizes the City Administrator
to hire Springsted, Inc., as a consultant and advisor on TIF and
special taxing districts.
Februarv 1. 1990 - City Council reviews financing alternatives for
public improvements in Water ford Phase III and directs staff to
investigate a TIF district, TIF plan, and public improvements that
may be included. Council directed that the developer be required
to provide a $15,000 escrow for the cost to prepare the TIF plan.
Februarv 26. 1990 - city Council agrees to pay 50% of the cost for
the preparation of a TIF plan. Planner Nielsen presented a
1
petition for a new E.A.W. for Waterford Phase III, a report for
which will be presented March 12, 1990.
March 12. 1990 - City Council directs City Attorney to draft
findings of fact denying the petition for a new E.A. W. to be
presented on March 19, 1990.
March 19. 1990 - City Council reviews the TIF plan and adopts
Resolution 29-90 setting a public hearing on the establishment of
Development District NO.1, including Tax Increment Financing
District NO.1, and the TIF plan for April 23, 1990 at 8:00 p.m.
Council adopts Resolution 25-90 denying a petition for a new
Environmental Assessment Worksheet for Waterford Phase III.
April 23. 1990 - city Council holds a public hearing on
establishment of Development District No.1, including
Increment Financing District No.1, and adopted Resolution
establishing the district and approving the TIF plan.
the
Tax
36-90
May 7. 1990 - City Council Tables a proposal to perform an
appraisal of the Water ford Phase III property.
June 20. 1990 City Council discusses the TIF development
agreement in a workshop. Council directs the preparation of the
TIF development agreement, to include a letter of credit equal to
the three highest years' debt service.
June 25. 1990 - City Council adopts Resolution 59-90 approving a
TIF development contract with Sherman-Boosalis, an Resolution 60-90
approving the assessment agreement with Sherman-Boosalis for
Waterford Phase III.
Auqust 27. 1990 - City Council reviews application for revised
development stage plan and preliminary plat by Sherman-Boosalis
permitting a gas station and family restaurant in Waterford Phase
III development, and direct City Attorney to prepare findings of
fact approving the revised plan, to include a convenience store
with gas pumps to be operated from 6:00 a.m. to 12:00 a.m. and a
family restaurant with no liquor.
September 10. 1990 City Council adopts Resolution 100-90
approving revised development stage plan and preliminary plat for
Waterford Phase III (adding a gas station and restaurant).
2
SeDtember 24. 1990 City Council adopts Resolution 106-90
approving an agreement for an interim cash escrow/letter of credit
for Waterford Phase III for $37,500. Council Adopts Resolution
107-90 ordering a feasibility report on public improvements,
Water ford Phase III. Peti tion for internal improvements is
deferred to October 8 as Trivesco has not signed petition.
October 8. 1990 - City Council adopts Resolution 115-90 approving
an amended assessment agreement with Sherman-Boosalis subject to
review by Springsted. Council adopts Resolution 112-90 receiving
feasibility report and ordering public improvements for Waterford
Phase III. Council adopts Resolution 113-90 ordering preparation
of plans and specifications for public improvements for Waterford
Phase III. Consideration of a petition for construction of
internal improvements and a feasibility report for internal
improvements is moved to October 22.
October 22. 1990 - Petition requesting construction of internal
improvements in not received and item is removed from Council
agenda.
October 30. 1990 - City Council is informed that work on the plans
and specifications has been stopped as Sherman-Boosalis had not
submitted a deposit for engineering fees.
November 26. 1990 - TIF development agreement and assessment
agreement is deferred to December 10 to allow Springsted to review
the financial agreements.
December 1. 1990 Original TIF development agreement and
assessment agreement expire. No letter of credit is posted by
Sherman-Boosalis.
December 10. 1990 - City Council adopts Resolution 136-90 approving
a TIF development agreement with Sherman-Boosalis and Resolution
137-90 approving a bond purchase agreement for $1,150,000 in TIF
revenue bonds with Trivesco.
December 12. 1990 - Sherman-Boosalis find terms negotiated between
the City and Trivesco unacceptable and back out of the Waterford
Phase III development without signing the formerly approved
agreements.
December 19. 1990 - City Council held a special meeting to consider
3
a TIF development agreement and a bond purchase agreement for TIF
revenue bonds with Trivesco. The legality of the meeting is
questioned due to notice requirements. The matter is deferred to
December 27, 1990. Trivesco submits to the City a check for
$53,000 for work performed by the City, and subsequently stops
paYment on the check.
December 27. 1990 - City Council rescinded Resolution 136-90
approving the TIF development contract with Sherman-Boosalis.
Council adopted Resolution 140-90 approving a TIF development
agreement with Trivesco, and Resolution 141-90 approving a bond
purchase agreement with Trivesco to purchase $920,000 in TIF
revenue bonds at ten percent, tax exempt, and rescinding Resolution
137-90. City receives $99,000 escrow for expenses from Trivesco
upon signing agreements. City served with a law suit brought by
Robert Snyder and Jay Hare stating that City had not followed
proper procedures in modifying the TIF plan by reducing thepublic
improvements to be constructed, reducing the amount of bonds to be
sold, and changing the financing from general obligation bonds to
revenue bonds.
January 28. 1991 - City Council adopts Resolution 9-91 calling for
a public hearing on the modifications to the TIF plan to be held
on February 11, 1991 at 8:80 p.m.
February 7. 1991 - Hennepin County District Court Judge Hedlund
rules in favor of Snyder/Hare in the suit against the City and
voids the TIF development agreement and bond purchase agreement
with Trivesco.
February 11. 1991 - City Council holds public hearing on the TIF
plan modifications. Council refers the issue to the Financial
Advisory Board for its recommendation.
February 12. 1991 - City refunds $99,000 to Trivesco as stipulated
in the TIF development agreement of December 27, 1990.
February 20. 1991 - Financial Advisory Board recommends approval of
the TIF plan modifications to the City Council.
Februarv 21. 1991 - City is served with a law suit brought by
Trivesco for failure to comply with the development agreement dated
August 12, 1985, between the City and Trivesco.
4
.... . - ..,...._~- ....: :"'~"'-~'--'.'. --... .--:-
Februarv 28. 1991 - City Council meets in executive session to
discuss law suit. Council defers decision on TIF plan
modifications and continues meeting to Thursday, February 27, to
negotiate terms with Trivesco. Date for meeting is subsequently
moved to March 4, 199i, at 7:30 p.m.
5
......__...~.,~..._._.,"...~,~_..'"'-.,.",..-....~...__.....~~
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CITY OF SHOREWOOD
FINANCIAL ADVISORY BOARD MEETING
TUESDAY, FEBRUARY 19, 1991
COUNCIL CHAMBERS
5755 COUNTRY CLUB ROAD
6:30 P.M.
M I NUT E S
CALL TO ORDER
Finance Director Rolek called the meeting to order at 6:35 p.m.
Present were Board Members John Bridge, Edward Snyder, William
Bohnhoff, and Robert Snyder, and Finance Director Rolek. Council
Liaison Rob Daugherty arrived later. Board Member D. J. Berkley
was absent.
INTRODUCTION OF THE BOARD MEMBERS
Rolek introduced the members of the Board to the audience.
MODIFICATIONS TO THE TAX INCREMENT FINANCING PLAN FOR TAX INCREMENT
FINANCING DISTRICT NO.1. DEVELOPMENT DISTRICT NO.1 (WATERFORD III)
Rolek stated that a public hearing had been held regarding the
modifications to the Tax Increment Financing (TIF) Plan by the City
Council on February 11 and that the Council had referred the matter
to the Financial Advisory Board for their recommendation. He
briefly summarized the history of TIF financing for the public
improvements in Waterford III Phase, and the events leading to the
proposed modifications and to the discussion at this meeting. He
gave a brief explanation of how TIF functions, and the distinction
between general obligation bonds and revenue bonds.
Rolek introduced Bob Thistle and Ron Langness, of springsted, Inc.,
to the Board, and opened discussion on the TIF Plan modifications.
Board Member Bridge asked the representatives from Springsted, Inc.
to address the issue, to provide a summary of pros and cons, and to
assess the risks to the City.
Bob Thistle, of Springsted, Inc., stated that his firm was brought
in to help determine the viability of TIF financing on this
project. Factors to be considered are the financial risk to the
City and how to provide security to the city protect the City
against potential liability and risk factors. Concerns of doing a
TIF project are two-fold. First, if the project does not develop
as expected and TIF revenues from the project are insufficient to
cover the costs, how is the City to be protected? There are
several ways to do this. In this project, conservative figures
were used in determining the viability of the district, and the
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CITY OF SHOREWOOD
FINANCIAL ADVISORY BOARD MEETING
TUESDAY, FEBRUARY 19, 1991
COUNCIL CHAMBERS
5755 COUNTRY CLUB ROAD
6:30 P.M.
developer provided a three-year letter of credi t and agreed to
guarantee a certain level of growth in the value of the property.
This, he felt, provided sufficient security so that if the City
wanted to issue general obligation bonds, there would be much lower
risk of the obligation falling on the tax rolls in the event of
default.
The guarantees made by Sherman-Boosalis were to be backed
financially by Trivesco. Trivesco felt that these guarantees were
too costly and did not want to finance them, and in the course of
negotiations, Sherman-Boosalis pulled out of the development.
Trivesco then became the prime developer of the project and
proposed a pay-as-you-go TIF arrangement, whereby the developer
would put in the improvements and be repaid by the tax increments
derived from the development. As these were all public
improvements, they proposed to purchase TIF revenue bonds issued by
the City, and the city would then use the proceeds to construct the
improvements. .
Bridge asked whether the entire proceeds of the bond issue would be
used for public improvements. Thistle and Rolek answered that they
would.
Thistle went on to say that in pursuing the revenue bond option,
the risk is shifted from the City to the developer. If the
developer does not develop the property as proposed, or if he does
not pay his taxes, he will not receive paYment on the bonds. As a
condition of this riSk, the developer has insisted on a ten percent
rate of interest on the bonds. The basic question in this case is
where is the risk and what is the cost of that risk. What is the
city willing to pay to ameliorate their risk in this project?
Bob Snyder asked if there is anything intrinsic to the financial
structure of this arrangement that the ten percent is critical
to the developer.
Thistle answered that the bond purchase agreement between the city
and Trivesco stated the ten percent figure and that Trivesco was
insisting on this rate of return in exchange for this level of
risk.
Bob Snyder asked what the total interest paYment would be on the
debt. Ron Langness of springsted answered that the total interest
would be about $454,000.
Ed Snyder stated that the reduction of risk to the City under the
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CITY OF SHOREWOOD
FINANCIAL ADVISORY BOARD MEETING
TUESDAY, FEBRUARY 19, 1991
COUNCIL CHAMBERS
5755 COUNTRY CLUB ROAD
6:30 P.M.
pay-as-you-go option was a fair trade-off for the additional three
percent interest, despite the fact that there is less increment
available for improvements. He asked what the feeling of the
public was at the public hearing held by the Council.
Rolek said that both sides of the issue were equally represented at
the public hearing. He asked Thistle what the City's risk would be
should the revenue bonds go into default?
Thistle said that if the development was not sufficient to generate
the necessary taxes to retire the debt as scheduled, or if taxes on
the property were not paid, the bond holder would not recei ve
paYment on the bonds. Langness~stated that unpaid principal and
interest would be carried out to the expiration of the TIF
district. When the district dies, the City'S liability on the
bonds would also expire and would not fall back on the general
taxes of the city.
Rolek asked about the long-term risks of defaulting on the bonds,
such as marketability of future issues, higher interest rates, and
bond rating.
Thistle stated that because it is a private placement and not a
public sale, and the bonds are closely held by knowing buyers, the
risk of adverse consequences are small.
Bob Snyder asked if the ten percent rate is cast in concrete?
Rolek stated that the agreement stipulating that interest rate was
nullified by the courts; however, Trivesco would be the party
which could best answer the question.
Bob Snyder asked why Trivesco stated they would not do the project
if they could not get a ten percent interest rate or use TIF
financing?
Thistle replied that he was not in a position to answer that
question. He said that since the improvement was a public
improvement and that financing options were limited, it may make
sense for the developer to seek public financing under a TIF
program. Langness also stated that since these were public
improvements, the developer is seeking public financing to
construct them. TIF is the only source of revenue available to the
city to pay for the improvement other that general property tax or
special assessments, and is the only revenue source available in
order to sell revenue bonds.
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CITY OF SHOREWOOD
FINANCIAL ADVISORY BOARD MEETING
TUESDAY, FEBRUARY 19, 1991
COUNCIL CHAMBERS
5755 COUNTRY CLUB ROAD
6:30 P.M.
Bob Snyder stated that, by using TIF revenue bonds as opposed to
other revenue bonds, the cost of the improvements would be borne by
the city rather than by the developer.
Langness said that other revenue bonds could not be used as there
is no other source of revenue other than TIF proceeds.
Thistle said there were basically three possible sources to pay for
the improvements. First, if the City had sufficient funds on-hand
from tax levies, it could simply build the improvements. Second,
the City could use special assessment financing and assess every
property within the assessment area. The third is to use TIF
revenues. This is the source which is least costly in its direct
impact on the residents of the community.
Bob Snyder asked if there will be an adverse affect to the school
district as a result of using TIF?
Thistle said that there would be no impact to the school district,
as revenue not collected in property taxes would be made up by
state school aid. This is one of the prime re_asons the tax
increment law was changed last year.
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Bob Snyder asked whether other TIF revenue bonds had been issued in
the area that could be used for comparison of interest rate?
Langness replied that there are a lot of cities that use TIF.
However, there are very few TIF projects where there are these type
of agreements and are for public improvements. In most other
proj ects, the improvements are private and the developer gains from
this. In exchange, he offers agreements guaranteeing certain
property values; or, the financing may be in the form of taxable
bonds. As this project is not of that nature, there are very few
comparable projects against which this can be measured, making it
difficult to ascertain whether ten percent is a fair rate.
Bob Snyder stated that this project may not be as speculative as is
believed in that the developer's property stands to increase in
value by as much as $1.0 to $1.5 million and the developer could
get his money out of it even if he forfeited the bond issue.
However, he felt that the biggest issue is the ten percent rate.
Thistle commented that the ten percent issue is a policy issue that
the Council would need to address, and may be revisited with
Trivesco.
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CITY OF SHOREWOOD
FINANCIAL ADVISORY BOARD MEETING
TUESDAY, FEBRUARY 19, 1991
COUNCIL CHAMBERS
5755 COUNTRY CLUB ROAD
6:30 P.M.
Council Liaison Rob Daugherty asked Thistle what the effective
return to the developer would be, given the tax exempt interest
rate and the expected enhanced p~operty value, and whether this
could be construed as the city offering a subsidy to the developer.
Thistle stated that is one way to look at itj however, it also
could be construed as an exchange for the reduced risk factor to
the citizens of the city.
Daugherty asked Thistle's opinion of what the ten percent rate
really yields to the developer over the life of the TIF district,
given an enhanced property value, and is it realistic to say the
City is offering a subsidy to the developer?
Persons in the audience asked whether it was appropriate for
Daugherty to speak or comment at this meeting given his role as the
Council Liaison? Rolek said that if the liaison has a pertinent
question or a point he feels should be addressed, he should bring
it before the Board. Members of the Board also stated that they
would be interested in Daugherty's comments and do not object to
his input.
People in the audience felt that, if this is the case, then the
public should be allowed to comment. Rolek stated that the meeting
was not a public hearing and that it was the prerogative of the
Board to hear public comment. The members of the Board stated they
had no objection to hearing comments from those present. Rolek
then opened the meeting to public comment with a three minute time
limitation per speaker.
Pat Malmsten of the Shady Hills neighborhood stated that the
decision on this matter has been delayed time and again.
Eventually, time will run out in which to use the TIF financing
option and all the citizens of Shorewood will end up paying for the
intersection. He felt that a decision should be made as soon as
possible and that things should move on.
Ed Snyder commented that if the developer has to borrow the money
to purchase the bonds, he will be making less than the ten percent
due to his cost of capital. However, if the developer has the
funds, he may be able to invest them in other investments that
maybe won't yield as much but also do not carry the same risks.
Bob Snyder said he had a number of questions to ask. He stated
that if the City did not approve the TIF modifications that $99,000
would have to be paid back to the develope~. He asked how the
expenses represented by that amount were incurred, by whose
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CITY OF SHOREWOOD
FINANCIAL ADVISORY BOARD MEETING
TUESDAY, FEBRUARY 19, 1991
COUNCIL CHAMBERS
5755 COUNTRY CLUB ROAD
6:30 P.M.
authority, whether that authority had been exceeded, and, if so,
could the $99,000 be negotiated down?
Rolek replied that the $99,000 was remitted to the City by Trivesco
upon signing the Bond Purchase Agreement and that it had been
refunded to Trivesco due to the nullification of that contract. He
stated that the City had incurred expenses amounting to about
$53,000 in developing the TIF Plan and in negotiating agreements
with Sherman-Boosalis and Trivesco. These expenses were incurred
to the city attorney, engineers, fiscal consultants, bonding
attorney and the League of Minnesota cities and that they had in
authorized by the City council, which stipulated that the City'S
consultants be utilized in this matter. The expenditures were also
approved by the city Council at the time of paYment.
Bob Snyder asked if the City had received detailed bills for these
expenses and Rolek stated that it had.
Bridge asked if this was relevant to the discussion and
recommendation.
Bob Snyder asked what portion of the City'S MSA Road funds was
represented by the $216,000 proposed to be used in this project?
Rolek replied that those funds were not MSA funds but were special
cooperative agreement state aid funds applied for by the City and
granted by MNDOT. These funds may be granted by MNDOT to applicant
cities for projects that are already scheduled to be done by MNDOT
but may not be done for some years to come. He stated that the
grant may cover 50% of the cost of the project, not to exceed
$200,000, plus 8% for engineering costs.
Bob Snyder asked if the city had final costs for the intersection.
Rolek answered that as the project had not be put out for bids,
final costs were not known. The City was working with engineering
estimates for the cost of the project.
Bob Snyder asked that if the bids came in at a higher cost than
provided by the bonds, would the difference be made up by available
City funds? Rolek replied that if the bids were higher than
expected or exceeded the available funding, the City could reject
the bids.
Bob Snyder asked whether Trivesco could sue the City in the event
bids are rejected? Rolek replied that he didn't believe so.
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CITY OF SHOREWOOD
FINANCIAL ADVISORY BOARD MEETING
TUESDAY, FEBRUARY 19, 1991
COUNCIL CHAMBERS
5755 COUNTRY CLUB ROAD
6:30 P.M.
Bridge asked what the engineering estimates were. Rolek stated
that the cost of the improvements wer, estimated at about $842,000.
A factor of 35% of the cost, amour1ting to about $295,000, was
included for "~oft costs, II which ~nclude cost of engineering,
administrative costs, and a contingency for possible construction
overruns, for a total project c~st of $1,136,000. After
subtracting the MNDOT funding of $216,000, $920,000 remains to be
I
funded by the proposed revenue bondst
Bob Snyder asked if the MNDOT funds ~ere guaranteed. Rolek stated
the funds were available, provided th~t bids on the project are let
by July 1, 1991. He also stated that the deadline for using TIF
was June 1, 1991. He said that the City had to meet one of five
conditions under state law before ttiat deadline, among which are
sale of bonds, acquisition of property, and entering into a
development agreement for the develo~ment.
Bob Snyder stated that the original p~oject included improvement of
the frontage road to Vine Hill Road ~nd watermain, and asked what
additional costs the City may incur f~r improvement of the frontage
road? Rolek stated the original! proposal included only the
frontage road in front of the waterford III property and it was
decided to add the additional sectiqns of frontage road after it
was determined that the TIF distri~t would generate sufficient
funds to include them. These sections were dropped from the
project in the latest proposal becausle Trivesco would not agree to
guarantee the additional cost of I improvements outside their
development area. I
Bob Snyder asked if those roads woul!d need to be upgraded and if
additional costs were involved. Rol!ek replied that the City had
not previously intended to upgrade th$ road. Engineering estimates
placed the cost of upgrading the roads at $180,000. Bob Snyder
asked whether the cost of upgradingj the frontage road could be
included in the deal with Trivesco. ! Rolek replied that this was
proposed but that Trivesco had rejected the proposal.
Bridge stated that this issue wasl made necessary due to an
agreement between the City and Trives~o in 1985, and asked if there
was potential for a law suit against ~he City. Rolek replied that
it was possible that the City could b, open to a law suit should it
cause a delay in the development of t~e property, but that the city
attorney would need to reply to the ~estion.
Bob Snyder stated that this was a v~lid concern. He stated that
three independent attorneys had revi.wed that agreement and found
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CITY OF SHOREWOOD
FINANCIAL ADVISORY BOARD MEETING
TUESDAY, FEBRUARY 19, 1991
COUNCIL CHAMBERS
5755 COUNTRY CLUB ROAD
6:30 P.M.
the city was not obligated to provide financing, but only to assist
in finding the financing.
John Askins of Shady Hills asked what the timetable was for the
project, including engineering time, MNDOT approval, and Council
approval. Rolek stated that should the TIF modifications be
approved and an agreement be made with Trivesco, the engineer has
said that six to eight weeks were needed to complete plans and
specifications, the Council would approve them, and the plans would
go to MNDOT, which would require a minimum of 60 days for review of
the plans. This adds up to three and one-half to four months of
time required.
Alec Janes of Christmas Lake Road asked that if TIF is delayed or
turned down by the City Council and the intersection goes through
due to MNDOT safety concerns, what would be the effect on the
taxpayers of Shorewood? Rolek answered that the intersection could
be funded from cash reserves, special assessments or a referendum
for general fund financing. The city does not have sufficient
reserves to fund the project, and special assessments may be hard
to justify and may be protested. A referendum is not considered a
viable alternative.
Bob Snyder asked that if the project was successful, would TIF
reduce the cost to the City? If TIF funding was not used for the
project, the entire TIF revenue would come to the City. Thistle
replied that if the project went in, the City would receive more
money through the TIF than if a TIF district were not in place, as
the City receives the full amount of property tax when using TIF
but only receives the City's portion otherwise. Thistle explained
how TIF financing works to the Board. Snyder said that, in effect,
the City would be transferring money from outside the City to the
City by using TIF. Thistle said that is correct.
Dan Noonan of the Christmas Lake/Radisson Road area asked about the
14% inflation of the property.
Thistle said that this referred to the original base value of the
district, which increases each year by the average historical
inflation rate for property within the City.
Rolek asked the Board for its recommendation to the City council on
this matter. The members of the Board felt that, as this is an
advisory board to the City Council, a formal motion and vote was
not necessary, but that the comments and individual recommendations
of the board members should be made known to the Council.
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CITY OF SHOREWOOD
FINANCIAL ADVISORY BOARD MEETING
TUESDAY, FEBRUARY 19, 1991
COUNCIL CHAMBERS
5755 COUNTRY CLUB ROAD
6:30 P.M.
Ed Snyder recommends that the city Council approve the
modifications to the TIF Plan, and that the City negotiate with
Trivesco, under a pay-as-you-go TIF alternative, terms Of a TIF
contract which are in the best interests of the ci ty , at an
interest rate not to exceed ten percent.
Bridge recommends that the City Council go ahead with the
modifications to the TIF Plan as outlined. He is concerned that
further delays, additional prolonged negotiations and indecision by
the Council could jeopardize the agreement and, ultimately, result
in additional costs to the City.
Bohnhoff recommends the City Council approve the modifications and
move ahead with the modified TIF Plan. He also feels that, in
light of the movements in the marketplace during the last few
months, that there may be room for further negotiation of the ten
percent interest rate.
Bob Snyder agrees that the structure using TIF revenue bonds is
appropriate. The City will incur costs in the future of
approximately $180,000 to upgrade the frontage road eliminated from
the proj ect. He suggests that if the City Council has reservations
pertaining to the legal ramifications of modifying the TIF Plan, a
second legal opinion be obtained.
Rolek thanked the Board and the representatives of springsted for
their comments. The meeting then went into a brief recess.
PROPOSAL FROM DAN HANUS FOR THE CITY TO LEASE THE BUILDING LOCATED
AT 5331 MANITOU ROAD. TONKA BAY. MN. FOR USE AS A PUBLIC WORKS
FACILITY VERSUS CONSTRUCTING A NEW BUILDING ON CITY-OWNED PROPERTY
Following the recess, the Board addressed the proposal from Dan
Hanus that the City lease a building, formerly used as a school bus
garage, loc~ted in Tonka Bay, for use as a public works facility.
The city Council had previously planned to construct a new public
works building within the next three to five years on City-owned
property.
The Board asked if the City had purchased the land. Rolek said the
land had been purchased wi th funds made available through the
defeasance of some of the City's outstanding bonded debt. He said
that this parcel was one of the few which met the criteria for a
public works site in the City and that it had been for sale.
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CITY OF SHOREWOOD
FINANCIAL ADVISORY BOARD MEETING
TUESDAY, FEBRUARY 19, 1991
COUNCIL CHAMBERS
5755 COUNTRY CLUB ROAD
6:30 P.M.
Bohnhoff asked, since the City had already purchased land, whether
this was a non--issue. Rolek replied that the land was a non-issue.
The issue at hand was the proposal by Hanus to lease the building
to the City. He outlined the terms of the lease to the Board.
Bridge asked whether Tonka Bay has decided how they want to treat
this matter. Rolek stated that Tonka Bay is still deliberating,the
issue. Their concerns appear to be loss of property tax revenues
in the event the ci ty purchases the property, and they are
examining whether they may recoup these losses in some manner.
Tonka Bay initially seemed open to examine the issue.
Daugherty formally introduced himself to the Board. He stated that
the City had outgrown the present public works building, and this
looked to be a viable alternative. Tonka Bay's concerns were for
outdoor storage and lost tax revenue. He felt the City may realize
savings by leasing the property over time, with a possible purchase
option. He felt the issue before the Board was whether the terms
of the lease made sense, and what are the steps the City should
take in the event that they do.
. Bohnhoff referred to a section in a memo by Brad Nielsen and Rolek
which seemed to question the immediate need for the facility, and
asked that this be elaborated. Rolek stated that the original
intent was to accumulate funds for construction of a building over
the next three to five years.
The Board examined a comparison prepared by Rolek of the two
options and commented that it ignored the time value of money
element and the savings that would accrue should the City lease
rather than build. Rolek stated the funds were being budgeted
especially for the building and would not accrue if construction
were not planned. He said that the time value of money element had
been left out for the lease option as well. He stated that the
proposal was for lease only, without an option to purchase, and
that under that proposal funds used for leasing would be
unavailable for construction should the city lose its lease.
Daugherty commented that perhaps a buy-out option should be
included in the lease agreement to protect the long-term interests
of the City.
Bohnhoff stated that if it is that important to Hanus to retain
interest in the property and not consider a purchase option, it
ought to represent that much of a concern to the City.
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CITY OF SHOREWOOD
FINANCIAL ADVISORY BOARD MEETING
TUESDAY, FEBRUARY 19, 1991
COUNCIL CHAMBERS
5755 COUNTRY CLUB ROAD
6:30 P.M.
Daugherty said that the feeling was that the Council had not used
the Board properly in the past and that the present Council would
like to utilize the Board to a greater extent.
The members of the Board felt that they should respond to financial
issues on a proj ect type basis, as they feel that their role should
not include the collection of data, or the day to day operations of
the city.
Rolek suggested that a regular day and time be set for the Board to
meet. Meetings may be canceled in the event that there are no
agenda items to be discussed. After some discussion, the Board
decided to set a monthly meeting for the third Wednesday of the
month at 6:00 p.m., on a trial basis. This would be subject to
change should this prove inadequate.
CONSIDER BUDGET CUTS IN RESPONSE TO LOSS OF STATE AID
Rolek briefly outlined the impact of the state aid cuts on the
City. He stated that the staff had reviewed the budget for areas
which may be cut back. He also suggested that this topic may be
revisited at the March meeting.
ADJOURNMENT
The meeting was adjourned at 9:15 p.m.
RESPECTFULLY SUBMITTED,
Alan Rolek
Finance Director
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CITY OF SHOREWOOD
CITY COUNCIL MEETING
MONDAY, FEBRUARY 25,1991
COUNCIL CHAMBERS
5755 COUNTRY CLUB ROAD
7:00 P.M.
AGENDA
1. CONVENE REGULAR CITY COUNCIL MEETING
A. Pledge of Allegiance
B.
Roll Call
Daugherty _
Lewis_
Mayor Brancel_
Gagne_
Stover_
C. Review Agenda
2. APPROVAL OF MINUTES
A. Regular City Council Meeting - February 11, 1991
(AU. No. 2A - Minutes)
B. Regular City Council Meeting - February 11, 1991 (Adjourned Session Held
on February 13, 1991) /'
vOCu. No. 2B - Minutes)
3. CONSENT AGENDA
A.
Approve Dock Licenses
flU. No. 3A - Planner' s Memo)
4. PARK COMMISSION REPORT
5. FENCE HEIGHT VARIANCE (Postponed from February 11 Meeting)
Applicant:
Location:
William Miller
25780 Sunnyvale Lane ./
\)See February 11 Packet for Planner's Report)
6.
MODIFICATIONS TO WATERFORD T.I.F. PLAN (Tabled from February 11
Meeting)
v{:.\U. No. .6 - Finance Advisory
Board's Recommendation)
+'
CITY COUNCIL AGENDA
FEBRUARY 25, 1991
Page two
7. LMCD REPORT - ROBERT RASCOP
8. FREEMAN PARK PUMP HOUSE BUDGET
~tt. No. 8 - Park Planner's Report)
9. SHADY HILLS DRAINAGE PROJECT
A. Approve Plans and Specifications and Direct Notice to Bidders (plans and
Specifications Available for Reyiew at City Hall)
v~tt. No. 9A - Proposed Resolution)
B.
Order Improvement
\jAft. No. 9B - Proposed Resolution)
10. DISCUSS LEASING SPACE FOR PU IC WORKS DEPARTMENT
tt. No. lOA - Planner's Report)
(Att. No. lOB - Finance Advisory
Board's Recommendation)
11. MATTERS FROM THE FLOOR
12. STAFF REPORTS
A. Attorney's Report
1. Status of Kennelly Ad~nistrative Hearing
v(Att. No. 12A-1 - Notice of Hearing)
2. ( f "" tor <' !)
B. Engineer's Report
1. Status of Lift Station Improvements
2. Status of Glen Road Drainage Project
3. Status of Sewer Televising/Cleaning/Rehabilitation
C. Planning Director's Report
1. Schedule Spring Cleanup
2.
."
CITY COUNCIL AGENDA
FEBRUARY 25, 1991
Page three
13. COUNCIL REPORTS
A. Mayor Brancel
B. Councilmembers
14. ADJOURN TO EXECUTIVE SESSION - PENDING LITIGATION
15. RECONVENE REGULAR COUNCIL MEETING
16. ADJOURNMENT SUBJECT TO PAYMENT OF THE CLAIMS APPROVED
(Att. No. 16 - Claims List)
BENSHOOF & ASSOC. INC.
TEL No.
612 944 9322 Mar 02,91 2:13 P.02
. ,
BENSHOOF & ASSOCIATES, INC.
TRANSPORTATION AND LAND USE CONSULTANTS
7901 FLYING CLOUD DRIVE. SUITE 119/ EDEN PRAIRIE, MINNESOTA 55344/ (612) 944-7590 / FAX (612) 94~9322
March 1, 1991
REFER TO FILE: 91-07
MEMORANDUM
TO:
FROM:
RE:
James Finstuen
1ames A.BenshOOf~~
Traffic Plan for South Side of T .H. 7 Between Christmas Lake Rd. and
Vine Hill Rd.
PURPOS~BACKGROUND
In response to your request, we have reviewed the traffic issues and needs regarding the
above referenced segment of T .H. 7 in Shorewood, with particular attention to the Old
Market Road area. A key question we have addressed is: Would a full access
intersection with traffic SIgnal control at T.R. 7 and Old Market Rd. cause any
significant adverse impacts? If the answer to this question is yes, the next step is to
determine whether an alternative plan is available that would better meet the overall
obiectives. . .
. 'J . .. .. -- ....
In addressin~ the above points, it is important to understand the historical background
and current ISSUes. Through our role as traffic engineering consultants for the City of
Minnetonka, we have been aware of issues along T.H. 7 in Shorewood since early
1985. At that time we reviewed the traffic study report for this portion of T .H. 7,
which was prepared by the firm of Orr Sche1en Mayeron & Associates, Inc. in
September 1984. In 1986 we monitored progress on the T.H. 7 Corridor Study and
have reviewed the final report for that project. More recently, we have-become aware
,of other important items affecting traffic in the study area, including:
.
Plans by MnlDOT to upgrade the intersections of T.H. 7 with Christmas Lake
Rd. and Vine Hill Rd. The Christmas Lake Rd. intersection is scheduled for
construction in 1993 or 1994, with the Vine Hill Rd. intersection being
constructed in 1994. .
Plans by Hennepin County to reconstruct Co. Hwy. 62 between T.H. 101 and
Baker Rd. Detailed plans have been p~ ~ ~pgrade this roadway to a four
lane design. Construction likely will occur in 1992.
Issues regarding substantial traffic volumes and impacts on Radisson Rd.
.
.
~
J~
Itp)