August 10th already okay we got a green light should we give our city attorneys 30 seconds we're going to let you sit but not get settled all right well good morning everybody and welcome to the Dyna housing Redevelopment Authority meeting it is Thursday August 10 2023 7 34 p.m on the clock on the wall am excuse me yeah thank you for that um thanks for that a catch on the part of the day we're in uh we've been conducting these meetings uh in a hybrid fashion and that continues we don't have any public hearings this morning for the HRA but we do have an opportunity course for folks to call in a community comment and here's the phone number for that if you want to call in and talk to the HRA about an item that's not on the agenda this morning or scheduled for a future public hearing and so we'll be happy to take that call you call that number punch in the pin number you'll speak to an operator the operator will get you the director been around who will bring you into the HRA and that'll come up fairly fast so if you're out there watching and want to speak to the hre make sure you write that number down having provided that information I'm going to call the meeting to order and um and then ask for a roll call from our administrative planning specialist Liz Olson Ms Olson commissioner here next is the Pledge of Allegiance foreign thanks for that and then we're moving on to the meeting agenda we've had a request from staff to remove item 6D from the agenda they're still working on that matter um so I suppose we technically have an amended agenda eliminating 6D is there a motion to approve the agenda in a cemented form with the elimination of 6D so moved second Mr uh Jackson moves commissioner Pierce second C adoption of the amended agenda with the exception of deleting 6-d any further discussion all those in favor of adoption of the amended agenda say aye aye aye opposed carried and next is back to community comment now we're going to put that number back up on the screen again we've got some folks with us in the audience uh may wish to speak with us we'll go to them first and then we'll go to the virtual world and see if anybody wants to talk to the HRA about a matter that's not on the agenda today or scheduled for a future public hearing so Community comment is there anyone in the audience who wishes to address the HRA on a matter of concern to them all right hearing nothing seen no one coming forward do we have anybody online unfortunately I don't have anyone on the line yet um because there is a slight delay with the broadcast though I would recommend that we wait one minute before moving on with the meeting my clock shows that it's 7 35 I think my collects a little slower than yours over there but I'll come back to you when my clock says 7 36 or when we have a call or whichever is first I know we can all detect that deep disappointment when you don't have anybody online and and hoping somebody will call in so all right foreign and I still don't have a collar so I think it's safe for you to move forward with your agenda okay thank you Mr Bernard as is our practice we usually have the executive director respond to community comments and there are no committee comments to respond to in this particular meeting of the HRA uh imagine noon or if you're recovering that I think that just to verify that please yes that is correct all right next we'll move on to the consent agenda there are several items on the consent agenda commissioner Risser wanted to remove item 6B as in boy with the exception of 6B is there a motion to approve the balance of the atoms on the on the consent agenda in a single motion it's almost second commissioner Jackson moves commissioner Pierce seconds the adoption of the Adams on the consent agenda with the exception of item Six B is a boy uh any further discussion all those in favor of adoption the motionless data say aye aye aye opposed carried and then let's go back to 6 B which is a request for purchase we've been doing as folks know in the community work on the ramp done at 50th and France next to Lunds Byerly's and we've got a change order request down there some further work was discovered to be needed and I'll turn to commissioner Richard I'll just see what her question is remember commissioner thank you Mr Mayor um I did go over the Kimberly horn report from November 2021 to look at the estimation of repairs and it included both the South and the north ramp and when I looked at the higher priority items that were recommended to be done in the summer of 2020 the cost for that was estimated at like around four hundred thousand dollars and the initial request for ramp repair was about half of that um and then when I looked at the estimation for repair on the North ramp we're talking you know 160 116 000 to 130 000 and um that was combining both high and low priority items and there were also medium term repairs for the South ramp that were estimated you know and and the total repair for the South ramp through the 2023 construction season got as high as nine hundred and seventy thousand dollars so when I look at the request to go from I believe it was 220 000 up to in the 600 000 range I I understood why that was being asked for but I thought it would be helpful to understand whether we have addressed all of the high priority items in the South ramp and if there's going to be additional requests for money concerning the South ramp and the north ramp just trying to get a handle on what the cost of upkeep is on those two facilities which do get used quite a bit yeah thanks for that question manager newendorf can you give us some guidance on that please sure happy to provide some additional insight there and then uh one of our facility supervisors John darso is here and he's most familiar with this particular contract uh but you're correct there is a lot of work necessary at the parking structures at 50th and France they are publicly owned and available for public use the uh the responsibility to pay for for most of the maintenance is borne by the property owners down at that business district so the uh the South ramp was first built in 1968 it's getting old so there's a constant [Music] list of work that is done on that on that ramp the facilities department does have it inspected annually to look at what needs to happen next year and they've also done a longer look to have a better idea of what has to happen three years out five years out and so on and that's the same in the north ramp the north ramp is newer built in 1992 expanded in 1998 and then again in 2018 so it's much much newer so that's why the scope of repairs there are typically less and then one thing we didn't note here or in your in your question was the center ramp the center ramp was built in the 70s and torn down in 2017 and replaced with the ramp that is publicly available for use but maintained by that private owner so right now our repair focus and our facilities team is really on that South and North ramp but you're right there is constant work we should expect more work uh we're almost done for this year but there's constant work going on there not as invasive as this here this is the first time in maybe eight years we had to close down that ramp um but we should all expect to see the normal repairs happening but for particular questions I'd defer to Mr darso who was insight about the contract good thank you that for that manager neuendorf any questions particular questions I think you might want to uh the professional Rissa was interested in this I think some of the structural things that yeah sometimes at least that's what I heard in her question is that make sure that we're it's safe for the public I think is what we all we all want that so did we address all the higher priority items that were listed in that report for the South ramp within that 2021 report we did address all the structural repairs that were needed in the North and the South ramp at this time um within the South ramp we had some additional and part of that um change order is some additional structural repairs to the columns and just so everybody understands that South ramp is also complicated because it was built in different stages true that's correct okay um a lot of that Shoring and the reason why we had to shut the entire ramp down was due to The Columns around the lower level but supported the third and fourth deck and I remember when the third and fourth deck was not there so it is an interesting thing okay thank you that is all I really wanted to talk about and we don't anticipate anymore change orders with this project okay and how about an anticipated opening date for the entire ramp uh right now the entire ramp's open we're just closing off uh perking stalls periodically just to do the painting of The Columns that were recently restored we had to wait a lead time for the curing of the concrete to happen um they should be done with that today so they'll hold lower level we're doing some electrical kind of cleanup you know getting rid of some of the junction boxes and cleaning up some of the old conduit that's within that lower level as well so that should be completed today as well so um stairwell work will continue for the next couple weeks we'll paint that and um by the end of mid-september completely back back open okay that's good thank you nope when I drive by there looks like people were parking at every level but when they read the report it said that part of it was still closed so I was trying to confuse as to as to was was it all open or partially open so thanks for that it was completely open and then we just closed off like I said where the columns were located on the lower level yesterday morning early to do the painting The priming and painting of those columns all right very good all right well thanks uh for that good work I'm sure the merchants down there and the people in our town are going to be eager to have that back operational again yep so it's been tough to have it closed yep no a lot of uh feedback of things it's okay thanks for being with us this morning no problem thank you all right uh commissioner brocher you want to move that matter uh yes I moved that item 6B be uh back in the consent agenda or did we what did we okay move it for approval thank you all right Trisha River uh Richard moves approval of the request for purchase on change order FC 22-11 the 50th and France parking ramp repairs uh commissioner Jackson seconds yes any further discussion all those in favor of adoption of the emotional stated say aye opposed Carrie okay that takes care of items in the consent agenda and we're going to go on now to report some recommendations which is uh another important part of our agenda this morning in manager nuendorf has some interesting thoughts around a potential loan agreement with Hawkeye hotels and just site lodging LLC for our consideration and this comes into reports and recommendations portion of the agenda and this is the only item in that portion of the agenda this morning that is your new endorph yes good morning um thanks uh this morning I am uh proposing and recommending that we prepare a loan agreement with a local hotel company to build a long-awaited hotel down in that Pentagon Village project I'll run through a couple slides in that are in your packet to give an overview of the project but the big picture is we have a very experienced Hotel developer they've been looking at at a site at Pentagon Village since around 2017 2018. um uh of course the pandemic happened and every the whole that whole industry died for a couple years um but they're ready to proceed uh the the price of the project of course has increased since they first looked into it back in 2018 and 2019 so they're looking to make about a 41 million dollar investment into the city uh with the changing economic conditions both on the supply side the cost side and the debt side there's a financial gap that is hindering them from moving forward a few years ago the city did create that spark program to use unallocated Tiff Monies to support new investment new private investment into the community that create jobs I've been meeting with the hotel group for a few weeks now to better understand their situation I've actually been chatting with them every every couple months we've been we've been checking in for the last few years so I think I've got a really good understanding of what their needs are and how we might fit that need to make us to meet all of our goals but before I get too far along I wanted to get your input and Direction before we do that but ultimately my my recommendation and my request this morning is your authorization to prepare a complete loan agreement that we would then bring back to this body to approve at a future meeting so the hotel group is JR Hospitality a very uh a very busy Hotel Group in the Twin Cities in the midwest Jay bhakta is my main contact there that group is based in in Bloomington as and has been in the industry for more than 30 years the hotel owner and operator is out of Iowa uh Hawkeye hotels that organization has also been around for more than 30 years they do business in about 30 some diff or about 20 some different states and parth Patel is the is the VP that I've been working with there which is the same one that's been discussed since about 2019 uh five stories 239 guest rooms shared parking with the surrounding neighbors there's indoor guest amenities as well as outdoor guest amenities the site plan was first approved back in 2019 and they were ready to go they were going to break ground in Spring of 2020 and the world changed so they had to come back in in 2022 and um and reaffirm their permit it had sat for about two years the site is that Pentagon Village so this perspective is looking to the south from 77th Street um uh the hotel is right in the middle to kind of the middle left of the image here Pentagon Village is 12 acres it's part of a tip District the city worked in cooperation with the developer as well as met Council indeed to bring down the old buildings completely transform the site put in roads where none existed put in utilities were none existed build a one acre Park in the middle that the public gets to use and the developer maintains and also a parking structure that the entire property gets to use as well as public parking in that in that parking garage with the maintenance borne by the private owners so that whole infrastructure was put into place back in 2018 2019 and 2020 the retail on the front the two smaller buildings in this image were were constructed as part of the first phase as well so the hotel is phase two a building in the upper left rear corner is phase three which should be opening in a few months that's the Eddy Apartments and then phase four is the smaller building on the far left that's currently under construction and then the office building on the far right will will be the the phase five from the very beginning that's been the the most challenging the most aggressive the most bold piece and of course in this climate it's even more difficult but our focus is here on the hotel and how that pad is is ready to to be built on right now there's great momentum and really good energy at the site uh it'd be fantastic to keep that going with this with this hotel coming in as I've been meeting with the developer on this um the problem is simple it's it's the cost um uh since they first secured approvals and bought the land and bid the project and prepared construction documents to build it their cost has gone up 30 so now that their project is now about 41 million to build uh their primary lender is still interested however they've reduced the level of contribution that they'll submit as as debt um so initially the bank was going to provide 80 percent of of the cost the owners were going to provide 20 and just with the change in the economy and the change in price the bank has reduced their offer down to 75 percent so right now they've got a two million dollar Gap in their financing uh they're nearly ready to go they've been meeting with our building department for months on The Architects they were planning on breaking ground in September early October now they've got a two million dollar Gap they'd still like to proceed but if they don't find a way to to solve the Gap they go back to square one redesign the hotel rescale it go back to zoning it it would be delayed for years I would love just to to help get this project moving so some of the hre objectives as well as some of the outcomes we've we've identified in our spark program it's just is to support new private investment in Edina uh our focus is really on Redevelopment um since that's pretty much all that happens in Edina uh with this project moving forward we of course would make a dramatic increase to the property tax base we'd also create new source of tax revenue in the lodging tax and the sales tax that helps the park and our marketing programs we would also create permanent jobs about 30 to 40 new jobs would be generated at this hotel site and if we use our spark program as we had first hoped and laid out a few years ago we'd be able to to provide an interest-bearing loan to this project and winning three paid back to us the HRA could use those proceeds in a future revolving Loan Fund to help the next project and then the next project and then the next project so that's the goal we've had for a long time and now with sparkly actually have a way to fund it so um while I've been meeting with the developer on an ongoing basis we don't have a term sheet I didn't want to get that far ahead without talking to you and getting your direction but we do have some general terms that we've been we've been floating around some of these may change but they're pretty close the loan amount would be about two million dollars uh this the HRA fees that would be included or added to that loan are probably about thirty thousand that's the higher Dorsey and ehlers with the financial and legal work as well as a staff administrative fee because just the cost of service the loan and do the payments that has an impact to our staff so we'd want to we'd want to be made whole on that the term of loan that I've offered so far is a 10-year maximum term more likely that would match the construction financing for the deal which would be in the three to five to seven year range that's still being discussed with the bank the interest rate still to be negotiated but it would be at or below the construction loan cost um if it's if the interest rate is is much higher it helps us but it hurts the project and potentially kills the project I'm trying to find a way to keep us whole and see this project move forward uh the developer is ready to go to go so they um and still intend to put this deal together get it to close on September October uh and break ground right away um so our funds would be deposited our loan amount would be deposited to the escrow agent they would sit on that money and then disperse it over the duration of the project as draw requests come in we the HRA would be able to see those draw requests and just confirm that the work that we are expecting to happen is actually what we're paying for there is a little bit of risk in this I just want to be very upfront about that the senior debt from the bank is going to be the primary source of financing and our smaller loan will be subordinated to them worst case scenario everything falls apart the bank gets paid back first we get paid back second if there's enough money we get paid back if there's not we don't um that's a position that we don't like right so um talking with the with the owners they are willing to provide personal guarantees on the loan um Hawkeye hotels has over a hundred properties in their portfolio and even during the pandemic which really tested that whole industry they had no defaults on any other projects a similar situation with the developer they own if they own a few dozen properties and develop most of them that's really where their bread and butter is similar uh experience two very strong companies I think a personal guarantee from them would certainly Abate any risk to us the eligible expenses would be any of the construction costs labor and materials foundation work concrete carpentry Plumbing HVAC electrical any of that would be eligible what would be ineligible though would be the soft costs architectural fees inspection fees the cost of furniture the cost of coffee machines or startup supplies towels uh we want to be careful with these spark funds and that we can only use them for hard physical construction state law is very clear about that so we would mimic that in any loan agreement with them that the bank or the their other sources of funding would pay for those soft costs that we just can't support repayment of the loan uh that would also still to be fully negotiated we'd be aiming at doing a traditional principal and interest payment just like at any standard mortgage or loan it might be necessary though uh where the bank requires an interest-only payment and that can still be can still be fine it's not my first choice but it's my second choice so we might have to settle for that but that'll really come in our negotiating with the bank the bank wants to make sure that the project can pay its debt and get up and running and operational so we all share that same goal the repayment source of the loan would come from any of the business revenue generated from the project there would be no forgiveness some of our other loans we've forgiven because they've achieved other community goals and this one is just a loan so that it would be fully repayable we'd also arrange terms so that if they refinance the project mid-stream or if they sold it before they got to their permanent financing they would pay us back first and similarly when they convert from their construction financing to their permanent financing we would also be paid back so Our intention is not to have this loan linger for 10 20 30 years it's to get the project built get it operational and then we get out um a lot of common uh things late fees there'd be late fees default conditions would be our standard default conditions we would put a deadline to complete the project right now they're aiming at Spring of 2025 assuming that they can break ground this this fall and in our loan agreement we would demand to see evidence of completion to our satisfaction as well as the banks so a lot of the paperwork is going to be redundant to what the bank already sees we don't want to just be more bureaucratic but we want to make sure that we've we've supported the project we thought we're going to support so we'd want to see lien waivers and occupancy permit from the building department confirmation of compliance with Fair labor laws and all the other state and federal laws they've got to comply with we'd want to see that before we sign off on the loan um and then some of the conditions of the loan um we want to be reasonable but um uh but just to make sure that we're supporting a good project so we definitely want to add language that the project must comply with the construction permits must comply with state and federal laws um the taxes must be paid if they're not that's a default we'd also require that the building be maintained In First Class condition for the duration of the of the loan term just in case sometimes things happen right but if it's a project we supported we want our investment to look good and perform well we might also ask that guests of the city are able to stay there and get the lowest available rate from time to time we have guests in town for um not like party guests but business guests that are doing business for the city of Edina sometimes they need a hotel room I'm not sure if we can do that I still have to get a feedback from from Council but my thought is if we're providing a loan I want to make sure that we can give the taxpayers who ultimately pay for some of our guest Consultants to get the best deal possible so when we administer the loan um it's six easy steps but the first step is just to close on the debt that would be this fall make sure the owner the bank the HRA Are all uh open book with each other about the loan proceeds later this fall we would submit the HRA money to the escrow agent at that point it's out of our hands and at the title at the escrow agent company they're anticipating the project to take about 12 months to build they'll be using that modular construction so it goes a lot faster in fact they're planning on using the same contractor that's just across the street the hope is they finish up the apartment building walk across the street and break round on this one so that's how they can get it finished more more promptly but they'll submit monthly draw requests we'll have a chance to see that make sure they're doing what they said they said they're doing and then as they get close to to completion again we'll certify that in Step number four we'll be able to re review the lean wave lean waivers Etc and then step five is where they start repaying the loan uh regular loan payments back to us until it's fully satisfied all these steps would be on the record recorded on title to make sure that the the deal gets um it's closed to everyone's satisfaction so that's where we are they're the high level there's still a million details that we'll work through with the with the with the attorneys but this morning I'm asking your for your authorization to proceed on this and seeking your input and Direction um there's a lot of next steps that would still happen probably in the next month September is right around the corner so this would be a quick um conversation um but we would work cooperatively with the developer the owner operator and their primary lender to make sure that we can all agree on terms that meet everyone's risk profiles we would have a chance to review the developers performa and their financial information just to confirm that they're as strong as they say they are I mean they've got a very good reputation that's hard to earn that but we want to double check we'd also review past agreements with Pentagon Village LLC the master developer just to ensure that doing it alone with the bank isn't doesn't put us at conflict with other agreements we've already issued on the site we've had meetings with with those folks are ready to start warming up the conversation we'd also need to review our Minnesota business subsidy requirements there are state law about business subsidy it's been I think 12 years since we updated our business subsidy policy uh it's probably time to update that so we would do that along the same time but the big the big uh piece is actually preparing that full loan agreement so we would in in uh we would engage Dorothy and Whitney to prepare that it would look very similar to the last two agreements they've done for the Chamber of Commerce and for the Edina theater we'd prepare that come back to you hold a public hearing and then seek your consideration and approval for it so there's a lot of work to do in the next six weeks or so I think it's a great investment I think it achieves so many goals in the community and to the HRA but before I go too far too far I wanted to get your input and direction if there's things that you think if we're hitting it straight on great if anything we're missing any concerns you have please hear that now and I'll make sure we address it as we prepare the documents yes thanks Andrew andorff a very thorough presentation um I'm sure there's many Commissioners with questions I'm going to turn to commissioner Pierce first but before we go there um we just had a little sidebar conversation with commissioner Agnew and of course we know that she works for uh Marriott the Marriott flag and while this isn't a Marriott project uh Hawkeye hotel's DBA fish fist side lodging LLC is preparing to fly the Marriott flag so I think I'll let you state it for yourself I think you'd feel most comfortable accusing yourself from the conversation yes that is correct I will recuse myself from this one given that we saw imagery and they will be using Marriott in the name we'll get married I don't think it's a technical conflict but I do believe that it's a probably a wise thing to do into the circumstances all right I'm going to turn to commissioner Pierce he's got some questions for you thank you mist is here and so a couple of questions um you mentioned this is a request to clarify so you mentioned Tiff in the first I don't know couple of slides um but this is not creating a new tip District so can you just clarify the connection to the request to Tiff um because we do mention that earlier in the presentation sure happy too um about 10 years ago we the city created a TIF district at Pentagon Park so that District exists it's there it'll it'll be there for another 13 or 14 years um I should double check my math on that one but it'll be there for a while still um the Tiff district has been highly underperforming when we created that District we thought we were going to be able to run hard and there was a lot of work there was a ton of effort and some things just didn't work out so while there is a TIF district there's not a lot of development it's coming you see a lot of cranes there and there's you know more coming but we would not extend the Tiff District we would not expand the Tiff District we would just keep the Tiff District where it is if this project can get started you will see an increase in the tax base there will be more taxes created there will be more Tiff type taxes that incremental taxes created but that was the plan going back to day one it just been delayed for six or eight years at this point and so then as you articulate the there are unallocated to Dollars and so maybe just clarify the spark plan a little bit more in detail of what that is how it gets funded sure sure so in 2021 um uh the state legislators legislators passed a new law that allows cities to use unallocated Tiff monies what that means is when you create a TIF district you collect the the incremental Revenue right all the regular taxes still go to the schools and the city and the county and the state the state takes a big piece so all the regular taxes go to the regular places but those new taxes stay in the Tiff District and the ways the state Tiff laws are set up you need to commit those new monies within five years with this Pentagon project for example we made part of a commission of a commitment by the five years but when that five-year deadline hit this Pentagon district there was no development in sight on the whole north side of the street so um we didn't we the city was not going to over commit or pre-commit so now that there is a there are new projects there is some incremental taxes coming in on the north side of the street part of those are going to be directed to the um 4620 project that was approved in December um but the point is with the unallocated Tiff monies their monies that have already been collected um we also had a similar situation in our Southdale 2 District we had collected the money it was sitting in a bank account are invested somewhere um but there is no legal path for us to spend it it was sitting there it had already been paid by the mall and Lifetime and Rh gallery and Macy's and everybody else and so with this special law the the state senate or the state legislators gave the cities the authority to spend that money on new projects provided it did two things built something physical that increased the tax base and created jobs and so in in a dino spark fund we called it the spark fund we had about 9.6 million dollars uh that we had available that were already collected and paid by the businesses and with the spark fund now we have an opportunity to invest it and so there's no new taxes generated there's no new or there's no no new taxes levied and there's no new Tiff districts created with this money it's just taking the funds that we already have and be go being able to invest them in our community in a manner that achieves our goals and then the follow-up to that um if those funds are not allocated they go back to the county so yeah talk about that a little bit yeah good point so it's a use it or lose it type of situation the state law gave all cities not just Edina but this is for every city in the state they have until 2025 to use those Monies um any monies that are not committed by the end of 2025 will be returned to the county nothing against the county but I think our preference would be to have us direct how those taxpayers or how those tax moneys that are generated in Edina get spent in a dyna so one of the goals as we talk about helping businesses and helping the community uh here uh is to is to find some larger projects that we can help with their investment 9.6 million dollars is a large pot of money so we've already committed a couple million to the um to the finch project on 77th Street that'll help improve access to the park uh as well as the surrounding properties we've pledged a little bit to the chamber a little bit to the um to the theater but having two million in one project is a really good way to to move that along our goal is to uh direct every dollar of that 9.6 into a good project before that timeline expires uh thank you and then the last comment or question depends on how you you interpret what I say when you talk about the interest rate being the same or a little less than a construction rate I would think that our rate would be the same as whatever they had prior but I don't have any insight into that it just feels like we wouldn't be giving a break on the rate um just on the surface when I when I go through this so I don't know if there's a question in there or or not but we'll do our best to get the best rate we can and still get the deal signed yeah thank you all right commissioners thank you Mr chair yes so just to follow up on that since we're taking on a little bit riskier alone than the banks are I would strongly encourage getting that interest rate at the same rate you know if you look at it in terms of risk maybe it should even be higher so if we can match that construction loan that would be my direction because we are taking on a risk year alone so that's that's the first thing just to follow up that that I have a couple of questions one is about um just the terms of what we're going to be looking at and negotiating one thing is um will the documents that you're looking at include looking at those personal guarantees fairly closely because I want to make sure that you know they're not all all their assets and llc's that couldn't be reached so just sort of understand the depth of what that means okay so that's one thing you'll be looking at yes yeah yeah um so right now you're right the the way the these real estate deals are structured um this project legally is called fifth side fifth side lodging LLC and if if it fails it fails it's not going to fail it's going to be fantastic but Hawkeye hotels is the parent of that so if there is a failure in the LLC there won't be any money left to pay us so our guarantee will be with Hawkeye hotels as an entity as a corporate entity or with the owners that actually own that entity the bank has some um collateral they'll have the land that's worth 3.6 million um but the bank is putting out a you know 35 million dollar loan and they've got three million dollars in collateral so we'll put out a two million dollar loan and we'll have two million dollars of guarantees but we'll make that will be um we'll we'll make sure we look through that very thoroughly okay terrific thank you I'm sure everything will be great I just have to ask the question um do you know if prevailing wage will be used on this project I I'm I don't know that I'm not aware I'd be curious to find out um so the second set of questions are around kind of what the cost of this not going forward has been so um you know how much um uh what's the cause I I have around my questions cost of delay and that was early in your presentation um and I think you know we're looking at you know if we delay this and not move forward we're looking at two million dollars the costs will go up over time and the Gap will only grow so the the sense of timeliness I think is important so that it's not just that get if we delayed that is that correct in the last couple years the cost has gone up 30 percent yeah yeah I mean that's extraordinary we don't expect that to happen again next year but of course there's that typical inflation uh increase that we should fully expect um so that that'll be a burden on the cost side um the other cost is the cost to not build it so right now the property taxes they pay are virtually nothing it's just a vacant piece of dirt so they do pay a little something but it's not much they pay zero sales tax to the city so nothing to support the parks and they pay zero lodging tax so nothing to support the city's marketing and tourism industry um they create they create zero jobs when I have family come and visit they have no place I mean they could they stay in Bloomington when my family comes to visit be awesome to have them stay in Edina sex would generate at this site uh we do not not at this point we can certainly prepare that for the next time okay that's something I would like to see and then my final question is actually I got to take a tour of the module construction at the apartments to the South there um and it was in the wintertime and they said it actually because there's less daylight in Winter it slowed the construction has there any been have you heard any feedback about the timing of this and and how the rise construction has adapted to building it both summer and winter uh I have not I've heard I've heard uh I've heard highlights I've heard lowlights of the project but I I I'm far from an expert in modular construction um I'm happy to ask the the developer and the Builder about that I'd be curious to hear so um that's all so thank you Mr chair thank you commissioner just one question the 30 to 40 new jobs that will be created do we have any information on how much people will get paid for those jobs and will they be you know one of the things that we try to do is really create jobs that offer a livable wage so that people can you know stay and live in Edina so it'd be great to have that piece of information I just have some general information now I can certainly get more when I come back but about 75 percent of the jobs will be permanent jobs that are full-time with full benefits so that's about 75 percent of them I don't know what the wage is but it's Industries you know it's what the industry is like the other 25 percent of the jobs would be part-time without benefits I don't know the exact hourly wage or anything but that's that's what I've gleaned so far but I'm happy to get more detail when we come back appreciate your support for this project I think this when the spark fund was created by the council and by the HRA recommendations it was a really effective way to deal with some economic challenges in fact we have 9.6 million in in the fund that we created this revolving sort of nature to it I think is really and we can we can let that have life beyond the end of 2025. it is really a critical component of it and I'm deeply appreciative of that direction that we took um so I'll probably like the rest of my fellow Commissioners up here I want to make sure that we take advantage of the balance whatever that is in the spark fund and find projects that we can make investments in our city in by the end of 2025 so that uh that we can meet the goals that the legislature and meet our own goals and and use that money effectively so I think this is a terrific opportunity here for the spark fund and for the residents of Edina and I appreciate you coming forward with the notion um so um we've had good conversation here uh kosher Agnew has recused herself sitting out in the audience and before she comes back up is there a motion by any of the Commissioners to authorize staff to prepare a loan agreement with Hawkeye hotels DBA fifth side lodging loc for future HRA board consideration relative to this particular project still moved second Mr Jackson moves commissioner Risser seconds the adoption of the motion to authorized staff to prepare a loan agreement with Hawkeye hotels DBA fifth side lodging LLC for future HRA board consideration any further discussion all those in favor of adoption of the motion of stated say aye aye aye opposed carried all right good thank you manager newendorf thank you and uh commissioner will rejoin us now and then we're going to switch over to you uh with regard to some project updates and I think um yes if you'd like we had um a project update on the last agenda and we just ran out of time um uh so I'm happy to walk through that just with some highlights um stop me if you want to know about anything else and I I don't have every detail but happy to walk through it I do have some slides but they really don't don't match up with with what I'm going to talk about so maybe uh if there's something relevant we can pop it on um but in the uh in the project update we try to do this at least twice a year just to keep an eye on the big picture so these are projects of the interest of the HRA right so it's not every project in town it's not future projects that haven't even submitted for zoning these are just projects that are either in a tiff District projects that we support are projects that we own so it's pretty Limited um but still with that it's like five pages so as always there's a lot happening in Edina um I'm going to start off uh in the Grandview District we've finally seen some major project our progress on all that infrastructure work that's been happening so last week we installed the pedestrian bridge over the high over the train tracks we had almost a two-year delay waiting for a flagger from the railroad and um he was there on Friday and that was great so we were able to pick up the get the Big Crane pick up the bridge plop it over the tracks and set it down and so that's the biggest piece and the most um obvious the project isn't done so um we're still doing final work we have to put in an ADA ramp to get from the from the bridge to the parking garage as most of the Landscaping is in but none of the safety railings are in so that's why you see lots of construction barricades there and tape and whatnot there still has to be guardrails and all those safety features the electrical the the lights are there but they're not hooked up so give it a little bit of time we'll get it finished and again the the intention of that bridge is to connect the parking structure that's on the west side of the tracks with all the properties on the and the businesses on the east side of the tracks and so um there's about 270 parking stalls that are used sometimes but meanwhile Hilltop is bursting when there's a big funeral their parking lot is bursting we've got the new develop new construction on the public worksite Opus Corporation is in for another new project so this is a link that allows people to get from that parking structure to the other side of the tracks all right before you move on to the next project Christian Risser has a question for you related to that I moving either logically if you think about more Development coming in the Jerry's grocery store hardware store all of that I think there will be a desire for people to go in a Westerly Direction and The Bridge gets you across the railroad it there is a ramp that takes you into the surface parking lot but there's no way to exit that lot if you were in a wheelchair I understand there's going to be striping that'll take people to the base of the steps that go up to that private building but the only way you could really get down would be to use the ramp that cars use to get up into or leave that space and I really think that that's creating a hazard because we can't control we can't say oh this is just for people moving in This One Direction and only for people who are driving and using that lot so it's a very car-centric Vision which is kind of ironic for a pedestrian bridge and the other thing is if so if you're in a wheelchair you've got that problem if you're on a bike you have the same problem if you go down the stairs you end up in that parking space area that's also very busy and so I'm wondering what is the plan for getting people to be able to safely move to the west and access a sidewalk a good question it's a tough site it's a very tough site so if you recall the initial plan or the initial vision 14 years ago was to do a street through there and East West Street all the way from Vernon to Arcadia in front of the hilltop we studied that for six or eight years before before we finally realized it just doesn't work and it doesn't work because of all the grades that you mentioned in order to get a street that works with sidewalks and accessible and bike lanes and all that we'd have to tear down the ramp tear down Jerry's office building and tear down the brand new Walgreens drive-through we don't own Jerry's office we don't own Walgreens and that ramps in really good condition with a big infrastructure piece underneath it so at some point we realized a street just doesn't work and that's how we morphed from a traditional Street to just a pedestrian facility this is phase one so in the design there is uh there were a lot of discussions amongst the design team of how to get how to extend the bike route without going into the into the garage so the uh the way that the designers left it was um they if you go west I don't have a picture of the bridge but if you're going West on the bridge and you get on the other side of the tracks where the stairway is now the ramp if you go to the South if you go into the parking structure there's a gap where if you go to the north you could extend and do a bike lane like an ADA friendly bike ramp going to the north so that's how we decided to leave it as a future thing why we didn't build it now was it was a dramatic increase in price we'd have to make some provision to Walgreens because it would affect their loading dock that's a private part of property we don't own or control and we'd have to rebuild the railroads retaining walls that's millions of dollars of railroad infrastructure we didn't feel that was a good use of our funds and it was honestly it the cost of this Improvement was pretty high to begin with and then to try to make it I'll say perfect and get that next phase just there just wasn't money there so there is an opportunity at some point in the future but just like this bridge we wait for those strategic opportunities to happen so if the building where the Walgreens is is ever redeveloped also where our liquor store is if that's ever redeveloped I think that's the opportunity to rethink that whole side but right now with active businesses privately owned and an active drive-through not to mention all the Jerry's traffic to try to get more pedestrian facilities in there is just property we don't own and we don't control so that unfortunately will be a future phase it'll be a future phase but it's a present hazard so if someone is using that parking ramp behind juries and they've got someone with them that has a disability or wheelchair bound and they want to go over to let's say a little we have a concert in the in the new park how do they how do they get there if they start off where start off with a ramp if they if they start off in the ramp they Park in the handicap they drive into the ramp in a van they Park in the handicap spot they exit the van go along those the walkway that's built for them and then use the ramp to cross the tracks and get to the park that's what the bridge is intended to do that's what it's designed to do and that's what it's being built to do but if someone's coming from three blocks away we didn't we didn't build that sidewalk or could they also stop an Arcadia and access the park by offloading someone with a disability sure yeah that um when when the park is built in a couple years there still will be street parking on Arcadia um all the new infrastructure that's gone in is fully accessible that's why if you look at it it's designed that way intentionally the park will be designed to be fully accessible so you could get dropped off right in front as well I know I walked over there yesterday morning after a breakfast meeting at Hilltop and um you know the bank is still steep because we haven't gotten to phase two adjusters and so I know that that grade on that Hill will will soften and it's my recollection from the design phase when we went to this approval process was that that entire Meandering sidewalk that we see up to the right side is all ADA Compliant and will allow people to get down into the park or down to the restaurants but um correct it would have to be a little bit more creative Bush wish we didn't have to commissioner Pierce um I just a point of clarification in commissioner risser's comment are are we saying so if you were if you're going from Jerry's to the park or to um Hilltop everything works fine you park you go across the bridge or you go down into the park um and then when you're ready to leave you Traverse the same path back into the ramp and you're fine so is the question then if you're at the funeral home and you decide you want to go into Jerry's and you're in a wheelchair you Traverse the same path but once you get back to the ramp there's no safe way to exit the ramp to go to Walgreens or Jerry's or whatever is is that what we're saying I think that's the concern yeah I mean there is a ramp to get from the upper level down to that Alleyway and the private parking lot but it's just it was built for cars it's a steep ramp I I don't know the grade but it's probably too steep um I think a wheelchair could most wheelchairs could do it yeah but if it's a manual wheelchair you could get tired going up the hill Down's easy right um but you have to stop it so that's why the grade is regulated so you don't roll too quickly um but it certainly was not designed that building was built in the early 80s predated mid 80s predated the Ada laws predated a lot of things sure thank you thank you one clarification so the bridge coming over from this Park area across the railroad does that go to the top of that parking ramp it does both the accessible route is from the top level and that's where we put the accessible parking and the accessible ramp there is a convenience stairway that goes down to the lower level because some people like to park there as well so we looked into doing ramps in both directions again you're really constrained you can't build too too much over the train tracks you still had to get trucks through that loading alley we didn't want to have to rebuild the office and the ramp so we'd try to we couldn't squeeze in two ramps but we could squeeze in one and a stairway thank you right here so um that's so I that's a great clarification um so then in my scenario if I go back I can be on the top level I should be able to go into that building into the elevator praying and down in the building if it were a brand new building yeah you should be able to do to do that as I recall and I think uh commissioner has more there are stairs you have to go up to get into the building yeah that's all I meant yeah because that is ADA Compliant if I remember you go in there the restrooms that are ADA Compliant are down I think a level or they might be on that level one or the other the elevator is intended to um to take people up and down through that building which doesn't solve The Pedestrian if I'm on a bicycle issue and then the last thing I'll say this is an update not problem solving so I'm not going to ask any more questions on that one commissary do you have a follow-on yeah and a scenario you gave you gay or in terms of people from the senior Cooperative wanting to buy groceries at Terry's and just walk over or roll or whatever but um my understanding is with Ada compliancy that building is a private building and technically I think yes I I believe there is an elevator in there but if it's a private building that you need to have public space for the Ada movement maybe this is something that's spark I don't know well we can certainly have a conversation with the owners of of the building so might be a good opportunity to do that it's something we can look into further but the reason that we built what we build is that's what our budget allowed it we we didn't try to solve every problem at once but just one problem that we knew that we could tackle but there's always there's any number of other things we could tackle in the future you know it um I will say from having walked over there going east to west on the sidewalk and there's already plantings there uh some nice landscaping that's been done it has a really wonderful feeling to it as you move east to west so I think we're on the beginning of something that's really special here as long as we're on this uh rendering why don't you give us an update on gestures and the senior Co-op yeah yeah so um uh things are progressing on both the senior Co-op as well as Jester they're progressing at a slower Pace than we had first thought um we continue to learn that when you try to get three different prop three different partners to work on the same property at the same time it gets more complicated so my point is um expect an amendment coming forward at our next meeting we weren't done this morning to push the dates a little bit the update on the on the housing is that they've been in there early interest mode marketing mode for months having great response in the marketplace this week they go live converting those people that have expressed interest and put a small deposit down to show their interest to convert them to sign a sales contract so they'll be kicking off or they did kick off their pre-sales mode this week in order to get the HUD financing to build it they need 60 percent of the units pre-sold so that's about 56 units so that's what they'll be working on for the next couple months um uh our current contract um anticipated things could just get worked out a lot faster and they haven't and the contract calls for the property to be sold by December 31st they won't have their HUD financing until spring so they've asked to defer the closing until they know they've got the sales and they know they've got the financing that's the intention that we've had all along but the amendment will generally say It'll ask to move the closing date from the end of this year until spring of next year um other than that the deal is the same project is the same the the sales price is the same the responsibilities are the same and then we've been having a lot of conversations with the contractors for the both the restaurants and the senior building because it's a tight sight and so they'll have to work a lot with each other so um we're still working through schedules we'll know more once we have that pre-sales pace once we figure out how how fast those are selling um but we all the parties agree there's a way to work together it's going to be tight at one point for actually for a long time they'd entertained having the same contractor build both buildings there'd be just less commotion but the two very different types of buildings and so they decided that each property would have their own contractor so we're still working through some of those logistical details but all parties are frankly chomping out the bit to uh get the sales locked in get the financing going the city has withheld any additional design work for the park until we know that these are on Pace to get to get built and on schedule the funds to build the park are the sales proceeds from selling the land so we don't want to get over our skis and design the world's most perfect Park that now we don't have money to build so uh we've got our design team queued up we just ask them to pause a little bit until we see the timing from the other two parties this rejection has a question for you yes thank you Mr chair so with the pushback on the agreement to the spring does that change the construction schedules that also push that back or were they planning on building that summer irrespective no they would only build it if they have financing from HUD I understand that but but when we originally set the contract were we thinking it would be spring of 2024 they would break ground and if they get the financing will it still be spring of 2024 are we also pushing the whole thing back another four months or so yes yeah yes we are yeah so pushing it back four months or so right so they'll close in May initially we had hoped that everything would go a lot faster and we could actually close on the land and break ground next month that was the initial goal and we push it back to December just to give us some we'll go room what we found is that it took a lot more time than we ever than we expected so it does push construction back um but honestly no one would break ground in the middle of December anyway so um so rather than being ground broken the spring or this like right now this fall it'll happen next spring so that is a slight delay okay thank you very good let you continue on with your project update please yeah in the same area I mean uh we're at City Hall this morning you've seen all the construction work out there uh the contractors are doing an amazing job getting that roadway rebuilt um while still letting people get in and out of City Hall letting the police department get in and out and letting a construction crew get in and out of that reuter Walton building that Mason green apartment building is slated for opening at the end of this year they are also working with a restaurant to uh to to open up on the first floor uh gesture Concepts also will be building that restaurant they really like Edina so that's good to see so expect more construction on that private building Chad Milner our city engineer tells me that the road will open in time for school that was the plan all along you'll notice the curb lines are a lot different and there's much more green space in front of the apartment building than there used to be because the road there's that humongous interception we narrowed that intersection to make it more grass and less pavement so when that road reopens the curb will be in a very different place I've also been working with the developer they have some great Public public art sculpture that will be erected right in that corner that was part of their Tiff agreement was they would spend at least two hundred thousand dollars on public art in that area and so that should also be installed this fall so um that should really be a transfer transformational project for that site um let's see jumping along and other things um some good news on some of the projects that we started prior to the pandemic and finally finished so the the Nolan Mains at project at 50th and France this may they signed their last lease on their last commercial space so Cooks at Crocus Hill moved into that first level of the north parking ramp Soul cycle had originally intended to go there pre-pandemic and with the pandemic they terminated deals all in fact every deal across the country so it took a while to unwind that contract get the new tenants going but with cooks and bellacor bakery in there Nolan Maines is fully leased residential is fully leased commercial is fully leased the plaza has programming three or four days a week with music dancing children activities Fitness something else I'm forgetting so it's taken a while but we're finally at that point so I think there's a great social benefit of that from the from the financial perspective of fully leased building pays a lot more taxes than a half lease building so we're nice to cry it's great to cross that threshold and then honest on the similar Pace the lorient building um up at 40 or at Sunnyside in France near 45th reach the same Milestone uh they had a yoga studio that was their last tenant um and they're actually they had a retail that was their last but that that building is also fully leased now which is great I don't know if their residential is 100 leased but their commercial is um both of those are Tiff agreements and so as they're fully leased we'll continue to make payments to reimburse them for their eligible costs um but obviously both of those are transformational projects up at at the lorient you've got the wider sidewalks all this all the telephone poles and electrical poles that used to block the sidewalks you notice are now underground for two blocks we have the part of the Tiff agreement was if the developer was going to do it for his property he had to bury the lines like half a block South and half a block North so those sidewalks are much broader it makes her a little bit more pleasant pedestrian experience [Music] but it's nice to have those behind it behind us and finished in the greater Southdale area a couple big projects um 7250 France Avenue the office building uh ideally the developer is going to break ground in July it's August and you notice they haven't Broken Ground the capital markets are not friendly to Office Buildings these days so the developers not giving up it's not a dead project but the construction of that office building that we said we'd support with Tiff for all the public stuff will be delayed probably until next Spring right now the the markets are just not friendly if you can can get a bank to give you an offer the terms are not doable so I meet with the developer on that monthly to check in and just they're not sitting just looking at at the sky they're working their rear ends off on both the equity and the debt side to get those pieces in place but right now it's a very Steep Hill for them and then across the street at 7001 France where the U.S bank branch is Morton Mortensen construction is seeing the same the same thing so on the 7000 site they've got the office building and the residential so they're actively negotiating and in conversation with lenders and investors for both of those it still looks like the residential is going to go first on the mortensen's project across the street they're in for refined pricing of course prices keep going up um uh but they still obviously think that's a great project um six months ago they thought the office might go first until the rates kept going up every month so that project that's why I check in with a monthly just to make sure they're on Pace these are great companies Great teams but for the time being I would not expect any additional construction this year on those sites they're stabilized they're clean but I would anticipate more work next spring so slower than we thought but that's where we are right now in the in the markets and then in that same part of the world the Macy's site um I'll pull an image of that one up so I've been working with Enclave development on the Macy's furniture site um uh they still have it uh Enclave still has it under contract um but they learned a lot through our scratch plan process I really think that's a good thing to get input from a variety of folks so they will probably probably be coming back with some changes to this plan that are a little a little bit more but take some of the public comment into consideration and also the changes in the marketplace the biggest public aspect of this is to see if we can do that pedestrian Crossing to link the west side of France on the east side so actually at our next HRA session where we intend to have a work session to give you a more full update on that we don't have a solution we've got a lot of ideas we've collected ideas from a lot of folks but we will give you an update at our next meeting and then we intend to go live on the Better Together Edina website and get more public input on that because right now we've it's been pretty Technical and so we want to open that up for public suggestions and ideas the the goal for the uh for the pedestrian Crossing is to have the city decide on a general direction by the end of the year both developers are interested in working with us um but there's a lot of different options to consider and so we're hoping that we can identify the First Choice option so that they can get get working with their designs the last comment I'm uh we're actually just I'm sorry two two things and I'll finish um the fire station number two site that'll be coming to you for zoning approvals and site plan review um as that site has been designed we're still anticipating that there will be a second phase of something is it public is it private we don't know but in the past the city council has usually deferred to the HRA as far as how to deal with the land transaction if we are going to consider a sale or a lease so right now there hasn't been any decision by by this group sitting as a city council but I put that on our list just because that's a really good Redevelopment opportunity for something right now we're really focused on getting the fire station designed approved and built but um in the next couple years we should still think about what we want for the rest of that site and then just the last update I wanted to give is on this Edina Chamber of Commerce and their Innovation lab um so that on the agenda this morning you approved a minor amendment to their contract similar story things take longer than we would have thought they had hoped to be in April 1st then they got moved to June and I believe they're moving in next week so a little bit slower than we had than we had all initially thought but I've been able to tour the site through the construction it's looking amazing it's going to be a great asset for our whole business and entrepreneurial Community it's built for the residents it's it's built for those entrepreneurial minded residents non-resident businesses can still come too but it's looking good so as they get moved in I understand their Furniture is taking forever to get delivered so they will have a grand open opening ribbon cutting type of thing probably September October but when we get a date we'll let of course everyone know about that having been up there a couple times and the building is great it did our residents EJ Anderson did a great job on renovating the building so it's just a real wonderful addition to our community commissioner yes thank you Mr chair 70th is at proceeding according to schedule and then you've Trail and if you could tell that answer those two questions yeah I'll defer to Stephanie Hawkinson on that one um hello Commissioners good morning uh yes 40 40 is proceeding on schedule they expect to get their certificate of occupancy on October 25th don't write that date in concrete yet they have a leasing office opened up at Pentagon Park area I from my understanding they have 300 residents interested in 118 spaces so they expect to be fully leased up prior to opening terrific and then on the bike trail across the street do we know the timing of that my understanding is they're trying to cooperate and time it with the opening of 40 40 so construction vehicles can still get on site so you know that's a question for Chad um but I believe this fall from my understanding okay so it will come subsequently yes okay my understanding all right thank you so much that's all thanks for the update great anything else from commissioners okay all right um any HRA commissioner comments pretty good of the order all right is there a motion to adjourn still moved second which rejection moves commissioner Pierce seconds the motion to adjourn the meeting of the HRA this Thursday August 10 2023. any further discussion all those in favor of adoption emotional status say aye aye opposed carried We Stand adjourned foreign