HomeMy WebLinkAbout20070402 - VIII-B-4Mazch 27, 2007 VIII-B-4
TO: The Honorable Mayor and Council
FROM: John Grossman, HRA Director
RE: Recommendation on Redevelopment Agreement with Sherman Associates
SUMMARY: The Council Planning Committee met with Loren Brueggemann of
Sherman Associates on March 26 to discuss the existing market and fmancial feasibility
of the condominium and townhouse proposals for Block 1. The committee recommended
that staff clarify public and private costs under the terms of the agreement, and prepare
language terminating the agreement for consideration by the City Council and HRA.
BACKGROUND:
The City and the HRA have pursued redevelopment of the downtown to attract and
support new development that:
• Is market feasible
• Is fmancially feasible
• Meets the community's redevelopment goals
In 2004 the City and HRA selected Sherman and Associates for downtown
redevelopment. A site and building plan and TIF district were approved. The City and
HRA executed a development agreement with Sherman Associates in July 2005. It
documents the 29-unit condominium project, and later phases on Blocks 1, 3 and 29. In
September 2006, Sherman determined that the condos were not market feasible and
proposed an alternate development of 23 town homes. On February 28, 2007 Sherman
concluded that they could not build the town homes at the unit prices recommended by
the market report, although time and a market upswing could change that. In comparison
to the condominium, the town homes would contribute significantly less revenue to fund
community goals such as park improvements or visitor destinations.
The development agreement states that if there has not been a closing on development
property by March 31, 2007, the agreement can be terminated by one party giving written
notice to the other. Unless specific action is taken to terminate the agreement, it remains
in effect. Mr. Brueggeman, Vice President of Sherman Associates, has indicated that if
the existing agreement is terminated they would like to discuss some form of agreement
to preserve their development rights.
COMMITTEE RECOMMENDATION: 1) That staffclarify public and private costs
under the terms of the agreement, and prepare language to terminate the agreement for
consideration by the City Council and HRA in May. 2) That Council and HRA take time
to review downtown redevelopment issues and goals, and not consider new proposals
during this time.
March 30, 2007
TO: The Honorable Mayor and City Council
The Commissioners of the Hastings HRA
FROM: John Grossman, HRA Director
RE: Sherman Associates -Downtown Redevelopment
The attached letter was received too late for the Council packet. It is not signed because
Mr. Brueggemann emailed the letter from out of state.
Sherman Associates, Inc.
233 Park Avenue South
Minneapolis, Mn. 55415
Mr. John Grossman
HRA Director
City of Hastings
Re Downtown Redevelopment
Dear Mr. Grossman;
As per our phone conversation, we hereby request that the City of Hastings and
the Hastings HRA consider granting Sherman Associates, Inc. redevelopment
rights to those areas of the Downtown determined to be redeveloped thru the
City's to be completed study of their Downtown redevelopment area. This right
would be predicated on our being able to conform to the redevelopment goals
and parameters as prescribed within the study that the City is about to undertake.
We hope that our request will be given consideration based on our significant
investment to date in the redevelopment of your Downtown area. Thank you for
listening to our request.
Yours truly,
Loren E. Brueggemann
Vice President of Development