Council Minutes
PROCEEDINGS OF THE CITY COUNCIL
OF THE CITY OF GRAND FORKS, NORTH DAKOTA
June 8, 1998
The city council of the city of Grand Forks, North Dakota met in its adjourned session in the council chambers in City Hall on Monday, June 8, 1998 at the hour of 4:00 o’clock p.m. with Mayor Owens presiding. Present at roll call were Council Members Beach, Polovitz, Lucke, Hamerlik, Bouley, Glassheim, Carpenter, Sande, Klave, Beyer, Bakken, Hafner - 12; absent: Council Members Hagness - 1.
Mayor Owens announced that anyone wishing to speak to any item may do so by being recognized prior to a vote being taken on the matter.
Mayor Owens reported that this is a continuation on the matter of the southend land development and that copies of the Implementation Plan for the Southend Development had been presented to the council members, and that the items would be reviewed one by one: Document No. 7559.2 - Plan.
CONSIDER ITEMS IN IMPLEMENTATION PLAN
1. Authorize entering into an agreement with the Park Board to purchase the Lincoln Park Golf Course.
a. City would advance $1.8 million to the Park Board prior to Wednesday, June 10, 1998.
1.) $1 million for the Park Board to use as their first installation on the purchase option on the Ole Flaat Trust land.
2.) $0.8 million for the Park Board to start the design, etc. of the southend housing/golf course development.
b. Start the process of establishing the purchase price of the Lincoln Park Golf Course.
2. Authorize starting negotiations on a development agreement with the Park Board for the Ole Flaat Trust land (south end housing/golf course development).
a. First, the City determines its interest in developing the property. This will include the economics of the project based on the findings of Maxfield Research and the findings of
preliminary engineering services. This will probably take until the end of August to complete.
b. If the City determines it is not interested in developing the project, the Park Board will have one year (until June 10, 1999) to seek another developer.
c. If the Park Board does not find another developer, the City will purchase the Ole Flaat Trust land at the price that the Park Board established in their purchase agreement.
3. Authorize starting the process of reactivating the Grand Forks Housing Finance Agency (GFHFA). It is anticipated that the GFHFA will be established as the financing and management agency for the entire development. It is anticipated that the City would need to obligate $2.5 million in CDBG funds as an equity investment for operating capital.
4. Authorize entering into an agreement to perform preliminary engineering services with Greater Grand Forks Engineering Group. They would be responsible for contracting for soil borings and any preliminary geo-technical designs, laying out the preliminary plat, laying out the preliminary infrastructure and all associated cost estimating. Also included would be construction management services for such things as design and construction sequencing and associated cash flow projections.
5. Authorize amending the City’s current contract with Maxfield Research to perform the market analysis. This information will help in several ways. First, it will supply critical information to be used to properly plat the subdivision to assure it meets market demands. This will help in balancing esthetics and cost for the lot layout. Secondly, it will help analyze the housing market to substantiate the economics of whether to proceed with this development.
*Note: All funds to be initially financed through the City’s line of credit with the State of North Dakota, except the $2.5 million in CDBG funds as equity under the Grand Forks Housing Finance Agency.
CONSIDER ITEM 1 OF THE IMPLEMENTATION
PLAN - ENTERING INTO AGREEMENT WITH PARK
BOARD TO PURCHASE LINCOLN PARK GOLF COURSE
Mayor Owens called for consideration of item 1. It was moved by Council Member Hafner and seconded by Council Member Bakken to authorize entering into an agreement with the Park Board to purchase the Lincoln Park Golf Course and the City would advance $1.8 million to the Park Board prior to Wednesday, June 10, 1998.
COUNCIL MEMBER BABINCHAK REPORTED PRESENT
Council Member Hamerlik stated that the $1 million is needed from the City for the first installment on the option will come from our line of credit with the State of North Dakota, that needs to be repaid, and questioned how that would be repaid or what is the funding mechanism for the repayment of that line of credit. Mr. Vein, city engineer, stated that what they would get by doing this is doing the purchase of the properties for the dike line and the levee alignment in the future and that there would not be a precise financing mechanism right now, that in the future they were looking at various funding options for a local share of the dike project, including using existing infrastructure, future quarter percent sales tax, selling bonds and paying that back through some type of special assessment process, etc. and would not be making that determination of the permanent funding until with the flood protection project and would be advancing the money at this time through the line of credit with the State of North Dakota. Council Member Hamerlik noted that this will not come from the General Fund from the City, but from other funding mechanisms to be determined later. Mr. Vein stated that was correct.
Gene Schneeweis stated that the City has needs far superior to being involved with providing money for infrastructure on the southend to the Park District and building a golf course, that the City should concentrate on coming up with the idea of where the money is going to come from to build a dike. He stated that they should be using money for building the dike and for the community development of other areas in fixing the streets.
Council Member Carpenter stated that with this motion the City would be acquiring the property from the Park District for the golf course for use in the dike line.
Howard Swanson, city attorney, stated that the difficulty he has with the motion is because we don’t have a stated price on the golf course and that remains to be negotiated, and it would be difficult to enter into a purchase agreement and a more prudent motion would be to authorize entering into a joint powers agreement with the Park District for the negotiation of the acquisition of the Lincoln Park Golf Course and which would include an advance of $1.8 million on any agreed upon purchase price. The mover and second agreed with the change in motion.
Mr. Swanson advised that the City would be advancing $1.8 million on the acquisition of the Lincoln Park golf course; and that the joint powers agreement will contain the same essential elements as the purchase agreement, and the problem they have under ND law with a purchase agreement is need to have some specificity with the price or the manner in which the price will be determined, and at this point those terms have not been agreed upon and have not been identified, and the joint powers agreement will give us broader room to include all of the terms that are contained in this document entitled “implementation Plan” into that one document as opposed to having a number of different documents. He stated that the joint powers agreement will provide for the advanced $1.8 million to the Park District on or before the 10th of June, 1998, assuming that it is approved; and will require additional negotiations on the purchase price for the Lincoln Park golf course, that you are not committing to that acquisition price but are advancing $1.8 million, and what the Park District does with that money presumably is to acquire the south end property, the City will not be taking title of that property at this point. He stated that terms talked about last week in general can be rolled into the joint powers agreement. He stated they are identifying a partnership between the City and the Park District to move forward in an incremental fashion to accomplish what they were discussing at the June 3 meeting
in one step.
Council Member Beach asked if the Army Corps of Engineers needs to be involved in any way if this is destined to be used as a dike line. Mr. Vein reported that the City of Grand Forks is responsible for all land, easements and rights of way for the alignment and with the alignment being planned adjacent to Belmont Road running the entire length of the Lincoln Park golf course, the City will be responsible for acquiring that property; and City would be responsible for that and acquire it, and the amount that would be applicable to the project would have to be according to some federal guidelines.
Council Member Beach questioned the matter of establishing the purchase price, and asked if there was any implied purchase price. Mr. Staley, Park District, stated there was none and that they have an appraisal and will negotiate and will be based on whatever is fair standards and principals. It was noted that the City will be acquiring a second appraisal.
Upon call for the question and upon roll call the following voted “aye”: Council Members Beach, Polovitz, Lucke, Hamerlik, Bouley, Glassheim, Carpenter, Sande, Klave, Beyer, Babinchak, Bakken, Hafner - 13; voting “nay”: none. Mayor Owens declared the motion carried.
Mayor Owens noted that these items will come back before council again.
CONSIDER ITEM 2 OF THE IMPLEMENTATION
PLAN - TO START NEGOTIONS ON DEVELOPMENT
AGREEMENT WITH THE PARK BOARD
It was moved by Council Member Sande and seconded by Council Member Klave to authorize starting negotiations on a development agreement with the Park Board for the Ole Flaat Trust land (southend housing/golf course development).
Gene Schneeweis asked if this will cut the Board of Realtors and local developers out of their share of the business, and should keep it in house and not cut the realtors, and asked to allow the local developers to have first hand and can’t build affordable houses in town because too many people involved.
Council Member Lucke stated that the order of possibilities that could occur, he didn’t see it specifically stated in Mr. Staley’s letter of June 6 that the Park Board still wanted to leave the option open to get a private developer involved in this earlier should that possibility present itself and that is before the Maxfield study came in and if thought it worthy to get a developer going on their own and City would provide the infrastructure as we would do for any other developer. He moved an amendment to include the following, that the option would be open for a private developer to come forth in the next few weeks and commit to the project guaranteeing the Park District a golf course, and that lot prices and distribution would be in the hands of private developer who will be playing to the open market. Council Member Beyer seconded the motion.
Council Member Lucke stated that the motion basically expands the a), b) and c) provisions of Item 2, that provides for the eventuality that should they want to get a developer involved earlier, they still have that right, that a), b) and c) almost prohibits them from doing that until the Maxfield research comes or the one year expires; this gives them the option to do what they would like to do earlier should that circumstance present itself.
Mr. Staley stated that his intention and discussions of the staff is before that happens, they would come back to the council, and that if a deal comes before them would come back and not wait until the end of August.
Council Member Babinchak questioned that if each one of these items comes back to council, and asked what the process is and how does that take place; that if voting for the motion are including the options. Mayor Owens stated this is not to start the negotiations, and the actual negotiation will come back to council. Council Member Carpenter stated that the Park District is asking and this agreement contemplates that the City would be the party that would buy them out June 10, 1999 if all else fails, and we are making that commitment with the approval of this. It was noted that the council is committing to this but the actual agreement will come back.
Council Member Babinchak stated that if the study shows that it’s not feasible right now, the City is still committing to buy the property and keeping the property for future growth. Council Member Carpenter stated that the City would end up owning 313 acres which City could do with as wish at that point in time.
Gene Schneeweis asked where the money is going to come from to purchase the313 acres if split up today, of $1.8 mil today and committing to the $3 mil, and where will that come from, raised taxes, bonds.
Council Member Carpenter stated there is nothing specifically identified, would either come from a bond issue or would come from CDBG funds.
Council Member Hamerlik stated that the agreement that the Park Board has with the Ole Flaat Trust, anything in there to prevent us from buying that property, providing that another developer isn’t found, that would prevent us from using it in any way that we wanted to, that he was led to believe that it had to be used for a golf course. Mr. Staley stated that the only provision is that if the Park District didn’t buy that, then the Park District is prevented from building a golf course east of I-29 and south of 32nd Avenue for five years. Council Member Hamerlik asked that as they go into the negotiations, that be cleared up.
Council Member Beyer stated that the Park District in their negotiations intended that, that if a developer came before the Maxfield study is done, that they would work with the private developer, and that if that happens the Federal Relocation Act is when take somebody’s home, have to provide them with a like lot, and if a private developer gets this we will be paying top dollar for those lots.
Mr. Swanson stated he wished to answer some questions: 1) whether or not the conveyance of the Park District contains any deed restrictions or covenants as to the use; 2) whether or not the purchase agreement or option agreement that the Park District has, is in fact assignable to the City if the City seeks to exercise under 2.c; and 3) whether the City would receive a warranty deed in the event of any ultimate acquisition by the City.
Dick Ohlson, attorney for the Park District of the City of Grand Forks, and in the representation of the
Park District as related to the purchase agreement with the First National Bank, that it is intended that the purchase agreement of the property will be for a deed, and they will then have a mortgage and promissory note as the unpaid balance of the property for the installments, and will have installments that will pay one year from date and two years from date to complete the payment. He stated that the limitation that everyone is concerned about is a limitation that states that the parties acknowledge the Park District as purchaser, and previously purchased 160 acres from the seller with the objective to build a golf course, and that was the first 160 acres described as the S Half of the N Half of Section 28, and what they are purchasing now is the S Half entirely of those two quarter sections, the SE Quarter and the SW Quarter of Section 28 of that property. He stated that the Park District further acknowledges that it has no intention to build a golf course on any other location or any other property, and the Park District further agreed that if in the next five years the Park District should purchase other property south of 32nd Avenue South and east of I-29 other than the property indicated herein and commence a golf course exceeding 9 holes on said purchased property, the Park District shall purchase the premises indicated herein meaning that if we should --- a golf course greater in size than 9 acres we still have the responsibility of buying this land. He stated it was a fail safe agreement so that if they build property elsewhere that they would still be bound by this land so that this land would not have a diminished value per acre by virtue of development elsewhere around the golf course. They would be acquiring property by warranty deed and be able to convey by warranty deed to the City, and that there are no restricted covenants or deed restrictions contained within that conveyance, other than documents already of record. Mr. Ohlson stated he has not seen the title opinion to see what limitations there may be on the land currently; he stated the purchase agreement will be consummated with the sale and there would not be an assignment of the purchase agreement, that he couldn’t state that the purchase agreement is assignable, it’s not an issue- the issue is whether or not they have enough money to buy the land effectively June 10, and if they do, they will receive a warranty deed subject to mortgage and note for the unpaid balance. Mr. Swanson stated that took care of his questions and seem to be consistent with the recommendation in 2.c in the Implementation Plan.
Council Member Beach stated concern that a private party could purchase the land from the Park Board before they realize the results of the Maxfield study, and if that was correct that the property could be sold out from under us. Council Member Hafner stated that maybe they would want to make that a mutual agreement between the City and the Park District.
Upon call for the question on the amendment to the motion, and upon roll call the following voted “aye”: Council Members Polovitz, Lucke, Hamerlik, Bouley, Beyer - 5; voting “nay”: Council Members Beach, Glassheim, Carpenter, Sande, Klave, Babinchak, Bakken, Hafner - 8. Mayor Owens declared the amendment defeated.
Council Member Hamerlik moved the same motion but include mutually agreed upon. Council Member Klave seconded the motion. Upon roll call the following voted “aye”: Council Members Beach, Polovitz, Lucke, Hamerlik, Bouley, Glassheim, Carpenter, Sande, Klave, Beyer, Babinchak, Hafner - 13; voting “nay”: none. Mayor Owens declared the motion carried.
Upon call for the question on the original motion, as amended, and upon roll call vote, the following voted “aye”: Council Members Beach, Polovitz, Lucke, Hamerlik, Bouley, Glassheim, Carpenter, Sande, Klave, Beyer, Babinchak, Hafner - 13; voting “nay”: none. Mayor Owens declared the motion carried.
CONSIDER ITEM 3 OF THE IMPLEMENTATION
PLAN - AUTHORIZE STARTING THE PROCESS OF
REACTIVATING THE GRAND FORKS HOUSING
FINANCE AGENCY
It was moved by Council Member Carpenter and seconded by Council Member Beyer to authorize starting the process of reactivating the Grand Forks Housing Finance Agency.
Council Member Beach asked what type of people might serve on this agency, whether there would be a direct representative of the City and direct representative of the Park Drive. Council Member Carpenter stated this motion is basically authorizing staff to began the process of doing some of that research, and will come back for any amendments to the bylaws or any changes and will have to come back and not actually going to be transferring money or starting the organization again so if do go ahead with this in August, then ready to move forward.
Mr. Schneeweis asked if they were going to include in the committee individuals from the private sector, such as developers and realtors that could be assisting, and private citizens that aren’t included in the special interest groups that would help coordinate their adventure in this.
Council Member Sande asked when this was last in existence and what it was for. Mr. O’Leary reported the Grand forks Housing Finance Agency was initiated in the mid-1970’s and was founded to do a single project, and the bond for that project was paid off several years ago, and did have Mr. Dittus through the Housing Authority take a look at the Housing Finance Agency to see if it could be rejuvenated for the purposes of this project and whether they could enter into an arrangement like this; Mr. Dittus called staff today and indicated it was his opinion that he thought that could happen. He stated that the Housing Finance Agency in Grand Forks is similar to the Housing Finance Agency on the State level, they have the authority to incur debt, acquire and dispose of property and have quite a lot of duties and responsibilities under the Century Code and that’s why this organization was chosen. He stated that the organization was founded as a non-profit corporation to sponsor a low income housing project, that they did that, and that was the only project they ever incurred; that the Housing Finance Agency could issue bonds to do first-time homeowners and on the State level that’s what the Housing Finance Agency does and assists property owners, property developers in developing affordable housing. He stated that in Grand Forks they haven’t gotten into that, because it would be redundant to what the State does.
Mr. Staley stated that in the wording it says it is anticipated that GFHFA will be established as a finance and management agency for the entire development, but that the concept is that may include part of the golf course or not, or more or less the housing part of it, and in their discussion with staff is that maybe in the joint powers that would be the entity from the City to be in the joint powers agreement with the Park Board for the entire thing, but this is all to be negotiated and brought back.
Upon call for the question and upon voice vote, the motion carried 13 votes affirmative.
CONSIDER ITEM 4 OF IMPLEMENTATION PLAN -
TO AUTHORIZE ENTERING INTO AN AGREEMENT TO
PERFORM PRELIMINARY ENGINEERING SERVICES
It was moved by Council Member Beyer and seconded by Council Member Bakken to authorize entering into an agreement to perform preliminary engineering services with Greater Forks Engineering Group.
Mr. Vein reported they are now looking at doing a preliminary engineering study which would look at the preliminary layout of the lots, look at the infrastructure that would be necessary to serve those lots and costs associated with that. He stated they would do some of the soil boring information that would be necessary for doing some of the grading, looking at fill requirements, and deleted from earlier plan a specific long term agreement for construction management services and they would not be as involved in this case because this would be a preliminary involvement here and would look at that to be incorporated and subcontracted through the engineering group, and not a specific contract. He stated that any additional professional services would either be an amendment to existing contracts or complete request for proposals for somebody and that would be a process that would be established later and not incorporated here.
Council Member Carpenter stated that they need to put a limit on the dollars spent with them and what level of dollars do they anticipate spending for this. Mr. Vein stated he would envision in the neighborhood of $100,000 for something like this, and would look at contracting on an hourly basis not to exceed, they would put together a scope and if there was any concern on that that would come back to the council for final approval, and best estimate would be $100,000.
Council Member Carpenter moved an amendment to the motion to limit the expenditure of funds not to exceed $100,000. Council Member Sande seconded the motion.
Mr. Schneeweis stated that in the past the engineering division had serious cost overruns, one was Advanced Engineering for $100,000 and they ran over $50,000, and asked if there was going to be a provision to keep a stronger look at the cost overruns.
Upon call for the question on the amendment and upon voice vote, the motion carried 13 votes affirmative.
Upon call for the question on the motion, as amended, and upon roll call vote, the following voted “aye”: Council Members Beach, Polovitz, Lucke, Hamerlik, Bouley, Glassheim, Carpenter, Sande, Klave, Beyer, Babinchak, Hafner - 13; voting “nay”: none. Mayor Owens declared the motion carried.
CONSIDER ITEM 5 TO THE IMPLEMENTATION PLAN -
TO AUTHORIZE AMENDING THE CITY’S CURRENT
CONTRACT WITH MAXFIELD RESEARCHTO PERFORM
MARKET ANALYSIS
It was moved by Council Member Beyer and seconded by Council Member Carpenter to authorize amending the City’s current contract with Maxfield Research to perform the market analysis, not to exceed $60,000 additional for specific study for the southend development.
Council Member Carpenter stated that the primary extent of the cost will be in a specific survey of the homeowners who have been or will be displaced. He stated that the initial with Maxfield Research was a community-wide housing study as to what were the needs across the entire spectrum of housing within the city, and this is specifically related to the southend development.
Council Member Babinchak asked if we would have to do this under the Uniform Relocation Act at some
time. Mr. Swanson advised that it wouldn’t be mandated by law but it is a possibility that study or some study of similar nature would be undertaken.
Upon call for the question and upon roll call vote, the following voted “aye”: Council Members
Beach, Polovitz, Lucke, Hamerlik, Bouley, Glassheim, Carpenter, Sande, Klave, Beyer, Babinchak, Hafner - 13; voting “nay”: none. Mayor Owens declared the motion carried.
ADJOURN
It was moved by Council Member Hamerlik and seconded by Council Member Hafner that we do now adjourn. Carried 13 votes affirmative.
Respectfully submitted,
Saroj Jerath
Deputy City Auditor
Approved:
______________________________________
Patricia A. Owens, Mayor