Wayzata is a premier suburb located 11 miles west of downtown Minneapolis. With a population of 4,500 people, Wayzata is a tight-knit community which is known for its vibrant downtown and picturesque setting on Lake Minnetonka. A popular destination for visitors, Wayzata’s downtown is home to a number of specialty shops, boutiques, professional services, and restaurants.

Wednesday, September 21, 2011

Presbyterian Homes proposes building one block, performance delay at Wayzata Bay Center

Thought you might want to see what Presbyterian Homes is up to...  They want to change the development agreement, and forgive me if I miss or have a detail wrong, but here it is to the best of my comprehension:
  • Pres. Homes wants to build only one of the five blocks that has been proposed instead of the three previously agreed upon in order to demolish the structures--however they will settle for two blocks of senior housing
  • Pres. Homes wants to delay and extend the timeline for completion to 2014 for Phase I (originally three blocks, now one or two blocks of senior housing) and 2016 for Phase II, the balance of the project.
  • Pres. Homes wants to restart the TIF District in 2011 or 2012, as opposed to the false start that occurred in 2009.
Long and short of it is that Presbyterian Homes wants to build one, maybe two blocks of senior housing on the Wayzata Bay Center site, and the rest of it is for sale whether directly from Prebyterian Homes, via a different developer like Opus, etc.

Know this as well, the City Council is now weighing a contingency plan for what the demolished blocks should look like in case it takes a number of years for a different developer to purchase and build on the sites.

Have a comment of your own?  Something overlooked? Put it in the comments box below this post.  

Also, please find a memo to the City Council and City Manager from Jay R. Lindgren of Dorsey & Whitney that summarizes Pres. Homes requested changes to the development agreement.  DG


This memorandum outlines the terms of the proposed Second Amendment to the Wayzata Bay Center Redevelopment Agreement.

1. Demolition Timing

A special law passed by the Minnesota Legislature in 2010 permits demolition of the shopping center without jeopardizing the ability of the City to continue to use tax increment.  The Amendment allows the Redeveloper to demolish the entire shopping center upon receiving a Go Ahead Letter for any one of the following Blocks: East Block, West Block, North Block, Superior Block or Plaza Block.  The current Agreement requires a commitment for three Blocks before demolition occurs.

2. DNR Parcel

The Amendment acknowledges that City purchased the DNR Parcel.  Consistent with the terms of the existing Agreement, the City agrees to convey the DNR Easement (or an equivalent license) to the  Redeveloper at the Land Transfer Closing, subject to DNR approval.  This reflects the progress to-date on the DNR transfer.

3. FOFR Agreement

The FOFR Agreement provides the Redeveloper with a right of first offer, first refusal (“FOFR”) on a portion of the Old Superior Boulevard Parcel and the Gas Station Parcel (the “FOFR Parcel”).   The FOFR Agreement has a term of five years and was triggered when the City improved the FOFR Parcel with parking this spring.  The Amendment acknowledges that the 5-year FOFR term started on April 29, 2011 and will expire on April 29, 2016.  The Amendment further stipulates that for a period of five years after the FOFR expires, the City will provide notice to the Redeveloper of its intent to sell the FOFR Parcel or if it considers any offers to sell the FOFR Parcel.  This brings greater clarity to what your advisors believe was
originally intended.

4. Maximum Redeveloper Amount 

 Under the Agreement, the Redeveloper had a maximum obligation for Public Infrastructure Costs up to a total $9,839,500.  When the First Amendment was adopted in December 2009, this maximum remaining obligation was estimated to be $6,285,000 (the 09202011_CC_Packet Page 6 of 2212 “Maximum Redeveloper Amount”) because of the public improvements costs already paid for by the Redeveloper (like the initial Superior Boulevard Improvements).  As a result of the construction of the Initial Superior Boulevard Improvements and the Sanitary Sewer Improvements, the Redeveloper has requested that the remaining Maximum Redeveloper Amount be further reduced to reflect the additional public improvements since the First Amendment.  Please note that the actual amount of this number is still being calculated and the
number may actually rise prior to Council consideration of the proposed Amendments as a result of inflation and delayed deadlines.

5. Minimum Improvements Completion Timeline

The Amendment extends the commencement and completion dates in the Minimum Improvements Timeline by twelve months.  Commencement for Phase I (senior housing on North and Superior Blocks, plus North Linear Park) is now June 30, 2012, with completion by December 31, 2014.  Phase II commencement is now March 31, 2015, with completion by September 30, 2016.

6. Public Infrastructure Completion Timeline

The Amendment acknowledges that the Initial Superior Boulevard Improvements, certain Lake Street Improvements and most Sanitary Sewer Improvements have been completed and were financed through special assessments levied against the Minimum Improvements Area.  The Amendment requires completion of the Remaining Public Infrastructure Improvements by the earlier of October 1, 2016 or upon issuance of a certificate of occupancy for either the East Block or West Block.

7. Timing and Sequence of Blocks

The current Agreement required the Redeveloper to construct at least three blocks under the Phase I timeline.  The Amendment requires only two blocks under the Phase I timeline.  All other blocks must be completed under Phase II timing.  The current Agreement required construction of the East Block Linear Park simultaneously with the first Block that is constructed.  The Redeveloper has instead requested that the North Block Linear Park be constructed simultaneously with the North Block (starting by June 30, 2012 and completed by December 31, 2014) and the East Block Linear Park be constructed simultaneously with the East Block (completed by September 30, 2016).

8. TIF District

The Amendment provides for the decertification and then recertification of the TIF District for purpose of resetting and therefore maximizing the term of the TIF District to include 26 years of collection.  The Amendment further provides that the Authority will defer receipt from the TIF District for four years unless the Redeveloper requests earlier collection.  This “resetting of the clock” doesn’t increase the maximum amount the Redeveloper can receive, but it likely allows more amounts to flow earlier and makes it more likely the Redeveloper will actually receive the amounts already authorized.

9. Gas Station Parcel Purchase

The Amendment acknowledges that the Redeveloper satisfied its obligations to purchase and transfer the Gas Station Parcel and the transfer and payoff of the Contract for 09202011_CC_Packet Page 7 of 2213
Deed to the City.  It further acknowledges that the City has satisfied its obligation to pay $50,000 to the Redeveloper and now has fee title to the Gas Station Parcel.  This reflects the current status of the development.

10. Satisfaction of Affordable Housing Requirements

The Amendment acknowledges that the Redeveloper has satisfied its obligation to make contributions for offsite affordable housing as required under the Agreement. This reflects the current status of the development.

11. Park Dedication

The Amendment provides that the Redeveloper will have satisfied all park dedication requirements upon completion of the North Linear Park, East Linear Park and Park Plaza.  It further provides that the Redeveloper will not be required to make a cash payment for park dedication if the Redeveloper provides the City with all Public Access Area Easements and Park Improvements Easements as required in the Agreement.  Your advisors believe this was always your intent, and the Redeveloper has requested this confirmation.

12. Deadline Extensions

The Amendment provides the Mayor with the ability to postpone any deadline in the Agreement, including the deadlines adopted under the Amendment, for up to 90 days if the Redeveloper agrees in writing to each extension.

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