Minneapolis Park & Recreation Board

Resolution
2018-125

Resolution Authorizing the Execution of a $1,160,000 Mortgage Note and Mortgage; and the Use of Up to $1,190,000 of the Operations Center Capital Allocation in the Capital Improvement Program to Complete the Acquisition of the Northside Operations Center Located at 4022 1/2 Washington Avenue North, Minneapolis, Minnesota

Information

Department:FinanceSponsors:
Category:Financial ReportProjects:No Project

Attachments

  1. Printout
  2. Attachment A - mortgage authorization

Item Discussion

Whereas, The Minneapolis Park and Recreation Board (MPRB) was created by the Minnesota Legislature in April 1883 and has the authority to acquire parkland with six votes of the Board of Commissioners;

 

Whereas, The MPRB has adopted the Above the Falls Regional Park Master Plan that defines a regional park boundary along both sides of the Mississippi River from the Plymouth Avenue Bridge to the Camden Bridge;

 

Whereas, 4022 ½ Washington Avenue North is within the Above the Falls Regional Park Master Plan boundary;

 

Whereas, This property was deemed a critical acquisition for implementation of the Riverfront Trail System articulated in RiverFirst, A Park Design Proposal and Implementation Framework for the Minneapolis Upper Riverfront that was approved by the MPRB in March 2012; 

 

Whereas, This property was acquired from L & R Development, LLC, with seller financing approved by the Board in January, 2016;

 

Whereas, This seller financing requires the MPRB pay a balloon payment of $1,797,421 in March, 2018;

 

Whereas, The total acquisition and closing costs is estimated to be $2,959,000 of which the MPRB previously secured $609,000 in revenue sources leaving $2,350,000 to be funded;

 

Whereas, MPRB staff and legal counsel have been presented a proposal whereby Bell Bank has offered to purchase the mortgage note and said offer has been determined to be a favorable offer; 

 

Whereas, The Note shall be issued pursuant to Chapter sections 6.2(f)(3) and 6.5(b) of the Minneapolis City Charter to finance the purchase of a new Northside operations facility for the Board; 

 

Whereas, MPRB staff, in concert with legal counsel, recommend Bell Bank as the lender to finance up to $1,160,0000 in the form of a mortgage;

 

Whereas, MPRB staff have identified the use of up to $1,190,000 of the Operations Center Capital allocation in the capital improvement program to cover the balance of the acquisition and closing costs;

 

Whereas, The mortgage authorization (Attachment A), mortgage note and mortgage will become effective with six votes of the Board of Commissioners; and

             

Whereas, This resolution is supported by the MPRB 2007-2020 Comprehensive Plan, which envisions “Dynamic parks that shape city character and meet diverse community needs;”

 

RESOLVED, That the Board of Commissioners authorize the execution of a $1,160,000 mortgage note and mortgage; and the use of up to $1,190,000 of the Operations Centers Capital allocation in the capital improvement program to complete the acquisition of the Northside Operations Center located at 4022 ½ Washington Avenue North, Minneapolis, Minnesota; and

 

RESOLVED, That the President of the Board and Secretary to the Board are authorized to take all necessary administrative actions to implement this resolution.

 

Body

BACKGROUND

 

This board action considers authorizing the execution of a $1,160,000 mortgage note and mortgage; and using of up to $1,190,000 of the operations center capital allocation in the capital improvement program to complete the acquisition of the Northside Operations Center (NSOC) located at 4022 ½ Washington Avenue North. The property is located on the west bank of the Mississippi River just south of the Minneapolis city limits and is within the Above the Falls Regional Park Master Plan boundary.

 

The Board adopted Resolution 2016-113 in January 2016 and entered into a purchase agreement with L & R Development, LLC to acquire the NSOC property.  The property was originally acquired as a critical acquisition for the implementation of the Riverfront Trail System articulated in RiverFirst, A Park Design Proposal and Implementation Framework for the Minneapolis Upper Riverfront that was approved by the MPRB in March 2012.

 

In 2017, as a part of the development of the operations and maintenance facilities master plan, this property was identified as a location which could be utilized and fill the need for an upgraded operations facility located on the north side of Minneapolis. The move to the NSOC was reviewed with the Board of Commissioners in August, 2017, renovation was completed and staff are set to move into the facility during the first quarter of 2018. 

 

The seller financed promissory note requires a balloon payment for the balance due of $1,797,421 on March 1, 2018. Since the property is utilized as an operations center, grant financing will not be able to be used to finalize the acquisition and associated costs.

 

The total acquisition, closing and other property related costs is estimated to be $2,959,000 of which the MPRB previously secured $609,000 in sources leaving $2,350,000 to be funded.

 

MPRB staff and legal counsel have identify Bell Bank as the lender to provide a $1,160,000 mortgage note and mortgage to partially finance the property acquisition (Attachment A).  Bell Bank is among the 25 largest independently owned banks in the United States and is the largest privately-owned bank in the Upper Midwest.  The bank has locations in North Dakota and Minnesota and is known for their company culture.  The bank has received national recognition as one of the best banks to work for and has a Pay It Forward Program which started in 2007 that gives full-time employees $1,000 and part-time employees $500 each year to give to people and organizations in need.

 

MPRB staff have identified the use of up to $1,190,000 of operations centers capital allocation in the capital improvement program.  The Board, through its adoption of the annual budget has allocated S230,000 each year for 2015-2017 and $500,000 for 2018 for operations and maintenance facilities improvements.  This leaves approximately $33,000 in the current budget allocation for operations and maintenance facilities. Staff recommends the use of these funds to partially finance the property acquisition.

 

 

 

The chart below summarizes the sources and uses for this property acquisition:

Sources

 

$609,000

Mississippi Watershed Management Organization (Land)

$500,000

 

Land Acquisition Fund

$60,000

 

Lease Agreement (L&R Development)

$49,000

 

 

 

 

Uses

 

$2,959,000

Purchase Agreement

$2,600,000

 

Interest on Promissory Note

$233,650

 

Closing and Other Associated Property Costs (Estimated)

$125,350

 

 

 

 

Balance

 

($2,350,000)

 

 

 

Mortgage Note

 

$1,160,000

Operations Center Capital Allocation (Estimated)

 

$1,190,000

 

 

 

Balance after Board Action

 

$0

 

Finalizing the acquisition and utilizing this property as an operations facility is a first and early step in the implementation of the yet-to-be completed master plan for operations and maintenance facilities.  The NSOC site, while it supports maintenance and operations functions, will also form a critical trail connection between Above the Falls Regional Park and North Mississippi Regional Park.

 

The mortgage authorization has been reviewed and approved by legal counsel.

 

Staff is requesting that this resolution be moved forward to the Full Board on February 7, 2018 to execute the mortgage and meet the balloon payment due date of March 1, 2018.

 

RECOMMENDATION

Staff recommends that the Board of Commissioners authorize the execution of a $1,160,000 mortgage note and mortgage; and the use of up to $1,190,000 of the Operations Centers Capital allocation in the capital improvement program to complete the acquisition of the North Side Operations Center located at 4022 ½ Washington Avenue North, Minneapolis, Minnesota

 

This action is supported by the following vision and goal statements in the MPRB 2007-2020 Comprehensive Plan.

Vision Theme 3:              Dynamic parks that shape city character and meet diverse community needs

Goal:              Focused land management supports current and future generations

Meeting History

Feb 7, 2018 5:00 PM  Minneapolis Park and Recreation Board Regular Meeting

Approved on a Roll Call Vote

RESULT:ADOPTED [UNANIMOUS]
MOVER:Jono Cowgill, Commissioner District 4
SECONDER:Meg Forney, Commissioner At Large
AYES:Brad Bourn, AK Hassan, Meg Forney, Londel French, Chris Meyer, Kale Severson, Jono Cowgill, Steffanie Musich
ABSENT:LaTrisha Vetaw
Feb 7, 2018 5:40 PM  Administration & Finance Committee Committee Meeting
RESULT:ADOPTED [UNANIMOUS]
MOVER:Steffanie Musich, Vice Chair, Commissioner District 5
AYES:Jono Cowgill, Steffanie Musich, Londel French, Chris Meyer
ABSENT:LaTrisha Vetaw