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Home My WebLink AboutEDA October 20, 1998 . \ ".-J CITY of ANDOVER Economic Development Authority Meeting - Tuesday, October 20, 1998 Call to Order - 7:00 PM Approval of Minutes Discussion Items 1. Name Commercial Park 2. Moving Expenses/Charles Mistelske/Commercial Auto 3. Other Business o Adjournment \ \.-.../' agenda minutes commpark moving CITY OF ANDOVER REQUEST FOR EDA ACTION '\ '- ) DATE: (habeT 20, 1998 AGENDA SECTION Approval of Minutes ORIGINATING DEPARTMENT City c~ 6.0 ITEM NO. Approval of Minutes The Economic Development Authority is requested to approve the following minutes: October 6, 1998 Regular EDA Meeting (Hupp, Nowak absent) , \ ,j , / / CITY OF ANDOVER REQUEST FOR ECONOMIC DEVELOPMENT AUTHORITY ACTION DATE October 20, 1998 AGENDA ITEM ORIGINA TING DEPARTMENT Community Development Naming of Commercial Park /, David L. Carlberg Community Development Director The Economic Development Authority is requested to select a name for the commercial park. Staff has advertised the contest rules to name the park (attached). The entries submitted by residents to date are: , / Andover Station Station Andover Andover Community Business Square Andover Square Names submitted after the packets were delivered will be presented at the meeting, Name suggestions presented to the EDA at the September 15,1998 meeting are as follows: Andover Park Andover Village Andover Crossing Andover Enterprise Park / , / '. / , / Naminl! of New Commercial Park Contest Andover Residents are being asked to participate in a contest naming the new commercial park. The commercial park is located south of Bunker Lake Boulevard NW between Jay Street and Thrush Street. This area was once covered by seven (7) junk yards and is being redeveloped into a multi-use (commercial, retail, office, office/warehouse) park. The rules of the contest are as follows: I. The name of the park should be limited to no more than four (4) words and have "Andover" in the title. 2. Entries will only be accepted from Andover Residents. 3. Entries must be submitted in writing by 4:30 p.m. on October 16, 1998 to David L. Carlberg, Community Development Director (Ph# 755-5100 ext. 140) at the Andover City Hall, 1685 Crosstown Boulevard NW. The Economic Development Authority will select the winner on October 20, 1998. The winner of the contest will receive $100.00 and will assist Mayor Jack McKelvey in the ribbon cutting ceremony. ) E D A AGENDA M E M 0 DATE: OCTOBER 20,1998 .I DEPARTMENT: ADMINISTRATION Richard Fursman I ITEM NO. MOVING EXPENSES: Charles Mistelske, Commercial Auto 01. The Economic Development Authority (EDA) is requested to prepare for the consideration of additional and final payments for relocation benefits to Mr. Mistelske. During January of 1998, Conworth, Inc. (firm hired to estimate moving expenses) reviewed bids for the relocation of Commercial Auto Parts. The low bid was obtained from Berger Transfer in the amount of$558,700. At that time, Mistelske indicated he would be doing a self move, and indeed had already cleared property from the yard. The initial and subsequent clearing of the property has resulted in the City paying $440.000 in moving expenses. The remaining moving expense "entitlement" has therefore been reduced to $118,700. During the self move process, Mistelske began selling parts and crushing cars to reduce his inventory. There were some expenses incurred in the process, yet the costs of liquidation were considerably less than the cost of moving the inventory. The initial bid estimate in January for moving the entire yard did not take into consideration the selling off of inventory, which is much less time consuming and expensive than an actual move. City Attorney Bill Hawkins was asked his opinion on the question of paying relocation costs on inventory that simply was not relocated. Mr. Hawkins indicated in a July 21, 1998 letter, (attached) the City is not obligated to pay Mr. Mistelske relocation benefits for material that is sold rather than relocated. To this date Mr. Mistelske has offered no proof of costs, such as expense receipts or a log of any kind. All payments to Mistelske have been made after observing certain percentages ofthe yard reduced. The EDA must decide as stewards of Andover residents money, the course to take on the final payments for the move relative to the "value" of activities and fairness to Mistelske and the community. File:admin/comrauto. '. / .~ o o LAW OFFICES OF William G. Hawkins and Associates r " ""---'" WILLIAM G. HAWKINS BARRY A. SULLIVAN Legal Assistant T AMMI J. UVEGES 2140 FOURTH AVENUE NORTH ANOKA. MINNESOTA 55303 PHONE (612) 427-8877 FAX (612) 421-4213 July 21, 1998 Mr. Richard Fursman Andover City Hall 1685 Crosstown Boulevard NW Andover, MN 55304 Re: Commercial Auto Parts Condemnation Dear Dick: ,- ~, You have asked us to review the issue of whether or not the Andover Economic Development Authority (AEDA) is obligated to pay Mr. Charles Mistelske's claim for moving expenses, The AEDA obtained two bids last year for moving Mr. Mistelske's entire inventory. Both bids exceeded $500,000.00. Mr. Mistelske has made a partial move of his personal property and received more than $100,000.00 as reimbursement for those expenses. Subsequent to that relocation, Mr. Mistelske has substantially reduced his inventory by crushing and selling vehicles rather than relocating them to another site. Mr. Mistelske has demanded the AEDA pay him the amount of the lower bid. The question raised is whether or not Mr. Mistelske can sell inventory rather than relocating it and still collect relocation benefits. In my opinion, the answer is no. Persons and businesses that are displaced by municipalities exercising their power of eminent domain, are entitled to certain relocation benefits. These benefits were established by federal law. 42 V.S.C. 4601 et seq. Federal rules have been established to implement the statute. 49 CFR part 24, et seq. Minnesota law provides that municipalities are obligated to abide by the federal statute and regulations. Minn. Stat. ~ 117.52. One of the regulations, Section 24.303 requires payment to businesses for reimbursement of moving expenses under certain circumstances. That section provides, in relevant part: "any business...which qualifies as a displaced person is entitled to payment for such actual moving and related expenses, as the agency determines to be reasonable and necessary, including expenses for: (1) transportation of personal property...." . , r ' ,,--j Plain language of the regulation makes it clear that the payments are intended to be reimbursement for expenses incurred. This section makes it clear that the business is J, ~,J \ \ J Mr. Richard Fursman July 21, 1998 Page Two entitled to payment for "'actual moving and related expenses." Further, those actual moving expenses are subject to determination by the AEDA as to whether or not they are "'reasonable and necessary." Finally, the regulations make clear that only a business that meets the definition of "'displaced person" is eligible for any relocation benefits. The regulations define "'displaced person" as "'...any person who moves from the real property or moves his or her personal property from the real property...as a direct result of the acquisition of such real property...." Case law exists for the proposition that a business whose property was obtained through eminent domain and who was given notice to vacate and order to vacate by the government agency but never moved its personal property was not yet a "'displaced person" under the regulation. Elm Shank and Heel Co. v. Commonwealth, 517 N.E.2d 460 (Mass. 1988). In that case, the property had been condemned and the authority had directed the business owner to vacate the premises. However, before the move actually took place the business was destroyed by fire. The business owner nonetheless applied for various relocation benefits. The claim for benefits was denied on the basis that the business was not yet a "'displaced person" as the business had not in fact moved. I believe the same logic and rule of law would apply to this case. While Mr. Mistelske may be eligible for relocation benefits, he has chosen to reduce his inventory rather than move the property. Consequently, the actual moving costs that he will incur will be substantially less than what was estimated last year. In conclusion, the AEDA should allow Mr. Mistelske to reduce his inventory as much as he practically can. If anything remains, a reappraisal of the moving costs for the remaining items should be completed. If Mr. Mistelske elects to move this property to another site, the lowest estimated costs should be paid to him following completion of the move. In any event, the AEDA is only obligated to reimburse him for expenses actually incurred. If you have any further questions on this matter, please feel free to contact me. Sincerely, William G. Hawkins WGH/tju cc: Sean Ingvalson :