02-16-99 Regular
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES
Richfield, Minnesota
Regular Meeting
February 16, 1999
CALL TO ORDER
The meeting was called to order by Chair Harms at 7:00 p.m.
ROLL CALL
HRA Members
Present:Thomas Harms; Joan Helmberger; Kristal Stokes; Michael Sandahl
and Russ Susag.
Staff Present :James Prosser, Executive Director; Thomas Ferber, City Clerk;
Bruce Palmborg, Community Development Director; and John Stark,
Community Development Manager.
APPROVAL OF MINUTES
M/Sandahl, S/Helmberger to approve the minutes of the Regular HRA Meeting of
January 19, 1999 and the Special HRA Meeting of February 1, 1999.
Motion carried 5-0.
Item #1OPPORTUNITY FOR CITIZENS TO ADDRESS THE HRA.
No one wished to address the HRA.
HRA Meeting Minutes-2-February 16, 1998
Item #2CONSIDERATION OF RESOLUTION AUTHORIZING ISSUANCE OF
CERTIFICATES OF COMPLETION TO VARIETY HOMES, INC. FOR 7332
QUEEN AVENUE, MAHONEY CONSTRUCTION FOR 7645 NICOLLET
AVENUE, AFFORDABLE SUBURBAN HOUSING FOR 6320-15TH
AVENUE, AND STEVEN MARLIN GRANT HOMES FOR 7204 FIRST
AVENUE. HRA LETTER NO. 11
Executive Director Prosser reviewed HRA Letter No. 11 regarding the issuance of
Certificates of Completion to Variety Homes, Inc. for 7332 Queen Avenue, Mahoney
Construction for 7645 Nicollet Avenue, Affordable Suburban Housing for 6320 15th
Avenue, and Steven Marlin Grant Homes for 7204 First Avenue.
M/Helmberger, S/Sandahl that the following HRA resolution be adopted, that it be
spread in the HRA resolution book and that it be made part of these minutes:
HRA RESOLUTION NO. 704
RESOLUTION AUTHORIZING ISSUANCE OF CERTIFICATES OF COMPLETION FOR
NEWLY CONSTRUCTED RESIDENTIAL PROPERTY AT 7332 QUEEN, 7645
NICOLLET, 6320-15TH, AND 7204 FIRST AVENUES
Motion carried 5-0.
Item #3CONSIDERATION OF AUTHORIZATION FOR MORTGAGE SET-ASIDE
PROGRAM IN RICHFIELD FOR MODERATE INCOME BUYERS.
HRA LETTER NO. 12
Executive Director Prosser reviewed HRA Letter No. 12 regarding authorization for
the Richfield HRA to be a co-applicant with Norwest Mortgage, Inc. to provide a mortgage
set-aside program for moderate income buyers. He reviewed and answered questions
regarding the following eligibility criteria:
1.Have gross annual income at or below 80 percent of the Twin Cities area median
income ($45,300 for a four person household); and
2.Identify a home for sale in Richfield whose purchase price is $112,500 or less, the
maximum allowed by the state finance agency (the average sale price of a Richfield
home in 1998 was $114,300 per Hennepin County records); and
3.Must meet ONE of the following criteria:
•have at least one family member who is disabled; or
•be a single head of household with children; or
•be of a minority population; or
•purchase a home on 12th Avenue or anywhere east of 12th Avenue in Richfield,
due to airport impacts and market perceptions in this area; or
•be a family purchasing a home in a redevelopment area which has been set
aside for affordable housing purposes; and
HRA Meeting Minutes-3-February 16, 1998
4.Meet regular lender-identified criteria for mortgage qualifying.
M/Sandahl, S/Stokes to authorize the HRA to apply to the Minnesota Housing
Finance Agency (MHFA) for a mortgage set-aside program in Richfield for moderate
income buyers.
Motion carried 5-0.
Item #4CONSIDERATION OF CSM'S COMPLETION OF PRECONDITIONS AND
REQUEST FOR EXTENSION OF SITE ASSEMBLY PERIOD FOR
REDEVELOPMENT OF INTERCHANGE WEST AREA.
HRA LETTER NO. 13
Executive Director Prosser reviewed HRA Letter No. 13 regarding the status of
CSM's completion of preconditions and request for extension of the site assembly period
for the redevelopment of the Interchange West area.
Murray Kornberg, Vice President, CSM Corporation, gave a status report on
property acquisition and site assembly activities for the Interchange West redevelopment
proposal. He requested a 90-day extension to allow sufficient time for negotiations with
property owners and acquisition contingencies. He stated that CSM had delivered
purchase offers to all 67 homeowners on February 15. He apologized for the delay in
sending out the purchase offers. He stated negotiations continue with the automobile
dealerships, commercial and multi-family residential property owners. He indicated CSM
had finalized deals with two of the smaller commercial property owners. Mr. Kornberg
stated that if a negotiated agreement wasn't reached with the residential property owners
within 30 days, they would use mediation.
Chair Harms expressed frustration and disappointment in the lack of progress CSM
had made in negotiating with property owners in a timely manner after assurances 30 days
ago that all property owners would have been contacted by now. He stated he could
understand the property owners' anger and frustration with delays by CSM in the process.
He proposed mandatory mediation after 30 days if CSM and the property owner are not
able to come to an agreement.
Mr. Kornberg reviewed purchase contingencies, timing, and acquisition schedule.
Mr. Harms asked CSM to have face to face negotiations with every property owner
within 30 days.
Sheri Keep, 7643 Newton Avenue, stated she understood the need for
redevelopment but that the change of the closing date from June 1 to September 1 would
create a hardship for those with school age children. She also stated delay could have a
negative economic impact if interest rates go back up.
Minou Hussain, owner of a plastics company at 7635 Logan Avenue, stated
concern about the impact on his business.
HRA Meeting Minutes-4-February 16, 1998
Kevin Anderson, realtor and owner of 7644-46 Logan Avenue, discussed various
formulas regarding the determination of market value and relocation benefits and statistics
from MLS regarding sales prices. He stated he felt that the purchase offers from CSM
were not high enough.
Gary Perna, 2121 West 77th Street, caretaker/tenant at the Diplomat Apartments,
expressed concern about relocation and finding another apartment for similar rent.
David Bakke, 7601 Morgan Avenue, stated concerns that the purchase offer for his
property was not reasonable and about the purchase contingencies.
John Kamrath, business rental tenant at 7700 Logan Avenue, stated that he had a
two-year lease and no one had talked to him about relocation.
Chair Harms suggested Mr. Kamrath speak to his landlord.
Chair Harms discussed the following requests:
x
That staff report weekly on the contacts CSM has with property owners.
x
That staff report on the concerns about hardship cases and early buyout options.
x
That CSM commit the resources to negotiate with the property owners as soon
as possible and utilize mediation.
An audience member, who did not identify herself, asked if CSM would negotiate at
times outside of regular business hours because she works 7-5.
Chair Harms asked CSM to be available as necessary to accomplish the
negotiations. He stated he wanted staff to track their progress. Mr. Harms stated that if
negotiations reach an impasse, then it should go to mediation, even if it is before the 30
days CSM suggested. He stated he wanted negotiations to proceed as soon as possible
to provide as much flexibility as possible for property owners.
Mr. Kornberg stated CSM would try to address the hardship cases as best they can
as they arise. He stated they would be available for negotiations outside of normal
business hours, including weekends. He stated agreement to reporting weekly on
contacts with property owners and the use of mediation if an impasse has been reached.
He stated all commercial properties would have offers within two weeks.
M/Sandahl, S/Stokes that the HRA approves the following actions:
1.Acknowledges the completion of the Preconditions as submitted in Exhibit A,
identified as items a, b, c, d, f and I of Article 11.5 in the Contract for Private
Development;
2.Accepts the manner for completion of the outstanding Preconditions (items e, g,
h, I, j, k and m of Article 11.5 of the Contract) as indicated in Exhibit B; and
3.Grants a 90-day extension for Site Assembly activities.
HRA Meeting Minutes-5-February 16, 1998
Motion carried 5-0.
Chair Harms stated that CSM representatives must discuss the purchase offer
individually with each homeowner within 30 days in an attempt to reach a negotiated
settlement and also provide each commercial property owner with a purchase offer within
two weeks.
Item #5STATUS REPORT ON PRECONDITIONS TO DEVELOPMENT OF URBAN
VILLAGE. HRA LETTER NO. 14
Executive Director Prosser reviewed HRA Letter No. 14 regarding the status of the
preconditions in the contract for private development with the Richfield State Agency
(RSA) for the Urban Village development.
Sid Inman, Development Consultant/Financial Advisor, Ehlers and Associates, Inc.,
reviewed the but/for tax increment analysis indicating that $9,500,000 was the maximum
the HRA has to provide for the project and indicating the following amounts as part of the
analysis:
1.The developer has submitted a list of extraordinary costs (memo dated October
13, 1998) totaling approximately $1,600,000. The City and Fred Hoisington
have reviewed these costs and agree they are "Over and Above" the normal
code requirements and therefore fall into the extraordinary costs.
2.The developer has submitted a parking ramp costs for approximately 600 stall
ramp (memo dated October 13, 1998) totaling $6,700,000. Based on Jan
Susee's letter dated August 11, 1998 normal cost for surface parking is $1,000
per stall or $600,000. Therefore the net amount of $6,100,000, is extraordinary
cost.
3.The developer has stated that the total amount they can spend for land for the
apartments is $750,000. The estimated total acquisition cost is from $2,500,000
to $3,000,000. Therefore the request for reimbursement is between $1,750,000
and $2,250,000.
Jan Susee, RSA, requested reduction of the required term for maintaining the
affordable units in the rental housing from 25 years to 15 years.
Community Development Director Palmborg stated that he thought the affordability
should run concurrently with the term of the TIF, which is 25 years.
After discussion, it was the consensus of the HRA that the affordable term would be
25 years but that after a minimum of 15 years the developer could petition the HRA to
consider a change in this condition.
M/Sandahl, S/Susag to authorize the HRA Executive Director to forward the
February 17, 1999 letter addressed to Mr. Steve Kirchner which identifies the amount of
TIF assistance for the Urban Village Project at $9.5 million and confirms the basis for
completion of preconditions.
HRA Meeting Minutes-6-February 16, 1998
Motion carried 5-0.
Ann Zilka, Hub Chiropractic, 6601 Grand Avenue, discussed the negotiation
process that occurred with Mr. Susee and RSA regarding the relocation of Hub
Chiropractic as part of the Urban Village Project. She stated disappointment with the
agreement that they signed with RSA, the difference in property appraisals, and the
process.
Paul Zilka, Hub Chiropractic, 6601 Grand Avenue, stated he did not feel they got a
fair economic deal from RSA but that they would honor their commitment.
Item #6 EXECUTIVE DIRECTOR REPORT
None.
Item #7CLAIMS AND PAYROLL
M/Susag, S/Stokes that the following claims and payrolls be approved:
FIRSTAR BANK
Section 8 Checks: 13302-13404$127,690.23
HRA Checks: 20374-20385; 20524-20573$136,852.46
Motion carried 5-0.
ADJOURNMENT
The meeting was adjourned by unanimous consent at 8:20 p.m.
Date Approved:
Thomas E. Harms Chair
Thomas P. FerberJames D. Prosser
City ClerkExecutive Director