02-18-03 Regular
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES
Richfield, Minnesota
Regular Meeting
February 18, '2003
The meeting was called to order by Vice Chair Heimberger at 7:00 p.m.
HRA Members
Present:
Joan Heimberger; Kristal Stokes; and Dan Linnihan.
HRA Members
Not Present:
Thomas Harms; and Michael Sandahl.
Staff Present:
Samantha Orduno, Executive Director; Bruce Palmborg, Community
Development Director; John Stark, Community Development Manager;
Bruce Nordquist, Housing and Redevelopment Manager; Cheryl Krumholz,
Recording Secretary; and John Dean, City Attorney.
MIStokes, S/Helmberger to determine the absence of Chair Harms and Commissioner
Sandahl as an excused absence.
Motion carried 3-0.
Item #1
MIStokes, S/Linnihan to approve the minutes of Regular HRA Meeting of January 21,2003.
Motion carried 3-0.
Item #2
HRA Meeting Minutes
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February 18, 2003
M/Stokes, S/Linnihan to approve the aqenda.
Motion carried 3-0.
Item #3
A. Approved resolution authorizing purchase of 6309 Bryant Avenue with Community
Development Block Grant funds for rehabilitation through New Home Program S.R. NO.9
HRA RESOLUTION NO. 885
RESOLUTION AUTHORIZING PURCHASE OF REAL PROPERTY
LOCATED AT 6309 BRYANT AVENUE SOUTH UNDER THE NEW HOME PROGRAM
This HRA Resolution appears as HRA. Resolution No. 885 in HRA Resolution Book NO.7.
B. Approved resolution authorizing execution of contract with Project for Pride in Living in
amount of $158,950 for rehabilitation of 6945 Clinton Avenue for future sale to first time buyer
under New Home Program S.R. No. 10
HRA RESOLUTION NO. 886
RESOLUTION AUTHORIZING EXECUTION OF A CONTRACT WITH PROJECT FOR PRIDE IN
LIVING FOR THE REHABILITATION OF 6945 CLINTON AVENUE
This HRA Resolution appears as HRA Resolution No. 886 in HRA Resolution Book NO.7.
C. Approved resolution amending Tax Increment Financing Plan for City Bella Tax Increment
Financing District within Richfield Redevelopment Project Area S.R. No. 11
HRA RESOLUTION NO. 887
RESOLUTION AMENDING THE TAX INCREMENT FINANCING PLAN FOR THE CITY BELLA
TAX INCREMENT FINANCING DISTRICT (A REDEVELOPMENT DISTRICT) WITHIN THE
RICHFIELD REDEVELOPMENT PROJECT AREA
This HRA Resolution appears as HRA Resolution No. 887 in HRA Resolution Book No.7.
D. Approved modification to Transformation Homes and First Time Advantage Loan program
guidelines S.R. No. 12
E. Approved supplemental agreement to Contract for Private Redevelopment between Gramercy
Corporation and HRA for condemnation and relocation costs and required financial security
S.R. No. 13
Vice Chair Heimberger clarified that Item 3A regarding 6309 Bryant Avenue is demolition
not rehabilitation of the property because there will be new construction on the site.
M/Linnihan, S/Stokes to approve the Consent Calendar.
Motion carried 3-0.
HRA Meeting Minutes
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February 18, 2003
Item #4
Executive Director Orduno reviewed Staff Report No. 14 regarding consideration of the
future status of Lyndale Gateway West redevelopment project as proposed by Lyndale Gateway,
LLC. She stated she did not believe it prudent public policy and would not recommend proceeding
with the $1.15 million public subsidy necessary to fill the funding "gap" that remains in the project.
She said she believed this funding could render the HRA ineffective for future development
projects and financially insolvent. She added this funding would also not guarantee the project
moving forward.
Executive Director Orduno recommended, as an alternative, that the HRA direct staff to
continue working with the developer until the March 17, 2003 HRA meeting to explore alternative
funding sources and not terminate the contract at this time.
Executive Director Orduno acknowledged a letter received from a homeowner in the area,
stating support for the project to proceed because the area needs redevelopment and the
homeowners and businesses continue to be in a very difficult situation.
Commissioner Linnihan asked about the 15% profit margin related to sale proceeds from
any home sales.
Executive Director Orduno stated that margin will be carefully scrutinized and may not be
possible with this development.
Colleen Carey, The Cornerstone Group President, explained that a 15% net profit margin is
typical for the real estate business. She said the margin is compensation for the financial risks of
the developer. She added the other Cornerstone developments, such as in Hopkins, did not
require funding of a financial "gap".
Commissioner Linnihan said if the market commands or demands this margin, the HRA
needs to review it. He asked why the development in Hopkins worked, but not this one in
Richfield.
Ms. Carey explained that Hopkins purchased all of the land for the development and sold it
to the developer. She said acquisition costs for Lyndale Gateway are in excess of the initial
budget.
Commissioner Linnihan asked if the increased acquisition was related to commercial or
residential properties.
Ms. Carey said commercial properties.
Commissioner Stokes expressed concern about costs related to waiting to proceed. She
encouraged staff and the developer to work out the funding so the project can continue.
Executive Director Orduno stated that if resolution to the concerns stated tonight can be
achieved prior to March 17, 2003 HRA meeting, a Special HRA meeting will be called to keep
waiting to a minimum.
HRA Meeting Minutes
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February 18, 2003
Ms. Carey explained the critical timing issues related to purchase agreements and
contingencies and the need to test the market. She stated she is willing to b.e part of the solution,
but there is risk in the condemnation process because the purchase price will be unknown. She
added that if there is no profit margin, the project cannot move forward.
The HRA deferred consideration of any action on this project to the March 17, 2003 HRA
meeting or sooner to allow the developer and staff to further evaluate the funding needs of the
project.
Item #6
Executive Director Orduno reported that, today, Gramercy Corporation and Trestman Music
have agreed on a purchase price with a projected closing on March 10 and vacating on June 1.
Executive Director Orduno stated that, after tonight, HRA and Planning Commission
meetings will no longer be cablecast because it is not cost or communication effective.
Item #6
MIStokes, S/Linnihan that the followino claims and pavroll be approved:
FIRSTAR BANK
Section 8 Checks: 104257 - 104363
HRA Checks: 26481 - 26517
$173,862.56
$162,734.87
Motion carried 3-0.
1
The meeting was adjourned by unanimous conse1~aY7:23 p.m. /;/
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Date Approved: April 21, 2003 L/'--L,flttt ,.' '.
Tom
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Cheryl Kr mholz
Recording Secretary