0214specialCCHRAPCworksessioncompleteagendaCITY OF RICHFIELD, MINNESOTA
Office of City Manager
February 9, 2012
SLD:cak
Council Memorandum No. 23 HRA Memorandum No. 10
Housing & Redevelopment
The Honorable Mayor Authority Commissioners
And City of Richfield
Members of the City Council
Subject: February 14 Worksession Regarding Pillsbury Commons Proposal
(Worksession Agenda Item No. 1)
Council Members and Commissioners:
At the conclusion of the January 24 Special Joint Worksession of the City Council,
Housing and Redevelopment Authority and Planning Commission, members of the City
Council indicated their desire to hold another such Worksession to continue the dialog
regarding Ron Clark Construction's proposed Pillsbury Commons development. That
Worksession has been scheduled for 5:45 p.m. on Tuesday, February 14, 2012.
Ron Clark Construction has provided the attached documents which are intended to
address some of the issues that were identified at the January 24, 2012 meeting.
ectf ly submitt
n . De ch
Cit Manager
Attachment
Email: Department Directors
Assistant City Manager
Copy: Planning Commission
105 South Fifth avenue
Suite 513
Minneapolis, MN 55401
February 9, 2012
Steven L. ®evich
City of Richfield
6700 Portland Avenue
Richfield, Mfol 55423
RE: Pillsbury Commons
Maear Mr. ®evich:
-:.,
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Tel: 612-252-9070
Fax: 612-252-9077
www.landform.net
We appreciate the opportunity to continue our discussion of our "Pillsbury Commons" proposal with
the City Council, PBanning Commission and HRA ("the City") at their February 14t" work session.
The January 24t" work session was very productive, but did not allow adequate time for us to
presen a project update and answer all of the questions-we look fonrvard to continuing the
discussion with the City.
There were a fevv items raised at the January 24t" work session that we wanted to take the time to
respond. to in writing:
What is affordable housing?
Affordable housing can mean many different things, but the generally accepted definition of
affordability is for a household to pay no more than 30 percent of its annual income or housing.
Families who pay more than 30 percent of their income for housing are considered cost burdened
and may have difficulty affording necessities such as food, clothing, transportation and medical care.
Our Pillsbury Commons project is funded in part by housing tax credits which establishes
affordability thresholds based on fihe median income of the region, specifically, it requires that units
be affordable to households that are earning 60% of the area median income. These income levels
(and rents) are reevaluated annually. The current maximum income for a family of four to qualify to
live in one of these units is $50,340. Our concept is to provide a quality housing option for moderate
income (i.e. "workforce") families and individuals.
These workers are in need of affordable housing opportunities. Affordable housing provides
opportunities for younger workers and senior citizens to stair in the community. Our 2011 lVlarket
Study prepared by Joe Urban indicates that there are 1.93 jobs paying less than X41,000/year for
every affordable housing unit in the project market area. That's almost two jobs for every affordable
housing unit in the area.
Will Richfield residents gel priority for these apartments?
In previous projects, NiHFA has not allowed us to give priority to local residents or any demographic
group, because they have deemed this to be discriminatory. However, we have asked the question
for this specific project and are awaiting a response from MHFA. Furthermare, we would expect that
the public process and oud° marketing efforts will make Richfield residents very well aware of the
project, so that they can choose to apply for one of the new apartments.
Landform` ~, Sensibly '~' and Si[e to Finislf ~ are service marks of Landform Professional Services, LLC.
Anyone who meets the income guides will be considered for these units provided that they pass the
background screening process. There is no preference given to any person or group. Fair Housing
Act prohibits discrimination based on:
® Race or color.
National origin.
® Religion.
® Sex.
® Handicap (clisabi!ity).
Famiiial status (including children under the age of 18 living with parents or legal custodians;
pregnant v~~oi~nen and ~aeople securing custody of children under 18).
L~`Idl~af is the impact of this type of development on property values?
Richfield staff has shared with the City Council two of the most relevant studies to this effect:
1. "A Study of the Relationship between Affordable Family Rental Housing and Home Values in
the Twin Cities" by Maxfield Research Inc. (September 2000)
"There Coes the Neighborhood? The Impact of Subsidized IVlulti~Family Housing on Urban
Neighborhoods" a 1906 study from the University of Monnesota's Center for Urban and
Regional Affairs
There is a lot of good information out there regarding housing policy and research that is available
from Urban Land Institute (ULI) and the Center for Housing Policy. There are also two other local
resources that have been referenced by neighbors and others in the discussion of Pillsbury
Commons:
1. "The Impact of Affordable Housing on Communities and Households" a discussion paper by
Spencer Agnew a graduate student at the University of Minnesota, Humphrey institute of
Public Affairs.
2. "Workforce Housing.' The Key to Ongoing Regional Prosperity. A Study of Housing's
Economic Impact on the Twin Cities" by Maxfield Research Inc. and GVA Marquette
Advisors (September 2001)
What these studies and others have found is that affordable housing has no negative impact on
property values. According to the Center for Housing Policy in a policy brief entitled "Don't Put it
Herel Does Affordable Housing Cause Property Values to Decline?" the answer is "NO!" That study
fourc` that the "vast majority of studies have found that affordable housing has no impact ora
positive impact on property values.
9 A 199.9 literature survey for the California Redevelopment Association examined ~ 1 separate
studies of multiple housing markets across the country including Oakland; Chicago and
Fai~~ax County, Virginia. Seven studies documented positive effects of affordable housing on
surrounding property values while 19 found no effects. Negative effects were found in one
study.
Sfieven L. Devich
February 9, 2012
® The North Carolina Coalition, a state civic group, compiled a catalog of 36 studies conducted
between 1986 and 2003 in various housing markets including Phoenix, Il~inneapolis,
Cleveland and Philadelphia. The vast majority found no impact on surrounding property
values. Several found positive effects and only one found possible negative effects."
Moreover, in a series of studies conducted by Ingrid Ellen and her colleagues at the Furman Center
of NYU on the impact of affordable housing on property values in New 1°ork City, developments
financed through the Low Income Housing Tax Credit (which serve slow- to moderate-income
population) were somewhat more likely than developments financed through other federal programs
to increase surrounding home prices. This is the type of project that is proposed for Pillsbury
Commons. Furthermore, this same analysis found that redevelopment of dilapidated buildings or
underutilized properties, like the old Richfield maintenance garage, showed positive effects on
property when redeveloped as affordable housing.
Much o'> the research suggests that the type of affordable housing matters less than the quality of
the proierties' design, management, and maintenance. v1/e have been very intentional in ou~° choice
of Steven Scofii: Management as orsr management company based on their experience and track
record of proven results. ®ur choice has also been vetted by MHFA, who is also cort~i~ritted to
quality management. ®ur on-site management team will be in place to ensure that the property is
maintained to the high quality that you expect from Ron Clark Construction ~ Design and to manage
any tenant issues that may arise.
A 2001 report (Workforce Housing: The ~cey to Ongoing Regional Prosperity report by Maxfield
Research Inc. ano! CVA A/larquette Advisors) estimated that the T~.ein Cities r`oregoes an estimated
$265 million in combined consumer spending and business income per year because there is a
current shortfall of workforce housing.
This development will have a positive effect on the community because the construction will create
jobs and increase local tax revenue. The National Association of Home Builders (NAHB) estimates
that the one-year impact of constructing a 100-unit housing tax credit project similar to Pillsbury
commons generates $7.9 million in local income, $827,000 in taxes and other revenue for local
governments and 122 local jobs! They also estimate the annual recurring impact of 100 family units
includes $2.4 million in local income, $441,000 in taxes and other revenue for local governments
and 30 local jobs. That is good for Richfield!
Will this increase crime in our neighborhood?
As the "Impact of Affordable Housing on Communities and Households" paper notes, "the body of
recent research examining the impact of affordable housing on neighborhood crime is not as
extensive as the literature on property value impacts" and while the paper only reviewed 5 studies,
"of the six studies reviewed, al[ found that affordable housing typically has no effect on neighborhood
crime."
This apartment will be professionally managed by Steven Scott Management to ensure that the
properly is properly maintained. Steve Scott iVianagement works closely with the police departments
in the communities where they have apartments and have an excellent track record for quality
developments. The good property management policies, application process and background
checks conducted by Steven Scott Management and relationship with the community police
Steven L. Devich
Feb~~uary S, 2012
department will provide significantly more control over residents than with for sale or market rate
housing.
,.
Will all 7® units require the same screening process with a criminal, credit and housing. history
background check?
Ail of the units will require the same screening process. This project will be professionally managed
by Steven Scott Management. Each potential tenant is required to pass a credit, criminal and
housing history check. ®nly tenants that pass these screenings and meet the income requirements
will be considered for a home. Steven Scott Management works closely with the Richfield Police
I~epartmenfi and their crime prevention programs.
However, the sfandards may be modified slightly for the four units set aside for families experiencing
long term h~°.amelessness, ®ne of which is set aside for a veterarti, in acknowledgement ®f the unigrae
~6~allei Eges facing these individuals, particularly related to housing history. The veteran`s unit will b
serviced by 4oeterans Affairs staff and the other three units wiil be served by Simpson Housing
Services.
As part of our development plan, we will be preparing a Tenant Selection Plan, Property
Management Plan and Marketing Plan, which are required by MHFA. These plans are unique to
each project and must be approved by the developer and by MHFA. VVe wild continue to develop the
details of these plans for Pillsbury Commons and will be happy to provide copies to the City when
available.
Flow many people are allowed to five in an apartment?
The final numbers will be formalized as part of the Property Management plan, but we typically allover
up to 3 people in a 1 bedroom, up to 5 people in a 2 bedroom and up to 6 people in a 3 bedroom.
What happens if someone moves in but then their income increases and they exceed the maximum
household income limits?
The concept for this type of housing is to provide move-up housing opportunities. Therefore, after a
tenant is income-qualified to move in and passes all of the background checks, they can remain at
the property provided their income does not exceed 140% of the allowable income limits.
Flow wilt you ensure that the property is property maintained?
The MFIFA funding requires that that property is properly maintained in compliance with the
Workforce Dousing program requirements for a minimum of ~0 years and requires a significant
financial reserve for on-going maintenance. The tax credit investor and the developer insist that the
property be maintained to ensure a return on their investment. Additionally, the developer has
contracted witi'~ Steven Scott Management to ensure that the project is property maintained and
remains an attractive, quality development. One unique aspect of a housing tax credit project is that
the MHFA has very specific requirements for the operating reserve (which is used for building
maintenance} and requires that the reserve be established prior to occupancy. ®ue appiication
Ste~~en L. Devich
February 9, 2012
•
anticipated an initial operating reserve of $247,000, but this number will be finalized with MHFA as
we complete our contract.
How does this meet the city's parking requirements?
As we have noted previously, as part of our development application, we will be requesting flexibility
from the City standard requirements. The City typically requires 2.5 parking stalls per unit, but we
are requesting a reduction in the number of stalls to be constructed with this project. We are
proposing 129 stalls (1.84 stalls per unit) for this project. We are requesting this reduction based on
a number of factors:
• Our experience with these types of apartment projects tells us that this level of parking is
more than adequate. The project is conveniently located near transit, therefore, residents
are more likely to use transit and;or walk to destinations.
• Recent analysis by the l~rban Land Institute (IJLI) and the American Planning Association
(APA) have found that typically between 1-2 parking stalls per unit are adequate for this type
of housing. The "21st Century Land Development Code" (2008) is an APA document by
Freilich, White and Murray that recommends a maximum of 1.9 parking stalls per unit for an
apartment building.
As park of our development application, we would like to work with the City of Richfield to reduce the
number of constructed stalls based on current data and our experience with these types of projects.
We would provide proof of parking for an additional 24 stalls, which is a plan for future construction
of additional parking stalls, should additional parking demand from this project be documented. We
believe that the green space provided in the proof of parking area will be an amenity to the
development and will reduce impervious area on the site, which in turn reduces runoff. We would
reserve this space for future parking stalls in the unlikely event that additional parking is needed.
Where are similar projects That interested people can visit?
Ron Clark Construction & Design has developed hundreds of quality homes in the Twin Cities over
the last 30 years. We have recently received approval to construct a similar workforce housing
building in Savage, but that project is not yet available to visit. While there are few truly comparable
projects in the metropolitan area, we have provided a list of 5 somewhat similar projects by other
developers. A copy of this list is attached to this memo. Please know that none of these projects
are truly comparable to what are proposing in Richfield for Pillsbury Commons. Southview Estates
in Qloomington is probably the best example of a building of similar size to Pillsbury Commons with
a similar single family home neighborhood across the street (although the face of our building is only
2 stories to create a better transition with the neighborhood). Maple Village in Maple Grove is the
newest of the developments and we have attached their brochure, which lists amenities that will be
most similar to what is proposed for Pillsbury Commons.
Where can interested people go to find more information about the project?
We have set up a project website at www~iilsburycommons corn where people can visit and learn
more about our proposal. ~ ~ --
Steven L. Devich
February 3, 2012
•
•
NEXT STEPS
It is our intention to get feedback from the City at the work session about the development concepts
including access to the site, building design, parking and any other issues that should be addressed
in our formal submittal. We will then prepare a submittal for a public hearing at the Planning
Commission meeting as soon as possible to address the feedback we get from the City.
We believe that Pillsbury Commons fills a need in Richfield. It will give young people just starting
their careers, working adults and young families the opportunity to live in Richfield in a modern, high
quality development. It will provide the chance to get started in Richfield and gives them the
opportunity to save equity to buy a home in Richfield in the future.
We believe that this project is a positive addition to the City of Richfield and we look forward fio the
opportunity to continue to work with the City and the residents of Richfield to develop a plan fihat the
community can be proud of and the residents can be proud to call "Home".
Sincerely,
~,andfo~°m
~~ ~~
~Cendra Lindahl, AICP
Principal
COPY: Ron Clark, Ron Clark Construction & Design
ENCL: Comparable Properties list dated January 30, 2012
Sieven L. Devich
February 9, 2012
I~.~h+~ i Ali`,
.~ i•I S't
,ianuary 30, 2012
i'/Ir. John Stark
~ultununity l~evelopnleut llirector
Ciry of Rici)field
G700 fortlautl a~~e South
Riclttield,'Vln. 5~~23
Re. Pillsbury ~:OIt111iOt1S
Slitljecr: L:laltlples C)~ silltllal' pr(~jecis in tlY~ aria
'~c ,~• Mr. Stan.:
LIS {Qh"' ,. ill;ll
!~S ~'eCllteS,ed of ill:i'.la`it:liaCy 21;1 ty(rt'kSlio}~ ~ylt~i ill;; 1_11;' ~'Crtr;~,i!, t}lat:illtl`F L•(}lY,lillSSti)ti ~Y,':tl 11.,1., (;i::
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sinlifat' ro ~vllat the ti re pt'ol)ositlg for Pilsbul•y C:atntnons a,rd at'e ~~i IOJ°lo afrordrele hou,il_s; ~.
develol).retlts,
?.) Solnh•~~ieeV stares, X901 ~~ldl°idge t~vc South, Eifcsat::ittg;tou, li3n.
a. ~I'11tS l)t)IeC,t l)1'eSelilS al ti~l';1'y Sti)11sar Setlln~ t0 ~yl;at ~„'~ a3'f; I)Y0l)OSing 'c[t ISlteSi:.1i'y ~.i)tY;it7~7' ~,.
1)tr~Ce.y $i',1'(ltia t1•,~ s'tt'?rc;i 11'01:4 'tale ~11)'cloli3Y€.'i:l 1:i1;It>. ;~:; :S .< S1: X10 (t:;::;lvy' ilC!" itC~t"Yell';' > I
etrtaclletl ~)11(1(();1,
?.) 1Vta1)le Village, 922(! Crallib<,Y Lane ~Ti)ttt1, ivfal:,le E.~roye. ivltt.
<I. T~(e~ver lx•gject similar to I illsbuly L.onunons tvitlt ltpdated amenities and rurnishi,,gs• r~fi iln3t`;
include ~~'ashcrs and dryers. See attached brochlare.
3.j Haraisoli ApartllYents, 15420 Founders, A1)ple V:~~lc;y. i~rin.
Se(: attached 1)ht)tc~s. (Haralsotl is the smaller 13uiltiing it) rile fbregl°ouaid of1)licio #2 ~4 #~?~,
=4.} Ciatesva~% Pia(:e, 721 Lake Susan DYie%e (Hey 212 ~t, (-I«Jy 10 i } C;hauhassetl, 3~ir..
See ~Lttacl:ed photos.
5.} crossings At Valley View, 1;735 I'ot-tlaud r'1ve. Sa.ltil, Rloonlntgton, l~ln,
The above are all 3 or 4 story buildings ~vit1 undergrouttti parking, similar to out' prol)osa1. f tc;~yevet•
tllel'z are I1C) 0.l"itl'il1)la',5 (7f it 10ti'el' 11etg111' 2 StOP'~' al)al'rttleiit S:}';C btt14f1iil~ itS 1!'2 a±'c 1)t'U1)i~Sit~ it (ii~(,t,
Pillsbur~'::<;YOSS io•a~tt1 the suagle fa'.~1ity homes.
Please ie1 t-1~ ktiuiv if e7ott would like adtlitiotlal e~atYtl)les of Taff ~:redtc pl•(?l-3erties rn• tnrr'ter ;4k.;,lls
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