071513completeagenda
CITY OF RICHFIELD, MINNESOTA
MONDAY, JULY 15, 2013
RICHFIELD MUNICIPAL CENTER
6700 PORTLAND AVENUE
REGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING
COUNCIL CHAMBERS
7:00 P.M.
AGENDA
Call to order
Roll call
1. Approval of minutes of (1) Regular HRA Meeting of June 17, 2013
2. HRA approval of agenda
3. Consideration of a request by the owner of 7600 Lyndale Avenue, Unit 408 to forgive a
Housing and Redevelopment Authority Community Revitalization Fund Program
mortgage in the amount of $10,080
Staff Report No. 38
Notes:
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
4. HRA discussion items
Notes: ___________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
5. Executive Director Report
Notes: ___________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
6. Claims and Payroll
Adjournment
Auxiliary aids for individuals with disabilities are available upon request. Requests must be
made at least 96 hours in advance to the City Clerk at 612-861-9738.
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES
Richfield, Minnesota
Regular Meeting
June 17, 2013
CALL TO ORDER
The meeting was called to order by Chair Sandahl at 7:02 p.m.
ROLL CALL
HRA Members Sue Sandahl, Chair; Steven J. Quam, Doris Rubenstein; Debbie Goettel;
Present: and David Gepner
Staff Present: John Stark, Acting Executive Director/Community Development Director;
Karen Barton, Assistant Community Development Director; and Nancy
Gibbs, City Clerk.
Item #1 APPROVAL OF MINUTES OF (1) REGULAR HRA MEETING OF APRIL 15, 2013;
(2) SPECIAL HRA MEETING OF APRIL 23, 2013; AND (3) SPECIAL HRA/CITY
COUNCIL/HOUSING VISIONING TASK FORCE MEETING OF MAY 7, 2013
M/Rubenstein, S/Quam to approve the minutes of (1) Regular HRA Meeting of April 15,
2013; (2) Special HRA Meeting of April 23, 2013; and (3) Special HRA/City Council/Housing
Visioning Task Force Meeting of May 7, 2013.
Motion carried 5-0.
Item #2 HRA APPROVAL OF AGENDA
M/Goettel, S/Gepner to approve the agenda.
Motion carried 5-0.
Item #3 CONSENT CALENDAR
A. Consideration of approval of a resolution authorizing the HRA to affirm the monetary limits
on municipal tort liability established by MN Statutes 466.04 S.R. No. 32
HRA Meeting -2- June 17, 2013
HRA RESOLUTION NO. 1155
RESOLUTION AFFIRMING MUNICIPAL TORT LIABILITY LIMITS ESTABLISHED BY
MINNESOTA STATUTES 466.04
This resolution appears as HRA Resolution No. 1155.
B. Consideration of approval of a resolution affirming and ratifying submittal of an application
to the Minnesota Housing Community Fix-Up Fund Program and Community
Homeownership Impact Fund for a program to write down the interest rate on home
improvement loans S.R. No. 33
HRA RESOLUTION NO. 1156
RESOLUTION AFFIRMING AND RATIFYING SUBMITTAL OF
AN APPLICATION TO MINNESOTA HOUSING COMMUNITY FIX-UP FUND PROGRAM AND
COMMUNITY HOMEOWNERSHIP IMPACT FUND FOR A PROGRAM TO WRITE DOWN THE
INTEREST-RATE ON HOME IMPROVEMENT LOANS
This resolution appears as HRA Resolution No. 1156.
C. Consideration of approval of an amendment to the Subordination and Satisfaction Policy
S.R. No. 34
D. Consideration of approval of a resolution affirming and ratifying submittal of an application
to the Minnesota Housing Community Homeownership Impact Fund for gap funds to
develop three affordable new homes through the HRA’s New Home Program S.R. No. 35
HRA RESOLUTION NO. 1157
RESOLUTION AFFIRMING AND RATIFYING SUBMITTAL OF
AN APPLICATION TO MINNESOTA HOUSING COMMUNITY HOMEOWNERSHIP IMPACT
FUND FOR GAP FUNDS TO DEVELOP THREE AFFORDABLE NEW HOMES THROUGH THE
HRA’S NEW HOME PROGRAM
This resolution appears as HRA Resolution No. 1157.
M/Goettel, S/Quam to approve the Consent Calendar.
Motion carried 5-0.
Item #4 PUBLIC HEARING AND CONSIDERATION OF A RESOLUTION AUTHORIZING
ST
THE SALE OF 7229 – 1 AVENUE TO ENDRES CUSTOM HOMES, INC. AND A
CONTRACT FOR PRIVATE DEVELOPMENT WITH ENDRES CUSTOM HOMES,
INC. FOR THE CONSTRUCTION OF A SINGLE FAMILY HOME UNDER THE
RICHFIELD REDISCOVERED PROGRAM S.R. NO. 36
Assistant Community Development Director Barton presented Staff Report No. 36.
M/Gepner, S/Goettel to close public hearing.
Motion carried 5-0.
M/Goettel, S/Rubenstein that the following resolution be adopted and that it be made part of
these minutes and to approve a contract for private development with Endres Custom Homes, Inc.
for the construction of a single family home under the Richfield Rediscovered Program:
HRA Meeting -3- June 17, 2013
HRA RESOLUTION NO. 1158
RESOLUTION AUTHORIZING THE SALE OF REAL PROPERTY LOCATED AT
7229 1ST AVENUE TO ENDRES CUSTOM HOMES, INC.
Motion carried 5-0. This resolution appears as HRA Resolution No. 1158.
Item #5 CONSIDERATION OF A PROPOSAL FROM SHERMAN ASSOCIATES FOR THE
CEDAR POINT PHASE II HOUSING REDEVELOPMENT AREA S.R. NO. 37
Assistant Community Development Director Barton presented Staff Report No. 37.
George Sherman, owner of Sherman Associates, introduced Andy Hughes, project manager
of Sherman Associates.
Mr. Hughes discussed redevelopment possibilities for Cedar Point Phase II Housing
Redevelopment Area.
Link Wilson, Kaas Wilson Architects, proved a PowerPoint presentation of possible future
development for Cedar Point Phase II Housing Redevelopment Area which would include senior
housing.
After much discussion the HRA directed staff to continue conversations with Sherman
Associates but to look at other options for development of the area.
Commissioner Goettel suggested mixed use with some affordable housing and added retail.
All commissioners agreed they would like something other than senior housing.
Acting Executive Director/Community Development Director Stark explained financing
obstacles for different types of development.
Item #6 HRA DISCUSSION ITEMS
Commissioner Goettel stated that she had visited some homes behind the Lyndale Plaza
Apartments. She stated that some homes have been impacted by the height of the apartment
building. She continued that the homes receive very little sunlight during the day and then at night
lights from the building shine into some of the yards.
Commissioner Goettel suggested the HRA possibly consider purchasing four homes behind
the Lyndale Plaza Apartments.
Commissioner Gepner asked staff to organize a date for the HRA to tour new home
development sites.
Item #7 EXECUTIVE DIRECTOR REPORT
Acting Executive Director/Community Development Director Stark reported the City
participated in National Bike to Work Week and there was 100% participation from HRA-paid staff
for at least one day that week.
HRA Meeting -4- June 17, 2013
Acting Executive Director/Community Development Director Stark stated that the HRA
would be receiving a memo regarding the date that the Housing Visioning Task Force would be
presenting their findings to the City Council and HRA. Acting Executive Director/Community
Development Director Stark also mentioned that the Housing Visioning Task Force was a
tremendous group of people to work with.
Item #8 CLAIMS AND PAYROLL
M/Goettel, S/Gepner that the following claims and payrolls be approved:
U.S. BANK 05/20/2013
Section 8 Checks: 123372 - 123492 $ 163,768.33
HRA Checks: 31748 - 31766 $ 239,978.07
TOTAL $ 403,746.40
U.S. BANK 06/17/2013
Section 8 Checks: 123493 - 123607 $ 158,798.15
HRA Checks: 31767 - 31786 $ 57,120.28
TOTAL $ 215,918.43
Motion carried 5-0.
ADJOURNMENT
The meeting was adjourned by unanimous consent at 8:18 p.m.
Date Approved: July 15, 2013
Suzanne M. Sandahl
Chair
Nancy Gibbs John Stark
City Clerk Acting Executive Director
III. BR
ASIS OF ECOMMENDATION
A. B
ACKGROUND
In 2003, the HRA received a CRV award to provide second mortgages
to condominium buyers in the Kensington Park development to make
units affordable to households earning 80 percent or less of the Twin
Cities Area Median Income (TCAMI). The HRA was awarded a
combined total of $300,000 from Minnesota Housing and Metropolitan
Council, of which $215,214 was spent. Ten loans were originated with
the funds. Six of the loans utilized Minnesota Housing funds and were
made in Minnesota Housing’s name. Four of the loans utilized
Metropolitan Council funds, and were made in the HRA’s name. The
Mortgage and Note provisions were the same for all ten loans. Ms.
Sklader received her loan through the HRA.
Under the terms of the Mortgage Note, the loan must be repaid under
the following conditions:
The Property ceases to be the Borrower’s principal place
o
of residence.
The Property is sold.
o
The First Mortgage is paid in full.
o
The First Mortgage is foreclosed upon.
o
An Event of Default is found to occur (e.g., false
o
information was provided in the application).
Thirty years from the date of the Mortgage Note.
o
In 2005, the Homeowner purchased unit 408 (1 bedroom, 1 bath) at
Kensington Park, 7600 Lyndale Avenue for $201,605. She secured a
first mortgage for $151,200 and received a second mortgage through
the HRA for $10,080.
The Homeowner currently owes $123,168.42 on the primary mortgage
in addition to the $10,080 owed to the Richfield HRA.
The Homeowner is seeking to sell the unit. Homeowner has had two
offers on the property, the first of which was withdrawn. The current
offer on the property is for $85,000.
The Homeowner is proposing to pay the difference between the sale
price and the amount owed on her primary mortgage.
The proposal from the Homeowner is not technically a “short sale” as
the primary mortgage holder is not being requested to accept less
than the full amount owed on the loan.
By requesting the HRA to forgive their mortgage, the Homeowner is
attempting to prevent a short-sale or foreclosure of the primary
mortgage.
The 2012 Hennepin County estimated market value for the property is
$95,000.
Two Kensington Park condominiums have sold in the past 12 months.
One unit (2 bedrooms, 2 baths) sold for $145,000. The second unit (1
bedroom, 1 bath) sold for $78,300.
There are currently two units listed for sale on the Multiple Listing
Service. One unit (1 bedroom, 1 bath) is listed for $106,900. The
second unit (2 bedrooms, 2 baths) is listed for $95,000.
There is no current appraisal of the unit available. The Homeowner
consulted with a realtor and reviewed real estate listings of similar
properties to determine a price.
B. P
OLICY
The Mortgage Foreclosure Response Program Procedural Guidelines
state as follows: “Staff will consider short sale offers and negotiate as
high of repayment as possible. Action will be taken quickly so as to
not disrupt the short sale opportunity and cause the homeowner to
enter into foreclosure.”
The HRA required that 20 percent of the Kensington Park units be
affordable. The CRV second mortgages helped the developer to meet
this requirement.
C. CTI
RITICAL IMING SSUES
The Homeowner has a purchase agreement for the property that
expires September 6, 2013.
D. F
INANCIAL
The attached letter from the Homeowner describes her financial
situation. Homeowner received an offer of $85,000 for her property.
Homeowner currently owes $123,168.42 on her mortgage.
Homeowner will pay $34,567.46 out of her own funds in order to avoid
a short sale or foreclosure.
Funding for the loan was provided by the Metropolitan Council through
a grant from the CRV Program.
Recaptured funds do not need to be repaid to the Metropolitan
Council. The terms of the grant agreement require the HRA to use
any recaptured funds for “affordable and life-cycle housing initiatives.”
When the funds were awarded in 2003, the HRA stated that it would
reuse any recaptured funds for a qualified household purchasing a
Kensington Park unit or using one of the City’s other affordable
homeownership programs. Households served by the funds can earn
up to 80 percent of the TCAMI.
E. L
EGAL
The Metropolitan Council awarded the funds to the HRA; therefore,
any modification of the Promissory Note is an HRA decision.
IV. AR()
LTERNATIVE ECOMMENDATIONS
Authorize staff to negotiate a settlement amount within certain parameters.
V. A
TTACHMENTS
Letter from Jill Sklader
VI. PPEM
RINCIPAL ARTIES XPECTED AT EETING
Jill Sklader, Homeowner