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09-20-04 agendaCITY OF RICHFIELD, MINNESOTA MONDAY, SEPTEMBER 20, 2004 SPECIAL HOUSING & REDEVELOPMENT AUTHORITY CLOSED EXECUTIVE SESSION RICHFIELD CITY HALL 6700 PORTLAND AVENUE EXECUTIVE CONFERENCE ROOM 6:30 P.M. Call to order 1. Discussion of next steps regarding recent Court of Appeals court case in matter of Kenneth Wren residential relocation claim Notes: Adjournment REGULAR HOUSING AND REDEVELOPMENT AUTHORITY REGULAR MEETING RICHFIELD CITY HALL 6700 PORTLAND AVENUE COUNCIL CHAMBERS 7:00 P.M. AGENDA Call to order 1. Approval of .minutes of Regular HRA Meeting of August 16, 2004 Notes: Z. HRA approval of agenda 3. Consent Calendar contains several separate items which are acted upon by the HRA in one motion. Once the Consent Calendar has been approved, the individual items and recommended actions have also been approved. No further HRA action is necessary. However, any HRA Commissioner may request that an item be removed from the Consent Calendar and placed on the regular agenda for HRA discussion and action. All items listed on the Consent Calendar are recommended for approval. A. Consideration of approval of continuation of public hearing to October 18, 2004 regarding resolution authorizing sale of real property at Emerson Avenue between 78th and old 77th Streets to CSM Corporation S.R. No. 38 B. Consideration of approval of form of pledge establishing $500,000 account by City Bella LLC towards cost of skyway S.R. No. 39 C. Consideration of approval of consent to register title to certain real estate related to Kensington Park redevelopment project S.R. No. 40 Notes: 4. Public hearing regarding HRA's annual Public Housing Authority Plan for Section 8 Housing Assistance Program Staff Report No. 41 Notes: 5. Presentation of Richfield Community Council's Attainable Housing Committee Action Plan and consideration of proceeding with Kids@Home Staff Report No. 42 Notes: 6. Consideration of third amendment to Purchase and Private Redevelopment Agreement with Penn Place Townhouse development including soil corrections Staff Report No. 43 Notes: 7. Consideration of resolution regarding corrected 2005 preliminary HRA tax levy Staff Report No. 44 Notes: 8. Executive Director report 9. 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 Administrative Services Director at 612-861-9702. AGENDA ITEM # 7 REPORT # 4 ~~ STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING SEPTEMBER 20, 2004 REPORT PREPARED BY: REPORT PRESENTER: DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTIVE DIRECTOR: CHRIS REGIS, FINANCE MANAGER SIGNATURE ITEM FOR HRA CONSIDERATION: Consideration of resolution approving corrected proposed property tax levy for payable 2005 for certification to Hennepin County RECOMMENDED ACTION: By Motion: Adopt the attached resolution approving corrected 2005 Preliminary Housing and Redevelopment Authority Tax Levv. II. BACKGROUND • At the August 16, 2004 Housing and Redevelopment Authority (HRA) meeting a resolution was adopted approving the 2005 preliminary HRA Tax Levy. • However, due to an error the amount of levy approved was not the intended levy amount. The levy approved was the maximum amount allowed less an estimated 2% deemed to be uncollectable, a difference of $7,558. III. BASIS OF RECOMMENDATION A. POLICY At a Special Meeting of the City Council on September 8, 2004, a preliminary levy for the HRA was adopted at the maximum amount based on taxable market value allowed by law. This levy was then certified to the County Auditor before September 15, 2004. • It would be appropriate for the HRA to approve the intended levy that was certified by the City Council • Minnesota Statutes require adoption of a preliminary levy from each taxing authority. B. CRITICAL ISSUES • As required by State Statutes, each taxing authority must certify its proposed tax levy for the payable year 2005 to the County Auditor on or before September 15, 2004. C. FINANCIAL • The levy adopted at the August 16, 2004 HRA meeting was incorrect in that it represented the net amount of the maximum levy based on market value allowed by law. • The preliminary levy adopted was $370,320; which is the maximum levy amount of $377,878 less 2% estimated to be uncoltectable. • The difference between the preliminary levy adopted by the HRA and the intended, maximum levy allowed by law is $7,558. • The Proposed 2005 HRA levy represents a 13.55% increase from the previous year's levy. D. LEGAL • N/A IV. ALTERNATNE RECOMMENDATION(S~ • The HRA could choose to let the approved levy stand as adopted at the August 1.6, 2004 HRA meeting. However, the City Council at a special meeting on September 8, 2004, adopted a preliminary HRA levy at the maximum. allowed by law. V. ATTACHMENTS • Resolution Approving Corrected Certified 2005 Tax Levy. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A HRA RESOLUTION NO. RESOLUTION APPROVING CORRECTED CERTIFIED 2005 HOUSING AND REDEVELOPMENT AUTHORITY TAX LEVY BE IT RESOLVED by the Housing and Redevelopment Authority of the City of Richfield, Minnesota as follows: Section 1. There is hereby levied upon all taxable property in the City of Richfield an ad valorem tax in 2004, payable in 2005 for the following purposes: Housing and Redevelopment Authority $377,878 Section 2. A certified copy of this resolution shall be transmitted to the County Auditor. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 20th day of September, 2004. Thomas E. Harms, Chair ATTEST: Kristal Stokes, Secretary n AGENDA ITEM # 6 REPORT # 43 F ~ x~~,~: STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING SEPTEMBER 20, 2004 REPORT PREPARED BY: BRUCE NORDQUIST, HOUSING AND REDEVELOPMENT MANAGER NAME, TI"!'LE REPORT PRESENTER: BRUCE NORDQUIST, HOUSING AND REDEVELOPMENT MANAGER NAME, TITLE DEPARTMENT DIRECTOR REVIEW: SIGNATURE REVIEWED BY EXECUTIVE DIRECTOR: C~ ITEM FOR HRA CONSIDERATION: Consideration of a third amendment to the Purchase and Private Redevelopment Agreement with the Penn Place Townhouse develo ment includin soil conditions. I. RECOMMENDED ACTION: By Motion: Amend the contract with Penn Place Townhouses LLC to extend the completion date, make letter of credit adjustments and include a cost of soil correction. II. BACKGROUND At the July 19, 2004 Housing and Redevelopment Authority (HRA) meeting, a third amendment to the private redevelopment agreement with Penn Place Townhouses LLC was considered to: • Determine whether the HRA would share in unexpected soil correction costs. • Modify the completion date to June 30, 2005.. • Accept technical aspects related to draws on the letter of credit. Much of the discussion established the HRA's concerns related to soils, buyer/seller responsibilities and precedence. The minutes of the July 19, 2004 meeting have been attached. The HRA tabled the item to a future meeting. 092004 Penn Place The soil tests found organic fill_soils distributed throughout the site that are unsuitable to build on. The townhouse project places foundations and pavement throughout the site with an engineer's recommendation to remove from four to 12 feet. of the soils prior to adding compacted fill to new footing/pavement depth. A review of the report indicates some of the least correction was recommended where building basements were located. Some of the most correction was required toward the edges of the site and below former slab on grade garage locations. The areas requiring the most correction were unexpected. The developer reports the total cost to correct is $45,267. The HRA's demolition contractor specifications were to breakdown the edges of the removed foundation area and not add fill. However, staff observed upon completion that the remaining depression would have caused storm water ponding, uneven terrain for maintenance, and a walking hazard due to proximity to sidewalks. At no additional cost, staff arranged for fill by the demolition contractor and top seeding the site to minimize negative conditions. Given the site was vacant approximately four years before development, this was a prudent decision. The building areas where the HRA fill was added total 2,340 sq. ft. of the 24,472 sq. ft. site. Thus the developers total cost to correct is $1.87/sq. ft. for the site and the portion than can be attributed to HRA fill is estimated to be $4,376. However, the amount of the site with fill that could have dated back 75 years to when the first house was built was unusual and unexpected by all parties. In addition to the soil correction matter, the third amendment updates performance dates with the actual closing date, a construction completion date of June 30, 2005 and details related to draws on the letter of credit. III. BASIS OF RECOMMENDATION A. POLICY • The HRA approved the sale of the land to the developer in March 2004 after a public hearing. The price was $150,000. The developer will pay $80,000. The balance will be paid by the tax increment generated by the project. • In redevelopment projects the cost of soil correction is typically reflected in the value placed on the site. • The sale price of the site did not reflect the need for soil correction, as it was an unknown condition when the price was set. • Technical corrections to development agreements are not unusual. B. CRITICAL ISSUES • The land has been vacant since August 1999, but did provide a site for two houses and three garages at the time of purchase and fill soils ~ were added in the building areas to stabilize the site following demolition. • The developer has put considerable time and expense into the project to get underway. The $45,000 soil correction was unexpected. No funds are available from outside sources for soil correction. • Technical corrections to the agreement are still needed. C. FINANCIAL • At closing, the Developer provided a letter of credit to pay for the land upon project completion. The $80,000 will be deposited in the Development Account. It is proposed that the Development Account be the source of the HRA's contribution toward soil correction. Funds are available. D. LEGAL • Legal counsel has prepared the amendment. • With or without soil correction assistance to the developer, a third amendment to the Purchase and Private Redevelopment Agreement is required to acknowledge the closing date, completion date, and terms of the letter of credit which were finalized just prior to closing. IV. ALTERNATIVE RECOMMENDATION(S~ • Share, dollar for dollar in the soil correction cost as the amount of soil correction. required throughout was very unusual for a previously developed Richfield site. The HRA has developed over 150 scattered sites without encountering the extent of reported conditions. The HRA's cost is $22,883. • Pay for the removal of fill placed by the HRA in building foundation areas in 1999 to stabilize the site. The HRA's cost is $4,376. • Amend the Purchase and Private Redevelopment agreement to allow revised performance dates and letter of credit adjustment but do not approve of soil correction assistance. V. ATTACHMENTS • Before and after site pictures • July 19, 2004 HRA minutes related to prior discussion- • Third amendment VI. PRINCIPAL PARTIES EXPECTED AT MEETING • David Gepner, developer BEFORE - 6833-6855 Penn Avenue Two houses with basements and three garages (one 3-car, two 2-car) with slabs on grade to be removed. AFTER - 6833-6855 PENN AVENUE • Level site available for development ;1 HRA Meeting Minutes ~ -3- July 19, 2004 Housing and Redevelopment Manager Nordquist reviewed Staff Report No. 32 regarding a Richfield HRA revised Administrative Plan for Section 8 Housing Assistance Program. Commissioner Helmberger asked if this would place an undo burden on existing clients. Housing and Redevelopment Manager Nordquist stated after a review of files that it shouldn't place a hardship on any of our clients. Chair Harms asked if the reduced funding from HUD is covered in the budget. Mr. Nordquist responded that Richfield is receiving less from HUD for clients, but that with the Fair Market Rent Adjustment by the HRA in June in combination with the requested action, sufficient rent assistance would be available. M/Linnihan, S/Stokes to close the public hearing. Motion carried 5-0. M/Linnihan; S/Stokes to approve the Housing and Redevelopment Authority's revised Administrative Plan for the Section 8 Housing Assistance Program. Motion carried 5-0. Item #5 CONSIDERATION OF A TH(RD AMENDMENT TO THE PURCHASE AND PRIVATE REDEVELOPMENT AGREEMENT WITH THE PENN PLACE ~ TOWNHOUSE DEVELOPMENT S.R. N0. 33 Housing and Redevelopment Manager Nordquist reviewed Staff Report No. 33 regarding consideration of a third amendment to the Purchase and Private Redevelopment Agreement with the Penn Place Townhouse development. Commissioner. Stokes asked who should have made the disclosure regarding the soil conditions. Housing and Redevelopment Manager Nordquist responded that early in the 1990's when the Richfield Rediscovered program began, we would routinely evaluate-soil conditions. Poor soils never occurred and the evaluation was expensive and eventually dropped from procedures. Chair Linnihan asked if it is generally the buyer or seller's responsibility to find the soil condition. Mr. Nordquist responded thafi the property was sold as is, but that both parties assumed the soils were buildable. Chair Harms said what staff is really asking is to change the development agreement and accept a financial obligation that is not the HRA's. Chair Harms then asked what is the cost. David Gepner, the developer, stated the cost is $45,767. Commissioner Linnihan stated that he is uncomfortable with just paying a portion of this cost because it is the developer's responsibility. HRA Meeting Minutes -4- July 19, 2004 Mr. Nordquist responded that staff went to other sources, but because there was no soil contamination, other funding was not available. ~:: Chair Harms asked if Mr. Gepner would have gone ahead with the project but for the $45, 000. Mr. Gepner said a neighbor may have observed that fill soils were brought in by the demolition contractor hired by the HRA. Mr. Gepner also stated that they would probably go ahead with the project because it was important to stay on schedule. Chair Harms stated that he is concerned about the policy and precedent in going back on a closed deal. Mr. Harms wants staff to go back and look at other sources of funding including the demolition contractor and carefully look at the bills being brought here. Commissioner Linnihan stated that he agreed and asked if staff could look at some alternative to keep the project cash flow going pending a final determination. . Mr. Gepner stated that the problem was discovered before the closing, but that it wasn't handled at the June HRA meeting. Chair Harms stated that he understood, but that he still had concern about the precedent setting impact of this decision. The item was tabled to a future meeting by unanimous consent. Item#6 EXECUTIVE DIRECTOR REPORT No report. Item #7 CLAIMS ANQ PAYROLL ~ M/Stokes, S/Kirsch that the following claims and payroll be approved. FIRSTAR BANK Section 8 Checks: 106469- - 106601 HRA Checks: 27196 - 27228 Motion carried 5-0. ADJOURNMENT $189,172.58 $222, 298.80 The meeting was adjourned by unanimous consent at 7:30 p.m. 6/8/04 THIRD AMENDMENT TO PURCHASE AND PRIVATE REDEVELOPMENT AGREEMENT By and Between THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD and PENN PLACE TOWNHOUSES, LLC This document drafted by: KENNEDY & GRAVEN, CHARTERED 470 Pillsbury Center Minneapolis, MN 55402 (612) 337-9300 JBD-248791v1 RC125-244 THIRD AMENDMENT _~ TO PURCHASE AND PRIVATE REDEVELOPMENT AGREEMENT This Third Amendment to Purchase and Private Redevelopment Agreement (the "First Amendment"), is made as of the day of , 2004, by and between the Housing and Redevelopment Authority in and for the city of Richfield, a public body corporate and politic under the laws of Minnesota, having its office at 6700 Portland Avenue South, Richfield, Minnesota 55423-2560 (the "Authorit}~') and Penn Place Townhouses, LLC, a Minnesota limited liability company, having its office at 7503-18th Avenue South, Richfield, Minnesota 55423 (the "Redeveloper"). WITNESSETH: WHEREAS, the Authority and the Redeveloper have entered into that certain Purchase. and Private Redevelopment Agreement dated November 18, 2002 (the "Agreement") concerning property generally located at 6833 and 6855 Penn Avenue in Richfield and more specifically described in the Agreement and in the attached Exhibit A (the "Redevelopment Propert~~; and WHEREAS, the Agreement was thereafter amended by a First Amendment to Purchase and Private Development Agreement dated as of 2003; and by a Second Amendment to Purchase and Private Development Agreement dated as of September 15, 2003 (the Agreement and the two amendments hereinafter referred to as the "Amended Agreement"). WHEREAS, the parties desire to modify the Amended Agreement in certain respects as hereafter provided. NOW, THEREFORE, in consideration of the covenants and the mutual obligations contained herein, the parties agree as follows: 1. Section 3.4 of the Amended Agreement is amended to read as follows: Section 3.4. Closin>;. The Authority shall execute and deliver at closing the Redevelopment Property Deed in the form attached hereto as Exhibit B. Closing shall occur on or before 2004 or upon such other date as the parties may agree. Notwithstanding any other provision in this Agreement to the contrary, if closing has not occurred by 2004, either party may declare an Event of Default pursuant to Section 6.1 of this Agreement and terminate this Agreement. The balance of the purchase price shall be paid by the Redeveloper in cash at closing, unless the parties agree to a letter of credit or property lien. All levied or pending special assessments shall be paid by the Authority prior to closing. The Redeveloper and the Authority agree to pro rate as of the date of closing any real estate property taxes for the Redevelopment Property payable in the year of closing. The Redeveloper agrees to pay all real estate taxes payable with regard to the Redevelopment Property in the years after closing. The Redeveloper's use of the Redevelopment Property shall also be subject to the building and zoning laws and ordinances and all other City, State and federal laws and regulations. The Redeveloper shall JBD-248791v1 2 RC125-244 have possession of the Redevelopment Property upon closing. Closing shall be at the - offices of the Authority or such other location to which the parties may agree. The Redeveloper shall pay for the cost of recording the Redevelopment Property Deed and the premium for title insurance. The Authority shall pay the fee associated with obtaining the commitment for title insurance. The Redeveloper and the Authority shall each pay one-half of the closer's fee. 2. Section 4.2 of the Amended Agreement is amended to read as follows: Section 4.2. Commencement and Completion of Construction. Subject to Unavoidable Delays, the Redeveloper shall commence construction of the Improvements within 30 days of the date of closing. Subject to Unavoidable Delays, the Redeveloper shall have substantially completed the construction of the Improvements by no later than 2005. All work with respect to the Improvements to be constructed or provided by the Redeveloper on the Redevelopment Property shall be in substantial conformity with the Construction Plans. In addition to construction of the Improvements, the Redeveloper shall be responsible for proper platting of the Redevelopment Property, for closing the two curb cuts on Penn Avenue, and for all work associated with site preparation and the installation, moving or removal of all public and private utilities serving the Redevelopment Property. The Redeveloper shall make such reports to the Authority regarding progress on construction of the Improvements as the Authority deems necessary or helpful. 3. The Amended Agreement is amended by adding to Section 6.2 the following new paragraph: (e) Subject to the notice and cure provisions contained in Section 7.7, but without being subject to the notice and cure provisions of this Section 6.2, draw on the Letter of Credit 4. The Amended Agreement is amended by adding the following new Section: Section 7.7. Letter of Credit. In accordance with the provisions of Section 3.2, the Redeveloper will deliver to the Authority, at closing, a Letter of Credit ("LC") in a form and from an institution reasonably acceptable to the Authority. The LC will be in the. amount of $80,000, which is the Purchase Price of the Redevelopment Property. The Authority may draw on the LC to cover any Event of Default described in Section 6.1, and the failure of the Redeveloper to pay the Authority the $80,000 Purchase Price of the Property by the earlier of (i) ten days following the closing on the sale of the last townhouse unit to be sold or, (ii) , 200_. The Redeveloper shall remain responsible for the payment of the portion of any monetary Events of Default described in Section 6.1; and for the portion of the Purchase Price not covered by the LC. If the payment of the Purchase Price has not. been made before 30 days from the expiration date of the LC, the Authority will notify and direct the Redeveloper to provide it with an acceptable substitute or replacement letter of credit. If the substitute or replacement letter of credit is not ~J provided by 10 days before the expiration of the LC, the Authority may draw the entire balance of JBD-248791v1 3 RC125-244 the LC and apply it to the payment of the Purchase Price and any other monetary Events of Default existing at that time. 5. The Amended Agreement is amended by adding the following new Section: Section 7.8. Soil Correction Costs. It is anticipated that up to $45,267 will be necessary to fund soil correction costs necessary to prepare the Redevelopment Property for construction of the Improvements. These costs were not known at the time the parties calculated the land and construction costs for the development. In order for the development to remain economically feasible, the Authority has agreed to consider with the Redeveloper the cost of the soil correction as follows: (a). The Redeveloper will contract for the soil correction work; and the Authority will not be a party to the contract, nor have any obligation to the contractor. The Redeveloper shall be responsible for the full and prompt payment of all invoices from its contractor. (b) Upon receiving an invoice from its contractor for soils correction work performed, the Redeveloper will provide a copy to the Authority together with supporting documentation reasonably necessary for the Authority to review the invoice. (c) The Authority will have ten business days to review the invoice, and either approve or reject the same.. If the invoice is rejected, the Authority will indicate in what respects the invoice is deficient, and what additional information is needed. (d) The Authority upon approving an invoice (including invoices approved following initial rejection) will pay the Redeveloper the amount it-has authorized on September 20, 2004. Such payment will be made within five days of approval. (e) The Authority shall have no further obligation to make payments under this section once the Authority's total payments reaches $ 6. Except as specifically noted in this Third Amendment, all terms of the Amended Agreement remain unchanged. IN WITNESS WHEREOF, the Authority and the Redeveloper have caused this. Third Amendment to be duly executed in their names and behalves on or as of the date first above written. THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD,. MINNESOTA STATE OF MINNESOTA By: By: Its Chairperson Its Executive Director JBD-248791v1 Q RC125-244 ) ss COUNTY OF ) The foregoing instrument as acknowledged before me this day of , 2004, by Thomas E. Harms, the chairperson of the Housing and Redevelopment Authority in and for the city of Richfield, Minnesota, a public body corporate and politic under the laws of Minnesota, on behalf of the Housing and Redevelopment Authority. Notary Public The foregoing instrument as acknowledged before me this day of , 2004, by Samantha Orduno, the executive director of the Housing and Redevelopment Authority in and for the city of Richfield, Minnesota, a public body corporate and politic under the laws of Minnesota, on behalf of the Housing and Redevelopment Authority. Notary Public JBD-248791v1 5 RC125-244 PENN PLACE TOWNHOUSES, LLC By: Its By: Its STATE OF NIINNESOTA ) ss COUNTY OF ) The foregoing instrument was executed this day of 2004, by and ,the and of Penn Place Townhouses, LLC, a Minnesota limited liability company, on behalf of the limited liability company. n JBD-248'791v1 RCI25-244 Notary Public 6 EXHIBIT A REDEVELOPMENT PROPERTY LEGAL DESCRIPTION LEGAL DESCRIPTION The Redevelopment Property is described as follows: Street Addresses The site consists of three platted lots: 6833 Penn Avenue South, Richfield (one lots) 6855 Penn Avenue South, Richfield (two lots) Legal Descriptions Legal 6833 Penn Avenue: Lot l 1, Block 9, Tingdale Bros.' Lincoln Hills Addn Descriptions North parcel of 6855 Penn Avenue: Lot 11 Subject to road, Block 9, Wood Lake Highlands Addn South parcel of 6855 Penn Avenue: Lot 10 Subject to road, Block 9, Wood Lake Highlands Addn PIN 6833 Penn Avenue: 28-028-24-33-0045 6855 Penn Avenue: 28-028-24-33-0146 Parcel Size 184' x 133' JBD-248791v1 '] RC125-244 AGENDA ITEM # 5 REPORT # !} 2 J STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING SEPTEMBER 20, 2004 REPORT PREPARED BY: BRUCE NORDQUIST, HOUSING AND REDEVELOPMENT MANAGER NAME, T//1!: REPORT PRESENTER: BRUCE NORDQUIST, HOUSING AND REDEVELOPMENT MANAGER NAME, TITLE DEPARTMENT DIRECTOR REVIEW: $ICNAT(IRE REVIEWED BY EXECUTNE DIRECTOR: ITEM FOR HRA CONSIDERATION: Consideration of presentation of the Richfield Community Council's Attainable Housing Committee Action Plan and consideration of roceedin with Kids Home. I. RECOMMENDED ACTION: By Motion: Accept the attached report by Committee representatives and authorize staff to proceed to administer Kids Home. II. BACKGROUND Committee leaders Camillo DeSantis and Council Member Susan Rosenberg have asked to present the Action Plan to the Housing and Redevelopment Authority (HRA). A copy of the Action Plan is attached and labeled as Attachment A. The Attainable Housing Committee, part of the Family Stability Work Group of the Richfield Community Council, shares the HRA's interest in affordable housing and has formulated an action plan for 2004/2005. Also, attached and labeled as Attachment B is a program with which the Attainable Housing Committee is working. The HRA is instrumental in helping the Attainable Housing Committee achieve its goals: 092004 Community Council's Action Plan 1. The HRA has authorized a portion of the Housing Fund for Kids@Home, a program that supports shallow rent subsidies for more stable home environments and therefore more stable school opportunity. 2. An estimated 30 lower income families could be supported annually by the HRA funding. 3. Asocial service support system, sought by the Affordable Housing Committee and recently funded by the Richfield Community Council will further assist families enrolled in the HRA's Kids@Home program. Staff will be available to answer any questions about Kids@Home. Attached are the proposed administrative uidelines marked as Attachment C. III. BASIS OF RECOMMENDATION A. POLICY • The HRA places a high priority on affordable housing programs. The Attainable Housing Committee of the Richfield Community Council developed an action plan in support of affordable housing programs. • The HRA authorized funding in May 2003 for a shallow rent subsidy program. That program entitled Kids a~Home is now ready to begin. • The Attainable Housing Committee supports KidsCc~Home and has secured additional funding to coordinate social service. support. B. CRITICAL ISSUES • The Attainable Housing Committee wants to ensure their action plan is consistent with HRA goals and objectives. • The Richfield School District reports that student performance is greatly affected by household stability. The Kids@Hame program offers greater stability to qualified families through rent assistance. • Kids@Home program criteria have-been developed to initiate program administration. C. FINANCIAL • The HRA authorized $200,000 from the Housing Fund for Kids@Home. • The 2004 revised/2005 proposed budget include a Kids@Home program. • The HRA budget also includes other affordable housing initiatives consistent with Committee interests. D. LEGAL • Federal Section 8 program guidelines and documents will be used as the basis for administering the Kids@Home program. O IV. ALTERNATIVE RECOMMENDATION(S~ • The HRA could recommend alternative policies and priorities for consideration as part of the Committee Action Plan. • The HRA could modify Kids@Home, as presented. V. ATTACHMENTS • Action Plan (Attachment A) • Summary of "Third Way" (Attachment B) • Kids@Home Program Summary (Attachment C) • List of committee members (Attachment D) • Housing Action Report VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Council Member Susan Rosenberg and Camillo DeSantis. n Attachment A Pa e 1 of 2 Richfield .Community Council (Family Stability Work Group) Attainable Housing Committee Action Plan Background The Attainable Housing Committee has been functioning since October 2001, to pursue the Richfield Community Council's goal of stable, affordable housing. The Committee has gone through two important transitions since its inception. One is the affirmation that while the committee supports a mix of housing at both ends of the spectrum -higher value housing as well as low cost housing -its primary focus is meeting the housing needs of those families which are at the 30% to 50% of Average Median Income (AMI). (For example: $23,000 to $38,500.00 for a family of four.) The second is a change in the name of the Committee from Low Cost Affordable Housing Committee to the Attainable Housing Committee. The premise is that affordability is key to owning a home or renting. For families at the 30% to 50% of AMI, they are not able to afford a home at current market rates. Families who choose to rent or own often are expending more than the recommended one-third of their income towards housing. he intent of the Attainable Housin Committee is to ex lore all availab 9 p le resources and options to assist lower income families to meet their housing needs in both rental and home ownership opportunities. Committee Goals • Advocate for low cost, attainable housing in Richfield. • Develop a plan to guide the Committee in pursuing its goals. • Develop a partnership with the City and Housing and Redevelopment Authority as one of the significant ways of achieving low cost, attainable housing in Richfield. , • Enlarge the committee membership to include other groups, organizations, and individuals in furthering low cost, attainable housing in Richfield.- (examples include: Metropolitan Council, Hennepin County, Third Way Network, Lutheran Social Services) Revised and Approved 6/lb/04 Attachment A Page 2 of 2 Attainable Housing Committee Action Plan for 2004/2005 ~1) Explore that the City/HRA dedicate a portion of its funds for maintaining, increasing, and enhancing low-cost attainable housing-for families with children. a) Create long-term permanent solutions b) Dedicate funds over several years for this purpose c) Advance policies, which support this purpose d) Explore work force housing opportunities in every development e) Seek ways for sons and daughters to live in Richfield f) Help seniors manage housing assets from aging in place to identifying housing choices 2) Plan for the Third Way Network approach for 2004, 2005 and in future years. a) Demonstrate approach in 2004 b) Support 2005 project funding c) Explore City/HRA participation in funding initially and for the long term (see The Third Way work plan for. Richfield Community Council LCTS funding attached) 3) Continue to develop, increase and enhance on-going low-cost housing activities and continue to explore new opportunities. Activit Units-to-date. Pro'ected Tar ets Section 8 (voucher) 350 350* Maintain ection 8 (ro'. based) 185 185* Maintain Kids @ Home 0 ~ 30 Initiate MetCouncil FAHP 10 10 Maintain Third Wa Network 0 2 2 - 5 Land Trust 1 1 1- 2 Annual) HN Co. Vocational 37 0 Discontinued Habitat for Humanity 9 1 1- 2 Annually r *Unchanged 4) Assist the Kids @ Home Program to develop the social service support system/program for the families enrolled in the program. a) Develop a collaborative system of agency resources. b) Explore how LCTS funded services/programs might provide needed services c) Utilize the personnel resources of The Richfield Community Council (Community Resource Coordinator) and the City (Human Services Planning/Coordinator) to assist in the development of this support system. ~ d) Explore RCC LCTS funds as a source for coordinating this system. (see Kids C~ Home Program draft attached) Revised and Approved 6/16/04 ousing Engagement, Action Research, Training and Stability Model. This model illustrates the three mponent parts and multiple points of entry for involving individuals and organizations committed to creating affordable housing solutions for low-income individuals and families. This private sector initiative does not rely on ongoing public subsidies. Rather, it is organized as a network of activities designed to mobilize and coordinate the ingenuity, talents and expertise of its participants. Attachment B Page 1 of 2 ~~ Housing ~ Suppliers ^ Construction Mgmt and Volunteer Coordination In-Kind ^^ Donations ^^ Housing Seekers Capitalto ~ ~ ~ L° __.~ Outreach Governance R & 0 Fundraising Management `~ ~ ~ .?' , ,; 5` Housing -Scout T"~~,, ~ , Initiatives ~ ~" U, , t ., t j _. ~ 4~' Local Group ~, Initiatives ^ ""~ '~ ~:~ Y. Property E Managers Housing ~ Projects ~ The numbers represent different ways that people and organizations can participate. (Refer to next page for more information.) ^ Housing Opportunity Family in Need Capital Investments Volunteer Sweat Equity ~~ In-Kind Contributions Mentors/Strategic Partners Organizational Infrastructure Property Manager/ Community Leader _ .._ __ L Housing Engagement Services The focus of this component is to utilize private initiative to identify, mobilize and coordinate the necessary resources for minimizing the cost of providing (ow-cost housing.. 1. Housing Suppliers -Work with property owners or others who want to provide decent affordable housing or related services for low-income families or individuals. 2. Construction Management and Volunteer Coordination -Work with construction managers on a pro Bono or stipend basis to coordinate housing projects that make appropriate use of skilled and unskilled volunteer workers. 3. In-Kind Donations -Work with individuals or businesses interested in making in-kind donations either directly for a project or to add to the inventory of a strategic partner for future use. Items include gathering both new and used construction materials, appliances and home furnishings ~4. Actess to Capital - On a per project basis, identify sources of investment capital needed to make a project feasible or work with area lenders and others willing to invest in affordable housing projects. Future plans call for creating the Stone SoupT~'t Fund to provide gap financing or assistance with acquiring properties on a timely basis. These properties are held for future development to benefit low income families or individuals. 11: Action Research Initiatives This component seeks to identify viable ways to increase the supply of low-cost housing and develop methods to evaluate and improve on these initiatives. 5. Housing SCOUt In'ttiat'tves - A 6-8 week initiative designed to organize small groups into two person scouting teams to each learn about a neighborhood of their choosing and identify possible affordable housing projects that may be selected for future. implementation. Third Way Network Page 2 of 2 6. Local Group Initiatives - A two year initiative organized into four month trimesters that train and organize small groups to identify their o~vn affordable housing responses and commit themselves to completing at least eight projects in partnership with others during that time. 7. Housing Projects - An initiative to respond to specific requests by property owners and work with them to design, organize and/or implement a particular low cost housing project. lil: Training and Stability Programs The purpose of this component is to build partnerships that enlist, train and support people or organizations with a particular need, interest°or expertise in creating long-term viable h©using-solutions. 8. Property Managers - A program designed to assist property managers seeking to provide housing to low- income families or individuals or for Third WayTM Network to serve as an intermediary and provide property management support on behalf of the property owner and tenant. 9. Strategic Partners - A program to strengthen the effectiveness of partner agencies and organizations involved in a particular aspect of providing housing or related services to low-income families or individuals. 10. Community Leaders - A program designed to identify, train, nurture and support leaders to become engaged in community housing projects that make a difference. 11. Mentors - A program to train individuals seeking to become a friend to aloes-income"person or family over a two year period to support them in becoming successful and independent. 12. Housing Seekers - A program to provide long-term cost-effective housing for graduates of homeless shelters or transitional housing programs who are ready to take the next step into independent living. For more information, please contact us: Third WayT`~ Network 529 South Seventh Street, Suite 500 Minneapolis, MN 5541.1 612-332-1311 www ThirdWayNetwork.org attachment c; Kids @ Home -.Rental Assistance Program . .Increase number of workforce households eligible for rent assistance • .provide more stable housing environment due to rent subsidy • provide more stable school opportunity due to stable housing • shared cost design provides incentive for families to keep working • serve approximately 30 households with $200,000 annually. Kids at Home is a 36-month rent assistance program. Families have a transition period of 6 months to 24 months to receive additional (minimal rent assistance) based on individual family's need at the end of 36-month program. Criteria for families: • have a child or children in Richfield schools (K -12) • one parent is either employed or in a training program • independently live in the city of Richfield • .not receiving any other housing assistance • annual income must fall at or below income guideline • rental payments current with landlord Referrals: • School Social Worker or Administrator • Social Service Agency Income Guidelines: This program focuses on working households between 30% and 50% of median income, an under served population. All households at incomes less than 50% of median are eligible. Income Limits Effective 4/114 50% of median famil income Persons Income 2 $30,700 3 $34,500 4 $38,350 5 $41,400 6 $44,500 7 $47,550 8 $50,600 Housing payment is the lesser of: • Payment standard (or gross rent) less 30% of the family's income (following Section 8 guidelines), or • Flat payment -safety net medium level of subsidy Qob loss, job change, medical leave, etc.) Flat Payment (decreases each year, so family's responsibility will increase.) Bedroom Size 15 Year Flat Pa ment 2" Year Flat Pa ment 3~ Year Flat Pa ment One $425.00 $375.00 $325.00 Two $475.00 $425.00 $375.00 Three $575.00 $525.00 $475.00 Four $675.00 $625.00 $575.00 Attachment D Attainable Housing Committee Camillo DeSantis, Richfield Community Council Susan Rosenberg, Richfield City Council John Bjostad, Richfield Community Council Hal Clapp, United Way Mike Czarnik, Dream Homes John Garry, HSSC Steve Lindgren, Richfield Chamber of Commerce Douglas Mayo, Commonbond Community Mike Welsh, Consultant with Richfield Faith Community Tom Zarth, Oak Grove Church Tracy Vicory, Third Way Network Paul Halvorson, Third Way Network Kathy Farris, City of Richfield Lynnette Chambers, Richfield HRA Bruce Nordquist, Richfield HRA c~ l e • Richfield Attainable Family Housin Committee RAFHC & Third Wa Network - - --- ----- ----------- g ( ) y Fall 2004 (#1) Overview of Partnership with Third Way Network: Creating Housing for Families with School-Age Children In March 2004, the Richfield Attainable Family Housing Committee (RAFHC) of the Richfield Community Council began amulti-year partnership with Third Way Network to create attainable housing for families earning $30,000 a year or less and who are ready for independent living. The focus of the RAFHC is to identify new and expanded uses of existing housing stock in Richfield for: a) working families with pre-school and school-age children. b) low-wage employees working or living in Richfield. /~ ~) seniors to remain independent and near loved ones by exploring new housing options. This grassroots initiative is intended to engage and educate key residents and stakeholders in the Richfield community about the unmet housing needs and opportunities in their community. The Richfield Attainable Family Housing Committee is also involved in other housing projects and initiatives. These will be featured in future editions of this report. This report identifies ways you can participate and support specific RAFHC projects being organized by Third Way Network For more information visit: www.ThirdWay-Network.org/~rouns ~, Housing Project Summary: Providing a six bedroom home for a family Our first housing project, a six bedroom house owned by the Richfield Bloomington Credit Union, was completed in July. Twenty-five volunteers from Hope Presbyterian Church, St. Richard's Catholic Church, Academy of Holy Angels, and Urban Immersion Service Retreat groups contributed to the renovation. Volunteers worked with the Third Way Construction crew to create a sixth bedroom making the house accessible for a larger family. They also installed a shed and fence in the backyard. As a result, Third Way Network in conjunction with the Richfield Bloomington Credit Union is able to offer a $500 rental assistance grant to reduce the rent for a family. We have found a qualified family who will move into their new home in October. Their children will attend the Richfield Public Schools. Next Housing Proiiect We work with property owners and landlords to renovate and expand existing space to create below-market rental housing to qualified families. Third Way Network and property owners sign an agreement to work out the details prior to starting a housing renovation project. If you would like more information about how this program might work for you, please contact Paul Halvorson, Third Way Network, 612 332-1311. ^ As of August 2004, two workers must earn $18/hour to purchase a median priced home at $222,000. (9/14/04 S,~ Tribune) ^ 37% of renters in Hennepin County pay over 30% of their household income on Housing. (US Census)' Contents Title: Overview ..........................1 Housing Project Summary...1 Interview Summaries...... 2 Housing Scout Training... 3 How you can participafe...4 About Third Way Network...4 This report is produced as a service to communicate the activities and projects of the RAFHC. Highlights from Stakeholder Interviews about Richfield Housing Needs and Opportunities erviewed over athree-month riod to gather ideas, opinions 3 identify ways Richfield can ;ate attainable housing for low- ;ome working families with ildren. What follows is a mmary of their comments as .d by them. A full copy of the report eluding a list of people who ire interviewed can be found at use interviews were conducted Paul Halvorson and Tracy ;ory of Third Way Network on calf of the RAFHC. Richfield Assets We have strong committed leaders : "The leadership of Richfield is broad and deep; they are compassionate, supportive, savvy, informed, smart, forward thinking and clear, and they've been successful." We are a strong community with a "small town" feel: "Residents are proud, engaged and care to make this a strong community." "There is a history of neighborly trust and loyalty to staying in the community and being invested." "Many amenities are readily accessible within a small radius." "Richfield has quality human services; a good education system, park system and quality housing; plus it is safe and is accessible to a variety of commercial and retail areas." Major Themes from Interviews with Richfield Stakeholders Offer Holistic Support to Low-income Families: "Many families are isolated and don't have access to services they need. Connect tenants with the community schools, churches, and other organizations. This affects their length of residency and the quality of life." "Collaborate more with other organizations so as not to duplicate existing services, but to strengthen service delivery and outcomes." Promote a "Balanced" Housing Portfolio: "I would like to see a mix of housing options designed for all income levels and types of needs." "There is limited housing for families with growing children. Increasingly, elderly parents and their grownup children can't afford to live here." "There is a need for existing homeowners to repair their homes who don't have easy access to the funding." "We need to get away from the stigma of Visions for the Future Encourage Collaboration & Diversity: "Housing can promote the integration of diverse neighbors both culturally and economically. I would like to see a community that integrates cultural backgrounds, no matter your income level. This contributes to the creativity of a community." "I believe there are three distinct groups of people living in Richfield: seniors who have been here for 40-50 years, new immigrant populations, and the 30-40 year ofds who have decided to stay here. All groups have different needs. I would like to see them get to know each other, reduce the fear factor and develop ways for these three groups to live together rather than living as three separate and isolated groups." These comments represent the views of interviewees and do not necessarily represents the views of the RAFHC renting and give [rental] families a sense of pride. Access to housing will increase family stability and help self-esteem." Provide Quality Seamless Housing: "Low-income housing should be invisible and blend into the community, be of quality construction and be completed in a timely manner." "If we want family stability, we have to create housing people feel good about and stay in. It's key to our community's health." "Tlre Housing stock is a big issz+e. They"e is limited housing•for families. If•N~e want fancily stability, ~~e have to create housing peoj~le•fee] good about and ,Slay lYl.. Il ~S keV l0 amp community's health... "Ricl~~field has u unique identity that has heen maintained in the n7ldSl (Jf a ina~(ll" metropolitan area. This is not just a city, it's u community. " Interview Summaries (continued from page 2) ~'We need to better educate ourselves and tenants on how to be strccessftrl residents. Many families are isolated and don 't hcive access necessary services. Lotin-income far~zilies should be supported holistically. This affects their length of residency and quality of life. " Support for "Smart" Community Planning: "Housing must be linked intentionally to jobs, transportation and services." "Housing should remain mixed; people of all income levels benefit from living together." Develop New Community Leaders: "We need to develop mechanisms to identify and train the next generation of community leaders by creating `Give Back' and `Community Legacy' programs to invest in the future health and vitality of Richfield. Supporting Families: "Increase the number of families with school-age children in Richfield." "It's important that we recognize that youth are the future of this community; they make a community vibrant. Stability starts with safe, decent and affordable housing options." "Housing is the greatest barrier for low-income families to raise emotionally healthy children. I see a lot of children moving from school to school. Last year, 29% of kids moved by the end." Educate Ourselves and Tenants on How to be Successful Residents: "What does low-cost affordable housing mean? Help paint a picture to make this real for people. For example, ask could you afford your house if you bought it today?" "Show what works and disperse fear with facts." "People don't make the connection to who is living here and the limited housing options." "If you walk into any business, there are low- wage employees who can't afford to live in this community; they are a major part of Richfield." .mmary of the RAFHC Fall 2004 Work Plan with Third Way Network: • Identify and start a second housing project. • Develop the mechanism to provide move-in and mentoring support for the families who will move into these units. • Complete several educational programs including the Housing Scout Training and a Workforce Housing Seminar. • Identify organizations to supply volunteers to work on future housing projects. • Approve the 2005 work l plan and budget with a l goal to complete five housing projects. (updated every four months) To receive the monthly E-newsletter for updates on RAFHC activities, contact Tracy Vicory at Third Way Network by phone at 612-332-1311 ext 3 or via email at VicoryTracy(c~ I'hirdWayNetwork org View the RAFHC web pages at www.ThirdWayNetwork.or~/groups for more information and to obtain a copy of the full report of the Richfield stakeholder interviews (posted by September 24, 2004) Housing Scout Training: An Invitation to Identify Housing Projects A Housing Scout Training will be offered in Richfield on Monday evenings over 5 sessions: Oct 4, Oct 18, Nov 1, Nov 22, and Dec 13 from 7:00 - 9:00 pm in the Fireside Room at Oak Grove Lutheran Church (7045 Lyndale Ave. S, Richfield). This training is a fabulous opportunity to learn about a Twin Cities neighborhood and identify a future housing project. No prior experience in housing or research is required and there is no charge. Space is limited to 12 people. To register, contact Camillo DeSantis, Chair of Richfield Attainable Family Housing Committee at 612-566-5171. For dates of other trainings and locations, contact Tracy Vicory at Third Way Network (612- 332-1311 ext 3). "l like the concept ~f redeveloping downtown where there is better access to services. 1 envision a walkable community that enhances neighborliness. " '~ Page 4 ~- ~~ The RAFHC Core Team consists of: Camillo DeSantis Steve Lindgren Susan Rosenberg Tom Zarth its group oversees work of this itiative. Please ntact Camillo, lair at 612-866- 71) or visit our eb page: ww_ThirdWavNet- How You Can Participate Our projects are organized around a four month calendar. You can participate as a volunteer, property owner, partner or financial sponsor. Property Owner: Landlords, homeowners, and others work with Third Way Network to "I grew up in a rural community where you didn 't ask if someone needed help. There wus a sense of belonging and knowing tha! someone would be there with u smile and an. ozftstretched hued. Third Way Neha/oi°k provided me with an opening _f~T" thl.S type Of C`03ni111.1717ty. ~~ Property Owner. About Third Way Network Third Way Network is a 501(c)(3) non-profit organization that works to empower local member groups and volunteers, property owners, service organizations and construction professionals to become personally engaged in the creation of affordable housing using their time, talents and resources to make a difference. We provide staff support and work with existing programs and organizations. offer housing oppor- tunities for low-income families and individuals. Volunteer: Individuals and groups volunteer as housing scouts, construction rehab workers, or provide move-in and mentoring support for a family. Adopted Neighborhood Boundary . x, _ _ -, - ,. . ~ _ ~. i ` o ¢ ~~tt=Ins ~ pevelODrtumt waoPt a Homeless Family ® ® ~~ e D S V /J 6 Recognltlon oT Lo<al ~ ~eu,ln. were, ® ». .- F.z ,a, ~ ,e Local Group ~ ® e m Shared Home ~mm t Housing m S Development Home Plus ... .. r °° '- Supply New or Rehab Mousing _~ s Shared t,Dme 1 Hyp.nc~nral csamplc of right pm~eets being lmple[rd over n [wn 1'Cnr [Inlt' fro nlC h)' ~ ' ~ s ~alun[ecr of their hxal ' group. (i.c. church, ` +w +t synagugutq mosque, Peopta suppon other business, organization or associationl One example of how we do this is to adapt existing structures to accommodate more people or make it family friendly. The vision of Third Way Network is that everyone has access to safe, decent housing they can afford and call home. The mission is to engage small groups of committed people to provide housing and be good neighbors to low- income working families and individuals. Partner: Construction contractors and service providers form strategic partnerships with Third Way Network to renovate housing projects, donate materials, or assist tenants. Sponsor: Foundations, corporations, businesses and individuals help underwrite the cost of a specific housing project. For more information, contact Tracy Vicory at Third Way Network by phone at 612-332-1311 ext 3 or via email: VicorvTracy cr,ThirdWa Network.or~ Giveback $600 Program Everyone needs access to safe, decent housing they can afford and call home. As part of your home purchase or refinance loan, Third Way Mortgage invites you to participate in its unique "Giveback $600" Program. This program is completely tax-deductible, supports RAFHC and is only available through Third Way Mortgage. For more info, please contact Gerald Carlson at Third Way Mortgage Office: 952-838-0266 Ce11: 952-994-45 83 Geraldiu "hhirdWavMortf;at?e.com ~~1~7b' eXpeYlellCe Li'as greClt ~ It it°as grout to rnect f ellvtiv parishioners while tirork to creole uffordcrble housing. The project wus ivell- organized and prgfess- sionul. I'll defrnitely consider working on other projects. "Volunteer ~~-Third Way NetQ TM Contact: Tracy Vicory or Paul Halvorson Third Way Network 529 South Seventh Street, Suite 500 Minneapolis, MN 55415 Ph: 612-332-1311 www.ThirdW ayNetW ork.org AGENDA ITEM # 4 REPORT # ~ 1 STAFF REPORT HOUSING AND REDEVELOPMENT ii'~~' AUTHORITY MEETING SEPTEMBER 20, 2004 REPORT PREPARED BY: LYNNETTE CHAMBERS, LEASED HOUSING SPECIALIST NaNrE, T[TLE BRUCE NORDQUIST, REPORT PRESENTER: HOUSING AND REDEVELOPMENT MANAGER NAML; Ti~i.i: DEPARTMENT DIRECTOR REVIEW: SIGNATURE REVIEWED BY EXECUTIVE DIRECTOR: ITEM FOR HRA CONSIDERATION: Public hearing regarding the approval of the Richfield Housing and Redevelopment Authority's annual Public Housin Authorit Plan. I. RECOMMENDED ACTION: Conduct and close the public hearing and by motion: Approve the Housing and Redevelopment Authority's annual Public Housing Authority Plan for the Section 8 Housing Assistance Program and authorize the Chair and Executive Director to execute program documents. II. BACKGROUND The Quality Housing and Work Responsibility Act of 1998 (QHWRA) created by Congress the requirement to provide Public Housing Agency (PHA) Plans -- a five-year plan and an annual plan. The five-year plan describes the mission of the Agency and the Agency's long range goals and objectives for achieving its mission over the subsequent five years. The annual plan provides details about the Agency's immediate operations, program participants, and programs and services and the Agency's strategy for addressing the needs of the community in the upcoming fiscal year. Staff has developed a plan in proper form and content. In addition, QHWRA requires the Richfield HRA to maintain a "Resident Advisory Board" to make comments on the PHA Plan. Every Section 8 household. in Richfield (there are 350) was 092004 Public Housing Authority Plan invited to join the Advisory Board. Four volunteered to participate. The Advisory Board then met after each member had an opportunity to review the PHA Plan. The Resident Advisory Board made no additional comments to the plan. ® III. BASIS OF RECOMMENDAT IAN A. POLICY • The HRA must formally adopt the PHA Plan following a public hearing. The Department of Housing and Urban Development (HUD) requires the HRA Chair and Executive Director to execute documents. • HUD has designated Richfield as a high performer. B. CRITICAL ISSUES • Failure to approve the PHA Plan will result in receiving anon-compliance status with HUD. "Non-compliance" violates the contracts that the HRA has with HUD and results in a loss of administrative and rent assistance funds. • At the time this staff report was prepared, there have been no calls or comments raising concerns about the PHA Plan. The PHA Plan is prepared in accordance with HUD requirements and historically, staff has been able to satisfactorily respond to questions and clarify the PHA Plan. C. FINANCIAL • The HRA has four contracts for administrative and rent assistance funds with HUD. Annually, the HRA receives $1,466,812 for rental assistance payments and $140,346 for administrative payments. A current PHA Plan is a requirement of these contracts. D. LEGAL • The Housing Assistance Program (HAP) contracts that the HRA has with HUD have been previously reviewed and approved by legal counsel. Proper notice was published on August 4, 2004 in the Sun Current of the availability to review the Plan and of the public hearing to be held concerning plan approval. The publication schedule is in compliance with HUD regulations. IV. ALTERNATIVE RECOMMENDATION(S~ • Do not approve the PHA Plan at this time. (The HRA would not be in compliance with HUD.) V. ATTACHMENTS • Summary Update (Attachment A). VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A Attachment A ~-~ Summary Update Richfield HRA Five-Year Plan, Year 2005 September 20, 2004 The Five-Year Pubic Housing Agency Plan (PHA Plan) is a 37-page document. Known as HUD Form #50075, this PHA Plan provides a standard way for all PHA Plans and the Richfield Housing and Redevelopment Authority (HRA) to report that the PHA Plan complies with all federal regulations. To summarize: ^ The mission of the HRA is the same as HUD's: to promote. adequate and affordable housing, economic opportunity and a suitable living environment free from discrimination. ^ The HRA goals are to: - Secure more rental vouchers when available. - Acquire and/or build affordable housing. - Improve program administration (Richfield is already a high performer.) - Increase program participation by landlords. - Promote client self-sufficiency. - Ensure equal opportunity and fair housing standards are achieved. The PHA Plan document ends with: • a drug-free certification form; • a certificate that no payments have been made to influence federal transactions; and • a three page certification form that the HRA does and will comply with all applicable federal regulations as listed on the certification and. signed by the HRA Chair. The Five-Year PHA Plan in its entirety is always available to the HRA and the public, and the PHA Plan is available for review at the Community Development Department. -~ STAFF REPORT AGENDA ITEM # 3C REPORT # 40 HOUSING AND REDEVELOPMENT AUTHORITY MEETING SEPTEMBER 20, 2004 REPORT PREPARED BY: KATIA MEDVETSKI, REDEVELOPMENT SPECIALIST NAME, TITLE REPORT PRESENTER: BRUCE PALMBORG, COMMUNITY DEVELOPMENT DIRECTOR NAME, TITLE DEPARTMENT DIRECTOR REVIEW: SIGNATURE REVIEWED BY EXECUTIVE DIRECTOR: ITEM FOR HRA CONSIDERATION: Consideration of consent to register title to certain real estate related to the Kensington Park redevelo ment ro'ect. I. RECOMMENDED ACTION: By Motion: Approve consent to register title to certain real estate related to the Kensington Park redevelopment pro'ect. II. BACKGROUND Lyndale Gateway, LLC, developer of the Kensington Park redevelopment project at Lyndale Avenue and 77th Street, is in the process of registering real estate titles through a legal proceeding with Hennepin County District Court. In order for the proceeding to move forward, the Richfield Housing-and Redevelopment Authority (HRA) is being asked to consent to this registration. The consent, if given, will constitute a waiver of the HRA's ability to claim an interest in the property, except as specifically addressed in the consent document. The HRA's interest in the land lies within (A.) two mortgages that the HRA previously approved - - - a $500,000 mortgage (that the developer will pay down within 15 years) and a $3,000,000 mortgage (that is to be paid off by the developer within 30 months by the sale proceeds of housing units); (B.) the Contract for Private Redevelopment with the developers; and (C.) the minimum assessment 092004Ken Pa rk_Land Reg istr agreements for the commercial and housing portions of the project. Exhibit A to the Consent provides the legal description of the land being registered. III. BASIS OF RECOMMENDATION A. POLICY • The HRA is named in the proceeding because of its interest in the land being registered. • The HRA's consent to the registration proceeding will expedite the land registration by the developer. B. CRITICAL ISSUES • The proposed consent form accurately reflects the HRA's interest in the land being registered and will avoid the need for a contested hearing on the HRA's interests. C. FINANCIAL • N/A D. LEGAL • By consenting to the proceeding, the HRA waives the right to contest the land registration proceeding. However, as noted the interests of the HRA are delineated in the consent and are therefore protected. The City has no reason to contest the proceeding as its interests are addressed. Legal counsel has reviewed this matter. IV. ALTERNATNE RECOMMENDATION(S~ • Delay or do not consent to the registration proceeding. However, doing so will only delay the registration proceeding. V. ATTACHMENTS • Consent Legal (Attachment A) VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A STATE OF MINNESOTA No. 20747 DISTRICT COURT COUNTY OF HENNEPIN FOURTH JUDICIAL DISTRICT CONSENT In the Matter of the Application of Lyndale Gateway, LLC, a Minnesota limited liability company, to register the title to certain real estate situated in Hennepin County, Minnesota, described in Exhibit A attached hereto. THE UNDERSIGNED hereby consents to the Application and Order prayed for in this matter, subject to the following matters: Mortgage dated September 5, 2003, and filed for record November 5, 2003,. as County Recorder Document No. 8215341 to secure the principal sum of $500,000.00. Mortgage dated September 25, 2003, and filed for record November 5, 2003 as County Recorder Document No. 8215342 to secure the principal sum of $3,000,000.00. Covenants and conditions contained. in County Recorder Document No. 8215340. Covenants and conditions contained in Assessment Agreements filed for record as Document Nos. 8215343 and 8215344. THE UNDERSIGNED hereby acknowledges and states that the Mortgage in favor of The Housing and Redevelopment Authority in and for the City of Richfield, dated September 4, 2003, and filed for record December 8, 2003, as County Recorder Document No. 8245952 has been paid in full and a Satisfaction of Mortgage has been executed and delivered for recording. Dated this day. of , 2004. HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA STATE OF MINNESOTA COUNTY OF HENNEPIN } ss. By Its: Chairperson By Its: Executive Director The foregoing was acknowledged before me this day of , 2004, by Thomas E. Harms, the Chairperson of the Housing and Redevelopment Authority in and for the City of Richfield, a public body corporate and politic under the laws of the State of Minnesota, on behalf of the corporation, Grantor. Signature of Person Taking Acknowledgment STATE OF MINNESOTA COUNTY OF HENNEPIN } ss. The foregoing was acknowledged before me this day of , 2004, by Samantha Orduno, the Executive Director, of the Housing and Redevelopment Authority in and for the City of Richfield, a public body corporate and politic under the laws of the State of Minnesota, on behalf of the corporation, Grantor. Signature of Person Taking Acknowledgment EXHIBIT A Lots 1 through 6 and Lots 9 through 15; The North 28.3 feet of Lot 7; That part of the East Half of the vacated alley lying between the westerly extensions of the north line of said Lot 1 and of the south line of the North 28.3 feet of said Lot 7; That part of the West half of the vacated alley lying between the easterly extensions of the north line of said Lot 15 and of the south line of said Lot 9: All in "GLENN'S ADDITION." AGENDA ITEM # REPORT # STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING SEPTEMBER 20,.2004 REPORT PREPARED BY: REPORT PRESENTER: BRUCE NORDQUIST, HOUSING AND REDEVELOPMENT MANAGER NAME, TirzE BRUCE NORDQUIST, HOUSING AND REDEVELOPMENT MANAGER NAME, TITLE DEPARTMENT DIRECTOR REVIEW: SIGNATURE REVIEWED BY EXECUTIVE DIRECTOR: ~' ITEM FOR HRA CONSIDERATION: Consideration of the form of security for the pledge by Gramercy Corporation LLC of $500,000 towards the cosf of a skvwav. I. RECOMMENDED ACTION: By Motion: Accept the proposed form of pledge establishing a $500,000 account b City Bella LLC towards the cost of a skyway. II. BACKGROUND On June 21, 2004 the Housing and Redevelopment Authority (HRA) authorized an agreement with City Bella LLC to receive $500,000 in Livable Communities funding from the Metropolitan Council for plaza improvements. Further, in consideration of the cost to construct a future skyway, the agreement proposes placing an amount of $500,000 in an account to be established. An agreement related to the account will be drafted. The receipt of $500,000 for the plaza from the Metropolitan Council and the ® leveraging of a $500,000 contribution from the developer for a skyway are consistent with: • The City Bella Contract for Private Redevelopment. • The City/HRA tax increment redevelopment plan and program. • Lakes at Lyndale Master Plari. 092004 SKYWAY It ensures that: • Plaza improvements are enhanced. • Public resources are fully leveraged. • The developer does not benefit from the $500,000 (plaza) because the developer has pledged $500,000 to another public expense (skyway). • Pedestrian linkages are more fully realized back and forth from the Nature Center, to the City Bella Plaza, to a skyway and to Woodlake Centre. III. BASIS OF RECOMMENDATION A. POLICY • The agreement regarding grant funds, authorized by the HRA on June 21, 2004 requires a pledge of $500,000 toward skyway costs by City Bella LLC. • The agreement also requires security for the pledge; a proposal to establish $500,000 in an account. B. CRITICAL ISSUES • Legal counsel has advised that the pledge be used for skyway costs and within a reasonable timeframe. • It is proposed that the $500,000 pledge toward a skyway be made for ten years. After ten years, the pledge would be withdrawn by the developer. • The developers of both Woodlake Centre and City Bella already installed infrastructure into their buildings to receive a skyway. City Bella LLC reports their costs to be approximately $250,000. C. FINANCIAL • The developer, Gramercy Corporation through City Bella LLC, is contributing $500,000 toward the costs of construction of a skyway. • The HRA does not incur any costs in accepting the $500,000. However, additional funds are needed to pay for skyway improvements. • An additional $1 million in outside resources. is estimated to be needed for a skyway to be built. D. LEGAL • If the HRA concurs, legal counsel would work with Gramercy Corporation to determine requirements for the account and return to the HRA with any agreement ALTERNATIVE RE • Request an OMMENDATION(S) ther form of pledge from the developer ~ V . ATTACHMENTS l m VI. PRINCIPAL PARTIES EXPECTED AT MEETING e n August 10, 2004 City of Richfield ATTN: John Dean 6700 Portland Avenue Richfield MN 55423-2599 ^ RE: City Bella Skyway Dear John: During the course of construction of City Bella, its owners, City Bella, LLC have spent approximately-$250,000 to prepare for the eventual installation of a skyway between. City Bella and the M & I Bank building. All of the space and .infrastructure has been. installed to accomplish .the skyway on the City~Bella side of the street. To that end, City Be11a, LLC is willing to pledge for-ten years. up to $500,000 towards the cost of a new skyway. I would note that this pledge relates only to City Bella, LLC and does not effect any liability on the co-op or commercial space at City Bella. It is the intent of City Bella, LLC to maintain an account of $500,000 for ten years in order to fund the possible construction of a skyway. City Bella, LLC makes this pledge on behalf of the developers of. City Bella, LLC. Failure to finalize the construction of a skyway would be a disappointment and a waste of resources to City Bella in view of the infrastructure which has been placed in the .building in order to accommodate the skyway. City Bella, LLC looks forward to working with the City to develop and improve the area surrounding 66th and Lyndale, including the installation of the skyway. Yours very truly, CITY BELLA, LLC BY Roger Schnobrich Chief Manager /cc m C:\Documents and Settings\BNordquist\Local Settings\Temporary Internet Files\OLR1\Richfield-Dean2.doc AGENDA ITEM # 3A REPORT # 38 STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING SEPTEMBER 20, 2004 REPORT PREPARED BY: JULIE URBAN, COMMUNITY DEVELOPMENT SPECIALIST NAMC TITLE REPORT PRESENTER: BRUCE PALMBORG, COMMUNITY DEVELOPMENT DIRECTOR NAME, TiTi ~ DEPARTMENT DIRECTOR REVIEW: SLGNATURL' REVIEWED BY EXECUTNE DIRECTOR: ITEM FOR HRA CONSIDERATION: Continue the public hearing and approval of a resolution authorizing the sale of real property at Emerson Avenue between 78th and old 77th Street to CSM Corporation until October 18, 2004. I. RECOMMENDED ACTION: Continue the public hearing and approval of a resolution authorizing the sale of the real property at Emerson Avenue between 78th and old 77th Street. ~ II. BACKGROUND 1 • .Issues have arisen that require this item to be delayed until the October HRA meeting. III. BASIS OF RECOMMENDATION A. POLICY • N/A 092004EmersonAveSale B. CRITICAL ISSUES • -Staff and CSM Corporation need additional time to address issues relating to this item. C. FINANCIAL • N/A D. LEGAL • A notice of public hearing was published September 9, 2004 in the Sun Current. Staff is requesting that the public hearing be continued until October 18, 2004 IV. ALTERNATNE RECOMMENDATION(S~ • N/A V. ATTACHMENTS • N/A VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A