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06-21-04 agendaCITY OF RICHFIELD, MINNESOTA MONDAY, JUNE 21, 2004 REGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING RICHFIELD CITY HALL 6700 PORTLAND AVENUE COUNCIL CHAMBERS 7:00 P.M. AGENDA Call to order 1. Approval of minutes of (1) Special Concurrent HRA/City/Planning Commission Worksession of May 11, 2004 and (2) Regular HRA Meeting of May 17, 2004 Notes: 2. 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 resolution authorizing purchase of real property at 6805-12th Avenue and 6329-14th Avenue with Community Development Block Grant Funds under New Home Program S.R. No. 24 B. Consideration of approval of resolution authorizing issuance of Certificate of Completion to BCB Construction, Inc. for construction of single family home at 6819 Oliver Avenue S.R. No. 25 C. Consideration of approval of adjustment of payment standard for Section 8 Rent Assistance program S.R. No. 26 Notes: 4. Public hearing regarding amendment to the business subsidy agreement between HRA and Gramercy Corporation for use of grant funds for City Bella and consideration of resolution authorizing Richfield HRA to distribute and administer Metropolitan Council Livable Communities Grant in amount of $500,000 for City Bella on behalf of City Staff Report No. 27 Notes: 5. Executive Director report 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 Administrative Services Director at 612-861-9702. n AGENDA ITEM # 4 REPORT # 2 7 ~~ STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING JUNE 21, 2004 REPORT PREPARED BY: BRUCE NORDQUIST, HOUSING AND REDEVELOPMENT MANAGER NAME, TITLE REPORT PRESENTER: BRUCE PALMBORG, COMMUNITY DEVELOPMENT MANAGER NAME, TITLE DEPARTMENT DIRECTOR REVIEW: SIGNATURE REVIEWED BY EXECUTIVE DIRECTOR: ITEM FOR HRA CONSIDERATION: (1) Conduct a public hearing to approve an amendment to the business subsidy agreement between the Housing and Redevelopment Authority and Gramercy Corporation for the use of grant funds for City Bella and (2) adopt a resolution authorizing the Richfield Housing and Redevelopment Authority to distribute and administer a Metropolitan Council Livable Communities Grant in the amount of $500,000 for City Bella on behalf of the City. RECOMMENDED ACTION: (1) Conduct and close the public hearing and by motion: Approve an amendment to the business subsidy agreement between the Housing and Redevelopment Authority and Gramercy Corporation for. the use of grant funds for City Bella and (2) adopt a resolution authorizing the Richfield Housing and Redevelopment Authority to distribute and administer a Metropolitan Council Livable Communities Grant in the amount of $500,000 for City Bella on behalf of the C II. BACKGROUND In December 2003, the Metropolitan Council awarded $500,000 to the City of Richfield as a contribution towards plaza improvements and connections. The JBD-248063v1 RC125-209 City Council approved the required agreement to receive the funds on June 8, 2004. It is proposed that the Housing and Redevelopment Authority (HRA) will administer the funds on behalf of the City and in accordance with the Metropolitan Council Grant Agreement. Further, the HRA would have an agreement with City Bella developer Gramercy Corporation to provide the plaza funds if in exchange, the developer provides $500,000 to be held by the HRA as part of the construction cost for a future skyway connection. A skyway connection is consistent with the Lakes at Lyndale downtown master plan. The $500,000, when given to the developer, is considered a business subsidy. The public hearing has been scheduled for June 21, 2004 for the HRA to consider the business subsidy. III. BASIS OF RECOMMENDATION A. POLICY • The City has been awarded a $500,000 development grant from the Metropolitan Council. • An agreement between the City and Metropolitan Council provides the funds for the City Bella plaza being built by Gramercy Corporation. • The Richfield HRA has a Contract for Private Redevelopment with Gramercy Corporation. • Agreements have been prepared for the City, HRA and Gramercy Corporation to utilize the Metropolitan Council funds. • The HRA must hold a public hearing as the development grant is considered a business subsidy when given to a developer. B. CRITICAL ISSUES • The development grant from the Metropolitan Council was competitively secured. • Multiple agreements are needed to secure the funds and apply the funds to their intended use. The funding from the Metropolitan Council helps to leverage additional resources toward a skyway connection in the downtown. Discussion with the developer continues on the form of security and method of payment to the HRA that will occur when the developer receives the funds for the plaza. The HRA will be asked to review any additional agreements. C. FINANCIAL • The Metropolitan Council review process clearly established the merit of contributing these funds to the City Bella project. • The agreements establish the requirements for the administration of the funds. JBD-248063v1 RC125-209 D. LEGAL • Legal counsel has prepared and reviewed all the agreements. IV. ALTERNATNE RECOMMENDATION(S~ • Do not authorize HRA administration of the funds on behalf of the City. • Do not modify the Business Subsidy Agreement that allows for the distribution of funds to Gramercy Corporation. V. ATTACHMENTS • Resolution • Agreement between the HRA and Gramercy Corporation regarding the grant funds including attached Grant Agreement and Easement Agreement VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Gramercy Corporation representatives JBD-248063v1 RC125-209 HRA RESOLUTION NO. RESOLUTION AMENDING BUSINESS SUBSIDY AGREEMENT WITH CITY BELLA, ACCEPTING AND AGREEING TO ADMINISTER AND DISTRIBUTE METROPOLITAN COUNCIL GRANT FUNDS, AND APPROVING AGREEMENT WITH CITY BELLA. WHEREAS, the Metropolitan Council did on December 17, 2003 award a Livable Communities Demonstration Account grant to the City of Richfield in the amount of $500,000, and 'WHEREAS, the purpose of the grant was to assist the City Bella mixed-use development to achieve certain goals as described in the grant application, and WHEREAS, the City Council has accepted the Grant and authorized the execution of the Grant Agreement with Metropolitan Council, and WHEREAS, the City Council has requested that the HRA distribute and administer the Grant so as to accomplish the purposed for which the Grant was made, and to fulfill the requirements of the Grant Agreement, and WHEREAS, the distribution of such funds to City Bella constitutes a "Business Subsidy" under Minnesota Statutes, sections 116J.993 through 116J.995 (the "Business Subsidy Act"), and WHEREAS, in compliance with the provisions of the Business Subsidy Act, the HRA has held a public hearing on the proposed amendment, and WHEREAS, in compliance with the Business Subsidy Act, the HRA has requested and obtained the approval of the proposed amendment by the Richfield City Council, and WHEREAS, the HRA has reviewed the terms of a proposed agreement between the HRA and City Bella entitled Agreement Regarding Grant Funds, which includes an amendment to the business subsidy agreement between said parties. NOW, THEREFORE, BE IT RESOLVED, by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, as follows: 1. The HRA hereby accepts the Grant Funds, and agrees to distribute and administer the same in accordance with the provisions of the Grant Agreement between the City and the Metropolitan Council, and the terms of the Agreement Regarding Grant Funds. 2. The amendment to the business subsidy agreement in the form contained Q in the Agreement Regarding Grant Funds is approved. JBD-248063v1 RC125-209 3. The Agreement Regarding Grant Funds is hereby approved, and the Chair and Executive Director are directed to execute the same on behalf of the HRA. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 21st day of June, 2004. Thomas E Harms, Chair ATTEST: Kristal Stokes, Secretary JBD-248063v1 RC125-209 612/04 Draft AGREEMENT REGARDING GRANT FUNDS THIS AGREEMENT, made and entered into as this _ day of , 2004 by and between the Housing and Redevelopment Authority in and for the City of Richfield, a Minnesota public body corporate and politic,(the "Authorit~~ and the Gramercy Club at City Bella, a Minnesota cooperative corporation ("City Bella"). RECITALS: 1. City Bella is the owner of the City Bella project located at 66~' and Lyndale Avenue South in the City of Richfield, which is legally described in the attached Exhibit A. 2. City Bella is developing the above referenced site pursuant to a Second Amended and Restated Contract for Private Redevelopment entered into on Apri121, 2003 by and between Gramercy Corporation, a Minnesota corporation and the Authority. 3. The City of Richfield has been awarded a Metropolitan Council Metropolitan Livable Communities Act Livable Communities Demonstration Account Grant (the "Grant") in the amount of $500,000 (the "Grant Funds") which are available for use on the City Bella Project as described in the Grant documents and in this Agreement. The Grant Agreement between the Metropolitan Council and the City of Richfield is ^ attached herein as Exhibit B. ~) 4. The Richfield City Council has authorized the Authority to administer the Grant, and has transferred the Grant Funds to the Authority to be expended in accordance with the terms of the Grant Agreement and this Agreement. NOW THEREFORE, in consideration of the mutual covenants and agreements hereinafter contained, the parties hereto stipulate and agree as follows: 1. Grant Agreement. The availability and use of the Grant Funds is in all manners and respects controlled by the provisions of the Grant Agreement. City Bella aclmowledges that neither the City nor the Authority shall have any responsibility to City Bella under this Agreement other than to provide City Bella with Grant Funds when and as such funds are provided to the Authority, and only to the extent that City Bella is in compliance with the provisions of this Agreement. 2. .Business Subsidy Agreement Amended. The Business Subsidy Agreement between the parties dated , is hereby amended by amending Section 2.1 (a) (1) to read as follows: Section 1.2. Business Subsidy Agreement. (a) General Terms. The parties agree and represent to each other as follows: (1) The business subsidy provided to the Redeveloper consists of (i) a portion of the principal amount of the Note; (ii), the estimated value of the HR.A Lands, which the JBA246095v1 RC1 ZS-209 The providing of such security shall be a precondition to the payment of any Grant Funds to City Bella. GRANTOR: Gramercy Club at City Bella GRANTEE: Housing and Redevelopment Authority in and for the City of Richfield By: By: Its: The foregoing instrument was aclrnowledged before me this day of 200 by Thomas E. Harms, the Chairperson of The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, a Minnesota public body corporate and politic, on behalf of the authority. Thomas E. Harms Its: Chair and By: Samantha Orduno Its: Executive Director Notary Public The foregoing instrument was aclmowledged before me this day of 200_, by Samantha Ordure, the Executive Director of The Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, a Minnesota public body corporate and politic on behalf of the authority. . JBD-246095v1 RC125-209 Ezhibit A Legal Description. Lot 1, Lot 2, Block 1, City Bella, Hennepin County JBA246095v1 RC125-209 ~xtn'~b it ~ Grant No. SG2003-156 METROPOLITAN ENABLE COI~BVIITNITIES ACT ENABLE COIVRVIUIVITIES DEMONSTRATION ACCOUNT GRANT AGREEMENT TffiS GRANT AGREEMENT is made and entered into.by the Metropolitan Council ("Council") and the City of Richfield ("Grantee"). WHEREAS, Minnesota Statutes section 473.251 creates the Metropolitan Livable Communities Fund, the uses of which fund must be consistent with and promote the purposes of the Metropolitan Livable Communities Act and the policies of the Metropolitan Development Guide adopted by the Council; and WHEREAS, Minnesota Statutes sections 473.251 and 473.253 establish within the Metropolitan Livable, Communities Fund a Livable Communities Demonstration Account and require the Council to use the funds in the account to make grants or loans to municipalities participating in the Local Housing Incentives Program under Minnesota Statutes section 473.254 or to metropolitan-area counties. or development authorities to fund the initiatives specified in Minnesota Statutes section 473.25, paragraph (b), in participating municipalities; and WHEREAS, the Grantee is a "municipality" participating in the Local Housing Incentives Account program under Minnesota Statutes section 473.254, ametropolitan-area county or a "development authority," as defined in Minnesota Statutes section 473.253, subdivision 2, and submitted an application-for Livable Communities Demonstration Account funds in response to the Council's request for applications; and WHEREAS, at its December 17, 2003 regular meeting, the Council awazded Livable Communities Demonstration Account grant funds to certain projects, including .the project described in the Grantee's application for Livable Communities Demonstration Account funds. NOW THEREFORE, in consideration of the mutual promises and covenants contained in this agreement, the Grantee and the Council agree as follows: ~~' ' ~ ~ ~ ~~'I: ~ DEFINITIONS 1.01 Definition of Terms. For the purposes of this agreement, the terms defined in this paragraph have. the meanings given them in this paragraph unless ~ otherwise provided or indicated by the context.' (a) "Metropolitan Area" means the seven-county metropolitan area as defined by Minnesota Statutes section 473.121, subdivision 2. (b) "Municipality" means a statutory or home rule charter city or town participating in the Local Housing Incentives Account Program under Minnesota Statutes. section 473.254, or a county in the Metropolitan Area. (c) "Participating Municipality" means a statutory or home rule charter city or town which has elected to participate in the Local Housing Incentive Account program and negotiated Page 1 of 6 Pages d 2.04 Disbursement Schedule. Subject to the Grantee's satisfactory performance of the conditions stated in paragraph 2.01, the Council will disburse the grant funds to the Grantee in accordance with the grant fund disbursement schedule contained in Attachment B, which is incorporated into and made a part of this agreement. The Council will make disbursements only upon receipt of a written disbursement request from the Grantee's authorized agent or representative. 2.05 Interest Earnings and Revolved Funds. If the Grantee earns any interest or other income from the grant funds received from the Council under this agreement, the Grantee will use the interest earnings or income only for the purposes of implementing the project activities described in Attachment A. If the Grantee uses the grant funds on a "revolving" basis or otherwise receives revolved funds from the project activities described in Attachment A, the Grantee must: (a) use the revolved funds to implement. similar eligible projects that will help the Grantee meet its affordable and life-cycle housing goals and implement the purposes of Minnesota Statutes sections 473.25, 473.254 and 473.253; or (b) return the revolved funds to the Council for use with other eligible projects. The Grantee shall report to the Council any revolved funds received by the Grantee and the Grantee's uses of those revolved funds. 2.06 Effect of Grant. Issuance of this grant neither implies any Council responsibility for contamination, if any, at the project site nor imposes any obligation on the Council to participate in any pollution cleanup of the project site if such cleanup, is undertaken or required. III. ACCOUNTING, AUDIT AND REPORT REQUIREMENTS 3.01 Accounting and Records. The Grantee agrees to establish and maintain accurate and complete accounts and records relating to the receipt and expenditure of all grant funds received from the Council. Notwithstanding the expiration and termination provisions of paragraphs 4.01 and 4.02, such accounts and records shall be kept and maintained by the Grantee for a period of six (6) yeazs following the completion of the project activities described in Attachment A or six (6) yeazs following the expenditure of the grant funds, whichever occurs earlier. For all expenditures of grant funds received pursuant to this agreement, the Grantee will keep proper financial records. including invoices, contracts, receipts, vouchers and other appropriate documents sufficient to evidence in proper detail the nature and propriety of the expenditure. Accounting methods shall be in accordance with generally accepted accounting principles. 3.02 Audits. The above accounts and records of the Grantee shall be audited in the same manner as all other accounts and records of the Grantee are audited and may be audited or inspected on the Grantee's premises or~otherwise by individuals or organizations designated and authorized by the Council at any time, following reasonable notification to the Grantee, for a period of six (6) years following the ..completion of the project activities described in Attachment A or six (6) years following the expenditure of the grant funds, whichever occurs eazlier. 3.03 Report Requirements. The Grantee will provide to the Council one or more written reports which report on the status of the project activities described in Attachment A and the expenditures of the grant funds. The reporting schedule and the content of the written report(s) are identified in Attachment C, which is incorporated into and made a part of this agreement. 3.04 Environmental Site Assessment. The Grantee re resents that a Phase I Environmental Site P Assessment or other environmental review has been or will be carried out, if such environmental Page 3 of 6 Pages termination of this agreement. This indemnification shall not be construed as a waiver on the part of either the Grantee or the Council of any immunities or limits on liability provided by Minnesota Statutes chapter 466, or other applicable state or federal law. 5.04 Acknowledgments. The Grantee shall acknowledge the financial assistance provided by the Council in promotional materials, press releases, reports and publications relating to the project activities described in Attachment A which are funded in whole or in part with the grant funds. The acknowledgment should contain the following language: Financing for this project was provided by the Metropolitan Council Metropolitan .Livable Communities Fund. Until the project activities funded by this agreement are completed, the Grantee shall ensure the above acknowledgment language, or alternative language approved by~ the Council's authorized agent, is included on all signs located at project or construction sites that identify project sponsors or entities providing financial support for the project. 5.05 Permits, Bonds and Approvals. The Council assumes no responsibility for obtaining any applicable local, state or federal licenses, permits, bonds, authorizations or approvals necessary to perform or complete the project activities described in Attachment A. 5.06 Contractors and Subcontractors. The Grantee shall include in any contract or subcontract for project activities appropriate contract provisions to ensure contractor and subcontractor compliance with all applicable state and federal laws. Along with such provisions, the Grantee shall require that contractors and subcontractors performing work covered by this grant comply with all applicable state and federal Occupational Safety and Health Act regulations. 5.07 Stormwater Discharge Requirements. If any grant funds are used for urban site redevelopment, the Grantee shall at such redevelopment site meet or require to be met: (a) all requirements of federal and state law relating to stozmwater discharges including, without limitation, any applicable requirements of title 40, Code of Federal Regulations, parts 122 and 123; and (b) any additional requirements of the Council's Interim Strategy to Reduce Nonpoint Source Pollution to AZZ Metropolitan Water Bodies (1992) including, without limitation: (1) the requirement to utilize the Minnesota Pollution Control Agency's urban best management practices entitled Protecting Water Quality in Urban Areas; and (2) the requirement that .all stormwater must be pretreated by facilities designed to provide pollutant removal efficiencies equal to or greater than those observed in wet-detention basin facilities designed in accordance with the National Urban Runoff Program (NURP) design criteria, 5.08 Attachments. The following are attached to this agreement and are incorporated into and made a part of this agreement: (a) Attachment A -Summary of the Grantee's application for Livable Communities Demonstration Account grant funds, as approved by the Council (b) Attachment B -Grant Fund Disbursement Schedule (c) Attachment C -Written Report Submission Schedule Page S of 6 Pages ~„/ ATTACHN~NT A APPLICATION FOR LIVABLE CO1~~VIUIVITIES DEMONSTRATION ACCOUNT GRANT FUNDS This attachment comprises this page and page A-1 and contains a summary of the proposed project identified in the Grantee's grant application which was submitted in response to the Council's notice of availability of grant funds. The summary reflects the Grantee's. proposed project as approved by the Council on December 17, 2003, and may reflect changes in project funding sources, changes in funding amounts, or minor changes in the proposed project that occurred subsequent to the application submission. The Grantee's grant application is incorporated into this grant agreement by reference and is made a part of this grant agreement except as follows. If the Grantee's application or any provision in the grant application conflicts with or is inconsistent with other provisions of this agreement or the project summary contained in this Attachment A, the terms, descriptions and dollar amounts contained in this grant agreement and the project summary contained on page A-1 shall prevail. d Applicant: Richfield Recommended Funding Amount: $500,000 Project Name: City Bella Plaza Project Description: City Bella is a mixed-use development currently under construction in the southwest quadrant of 66th Street and Lyndale Avenue. The project goals include: • Iklake connections between retail, housing, community and natural spaces in the current development and to other azeas of the "Lakes at Lyndale" (i.e. downtown Richfield). • Provide extensive green space and acommunity-gathering place on top of the underground parking structure. • Enhance an existing affordable town center: provide new housing choices with a wide range of prices including affordable units. • Implement the next step of the Lakes at Lyndale Master Plan: add an important component to the new town center contributing to its vitality and creating a sense of place. As each quadrant is redeveloped, the missing element is the connection between the projects. The request is for funds to complete the plaza which will provide the necessary connections within the development and to the rest of the Lakes at Lyndale area. Funding Requested/I~nding Recommended: Total Requested: 51.050.000 $1,050,000 Total Recommended: $500,000 Lse ~fT'~n ~~k`. Plaza improvements and connections: interior roads and pazking areas with pavers, curb, gutter, lighting, landscaping, plaza features, walls, pedestrian walkways within the development and to other developments $500,000 Previous LCDA Grants Received For This Or Related Project: went Timeline: None _ _ _ .~s. ~.., ~. , ~_ a `_: ,;,~ ~ ~ ` .a ;ate Y ' - - ~ ., E Ida e _ Plaza improvements/connections , Apri12004 October 2004 A-1 J~ ATTACHMENT B GRANT FUND DISBURSEMENT SCHEDULE The total grant amount specified in paragraph 2.01 of this agreement shall be disbursed to the Grantee for uses consistent with this agreement according to the following schedule: The Council will disburse grant funds in response to written disbursement requests submitted by the Grantee and reviewed .and approved by the Council. Written disbursement requests shall indicate the project activity funded by this agreement, the contractor(s)/vendor(s) to be paid, and the time period within which the project activity was or will be performed. Disbursements prior to the performance of a project activity will be subject to terms and conditions mutually agreed to by the Council's authorized agent and the Grantee. Individual disbursement requests should specify the project or activity to be funded and identify dollar amounts by project or activity. Subject to verification of a written disbursement request and approval for consistency with this agreement, the Council will disburse a requested amount to the Grantee within fifteen (15) business days after receipt of a written disbursement request. Vw ATTACFI&>ENT C WRITTEN REPORTS AND SUBMLSSION SCHEDULE Beginning three (3) months after the Grantee initially receives grant funds, the Grantee shall submit to the Council written quarterly reports which shall contain at least the following elements: • A summary of grant funds received and expended to date, including a description of the purposes or uses for which the grant funds were expended; and • A statement of expected grant fund expenditures within the next quarter. The Grantee's final written quarterly report shall be submitted within two (2) months following the expenditure of all grant funds by the Grantee and shall contain a certification by the Grantee's chief financial officer that alI grant funds have been expended in accordance with this agreement and the provisions of the Metropolitan Livable Communities Act. The Grantee also shall complete and submit to the Council a Monitoring and Evaluation Report which will assist the Council in monitoring and evaluating the implementation of the Livable Communities Demonstration Account program. The contents, format and completion date of the Monitoring and Evaluation Report will be determined by the Council. This reporting requirement and the reporting requirement of paragraph 2.05 shall survive the termination or expiration of this agreement. AUTHORIZED AGENT The Council's authorized agent for the purposes of administering this agreement is Janice Gustafson or another designated Council employee. The written report(s) submitted to the Council shall be ,directed to the attention of the Council's authorized agent at the following address: Metropolitan Council Mears Park Centre 230 East Fifth Street Saint Paul, Minnesota 55101-1634 C~c~i,b i~ C PEDESTRIAN INGRESS AND EGRESS EASEMENT AGREEMENT THIS AGREEMENT, made this _ day of , 2004 between The Gramercy Club at City Bella ("Owner"), and the City of Richfield, a Minnesota municipal corporation ("City"). RECITALS: A. Owner is the holder of a fee simple interest in property located in Hennepin County, Minnesota, which is legally described as: Lot 1, Block 1, City Bella (the "Property"). B. The City desires certain easements for pedestrian ingress and egress and the Owner has agreed to grant such easements upon the terms and conditions contained herein. NOW, THEREFORE, in consideration of the sum of One Dollar ($1.00) and other good and valuable consideration given to Owner by the City, the receipt and sufficiency of which is acknowledged,, it is agreed: AGREEMENTS 1. Grant of Easement. Owner hereby grants to the City for the benefit of the public, a permanent, nonexclusive easement over, across and upon that portion of the Property shown on the rendering (cross hatched) attached as Exhibit A hereto (the "Easement Area") for the purposes of pedestrian ingress and egress (hereinafter referred to as "Public Improvement"). The Easement Area maybe revised only by written agreement between the Owner and the City. 2. ,Maintenance. The Owner shall maintain the Easement Area at its own expense. Said maintenance-obligation shall include, without limitation, keeping the same in good and safe condition for the purpose granted herein and reasonably free and clear of foreign objects, debris and obstructions, and snow and ice removal. 3. Liability and Indemnification. The City hereby agrees to indemnify and save the Owner harmless from and against any and all suits, demands, liabilities, costs and other expenses, including reasonable attorneys' fees, incurred in connection with or arising out of the use of the Easement Area by the City, its contractors and agents or the general public for the purposes granted herein, excluding, however, from such indemnity any loss resulting from acts of Owner and his invitees. 4. Owner's Covenants. Owner covenants and agrees that: a. The Easement Area shall not be encroached upon by fill, excavation, paving or concrete, erection of buildings or permanent enclosures, fences or walls, or 121090799v3 788254 6/1/104 STATE OF MINNESOTA ) ) sS. COUNTY OF HENNEPIN ) THE GRAMERCY CLUB AT CITY BELLA By Roger W. Schnobrich Its President OWNER CITY OF RICHFIELD By Its Mayor By Its CITY The foregoing instrument was acknowledged before me this day of , 2004 by Roger W. Schnobrich, the President of the Gramercy Club at City Bella, a Minnesota cooperative corporation, on behalf of the cooperative corporation. STATE OF MINNESOTA ) ss. COUNTY OF HENNEPIN ) Notary Public The foregoing instrument was acknowledged before me this _ day of ~ , 2004 by and ,the Mayor and respectively, of the City of Richfield, a Minnesota municipal corporation, who executed this Agreement and acknowledged that they executed the same on behalf of the City of Richfield. Notary Public 3 121090799x3 788254 b/1/04 AGENDA ITEM # 3 C REPORT # 2 6 STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING JUNE 21, 2004 REPORT PREPARED BY: REPORT PRESENTER: LYNNETTE CHAMBERS, LEASED HOUSING SPECIALIAST NAME, T/TLE BRUCE PALMBORG, COMMUNITY DEVELOPMENT DIRECTOR NAME, TITLE DEPARTMENT DIRECTOR REVIEW: ©~ SIGNATURE REVIEWED BY EXECUTIVE DIRECTOR: ITEM FOR HRA CONSIDERATION: Consideration regarding a proposed adjustment of payment standard for the Section 8 Rent Assistance ro ram. I. RECOMMENDED ACTION: By Motion: Approve the attached adjustment of payment standard for the Section 8 Rent Assistance program and require that all new ram leases have a minimum one year term. II. BACKGROUND The Section 8 program is administered in accordance with the Housing and Redevelopment Authority's (HRA) Administrative Plan. According to the plan and the Department of Housing and Urban Redevelopment (HUD) regulation, the voucher program provides financial assistance based on unit bedroom size. Clients pay a minimum of 30 percent of their income towards rent. On an~ annual basis HUD establishes a Fair Market Rent (FMR). The allowable FMR is expressed as a specific percentile point within the rent distribution of standard-quality rental housing units. Richfield HRA was notified in April that HUD has decided to alter the funding formula for the Fiscal Year 2004 Section 8 Housing Choice Voucher program. Previously, housing authorities made housing assistance payments on behalf of 062104-Section 8 Payment Standanis clients and HUD in turn would match those payments dollar for dollar. This year HUD has determined they will look at the average housing assistance payments made last year, add a factor for inflation and pay the local housing authorities. Therefore, housing authorities are not getting a dollar for dollar match and HUD has recommended housing authorities look at various cost saving measures to ensure all participating families will be able to continue to participate in the Section 8 Housing Choice Voucher program. Individual HRA's are allowed to select a payment standard within 90% to 110% of HUD's FMR. Currently, Richfield HRA has a payment standard that is 100% of the current FMR. One of HUD's cost savings recommendations is to lower the payment standard. The new payment standards proposed are at approximately 95.8% of the current FMR and would be effective 8/1/04. The proposed payment standards are Richfield HRA's previous payment standards. The attached table (Attachment A) clarifies the changes being proposed.. In addition to lowering the current payment standard, Richfield HRA would like to implement the policy that all new leases will be required to be one year in length. This will ensure rent increases proposed by the owner-will be limited to once a year. III. BASIS OF RECOMMENDATION ~ A. POLICY • The HRA must approve decreases in the payment standard for the Section 8 program. • The decrease in payments standards will help to assure that families will be able to remain on the program and Richfield HRA will not have to deny families participation in the Section 8 Housing Choice Voucher program. B. CRITICAL ISSUES • Without a decrease in the payment standard .Richfield HRA may have to propose denial of assistance for some families. • Richfield HRA's payment standards will be consistent with the payment standards of other Housing Authorities in the Metro Area. • In the past a payment standard for families with a disabled member would be higher. This will be discontinued. C. FINANCIAL • A decrease in the payment standard will decrease the rent burden for Richfield HRA. D. LEGAL • The contract between the HRA and HUD provides for FMR adjustments in accordance with federal regulations. IV. ALTERNATIVE RECOMNIENDATION(S~ • Do not change the payment standard at this time. However, HUD guidelines suggest an adjustment is needed. V. ATTACHI~IENTS • Attachment A, proposed modifications to voucher program. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A Attachment A PROPOSED MODIFICATIONS TO SECTION 8 VOUCHER PAYMENT STANDARDS PROPOSED INCREASE FOR AUGUST 1, 2004 CURRENT HRA UNIT SIZE PAYMENT STANDARD 0 Bedroom $ 578 1 Bedroom $ 743 2 Bedroom $ 951 3 Bedroom $1,286 4 Bedroom $1,457 PROPOSED HRA PAYMENT STANDARD $ 554 $ 713 $ 912 $1,233 $1,397 062104-Section 8 Payment Standards AGENDA ITEM # ~ R REPORT # ~ S STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING JUNE 21, 2004 REPORT PREPARED BY: REPORT PRESENTER: PAM BOOKHOUT, REHABILITATION SPECIALIST NeuE Tura BRUCE PALMBORG, COMMUNITY DEVELOPMENT DIRECTOR DEPARTMENT DIRECTOR REVIEW: Nan1E TITLE SIGNATURE REVIEWED BY EXECUTIVE DIRECTOR: ITEM FOR HRA CONSIDERATION: Consideration of resolution regarding authorization to issue a Certificate of Completion to BCB Construction Inc. for the construction of a sin le famil home at 6819 Oliver Avenue. I. RECOMMENDED ACTION: By Motion: Authorize the Chair and Executive Director to execute the Certificate of Com letion in accordance with the attached resolution. II. BACKGROUND Development Agreements under the Richfield Rediscovered program provide for the issuance of a Certificate of Completion when residential construction is completed. (A sample certificate is attached.) The home at 6819 Oliver Avenue has been completed and will be sold to.the end buyer at the end of June, after the home is in the Richfield Beautiful event (June 26 and 27). Authorization for, a Certificate of Completion is requested at this time in preparation of the builder's sale this month. 062104 Compl Cert 6819 Oliver III. BASIS OF RECOMMENDATION A. POLICY • The Richfield Housing and Redevelopment Authority (HRA) must authorize the issuance of Certificates of Completion. B. CRITICAL ISSUES • Construction has been completed and the Inspections Division has issued a Certificate of Occupancy. • The issuance of a Certificate of Completion is required to release the builder from the Contract for Private Development after construction completion. C. FINANCIAL • The project is completed and financial obligations have been met. D. LEGAL • The project is completed and legal obligations have been met. IV. ALTERNATIVE RECOMMENDATION(S~ • Do not issue the Certificate of Completion at this time. V. ATTACHIvIENTS • Resolution Sample Certificate of Completion VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A HRA RESOLUTION NO. RESOLUTION AUTHORIZING ISSUANCE OF A CERTIFICATE OF COMPLETION FOR THE NEWLY CONSTRUCTED RESIDENTIAL PROPERTY AT 6819 OLIVER AVENUE WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA) entered into contract with BCB Construction Inc. for the construction of 6819 Oliver Avenue; and WHEREAS, the new home is completed. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield, the Certificate of Completion for 6819 Oliver Avenue can be issued. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 21st day of June, 2004. Thomas E. Harms, Chairperson ATTEST: Kristal Stokes, Secretary 062104 Compl Cert 6819 Oliver FORM OF CERTIFICATE OF COMPLETION The undersigned hereby certifies that has fully and completely complied with its obligations under Article IV of that document entitled "Contract for Private Development", between the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota and dated , filed as Document No. with respect to the construction of the approved construction plans at legally described as and is released and forever discharged from its obligations to construct under such above- referenced Article. DATED: THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY RICHFIELD, MN By Its Chairperson By Its Executive Director STATE OF MINNESOTA ) )SS COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged .before me this day of 20 , by Thomas E. Harms and Samantha Orduno the Chairperson and 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 public body corporate and politic. Notary Public This instrument was drafted by: The Housing and Redevelopment Authority in and for the City of Richfield 6700 Portland Avenue South Richfield, MN 55423 612-861-9760 n STAFF REPORT 3A 24 AGENDA ITEM # REPORT # HOUSING AND REDEVELOPMENT AUTHORITY MEETING JUNE 21, 2004 REPORT PREPARED BY: REPORT PRESENTER: DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTIVE DIRECTOR: PAM BOOKHOUT, REHABILITATION SPECIALIST NAME, TITLE BRUCE PALMEORG, COMMUNITY DEVELOPMENT DIRECTOR ITEM FOR HRA CONSIDERATION: Consideration of resolution authorizing the purchase of real property located at 6805 12th Avenue and 6329 14th Avenue with Community Development Block Grant funds under the New Home Pro ram. I. RECOMMENDED ACTION: By Motion: Approve the attached resolution authorizing the purchase of real property located at 680512th Avenue and 6329 14th Avenue under the New Home Program. II. BACKGROUND • The house at 6805 12th Avenue has 672 sq. ft. on the first floor with less than a half story above. The house is very small with several functionally obsolete features. • The house at 6329 14th Avenue consists of only 540 sq. ft. Its garage, built in 1981, exceeds the house in size at 672 sq. ft. Small doorways, the orientation of the house on the lot, the lot size, and design of the house framing will not support a second story and limit remodeling potential. • The City would purchase both properties by the end of June 2004 and convey to the Housing and Redevelopment Authority (HRA) in July 2004 for development under the New Home Program. 062104 6805 12th / NAME, TITLE • After conveyance, the HRA could provide two affordable homes for first time homebuyers. A contract with. Habitat for Humanity for 6805 12th Avenue would rehabilitate the house, construct an addition and create more usable space. The HRA could demolish the house at 6329 14th Avenue, retain the garage, and convey the lot and garage to a nonprofit developer for single family new construction. Development agreements would be presented to the HRA at a subsequent meeting. • The negotiated purchase price of 6805 12th Avenue is $150,000 based on an independent appraisal. $110,000 in Community Development Block Grant (CDBG) funds would be used to purchase the property; $40,000 would come from the nonprofit developer. • The purchase price of 6329 14th Avenue is $140,000. Of that, $90,000 would come from CDBG, and $50,000 would come from the nonprofit developer. • Both properties would be sold to income-qualifying families, as defined by CDBG regulations. An eligible family of four would earn less than $57,500 annually. • The City Council held the first reading of a transitory ordinance on May 25 for the City to purchase 6805 12th Avenue and 6329 14th Avenue and convey them to the HRA for $1.00. The second reading of the ordinance would take place at the City Council meeting on June 22. III. BASIS OF RECOMMENDATION A. POLICY • The use of CDBG funds to buy small and/or substandard property and to construct a new home or rehabilitate an existing one with a nonprofit developer has been a successful program model for the HRA. B. CRITICAL ISSUES • Acquisition for rehabilitation or for demolition and redevelopment on sites scattered throughout Richfield has been well received. • The house plans would be subject to the review design to help assure that they would compliment Richfield's existing housing. • One very small house with limited market appeal will be remodeled to accommodate afirst-time home buying family. Another very small house with no remodeling potential would be replaced with a newly constructed three to four bedroom house for a family to buy. • Continuing relationships with nonprofit developers helps solve for financial gaps to provide new homes for first time buyers. C. FINANCIAL • 2003 and 2004 CDBG funds will be available for acquisition of the properties: $110,000 for 6805 12th Avenue, and $90,000 for 6329 14th Avenue. Proceeds of sale and grants received by nonprofit developers will make the acquisitions possible. • The nonprofit developers would cover construction costs. • No City or HRA General Fund revenues would be used for development. D. LEGAL • The HRA has approved general acquisition activities for use of CDBG funds. • A City Council public hearing is required at the second reading of the transitory ordinance, scheduled for June 22, 2004. • The HRA would establish a contract with nonprofit developer(s) for construction to begin after the City conveys the property to the HRA. IV. ALTERNATIVE RECOMMENDATION(S~ • Do not acquire the property. V. ATTACHMENTS • Resolution VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A HRA RESOLUTION NO. RESOLUTION AUTHORIZING PURCHASE OF REAL PROPERTY LOCATED AT 6805 12TH AVENUE AND 6329 14TH AVENUE UNDER THE NEW HOME PROGRAM WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota ("the HRA") desires to purchase certain real property pursuant to and in furtherance of the New Home Program, said property being described as: 6805 12t" Avenue: All of the South seventy-two (72) feet of the North One Hundred Forty-four (144) feet of Block Five (5), except the East One Hundred Thirty-three (133) feet thereof, Rich Fields, Hennepin County, Minn., according to the plat or map thereof now on file and of record in the office of the Registrar of Titles, in and for said County and State. Subject to a right of way for private roadway eight (8) feet wide commencing at road on the North side of Southeast Quarter (SE'/) Sec. 26 Twp. 26 R. 24 and running South along the Westerly side of said tract to the South ten (10) acres of the West fifty-five (55) rods of the West Half (W %) of said Southeast quarter (SE'/4) according to deeds record in Book 264 of Deeds page 123 and Book 340 of Deeds page 129 and Book 460 of Deeds page 192. Also That part of the South Thirteen Hundred and Ten (1310) feet of the East Eight and 58/100 (8.58) feet of the West Forty-one and 58/100 (41.58) feet of the Southwest Quarter (SW'/) of Southeast Quarter (SE'/), Section 26, Township 28, Range 24, which lies between the north and south lines extended of the South 72 feet of the North 144 feet of Block 5, Rich Fields, Hennepin County, Minn. according to the map or plat thereof now on file and of record in the office of the Registrar of Titles in and for said County and State; 6329 14th Avenue: Lot 17, Block 2, Nokomis Gardens Rearrangement of Blocks 1, 2, 3, 4 and 5 Girard Parkview, Hennepin County; and WHEREAS, the HRA is authorized by Minnesota Statutes Section 469.012 to acquire real property within its area of operation; and WHEREAS, a purchase prices have been negotiated based on independent appraisals; and WHEREAS, Community Development Block Grant funds are available for acquisition .purposes. NOW THEREFORE, BE IT RESOLVED, by the City of Richfield Housing and Redevelopment Authority: 062104 6805 12th 1. The purchase price for the properties identified are approved at $150,000 for 6805 12th Avenue, and $140,000 for 6329 14th Avenue. 2. The Chairperson and Executive Director are authorized to execute purchase agreements and to take other actions necessary to purchase the properties for the amount set forth in this resolution. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota on this 21st day of June, 2004. Thomas E. Harms, Chair ATTEST: Kristal Stokes, Secretary