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09-15-03 agendaCITY OF RICHFIELD, MINNESOTA HOUSING AND REDEVELOPMENT AUTHORITY MONDAY, SEPTEMBER 15, 2003 RICHFIELD CITY HALL 6700 PORTLAND AVENUE COUNCIL CHAMBERS 7 P.M. AGENDA Call to order 1. Approval of minutes of Regular HRA Meeting on August 18, 2003 2. HRA approval of agenda 3. Public hearing regarding Richfield HRA's annual Public Housing Authority Plan for Section 8 Housing Assistance Program Staff Report No. 53 Notes: 4. Public hearing regarding resolution authorizing sale of 6819 Oliver Avenue to BCB Construction, Inc. for construction of single family home Staff Report No. 54 Notes: 5. Status and future direction for Penn Place Townhouses LLC development, 6833 and 6855 Penn Avenue Staff Report No. 55 Notes; 6. Executive Director report 7. 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 # REPORT # J STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING SEPTEMBER 15, 2003 ~o~~-- 5A 56 REPORT PREPARED BY: REPORT PRESENTER: DEPARTMENT DIRECTOR REVIEW REVIEWED BY EXECUTIVE DIRECTOR: BRUCE PALMBORG, COMMUNITY DEVELOPMENT DIRECTOR NAME, TITLE BRUCE PALMBORG, COMMUNITY DEVELOPMENT DIRECTOR ~/ ~ NAME, TITLE 1~1 /~.~'E' l ITEM FOR HRA CONSIDERATION: Consideration of authorizing the attached resolution for transfer of deeds for real estate to Lyndale Gateway LLC from the Housing and Redevelopment Authority. I. RECOMMENDED ACTION: By Motion: Approve the attached resolution authorizing the transfer of deeds for real estate from the Housing and Redevelopment Authority to Lyndale Gateway LLC; Kensington Place project. III. BACKGROUND I Title insurance companies now require a resolution from a public body when the public conveys real estate. The resolution authorizes the conveyance of all the real estate on the block bounded by Aldrich and Lyndale Avenues and 76th and 77th Streets to Lyndale Gateway LLC. This is the site of Kensington Place project. III. BASIS OF RECOMMENDATION A. POLICY • The authorizing resolution is simply another piece of paper approving the transfer of title to real estate on the block to Lyndale Gateway LLC. 091503 Lyndale Gateway The resolution is consistent with all prior Housing and Redevelopment Authority (HRA) actions with regards to redevelopment of this block. B. CRITICAL ISSUES • Absent the resolution the property cannot be transferred to Lyndale Gateway LLC. C. FINANCIAL • This does not result in any new financial obligation to either party. D. LEGAL • HRA's legal counsel prepared the resolution. IV. ALTERNATIVE RECOMMENDATION~S~ • Do not approve the resolution. • Delay approval of the resolution. • Either of the above actions would delay the redevelopment process. V. ATTACHMENTS • Resolution. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A HRA RESOLUTION NO. RESOLUTION AUTHORIZING THE CONVEYANCE OF INTEREST IN CERTAIN LANDS WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the "HRA"), and Lyndale Gateway, LLC (the "Developer") have entered into a First Amended and Restated Contract for Private Redevelopment dated as of August 18, 2003 (the "Contract"); and WHEREAS, pursuant to the terms of the Contract, the HRA is required to convey to the Developer all of the HRA's right, title and interest in the various parcels and tracts of land that constitute the Redevelopment Property as that term is defined in the Contract, and described in the attached Exhibit A. NOW THEREFORE, be it resolved by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota as follows: 1. The conveyance of the HRA's right title and interest in the parcels of land described in the attached Exhibit A is hereby approved. 2. The Chair and the Executive Director are hereby authorized to execute and deliver to the Redeveloper, such quit claim deeds as are required to carry out this resolution. Approved by the Board of Commissioners of the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 15th day of September, 2003. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary Exhibit A Redevelopment Property. Legal Description. Parcel 1: Lot 1, "Glenn's Addition" Parcel 2: Lot 2, "Glenn's Addition" Parcel 3: Lot 3, "Glenn's Addition" Parcel 4: South 1/2 of Lot 5, "Glenn's Addition" Parcel 5: The North 20.5 feet of Lot 5, "Glenn's Addition" Parcel 6: South 20.5 feet of North 1/2 of Lot 5, "Glenn's Addition" Parcel 7: All of Lot 6, except the South 13.7 feet thereof, "Glenn's Addition" Parcel 8: South 13.7 feet of Lot 6, and the North 6.3 feet of Lot 7, "Glenn's Addition" Parcel 9: Lot 9, "Glenn's Addition" Parcel 10: Lot 10, "Glenn's Addition" Lot 11: Lot 11, "Glenn's Addition" Parcel 12: Lot 12, "Glenn's Addition" Parcel 13: Lot 13, "Glenn's Addition" Parcel 14: Lot 14, "Glenn's Addition" Parcel 15: Lot 15, "Glenn's Addition" Parcel 16: South 22 feet of the North 28.3 feet; Lot 7, "Glenn's Addition" Parcel 17: Lot 4, "Glenn's Addition" Parcel 18: The alley dedicated in the plat of Glenn's Addition, lying southerly of the southerly right of way line of 76th Street and northerly of the northerly right of way line of 77th Street, Hennepin County, Minnesota Parcel 19: That part of Lot 8, Glenn's Addition, according to the recorded plat thereof, Hennepin County, Minnesota, lying North of the South 51.35 feet of said Lot 8. Parcel 20: That part of Lot 7, Glenn's Addition, according to the recorded plat thereof, Hennepin County, Minnesota, lying South of the North 28.30 feet of said Lot 7, lying North of the South 45.30 feet of said Lot 7, and lying Westerly of a curve concave to the east having a radius of 17.01 feet. Said curve passes through a point on the South line of said North 28.30 feet of Lot 7 distant 108.99 feet Easterly of the West line of said Lot 7, and passes through a point on the North line of said South 45.30 feet of Lot 7 distant 105.76 feet Easterly of said West line of Lot 7. AGENDA ITEM # 5 REPORT # 55 J STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING SEPTEMBER 15, 2003 REPORT PREPARED BY: PAMELA BOOKHOUT, REHABILITATION 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 status and future direction for the Penn Place Townhouses LLC development. I. RECOMMENDED ACTION: By Motion: Amend the contract with Penn Place Townhouses LLC to incorporate the dates listed in the "attachment" to the Housing and Redevelopment Authority staff report; or direct staff to identify another developer. III. BACKGROUND ~ David Gepner and Harold Teasdale have proposed aseven-unit townhome development for the vacant Housing and Redevelopment Authority (HRA) owned land located at 6833 and 6855 Penn Avenue. Their development team has completed the following since November, 2000 when the project was first conceptually discussed: • Produced elevations, floor plans and a site plan for the development. • Provided $2,000 required participation fee. • Entered into a Development Planning Agreement with the HRA. • Met with City staff to review requirements pertaining to zoning, building inspections, engineering, fire safety and made plan modifications. 091503 Penn Place Submitted a zoning application for a Conditional Use Permit; later approved. Held a neighborhood meeting, receiving positive feedback and modified the plan. Entered into a Purchase and Redevelopment Agreement with the HRA. The land has been vacant since 1999. The terms of the current Purchase and Redevelopment Agreement will expire at the end of September. Attached is a letter from the developer stating what still has to be done and the time required to accomplish the tasks. The HRA may find this timeframe reasonable, and may wish to amend the Contract to allow the project to move forward. It may be the will of the HRA to request staff to identify a different developer. Staff wishes to ascertain the will of the HRA. III. BASIS OF RECOMMENDATION A. POLICY • The HRA removed two substandard homes from the site as part of the Richfield Rediscovered Program. • The property is zoned single family residential. The developer has received conditional use permit approval for townhomes. The Comprehensive Plan calls for higher density housing on the site. • The terms of the Contract between the HRA and Penn Place Townhouses LLC will soon expire. B. CRITICAL ISSUES • The land has been vacant since August 1999. • The developer has put considerable time and expense into the project to date, has requested additional time, and has not achieved sufficient project progress to purchase the land and begin construction. C. FINANCIAL • ,The HRA is in receipt of a $2,000 participation fee. D. LEGAL • To continue the relationship with the developer, an amendment to the Contract would be required; see "attachment HRA staff report". IV. ALTERNATIVE RECOMMENDATION(S) • Amend Contract to allow revised performance dates. • Proposed alternative dates. • Identify a different developer. V. ATTACHMENTS Nresent and proposed scr Letter from the developer. ~ VI. PRINCIPAL PARTIES EXPECTED AT MEETING ~ pner, deve~oper. Attachment Present and Proposed Schedule Penn Place Action Required Present Contract Requirement Proposed Completion Developer selects building contractor August 26, 2003 January 31, 2004 Developer selects construction financing lender August 26, 2003 January 31, 2004 Developer submits required items for plat application August 26, 2003 January 31, 2004 HRA sells land to Developer September 30, 2003 March 31, 2004 Developer starts construction October 1, 2003 April 30, 2004 Developer completed construction February, 2004 October 31, 2004 091503 Penn Place To the members of the HRA -Penn Place Update Back in'99 when I thought I was soon to be displaced from my 18t" Avenue residence by the city's Cedar Avenue Airport Redevelopment Plan I started to look for a replacement home. I wanted to relocate within the city of Richfield, but could not find the type of housing I wanted. So with what now seems like somewhat of a naive pioneering spirit I determined that I would build the type of structure I had envisioned. I presented my idea to Bruce Palmborg, and inquired about available sites. In the spring of'00 I asked landscape architect Michael Schroeder to put my concept on paper, which I then took to Richfield Planning Department Community Development staff. Feeling somewhat out of my element I aligned myself with Harold Teasdale, an experienced and innovative developer, who helped me work with the city on a development planning agreement for the parcel at 69t" & Penn. In an effort to foster f resh ideas we engaged the services Robert Gerlof, a successful residential architect who wanted to design amulti-family structure. This progressive minded individual adapted the original drawing into the "ideal" dwelling. The concept was reviewed and critiqued by Richfield's ARC committee who pointed out some conflicts with building codes and the city's zoning ordinances. Simultaneously the Planning Commission was considering adaptations to the zoning code that would encourage multi-housing development in the city. That body recommended changes in the density, the height, and the setback requirements, and drafted a provision allowing accessory units above garages. Public hearings were held, and the matter was referred to the City Council. More public hearings ensued, the comp plan had to be amended, approval of which was delayed by a mandated study of the city's sewer capacity. With much controversy three of the four recommendations were enacted by the counci I. The Penn Place project had then to be redesigned to allow for the stipulated changes, that were then subject to another examination by the ARC committee. Concurrent to the redesign the concept was discussed and slightly altered after a neighborhood meeting, and then the project had to be approved by the council. The original three parcels had to be sub divided into seven parcels one for each of the townhouse units, and the association document had to be written. Working drawings were distributed to five different builders in March. Subsequent to the working drawing distribution Penn Place had been selected as a demonstration project by Center for Energy and Environment, a non profit that wants to establish a list of recommendations for similar multi-family developments. That organization contracted with the Energy Design Division of the Weidt Group to do a study the results of which determined that our proposed geothermal heating and cooling system would not be cost effective. That revelation resulted in additional design changes and delayed the bidding process well into this year's busy building season. When the bids did come in the costs were greater than expected. The challenge of selling a townhome priced higher than any other in Richfield was a major concern to Harold and me as developers, and creates a serious issue for the lenders. In an effort to reduce costs the architect met with the builders and more changes were made. I believe that we now have a marketable product that still maintains project's desired quality and character. Anew pro forma has been drafted and packets are out to four prospective lenders. It is hoped that an agreement with a banker will be reached by month end. It appears that Frerichs Construction will be the builder. Marketing will commence this fall, with the 6 - 8 month construction staring in the spring. No one is more disappointed with the delays and setbacks than I. It has been a long and arduous struggle both in time and expense to get to this point. I am elated that the compromised Penn Place remains innovative and unique, and was very heartened by the unanimous endorsement by the Richfield City Council. I appreciate your continued indulgence. David Gepner J STAFF REPORT AGENDA ITEM # REPORT # HOUSING AND REDEVELOPMENT AUTHORITY MEETING SEPTEMBER 15, 2003 _. ___ . 4 - 54 REPORT PREPARED BY: PAM BOOKHOUT, REHABILITATION SPECIALIST NAME, TITLE REPORT PRESENTER: BRUCE PALMBORG, COMMUNITY DEVELOPMENT DIRECTOR NAME, TITLE DEPARTMENT DIRECTOR REVIEW: SIGNATURE REVIEWED BY EXECUTIVE DIRECTOR: ITEM FOR HRA CONSIDERATION: Public hearing and approval of the attached resolution regarding the sale of 6819 Oliver Avenue to BCB Construction Inc., for new construction of a single family home. I. RECOMMENDED ACTION: Conduct and close the public hearing and by motion: Approve the attached resolution authorizing a Contract for Private Development and the sale of real property located at 6819 Oliver Avenue to BCB Construction Inc. III. BACKGROUND The Housing and Redevelopment Authority (HRA) purchased and demolished. the abandoned substandard house at 6819 Oliver Avenue. In October 2002, the HRA approved the planning and design of a new home on the site that would demonstrate new building technologies for energy efficiency, durability, and healthier indoor air quality. In March 2003, the HRA was informed of the builder selection process, which resulted in identifying BCB Construction Inc. (BCB) of St. Paul. BCB has experience with in-fill residential construction, working for several nonprofit agencies, and the City of New Hope. Two houses built in 2000 were given an 091503-6819 Oliver Award of Recognition for "exceptional quality in construction" by the St. Paul Heritage Preservation Commission and the St. Paul Chapter of the American Institute of Architects. BCB would build the home as designed by LHB Engineers and Architects, incorporating the innovative Metal Fit framing system and the American Lung Association requirements for "Health House" certification. The home is planned to be part of the Builders Association Parade of Homes Spring Preview in February 2004. This will be Richfield's 11th entry in the Parade. The home will be available for sale during the Parade; generally homes have sold even prior to the start of the Parade. The new home will be a split-level design, with-1,880 finished sq. ft. on the main and upper levels. The lower level will have 1,300 sq. ft. available for future finishing. The home's end value is anticipated to be between approximately $350,000 and $400,000. Construction is anticipated to start the first week of October. The Contract for Private Development is similar in form and content to past Richfield Rediscovered contracts. III. BASIS OF RECOMMENDATION A. POLICY • The HRA acquired the site for Richfield Rediscovered program development. • The builder is experienced, qualified, and has proven financial capability. The terms of the Contract for Private Development that have been negotiated are in conformance with program guidelines and consistent with past agreements. B. CRITICAL ISSUES • The property at 6819 Oliver Avenue provides a unique opportunity for demonstrating new building technologies, a Parade of Homes opportunity, and the development of a high value new home. • BCB has been trained by the American Lung Association for "Health House" construction and has received the technical specifications and training on the Metal Fit framing system. C. FINANCIAL • According to the program guidelines, the builder must provide a Letter of Credit or other acceptable security upon closing to cover the purchase price of the land, $57,000, and performance security in the same amount. D. LEGAL • Notice of public hearing on sale of the property was published on September 4, 2003 in the Sun-Current. IV. ALTERNATIVE RECOMMENDATION(S~ • Do not proceed with the sale of the property and a Contract for Private Development with the recommended builder and direct staff to find another buyer. V. ATTACHMENTS • Resolution House plans/elevations VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Richard Klimala; builder HRA RESOLUTION NO. RESOLUTION AUTHORIZING THE SALE OF REAL PROPERTY LOCATED AT 6819 OLIVER AVENUE TO BCB CONSTRUCTION INC. WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA) desires to develop certain real property pursuant to and in furtherance of the Richfield Rediscovered program adopted by the HRA, said real property being described as 6819 Oliver Avenue, and whose legal description is Lot 10, Block 8, Tingdale Bros. Lincoln Hills 2nd Addition, Hennepin County, Minnesota; and WHEREAS, the HRA is authorized to sell real property within its area of operation after a public hearing; and WHEREAS, the purchaser of the described property has been identified as BCB Construction Inc.; and WHEREAS, a Contract for Private Development has been prepared, and the sale price of the land is $57,000 with performance security in the same amount; and WHEREAS, a public hearing has been held after proper public notice. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota: 1. The Chairperson and Executive Director are authorized to execute a Contract for Private Development and other agreements as required to effectuate the sale to BCB Construction Inc. 2. A public hearing has been held and 6819 Oliver Avenue is authorized to be sold for $57,000 to BCB Construction Inc.; and Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 15th day of September, 2003. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary 091503-6819 Oliver O M ~A r ~1 W rr~^ VL .~1 A~ r ~1 W u+~l i.~ ~1 z as a f I I b~A !~ 0 v a 0 0 b a~ AGENDA ITEM # 3 REPORT # 5 3 STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING SEPTEMBER 15, 2003 REPORT PREPARED BY: LYNNETTE CHAMBERS, LEASED HOUSING SPECIALIST NAME, TITLE BRUCE NORDQUIST, REPORT PRESENTER: HOUSING AND REDEVELOPMENT MANAGER NAME, TITLE 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 requires the Richfield Housing and Redevelopment Authority (HRA) to provide a Public Housing Agency Plan (PHA Plan) on an annual basis. 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 invited to join the Advisory Board. Two 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 RECOMMENDATION 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 $1,340,316 for rental assistance payments and $155,859 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 July 31, 2003 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 Annual Plan, Year 2004 September 15, 2003 The annual Pubic Housing Agency Plan (PHA Plan) is a 20-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 annual 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.