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08-18-03 agenda.(.~~ CITY OF RICHFIELD, MINNESOTA HOUSING AND REDEVELOPMENT AUTHORITY MONDAY, AUGUST 18, 2003 RICHFIELD CITY HALL 6700 PORTLAND AVENUE COUNCIL CHAMBERS 7 P.M. AGENDA Call to order 1. Approval of minutes of (1) Regular HRA Meeting on June 16, 2003; (2) Concurrent Special HRA/City Council Meeting of July 8, 2003; and (3) Special HRA Meeting of August 4, 2003 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 amending HRA by-laws S.R. No. 45 B. Consideration of approval of leasing HRA-owned property at 7601 Pleasant Avenue S.R. No. 46 C. Consideration of approval of 2003-2004 contract with Julianne Schwietz to work with Livable Communities Team S.R. No. 47 D. Consideration of approval of extending closing date for sale of land at 6833 and 6855 Penn Avenue to Penn Place Townhouses LLC for residential redevelopment S.R. No. 48 E. Consideration of approval of resolution authorizing $855,000 internal loan for advance of public redevelopment costs in connection with Lyndale Gateway West Tax Increment Financing District S. R. No. 49 F. Consideration of approval of resolution authorizing execution of Tax Increment Pledge Agreement with City of Richfield relating to $6 million Taxable General Obligation Tax Increment Bonds S.R. No. 50 Notes: 4. Consideration of administrative revisions to First Amended and Restated Contract for Private Redevelopment for Lyndale Gateway, LLC Staff Report No. 51 Notes: 5. Consideration of resolutions approving 2004 Proposed HRA budget and tax levy and 2003 Revised HRA budget Staff Report No. 52 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 # 5 52 REPORT PREPARED BY: REPORT PRESENTER: DEPARTMENT DIRECTOR REVIEW: CHRIS REGIS, FINANCE MANAGER NAME, TITLE CHRIS REGIS, FINANCE MANAGER REVIEWED BY EXECUTIVE DIRECTOR: ~ ` ITEM FOR HRA CONSIDERATION: Consideration of resolutions approving proposed property tax levy for payable 2004 for certification to Hennepin County. I. RECOMMENDED ACTION: By Motion: Adopt the attached resolutions approving the 2004 Proposed Housing and Redevelopment Authority Budget and Tax Levy and 2003 Revised Housing and Redevelopment Authority Budget. III. BACKGROUND ~ III. BASIS OF RECOMMENDATION A. POLICY • Minnesota Statutes require adoption of a preliminary levy from each taxing authority. • The budget and accompanying proposed levy for 2004 are ready for consideration. 0821 budget Even though a pubic hearing for the HRA tax levy is not required by State Statute, this does not preclude the HRA from opening this item up for public discussion if the HRA desires to do so. B. CRITICAL ISSUES • As required by State Statutes, each taxing authority must certify its proposed tax levy for the payable year 2004 to the County Auditor on or before September 15, 2003. C. FINANCIAL • The Proposed 2004 HRA levy represents a 22.71% increase from the previous year's levy. D. LEGAL • N/A IV. ALTERNATIVE RECOMMENDATION(S~ • The HRA could adopt a preliminary levy less than the one proposed herein. However, that would not provide for programs. that are recommended in the 2003 Revised/2004 Proposed budget. V. ATTACHMENTS • Resolution Approving Proposed 2004 Housing and Redevelopment Authority Budget and Certifying the 2004 Tax Levy • Resolution Authorizing Revision of the 2003 Budget of the Housing and Redevelopment Authority of Richfield VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A HRA RESOLUTION NO. RESOLUTION APPROVING PROPOSED 2004 HOUSING AND REDEVELOPMENT AUTHORITY BUDGET AND CERTIFYING THE 2003 TAX LEVY BE IT RESOLVED by the Housing and Redevelopment Authority of the City of Richfield, Minnesota as follows: Section 1. The budget for the Housing and Redevelopment Authority General Fund of Richfield for the year 2004 in the amount of $413,370 is hereby ratified. Section 2. The estimated gross revenue of the Housing and Redevelopment Authority General Fund of Richfield from all sources, including general ad valorem tax levies as hereinafter set forth for the year 2004, and as the same are more fully detailed in the Executive Director's official copy of the budget for the year 2004, in the amount of $480,910 is hereby approved.. Section 3. There is hereby levied upon all taxable property in the City of Richfield an ad valorem tax in 2003, payable in 2004 for the following purposes: Housing and Redevelopment Authority $332,324 Section 4. 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 18th day of August, 2003. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary HRA RESOLUTION NO. RESOLUTION AUTHORIZING REVISION OF THE 2002 BUDGET OF THE HOUSING AND REDEVELOPMENT AUTHORITY OF RICHFIELD WHEREAS, Resolution No. 858 appropriated funds for personal services and other expenses and capital outlay for the Housing and Redevelopment Authority for the year 2003, and WHEREAS, The Executive Director has requested a revision of the 2003 budget as detailed in the 2004 budget document. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority of Richfield, Minnesota as follows: Section 1. That the 2003 appropriation for the Housing and Redevelopment Authority General Fund be revised as follows: $35,110 increase Section 2. Estimated 2003 gross revenue of the Housing and Redevelopment Authority General Fund from all sources, as the same are more fully detailed in the Executive Director's official copy of the 2004 budget document, are hereby revised as follows: $75,700 increase Section 3. That the Executive Director bring into effect the provisions of this resolution. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 18th day of August, 2003. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary STAFF REPORT AGENDA ITEM # REPORT # HOUSING AND REDEVELOPMENT AUTHORITY MEETING AUGUST 18, 2003 4 51 REPORT PREPARED BY: JOHN STARK, COMMUNITY DEVELOPMENT MANAGER REPORT PRESENTER: JOHN STARK, COMMUNITY DEVELOPMENT MANAGER NAME, TITLE ACTING DEPARTMENT DIRECTOR REVIEW: ~ ~N ~f~/~ SIGNATURE REVIEWED BY EXECUTIVE DIRECTOR: ITEM FOR HRA CONSIDERATION: Consideration of administrative revisions to the First Amended and Restated Contract for Private Redevelopment for the Lyndale Gateway West Area. I. RECOMMENDED ACTION: By Motion: Authorize recommended administrative revisions to the First Amended and Restated Contract for Private Redevelopment with Lyndale Gateway, LLC. III. BACKGROUND I At a Special Housing and Redevelopment Authority (HRA) meeting on August 4, 2003, the HRA approved the First Amended and Restated Contract for Private Redevelopment (the "Contract") between the HRA and Lyndale Gateway LLC. The approved contract serves as a blending of the earlier contract between the parties, and the supplemental agreement between the parties. It also contained numerous revisions to the terms contained in those earlier agreements. In its action approving the Contract, the HRA directed staff to attempt to seek a modification to the Option Agreement which would clearly permit the HRA to elect, at no cost to it, to accept the assignment of any purchase agreement or letter of intent. The developer has consented to that modification and it is not contained in the Option Agreement. The HRA also wanted the Option Agreement to make it 081803 LGWContract clear that the HRA would have no obligation to the holder of any purchase agreement or letter of intent that the HRA did not elect to assume. That modification is also now in the Option Agreement; and is acceptable to the developer. At the August 4 meeting it was also reported that negotiations were ongoing with the developer's lender, M&I Bank over certain terms and conditions of the agreement that affected their rights in the property. The HRA's action approving the contract included acceptance of language that had been generally worked out between the HRA counsel and counsel for the bank. Subsequently, bank counsel submitted the proposed language to the bank, and has learned that the bank wishes to make certain additional revisions to the Contract. The revision that is the most notable would provide that the minimum sales price for housing units can be adjusted downward without the consent of the HRA, but not more that 15%. Of course the developer would still need to agree. Although this change was not specifically considered at the August 4 meeting, it is the opinion of the financial consultant and legal counsel that this provision should not create any additional exposure to the HRA. The bonds remain fully covered, repayment of principal on the Interfund Loan remains covered, interest on the HRA Commercial Mortgage remains covered. Interest on the balance of the Interfund Loan is fully covered through a combination of tax increment, and the developer's letter of credit. This matter is being returned to the HRA primarily for informational purposes, and to give the board. an opportunity to provide the staff with any response or directive concerning these additional proposed language changes. III. BASIS OF RECOMMENDATION ~ A: POLICY The Contract and the discussions at the August 4 meeting made it clear that the discussions concerning these matters were continuing. The lender requirement appears to be customary and typical of lender needs for financing of projects of this type. The lender has agreed to finance the project through a single transaction rather than in phases. This approach is unusual and was insisted on by the HRA. The need for the lender to have additional flexibility arises out of meeting the HRA requirement. B. CRITICAL ISSUES • Agreeing to the lender's additional requirements is necessary if the. developer is to be able to finance construction of the project. • Agreeing to the lender's additional requirements does not place any additional risk on the HRA. C. FINANCIAL • Any reduction in tax increment resulting from the unconsented to reduction in sales prices will not impair the repayment of the bonds; or the repayment of principal and interest on the interfund loan. D. LEGAL • The HRA counsel has reviewed the proposed changes. IV. ALTERNATIVE RECOMMENDATION~S~ • Continue discussions with developer and developer's lender over other possible language. V. ATTACHMENTS • N/A. VI. PRINCIPAL PARTIES EXPECTED AT MEETING • Representatives of CSM • HRA financial consultant HRA legal counsel AGENDA ITEM # 3F REPORT # ~~ STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING AIIGIIST 18, 2003 REPORT PREPARED BY: REPORT PRESENTER: ACTING DEPARTMENT DIRECTOR REVIEW: JOHN STARK, COMMUNITY DEVELOPMENT MANAGER NAME, TITLE JOHN STARK, COMMUNITY DEVELOPMENT MANAGER NAME, TITLE REVIEWED BY EXECUTIVE DIRECTOR TUBE ITEM FOR HRA CONSIDERATION: Consideration of the attached resolution authorizing execution of Tax Increment Pledge Agreement with the City of Richfield relating to $6 million Taxable General Obligation Tax Increment Bonds. RECOMMENDED ACTION: By Motion: Approve the attached resolution authorizing execution of Tax Increment Pledge Agreement with the City of Richfield relating to $6 million Taxable General Obligation Tax Increment Bonds. III. BACKGROUND On August 4, 2003 the Richfield Housing Redevelopment Authority (HRA) approved the First Amended and Restated Contract for Private Redevelopment with Lyndale Gateway, LLC for the Lyndale Gateway West redevelopment- project. That Contract, as well as earlier agreements which it replaces, contemplates the City of Richfield issuing up to $6 million in Taxable General Obligation Tax Increment Bonds. The intended source of debt service for these bonds is through payments made to the HRA by the developer upon sales of housing units and ultimately by tax increment to be generated by the project. Because tax increment is a revenue source available only to the HRA, but the debt is to be incurred by the City of Richfield, the HRA must pledge the tax increment to the City for servicing the bonds. The attached resolution would authorize the HRA a pledge of tax increment as a payment source for the bonds being issued by the City of Richfield for the purposes of this project. III. BASIS OF RECOMMENDATION A. POLICY The Richfield HRA approved the First Amended and Restated Contract for Private Redevelopment with Lyndale Gateway LLC on August 4, 2003. This Contract contemplates the availability of up to $6 million in Taxable General Obligation TIF Bonds. • In a concurrent meeting of the Richfield HRA and City Council on July 8, 2003, the general financing method was deemed appropriate by both the HRA and City Council. • In order for the City Council to issue General Obligation Tax Increment Bonds, there must be a pledge of the Tax Increment by the HRA. B. CRITICAL ISSUES • The Contract has been drafted in a manner that would allow the HRA to take title to the properties and proceed with a different development plan in the event that the current proposal could not occur; the bonds (and their debt service sources) have been designed in a manner that allows for this scenario. C. FINANCIAL • There is a three year period of capitalized interest built into the bonds so that if the HRA must ultimately take title to the properties in this development area, there is a period of time before a new developer would need to construct improvements on the site which would be the basis of new tax increment. D. LEGAL Legal counsel drafted the attached resolution. IV. ALTERNATIVE RECOMMENDATION(S~ • N/A V. ATTACHMENTS- • Resolution VI. PRINCIPAL PARTIES EXPECTED AT MEETING • HRA Legal Counsel HRA RESOLUTION NO. RESOLUTION AUTHORIZING EXECUTION OF TAX INCREMENT PLEDGE AGREEMENT WITH THE CITY OF RICHFIELD RELATING TO $6 MILLION TAXABLE GENERAL OBLIGATION TAX INCREMENT BONDS WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (the "HRA") has established the Richfield Redevelopment Project Area (the "Project Area"), and approved a Redevelopment Plan (the "Project Plan") for the Project Area; and WHEREAS, within the Project Area, the HRA and City have established the Lyndale Gateway West Tax Increment Financing District (the "TIF District"); and WHEREAS, the HRA and Lyndale Gateway, LLC have entered into the First Amended and Restated Contract for Private Redevelopment on August 4, 2003, as amended (the "Contract"); and WHEREAS, pursuant to the Contract the HRA agrees to provide various forms of financial assistance in connection with redevelopment of certain property in the Tax Increment Finance District, including proceeds of certain tax increment bonds; and. WHEREAS, as contemplated in the Contract, the City and HRA have proposed that the City issue General Obligation Taxable Tax Increment Bonds in an aggregate principal amount not to exceed $6 million (the "Bonds"); and WHEREAS, the City and HRA have previously entered into a Tax Increment Pledge Agreement dated as of April 22, 2003 ("Original Pledge Agreement") providing for issuance of such bonds and the pledge of certain tax increments as security for the bonds; and WHEREAS, the City and HRA have determined to modify the Original Pledge Agreement to reflect changes in the proposed structure of bonds to be issued; and WHEREAS, there has been presented to the HRA a form of Amended Tax Increment Pledge Agreement Series 2003 between the HRA and the City (the "Amended Pledge Agreement"), providing for issuance of the Bonds, .the use of proceeds, and the pledge of tax increments from the TIF District tax increment districts to payment of principal and interest on the Bonds. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota as follows: 1. The HRA Chair and Secretary are hereby authorized to execute and deliver the Amended Pledge Agreement substantially in the form on file with the City, subject to modifications that do not alter the substance of the transaction that are approved by the Chair and Executive Director, whose execution will be conclusive evidence of their approval. 2. This resolution shall be effective as of the date hereof. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 18th day of August, 2003. Thomas E. Harms, Chair - Attest: Michael Sandahl, Secretary AGENDA ITEM # 3E REPORT # ~ 49 STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING AUGUST 18, 2003 REPORT PREPARED BY: REPORT PRESENTER: ACTING DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTIVE DIRECTOR: ~~ JOHN STARK, COMMUNITY DEVELOPMENT MANAGER NAME, TITLE JOHN STARK, COMMUNITY DEVELOPMENT TiTei.T~rrn ITEM FOR HRA CONSIDERATION: Consideration of the attached resolution authorizing an Internal Loan Agreement in the amount of $855,000. I. RECOMMENDED ACTION: By Motion: Approve the attached resolution, authorizing a $855,000 Internal Loan for Advance of Public Redevelopment Costs in Connection with Lyndale Gateway West Tax Increment Financing District. III. BACKGROUND I On May 19, 2003, the Richfield Housing and Redevelopment Authority (HRA) approved an internal loan agreement in the amount of $1.1 million for the Lyndale Gateway redevelopment project. The source of these funds was the HRA's Bonds of 1996. Since that time, a contingent plan for the redevelopment of this area has been approved. This plan allows for the City of Richfield and the Richfield HRA to advance public funds for the assembly of the Lyndale Gateway site prior to the developer's receipt of private construction financing. In order to accommodate this advance funding, it has been determined that up to $855,000 in additional HRA contributions may be required. The source of this additional funding is $750,000 from the HRA's bonds of 1996 and $105,000 from the HRA's bonds of 1988. 081803 LGW InterFund In the event that the current developer (The Cornerstone Group dba Lyndale Gateway LLC) is able to proceed with the redevelopment, then an additional City of Richfield General Obligation Tax Increment Bond will be issued and a portion of the proceeds will be used to repay this internal loan. In the event that another developer must be sought, this internal loan would be repaid either through a similar bond issuance in the future or by future tax increment proceeds. III. BASIS OF RECOMMENDATION A. POLICY • In a concurrent meeting of the Richfield HRA and City Council on July 8, 2003, the general financing method was deemed appropriate by both the HRA and City Council. B. CRITICAL ISSUES • The funding which is subject to the internal loan agreement may be needed to assemble the Lyndale Gateway West site. C. FINANCIAL • The HRA's financial analysts, Ehlers and Associates, Inc., have reviewed the proposed internal loan and have determined that there are sufficient repayment sources with which to service the loan. D. LEGAL • Legal counsel drafted the attached internal loan resolution. IV. ALTERNATIVE RECOMMENDATION(S~ • N/A V. ATTACHMENTS • Resolution VI. PRINCIPAL PARTIES EXPECTED AT MEETING • HRA Legal Counsel HRA RESOLUTION NO. AUTHORIZING $855,000 INTERNAL LOAN FOR ADVANCE OF PUBLIC REDEVELOPMENT COSTS IN CONNECTION WITH LYNDALE GATEWAY WEST TAX INCREMENT FINANCING DISTRICT BE IT RESOLVED BY THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA (the "HRA") AS FOLLOWS: Section 1. Background. 1.01. Pursuant to Minnesota Statutes, Sections 469.174 to 469.179 (the "TIF Act") the Authority previously established the Lyndale Gateway West Tax Increment Financing District (the "TIF District") within the Richfield Redevelopment Project Area (the "Project Area"). 1.02. The Authority may incur certain costs related to the TIF District, which costs may be financed on a temporary basis from available funds in the account for other tax increment financing districts administered by the HRA, or from other HRA funds available for such purposes. 1.03. Under Section 469.178, Subdivision 7 of the TIF Act, the HRA is authorized to advance or loan money from any fund from which such advances may. be legally made in order to finance expenditures that are eligible to be paid with tax increments under the TIF Act. 1.04. The HRA has approved and the parties have executed an Amended and Restated Contract for Private Redevelopment (the "Contract") between the HRA and Lyndale Gateway LLC, ("Redeveloper") under which, among other things, the HRA will provide the Redeveloper proceeds from general obligation tax increment bonds to be issued by the City and an internal loan fund to finance certain Public Development Costs as defined in the Contract. 1.05. The HRA has previously approved an internal loan (on May 19, 2003) in the amount of $1,100,000 to finance certain Public Redevelopment Costs (as defined in the Contract) on a temporary basis. 1.06. The City intends to issue its $4,965,000 Taxable General Obligation Temporary Tax Increment Bonds, Series 2003A (the "Short Term Bonds") to provide financing .for part of the Public Redevelopment Costs. A portion of the Short Term Bonds will be paid with proceeds of long-term general obligation tax increment bonds (the "Long Term Bonds") to be issued at or before maturity of the Short Term Bonds. 1.07. The HRA has determined a need to provide additional temporary financing for Public Redevelopment Costs through an additional internal loan (the "Loan") to be repaid in accordance with the terms of this resolution. Section 2. Repayment of Public Redevelopment Costs. 2.01. The HRA will provide funds to the Redeveloper for certain Public Redevelopment Costs in accordance with the Contract, in the amount of $750,000 from proceeds of the City's General Obligation Taxable Tax Increment Bonds, Series 1996 (the "1996 Bonds"), and in the amount of $105,000 from proceeds of the City's General Obligation Bonds, Series 1988 (the "Series 1988 Bonds"), for a total Loan of $855,000. 2.02. The HRA will reimburse itself for the Loan in the principal amount of $855,000, together with (i) interest at the lesser of 5% per annum or the yield on the Series 1988 Bonds, 081803 LGW InterFund with respect to $105,000 of the original principal amount, and (ii) interest at the rate of 5.0% per annum with respect to $750,000 of the original principal amount. Interest accrues from the date of closing the Contract (hereafter, the "Closing Date"). Each interest rate is no more than the greatest of the rate specified under Minnesota Statutes, Section 270.75 and Section 549.09, both in effect for calendar year 2003. 2.03. The principal and accrued interest on the Loan shall be paid on the date of issuance of the Long Term Bonds, which payment shall be credited to the respective accounts for the Series 1996 Bonds and the Series 1988 Bonds. 2.04. The Loan will be paid from proceeds of the Long Term Bonds. 2.05. The principal sum and all accrued interest payable under this resolution is pre- payable in whole or in part at any time by the HRA without premium or penalty. 2.06. This resolution is evidence of an internal borrowing by the HRA in accordance with Section 469.178, Subdivision 7 of the TIF Act, and is a limited obligation payable solely from tax increment and other funds pledged to the payment hereof under this resolution. Thee Loan shall not be deemed to constitute a general obligation of the State of Minnesota or any political subdivision thereof, including, without .limitation, the Authority and the City of Richfield. Neither the State of Minnesota, nor any political subdivision thereof shall be - obligated to pay the principal of or interest on the Loan or other costs incident hereto except from the sources described in this resolution. 2.07. HRA staff and officials are authorized and. directed to execute any collateral documents and take any other actions necessary to carryout the intent of this resolution. 2.08. The HRA may at any time determine to forgive the outstanding principal amount and accrued interest on the Loan to the extent permissible under law. 2.09. The HRA may from time to time amend the terms of this resolution to the extent permitted by law, including without Limitation amendment to the payment schedule and .the interest rate; provided that the interest rate may not be increased above the maximum specified in Section 469.178. Subd. 7 of the TIF Act. Section 3. Effective Date. -.This resolution is effective upon approval, provided, however, that the Loan will not be made until all of the preconditions of the Contract have been satisfied or waived by the HRA. Approved by the Housing and Redevelopment .Authority in and for the City of Richfield, Minnesota this 18th day of August, 2003. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary AGENDA ITEM # 3D REPORT # 48 STAFF REPORT ~ HOUSING AND REDEVELOPMENT AUTHORITY MEETING AUGUST 18, 2003 REPORT PREPARED BY: REPORT PRESENTER: ACTING DEPARTMENT DIRECTOR REVIEW: REVIEWED BY EXECUTIVE DIRECTOR: PAM BOOKHOUT, REHABILITATION SPECIALIST NAME, TITLE BRUCE PALMBORG, COMMUNITY DEVELOPMENT DIRECTOR ITEM FOR HRA CONSIDERATION: Consideration of extending the closing date for the sale of land at 6833 and 6855 Penn ~' Avenue to Penn Place Townhouses LLC for residential redevelopment. I. RECOMMENDED ACTION: By Motion: Authorize the extension of the closing date for the sale of land at 6833 and 6855 Penn Avenue to Penn Place Townhouses LLC. III. BACKGROUND I In November 2002 the Housing and Redevelopment Authority (HRA) approved a Purchase and Private Redevelopment Agreement (Agreement) with Penn Place Townhouses LLC for the construction of seven attached townhomes at the northeast corner of Penn Avenue and 69th Street. In April 2003 the HRA approved an amendment to extend the closing date and the construction completion date due to delayed architectural drawings and the subsequent timing issues of getting specifications drawn up for builders to bid. In reviewing building estimates for the development, per unit costs came in significantly higher than the developer anticipated. Since April, the developer has been working to reduce costs without compromising the unique nature of the development. Simultaneously the developer has been preparing a zoning application for a new plat for the site. 081803-6833 Penn Ave NAME, TITLE The developer has asked to extend the closing date to the end of September, rather than in August, as had previously been planned. Construction completion is still expected in February, to coincide with participation in the Parade of Homes spring preview. Because the Agreement indicates in Section 3.4 that the closing may occur on "such other date as the parties may agree upon", and the completion date has not changed, an amendment to the Agreement is not required at this time. III. BASIS OF RECOMMENDATION A. POLICY • The Agreement functions as a purchase agreement and also sets the conditions for the land sale. A public hearing for sale and request for HRA authorization are planned to occur by the end of the summer. Sale to the developer would occur shortly afterwards, but prior to the end of September 2003. • The HRA purchased the sites as part of the Richfield Rediscovered program. The development concept conforms with comprehensive plan goals for higher density housing on arterial streets such as Penn Avenue. B. CRITICAL ISSUES • The developer continues to move forward and has made progress to date. Completion is expected for the February 2004 Parade of Homes spring preview. C. FINANCIAL • NA D. LEGAL • The Agreement allows for a closing date that the parties agree upon. IV. ALTERNATIVE RECOMMENDATION(S~ • Do not approve the extension. V. ATTACHMENTS • NA VI. PRINCIPAL PARTIES EXPECTED AT MEETING • David Gepner, Penn Place Townhouses LLC. AGENDA ITEM # 3C REPORT # 4 7 BRUCE PALMBORG, COMMUNITY REPORT PREPARED BY: DEVELOPMENT DIRECTOR 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 a Livable Communities Team contract for 2003-20004. I. RECOMMENDED ACTION: By Motion: Approve the execution of a contract with Julianne Schwietz to work with the Livable Communities Team beginning July 22, 2003 for 12 months. III. BACKGROUND ~ Julianne Schwietz has successfully worked with apartment owners apartment managers, and. staff for several years. Because of the need to reduce operating. expenses, the recently completed 2002-2003 contract was narrowly focused on the Livable Communities Team (staff from- several departments and divisions who focus. on apartment related issues). Work would continue under a new contract with the Livable Communities Team on the following matters. • An abatement plan for Dominion properties. • A study of housing court issues and how to make the process more efficient. • Rewriting of the housing code. • Formulation of a rating system for grading apartment properties with an A or B or C (staff reductions may delay implementation). 081803 livable communities Restructuring of internal processes to better handle problems related to apartments. III. BASIS OF RECOMMENDATION • The services of Julianne Schwietz continue to be needed to accomplish the aforementioned objectives. A. POLICY • One third of Richfield's housing units are in apartments and the physical condition of the structures and management practices are of concern to the HRA and City Council. B. CRITICAL ISSUES • A significant portion of Richfield's population is housed in apartments. C. FINANCIAL • The Housing and Redevelopment Authority contract will be for 12 months with a cost not to exceed $27,000. The Section 8 program provides this revenue. D. LEGAL • The contract is the HRA standard form as used previously. IV. ALTERNATIVE RECOMMENDATION(S~ • Direct staff to find another consultant. • Refuse approval. • Delay approval. V. ATTACHMENTS • N/A VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A AGENDA ITEM # 3B REPORT # 46 STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING AUGUST 18, 2003 REPORT PREPARED BY: BRUCE PALMBORG, COMMUNITY DEVELOPMENT DIRECTOR Na,~E, TiT[,E REPORT PRESENTER: BRUCE PALMBORG, COMMUNITY DEVELOPMENT DIRECTOR NanaE, TITLE DEPARTMENT DIRECTOR REVIEW: SIGNATURE REVIEWED BY EXECUTIVE DIRECTOR: '~~ ITEM FOR HRA CONSIDERATION: ~ Consideration of leasing a Housing and Redevelopment Authority owned property located at 7601 Pleasant Avenue. I. RECOMMENDED ACTION: By Motion: Authorize the Chair and Executive Director to execute a lease amendment with the City of Richfield for use of the former Mortuary at 7601 Pleasant Avenue. II. BACKGROUND The Housing and Redevelopment Authority (HRA) purchased the Mortuary several years ago when it was for sale. Currently the building is vacant. The property was purchased as a part of land assemblage in the block for future redevelopment. The second property related to this situation is 1710 East 78th Street. The City has owned 1710 for some time (this property is some times referred to as the Normark Building). It was purchased to help provide for the tunneling of 77th Street under Trunk Highway 77. However, funding has not been adequate to undertake this portion of the project. The highest priority element of the 77th Street project currently is the reconstruction of the Lyndale Avenue bridge. During the interim the City has been using this building for storage of a variety of items. Public Works and Public Safety have been using portions of the building in this way. 081803-7601 Pleasant Metro Sales operate from 1640 East 78th Street, which is adjacent to 1710 East 78th Street to the west. They market office copy equipment. They would like to lease a portion of the 1710 property to service and temporarily store copy equipment. The availability of this facility would increase their operating efficiency and make them more competitive. This would mean that Public Safety and Public Works would have to vacate their use of the property. The City does not have adequate space elsewhere. However, the 7601 Pleasant Avenue property would meet their needs. The City use would continue until the property was needed for redevelopment related purposes. III. BASIS OF RECOMMENDATION A. POLICY • The HRA has rented property to the City on an interim basis previously. B. CRITICAL ISSUES • The HRA would not incur any costs by leasing. C. FINANCIAL • The HRA has previously authorized the City to use the paved areas adjoining the building for which the HRA receives $3,600 per year. It is proposed that this payment not be increased. D. LEGAL • Use of the building would be amended into the current Agreement. IV. ALTERNATIVE RECOMMENDATION(S~ • Delay the consideration. • Refuse the request. V. ATTACHMENTS • N/A VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A AGENDA ITEM # 1-' 3A REPORT # STAFF REPORT HOUSING AND REDEVELOPMENT AUTHORITY MEETING AUGUST 18, 2003 REPORT PREPARED BY: BRUCE PALMBORG, COMMUNITY DEVELOPMENT DIRECTOR NAME, TITLE REPORT PRESENTER: BRUCE PALMBORG, COMMUNITY DEVELOPMENT DIRECTOR NAME, T/TLE DEPARTMENT DIRECTOR REVIEW: SIGNATURE REVIEWED BY EXECUTIVE DIRECTOR: ~ ~ - ITEM FOR HRA CONSIDERATION: Consideration of the attached resolution regarding a proposed amendment to the Housing and Redevelopment Authority Bylaws. RECOMMENDED ACTION: By Motion: Approve the attached resolution regarding a proposed amendment to the Housing and Redevelopment Authority. Bylaws, Article II Section 4 to permit the Secretary to sign. contracts, deeds and other instruments on behalf of the Housing and: Redevelopment Authority in the event that the Chair and the Vice Chair are unavailable. II. BACKGROUND On occasion, the Chair and Vice Chair are not available to sign documents on behalf of th8 Housing and Redevelopment Authority (HRA). It would facilitate processing of these documents if the Secretary was also authorized to sign documents should the Chair and Vice Chair be unavailable. III. BASIS OF RECOMMENDATION A. POLICY • Current blaws authorize only the Chair and Vice Chair to sign documents. B. CRITICAL ISSUES • The processing of documents would be facilitated by this recommendation. C. FINANCIAL • N/A D. LEGAL • Legal counsel has reviewed the proposed amendment and this recommendation was found acceptable. IV. ALTERNATIVE RECOMMENDATION(S~ • Reject the recommendation. • Delay consideration of the recommendation. V. ATTACHMENTS • Resolution VI. PRINCIPAL PARTIES EXPECTED AT MEETING • N/A 081803 HRA Bylaws HRA RESOLUTION NO. RESOLUTION AMENDING THE BYLAWS OF THE HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF RICHFIELD, MINNESOTA WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (Authority) has established Bylaws; and WHEREAS, from time to time it is appropriate for the Bylaws to be amended; and WHEREAS, Article II of the Bylaws identifies the officers of the Authority and their duties and responsibilities; and WHEREAS, the Chair is authorized to preside at all meetings, sign contracts, deeds and other instruments made by the Authority; and WHEREAS, the Vice Chair is authorized to take such actions in the absence or incapacity of the Chair; and WHEREAS, on occasion neither the Chair and Vice Chair may be available for signing documents; and WHEREAS, the Secretary is also an officer of the Authority. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota that the Article II, Section 4 is amended to read as follows: Section 4. Secretary. The Secretary shall perform the duties as Secretary for the Authority. The Secretary shall perform the duties as the Chair in cases where both the Chair and Vice Chair are absent or incapacitated. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 18th day of August 2003. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary 081803 HRA Bylaws