05-19-03 agendaCITY OF RICHFIELD, MINNESOTA
HOUSING AND REDEVELOPMENT AUTHORITY
MONDAY, MAY 19, 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 April 21, 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 authorizing HRA not to waive monetary limits on
municipal tort liability established by Minnesota Statutes 466.04 S.R. No. 29
B. Consideration of approval of resolution calling for public hearing on June 16, 2003
regarding use of eminent domain proceedings to acquire splinter parcel adjacent to City
Bella project S.R. No. 30
C. Consideration of approval of resolution authorizing internal loan for advance of public
redevelopment costs m connection with Lyndale Gateway West Tax Increment Financing
District S.R. No. 31
Notes:
4. Public hearing regarding resolution authorizing sale of 6309 Bryant Avenue to Twin Cities
Habitat for Humanity for single family home development
Staff Report No. 32
Notes:
5. Consideration of proposal for use of Best Buy Housing Fund Resources
Staff Report No. 33
- 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 # ,5
REPORT # 3 3
J STAFF REPORT
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
MAY 19, 2003
REPORT PREPARED BY: BRUCE NORDQUIST, HOUSING AND
REDEVELOPMENT MANAGER
NAME, TITLE
BRUCE NORDQUIST, HOUSING AND
REPORT PRESENTER: REDEVELOPMENT MANAGER
NAME, TITLE
DEPARTMENT DIRECTOR REVIEW:
SIGNATURE
REVIEWED BY EXECUTIVE DIRECTOR:
ITEM FOR HRA CONSIDERATION:
Review and discussion of a proposal for the use of Best Buy Housing Fund Resources.
I. RECOMMENDED ACTION:
By Motion: Approve the concepts discussed below to help meet
community housing needs and direct staff to prepare operating
details for subsequent submission to the Housing and
Redevelopment Authority.
II. BACKGROUND
The Housing and Redevelopment Authority (HRA) will receive housing fund
resources from the Best Buy project. How these funds are used is an important
HRA consideration. Cash flow analysis by Ehlers, Inc., reports approximately
$500,000 to be available annually starting in 2005.
The work of several community based task forces can be used as a guide to the
HRA for the commitment of funds:
• Recommendations of the Affordable Housing Task force, 1999.
• Recommendations of the Housing and Neighborhood work group of the
2020 Task Force, 2001.
• Priorities of the Richfield Community Council, 2003
051903 Housing Fund
The work of each group had differing objectives. However, each group recognized
similar community needs. To summarize, the need for:
• New housing
• Remodeled housing
• Higher income housing choices
• Affordable housing choices
All of the HRA's core housing and redevelopment programs over a 28-year period
have responded to these needs with a variety of federal, state, metropolitan, county,
and local resources. A review of these programs offers three programs that are
uniquely "Richfield's" and best meet the wide range of needs:
• Richfield Rediscovered encourages the replacement of substandard homes with
higher valued single family homes. The HRA has requested staff to improve on
the already successful program by reducing per unit cost with more private
investment to the extent the market place will be responsive. The program has
lacked a reliable funding source to proceed with redesign, HRA review and
implementation.
• Transformation Homes encourages the value added remodeling of existing
single family homes. A revised program was authorized by the HRA in February
2003. The revised program provides $5,000 deferred loans to leverage more
than $50,000 in value added improvements by individual homeowners. Funding
is available through 2003 and no 2004 source of funds has been identified.
• The Richfield Section 8 Rent Assistance Program has operated since 1988. In
addition to HUD providing sufficient funding to serve approximately 350 lower
income rental households, the State of Minnesota (through the Minnesota
Housing Finance Agency) has also been an active participant. MHFA's Rent
Stabilization Program and 4(d) Property Tax Classification Program are being
phased out in 2003, discontinuing programs dedicated to affordability to over
1,000 housing units in Richfield. Multiple applications to HUD have not secured
additional funding. No new funding is expected from the state.
The proposed Housing Fund Concept is as follows:
• Distribute Best Buy housing fund resources to three programs.
• Richfield Rediscovered, once revised and approved by the HRA, would receive
approximately $200,000 of Best Buy housing fund resources so that two homes
might be possible annually. While down from past performance of five to eight
homes annually, the sustained performance is what continues to be important to
remove substandard homes from neighborhoods.
• Transformation Homes as approved in February would receive funding of
$100,000 annually to provide approximately 20 remodeling opportunities.
• The Section 8 Program would have a local program element and receive
approximately $200,000 of the available funding. Because of the local source of
funds, the program could be narrowly targeted to meet Richfield priorities:
• Richfield households with incomes less than 30 percent of median income
would be served. (Less than $23,000 for a family of four.)
• Existing rental housing stock would be inspected and qualified as for the
regular Section 8 program.
• Households with children in the Richfield schools would be prioritized.
• The head of household would be required to be employed or in a job training
program.
It is estimated that 30 households could be served annually.
If the HRA concurs with these concepts, a more detailed program would be
developed for subsequent presentation. Staff would report annually on program
performance and adjustments could be made as needs and priorities change.
III. BASIS OF RECOMMENDATION
A. POLICY
• The HRA is responsible for the receipt of and allocation of housing
fund resources from Best Buy.
• Multiple housing program options meeting a wide range of community
needs would be of greatest benefit.
• The HRA has been successfully administering multiple programs for
years.
• It is appropriate for the HRA to consider policies and priorities from the
aforementioned community based task forces.
B. CRITICAL ISSUES
• Programming is dependent on fund availability and resources continue
to be limited.
• Programs need to be developed, reviewed, and approved.
• The programs, as proposed, could be administered with existing staff
resources.
• Other HRA programs; New Homes (through Habitat and
redevelopment), CDBG Deferred Rehabilitation Loans, and the
Existin Federal Section 8 Assistant Program, would continue.
• About 260,000 to be received in the last half of 2004 from the Best
Buy cash flow would allow some program activity to begin before
2005.
C. FINANCIAL
• Recommendations are based on the cash flow analysis prepared by
Ehlers, Inc.
• The estimated housing funds available in 2004 would be programmed
during 2004 budget preparation.
D. LEGAL
• New program requirements would be reviewed by legal counsel.
IV. ALTERNATIVE RECOMMENDATION(S) ~
• Modify the proposal.
• Propose other programs.
I V . ATTAC~IMENTS I
~ VI. PRINCIPAL PARTIES EXPECTED AT MEETING ~
AGENDA ITEM #
REPORT #
~~ STAFF REPORT
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
MAY 19, .2003
REPORT PREPARED BY: PAM BOOKHOUT,
REHABILITATION SPECIALIST
NAME, TITLE
BRUCE NORDQUIST,
REPORT PRESENTER:. HOUSING AND REDEVELOPMENT
MANAGER
NAME, TITLE
ACTING DEPARTMENT DIRECTOR
REVIEW:
G TUBE
REVIEWED BY EXECUTIVE DIRECTOR:
ITEM FOR HRA CONSIDERATION:
Public hearing regarding the sale of 6309 Bryant Avenue to Twin Cities Habitat for Humanity
for single family home development.
I. RECOMMENDED ACTION:
Conduct and close the public hearing and by motion: Adopt the
attached resolution authorizing the sale of 6309 Bryant Avenue to
Twin Cities Habitat for Humanity for single family home development
and the execution of appropriate documents by the Housing and
Redeveloament Authority's Chair and Executive Director.
III. BACKGROUND ~
The Housing and Redevelopment Authority (HRA) purchased the substandard
property at 6309 Bryant Avenue for single family redevelopment. It is proposed that
the HRA sell the property to Twin Cities Habitat for Humanity (Habitat) to build a
new single family home. The development agreement is similar to those used for
the past seven Habitat developments. The following items are those which differ
from a typical HRA development agreement but are typical for Habitat projects:
• The 1,800 sq. ft. three or four bedroom home will have a property value upon
completion of approximately $180,000. A copy of the proposed plan is attached.
051903-6309 sale TCHFH
• The sale price of the property from the HRA to Habitat is $1. The development
agreement will be recorded against the property, which would be released by a
Certificate of Completion upon construction completion.
• Habitat will require their end buyer to execute a $30,000 second mortgage to
Hennepin County for the HOME funds used in the initial purchase of the
property, and $10,000 to the HRA for the balance of the land value.
• Habitat will be provided approximately seven months to complete the project
rather than the four months builders typically receive.
III. BASIS OF RECOMMENDATION
A. POLICY
• Habitat has evidenced experience, capability and financial security.
• The HRA acquired the property with federal CDBG funds for an
affordable housing initiative.
• The terms of the development agreement have been negotiated and
are in conformance with program guidelines.
B. CRITICAL ISSUES
• The property is in the Lakes at Lyndale area where the City Council
has emphasized that housing investment is important to neighborhood
stability.
• Habitat would like to begin the project in early June.
• The style of home has been successfully built by Habitat in other
Richfield neighborhoods where a narrow lot (40') with alley access is
available.
- C. FINANCIAL
• $90,000 in CDBG funds were used by the HRA to acquire the property
as part of the New Home Program.
• $30,000 was contributed to Habitat by Hennepin County to acquire the
ro ert
• Hennepin County will be reimbursed $30,000 and the HRA $10,000 if
the house does not remain an affordable opportunity.
• The HRA will receive tax increment from the increased value, as this
lot is a Richfield Rediscovered certified lot that will yield contributions
to the HRA's housing fund. Over time, the TIF amounts recover the
balance of HRA land sale proceeds.
D. LEGAL
• Notice of public hearing on sale of the property was published April 29
in the Sun-Current.
IV. ALTERNATIVE RECOMMENDATION S
• Do not proceed with the development agreement with Habitat and direct staff
to find another buyer.
I V . ATTACHMENTS I
• rcesoiution
• Proposed plans
I V 1. PRINCIPAL PARTIES EXPECTED AT MEETING I
HRA RESOLUTION NO.
RESOLUTION AUTHORIZING SALE OF REAL PROPERTY LOCATED AT
6309 BRYANT AVENUE SOUTH TO TWIN CITIES HABITAT FOR HUMANITY
IN ACCORDANCE WITH A DEVELOPMENT AGREEMENT
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 New Home and Richfield Rediscovered Programs adopted by the HRA,
said real property being described as follows:
Address Legal
6309 Bryant Avenue South Lot 11, Block 2, Ray's Lynnhurst Second Addition
WHEREAS, the HRA is authorized to sell real property within its area of operation
after public hearing; and
WHEREAS, a developer, Twin Cities Habitat for Humanity, has been identified as
the purchaser of the described property and in accordance with a development agreement;
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:
A public hearing has been held and 6309 Bryant Avenue is authorized to be sold for
$1.00 to Twin Cities Habitat for Humanity in accordance with a development
agreement with the HRA.
2. That the HRA accept a $10,000 second mortgage lien executed by Habitat, and
upon sale to an end buyer, the HRA release the lien with Habitat and accept a
second mortgage lien executed by the end buyer.
3. The Chairperson and Executive Director are authorized to execute a Contract for
Private Development and other agreements as required to effectuate the sale to
Twin Cities Habitat for Humanity.
Adopted by the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota this 19th day of May, 2003.
Thomas E. Harms, Chair
ATTEST:
Michael Sandahl, Secretary
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AGENDA ITEM # 3 C
REPORT # 3
STAFF REPORT
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
MAY 19, 2003
JOHN STARK,
REPORT PREPARED BY: COMMUNITY DEVELOPMENT MANAGER
NAME, TiTGE
JOHN STARK,
REPORT PRESENTER: COMMUNITY DEVELOPMENT MANAGER
ACTING DEPARTMENT DIRECTOR
REVIEW:
SIGNATURE
REVIEWED BY EXECUTIVE DIRECTOR:
ITEM FOR HRA CONSIDERATION:
Consideration of a resolution authorizing an internal loan for the advance of public redevelopment
costs in connection with the Lyndale Gateway West Tax Increment Financing District.
I. RECOMMENDED ACTION:
By Motion: Adopt the attached resolution: Authorizing an Internal
Loan for Advance of Public Redevelopment Costs in Connection with
the Lyndale Gateway West Tax Increment Financing District.
III. BACKGROUND
At the February 18, 2003 Housing and Redevelopment Authority (HRA) meeting,
staff reported a $1.1 million financing "gap" in the Lyndale Gateway West
redevelopment project. At that meeting, the HRA was responsive to funding the
gap as long as a viable repayment source could be identified. Then, at a special
HRA meeting on February 26, 2003, staff described a payback process for the $1.1
million in gap financing. This payback.,process was formally outlined in a
Supplement to the Contract for Private Redevelopment with the developer that was
adopted at the February 26 HRA meeting. `
The gap financing and its repayment, as approved, are as follows:
• A $1.1 million loan from the Bonds of 1996 -which are being serviced by tax
increment from the Interstate Lyndale Nicollet (ILN) TIF District.
• Up to $500,000 of the Loan would be repaid by the developer.
• The remaining $600,000 (plus 5% interest on the entire $1.1 million) would be
repaid from the tax increment to be generated by the project.
In order for tax increment from the Lyndale Gateway West TIF District to repay a
loan from the ILN TIF District, however, a formal loan must be approved. The
attached resolution, entitled "A Resolution Authorizing an Internal Loan for Advance
of Public Redevelopment Costs in Connection with the Lyndale Gateway West Tax
Increment Financing District" establishes the required loan approval.
III. BASIS OF RECOMMENDATION
A. POLICY
• On February 26, 2003 the Richfield HRA adopted a Supplemental
Agreement to the Contract for Private Redevelopment for the Lyndale
Gateway West Area.
• That Supplemental Agreement identifies $1.1 million of the Bonds of
1996 to be loaned to the project.
• In order to repay that loan in conformance with Minnesota Statutes, a
formal loan agreement must be approved.
• The attached resolution creates the required formal loan agreement.
B. CRITICAL ISSUES
• The commitment to provide the $1.1 million in funding has already
been made. In order for the ILN TIF District to receive repayment for
these funds, this .resolution must be approved.
C. FINANCIAL
• The attached resolution does not provide for any additional funding
beyond that which has already been approved.
D. LEGAL
• HRA legal counsel drafted the attached resolution. _ _
IV. ALTERNATIVE RECOMMENAATION(S)
• Continue the discussion of this item to a future HRA meeting if further
clarification is sought.
V. ATTACHMENTS
• Resolution
VI. PRINCIPAL PARTIES EXPECTED AT MEETING
• HRA legal counsel.
HRA RESOLUTION NO.
AUTHORIZING 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 "Authority") 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 Authority, or from other Authority funds
available for such purposes.
1.03. Under Section 469.178, Subdivision 7 of the TIF Act, the Authority 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 Authority has approved and the parties have executed a Contract for
Private Redevelopment (the "Contract") and a Supplemental Agreement to Contract for
Private Redevelopment (the "Supplement") between the Authority and Lyndale Gateway
LLC, ("Redeveloper") (collectively the "Agreements") under which the Authority will
provide the Redeveloper proceeds from an interfund loan fund to finance certain Public
Redevelopment Costs as defined in the Contract.
1.05. Under the Agreements, the Authority will disburse Public Redevelopment
Costs in the amount of up to $7,710,000, subject to the terms and conditions of the
Agreements. Of that amount, $1,100,000 will be financed on a temporary basis and
subject to reimbursement as set out in this resolution.
1.06. The Authority intends that $1,100,000 of the Public Redevelopment Costs will
be financed on a temporary basis as an interFund loan (the "Loan") and be repaid in
accordance with the terms of this resolution.
Section 2. Repayment of Public Redevelopment Costs.
2.01. The Authority will reimburse itself for the Loan in the principal amount of
$1,100,000 together with interest at the rate of 5.0% per annum accruing from. the date of
closing the Contract (hereafter, the "Closing Date"). The 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.
2.02. Principal and interest ("Payments") on the Loan shall be paid semi-annually
on the dates (each a "Payment Date"), and in the amounts specified in Exhibit A hereto.
2.03. Payments on the Loan will be made from Available Tax Increment as
defined in the Agreements after first deducting from tax increment receipts in amounts
necessary to pay principal and interest on the Bonds; and from amounts received from the
Developer under Section 7 of the Supplement. Payments shall be applied first to accrued
interest, and then to unpaid principal. Interest accruing from the Closing Date will be
compounded semiannually on February 1 and August 1 of each year and added to
principal, unless otherwise specified by the Executive Director.
2.04. The principal sum and all accrued interest payable under this resolution is
pre-payable in whole or in part at any time by the Authority without premium or penalty.
No partial prepayment shall affect the amount or timing of any other regular payment
otherwise required to be made under Exhibit A.
2.05. The Public Redevelopment Costs are evidence of an internal borrowing by
the Authority 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. The 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 Public Redevelopment Costs or other costs incident hereto except from the sources
described in this resolution.
2.06. The City Chief Financial Officer is authorized and directed to determine
the fund(s) or account(s) from which monies are drawn for the interfund loan, and to
credit repayments under this to the relevant fund(s) or account(s)..
2.07. Authority staff and officials are authorized and directed to execute any
collateral documents and take any other actions necessary to carry out the intent of this
resolution.
2.08. The Authority may at any time determine to forgive the outstanding principal
amount and accrued interest on the Public Redevelopment Costs to the extent permissible
under law.
2.09. The Authority 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 interfund loan will not be made until all of the preconditions of the
Supplement have been satisfied or waived by the Authority.
Approved by the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota this 19th day of May 2003.
Thomas E. Harms, Chair
ATTEST:
Michael Sandahl, Secretary
05/14/2003
Page 1 of 1
EXHIBIT A
Inter Fund Loan Payment Schedule
Beginning Period
Yrs.
th. Yr. INTERFUND
LOAN
$600,000
Principal and Interes
5.00% INTERFUND
LOAN
$500,000
Principal Only
500,000 INTERFUND
LOAN
$500,000
Interest Only
5.00% INTERFUND
LOAN
TOTAL
rincipal and Interest
PAYMENT DATE
Ending Period
Yrs. Mth. Yr.
0.0 02-01 2002 0.5 08-01 2002
0.5 08-01 2002 1.0 02-01 2003
1.0 02-01 2003 0.00 0.00 0.00 0.00 1.5 08-01 2003
1.5 08-01 2003 0.00 0.00 0.00 0.00 2.0 02-01 2004
2.0 02-01 2004 0.00 0.00 0.00 0.00 2.5 08-01 2004
2.5 08-01 2004 0.00 0.00 0.00 0.00 3.0 02-01 2005
3.0 02-01 2005 0.00 0.00 0.00 0.00 3.5 08-01 2005
3.5 08-01 2005 0.00 0.00 0.00 0.00 4.0 02-01 2006
4.0 02-01 2006 0.00 0.00 0.00 0.00 4.5 08-01 2006
4.5 08-01 2006 0.00 0.00 0.00 0.00 5.0 02-01 2007
5.0 02-01 2007 0.00 0.00 0.00 0.00 5.5 08-01 2007
5.5 08-01 2007 0.00 0.00 0.00 0.00 6.0 02-01 2008
6.0 02-01 2008 (27,500.00) 0.00 0.00 (27,500.00) 6.5 08-01 2008
6.5 08-01 2008 0.00 0.00 0.00 0.00 7.0 02-01 2009
7.0 02-01 2009 (27,500.00) 0.00 0.00 (27,500.00) 7.5 08-01 2009
7.5 08-01 2009 0.00 0.00 0.00 0.00 8.0 02-01 2010
8.0 02-01 2010 (33,000.00) 0.00 0.00 (33,000.00) 8.5 08-01 2010
8.5 08-01 2010 0.00 0.00 0.00 0.00 9.0 02-01 2011
9.0 02-01 2011 (39,300.00) 0.00 0.00 (39,300.00) 9.5 08-01 2011
9.5 08-01 2011 0.00 0.00 0.00 0.00 10.0 02-01 2012
10.0 02-01 2012 (38,300.00) 0.00 0.00 (38,300.00) 10.5 08-01 2012
10.5 08-01 2012 0.00 (500,000.00) 0.00 (500,000.00) 11.0 02-01 2013
11.0 02-01 2013 (40,700.00) 0.00 0.00 (40,700.00) 11.5 08-01 2013
11.5 08-01 2013 0.00 0.00 0.00 0.00 12.0 02-01 2014
12.0 02-01 2014 (40,000.00) 0.00 0.00 (40,000.00) 12.5 08-01 2014
12.5 08-01 2014 0.00 0.00 0.00 0.00 13.0 02-01 2015
13.0 02-01 2015 (43,000.00) 0.00 0.00 (43,000.00) 13.5 08-01 2015
13.5 08-01 2015 0.00 0.00 0.00 0.00 14.0 02-01 2016
14.0 02-01 2016 (46,000.00) 0.00 0.00 (46,000.00) 14.5 08-01 2016
14.5 08-01 2016 0.00 0.00 0.00 0.00 15.0 02-01 2017
15.0 02-01 2017 (52,000.00) 0.00 0.00 (52,000.00) 15.5 08-01 2017
15.5 08-01 2017 0.00 0.00 0.00 0.00 16.0 02-01 2018
16.0 02-01 2018 (52,000.00) 0.00 0.00 (52,000.00) 16.5 08-01 2018
16.5 08-01 2018 0.00 0.00 0.00 0.00 17.0 02-01 2019
17.0 02-01 2019 (58,000.00) 0.00 0.00 (58,000.00) .17.5 08-01 2019
17.5 08-01 2019 0.00 0.00 0.00 0.00 18.0 02-01 2020
18.0 02-01 2020 (66,000.00) 0.00 0.00 (66,000.00) 18.5 08-01 2020
18.5 08-01 2020 0.00 0.00 0.00 0.00 19.0 02-01 2021
19.0 02-01 2021 (69,000.00) 0.00 0.00 (69,000.00) 19.5 08-01 2021
19.5 08-01 2021 0.00 0.00 0.00 0.00 20.0 02-01 2022
20.0 02-01 2022 (73,000.00) 0.00 0.00 (73,000.00) 20.5 08-01 2022
20.5 08-01 2022 0.00 0.00 t).00 0.00 21.0 02-01 2023
21.0 02-01 2023 (74,500.00) 0.00 0.00 (74,500.00) 21.5 08-01 2023
21.5 08-01 2023 0.00- 0.00 0.00 0.00 22.0 02-01 2024
22.0 02-01 2024 (77,400.00) 0.00 0.00 (77,400.00) 22.5 08-01 2024
22.5 08-01 2024 0.00 0.00 0.00 0.00 23.0 02-01 2025
23.0 02-01 2025 (204,OQ0.00) 0.00 0.00 (204,000.00) 23.5 08-01 2025
23.5 08-01 2025 (200,000.00) 0.00 0.00 (200,000.00) 24.0 02-01 2026
24.0 02-01 2026 (156,293.00) 0.00 (10,000.00) (166,293.00) 24.5 08-01 2026
24.5 08-01 2026 0.00. 0.00 (167,000.00) (167,000.00) 25.0 02-01 2027
25.0 02-01 2027 p.00 0.l)0 (73,000.00) (73,000.00) 25.5 08-01 2027
25.5 08-01 2027 O.OQ Q.00 0.00. 0.00 26.0 02-01 2028
26.0 02-01 2028 0.00. 0.00 0.00 0.00 26.5 08-01 2028
26.5 08-01 202$ O.t)p 0.00 0.00 0.00 27.0 02-01 2029
27.0 02-01 2029 0.00 0.00 0,0O O.OQ 27.5 08-01 2029
27.5 08-01 2029 0.00 0.00 0.00 0.00. 28.0 02-01 2030
(1,417,493.00) (500,000.00) (250,000.00) (2,167,493.00)
(600,000.17) (500,000.00) (1,100,000.17)
Prepared by Ehlers Inc. -Please review all assumptions. INTerfund loan payment.xls
AGENDA ITEM # 3B
REPORT # ~~
J STAFF REPORT
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
MAY 19, 2003
REPORT PREPARED BY: BRUCE NORDQUIST, HOUSING AND
REDEVELOPMENT MANAGER
NAME, TITLE
REPORT PRESENTER: BRUCE NORDQUIST, HOUSING AND
REDEVELOPMENT MANAGER
NAn~ TITLE
ACTING DEPARTMENT DIRECTOR
REVIEW:
SIGNAT RE
REVIEWED BY EXECUTIVE DIRECTOR:
ITEM FOR HRA CONSIDERATION:
Consideration of a resolution calling for a public hearing on the use of eminent domain t0
acquire a splinter parcel adjacent to the City Bella project.
RECOMMENDED ACTION:
By Motion: Authorize the attached resolution calling for a public
hearing for June 16, 2003 on the use of eminent domain proceedings
to acquire property for redevelopment pursuant to the City Bella
project.
III. BACKGROUND ~
Staff was recently contacted by the developer, Gramercy Corporation, with
information that suggests a portion of vacated right of way may not yet have been
acquired for the City Bella project. Using land survey information from 2000, the
Housing and Redevelopment Authority (HRA) had proceeded with eminent domain
to include all vacated right-of-way in the project. Aland survey performed in April,
2003 identified a small eight ft. by 20 ft. vacated right-of--way area where title
passed to Gramercy Park. It is the developer's intent to acquire title form Gramercy
Park. However, Gramercy's lender has required resolution by October 1, 2003.
051903City Bella
The proceeding ensures the deadline can be met if for any reason Gramercy Park
cannot convey the small parcel.
III. BASIS OF RECOMMENDATION
A. POLICY
• The Amended and Restated Contract for Private Redevelopment
between the HRA and Gramercy Corporation requires the acquisition
of property within the project area.
• In accordance with the Contract, the Developer has requested the
HRA to acquire the parcel described herein.
B. CRITICAL ISSUES
• The parcel is within the City Bella project area.
• The public walkway cannot be completed without the acquisition of the
parcel.
C. FINANCIAL
• Any costs related to legal, publication and eminent domain
proceedings are covered by the Developer.
D. LEGAL
• The request has been reviewed to confirm it is needed and documents
have been prepared by legal counsel.
IV. ALTERNATIVE RECOMMENDATION~S~
• The HRA could decide not to acquire this property and convey to the
developer. However, a portion of the walkway between the City Bella plaza
and Wood Lake Nature Center would not be part of the project.
V. ATTACHMENTS
• Resolution
VI. PRINCIPAL PARTIES EXPECTED AT MEETING
• N/A
RESOLUTION NO.
RESOLUTION OF THE HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
SCHEDULING A PUBLIC HEARING ON USE OF EMINENT DOMAIN
PROCEEDINGS TO ACQUIRE PROPERTY FOR REDEVELOPMENT
PURSUANT TO THE CITY BELLA PROJECT
WHEREAS, The Housing and Redevelopment Authority in and for the City of Richfield,
Minnesota ("HRA") has received a proposal from Gramercy Corporation ("Redeveloper") to
redevelop certain real estate in the City of Richfield (which real estate is legally described in Exhibit
A attached hereto) as the "City Bella Project" (referred to herein as "Project").
WHEREAS, pursuant to the earlier request of Redeveloper, the HRA authorized the
acquisition by eminent domain proceedings of the properties described on Exhibit B attached hereto
("Properties").
WHEREAS, Redeveloper has represented to HRA staff that agents of Redeveloper have
now identified a parcel which Redeveloper should previously have requested be acquired by
condemnation but which Redeveloper inadvertently previously. overlooked and now deems to be
necessary for the Project ("Omitted Property").
WHEREAS, Redeveloper also represents that, due to the method of property ownership, it
may be difficult for the owner to deliver required consent to sale of the Omitted Property without
use of eminent domain proceedings.
WHEREAS, Redeveloper has submitted a written request to HRA that the HRA Board of
Commissioners authorize acquisition of the Omitted Property by eminent domain proceedings and
conveyance of the Omitted Property to Redeveloper for redevelopment as part of the Project
pursuant to agreements between HRA and Redeveloper.
WHEREAS, prior to commencement of eminent domain proceedings pursuant to Minn.
Stat. Section 469.012, a housing and redevelopment authority is obliged to hold a public hearing on
the question of whether it should authorize commencement of such proceedings.
WHEREAS, Redeveloper has requested that the HRA Board of Commissioners schedule
such a public hearing to be held at its meeting of June _, 2003.
NOW, THEREFORE, BE IT RESOLVED, by the Board of Commissioners of the
Housing and Redevelopment Authority in and for the City of Richfield, Minnesota, that the
Executive Director of the Authority is authorized and directed to publish notice in a newspaper of
general circulation in the City of Richfield, that a public hearing will be held by the Board of
Commissioners of the HRA on June _, 2003, beginning at p.m. in the Richfield City Hall,
6700 Portland Avenue South, Richfield, MN 55423, to hear public comment on the question of
RJL-231153v2
RC 125-212
whether the HRA Board shall authorize and direct the acquisition of the Omitted Property,..
including by use of eminent domain proceedings, for redevelopment thereof in furtherance of-the
proposed Project. Said notice shall be published at least one time not less than ten days nor more
than 30 days prior to the date of the hearing. The notice must reasonably describe the property to be
acquired and state that the purpose of the hearing is to consider acquisition by exercise of the
Authority's powers of eminent domain. Not less than ten days before the hearing, notice of the
hearing must also be mailed to the owner of each parcel proposed to be acquired but failure to give
mailed notice or any defects in the notice does not invalidate the acquisition. For the purpose of
giving mailed notice, owners are determined in accordance with section 429.031, subdivision 1;
paragraph (a).
Approved by the Board of Commissioners of the Housing and Redevelopment Authority in
and for the City of Richfield, Minnesota, the day of May, 2003.
Thomas E. Harms, Chairperson
ATTEST:
Mike Sandahl, Secretary
RJL-231153v2 2
RC 125-212
EXHIBIT A
Legal Description of Property Proposed to be Redeveloped as Part of City Bella Project
Lots 1 and 2, Block 1; Lots 11 to 17 inclusive, Block 1, Fairwood Shores, according
to the plat thereof on file or of record in the Office of the Registrar of Titles in and
for Hennepin County, Minnesota.
Lots 3, 4 and 18; Lot 19, except that part of the North 5.0 feet thereof lying East of a
line drawn South at right angles to the North line of said Lot from a point thereon
distant 32.0 feet West of the Northeast corner of said Lot; and except that part of the
Easterly 10.0 feet of said Lot lying Northeasterly of a line drawn Northwesterly at
right angles to the Easterly line of said Lot from a point thereon distant 52.0 feet
South of the Northeast corner thereof, Block 1, Fairwood Shores, according to "the
plat thereof on file or of record in the Office of the Registrar of Titles in and for said
County.
Lots 1, 2 and 3, Block 2, Fairwood Shores.
Lots 1 and 2, Block 3, "Fairwood Shores".
Lots 3, 4 and 5, Block 3, Fairwood Shores.
Lot 16, Block 3, "Fairwood Shores", according to the plat thereof on file and of
record in the Office of the Registrar of Titles in and for said County of Hennepin,
State of Minnesota.
Lot 17, Block 3, Fairwood Shores, according to the plat thereof on file or of record
in the Office of the Registrar of Titles in and for said County.
Lot 18, Block 3, "Fairwood Shores".
RJL-231153v2 f~-1
RC 125-212
EXHIBIT B
Legal Description of Portions of Property to be Redeveloped as Part of City Bella Project
Which are Proposed to be Acquired by the HRA's Use of Condemnation ("Remaining Parcels"~
Parcel 1: Lots 1, 2 and 3, Block 2, Fairwood Shores, according to the map or plat thereof on
file in the Office of the Registrar of Titles in and for Hennepin County, Minnesota
Together with adjacent street or alleys vacated or to be vacated, accruing thereto.
Being registered property pursuant to Certificate of Title No. 715782.
Owner: Sharon Trestman
Address of Property: 6630 I,yndale Avenue South
Property Tax Identification No.: 27-028-24-32-0005
Parcel 2: Lots 1 and 2, Block 3, Fairwood Shores, according to the map or plat thereof on file
in the Office of the Registrar of Titles in and for Hennepin County, Minnesota
Together with adjacent street or alleys vacated or to be vacated, accruing thereto.
Being registered property pursuant to Certificate of Title No. 770971.
Owner: Triple S. Investments, a Minnesota general partnership
Address of Property: 6700 Lyndale Avenue South
Property Tax Identification No.: 27-028-24-32-0006
Parcel 3: Lot 17, Block 3, Fairwood Shores, according to the map or plat thereof on file in the
Office of the Registrar of Titles in and for Hennepin County, Minnesota
Together with adjacent street or alleys vacated or to be vacated, accruing thereto.
Being registered property pursuant to Certificate of Title No. 684656.
Owner: Lake Shore Drive Condominium Association, a Minnesota non-profit
corporation
Address of Property: 6633 Lake Shore Drive
Property Tax Identification No.: 28-028-24-41-0016
Parcel 4: Those portions of Auto Lane and Lake View Walk, vacated or to be vacated,
accruing to Condominium No. 353, commonly known as Lake Shore Drive
Condominium.
RJL-231153v2 B-1
RC 125-212
Parcel 5: Those portions of Graham Avenue and Circle Place, vacated or to be vacated, lying
Southeasterly of a line commencing on the most Easterly corner of Lot 6, Block 3,
Fairwood Shores and ending at the Southwesterly corner of Lot 11, Block 1,
Fairwood Shores, accruing to Condominium No. 353, commonly known as Lake
Shore Drive Condominium.
Parcel 6: Those portions of Lakeview Walk and Auto Lane, vacated or to be vacated, accruing
to Lot 1, Block 1, Gramercy Park Richfield.
Parcel 7: Those portions of Graham Avenue and Auto Lane, vacated or to be vacated,
accruing to Lots 1 and 2, Block 3, Fairwood Shores.
Parcel 8: Those portions of Graham Avenue and Circle Place vacated or to be vacated,
accruing to Lots 1, 2 and 3, Block 2, Fairwood Shores.
Parcel 9: Those portions of Auto Lane, vacated or to be vacated, accruing to Lot 17, Block 3,
Fairwood Shores.
RJL-2311~3v2 $-2
RC 125-212
EXHIBIT C
Legal Description of Property Needed for City Bella Redevelopment
and Not Included in Previous Eminent Domain Resolution
("Omitted Property")
Parcel 10: That part of vacated Lake Shore Drive, as dedicated in the plat of FAIRWOOD
SHORES, Hennepin County, Minnesota, which lies northwesterly of the
northwesterly line of Lot 1, Block 1, GRAMERCY PARK RICHFIELD, which lies
southeasterly of the center line of Lake View Walk, said FAIRWOOD SHORES,
and its southwesterly extension, and which lies northeasterly of a line drawn from
the most westerly corner of said Lot 1 to a point on the southwesterly line of Lot 17,
Block 3, said FAIRWOOD SHORES, distant 42.31 feet northwesterly,- measured
along said southwesterly line, from the most southerly corner of said Lot 17.
Together with adjacent streets and alleys,. vacated or to be vacated, accruing thereto,
and together with appurtenant easements.
Being registered land pursuant to Certificate of Title No. 1055215, Office of the
Registrar of Titles, Hennepin County, Minnesota
RJL-231153v2 C-1
RC 125-212
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AGENDA ITEM # 3A
REPORT # 2 9
J STAFF REPORT
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING
MAY 19, 2003
REPORT PREPARED BY: STEVEN L. DEVICH,
ADMII~TISTRATIVE SERVICES DIRECTOR
REPORT PRESENTER: SAM~ITHA ORDUNO, CITY MANAGER
DEPARTMENT DIRECTOR REVIEW:
REVIEWED BY CITY MANAGER: ~ ~
ITEM FOR HRA CONSIDERATION:
Consideration of the attached resolution authorizing the HRA not to waive the. monetary limits
on statutory municipality tort liability.
I. RECOMMENDED ACTION:
By Motion: Adopt the attached resolution authorizing the HRA not to
waive the monetary limits on municipal tort liability established by
Minnesota Statutes 466.04.
II. BACKGROUND
The HRA purchases its insurance from the League of Minnesota Cities Insurance
Trust (LMCIT). A requirement of that insurance coverage is that each participating
municipality must annually either affirm or waive its statutory limits of liability. This
action must be taken on or before July 1 of each year.
The current statutory limits of liability for Minnesota cities are $300,000 for an
individual claimant and $1,000,000 per occurrence. Cities can waive those limits by
allowing an individual claimant to recover more than $300,000, up to the $1,000,000
occurrence limit or more if limits are waived and excess liability insurance is
0519 HRA Ins Limits
purchased. They may also waive the per occurrence limit and purchase excess
liability insurance.
Historically, the Richfield HRA has not waived its limits of liability. This is true of the
City of Richfield also. The majority of cities in Minnesota have not waived their
limits in the past.
III. BASIS OF RECOMMENDATION
A. POLICY
• The State Statute establishing liability limits for municipal entities has
been raised two times in the last few years to the current $1,000,000
level. The legislature felt that the $1,000,000 limit was more reasonable
than the previous lower limits.
• Historically, just over one-half of the municipalities in Minnesota have not
waived the monetary limits on municipality tort liability as was established
by statutes 466.04.
• The HRA could waive its statuary limits in future years if the
Commissioners should decide to do so.
• The City of Richfield has historically not waived its limits of liability.
B. CRITICAL ISSUES
• The HRA's insurance policy with the League of Minnesota Cities
Insurance Trust renews on July 1, 2003. This action must be completed
before that time.
• The HRA does not have to make a decision on purchasing excess liability
coverage at this time. Coverage such as excess liability may be added at
any time.
C. FINANCIAL
• There is a slight premium savings for political entities that affirm the
statutory monetary limits. For the Richfield HRA the savings would be
less than $1,000 for the coverage year.
• The HRA has historically not purchased excess liability coverage because
of the relatively high cost of such coverage. The cost for $1,000,000 of
excess coverage would be between $5,300 and $6,500 per year.
D. LEGAL
• The tort liability limits established by Minnesota statutes have protected
cities historically and no Minnesota court has ever established a monetary
award in excess of the statutory limits against a municipality.
• Each municipal entity must annually decide whether the City would
voluntarily waive the statute for both the single claims each occurrence
limits.
IV. ALTERNATIVE RECOMMENDATION~S~
• If the HRA feels that any single claimant should receive more than the
$300,000 limit, the HRA could elect to waive the statutory monetary limits.
• If the HRA feels that the $1,000,000 per occurrence limit is not adequate, the
HRA could purchase excess liability coverage and subsequently waive the
limits of liability up to the amount of excess coverage purchased by the HRA.
V. ATTACHMENTS
• Resolution.
VI. PRINCIPAL PARTIES EXPECTED AT MEETING
• None.
HRA RESOLUTION NO.
RESOLUTION AFFIRMING MUNICIPAL TORT LIABILITY LIMITS ESTABLISHED BY
MINNESOTA STATUTES 466.04
WHEREAS, Minnesota Statute 466.04 provides for Municipal tort liability limits for
Minnesota cities; and
WHEREAS, the League of Minnesota Cities Insurance Trust has asked that each
city review the tort liability limits and determine if the respective city would choose to waive
it's limits; and
WHEREAS, such decision to affirm or waive the tort liability limits must be filed with
the League of Minnesota Cities Insurance Trust at the insurance renewal date.
NOW, THEREFORE, BE IT RESOLVED that the Executive Director is directed to
report to the League of Minnesota Cities Insurance Trust that the Richfield HRA does not
waive the monetary limits on the municipal tort liability established by Minnesota statutes
466.04.
Approved by the Housing and Redevelopment Authority in and for the City of
Richfield, Minnesota this 19th day of May 2003.
Thomas E. Harms, Chair
ATTEST:
Michael Sandahl, Secretary