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06-21-99 agenda• CITY OF RICHFIELD MONDAY, JUNE 21, 1999 REGULAR HOUSING AND REDEVELOPMENT AUTHORITY MEETING RICHFIELD CITY HALL COUNCIL CHAMBERS 7 P.M. AGENDA CALL TO ORDER APPROVAL OF MINUTES OF REGULAR HRA MEETING OF MAY 17, 1999 1. OPPORTUNITY FOR CITIZENS TO ADDRESS THE HRA ON ITEMS NOT ON THE AGENDA 2. CONSIDERATION OF INTERCHANGE WEST DEVELOPMENT AREA • HRA LETTER NO. 30 3. PUBLIC HEARING AND CONSIDERATION OF RESOLUTION AUTHORIZING SALE OF 6228 PLEASANT AVENUE TO THOMAS ALLEN, INC. FOR SINGLE FAMILY HOME DEVELOPMENT HRA LETTER NO. 31 4. CONSIDERATION OF RESOLUTION AUTHORIZING PURCHASE OF 6537- 14TH AVENUE WITH COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS FOR NEW HOME PROGRAM HRA LETTER NO. 32 5. CONSIDERATION OF RESOLUTION AUTHORIZING CONTRACT WITH HENNEPIN TECHNICAL COLLEGE TO INITIATE TWO 1999-2000 NEW HOME PROGRAM PROJECTS AT 6537-14TH AVENUE AND 6224 BLOOMINGTON AVENUE HRA LETTER NO. 33 • 6. CONSIDERATION OF RESOLUTION AUTHORIZING PURCHASE OF 6639 LAKE SHORE DRIVE; GRAMERCY TAX INCREMENT REDEVELOPMENT DISTRICT HRA LETTER NO. 34 7. CONSIDERATION OF LEASING EXTERIOR PORTION OF 7214 CEDAR AVENUE TO CITY OF RICHFIELD PUBLIC SAFETY DEPARTMENT HRA LETTER NO. 35 8. CONSIDERATION OF REQUEST BY CSM PROPERTIES, INC. TO AMEND CONCEPT PLAN FOR LYNDALE GATEWAY REDEVELOPMENT AREA HRA LETTER NO. 36 9. CONSIDERATION OF REQUEST BY CSM PROPERTIES, INC. FOR 120 DAY ..EXTENSION FOR SITE ASSEMBLY ACTIVITIES IN LYNDALE GATEWAY AREA HRA LETTER NO. 37 . 10. EXECUTIVE DIRECTOR REPORT 11. 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. • HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 37 Agenda June 21, 1999 • Issue Statement: Consideration of a request by CSM Properties, Inc. fora 120-day extension for site assembly activities in the Lyndale Gateway area. Background: On January 19, the Housing and Redevelopment Authority (HRA) entered into a Contract for Private Development with CSM Properties, Inc. (CSM) for the redevelopment of the Lyndale Gateway area. One of the terms of that contract was that CSM complete their negotiations for the purchase of property within 150 days. If CSM were unable to privately acquire any of the properties, the contract requires that condemnation be requested no later than the end of that 150-day period. In the attached letter (Exhibit A), Murray Kornberg of CSM explains that purchase offers have not yet been made to the property owners in the Lyndale Gateway area. CSM is therefore requesting a 120-day extension to complete the site assembly activities. Mr. Kornberg cites several reasons for the delay -- including a change to the concept plan replacing the hardware store component; the addition of townhouses on the east side of Garfield Avenue in response to homeowners' concerns; and changes in the property tax system which have an impact on the financing of the project. Recommended Motion: Accept CSM's request fora 120-day extension for site assembly activities in the • Lyndale Gateway area. Basis of Recommendation: Due to site plan changes and changes to the properly tax system, CSM has not yet been able to negotiate for the purchase of property. Alternative Recommendation: 1. Do not accept CSM's request fora 120-day extension and terminate the contract for Private Development due to non-compliance. 2. Grant an extension of less than 120 days. Discussion/Decision Mode: Murray Kornberg of CSM will be present at the HRA meeting to provide an update of activities in the Lyndale Gateway area and to answer questions. Re p ctful submitte - tev evich Acting Executive Director ~• SLD:cak Attachment EXHIBIT A -,~ __,~ Celebrati~i~ 20 Years of Servi~tg You -~ CSM Corporation:. • '~ 2575 University Avenue West, Suite 150 • St Paul, MN 55114-1024 (651) 646-1717 FAX (651) 646-2404 June 11, 1999 Mr. John Stark City of Richfield 6700 Portland Avenue Richfield, MN 55423 Via Facsimile and Mail Re: Lyndale Gateway Dear John: As you know, the I-IRA will meet on June 21 to review the status of the above captioned project. The Contract for Redevelopment currently provides for the satisfaction of the conditions precedent to our request for condemnation on or before that date. During the time between the satisfaction of our initial preconditions (and our submission of the original concept plan) and today, the project has undergone some significant changes, including: (1) a modification to the plan for the commercial component located on the west side of Lyndale that deletes the hardware store (a significant anchor component); (2) fmal resolution of the issue regarding the acquisition of homes located on the east side of Garfield; (3) a modification to the concept plan adding Townhomes to the east side of Garfield in response to those homeowners' desire to be acquired as part of the redevelopment; and (4) changes to the property tax system during the recently ended legislative session that have had an impact on the TIF plan and the completion of the "But-For" analysis for the project. By the time of the HR.A meeting, the City Council will have taken action on the TIF Plan, and the HRA will be reviewing our amended concept plan as part of a separate (but related) action at the June 21 meeting. Collectively these issues have caused a delay in our acquisition activity, and the .satisfaction of the remaining preconditions. Based on these changes in the project, we hereby request a one hundred and twenty (120) day extension to the date for the satisfaction of our fmal preconditions. It is our hope that we will be able to acquire the property for the redevelopment without the need for condemnation and will be successful in doing so before the end of the requested extension period, but if condemnation is ultimately required, the additional time will allow us to satisfy the remaining unresolved conditions precedent. • We are currently preparing the applications required for Planning Commission and City • Council approval of the zoning, l~ncl use, and building and site plans for project, and those hearings will be proceeding within the requested extension period. We are also completing the financial review required to finalize our "But-For" analysis, and that can also be acted on by the HRA prior to the expiration of our requested extension period. I will be happy to discuss the status of the project, including our amended concept plan, our acquisition activity and our extension request with the members of the HRA at its hearing on June 21. Should you have any questions on the project or our request prior to that time, please do not hesitate to contact me. Murray Kornberg Cc: Kristi Olson Gary Tushie • HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 36 Agenda June 21, 1999 Issue Statement: Consideration of a request by CSM Properties, Inc. to amend the concept plan for the Lyndale Gateway redevelopment area. Background: On January 19 the HRA entered into a Contract for Private Redevelopment with CSM Properties, Inc. for the redevelopment of South Lyndale Avenue between 76th and 77th Streets. The concept plan which CSM presented to the HRA extended back a full block from Lyndale Avenue on both sides to include the redevelopment of property on the east side of Aldrich Avenue and the west side of Garfield Avenue. Several property owners on the east side of Garfield Avenue expressed concern to the HRA and staff regarding the impact of the development on their property, especially since the development would be accessible only from Garfield Avenue. For this reason, the Contract for Private Redevelopment specified that CSM must determine a way to address the concerns of these property owners on the east side of Garfield Avenue. Aimee Gourlay, a professional mediator acting as Richfield's ombudsperson for redevelopment issues, assisted CSM in determining the concerns of the seven homeowners on the east side of Garfield Avenue. Ms. Gourlay found that five of the homeowners preferred to have their home acquired due to a perceived negative impact of the development. Another of the homeowners stated a desire to move but had concerns about the ability to find a suitable replacement home. After repeated attempts, Aimee was unable to contact the seventh homeowner. Based on the results of Aimee Gourlay's survey of the homeowner's desire to move, CSM is proposing to acquire and redevelop these properties. The CSM proposal, which was created in cooperation with staff, includes 30 townhome units. If the concept plan is amended to include this area, all of the provisions of the Contract for Private Redevelopment would apply, including the ability of the developer to request condemnation on any property which could not be purchased through a voluntary agreement. Another change to the concept plan includes the reduction of retail space on the west side of Lyndale Avenue. The concept plan which was approved by the HRA on April 19 included a free standing drug store and a second 45,000 sq. ft. commercial structure with 107 spaces of underground parking. The concept plan which CSM is now submitting for approval continues to show the drug store on the west side of Lyndale, but the other retail structure has been reduced to 31,000 sq. ft. and no longer provides underground parking. • Recommended Motion: Approve CSM's revised concept plan for the Lyndale Gateway redevelopment area in accordance with the Contract for Private Redevelopment. Basis of Recommendation: 1. The Contract for Private Redevelopment for Lyndale Gateway requires an HRA approved concept plan. 2. The contract also specified that the developer was to determine the means for addressing the concerns of the property owners on the east side of Garfield Avenue. 3. CSM has provided a revised concept plan which accommodates the desire of the majority of homeowners on the east side of Garfield to have their property acquired. Alternative Recommendation: 1. Reject CSM's revised concept plan for the Lyndale Gateway area and obligate them to the original concept plan. 2. Request that staff work with CSM on making further modifications. to the concept plan. Discussion/Decision Mode: Murray Kornberg of CSM Properties, Inc. will be present at the HRA meeting to present the revised concept plan and answer any questions. Ipec Ily submitted, i evich ng Executive Direct r SLD:ds Attachment • DEVELOPMENT SUMMARY LOT 'A' - WEST DEVELOPMENT - RETAIL TOTAL SITE AREA 276' x 525' 144,900 SF 3.33 ACRES PARKING SPACES: 232 (5.09/1000 SF) BUILDING AREAS: NORTH BUILDING 30,461 SF DENTIST OFFICE 15,637 SF RETAIL STORES 14,824 SF SOUTH BUILDING 15,120 SF DRUGSTORE LOT 'B' SENIOR APARTMENTS/ OFFICE TOTAL SITE AREA 247' x 570 (ASSUMED) ~ 140,687 SF 3,23 ACRES SENIOR APARTMENT PARKING SPACES 115 41 ABOVE GRADE 74 BELOW GRADE OFFICE BUILDING PARKING SPACES 142 79 ABOVE GROUND 63 BELOW GRADE APARTMENT BUILDING AREA UNITS AREA GARAGE WA 29,884 SF FIRST FLOOR 3I 82,288 SF 2ND FLOOR 40 43,319 5F 3RD FLOOR 40 43,319 SF 4TH FLOOR 41 43,319 SF TOTAL I BED UNITS 73 TOTAL 2 BED UNITS 79 TOTAL >: OF UNITS 152 202,129 SF (GROSS AREA) OFFICE BUILDING AREA GARAGE 27,600 SF FIRST FLOOR TCCH 5,876 SF (LEASABLE) TMI 6,335 SF COMMON AREA 1,692 SF ND FLOOR WEIS 12,196 5F 2 (LEASABLE) RD FLOOR WEIS 12,196 5F 3 (LEASABLE) LOT 'C' EAST DEVELOPMENT TOWNHOMES TOTAL SITE AREA 134.5' z 525 = 70,bt3 SF = 1.62 ACRES (3) 8 UNIT TOWN HOMES BUILDING AREA = 14,942 SF PER UNIT (I) 6 UNiT TOWN HOMES•- BUILDING AREA = 11,734 SF PER UNIT ON SITE PARKING 9 STREET PARKING AREA OF GREEN SURFACE 26,847 SF 38X AREA OF IMPERVIOUS SURFACE 43,766 5F 62X • • a ,., a n 0 i C L C It lC v • e ~~ ~ a ~~ ~~~~ ~ "~ -r----r--~--~-~-~a- _ 1 ~, a - -I I I ~ IIJI 1 t 1 I I I I I 1 1 1 I I I 1 1 1 I I I 1 1 I I I . ~~ 1 I 1 1 ~ 1 -1---1 ,~ -, - ~ Q ~I I i I i a i ~' 1 • I 1 I I i ~~ - i, I 1 I i ~ ~ i ~ ~i m '-~ I i i ~ I rn 4 i --~ I ....L ' ~ I1 Ili ~f . ~~ ~~ ^~ 1 1 I ~~ ~I M 1 I I~ V O I . ire ~ 3 ~ ~ ~~~~~~~ ~~i g= ~ I ~~~~~ a~l~s~ r ~ `~ ~g i ~ v~~~~~ t~~ ~~t ~~ ~~ ~3 ~~ ~~ ~~ ~ ~~~~ MAINSTREET SENIOR HOUSING RICHFIELD, MINNESOTA HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No: 35 Agenda June 21,--1999 • Issue Statement: Authorization to lease 7214 Cedar Avenue to the City of Richfield Public Safety Department. Background: In 1997, the Housing and Redevelopment Authority (HRA) purchased this property with the intent to hold it until a redevelopment strategy indicated an appropriate reuse. Currently, the building is leased to Richfield Transmission Center which utilizes only the inside of the building for storage for $600 per month. Public Safety would like to reduce its operating costs by leasing from the HRA the exterior portion of the property which is enclosed with the chain link fence for $300 per month. They would store motor vehicles which come into their possession until they are able to dispose of them. Neither sales nor repair work would be conducted from the site. Recommended Motion: Authorize the leasing of the exterior portion of 7214 Cedar Avenue to the City of Richfield at a rent of $300 per month. Basis of Recommendation: 1. The lease would help Public Safety reduce their operating costs. 2. The HRA would realize a modest increase in income from this property. 3. The lease protects the HRA from liability. 4. Cancellation provisions make it possible for the lease to be terminated when the property is needed for redevelopment. Alternative Recommendation: 1. Delay consideration. 2. Refuse to approve the lease. Discussion/Decision Mode: With approval from the HRA on June 21, 1999, the authorization request will be submitted to the City Council for approval on June 28, 1999. • Acting Executive Director SLD:cak HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 34 Agenda June 21, 1999 Issue Statement: Authorization to purchase 6639 Lake Shore Drive; Gramercy Tax Increment Redevelopment District. Background: The single family residence is located immediately adjacent to and west of the Gramercy co-operative now under construction. Some time ago the owner who resides in the property contacted staff about the HRA purchasing this property. Discussion has concluded with a proposed purchase price of $145,000 with the seller purchasing the house for removal from the site for $1. The purchase price is the amount of the HRA appraisal. The seller's parents built the house and the seller was raised in it. It would be moved to a parcel of land outside the community. The sale for removal from the site would be a cost savings to the HRA of approximately $4,000 because the structure would not have to be demolished. The seller would not remove the garage. The family would also be eligible for a relocation payment. This is one of three parcels which front on Lake Shore Drive. A vacant parcel and another single family residence are adjacent to this property on the west. Staff has had discussions with developers about the development of townhouses on these three parcels. There is market interest in the concept and with the approval of this acquisition, discussion. will ensue. Recommended Motion: Adopt the attached resolution, which authorizes the purchase of 6639 Lake Shore Drive for $145,000 and the sale of the residential structure for $1 to the Davis family. Basis of Recommendation: 1. This is an area inappropriate for continued use by single family detached housing. 2. HRA interest in redeveloping this area for higher density housing dates from the late 1970's. 3. The owners of the property are at a point in their life when a move is desirable. 4. Funds are available for the purchase. 5. The development community has expressed interest in redeveloping this area with townhomes. 6. Sale of the residential structure for removal from the site will result in a cost savings to the HRA. • Alternative Recommendation: 1. Delay consideration of the proposal. 2. Refuse to approve the proposal. Discussion/Decision Mode: Approval of the purchase would permit the owners to proceed. Ily su ng Executive D SLD:cak Attachment • • HRA RESOLUTION NO. RESOLUTION AUTHORIZING PURCHASE OF REAL PROPERTY LOCATED AT 6639 LAKE SHORE DRIVE FOR THE GRAMERCY TAX INCREMENT FINANCING DISTRICT PROJECT WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA) desires to purchase certain real property pursuant to and in furtherance of the land assembly for the Gramercy Tax Increment Financing District (Project) heretofore adopted by the City of Richfield (City) and the HRA, said real property being described as follows: 6639 Lake Shore Drive: Lot 18, Block 3, Fairwood Shores Addition WHEREAS, the HRA is authorized by Minnesota Statutes Section 469.012 to acquire real property within its area of operation; and WHEREAS, the property meets all program requirements for acquisition; and WHEREAS, the HRA has caused an appraisal of the subject property to be made by a qualified, independent professional real estate appraiser and has negotiated a purchase price with the owners based on that appraisal; and WHEREAS, HRA funds are available for acquisition. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota. 1. The purchase price for 6639 Lake Shore Drive is approved at $145,000. 2. The Chairperson and Executive Director are authorized to execute a Purchase Agreement and other documents to effectuate purchase for the amount set forth. in this resolution and to convey the residential structure to the seller. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 21st day of June, 1999. Thomas E. Harms, Chair ATTEST: • Michael Sandahl, Secretary 5 HOUSING AND REDEVELOPMENT AUTHORITY WRA Letter No. 33 Agenda June 21, 1999 Issue Statement: Authorization to execute a contract with Hennepin Technical College to initiate two 1999-2000 New Home Program projects at 6537-14th and 6224 Bloomington Avenues. Background: Hennepin Technical College (HTC) has been rehabilitating or building new homes in cooperation with the Richfield Housing and Redevelopment Authority (HRA) since 1978. In 1995, two occurrences marked a change in the HRA and HTC :relationship. First, Performance Standards were established to better delineate HTC's responsibilities for each construction project and to specify a timeline by which certain phases of construction should be completed. HTC has operated successfully under those standards for the last four projects and has finished within the established timeframe. HTC's Dean for Construction Technologies and Natural Resources, .new in-1995, has been very effective in supervising conformance to the Performance Standards. A copy of those standards is attached (Exhibit A). The second change occurred when all Minnesota Technical Colleges became a part of the State College system. Following are some changes that were initiated as a result: • HTC has now obtained accreditation. This requires that two-thirds of all building instructors go beyond the expertise of their trade and have academic degrees. • Starting with the 1998-99 school year, the carpentry program was reduced from a two-year program to a one-year program. Of the new enrollees that began the two- year program, half of the students left after the first year because the carpentry skills they had obtained were sufficient to obtain good jobs. The new one-year program emphasizes framing, roofing and trim work. More advanced courses or special skill courses are being developed to be offered in the evenings for students who seek special skills or continuing education. • The concrete courses have had limited enrollment; therefore HTC decided to drop them. Foundation installation and other brick laying for future projects are now performed by a qualified subcontractor. Because the carpentry program has been reduced to one year, HTC will have two classes of students going through simultaneously. They have requested two project sites in Richfield in 1999-2000. Each site would have its own class of students, rather than one class covering both sites as had occurred in previous years. Each site will have a supervisor, and each will conform to the same timeline as is currently required. The sites are close together which will also provide good proximity for delivery of supplies. The property at 6537-14th Avenue qualifies as a candidate for voluntary acquisition. The property is appraised at $65,500. In order to use Community Development Block Grant (CDBG) funds, the City must purchase first and convey to the HRA. The City Council held the first reading of a transitory ordinance at its May 24 meeting. The HRA will consider acquisition at its June 21 meeting. The HRA purchased the substandard property at 6224 Bloomington Avenue from HUD for $35,100 in 1998 under the Richfield Rediscovered Program. Due to its very poor condition, the house was a detriment to the property value. The structure has already been removed. A project similar to the one recently completed by HTC and the HRA at 6241-14th Avenue is envisioned for both sites. The two homes will have the same floor plan and elevations so that the instructors may cover the same construction issues, and so that subcontractors and material suppliers may more easily bid (see Exhibit B for site plan). Although neither of the sites are in the designated mitigative area, they are in an area impacted by airport noise. However, recognizing that it is important to remove substandard property and contribute towards strong neighborhoods, new homes on these sites are being proposed. Staff obtained information from an airport noise mitigative project in Baltimore, Maryland and had a discussion with Sandy Fidell, a noise consultant to the City. The following modifications will be applied to help reduce the potential effects of low frequency noise: • Exterior sound board applied to the exterior walls and ceiling, which is another layer of gypsum or cement board • Maximum insulation values in the ceiling and rim joists • Windows with an STC rating that exceed standard requirements. • Installation of storm doors • Gaskets placed between foundation and wood framing, and between top plates and floor joist system connections • Seal exterior framing elements with sound-deadening mastic Under the Performance Standards established between the two organizations, the homes will be framed, roofed and sided by the end of December. Interior walls, carpentry, electrical, etc. will be completed during the winter, and concrete, landscaping and finishes will be completed by the end of June 2000. Both homes will then be marketed and sold next summer. The project plan for both lots meets all setback requirements and incorporates interior features desirable in today's market. A copy of the plan is attached (Exhibit B). The new houses will have approximately 1,000 sq. ft. of finished living area. Features include a living room, dining room, kitchen, three finished bedrooms, 1-3/4 bathrooms, main level laundry, a deck and room for a future fourth bedroom. The amount of the HTC contract for each project is $118,000. This cost is higher than previous projects due to increased costs in lumber, sheetrock, and subcontracts. It is estimated that the property value upon completion would be approximately $135,000 per property. An HRA second mortgage of $15,000 would still make this an affordable home, and would provide proceeds of sale to cover the HTC contracts. The estimated project costs and funding sources follows: ACTIVITY 6537-14TH AVENUE COSTS/SOURCE 6224 BLOOMINGTON AVENUE COSTS/SOURCE Ac uisition $ 65,500 CDBG Funds $ 35,100` RR Demolition $ 4,000 CDBG Funds $ 4,000 RR HTC Contract 118,000 Proceeds of Sale $118,000 Proceeds of Sale Landsca in $ 4,000 Proceeds of Sale $ 4,000 Proceeds of Sale Le al $ 1,000 Proceeds of Sale $ 1,000 Proceeds of Sale *The structure had virtually no value. • Private contractors will complete the electrical, plumbing, heating, and painting portions of the work. The new homes will be marketed as New Home Program projects and sold to moderate income first-time buying families. Recommended Motion: It is recommended that the HRA adopt the attached resolution which authorizes the execution of the 1999-2000 Hennepin Technical College contract in the amount of $118,000 for the new construction project at 6537-14th Avenue and $118,000 for the new construction project at 6224 Bloomington Avenue. Basis of Recommendation: 1. Plans have been developed for 6537-14th and 6224 Bloomington Avenues that will meet site requirements and program needs of the HRA. 2. The contract provisions are similar to previous contracts with HTC; a summary of contract provisions is attached. 3. Performance Standards established between the HRA and HTC have ensured predictable and timely completion of projects. 4. HTC has demonstrated a unique ability to provide a desirable product at a more modest cost than other builders on sites that are challenging to market. 5. To leave the sites vacant may cause a blighting influence and market concern. Alternative Recommendation: Do not authorize execution of the HTC contract. Discussion/Decision Mode: CDBG funds have been used to purchase the substandard property at 6537-14th Avenue. The property at 6224 Bloomington Avenue was purchased under the Richfield Rediscovered Program. New homes built by HTC, as proposed, are the best uses of the properties. SLD:cak Attachments • HRA RESOLUTION NO. RESOLUTION RELATING TO A CONTRACT BETWEEN THE RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY AND HENNEPIN TECHNICAL COLLEGE FOR THE DEVELOPMENT OF 6537-14TH AVENUE AND 6224 BLOOMINGTON AVENUE WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA) purchased 6537-14th from the owner with Community Development Block Grant (CDBG) funds, and purchased 6224 Bloomington Avenue from HUD under the Richfield Rediscovered Program. The properties are legally described as: Address Legal Description 6537-14th Avenue Lot 17, Block 4, Nokomis Gardens Rearrangement of Blocks 1, 2, 3, 4, 5 Girard Parkview 6224 Bloomington Avenue Lot 9, Block 8, Girard Parkview Addition WHEREAS, the project has been proposed as a cooperative efforts between the HRA and Hennepin Technical College (HTC); and WHEREAS, the properties at 6537-14th Avenue and 6224 Bloomington Avenue will be developed with new single family homes; and WHEREAS,. the contract price for each new construction will not exceed $118,000; and WHEREAS, following completion of the new construction work, the properties will be sold. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota that the HRA Chairperson and Acting Executive Director are authorized to enter into a Construction Agreement with HTC for an amount not to exceed $118,000 for each new construction project at 6537- 14th and 6224 Bloomington Avenues. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 21st day of June, 1999. Thomas E. Harms, Chair ATTEST: • Michael Sandahl, Secretary Exhibit A • PROJECT PERFORMANCE STANDARDS 1. One project will be stick built in Richfield on-site each school year (Augustr to June). 2. Preliminary project drawings, contracts and cost estimates must be assembled by May 31st of each year for the upcoming project. 3. The HRA must provide a cleared site for construction by August 15th or before of each year. 4. Final contract and plan approval will occur by July of each year. 5. Hennepin Technical College (HTC) will start construction by August or before each year. 6. HTC has approximately 110 to 120 days, until winter break of each year (approx. December 20th), to excavate, place footings and foundations, frame, enclose, side, install windows/doors, flash, roof. 7. Exterior appearance in regard to construction debris must be monitored daily and continuously. In addition, by November 1st of each year, HTC will ensure that the site has .been completely picked up and rough graded so that winter weather does not entrap debris and leave uneven surfaces on site that impair perimeter mowing and maintenance by the HRA. Dirt piles should not be present during the course of construction. If a particular site provides difficulty for relocating dirt, options should be discussed with the HRA. 8. Upon installation of landscaping, floor covering, countertops, finished (stained/varnished) wood, and painted surfaces, HTC shall take all measures necessary to ensure that those surfaces materials will not be damaged, marred, etc. 9. Concrete steps and sidewalks, brick work, decks and bituminous driveways should not be installed in the fall and winter of each project. However, they must be installed promptly after the lifting of statutory load limits, and no later than the final work day. preceding the Memorial Day holiday of each spring. 10. Where steps and brick work may leave an unfinished appearance until the following spring, the HTC construction supervisor may provide interim finish options which are temporary but provide. a reasonable appearance of completion prior to installation of the final materials. The HRA will review and approve each of those options. 11. The HTC construction supervisor will respond to in-progress and post-completion construction requests of the HRA and the City Building Official in a timely manner. For each request, a deadline must be agreed upon and the deadline must be met. 1 Unless completion of the task warrants a longer period of time, seven (7) days is the maximum time allowed to respond to requests. 12. Satellites should be removed from the site as soon as possible, i.e., as soon as interior carpentry is completed and a temporary indoor commode and lavatory with privacy is provided. 13. The number of vehicles at each site must be kept to a minimum. Parking should be off-street and in the rear yard. Vehicle pooling is essential. Off-site parking locations will be reviewed and approved by the HRA. 14. The HRA will pick out floor covering and electrical fixtures by May of each year for installation in June of each year. 15. The HRA will install landscaping in July of each year. This requires all exterior construction work, steps, sidewalks, driveways, to be completed by June 30th of each year. 16. HTC will complete its project by June 30th each year. [p:htc\contract] 2 • front Elwat~ f ,~~ • R•~r ~Mvot~ar ~lsnnspkt Teoh~#os! CoMeti~ O~Y~iop~t 1~-000 • • .y :_; ~" ~~=: °j ~~~ . _.,, ~~ ,•~ i i ~ r-- _ ~r.. ~. <. ,, 116 t'°" ;t-` • Second HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 32 Agenda June 21, 1999 Issue Statement: Adoption of a resolution authorizing the purchase of 6537-14th Avenue with Community Development Block Grant funds for the New Home Program. Background: The property at 6537-14th Avenue is a 590 sq. ft. home with one bedroom and no garage. The owner has moved into an assisted living facility and the .property is now vacant. The house has structural and systemic problems, including substandard ceiling height and quality, illegal electric wiring and plumbing. The furnace needs replacement and all interior finishes need updating. The property has been appraised at $65,500. Recommended Motion: Adopt the resolution authorizing the purchase of the property at 6537-14th Avenue for $65,500 with Community Development Block Grant (CDBG) funds. Basis of Recommendation: 1. The property meets program requirements for acquisition. 2. Acquisition funding for the New Home Program is available. 3. The owner has voluntarily expressed interest in selling the property to the HRA, and the property is vacant. 4. The purchase of 6537-14th Avenue was negotiated relative to its appraised value. Alternative Recommendation: Do not authorize acquisition. Discussion/Decision Mode: The„~rchase agreement is ready to be prepared in final form. Ily Acting Executive Directo SLD:cak HRA RESOLUTION NO. RESOLUTION AUTHORIZING PURCHASE OF REAL PROPERTY LOCATED AT 6537-14TH AVENUE FOR THE NEW HOME PROGRAM WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA) desires to purchase certain real property pursuant to and in furtherance of the New Home Program, said property being described as: Lot 17, Block 4, Nokomis Gardens Rearrangement of Blocks 1, 2, 3, 4, and 5 Girard Parkview; and WHEREAS, the HRA is authorized by Minnesota Statutes Section 469.012 to acquire real property within its area of operation; and WHEREAS, the property meets all program requirements for acquisition; and WHEREAS, the HRA has caused an appraisal of 6537-14th Avenue to be made by a qualified, independent professional real estate appraiser and has negotiated a purchase price with the owner based on stated values; and WHEREAS, funds are available for acquisition. • NOW, THEREFORE, BE IT RESOLVED by the Richfield Housing and Redevelopment Authority: 1. The purchase price for 6537-14th Avenue is approved at $65,500. 2. The Chairperson and Acting Executive Director are authorized to execute a Purchase Agreement or other documents to allow purchase for the amount set forth in this resolution. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield,-.Minnesota this 21st day of June, 1999. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary • HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 31 Agenda June 21, 1999 Issue Statement: Public hearing and consideration of a resolution authorizing the sale of 6228 Pleasant Avenue to Thomas Allen; Inc. for single family home development. Background: As a result of the Minnesota Department of Transportation's (MnDOT) improvements to I- 35W and expansion of 66th Street, a single family .home that houses four developmentally disabled adults will be purchased in its entirety. Thomas Allen, Jnc., owner of the property, has been seeking a suitable replacement site for over a year, when first informed of MnDOT's plans. They would prefer to build a new single family home in order to provide the proper door widths and other features which are extremely difficult and expensive to modify in an existing single family home. In October 1998, the HRA purchased the substandard property at 6228 Pleasant Avenue. It is proposed that the HRA sell the property to Thomas Allen, Inc. for new single family home construction. It is anticipated that the home will have 1850 to 2000 sq. ft., six bedrooms and two finished baths, and will have a property value upon completion of approximately $170,000. A copy of the proposed plan is attached (Exhibit A). The development agreement is similar to those used for special development projects such as • with Twin Cities Habitat for Humanity and Affordable Suburban Housing, Inc. The following items are those which differ from a typical HRA development agreement but are typical for affordable housing developments: • The HRA will assume responsibility for demolition of the existing house, the cost of which will be covered by Community Development Block Grant (CDBG) funds. • The sale price of the property from the HRA to Thomas Allen, Inc. is $1. The development agreement will be recorded and requires Thomas Allen, Inc. to provide a Letter of Credit in the amount of $30,000 as performance security. • Thomas Allen will execute a $30,000 second mortgage to the HRA to secure the land value after construction completion. • Thomas Allen, Inc. will be provided five months to complete the project, which is typical, and at which period they must vacate their existing home due to MnDOT's purchase. Recommended Motion: Following a public hearing, adopt the resolution authorizing the sale of 6228 Pleasant Avenue to Thomas Allen, Inc. and the execution of appropriate documents by the HRA Chair and Acting Executive Director. Basis of Recommendation: 1. The developer has provided evidence of capability and financial security. c: 2. The HRA initially acquired 6228 Pleasant Avenue under the Richfield Rediscovered Program. However, the proposed home is an appropriate development for the site and CDBG funds may be used instead. L~ 3. The terms of the development agreement have been negotiated and are in conformance with program guidelines as noted. 4. Notice of a public hearing on the sale of the property was published June 9 in the Sun- Current. Alternative Recommendation: Do not proceed with the development agreement with Thomas. Allen, Inc.. and direct staff to find another buyer. Discussion/Decision Mode: Closing would occur in July with construction starting soon afterward. The site clearance work has been initiated. Thomas Allen, Inc. has signed the required documents to sell their property at 6600 Emerson to MnDOT. Acting Executive Di SLD:ds Attachment • HRA RESOLUTION. NO. RESOLUTION AUTHORIZING SALE OF REAL PROPERTY LOCATED AT 6228 PLEASANT AVENUE TO THOMAS ALLEN, INC. 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, said real property being described as follows: Address 6228 Pleasant Avenue Legal Description Lot 5 and the South 30 feet of Lot 4, Block 1, Kendale Addition WHEREAS, the HRA is authorized to sell real property within its area of operation after public hearing; and WHEREAS, Thomas Allen, Inc., has been identified as the purchaser and developer 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: 1. A public hearing has been held and 6228 Pleasant Avenue is authorized to be sold for $1.00 to Thomas Allen, Inc. in accordance with a development agreement with the HRA. 2. That the HRA accept a $30,000 second mortgage lien executed by the buyer from Thomas Allen, Inc. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 21 st day of June, 1999. Thomas E. Harms, Chair ATTEST: Michael Sandahl, Secretary 6228 Pleasant Avenue Concept Plan i ,,,..,.~~ , :.. ~• ,~ 1 ~: i '1 ~ ~i :~ .~ 'I' ~~ --. ,, __ _ _.. , . - - .. ,.. -~ .: _ - ~,6~ .. . ---- ,, _ _~ _. i . ~ ~}n,1~x • -T~ rn~ r r , r• Front Elevation Right Elevation ~- ~ .:~ ~' i..::' i~ . nt~ lip' - Ilj ?~ - I~ .: .- _1'~ I~i'j1hil~~ ..., Rear Elevation Left Elevation ~- ~~ ~~ . ,. ~ ~: ! ~~ ! ~~ I ~ ~ ~• + ~~ 1 -- ~ ~- i~ :~ ~ ~ ~ , .~" ! .r ~~. -; , ` ~~-~ --~~- -- - . - fi ~~~ ~ ~~ !~~ ~----a ~ . -- - - ~ -- ~# Al; ~ t ~ f. , , ,. ~_l .1. ~::~ .~ ,.~ ~~ ~I ~~ .. -~T. ~ \~ ~ 'I. --- - ~~ ~ i ~ ~( :~ ~ ~~ _ ~,,,y~,y,, I -,, ~1 .~ ,: s '~ I ~ ~-~ I ~ ' i - '~, , . I i -_ -- _ ` -.~ i d W J i i ' - ~! ~ i i -- ,) _; ;~ 1 _~~' ~~ - .___~_ _ ~ `~ I i ..__~- ~-._.._.. _ --_~ `~ 1 ~ `- ~ ! ~ I ~ f .~ +a ~r--~ ~. I. ~ 'ice ~~ f i ~' • I ! ~_ ~ ! ~ I :~ I ~ ~ ~ j .1 i .4 ~ (I I' , ~ ~ ~ ; ~; :al J ~, , ~. ~ it I ^ I t i ~ ~ ~ -iii ,~ ~ i i I I ~'~ I ~ _... _ .. _a.---~-.. .__~ _.____ .. -- - '- --- - -. ... ... ~ ~ I NI ~ ~~~ °' ! ~--- - - ----- - - --- --__- '~ I ~, 1" 2 (~ ` ~ i 1. ~ . ;;~ ~~ I ~- 7 l 1~ i ~~ ~~ I i .~ G ~. . ~~ ~.~ --- ~TI~ ~~~- ,~: 1 ~ ~ 'I :1 \ ~IIi ,; ~. ~' 1 :1 ; ~' Z: ~~ -- - ~-_ !1; - - --~-~ ~.; ~ ~_ _ •_ ~1 ~~~~ ,/, ., ~~ TJ a~ as J L J a HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 30 Agenda June 21, 1999 Issue Statement: Consideration of a request from CSM Properties, Inc. to extend the site assembly period for the Interchange West development. Background: At the May 17 Housing and Redevelopment Authority (HRA) meeting, CSM Properties, Inc. (CSM) requested that the Contract for Private Development (Contract) be amended in order to provide more time for the commercial negotiations to occur without causing further delays for the purchase of residential properties. Murray Kornberg of CSM stated that purchase agreements had been reached with all 68 of the residential property owners, but that there had not been the same degree of progress in negotiating the purchase of commercial property. The HRA accepted CSM's request and directed staff to draft an amendment for their consideration at the June 21 meeting. At that time, the intention was to amend the contract to permit the residential element to proceed on schedule while allowing the developer additional time to complete site assembly for the commercial element. Since that meeting, however, CSM has determined that they will be unable to drop the contingencies contained in the residential purchase offers on July 1 as scheduled, nor will they be able to close on the purchase of properties on September 1 as was stated in ~- the purchase offers. This means that CSM will need to cancel all 68 purchase agreements, and further, that it will not be in a position to comply with the site assembly obligation contained in the development contract. Mr. Kornberg has stated that the reason CSM will not be able to progress on the residential acquisitions as scheduled is because they will not be in a position to apply for zoning and other approvals until August 23. Discussions with CSM about this request have also revealed that the residential portion of the development does not generate enough tax increment financing (TIF) and land proceeds to offset the site assembly costs. The ability to develop the residential portion, therefore, is dependent on the ability to successfully develop the commercial portion. There remains a remote possibility that the contingencies could be removed on or before July 1, and the residential acquisitions could occur on September 1. For this to occur, the developer would have to take the risk that all City approvals would be granted, and some mechanism to assure payment of the anticipated revenue from the commercial development would have to be put in place. That mechanism would likely involve commitments from the HRA . CSM expressed an interest in pursuing this approach and will discuss it at the June 21 meeting. Because this approach may not work, the HRA must consider other options as well. Staff has identified several options for addressing CSM's request to amend the Contract in the event that the contingencies cannot be removed by July 1 and the closings cannot occur on September 1; these options are as follows (the positive and negative impacts of each option are contained in Exhibit A): 1. Defer action until the July meeting to give CSM an opportunity to satisfy the +~ concerns of the residential property owners. 2. Extend the site assembly period for the entire development for four months. 3. Extend the site assembly period for the entire development indefinitely. 4. Extend the commercial portion of the development for four months and terminate the residential portion of the development. 5. Terminate the contract with CSM. Recommended Motion: Accept one of the five options outlined above to be implemented in the event that CSM or the residential sub-developer fails. to remove contingencies from residential contracts by July 1. Basis of Recommendation: The site assembly period (during which CSM could request condemnation by the HRA) has expired, and it appears unlikely that CSM will be able to purchase residential properties on the schedule which they had established. Alternative Recommendation: The options outlined above represent the alternative actions. Discussion/Decision Mode: The timing of the project and the hardships conveyed to staff by the residents of this area require an immediate response from the HRA. Murray Kornberg, of CSM Properties, Inc., will be present at the meeting to present CSM's request and to answer questions. Re ec ully submi d, Steven L. Devi Acting Executive Director SLD:cak Attachment Exhibit A Pros and Cons of Each Option 1. Defer action until the July meeting to give CSM an opportunity to satisfy the concerns of the residential property owners. Pros • Provides a last chance to have the development proceed generally as envisioned. • Provides the only realistic mechanism that might remedy hardships caused by not closing on September 1. • Avoids the uncertainty to homeowners if everything goes back to "square one". Cons • Persons purchasing replacement property with July 1 contingencies in those agreements may be forced to cancel those agreements. • The need for an additional delay will create significant uncertainty among residents. • Residents might continue to make commitments on other properties, when the project is still not guaranteed. 2. Extend the site assembly period for the entire development for four months. Pros • Allows property owners and tenants to make future plans based on a set date. • The development process continues with a developer who has already done a lot of the groundwork. Cons • Many residents have made financial commitments based on a September 1 closing date. • The need for an additional delay will create significant uncertainty among residents. • Residents might continue to make commitments on other properties when the project is still not guaranteed. • CSM may set an unattainable date and end up requesting another extension. • There is no effective mechanism for the City to enforce CSM's ability to perform on a given date. • The project may be delayed further if CSM hasn't signed purchase offers with all of the property owners (including commercial) and/or has not lined up all the end users. • There maybe changes to the housing market which negatively impact resident's relocation plans. • Residents won't be in a position to relocate before the beginning of the school year. • 3. Extend the site assembly period for the entire development indefinitely. Pros • Does not set up false expectations for residents. • The development process continues with a developer who has already done a lot of the groundwork. Cons • Property owners and residents will be in an indefinite state of uncertainty. • Residents might continue_to make commitments on other properties when the project is still not guaranteed. • There may be changes to the housing market which negatively impact resident's relocation plans. • Residents may have to move during the school year. • Many residents have made financial commitments based on a September 1 closing date. 4. Extend the commercial portion of the development for four months and terminate the residential portion of the development. Pros • Residential property owners and tenants could get on with their lives. • .The commercial portion of the development process could continue vvith a developer who has already done a lot of the groundwork. • May eliminate the threat of future redevelopment in the residential portion. Cons • The residents responded, via a survey, that the commercial development would have a negative impact on them. • The residents who have made a financial commitment or have deferred maintenance on their homes will have a financial loss. • The commercial development will have some negative impacts on the residential neighborhood -primarily related to trafFc. • Residents have accepted that they will be moving on with their lives. 5. Terminate the contract with CSM. Pros • Property owners and tenants could get on with their lives. • Another developer might be able to successfully complete the development. Cons • There is a looming threat of another future redevelopment process. • The residents who have made a financial commitment or have deferred maintenance on their homes will have a financial loss. • The community wants the commercial redevelopment to occur. • It may be difficult to find another developer willing to take on a project from which a reputable developer has moved on.