062016CompleteAgenda
HOUSING AND REDEVELOPMENT
AUTHORITY MEETING MINUTES
Richfield, Minnesota
Regular Meeting
May 16, 2016
CALL TO ORDER
The meeting was called to order by Chair Supple at 7:00 p.m.
ATTENDANCE
HRA Members Mary Supple, Chair; David Gepner; Pat Elliott; Doris Rubenstein; and Debbie
Present: Goettel (arrived 7:03 p.m.)
Staff Present: Steven L. Devich, Executive Director and Karen Barton, Assistant
Community Development Director
Item #1 APPROVAL OF THE MINUTES OF THE (1) SPECIAL CONCURRENT HRA, CITY
COUNCIL AND PLANNING COMMISSION WORKSESSION OF APRIL 12, 2016
AND (2) REGULAR HRA MEETING OF APRIL 18, 2016
M/Rubenstein, S/Gepner to approve the minutes.
Motion carried 4-0.
Item #2 HRA APPROVAL OF THE AGENDA
M/Rubenstein, S/Elliott to approve the agenda.
Motion carried 4-0.
Item #3 CONSENT CALENDAR
A. Consideration of the approval of a resolution authorizing the HRA to affirm the monetary
limits on municipal tort liability established by Minnesota Statute 466.04 S.R. No. 15
HRA RESOLUTION NO. 1226
RESOLUTION AFFIRMING MUNICIPAL TORT LIABILITY LIMITS ESTABLISHED BY
MINNESOTA STATUTES 466.04
This resolution appears as HRA Resolution No. 1226.
HRA Meeting -2- May 16, 2016
B. Consideration of the approval of a resolution authorizing the execution of an agreement
with the Greater Metropolitan Housing Corporation for the acquisition, rehabilitation and
sale of houses under the New Home Program utilizing Community Development Block
Grant funds S.R. No. 16
HRA RESOLUTION NO. 1227
RESOLUTION APPROVING DEVELOPMENT AGREEMENT WITH GREATER
METROPOLITAN HOUSING CORPORATION
This resolution appears as HRA Resolution No. 1227.
HRA Commissioner Goettel arrived.
M/Rubenstein, S/Elliott to approve the Consent Calendar.
Motion carried 5-0.
Item #4 PUBLIC HEARING AND CONSIDERATION OF A RESOLUTION AUTHORIZING
THE SALE OF 7309 10TH AVENUE TO ENDRES CUSTOM HOMES AND A
CONTRACT FOR PRIVATE DEVELOPMENT WITH ENDRES CUSTOM HOMES
FOR THE CONSTRUCTION OF A SINGLE FAMILY HOME THROUGH THE
RICHFIELD REDISCOVERED PROGRAM S.R. NO. 17
Assistant Community Development Director Barton presented Staff Report No. 17.
Sue Kimmel, 7214 Logan Avenue, stated that she is a long term Richfield resident and
wanted to build a new home here.
HRA Commissioner Elliott asked about the appearance of the exterior.
Ms. Kimmel responded that they would use hardie board with a brown color to simulate the
look of wood. The rest will be a light taupe color.
M/Goettel, S/Elliott to close the public hearing.
Motion carried 5-0.
M/Gepner, S/Goettel that the following resolution be approved:.
HRA RESOLUTION NO. 1228
RESOLUTION AUTHORIZING THE SALE OF REAL PROPERTY LOCATED AT
7309 10TH AVENUE TO ENDRES CUSTOM HOMES
Motion carried 5-0. This resolution appears as HRA Resolution No. 1228.
Item #5 HRA DISCUSSION ITEMS
HRA Commissioner Elliott stated the he wanted to go through the claims and payroll to
define anagrams.
Item #6 EXECUTIVE DIRECTOR REPORT
Executive Director Devich presented a brief update on the status of the Cedar Point II
Boisclair Development. He stated that while the preliminary development agreement had
HRA Meeting -3- May 16, 2016
expired, the negotiations continue and that he believed a development agreement would be
achieved.
Laurie Boisclair, President of Boisclair Corporation, addressed the HRA and stated that
they are diligently working toward getting a development agreement put together for this
project.
HRA Commissioner Goettel asked about recent communications with the residents in the
affected areas.
Ms. Boisclair responded that there hadn’t been any recent communication, but that they are
working on contacting residents with updated information. She also explained the delays in
getting the project moved forward.
Item #7 CLAIMS AND PAYROLL
M/Rubenstein, S/Elliott that the following claims and payroll be approved:
U.S. BANK 05/16/2016
Section 8 Checks: 127667-127745 $ 155,033.11
HRA Checks: 32680-32717 $ 61,827.80
TOTAL $ 216,860.91
Motion carried 5-0.
ADJOURNMENT
The meeting was adjourned by unanimous consent at 7:19 p.m.
Date Approved: May 16, 2016
Mary B. Supple
HRA Chair
Steven L. Devich Steven L. Devich
Acting City Clerk Executive Director
HOUSING AND REDEVELOPMENT
AUTHORITY MINUTES
Richfield, Minnesota
Special Concurrent Housing and
Redevelopment Authority, City Council,
and Planning Commission Worksession
May 24, 2016
CALL TO ORDER
The concurrent worksession was called to order by Mayor/HRA Commissioner Goettel at 6:00
p.m. in the Bartholomew Room.
HRA Members Mary Supple, Chair; Pat Elliott, Debbie Goettel, and David Gepner.
Present:
HRA Members Doris Rubenstein.
Absent:
Council Members Debbie Goettel, Mayor; Pat Elliott; Edwina Garcia; Tom Fitzhenry and
Present: Michael Howard.
Planning Commission Erin Vrieze Daniels, Chair; and Sean Hayford Oleary.
Members Present:
Planning Commission Susan Rosenberg; Charles Standfuss; Gordon Vizecky; Rick Jabs; and
Members Absent: Daniel Kitzberger.
Staff Present: Steven L. Devich, City Manager/Executive Director; John Stark, Community
Development Director; Melissa Poehlman, City Planner; and Theresa
Schyma, Deputy City Clerk.
Item #1 DISCUSSION REGARDING CEDAR CORRIDOR MASTER PLAN UPDATE
(COUNCIL MEMO NO. 34/HRA MEMO NO. 14)
Michelle Mongeon Allen, JLG Architects, presented preliminary Comprehensive Plan and
Zoning District designation options for the Cedar Corridor area.
Community Development Director Stark stated that staff is requesting feedback and
clarification from the three policy bodies regarding any changes they would like to see to the Cedar
Corridor Master Plan so that those ideas can be incorporated into the draft documents that will be
presented at a community open house scheduled for June 1, 2016.
The City Council, HRA Commissioners and Planning Commission Members discussed the
differences between Mixed Use Neighborhood, Mixed Use Community and Mixed Use Regional;
attracting businesses that will hire locally for living wage jobs; overlay zoning; finding a theme in the
area for marketing purposes; finding a balance between businesses that are complimentary to the
airport and residential neighborhoods; and inclusionary housing.
Special Worksession Minutes -2- May 24, 2016
Community Development Director Stark stated that finding a balance between thinking big
versus impacts to the surrounding residential area is more in the details and scale of the potential
businesses than in specific use.
The consensus was that there needs to be flexibility in the plan for when the market and
economy meander. Furthermore, the consensus was to start in a broad place and get feedback from
the community with specific examples, descriptions and visuals so that people are able to envision the
future of the area.
City Manager Devich stated that the Cedar Corridor is a big chance to attract businesses that
make sense for the City, especially when the underpass is complete and the area will be in very high
demand.
th
City Planner Poehlman asked if there were any strong feelings about the 18 Avenue
alignment option.
th
The consensus was the 18 Avenue alignment is still the best option.
The concurrent worksession was adjourned by unanimous consent at 6:50 p.m.
Date Approved: June 20, 2016.
Mary B. Supple
Chair
Theresa Schyma Steven L. Devich
Deputy City Clerk City Manager/Executive Director
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF RICHFIELD, MINNESOTA
RESOLUTION NO. ______
RESOLUTION APPROVING FIRST AMENDMENT TO PRELIMINARY DEVELOPMENT
AGREEMENT WITH INLAND DEVELOPMENT PARTNERS, LLC
WHEREAS
, the City of Richfield, Minnesota (the “City”) was the owner of certain property
located within the City (the “Properties”) and has conveyed such Properties to the Housing and
Redevelopment Authority in and for the City of Richfield, Minnesota (the “Authority”) for purposes of
development; and
WHEREAS
, Inland Development Partners, LLC, a Minnesota limited liability company (the
“Developer”) has proposed purchasing the Properties from the Authority for the purpose of developing an
approximately 300 unit apartment building thereon (the “Project”); and
WHEREAS
, the City, the Authority, and the Developer previously entered into a Preliminary
Development Agreement, dated October 19, 2015 (the “Preliminary Development Agreement”), which
sets forth the Developer’s intentions and the conditions under which the Developer will undertake the
Project; and
WHEREAS
, the Developer has requested an extension of the termination date of the Preliminary
Development Agreement and the Board of Commissioners of the Authority has been presented with a
First Amendment to Preliminary Development Agreement, between the Authority and the Developer (the
“First Amendment to Preliminary Development Agreement”); and
WHEREAS
, Section 5 of the Preliminary Development Agreement provides the Board of the
Authority to authority to extend the termination date of the Preliminary Development Agreement;
NOW, THEREFORE, BE IT RESOLVED
, by the Housing and Redevelopment Authority in
and for the City of Richfield, Minnesota as follows:
1. The First Amendment to Preliminary Development Agreement presented to the Authority
and on file with the Community Development Director is hereby in all respects approved, subject to
modifications that do not alter the substance of the transaction and that are approved by the Chairperson and
Executive Director; provided that execution of such document by such officials shall be conclusive evidence
of approval.
2. The Chairperson and Executive Director are hereby authorized to execute the Preliminary
Development Agreement on behalf of the Authority and to carry out on behalf of the Authority the
Authority’s obligations thereunder.
481058v1 JAE RC125-348
Adopted by the Housing and Redevelopment Authority in and for the City of Richfield,
th
Minnesota this 20 day of June, 2016.
Mary Supple, Chair
ATTEST
:
Doris Rubenstein, Secretary
2
481058v1 JAE RC125-348
The Mortgage was executed without a maturity date, making it
automatically a 15-year mortgage. The ability to enforce the Mortgage
therefore expired in 1998.
The HRA attorney has advised that the HRA provide a Release of Mortgage to the
homeowners to allow them to clear the property title of the mortgage.
III. BR
ASIS OF ECOMMENDATION
A. B
ACKGROUND
In 1983, the Homeowners purchased the home at 6822 Queen
Avenue through the HRA’s New Home Program. The gap between
the purchase price and the mortgage that the Homeowners could
afford was covered with a loan from the HRA in the amount of
$20,000, which was evidenced by a Promissory Note and secured by
a second mortgage in favor of the HRA.
Instead of listing a specific maturity date, the Mortgage refers to the
Note for the conditions under which the Mortgage matures. The Note
lists several conditions, including that the Note is due and payable
upon payment in full of the first mortgage or refinancing.
The Homeowners repaid their first mortgage in 2002. The HRA was
unaware that the first mortgage was satisfied and therefore, was not
able to require repayment of the HRA mortgage at that time.
The Homeowners were unaware that the HRA required repayment at
the time the first mortgage was satisfied.
B. P
OLICY
The New Home Program requires all second mortgages to be due and
payable upon the maturity date or upon various other events of
maturity provided in the Note.
C. CTI
RITICAL IMING SSUES
The Homeowners are in the process of doing estate planning and
recently contacted HRA staff with questions about the Note provisions.
As part of this planning, they would like to clear the title.
D. F
INANCIAL
The HRA’s loan to the Homeowners was originally financed with
Community Development Block Grant (CDBG) funding. There is no
requirement that CDBG funds be repaid.
E. L
EGAL
For the HRA to enforce the Note and require repayment, the HRA
would need to file civil action. The HRA Attorney has determined that
the HRA would not likely succeed in this action.
The HRA Attorney prepared the Release of Mortgage.
IV. AR()
LTERNATIVE ECOMMENDATIONS
Decide not to provide the Release. At the time the property is sold, the
Homeowners would have to pursue other avenues to clear the title of the
HRA Mortgage.
Enforce the Note and pursue all legal remedies to seek loan repayment.
V. A
TTACHMENTS
Release of Mortgage
VI. PPEM
RINCIPAL ARTIES XPECTED AT EETING
N/A
RELEASE OF MORTGAGE
Date: June 16, 2016
FOR VALUABLE CONSIDERATION, the real property in Hennepin County, Minnesota which is
described as Lot 6, Block 2, Tingdale Bros. Lincoln Hills, Third Addition, Hennepin County,
Minnesota, is hereby released from the lien of the Mortgage, owned by the undersigned, dated
November 1, 1983, executed by Reed D. Andersen and Melodee L. Andersen, husband and wife,
Mortgagors, to Housing and Redevelopment Authority in and for the City of Richfield, as
Mortgagee, and filed for record November 15, 1983 as Document No. 4844809, in the Office of the
County Recorder of Hennepin County, Minnesota.
Housing and Redevelopment Authority in and for the
City of Richfield
By
Its Chairperson
By
Its Executive Director
STATE OF MINNESOTA
} ss.
COUNTY OF HENNEPIN
The foregoing was acknowledged before me this ____ day of __________, 2016, by
__________________, the Chairperson of the Housing and Redevelopment Authority in and for the
City of Richfield, a public body corporate and politic under the laws of Minnesota, on behalf of the
corporation, Grantor.
________________________________________
SIGNATURE OF PERSON TAKING ACKNOWLEDGMENT
STATE OF MINNESOTA
} ss.
COUNTY OF HENNEPIN
The foregoing was acknowledged before me this ___ day of ___________, , by
2016
____________________, the Executive Director of Housing and Redevelopment Authority in and
for the City of Richfield, a public body corporate and politic under the laws of the State of
Minnesota, on behalf of the corporation, Grantor.
________________________________________
SIGNATURE OF PERSON TAKING ACKNOWLEDGMENT
This document drafted by:
Housing and Redevelopment Authority
in and for the City of Richfield
6700 Portland Avenue South
Richfield, MN 55423
III. BR
ASIS OF ECOMMENDATION
A. B
ACKGROUND
In 2000 the Homeowner received a Deferred Loan in the amount of
$15,000 in order to make necessary repairs to her home.
The loan is deferred with no payments or interest and is forgiven after
30 years. If the property is sold or transferred within the 30-year
period, the loan becomes due and payable.
In 2004, the HRA agreed to subordinate to a reverse mortgage.
The current Hennepin County Estimated Market Value is $161,000.
The attached letter from the realtor describes the circumstances that
have led to the need to sell the home.
After paying off the reverse mortgage, fees and commissions, and
closing costs, the settlement leaves the Homeowner unable to repay
the HRA’s Deferred Loan.
Debt Amount Proposed
Owed Settlement
Reverse Mortgage (Financial Freedom) $126,375 $126,375
Settlement Charges $11,431 $11,431
Deferred Loan (HRA) $15,000 $0
TOTAL $152,806 $137,806
B. P
OLICY
The Deferred Loan Program provides loans to homeowners earning
less than 80 percent of the Twin Cities Area Median Income (AMI) to
make repairs and improvements that address health, safety and/or
property maintenance items.
The Mortgage Foreclosure Response Program Procedural Guidelines
state as follows: “Staff will consider short sale offers and negotiate as
high of repayment as possible. Action will be taken quickly so as to
not disrupt the short sale opportunity and cause the homeowner to
enter into foreclosure.”
Neighborhoods in which there are one or more foreclosed and vacant
homes have detrimental impacts on the surrounding property values.
The Buyer is an investor who plans to make improvements to the
home.
The entire loan amount is normally due and payable if the property is
sold within the 30-year period, regardless of the number of years
remaining on the loan.
C. CTI
RITICAL IMING SSUES
The sale of the property was to have closed the week of June 13. The
Buyer agreed to defer closing until after the HRA’s decision.
If the HRA does not agree to forgive the mortgage, the sale will be
cancelled and the property will enter foreclosure.
D. F
INANCIAL
The HRA has a subordinated position to the primary lender. If the
property is foreclosed by the lender, the HRA would also receive
nothing.
The Deferred Loan Program is funded with federal Community
Development Block Grant (CDBG) funds. There is no federal
requirement that the money be repaid.
The HRA has received eight requests for a short sale settlement in the
past four years. The HRA agreed to the following settlements:
$1,000 out of $10,345 (10%)
o
$2,500 out of $25,000 (10%)
o
$1,000 out of $1,577 (63%)
o
$0 out of $8,249.95 (0%)
o
$2,600 out of $26,000 (10%)
o
$5,040 out of $10,080 (50%)
o
$26,094.28 out of $30,000 (87%)
o
$2,384 out of $15,892.34 (15%)
o
E. L
EGAL
The HRA has the authority to negotiate a settlement or forgive the loan.
The Deferred Loan Program is funded with federal Community Development
Block Grant (CDBG) funds. There is no federal requirement that the money
be repaid.
IV. AR()
LTERNATIVE ECOMMENDATIONS
Deny the request for forgiveness; however, the property will likely go into
foreclosure, the HRA will receive no funds, and the property will remain
vacant until the foreclosure process is complete.
V. A
TTACHMENTS
Letter from Ted Field, Remax Realtor
VI. PPEM
RINCIPAL ARTIES XPECTED AT EETING
Shirley Tormoen, Power of Attorney and sister of the Homeowner
Kelley Krueger, RE/MAX Results