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05-12-93 agenda
CITY OF RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY MONDAY, MAY 17, 1993 7:00 P.M. COUNCIL CHAMBERS AGENDA CALL TO ORDER APPROVAL OF MINUTES OF APRIL 19, 1993 HRA MEETING 1. OPPORTUNITY FOR CITIZENS TO ADDRESS THE HRA ON ITEMS NOT ON THE AGENDA 2. PUBLIC HEARING AND CONSIDERATION OF RESOLUTION AUTHORIZING SALE OF RICHFIELD REDISCOVERED PROPERTY AT 6225-14TH AVENUE TO HABITAT FOR HUMANITY HRA LETTER NO. 17 3. PUBLIC HEARING AND CONSIDERATION OF RESOLUTION AUTHORIZING SALE OF RICHFIELD REDISCOVERED PROPERTY AT 7520 AND 7528 HRYANT AVENUE TO MARLIN GRANT HOMES, INC. HRA LETTER NO. 18 4. CONSIDERATION OF ADOPTION OF RESOLUTION ESTABLISHING THE RICHFIELD REDEVELOPMENT PROJECT AREA AND MODIFYING EXISTING REDEVELOPMENT PROJECT AREAS AND TAX INCREMENT DISTRICTS HRA LETTER NO. 19 5. CONSIDERATION OF. AUTHORIZATION TO INITIATE A HOUSING PROJECT AT 7021 NICOLLET AVENUE WITH AFFORDABLE SUBURBAN HOUSING, INC. HRA LETTER NO. 20 6. CONSIDERATION OF PRIORITIZATION OF DEVELOPMENT FUND INITIATIVES HRA LETTER NO. 21 7. CONSIDERATLON OF AUTHORIZATION OF A NEW HOUSING CONCEPT, TRANSFORMATION HOUSING, AT 6500 JAMES AVENUE HRA LETTER NO. 22 8. CONSIDERATION OF AUTHORIZATION TO SECURE LIEN REPAYMENT ON PROPERTY AT 7245 HUMBOLDT AVENUE HRA LETTER NO. 23 9. CONSIDERATION OF AUTHORIZATION TO ISSUE CERTIFICATES OF COMPLETION TO MARLIN GRANT HOMES INC. FOR RICHFIELD REDISCOVERED PROPERTIES AT 7500 BRYANT, 6641 OLIVER, 6407- 15TH AND 6415-15TH AVENUES HRA LETTER NO. 24 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 861-9702. • • HOUSING AND REDEVELOPMENT AUTHORITY -HRA Letter No. 24 Agenda May 17, 1993 Issue Statement: Authorization to issue completion certificates to Marlin Grant Homes Inc. for Richfield Rediscovered properties at 7500 Bryant, 6641 Oliver, 6407-15th and 6415-15th Avenues. Background: The HRA authorized development of the above referenced properties in 1992. The development agreements provide for the issuance of a certificate of completion when construction is completed. (A sample certificate is attached.). The homes have been completed and occupied. It is anticipated that during the month of May, the concrete walk and steps, curb cuts, driveways and landscaping will be completed. Upon completion, the builder will request the release of the letter of credit .and the completion certificate. Staff is anticipating this request and wants to respond in a timely manner upon verification of completion. It is likely that remaining work would be completed by May 31, 1993. Recommended Motion: Authorize the Chair and Executive Director to execute completion certificates in accordance with the attached resolution which includes visual verification by staff. Basis of Recommendation: 1. Construction has been completed and a certificate of occupancy issued by the Inspection Division. Site work will be completed shortly subject to acceptable weather and includes concrete, driveway and landscaping work. 2. The builder has performed in accordance with construction agreements and will seek the issuance of completion certificates and the release of performance security in the following amounts: Performance Builder Property Address Security Amount Marlin Grant Homes, Inc. -7500 Bryant $29,500 6641 Oliver $30,000 6407-15th $37,876 6415-15th $37,411 Alternative Recommendation: Do not issue certificates of completion at this time. Discussion/Decision Mode: The HRA may not unreasonably withhold approval of this request. Respectfully submitted, JDP:ds James Prosser Execu i Director HRA RESOLUTION NO. RESOLUTION RELATING TO THE ISSUANCE OF COMPLETION CERTIFICATES FOR RICHFIELD REDISCOVERED PROPERTIES AT 7500 BRYANT, 6641 OLIVER, 6407-15TH AND 6415-15TH AVENUES WHEREAS, in late 1992, the Richfield Housing and Redevelopment Authority (HRA) entered into contracts with Marlin Grant Homes, Inc. for the construction of single family. homes; and WHEREAS, the new home locations are as follows: 7500 Bryant, 6641 Oliver, 6407-15th and 6415-15th Avenues; and WHEREAS, the construction agreements require the construction of homes and upon completion, the issuance of a. Completion Certificate and the release of performance security; and WHEREAS, staff will verify by visual inspection that construction is completed and that performance security in the following amounts can be released to Marlin Grant Homes, Inc.: 7500 Bryant - $29,500; 6641 Oliver - $30,000; 6407-15th - $37,876 and 6415-15th - $37,411. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota that: 1. Upon verification of completion by staff, Completion Certificates shall be issued for 7500 Bryant, 6641 Oliver, 6407- 15th-and 6415-15th Avenues. 2. The performance security be released. Passed by the Housing and Redevelopment Authority of Richfield this 17th day of May, 1993. Thomas E. Harms Chairperson ATTEST: Larry Wozniczka, Secretary CERTIFICATE OF COMPLETION The undersigned hereby certifies that at the following described property has fully and (Address) (Builder) completely complied with its obligations under Article IV of that document entitled "Contract-for Private Development" dated. 199 between the HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA and with respect to construction of the improvements in accordance with the approved construction plans and is released and forever discharged from its obligations to construct under such above-referenced Article. DATED: HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OR RICHFIELD ,_ BY Its Chairperson By Its Executive Director HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 23 Agenda May 17, 1993 Issue Statement• Authorization to secure repayment of a lien held on property at 7245 Humboldt Avenue. Background:- In 1986,-South Hennepin Technical College completed substantial rehabilitation of a home located at 7245 Humboldt Avenue. The HRA sold the home to a qualifying family who lived there .until December 1992. Divorce and internal family issues have led to mortgage default and foreclosure. In 1986, the house was sold to the family for $85,000. The first mortgage was set at $60,000 and the HRA set the second mortgage at $25.,000. Since the sale, the homeowners obtained a third and fourth mortgage. The order of mortgages is as follows: Mortgage Date Mortgagee Amount 1 12/8/86 TCF $59,166.00 2 12/8/86 Richfield HRA 525,000.00 3 01/30/90 First Bank $13,000.00 4 03/27/92 Donald Sidie (family member) $ 2,685.00 Total Encumbrance 599,851.00 TCF Mortgage Corporation will become the owner of the property on June 7, 1993, which is six months after the date of the Sheriff's sale. In order to protect the HRA's mortgage, a Notice of Intention to Redeem needs to be filed prior to that date. Legal counsel has recommended that the HRA file this document. When the document is filed, the HRA has the following options: • Satisfy mortgage holder one and two and gain clear title, resell the home to a first-time buying family. With the cost of acquisition of the two morgages at over $90,000, an estimated $5,000 to make cosmetic repairs and $7,000 to sell, total project cost is estimated to be in excess of $100,000. The assessor's market value for 1993 is $100,000 but the selling price would likely be somewhat less. Project costs increase if repairs cost more (the house has not been inspected) or if the house is on the market a long time (non homestead taxes are 53,186 annually). Project costs would probably exceed proceeds by about $10,000 not including staff time. In effect, the HRA would be accepting a lien repayment of $15,000 and have assumed responsibility for a significant project. • Sell the HRA mortgage at a discount to mortgage holder three or four or an investor. A $10,000 offer has been received from an investor. -Staff may be able to negotiate somewhat more, probably not exceeding $15,000. • Take no action since TCF, as the first mortgage holder, may take title without having to satisfy the HRA mortgage. The net loss to the HRA is 525,000. Filing the notice does not require the HRA to buy back the property. Repurchase of the property is not recommended. However, filing the notice would give the HRA the ability to recover a portion of the mortgage. It is unlikely that the full amount of the HRA's mortgage could be recovered, but revenue in the range of 510,000 to $15,000 could be expected. Recommended Motion: It is recommended that the HRA authorize the Chair and Executive Director to execute and file a Notice of Intention to Redeem, and to recover repayment of the lien to the greatest extent possible without incurring significant expense. Basis of Recommendation: 1. The HRA has a lien against the property located at 7245 Humboldt Avenue in the amount of 525,000. 2. Since the property has been foreclosed, the Notice of Intention to Redeem needs to be filed in order to protect the mortgage position and recover the mortgage to the extent possible. 3. Project expenses in excess of 5100,000, including the second mortgage, are anticipated if the HRA purchases the property. A funding source has not been identified. Anticipated proceeds from the sale of the property suggests a shortfall of 510,000 or more. 4. Only partial repayment is likely because the total encumbrances and cost of resale will exceed the selling price. Therefore, a negotiated repayment amount would be .anticipated in the range of 510,000 to 515,000. Alternative Recommendation: 1. Do nothing; accepting the 525,000 loss. 2. Purchase and resell the home in hopes of recovering a larger mortgage share. This would be a speculative alternative. Because of workload, a realtor would be engaged for the sale. Discussion/Decision Mode: The Notice of Intention to Redeem needs to be filed prior to June 7, 1.993 or the HRA loses the ability to recover a portion of the lien. Res ct lly submitted, JDP:ds Jams Prosser Exe u ive Director HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 22 Agenda May 17, 1993 Issue Statement: Authorizing a new housing concept called "housing transformation" at 6500 James Avenue. Background: The New Home and Richfield Rediscovered Programs remove substandard housing and replace with new housing. The New Home Program has also rehabilitated .housing, typically in cooperation with Vo-Tech. A new concept called "housing transformation" has been proposed as part of the Development Fund. A development team known as Quam, Sumnicht and Associates (QSA) has contacted the HRA staff and expressed an interest in participating in this concept. Mr. Steve Quam and Mr. Dave Sumnicht have assembled a supporting team which includes rehabilitation, finance and design professionals. QSA has the following objectives: • to initiate a house transformation rehabilitation project at a specified site. • appeal to the homeowner market which wants to invest $30,000 or more in value added improvements. The "transformation" goes beyond basic repairs (electrical, plumbing, siding, roofing, windows, doors) and basic additions (family room, porch, deck, garage). • take an average Richfield home and make it into a home valued in excess of 5100,000 by providing unique and well thought out remodeling and redesign. • utilize a home unlikely to be taken through the Richfield Rediscovered Program yet located in neighborhoods where Richfield Rediscovered has already provided new housing in the $110,000 to $150,000 range. In the last 18 months, staff is aware of two homes which have been "transformed." The addresses of these once modest homes are: 6701 Lakeview Avenue (intersection of 67th and Knox) and 7435 Emerson Avenue. The property at 6500 James Avenue is a potential candidate for this program. It has been abandoned. HUD has acquired the property through a foreclosure and anticipates marketing it in June 1993. HUD always offers their Richfield foreclosures to the HRA/City prior to general marketing. The HRA/City benefits by receiving a ten percent discount on the purchase price. Thus, the HRA may purchase the property for $44,500 rather than the anticipated general market offer of $49,500. While the sale price and condition of this home places the home in the acquisition/clearance category, the more standard design and lot location also makes it a candidate for substantial rehabilitation. _ It is proposed that the-HRA authorize staff to facilitate QSA's preparation of a more detailed rehabilitation concept with the following provisions: • The HRA would acquire the property from HUD, utilizing the Development Fund as an interim source of cash. • The property would be sold to QSA at the HRA's cost of acquisition. Net cost to the HRA would be minimized but may include some staff time and legal counsel costs related to the transaction. (The sale process would include the required public hearing at the appropriate time.) • QSA would provide a letter of credit equal. to the cost of the property as performance security. • QSA and the HRA would enter into a contract which includes detailed plans and specifications. • The renovated home would conform to the Richfield Rediscovered "Housing Design and Site Development Criteria." Recommended Motion: Authorize staff to facilitate a house transformation project with Quam, Sumnicht and Associates. HUD would be notified of HRA intent to purchase 6500 James Avenue. Basis of Recommendation: 1. The Development Fund identifies house transformation projects as a program initiative targeting FHA/VA foreclosures as candidates. 2. A property being offered by HUD, 6500 James, is a good candidate for a project of this type. 3. A development team, QSA, has indicated an interest in .initiating a project of this type. 4. The HRA will have a chance to review the project in more detail when contracts, plans and specifications are prepared and a public hearing is held for the HRA sale to QSA. Alternative Recommendation: Do not. initiate a project at this time. Notify QSA and HUD that the City does not have an interest in purchasing the property. Discussion/Decision Mode: If the HRA concurs, HUD will be notified of the intent to purchase. Staff would begin working on a project in cooperation with QSA. Res f lly submitted, James . Prosser Executive Director JDP:ds HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter. No. 27 Agenda May 17, 1993 Issue Statement• Prioritization of projects to be undertaken through the Development Account and consideration of funding three program initiatives. Background• To date HRA action has included the following: 1) Receipt of a listing of potential program initiatives on March 15. 2) Adoption of a resolution establishing the Development Account on April 19. At the May 17 meeting it would be appropriate to review the potential initiatives and identify those with the highest priority. Three proposals by staff should be evaluated to determine whether they should be initiated immediately. Note some additional initiatives. Included are those mentioned by Commissioner Wozniczka at the April meeting and which are located in the LHN and two initiatives from staff which include a neighborhood improvement advisor and an arterial street front yard preservation program. The three initiatives proposed for immediate implementation follow. Richfield Rediscovered Demand is strong! There are still more than. 180 houses, many with owners interested in selling, and approximately 70 interested new home buyers. The $500,000 appropriation received last August is committed. The market momentum needs to be continued. Funding for an additional six properties would require an initial use of approximately 5360,000 with a final net cost of approximately $240,000. Transformation Homes This initiative envisions the HRA functioning as a conduit. It would purchase foreclosed property at a discount from FHA or VA and sell it to a builder/developer at cost: The builder/developer would make significant improvements to the house literally transforming it. The house would, of course, need to be suitable for transformation. To initiate this program, the interim cost would approximate 545,000 which. would be paid back by the builder/developer. Net cost may approximate 52,000-53,000. Cost to market their program to other builders is estimated to be $5,000. A proposal to initiate this program is part of the agenda for the May 17 meeting. Apartment Management Program The strategy would be to develop a coordinated linkage system involving staff, landlords, tenants and social service agencies. This is a complex problem involving at least three converging factors: tax law changes which have made apartments a less attractive investment and discourage maintenance expenditures, aging facilities with many buildings in the 20 to 30 years of age range and changing demographics which have resulted in higher vacancy rates (therefore less rental income which again impacts maintenance) together with residents who are unable to live independent of outside support systems. The problems with aging apartment facilities are common knowledge. However, the changing demographic profile is not as well known. The South Hennepin Regional Planning Agency supported by Richfield, Bloomington, Eden Prairie and Edina has analyzed 1980 and 1990 census data, Richfield Public School data and Hennepin County Economic Assistance Program data. Trends in Richfield include the following: • a significant percent of families receiving AFDC when compared to all families with children (8.4~). • a significant increase in the number of public assistance cases (from 1982-90, an 86~ increase from 530 to 985). • a significant increase in the number of single-parent families (22$ increase from 1980-1990). • a significant number of students who are approved to participate in the free lunch program (18~ of all students). The assumption is that the majority of these residents reside in apartments. An effective program must focus on traditional apartment management practices, maintenance and updating of buildings, and the needs of the residents. The initial step in this program would be to establish a task force. The task force would include appropriate City staff including City Manager/Executive Director, HRD, Public Safety, and a representative from Bloomington-Richfield Family Center. As the issues are more clearly defined, additional people would be added. The purpose of the task force. would be to formulate an effective strategy and implementation program. Initial funding needs would be minimal and would relate to supporting the task force. Expenses would include staff time and clerical support. However, early in the process, it may become necessary to hire a coordinator to assure rapid program formulation and implementation. (Existing staff cannot assume primary responsibility for this program.) Estimated cost $30,000-$50,000. Recommended Motion: Adopt a motion which does the following: 1. Identifies the .priority program initiatives and directs staff tb develop preliminary recommendations for ways in which the initiatives could be developed for presentation to the HRA. 2. Initiates and funds the three programs identified in this letter: a. Richfield Rediscovered b. Transformation Homes c. Apartment Management Program Basis of Recommendation: 1. Prioritization of program initiatives will assist staff in establishing program and budget priorities for revised 1993 and proposed 1994 budgets. 2. Program initiatives must be implemented in a manner which assures that existing programs do not suffer. 3. The three. programs proposed for funding and immediate initiation respond to existing demonstrated needs; the momentum of Richfield Rediscovered needs to be continued, a builder/developer is interested in transformation homes and the apartment situation must be addressed. Alternative Recommendation: 1. Modify the recommendations. 2. Delay implementation of the three proposed initiatives. Discussion/Decision Mode: A response at this time would permit staff to pursue initiatives in an orderly manner. y submitted, James Prosser Execu ve Director JDP:ds Richfield, as a post World War II community, has reached a critical development stage. Extraordinary effort has been made, but continuing support is necessary to revitalize and reposition the housing market. To support the cost of service, a viable commercial tax base must be developed and maintained. With the establishment of a Development Fund, the HRA would have a limited opportunity to provide stable funding for some existing programs and to initiate some new programs. The following reflects the need: of the HRA to maintain an aggressive pro- active role to enhance the vitality and quality of life of our community. A. APARTMENT MANAGEMENT PROGRAM Implement an apartment housing operations program for owners and managers, in cooperation with Public Safety, and develop a coordinated linkage system between landlords, tenants and social service agencies in the community. ~ First year support. $ 50,000 B. ALTERNATIVE OCCUPANCIES FOR APARTMENTS ~ Within the community there are approximately 200 apartment buildings. A strategy for encouraging rehabilitation/renovation and higher occupancy would determine -the feasibility of alternative occupancies for specific populations such as elderly, congregate, and assisted living. $ 20,000 C. RICHFIELD REMODEL Staff is working to devise a Richfield remodeling loan program to encourage people to remodel their homes. To support such a program the following could be implemented. Richfield Remodeling Loan Marketing $ 16,000 Program for one year. Remodeling loan 1 % buy down on $5 million $ 50,000 of privately provided loan funds. Remodeling loan "hot line" which would provide telephone assistance to people seeking information about remodeling financing. Consumer advice and follow up. $ 27,300 D. RESIDENTIAL ACQUISITION The success of the scattered site residential redevelopment project has been dramatic. Initially it took the form of Vo-Tech projects. More recently the concept was expanded to include Richfield Rediscovered. 1. Troubled Property ~ Public Safety has from time to time identified property which would be appropriate for purchase on a voluntary basis. 2. Affordable Homes $ 55,000/ea. ~ This program would make it possible to purchase properties which require greater subsidy than Richfield Rediscovered can afford. $ 50,000/ea. 3. Foreclosure/Transformation Homes A selective purchase program of FHA/VA foreclosure property for subsequent resale to a builder/developer. $ 12,000/ea. 4. Richfield Rediscovered To continue this program and maintain a market presence would require at minimum the purchase of six (6) properties per year. The net expenditure for each would approximate $40,000. $240,000 E. NEIGHBORHOOD IMPROVEMENT ADVISOR Provide free advice to homeowners regarding routine maintenance, expansion and remodeling projects. Identify homes in need of basic exterior repair and work out a process for completing the work. It might involve identifying labor sources including volunteer labor, and funding sources. This person should have experience and knowledge in residential construction, and cost estimation and be capable of establishing good relationships with people. Part-time person for one yeaz $25,000 including office support F. ARTERIAL STREET FRONT YARD PRESERVATION The front yazd space of many homes especially along arterial streets aze taking on alternative uses which aze most notably parking lots. The City has explored the use of the Zoning Ordinance to control this situation but has been unsuccessful. Funds would provide for identifying success stories of other communities and a brainstorming session with appropriate professional people and follow-up. $3,000 :::: >~::<::<>>>~S~D.~~.~~ ............::.::::::::::::::::::::::::::::::::::................................................. ;II,:.;:.; :::::::::::::::: ,::::::::::::::::::::::::::::::.:::.::............................................. . Exterior Building Design Property owners, residential as well as commercial, aze constantly modifying building exteriors. These changes have an impact on the appearance of our community. It would be possible to encourage more attractive building exterior appearance by offering a limited amount of azchitectural design advice. Services. $ 16,000 ~D ,~ Richfield has aggressively pursued designating the major commercial azeas for redevelopment. Commercial redevelopment has been made available to the LHN, ILN, PASSS and CABA azeas. Redevelopment in the traditional sense (removal of obsolete structures) is not always appropriate for every site within a designated project area, nor is it appropriate for every commercial azea within the community. Other strategies and tools are needed. A. AREA COMMERCIAL ECONOMIC GROWTH Review commercial redevelopment areas, as well as 77th Street East, and assess opportunities and constraints. Establish individual market area characteristics including identification, image, promotion, and operation. Determine policy options. ~ Technical assistance to formulate area assessments. $ 30,000 B. LYNDALE AVENUE SOUTH The Lyndale Avenue frontage between 75th and 77th Streets needs improvement. Given lot depth and the intensity of existing development, redevelopment through tax increment is not practical. A renovation program to encourage an upgrading of building facades and interiors and anoff-street parking strategy could substantially improve this area. Major elements of this program would be the following: Formulation of strategic plan with property owners and tenants. $ 10,000 1 % buy-down on $5 million of privately provided loans for upgrading. $ 50,000 Technical and support services to: Implement strategy. $ 40,000 Implementation of off-street parking strategy. $300,000 C. LHN Installation of sidewalk on the north side of 66th Street near the railroad track. $ 500 Paving of Graham Avenue. $ 30,000 During the last year, several successful events have been scheduled which promote Richfield as a vital active community. These events should continue and may from time to time be expanded. 1. Realtor Information Program Regularly provide information about Richfield to residential and commercial realtors and developers in a luncheon format and tours as appropriate. °~' Annual cost. $ 3,500 2. Exhibitions Develop an appropriate exhibitor booth to be displayed at various trade shows in the Twin City area. Cost. $ 3,000 3. Parade of Homes To demonstrate ways in which homes can be updated through remodeling. First year. $ 5,000 Annual cost. $ 2~~ 4. Remodeling Fair Continue to support the 2004 Marketing Committee and its annual fair. ~ Annual cost. $ 1,000 5. Fix-Up Street Provide an event at which various trades people demonstrate "do it yourself" techniques. ~' Annual cost. $ 1,500 6. Community Education .Work with the Richfield Community Education Program to formulate and implement a cyclical curriculum related to home maintenance and renovation. ~ Cost. $ 2,000 HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No .20 Agenda May 17, 1993 Issue Statement• Authorization to initiate a housing project with Affordable Suburban Housing, Inc. at 7021 Nicollet. Background• A part of the Richfield Rediscovered program provides an affordable homes component for modest cost new housing. The non-profit housing corporation "Affordable Suburban Housing" (ASH) has proposed an affordable housing concept for 7021 Nicollet. The proposal received from Mr. William Schatzlein, ASH Executive Director: • provides a new four bedroom home with a parking pad to be sold at a price of $82,000 to a moderate income family; • requests .the HRA to defer the value of the land (and the receipt of land proceeds) with a second mortgage of $20,000; and • seeks a reservation for a 90 day period during which ASH will market the project. The development agreement would be similar to that required on all Richfield Rediscovered projects except the second mortgage would be used as the performance security. If the HRA concurs, Mr. Schatzlein would proceed to: • finalize plans; • finalize construction financing; and • market the home, identifying a qualified buyer prior to entering into a. development agreement. Mr. Schatzlein has been involved in a variety of housing rehabilitation and home improvement education initiatives of the HRA, City and Visions 2004 Committee. He has played an active role in the Richfield Remodeling Fair and Fix-Up Street events. ASH is actively involved in assisting Brooklyn Park in the renovation of apartment buildings. This proposal is a new venture for ASH. Mr. Schatzlein will be available at the HRA meeting to answer questions. The property at 7021 Nicollet was purchased for approximately $17,000 by the HRA following a HUD foreclosure. Recommended Motion: It is recommended that the HRA reserve this lot for ASH and authorize staff to formulate a development agreement and schedule a public hearing to sell 7021 Nicollet Avenue to ASH when a qualified buyer has been identified. Basis of Recommendation: 1. The property at 7021 Nicollet is part of the Richfield Rediscovered Program previously approved by the HRA and available for development. 2. An affordable homes initiative consistent with the program has been proposed. Deferring the value of the land keeps the home purchase affordable and ensures the payment of land proceeds at a future time. 3. With the knowledge and experience of Mr. Schatzlein, it is anticipated that this project will be successful. 4. The Richfield Rediscovered cash flow remains viable with the inclusion of this project. Alternative Recommendation: 1. Do not authorize this initiative. 2. Seek an alternative builder/buyer for development. Discussion/Decision Mode: A qualified buyer will be identified before returning to the HRA for. final approval of development. Marketing would begin immediately. JDP:ds Respec fully submitted, Ja a D. Prosser Ex c ive Director AFFORDABLE SUBURBAN HOUSING, INC A Nan-Profit Housing Corporation 4032 Grand Avenue South Minneapolis, Minnesota 55409 {612) 824-1628 May 5, 1993 Mr. Bruce Nordquist Richfield HRA 6704 Portland Avenue Richfield, MN. Dear Mr. Nordquist: The mission ofi Affordable Suburban Housing, Inc. is to increase the supply of affordable housing for low and moderate income people in suburban communities. In order to carry out this mission we have developed a program entitled "Affordable Single Family New Construction Homeownership Program". This letter contains our proposal to work with the Richfield HRA to implement this new program. THE PURPOSE OF THE PROGRAM The development of a new home by A.S.H. will be part of the Richfield Rediscovered Pro~am. Our objective, as anon-profit development company, is to provide homes that are mere affordable than private builders can provide. Through the construction ofi affordable new single family homes we make it possible fior families to purchase a home that otherwise could not afford a new home. This program is intended to serve families with income in the 84% to 144°% of the median income for the Metropolitan area. The median income in the Metro area is $49,400. THE SITE The site for this new home is located at 7421 Nicollet Avenue South in Richfield, and is owned by the Richfield HRA. The site is 59 feet in width and 133 feet in depth, with alley access. The Richfield HRA has valued the lot at $24,004.04 THE NEW HOME The new hams to be built on this site will be a two story split entry contemporary style home. The upper level of the home will have two bect-ooms, living roam, dining roam, kitchen and bath. The lower level will have two bec6-ooms, bathroom, fiamily room, and laundry. The total area of finished space on the interior is approximately 1700 sq. ft. The exterior- of the home will be maintenance free with vinyl siding, aluminum clad trim, and metal clad window sash. A wooden deck will be located at the rear of the home with access from the dining area through a patio door. A two stall cana-ete parking pad wil! be located at the rear Qf the property with access from the alley. Special features of this home are two skylights, central air conditioning, good quality carpet and vinyl floor- coverings, and appliances are included. THE DEVELOPMENT COSTS ~Ne have received a construction cast estimate based on bids from subcontractors. The total development costs are: Land costs $20,000.00 Construction Costs $75,000.00 A.S.H. overhead and Marketing 7.000.00 Total Development costs $102,000,00 CONSTRUCTION FINANCING YVe have received a preliminary commitment for construction financing from The Minnesota Nonprofits Assistance Fund. However, at this time we do not know the terms afi that financing. Fallowing the approval of the Richfield HRA, A.S.H. will explore, in more detail, this source of construction financing as well as other possible sources. THE MARKET YVe expect that the primary market for this home will be Richfield residents who are currently renting or own a home that does not meef their needs. The secondary market wilt be persons living outside of Richfield who wish to move into the community. THE PRICE In order to make this home affordable for families with income in the 80% to 100% of median income we ask that the Richfield HRA agree to defer the payment for the land, and take a second mortgage on the property in lieu ofi that payment. There would be no payments on the second mortgage and the entire amount {$2o,0ooAOj would be due at the time the home is sold, or refinanced. Through the deferral of the land payment it will make it possible for A.S.H. to make this home available for a price of $a~,ooo.oo MARKETING PLAN The marketing plan for this home will include a sign on the property, advertisements in local news papers, mailings to residents who have indicated an interest in purchasing a home through the Richfield Rediscovered program. A.S.H. will work closely with the Richfield HRA staff to identify Richfield residents who may be interested in purchasing this home. We expect to pre-sell the home and have a qualified buyer before construction begins. DEVELOPMENT SCHEDULE Following the approval of this p{an by the Richfield HRA, A.S.H. will obtain a commitment for construction financing, begin the marketing of the home, enter into an agreement with a qualified buyer, and reach agreement with the Richfield HRA staff on the terms of a Redevelopment Contract. The Redevelopment Contract, along with the offer to purchase the property, will be presented to the Richfield HRA for approval. That approval will authorize the staff to sign the Redevelopment Contract with Affordab}e Suburban Housing, lne. The closing on the land purchase and the construction loan wi}I be held, and construction will begin. We expect that the construction period for this new home will be four months, and the total time from the date the Redevelopment Contract is signed will be about six months. I look forward to working with you, and the Richfield HRA, to complete this important new development for the City of Richfield. Sincerely, ~ Bil( Schatzlein Executive Director HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 19 Agenda May 17, 1993 Issue Statements Adoption of a resolution approving the establishment of the Richfield Redevelopment Project Area and modifications to existing redevelopment project areas and tax increment districts (LHN, ILN, PASSS, CABA, and Richfield Rediscovered). Backgrounds At the April 19 ,1993 meeting., the HRA .adopted a resolution requesting the City Council to schedule a public hearing on the above stated project areas and tax. increment districts. On May 10, the. City Council responded to the request and adopted a resolution setting a public hearing date for June 14, 1993. It is now appropriate for the HRA to consider formal approval of the proposal. In addition to the information presented in this letter, representatives of Publicorp will be available at the May 17 HRA meeting to answer questions. By establishing the Richfield Redevelopment Project Area and modifying existing projects and districts, a concept known as "pooling" could be implemented. The advantages of pooling include the following: 1) Project with strong cash flows can support, if necessary, projects with a weaker cash flow. 2) Expenses may be reduced by lessening the need for bond sales and possibly the need. for additional tax increment districts. 3) Provide credit enhancements for bonds if and when sold. The above advantages can be realized without lengthening the existing bond debt amortization schedules. Because of these advantages, most cities utilizing tax increment financing incorporate this pooling concept. The attached document includes the Redevelopment Plan For Richfield Redevelopment Project Area and modifications to all existing projects. Pooling would be established by placing all the existing redevelopment and tax increment districts in one redevelopment district, the proposed name of which is the Richfield Redevelopment Project Area. The boundary generally conforms to the existing redevelopment project boundary for Richfield Rediscovered and also includes existing projects. The southeast quadrant of Richfield has been added. as have the locations of the larger apartment developments which were outside existing boundaries. No existing project boundaries are being changed. The inclusion of this southeast area would be prudent for long range planning purposes. The inclusion of apartments could facilitate future improvements to these properties. Note the maps in the redevelopment project area plan, Appendix A page A-2, and Appendix B page B-2. The Richfield Redevelopment Plan is basically a compilation of previously approved redevelopment plans (ILN, LHN, PASSS, CABA and Richfield Rediscovered A and B). Note the Table of Contents. • Page 3 is a Statement of Public Purpose and explains the basis for creating the Richfield Redevelopment Project Area. • Goals and Objectives are listed on pages 4-6. • Page 6 also lists anticipated public activities and page 8 lists anticipated private development activities. • Page 10-22 are the amendments to the existing redevelopment and tax increment areas which would effectuate pooling. • On page 12 is a proposed modification to the ILN Tax Increment District. The modification would delete from the tax increment district the Corporate Travel property on 76th Street and Girard Avenue. The Market Value has dropped from $3.6 million in 1985 to $1.8 million for taxes payable. in 1993. (The plan identifies the value drop. by use of tax capacity.) It is unlikely that this property will return to .its previous valuation. The project cash flow would benefit from this deletion by approximately $125,000. Amendments to each of the redevelopment plans and tax increment plans must be approved concurrently with the Richfield Redevelopment Project Area Plan to establish the Richfield Redevelopment Project to implement the pooling. The resolution which follows, when adopted by the HRA, would approve the establishment of the Richfield Redevelopment Project Area and the proposed amendments to the existing project areas and tax increment districts. The proposed schedule for implementing the pooling concept is as follows: 5/17/93 HRA requested to approve project plan modifications and. Richfield Redevelopment Project Area Plan. 5/25/93 Planning commission requested to make a finding with regards to plan modifications and Richfield Redevelopment Project Area Plan and their compliance with the Comprehensive Plan. 6/14/93 City Council public hearing on plan amendments and Richfield Redevelopment Project Area Plan followed by consideration to approve them. Recommended Motion: Adopt a motion which approves the attached resolution establishing the Richfield Redevelopment Project Area and modifications to existing project areas and tax increment districts. Basis of Recommendation: 1. Pooling of tax increment project wbuld: a. strengthen the cash flows of all existing tax increment projects with debt service. b. increase the possibility of credit enhancements for future projects which may require them. c. reduce operating expenses related to tax increment projects. 2. Pooling can be implemented without lengthening the debt service schedules of any projects. 3. Pooling is a good fiscal tool for prudent management of tax. increment cash flows. 4. The pooling proposal is consistent with state laws. 5. Neither of the proposals is in conflict with the five point policy adopted by the HRA several years ago (attached). Alternative Recommendation: 1. Modify the recommendation. 2. Delay proposed action. Discussion/Decision Mode: Adoption of the resolution at the May meeting is appropriate given the actions scheduled for the Planning commission on May 25 and the City Council on June 14. Respec ully submitted, Jam s Prosser Exe ive Director JDP:ds COUNCIL POLICIlJS [9HEN ISSUING TA2~ INCREI~4ENT BONDS 1. The multi-family project, home improvement center, Richfield Bank ,and Trust project and promotional departrilent store project be completed by separate developers. 2. The bond issue should be divided into stages. 3. Surety bonds for project completion must be retained from each developer. ~1. Bonds must not be sold or land assembled until a definite financial ccmmitment is obtained from the developer. 5. Speedy site assembly (property purchase relocation and demolition) must be completed . by the 13RA once a developer is committed.to the project. HRA RESOLUTION NO. THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA RESOLUTION APPROVING THE REDEVELOPMENT PLAN FOR THE RICHFIELD REDEVELOPMENT PROJECT AREA, MODIFICATION OF CERTAIN REDEVELOPMENT PLANS AND TAX INCREMENT FINANCING PLANS, AND RECOMMENDING APPROVAL BY THE CITY COUNCIL BE IT RESOLVED by the Housing and redevelopment Authority in and for the City of Richfield, Minnesota as follows: Section 1. .Recitals. 1.01 The City Council (the "Council") of the City of Richfield, Minnesota (the "City") together with the Housing and Redevelopment Authority (the "HRA") in and for the City of Richfield, Minnesota, have established the Lyndals-Hub-Nicollet Redevelopment Project Area ("LHN Project Area"), the Interstate-Lyndale-Nicollet Redevelopment Project Area ("ILN Project Area") and the Interstate-Lyndale-Nicollet Tax Increment Financing District ("ILN District"), the Cedar Avenue Business Area Redevelopment Project Area ("CABA Project Area") and the Cedar Avenue Business Area Tax Increment Financing District ("CABA District"), the Penn Avenue and Sixty Sixth Street Redevelopment Project Area ("PASSS Project Area") and Penn Avenue and Sixty Sixth Street Tax Increment Financing District ("PASSS District"), Redevelopment Project Area A and Tax Increment Financing District A-1 ("District A-1") and Tax Increment Financing District A-2 ("District A-2"), and. Redevelopment Project Area B and Tax Increment Financing District B-1 ("District B-1") and Tax Increment Financing. District B-2 ("District B-2"), collectively the "Project Areas" and "Tax Increment Financing Districts"). 1.02 The Council and HRA have adopted. and modified from time to time the Redevelopment Program and Plans and Tax Increment Financing Plans (collectively the "Modified Plans") relating to each of the respective Project Areas and Tax Increment Financing Districts. '1.03 The HRA has identified blighted areas within the city as being in need of development and redevelopment which are not currently within the boundaries of existing Project Areas. 1.04 The HRA anticipates that the costs of financing redevelopment will be reduced through the sharing of tax increments among existing Project Areas by means of the Richfield Rediscovered Project Area. 1.05 The HRA has caused to be prepared a Redevelopment Plan for the Richfield Redevelopment Project Area to include areas previously not included in the Project Areas and has caused to be prepared Modified Plans on file with the HRA. 1.06 The executive director of the HRA transmitted copies of the Richfield Redevelopment Plan and Modified Plans to the City of Richfield Planning Commission, school boards of Independent School District No. 280, Intermediate School District No. 287, and the board of commissioners of Hennepin County for review and comment and notified said public bodies of the public hearings to be held by the City. Section 2. HRA Approval. 2.01 The HRA finds that the objective of encouraging development, redevelopment, and new construction within the Richfield Redevelopment Project Area and Project Areas will be advanced by adoption of the Richfield Redevelopment Plan and Modified Plans. 2.02 The Richfield Redevelopment Plan and Modified Plans are hereby approved and adopted by the HRA. 2.03 Staff is directed to formulate procedures which will result in implementation of the establishment of the Richfield Redevelopment Project Area and the methodology for sharing tax increments among Project Areas. Section 3. Further Proceeding. 3.01. The HRA requests the City approve the Richfield Redevelopment Plan and Modified Plans required by Minnesota Statutes, Section 469.028 and Minnesota Statutes Section 469.175, subd. 3 at the City Council meeting of June 14, 1993. Passed by the Housing and Redevelopment Authority of Richfield this 17th day of May, 1993. Thomas E. Harms, Chairperson ATTEST: Lawrence Wozniczka, Secretary REDEVELOPMENT PLAN FOR RICHFIELD REDEVELOPMENT PROJECT AREA and MODIFICATIONS TO THE LHN COMMERCIAL IMPROVEMENT PROGRAM for LHN REDEVELOPMENT PROJECT AREA ILN REDEVELOPMENT PLAN for tLN REDEVELOPMENT PROJECT AREA including the TAX INCREMENT FINANCING PLAN for ILN TAX INCREMENT FINANCING DISTRICT REDEVELOPMENT PLAN for CABA REDEVELOPMENT PROJECT AREA including the TAX INCREMENT FINANCING PLAN for CABA TAX INCREMENT FINANCING DISTRICT REDEVELOPMENT PLAN for PASSS REDEVELOPMENT PROJECT AREA including the TAX INCREMENT FINANCING PLAN for PASSS TAX INCREMENT FINANCING DISTRICT REDEVELOPMENT PLAN for REDEVELOPMENT PROJECT AREA A including the TAX INCREMENT FINANCING PLAN for A-1 TAX INCREMENT FINANCING DISTRICT and TAX INCREMENT FINANCING PLAN for A-2 TAX INCREMENT FINANCING DISTRICT REDEVELOPMENT PLAN for REDEVELOPMENT PROJECT AREA B including the TAX INCREMENT FINANCING PLAN for B-1 TAX INCREMENT FINANCING DISTRICT _ and TAX INCREMENT FINANCING PLAN for B-2 TAX INCREMENT FINANCING DISTRICT RICHFIELD HOUSING AND REDEVELOPMENT AUTHORITY in and for the CITY OF RICHFIELD, MINNESOTA HRA Adoption: May 17, 1993 City Council Adoption: June 14, 1993 MAYOR Martin Kirsch .CITY COUNCIL Michael Sandahl Susan Rosenberg Russ Susag Donald Priebe HOUSING AND REDEVELOPMENT AUTHORITY Thomas Harms Russ Susag Joan Helmberger Vern Luettinger Larry Wozniczka PLANNING COMMISSION Robert Elliott Timothy Erlander Michael Gallagher Daniel Linnihan Morris Nilsen, II Thomas Scaglia William Snyder Kristal Stokes Paul Wasko CITY MANAGER/HRA EXECUTIVE DIRECTOR James Prosser COMMUNITY DEVELOPMENT DEPARTMENT Byron Wallace, Director Bruce Palmborg, Housing and Redevelopment Coordinator Kathy Jablonsky, Redevelopment Specialist HRA ATTORNEYS John Dean, Holmes & Graven Steven Bubul, Holmes & Graven HRA FINANCIAL CONSULTANTS Sidney Inman, Publicorp, Inc. Mark Ruff, Publicorp, Inc. TABLE OF CONTENTS Municipal Action Taken ............................................................................................ i ................... . :..................................... 1 ..................................... Definitions ............... Statement of Public Purpose ........................................:...... ...................................... 3 ........ i ...................................... 4 ty .................................................... Statutory Author Statement of Goals and Objectives ...................................... .... ............................... 4 ............... li C ..................................... 6 osts ...................... ......... c Estimated Pub Boundary of Richfield Project Area ...................................... .............................:......... 7 Parcels in Acquisition and Relocation .................................. ....................................... 7 Environmental Considerations ............................................. ...................................... 7 Proposed Land Use .................................................................................................. 7 8 Development Activity in Richfield Project Area ....:....................................................... 8 Administration and Maintenance of Richfield Project Area ............................................. 9 R~nF,f~olrl Prn•iart L1,raa MOdifiCatlOnS ........................................................................... Modification to LHN Redevelopment Project Area ...................................................... 11 Modification to ILN Redevelopment Project Area and Tax Increment Financing Plan........12 Modification to CABA Redevelopment Project Area and Tax Increment Financing Plan.....14 Modification to PASSS Redevelopment Project Area and Tax Increment Financing Plan...16 Modification to Redevelopment Project Area A and Tax Increment Financing Plans......... 18 Modification to Redevelopment Project Area B and Tax Increment Financing Plans......... 20 Appendix A: Richfield Project Area Map and Description ...............................................A Appendix B: Tax Increment Districts and Project Areas Map ......................................... B MUNICIPAL ACTION TAKEN Richfield Redevelopment Project Area Based upon the statutory authority described in the Redevelopment Plan for Richfield Project Area attached hereto, the public purpose findings by the City Council of the City of Richfield and the Housing and Redevelopment Authority of the City of Richfield and for the purpose of fulfilling the City's redevelopment goals and objectives the City Council established Richfield Project Area pursuant to and in accordance with the requirements. of Minnesota Statutes, Section 469.001 to 469.047, inclusive, as amended. The following municipal action was taken in connection therewith: June 14, 1993: The Redevelopment Plan for Richfield Redevelopment Project Area was adopted by the City Council MUNICIPAL ACTION TAKEN Lyndale-Hub-Nicollet (LHN) Redevelopment Project Area October 15, 1975: The Commercial Improvement Program for the LHN Redevelopment Project Area was adopted by the City Council. June 14, 1993: The Commercial Improvement Program for the LHN .Redevelopment Project Area was modified by the City Council MUNICIPAL ACTION TAKEN Interstate-Lyndale-Nicollet (ILNI Redevelopment Project Area October 21, 1985: The Redevelopment Plan for the ILN Redevelopment Project Area and the Tax Increment Financing Plan for the ILN Tax Increment Financing District were adopted by the City Council. June 14, 1993: The Redevelopment Plan for the ILN Redevelopment Project Area and the Tax Increment Financing Plan for the ILN Tax Increment Financing District were modified by the City Council. MUNICIPAL ACTION TAKEN Cedar Avenue Business Areas (CABA) Redevelopment Project Area October 21, 1.985: The Redevelopment Plan for the CABA Redevelopment Project Area and the Tax Increment Financing Plan for the CABA Tax Increment Financing District were adopted by the City Council June 14, 1993: The Redevelopment Plan for the CABA Redevelopment Project Area and the Tax Increment Financing Plan for'the CABA Tax Increment Financing District were modified by the City Council. MUNICIPAL ACTION TAKEN Penn Avenue and Sixty Sixth Street (PASSS) Redevelopment Project Area December 18, 1989: The Redevelopment Plan for the PASSS Redevelopment Project Area and the Tax Increment Financing Plan for the PASSS Tax Increment Financing District were adopted by the City Council. June 14, 1993: The Redevelopment Plan for the PASSS Redevelopment Project Area. and the Tax Increment Financing Plan for the PASSS Tax Increment Financing District were modified by the City Council. MUNICIPAL ACTION TAKEN Redevelopment Project Area A July 23, 1990: The Redevelopment Plan for the Redevelopment Project Area A and the Tax Increment Financing Plan for the Tax Increment Financing District A-1 were adopted by the City Council. June 14, 1993: The Redevelopment Plan for the Redevelopment Project Area A and the Tax Increment Financing Plans for the Tax Increment Financing District A-1 and Tax Increment Financing District A-2 were modified by the City Council. MUNICIPAL ACTION TAKEN Redevelopment Project Area 6 July 23, 1990: The Redevelopment Plan for the Redevelopment ProjectArea B and the Tax Increment Financing Plan for the Tax Increment Financing District 6-1 were adopted by .the City Council June 14, 1993: The Redevelopment Plan for the Redevelopment Project Area B and the Tax Increment Financing Plans for the Tax Increment Financing District 6-1 and .Tax Increment Financing District B-2 were modified by the City Council. A. Definitions. The terms defined below shall, for purposes of this Development Program, have the meanings herein specified, unless the context otherwise specifically requires: "CABA Redevelopment Project Area" means the Cedar Avenue .Business Area Redevelopment Project Area as modified. "City" means the City of Richfield, a municipal corporation and political subdivision of the State of Minnesota designated as a home rule charter city. "Comprehensive Plan" means the documents which contain the objectives, policies, standards and programs to guide public and private land use, development, development and preservation for all lands and water within the City. "Council" means the .City Council of the City, also referred to as the governing body. lSee "Governing Body" below). "County" means the County of Hennepin, Minnesota. "Governing Body" means the duly elected City Council. "HRA" means the Housing and Redevelopment Authority in and for the City of Richfield. "HRA Act" means Minnesota Statutes, Section 469.001 to 469.047, as amended. "ILN Redevelopment Project Area" means the Interstate-Lyndale-Nicollet Redevelopment Project Area as modified. "LHN Redevelopment Project Area" means the Lyndale-Hub-Nicollet Redevelopment Project Area established by the Council as modified. "Municipality" means any city, however organized as defined in Minnesota Statutes Section 469.125, Subdivision 2. "PASSS Redevelopment Project Area" means the Penn Avenue and Sixty Sixth Street Redevelopment Project Area as modified. "Richfield Project Area" means the Richfield Redevelopment Project established by the Council on June 14, 1993. "Redevelopment Plans" means the Commercial Improvement Program for the LHN Redevelopment Project Area and the Redevelopment Plans for the ILN Redevelopment Project Area, the -CABA Redevelopment Project Area, the PASSS Redevelopment Project Area, Redevelopment Project Area A and Redevelopment Project Area B. 1 "Redevelopment Project Areas" means the LHN Redevelopment Project Area, the ILN Redevelopment Project Area, the CABA Redevelopment Project Area, the PASSS Redevelopment Project Area, Redevelopment Project Area A and Redevelopment Project Area B. "Richfield Redevelopment Plan" means the Richfield Plan adopted by the City on June 14, 1993. "School District" means Independent School District No. 280. "State" means-the State of Minnesota. "Tax Increment Financing Districts" means the LHN Redevelopment Project Area, the. ILN Redevelopment Project Area, the CABA Tax Increment Financing District, the PASSS Tax Increment Financing District, Tax Increment Financing District A-1, Tax Increment Financing District A-2, Tax Increment Financing District 6-1, and Tax Increment Financing District B-2. "Tax Increment Financing Plans" means the Commercial Improvement Plan for the I_HN Redevelopment Project Area, the Tax Increment Financing Plan for the ILN Tax Increment Financing District, the Tax Increment Financing Plans for the CABA Tax Increment Financing District, the Tax Increment Financing Plan for the PASSS Tax Increment Financing, District, the Tax Increment Financing Plan for Tax Increment Financing District A-1, the Tax Increment Financing Plan for Tax Increment Financing District A-2, Tax Increment Financing Plan for Tax Increment Financing District. B-1, and the Tax Increment Financing Plan for Tax Increment Financing District B-2. "Tax Increment Financing Act" means the statutory provisions of Minnesota Statutes, Sections 469.174 - 469.179, inclusive, as amended. 2 B. Statement of Public Purpose. The HRA has found that public interest requires the replanning and rehabilitation of residential and commercial neighborhoods across the City to remedy conditions of underutilized land, to correct numerous traffic and pedestrian hazards, to improve substandard and unsafe housing units, to increase the property tax base, to increase employment, and to encourage the expansion of private enterprise. To these ends, the HRA and the Council from 1975 to 1990 established and modified from time to time six individual Redevelopment Project Areas to enhance the public interest and accomplish goals and objectives set forth in the Redevelopment Plans. Given the geographical separation of the Redevelopment Project Areas, the HRA finds cause to explore opportunities to more effectively address the public interest. These opportunities include developing a more efficient method of financing public costs and assisting in the development and redevelopment by private enterprise unimpeded by individual Redevelopment Project Areas' boundaries. The HRA finds that it is necessary to facilitate the flow of funds into areas of the City which are in need of public intervention but previously had little or no resources available. The HRA has also determined that there exists areas of the City not included in one of the Redevelopment Project Areas in which needs are not being served and for which funds are not currently available. These areas include buildings or improvements which, by reason of dilapidation, obsolescence, overcrowding, faulty arrangement or design, lack of ventilation, light and sanitary facilities, excessive land coverage, deleterious land use, or obsolete layout, or any combination of these or other factors, are detrimental to the safety, health, morals or welfare of the City. The HRA has further determined that the welfare of the City requires active promotion, attraction, encouragement and development of economically sound industry and commerce through government action for the purpose of preventing the emergence of blight and the occurrence of conditions requiring redevelopment. Therefore, the HRA has determined that the it is necessary to establish the Richfield Project Area which would encompass existing Redevelopment Project Areas as well as include portions of the City previously not included. Funds for redevelopment and development could therefore be targeted to specific needs without geographical barriers. Potential funding sources include, but .are not limited to, tax increments, federal grants and loans, state grants and loans, interest earnings, land sale proceeds, development accounts, and other local resources. The establishment of the Richfield Project Area does not replace the existing Redevelopment Areas, does not include the establishment of a new tax increment financing district, nor does it extend the duration of existing Tax Increment Financing Districts. Instead, the establishment of the Richfield Project Area will serve as an umbrella entity. Therefore, costs of financing redevelopment activities will be reduced and areas of the City previously outside the HRA's area of operation will be included. 3 C. ~atutorv Authority The statutory authority for the undertaking of a redevelopment project -and the activities proposed in the redevelopment plan .relating thereto. is conferred upon the HRA pursuant to and in accordance with the HRA Act. Specifically, Minnesota Statutes, Section 469.027 establishes the requirements for the redevelopment plan preparation by an HRA prior to the undertaking of property acquisition, redevelopment, development and other related improvements. p, Statement of Goals and Obiectives. The HRA determines that the establishment of the Richfield Project Area and the modification of Redevelopment Project Areas and Tax Increment Financing Districts will provide the HRA with the ability to achieve certain public purpose. objectives not otherwise obtainable in the foreseeable future without HRA intervention in the normal development process. The HRA and Council seek to achieve the following goals and objectives: Goals: 1. To provide a revenue base to meet the needs of Richfield. 2. To .develop job opportunities for area residents. 3: To develop strategies to encourage revitalization. 4. To maintain a positive business environment. 5. To enrich the quality of life for residents through planning of the interrelationship of land use. 6. To recognize the needs of all segments of the populace through diversity in housing stock which is a major determinant of the living environment. - Objectives: 1. To achieve. a high level of design quality through use of design features such as landscaping to enhance the physical environment. 2. To better utilize. vacant or underdeveloped land. 3. To improve vehicular circulation by providing a comprehensive system which provides good direct access to and from the commercial areas. To the extent practical, eliminate commercial traffic from residential streets and minimize vehicular circulation conflicts or congestion. 4. To achieve a balanced variety of commercial businesses. and services appropriate to the market area. 5. To provide increased employment opportunities. 4 6. To diversify the tax base of the community. 7. To eliminate or reduce the conflicts which result from incompatible land use relationships, especially between residential and non-residential. 8. To protect the single-family residences from the adverse effects of nearby commercial development, roadways and off-street parking. 9. To utilize landscaping and/or screening between all single-family residential and commercial/office uses. Landscaping and/or screening should also be provided along major thoroughfares which border residential areas. 10. To eliminate unsightly and blighting elements such as exposed trash storage areas, overhead utility lines, poorly maintained and excessively large billboards or signs, and deteriorated structures. 11. To provide for the elimination of blight which is evidenced by irregular sized lots, inadequate streets, incompatible land uses, physical and functional. obsolescence, and inadequate parking. 12. To encourage the sharing of parking facilities and to generally improve the parking and circulation in the area. 13. To provide public utilities and other public facilities of sufficient quality and size to support the future development in the area. 14. To provide for an expanded range of housing opportunities in the community, as appropriate. 15. To encourage open lines of communication between all the residents, businesses and city staff. 16. To provide maximum opportunity, consistent with the needs of the city for _ development by private enterprise. 17. To coordinate elements of the City's Comprehensive Plan with these project objectives. 18. Provide jobs within close proximity of the residential population and concurrently saving energy by reducing trip time to jobs. 19. Provide a retail service level required by the residents of the community. 20. Secure the increase of housing, commercial, and industrial property subject to taxation by the City, Independent School District No. 280, Intermediate School District No. 287, Hennepin County,. City, and other taxing jurisdictions in order to better enable such entities to pay for governmental services and programs required to be provided by them. 5 21. Encourage local business expansion,. improvements, rehabilitation, and development, whenever possible and provide financial incentives for same. 22. Combine the .elements of other City Plans with these project objectives. E. Estimated Public Costs. The anticipated public development activities in the Richfield Project Area to be undertaken by the HRA and City in order to support the private development activities include: 1. Property acquisition; 2. Site clearance; 3. Site improvements; 4. Activities in support of streetscape improvements; 5. Rehabilitation and renovation; 6. Public infrastructure improvements; 7. Parking facilities; B. Right-of-way improvements; 9. Vacation of right-of-ways; and 10. Dedication of new right-of ways. The establishment of Richfield Project Area does not concurrently include the establishment of a new tax increment financing district. Budgets for tax increments contained within the Tax Increment Financing Plans will be utilized for any current expenditures. The establishment - of Richfield Project Area is intended to authorize the HRA to expend tax increments derived from the Tax Increment Financing Districts on any property within the Richfield Project Area. Revenue other than tax increments to be expended in the Richfield Project Area will be designated in the annual HRA appropriation and budget process. Because the .establishment of the Richfield Project Area is not expected to increase the captured tax capacity of the Tax Increment Financing Districts beyond the scope of the Tax Increment Financing Districts, as modified, the impact on other taxing jurisdictions is SO at this time. The HRA is not requesting new authority to issue bonds at this time. If bonds are issued according to the Tax Increment Financing Plans, tax increments from each of the Tax Increment Financing Districts may be used for credit enhancement or for payment of debt service on the bonds. Administrative costs will be funded as revenue sources become available and out of existing balances. 6 F. Boundary of the Richfield Prg~ect Area. The map and description for the boundary for the Richfield Project Area is found in Appendix A. A map outlining the boundary of the Project Area, the Redevelopment Project Areas, and the Tax Increment Financing Districts is found in Appendix B. The HRA is intending to expend tax increment in any parcel or right-of-way located within or is a portion of the Richfield Project Area boundary. G. Parcels in Acauisition and Relocation. The HRA may acquire and reconvey the parcels identified in Redevelopment Plans and Tax Increment Financing Plans. The HRA may acquire property by gift, dedication, condemnation or direct purchase from willing sellers in order to achieve the objectives. No additional parcels have been added to the list of properties to be acquired. The HRA accepts as binding its obligations under federal and state law for relocation and will administer relocation services for families, individuals and businesses to be displaced by public action if such services are requested or necessary. Prior to approval by the HRA of any development or development plan, it shall be satisfied that there is a feasible method for the temporary relocation of families and businesses to be displaced and that there are available or will be provided, in the project area or in other areas not less. desirable in regard to public utilities and public commercial facilities and at rents or prices within the financial means of the families and businesses displaced from the project area, decent, safe and sanitary residences and buildings equal in number of such displaced families and businesses. H. Environmental Considerations. Prior to development and substantial financing of the public costs associated with the project, the HRA will have secured the necessary review of the Project by the Minnesota Pollution Control Agency, the Minnesota Environmental Quality Council, the Minnesota Department of Natural Resources and any other state, federal or local agencies and received the necessary permits or .approvals from the affected agencies at the federal, state, and local levels of government, if such review and approval are identified as necessary by the HRA. I. Prooosed Land Use. Property reused in the Richfield Project Area that is in a Tax Increment Financing District will continue to be governed by the Tax Increment Financing Plan as well as by the Comprehensive Plan. Land reuse outside a Tax Increment Financing District but within Richfield Project Area will be governed by the Comprehensive Plan, including any changes that are made thereto. The public improvements needed to bring about the new development or redevelopment any. activities listed in Section E, "Estimated Public Costs", of this document. 7 J. Development Activity in Richfield Proiect Ar Any and all proposals by developers will be reviewed by the HRA and City, when appropriate, to determine conformance with the redevelopment plan and applicable municipal ordinances and codes. Property acquired by the HRA will be subject. to a contract for sale upon disposition to the developer.. The general requirements to be imposed upon the developer by the contract for sale. are: 1. To redevelop the property purchased in accordance with this redevelopment plan; 2. To commence and complete the construction of improvements on the property within specified periods of time; 3. Not to resell the property before improvements are made without the prior consent of the HRA; and 4. Not to discriminate on the basis.of age, race, color, sex, sexual preference, creed, or national origin on the. sale, lease, transfer, or occupancy of the property purchased from the HRA. Description of Private Development Activities The private development activities within the Richfield Project Area which are anticipated to _ occur include: 1. Property acquisition; 2. Site clearance; 3. Site improvements; 4. .Activities in support of streetscape improvements; 5. Rehabilitation and renovation; 6. New construction; 7. Public infrastructure improvements; 8. Parking facilities; 9. Right-of-way improvements; 10. Vacation of .right-of-ways; and 11. Dedication of new right-of-ways. 8 K. Administration and Maintenance of Richfield Project Ar Maintenance and operation of the public improvements will be the responsibility of the Executive Director of the- HRA. Each year the Administrator will submit to the HRA the maintenance and operation budget for the following year and will submit the necessary documents to the appropriate state agencies. No action taken by the Administrator pursuant to the above mentioned powers shall be effective without authorization by the HRA. L. Modification to the Richfield Proiect Area. All redevelopment plan modifications will be processed in accordance with Minnesota to u e ,Section 469.029, Subdivision 6. 9 Modification #7 to LHN Commercial Improvement Program for the LHN .Redevelopment Project Area June 14, 1993 Introduction The following text represents a modification to the LHN Commercial Improvement Program for the LHN Redevelopment Project Area to include references to the Redevelopment Plan for Richfield Redevelopment Project Area. The modified Commercial Improvement Program represents a continuation of the goals and objectives set forth in the original Program. Generally, the substantive changes include the authority to spend tax increments generated from any of the HRA's eight tax increment financing .districts in the Richfield .Redevelopment Project Area. For further information, a review of the Redevelopment Plan for Richfield Redevelopment Project Area dated June 14, 1993 and the Commercial Improvement Program for the LHN Redevelopment Project Area originally dated October 15, 1975 and last modified on December 17, 1990 is recommended. Statutory Authority Statement See also the Statutory Authority found in Section C of the Redevelopment Plan for Richfield Redevelopment Project Area, dated .June 14, 1993. Map of Project Area List of Parcels and Legal Description The boundary for LHN Redevelopment Project Area is not being modified. References to the area in which tax increments may be expended can be found Appendix A and Appendix B of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. Public Purpose Statement See also the Statement of Public Purpose found in Section B of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. Statement of Goals and Objectives Additional goals and objectives can be found in Section D of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. Public Costs and Financing This modification authorizes the HRA to expend tax increment from the LHN Redevelopment Project Area for qualified activities identified in the budget of any of the Tax Increment Financing Districts. 10 Modification #3 to Redevelopment Plan for ILN Redevelopment Project Area and Modification#3 to Tax Increment Financing Plan for ILN Tax Increment Financing District June 14, 1993 Introduction The following text represents a modification to the Redevelopment Plan for the ILN Redevelopment Project Area and the Tax Increment Financing Plan for the ILN Tax Increment Financing District to include references to the Redevelopment. Plan for Richfield Redevelopment Project Area. The modifications to the ILN Redevelopment Plan and ILN Tax Increment Financing Plan represent a continuation of the goals and objectives set forth in the original Redevelopment Plan and Tax Increment Financing Plan. Generally, the substantive changes include the authority to spend tax increments generated from any of the HRA's eight tax increment financing districts in the Richfield Redevelopment Project Area. In addition, a reduction in the original net tax capacity of ILN Tax Increment Financing District is contemplated in this modification through the reduction in the size of the tax increment financing district. Because the original net tax capacity of the parcel is higher than the current tax capacity, the Tax Increment Financing Plan for the ILN Tax Increment is being formally modified. For further information, a review of the Redevelopment Plan for Richfield Redevelopment Project Area dated June 14, 1993 and the Redevelopment Plan for the ILN Redevelopment Project Area and Tax Increment Financing Plan for the ILN Tax Increment Financing District dated October 21, 1985 and September 18, 1989 is recommended. Modification No. 3 Redevelopment Plan for ILN Redevelopment Proiect Area Statutory Authority Statement See also the Statutory Authority found in Section C of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. Map of Proiect Area List of Parcels and Legal Description The boundary for ILN Redevelopment Project Area is not being modified. References to the area in which tax increments may be expended can be found Appendix A and Appendix B of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. Public Purpose Statement See also the Statement of Public Purpose found in Section B of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. 11 Statement of Goals and Obiectives Additional goals and objectives can be found in Section D of the Redevelopment Plan for Richfield Redevelopment Project Area, dated. June 14, 1993. Modification No. 3 Tax Increment Financing Plan for ILN Tax Increment Financina District c+a*ement of Goals and Obj tec fives See also the Statement of Goals and Objectives found in Section D of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. Estimated Project Costs This modification authorizes the HRA to expend tax increment from the ILN Tax Increment Financing. District for qualified activities identified in the budget of any of the Tax Increment Financing Districts. Properties to be Included in the Tax Increment Financina District Pursuant to Minnesota Statutes, Section 469.175, Subdivision 4, the Tax Increment Financing Plan is being modified to reduce the geographic area of the tax increment financing district. The parcel to be eliminated has a current net tax capacity of 582,900 and an original net tax capacity of 5179,850 for taxes payable in 1993. Because the original net tax capacity exceeds the current net tax capacity, the tax increment financing plan is being modified to reflect a reduction in the original net tax capacity of the ILN Tax Increment Financing District. The amount of annual tax increment contemplated in the Tax Increment Financing Plan for the ILN Tax Increment Financing District was approximately 52,21 1,000. Because the tax increment generated from the ILN Tax Increment District in 1993 is expected to be substantially less than originally disclosed in the tax increment financing plan (approximately S200,000 in tax increment prior to the removal of the parcel and approximately 5325,000 in tax increment after the reduction in the original net tax capacity), no additional impacts upon other taxing jurisdictions is contemplated in this modification. The parcel to be eliminated from the ILN Tax Increment Financing District is listed below: Parcel ID # 33-028-24-43-0019 The Executive Director of the HRA is authorized to notify the county auditor of the modification to the. original net tax capacity of the ILN Tax Increment Financing District. 12 Modification #2 to Redevelopment Plan for CABA Redevelopment Project Area and Modification #2 to Tax Increment Financing Plan for CABA Tax Increment Financing District June 14, 1993 Introduction The following text represents a modification to the Redevelopment Plan for the CABA Redevelopment Project Area and the Tax Increment Financing Plan for the CABA Tax Increment Financing District to include references to the Redevelopment Plan for Richfield Redevelopment Project Area. The modified Redevelopment Plan and Tax Increment Financing Plan represent a continuation of the goals and. objectives set forth in the original Redevelopment Plan and Tax Increment Financing Plan. Generally, the substantive changes include the authority to spend tax increments generated from any of the HRA's eight tax increment financing districts in the Richfield Redevelopment Project Area. For further information, a review of the Redevelopment Plan for Richfield Redevelopment Project Area dated June 14, 1993 and the Redevelopment Plan for the CABA Redevelopment Project Area and Tax .Increment Financing Plan for the CABA Tax Increment Financing District dated January 19, 1988 is recommended. Modification No. 2 Redevelopment Plan for CABA Redevelopment Proiect Area A. Statement of Public Purpose See also the Statement of Public Purpose found in Section B of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. B. Statutory Authority See. also the Statutory Authority found in Section C of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. C. Description of the Redevelopment Project Area The boundary for CABA Redevelopment Project Area is not being modified. References to the area in which tax increments may be expended can be found Appendix A and Appendix B of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. D. Statement of Goals and Objectives Additional goals and objectives can be found in Section D of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. 13 Modification No. 2 Tax Increment Financing Plan for CABA Tax Increment Financing District A. Statutory Authority See also the Statutory Authority found in Section C of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. B. Statement of Objectives See also the Statement of Goals and Objectives found in Section D of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. G. Estimate of Costs This modification authorizes the HRA to expend tax increment from the CABA Tax Increment Financing District for qualified activities identified in the budget of any of the Tax Increment Financing Districts. 14 Modification #1 to Redevelopment Plan for PASSS Redevelopment Project Area and Modification #1 to Tax Increment Financing Plan for PASSS Tax Increment Financing District June 14, 1993 Introduction The following text represents a modification to the Redevelopment Plan for the PASSS Redevelopment Project. Area and the Tax Increment Financing Plan for the PASSS Tax Increment Financing District to include references to the Redevelopment Plan for Richfield Redevelopment Project Area. The modified Redevelopment Plan and Tax Increment Financing Plan represent a continuation of the goals and objectives set forth in the original .Redevelopment Plan and Tax Increment Financing Plan. Generally, the substantive changes include the authority to spend tax increments generated from any of the HRA's eight tax increment financing districts in the Richfield Redevelopment Project -Area. For further information, a review of the Redevelopment Plan for Richfield Redevelopment Project Area dated June 14, 1993 and the Redevelopment Plan for the PASSS Redevelopment Project Area and Tax Increment Financing Plan for the. PASSS Tax Increment Financing District dated December 19, 1989 is recommended. Modification No. 1 Redevelopment Plan for PASSS Redevelopment Proiect Area A. Statement of Public Purpose See also the Statement of Public Purpose found in Section B of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. B. Statutory Authority See also the Statutory Authority found in Section C of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. C. Description of the Redevelopment Project Area The boundary for PASSS Redevelopment Project Area is not being modified. References to the area in which tax increments may be expended can be found Appendix A and Appendix B of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. D. Statement of Goals and Objectives Additional goals and objectives can be found in Section D of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. 15 Modification No. 1 J~x Increment Financing Plan for PASSS Tax Increment Financing District A. Statutory Authority See also the Statutory Authority found in Section C of the Redevelopment Plan for .Richfield Redevelopment Project Area, dated June 14, Y993. 6. Statement of Objectives See also the Statement of Goals and Objectives found in Section D of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. G. Estimate of Costs This modification authorizes the HRA to expend tax increment from the PASSS Tax Increment Financing District for qualified activities identified in the. budget of any of the Tax Increment Financing Districts. 16 Modification #2 to Redevelopment Plan for Redevelopment Project Area A and Modification #2 to Tax Increment Financing Plan for Tax Increment Financing District A-1 and Modification #1 to Tax Increment Financing Plan for Tax Increment Financing District A-2 June 14, 1993 Introduction The following. text represents a modification to the Redevelopment Plan for Redevelopment Project Area A and the Tax Increment Financing Plan for Tax Increment Financing District A-1 and the Tax Increment Financing Plan for Tax Increment Financing District A-2 to include references to the Redevelopment Plan for Richfield Redevelopment Project Area. The modified Redevelopment Plan and Tax Increment Financing Plans represent a continuation of the goals and objectives set forth in the original Redevelopment Plan and Tax Increment Financing Plans. Generally, the substantive changes include the authority to spend tax increments generated from any of the HRA's eight tax increment financing districts in the Richfield Redevelopment Project Area. For further information, a review of the Redevelopment Plan for Richfield Redevelopment Project .Area dated June 14, 1993 and the Redevelopment Plan for Redevelopment Project Area A and Tax Increment Financing Plans for Tax Increment Financing District A-1 and Tax Increment Financing District A-2 dated July 16, 1990 and July 20, 1992 is recommended... Modification No. 2 Redevelopment Plan for Redevelopment Proiect Area A A. Statement of Public Purpose See also the Statement of Public Purpose found in Section B of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. B. Statutory Authority See also the Statutory Authority found in Section C of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. C. Description of the Redevelopment Project Area The boundary for Redevelopment Project Area A is not being modified. References to the area in which tax increments may be expended can be found Appendix A and Appendix B of the Redevelopment Plan for Richfield Redevelopment Project Area, dated. June 14, 1993. D. Statement of Goals and Objectives Additional goals and objectives can be found in Section D of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. 17 ' Modification No. 2 Tax Increment Financina Plan for Tax Increment Financina District A-1 A. Statutory Authority See also the Statutory Authority found in .Section C of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. B. Statement of Objectives See also the Statement of Goals and Objectives found in Section D of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. G. Estimate of Costs This modification authorizes the HRA to expend tax increment from the Tax Increment Financing District A-1 for qualified activities identified in the budget of any of the Tax. Increment Financing Districts. W. Restrictions of Pooling Tax increments generated from Tax Increment Financing District A-1 may be expended outside the boundary of Tax Increment Financing District A-1 pursuant to Minnesota Statutes, Sections 469...1763 and 469.175, Subdivision 8. 18 Modification No. 1 Tax Increment Financina Plan for Tax Increment Financina District A-2 A. Statutory Authority See also the Statutory Authority found in Section C of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. B. Statement of Objectives See also the Statement of Goals and Objectives found in Section D of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. G. Estimate of Costs This modification authorizes the HRA to expend tax increment from Tax Increment Financing District A-2 for qualified activities identified in the budget of any of the Tax Increment Financing Districts. W. Restrictions of Pooling Tax increments generated from Tax Increment Financing District A-2 may be expended outside the boundary of Tax increment Financing District A-2 pursuant to Minnesota Statutes, Sections 469.1763 and 469.175, Subdivision 8. 19 Modification#2 to Redevelopment Plan for Redevelopment Project Area B and Modification #2 to Tax Increment Financing Plan for Tax Increment Financing District B-1 and Modification.#1 to Tax Increment Financing Plan for Tax Increment Financing District B-2 June 14, 1993 Introduction The following text represents a modification to the Redevelopment Plan for Redevelopment Project Area B and the Tax Increment. Financing Plan for Tax Increment Financing District B-1 and the Tax Increment Financing Plan for Tax Increment Financing District B-2 to include references to the Redevelopment Plan for Richfield Redevelopment .Project Area. The modified' Redevelopment Plan and Tax Increment Financing Plans represent a continuation of the goals and objectives set forth in the original Redevelopment Plan and Tax Increment Financing Plans. Generally, the substantive changes include the authority to spend tax increments generated from any of the HRA's eight tax increment financing districts in the Richfield Redevelopment Project Area. -For further information, a review of the, Redevelopment Plan for Richfield Redevelopment Project Area dated June 14, 1993 and the Redevelopment Plan for Redevelopment Project Area B and Tax Increment Financing Plans for Tax Increment Financing District B-1 and Tax Increment Financing District B-2 dated July 16, 1990 and July 20, 1992 is recommended. Modification No. 2 Redevelopment Plan for Redevelopment Proiect Area B A. Statement of Public Purpose See also the Statement of Public Purpose found in Section B of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. B. Statutory Authority See also the Statutory Authority found in Section C of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. C. Description of the Redevelopment Project Area The boundary for Redevelopment Project Area 6 is not being modified. References to the area in which tax increments may be expended can be found Appendix A and Appendix B of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. D. Statement of .Goals and Objectives Additional goals and objectives can be found in Section D of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. 20 Modification No. 2 Tax Increment Financina Plan for Tax Increment Financina District B-1 A. Statutory Authority See also the Statutory Authority found in Section C of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1983. B. Statement of Objectives See also the Statement of Goals and Objectives found in Section D of the Redevelopment Plan. for Richfield Redevelopment Project Area, dated June 14, 1993. G. Estimate of Costs This modification authorizes the HRA to expend tax increment from Tax Increment Financing District B-1 for qualified activities identified in the budget of any of the Tax Increment Financing Districts. W. Restrictions of Pooling Tax increments generated from Tax Increment Financing District B-1 maybe expended outside the boundary of Tax Increment Financing District B-1 pursuant to Minnesota Statutes, Sections 469.1763 and 469.175, Subdivision 8. 21 Modification No. 1 Tax Increment Financing Plan for Tax .Increment Financing District B-2 A. Statutory Authority See also the Statutory Authority found in Section C of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. B. Statement of Objectives See also the Statement of Goals and Objectives found in Section D of the Redevelopment Plan for Richfield Redevelopment Project Area, dated June 14, 1993. G. Estimate of Costs This modification authorizes the HRA to expend tax increment from the CABA Tax Increment Financing District B-2 for qualified activities identified in the budget of any of the Tax Increment Financing Districts. W. Restrictions of Pooling Tax increments generated from Tax Increment Financing District B-2 may be expended outside the boundary of Tax Increment Financing District B-2 pursuant to Minnesota Statutes, Sections 469:1763 and 469.175, Subdivision 8. 22 APPENDIX A MAP AND DESCRIPTION OF RICHFIELD REDEVELOPMENT PROJECT AREA A-1 Q z O m W I~ • ^ III Q I z a _~~ a rW Q 7 a ~I O W " W W _W V r-•~ Z ~i ~ ti ti ~ F ! ~i iii. _ ~L < o~ Wfz TAU NSIONr1S ~~~ •~ ~' ~' _ oY zz ~ ° V d V102 [.~~I~ ~L. ~~7~ ~~ g e f f: f W Y161 ~_Jl~~. JJ O ~ ~ ~ w ~.\ ~ ~ ~ ti ~~ MOll3l,ONOI __ '-'-'---J~ "- -~ M0113lONOl '3AV ar030 ----- -1--n•-- --~-~ - - '3AV W030 --• I VI pl Yl pl '~ ~00~0 Yitl I 00 O~O ~D O _ OBI ,-- YI LI NOlONIw00lS 00001 10 ~OO NOlONIwOQIp YI SI 00000 OO ~O 41 SI YI'41 000 ~00000~~ ~~~ 4141 YI fl 000 000 00 0 0 0 00 0 VI fl YI ZI 000 ~ 000000 V121 YI GI ~1 DOD OOOOOO Y101 101113 II =.-. r-1~O ~ O~~OO~ 101113 WJr01N0 II °- 'W` 0000000000 ' oOrmNo SOpwn109 ~~ ~ J 0000000000 ~ SOSNnl00 ~~~~~~~~~~ 1 Xtlrd Xard I -i ~-, OOOOOOOOL~O ~ uNr,Xru ONY1Xr0 I .~~-~ ~ - OO('~0~~~~-IOO '3AV ONV11a0d ' O~~J ~~OJO ' '3Ar..ON1l'11a0d 1 VIS YIC it ~~ _. ~~~~ !~ I BOO vlr ~ D~O~O~B~~ ~ Y14 NOlNIlO L-J NOl NII~ P,f DO OOOOOOBOO --- „f O O 0880000 vut SN3A315 ' ~~O O~OBB0000 SN3A315 o~^oBe^~ooo IYI O OO~BB0000 Isl '3Ar y311001N ^ ~~ ~ BBBBO '3Ar 1311001N 113051tl1p 1 ~ 1130SIr18 Nla0M1N3M I ~ ~ 00 00000 N180M1N3M AtlnpSTld ' ~~ ~O'1 ~o1Io1 ~ ~ooooo Aanesille 1NVSr3ld IV'L1- 4 -.~. ~_ - ~~~~``''°~``~~~~L``,~~~!T n_:_n,:~__-.-._. ®®~~D~~_ ~-i.-.l__ yNYSV31d ONraO I1~ LJ L._JO Il~1C ~~CJ L-_' ONdtlO 131aarN ~ I ~ B~ B~ 131aarN 0131lar0 ICI 1 o~~ BBB O O131laV0 '3Ar 31rONA~ ~ ®~[~OOBB® '3Ar 31rONA1 Nolaalr jl n 00000 Nolaalr yNVAaB Ilt IiJ j O~O~ 1NVAtlp li '" < xrllo~ Xtlll00 ~~ ~ 0000 u 1NOdn0 \ ~ O Y ~ OO~O 1NOdn0 ' \ O t NOSa3w3 ~~` ; .+ ~(-~O NOStl3w3 1NOw3a! ~-- ----_ _= ~ d QUO i 1-aw3a! aaralo ~ \~ ~~, ~ oaralo laloewnN .~B000 --- lOloewnN oNlAal ~~0~~~~®® nMe -- I p~~~ ONIAaI Oo000000 s3wrr __ ~~~`_.-. `"~ 0000 1 _~~~ s3wrr XOIiX _._. 0000~+z,~10000 ~ l n ~ ~ XCNX Nrool ~OO~ ~v0000 ! ~~ Nrool Nr~aow OO~O0000 ~ ~~ Nroaow NOlM3N BO~OI~ /~10~~~ OO I NOy M3N • a3All0 ~TO~Ir I~OO~ ~ a3A110 '3AV NN3d .- ~-~ pO©©~~ 3Ar NN3d N33n0 i. i~~l jI N33n0 11355na ~`^ `""~BBj ~' ~ i 1135S0a Nr01a3HS ~n~- B~~~I i, ~~ Ntl01a3N5 SVwONl '~~~J;OI uI I r SVwONy NOldn ~ ~~ 1 _` -~O` JB~U ~~ I NOydn 1N30NIA I ~- -'.~OL I ~~B~IInII ~IInf1IInIII ~~-`' ~'~~ I 1N30NIA I ~_ ~1..~ I ~©BB~J II L I~ `~, "~~y I_ I' ~o NanpNfrM NanSNSVM 'I r--,, ~- - -- r' [~_ Y`~'' I '3Ar 53Xa3X '3AV 53Xa3X e4 ~ ~.• ~~~... -_• N ~ N N N 1~/J N m N N N N N V~i N N ~ ~ N Q 3 n ~ h m P m A - O ~ ° ~ N n e. n 10 w m, C 1D m m m m JO m m A P A P r r A A r w N H . A-2 Legal Description of Richfield Redevelopment Project Area Boundary Starting at the intersection of the Richfield west city line and 66th Street, following east on 66th Street to Queen Avenue, thence north to 65th Street, thence west to the rear lot lines of the properties on the east side of Russell Avenue, thence north on said rear property lines to the north city line, thence east to Lyndale Avenue, thence south to 63rd Street, thence east to Harriet Avenue, thence south to 64 1/2 Street, thence continuing south on the property line between Lots 4 and 5, -Block 6, Lyndale Oaks Subdivision to the south line of said subdivision, which is also the north line of Hauser's Second Addition. Thence continuing east on said line and as extended to Pillsbury Avenue, thence north on Pillsbury Avenue to the south line of Block 6, Rearrangement of Nicollet Homes Second Addition, thence east on said line to the rear lot line of the lots in Block 8 of said addition, between Blaisdell and Nicollet Avenues, thence north on said line to 64th Street, thence east on 64th Street to the rear lot line of the lots in Block 8, Town's Edge Subdivision, thence south to 65th Street, following the east edge of First Federal Richfield Addition. Thence continuing east on 65th Street to First Avenue, thence south to 66th Street, thence east to 11th Avenue, thence north to the north city line, thence east to Bloomington Avenue, thence south to 63rd Street, thence east to 16th Avenue, thence south to the south border of Taft Park, thence east to 18th Avenue, thence south to the intersection of the northerly lot line of Lot 10, Block 1, Wexler's Addition and 18th Avenue South, thence in a line along said northerly lot line as extended to the west right-of--way line of Cedar Avenue, thence north to a point 55 feet south of the centerline of 66th Street, thence east to a point 110 feet east of the centerline of Cedar Avenue, thence south to the easterly extension of the south line of Lot 1, Block 4, Wexler's Addition, thence west along said line to the west line of said lot, thence north to the south right-of--way line of vacated 67th Street. Thence west to 18th Avenue, thence south to Diagonal Boulevard, thence east along the centerline of said boulevard, extended to T.H. 77, thence south to the south city line, thence west to Interstate 35W, thence north to 73rd street, thence west to Penn Avenue, thence south to 74th Street, thence west to Sheridan Avenue, thence south to 76th Street, thence east to Penn Avenue, thence south to the north Frontage Road of Interstate I-494, thence west to Thomas Avenue, thence north to 77th Street, thence east to the west right of way line of Sheridan Avenue, thence north to 76th Street, thence west to the west city line, thence north to the point of beginning at 66th Street. A-3 APPENDIX B MAP OF RICHFIELD REDEVELOPMENT PROJECT AREA AND REDEVELOPMENT PROJECT AREAS AND TAX INCREMENT FINANCING DISTRICTS B-1 X Z a Q i 7 r/ c7 Naorru rr i7 P 17 r/07 rlfl fi0'117Jf110'1 Q's ~~ ta7 = 4i ~~ =z ~ ~ uU. W ~' C {n ~ >A G ~ F is G DG _ S t ~ n f II: K ~ ~~ W ~ ~ w ~.\ w f a~ fl0'717l0Np1 (~ "7Ar Yr07a I-~+O~O r111 ~; rl fl (''~:~ ~ ~ ~ ~OO , NO1fMIwOQ1 . • ~ ':.•:•: ~ rl f l Q v r/ cl ~ . ~ 0~~ r171 C A i ~V ~ ~~~~ ; rl u ~ Q '•"' ~~~ rl of O ~ ~ //1y/~~ I !01117 W ~ M ~ OOO i ODraINa '~ •..: • i fnfwmoa L ~ ~ O ~'~ ~DO ~ Nrw Q orrlNrp ''~ C ~ ~ 7Ar OMr11Y0Y ~ ~~ ~ V ~ b ~•'•' r/• ~ V ~t tl I Q x ~ C ~ ~ ~_ MO1NIla L ~ C o ~ ` ii ~ ..: ,.. ~~~. sN7A7is C C Irl 7 • • • . ~ .. '7Ar 1711001N a, c ~~ M1~OMINIA ~ C .~. ~ AYIIKTM ' IL ~l~~if~7 •: _ •~•: .•.•.. _r_ :..: ... iNrfr7L ~ C ..;,tL- s "... 3Ar 71rONAl Y/ ~ •~•.. NalY01r ~ C 1NrAW ~ xrslm t x % 1+ •~` iNOrlq V ~ i Y ..•.. .... T:•: i ~ /~ I'^y~: •S : • ~ • .w:v.,'X~, NOfY7w7 Q '7Ar YrOYJ z r/fl rill Q rl fl ' Q Q MO1fN1 W Z rl s .1 . /~ IQ ~ rl c Q • W ~ V• Q W ~ Q. ' ` V /~ w~ ~ Q ri7i uu rl of I lonl7 ofralNa II fnswmoa ,~ rrw I .. ONr1Nr0 O '7Ar ONr11YW a. ~ . ~ ~ YL- MO1MIla F- W W ~ V Q rdf n II f N7A71f ' 1 ,.,111 '7Ar 17110aIN a ll7aflrlf II a _ N1YOf+1N7r ,I I Arnsml~ I O J W ~ W S ~ ~ W 1Nrsr71! iq'I aNrre li 171YY1N ~I ol7urrs iil w Q W s.. a O J ~ W ~ '7Ar 7lrON11 ~I NalYOlr II 1Nr/yf Ili I xrlloa ~i~ Q W ' 1MOd110 NOf YIw7 1NOw71W . Orrrro • Q ~ lOlOfwflN I W ~ ONIAYII flwrl' xoNNI Nroolj V NrfYOwi _ NOl •INI YIA110~ . :.:.. ~ QQ Nrarow 7Ar MM7Y - , .~ ...... yp~ ~~ •7Ar MN7Y N33f10 ~i.•••::~'•'•LL'~' • ::::::'::::: .: L"~I ~ it M77M i 117fs11Y :.•... :•:::::: ~- ~~^~~ ( ~ ~}•:•:•:•:':': , I117Sf11Y Mr01r INf ~ ~~~_ ~ • Q.F ~ ~ ~ V:~ • ••••' ~ ~II Nr01Y INf ~ C 1 i:•••:•:•::: •.•:.• . • srr10N1 frwoNl ~--~ Q ~ i•.•.•:: i 4 NOl/fl ' r~~ ~'~ j O Nr ~~ `• I NOlYII 1N77NIA `- ____ _ ~~'~ I • . {~ b ~ ~ ~•,~.•• •• ':••••• '•':••• Ir 11N7aNIA NNOfNfrM I ~ . ~ ` ,~ ... .t. :•:•:•: :•:•: _._ -7Ar f7xr7x '7Ar !]xNlx>d. ..-..i •. .-1~-..~ ` ~ M C'[$~p] . n . s•~~ ~~~~~~~~ 1._ F • " •~ ~ ~ N ~ IA ~ ~ p` ~ ~ ~ ~ ~ ~ ~ N IA ~: ii ~ t. ^ f t = y. ~ M ~ 4 ~' j A w ~ ~ ~ ~ • ~ b € ~ ~ e x ~ ~ F B-2 1 HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 1$ Agenda May 17, 1993 Issue Statement: Public hearing and authorization of the sale of Richfield Rediscovered property at 7520 and 7528 Bryant Avenue to Marlin Grant Homes, Inc. Background: In August 1992, the HRA authorized the acquisition of property at 7520 and 7528 Bryant Avenue under the Richfield Rediscovered Program. Marlin Grant Homes., Inc. of Bloomington has secured purchase agreements from buyers for these two lots and signed a development agreement. The sale price of the lots will be $27,500 each. The new homes will be valued at approximately $121,000 (7520 Bryant) and 5147,000 (7528 Bryant). The HRA has already cleared 7520 Bryant. Grant is responsible for clearance at 7528 Bryant and is given a credit on the purchase price. Staff has secured bids to use as a guide for determining the credit. The credit for 7528 Bryant is 54,550. The development agreement form remains essentially unchanged from those previously used for Richfield Rediscovered. The agreements require Marlin Grant Homes, Inc. to: • pay for the site at the stated lot value minus the demolition credit, if any, upon completion of the home; • provide financial security during the construction period with a letter of credit, or similar security, that has a value of $27,500 for each site. (The security amount is the difference between the lot price and the total HRA investment in the property or the lot price, which ever is greater.) • complete each home and pay for the lot by October 1993. Marlin Grant Homes, Inc. has already completed five Richfield Rediscovered homes. The projects have been promptly developed, buyers have been pleased with the product and all of the HRA's financial requirements were met. Recommended Motion: Following the public hearing, adopt the attached resolution which authorizes the Chair and Executive Director to execute agreements which sell 7520 and 7528 Bryant Avenue to Marlin Grant Homes, Inc. for the development of new single family homes. Basis of Recommendation: 1. A check of references indicates Marlin Grant Homes, Inc. is an experienced, capable, financially secure builder. 2. The HRA has acquired the lots at 7520 and 7528 Bryant Avenue for the Richfield Rediscovered program. 3. Development agreements have been. negotiated and are in conformance with program .guidelines. 4. Notice of public hearing was published in the Sun-Current on May 5, 1993. 5. Previously, the Planning Commission found the sale of•the lots for development of new single family homes to be in conformance with the City's Comprehensive Plan. Alternative Recommendation: Do not proceed with .development. agreements with Marlin Grant Homes, Inc. and direct. staff to find other buyers. Discussion/Decision Mode: Closings are anticipated to occur in early June with site clearance and construction starting shortly thereafter. Respectf ly submitted, James rosser Execut' Director JDP:ds HRA RESOLUTION NO. RESOLUTION AUTHORIZING THE SALE OF REAL PROPERTY LOCATED AT 7520 AND 7528 BRYANT AVENUE TO MARLIN GRANT HOMES, 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 pursuant to and in furtherance of the Richfield Rediscovered Program Redevelopment Project (Project) heretofore adopted by the City of Richfield (City) and the HRA, said real property being described as follows: 7520 Bryant Lot 6, Block 23, Irwin Shores, Hennepin County 7528 Bryant Lot 8, Block 23, Irwin. Shores, Hennepin County WHEREAS, the HRA is authorized to sell real property within its area of operation after public hearing; and WHEREAS, a developer,. Marlin Grant Homes,-Inc. of Bloomington has been identified as the purchaser of the described property, in accordance with a development agreement:; and WHEREAS, the public hearing has been held after proper public notice; and WHEREAS, the Planning Commission has made a finding that -the disposition of the property for residential purposes is consistent with the Comprehensive Plan. NOW, THEREFORE, BE IT RESOLVED by the Richfield Housing- - and Redevelopment Authority: 1. 'A public hearing has been held and 7520 and 7528 Bryant Avenue are authorized to be sold to Marlin Grant Homes, Inc. in accordance with a development agreement with the HRA. 2. The purchase price for 7520 Bryant 3. The purchase price for 7528 Bryant 4. That the Chairperson and Executive to execute the Development Agreeme~ as required to effectuate the sale Inc. is is Di nts to $27,500. $27,500. rector are authorized and other agreements Marlin Grant Homes, 1 Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 17th. day of May, 1993. Thomas E. Harms, Chairperson ATTEST: Larry Wozniczka, Secretary 0 H W z W a z m o N s Z S _.~. o~. Z Q ~o ~ ~~ Z ~ ! ~I ~ ~~ ~ ~ ~. ~ ~„ ~_ ~ 7 ~ ~ z p d .Q ~ ~ ~~ _ S ~- 0 H W Z. _ W a O N R. .:,. ~iinw ~O J P s ~ _~ ~ ~ ~ I Q ,-~ >, ,~ W ' Z g s~ ~ o ~ „ ~ =d s ~~ ~ ° ~r ~ ~ ~ ~ ,__. r >- d H .¢,~ ,~i0 iDi ~ n8;1 4;1 ;l ;I i9~1 °~ b ~ i~ ~ _ ~ ~~ I :.~ _ ~ _ °~ ~ ~` ~ 4 N N 'J'O ,.01 _ _ 'Z . SLSS a~ "Z ~ > ~ Y Z ? si. 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I~ _ - ---~~ ~~ ~~ - -- 1 ~ ~-~ Y I I I ~ '~ I I ( I I I I ~ I---1 1 ~i ---~1 0 H W Z W a ~- Z m N a ~\ ~~-\ I~ I I I~ ~~ ~I ~~ ~~ ~I --~ 'I~ III - - - -fit - --~'~; ~~ __ .~ III I ~,I II I - -~.J i~ ---~1 --~1 0 , u ---j? ,. , ~~ ~~ ~~ 'I I~ i~ ~~ ,. -- ---~, „~. ---~, ,~;~ ~~,~ ----u r~ i, ~ ~~ d li ~ oL ----~. 0 ~_ ~- -~ -~ ~ ~ -- -- 1 ~~ ~ ~ ~~ ~ ~ ~~ .1 ~ , o, "`~ s ~ 3 -~evJ '+y5 ~. c ~ .~ I ~ o~ S9ati~L ~ N ,p ~ 1 N ~,~ ~ I 1 - - . _ `4'151 .b 'li- „11,°`'15 : l.~ i~ o -~~t' .b'~t '~ ~~ 1 -~'-- -- -- ~ -- / J ~ M ;. ~o ~ Q v T Y ~~ Z r - - I ~ .. ---- -}. ~ ~ ~ tV -.- i i A _ _ ::rr. _ -.. - -... -.. __.._ M ~ ~ E i II ~ N ._. ~ 1 ~ 0 11 \ ~ ~ ~r 1 ~ ~~Y y.~I ~~ ~ dl __ ,~ a 111 I of `rs,~(~ rr.~* ,,,f.o~-~~ , ~ ;~r.i,t - ~ ~ ~ a ` f, 1111 .`~r' ~ I N ~ - a I ~ r _ _ ~ ~t 3'" o~ . s i~. ~~ ~ ~ . . N~ -- I - --- -'-- ,.all °~ H11 ~ r 1 1 ~ ._l i 1 R _ s ~ o y $- N y, "O O-Y pT. - Z Y719 ~ ~ i ~ ~ J ~-- y0 '~ .~P -; ~ ~ `n _ ~~ ~. .0. ; 'tie •~ry.,ls ~~! 'a --- V o ed, (~, .,p . ~,? SY3v, our~oy~ •~ __ ~ r \\ .4 -~5 ..ti'1~ ,c iZ >,p i 7 0 ~1 .'!'1tr 9-111 . „0 ., 9 ~i oC O H O 0 ~. 0 z 0 W H ~~I °{ 052, -£ v~y. 0 ~ ,, ~~~~. ;~ p ., ,~ S ~~ s pQ •1 °1 ~G ~z,~L'~L2 ~ fwK. \` 0 HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No. 17 Agenda May 17, 1993 Issue Statement• Public hearing and authorization of the sale of Richfield Rediscovered property at 6225-14th Avenue to Twin Cities Habitat for Humanity (Habitat). Background: In April 1993, the HRA authorized the acquisition of property at 6225-14th Avenue under the Richfield Rediscovered program. It is proposed that the HRA sell the property to Habitat as the builder, in accordance with a development agreement. The HRA requested additional information about.: • the role of a second mortgage lien to recover a portion of the approximate 540,000 writedown due to the HRA cost of acquisition, clearance, and $1 sale to Habitat; • the operational/financial soundness of Habitat; and • having Habitat assume the site clearance responsibility and expense. Those concerns are addressed in the attachment to this letter. The development agreement typically used for Richfield Rediscovered has been modified as follows: • A minimum value is not required. It is anticipated that the 1008 sq. ft., 3 bedroom home will have a value upon.. completion of approximately $80,000. A copy of the proposed plan is attached. • The purchase price of the property is $1. • No letter of credit performance security is required. However, the development agreement will be recorded and requires Habitat to pay 520,000 for the site if they fail to perform.. A Completion Certificate would release this lien. • The HRA will assume responsibility for demolition. • Evidence of construction financing is not required. • Habitat will repurchase the home from the future buyer, should they need to sell, by satisfying the buyer's accumulated equity interest. The home would then be resold to another qualfying low income family. • A two car garage will not be provided. A storage shed which complements the house will be provided. • Habitat will be provided 12 months to complete the project rather than the 5 months builders typically receive. Habitat Construction Manager Ryan Karis and local church representatives are anticipated to beat the May HRA meeting. Recommended Motion: Following the public hearing, adopt the attached resolution which authorizes the Chair and Executive Director to execute agreements and sell 6225-14th Avenue to Habitat for the development of a new single family home. Basis of Recommendation: 1. Habitat has proven to be an experienced, capable, financially secure builder. 2. The HRA has authorized acquisition of 6225-14th Avenue for the Richfield Rediscovered program. 3. The terms of the development agreement have been negotiated and are in conformance with program guidelines; except as noted. 4. Notice of public hearing was published in the Sun-Current on May 5, 1993. 5. Previously, the Planning Commission found the sale of this lot for development of a new home to be in conformance with the City's Comprehensive Plan. 6. A neighborhood meeting was held to discuss the project and no issues were identified. 7. The Richfield Rediscovered cash flow can support this -transaction as proposed. Alternative Recommendation: Do not proceed with a development agreement with Habitat and direct staff to find other buyers. Discussion./Decision Mode: Closing would occur in June with site clearance and construction starting shortly thereafter. Respectfully submitted, Ja Prosser Ex cu 've Director JDP:ds RESOLUTION NO. RESOLUTION AUTHORIZING THE SALE OF REAL PROPERTY LOCATED AT 6225-14TH AVENUE 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 Richfield Rediscovered Program Redevelopment Project (Project) heretofore adopted by the City of .Richfield (City) and the HRA, said real property being described as follows: 6225-14th Avenue, Lot 20, Block 1, Nokomis Gardens Rearrangement of Blocks 1, 2, 3, 4, and 5, Girard Parkview. WHEREAS, the HRA is authorized to sell real property within its area of operation after public hearing; and WHEREAS, a builder, Twin Cities Habitat for Humanity has been identified as the purchaser of the described property, in accordance with a development agreement; and WHEREAS, the public hearing has been held after proper public notice; and WHEREAS, the Planning Commission has made a finding that the disposition of the property for residential purposes is consistent with the Comprehensive Plan. NOW, THEREFORE, BE IT RESOLVED by the Richfield Housing and Redevelopment Authority: 1. A public hearing has been held and 6225-14th Avenue is authorized to be sold to Twin Cities Habitat for Humanity in accordance with a development agreement with the HRA. 2. The purchase price for 6225-14th Avenue is $1. 3. That the Chairperson and Executive Director are authorized to execute the Development Agreement 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 17th day of May, 1993. Thomas E. Harms, Chairperson ATTEST: Larry Wozniczka, Secretary Discussion Items at 6225-14th Avenue HRA/Habitat Project Is there a role for a second mortgage lien in favor of the HRA to permit recovery of a portion of the approximate $40,000 writedown cost of acquisition, clearance, and $1 sale price? Habitat presently requires ownership without encumbrances and .liens against the acquired property. The HRA typically-seeks a second mortgage lien for one of three. reasons: 1) to recover the cost of land. writedown; 2) to prevent a speculative monetary benefit to a future buyer when the value of a finished house exceeds project costs; or 3) to provide for long term affordability by deferring the lien to qualifying subsequent purchasers. Historically, the HRA has not recovered land writedown when the ownership or rental beneficiaries have incomes at or below 50 percent of median income. However, the writedown has always been federal CDBG and not Richfield Rediscovered monies. Habitat retains a first option to buy if a Habitat-owner wants to sell. This effectively prevents speculation and ensures long term affordability if the HRA assigns this responsibility to Habitat. The development agreement requires Habitat to exercise this option and ensures long term affordability.. Can the operational/financial soundness of Habitat be further clarified? .Twin Cities Habitat .for Humanity operates as an affiliate to Habitat for Humanity International (HFHI). If financial difficulties were to beset Twin Cities Habitat, HFHI would be responsible for working out solutions. Secondly, the contracts for deed, mortgages, purchase agreements, etc. are binding legal documents which would remain in effect. Whomever takes over Habitats assets would have to operate under the terms of those contracts, assuming the families remain faithful with their monthly payments. Habitat has indicated that its asset .line has increased yearly, with approximately $2 million tied into long term assets. The organization's financial stability has continued to increase. Can Habitat assume the responsibility for site clearance? Habitat is able to provide affordable housing because of significant donations of capital, materials and labor. In producing each house, several costs still surface. In acquiring a lot for new construction, there is a great cost difference in purchasing a lot for $1.00, and in purchasing a lot that could require $4,000 worth of demolition. Habitat has not provided demolition services in any other Twin City projects. Habitat is not able to receive government money directly. However, government funds can .typically be expended for site preparation, which would include. demolition. For this reason, Habitat looks to utilize these opportunities; whenever possible. . G Iii a d" r L~ N t0 I I ---~1 1 1 ---tJ -~~ j I ~( 1 I II II ---~~ 0 ~~~ o cn a~ as ..~ a~ +~ • o ~+ ~~o ~~~b b~o~ o ,~ •~ ~~~b a, ,~ ~ •~ ~ " ~ a ~ a~ a~ o ~ .x v ~ •~ ~~., ~~ °o ~ •° ~° ~ .~ ~~~~ a~i 3 ~ ~ ~ ~ W UI t~ U 3 ~ o ~°n ~ ~,•~~ ~ w 3 ~ a~ ei +~ 0 z QJ Z a v Z O t= w J W (." Z 'O ~i.. ~~ ~~. ~b ~o~ <~Q ~o~~ N Z' 0', a~' w J W. F-- U 1~ .~ a N .C ~ bA ~O .~ ~ ~ ~ cd ~ ~ +~ 4-I Z va o ~ ~ 0 ~ ~ a ~~ ~ ~~ ~~ ~ ;~ W ~ ~ ~. 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