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03-15-93 agendaCITY OF RICHFIELD HOUSING. AND REDEVELOPMENT AUTHORITY MONDAY, MARCH 15, 1993 7:00 P.M. COUNCIL CHAMBERS AGENDA CALL TO ORDER APPROVAL OF MINUTES OF JANUARY 19, 1993 HRA MEETING 1. OPPORTUNITY FOR CITIZENS TO ADDRESS THE HRA ON ITEMS NOT ON THE AGENDA 2. CONSIDERATION OF RESOLUTION AUTHORIZING EXECUTION OF SOUTH HENNEPIN VOCATIONAL TECHNICAL SCHOOL CONTRACT FOR 1993-94 NEW CONSTRUCTION PROJECT AT 6634 FOURTH AVENUE IN AMOUNT OF $77,720 HRA LETTER NO. 9 3. PUBLIC HEARING AND CONSIDERATION OF RESOLUTION AUTHORIZING SALE OF A PORTION OF CLOVERLEAF SITE TO CITY TO PROVIDE FOR CONSTRUCTION OF 77TH STREET HRA LETTER NO. 10 4. CONSIDERATION OF ESTABLISHMENT OF DEVELOPMENT FUND TO SUPPORT HRA ACTIVITIES HRA LETTER N0. 11 5. EXECUTIVE DIRECTOR REPORT 6. 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. 11 Agenda March 15, 1993 Issue Statement: Establishment of a Development Fund to support HRA initiatives. Background• During the•annual budget review process last fall, the HRA suggested that staff explore alternative funding sources to support HRA initiatives. Staff began the exploration with assistance from Publicorp Inc. After some. initial discussions with Publicorp, it became apparent that unlike many other cities, the Richfield HRA had not realized the potential of utilizing existing tax increment project cash flows to establish a Development Fund. Publicorp has recently completed an analysis of the existing tax increment projects (ILN, LHN, CABA, PASSS and Richfield Rediscovered). The attached analysis recommends the establishment of a Development Fund. A second attachment to this letter is a report entitled Development Fund Program Initiatives. It is an inventory of potential program ideas to serve as a catalyst for the HRA to formulate additional program initiatives. The ideas reflect the need of the HRA to maintain an aggressive pro-active role to maintain and enhance the vitality and quality of life in our community. Recommended Motion: 1. Participate in a presentation and discussion by Publicorp, Inc. of their recommendation to establish a Development Fund. 2. Review and discuss the proposal and program initiatives and, if appropriate, direct staff action. Basis of Recommendation: 1. The HRA requested staff to identify alternative sources of funding. 2. A viable source of funds has been identified. 3. Additional funds are needed to meet the changing needs of Richfield. Alternative Recommendation: Direct staff to develop further alternatives. Discussion/Decision Mode: Timely consideration will give direction to staff in program development for the next year. Resp ully submitted, Jam D. Prosser Ex~e tive Director JDP:ds February 26, 1993 TO: Jim Prosser, City of Richfield FR: Sid Inman Mark Ruff RE: Richfield's Tax Increment District Review We have completed our annual review of the Richfield tax increment financing districts. All of the tax increment. districts contain adequate reserves and should meet current and future debt service payments. In this review we attempted to compare Richfield's procedures to other cities' procedures to determine if Richfield.is utilizing all of its resources. Below is •a list of suggestions which could benefit the City. and HRA's redevelopment efforts. ~ . LHN, ILN, CABA, PASS, and Richfield Rediscovered Project Areas Richfield is one of few cities in the State which has individual project areas for each of its tax increment districts. This means, for example, that LHN tax increment can only be spent within the boundaries of the LHN District. Most cities pool tax increments among all of their districts to credit enhance their bonds, ensure adequate cash flows, and concentrate efforts on programs which are outside of the typical tax increment prototype. We recommend that the City and HRA combine all of its project areas into a single area so that tax increments from one or more districts could be utilized in other tax increment districts when the opportunities arise. This change would require modifying the tax increment plans for each. district. The LHN District would serve as the main source of funds for pooling opportunities in other tax increment districts, ahhough funds from the CABA District could also be used. 2. Establishment of a Development Account A significant portion ofi the ILN and LHN reserves consist of interest eamings on tax increment. Many cities have moved interest eamings into a fund called a development account. Instead of the limited list of eligible uses for tax increment funds, development account funds can be used for any qualified HRA activity. Tax increment funds can be moved into a development account on an annual basis. If the need ever arises, development account funds can be used for debt service payments in any of the tax increment districts. The LHN District currently has and is projected to maintain a reserve balance of over S2.95 million, based upon conservative assumptions including no interest earnings and no inflation over time. Interest earnings on the LHN District and the ILN District would serve as the main source of funds for the development account. These funds could be transferred from the LHN and ILN accounts to the development account in amounts ranging from 8400,000 to 5600,000 per year from 1993 to 2000. The actual amount transferred to the development account each year would be allocated only after adequate funds were available for debt service. TI Review • 1 In every city in which we work, the issue of the development account's impact upon taxpayers has been raised. In other words, would it be better for the local taxpayers to prepay the outstanding bonds and close down the tax increment districts early rather than create a development account: In our experience, no metropolitan city has chosen to prepay bonds and forgo the opportunity for a development account. An example of the distribution of tax base may help to demonstrate the rationale for this decision. For argument's sake, we will estimate that prepaying bonds would rosuh in an average. of 8500,000 per year being added to the tax base over the next eight years (we are unable to predict the exact amount due to uncertainties in future market valuesl. F'~acal disparities would reduce the amount of tax dollars available by a net of approximately 35 percent. Therefore, only 5325,000 would be available for local .jurisdictions. Based upon 1993 tax rates; the school district would be entitled 46 percent of this remaining amount. However, local property taxes are not reduced by increases in a school district's tax base; only state aid to the school district is reduced. Therefore, 5175,000 remains for county and city IeW reductions.. Hennepin County would be entitled to 52 percent of the S 175,000 and the city and other local jurisdictions would receive the remainder, or 583,000. Due to the size of its tax base, savings on Hennepin County's share of the allocation would be minimal. Therefore, the net savings to the Richfield taxpayers is 583,000 per year on a total of $500,000 of potential development account funds. A short-term cost versus long-term benefit question then arises: would the HRA be able to use the 5500,000 per year to leverage increases in the C'~ty's tax base which would'benefit the taxpayers for the next 30 or 40 years by an amount groater than than eight years of 583,000 in annual savings? . 3. Internal Costs Unlike most metropolitan cities, Richfield uses only a small portion of the permissible allotment of internal costs allocable to tax increment. The HRA and City should review its tax increment • policy to determine if an increase in the intemal cost allocation is warranted. The small percentage of tax increment used for internal purposes is unusual when compared to the fact that Richfield remits over 570,000 in extra tax increment in CABA to the county for redistribution. The redistribution formula, like the development account analysis, does not substantially reduce the taxpayers' bill. We recommend, at a minimum, that these S70,000 in payments be redirected to HRA costs. 4. Changing the Status of Certain Parcels In the ILN District there-are parcels which, due to a decrease in current value or a change to an exempt status, have a current tax capacity which is lower than the original tax capacity. Because Hennepin County does not change the values to reflect the lower tax capacity, we recommend that the HRA request certain changes. in the parcels' status. This change will have the effect of increasing cash flow of the ILN District and will have no negative effect upon Richfield taxpayers. Please call with any questions or comments. TI Review • 2 o~r~~~` r~ ~ irnt~~ Richfield, as a post World Waz 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. $ 55,000/ea. 2. Affordable Homes ~' 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 Exterior $uilding Design Property owners, residential as well as commercial, are 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 architectural design advice. ~ Services. $ 16,000 Richfield has aggressively pursued designating the major commercial azeas for redevelopment. Commercial redevelopment has been made available to the LHN, ILN, PASSS and CABA areas. 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 area within the community.. Other strategies and tools aze needed. A. AREA COMMERCIAL ECONOMIC GROWTH Review commercial redevelopment azeas, 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 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. $ 2,000 4. Remodeling Fair Continue to support the 2004 Marketing Committee and its annual fair. ~ Annual cost. 5. Fix-Up Street $ 1,000 Provide an event at which various trades people demonstrate "do it yourself° techniques. ~ Annual cost. 6. Community Education $ 1,500 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. 10 Agenda March 15, 1993 Issue Statement: Consideration of the adoption of a resolution following a public hearing which authorizes the sale of a portion of the Cloverleaf site to the City of Richfield to provide for the construction of 77th Street. Background: Seventy-Seventh Street has been a part of the future land use for the Cloverleaf site since 1985. At that time, the HRA and City Council approved the ILN redevelopment plan. The road will Consume approximately 1.8 acres of the 14 acre site. At the same time, the road will significantly improve site access. The City Council established just compensation for the property needed for the road and is thus. offering $116,600 ($1.48 per square foot) plus $200 for a temporary construction easement of 2,380 square feet. The fee taking for ownership by the City encompasses property on parcels 5 and 10. Parcel 4 is included only because of the need for a temporary construction easement. (See attached maps). Just compensation is equal to the certified fair market value appraisal of the property and assumes marketable title. Recommended Motion: Adopt-the attached resolution which authorizes the sale of a portion of the Cloverleaf site to the City of Richfield to provide for the construction of 77th Street. Basis of Recommendation: 1. The land has been identified for 77th Street construction since 1985.- 2. The MnDot/FHWA rules have been followed in the appraisal process. 3. The 77th Street project, as purchaser of the property, will pay all the related costs. 4. The HRA will realize income of 5116,800 which approximates $1.48 per square foot. When the HRA purchased the entire Cloverleaf property from the RTC, it paid an average of about $1.88 per square foot. The $.40 per square foot difference is attributable to a locational difference. The northern portion of the site is less valuable than the southern portion of the site. 5. The required notice of public hearing was published on March 3, 1993. Alternative Recommendation: 1. Delay action. 2. Reject the offer and seek a higher value. Discussion/Decision Mode: A timely response will permit the project process to continue towards its goal of a spring construction. Respe ly submitted, Jam Prosser Exe tive Director JDP:ds ~~~ RESOLUTION N0. THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA AUTHORIZING THE SALE OF REAL PROPERTY LOCATED AT 7600 FREMONT AVENUE SOUTH AND 7644 EMERSON AVENUE SOUTH AND THE GRANTING OF A TEMPORARY EASEMENT TO THE CITY OF RICHFIELD FOR THE 77TH STREET PROJECT WHEREAS, the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota (HRA) acquired the Cloverleaf site on April 15, 1992; and WHEREAS, the City of Richfield, Minnesota (City) desires to purchase. a portion of the real property located within the Cloverleaf site pursuant to and in furtherance of the 77th Street project (Project) heretofore adopted by the City of Richfield (City); and WHEREAS, said real property is described as Parcel No. 5 and Parcel No. 10 in Attachment A; and WHEREAS, the HRA is authorized to sell real property within its area of operation after public hearing; and WHEREAS, the public hearing has been held after proper public notice; and WHEREAS, the Planning Commission on November 28, 1989 considered and approved an amendment to the Comprehensive Plan designating 77th Street as a minor arterial between I-35W and Cedar Avenue and adopted the Official Map for said 77th Street; and WHEREAS, the City has offered $116,600 for fee title to Parcels 5 and 10 described in attachment A; and WHEREAS, the City has offered $200 for the temporary use of a portion of Parcel 4 described in attachment B; and WHEREAS, the Cloverleaf site is evidenced on the Official Map for 77th Street as adopted by the Planning Commission on November 28, 1989; and WHEREAS, the finding by the Planning Commission that the disposition of the Property for Project purposes is consistent with the comprehensive plan and is implied by its action on November 28, 1989; and WHEREAS, the HRA is empowered to permit temporary uses of its property and the City desires to use a portion of the Cloverleaf site for construction purposes as described in Attachment B and identified as Parcel 4. NOW, THEREFORE, BE IT RESOLVED by the Richfield Housing and Redevelopment Authority: 1. A public hearing has been held and portions of Parcels 5 and 10 of the Cloverleaf site are authorized to be sold to the City of Richfield, Minnesota for $116,-600. 2. The use of the temporary easement area on a portion of Parcel 4 by the City in exchange for $200 is authorized. 3. That the Chairperson and Executive Director are authorized to execute any and all agreements required to effectuate this resolution. Adopted by the Housing. and Redevelopment Authority in and for the City of Richfield, Minnesota this 15th day of March, 1993. Thomas E. Harms, Chairperson ATTEST: Joan Helmberger, Secretary Attachment A (Page 1 of 2) PARCEL NO.: 5 PID NO.: 33 028 24 43 0016 OWNER: Richfield HRA Description of Taking: Fee Taking for Right of Way That part of the West 2/5 of the East 5/8 of the North Half of the Southwest Quarter of the Southeast Quarter of Section 33, Township 28, Range 24, Hennepin County, Minnesota, which lies northeasterly of the following described Line A: Commencing at the northeast corner of said West 2/5 of the East 5/8; thence South 00 degrees 08 minutes 11 seconds West, grid bearing, Hennepin County Coordinate. System, along the east line of said West 2/5 of the East 5/8 a distance of 290.63 feet to the point of beginning.of Line A to be described; thence North 34 degrees 03 minutes 06 seconds West 15.50 feet; thence northwesterly along a tangential curve, concave to the southwest, having a radius of 511.33 feet to a point on the southeasterly line of the right, of way of Interstate Highway 35W, according to Hennepin County Recorder Document No. 3772729 in said Line A there terminating. Together with a 30.00 foot permanent easement for roadway slopes, cuts and fills over, under and across that part of said West 2/5 of the East 5/8 which lies southwesterly of and adjacent to the above described Line A. S ~~~ CORNER SEC. 33. T. 2S. R. z~ .""' N00' 11' 10"E ~ 1312. ,,--~ 72 - `. PI ~ +~ .46 . _ _ ____ ~ _~ ' _ '~f ~ -- ~ `- 30 -~ t N ` ~~-- MfEST LINE OF THE SE ~~' ~ ~X !"~' ~X r ~ i ` ~ OF SEC. 33. T. 28. R. 24 ~ -- v • ~ c C .` ~ t ~ m w ~ .. ~ ~ = i ,~ ~ ~ ~ ~ N ~ ~ ' ~ -~ `' '' Z S .y ••• Z ~~ ~ ~ W s ' ~ Qom Z ~ r ~ ~~ ~'• 30 ~ ~~ i ~ ~ / ` _ Sp0•t2'05'M , •r 1 /1/ `- .~- ~ - W Y m ~ n r ~p~ Z ~ ` ~ . m = ~ ~ Z 1 ` `~ t*7 ~ i N ~ cn m ~ )! V n c . ,~ • N ~ •:.:' i~! ~ •' ~ /. (.! to ~ ~' '' ~ . I 1! 'j ~ ~ -~D 6 1 ~ i t ,~ ~' .a. -. ~ , ~ ~ c ~ ~ ', ,fh ' ~~ ~ i ,~ J ~ ~ ~ ~~ r> ~_, - , --- NO.07 ~''E 655.59 -- •.'~ ,,,. ,•rn , , ~ , ,-,~,.. Attachment A (Page 2 of 2) PARCEL NO.: 10 PID NO.: 33 028 24 43 0015 OWNER: Richfield HRA Description of Taking: Fee Taking-for Right of Way That part of the East Half of the West Half of the Northeast Quarter of the Southwest Quarter of the Southeast Quarter lying southerly of the northerly 315.00 feet of Section 33, Township 28, Range 24, Hennepin County, Minnesota and lying northwesterly of the following described Line A: Commencing at the northwest corner of said East Half of the West Half of the Northeast Quarter of the Southwest Quarter of the Southeast Quarter; thence South 00 degrees 08 minutes 11 seconds West, grid bearing, Hennepin County Coordinate System, a distance of 290.63 feet; thence South 34 degrees 03 minutes 06 seconds East 33.02 feet to the point of beginning of Line A to be described; thence continuing South 34 degrees 03 minutes 06 seconds East 122.28 feet; thence southeasterly along a tangential curve, concave to the northeast, having a radius of 640.33 feet to a point on a line 30.00 feet westerly of the east line of said East Half of the West Half, also known as the west line of Emerson Avenue and said Line A there terminating. And a 30.00 foot permanent easement for roadway slopes, cuts and fills over, under and across that part of said East Half of the West Half which lies. southwesterly of and adjacent to the above described Line A. ~- S ~~~ CORNER SEC. 33. T. 28. R. 24 ~,_,_,.r._..---- ~-"_..._ ~,.--~_ _ N00.1 t' Z O"E t 312. T2 _ _ ~~ pI +5 .46 R r •~~~ 30 7 ~ t r N `~~`-1MEST L iNE OF THE SE ~~+ ~ z OF SEC. 33. T. 28. R. 2~ N r-~X ~ ~X 1 ' -i ~ ~ 1 - - ~z oc ~~ \ ~ Z w .. ~ ~ ~ m '' °z o ~\ %~' ~' .. v, ~ ~ z ~ ,, Ni ~ .. ., ~ .., z ~ ~ rn ~ ~ ~ ~m J•`N' ~ 3C ~ ~ S00•~2'OS'M L ~r~r ' r ~ m~ ~ x n Z ~'~ , ~ Cs m m i z `° Z v~ ft1 ; 1 N ~ ~~ t N ~ 1~ 1 ~ /~ ~ ~~~ ,~ • ' .. ~ 1 C'- C11 C ~ ,~ • N CD tp ~ ~ ; I m ~~ W C ~ ~~ ` r • ~O~ ~ "' ~ ~ REM '~ ~ ~; . i 1/ 1 Ij __ ~~~~ '! ~ ~ .I f,'1 N ~ 4 / / ~. 1 r .. ~ 'f ~ ~,. ~ ~ ~~ X 3 5 I '; ~ _~ ~ ~_ ~ ' ~` NO•~ ~''E . " ~ _ --- I ~ / 1 / M • 1 1 .:..... ~ I~ ~ i. 1 _~: _..~~ __ .. .~ ~%- S ~~~ CORNER SEC. 33. T. 28. R. 2, ,~_,_,_...._------ '~ ~,,...'_ ,.--~_ _ N00.11't0"E 1312.72 _ ~. PI +5 .46 i t N `~~`- MEST LINE OF THE SE ~~+ ~ ~ OF SEC. 33. T. 28. R. 2~ N ~~X ---" 3X _ ~ ! - - ~Z - - v v oD~ \ ~ ~ w _ ~ ~ ~ cn pp 1 ~ ~ r .~ .. Vt =m ,.JN ~ 30 ~ ~ S00•t2'03'M ~~ ~ N `~ ~~: r ~ _m ~ i x r ~ n •- -- 0 2 ' ~. C1 m = z ~ ~? ~~• N ,r ~~~ 1 in m ~ ~ 1 ~ r ~ ~i. ~ m~ ~ ~ ~ ~ a+ v+ ~ ,. • ,I o ~ -~ . ~, ~ ~~ N ~ ~ m ~~~ A wC_ / ~~i ` ~. ~ ~^' ~ REMO ~ i ` N "~ _~ t ~ O !~y N ~ ~/ f 1 ~ ~ ~ O f ? ~~ ~ ~ i i L i ~~ ~ ~o i ~I , _ ~ ; Z m / v+ '. n'i ~ ~ ~ , ~ a ' ,~ 3 5 `! S l~ a. .. / ,~~ / r> ~_, -- ' ~ - NO.07 ~''E 655.59 -- •~-i v ~ ~ s 1 ~ • ~ f PARCEL NO.: 4 PID NO.: 33 028 24 43 0017 OWNER: Richfield HRA Description of Taking: Attachment B A 10.00 foot temporary construction easement for roadway and utility purposes over, under and across that part of the West Half of the East Half of the Northwest Quarter of the Southwest Quarter of the Southeast Quarter Section 33, Township 28, Range 24, Hennepin County, Minnesota, which lies southerly of the following described Line A: Commencing at the northwest corner of said West Half of the East Half; thence South 00 degrees 12 minutes 05 seconds West, grid bearing, Hennepin County Coordinate System, along the west line of said West Half of the East Half a distance of 127.31 feet to the point of beginning of Line A to be described; thence North 75 degrees 35 minutes 33 seconds East 169.84 feet more or less to a point on the east line of said West Half of the East Half and said Line A there terminating. Together with a temporary construction easement over, under and across the west-30.00 feet of that part of said West Half of the East Half which lies northerly of a line 165.00 feet southerly of the north line of said Southwest Quarter of the Southeast Quarter and southerly of the herein described Line A. Said temporary construction easements expire December 31, 1993. .J 6700 Portland Avenue • Richfield, Minnesota 55423-2599 City Manager James D. Prosser Mayor Martin Kirsch Council Don Priebe Michael Sandahl Susan Rosenberg Russ Susag March 15, 1993 Mr. James Prosser City of Richfield HRA Richfield City Hall 6700 Portland Avenue South Richfield, MN 55423 Subject: Initial Offering Letter, Establishment of Relocation Eligibility, Partial Taking Cloverleaf Site, 77th Street Project Dear Mr. Prosser: The City Council has established just compensation and authorized the purchase of a portion of the property at the Cloverleaf Site. The purchase of the property will make it possible for the City to proceed with the construction of improvements to 77th Street this year, 1993. The project is prepared to pay a total of $116,800. This includes 5116,600 for approximately 79,227 square feet of vacant land to be permanently utilized for street improvements. An additional $200 is to be paid for the use of land during the construction period. Attached are site sketches which depict the area. The compensation was based on the following values: Market Value of Land Before Taking $1,753,500 Market Value of Land After Taking $1,636,900 Damages $ 116,600 The value of the temporary easement was based on rental of approximately 2,380 square feet of land. Upon receiving this initial offer, the HRA becomes eligible and entitled to relocation benefits and other assistance in accordance with the Federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as amended. The Urban Hometown Telephone (612) 861-9700 Fax 861-9749 An Equal Opportunity Employer Mr. James Prosser, Manager March 15, 1993 Page 2 Information regarding the specific assistance to which you are entitled will be provided by Mr. John Connors of Conworth Inc. He will contact you shortly. If you wish to call him, he is available at 929-0044. Conworth Inc. is located at 4725 Excelsior Boulevard, St. Louis Park, MN 55416. Please direct any questions you have regarding the purchase of your property to me. If I'm not available when you call leave a message. You may specify the most desirable time for me to return your call. It may be a time prior to 8:00 a.m. and after 4:30 p.m. if that would be more convenient for you. Accompanying this letter is a Guide for Property Owners which presents information related to the purchase of your property by the City. The regulations which we are following require me to request you to sign an exact copy of this letter which will then be placed in our files. You are simply acknowledging receipt of this letter on the stated date. A copy of this letter is also provided for you. Sincerely, B ce C. Palmborg, Housing and Redevelopment Coordinator Housing and Redevelopment Division BCP : j s Enclosure I certify that, on the day of 1993, a copy of this letter and a copy of a Guide for Property Owners was delivered to me by the undersigned City staff person. Signature of Owner Signature of staff person HOUSING AND REDEVELOPMENT AUTHORITY HRA Letter No.9 Agenda March 15, 1993 Issue Statement: Authorization to execute contract with South Hennepin Vocational Technical School (Vo-Tech) to initiate a 1993-94 New Home project. Background• Vo-Tech has requested that the HRA participate in a new construction project for the school year 1993-94. The two organizations have participated together in 20 projects since 1977. The projects provide rehabilitation and new construction training opportunities for the Vo-Tech students and affordable new housing for the community. A project at 6634 Fourth Avenue is proposed. A structure is being built at the Vo-Tech campus and can be moved to the .site, and placed on a permanent foundation. On November 16, 1992, the HRA authorized staff to acquire the property at 6634 Fourth Avenue through the Voluntary Acquisition Program. .New HUD rules require that the City purchase the property and subsequently transfer the property to the HRA. The City acquired the property on February 2, 1993. Transfer of the property to the HRA can occur at any time since the City authorized transitory ordinance became effective on February 20, 1993. Staff, in cooperation with Vo-Tech architectural drafting faculty, has developed project plans to meet all setback requirements, to complement the design of neighboring homes and to incorporate interior features desirable in today's market even though the home is on a narrower lot. The new house will have approximately 1,800 square feet of finished living area. It will feature a split level design with a living room, dining room, family room, kitchen, three finished bedrooms, 1-3/4 bathrooms, and a deck area. Space is provided for a future fourth bedroom. The amount of the Vo-Tech contract for this project is not to exceed $77,720. This cost is consistent with previous projects given design and square footage variabilities. The estimated project costs and funding source follows: ACTIVITY FUNDING SOURCE Acquisition, site: $ 48,000 CDBG Demolition, site: $ 4,500 CDBG Vo-Tech Contract: $ 77,720 Proceeds of Sale Landscaping: $ 4,000 Proceeds of Sale Legal (Sale): $ 600 Proceeds of Sale Closing Costs: $ 2,500- Proceeds of Sale Total Cost. $136,320 Private contractors will complete the electrical, plumbing, heating, and painting portions of the work. Legal counsel has previously reviewed the contract requirements. A copy of the building elevations also accompany this .letter. The home will be sold to a first time home buying family of three to six members, having a moderate income (as determined by Section 8 income limits) of between $25,100 and $40,800. Although the completed value of the home has not yet been determined by independent appraisal, staff estimates that the value should approximate $87,500. A reduced interest rate mortgage would be secured from the Minnesota Housing Finance Agency in spring 1994, if available. FHA financing is an acceptable alternative pending mortgage interest rates at the time. Recommended Motion: It is recommended that the HRA adopt the attached resolution which authorized the execution of the Vo-Tech contract in the amount of $77,720 for the 1993-94 new construction project at 6634 Fourth Avenue. Basis of Recommendation: 1. The City has purchased the property and the required actions for the HRA to acquire the property have occurred. 2. Plans have been developed and a house is being built by Vo- Tech that will meet site requirements and program needs of the HRA. 3. The Inspection Division has reviewed the plans for the project . 4. Site development is consistent with the Comprehensive Plan. 5. Adjoining neighbors have reviewed the project with staff. Alternative Recommendation: Do not authorize execution of the Vo-Tech contract. Discussion/Decision Mode: The 6634 Fourth Avenue project was started on campus in September 1992. Contract execution would occur immediately following the transfer of the property from the City to the HRA to ensure the HRA's interest in the project. Alternately, the structure would be sold by Vo-Tech to another party. Resp ly submitted, Jame Prosser Exec ive Director JDP:ds RESOLUTION NO. THE HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR THE CITY OF RICHFIELD, MINNESOTA RESOLUTION RELATING TO VO-TECH AGREEMENT FOR 6634 FOURTH AVENUE WHEREAS, on November 16, 1992, the HRA authorized the purchase of 6634 Fourth Avenue, legally described as: Lot 9, Block 3, McCutchan's Portland Avenue Park; and WHEREAS, HUD CDBG funds have been authorized for this acquisition; and WHEREAS, HUD rules requires that the City, rather than the HRA, initially purchase the property with a subsequent sale to the HRA; and WHEREAS, the City purchased the property on February 2, 1993; and WHEREAS, a project has been proposed as a cooperative effort between the HRA and South Hennepin Vocational Technical College (Vo-Tech); and WHEREAS, the property at 6634 Fourth Avenue would be developed with a new single family home; and WHEREAS, the construction Agreement price for the new construction program will not exceed $77,720; and WHEREAS, following completion of the new construction work, the property will be sold to a first time home buying, moderate income family. NOW, THEREFORE, BE IT RESOLVED by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota that the HRA Chairperson and Executive Director are authorized to: Enter into a construction agreement with Vo-Tech for an amount not to exceed $77,720, for the new construction project at 6634 Fourth Avenue South. Adopted by the Housing and Redevelopment Authority in and for the City of Richfield, Minnesota this 15th day of March, 1993. Thomas E. Harms, Chairperson ATTEST: Lawrence Wozniczka, Secretary SUMMARY OF CONTRACT REQUIREMENTS FOR VO-TECH PROJECT AT 6634 FOURTH AVENUE • The construction. of a split entry home at 6634 Fourth Avenue. • The professional installation of heating, electrical and plumbing systems. • Completion by July 1994. .The house will be relocated from the campus in May or June 1993. • Supervision of labor and insurance coverage to be the responsibility of Vo-Tech. • Vo-Tech is responsible for a one-year warranty for defects caused by faulty workmanship or defective materials, a two- year warranty on .installation of plumbing, electrical, heating and cooling systems and a ten-year warranty on structural defects. • A provision specifying the Vo-Tech's responsibilities concerning timely completion of the exterior facade, and routine site maintenance during the construction period. • N • Q i~ LL tt M . ~ • ~' i I' 'li;•' I i illli) ~~ '' .~~ O .~'~ }f, •i 1 I. I o • ~ '~ r ' ~, ' ~ i ~ .. ~ , I ~' f . , . ~' ~ .r T+ n i j •~ ~ :~~ .> .i f I' ~ T ~.....~ . ,' p III t+~ - ~ ~;. .. ~`' II q„i.~ .i', 'I i . ~. 'i ~. i ~~ ~~ ly--~- 'i ,,. i I ~' I I. ~~. ~, ~;~..~ ,~ a i~ ,~.y~ i,..~ .,. - , i Z Q W J W W J 0 a J W Q W 2 O a W J W S GUIDE FOR PROPERTY O~%'VNERS PROPERTY PURCHASE PROCESS ~bb Y i The :information , in this. booklet is Provided by the City of Richfield to help you better understand the process to be _ followed in purchasing your property. ~ ~~ _ ~ Please read it carefully and be sure to ask questions which come to mind.. City. staff has considerable experience in purchasing property.. The experience should make the process of selling your property less burdensome. At the back of this booklet are the names and telephones nurimbers of people prepared to help You. GENERAL INFORMATION How Richfield Acquires Property Under Minnesota law, the City may acquire property by gift,: direct purchase, or eminent domain proceedings. This nghtwill be used to acquire property for the 77th.-Street Project. i; 1 The City sent a qualified appraiser(s) to determine the market } value of your property: The appraisercontacted you at that time. You were given the opportunity to accompany-.him/her ` during the evaluation of your property. The appraisal was' based on studies of recen# similar sales of property in the area and also includes the replacement cost approach and if an income property valuation by-that approach was also considered. ,,. ;' ~ In some instances the City may determine there are minimal ~-- damages to property and there will not be a need for a complete appraisal Additional contacts by city staff are, sometimes made to obtain other necessary information prior to the time that offers for purchase are made. ~ , r 1 r Z U W a`~ ~ ~ a~ ~ ~_ a~ L ~_ •~ o _ ~~ ~ ~-~ ~ a~° ~' °3°c~a~ ~Eaci ~ •~o~~~~oc c E ~a~~~oE° ~vic'n r~E~~-o~~ •c c ••-.,~ a~ o o a.«- c~ •.- ~ ~E~•Loc c ~~ ~ ~ ~y ~ o c~n,a ~ c~ s~~ ao~oaUio v~v~ a~nc~a~~~~o . i LiAUU _ v,a~ Uc~a~o,~:~~~ c~4i •-_....ccco O °'~o ~~~Ec~~oca con QC a~~~(a, 0•.30 •3~`"Z'c o a~o~ c m._ cn c L cn t a~ a~ t a~ •- .. ~ v ._ ~ f ~ C U f- rte. ,~ ~r .~ a (~~.. 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V~ !n ~N ~ N N ~ C~ ~ ~ U ~ ~.~ ~ C a3iEv~.o~~~,~~,~ a o as .`c~~~o`~oa°'~ o "'.~_v~ti~cooo w ~ U ~ ~ Qacuco~aco~3C.~3a ?. d~ ~~ to ~ (~ ~, >~~~~ ~-~ N ~ o_~ ~ o'> »~,o ' d~ V ~ Q. w •- ++ ' O ~ ~ ~.~ C Q' U ~'' O y r.. ?~ ~a~on~ ur-°~v .- ~ U oo~o c~ o~~.o .~~~oY 0.x:3 ~.C ~oasc ~a~=o ~~~~~ '°~~Q°'a ~~~.~~ ~~ ~~ ~'.o -o3o~aa~- ~c~~~a~3 a> ~. ~ ~ c ~ o ~•> ~ c c~ ~•~ o o~' Cn n 3 Q~ U ,:~. !""g ~ ~ t/3 ~' O ~ •~ oY°oo.~3 ~ ~~c°~ ~~=•~:c~i3~ cc~L.~ ocuo~a~~'cnE v•~n~o~a~ U~.a~~U~~_' n>>. own N~~~v~~~ ~arn~~~ ~ •- ~ ~«- D.~N~~~ ~-coo. a~~~~o>E3 ~ o--a o~~a~oQU >. ~o ~a~i~~~3L°- ~Uc~o~~o a~ ~ Q.~ o - ,~ w o a~ ~ cu =- ~, o N~i7 a+~~.a Ot ~'~•~i E O Qom.- ~}. ~:~30~°°'aoiY °'_~aEi~~°'3 o3~co-atc~ ~.~~~~c~ °~m~o n~ No~>.o3 L~~ra3.~o~ a~no~c>, ~ Q-p .~ (~ N n~i n. a~ ~ ~ ~ ~ a '~-o~a~~=ccQ '~3~U~w= rn SUMMARY AND CONCLUSION The information in this Guide for Property Owners is brief and general. If you desire additional information please request assistance from the. City. ' ~--ti<. PHONE NUMBERS FOR YOUR USE ARE AS FOLLOWS: ~ _ . '' Offers to Purchase ............ ..::...................86.1-.9760 i3:ruce Palmborg Information Related to Closing ...............861-9760 Richfield City Staff Kathy Jablonsky Pam Rahne Relocation Assistance ...............................929-0044 Conworth, Inc. John. Connors Adapted. by the City of Richfield from MNDOT Publication 10